Dover Downs Gaming & Entertainment, Inc. Reports Results for the First Quarter Ended March 31, 2016

DOVER, Del.--()--Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended March 31, 2016.

Net loss was ($239,000), or ($.01) per diluted share, compared with net loss of ($352,000), or ($.01) per diluted share for the first quarter of 2015.

The Company’s revenues for the first quarter of 2016 were $44,717,000 compared with $44,338,000 for the first quarter of 2015.

Gaming revenues of $39,358,000 were up 1.5% compared to the first quarter of last year, primarily from higher table game revenue.

Other operating revenues were $5,359,000 compared to $5,562,000 last year. Occupancy levels in the Dover Downs Hotel were approximately 74% for the first quarter of 2016 compared with approximately 76% for the first quarter of 2015.

General and administrative expenses of $1,328,000 were lower than last year, primarily from employee separation costs during the first quarter of last year.

Depreciation expense of $1,887,000 was down compared to $2,152,000 last year.

Interest expense decreased to $229,000 during the quarter as a result of lower rates and lower outstanding borrowings.

Denis McGlynn, the Company's President and Chief Executive Officer, stated: "We point out in our recently filed Annual Report to Stockholders that our fate remains in the hands of our state legislature. Recommendations of the legislatively appointed Gaming and Lottery Study Commission need to be enacted for the health of our industry and for thousands of employees whose livelihood depends – directly and indirectly – on having Delaware’s casinos able to compete effectively in the regional marketplace. It is imperative that we re-invest in our facilities and amenities. And if we cannot spend the marketing and promotional dollars that will bring repeat customers into Delaware, they will go to neighboring jurisdictions. Last year, Senate Bill 30 did not advance due to unrelated state budget issues. This year, Senate Bill 183 – which phases in required changes to the revenue sharing model over the next four years – represents what industry experts believe to be the best possible strategic and long-term restructuring model for all stakeholders. It is time for us to enact a long-term solution and we are working diligently with our state legislators toward that end.”

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 OPERATIONS
In Thousands, Except Per Share Amounts
(Unaudited)
   
 
Three Months Ended
March 31,
2016 2015
Revenues:
Gaming (1) $ 39,358 $ 38,776
Other operating (2)   5,359     5,562  
  44,717     44,338  
Expenses:
Gaming 37,495 36,762
Other operating 3,973 3,887
General and administrative 1,328 1,496
Depreciation   1,887     2,152  
  44,683     44,297  
 
Operating earnings 34 41
 
Interest expense   (229 )   (348 )
 
Loss before income taxes (195 ) (307 )
 
Income tax expense   (44 )   (45 )
 
Net loss $ (239 ) $ (352 )
 
Net loss per common share:
- Basic $ (0.01 ) $ (0.01 )
- Diluted $ (0.01 ) $ (0.01 )
 
Weighted average shares outstanding:
- Basic 32,199 32,083
- Diluted 32,199 32,083
 
_________________________
(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)
 
 
March 31, December 31,
2016 2015
ASSETS
 
Current assets:
Cash $ 11,077 $ 10,496
Accounts receivable 3,055 2,926
Due from State of Delaware 2,663 7,952
Inventories 1,938 1,912
Prepaid expenses and other 1,983 2,530
Receivable from Dover Motorsports, Inc. 10 -
Income taxes receivable 225 254
Deferred income taxes   1,433     1,308  
Total current assets 22,384 27,378
 
Property and equipment, net 144,750 145,425
Other assets 638 672
Deferred income taxes   297     482  
Total assets $ 168,069   $ 173,957  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 3,875 $ 3,380
Purses due horsemen 2,750 7,473
Accrued liabilities 7,690 8,538
Payable to Dover Motorsports, Inc. - 44
Deferred revenue 503 408
Revolving line of credit   31,000     31,500  
Total current liabilities 45,818 51,343
 
Liability for pension benefits   7,423     7,606  
Total liabilities   53,241     58,949  
 
Stockholders’ equity:
Common stock 1,814 1,799
Class A common stock 1,487 1,487
Additional paid-in capital 5,446 5,424
Retained earnings 110,263 110,502
Accumulated other comprehensive loss   (4,182 )   (4,204 )
Total stockholders’ equity   114,828     115,008  
Total liabilities and stockholders’ equity $ 168,069   $ 173,957  
 
   
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Three Months Ended
March 31,
2016 2015
 
Operating activities:
Net loss $ (239 ) $ (352 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation 1,887 2,152
Amortization of credit facility origination fees 26 27
Stock-based compensation 103 105
Deferred income taxes 46 (31 )
Changes in assets and liabilities:
Accounts receivable (129 ) (616 )
Due from State of Delaware 5,289 4,603
Inventories (26 ) 140
Prepaid expenses and other 559 121
Receivable from/payable to Dover Motorsports, Inc. (54 ) 11
Income taxes receivable 28 78
Accounts payable 562 (579 )
Purses due horsemen (4,723 ) (4,940 )
Accrued liabilities (848 ) 2,437
Deferred revenue 95 203
Liability for pension benefits   (149 )   (109 )
Net cash provided by operating activities   2,427     3,250  
 
Investing activities:
Capital expenditures (1,279 ) (472 )
Purchase of available-for-sale securities   (1 )   -  
Net cash used in investing activities   (1,280 )   (472 )
 
Financing activities:
Borrowings from revolving line of credit 15,450 14,820
Repayments of revolving line of credit (15,950 ) (15,830 )
Repurchase of common stock   (66 )   (65 )
Net cash used in financing activities   (566 )   (1,075 )
 
Net increase in cash 581 1,703
Cash, beginning of period   10,496     10,079  
Cash, end of period $ 11,077   $ 11,782  
 

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