8-K

United States

Securities And Exchange Commission

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2016

Dover Downs Gaming & Entertainment, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number 1-16791

Delaware	51-0414140
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

1131 N. DuPont Highway
Dover, Delaware	19901
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (302) 674-4600

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition and

Item 7.01 Regulation FD Disclosure.

The following information is furnished pursuant to Item 2.02 Results of Operations and Financial Condition and Item 7.01 Regulation FD Disclosure.

On July 28, 2016, we issued a press release announcing our financial results for the second quarter ended June 30, 2016.  A copy of our press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits

99.1Press Release dated July 28, 2016

99.2Reconciliation of Net Earnings to EBITDA

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned hereunto duly authorized.

Dover Downs Gaming & Entertainment, Inc.

/s/ Denis McGlynn

Denis McGlynn

President and Chief Executive Officer

Dated:  July 28, 2016

2

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release dated July 28, 2016, issued by Dover Downs Gaming & Entertainment, Inc.
99.2	Reconciliation of Net Earnings to EBITDA

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	For further information, call:
	Timothy R. Horne - Sr. Vice President-Finance
Dover, Delaware, July 28, 2016	(302) 857-3292

DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS

RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2016

Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2016.

The Company’s revenues for the second quarter of 2016 were $46,224,000 compared with $45,301,000 for the second quarter of 2015.  Gaming revenues were $39,058,000 compared to $38,058,000 for the second quarter of last year.

Other operating revenues decreased to $7,166,000 compared to $7,243,000 for the second quarter of 2015 from lower rooms revenue and revenue in the second quarter of 2015 associated with the Company taking over certain retail operations in the casino. Occupancy levels in the Dover Downs Hotel were approximately 88% for the second quarter of 2016 compared with 85% during the second quarter last year.

General and administrative, depreciation and interest expenses were each down compared to the second quarter of 2015.

Net earnings were $796,000 compared with $631,000 for the second quarter of 2015.  Earnings per diluted share were $.02 in the second quarter of 2016 and 2015.

“We were disappointed that the state budget shortfall that was revealed late in the legislative session preempted consideration of the recommended changes to the casino industry’s revenue sharing model set forth in Senate Bill 183,” said Denis McGlynn President/CEO.  “Needless to say, we will continue to pursue this much needed legislation in January when the legislature returns.”

* * *

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 2,300 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

In Thousands, Except Per Share Amounts

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Revenues:
Gaming (1)	$	39,058		$	38,058		$	78,416		$	76,834
Other operating (2)	7,166			7,243			12,525			12,805
	46,224			45,301			90,941			89,639
Expenses:
Gaming	36,741			35,874			74,236			72,636
Other operating	4,726			4,519			8,699			8,406
General and administrative	1,295			1,338			2,623			2,834
Depreciation	1,953			2,171			3,840			4,323
	44,715			43,902			89,398			88,199
Operating earnings	1,509			1,399			1,543			1,440
Interest expense	(218		)	(330		)	(447		)	(678		)
Earnings before income taxes	1,291			1,069			1,096			762
Income tax expense	(495		)	(438		)	(539		)	(483		)
Net earnings	$	796		$	631		$	557		$	279
Net earnings per common share:
- Basic	$	0.02		$	0.02		$	0.02		$	0.01
- Diluted	$	0.02		$	0.02		$	0.02		$	0.01
Weighted average shares outstanding:
- Basic	32,202			32,086			32,200			32,084
- Diluted	32,202			32,086			32,200			32,084

(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,
	2016			2015
ASSETS
Current assets:
Cash	$	10,307		$	10,496
Accounts receivable	1,964			2,926
Due from State of Delaware	4,297			7,952
Inventories	2,051			1,912
Prepaid expenses and other	2,359			2,530
Receivable from Dover Motorsports, Inc.	14			—
Income taxes receivable	—			254
Deferred income taxes	—			1,308
Total current assets	20,992			27,378
Property and equipment, net	143,457			145,425
Other assets	606			672
Deferred income taxes	1,809			482
Total assets	$	166,864		$	173,957
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,468		$	3,380
Purses due horsemen	4,334			7,473
Accrued liabilities	7,317			8,538
Payable to Dover Motorsports, Inc.	—			44
Income taxes payable	158			—
Deferred revenue	540			408
Revolving line of credit	28,000			31,500
Total current liabilities	43,817			51,343
Liability for pension benefits	7,327			7,606
Total liabilities	51,144			58,949
Stockholders’ equity:
Common stock	1,814			1,799
Class A common stock	1,487			1,487
Additional paid-in capital	5,520			5,424
Retained earnings	111,059			110,502
Accumulated other comprehensive loss	(4,160		)	(4,204		)
Total stockholders’ equity	115,720			115,008
Total liabilities and stockholders’ equity	$	166,864		$	173,957

DOVER DOWNS GAMING & ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)

	Six Months Ended
	June 30,
	2016			2015
Operating activities:
Net earnings	$	557		$	279
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	3,840			4,323
Amortization of credit facility origination fees	52			54
Stock-based compensation	177			195
Deferred income taxes	(47		)	(325		)
Changes in assets and liabilities:
Accounts receivable	962			477
Due from State of Delaware	3,655			2,640
Inventories	(139		)	(63		)
Prepaid expenses and other	193			(730		)
Receivable from/payable to Dover Motorsports, Inc.	(58		)	—
Accounts payable	155			(204		)
Purses due horsemen	(3,139		)	(2,296		)
Accrued liabilities	(1,221		)	1,537
Income taxes payable/receivable	410			236
Deferred revenue	132			277
Liability for pension benefits	(211		)	(163		)
Net cash provided by operating activities	5,318			6,237
Investing activities:
Capital expenditures	(1,939		)	(915		)
Purchase of available-for-sale securities	(11		)	(3		)
Proceeds from sale of available-for-sale securities	9			1
Net cash used in investing activities	(1,941		)	(917		)
Financing activities:
Borrowings from revolving line of credit	20,830			36,450
Repayments of revolving line of credit	(24,330		)	(40,560		)
Repurchase of common stock	(66		)	(65		)
Net cash used in financing activities	(3,566		)	(4,175		)
Net (decrease) increase in cash	(189		)	1,145
Cash, beginning of period	10,496			10,079
Cash, end of period	$	10,307		$	11,224

EX-99.2

Exhibit 99.2

DOVER DOWNS GAMING & ENTERTAINMENT, INC.

SUPPLEMENTAL DATA

RECONCILIATION OF NET EARNINGS TO EBITDA

In Thousands

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2016		2015		2016		2015
Reconciliation of net earnings to EBITDA:
Net earnings	$	796	$	631	$	557	$	279
Income tax expense	495		438		539		483
Earnings before income taxes	1,291		1,069		1,096		762
Interest expense	218		330		447		678
Depreciation	1,953		2,171		3,840		4,323
EBITDA	$	3,462	$	3,570	$	5,383	$	5,763

We define EBITDA as earnings before interest, taxes, depreciation and amortization.  EBITDA is a supplemental non-GAAP financial measure commonly used by management and industry analysts to evaluate our operations. We believe that EBITDA provides useful information to investors regarding our ability to service debt.  EBITDA should not be construed as an alternative to net earnings (as an indicator of our operating performance) as determined in accordance with accounting principles generally accepted in the United States of America. Not all companies calculate EBITDA in the same manner, and EBITDA as presented by Dover Downs Gaming & Entertainment, Inc. may not be comparable to similarly titled measures presented by other companies.