DOVER, Del. -- (Business Wire)
Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported
results for the three months ended March 31, 2011.
The Company’s revenues for the first quarter of 2011 were $59,406,000
compared with $56,050,000 for the first quarter of 2010. Gaming revenues
increased 5.1% compared to the first quarter of last year. The addition
of table games revenue for the quarter was partially offset by lower
slot win.
Gaming profits were lower compared to the first quarter of last year as
a result of the lower slot win, high gaming taxes, license fees and
costs associated with table game operations, and from higher marketing
costs during the quarter.
Other operating revenues increased 16.5% from higher cash hotel, food
and beverage revenues. Occupancy levels in the Dover Downs Hotel were
approximately 85% for the first quarter of 2011 compared with
approximately 73% for the first quarter of 2010.
Interest expense increased $128,000 during the quarter from slightly
higher interest rates offsetting lower outstanding borrowings.
The effective income tax rate for the quarter was 111.8% compared to
47.6% in the first quarter last year. The increase for this interim
period relates to the impact of a permanent book vs. tax difference
being magnified by the low pretax earnings. The Company expects the
effective income tax rate to approximate 40% for the year.
Net loss was $38,000, or $.00 per diluted share, compared with net
earnings of $1,673,000, or $.05 per diluted share for the first quarter
of 2010.
Denis McGlynn, the Company's President and Chief Executive Officer,
stated: "While we were able to grow revenues in an environment with many
economic and competitive challenges, the tax burdens at these business
levels remain significant. We are confident that we have the facility,
amenities and service standards to compete, but as so much of our
revenues come from out of state patrons, we cannot ignore that our
customers suddenly find that they have a multitude of other gaming
choices closer to home. A more reasonable gaming tax is needed for us to
be able to continue to reinvest in our facilities and to offer
compelling amenities and games offerings that will allow us to remain
the preferred gaming choice for these patrons. Long-term, structural
changes are needed to benefit all stakeholders in Delaware’s gaming
industry, including the State."
The Company announced yesterday that its Board of Directors declared a
quarterly dividend of $.03 per share payable on June 10, 2011 to
shareholders of record at the close of business on May 10, 2011.
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.
Dover Downs Gaming & Entertainment, Inc. is a diversified gaming and
entertainment company whose operations consist of Dover Downs Casino – a
165,000-square foot casino complex featuring popular table games, the
latest in slot machine offerings, multi-player electronic table games,
the Crown Royal poker room, and a Race & Sports Book operation; the
Dover Downs Hotel and Conference Center – a 500 room AAA Four Diamond
hotel with conference, banquet, fine dining, spa, retail, ballroom and
concert hall facilities; and Dover Downs Raceway – a harness racing
track with pari-mutuel wagering on live and simulcast horse races.
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DOVER DOWNS GAMING & ENTERTAINMENT, INC.
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CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
In Thousands, Except Per Share Amounts
|
|
(Unaudited)
|
|
| | | | | | | | | | | |
| | | | | | | | | | |
|
| | | | | | | | |
Three Months Ended
|
| | | | | | | | |
March 31,
|
| | | | | | | | |
2011
| |
2010
|
|
Revenues:
| | | | | | | | | | |
|
Gaming (1) | | | | | | |
$
|
54,332
| | |
$
|
51,696
|
|
Other operating (2) | | | | | |
| 5,074 |
| |
| 4,354 |
| | | | | | | | |
| 59,406 |
| |
| 56,050 |
|
Expenses:
| | | | | | | | | | |
|
Gaming
| | | | | | | | |
49,477
| | | |
43,972
|
|
Other operating
| | | | | | | |
3,873
| | | |
3,452
|
|
General and administrative
| | | | | | |
1,779
| | | |
1,727
|
|
Depreciation
| | | | | | |
| 3,144 |
| |
| 3,023 |
| | | | | | | | |
| 58,273 |
| |
| 52,174 |
| | | | | | | | | | |
|
|
Operating earnings
| | | | | | | |
1,133
| | | |
3,876
|
| | | | | | | | | | |
|
|
Interest expense
| | | | | | |
| 811 |
| |
| 683 |
| | | | | | | | | | |
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Earnings before income taxes
| | | | | | |
322
| | | |
3,193
|
| | | | | | | | | | |
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Income taxes
| | | | | | | |
| 360 |
| |
| 1,520 |
| | | | | | | | | | |
|
|
Net (loss) earnings
| | | | | | | $ | (38 | ) | | $ | 1,673 |
| | | | | | | | | | |
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Net earnings per common share:
| | | | | | | | |
|
- Basic
| | | | | | | | $ | - |
| | $ | 0.05 |
|
- Diluted
| | | | | | | | $ | - |
| | $ | 0.05 |
| | | | | | | | | | |
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Weighted average shares outstanding:
| | | | | | | |
|
- Basic
| | | | | | | | |
31,644
| | | |
31,548
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|
- Diluted
| | | | | | | | |
31,644
| | | |
31,548
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| (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.
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DOVER DOWNS GAMING & ENTERTAINMENT, INC.
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CONSOLIDATED BALANCE SHEETS
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In Thousands
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(Unaudited)
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| | | | | | | |
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| | | | | | | |
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| | | | | |
March 31,
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December 31,
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| | | | | |
2011
| |
2010
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ASSETS
| | | | | | | | |
| | | | | | | |
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Current assets:
| | | | | | | |
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Cash
| | | | | |
$
|
15,478
| | |
$
|
18,819
| |
|
Accounts receivable
| | | | | |
2,878
| | | |
3,098
| |
|
Due from State of Delaware
| | | | |
1,991
| | | |
9,829
| |
|
Inventories
| | | | | | |
2,169
| | | |
1,989
| |
|
Prepaid expenses and other
| | | | |
3,797
| | | |
2,551
| |
|
Receivable from Dover Motorsports, Inc.
| | | |
27
| | | |
18
| |
|
Prepaid income taxes
| | | | | |
-
| | | |
617
| |
|
Deferred income taxes
| | | |
| 1,407 |
| |
| 1,349 |
|
|
Total current assets
| | | | | |
27,747
| | | |
38,270
| |
| | | | | | | |
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Property and equipment, net
| | | | |
183,496
| | | |
186,227
| |
|
Other assets
| | | | |
| 833 |
| |
| 789 |
|
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Total assets
| | | | | $ | 212,076 |
| | $ | 225,286 |
|
| | | | | | | |
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| | | | | | | |
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LIABILITIES AND STOCKHOLDERS’ EQUITY
| | | | |
| | | | | | | |
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Current liabilities:
| | | | | | | |
|
Accounts payable
| | | | |
$
|
4,604
| | |
$
|
3,742
| |
|
Purses due horsemen
| | | | | |
2,265
| | | |
9,829
| |
|
Accrued liabilities
| | | | | |
7,759
| | | |
12,286
| |
|
Income taxes payable
| | | | | |
38
| | | |
-
| |
|
Deferred revenue
| | | | |
| 252 |
| |
| 307 |
|
|
Total current liabilities
| | | | |
14,918
| | | |
26,164
| |
| | | | | | | |
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Revolving line of credit
| | | | |
77,150
| | | |
78,600
| |
|
Liability for pension benefits
| | | |
5,207
| | | |
4,949
| |
|
Other liabilities
| | | | | |
498
| | | |
598
| |
|
Deferred income taxes
| | | |
| 4,161 |
| |
| 4,224 |
|
|
Total liabilities
| | | | |
| 101,934 |
| |
| 114,535 |
|
| | | | | | | |
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|
Stockholders’ equity:
| | | | | | |
|
Common stock
| | | | | |
1,580
| | | |
1,564
| |
|
Class A common stock
| | | | |
1,660
| | | |
1,660
| |
|
Additional paid-in capital
| | | | |
2,846
| | | |
2,721
| |
|
Retained earnings
| | | | | |
105,609
| | | |
106,432
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Accumulated other comprehensive loss
| | |
| (1,553 | ) | |
| (1,626 | ) |
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Total stockholders’ equity
| | | |
| 110,142 |
| |
| 110,751 |
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Total liabilities and stockholders’ equity
| | $ | 212,076 |
| | $ | 225,286 |
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| | | | |
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DOVER DOWNS GAMING & ENTERTAINMENT, INC.
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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In Thousands
|
|
(Unaudited)
|
| | | | |
|
| |
| |
| | | | | | |
Three Months Ended
|
| | | | | | |
March 31,
|
| | | | | | |
2011
| |
2010
|
| | | | | | | | |
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Operating activities:
| | | | | | | | |
|
Net (loss) earnings
| | | | | |
$
|
(38
|
)
| |
$
|
1,673
| |
Adjustments to reconcile net (loss) earnings to net cash (used in)
provided by operating activities:
| | | | | |
|
Depreciation
| | | | | | |
3,144
| | | |
3,023
| |
|
Amortization of credit facility origination fees
| | | | |
19
| | | |
16
| |
|
Stock-based compensation
| | | | | |
291
| | | |
311
| |
|
Deferred income taxes
| | | | | |
(402
|
)
| | |
(230
|
)
|
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Changes in assets and liabilities:
| | | | | | | |
|
Accounts receivable
| | | | | | |
220
| | | |
(1,081
|
)
|
|
Due from State of Delaware
| | | | | |
7,838
| | | |
7,772
| |
|
Inventories
| | | | | | | |
(180
|
)
| | |
(23
|
)
|
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Prepaid expenses and other
| | | | | |
(1,232
|
)
| | |
(288
|
)
|
|
Receivable from Dover Motorsports, Inc.
| | | | |
(9
|
)
| | |
(152
|
)
|
|
Accounts payable
| | | | | | |
1,058
| | | |
667
| |
|
Purses due horsemen
| | | | | | |
(7,564
|
)
| | |
(6,850
|
)
|
|
Accrued liabilities
| | | | | | |
(4,527
|
)
| | |
(2,147
|
)
|
|
Income taxes payable/prepaid income taxes
| | | | |
762
| | | |
1,750
| |
|
Deferred revenue
| | | | | | |
(55
|
)
| | |
(70
|
)
|
|
Other liabilities
| | | | | |
| 278 |
| |
| (165 | ) |
|
Net cash (used in) provided by operating activities
| | |
| (397 | ) | |
| 4,206 |
|
| | | | | | | | |
|
|
Investing activities:
| | | | | | | | |
|
Capital expenditures
| | | | | | |
(298
|
)
| | |
(509
|
)
|
|
Proceeds from sale of available-for-sale securities
| | | |
21
| | | |
-
| |
|
Purchase of available-for-sale securities
| | | |
| (95 | ) | |
| - |
|
|
Net cash used in investing activities
| | | |
| (372 | ) | |
| (509 | ) |
| | | | | | | | |
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Financing activities:
| | | | | | | | |
|
Borrowings from revolving line of credit
| | | | |
39,125
| | | |
33,000
| |
|
Repayments of revolving line of credit
| | | | |
(40,575
|
)
| | |
(38,150
|
)
|
|
Dividends paid
| | | | | | |
(972
|
)
| | |
(968
|
)
|
|
Repurchase of common stock
| | | | |
| (150 | ) | |
| (101 | ) |
|
Net cash used in financing activities
| | | |
| (2,572 | ) | |
| (6,219 | ) |
| | | | | | | | |
|
|
Net decrease in cash
| | | | | | |
(3,341
|
)
| | |
(2,522
|
)
|
|
Cash, beginning of period
| | | | |
| 18,819 |
| |
| 21,415 |
|
|
Cash, end of period
| | | | | | $ | 15,478 |
| | $ | 18,893 |
|
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|
Contacts:
Dover Downs Gaming & Entertainment, Inc.
Timothy R. Horne - Sr.
Vice President-Finance
302-857-3292
Source: Dover Downs Gaming & Entertainment, Inc.
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