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

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

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. (NYS: 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