Dover Downs Gaming & Entertainment, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2013

Business Wire

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

Dover Downs Gaming & Entertainment, Inc. (DDE) today reported results for the fourth quarter and year ended December 31, 2013.

The Company’s revenues were $46,592,000 for the fourth quarter of 2013 compared with $48,559,000 for the fourth quarter of 2012.

Gaming revenues of $40,775,000 were down 5.7% compared to the fourth quarter of last year.

Other operating revenues improved to $5,817,000 from $5,310,000 due to higher cash rooms and food and beverage revenue. Occupancy levels in the Dover Downs Hotel were approximately 81% for the fourth quarter of 2013 and 2012.

General and administrative and depreciation expense were both lower than the fourth quarter of 2012.

Interest expense increased to $485,000 during the quarter as a result of higher interest rates and fees offsetting lower average outstanding borrowings.

Net loss was ($418,000), or ($.01) per diluted share, compared with a net loss of ($528,000), or ($.02) per diluted share for the fourth quarter of 2012.

Net earnings for the year were $13,000, or $.00 per diluted share compared with $4,807,000 or $.15 per diluted share for 2012.

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 OPERATIONS
In Thousands, Except Per Share Amounts
(Unaudited)
       
 
Three Months Ended Years Ended
December 31, December 31,
2013 2012 2013 2012
Revenues:
Gaming (1) $ 40,775 $ 43,249 $ 172,991 $ 203,055
Other operating (2)   5,817     5,310     24,240     22,857  
  46,592     48,559     197,231     225,912  
Expenses:
Gaming 38,868 41,000 162,398 182,951
Other operating 4,275 4,009 17,314 16,359
General and administrative 1,335 1,506 5,645 6,034
Depreciation   2,315     2,528     9,726     10,297  
  46,793     49,043     195,083     215,641  
 
Operating (loss) earnings (201 ) (484 ) 2,148 10,271
 
Interest expense   (485 )   (388 )   (1,752 )   (1,805 )
 
(Loss) earnings before income taxes (686 ) (872 ) 396 8,466
 
Income tax benefit (expense)   268     344     (383 )   (3,659 )
 
Net (loss) earnings $ (418 ) $ (528 ) $ 13   $ 4,807  
 
Net (loss) earnings per common share:
- Basic $ (0.01 ) $ (0.02 ) $ -   $ 0.15  
- Diluted $ (0.01 ) $ (0.02 ) $ -   $ 0.15  
 
Weighted average shares outstanding:
- Basic 31,849 31,745 31,849 31,745
- Diluted 31,849 31,745 31,849 31,745

 

(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)
 
 
  December 31,   December 31,
2013 2012
ASSETS
 
Current assets:
Cash $ 12,950 $ 14,993
Accounts receivable 4,248 4,093
Due from State of Delaware 8,225 9,708
Inventories 1,957 1,921
Prepaid expenses and other 2,432 3,207
Income taxes receivable 138 155
Deferred income taxes   1,268     1,284  
Total current assets 31,218 35,361
 
Property and equipment, net 160,570 168,963
Other assets   932     938  
Total assets $ 192,720   $ 205,262  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Accounts payable $ 4,480 $ 3,785
Purses due horsemen 7,978 9,833
Accrued liabilities 10,513 10,361
Payable to Dover Motorsports, Inc. 4 -
Deferred revenue 463 346
Revolving line of credit   47,040     -  
Total current liabilities 70,478 24,325
 
Revolving line of credit - 58,500
Liability for pension benefits 3,353 6,983
Deferred income taxes   2,725     1,994  
Total liabilities   76,556     91,802  
 
Stockholders’ equity:
Common stock 1,774 1,590
Class A common stock 1,487 1,660
Additional paid-in capital 4,663 4,136
Retained earnings 109,335 109,322
Accumulated other comprehensive loss   (1,095 )   (3,248 )
Total stockholders’ equity   116,164     113,460  
Total liabilities and stockholders’ equity $ 192,720   $ 205,262  
 
 
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
  Years Ended
December 31,
2013   2012
 
Operating activities:
Net earnings $ 13 $ 4,807

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

Depreciation 9,726 10,297
Amortization of credit facility origination fees 183 101
Stock-based compensation 682 793
Deferred income taxes (519 ) (318 )
Gain from insurance settlement (22 ) -
Changes in assets and liabilities:
Accounts receivable (155 ) (111 )
Due from State of Delaware 1,483 (268 )
Inventories (36 ) (61 )
Prepaid expenses and other 662 310
Income taxes receivable/payable (138 ) (928 )
Accounts payable 915 (470 )
Purses due horsemen (1,855 ) 829
Accrued liabilities 152 (1,571 )
Payable to Dover Motorsports, Inc. 4 (11 )
Deferred revenue 117 92
Other liabilities   (75 )   (325 )
Net cash provided by operating activities   11,137     13,166  
 
Investing activities:
Capital expenditures (1,574 ) (2,625 )
Insurance proceeds 74 -
Purchase of available-for-sale securities (37 ) -
Proceeds from sale of available-for-sale securities   31     -  
Net cash used in investing activities   (1,506 )   (2,625 )
 
Financing activities:
Borrowings from revolving line of credit 72,160 19,620
Repayments of revolving line of credit (83,620 ) (30,120 )
Dividends paid - (3,575 )
Repurchase of common stock (144 ) (107 )
Credit facility fees   (70 )   -  
Net cash used in financing activities   (11,674 )   (14,182 )
 
Net decrease in cash (2,043 ) (3,641 )
Cash, beginning of year   14,993     18,634  
Cash, end of year $ 12,950   $ 14,993  
 

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