Dover Downs Gaming & Entertainment, Inc. Reports Results for the Second Quarter Ended June 30, 2013

Business Wire

DOVER, Del.--(BUSINESS WIRE)--

Dover Downs Gaming & Entertainment, Inc. (DDE) today reported results for the three months ended June 30, 2013.

Net earnings were $491,000 compared with $1,817,000 for the second quarter of 2012. Earnings per diluted share were $.02 compared with $.06 per diluted share for the second quarter of 2012.

The Company’s revenues for the second quarter of 2013 were $50,048,000 compared with $58,355,000 for the second quarter of 2012. Gaming revenues were $43,177,000 compared to $52,331,000 for the second quarter of last year. The decline is primarily attributable to the increased competition in the Mid-Atlantic gaming market.

Other operating revenues improved 14.1% to $6,871,000 for the second quarter of 2013. Occupancy levels in the Dover Downs Hotel were approximately 93% for the second quarter of 2013 and 2012, but the Company saw improved cash rooms revenue during the quarter from strong convention business as well as from activity related to the Firefly Music Festival hosted by Dover International Speedway.

General and administrative, depreciation and interest expenses were all down slightly compared to the second quarter of 2012.

Denis McGlynn, the Company's President and Chief Executive Officer, stated: "This regional market remains extremely competitive. We are hopeful that the recently formed Lottery & Gaming Study Commission established to examine the Delaware gaming industry will be productive, educational and beneficial to all industry stakeholders as the gaming industry deals with the changing operational environment. We are grateful the State has agreed to move forward with this review in light of this dramatically changed marketplace.”

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. (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
In Thousands, Except Per Share Amounts
(Unaudited)
 
 
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Revenues:
Gaming (1) $ 43,177 $ 52,331 $ 88,480 $ 110,805
Other operating (2)   6,871   6,024   12,086   11,634
  50,048   58,355   100,566   122,439
Expenses:
Gaming 40,236 46,479 82,425 97,443
Other operating 4,614 4,339 8,632 8,239
General and administrative 1,427 1,508 2,956 3,064
Depreciation   2,524   2,566   5,033   5,246
  48,801   54,892   99,046   113,992
 
Operating earnings 1,247 3,463 1,520 8,447
 
Interest expense   405   426   807   1,012
 
Earnings before income taxes 842 3,037 713 7,435
 
Income tax expense   351   1,220   505   3,247
 
Net earnings $ 491 $ 1,817 $ 208 $ 4,188
 
Net earnings per common share:
- Basic $ 0.02 $ 0.06 $ 0.01 $ 0.13
- Diluted $ 0.02 $ 0.06 $ 0.01 $ 0.13
 
Weighted average shares outstanding:
- Basic 31,849 31,745 31,848 31,744
- Diluted 31,849 31,745 31,848 31,744
 
_________________________
(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,
2013 2012
ASSETS
 
Current assets:
Cash $ 14,848 $ 14,993
Accounts receivable 3,491 4,093
Due from State of Delaware 4,967 9,708
Inventories 1,957 1,921
Prepaid expenses and other 3,604 3,207
Income taxes receivable 8 155
Deferred income taxes   1,330     1,284  
Total current assets 30,205 35,361
 
Property and equipment, net 164,718 168,963
Other assets   1,027     938  
Total assets $ 195,950   $ 205,262  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 3,101 $ 3,785
Purses due horsemen 4,976 9,833
Accrued liabilities 9,667 10,361
Payable to Dover Motorsports, Inc. 57 -
Deferred revenue 377 346
Revolving line of credit   55,000     -  
Total current liabilities 73,178 24,325
 
Revolving line of credit - 58,500
Liability for pension benefits 6,883 6,983
Deferred income taxes   1,965     1,994  
Total liabilities   82,026     91,802  
 
Stockholders’ equity:
Common stock 1,776 1,590
Class A common stock 1,487 1,660
Additional paid-in capital 4,346 4,136
Retained earnings 109,530 109,322
Accumulated other comprehensive loss   (3,215 )   (3,248 )
Total stockholders’ equity   113,924     113,460  
Total liabilities and stockholders’ equity $ 195,950   $ 205,262  
 
   
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Six Months Ended
June 30,
2013 2012
 
Operating activities:
Net earnings $ 208 $ 4,188

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

Depreciation 5,033 5,246
Amortization of credit facility origination fees 97 46
Stock-based compensation 367 408
Deferred income taxes (98 ) 345
Gain from insurance settlement (22 ) -
Changes in assets and liabilities:
Accounts receivable 602 1,351
Due from State of Delaware 4,741 3,145
Inventories (36 ) (194 )
Prepaid expenses and other (521 ) (1,608 )
Income taxes receivable/payable 147 (371 )
Accounts payable (533 ) (204 )
Purses due horsemen (4,857 ) (2,713 )
Accrued liabilities (694 ) (2,576 )
Payable to/receivable from Dover Motorsports, Inc. 57 (13 )
Deferred revenue 31 108
Other liabilities   (50 )   (276 )
Net cash provided by operating activities   4,472     6,882  
 
Investing activities:
Capital expenditures (976 ) (1,847 )
Insurance proceeds 74 -
Purchase of available-for-sale securities (13 ) -
Proceeds from sale of available-for-sale securities   12     -  
Net cash used in investing activities   (903 )   (1,847 )
 
Financing activities:
Borrowings from revolving line of credit 48,270 11,630
Repayments of revolving line of credit (51,770 ) (15,690 )
Dividends paid - (1,950 )
Repurchase of common stock (144 ) (107 )
Credit facility fees   (70 )   -  
Net cash used in financing activities   (3,714 )   (6,117 )
 
Net decrease in cash (145 ) (1,082 )
Cash, beginning of period   14,993     18,634  
Cash, end of period $ 14,848   $ 17,552  
 

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