Dover Downs swung to the loss column in the 4th quarter, as Sandy, competition take toll. In response to the conditions, the board of the one-casino company suspended the dividend.
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 percent 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 affected these revenues. Occupancy levels in the Dover Downs Hotel were about 81 percent for the fourth quarter of 2012 compared with approximately 87 percent 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 CEO 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.
