Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: |
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, July 25, 2013 | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS
RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2013
Dover Downs Gaming & Entertainment, Inc. (NYSE: 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. (NYSE: DDE), Dover Downs Hotel & Casino® is a premier gaming and entertainment resort destination in the Mid-Atlantic region. Gaming operations consist of approximately 2,500 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 | |
