Dover Downs Gaming & Entertainment, Inc. (Public, NYSE:DDE)



Web Site
Google Finance
SEC Filing

02 14, 2012
2011 Data
Check list:
1.Major Business.
One casino (90% of revenue ).  One 500 room hotel and horse racing(10% of revenue).

2.Balance sheet.
Recent Price: $2.43, Tangible book value:$3.47, Share outstanding: 32.40m shares, Market Cap:$79m.
Current asset: $39m, Current liability:$26m, Debt: $69m,  Cash:$18.6m.
Current ratio = 1.5.

3.Credit facility.
Principle at Mar. 2012: $85m. Mar. 2013:$80m. Mar. 2014: 75m.  Expire at June.2014.
Outstanding at Dec.31. 2011: $69m. Rate LIBOR+2.75.

4.Financial data by years.
201120102009200820072006200520042003
Revenue 240238233239242236 216207188
OP Income 12.114.721.536.546.9 45.9 4028.329.9
Net Income 5.46.711.319.526.1 25.3 26*16.317.2
CF-WC 17.62026.631.134.5 31.5 27.123.524.7
CAPX 1.95.64.540.252.1 22.1 5.56.36.4
Cash 18.618.821.417.922.5 20 2017.714.1
Debt 6978.695.1108.392.4 59.4 2451.931
Dividend/s 0.120.120.200.200.19 0.175 0.160.150.13

*Including gains on property sales pre-tax $5.8m.

5.Cost structure


6.Insider holding, options, Insider trading info, share buy back.
Common share: 15.8m. A share: 16.6m.
Henry Tippie(Chairman): 9.75m A share. (include 1.5m from Randall Rollins and some from Michele Rollins).
Randall Rollins: 2.1m A share
Jeffrey Rollins: 1m  A share
Gary Rollins:2.1m A share
Eugene Weaver: 1.7m A share
Denis McGlynn(CEO): 860k
Total insider hold 72% of A share and 8% of common share.
It seems Henry Tippie(Age 85) and Randall Rollins(Age: 80) are the original partner and both hold around 6m-7m A share. While  Randall  distribute around 5m to his wife and two sons.

7.Management compensation.
CEO 300k/year and remain the same since 2008. other compensation small. Kind of pretty low.
Options are all higher than current price.

8.Employee numbers. Revenue/Employee. Compensation/Employee.
Around 1300.

9.Industry comparison.
Other two in Delaware: 
Delaware Park, and Harrington Raceway.
Two new casinos will be opened at Maryland.

10.Auditor
KPMG

11.Major events.
(1)At 2002, its a spin off from Dover Motorsports(NYSE:DVD).
(2)At 2010, there is plan to merge DVD and DDE. Then dropped because of lawsuit.

12.Comments.
(1) Game tax burden: 2011 unknown. 2010 increased by $5.6m compare to 2009. 2009 increased by $10m compare to 2008.
At 2009 there is a deal to legalize table games for exchange of tax for slot machine is 43.5% at 2010. (might be 37% previously) Table game: 29.4% + 13m(or 6.75m at 2011) license fee/year.
It seems the tax rate won't go higher since it is already very high compare to neighbourhood states.
(2) New casino's: Since Maryland's customer accounts for 40% of its revenue.
"The projected June 2012 opening of a large casino at Anne Arundel Mills in Maryland is expected to have a significant adverse affect on our visitation numbers, our employee headcount, our revenues and our profitability."
(3)Seems a capable management with low compensation. While the chairman now is 85 which comes as a risk.
(4)Need to wait to see how the tax and new casino affect this company.


Links:
http://ggbmagazine.com/issue/vol-10-no-7-july-2011/article/delaware-dilemma

http://casinoconnectionac.com/issue/vol-8-no-10-october-2011/article/delaware-considers-slashing-gaming-tax

http://www.delawarefirst.org/1415-subtraction-by-addition-delawares-casino-expansion-battle/