DDE Dover Downs Gaming & Entertainment

Dover Downs Gaming & Entertainment, Inc. (NYSE:DDE) today reported results for the three months ended September 30, 2018.

Gaming revenues increased 2.8% to $36,723,000 compared to $35,716,000 for the third quarter of 2017. Slot machine and table game win were both higher, and sports betting win improved as a result of recently expanded sports wagering in Delaware. These increases were offset by lower wagering on horse racing compared to last year.

Other operating revenues of $9,284,000 were up slightly compared to the third quarter of 2017 from an increase in food and beverage revenue offset by a decline in rooms revenue during the quarter. Occupancy levels in the Dover Downs Hotel were almost 90% for the third quarter of both years, while average rates were lower this year.

General and administrative costs were $1,355,000 for the third quarter compared to $1,316,000 last year.

Costs incurred to date related to the Company’s pending merger with Twin River Worldwide Holdings, Inc. were $765,000 during the quarter.

Including the merger related costs, the Company’s pretax loss was ($149,000) compared with ($225,000) for the third quarter of last year.

Net loss was ($269,000), or ($.01) per diluted share compared with net loss of ($138,000) or $.00 per diluted share for the third quarter of 2017.

Capital spending increased to $3,029,000 for the nine months ended September 30, 2018 as compared to $1,764,000 for the comparable period last year, and related primarily to renovations to the Dover Downs Hotel and improvements related to the recently opened Pearl Oyster Grill.

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 2,200 slots, a full complement of table games, including poker, and a newly expanded race and sports book taking single game wagers on professional and college sports. 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. 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 Nine Months Ended September 30, September 30, 2018 2017 * 2018 2017 * Revenues: Gaming $ 36,723 $ 35,716 $ 104,752 $ 104,249 Other operating   9,284     9,245     28,547     27,865     46,007     44,961     133,299     132,114   Expenses: Gaming 34,427 34,446 99,992 100,427 Other operating 7,493 7,141 22,182 21,403 General and administrative 1,355 1,316 4,082 4,024 Merger costs 765 - 765 - Depreciation   2,010     2,096     6,200     6,128     46,050     44,999     133,221     131,982     Operating (loss) earnings (43 ) (38 ) 78 132   Interest expense (190 ) (217 ) (598 ) (634 ) Other income   84     30     251     118     Loss before income taxes (149 ) (225 ) (269 ) (384 )   Income tax (expense) benefit   (120 )   87     (120 )   83     Net loss $ (269 ) $ (138 ) $ (389 ) $ (301 )   Net loss per common share: - Basic $ (0.01 ) $ -   $ (0.01 ) $ (0.01 ) - Diluted $ (0.01 ) $ -   $ (0.01 ) $ (0.01 )   Weighted average shares outstanding: - Basic 32,447 32,322 32,446 32,321 - Diluted 32,447 32,322 32,446 32,321   _________________________ *  

Prior-period information has been restated for the adoption of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, and ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which we adopted on January 1, 2018.

        DOVER DOWNS GAMING & ENTERTAINMENT, INC. CONSOLIDATED BALANCE SHEETS In Thousands (Unaudited)     September 30, December 31, 2018 2017 * ASSETS   Current assets: Cash $ 10,184 $ 10,714 Accounts receivable 2,784 3,557 Due from State of Delaware 8,958 5,720 Inventories 2,059 1,928 Prepaid expenses and other 3,504 2,840 Receivable from Dover Motorsports, Inc. 6 7 Income taxes receivable   294     318   Total current assets 27,789 25,084   Property and equipment, net 131,460 134,527 Other assets 404 564 Deferred income taxes   1,656     1,786   Total assets $ 161,309   $ 161,961     LIABILITIES AND STOCKHOLDERS’ EQUITY   Current liabilities: Accounts payable $ 2,569 $ 2,571 Purses due horsemen 8,960 5,814 Accrued liabilities 8,372 8,111 Deferred credits 120 49 Contract liabilities 3,954 3,724 Revolving line of credit   16,500     19,900   Total current liabilities 40,475 40,169   Liability for pension benefits   6,713     7,483   Total liabilities   47,188     47,652     Stockholders’ equity: Common stock 1,841 1,827 Class A common stock 1,487 1,487 Additional paid-in capital 5,976 5,877 Retained earnings 109,462 109,817 Accumulated other comprehensive loss   (4,645 )   (4,699 ) Total stockholders’ equity   114,121     114,309   Total liabilities and stockholders’ equity $ 161,309   $ 161,961     _________________________ *  

Prior-period information has been restated for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers, which we adopted on January 1, 2018.

        DOVER DOWNS GAMING & ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands (Unaudited)   Nine Months Ended September 30, 2018 2017 *   Operating activities: Net loss $ (389 ) $ (301 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation 6,200 6,128 Amortization of credit facility origination fees 30 42 Stock-based compensation 187 243 Deferred income taxes 98 (233 ) Gains on equity investments (5 ) - Changes in assets and liabilities: Accounts receivable 773 729 Due from State of Delaware (3,238 ) (454 ) Inventories (131 ) (164 ) Prepaid expenses and other (671 ) (1,185 ) Receivable from/payable to Dover Motorsports, Inc. 1 34 Income taxes receivable 22 50 Accounts payable 73 238 Purses due horsemen 3,146 115 Accrued liabilities 261 (848 ) Deferred credits 71 23 Contract liabilities 230 469 Liability for pension benefits   (648 )   (347 ) Net cash provided by operating activities   6,010     4,539     Investing activities: Capital expenditures (3,029 ) (1,764 ) Purchase of equity investments (33 ) (47 ) Proceeds from sale of equity investments   29     44   Net cash used in investing activities   (3,033 )   (1,767 )   Financing activities: Borrowings from revolving line of credit 34,180 58,670 Repayments of revolving line of credit (37,580 ) (62,420 ) Repurchase of common stock (74 ) (74 ) Credit facility fees   (33 )   (35 ) Net cash used in financing activities   (3,507 )   (3,859 )   Net decrease in cash (530 ) (1,087 ) Cash, beginning of period   10,714     11,677   Cash, end of period $ 10,184   $ 10,590     _________________________ *  

Prior-period information has been restated for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers, which we adopted on January 1, 2018.

 

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Dover Downs Gaming & Entertainment, Inc.Timothy R. Horne - Sr. Vice President-Finance302-857-3292