Dover Downs Gaming & Entertainment, Inc. Reports Results for the Third Quarter Ended September 30, 2015

DOVER, Del.--()--Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended September 30, 2015.

Gaming revenues of $42,012,000 were up 1.6% compared to the third quarter of 2014. The revenue increase was primarily attributable to increased slot machine revenue.

Other operating revenues of $5,184,000 were down compared to the third quarter of 2014, primarily from the fact that there were several large non-recurring conventions in the third quarter of last year and the fact that the fall NASCAR race weekend at Dover International Speedway was held in the fourth quarter of this year compared to the third quarter of last year. Occupancy levels in the Dover Downs Hotel were 92% for the third quarter of this year.

General and administrative costs were down to $1,331,000 for the third quarter compared to $1,468,000 last year.

Interest expense decreased to $259,000 during the quarter from lower interest rates and lower average outstanding borrowings.

Net earnings were $826,000, or $.03 per diluted share compared with $699,000 or $.02 per diluted share for the third quarter of 2014.

Denis McGlynn, the Company's President and Chief Executive Officer, stated: "The fact that we were able to generate a small Gaming revenue increase for the quarter reflects the value of our assets on-site, especially our 500-room hotel which continues to be our strongest competitive tool. While we continue to benefit from legislation passed in July 2014 by which the State shares in some of our slot machine vendor costs, more comprehensive legislation proposed in the Senate stalled in 2015 and it remains imperative that we impress upon those who regulate and control our destiny that our hotel and restaurants are in need of upgrades in order to remain the critical marketing assets they have historically been.”

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
September 30,
Nine Months Ended
September 30,
2015 2014 2015 2014
Revenues:
Gaming (1) $ 42,012 $ 41,349 $ 118,846 $ 120,415
Other operating (2)   5,184     6,639     17,989     19,256  
  47,196     47,988     136,835     139,671  
Expenses:
Gaming 39,068 38,260 111,704 113,626
Other operating 3,551 4,638 11,957 13,691
General and administrative 1,331 1,468 4,165 4,284
Depreciation   2,030     2,196     6,353     6,764  
  45,980     46,562     134,179     138,365  
 
Operating earnings 1,216 1,426 2,656 1,306
 
Interest expense   (259 )   (412 )   (937 )   (1,312 )
 
Earnings (loss) before income taxes 957 1,014 1,719 (6 )
 
Income tax expense   (131 )   (315 )   (614 )   (184 )
 
Net earnings (loss) $ 826   $ 699   $ 1,105   $ (190 )
 
Net earnings (loss) per common share:
- Basic $ 0.03   $ 0.02   $ 0.03   $ (0.01 )
- Diluted $ 0.03   $ 0.02   $ 0.03   $ (0.01 )
 
Weighted average shares outstanding:
- Basic 32,086 31,962 32,085 31,961
- Diluted 32,086 31,962 32,085 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.

 
 
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
     
 
September 30,
2015
December 31,
2014
ASSETS
 
Current assets:
Cash $ 8,787 $ 10,079
Accounts receivable 2,793 3,838
Due from State of Delaware 8,758 7,258
Inventories 1,935 1,783
Prepaid expenses and other 3,632 2,324
Receivable from Dover Motorsports, Inc. 11 22
Income taxes receivable 162 6
Deferred income taxes   1,395     1,243  
Total current assets 27,473 26,553
 
Property and equipment, net 146,873 152,107
Other assets 711 752
Deferred income taxes   732     404  
Total assets $ 175,789   $ 179,816  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 3,301 $ 3,975
Purses due horsemen 8,761 6,917
Accrued liabilities 7,398 8,196
Deferred revenue 501 389
Revolving line of credit   33,660     39,010  
Total current liabilities 53,621 58,487
 
Liability for pension benefits   8,435     8,980  
Total liabilities   62,056     67,467  
 
Stockholders’ equity:
Common stock 1,799 1,788
Class A common stock 1,487 1,487
Additional paid-in capital 5,334 5,125
Retained earnings 109,734 108,629
Accumulated other comprehensive loss   (4,621 )   (4,680 )
Total stockholders’ equity   113,733     112,349  
Total liabilities and stockholders’ equity $ 175,789   $ 179,816  
 
 
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
     
Nine Months Ended
September 30,
2015 2014
 
Operating activities:
Net earnings (loss) $ 1,105 $ (190 )

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

Depreciation 6,353 6,764

Amortization of credit facility origination fees

85 106
Stock-based compensation 285 441
Deferred income taxes (571 ) (435 )
Changes in assets and liabilities:
Accounts receivable 1,045 748
Due from State of Delaware (1,500 ) (343 )
Inventories (152 ) 25
Prepaid expenses and other (1,269 ) (934 )
Receivable from/payable to Dover Motorsports, Inc. 11 (33 )
Income taxes receivable/payable (104 ) 443
Accounts payable (674 ) (1,393 )
Purses due horsemen 1,844 629
Accrued liabilities (798 ) 39
Deferred revenue 112 (13 )
Liability for pension benefits   (435 )   (335 )
Net cash provided by operating activities   5,337     5,519  
 
Investing activities:
Capital expenditures (1,118 ) (640 )
Purchase of available-for-sale securities (8 ) (28 )
Proceeds from sale of available-for-sale securities   5     26  
Net cash used in investing activities   (1,121 )   (642 )
 
Financing activities:
Borrowings from revolving line of credit 46,130 81,470
Repayments of revolving line of credit (51,480 ) (88,010 )
Repurchase of common stock (65 ) (104 )
Credit facility fees   (93 )   (108 )
Net cash used in financing activities   (5,508 )   (6,752 )
 
Net decrease in cash (1,292 ) (1,875 )
Cash, beginning of period   10,079     12,950  
Cash, end of period $ 8,787   $ 11,075  
 

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