DOVER, Del.--(BUSINESS WIRE)--Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2015.
Net earnings were $631,000 compared with $164,000 for the second quarter of 2014. Earnings per diluted share were $.02 compared with $.01 for the second quarter of 2014.
The Company’s revenues for the second quarter of 2015 were $45,301,000 compared with $46,206,000 for the second quarter of 2014. Gaming revenues were $38,058,000 compared to $39,284,000 for the second quarter of last year. The decline is primarily attributable to the competitive environment in the mid-Atlantic gaming market and a lower table game hold percentage in the second quarter of this year.
Other operating revenues increased to $7,243,000 compared to $6,922,000 for the second quarter of 2014 from higher cash rooms revenue and revenue associated with the Company taking over certain retail operations in the casino. Occupancy levels in the Dover Downs Hotel were approximately 85% for the second quarter of 2015 compared with 88% during the second quarter last year.
General and administrative, depreciation and interest expenses were each down slightly compared to the second quarter of 2014.
“Historically, the spring and summer months are stronger months for the company and that held true during our second quarter,” said Denis McGlynn President/CEO. “We benefitted from growth in hotel rooms revenue and a decision to take on-site retail operations in-house. Unfortunately, we also had to engage in another round of expense reductions which included the elimination of 72 jobs so far this year. We’re hopeful that the legislature will act on the recommendations of its own appointed study commission when the next session convenes in January and provide the gaming tax relief that was recommended.”
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.
Owned by Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE), Dover Downs Hotel & Casino® is a premier gaming and entertainment resort destination in the Mid-Atlantic region. Gaming operations consist of approximately 2,500 slots and a full complement of table games including poker. The AAA-rated Four Diamond hotel is Delaware’s largest with 500 luxurious rooms/suites and amenities including a full-service spa/salon, concert hall and 41,500 sq. ft. of multi-use event space. Live, world-class harness racing is featured November through April, and horse racing is simulcast year-round. Professional football parlay betting is accepted during the season. Additional property amenities include multiple restaurants from fine dining to casual fare, bars/lounges and retail shops. For more information, please visit www.doverdowns.com.
| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) | ||||||||||||||||
| In Thousands, Except Per Share Amounts | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenues: | ||||||||||||||||
| Gaming (1) | $ | 38,058 | $ | 39,284 | $ | 76,834 | $ | 79,066 | ||||||||
| Other operating (2) | 7,243 | 6,922 | 12,805 | 12,617 | ||||||||||||
| 45,301 | 46,206 | 89,639 | 91,683 | |||||||||||||
| Expenses: | ||||||||||||||||
| Gaming | 35,874 | 37,012 | 72,636 | 75,366 | ||||||||||||
| Other operating | 4,519 | 4,657 | 8,406 | 9,053 | ||||||||||||
| General and administrative | 1,338 | 1,423 | 2,834 | 2,816 | ||||||||||||
| Depreciation | 2,171 | 2,273 | 4,323 | 4,568 | ||||||||||||
| 43,902 | 45,365 | 88,199 | 91,803 | |||||||||||||
| Operating earnings (loss) | 1,399 | 841 | 1,440 | (120 | ) | |||||||||||
| Interest expense | (330 | ) | (440 | ) | (678 | ) | (900 | ) | ||||||||
| Earnings (loss) before income taxes | 1,069 | 401 | 762 | (1,020 | ) | |||||||||||
| Income tax (expense) benefit | (438 | ) | (237 | ) | (483 | ) | 131 | |||||||||
| Net earnings (loss) | $ | 631 | $ | 164 | $ | 279 | $ | (889 | ) | |||||||
| Net earnings (loss) per common share: | ||||||||||||||||
| - Basic | $ | 0.02 | $ | 0.01 | $ | 0.01 | $ | (0.03 | ) | |||||||
| - Diluted | $ | 0.02 | $ | 0.01 | $ | 0.01 | $ | (0.03 | ) | |||||||
| Weighted average shares outstanding: | ||||||||||||||||
| - Basic | 32,086 | 31,962 | 32,084 | 31,961 | ||||||||||||
| - Diluted | 32,086 | 31,962 | 32,084 | 31,961 | ||||||||||||
| _________________________ | ||
| (1) |
Gaming revenues from the Company’s slot machine and table game 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. |
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| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2015 | 2014 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 11,224 | $ | 10,079 | ||||
| Accounts receivable | 3,361 | 3,838 | ||||||
| Due from State of Delaware | 4,618 | 7,258 | ||||||
| Inventories | 1,846 | 1,783 | ||||||
| Prepaid expenses and other | 3,074 | 2,324 | ||||||
| Receivable from Dover Motorsports, Inc. | 22 | 22 | ||||||
| Income taxes receivable | - | 6 | ||||||
| Deferred income taxes | 1,284 | 1,243 | ||||||
|
Total current assets |
25,429 | 26,553 | ||||||
| Property and equipment, net | 148,699 | 152,107 | ||||||
| Other assets | 683 | 752 | ||||||
| Deferred income taxes | 658 | 404 | ||||||
| Total assets | $ | 175,469 | $ | 179,816 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,771 | $ | 3,975 | ||||
| Purses due horsemen | 4,621 | 6,917 | ||||||
| Accrued liabilities | 9,733 | 8,196 | ||||||
| Income taxes payable | 231 | - | ||||||
| Deferred revenue | 666 | 389 | ||||||
| Revolving line of credit | 34,900 | 39,010 | ||||||
| Total current liabilities | 53,922 | 58,487 | ||||||
| Liability for pension benefits | 8,742 | 8,980 | ||||||
| Total liabilities | 62,664 | 67,467 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 1,799 | 1,788 | ||||||
| Class A common stock | 1,487 | 1,487 | ||||||
| Additional paid-in capital | 5,244 | 5,125 | ||||||
| Retained earnings | 108,908 | 108,629 | ||||||
| Accumulated other comprehensive loss | (4,633 | ) | (4,680 | ) | ||||
| Total stockholders’ equity | 112,805 | 112,349 | ||||||
| Total liabilities and stockholders’ equity | $ | 175,469 | $ | 179,816 | ||||
| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2015 | 2014 | |||||||
| Operating activities: | ||||||||
| Net earnings (loss) | $ | 279 | $ | (889 | ) | |||
|
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: |
||||||||
| Depreciation | 4,323 | 4,568 | ||||||
| Amortization of credit facility origination fees | 54 | 91 | ||||||
| Stock-based compensation | 195 | 301 | ||||||
| Deferred income taxes | (325 | ) | (163 | ) | ||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 477 | 476 | ||||||
| Due from State of Delaware | 2,640 | 3,740 | ||||||
| Inventories | (63 | ) | 138 | |||||
| Prepaid expenses and other | (730 | ) | (987 | ) | ||||
| Receivable from/payable to Dover Motorsports, Inc. | - | (43 | ) | |||||
| Accounts payable | (204 | ) | (1,562 | ) | ||||
| Purses due horsemen | (2,296 | ) | (3,448 | ) | ||||
| Accrued liabilities | 1,537 | (505 | ) | |||||
| Income taxes payable/receivable | 236 | 5 | ||||||
| Deferred revenue | 277 | (137 | ) | |||||
| Liability for pension benefits | (163 | ) | (214 | ) | ||||
| Net cash provided by operating activities | 6,237 | 1,371 | ||||||
| Investing activities: | ||||||||
| Capital expenditures | (915 | ) | (521 | ) | ||||
| Purchase of available-for-sale securities | (3 | ) | (15 | ) | ||||
| Proceeds from sale of available-for-sale securities | 1 | 14 | ||||||
| Net cash used in investing activities | (917 | ) | (522 | ) | ||||
| Financing activities: | ||||||||
| Borrowings from revolving line of credit | 36,450 | 58,510 | ||||||
| Repayments of revolving line of credit | (40,560 | ) | (61,840 | ) | ||||
| Repurchase of common stock | (65 | ) | (104 | ) | ||||
| Net cash used in financing activities | (4,175 | ) | (3,434 | ) | ||||
| Net increase (decrease) in cash | 1,145 | (2,585 | ) | |||||
| Cash, beginning of period | 10,079 | 12,950 | ||||||
| Cash, end of period | $ | 11,224 | $ | 10,365 | ||||
