Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: |
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, April 26, 2012 | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS
RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2012
Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended March 31, 2012.
Unseasonably mild winter weather and an extra day due to leap year contributed to an improved first quarter. The Company’s revenues for the first quarter of 2012 were $64,084,000 compared with $59,406,000 for the first quarter of 2011. Gaming revenues increased 7.6% compared to the first quarter of last year. Slot machine revenue improved approximately 6% compared to last year while table game revenue improved approximately 24%.
Gaming profits were also higher compared to the first quarter of last year as a result of the improved revenue and lower marketing and other costs.
Other operating revenues increased 10.6% from higher hotel, food and beverage revenues. Occupancy levels in the Dover Downs Hotel were approximately 89% for the first quarter of 2012 compared with approximately 85% for the first quarter of 2011.
General and administrative expenses decreased $223,000 during the quarter primarily from the freezing of the Company’s defined benefit pension plan in July 2011.
Interest expense decreased $225,000 during the quarter compared to the first quarter of 2011 due to lower interest rates and lower outstanding borrowings.
Net earnings were $2,371,000, or $.07 per diluted share, compared with a loss of $38,000, or $.00 per diluted share for the first quarter of 2011.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “While we may be seeing a slightly more confident consumer, warm weather and a favorable calendar were clearly big contributors to our year-over-year improvement for the quarter. Our investment in amenities has again allowed us to grow our market share during the quarter. We still face competitive challenges later this year and we are focusing on continuing to provide unmatched service to our customers while operating as efficiently as possible.”
The Company announced yesterday that its Board of Directors declared a quarterly dividend of $.03 per share payable on June 10, 2012 to shareholders of record at the close of business on May 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 41,500 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 OPERATIONS
In Thousands, Except Per Share Amounts
(Unaudited)
|
| Three Months Ended |
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|
| March 31, |
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|
| 2012 |
| 2011 |
| ||
Revenues: |
|
|
|
|
| ||
Gaming (1) |
| $ | 58,474 |
| $ | 54,332 |
|
Other operating (2) |
| 5,610 |
| 5,074 |
| ||
|
| 64,084 |
| 59,406 |
| ||
Expenses: |
|
|
|
|
| ||
Gaming |
| 50,964 |
| 49,477 |
| ||
Other operating |
| 3,900 |
| 3,873 |
| ||
General and administrative |
| 1,556 |
| 1,779 |
| ||
Depreciation |
| 2,680 |
| 3,144 |
| ||
|
| 59,100 |
| 58,273 |
| ||
|
|
|
|
|
| ||
Operating earnings |
| 4,984 |
| 1,133 |
| ||
|
|
|
|
|
| ||
Interest expense |
| 586 |
| 811 |
| ||
|
|
|
|
|
| ||
Earnings before income taxes |
| 4,398 |
| 322 |
| ||
|
|
|
|
|
| ||
Income taxes |
| 2,027 |
| 360 |
| ||
|
|
|
|
|
| ||
Net earnings (loss) |
| $ | 2,371 |
| $ | (38 | ) |
|
|
|
|
|
| ||
Net earnings per common share: |
|
|
|
|
| ||
- Basic |
| $ | 0.07 |
| $ | — |
|
- Diluted |
| $ | 0.07 |
| $ | — |
|
|
|
|
|
|
| ||
Weighted average shares outstanding: |
|
|
|
|
| ||
- Basic |
| 31,743 |
| 31,644 |
| ||
- Diluted |
| 31,743 |
| 31,644 |
| ||
(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. |
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|
(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)
|
| March 31, |
| December 31, |
| ||
|
| 2012 |
| 2011 |
| ||
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
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Current assets: |
|
|
|
|
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Cash |
| $ | 18,510 |
| $ | 18,634 |
|
Accounts receivable |
| 3,753 |
| 3,982 |
| ||
Due from State of Delaware |
| 3,607 |
| 9,440 |
| ||
Inventories |
| 1,908 |
| 1,860 |
| ||
Prepaid expenses and other |
| 3,606 |
| 3,659 |
| ||
Receivable from Dover Motorsports, Inc. |
| 1 |
| — |
| ||
Deferred income taxes |
| 1,361 |
| 1,317 |
| ||
Total current assets |
| 32,746 |
| 38,892 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
| 174,262 |
| 176,415 |
| ||
Other assets |
| 857 |
| 877 |
| ||
Total assets |
| $ | 207,865 |
| $ | 216,184 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
|
|
|
|
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Current liabilities: |
|
|
|
|
| ||
Accounts payable |
| $ | 3,870 |
| $ | 4,035 |
|
Purses due horsemen |
| 3,701 |
| 9,004 |
| ||
Accrued liabilities |
| 10,391 |
| 11,912 |
| ||
Payable to Dover Motorsports, Inc. |
| — |
| 11 |
| ||
Income taxes payable |
| 2,104 |
| 444 |
| ||
Deferred revenue |
| 270 |
| 254 |
| ||
Total current liabilities |
| 20,336 |
| 25,660 |
| ||
|
|
|
|
|
| ||
Revolving line of credit |
| 64,500 |
| 69,000 |
| ||
Liability for pension benefits |
| 5,380 |
| 5,570 |
| ||
Other liabilities |
| 23 |
| 147 |
| ||
Deferred income taxes |
| 3,528 |
| 3,301 |
| ||
Total liabilities |
| 93,767 |
| 103,678 |
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock |
| 1,590 |
| 1,576 |
| ||
Class A common stock |
| 1,660 |
| 1,660 |
| ||
Additional paid-in capital |
| 3,558 |
| 3,464 |
| ||
Retained earnings |
| 109,486 |
| 108,090 |
| ||
Accumulated other comprehensive loss |
| (2,196 | ) | (2,284 | ) | ||
Total stockholders’ equity |
| 114,098 |
| 112,506 |
| ||
Total liabilities and stockholders’ equity |
| $ | 207,865 |
| $ | 216,184 |
|
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
|
| Three Months Ended |
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|
| March 31, |
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|
| 2012 |
| 2011 |
| ||
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|
|
|
|
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Operating activities: |
|
|
|
|
| ||
Net earnings (loss) |
| $ | 2,371 |
| $ | (38 | ) |
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
| ||
Depreciation |
| 2,680 |
| 3,144 |
| ||
Amortization of credit facility origination fees |
| 23 |
| 19 |
| ||
Stock-based compensation |
| 215 |
| 291 |
| ||
Deferred income taxes |
| 116 |
| (402 | ) | ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| 229 |
| 220 |
| ||
Due from State of Delaware |
| 5,833 |
| 7,838 |
| ||
Inventories |
| (48 | ) | (180 | ) | ||
Prepaid expenses and other |
| 66 |
| (1,232 | ) | ||
Receivable from/payable to Dover Motorsports, Inc. |
| (12 | ) | (9 | ) | ||
Accounts payable |
| (165 | ) | 1,058 |
| ||
Purses due horsemen |
| (5,303 | ) | (7,564 | ) | ||
Accrued liabilities |
| (1,521 | ) | (4,527 | ) | ||
Income taxes payable |
| 1,661 |
| 762 |
| ||
Deferred revenue |
| 16 |
| (55 | ) | ||
Other liabilities |
| (176 | ) | 278 |
| ||
Net cash provided by (used in) operating activities |
| 5,985 |
| (397 | ) | ||
|
|
|
|
|
| ||
Investing activities: |
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|
|
|
| ||
Capital expenditures |
| (527 | ) | (298 | ) | ||
Proceeds from sale of available-for-sale securities |
| — |
| 21 |
| ||
Purchase of available-for-sale securities |
| — |
| (95 | ) | ||
Net cash used in investing activities |
| (527 | ) | (372 | ) | ||
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|
|
|
|
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Financing activities: |
|
|
|
|
| ||
Borrowings from revolving line of credit |
| 4,230 |
| 39,125 |
| ||
Repayments of revolving line of credit |
| (8,730 | ) | (40,575 | ) | ||
Dividends paid |
| (975 | ) | (972 | ) | ||
Repurchase of common stock |
| (107 | ) | (150 | ) | ||
Net cash used in financing activities |
| (5,582 | ) | (2,572 | ) | ||
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|
|
|
|
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Net decrease in cash |
| (124 | ) | (3,341 | ) | ||
Cash, beginning of period |
| 18,634 |
| 18,819 |
| ||
Cash, end of period |
| $ | 18,510 |
| $ | 15,478 |
|