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TheStreet Open House

Dover Downs Gaming & Entertainment, Inc. Reports Results For The First Quarter Ended March 31, 2012

Stocks in this article: DDE

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
March 31,
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.

 
(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
 
Current assets:
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
 
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
March 31,
2012 2011
 
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:
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 )
 
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 )
 
Net decrease in cash (124 ) (3,341 )
Cash, beginning of period   18,634     18,819  
Cash, end of period $ 18,510   $ 15,478  
 




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