Dover Downs Gaming & Entertainment Inc. (DDE, Financial) filed Quarterly Report for the period ended 2010-06-30.
Dover Downs Gaming & Entertainment Inc. has a market cap of $106.8 million; its shares were traded at around $3.31 with a P/E ratio of 12.7 and P/S ratio of 0.5. The dividend yield of Dover Downs Gaming & Entertainment Inc. stocks is 3.6%. Dover Downs Gaming & Entertainment Inc. had an annual average earning growth of 5.1% over the past 10 years.DDE is in the portfolios of Private Capital of Private Capital Management, Jim Simons of Renaissance Technologies LLC.
Other operating revenues were $10,090,000 in the first six months of 2010 as compared to $9,397,000 in the first six months of 2009. Cash rooms revenue increased $408,000 in the first six months of 2010 mainly due to an increase in convention and transient sales. Cash food and beverage revenues increased $575,000 to $6,543,000 from $5,968,000 in the first six months of 2009 due primarily to higher banquet sales and the opening of our Race & Sports Book restaurant and Frankies Italian restaurant in September 2009. Partially offsetting these increases was a decrease in our cash services revenue. Other operating revenues do not include the retail amount of promotional allowances which are provided to customers on a complimentary basis of $8,278,000 and $8,767,000 in the first six months of 2010 and 2009, respectively.
Net cash used in financing activities was $12,153,000 for the six months ended June 30, 2010 compared to $10,967,000 for the six months ended June 30, 2009. During the first six months of 2010, we repaid $10,100,000 of our credit facility. During the first six months of 2009, we repaid $7,700,000 of our credit facility. We paid $1,936,000 and $3,208,000 in cash dividends during the first six months of 2010 and 2009, respectively. We repurchased and retired $117,000 of our outstanding common stock during the first six months of 2010 compared to $59,000 during the first six months of 2009.
Based on current business conditions, we expect to make capital expenditures of approximately $4,000,000 to $4,500,000 during the remainder of 2010. Additionally, we expect to contribute approximately $1,000,000 to our pension plans in 2010, of which $700,000 was contributed in the first six months of 2010.
At June 30, 2010, we had a $105,000,000 credit facility with a bank group. Effective February 19, 2010, the credit facility was amended to extend the maturity date, increase the maximum borrowing limit, revised certain financials covenants and change the margins used to determine interest rates. The maximum borrowing limit under the facility reduces to $95,000,000 on April 1, 2011 and to $82,500,000 on April 1, 2012 and the agreement terminates on January 1, 2013. Interest is based, at our option, upon LIBOR plus a margin that varies between 175 and 350 basis points (275 basis points at June 30, 2010) depending on the ratio of funded debt to earnings before interest, taxes, depreciation and amortization (the leverage ratio) or the base rate minus 100 basis points plus a margin that varies between 25 and 200 basis points (125 basis points at June 30, 2010) depending on the leverage ratio. In either case, the minimum interest rate on borrowings under the agreement ranges from 275 to 400 basis points depending on the leverage ratio (325 basis points at June 30, 2010). The base rate option is not available for the portion of indebtedness equal to the notional amount under our interest rate swap agreement. The credit facility has minimum net worth, interest coverage and maximum leverage requirements. Material adverse changes in our results of operations could impact our ability to satisfy these requirements. In addition, the credit agreement also includes a material adverse change clause. The facility is for seasonal funding needs, capital improvements and other general corporate purposes. At June 30, 2010, we were in compliance with all terms of the facility and there was $85,025,000 outstanding at a weighted average interest rate of 3.27%. At June 30, 2010, $19,975,000 was available pursuant to the facility.
At June 30, 2010, there was $85,025,000 outstanding under our revolving credit agreement. The credit agreement bears interest, at our option, upon LIBOR plus a margin that varies between 175 and 350 basis points (275 basis points at June 30, 2010) depending on the ratio of funded debt to earnings before interest, taxes, depreciation and amortization (the leverage ratio) or the base rate minus 100 basis points plus a margin that varies between 25 and 200 basis points (125 basis points at June 30, 2010) depending on the leverage ratio. In either case, the minimum interest rate on borrowings under the agreement ranges from 275 to 400 basis points depending on the leverage ratio (325 basis points at June 30, 2010). The base rate option is not available for the portion of indebtedness equal to the notional amount under our interest rate swap agreement. Therefore, we are subject to interest rate risk on the variable component of the interest rate. Historically, we managed our mix of fixed and variable rate debt by structuring the terms of our debt agreements. Effective January 15, 2009, we entered into an interest rate swap agreement that effectively converted $35,000,000 of our variable-rate debt to a fixed-rate basis, thereby hedging against the impact of potential interest rate changes on future interest expense. Pursuant to this agreement, we pay a fixed interest rate of 1.74%, plus a margin that varies between 175 and 350 basis points depending on our leverage ratio (275 basis points at June 30, 2010). In return, the issuing lender refunds to us the variable-rate interest paid to the bank group under our revolving credit agreement on the same notional principal amount, excluding the margin. The agreement terminates on April 17, 2012. As of June 30, 2010, the interest rate swap had a negative fair value of $626,000. An increase in interest rates of one percent would result in the interest rate swap having a fair value of approximately $15,000 at June 30, 2010. A decrease in interest rates of one percent would result in the interest rate swap having a negative fair value of approximately $1,248,000 at June 30, 2010. A change in interest rates will have no impact on the interest expense associated with the $35,000,000 of borrowings under the revolving credit agreement that are subject to the interest rate swap agreement. A change in interest rates of one percent on the outstanding borrowings under the revolving credit agreement at June 30, 2010 not subject to the interest rate swap would cause a change in total annual interest costs of $500,000. The borrowings under our revolving credit agreement bear interest at the variable rate described above and therefore approximate fair value at June 30, 2010.
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Dover Downs Gaming & Entertainment Inc. has a market cap of $106.8 million; its shares were traded at around $3.31 with a P/E ratio of 12.7 and P/S ratio of 0.5. The dividend yield of Dover Downs Gaming & Entertainment Inc. stocks is 3.6%. Dover Downs Gaming & Entertainment Inc. had an annual average earning growth of 5.1% over the past 10 years.DDE is in the portfolios of Private Capital of Private Capital Management, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Other operating revenues were $5,736,000 in the second quarter of 2010 as compared to $5,220,000 in the second quarter of 2009. Cash rooms revenue increased $288,000 in the second quarter of 2010 mainly due to an increase in convention and transient sales. Cash food and beverage revenues increased $510,000 to $3,670,000 from $3,160,000 in the second quarter of 2009 due primarily to higher banquet sales and the opening of our Race & Sports Book restaurant and Frankies Italian restaurant in September 2009. Partially offsetting these increases was a decrease in concert revenues as a result of promoting fewer concerts during the second quarter of 2010. Other operating revenues do not include the retail amount of promotional allowances which are provided to customers on a complimentary basis of $4,269,000 and $4,461,000 in the second quarter of 2010 and 2009, respectively.Other operating revenues were $10,090,000 in the first six months of 2010 as compared to $9,397,000 in the first six months of 2009. Cash rooms revenue increased $408,000 in the first six months of 2010 mainly due to an increase in convention and transient sales. Cash food and beverage revenues increased $575,000 to $6,543,000 from $5,968,000 in the first six months of 2009 due primarily to higher banquet sales and the opening of our Race & Sports Book restaurant and Frankies Italian restaurant in September 2009. Partially offsetting these increases was a decrease in our cash services revenue. Other operating revenues do not include the retail amount of promotional allowances which are provided to customers on a complimentary basis of $8,278,000 and $8,767,000 in the first six months of 2010 and 2009, respectively.
Net cash used in financing activities was $12,153,000 for the six months ended June 30, 2010 compared to $10,967,000 for the six months ended June 30, 2009. During the first six months of 2010, we repaid $10,100,000 of our credit facility. During the first six months of 2009, we repaid $7,700,000 of our credit facility. We paid $1,936,000 and $3,208,000 in cash dividends during the first six months of 2010 and 2009, respectively. We repurchased and retired $117,000 of our outstanding common stock during the first six months of 2010 compared to $59,000 during the first six months of 2009.
Based on current business conditions, we expect to make capital expenditures of approximately $4,000,000 to $4,500,000 during the remainder of 2010. Additionally, we expect to contribute approximately $1,000,000 to our pension plans in 2010, of which $700,000 was contributed in the first six months of 2010.
At June 30, 2010, we had a $105,000,000 credit facility with a bank group. Effective February 19, 2010, the credit facility was amended to extend the maturity date, increase the maximum borrowing limit, revised certain financials covenants and change the margins used to determine interest rates. The maximum borrowing limit under the facility reduces to $95,000,000 on April 1, 2011 and to $82,500,000 on April 1, 2012 and the agreement terminates on January 1, 2013. Interest is based, at our option, upon LIBOR plus a margin that varies between 175 and 350 basis points (275 basis points at June 30, 2010) depending on the ratio of funded debt to earnings before interest, taxes, depreciation and amortization (the leverage ratio) or the base rate minus 100 basis points plus a margin that varies between 25 and 200 basis points (125 basis points at June 30, 2010) depending on the leverage ratio. In either case, the minimum interest rate on borrowings under the agreement ranges from 275 to 400 basis points depending on the leverage ratio (325 basis points at June 30, 2010). The base rate option is not available for the portion of indebtedness equal to the notional amount under our interest rate swap agreement. The credit facility has minimum net worth, interest coverage and maximum leverage requirements. Material adverse changes in our results of operations could impact our ability to satisfy these requirements. In addition, the credit agreement also includes a material adverse change clause. The facility is for seasonal funding needs, capital improvements and other general corporate purposes. At June 30, 2010, we were in compliance with all terms of the facility and there was $85,025,000 outstanding at a weighted average interest rate of 3.27%. At June 30, 2010, $19,975,000 was available pursuant to the facility.
At June 30, 2010, there was $85,025,000 outstanding under our revolving credit agreement. The credit agreement bears interest, at our option, upon LIBOR plus a margin that varies between 175 and 350 basis points (275 basis points at June 30, 2010) depending on the ratio of funded debt to earnings before interest, taxes, depreciation and amortization (the leverage ratio) or the base rate minus 100 basis points plus a margin that varies between 25 and 200 basis points (125 basis points at June 30, 2010) depending on the leverage ratio. In either case, the minimum interest rate on borrowings under the agreement ranges from 275 to 400 basis points depending on the leverage ratio (325 basis points at June 30, 2010). The base rate option is not available for the portion of indebtedness equal to the notional amount under our interest rate swap agreement. Therefore, we are subject to interest rate risk on the variable component of the interest rate. Historically, we managed our mix of fixed and variable rate debt by structuring the terms of our debt agreements. Effective January 15, 2009, we entered into an interest rate swap agreement that effectively converted $35,000,000 of our variable-rate debt to a fixed-rate basis, thereby hedging against the impact of potential interest rate changes on future interest expense. Pursuant to this agreement, we pay a fixed interest rate of 1.74%, plus a margin that varies between 175 and 350 basis points depending on our leverage ratio (275 basis points at June 30, 2010). In return, the issuing lender refunds to us the variable-rate interest paid to the bank group under our revolving credit agreement on the same notional principal amount, excluding the margin. The agreement terminates on April 17, 2012. As of June 30, 2010, the interest rate swap had a negative fair value of $626,000. An increase in interest rates of one percent would result in the interest rate swap having a fair value of approximately $15,000 at June 30, 2010. A decrease in interest rates of one percent would result in the interest rate swap having a negative fair value of approximately $1,248,000 at June 30, 2010. A change in interest rates will have no impact on the interest expense associated with the $35,000,000 of borrowings under the revolving credit agreement that are subject to the interest rate swap agreement. A change in interest rates of one percent on the outstanding borrowings under the revolving credit agreement at June 30, 2010 not subject to the interest rate swap would cause a change in total annual interest costs of $500,000. The borrowings under our revolving credit agreement bear interest at the variable rate described above and therefore approximate fair value at June 30, 2010.
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