Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: |
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, January 24, 2013 | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS RESULTS
FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2012
Dover Downs Gaming & Entertainment, Inc. (NYSE-DDE) today reported results for the fourth quarter and year ended December 31, 2012.
The Company’s revenues were $48,559,000 for the fourth quarter of 2012 compared with $61,619,000 for the fourth quarter of 2011. Gaming revenue decreased 21.4% compared to the fourth quarter of last year as a result of increased competition in the region compounded by the impact of hurricane Sandy.
Other operating revenues declined to $5,310,000 from $6,600,000 due primarily to lower food and beverage revenue related to catering services for the NASCAR weekend in Dover which was held in the third quarter of this year compared to the fourth quarter of last year. The lower casino volume and the hurricane also impacted these revenues. Occupancy levels in the Dover Downs Hotel were approximately 81% for the fourth quarter of 2012 compared with approximately 87% for the fourth quarter of 2011.
Net loss was ($528,000), or ($.02) per diluted share, compared with net earnings of $2,120,000, or $.07 per diluted share for the fourth quarter of 2011.
Net earnings for the year were $4,807,000, or $.15 per diluted share compared with $5,359,000 or $.17 per diluted share for 2011.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “Gaming expansion in Maryland and Pennsylvania continues to depress gaming revenues in Delaware and we are keeping the Lottery Office and the Administration informed as to the impacts on our business and our ability to maintain current employment levels. We are encouraging a review of the gaming tax structure during the current legislative session.”
“At the same time, we continue to collaborate on a roll out of the nation’s most comprehensive internet gaming program — estimated to commence in the third quarter of 2013. We remain confident that Delaware’s internet casino offerings will be among the first to come online and set the standard for other states. Our goal remains to stay one step ahead of the competition and to continue offering our patrons the region’s finest amenities and richest gaming experiences.”
Given the competitive environment and recent financial results, the Company’s Board of Directors has suspended the quarterly dividend.
* * *
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 | | Years Ended | |
| | December 31, | | December 31, | |
| | 2012 | | 2011 | | 2012 | | 2011 | |
Revenues: | | | | | | | | | |
Gaming (1) | | $ | 43,249 | | $ | 55,019 | | $ | 203,055 | | $ | 217,415 | |
Other operating (2) | | 5,310 | | 6,600 | | 22,857 | | 22,527 | |
| | 48,559 | | 61,619 | | 225,912 | | 239,942 | |
Expenses: | | | | | | | | | |
Gaming | | 41,000 | | 48,468 | | 182,951 | | 193,392 | |
Other operating | | 4,009 | | 4,785 | | 16,359 | | 16,510 | |
General and administrative | | 1,506 | | 1,434 | | 6,034 | | 6,288 | |
Depreciation | | 2,528 | | 2,797 | | 10,297 | | 11,665 | |
| | 49,043 | | 57,484 | | 215,641 | | 227,855 | |
| | | | | | | | | |
Operating (loss) earnings | | (484 | ) | 4,135 | | 10,271 | | 12,087 | |
| | | | | | | | | |
Loss on extinguishment of debt | | — | | — | | — | | 45 | |
Interest expense | | 388 | | 625 | | 1,805 | | 2,872 | |
| | | | | | | | | |
(Loss) earnings before income taxes | | (872 | ) | 3,510 | | 8,466 | | 9,170 | |
| | | | | | | | | |
Income taxes | | (344 | ) | 1,390 | | 3,659 | | 3,811 | |
| | | | | | | | | |
Net (loss) earnings | | $ | (528 | ) | $ | 2,120 | | $ | 4,807 | | $ | 5,359 | |
| | | | | | | | | |
Net (loss) earnings per common share: | | | | | | | | | |
- Basic | | $ | (0.02 | ) | $ | 0.07 | | $ | 0.15 | | $ | 0.17 | |
- Diluted | | $ | (0.02 | ) | $ | 0.07 | | $ | 0.15 | | $ | 0.17 | |
| | | | | | | | | |
Weighted average shares outstanding: | | | | | | | | | |
- Basic | | 31,745 | | 31,646 | | 31,745 | | 31,645 | |
- Diluted | | 31,745 | | 31,646 | | 31,745 | | 31,645 | |
(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, | |
| | 2012 | | 2011 | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash | | $ | 14,993 | | $ | 18,634 | |
Accounts receivable | | 4,093 | | 3,982 | |
Due from State of Delaware | | 9,708 | | 9,440 | |
Inventories | | 1,921 | | 1,860 | |
Prepaid expenses and other | | 3,207 | | 3,659 | |
Income taxes receivable | | 155 | | — | |
Deferred income taxes | | 1,284 | | 1,317 | |
Total current assets | | 35,361 | | 38,892 | |
| | | | | |
Property and equipment, net | | 168,963 | | 176,415 | |
Other assets | | 938 | | 877 | |
Total assets | | $ | 205,262 | | $ | 216,184 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 3,785 | | $ | 4,035 | |
Purses due horsemen | | 9,833 | | 9,004 | |
Accrued liabilities | | 10,361 | | 11,912 | |
Payable to Dover Motorsports, Inc. | | — | | 11 | |
Income taxes payable | | — | | 444 | |
Deferred revenue | | 346 | | 254 | |
Total current liabilities | | 24,325 | | 25,660 | |
| | | | | |
Revolving line of credit | | 58,500 | | 69,000 | |
Liability for pension benefits | | 6,983 | | 5,570 | |
Other liabilities | | — | | 147 | |
Deferred income taxes | | 1,994 | | 3,301 | |
Total liabilities | | 91,802 | | 103,678 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock | | 1,590 | | 1,576 | |
Class A common stock | | 1,660 | | 1,660 | |
Additional paid-in capital | | 4,136 | | 3,464 | |
Retained earnings | | 109,322 | | 108,090 | |
Accumulated other comprehensive loss | | (3,248 | ) | (2,284 | ) |
Total stockholders’ equity | | 113,460 | | 112,506 | |
Total liabilities and stockholders’ equity | | $ | 205,262 | | $ | 216,184 | |
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
| | Years Ended | |
| | December 31, | |
| | 2012 | | 2011 | |
| | | | | |
Operating activities: | | | | | |
Net earnings | | $ | 4,807 | | $ | 5,359 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | |
Depreciation | | 10,297 | | 11,665 | |
Amortization of credit facility origination fees | | 101 | | 90 | |
Stock-based compensation | | 793 | | 905 | |
Deferred income taxes | | (318 | ) | (389 | ) |
Loss on extinguishment of debt | | — | | 45 | |
Changes in assets and liabilities: | | | | | |
Accounts receivable | | (111 | ) | (884 | ) |
Due from State of Delaware | | (268 | ) | 389 | |
Inventories | | (61 | ) | 129 | |
Prepaid expenses and other | | 310 | | (995 | ) |
Income taxes receivable/payable | | (928 | ) | 869 | |
Accounts payable | | (470 | ) | 604 | |
Purses due horsemen | | 829 | | (825 | ) |
Accrued liabilities | | (1,571 | ) | (374 | ) |
Payable to Dover Motorsports, Inc. | | (11 | ) | 29 | |
Deferred revenue | | 92 | | (53 | ) |
Other liabilities | | (325 | ) | (913 | ) |
Net cash provided by operating activities | | 13,166 | | 15,651 | |
| | | | | |
Investing activities: | | | | | |
Capital expenditures | | (2,625 | ) | (1,853 | ) |
Proceeds from sale of available-for-sale securities | | — | | 214 | |
Purchase of available-for-sale securities | | — | | (291 | ) |
Net cash used in investing activities | | (2,625 | ) | (1,930 | ) |
| | | | | |
Financing activities: | | | | | |
Borrowings from revolving line of credit | | 19,620 | | 180,683 | |
Repayments of revolving line of credit | | (30,120 | ) | (190,283 | ) |
Dividends paid | | (3,575 | ) | (3,888 | ) |
Repurchase of common stock | | (107 | ) | (150 | ) |
Credit facility fees | | — | | (268 | ) |
Net cash used in financing activities | | (14,182 | ) | (13,906 | ) |
| | | | | |
Net decrease in cash | | (3,641 | ) | (185 | ) |
Cash, beginning of period | | 18,634 | | 18,819 | |
Cash, end of period | | $ | 14,993 | | $ | 18,634 | |
