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The Company's revenues fell 2.4% to $58,530,000 compared with $59,971,000 for the second quarter of 2008.
Gaming expenses were higher from increased gaming taxes and slot machine fees that resulted from legislation passed in June of 2008 that became effective on July 1, 2008, and from legislation passed in May of 2009 that became effective on May 28, 2009. These increases were approximately $1.8 million for the second quarter of 2009.
Depreciation expense increased $594,000, primarily related to the casino expansion.
Net earnings were $3,938,000 compared with $5,698,000 for the second quarter of 2008. Net earnings per diluted share were $.12 for the quarter compared with $.18 per diluted share in the second quarter of 2008.
Denis McGlynn, President and CEO of Dover Downs Gaming & Entertainment, Inc. stated, "The improvements we have made to our property have allowed us to hold up pretty well in what remains a challenging environment. We look forward to the introduction of sports wagering in Delaware sometime this Fall, and will be working with the State to try to have table games operational as soon as possible."
The Company announced yesterday that its Board of Directors declared a regular quarterly dividend of $.05 per share. The dividend is payable on September 10, 2009 to shareholders of record at the close of business on August 10, 2009.
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.
Dover Downs Gaming & Entertainment, Inc. is a diversified gaming and entertainment company whose operations consist of Dover Downs Slots - a 165,000-square foot video lottery casino complex featuring the latest in slot machine offerings, including multi-player electronic table games with virtual dealers; the Dover Downs Hotel and Conference Center - a 500 room AAA Four Diamond hotel with conference, banquet, fine dining, ballroom and concert hall facilities; and Dover Downs Raceway - a harness racing track with pari-mutuel wagering on live and simulcast horse races.
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
Revenues:
Gaming (1) $ 53,310 $ 54,643 $ 108,213 $ 110,643
Other operating (2) 5,220 5,328 9,397 9,117
58,530 59,971 117,610 119,760
Expenses:
Gaming 42,463 41,443 85,616 83,854
Other operating 3,908 4,182 7,251 7,481
General and administrative 1,778 1,596 3,508 3,360
Depreciation 3,073 2,479 6,021 4,860
51,222 49,700 102,396 99,555
Operating earnings 7,308 10,271 15,214 20,205
Interest expense 628 631 1,265 1,566
Earnings before income taxes 6,680 9,640 13,949 18,639
Income taxes 2,742 3,942 5,718 7,620
Net earnings $ 3,938 $ 5,698 $ 8,231 $ 11,019
Net earnings per common share:
- Basic $ 0.12 $ 0.18 $ 0.26 $ 0.35
- Diluted $ 0.12 $ 0.18 $ 0.26 $ 0.34
Weighted average shares outstanding:
- Basic 31,493 31,434 31,489 31,430
- Diluted 31,493 31,543 31,489 31,576
_________________________
(1) Gaming revenues from the Company's video lottery (slot) machine
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)
June 30, December 31,
2009 2008
ASSETS
Current assets:
Cash $ 19,097 $ 17,889
Accounts receivable 2,253 2,661
Due from State of Delaware 6,603 10,870
Inventories 2,083 2,025
Prepaid expenses and other 2,633 2,029
Prepaid income taxes 305 -
Deferred income taxes 1,285 1,317
Total current assets 34,259 36,791
Property and equipment, net 198,001 203,522
Other assets 1,041 1,019
Total assets $ 233,301 $ 241,332
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,589 $ 4,679
Purses due horsemen 5,408 9,395
Accrued liabilities 8,059 7,419
Payable to Dover Motorsports, Inc. 9 11
Income taxes payable - 619
Deferred revenue 233 212
Total current liabilities 16,298 22,335
Revolving line of credit 100,625 108,325
Liability for pension benefits 6,251 6,099
Deferred income taxes 3,600 3,488
Total liabilities 126,774 140,247
Stockholders' equity:
Common stock 1,546 1,521
Class A common stock 1,660 1,660
Additional paid-in capital 1,190 933
Retained earnings 104,286 99,263
Accumulated other comprehensive loss (2,155 ) (2,292 )
Total stockholders' equity 106,527 101,085
Total liabilities and stockholders' equity $ 233,301 $ 241,332
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
Six Months Ended
June 30,
2009 2008
Operating activities:
Net earnings $ 8,231 $ 11,019
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation 6,021 4,860
Amortization of credit facility origination fees 18 18
Stock-based compensation 478 527
Deferred income taxes (124 ) 87
Changes in assets and liabilities:
Accounts receivable 408 1,802
Due from State of Delaware 4,267 4,840
Inventories (58 ) (191 )
Prepaid expenses and other (527 ) (279 )
Prepaid income taxes/income taxes payable (887 ) (560 )
Accounts payable (510 ) 246
Purses due horsemen (3,987 ) (5,067 )
Accrued liabilities 640 (2,442 )
Payable to/receivable from Dover Motorsports, Inc. (2 ) (19 )
Deferred revenue 21 265
Other liabilities 267 (63 )
Net cash provided by operating activities 14,256 15,043
Investing activities:
Capital expenditures (2,081 ) (26,469 )
Purchase of available-for-sale securities - (100 )
Net cash used in investing activities (2,081 ) (26,569 )
Financing activities:
Borrowings from revolving line of credit 89,775 94,215
Repayments of revolving line of credit (97,475 ) (81,640 )
Dividends paid (3,208 ) (3,178 )
Repurchase of common stock (59 ) (1,040 )
Proceeds from stock options exercised - 366
Excess tax benefit on stock awards - 25
Net cash (used in) provided by financing activities (10,967 ) 8,748
Net increase (decrease) in cash 1,208 (2,778 )
Cash, beginning of period 17,889 22,456
Cash, end of period $ 19,097 $ 19,678
SOURCE: Dover Downs Gaming & Entertainment, Inc.
Dover Downs Gaming & Entertainment, Inc. Timothy R. Horne - Sr. Vice President-Finance 302-857-3292
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