- Pays: $75 Million to State and
Horsemen
- Loses: $1 Million for the Year
Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today
reported results for the fourth quarter and year ended December 31,
2017.
The Company’s total revenues were $44,377,000 for the fourth
quarter of 2017 compared with $44,241,000 for the fourth quarter of
2016.
Gaming revenues of $37,966,000 were up 1.2% compared to the
fourth quarter of last year, primarily the result of higher table
game and sports betting hold percentages.
Other operating revenues were $6,411,000 compared to $6,726,000
for the fourth quarter of last year. Occupancy levels in the Dover
Downs Hotel were approximately 80% and 81% for the fourth quarters
of 2017 and 2016, respectively.
General and administrative expenses were down to $1,268,000 for
the fourth quarter compared to $1,524,000 last year, from lower
employee related costs.
Interest expense was consistent with last year as a result of
lower average outstanding borrowings offset by slightly higher
interest rates.
On December 22, 2017, the Tax Cuts and Jobs Act was signed into
law. The fourth quarter of 2017 and full-year 2017 results reflect
the impact of the new tax law, which resulted in an income tax
expense of $662,000, or ($.02) per diluted share, primarily from
revaluing the Company's net deferred tax assets to reflect the
recently enacted 21% federal corporate tax rate.
Net loss for the fourth quarter was ($779,000), or ($.02) per
diluted share, compared with net loss of ($291,000), or ($.01) per
diluted share last year.
For the year as a whole, total revenues were $176,924,000 for
2017 compared with $182,292,000 for 2016.
Net loss was ($1,068,000), or ($.03) per diluted share, compared
with net earnings of $786,000, or $.02 per diluted share for
2016.
Denis McGlynn, the Company's President and Chief Executive
Officer, stated: “Once again the Company demonstrated substantial
gaming operational profitability which once again was totally wiped
out by an unfair and outdated gaming revenue sharing formula.
“Legislation has been introduced to implement a more fair and
realistic formula and we hope the Delaware Legislature and
Administration will act favorably on it.”
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 (LOSS) EARNINGS In Thousands, Except Per Share
Amounts (Unaudited) Three Months
Ended Years Ended December 31, December 31, 2017 2016 2017 2016
Revenues: Gaming (1) $ 37,966 $ 37,515 $ 152,534 $ 157,226 Other
operating (2)
6,411
6,726 24,390
25,066 44,377
44,241 176,924
182,292 Expenses: Gaming 36,507 36,326
146,209 149,577 Other operating 4,597 4,722 17,140 17,316 General
and administrative 1,268 1,524 5,174 5,375 Depreciation
2,040 1,944
8,168 7,743
44,412 44,516
176,691 180,011
Operating (loss) earnings (35 ) (275 ) 233 2,281
Interest expense
(206 )
(202 ) (840
) (863 )
(Loss) earnings before income taxes (241 ) (477 ) (607 ) 1,418
Income tax (expense) benefit
(538
) 186
(461 ) (632
) Net (loss) earnings
$
(779 ) $ (291
) $ (1,068 )
$ 786 Net (loss) earnings
per common share: - Basic
$ (0.02
) $ (0.01 )
$ (0.03 ) $
0.02 - Diluted
$
(0.02 ) $ (0.01
) $ (0.03 )
$ 0.02 Weighted average
shares outstanding: - Basic 32,322 32,202 32,321 32,201 - Diluted
32,322 32,202 32,321 32,201 _________________________ (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. RECONCILIATION
OF GAAP NET (LOSS) EARNINGS TO ADJUSTED NET (LOSS) EARNINGS In
Thousands, Except Per Share Amounts (Unaudited)
Three Months Ended Years Ended December 31,
December 31, 2017 2016 2017 2016 GAAP net (loss) earnings $
(779 ) $ (291 ) $ (1,068 ) $ 786 Federal income tax reform
(1)
662 -
662 -
Adjusted net (loss) earnings
$ (117
) $ (291 )
$ (406 ) $
786 GAAP net (loss) earnings per common
share - basic and diluted $ (0.02 ) $ (0.01 ) $ (0.03 ) $ 0.02
Federal income tax reform (1)
0.02
- 0.02
- Adjusted net (loss) earnings per
common share - basic and diluted
$ -
$ (0.01 )
$ (0.01 ) $
0.02
_________________________
(1)
The passage of the Tax Cuts and Jobs Act
in December 2017 lowered our future federal income tax rate to 21%
requiring us to revalue net deferred federal tax assets.
The above financial information is
presented using other than generally accepted accounting principles
("non-GAAP"), and is reconciled to comparable information presented
using GAAP. Non-GAAP adjusted net (loss) earnings and adjusted net
(loss) earnings per common share - basic and diluted are derived by
adjusting amounts determined in accordance with GAAP for the
aforementioned federal income tax reform. We believe such non-GAAP
information is useful and meaningful to investors, and is used by
investors and us to assess core operations. This non-GAAP financial
information may not be comparable to similarly titled measures used
by other entities and should not be considered as an alternative to
net (loss) earnings or net (loss) earnings per common share - basic
and diluted, which are determined in accordance with GAAP.
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS In Thousands (Unaudited)
December 31, December 31, 2017 2016 ASSETS Current
assets: Cash $ 10,714 $ 11,677 Accounts receivable 3,557 3,507 Due
from State of Delaware 5,720 7,285 Inventories 1,928 1,910 Prepaid
expenses and other 2,840 2,365 Receivable from Dover Motorsports,
Inc. 7 7 Income taxes receivable
318
221 Total current assets 25,084 26,972
Property and equipment, net 134,527 140,714 Other assets 564
594 Deferred income taxes
1,630
2,020 Total assets
$
161,805 $ 170,300
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities: Accounts payable $ 3,769 $ 3,749 Purses due horsemen
5,814 7,649 Accrued liabilities 9,811 9,854 Deferred revenue 316
361 Revolving line of credit
19,900
25,250 Total current liabilities 39,610
46,863 Liability for pension benefits
7,483 7,775 Total
liabilities
47,093
54,638 Stockholders’ equity: Common
stock 1,827 1,814 Class A common stock 1,487 1,487 Additional
paid-in capital 5,877 5,669 Retained earnings 110,220 111,288
Accumulated other comprehensive loss
(4,699
) (4,596 ) Total
stockholders’ equity
114,712
115,662 Total liabilities and stockholders’
equity
$ 161,805 $
170,300 DOVER DOWNS GAMING &
ENTERTAINMENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In
Thousands (Unaudited) Years Ended December 31, 2017
2016 Operating activities: Net (loss) earnings $ (1,068 ) $
786
Adjustments to reconcile net (loss)
earnings to net cash provided by operating activities:
Depreciation 8,168 7,743 Amortization of credit facility
origination fees 57 89 Stock-based compensation 295 326 Deferred
income taxes 457 (36 ) Changes in assets and liabilities: Accounts
receivable (50 ) (581 ) Due from State of Delaware 1,565 667
Inventories (18 ) 2 Prepaid expenses and other (446 ) 204
Receivable from/payable to Dover Motorsports, Inc. - (51 ) Income
taxes receivable (96 ) 99 Accounts payable 232 149 Purses due
horsemen (1,835 ) 176 Accrued liabilities (79 ) 1,174 Deferred
revenue (45 ) (47 ) Liability for pension benefits
(437 ) (345
) Net cash provided by operating activities
6,700 10,355
Investing activities: Capital expenditures (2,193 ) (2,812 )
Purchase of available-for-sale securities (59 ) (55 ) Proceeds from
sale of available-for-sale securities
48
49 Net cash used in investing activities
(2,204 )
(2,818 ) Financing activities:
Borrowings from revolving line of credit 69,280 46,850 Repayments
of revolving line of credit (74,630 ) (53,100 ) Repurchase of
common stock (74 ) (66 ) Credit facility fees
(35 ) (40
) Net cash used in financing activities
(5,459 ) (6,356
) Net (decrease) increase in cash (963 ) 1,181
Cash, beginning of year
11,677
10,496 Cash, end of year
$
10,714 $ 11,677
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version on businesswire.com: http://www.businesswire.com/news/home/20180125005259/en/
Dover Downs Gaming & Entertainment, Inc.Timothy R. Horne -
Sr. Vice President-Finance302-857-3292
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