Dover Downs Gaming & Entertainment, Inc. Reports Results for the Second Quarter Ended June 30, 2018

Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended June 30, 2018.

The Company’s revenues for the second quarter of 2018 increased 2.3% to $44,133,000 compared with $43,141,000 for the second quarter of 2017. Gaming revenues were $33,895,000 compared to $33,227,000 for the second quarter of last year.

Occupancy levels in the Dover Downs Hotel were approximately 85% for the second quarter of both years.

General and administrative, depreciation and interest expenses were each fairly consistent with the second quarter of 2017.

Net earnings were $153,000 compared with $33,000 for the second quarter of 2017. Earnings per diluted share were $.00 for the second quarter of each year.

Denis McGlynn, the Company's President and Chief Executive Officer, stated: “I want to take this opportunity to thank the Legislature and the Administration for listening to the needs of the casino industry in Delaware. The modification to the gaming tax structure will help us going forward as we continue to improve our performance in this intensely competitive market.”

As previously announced, the Company has entered into a definitive merger agreement with Twin River Worldwide Holdings, Inc. The merger contemplates that Dover Downs stockholders will exchange their Dover Downs stock for Twin River common shares representing 7.225% of the equity in the combined company at closing. Please see the press release of July 22, 2018 and the Form 8-K filed on July 23, 2018 for more information.

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 EARNINGS (LOSS)
In Thousands, Except Per Share Amounts
(Unaudited)
		Three Months Ended June 30,									Six Months Ended June 30,
		2018				2017 *					2018				2017 *
Revenues:
Gaming		$	33,895			$	33,227				$	68,029			$	68,533
Other operating			10,238				9,914					19,263				18,620
			44,133				43,141					87,292				87,153
Expenses:
Gaming			32,730				32,115					65,565				65,981
Other operating			7,655				7,425					14,689				14,262
General and administrative			1,342				1,333					2,727				2,708
Depreciation			2,050				2,086					4,190				4,032
			43,777				42,959					87,171				86,983
Operating earnings			356				182					121				170
Interest expense			(199	)			(208	)				(408	)			(417	)
Other income			84				44					167				88
Earnings (loss) before income taxes			241				18					(120	)			(159	)
Income tax (expense) benefit			(88	)			15					-				(4	)
Net earnings (loss)		$	153			$	33				$	(120	)		$	(163	)
Net earnings (loss) per common share:
- Basic		$	-			$	-				$	-			$	(0.01	)
- Diluted		$	-			$	-				$	-			$	(0.01	)
Weighted average shares outstanding:
- Basic			32,447				32,322					32,445				32,321
- Diluted			32,447				32,322					32,445				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)
		June 30, 2018				December 31, 2017 *
ASSETS
Current assets:
Cash		$	10,837			$	10,714
Accounts receivable			3,013				3,557
Due from State of Delaware			4,794				5,720
Inventories			1,932				1,928
Prepaid expenses and other			2,847				2,840
Receivable from Dover Motorsports, Inc.			19				7
Income taxes receivable			317				318
Total current assets			23,759				25,084
Property and equipment, net			131,835				134,527
Other assets			370				564
Deferred income taxes			1,765				1,786
Total assets		$	157,729			$	161,961
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	1,949			$	2,571
Purses due horsemen			4,799				5,814
Accrued liabilities			7,499				8,111
Deferred credits			122				49
Contract liabilities			3,971				3,724
Revolving line of credit			18,000				19,900
Total current liabilities			36,340				40,169
Liability for pension benefits			7,080				7,483
Total liabilities			43,420				47,652
Stockholders’ equity:
Common stock			1,841				1,827
Class A common stock			1,487				1,487
Additional paid-in capital			5,924				5,877
Retained earnings			109,731				109,817
Accumulated other comprehensive loss			(4,674	)			(4,699	)
Total stockholders’ equity			114,309				114,309
Total liabilities and stockholders’ equity		$	157,729			$	161,961

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*		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)
		Six Months Ended June 30,
		2018				2017 *
Operating activities:
Net loss		$	(120	)		$	(163	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation			4,190				4,032
Amortization of credit facility origination fees			20				26
Stock-based compensation			135				186
Deferred income taxes			(2	)			(171	)
Losses on equity investments			2				-
Changes in assets and liabilities:
Accounts receivable			544				1,113
Due from State of Delaware			926				3,458
Inventories			(4	)			(277	)
Prepaid expenses and other			(12	)			(389	)
Receivable from Dover Motorsports, Inc.			(12	)			(26	)
Income taxes receivable			1				124
Accounts payable			(547	)			(687	)
Purses due horsemen			(1,015	)			(3,782	)
Accrued liabilities			(612	)			(1,534	)
Deferred credits			73				131
Contract liabilities			247				449
Liability for pension benefits			(321	)			(199	)
Net cash provided by operating activities			3,493				2,291
Investing activities:
Capital expenditures			(1,393	)			(1,196	)
Purchase of equity investments			(21	)			(40	)
Proceeds from sale of equity investments			18				38
Net cash used in investing activities			(1,396	)			(1,198	)
Financing activities:
Borrowings from revolving line of credit			29,830				46,720
Repayments of revolving line of credit			(31,730	)			(48,970	)
Repurchase of common stock			(74	)			(74	)
Net cash used in financing activities			(1,974	)			(2,324	)
Net increase (decrease) in cash			123				(1,231	)
Cash, beginning of period			10,714				11,677
Cash, end of period		$	10,837			$	10,446

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*		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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