Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended September 30, 2011.

Gaming revenues of $54,935,000 were down 8.3% compared to the third quarter of 2010. Lower slot win was offset to some extent by higher table game revenue for the quarter. Hurricane Irene forced the closure of the Company’s facility for almost an entire weekend in August contributing to the decline.

Other operating revenues of $5,167,000 were down 10.4% compared to the third quarter of 2010. The majority of that decline is related to the catering services provided to Dover Motorsports for their NASCAR weekend which was held in the fourth quarter of this year as compared to the third quarter of last year. Occupancy levels in the Dover Downs Hotel were approximately 95% for the third quarter of both years.

General and administrative costs were $1,461,000 compared with $1,912,000 in the third quarter of last year. The decline was related to cost savings from the freezing of the Company’s defined benefit pension plan and from legal and banking costs that were incurred in the third quarter last year.

Interest expense decreased $214,000 during the quarter as a result of lower average outstanding borrowings and lower interest rates.

Net earnings were $2,039,000, or $.06 per diluted share compared with $2,292,000 or $.07 per diluted share for the third quarter of 2010.

The Company announced yesterday that its Board of Directors declared a regular quarterly dividend of $.03 per share. The dividend is payable on December 10, 2011 to shareholders of record at the close of business on November 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.

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 2,600 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 35,000 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 EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
 
 
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
Revenues:
Gaming (1) $ 54,935 $ 59,934 $ 162,396 $ 164,352
Other operating (2)   5,167   5,766   15,927   15,856
  60,102   65,700   178,323   180,208
Expenses:
Gaming 48,218 51,696 144,924 140,497
Other operating 3,676 4,490 11,725 12,289
General and administrative 1,461 1,912 4,854 5,345
Depreciation   2,823   3,103   8,868   8,949
  56,178   61,201   170,371   167,080
 
Operating earnings 3,924 4,499 7,952 13,128
 
Loss on extinguishment of debt - - 45 -
Interest expense   646   860   2,247   2,419
 
Earnings before income taxes 3,278 3,639 5,660 10,709
 
Income taxes   1,239   1,347   2,421   4,467
 
Net earnings $ 2,039 $ 2,292 $ 3,239 $ 6,242
 
Net earnings per common share:
- Basic $ 0.06 $ 0.07 $ 0.10 $ 0.19
- Diluted $ 0.06 $ 0.07 $ 0.10 $ 0.19
 
Weighted average shares outstanding:
- Basic 31,646 31,558 31,645 31,554
- Diluted 31,646 31,558 31,645 31,554
 
 
(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)
 
 
September 30, December 31,
2011 2010
ASSETS
 
Current assets:
Cash $ 16,026 $ 18,819
Accounts receivable 1,984 3,098
Due from State of Delaware 10,252 9,829
Inventories 2,204 1,989
Prepaid expenses and other 4,512 2,551
Receivable from Dover Motorsports, Inc. 4 18
Prepaid income taxes 511 617
Deferred income taxes   1,321   1,349  
Total current assets 36,814 38,270
 
Property and equipment, net 178,797 186,227
Other assets   904   789  
Total assets $ 216,515 $ 225,286  
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 4,514 $ 3,742
Purses due horsemen 10,260 9,829
Accrued liabilities 8,310 12,286
Deferred revenue   265   307  
Total current liabilities 23,349 26,164
 
Revolving line of credit 71,515 78,600
Liability for pension benefits 2,470 4,949
Other liabilities 271 598
Deferred income taxes   5,645   4,224  
Total liabilities   103,250   114,535  
 
Stockholders’ equity:
Common stock 1,580 1,564
Class A common stock 1,660 1,660
Additional paid-in capital 3,300 2,721
Retained earnings 106,942 106,432
Accumulated other comprehensive loss   (217 )   (1,626 )
Total stockholders’ equity   113,265   110,751  
Total liabilities and stockholders’ equity $ 216,515 $ 225,286  
 
   
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Nine Months Ended
September 30,
2011 2010
 
Operating activities:
Net earnings $ 3,239 $ 6,242

Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation 8,868 8,949
Amortization of credit facility origination fees 67 53
Stock-based compensation 745 901
Deferred income taxes 320 (385 )
Loss on extinguishment of debt 45 -
Changes in assets and liabilities:
Accounts receivable 1,114 712
Due from State of Delaware (423 ) (698 )
Inventories (215 ) (334 )
Prepaid expenses and other (1,865 ) (881 )
Receivable from Dover Motorsports, Inc. 14 (35 )
Prepaid income taxes 146 (172 )
Accounts payable 1,083 560
Purses due horsemen 431 1,565
Accrued liabilities (3,976 ) 187
Deferred revenue (42 ) (46 )
Other liabilities   (412 )   (499 )
Net cash provided by operating activities   9,139     16,119  
 
Investing activities:
Capital expenditures (1,438 ) (4,556 )
Proceeds from sale of available-for-sale securities 127 46
Purchase of available-for-sale securities   (202 )   (48 )
Net cash used in investing activities   (1,513 )   (4,558 )
 
Financing activities:
Borrowings from revolving line of credit 168,943 90,585
Repayments of revolving line of credit (176,028 ) (103,610 )
Dividends paid (2,916 ) (2,903 )
Repurchase of common stock (150 ) (117 )
Credit facility fees   (268 )   -  
Net cash used in financing activities   (10,419 )   (16,045 )
 
Net decrease in cash (2,793 ) (4,484 )
Cash, beginning of period   18,819     21,415  
Cash, end of period $ 16,026   $ 16,931  
 

Copyright Business Wire 2010

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