Exhibit 99.1
FOR IMMEDIATE RELEASE |
| For further information, call: |
|
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, October 24, 2013 |
| (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS RESULTS
FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2013
Dover Downs Gaming & Entertainment, Inc. (NYSE-DDE) today reported results for the three months ended September 30, 2013.
Gaming revenues of $43,736,000 were down 10.7% compared to the third quarter of 2012. The revenue decline was primarily attributable to increased competition in the region.
Other operating revenues of $6,337,000 were up 7.2% compared to the third quarter of 2012. The improvement was from increased food and beverage revenue and slightly higher cash room revenue. Occupancy levels in the Dover Downs Hotel were approximately 93% for the third quarter of 2013.
General and administrative costs of $1,354,000 for the third quarter were down 7.5% compared to last year.
Interest expense increased to $460,000 during the quarter as a result of higher interest rates and fees offsetting lower average outstanding borrowings.
Net earnings were $223,000, or $.01 per diluted share compared with $1,147,000 or $.04 per diluted share for the third quarter of 2012.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “We mentioned last quarter that the State had formed a Lottery & Gaming Study Commission to examine the Delaware gaming industry and to make recommendations to the State legislature regarding the division of gaming revenues among the State, casinos, vendors and horsemen. The State’s casinos have all had an opportunity to make presentations to this new Commission and we hope to have further input into the Commission’s fact gathering and deliberations. The Commission’s recommendations to the State legislature are expected to be made on or before January 31, 2014.”
* * *
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 |
| Nine Months Ended |
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| September 30, |
| September 30, |
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| 2013 |
| 2012 |
| 2013 |
| 2012 |
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Revenues: |
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Gaming (1) |
| $ | 43,736 |
| $ | 49,001 |
| $ | 132,216 |
| $ | 159,806 |
|
Other operating (2) |
| 6,337 |
| 5,913 |
| 18,423 |
| 17,547 |
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|
| 50,073 |
| 54,914 |
| 150,639 |
| 177,353 |
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Expenses: |
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Gaming |
| 41,105 |
| 44,508 |
| 123,530 |
| 141,951 |
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Other operating |
| 4,407 |
| 4,111 |
| 13,039 |
| 12,350 |
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General and administrative |
| 1,354 |
| 1,464 |
| 4,310 |
| 4,528 |
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Depreciation |
| 2,378 |
| 2,523 |
| 7,411 |
| 7,769 |
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|
| 49,244 |
| 52,606 |
| 148,290 |
| 166,598 |
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Operating earnings |
| 829 |
| 2,308 |
| 2,349 |
| 10,755 |
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Interest expense |
| 460 |
| 405 |
| 1,267 |
| 1,417 |
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Earnings before income taxes |
| 369 |
| 1,903 |
| 1,082 |
| 9,338 |
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Income tax expense |
| 146 |
| 756 |
| 651 |
| 4,003 |
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Net earnings |
| $ | 223 |
| $ | 1,147 |
| $ | 431 |
| $ | 5,335 |
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Net earnings per common share: |
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- Basic |
| $ | 0.01 |
| $ | 0.04 |
| $ | 0.01 |
| $ | 0.16 |
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- Diluted |
| $ | 0.01 |
| $ | 0.04 |
| $ | 0.01 |
| $ | 0.16 |
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Weighted average shares outstanding: |
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- Basic |
| 31,849 |
| 31,745 |
| 31,848 |
| 31,744 |
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- Diluted |
| 31,849 |
| 31,745 |
| 31,848 |
| 31,744 |
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(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)
|
| September 30, |
| December 31, |
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| 2013 |
| 2012 |
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ASSETS |
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Current assets: |
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Cash |
| $ | 14,392 |
| $ | 14,993 |
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Accounts receivable |
| 3,688 |
| 4,093 |
| ||
Due from State of Delaware |
| 9,301 |
| 9,708 |
| ||
Inventories |
| 2,033 |
| 1,921 |
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Prepaid expenses and other |
| 3,890 |
| 3,207 |
| ||
Receivable from Dover Motorsports, Inc. |
| 12 |
| — |
| ||
Income taxes receivable |
| — |
| 155 |
| ||
Deferred income taxes |
| 1,294 |
| 1,284 |
| ||
Total current assets |
| 34,610 |
| 35,361 |
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Property and equipment, net |
| 162,632 |
| 168,963 |
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Other assets |
| 975 |
| 938 |
| ||
Total assets |
| $ | 198,217 |
| $ | 205,262 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
| $ | 3,187 |
| $ | 3,785 |
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Purses due horsemen |
| 9,310 |
| 9,833 |
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Accrued liabilities |
| 9,858 |
| 10,361 |
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Income taxes payable |
| 262 |
| — |
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Deferred revenue |
| 337 |
| 346 |
| ||
Revolving line of credit |
| 52,500 |
| — |
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Total current liabilities |
| 75,454 |
| 24,325 |
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Revolving line of credit |
| — |
| 58,500 |
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Liability for pension benefits |
| 6,888 |
| 6,983 |
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Deferred income taxes |
| 1,551 |
| 1,994 |
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Total liabilities |
| 83,893 |
| 91,802 |
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Stockholders’ equity: |
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Common stock |
| 1,775 |
| 1,590 |
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Class A common stock |
| 1,487 |
| 1,660 |
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Additional paid-in capital |
| 4,505 |
| 4,136 |
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Retained earnings |
| 109,753 |
| 109,322 |
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Accumulated other comprehensive loss |
| (3,196 | ) | (3,248 | ) | ||
Total stockholders’ equity |
| 114,324 |
| 113,460 |
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Total liabilities and stockholders’ equity |
| $ | 198,217 |
| $ | 205,262 |
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DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
|
| Nine Months Ended |
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|
| September 30, |
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| 2013 |
| 2012 |
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Operating activities: |
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Net earnings |
| $ | 431 |
| $ | 5,335 |
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Adjustments to reconcile net earnings to net cash provided by operating activities: |
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Depreciation |
| 7,411 |
| 7,769 |
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Amortization of credit facility origination fees |
| 140 |
| 74 |
| ||
Stock-based compensation |
| 525 |
| 600 |
| ||
Deferred income taxes |
| (333 | ) | (126 | ) | ||
Gain from insurance settlement |
| (22 | ) | — |
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Changes in assets and liabilities: |
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Accounts receivable |
| 405 |
| 849 |
| ||
Due from State of Delaware |
| 407 |
| (1,694 | ) | ||
Inventories |
| (112 | ) | (224 | ) | ||
Prepaid expenses and other |
| (799 | ) | (917 | ) | ||
Receivable from/payable to Dover Motorsports, Inc. |
| (12 | ) | (11 | ) | ||
Income taxes receivable/payable |
| 262 |
| (327 | ) | ||
Accounts payable |
| (424 | ) | (1,499 | ) | ||
Purses due horsemen |
| (523 | ) | 2,136 |
| ||
Accrued liabilities |
| (503 | ) | (1,783 | ) | ||
Deferred revenue |
| (9 | ) | 77 |
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Other liabilities |
| (20 | ) | (375 | ) | ||
Net cash provided by operating activities |
| 6,824 |
| 9,884 |
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Investing activities: |
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Capital expenditures |
| (1,283 | ) | (2,158 | ) | ||
Insurance proceeds |
| 74 |
| — |
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Purchase of available-for-sale securities |
| (27 | ) | — |
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Proceeds from sale of available-for-sale securities |
| 25 |
| — |
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Net cash used in investing activities |
| (1,211 | ) | (2,158 | ) | ||
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Financing activities: |
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Borrowings from revolving line of credit |
| 56,140 |
| 12,910 |
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Repayments of revolving line of credit |
| (62,140 | ) | (20,410 | ) | ||
Dividends paid |
| — |
| (2,925 | ) | ||
Repurchase of common stock |
| (144 | ) | (107 | ) | ||
Credit facility fees |
| (70 | ) | — |
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Net cash used in financing activities |
| (6,214 | ) | (10,532 | ) | ||
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Net decrease in cash |
| (601 | ) | (2,806 | ) | ||
Cash, beginning of period |
| 14,993 |
| 18,634 |
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Cash, end of period |
| $ | 14,392 |
| $ | 15,828 |
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