Dover Downs Gaming & Entertainment, Inc. Reports Results for the Fourth Quarter and Year Ended Decem

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Dover Downs Gaming & Entertainment, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2012

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. (NYS: 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 EndedYears Ended
December 31,December 31,
2012201120122011
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:
Gaming41,00048,468182,951193,392
Other operating4,0094,78516,35916,510
General and administrative1,5061,4346,0346,288
Depreciation 2,528  2,797 10,297 11,665
 49,043  57,484 215,641 227,855
 
Operating (loss) earnings(484)4,13510,27112,087
 
Loss on extinguishment of debt---45
Interest expense 388  625 1,805 2,872
 
(Loss) earnings before income taxes(872)3,5108,4669,170
 
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:
- Basic31,74531,64631,74531,645
- Diluted31,74531,64631,74531,645
 

________________________

(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,
20122011
ASSETS
 
Current assets:
Cash$14,993$18,634
Accounts receivable4,0933,982
Due from State of Delaware9,7089,440
Inventories1,9211,860
Prepaid expenses and other3,2073,659
Income taxes receivable155-
Deferred income taxes 1,284  1,317 
Total current assets35,36138,892
 
Property and equipment, net168,963176,415
Other assets 938  877 
Total assets$205,262 $216,184 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
Accounts payable$3,785$4,035
Purses due horsemen9,8339,004
Accrued liabilities10,36111,912
Payable to Dover Motorsports, Inc.-11
Income taxes payable-444
Deferred revenue 346  254 
Total current liabilities24,32525,660
 
Revolving line of credit58,50069,000
Liability for pension benefits6,9835,570
Other liabilities-147
Deferred income taxes 1,994  3,301 
Total liabilities 91,802  103,678 
 
Stockholders' equity:
Common stock1,5901,576
Class A common stock1,6601,660
Additional paid-in capital4,1363,464
Retained earnings109,322108,090
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,
20122011
 
Operating activities:
Net earnings$4,807$5,359

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

Depreciation10,29711,665
Amortization of credit facility origination fees10190
Stock-based compensation793905
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 other310(995)
Income taxes receivable/payable(928)869
Accounts payable(470)604
Purses due horsemen829(825)
Accrued liabilities(1,571)(374)
Payable to Dover Motorsports, Inc.(11)29
Deferred revenue92(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 credit19,620180,683
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 Read Full Story

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