Dover Downs Gaming & Entertainment, Inc. Reports Results for the Second Quarter Ended June 30, 2017

DOVER, Del.--()--Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2017.

The Company’s revenues for the second quarter of 2017 were $43,305,000 compared with $46,224,000 for the second quarter of 2016. Gaming revenues were $36,418,000 compared to $39,058,000 for the second quarter of last year. The decrease is primarily attributable to increased competition in the mid-Atlantic gaming market.

Other operating revenues decreased to $6,887,000 from $7,166,000 for the second quarter of 2016 primarily due to lower banquet revenue in the second quarter of 2017. Occupancy levels in the Dover Downs Hotel were approximately 85% for the second quarter of 2017 compared with 88% during the second quarter last year.

General and administrative, depreciation and interest expenses were each fairly consistent with the second quarter of 2016.

Net earnings were $32,000 compared with $796,000 for the second quarter of 2016. Earnings per diluted share were $.00 in the second quarter of 2017 compared with $.02 for the second quarter of 2016.

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 2,200 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,
  2017     2016     2017     2016  
Revenues:
Gaming (1) $ 36,418 $ 39,058 $ 75,065 $ 78,416
Other operating (2)   6,887     7,166     12,388     12,525  
  43,305     46,224     87,453     90,941  
Expenses:
Gaming 34,970 36,741 71,839 74,236
Other operating 4,737 4,726 8,687 8,699
General and administrative 1,289 1,295 2,620 2,623
Depreciation   2,086     1,953     4,032     3,840  
  43,082     44,715     87,178     89,398  
 
Operating earnings 223 1,509 275 1,543
 
Interest expense   (208 )   (218 )   (417 )   (447 )
 
Earnings (loss) before income taxes 15 1,291 (142 ) 1,096
 
Income tax benefit (expense)   17     (495 )   (10 )   (539 )
 
Net earnings (loss) $ 32   $ 796   $ (152 ) $ 557  
 
Net earnings per common share:
- Basic $ -   $ 0.02   $ -   $ 0.02  
- Diluted $ -   $ 0.02   $ -   $ 0.02  
 
Weighted average shares outstanding:
- Basic 32,322 32,202 32,321 32,200
- Diluted 32,322 32,202 32,321 32,200

________________

(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)
 
 
June 30, December 31,
  2017     2016  
ASSETS
 
Current assets:
Cash $ 10,446 $ 11,677
Accounts receivable 2,394 3,507
Due from State of Delaware 3,827 7,285
Inventories 2,187 1,910
Prepaid expenses and other 2,755 2,365
Receivable from Dover Motorsports, Inc. 33 7
Income taxes receivable   96     221  
Total current assets 21,738 26,972
 
Property and equipment, net 137,701 140,714
Other assets 571 594
Deferred income taxes   2,144     2,020  
Total assets $ 162,154   $ 170,300  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 3,301 $ 3,749
Purses due horsemen 3,867 7,649
Accrued liabilities 8,315 9,732
Deferred revenue 453 361
Revolving line of credit   -     25,250  
Total current liabilities 15,936 46,741
 
Revolving line of credit 23,000 -
Liability for pension benefits   7,534     7,897  
Total liabilities   46,470     54,638  
 
Stockholders’ equity:
Common stock 1,828 1,814
Class A common stock 1,487 1,487
Additional paid-in capital 5,767 5,669
Retained earnings 111,136 111,288
Accumulated other comprehensive loss   (4,534 )   (4,596 )
Total stockholders’ equity   115,684     115,662  
Total liabilities and stockholders’ equity $ 162,154   $ 170,300  
   
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Six Months Ended
June 30,
  2017     2016  
 
Operating activities:
Net (loss) earnings $ (152 ) $ 557

Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:

Depreciation 4,032 3,840
Amortization of credit facility origination fees 26 52
Stock-based compensation 186 177
Deferred income taxes (165 ) (47 )
Changes in assets and liabilities:
Accounts receivable 1,113 962
Due from State of Delaware 3,458 3,655
Inventories (277 ) (139 )
Prepaid expenses and other (389 ) 193
Receivable from/payable to Dover Motorsports, Inc. (26 ) (58 )
Income taxes receivable/payable 124 410
Accounts payable (271 ) 155
Purses due horsemen (3,782 ) (3,139 )
Accrued liabilities (1,417 ) (1,221 )
Deferred revenue 92 132
Liability for pension benefits   (261 )   (211 )
Net cash provided by operating activities   2,291     5,318  
 
Investing activities:
Capital expenditures (1,196 ) (1,939 )
Purchase of available-for-sale securities (40 ) (11 )
Proceeds from sale of available-for-sale securities   38     9  
Net cash used in investing activities   (1,198 )   (1,941 )
 
Financing activities:
Borrowings from revolving line of credit 46,720 20,830
Repayments of revolving line of credit (48,970 ) (24,330 )
Repurchase of common stock   (74 )   (66 )
Net cash used in financing activities   (2,324 )   (3,566 )
 
Net decrease in cash (1,231 ) (189 )
Cash, beginning of period   11,677     10,496  
Cash, end of period $ 10,446   $ 10,307  

Contacts

Dover Downs Gaming & Entertainment, Inc.
Timothy R. Horne - Sr. Vice President-Finance
302-857-3292

Contacts

Dover Downs Gaming & Entertainment, Inc.
Timothy R. Horne - Sr. Vice President-Finance
302-857-3292