Dover Downs Gaming & Entertainment, Inc. Reports Results For The Fourth Quarter And Year Ended December 31, 2012

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  
 

Copyright Business Wire 2010

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