Dover Downs Gaming & Entertainment, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2012

Thu Jan 24, 2013 8:15am EST

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DOVER, Del.--(Business Wire)--
Dover Downs Gaming & Entertainment, Inc. (NYSE-DDE) today reported results for
the fourth quarter and year ended December 31, 2012. 

The Company`s revenues were $48,559,000 for the fourth quarter of 2012 compared
with $61,619,000 for the fourth quarter of 2011. Gaming revenue decreased 21.4%
compared to the fourth quarter of last year as a result of increased competition
in the region compounded by the impact of hurricane Sandy. 

Other operating revenues declined to $5,310,000 from $6,600,000 due primarily to
lower food and beverage revenue related to catering services for the NASCAR
weekend in Dover which was held in the third quarter of this year compared to
the fourth quarter of last year. The lower casino volume and the hurricane also
impacted these revenues. Occupancy levels in the Dover Downs Hotel were
approximately 81% for the fourth quarter of 2012 compared with approximately 87%
for the fourth quarter of 2011. 

Net loss was ($528,000), or ($.02) per diluted share, compared with net earnings
of $2,120,000, or $.07 per diluted share for the fourth quarter of 2011. 

Net earnings for the year were $4,807,000, or $.15 per diluted share compared
with $5,359,000 or $.17 per diluted share for 2011. 

Denis McGlynn, the Company`s President and Chief Executive Officer, stated:
"Gaming expansion in Maryland and Pennsylvania continues to depress gaming
revenues in Delaware and we are keeping the Lottery Office and the
Administration informed as to the impacts on our business and our ability to
maintain current employment levels. We are encouraging a review of the gaming
tax structure during the current legislative session." 

"At the same time, we continue to collaborate on a roll out of the nation`s most
comprehensive internet gaming program - estimated to commence in the third
quarter of 2013. We remain confident that Delaware`s internet casino offerings
will be among the first to come online and set the standard for other states.
Our goal remains to stay one step ahead of the competition and to continue
offering our patrons the region`s finest amenities and richest gaming
experiences." 

Given the competitive environment and recent financial results, the Company`s
Board of Directors has suspended the quarterly dividend. 

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 OPERATIONS                                                                               
 In Thousands, Except Per Share Amounts                                                                              
 (Unaudited)                                                                                                         
                                                                                                                     
                                                                                                                     
                                          Three Months Ended                        Years Ended                      
                                          December 31,                              December 31,                     
                                          2012                      2011            2012               2011          
 Revenues:                                                                                                           
 Gaming (1)                               $     43,249              $     55,019    $    203,055       $    217,415  
 Other operating (2)                            5,310                     6,600          22,857             22,527   
                                                48,559                    61,619         225,912            239,942  
 Expenses:                                                                                                           
 Gaming                                         41,000                    48,468         182,951            193,392  
 Other operating                                4,009                     4,785          16,359             16,510   
 General and administrative                     1,506                     1,434          6,034              6,288    
 Depreciation                                   2,528                     2,797          10,297             11,665   
                                                49,043                    57,484         215,641            227,855  
                                                                                                                     
 Operating (loss) earnings                      (484    )                 4,135          10,271             12,087   
                                                                                                                     
 Loss on extinguishment of debt                 -                         -              -                  45       
 Interest expense                               388                       625            1,805              2,872    
                                                                                                                     
 (Loss) earnings before income taxes            (872    )                 3,510          8,466              9,170    
                                                                                                                     
 Income taxes                                   (344    )                 1,390          3,659              3,811    
                                                                                                                     
 Net (loss) earnings                      $     (528    )           $     2,120     $    4,807         $    5,359    
                                                                                                                     
 Net (loss) earnings per common share:                                                                               
 - Basic                                  $     (0.02   )           $     0.07      $    0.15          $    0.17     
 - Diluted                                $     (0.02   )           $     0.07      $    0.15          $    0.17     
                                                                                                                     
 Weighted average shares outstanding:                                                                                
 - Basic                                        31,745                    31,646         31,745             31,645   
 - Diluted                                      31,745                    31,646         31,745             31,645   
                                                                                                                     


 ________________________                                                                                                                                                                                                                                                                                                                                                                
 (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,           
                                               2012                     2011                   
 ASSETS                                                                                        
                                                                                               
 Current assets:                                                                               
 Cash                                          $      14,993            $      18,634          
 Accounts receivable                                  4,093                    3,982           
 Due from State of Delaware                           9,708                    9,440           
 Inventories                                          1,921                    1,860           
 Prepaid expenses and other                           3,207                    3,659           
 Income taxes receivable                              155                      -               
 Deferred income taxes                                1,284                    1,317           
 Total current assets                                 35,361                   38,892          
                                                                                               
 Property and equipment, net                          168,963                  176,415         
 Other assets                                         938                      877             
 Total assets                                  $      205,262           $      216,184         
                                                                                               
 LIABILITIES AND STOCKHOLDERS` EQUITY                                                          
                                                                                               
 Current liabilities:                                                                          
 Accounts payable                              $      3,785             $      4,035           
 Purses due horsemen                                  9,833                    9,004           
 Accrued liabilities                                  10,361                   11,912          
 Payable to Dover Motorsports, Inc.                   -                        11              
 Income taxes payable                                 -                        444             
 Deferred revenue                                     346                      254             
 Total current liabilities                            24,325                   25,660          
                                                                                               
 Revolving line of credit                             58,500                   69,000          
 Liability for pension benefits                       6,983                    5,570           
 Other liabilities                                    -                        147             
 Deferred income taxes                                1,994                    3,301           
 Total liabilities                                    91,802                   103,678         
                                                                                               
 Stockholders` equity:                                                                         
 Common stock                                         1,590                    1,576           
 Class A common stock                                 1,660                    1,660           
 Additional paid-in capital                           4,136                    3,464           
 Retained earnings                                    109,322                  108,090         
 Accumulated other comprehensive loss                 (3,248   )               (2,284   )      
 Total stockholders` equity                           113,460                  112,506         
 Total liabilities and stockholders` equity    $      205,262           $      216,184         
                                                                                               


                                                                                                                               
 DOVER DOWNS GAMING & ENTERTAINMENT, INC.                                                                                      
 CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                         
 In Thousands                                                                                                                  
 (Unaudited)                                                                                                                   
                                                                                                                               
                                                                                        Years Ended                            
                                                                                        December 31,                           
                                                                                        2012                 2011              
                                                                                                                               
 Operating activities:                                                                                                         
 Net earnings                                                                           $   4,807            $   5,359         
 Adjustments to reconcile net earnings to net cash provided by operating activities:                                           
 Depreciation                                                                               10,297               11,665        
 Amortization of credit facility origination fees                                           101                  90            
 Stock-based compensation                                                                   793                  905           
 Deferred income taxes                                                                      (318     )           (389      )   
 Loss on extinguishment of debt                                                             -                    45            
 Changes in assets and liabilities:                                                                                            
 Accounts receivable                                                                        (111     )           (884      )   
 Due from State of Delaware                                                                 (268     )           389           
 Inventories                                                                                (61      )           129           
 Prepaid expenses and other                                                                 310                  (995      )   
 Income taxes receivable/payable                                                            (928     )           869           
 Accounts payable                                                                           (470     )           604           
 Purses due horsemen                                                                        829                  (825      )   
 Accrued liabilities                                                                        (1,571   )           (374      )   
 Payable to Dover Motorsports, Inc.                                                         (11      )           29            
 Deferred revenue                                                                           92                   (53       )   
 Other liabilities                                                                          (325     )           (913      )   
 Net cash provided by operating activities                                                  13,166               15,651        
                                                                                                                               
 Investing activities:                                                                                                         
 Capital expenditures                                                                       (2,625   )           (1,853    )   
 Proceeds from sale of available-for-sale securities                                        -                    214           
 Purchase of available-for-sale securities                                                  -                    (291      )   
 Net cash used in investing activities                                                      (2,625   )           (1,930    )   
                                                                                                                               
 Financing activities:                                                                                                         
 Borrowings from revolving line of credit                                                   19,620               180,683       
 Repayments of revolving line of credit                                                     (30,120  )           (190,283  )   
 Dividends paid                                                                             (3,575   )           (3,888    )   
 Repurchase of common stock                                                                 (107     )           (150      )   
 Credit facility fees                                                                       -                    (268      )   
 Net cash used in financing activities                                                      (14,182  )           (13,906   )   
                                                                                                                               
 Net decrease in cash                                                                       (3,641   )           (185      )   
 Cash, beginning of period                                                                  18,634               18,819        
 Cash, end of period                                                                    $   14,993           $   18,634        
                                                                                                                               


Dover Downs Gaming & Entertainment, Inc.
Timothy R. Horne - Sr. Vice President-Finance
302-857-3292 

Copyright Business Wire 2013

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