Dover Downs Gaming & Entertainment, Inc. Reports Results for the Second Quarter Ended June 30, 2012

Thu Jul 26, 2012 8:10am EDT

* Reuters is not responsible for the content in this press release.

Dover Downs Gaming & Entertainment, Inc. Reports Results for the Second Quarter Ended June 30, 2012

Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2012.

The Company’s revenues for the second quarter of 2012 were $58,355,000 compared with $58,815,000 for the second quarter of 2011. Gaming revenues were $52,331,000 compared to $53,129,000 for the second quarter of last year, with lower slot win being somewhat offset by improved table game win.

Occupancy levels in the Dover Downs Hotel were approximately 93% for the second quarter of 2012 compared with approximately 91% last year.

With lower general and administrative, depreciation and interest expenses, net earnings improved 46.8% to $1,817,000 compared with $1,238,000 for the second quarter of 2011. Earnings per diluted share were $.06 compared with $.04 per diluted share for the second quarter of 2011.

Denis McGlynn, the Company's President and Chief Executive Officer, stated: "The second quarter saw several more casinos added to an already crowded market. While it is far too early to understand the long-term impact these new properties will have on our business levels, we believe the quality of our property and amenities will allow us to compete effectively. We are thankful that the State has recognized the challenges we face and has taken steps to improve our competitiveness with the reduction of certain fees and the approval of internet gaming, and look forward to their continued collaboration and partnership as the competitive environment continues to evolve.”

The Company announced yesterday that its Board of Directors declared a quarterly dividend of $.03 per share payable on September 10, 2012 to shareholders of record at the close of business on August 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 Six Months Ended
June 30, June 30,
2012 2011 2012 2011
Revenues:
Gaming (1) $ 52,331 $ 53,129 $ 110,805 $ 107,461

Other operating (2)

  6,024   5,686   11,634   10,760
  58,355   58,815   122,439   118,221
Expenses:
Gaming 46,479 47,229 97,443 96,706
Other operating 4,339 4,176 8,239 8,049
General and administrative 1,508 1,614 3,064 3,393
Depreciation   2,566   2,901   5,246   6,045
  54,892   55,920   113,992   114,193
 
Operating earnings 3,463 2,895 8,447 4,028
 
Loss on extinguishment of debt - 45 - 45
Interest expense   426   790   1,012   1,601
 
Earnings before income taxes 3,037 2,060 7,435 2,382
 
Income taxes   1,220   822   3,247   1,182
 
Net earnings $ 1,817 $ 1,238 $ 4,188 $ 1,200
 
Net earnings per common share:
- Basic $ 0.06 $ 0.04 $ 0.13 $ 0.04
- Diluted $ 0.06 $ 0.04 $ 0.13 $ 0.04
 
Weighted average shares outstanding:
- Basic 31,745 31,646 31,744 31,645
- Diluted 31,745 31,646 31,744 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)
 
 
June 30, December 31,
  2012     2011  
ASSETS
 
Current assets:
Cash $ 17,552 $ 18,634
Accounts receivable 2,631 3,982
Due from State of Delaware 6,295 9,440
Inventories 2,054 1,860
Prepaid expenses and other 5,295 3,659
Receivable from Dover Motorsports, Inc. 2 -
Deferred income taxes   1,367     1,317  
Total current assets 35,196 38,892
 
Property and equipment, net 173,016 176,415
Other assets   814     877  
Total assets $ 209,026   $ 216,184  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 3,831 $ 4,035
Purses due horsemen 6,291 9,004
Accrued liabilities 9,336 11,912
Payable to Dover Motorsports, Inc. - 11
Income taxes payable 72 444
Deferred revenue   362     254  
Total current liabilities 19,892 25,660
 
Revolving line of credit 64,940 69,000
Liability for pension benefits 5,266 5,570
Other liabilities - 147
Deferred income taxes   3,776     3,301  
Total liabilities   93,874     103,678  
 
Stockholders’ equity:
Common stock 1,590 1,576
Class A common stock 1,660 1,660
Additional paid-in capital 3,751 3,464
Retained earnings 110,328 108,090
Accumulated other comprehensive loss   (2,177 )   (2,284 )
Total stockholders’ equity   115,152     112,506  
Total liabilities and stockholders’ equity $ 209,026   $ 216,184  
   
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Six Months Ended
June 30,
  2012     2011  
 
Operating activities:
Net earnings $ 4,188 $ 1,200

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation 5,246 6,045
Amortization of credit facility origination fees 46 44
Stock-based compensation 408 518
Deferred income taxes 345 188
Loss on extinguishment of debt - 45
Changes in assets and liabilities:
Accounts receivable 1,351 1,407
Due from State of Delaware 3,145 5,029
Inventories (194 ) (115 )
Prepaid expenses and other (1,608 ) (2,548 )
Receivable from/payable to Dover Motorsports, Inc. (13 ) 14
Accounts payable (204 ) (228 )
Purses due horsemen (2,713 ) (5,012 )
Accrued liabilities (2,576 ) (4,999 )
Income taxes payable (371 ) (12 )
Deferred revenue 108 -
Other liabilities   (276 )   209  
Net cash provided by operating activities   6,882     1,785  
 
Investing activities:
Capital expenditures (1,847 ) (959 )
Proceeds from sale of available-for-sale securities - 21
Purchase of available-for-sale securities   -     (95 )
Net cash used in investing activities   (1,847 )   (1,033 )
 
Financing activities:
Borrowings from revolving line of credit 11,630 154,577
Repayments of revolving line of credit (15,690 ) (158,077 )
Dividends paid (1,950 ) (1,944 )
Repurchase of common stock (107 ) (150 )
Credit facility fees   -     (268 )
Net cash used in financing activities   (6,117 )   (5,862 )
 
Net decrease in cash (1,082 ) (5,110 )
Cash, beginning of period   18,634     18,819  
Cash, end of period $ 17,552   $ 13,709  

Dover Downs Gaming & Entertainment, Inc.
Timothy R. Horne - Sr. Vice President-Finance
302-857-3292

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.