Exhibit 99.1
FOR IMMEDIATE RELEASE |
| For further information, call: |
|
| Timothy R. Horne - Sr. Vice President-Finance |
Dover, Delaware, January 29, 2015 |
| (302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS RESULTS
FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2014
Dover Downs Gaming & Entertainment, Inc. (NYSE-DDE) today reported results for the fourth quarter and year ended December 31, 2014.
The Company’s revenues were $45,711,000 for the fourth quarter of 2014 compared with $46,592,000 for the fourth quarter of 2013.
Gaming revenues of $39,976,000 were down 2.0% compared to the fourth quarter of last year, primarily the result of lower table game revenue.
Other operating revenues were $5,735,000 compared to $5,817,000 for the fourth quarter of last year. Occupancy levels in the Dover Downs Hotel were approximately 80% and 81% for the fourth quarters of 2014 and 2013, respectively.
General and administrative expense was slightly higher than the fourth quarter of 2013, primarily from increased pension expenses.
The Company recorded a pre-tax impairment charge of $358,000 to write-down the value of certain food & beverage equipment and improvements.
Interest expense decreased to $375,000 during the quarter as a result of lower average outstanding borrowings compared to last year.
Net loss was ($516,000), or ($.02) per diluted share, compared with ($418,000), or ($.01) per diluted share for the fourth quarter of 2013.
Net loss for the year was ($706,000), or ($.02) per diluted share compared with net earnings of $13,000 or $.00 per diluted share for 2013.
Denis McGlynn, the Company’s President and Chief Executive Officer, stated: “During the year just ended, Dover Downs distributed $92 million to the state, the horsemen and the slot machine vendors. The share of gaming revenues we were left with was insufficient to cover all expenses, and as you can see, leaves an otherwise profitable business with a $706,000 loss for the year. Clearly, this demonstrates the irrationality of the current gaming revenue sharing formula and the need for rebalancing. We will continue to make our case for change during the current session of the legislature which runs through June 30.”
* * *
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 (LOSS) EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
|
| Three Months Ended |
| Years Ended |
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|
| December 31, |
| December 31, |
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|
| 2014 |
| 2013 |
| 2014 |
| 2013 |
| ||||
Revenues: |
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Gaming (1) |
| $ | 39,976 |
| $ | 40,775 |
| $ | 160,391 |
| $ | 172,991 |
|
Other operating (2) |
| 5,735 |
| 5,817 |
| 24,991 |
| 24,240 |
| ||||
|
| 45,711 |
| 46,592 |
| 185,382 |
| 197,231 |
| ||||
Expenses: |
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|
|
|
|
|
|
|
| ||||
Gaming |
| 37,808 |
| 38,868 |
| 151,434 |
| 162,398 |
| ||||
Other operating |
| 4,117 |
| 4,275 |
| 17,808 |
| 17,314 |
| ||||
Impairment charge |
| 358 |
| — |
| 358 |
| — |
| ||||
General and administrative |
| 1,427 |
| 1,335 |
| 5,711 |
| 5,645 |
| ||||
Depreciation |
| 2,364 |
| 2,315 |
| 9,128 |
| 9,726 |
| ||||
|
| 46,074 |
| 46,793 |
| 184,439 |
| 195,083 |
| ||||
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Operating (loss) earnings |
| (363 | ) | (201 | ) | 943 |
| 2,148 |
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Interest expense |
| (375 | ) | (485 | ) | (1,687 | ) | (1,752 | ) | ||||
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(Loss) earnings before income taxes |
| (738 | ) | (686 | ) | (744 | ) | 396 |
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Income tax benefit (expense) |
| 222 |
| 268 |
| 38 |
| (383 | ) | ||||
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Net (loss) earnings |
| $ | (516 | ) | $ | (418 | ) | $ | (706 | ) | $ | 13 |
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Net (loss) earnings per common share: |
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- Basic |
| $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | — |
|
- Diluted |
| $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | — |
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Weighted average shares outstanding: |
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- Basic |
| 31,962 |
| 31,849 |
| 31,961 |
| 31,849 |
| ||||
- Diluted |
| 31,962 |
| 31,849 |
| 31,961 |
| 31,849 |
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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)
|
| December 31, |
| December 31, |
| ||
|
| 2014 |
| 2013 |
| ||
ASSETS |
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| ||
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Current assets: |
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Cash |
| $ | 10,079 |
| $ | 12,950 |
|
Accounts receivable |
| 3,838 |
| 4,248 |
| ||
Due from State of Delaware |
| 7,258 |
| 8,225 |
| ||
Inventories |
| 1,783 |
| 1,957 |
| ||
Prepaid expenses and other |
| 2,324 |
| 2,432 |
| ||
Receivable from Dover Motorsports, Inc. |
| 22 |
| — |
| ||
Income taxes receivable |
| 6 |
| 138 |
| ||
Deferred income taxes |
| 1,243 |
| 1,268 |
| ||
Total current assets |
| 26,553 |
| 31,218 |
| ||
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|
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Property and equipment, net |
| 152,107 |
| 160,570 |
| ||
Other assets |
| 752 |
| 932 |
| ||
Deferred income taxes |
| 404 |
| — |
| ||
Total assets |
| $ | 179,816 |
| $ | 192,720 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
| $ | 3,975 |
| $ | 4,480 |
|
Purses due horsemen |
| 6,917 |
| 7,978 |
| ||
Accrued liabilities |
| 8,196 |
| 10,513 |
| ||
Payable to Dover Motorsports, Inc. |
| — |
| 4 |
| ||
Deferred revenue |
| 389 |
| 463 |
| ||
Revolving line of credit |
| 39,010 |
| 47,040 |
| ||
Total current liabilities |
| 58,487 |
| 70,478 |
| ||
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Liability for pension benefits |
| 8,980 |
| 3,353 |
| ||
Deferred income taxes |
| — |
| 2,725 |
| ||
Total liabilities |
| 67,467 |
| 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 |
| 5,125 |
| 4,663 |
| ||
Retained earnings |
| 108,629 |
| 109,335 |
| ||
Accumulated other comprehensive loss |
| (4,680 | ) | (1,095 | ) | ||
Total stockholders’ equity |
| 112,349 |
| 116,164 |
| ||
Total liabilities and stockholders’ equity |
| $ | 179,816 |
| $ | 192,720 |
|
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
|
| Years Ended |
| ||||
|
| December 31, |
| ||||
|
| 2014 |
| 2013 |
| ||
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Operating activities: |
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Net (loss) earnings |
| $ | (706 | ) | $ | 13 |
|
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: |
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Depreciation |
| 9,128 |
| 9,726 |
| ||
Amortization of credit facility origination fees |
| 133 |
| 183 |
| ||
Stock-based compensation |
| 580 |
| 682 |
| ||
Deferred income taxes |
| (723 | ) | (519 | ) | ||
Impairment charge |
| 358 |
| — |
| ||
Gain from insurance settlement |
| — |
| (22 | ) | ||
Changes in assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| 410 |
| (155 | ) | ||
Due from State of Delaware |
| 967 |
| 1,483 |
| ||
Inventories |
| 174 |
| (36 | ) | ||
Prepaid expenses and other |
| 154 |
| 662 |
| ||
Receivable from/payable to Dover Motorsports, Inc. |
| (26 | ) | 4 |
| ||
Income taxes receivable/payable |
| 114 |
| (138 | ) | ||
Accounts payable |
| (505 | ) | 915 |
| ||
Purses due horsemen |
| (1,061 | ) | (1,855 | ) | ||
Accrued liabilities |
| (2,369 | ) | 152 |
| ||
Deferred revenue |
| (74 | ) | 117 |
| ||
Liability for pension benefits |
| (274 | ) | (75 | ) | ||
Net cash provided by operating activities |
| 6,280 |
| 11,137 |
| ||
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Investing activities: |
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Capital expenditures |
| (900 | ) | (1,574 | ) | ||
Purchase of available-for-sale securities |
| (35 | ) | (37 | ) | ||
Proceeds from sale of available-for-sale securities |
| 26 |
| 31 |
| ||
Insurance settlement proceeds |
| — |
| 74 |
| ||
Net cash used in investing activities |
| (909 | ) | (1,506 | ) | ||
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Financing activities: |
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Borrowings from revolving line of credit |
| 94,530 |
| 72,160 |
| ||
Repayments of revolving line of credit |
| (102,560 | ) | (83,620 | ) | ||
Repurchase of common stock |
| (104 | ) | (144 | ) | ||
Credit facility fees |
| (108 | ) | (70 | ) | ||
Net cash used in financing activities |
| (8,242 | ) | (11,674 | ) | ||
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Net decrease in cash |
| (2,871 | ) | (2,043 | ) | ||
Cash, beginning of period |
| 12,950 |
| 14,993 |
| ||
Cash, end of period |
| $ | 10,079 |
| $ | 12,950 |
|