Dover Downs Gaming & Entertainment, Inc. Reports Results for the Second Quarter Ended June 30, 2016

DOVER, Del.--()--Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2016.

The Company’s revenues for the second quarter of 2016 were $46,224,000 compared with $45,301,000 for the second quarter of 2015. Gaming revenues were $39,058,000 compared to $38,058,000 for the second quarter of last year.

Other operating revenues decreased to $7,166,000 compared to $7,243,000 for the second quarter of 2015 from lower rooms revenue and revenue in the second quarter of 2015 associated with the Company taking over certain retail operations in the casino. Occupancy levels in the Dover Downs Hotel were approximately 88% for the second quarter of 2016 compared with 85% during the second quarter last year.

General and administrative, depreciation and interest expenses were each down compared to the second quarter of 2015.

Net earnings were $796,000 compared with $631,000 for the second quarter of 2015. Earnings per diluted share were $.02 in the second quarter of 2016 and 2015.

“We were disappointed that the state budget shortfall that was revealed late in the legislative session preempted consideration of the recommended changes to the casino industry’s revenue sharing model set forth in Senate Bill 183,” said Denis McGlynn President/CEO. “Needless to say, we will continue to pursue this much needed legislation in January when the legislature returns.”

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 Six Months Ended
June 30, June 30,
2016 2015 2016 2015
Revenues:
Gaming (1) $ 39,058 $ 38,058 $ 78,416 $ 76,834
Other operating (2)   7,166     7,243     12,525     12,805  
  46,224     45,301     90,941     89,639  
Expenses:
Gaming 36,741 35,874 74,236 72,636
Other operating 4,726 4,519 8,699 8,406
General and administrative 1,295 1,338 2,623 2,834
Depreciation   1,953     2,171     3,840     4,323  
  44,715     43,902     89,398     88,199  
 
Operating earnings 1,509 1,399 1,543 1,440
 
Interest expense   (218 )   (330 )   (447 )   (678 )
 
Earnings before income taxes 1,291 1,069 1,096 762
 
Income tax expense   (495 )   (438 )   (539 )   (483 )
 
Net earnings $ 796   $ 631   $ 557   $ 279  
 
Net earnings per common share:
- Basic $ 0.02   $ 0.02   $ 0.02   $ 0.01  
- Diluted $ 0.02   $ 0.02   $ 0.02   $ 0.01  
 
Weighted average shares outstanding:
- Basic 32,202 32,086 32,200 32,084
- Diluted 32,202 32,086 32,200 32,084
 
_________________________
(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,
2016 2015
ASSETS
 
Current assets:
Cash $ 10,307 $ 10,496
Accounts receivable 1,964 2,926
Due from State of Delaware 4,297 7,952
Inventories 2,051 1,912
Prepaid expenses and other 2,359 2,530
Receivable from Dover Motorsports, Inc. 14 -
Income taxes receivable - 254
Deferred income taxes   -     1,308  

Total current assets

20,992 27,378
 
Property and equipment, net 143,457 145,425
Other assets 606 672
Deferred income taxes   1,809     482  
Total assets $ 166,864   $ 173,957  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 3,468 $ 3,380
Purses due horsemen 4,334 7,473
Accrued liabilities 7,317 8,538
Payable to Dover Motorsports, Inc. - 44
Income taxes payable 158 -
Deferred revenue 540 408
Revolving line of credit   28,000     31,500  
Total current liabilities 43,817 51,343
 
Liability for pension benefits   7,327     7,606  
Total liabilities   51,144     58,949  
 
Stockholders’ equity:
Common stock 1,814 1,799
Class A common stock 1,487 1,487
Additional paid-in capital 5,520 5,424
Retained earnings 111,059 110,502
Accumulated other comprehensive loss   (4,160 )   (4,204 )
Total stockholders’ equity   115,720     115,008  
Total liabilities and stockholders’ equity $ 166,864   $ 173,957  
 
   
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Six Months Ended
June 30,
2016 2015
 
Operating activities:
Net earnings $ 557 $ 279

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

Depreciation 3,840 4,323
Amortization of credit facility origination fees 52 54
Stock-based compensation 177 195
Deferred income taxes (47 ) (325 )
Changes in assets and liabilities:
Accounts receivable 962 477
Due from State of Delaware 3,655 2,640
Inventories (139 ) (63 )
Prepaid expenses and other 193 (730 )
Receivable from/payable to Dover Motorsports, Inc. (58 ) -
Accounts payable 155 (204 )
Purses due horsemen (3,139 ) (2,296 )
Accrued liabilities (1,221 ) 1,537
Income taxes payable/receivable 410 236
Deferred revenue 132 277
Liability for pension benefits   (211 )   (163 )
Net cash provided by operating activities   5,318     6,237  
 
Investing activities:
Capital expenditures (1,939 ) (915 )
Purchase of available-for-sale securities (11 ) (3 )
Proceeds from sale of available-for-sale securities   9     1  
Net cash used in investing activities   (1,941 )   (917 )
 
Financing activities:
Borrowings from revolving line of credit 20,830 36,450
Repayments of revolving line of credit (24,330 ) (40,560 )
Repurchase of common stock   (66 )   (65 )
Net cash used in financing activities   (3,566 )   (4,175 )
 
Net (decrease) increase in cash (189 ) 1,145
Cash, beginning of period   10,496     10,079  
Cash, end of period $ 10,307   $ 11,224  
 

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