Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: |
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, July 24, 2014 | (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS
RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2014
Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2014.
Net earnings were $164,000 compared with $491,000 for the second quarter of 2013. Earnings per diluted share were $.01 compared with $.02 per diluted share for the second quarter of 2013.
The Company’s revenues for the second quarter of 2014 were $46,206,000 compared with $50,048,000 for the second quarter of 2013. Gaming revenues were $39,284,000 compared to $43,177,000 for the second quarter of last year. The decline is primarily attributable to the competitive environment in the mid-Atlantic gaming market.
Other operating revenues increased to $6,922,000 compared to $6,871,000 for the second quarter of 2013. Occupancy levels in the Dover Downs Hotel were approximately 88% for the second quarter of 2014.
General and administrative and depreciation expenses were down slightly compared to the second quarter of 2013, while interest expense was slightly higher.
Regarding the June 2014 gaming legislation which provides that the State’s share of slot revenues shall be calculated after the payment of a portion of equipment vendor costs beginning on July 1, 2014, Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “We are grateful for the consideration given by our elected officials to the challenges facing the Delaware gaming industry. Most people now recognize that the current revenue sharing arrangement no longer works in this hyper-competitive region. While the difficult fiscal situation the legislature was dealing with this year limited the changes made to the current model, we are hopeful that the Lottery and Gaming Study Commission will consider longer term solutions when they reconvene later this year.”
* * *
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 (LOSS)
In Thousands, Except Per Share Amounts
(Unaudited)
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| June 30, |
| June 30, |
| ||||||||
|
| 2014 |
| 2013 |
| 2014 |
| 2013 |
| ||||
Revenues: |
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|
|
|
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Gaming (1) |
| $ | 39,284 |
| $ | 43,177 |
| $ | 79,066 |
| $ | 88,480 |
|
Other operating (2) |
| 6,922 |
| 6,871 |
| 12,617 |
| 12,086 |
| ||||
|
| 46,206 |
| 50,048 |
| 91,683 |
| 100,566 |
| ||||
Expenses: |
|
|
|
|
|
|
|
|
| ||||
Gaming |
| 37,012 |
| 40,236 |
| 75,366 |
| 82,425 |
| ||||
Other operating |
| 4,657 |
| 4,614 |
| 9,053 |
| 8,632 |
| ||||
General and administrative |
| 1,423 |
| 1,427 |
| 2,816 |
| 2,956 |
| ||||
Depreciation |
| 2,273 |
| 2,524 |
| 4,568 |
| 5,033 |
| ||||
|
| 45,365 |
| 48,801 |
| 91,803 |
| 99,046 |
| ||||
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|
|
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|
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Operating earnings (loss) |
| 841 |
| 1,247 |
| (120 | ) | 1,520 |
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Interest expense |
| (440 | ) | (405 | ) | (900 | ) | (807 | ) | ||||
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|
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Earnings (loss) before income taxes |
| 401 |
| 842 |
| (1,020 | ) | 713 |
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Income tax (expense) benefit |
| (237 | ) | (351 | ) | 131 |
| (505 | ) | ||||
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Net earnings (loss) |
| $ | 164 |
| $ | 491 |
| $ | (889 | ) | $ | 208 |
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Net earnings (loss) per common share: |
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- Basic |
| $ | 0.01 |
| $ | 0.02 |
| $ | (0.03 | ) | $ | 0.01 |
|
- Diluted |
| $ | 0.01 |
| $ | 0.02 |
| $ | (0.03 | ) | $ | 0.01 |
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Weighted average shares outstanding: |
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|
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- Basic |
| 31,962 |
| 31,849 |
| 31,961 |
| 31,848 |
| ||||
- Diluted |
| 31,962 |
| 31,849 |
| 31,961 |
| 31,848 |
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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)
|
| June 30, |
| December 31, |
| ||
|
| 2014 |
| 2013 |
| ||
ASSETS |
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|
| ||
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|
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Current assets: |
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|
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Cash |
| $ | 10,365 |
| $ | 12,950 |
|
Accounts receivable |
| 3,772 |
| 4,248 |
| ||
Due from State of Delaware |
| 4,485 |
| 8,225 |
| ||
Inventories |
| 1,819 |
| 1,957 |
| ||
Prepaid expenses and other |
| 3,441 |
| 2,432 |
| ||
Receivable from Dover Motorsports, Inc. |
| 39 |
| — |
| ||
Income taxes receivable |
| 132 |
| 138 |
| ||
Deferred income taxes |
| 1,333 |
| 1,268 |
| ||
Total current assets |
| 25,386 |
| 31,218 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
| 156,539 |
| 160,570 |
| ||
Other assets |
| 814 |
| 932 |
| ||
Total assets |
| $ | 182,739 |
| $ | 192,720 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
| $ | 2,918 |
| $ | 4,480 |
|
Purses due horsemen |
| 4,530 |
| 7,978 |
| ||
Accrued liabilities |
| 10,008 |
| 10,513 |
| ||
Payable to Dover Motorsports, Inc. |
| — |
| 4 |
| ||
Deferred revenue |
| 326 |
| 463 |
| ||
Revolving line of credit |
| 43,710 |
| 47,040 |
| ||
Total current liabilities |
| 61,492 |
| 70,478 |
| ||
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Liability for pension benefits |
| 3,136 |
| 3,353 |
| ||
Deferred income taxes |
| 2,631 |
| 2,725 |
| ||
Total liabilities |
| 67,259 |
| 76,556 |
| ||
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Stockholders’ equity: |
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Common stock |
| 1,788 |
| 1,774 |
| ||
Class A common stock |
| 1,487 |
| 1,487 |
| ||
Additional paid-in capital |
| 4,846 |
| 4,663 |
| ||
Retained earnings |
| 108,446 |
| 109,335 |
| ||
Accumulated other comprehensive loss |
| (1,087 | ) | (1,095 | ) | ||
Total stockholders’ equity |
| 115,480 |
| 116,164 |
| ||
Total liabilities and stockholders’ equity |
| $ | 182,739 |
| $ | 192,720 |
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DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
|
| Six Months Ended |
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|
| June 30, |
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|
| 2014 |
| 2013 |
| ||
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Operating activities: |
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|
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Net (loss) earnings |
| $ | (889 | ) | $ | 208 |
|
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: |
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|
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Depreciation |
| 4,568 |
| 5,033 |
| ||
Amortization of credit facility origination fees |
| 91 |
| 97 |
| ||
Stock-based compensation |
| 301 |
| 367 |
| ||
Deferred income taxes |
| (163 | ) | (98 | ) | ||
Gain from insurance settlement |
| — |
| (22 | ) | ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| 476 |
| 602 |
| ||
Due from State of Delaware |
| 3,740 |
| 4,741 |
| ||
Inventories |
| 138 |
| (36 | ) | ||
Prepaid expenses and other |
| (987 | ) | (521 | ) | ||
Receivable from/payable to Dover Motorsports, Inc. |
| (43 | ) | 57 |
| ||
Income taxes receivable/payable |
| 5 |
| 147 |
| ||
Accounts payable |
| (1,562 | ) | (533 | ) | ||
Purses due horsemen |
| (3,448 | ) | (4,857 | ) | ||
Accrued liabilities |
| (505 | ) | (694 | ) | ||
Deferred revenue |
| (137 | ) | 31 |
| ||
Other liabilities |
| (214 | ) | (50 | ) | ||
Net cash provided by operating activities |
| 1,371 |
| 4,472 |
| ||
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Investing activities: |
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Capital expenditures |
| (521 | ) | (976 | ) | ||
Insurance settlement proceeds |
| — |
| 74 |
| ||
Purchase of available-for-sale securities |
| (15 | ) | (13 | ) | ||
Proceeds from sale of available-for-sale securities |
| 14 |
| 12 |
| ||
Net cash used in investing activities |
| (522 | ) | (903 | ) | ||
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Financing activities: |
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Borrowings from revolving line of credit |
| 58,510 |
| 48,270 |
| ||
Repayments of revolving line of credit |
| (61,840 | ) | (51,770 | ) | ||
Repurchase of common stock |
| (104 | ) | (144 | ) | ||
Credit facility fees |
| — |
| (70 | ) | ||
Net cash used in financing activities |
| (3,434 | ) | (3,714 | ) | ||
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|
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Net decrease in cash |
| (2,585 | ) | (145 | ) | ||
Cash, beginning of period |
| 12,950 |
| 14,993 |
| ||
Cash, end of period |
| $ | 10,365 |
| $ | 14,848 |
|