Dover Downs Gaming & Entertainment, Inc. Reports Results for the First Quarter Ended March 31, 2018

Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended March 31, 2018.

The Company’s revenues for the first quarter of 2018 were $43,159,000 compared with $44,012,000 for the first quarter of 2017.

Gaming revenues of $34,134,000 were down 3.3% compared to the first quarter of last year, primarily from lower slot machine win.

Other operating revenues increased to $9,025,000 compared to $8,706,000 last year. Occupancy levels in the Dover Downs Hotel were approximately 73% for the first quarter of 2018 compared with 74% for the first quarter of 2017.

General and administrative expenses were consistent with last year.

Depreciation expense increased to $2,140,000 from $1,946,000 last year.

Net loss was ($273,000), or ($.01) per diluted share, compared with net loss of ($196,000), or ($.01) per diluted share for the first quarter of 2017.

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demonstrated substantial gaming operational profitability which once again was totally wiped out by an unfair and outdated gaming revenue sharing formula.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 2,300 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
		March 31,
		2018				2017 *
Revenues:
Gaming		$	34,134			$	35,306
Other operating			9,025				8,706
			43,159				44,012
Expenses:
Gaming			32,835				33,866
Other operating			7,034				6,837
General and administrative			1,385				1,375
Depreciation			2,140				1,946
			43,394				44,024
Operating loss			(235	)			(12	)
Interest expense			(209	)			(209	)
Other income			83				44
Loss before income taxes			(361	)			(177	)
Income tax benefit (expense)			88				(19	)
Net loss		$	(273	)		$	(196	)
Net loss per common share:
- Basic		$	(0.01	)		$	(0.01	)
- Diluted		$	(0.01	)		$	(0.01	)
Weighted average shares outstanding:
- Basic			32,444				32,319
- Diluted			32,444				32,319

_________________________
*		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)
		March 31,				December 31,
		2018				2017 *
ASSETS
Current assets:
Cash		$	11,520			$	10,714
Accounts receivable			3,463				3,557
Due from State of Delaware			1,866				5,720
Inventories			1,954				1,928
Prepaid expenses and other			2,178				2,840
Receivable from Dover Motorsports, Inc.			12				7
Income taxes receivable			318				318
Total current assets			21,311				25,084
Property and equipment, net			133,274				134,527
Other assets			373				564
Deferred income taxes			1,862				1,786
Total assets		$	156,820			$	161,961
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	2,709			$	2,571
Purses due horsemen			1,889				5,814
Accrued liabilities			7,268				8,111
Deferred credits			170				49
Contract liabilities			3,913				3,724
Revolving line of credit			19,500				19,900
Total current liabilities			35,449				40,169
Liability for pension benefits			7,298				7,483
Total liabilities			42,747				47,652
Stockholders’ equity:
Common stock			1,841				1,827
Class A common stock			1,487				1,487
Additional paid-in capital			5,871				5,877
Retained earnings			109,578				109,817
Accumulated other comprehensive loss			(4,704	)			(4,699	)
Total stockholders’ equity			114,073				114,309
Total liabilities and stockholders’ equity		$	156,820			$	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)
		Three Months Ended
		March 31,
		2018				2017 *
Operating activities:
Net loss		$	(273	)		$	(196	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation			2,140				1,946
Amortization of credit facility origination fees			10				13
Stock-based compensation			82				128
Deferred income taxes			(88	)			(10	)
Losses on equity investments			5				-
Changes in assets and liabilities:
Accounts receivable			94				692
Due from State of Delaware			3,854				5,396
Inventories			(26	)			(197	)
Prepaid expenses and other			659				226
Receivable from Dover Motorsports, Inc.			(5	)			(1	)
Income taxes receivable			-				(21	)
Accounts payable			213				(94	)
Purses due horsemen			(3,925	)			(5,565	)
Accrued liabilities			(843	)			(1,827	)
Deferred credits			121				156
Contract liabilities			189				472
Liability for pension benefits			(144	)			(94	)
Net cash provided by operating activities			2,063				1,024
Investing activities:
Capital expenditures			(782	)			(574	)
Purchase of equity investments			(11	)			(31	)
Proceeds from sale of equity investments			10				30
Net cash used in investing activities			(783	)			(575	)
Financing activities:
Borrowings from revolving line of credit			24,760				29,730
Repayments of revolving line of credit			(25,160	)			(30,980	)
Repurchase of common stock			(74	)			(74	)
Net cash used in financing activities			(474	)			(1,324	)
Net increase (decrease) in cash			806				(875	)
Cash, beginning of period			10,714				11,677
Cash, end of period		$	11,520			$	10,802

_________________________
*		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.

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