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 27, 2017

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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 27, 2017, we issued a press release announcing our financial results for the second quarter ended June 30, 2017.  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 27, 2017

99.2Reconciliation of Net Earnings (Loss) 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 27, 2017

2

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated July 27, 2017, issued by Dover Downs Gaming & Entertainment, Inc.
99.2	Reconciliation of Net Earnings (Loss) 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 27, 2017	(302) 857-3292

DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS

RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2017

Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2017.

The Company’s revenues for the second quarter of 2017 were $43,305,000 compared with $46,224,000 for the second quarter of 2016.  Gaming revenues were $36,418,000 compared to $39,058,000 for the second quarter of last year.  The decrease is primarily attributable to increased competition in the mid-Atlantic gaming market.

Other operating revenues decreased to $6,887,000 from $7,166,000 for the second quarter of 2016 primarily due to lower banquet revenue in the second quarter of 2017.  Occupancy levels in the Dover Downs Hotel were approximately 85% for the second quarter of 2017 compared with 88% during the second quarter last year.

General and administrative, depreciation and interest expenses were each fairly consistent with the second quarter of 2016.

Net earnings were $32,000 compared with $796,000 for the second quarter of 2016.  Earnings per diluted share were $.00 in the second quarter of 2017 compared with $.02 for the second quarter of 2016.

* * *

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 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,
	2017			2016			2017			2016
Revenues:
Gaming (1)	$	36,418		$	39,058		$	75,065		$	78,416
Other operating (2)	6,887			7,166			12,388			12,525
	43,305			46,224			87,453			90,941
Expenses:
Gaming	34,970			36,741			71,839			74,236
Other operating	4,737			4,726			8,687			8,699
General and administrative	1,289			1,295			2,620			2,623
Depreciation	2,086			1,953			4,032			3,840
	43,082			44,715			87,178			89,398
Operating earnings	223			1,509			275			1,543
Interest expense	(208		)	(218		)	(417		)	(447		)
Earnings (loss) before income taxes	15			1,291			(142		)	1,096
Income tax benefit (expense)	17			(495		)	(10		)	(539		)
Net earnings (loss)	$	32		$	796		$	(152	)	$	557
Net earnings per common share:
- Basic	$	—		$	0.02		$	—		$	0.02
- Diluted	$	—		$	0.02		$	—		$	0.02
Weighted average shares outstanding:
- Basic	32,322			32,202			32,321			32,200
- Diluted	32,322			32,202			32,321			32,200

(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,
	2017			2016
ASSETS
Current assets:
Cash	$	10,446		$	11,677
Accounts receivable	2,394			3,507
Due from State of Delaware	3,827			7,285
Inventories	2,187			1,910
Prepaid expenses and other	2,755			2,365
Receivable from Dover Motorsports, Inc.	33			7
Income taxes receivable	96			221
Total current assets	21,738			26,972
Property and equipment, net	137,701			140,714
Other assets	571			594
Deferred income taxes	2,144			2,020
Total assets	$	162,154		$	170,300
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,301		$	3,749
Purses due horsemen	3,867			7,649
Accrued liabilities	8,315			9,732
Deferred revenue	453			361
Revolving line of credit	—			25,250
Total current liabilities	15,936			46,741
Revolving line of credit	23,000			—
Liability for pension benefits	7,534			7,897
Total liabilities	46,470			54,638
Stockholders’ equity:
Common stock	1,828			1,814
Class A common stock	1,487			1,487
Additional paid-in capital	5,767			5,669
Retained earnings	111,136			111,288
Accumulated other comprehensive loss	(4,534		)	(4,596		)
Total stockholders’ equity	115,684			115,662
Total liabilities and stockholders’ equity	$	162,154		$	170,300

DOVER DOWNS GAMING & ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)

	Six Months Ended
	June 30,
	2017			2016
Operating activities:
Net (loss) earnings	$	(152	)	$	557
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
Depreciation	4,032			3,840
Amortization of credit facility origination fees	26			52
Stock-based compensation	186			177
Deferred income taxes	(165		)	(47		)
Changes in assets and liabilities:
Accounts receivable	1,113			962
Due from State of Delaware	3,458			3,655
Inventories	(277		)	(139		)
Prepaid expenses and other	(389		)	193
Receivable from/payable to Dover Motorsports, Inc.	(26		)	(58		)
Income taxes receivable/payable	124			410
Accounts payable	(271		)	155
Purses due horsemen	(3,782		)	(3,139		)
Accrued liabilities	(1,417		)	(1,221		)
Deferred revenue	92			132
Liability for pension benefits	(261		)	(211		)
Net cash provided by operating activities	2,291			5,318
Investing activities:
Capital expenditures	(1,196		)	(1,939		)
Purchase of available-for-sale securities	(40		)	(11		)
Proceeds from sale of available-for-sale securities	38			9
Net cash used in investing activities	(1,198		)	(1,941		)
Financing activities:
Borrowings from revolving line of credit	46,720			20,830
Repayments of revolving line of credit	(48,970		)	(24,330		)
Repurchase of common stock	(74		)	(66		)
Net cash used in financing activities	(2,324		)	(3,566		)
Net decrease in cash	(1,231		)	(189		)
Cash, beginning of period	11,677			10,496
Cash, end of period	$	10,446		$	10,307

EX-99.2

Exhibit 99.2

DOVER DOWNS GAMING & ENTERTAINMENT, INC.

SUPPLEMENTAL DATA

RECONCILIATION OF NET EARNINGS (LOSS) TO EBITDA

In Thousands

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2017			2016		2017			2016
Reconciliation of net earnings (loss) to EBITDA:
Net earnings (loss)	$	32		$	796	$	(152	)	$	557
Income tax (benefit) expense	(17		)	495		10			539
Earnings (loss) before income taxes	15			1,291		(142		)	1,096
Interest expense	208			218		417			447
Depreciation	2,086			1,953		4,032			3,840
EBITDA	$	2,309		$	3,462	$	4,307		$	5,383

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 (loss) (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.