Dover Downs Gaming & Entertainment, Inc. was modestly profitable in the third quarter as higher lodging revenues and lower interest costs offset lower gaming results..
On the minus side, the company was notified this week by the New York Stock Exchange that the average closing price of its common stock had fallen below $1 a share for 30 consecutive trading days. That is below the minimum price set by the exchange.
On Thursday, shares were trading at about 80 cents each, up about 21 percent for the day.
Gaming revenues totaling $41,349,000 were down 5.5 percent compared to the third quarter of 2013.
Other operating revenues of $6,639,000 were up 4.8 percent compared to the third quarter of 2013. The improvement was from increased cash rooms revenue and food and beverage revenue. Occupancy levels in the Dover Downs Hotel were more than 91% for the third quarter of 2014.
Gaming expenses were lower from the lower gaming revenue and from the state sharing in a portion of slot machine vendor costs beginning July 1, 2014.
Net earnings were $699,000, compared with $223,000 or $.01 per diluted share for the third quarter of 2013.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “While the legislation that was passed on June 30 has been helpful, we have operated at a loss for the first nine months of the year. We’re continuing our discussions with the state with the goal of arriving at a new formula for the distribution of gaming revenues. Just as changes to the formula have been made over the years to steadily increase the state’s share, change is again needed to allow the gaming industry to earn a fair rate of return on their investments taking into account the increased gaming supply in the region.”
Regarding it stock listing Dover Downs has six months to regain compliance with the minimum share price requirement or be subject to delisting.
The rules allow compliance to be regained at any time during the six months if the stock has a closing share price of at least $1 on the last trading day of any calendar month during the period and also has an average closing share price of at least $1 over the 30-trading day period ending on the last trading day of that month.
The one-casino company has 10 business days to notify the NYSE of its intent to correct the situation.
Dover Downs has been hit by competition from neighboring states. Delaware also takes a large chunk of revenues.
Gaming operations consist of approximately 2,500 slots and table games including poker. Its hotel is Delaware’s largest with 500 rooms/suites and amenities including a full-service spa/salon, concert hall and 41,500 square feet of event space. Also offered is harness racing from November through April.
