DOVER, Del.--(BUSINESS WIRE)--Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended September 30, 2016.
Gaming revenues of $41,295,000 were down 1.7% compared to the third quarter of 2015. The revenue decrease was primarily attributable to lower slot machine revenue.
Other operating revenues of $5,815,000 were up compared to the third quarter of 2015 from higher food and beverage and rooms revenue. Occupancy levels in the Dover Downs Hotel were 91.4% for the third quarter of this year.
General and administrative costs were down to $1,228,000 for the third quarter compared to $1,331,000 last year.
Depreciation and interest expense were lower during the quarter from limited capital spending and lower average outstanding borrowings.
Net earnings were $520,000, or $.02 per diluted share compared with $826,000 or $.03 per diluted share for the third quarter of 2015.
Denis McGlynn, the Company's President and Chief Executive Officer, stated: "We continue to do our best with what little the State allows us to retain from gaming revenues and, despite these limitations, we continue to enjoy excellent customer service ratings and employee morale.
“We use an outside contractor to measure customer service and our ratings far exceed our competitors. Our employees play an enormous role in our success in this area, and, despite our current operating environment, we were named a 'Top 10 Workplace in Delaware' for the 8th consecutive year.
“With more competition entering the market, we’ll need a restructured gaming revenue sharing formula to allow us to reinvest in our property, and we’ll be resuming our efforts in this regard.”
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 2,300 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 | ||||||||||||||||
| In Thousands, Except Per Share Amounts | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenues: | ||||||||||||||||
| Gaming (1) | $ | 41,295 | $ | 42,012 | $ | 119,711 | $ | 118,846 | ||||||||
| Other operating (2) | 5,815 | 5,184 | 18,340 | 17,989 | ||||||||||||
| 47,110 | 47,196 | 138,051 | 136,835 | |||||||||||||
| Expenses: | ||||||||||||||||
| Gaming | 39,015 | 39,068 | 113,251 | 111,704 | ||||||||||||
| Other operating | 3,895 | 3,551 | 12,594 | 11,957 | ||||||||||||
| General and administrative | 1,228 | 1,331 | 3,851 | 4,165 | ||||||||||||
| Depreciation | 1,959 | 2,030 | 5,799 | 6,353 | ||||||||||||
| 46,097 | 45,980 | 135,495 | 134,179 | |||||||||||||
| Operating earnings | 1,013 | 1,216 | 2,556 | 2,656 | ||||||||||||
| Interest expense | (214 | ) | (259 | ) | (661 | ) | (937 | ) | ||||||||
| Earnings before income taxes | 799 | 957 | 1,895 | 1,719 | ||||||||||||
| Income tax expense | (279 | ) | (131 | ) | (818 | ) | (614 | ) | ||||||||
| Net earnings | $ | 520 | $ | 826 | $ | 1,077 | $ | 1,105 | ||||||||
| Net earnings per common share: | ||||||||||||||||
| - Basic | $ | 0.02 | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||||
| - Diluted | $ | 0.02 | $ | 0.03 | $ | 0.03 | $ | 0.03 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| - Basic | 32,202 | 32,086 | 32,201 | 32,085 | ||||||||||||
| - Diluted | 32,202 | 32,086 | 32,201 | 32,085 | ||||||||||||
| _________________________ | ||
|
(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. |
|
| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| September 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 11,264 | $ | 10,496 | ||||
| Accounts receivable | 2,024 | 2,926 | ||||||
| Due from State of Delaware | 8,373 | 7,952 | ||||||
| Inventories | 2,150 | 1,912 | ||||||
| Prepaid expenses and other | 3,377 | 2,530 | ||||||
| Receivable from Dover Motorsports, Inc. | 44 | - | ||||||
| Income taxes receivable | 125 | 254 | ||||||
| Deferred income taxes | - | 1,308 | ||||||
| Total current assets | 27,357 | 27,378 | ||||||
| Property and equipment, net | 142,377 | 145,425 | ||||||
| Other assets | 619 | 672 | ||||||
| Deferred income taxes | 1,627 | 482 | ||||||
| Total assets | $ | 171,980 | $ | 173,957 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,450 | $ | 3,380 | ||||
| Purses due horsemen | 8,410 | 7,473 | ||||||
| Accrued liabilities | 7,699 | 8,538 | ||||||
| Payable to Dover Motorsports, Inc. | - | 44 | ||||||
| Deferred revenue | 374 | 408 | ||||||
| Revolving line of credit | 27,500 | 31,500 | ||||||
| Total current liabilities | 48,433 | 51,343 | ||||||
| Liability for pension benefits | 7,210 | 7,606 | ||||||
| Total liabilities | 55,643 | 58,949 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 1,814 | 1,799 | ||||||
| Class A common stock | 1,487 | 1,487 | ||||||
| Additional paid-in capital | 5,595 | 5,424 | ||||||
| Retained earnings | 111,579 | 110,502 | ||||||
| Accumulated other comprehensive loss | (4,138 | ) | (4,204 | ) | ||||
| Total stockholders’ equity | 116,337 | 115,008 | ||||||
| Total liabilities and stockholders’ equity | $ | 171,980 | $ | 173,957 | ||||
| DOVER DOWNS GAMING & ENTERTAINMENT, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2016 | 2015 | |||||||
| Operating activities: | ||||||||
| Net earnings | $ | 1,077 | $ | 1,105 | ||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
| Depreciation | 5,799 | 6,353 | ||||||
| Amortization of credit facility origination fees | 77 | 85 | ||||||
| Stock-based compensation | 252 | 285 | ||||||
| Deferred income taxes | 54 | (571 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 902 | 1,045 | ||||||
| Due from State of Delaware | (421 | ) | (1,500 | ) | ||||
| Inventories | (238 | ) | (152 | ) | ||||
| Prepaid expenses and other | (820 | ) | (1,269 | ) | ||||
| Receivable from/payable to Dover Motorsports, Inc. | (88 | ) | 11 | |||||
| Income taxes receivable/payable | 194 | (104 | ) | |||||
| Accounts payable | 788 | (674 | ) | |||||
| Purses due horsemen | 937 | 1,844 | ||||||
| Accrued liabilities | (839 | ) | (798 | ) | ||||
| Deferred revenue | (34 | ) | 112 | |||||
| Liability for pension benefits | (294 | ) | (435 | ) | ||||
| Net cash provided by operating activities | 7,346 | 5,337 | ||||||
| Investing activities: | ||||||||
| Capital expenditures | (2,469 | ) | (1,118 | ) | ||||
| Purchase of available-for-sale securities | (47 | ) | (8 | ) | ||||
| Proceeds from sale of available-for-sale securities | 44 | 5 | ||||||
| Net cash used in investing activities | (2,472 | ) | (1,121 | ) | ||||
| Financing activities: | ||||||||
| Borrowings from revolving line of credit | 37,880 | 46,130 | ||||||
| Repayments of revolving line of credit | (41,880 | ) | (51,480 | ) | ||||
| Repurchase of common stock | (66 | ) | (65 | ) | ||||
| Credit facility fees | (40 | ) | (93 | ) | ||||
| Net cash used in financing activities | (4,106 | ) | (5,508 | ) | ||||
| Net increase (decrease) in cash | 768 | (1,292 | ) | |||||
| Cash, beginning of period | 10,496 | 10,079 | ||||||
| Cash, end of period | $ | 11,264 | $ | 8,787 | ||||
