Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: |
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, January 26, 2012 | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS RESULTS
FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2011
Dover Downs Gaming & Entertainment, Inc. (NYSE-DDE) today reported results for the fourth quarter and year ended December 31, 2011.
The Company’s revenues were $61,619,000 compared with $57,941,000 for the fourth quarter of 2010. As a result of better weather compared to 2010, gaming revenue increased 4.0% compared to the fourth quarter of last year from higher slot win and table game revenue for the quarter.
Gaming profits were higher compared to the fourth quarter of last year as a result of the revenue increases and from various cost cutting programs implemented during the year.
Other operating revenues improved to $6,600,000 from $5,026,000 due to increased rooms and food and beverage business attributable to the timing of Dover Motorsports’ fall NASCAR race weekend held in October this year vs. September last year and from increased convention business. Occupancy levels in the Dover Downs Hotel were approximately 87% for the fourth quarter of 2011 compared with approximately 83% for the fourth quarter of 2010.
Net earnings were $2,120,000, or $.07 per diluted share, compared with $501,000, or $.02 per diluted share for the fourth quarter of 2010.
Net earnings for the year declined 20% to $5,359,000, or $.17 per diluted share compared with $6,743,000 or $.21 per diluted share for 2010.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “Compared to last year, casinos in our region benefited from mild weather in the fourth quarter this year, especially in December. Additionally, our non-gaming activity was strong in the fourth quarter, in large part due to the October NASCAR race. Our year end results emphasize that increasing competitive challenges and high taxes will require us to continue to find efficiencies — a formidable task considering that we are in a customer centric business that necessitates continued investment in our facility and in our promotions and marketing initiatives.”
The Company announced yesterday that its Board of Directors declared a quarterly dividend of $.03 per share payable on March 10, 2012 to shareholders of record at the close of business on February 10, 2012.
* * *
This release contains or may contain forward-looking statements based on management’s beliefs and assumptions. Such statements are subject to various risks and uncertainties that could cause results to vary materially. Please refer to the Company’s SEC filings for a discussion of such factors.
Owned by Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE), Dover Downs Hotel & Casino® is a premier gaming and entertainment resort destination in the Mid-Atlantic region. Gaming operations consist of approximately 2,500 slots and a full complement of table games including poker. The AAA-rated Four Diamond hotel is Delaware’s largest with 500 luxurious rooms/suites and amenities including a full-service spa/salon, concert hall and 35,000 sq. ft. of multi-use event space. Live, world-class harness racing is featured November through April, and horse racing is simulcast year-round. Professional football parlay betting is accepted during the season. Additional property amenities include multiple restaurants from fine dining to casual fare, bars/lounges and retail shops. For more information, please visit www.doverdowns.com.
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
|
| Three Months Ended |
| Years Ended |
| ||||||||
|
| December 31, |
| December 31, |
| ||||||||
|
| 2011 |
| 2010 |
| 2011 |
| 2010 |
| ||||
Revenues: |
|
|
|
|
|
|
|
|
| ||||
Gaming (1) |
| $ | 55,019 |
| $ | 52,915 |
| $ | 217,415 |
| $ | 217,267 |
|
Other operating (2) |
| 6,600 |
| 5,026 |
| 22,527 |
| 20,882 |
| ||||
|
| 61,619 |
| 57,941 |
| 239,942 |
| 238,149 |
| ||||
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Gaming |
| 48,468 |
| 47,796 |
| 193,392 |
| 188,293 |
| ||||
Other operating |
| 4,785 |
| 3,838 |
| 16,510 |
| 16,127 |
| ||||
General and administrative |
| 1,434 |
| 1,577 |
| 6,288 |
| 6,922 |
| ||||
Depreciation |
| 2,797 |
| 3,110 |
| 11,665 |
| 12,059 |
| ||||
|
| 57,484 |
| 56,321 |
| 227,855 |
| 223,401 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating earnings |
| 4,135 |
| 1,620 |
| 12,087 |
| 14,748 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Loss on extinguishment of debt |
| — |
| — |
| 45 |
| — |
| ||||
Interest expense |
| 625 |
| 835 |
| 2,872 |
| 3,254 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Earnings before income taxes |
| 3,510 |
| 785 |
| 9,170 |
| 11,494 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income taxes |
| 1,390 |
| 284 |
| 3,811 |
| 4,751 |
| ||||
|
|
|
|
|
|
|
|
|
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Net earnings |
| $ | 2,120 |
| $ | 501 |
| $ | 5,359 |
| $ | 6,743 |
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|
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Net earnings per common share: |
|
|
|
|
|
|
|
|
| ||||
- Basic |
| $ | 0.07 |
| $ | 0.02 |
| $ | 0.17 |
| $ | 0.21 |
|
- Diluted |
| $ | 0.07 |
| $ | 0.02 |
| $ | 0.17 |
| $ | 0.21 |
|
|
|
|
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|
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Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
- Basic |
| 31,646 |
| 31,558 |
| 31,645 |
| 31,555 |
| ||||
- Diluted |
| 31,646 |
| 31,558 |
| 31,645 |
| 31,555 |
| ||||
(1) | Gaming revenues from the Company’s slot machine and table game operations include the total win from such operations. The Delaware State Lottery Office collects the win and remits a portion thereof to the Company as its commission for acting as a Licensed Agent. The difference between total win and the amount remitted to the Company is reflected in gaming expenses. |
(2) | Other operating revenues do not include the retail amount of promotional allowances which are provided to customers on a complimentary basis. |
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
|
| December 31, |
| December 31, |
| ||
|
| 2011 |
| 2010 |
| ||
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash |
| $ | 18,634 |
| $ | 18,819 |
|
Accounts receivable |
| 3,982 |
| 3,098 |
| ||
Due from State of Delaware |
| 9,440 |
| 9,829 |
| ||
Inventories |
| 1,860 |
| 1,989 |
| ||
Prepaid expenses and other |
| 3,659 |
| 2,551 |
| ||
Receivable from Dover Motorsports, Inc. |
| — |
| 18 |
| ||
Income taxes receivable |
| — |
| 617 |
| ||
Deferred income taxes |
| 1,317 |
| 1,349 |
| ||
Total current assets |
| 38,892 |
| 38,270 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
| 176,415 |
| 186,227 |
| ||
Other assets |
| 877 |
| 789 |
| ||
Total assets |
| $ | 216,184 |
| $ | 225,286 |
|
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|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
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| ||
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Current liabilities: |
|
|
|
|
| ||
Accounts payable |
| $ | 4,035 |
| $ | 3,742 |
|
Purses due horsemen |
| 9,004 |
| 9,829 |
| ||
Accrued liabilities |
| 11,912 |
| 12,286 |
| ||
Payable to Dover Motorsports, Inc. |
| 11 |
| — |
| ||
Income taxes payable |
| 444 |
| — |
| ||
Deferred revenue |
| 254 |
| 307 |
| ||
Total current liabilities |
| 25,660 |
| 26,164 |
| ||
|
|
|
|
|
| ||
Revolving line of credit |
| 69,000 |
| 78,600 |
| ||
Liability for pension benefits |
| 5,570 |
| 4,949 |
| ||
Other liabilities |
| 147 |
| 598 |
| ||
Deferred income taxes |
| 3,301 |
| 4,224 |
| ||
Total liabilities |
| 103,678 |
| 114,535 |
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock |
| 1,576 |
| 1,564 |
| ||
Class A common stock |
| 1,660 |
| 1,660 |
| ||
Additional paid-in capital |
| 3,464 |
| 2,721 |
| ||
Retained earnings |
| 108,090 |
| 106,432 |
| ||
Accumulated other comprehensive loss |
| (2,284 | ) | (1,626 | ) | ||
Total stockholders’ equity |
| 112,506 |
| 110,751 | �� | ||
Total liabilities and stockholders’ equity |
| $ | 216,184 |
| $ | 225,286 |
|
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
|
| Years Ended |
| ||||
|
| December 31, |
| ||||
|
| 2011 |
| 2010 |
| ||
|
|
|
|
|
| ||
Operating activities: |
|
|
|
|
| ||
Net earnings |
| $ | 5,359 |
| $ | 6,743 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
| ||
Depreciation |
| 11,665 |
| 12,059 |
| ||
Amortization of credit facility origination fees |
| 90 |
| 72 |
| ||
Stock-based compensation |
| 905 |
| 1,192 |
| ||
Deferred income taxes |
| (389 | ) | (85 | ) | ||
Loss on extinguishment of debt |
| 45 |
| — |
| ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| (884 | ) | (462 | ) | ||
Due from State of Delaware |
| 389 |
| 1,240 |
| ||
Inventories |
| 129 |
| (168 | ) | ||
Prepaid expenses and other |
| (995 | ) | (392 | ) | ||
Accounts payable |
| 604 |
| 664 |
| ||
Purses due horsemen |
| (825 | ) | (390 | ) | ||
Accrued liabilities |
| (374 | ) | 3,498 |
| ||
Payable to/receivable from Dover Motorsports, Inc. |
| 29 |
| (13 | ) | ||
Income taxes payable/receivable |
| 869 |
| (187 | ) | ||
Deferred revenue |
| (53 | ) | 1 |
| ||
Other liabilities |
| (913 | ) | (278 | ) | ||
Net cash provided by operating activities |
| 15,651 |
| 23,494 |
| ||
|
|
|
|
|
| ||
Investing activities: |
|
|
|
|
| ||
Capital expenditures |
| (1,853 | ) | (5,576 | ) | ||
Proceeds from sale of available-for-sale securities |
| 214 |
| 65 |
| ||
Purchase of available-for-sale securities |
| (291 | ) | (67 | ) | ||
Net cash used in investing activities |
| (1,930 | ) | (5,578 | ) | ||
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|
|
|
| ||
Financing activities: |
|
|
|
|
| ||
Borrowings from revolving line of credit |
| 180,683 |
| 116,300 |
| ||
Repayments of revolving line of credit |
| (190,283 | ) | (132,825 | ) | ||
Dividends paid |
| (3,888 | ) | (3,870 | ) | ||
Repurchase of common stock |
| (150 | ) | (117 | ) | ||
Credit facility fees |
| (268 | ) | — |
| ||
Net cash used in financing activities |
| (13,906 | ) | (20,512 | ) | ||
|
|
|
|
|
| ||
Net decrease in cash |
| (185 | ) | (2,596 | ) | ||
Cash, beginning of period |
| 18,819 |
| 21,415 |
| ||
Cash, end of period |
| $ | 18,634 |
| $ | 18,819 |
|