Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | ||
Mar. 31, 2014 | Apr. 25, 2014 | Apr. 25, 2014 | |
Common stock | Class A common stock | ||
Entity Registrant Name | 'DOVER DOWNS GAMING & ENTERTAINMENT INC | ' | ' |
Entity Central Index Key | '0001162556 | ' | ' |
Document Type | '10-Q | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 17,880,650 | 14,870,673 |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q1 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Gaming | $39,782 | $45,303 |
Other operating | 5,695 | 5,215 |
Total revenues | 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 |
Total expenses | 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 |
Change in pension net actuarial loss and prior service cost, net of income taxes | 1 | 15 |
Unrealized gain on available-for-sale securities, net of income taxes | 2 | 6 |
Comprehensive loss | ($1,050) | ($262) |
Net loss per common share: | ' | ' |
Basic (in dollars per share) | ($0.03) | ($0.01) |
Diluted (in dollars per share) | ($0.03) | ($0.01) |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash | $10,482,000 | $12,950,000 |
Accounts receivable | 4,707,000 | 4,248,000 |
Due from State of Delaware | 2,898,000 | 8,225,000 |
Inventories | 1,761,000 | 1,957,000 |
Prepaid expenses and other | 2,257,000 | 2,432,000 |
Income taxes receivable | 519,000 | 138,000 |
Deferred income taxes | 1,301,000 | 1,268,000 |
Total current assets | 23,925,000 | 31,218,000 |
Property and equipment, net | 158,493,000 | 160,570,000 |
Other assets | 868,000 | 932,000 |
Total assets | 183,286,000 | 192,720,000 |
Current liabilities: | ' | ' |
Accounts payable | 4,043,000 | 4,480,000 |
Purses due horsemen | 2,199,000 | 7,978,000 |
Accrued liabilities | 10,462,000 | 10,513,000 |
Payable to Dover Motorsports, Inc. | ' | 4,000 |
Deferred revenue | 427,000 | 463,000 |
Revolving line of credit | 45,000,000 | 47,040,000 |
Total current liabilities | 62,131,000 | 70,478,000 |
Liability for pension benefits | 3,210,000 | 3,353,000 |
Deferred income taxes | 2,773,000 | 2,725,000 |
Total liabilities | 68,114,000 | 76,556,000 |
Commitments and contingencies (see Notes to the Consolidated Financial Statements) | ' | ' |
Stockholders' equity: | ' | ' |
Preferred stock, $0.10 par value; 1,000,000 shares authorized; shares issued and outstanding: none | ' | ' |
Additional paid-in capital | 4,707,000 | 4,663,000 |
Retained earnings | 108,282,000 | 109,335,000 |
Accumulated other comprehensive loss | -1,092,000 | -1,095,000 |
Total stockholders' equity | 115,172,000 | 116,164,000 |
Total liabilities and stockholders' equity | 183,286,000 | 192,720,000 |
Common stock | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | 1,788,000 | 1,774,000 |
Class A common stock | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | $1,487,000 | $1,487,000 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Preferred stock, par value (in dollars per share) | $0.10 | $0.10 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock | ' | ' |
Common stock, par value (in dollars per share) | $0.10 | $0.10 |
Common stock, shares authorized | 74,000,000 | 74,000,000 |
Common stock, shares issued | 17,880,650 | 17,736,479 |
Common stock, shares outstanding | 17,880,650 | 17,736,479 |
Class A common stock | ' | ' |
Common stock, par value (in dollars per share) | $0.10 | $0.10 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 14,870,673 | 14,870,673 |
Common stock, shares outstanding | 14,870,673 | 14,870,673 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
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 |
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 |
Supplemental information: | ' | ' |
Interest paid | $433 | $347 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
NOTE 1 — Basis of Presentation | |
References in this document to “we,” “us” and “our” mean Dover Downs Gaming & Entertainment, Inc. and/or its wholly owned subsidiaries, as appropriate. | |
The accompanying consolidated financial statements have been prepared in compliance with Rule 10-01 of Regulation S-X and U.S. generally accepted accounting principles, and accordingly do not include all of the information and disclosures required for audited financial statements. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our latest Annual Report on Form 10-K filed on March 7, 2014. In the opinion of management, these consolidated financial statements include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods presented. Operating results for the three months ended March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. |
Business_Operations
Business Operations | 3 Months Ended |
Mar. 31, 2014 | |
Business Operations | ' |
Business Operations | ' |
NOTE 2 - Business Operations | |
We are a premier gaming and entertainment resort destination whose operations consist of: | |
· Dover Downs Casino — a 165,000-square foot casino complex featuring popular table games, including craps, roulette and card games such as blackjack, Spanish 21, baccarat, 3-card and pai gow poker, the latest in slot machine offerings, multi-player electronic table games, the Crown Royal poker room, a Race & Sports Book operation, the Dover Downs’ Fire & Ice Lounge, the Festival Buffet, Doc Magrogan’s Oyster House, Frankie’s Italian restaurant, as well as several bars, restaurants and four retail outlets; | |
· Dover Downs Hotel and Conference Center — a 500 room AAA Four Diamond hotel with a full-service spa/salon, conference, banquet, ballroom and concert hall facilities; and | |
· Dover Downs Raceway — a harness racing track with pari-mutuel wagering on live and simulcast horse races. | |
All of our gaming operations are located at our entertainment complex in Dover, the capital of the State of Delaware. | |
In February 2013, we opened a Herschel’s Famous 34 Pub & Grill in Athens, Georgia, which has since been rebranded as Herschel’s 34 Chicken & Ribs Kitchen. Herschel’s 34 is a 110-seat sports-themed restaurant owned and operated by us on approximately 4,100 square feet of leased property. We have license rights to the name and likeness of former college and professional football star Herschel Walker for restaurant operations. | |
Dover Downs Gaming & Entertainment, Inc. is a public holding company that has two wholly owned subsidiaries: Dover Downs, Inc. and Dover Downs Gaming Management Corp. Dover Downs, Inc. was incorporated in 1967 and began motorsports and harness racing operations in 1969. In June of 1994, legislation authorizing video lottery operations in the State of Delaware (the “State”) was adopted. Our casino operations began on December 29, 1995. As a result of several restructurings, Dover Downs, Inc. became a wholly owned subsidiary of Dover Motorsports, Inc. (formerly known as Dover Downs Entertainment, Inc.) (“DVD”), and became the operating entity for all of DVD’s gaming operations. | |
Dover Downs Gaming & Entertainment, Inc. was incorporated in the State in December of 2001 as a wholly owned subsidiary of DVD. Effective March 31, 2002, DVD completed a tax-free spin-off of its gaming operations by contributing 100% of the issued and outstanding common stock of Dover Downs, Inc. to Dover Downs Gaming & Entertainment, Inc., and subsequently distributing 100% of our issued and outstanding common stock to DVD stockholders. Immediately following the spin-off, Dover Downs Gaming & Entertainment, Inc. became an independent publicly traded company. | |
Dover Downs, Inc. is authorized to conduct video lottery, sports wagering, table game and internet gaming operations as one of three “Licensed Agents” under the Delaware State Lottery Code. Licensing, administration and control of gaming operations in Delaware is under the Delaware State Lottery Office and Delaware’s Department of Safety and Homeland Security, Division of Gaming Enforcement. | |
Our license from the Delaware Harness Racing Commission (the “Commission”) to hold harness race meetings on our premises and to offer pari-mutuel wagering on live and simulcast horse races must be renewed on an annual basis. In order to maintain our gaming license, we are required to maintain our harness horse racing license. We have received an annual license from the Commission for the past 45 consecutive years and management believes that our relationship with the Commission remains good. | |
Due to the nature of our business activities, we are subject to various federal, state and local regulations. As part of our license arrangements, we are subject to various taxes and fees which are subject to change by the Delaware legislature. | |
In recent years, additional gaming venues have opened in Maryland, Pennsylvania and New Jersey. These venues — particularly a large casino at Arundel Mills Mall in Maryland which opened in June 2012 with slot machines and subsequently added table games in April 2013 — are having a significant adverse effect on our visitation numbers, our revenues and our profitability. Management has estimated that approximately 32% of our gaming win comes from Maryland patrons and approximately 63% of our Capital Club® member gaming win comes from out of state patrons. | |
On June 28, 2012, the State enacted the Delaware Gaming Competitiveness Act of 2012 (the “Act”), under which Delaware’s video lottery agents are authorized to offer, through their websites, internet versions of their table games (including poker) and video lottery offerings. All games remain under the control and operation of the Delaware Lottery. These internet gaming offerings capitalize on a 2011 United States Department of Justice ruling clarifying that wagering within a state’s boundaries does not violate the federal Wire Act. We began offering internet gaming in the fourth quarter of 2013; to date operating results from internet gaming have not been material. | |
Internet lottery games are, at least initially, offered solely to persons located within the State of Delaware. This territorial limitation would not apply to gaming pursuant to an interstate compact, such as the one announced in February 2014 between Delaware and Nevada. Internet gaming participation is limited to persons who meet the age requirements for equivalent non-internet games. | |
Revenues from the internet versions of table games and video lottery games are distributed generally pursuant to the formula currently applicable to those games physically located within our casino, with the exception that internet service provider costs are deducted first, and the Delaware Lottery retains the first $3.75 million of state-wide net proceeds. The Act also eliminated and restructured certain fees currently paid by video lottery agents to incentivize agents to make capital expenditures, spend on marketing and promotions, and make debt service payments. In February 2012, we paid a $1,540,000 gaming license fee, which was for the period July 1, 2011 to June 30, 2012 — this fee was eliminated beginning July 1, 2012. In June 2012, we paid a $2,241,000 table game license fee, which was for the period July 1, 2012 to June 30, 2013. This fee decreased to $1,017,000 for the period July 1, 2013 to June 30, 2014 and was paid in June 2013. We estimate that the table game license fee will be approximately $1,100,000 for the period July 1, 2014 to June 30, 2015, which we will pay in June 2014. | |
On July, 1, 2013, the State enacted a bond and capital improvements bill which appropriates $8,000,000 to the Department of Finance to be used to offset increases in vendor costs that the three Delaware video lottery agents would otherwise be required to pay for the period July 1, 2013 to June 30, 2014. Additionally, the bill created a Lottery & Gaming Study Commission responsible for examining the competitive marketplace confronting the Delaware gaming industry, including the business performance and business plans of existing lottery agents, the marketing efforts and investments made by Delaware video lottery agents, and the division of revenue from the video lottery, sports lottery, table games and internet gaming. The commission’s findings and recommendations were released in March 2014 and included: the State sharing certain vendor costs that the three Delaware video lottery agents currently pay associated with slot machines; eliminating the annual table game license fee; and reducing the State’s share of table game win. These recommendations require legislation in order to be effected. The Delaware legislature is in session until the end of June and then does not reconvene until the following January. Since Delaware has a fiscal year that ends June 30, it is likely that any legislation will not be effective until July 1, 2014. Without legislative relief on gaming taxes and license fees, we may be unable to refinance our credit facility on favorable terms or may default on our obligations, we may be unable to allocate sufficient resources to marketing and promotions in order to compete effectively in the regional marketplace, we may be unable to allocate sufficient resources to maintaining our facility, and we may be required to curtail operations and lay off employees in order to manage expenses - especially with respect to operations that have operated at a loss, such as table games and internet gaming. Such actions could adversely affect our business, financial condition, operating results and cash flow. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Summary of Significant Accounting Policies | ' | |||||||
Summary of Significant Accounting Policies | ' | |||||||
NOTE 3 - Summary of Significant Accounting Policies | ||||||||
Basis of consolidation and presentation—The consolidated financial statements include the accounts of Dover Downs Gaming & Entertainment, Inc. and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated. | ||||||||
Accounts receivable—Accounts receivable are stated at their estimated collectible amount and primarily consist of casino, hotel and other receivables which arise in the normal course of business. We issue credit in the form of “markers” to approved casino customers who are investigated as to their credit worthiness. | ||||||||
Investments—Investments, which consist of mutual funds, are classified as available-for-sale and reported at fair-value in other assets in our consolidated balance sheets. Changes in fair value are reported in other comprehensive income (loss). See NOTE 6 — Stockholders’ Equity and NOTE 7 — Fair Value Measurements for further discussion. | ||||||||
Property and equipment—Property and equipment is stated at cost. Depreciation is provided for financial reporting purposes using the straight-line method over the asset’s estimated useful life. Accumulated depreciation was $118,006,000 and $115,790,000 as of March 31, 2014 and December 31, 2013, respectively. | ||||||||
We perform reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its fair value. Generally, fair value will be determined using valuation techniques such as the present value of future cash flows. | ||||||||
Income taxes—Deferred income taxes are provided on all differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements based upon enacted statutory tax rates in effect at the balance sheet date. Tax years after 2009 remain open to examination for federal and state income tax purposes. | ||||||||
Point loyalty program—We currently have a point loyalty program for our customers which allows them to earn points based on the volume of their gaming activity. All reward points earned by customers are expensed in the period they are earned. The estimated amount of points redeemable for cash is recorded as a reduction of gaming revenue and the estimated amount of points redeemable for services and merchandise is recorded as gaming expense. In determining the amount of the liability, which was $1,914,000 and $1,930,000, respectively, at March 31, 2014 and December 31, 2013, we estimate a redemption rate, a cost of rewards to be offered and the mix of cash, goods and services for which reward points will be redeemed. We use historical data to estimate those amounts. | ||||||||
Revenue and expense recognition—Gaming revenues represent (i) the net win from slot machine, table games, internet gaming and sports wagering and (ii) commissions from pari-mutuel wagering. Other operating revenues consist of hotel rooms revenue, food and beverage sales and other miscellaneous income. Revenues do not include the retail amount of hotel rooms, food and beverage and other miscellaneous goods and services provided without charge to customers as promotional items of $4,470,000 and $5,005,000 for the three months ended March 31, 2014 and 2013, respectively. The estimated direct cost of providing these items has been charged to the casino through interdepartmental allocations and is included in gaming expenses in the consolidated statements of earnings. | ||||||||
For the casino operations, the difference between the amount wagered by bettors and the amount paid out to bettors is referred to as the win. The win is included in the amount recorded in our consolidated financial statements as gaming revenue. The Delaware State Lottery Office sweeps the win from the casino operations, collects the State’s share of the win and the amount due to the vendors under contract with the State who provide the slot machines and associated computer systems, collects the amount allocable to purses for harness horse racing and remits the remainder to us as our commission for acting as a Licensed Agent. Gaming expenses include the amounts collected by the State (i) for the State’s share of the win, (ii) for remittance to the providers of the slot machines and associated computer systems, and (iii) for harness horse racing purses. We recognize revenues from sports wagering commissions when the event occurs. We recognize revenues from pari-mutuel commissions earned from live harness horse racing and importing of simulcast signals from other race tracks when the race occurs. Revenues from hotel rooms, food and beverage sales and other miscellaneous income are recognized at the time the service is provided. Amounts received in advance for hotel rooms, convention bookings and advance ticket sales are recorded as deferred revenue until the services are provided to the customer, at which point revenue is recognized. | ||||||||
Advertising costs—The cost of general advertising is charged to operations as incurred. Advertising expenses were $548,000 and $510,000 for the three months ended March 31, 2014 and 2013, respectively. | ||||||||
Net loss per common share—Nonvested share-based payment awards that include rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities, and the two-class method of computing basic and diluted net loss per common share (“EPS”) is applied for all periods presented. The following table sets forth the computation of EPS (in thousands, except per share amounts): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Net loss per common share — basic: | ||||||||
Net loss | $ | (1,053 | ) | $ | (283 | ) | ||
Allocation to nonvested restricted stock awards | — | — | ||||||
Net loss available to common stockholders | $ | (1,053 | ) | $ | (283 | ) | ||
Weighted-average shares outstanding | 31,959 | 31,846 | ||||||
Net loss per common share — basic | $ | (0.03 | ) | $ | (0.01 | ) | ||
Net loss per common share — diluted: | ||||||||
Net loss | $ | (1,053 | ) | $ | (283 | ) | ||
Allocation to nonvested restricted stock awards | — | — | ||||||
Net loss available to common stockholders | $ | (1,053 | ) | $ | (283 | ) | ||
Weighted-average shares and dilutive shares outstanding | 31,959 | 31,846 | ||||||
Net loss per common share — diluted | $ | (0.03 | ) | $ | (0.01 | ) | ||
There were no options outstanding during the three months ended March 31, 2014 or 2013. | ||||||||
Accounting for stock-based compensation—We recorded total stock-based compensation expense for our restricted stock awards of $162,000 and $196,000 as general and administrative expenses for the three months ended March 31, 2014 and 2013, respectively. We recorded income tax expense of $119,000 and $128,000 for the three months ended March 31, 2014 and 2013, respectively, related to our restricted stock awards. | ||||||||
Use of estimates—The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities, disclosures about contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on our best estimates and judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which we believe to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. |
Credit_Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2014 | |
Credit Facility | ' |
Credit Facility | ' |
NOTE 4 — Credit Facility | |
At March 31, 2014, we had a $60,000,000 credit agreement with a bank group. The facility expires June 17, 2014. Interest is based upon LIBOR plus a margin that varies between 150 and 350 basis points (300 basis points at March 31, 2014) depending on the ratio of funded debt to earnings before interest, taxes, depreciation and amortization (the “leverage ratio”). The credit facility contains certain covenants including minimum fixed charge coverage, maximum funded debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) and minimum EBITDA and tangible net worth. Material adverse changes in our results of operations could impact our ability to satisfy these requirements. In addition, the credit agreement includes a material adverse change clause and prohibits the payment of dividends. The credit facility provides for seasonal funding needs, capital improvements and other general corporate purposes. At March 31, 2014, we were in compliance with all terms of the facility and there was $45,000,000 outstanding at a weighted average interest rate of 3.2%. At March 31, 2014, $15,000,000 was available pursuant to the facility; however, in order to maintain compliance with the required quarterly debt covenant calculations as of March 31, 2014 $1,967,000 could have been borrowed as of that date. | |
The facility is classified as a current liability as of March 31, 2014 and December 31, 2013 in our consolidated balance sheets as the facility expires on June 17, 2014. We are currently seeking to refinance this obligation; however, there is no assurance that we will be able to execute this refinancing or, if we are able to refinance this obligation, that the terms of such refinancing would be as favorable as the terms of our existing credit facility. These factors raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. |
Pension_Plans
Pension Plans | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Pension Plans | ' | |||||||
Pension Plans | ' | |||||||
NOTE 5 — Pension Plans | ||||||||
We maintain a non-contributory, tax qualified defined benefit pension plan that has been frozen since July 2011. All of our full time employees were eligible to participate in this qualified pension plan. Benefits provided by our qualified pension plan were based on years of service and employees’ remuneration over their term of employment. We also maintain a non-qualified, non-contributory defined benefit pension plan, the excess plan, for certain employees that has been frozen since July 2011. This excess plan provided benefits that would otherwise be provided under the qualified pension plan but for maximum benefit and compensation limits applicable under federal tax law. The cost associated with the excess plan is determined using the same actuarial methods and assumptions as those used for our qualified pension plan. The assets for the excess plan aggregate $274,000 and $269,000 as of March 31, 2014 and December 31, 2013, respectively, and are recorded in other assets in our consolidated balance sheets (see NOTE 7 — Fair Value Measurements). | ||||||||
On June 15, 2011, we decided to freeze participation and benefit accruals under our pension plans, primarily to reduce some of the impact on earnings and volatility in cash flows that can accompany the maintenance of a defined benefit plan. The freeze was effective July 31, 2011. Compensation earned by employees up to July 31, 2011 is used for purposes of calculating benefits under our pension plan with no future benefit accruals after this date. Participants as of July 31, 2011 continue to earn vesting credit with respect to their frozen accrued benefits as they continue to work. | ||||||||
The components of net periodic pension income for our defined benefit pension plans are as follows: | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Interest cost | $ | 217,000 | $ | 213,000 | ||||
Expected return on plan assets | (276,000 | ) | (247,000 | ) | ||||
Recognized net actuarial loss | 2,000 | 25,000 | ||||||
$ | (57,000 | ) | $ | (9,000 | ) | |||
We did not contribute to our defined benefit pension plans during the three months ended March 31, 2014 and 2013. | ||||||||
Effective December 1, 2012, we created a new non-elective, non-qualified supplemental executive retirement plan (“SERP”) in connection with the freezing of our pension plan. Its purpose is to provide deferred compensation to certain highly compensated employees that approximates the value of benefits lost by the freezing of the pension plan which are not offset by our enhanced matching contribution in our 401(k) plan. The SERP is a discretionary defined contribution plan and contributions made to the SERP in any given year are not guaranteed and will be at the sole discretion of our Compensation and Stock Incentive Committee. During the three months ended March 31, 2014 and 2013, we recorded an expense of $30,000 and $30,000, respectively, related to the SERP and contributed $115,000 and $107,000 to the plan, respectively. The liability for pension benefits was $28,000 and $113,000 as of March 31, 2014 and December 31, 2013, respectively. | ||||||||
We maintain a defined contribution 401(k) plan which permits participation by substantially all employees. Our matching contributions to the 401(k) plan were $195,000 and $223,000 for the three months ended March 31, 2014 and 2013, respectively. |
Stockholders_Equity
Stockholders' Equity | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||
NOTE 6 — Stockholders’ Equity | |||||||||||||||||
Changes in the components of stockholders’ equity are as follows (in thousands, except per share amounts): | |||||||||||||||||
Common | Class A | Additional | Retained | Accumulated | |||||||||||||
Stock | Common | Paid-in | Earnings | Other | |||||||||||||
Stock | Capital | Comprehensive | |||||||||||||||
Loss | |||||||||||||||||
Balance at December 31, 2013 | $ | 1,774 | $ | 1,487 | $ | 4,663 | $ | 109,335 | $ | (1,095 | ) | ||||||
Net loss | — | — | — | (1,053 | ) | — | |||||||||||
Issuance of nonvested stock awards, net of forfeitures | 21 | — | (21 | ) | — | — | |||||||||||
Stock-based compensation | — | — | 162 | — | — | ||||||||||||
Change in net actuarial loss and prior service cost, net of income tax expense of $1 | — | — | — | — | 1 | ||||||||||||
Unrealized gain on available-for-sale securities, net of income tax expense of $2 | — | — | — | — | 2 | ||||||||||||
Repurchase and retirement of common stock | (7 | ) | — | (97 | ) | — | — | ||||||||||
Balance at March 31, 2014 | $ | 1,788 | $ | 1,487 | $ | 4,707 | $ | 108,282 | $ | (1,092 | ) | ||||||
As of March 31, 2014 and December 31, 2013, accumulated other comprehensive loss consists of the following: | |||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||
Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $771,000 and $772,000, respectively | $ | (1,122,000 | ) | $ | (1,123,000 | ) | |||||||||||
Accumulated unrealized gain on available-for-sale securities, net of income tax expense of $22,000 and $20,000, respectively | 30,000 | 28,000 | |||||||||||||||
Accumulated other comprehensive loss | $ | (1,092,000 | ) | $ | (1,095,000 | ) | |||||||||||
On January 23, 2013, our Board of Directors suspended the quarterly dividend. In addition, our credit facility prohibits the payment of dividends. See NOTE 4 — Credit Facility. | |||||||||||||||||
On October 23, 2002, our Board of Directors authorized the repurchase of up to 3,000,000 shares of our outstanding common stock. The purchases may be made in the open market or in privately negotiated transactions as conditions warrant. The repurchase authorization has no expiration date, does not obligate us to acquire any specific number of shares and may be suspended at any time. No purchases of our equity securities were made pursuant to this authorization during the first three months of 2014 or 2013. At March 31, 2014, we had remaining repurchase authority of 1,653,333 shares. At present we are not permitted to make such purchases under our credit facility. | |||||||||||||||||
We have a stock incentive plan which provides for the grant of up to 2,000,000 shares of common stock to our officers and key employees through stock options and/or awards valued in whole or in part by reference to our common stock, such as nonvested restricted stock awards. Under the plan, nonvested restricted stock vests an aggregate of twenty percent each year beginning on the second anniversary date of the grant. The aggregate market value of the nonvested restricted stock at the date of issuance is being amortized on a straight-line basis over the six-year period. We granted 211,000 and 205,500 stock awards under this plan during the three months ended March 31, 2014 and 2013, respectively. As of March 31, 2014, there were 563,975 shares available for granting options or stock awards. | |||||||||||||||||
During the three months ended March 31, 2014 and 2013, we purchased and retired 66,829 and 61,869 shares of our outstanding common stock for $104,000 and $144,000, respectively. These purchases were made from employees in connection with the vesting of restricted stock awards under our stock incentive plan and were not pursuant to the aforementioned repurchase authorization. Since the vesting of a restricted stock award is a taxable event to our employees for which income tax withholding is required, the plan allows employees to surrender to us some of the shares that would otherwise have vested in satisfaction of their tax liability. The surrender of these shares is treated by us as a purchase of the shares. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
NOTE 7 — Fair Value Measurements | ||||||||||||||
Our financial instruments are classified and disclosed in one of the following three categories: | ||||||||||||||
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; | ||||||||||||||
Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; | ||||||||||||||
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). | ||||||||||||||
The following table summarizes the valuation of our financial instrument pricing levels as of March 31, 2014 and December 31, 2013: | ||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
March 31, 2014 | ||||||||||||||
Available-for-sale securities | $ | 274,000 | $ | 274,000 | $ | — | $ | — | ||||||
December 31, 2013 | ||||||||||||||
Available-for-sale securities | $ | 269,000 | $ | 269,000 | $ | — | $ | — | ||||||
Our investments in available-for-sale securities consist of mutual funds. These investments are included in other assets on our consolidated balance sheets. | ||||||||||||||
The carrying amounts of other financial instruments reported in our consolidated balance sheets for current assets and current liabilities approximates their fair values because of the short maturity of these instruments. | ||||||||||||||
At March 31, 2014 and December 31, 2013, there was $45,000,000 and $47,040,000, respectively, outstanding under our revolving credit agreement. The borrowings under our revolving credit agreement bear interest at the variable rate described in NOTE 4 — Credit Facility and therefore we believe approximate fair value. We consider the inputs utilized to determine the fair value of borrowings under our revolving credit agreement to be Level 2 inputs. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions | ' |
Related Party Transactions | ' |
NOTE 8 - Related Party Transactions | |
During the three months ended March 31, 2014 and 2013, we allocated costs of $466,000 and $427,000, respectively to DVD, a company related through common ownership, for certain administrative and operating services, including leased space. DVD allocated certain administrative and operating service costs of $61,000 and $94,000, respectively, to us for the three months ended March 31, 2014 and 2013. The allocations were based on an analysis of each company’s share of the costs. Additionally, DVD invoiced us $5,000 and $0 during the three months ended March 31, 2014 and 2013, respectively, for tickets to DVD’s spring NASCAR event weekend at Dover International Speedway. As of December 31, 2013, our consolidated balance sheets included a $4,000 payable to DVD for the aforementioned items. This payable was settled in January of 2014. The net costs incurred by each company for these services are not necessarily indicative of the costs that would have been incurred if the companies had been unrelated entities and/or had otherwise independently managed these functions; however, management believes that these costs are reasonable. | |
Prior to our spin-off from DVD in 2002, both companies shared certain real property in Dover, Delaware. At the time of the spin-off, some of this real property was transferred to us to ensure that the real property holdings of each company was aligned with its past uses and future business needs. During our harness racing season, we have historically used the 5/8-mile harness racing track that is located on DVD’s property and is on the inside of its one-mile motorsports superspeedway. In order to continue this historic use, DVD granted a perpetual easement to the harness track to us at the time of the spin-off. This perpetual easement allows us to have exclusive use of the harness track during the period beginning November 1 of each year and ending April 30 of the following year, together with set up and tear down rights for the two weeks before and after such period. The easement requires that we maintain the harness track but does not require the payment of any rent. | |
Various easements and agreements relative to access, utilities and parking have also been entered into between us and DVD relative to our respective Dover, Delaware facilities. DVD pays rent to us for the lease of its principal executive office space. We also allow DVD to use our indoor grandstands in connection with DVD’s two annual motorsports weekends. We do not assess rent for this nominal use and may discontinue the use at our discretion. | |
Henry B. Tippie, Chairman of our Board of Directors, controls in excess of fifty percent of our voting power. Mr. Tippie’s voting control emanates from his direct and indirect holdings of common stock and Class A common stock, from his status as trustee of the RMT Trust, our largest stockholder, and from certain shares as to which he has voting rights pursuant to a voting agreement with R. Randall Rollins, one of our directors. This means that Mr. Tippie has the ability to determine the outcome of our election of directors and to determine the outcome of many significant corporate transactions, many of which only require the approval of a majority of our voting power. | |
Patrick J. Bagley, Timothy R. Horne, Denis McGlynn, Jeffrey W. Rollins, R. Randall Rollins, Richard K. Struthers and Henry B. Tippie are all Directors of ours and DVD. Denis McGlynn is the President and Chief Executive Officer of both companies, Klaus M. Belohoubek is the Senior Vice President — General Counsel and Secretary of both companies and Timothy R. Horne is the Senior Vice President — Finance and Chief Financial Officer of both companies. Mr. Tippie controls in excess of fifty percent of the voting power of DVD. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies | ' |
Commitments and Contingencies | ' |
NOTE 9 — Commitments and Contingencies | |
We are a party to ordinary routine litigation incidental to our business. Management does not believe that the resolution of any of these matters is likely to have a material adverse effect on our results of operations, financial position or cash flows. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Summary of Significant Accounting Policies | ' | |||||||
Basis of consolidation and presentation | ' | |||||||
Basis of consolidation and presentation—The consolidated financial statements include the accounts of Dover Downs Gaming & Entertainment, Inc. and its wholly owned subsidiaries. Intercompany transactions and balances have been eliminated. | ||||||||
Accounts receivable | ' | |||||||
Accounts receivable—Accounts receivable are stated at their estimated collectible amount and primarily consist of casino, hotel and other receivables which arise in the normal course of business. We issue credit in the form of “markers” to approved casino customers who are investigated as to their credit worthiness. | ||||||||
Investments | ' | |||||||
Investments—Investments, which consist of mutual funds, are classified as available-for-sale and reported at fair-value in other assets in our consolidated balance sheets. Changes in fair value are reported in other comprehensive income (loss). See NOTE 6 — Stockholders’ Equity and NOTE 7 — Fair Value Measurements for further discussion. | ||||||||
Property and equipment | ' | |||||||
Property and equipment—Property and equipment is stated at cost. Depreciation is provided for financial reporting purposes using the straight-line method over the asset’s estimated useful life. Accumulated depreciation was $118,006,000 and $115,790,000 as of March 31, 2014 and December 31, 2013, respectively. | ||||||||
We perform reviews for impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its fair value. Generally, fair value will be determined using valuation techniques such as the present value of future cash flows. | ||||||||
Income taxes | ' | |||||||
Income taxes—Deferred income taxes are provided on all differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements based upon enacted statutory tax rates in effect at the balance sheet date. Tax years after 2009 remain open to examination for federal and state income tax purposes. | ||||||||
Point loyalty program | ' | |||||||
Point loyalty program—We currently have a point loyalty program for our customers which allows them to earn points based on the volume of their gaming activity. All reward points earned by customers are expensed in the period they are earned. The estimated amount of points redeemable for cash is recorded as a reduction of gaming revenue and the estimated amount of points redeemable for services and merchandise is recorded as gaming expense. In determining the amount of the liability, which was $1,914,000 and $1,930,000, respectively, at March 31, 2014 and December 31, 2013, we estimate a redemption rate, a cost of rewards to be offered and the mix of cash, goods and services for which reward points will be redeemed. We use historical data to estimate those amounts. | ||||||||
Revenue and expense recognition | ' | |||||||
Revenue and expense recognition—Gaming revenues represent (i) the net win from slot machine, table games, internet gaming and sports wagering and (ii) commissions from pari-mutuel wagering. Other operating revenues consist of hotel rooms revenue, food and beverage sales and other miscellaneous income. Revenues do not include the retail amount of hotel rooms, food and beverage and other miscellaneous goods and services provided without charge to customers as promotional items of $4,470,000 and $5,005,000 for the three months ended March 31, 2014 and 2013, respectively. The estimated direct cost of providing these items has been charged to the casino through interdepartmental allocations and is included in gaming expenses in the consolidated statements of earnings. | ||||||||
For the casino operations, the difference between the amount wagered by bettors and the amount paid out to bettors is referred to as the win. The win is included in the amount recorded in our consolidated financial statements as gaming revenue. The Delaware State Lottery Office sweeps the win from the casino operations, collects the State’s share of the win and the amount due to the vendors under contract with the State who provide the slot machines and associated computer systems, collects the amount allocable to purses for harness horse racing and remits the remainder to us as our commission for acting as a Licensed Agent. Gaming expenses include the amounts collected by the State (i) for the State’s share of the win, (ii) for remittance to the providers of the slot machines and associated computer systems, and (iii) for harness horse racing purses. We recognize revenues from sports wagering commissions when the event occurs. We recognize revenues from pari-mutuel commissions earned from live harness horse racing and importing of simulcast signals from other race tracks when the race occurs. Revenues from hotel rooms, food and beverage sales and other miscellaneous income are recognized at the time the service is provided. Amounts received in advance for hotel rooms, convention bookings and advance ticket sales are recorded as deferred revenue until the services are provided to the customer, at which point revenue is recognized. | ||||||||
Advertising costs | ' | |||||||
Advertising costs—The cost of general advertising is charged to operations as incurred. Advertising expenses were $548,000 and $510,000 for the three months ended March 31, 2014 and 2013, respectively. | ||||||||
Net loss per common share | ' | |||||||
Net loss per common share—Nonvested share-based payment awards that include rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities, and the two-class method of computing basic and diluted net loss per common share (“EPS”) is applied for all periods presented. The following table sets forth the computation of EPS (in thousands, except per share amounts): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Net loss per common share — basic: | ||||||||
Net loss | $ | (1,053 | ) | $ | (283 | ) | ||
Allocation to nonvested restricted stock awards | — | — | ||||||
Net loss available to common stockholders | $ | (1,053 | ) | $ | (283 | ) | ||
Weighted-average shares outstanding | 31,959 | 31,846 | ||||||
Net loss per common share — basic | $ | (0.03 | ) | $ | (0.01 | ) | ||
Net loss per common share — diluted: | ||||||||
Net loss | $ | (1,053 | ) | $ | (283 | ) | ||
Allocation to nonvested restricted stock awards | — | — | ||||||
Net loss available to common stockholders | $ | (1,053 | ) | $ | (283 | ) | ||
Weighted-average shares and dilutive shares outstanding | 31,959 | 31,846 | ||||||
Net loss per common share — diluted | $ | (0.03 | ) | $ | (0.01 | ) | ||
There were no options outstanding during the three months ended March 31, 2014 or 2013. | ||||||||
Accounting for stock-based compensation | ' | |||||||
Accounting for stock-based compensation—We recorded total stock-based compensation expense for our restricted stock awards of $162,000 and $196,000 as general and administrative expenses for the three months ended March 31, 2014 and 2013, respectively. We recorded income tax expense of $119,000 and $128,000 for the three months ended March 31, 2014 and 2013, respectively, related to our restricted stock awards. | ||||||||
Use of estimates | ' | |||||||
Use of estimates—The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities, disclosures about contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on our best estimates and judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which we believe to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Summary of Significant Accounting Policies | ' | |||||||
Schedule of computation of basic and diluted EPS | ' | |||||||
The following table sets forth the computation of EPS (in thousands, except per share amounts): | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Net loss per common share — basic: | ||||||||
Net loss | $ | (1,053 | ) | $ | (283 | ) | ||
Allocation to nonvested restricted stock awards | — | — | ||||||
Net loss available to common stockholders | $ | (1,053 | ) | $ | (283 | ) | ||
Weighted-average shares outstanding | 31,959 | 31,846 | ||||||
Net loss per common share — basic | $ | (0.03 | ) | $ | (0.01 | ) | ||
Net loss per common share — diluted: | ||||||||
Net loss | $ | (1,053 | ) | $ | (283 | ) | ||
Allocation to nonvested restricted stock awards | — | — | ||||||
Net loss available to common stockholders | $ | (1,053 | ) | $ | (283 | ) | ||
Weighted-average shares and dilutive shares outstanding | 31,959 | 31,846 | ||||||
Net loss per common share — diluted | $ | (0.03 | ) | $ | (0.01 | ) |
Pension_Plans_Tables
Pension Plans (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Pension Plans | ' | |||||||
Schedule of components of net periodic pension income | ' | |||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
Interest cost | $ | 217,000 | $ | 213,000 | ||||
Expected return on plan assets | (276,000 | ) | (247,000 | ) | ||||
Recognized net actuarial loss | 2,000 | 25,000 | ||||||
$ | (57,000 | ) | $ | (9,000 | ) |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||
Stockholders' Equity | ' | ||||||||||||||||
Schedule of changes in the components of stockholders' equity | ' | ||||||||||||||||
Changes in the components of stockholders’ equity are as follows (in thousands, except per share amounts): | |||||||||||||||||
Common | Class A | Additional | Retained | Accumulated | |||||||||||||
Stock | Common | Paid-in | Earnings | Other | |||||||||||||
Stock | Capital | Comprehensive | |||||||||||||||
Loss | |||||||||||||||||
Balance at December 31, 2013 | $ | 1,774 | $ | 1,487 | $ | 4,663 | $ | 109,335 | $ | (1,095 | ) | ||||||
Net loss | — | — | — | (1,053 | ) | — | |||||||||||
Issuance of nonvested stock awards, net of forfeitures | 21 | — | (21 | ) | — | — | |||||||||||
Stock-based compensation | — | — | 162 | — | — | ||||||||||||
Change in net actuarial loss and prior service cost, net of income tax expense of $1 | — | — | — | — | 1 | ||||||||||||
Unrealized gain on available-for-sale securities, net of income tax expense of $2 | — | — | — | — | 2 | ||||||||||||
Repurchase and retirement of common stock | (7 | ) | — | (97 | ) | — | — | ||||||||||
Balance at March 31, 2014 | $ | 1,788 | $ | 1,487 | $ | 4,707 | $ | 108,282 | $ | (1,092 | ) | ||||||
Schedule of accumulated other comprehensive loss | ' | ||||||||||||||||
March 31, 2014 | December 31, 2013 | ||||||||||||||||
Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $771,000 and $772,000, respectively | $ | (1,122,000 | ) | $ | (1,123,000 | ) | |||||||||||
Accumulated unrealized gain on available-for-sale securities, net of income tax expense of $22,000 and $20,000, respectively | 30,000 | 28,000 | |||||||||||||||
Accumulated other comprehensive loss | $ | (1,092,000 | ) | $ | (1,095,000 | ) |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Summary of valuation of financial instrument | ' | |||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||
March 31, 2014 | ||||||||||||||
Available-for-sale securities | $ | 274,000 | $ | 274,000 | $ | — | $ | — | ||||||
December 31, 2013 | ||||||||||||||
Available-for-sale securities | $ | 269,000 | $ | 269,000 | $ | — | $ | — |
Business_Operations_Details
Business Operations (Details) (USD $) | 1 Months Ended | 3 Months Ended | |||||
Jun. 30, 2013 | Jun. 30, 2012 | Feb. 29, 2012 | Mar. 31, 2014 | Jul. 02, 2013 | Feb. 28, 2013 | Mar. 31, 2002 | |
agent | agent | sqft | |||||
subsidiary | item | ||||||
sqft | |||||||
outlet | |||||||
room | |||||||
Business Operations | ' | ' | ' | ' | ' | ' | ' |
Area of casino (in square feet) | ' | ' | ' | 165,000 | ' | ' | ' |
Number of retail outlets | ' | ' | ' | 4 | ' | ' | ' |
Number of rooms in AAA Four Diamond hotel | ' | ' | ' | 500 | ' | ' | ' |
Number of seats in sports-themed restaurant | ' | ' | ' | ' | ' | 110 | ' |
Area of leased property (in square feet) | ' | ' | ' | ' | ' | 4,100 | ' |
Number of wholly owned subsidiaries | ' | ' | ' | 2 | ' | ' | ' |
Percentage of the issued and outstanding common stock of Dover Downs, Inc. contributed by DVD | ' | ' | ' | ' | ' | ' | 100.00% |
Percentage of issued and outstanding common stock distributed to parent stockholders | ' | ' | ' | ' | ' | ' | 100.00% |
Number of Licensed Agents under Delaware State Lottery Code | ' | ' | ' | 3 | 3 | ' | ' |
Number of consecutive years for which annual license has been received from the Harness Racing Commission | ' | ' | ' | '45 years | ' | ' | ' |
State-wide net proceeds to be retained in lottery | ' | ' | ' | $3,750,000 | ' | ' | ' |
Gaming license fee paid | ' | ' | 1,540,000 | ' | ' | ' | ' |
Table game license fee paid | 1,017,000 | 2,241,000 | ' | ' | ' | ' | ' |
Estimated table game license fee for next Delaware Lottery fiscal year | ' | ' | ' | 1,100,000 | ' | ' | ' |
Business operations | ' | ' | ' | ' | ' | ' | ' |
Amount appropriated to Department of Finance under a bond and capital improvements bill | ' | ' | ' | ' | $8,000,000 | ' | ' |
Gaming win | Geographic concentration risk | Maryland patrons | ' | ' | ' | ' | ' | ' | ' |
Business operations | ' | ' | ' | ' | ' | ' | ' |
Estimated percentage of gaming win attributable to patrons | ' | ' | ' | 32.00% | ' | ' | ' |
Capital Club member gaming win | Geographic concentration risk | Out of state patrons | ' | ' | ' | ' | ' | ' | ' |
Business operations | ' | ' | ' | ' | ' | ' | ' |
Estimated percentage of gaming win attributable to patrons | ' | ' | ' | 63.00% | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Property and Equipment | ' | ' | ' |
Accumulated depreciation | $118,006,000 | ' | $115,790,000 |
Point loyalty program | ' | ' | ' |
Amount of liability for redeemable reward points | 1,914,000 | ' | 1,930,000 |
Revenue and expense recognition | ' | ' | ' |
Goods and services provided without charge to customers as promotional items | 4,470,000 | 5,005,000 | ' |
Advertising costs | ' | ' | ' |
Advertising expenses | $548,000 | $510,000 | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Net loss per common share - basic: | ' | ' |
Net loss | ($1,053,000) | ($283,000) |
Net loss available to common stockholders | -1,053,000 | -283,000 |
Weighted-average shares outstanding | 31,959,000 | 31,846,000 |
Net loss per common share - basic (in dollars per share) | ($0.03) | ($0.01) |
Net loss per common share - diluted: | ' | ' |
Net loss | -1,053,000 | -283,000 |
Net loss available to common stockholders | -1,053,000 | -283,000 |
Weighted-average shares and dilutive shares outstanding | 31,959,000 | 31,846,000 |
Net loss per common share - diluted (in dollars per share) | ($0.03) | ($0.01) |
Anti-dilutive securities not included in the computation of diluted EPS (in shares) | 0 | 0 |
Accounting for stock-based compensation | ' | ' |
Stock-based compensation expense for restricted stock awards | 162,000 | 196,000 |
Income tax expense related to restricted stock awards | $119,000 | $128,000 |
Credit_Facility_Details
Credit Facility (Details) (Credit facility, USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
Credit Facility | ' | ' |
Maximum borrowing capacity | $60,000,000 | ' |
Variable interest rate base | 'LIBOR | ' |
Percentage points added to the reference rate | 3.00% | ' |
Outstanding borrowings | 45,000,000 | 47,040,000 |
Weighted average interest rate on the amount outstanding (as a percent) | 32.00% | ' |
Amount available for borrowing pursuant to the facility | 15,000,000 | ' |
Amount available for borrowing subject to the required quarterly debt covenant | $1,967,000 | ' |
Minimum | ' | ' |
Credit Facility | ' | ' |
Percentage points added to the reference rate | 1.50% | ' |
Maximum | ' | ' |
Credit Facility | ' | ' |
Percentage points added to the reference rate | 3.50% | ' |
Pension_Plans_Details
Pension Plans (Details) (USD $) | Jul. 31, 2011 | Mar. 31, 2014 | Dec. 31, 2013 |
Excess plan | Excess plan | ||
Pension Plans | ' | ' | ' |
Fair values of pension assets | ' | $274,000 | $269,000 |
Future benefits accruals | $0 | ' | ' |
Pension_Plans_Details_2
Pension Plans (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Components of net periodic pension cost | ' | ' |
Interest cost | $217,000 | $213,000 |
Expected return on plan assets | -276,000 | -247,000 |
Recognized net actuarial loss | 2,000 | 25,000 |
Total net periodic pension cost | ($57,000) | ($9,000) |
Pension_Plans_Details_3
Pension Plans (Details 3) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
SERP | ' | ' | ' |
Defined contribution plan disclosures | ' | ' | ' |
Expense recorded | $30,000 | $30,000 | ' |
Employer contributions | 115,000 | 107,000 | ' |
Liability for benefits | 28,000 | ' | 113,000 |
Defined contribution 401 (k) plan) | ' | ' | ' |
Defined contribution plan disclosures | ' | ' | ' |
Expense recorded | $195,000 | $223,000 | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 3 Months Ended | 3 Months Ended | ||||||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | |
Common Stock | Common Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | |||
Class A common stock | Class A common stock | |||||||
Changes in the components of stockholders' equity | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | $116,164,000 | ' | $1,774,000 | $1,487,000 | $1,487,000 | $4,663,000 | $109,335,000 | ($1,095,000) |
Net loss | -1,053,000 | -283,000 | ' | ' | ' | ' | -1,035,000 | ' |
Issuance of nonvested stock awards, net of forfeitures | ' | ' | 21,000 | ' | ' | -21,000 | ' | ' |
Stock-based compensation | ' | ' | ' | ' | ' | 162,000 | ' | ' |
Change in net actuarial loss and prior service cost, net of income tax expense of $1 | ' | ' | ' | ' | ' | ' | ' | 1,000 |
Unrealized gain on available-for-sale securities, net of income tax expense of $2 | 2,000 | 6,000 | ' | ' | ' | ' | ' | 2,000 |
Repurchase and retirement of common stock | -104,000 | -144,000 | -7,000 | ' | ' | -97,000 | ' | ' |
Balance at the end of the period | 115,172,000 | ' | 1,788,000 | 1,487,000 | 1,487,000 | 4,707,000 | 108,282,000 | -1,092,000 |
Income tax expense on change in pension net actuarial loss and prior service cost | 1,000 | ' | ' | ' | ' | ' | ' | ' |
Income tax expense on unrealized gain on available-for-sale securities | $2,000 | ' | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Accumulated other comprehensive loss | ' | ' |
Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $771,000 and $772,000, respectively | ($1,122,000) | ($1,123,000) |
Accumulated unrealized gain on available-for-sale securities, net of income tax expense of $22,000 and $20,000, respectively | 30,000 | 28,000 |
Accumulated other comprehensive loss | -1,092,000 | -1,095,000 |
Income tax benefit of net actuarial loss and prior service cost not yet recognized in net periodic benefit cost | 772,000 | 771,000 |
Income tax expense of accumulated unrealized gain on available-for-sale securities | $22,000 | $20,000 |
Stockholders_Equity_Details_3
Stockholders' Equity (Details 3) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Oct. 23, 2002 | |
Stockholders' Equity | ' | ' | ' |
Number of shares of outstanding common stock authorized to be repurchased | ' | ' | 3,000,000 |
Purchases made pursuant to repurchase authorization (in shares) | 0 | 0 | ' |
Number of remaining shares of common stock authorized to be repurchased | 1,653,333 | ' | ' |
Number of common stock shares purchased and retired | 66,829 | 61,869 | ' |
Amount of common stock purchased and retired | $104,000 | $144,000 | ' |
Stockholders_Equity_Details_4
Stockholders' Equity (Details 4) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Stockholders' Equity | ' | ' |
Common stock shares reserved for issuance under the 2012 Stock Incentive Plan | 2,000,000 | ' |
Shares granted under the 2012 Stock Incentive Plan | 211,000 | 205,500 |
Shares available for granting options or stock awards | 563,975 | ' |
Nonvested restricted stock | ' | ' |
Stockholders' Equity | ' | ' |
Vesting percentage on each anniversary of the grant date | 20.00% | ' |
Service period to amortize aggregate market value of the nonvested restricted stock | '6 years | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
Revolving credit agreement | ' | ' |
Fair Value Measurements | ' | ' |
Amount outstanding under revolving credit agreement | $45,000,000 | $47,040,000 |
Total | ' | ' |
Fair Value Measurements | ' | ' |
Available-for-sale securities | 274,000 | 269,000 |
Level 1 | ' | ' |
Fair Value Measurements | ' | ' |
Available-for-sale securities | $274,000 | $269,000 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Related Party Transactions | ' | ' | ' |
Payable to DVD | ' | ' | $4,000 |
Dover Motorsports, Inc. (DVD) | ' | ' | ' |
Related Party Transactions | ' | ' | ' |
Harness racing track length (in miles) | 0.625 | ' | ' |
Motorsports superspeedway length (in miles) | 1 | ' | ' |
Period for set up and tear down rights | '14 days | ' | ' |
Number of annual motorsports weekends | 2 | ' | ' |
Dover Motorsports, Inc. (DVD) | Allocation of costs of administrative and operating services | ' | ' | ' |
Related Party Transactions | ' | ' | ' |
Costs allocated to DVD | 466,000 | 427,000 | ' |
Costs allocated to the entity by DVD | 61,000 | 94,000 | ' |
Dover Motorsports, Inc. (DVD) | NASCAR event at Dover International Speedway | ' | ' | ' |
Related Party Transactions | ' | ' | ' |
Costs allocated to the entity by DVD | 5,000 | 0 | ' |
Payable to DVD | ' | ' | $4,000 |
Chairman of board of directors | ' | ' | ' |
Related Party Transactions | ' | ' | ' |
Minimum percentage of voting power controlled by related party | 50.00% | ' | ' |
Minimum percentage of voting power of Gaming controlled by other related party | 50.00% | ' | ' |