Market Overview

Dover Downs Gaming & Entertainment, Inc. Reports Results for the First Quarter Ended March 31, 2018

Share:
  • Pays: $18.1 Million to State and Horsemen
  • Loses: $361,000 for the Quarter

Dover Downs Gaming & Entertainment, Inc. (NYSE:DDE) today reported
results for the three months ended March 31, 2018.

The Company's revenues for the first quarter of 2018 were $43,159,000
compared with $44,012,000 for the first quarter of 2017.

Gaming revenues of $34,134,000 were down 3.3% compared to the first
quarter of last year, primarily from lower slot machine win.

Other operating revenues increased to $9,025,000 compared to $8,706,000
last year. Occupancy levels in the Dover Downs Hotel were approximately
73% for the first quarter of 2018 compared with 74% for the first
quarter of 2017.

General and administrative expenses were consistent with last year.

Depreciation expense increased to $2,140,000 from $1,946,000 last year.

Net loss was ($273,000), or ($.01) per diluted share, compared with net
loss of ($196,000), or ($.01) per diluted share for the first quarter of
2017.

Denis McGlynn, the Company's President and Chief Executive Officer,
stated: "Once again the Company demonstrated substantial gaming
operational profitability which once again was totally wiped out by an
unfair and outdated gaming revenue sharing formula.

"Legislation has been introduced to implement a more fair and realistic
formula and we hope the Delaware Legislature and Administration will act
favorably on it."

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,
2018   2017 *
Revenues:
Gaming $ 34,134 $ 35,306
Other operating   9,025     8,706  
  43,159     44,012  
Expenses:
Gaming 32,835 33,866
Other operating 7,034 6,837
General and administrative 1,385 1,375
Depreciation   2,140     1,946  
  43,394     44,024  
 
Operating loss (235 ) (12 )
 
Interest expense (209 ) (209 )
Other income   83     44  
 
Loss before income taxes (361 ) (177 )
 
Income tax benefit (expense)   88     (19 )
 
Net loss $ (273 ) $ (196 )
 
Net loss per common share:
- Basic $ (0.01 ) $ (0.01 )
- Diluted $ (0.01 ) $ (0.01 )
 
Weighted average shares outstanding:
- Basic 32,444 32,319
- Diluted 32,444 32,319
 

 

 

_________________________

*  

Prior-period information has been restated for the adoption of
Accounting Standards Update ("ASU") No. 2014-09, Revenue from

Contracts with Customers, and ASU No. 2017-07, Improving
the Presentation of Net Periodic Pension Cost and Net Periodic

Postretirement Benefit Cost, which we adopted on January 1,
2018.

 
 
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
   
 
March 31, December 31,
2018 2017 *
ASSETS
 
Current assets:
Cash $ 11,520 $ 10,714
Accounts receivable 3,463 3,557
Due from State of Delaware 1,866 5,720
Inventories 1,954 1,928
Prepaid expenses and other 2,178 2,840
Receivable from Dover Motorsports, Inc. 12 7

Income taxes receivable

  318     318  
Total current assets 21,311 25,084
 
Property and equipment, net 133,274 134,527
Other assets 373 564
Deferred income taxes   1,862     1,786  
Total assets $ 156,820   $ 161,961  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current liabilities:
Accounts payable $ 2,709 $ 2,571
Purses due horsemen 1,889 5,814
Accrued liabilities 7,268 8,111
Deferred credits 170 49
Contract liabilities 3,913 3,724
Revolving line of credit   19,500     19,900  
Total current liabilities 35,449 40,169
 
Liability for pension benefits   7,298     7,483  

Total liabilities

  42,747     47,652  
 
Stockholders' equity:
Common stock 1,841 1,827
Class A common stock 1,487 1,487
Additional paid-in capital 5,871 5,877
Retained earnings 109,578 109,817
Accumulated other comprehensive loss   (4,704 )   (4,699 )
Total stockholders' equity   114,073     114,309  
Total liabilities and stockholders' equity $ 156,820   $ 161,961  
 
 
_________________________
*  

Prior-period information has been restated for the adoption of ASU
No. 2014-09,

Revenue from Contracts with Customers, which we adopted on
January 1, 2018.

 
 
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
  Three Months Ended
March 31,
2018   2017 *
 
Operating activities:
Net loss $ (273 ) $ (196 )

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

Depreciation 2,140 1,946
Amortization of credit facility origination fees 10 13
Stock-based compensation 82 128
Deferred income taxes (88 ) (10 )
Losses on equity investments 5 -
Changes in assets and liabilities:
Accounts receivable 94 692
Due from State of Delaware 3,854 5,396
Inventories (26 ) (197 )
Prepaid expenses and other 659 226
Receivable from Dover Motorsports, Inc. (5 ) (1 )
Income taxes receivable - (21 )
Accounts payable 213 (94 )
Purses due horsemen (3,925 ) (5,565 )
Accrued liabilities (843 ) (1,827 )
Deferred credits 121 156
Contract liabilities 189 472
Liability for pension benefits   (144 )   (94 )
Net cash provided by operating activities   2,063     1,024  
 
Investing activities:
Capital expenditures (782 ) (574 )
Purchase of equity investments (11 ) (31 )

Proceeds from sale of equity investments

  10     30  
Net cash used in investing activities   (783 )   (575 )
 

Financing activities:

Borrowings from revolving line of credit 24,760 29,730
Repayments of revolving line of credit (25,160 ) (30,980 )
Repurchase of common stock   (74 )   (74 )
Net cash used in financing activities   (474 )   (1,324 )
 
Net increase (decrease) in cash 806 (875 )
Cash, beginning of period   10,714     11,677  
Cash, end of period $ 11,520   $ 10,802  
 
 
_________________________
*  

Prior-period information has been restated for the adoption of ASU
No. 2014-09,

Revenue from Contracts with Customers, which we adopted on
January 1, 2018.

 

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