EX-99.1 2 a16-3026_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

 

FOR IMMEDIATE RELEASE

For further information, call:

 

Timothy R. Horne - Sr. Vice President-Finance

Dover, Delaware, January 28, 2016

(302) 857-3292

 

DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS RESULTS

FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2015

 

Dover Downs Gaming & Entertainment, Inc. (NYSE-DDE) today reported results for the fourth quarter and year ended December 31, 2015.

 

Despite lower gaming revenues, the Company’s total revenues increased to $46,111,000 for the fourth quarter of 2015 compared with $45,711,000 for the fourth quarter of 2014.

 

Gaming revenues of $39,076,000 were down 2.3% compared to the fourth quarter of last year, primarily the result of lower slot machine revenue.

 

Other operating revenues were $7,035,000 compared to $5,735,000 for the fourth quarter of last year.  These other revenues for the quarter benefited from hotel and food and beverage sales due to the fact that Dover International Speedway’s NASCAR weekend fell in the fourth quarter of this year compared to the third quarter of last year.  Occupancy levels in the Dover Downs Hotel were approximately 84% and 80% for the fourth quarters of 2015 and 2014, respectively.

 

General and administrative expenses were down to $1,334,000 for the fourth quarter compared to $1,427,000 last year.

 

Interest expense decreased to $223,000 during the quarter as a result of lower average outstanding borrowings and lower interest rates compared to last year.

 

Net earnings were $768,000, or $.02 per diluted share, compared with a net loss of ($516,000), or ($.02) per diluted share for the fourth quarter of 2014.

 

Denis McGlynn, the Company’s President and Chief Executive Officer, stated:  “Despite a reduction in gaming revenues, we managed to achieve minor earnings improvement last year through various cost containment measures.  We remain focused on the challenges to come.  In addition to cost increases most businesses are dealing with, such as in healthcare, minimum wage and property taxes, new competition will enter the market later this year in Maryland, and in Pennsylvania in the next couple of years.  This means our need to reinvest in our hotel and other amenities, as well as our ability to market and promote, become more important.”

 



 

“To that end, we expect to see legislation introduced in the State Senate shortly to once again attempt to restructure the distribution of gaming revenues between the State and Delaware’s three casinos.  It would seek to implement several recommendations from last year’s Lottery and Gaming Study Commission relative to revenue sharing, license fees and incentives.  Changes would be phased in over the course of the next four years in an effort to minimize any perceived negative impact on the State’s General Fund.  We believe that without making these changes, the State will experience a significant long-term decline in contributions to the General Fund from its video lottery operations.”

 

* * *

 

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

 

Years Ended

 

 

 

December 31,

 

December 31,

 

 

 

2015

 

2014

 

2015

 

2014

 

Revenues:

 

 

 

 

 

 

 

 

 

Gaming (1)

 

$

39,076

 

$

39,976

 

$

157,922

 

$

160,391

 

Other operating (2)

 

7,035

 

5,735

 

25,024

 

24,991

 

 

 

46,111

 

45,711

 

182,946

 

185,382

 

Expenses:

 

 

 

 

 

 

 

 

 

Gaming

 

36,891

 

37,808

 

148,595

 

151,434

 

Other operating

 

4,645

 

4,117

 

16,602

 

17,808

 

Impairment charge

 

 

358

 

 

358

 

General and administrative

 

1,334

 

1,427

 

5,499

 

5,711

 

Depreciation

 

2,022

 

2,364

 

8,375

 

9,128

 

 

 

44,892

 

46,074

 

179,071

 

184,439

 

 

 

 

 

 

 

 

 

 

 

Operating earnings

 

1,219

 

(363

)

3,875

 

943

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(223

)

(375

)

(1,160

)

(1,687

)

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

996

 

(738

)

2,715

 

(744

)

 

 

 

 

 

 

 

 

 

 

Income tax (expense) benefit

 

(228

)

222

 

(842

)

38

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

768

 

$

(516

)

$

1,873

 

$

(706

)

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) per common share:

 

 

 

 

 

 

 

 

 

- Basic

 

$

0.02

 

$

(0.02

)

$

0.06

 

$

(0.02

)

- Diluted

 

$

0.02

 

$

(0.02

)

$

0.06

 

$

(0.02

)

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

- Basic

 

32,086

 

31,962

 

32,085

 

31,961

 

- Diluted

 

32,086

 

31,962

 

32,085

 

31,961

 

 


(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,

 

 

 

2015

 

2014

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash

 

$

10,496

 

$

10,079

 

Accounts receivable

 

2,926

 

3,838

 

Due from State of Delaware

 

7,952

 

7,258

 

Inventories

 

1,912

 

1,783

 

Prepaid expenses and other

 

2,530

 

2,324

 

Receivable from Dover Motorsports, Inc.

 

 

22

 

Income taxes receivable

 

254

 

6

 

Deferred income taxes

 

1,308

 

1,243

 

Total current assets

 

27,378

 

26,553

 

 

 

 

 

 

 

Property and equipment, net

 

145,425

 

152,107

 

Other assets

 

672

 

752

 

Deferred income taxes

 

482

 

404

 

Total assets

 

$

173,957

 

$

179,816

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

3,380

 

$

3,975

 

Purses due horsemen

 

7,473

 

6,917

 

Accrued liabilities

 

8,538

 

8,196

 

Payable to Dover Motorsports, Inc.

 

44

 

 

Deferred revenue

 

408

 

389

 

Revolving line of credit

 

31,500

 

39,010

 

Total current liabilities

 

51,343

 

58,487

 

 

 

 

 

 

 

Liability for pension benefits

 

7,606

 

8,980

 

Total liabilities

 

58,949

 

67,467

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

1,799

 

1,788

 

Class A common stock

 

1,487

 

1,487

 

Additional paid-in capital

 

5,424

 

5,125

 

Retained earnings

 

110,502

 

108,629

 

Accumulated other comprehensive loss

 

(4,204

)

(4,680

)

Total stockholders’ equity

 

115,008

 

112,349

 

Total liabilities and stockholders’ equity

 

$

173,957

 

$

179,816

 

 



 

DOVER DOWNS GAMING & ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)

 

 

 

Years Ended

 

 

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

Net earnings (loss)

 

$

1,873

 

$

(706

)

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

 

 

 

 

 

Depreciation

 

8,375

 

9,128

 

Amortization of credit facility origination fees

 

111

 

133

 

Stock-based compensation

 

375

 

580

 

Deferred income taxes

 

(508

)

(723

)

Impairment charge

 

 

358

 

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

912

 

410

 

Due from State of Delaware

 

(694

)

967

 

Inventories

 

(129

)

174

 

Prepaid expenses and other

 

(146

)

154

 

Income taxes receivable

 

(197

)

114

 

Accounts payable

 

(662

)

(505

)

Purses due horsemen

 

556

 

(1,061

)

Accrued liabilities

 

211

 

(2,369

)

Payable to/receivable from Dover Motorsports, Inc.

 

66

 

(26

)

Deferred revenue

 

19

 

(74

)

Liability for pension benefits

 

(443

)

(274

)

Net cash provided by operating activities

 

9,719

 

6,280

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Capital expenditures

 

(1,651

)

(900

)

Proceeds from sale of property and equipment

 

25

 

 

Purchase of available-for-sale securities

 

(16

)

(35

)

Proceeds from sale of available-for-sale securities

 

8

 

26

 

Net cash used in investing activities

 

(1,634

)

(909

)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Borrowings from revolving line of credit

 

52,060

 

94,530

 

Repayments of revolving line of credit

 

(59,570

)

(102,560

)

Repurchase of common stock

 

(65

)

(104

)

Credit facility fees

 

(93

)

(108

)

Net cash used in financing activities

 

(7,668

)

(8,242

)

 

 

 

 

 

 

Net increase (decrease) in cash

 

417

 

(2,871

)

Cash, beginning of year

 

10,079

 

12,950

 

Cash, end of year

 

$

10,496

 

$

 10,079