|
FOR IMMEDIATE RELEASE |
For further information, call: |
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|
Timothy R. Horne - Sr. Vice President-Finance |
|
Dover, Delaware, October 25, 2018 |
(302) 857-3292 |
DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS RESULTS
FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2018
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 |
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|
|
|
September 30, |
|
September 30, |
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|
|
|
2018 |
|
2017 * |
|
2018 |
|
2017 * |
| ||||
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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 |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
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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 |
| ||
|
|
|
|
|
|
| ||
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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 |
|
|
|
|
|
|
|
| ||
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
|
|
|
|
|
| ||
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Current liabilities: |
|
|
|
|
| ||
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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.