Exhibit 99.1
FOR IMMEDIATE RELEASE |
| For further information, call: |
|
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, April 24, 2014 |
| (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS
RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2014
Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended March 31, 2014.
The Company’s revenues for the first quarter of 2014 were $45,477,000 compared with $50,518,000 for the first quarter of 2013.
Gaming revenues were down 12.2% compared to the first quarter of 2013, primarily as a result of increased competition in the region.
Other operating revenues were up 9.2% compared to last year to $5,695,000. Occupancy levels in the Dover Downs Hotel were approximately 80% for the first quarter of 2014 compared with approximately 84% for the first quarter of 2013, though cash sales were higher than last year. Strong convention business helped improve cash food and beverage sales.
General and administrative expenses of $1,393,000 and depreciation expense of $2,295,000 were both down compared to last year.
Interest expense increased to $460,000 during the quarter as a result of higher interest rates and fees offsetting lower outstanding borrowings.
Net loss was ($1,053,000), or ($.03) per diluted share, compared with net loss of ($283,000), or ($.01) per diluted share for the first quarter of 2013.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “The fact that the Company paid more than $16 million into the State’s General Fund, more than $4 million for horse racing purses and almost $2.7 million on slot vendor fees during a quarter in which we incurred a $1 million net loss is clear evidence that our current revenue sharing model is out of balance and needs to be reset. This is an issue we continue to pursue with the state and with our current loan agreement set to expire in June, we are hopeful of a speedy resolution during the current legislative session.”
* * *
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 OPERATIONS
In Thousands, Except Per Share Amounts
(Unaudited)
|
| Three Months Ended |
| ||||
|
| March 31, |
| ||||
|
| 2014 |
| 2013 |
| ||
Revenues: |
|
|
|
|
| ||
Gaming (1) |
| $ | 39,782 |
| $ | 45,303 |
|
Other operating (2) |
| 5,695 |
| 5,215 |
| ||
|
| 45,477 |
| 50,518 |
| ||
Expenses: |
|
|
|
|
| ||
Gaming |
| 38,354 |
| 42,189 |
| ||
Other operating |
| 4,396 |
| 4,018 |
| ||
General and administrative |
| 1,393 |
| 1,529 |
| ||
Depreciation |
| 2,295 |
| 2,509 |
| ||
|
| 46,438 |
| 50,245 |
| ||
|
|
|
|
|
| ||
Operating (loss) earnings |
| (961 | ) | 273 |
| ||
|
|
|
|
|
| ||
Interest expense |
| (460 | ) | (402 | ) | ||
|
|
|
|
|
| ||
Loss before income taxes |
| (1,421 | ) | (129 | ) | ||
|
|
|
|
|
| ||
Income tax benefit (expense) |
| 368 |
| (154 | ) | ||
|
|
|
|
|
| ||
Net loss |
| $ | (1,053 | ) | $ | (283 | ) |
|
|
|
|
|
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Net loss per common share: |
|
|
|
|
| ||
- Basic |
| $ | (0.03 | ) | $ | (0.01 | ) |
- Diluted |
| $ | (0.03 | ) | $ | (0.01 | ) |
|
|
|
|
|
| ||
Weighted average shares outstanding: |
|
|
|
|
| ||
- Basic |
| 31,959 |
| 31,846 |
| ||
- Diluted |
| 31,959 |
| 31,846 |
| ||
|
|
|
|
|
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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)
|
| March 31, |
| December 31, |
| ||
|
| 2014 |
| 2013 |
| ||
ASSETS |
|
|
|
|
| ||
|
|
|
|
|
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Current assets: |
|
|
|
|
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Cash |
| $ | 10,482 |
| $ | 12,950 |
|
Accounts receivable |
| 4,707 |
| 4,248 |
| ||
Due from State of Delaware |
| 2,898 |
| 8,225 |
| ||
Inventories |
| 1,761 |
| 1,957 |
| ||
Prepaid expenses and other |
| 2,257 |
| 2,432 |
| ||
Income taxes receivable |
| 519 |
| 138 |
| ||
Deferred income taxes |
| 1,301 |
| 1,268 |
| ||
Total current assets |
| 23,925 |
| 31,218 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
| 158,493 |
| 160,570 |
| ||
Other assets |
| 868 |
| 932 |
| ||
Total assets |
| $ | 183,286 |
| $ | 192,720 |
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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|
|
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Current liabilities: |
|
|
|
|
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Accounts payable |
| $ | 4,043 |
| $ | 4,480 |
|
Purses due horsemen |
| 2,199 |
| 7,978 |
| ||
Accrued liabilities |
| 10,462 |
| 10,513 |
| ||
Payable to Dover Motorsports, Inc. |
| — |
| 4 |
| ||
Deferred revenue |
| 427 |
| 463 |
| ||
Revolving line of credit |
| 45,000 |
| 47,040 |
| ||
Total current liabilities |
| 62,131 |
| 70,478 |
| ||
|
|
|
|
|
| ||
Liability for pension benefits |
| 3,210 |
| 3,353 |
| ||
Deferred income taxes |
| 2,773 |
| 2,725 |
| ||
Total liabilities |
| 68,114 |
| 76,556 |
| ||
|
|
|
|
|
| ||
Stockholders’ equity: |
|
|
|
|
| ||
Common stock |
| 1,788 |
| 1,774 |
| ||
Class A common stock |
| 1,487 |
| 1,487 |
| ||
Additional paid-in capital |
| 4,707 |
| 4,663 |
| ||
Retained earnings |
| 108,282 |
| 109,335 |
| ||
Accumulated other comprehensive loss |
| (1,092 | ) | (1,095 | ) | ||
Total stockholders’ equity |
| 115,172 |
| 116,164 |
| ||
Total liabilities and stockholders’ equity |
| $ | 183,286 |
| $ | 192,720 |
|
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
|
| Three Months Ended |
| ||||
|
| March 31, |
| ||||
|
| 2014 |
| 2013 |
| ||
|
|
|
|
|
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Operating activities: |
|
|
|
|
| ||
Net loss |
| $ | (1,053 | ) | $ | (283 | ) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
|
| ||
Depreciation |
| 2,295 |
| 2,509 |
| ||
Amortization of credit facility origination fees |
| 48 |
| 54 |
| ||
Stock-based compensation |
| 162 |
| 196 |
| ||
Deferred income taxes |
| 14 |
| 57 |
| ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| (459 | ) | 154 |
| ||
Due from State of Delaware |
| 5,327 |
| 7,159 |
| ||
Inventories |
| 196 |
| (39 | ) | ||
Prepaid expenses and other |
| 187 |
| 386 |
| ||
Income taxes receivable/payable |
| (383 | ) | 98 |
| ||
Accounts payable |
| (437 | ) | 215 |
| ||
Purses due horsemen |
| (5,779 | ) | (7,192 | ) | ||
Accrued liabilities |
| (51 | ) | (694 | ) | ||
Payable to Dover Motorsports, Inc. |
| (4 | ) | — |
| ||
Deferred revenue |
| (36 | ) | (110 | ) | ||
Other liabilities |
| (141 | ) | (80 | ) | ||
Net cash (used in) provided by operating activities |
| (114 | ) | 2,430 |
| ||
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|
|
|
|
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Investing activities: |
|
|
|
|
| ||
Capital expenditures |
| (210 | ) | (569 | ) | ||
Net cash used in investing activities |
| (210 | ) | (569 | ) | ||
|
|
|
|
|
| ||
Financing activities: |
|
|
|
|
| ||
Borrowings from revolving line of credit |
| 25,690 |
| 29,690 |
| ||
Repayments of revolving line of credit |
| (27,730 | ) | (31,690 | ) | ||
Repurchase of common stock |
| (104 | ) | (144 | ) | ||
Credit facility fees |
| — |
| (70 | ) | ||
Net cash used in financing activities |
| (2,144 | ) | (2,214 | ) | ||
|
|
|
|
|
| ||
Net decrease in cash |
| (2,468 | ) | (353 | ) | ||
Cash, beginning of period |
| 12,950 |
| 14,993 |
| ||
Cash, end of period |
| $ | 10,482 |
| $ | 14,640 |
|