Dover Downs Gaming & Entertainment, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2012
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http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130124:nBw245287a http://www.businesswire.com/news/home/20130124005287/en DOVER, Del.--(Business Wire)-- 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 Dover Downs Gaming & Entertainment, Inc. Timothy R. Horne - Sr. Vice President-Finance 302-857-3292 Copyright Business Wire 2013
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