8-K

United States

Securities And Exchange Commission

Washington, D.C. 20549

Form 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 27, 2017

Dover Downs Gaming & Entertainment, Inc.

(Exact name of registrant as specified in its charter)

Commission File Number 1-16791

Delaware	51-0414140
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

1131 N. DuPont Highway
Dover, Delaware	19901
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (302) 674-4600

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02 Results of Operations and Financial Condition and

Item 7.01 Regulation FD Disclosure.

The following information is furnished pursuant to Item 2.02 Results of Operations and Financial Condition and Item 7.01 Regulation FD Disclosure.

On April 27, 2017, we issued a press release announcing our financial results for the first quarter ended March 31, 2017.  A copy of our press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.

Item 9.01 Financial Statements and Exhibits.

(d)           Exhibits

99.1Press Release dated April 27, 2017

99.2Reconciliation of Net Loss to EBITDA

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned hereunto duly authorized.

Dover Downs Gaming & Entertainment, Inc.

/s/ Denis McGlynn

Denis McGlynn

President and Chief Executive Officer

Dated: April 27, 2017

2

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release dated April 27, 2017, issued by Dover Downs Gaming & Entertainment, Inc.
99.2	Reconciliation of Net Loss to EBITDA

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE	For further information, call:
	Timothy R. Horne - Sr. Vice President-Finance
Dover, Delaware, April 27, 2017	(302) 857-3292

DOVER DOWNS GAMING & ENTERTAINMENT, INC. REPORTS

RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2017

Dover Downs Gaming & Entertainment, Inc. (NYSE: DDE) today reported results for the three months ended March 31, 2017.

The Company’s revenues for the first quarter of 2017 were $44,148,000 compared with $44,717,000 for the first quarter of 2016.

Gaming revenues of $38,647,000 were down 1.8% compared to the first quarter of last year, primarily from lower horse racing revenue and a lower table game hold percentage.

Other operating revenues were $5,501,000 compared to $5,359,000 last year.  Occupancy levels in the Dover Downs Hotel were approximately 74% for the first quarter of 2017 and 2016.

General and administrative expenses of $1,331,000 were consistent with last year.

Depreciation expense increased to $1,946,000 from $1,887,000 last year.

Interest expense decreased to $209,000 during the quarter as a result of lower outstanding borrowings partially offset by slightly higher rates.

Net loss was ($184,000), or ($.01) per diluted share, compared with net loss of ($239,000), or ($.01) per diluted share for the first quarter of 2016.

* * *

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,
	2017			2016
Revenues:
Gaming (1)	$	38,647		$	39,358
Other operating (2)	5,501			5,359
	44,148			44,717
Expenses:
Gaming	36,869			37,495
Other operating	3,950			3,973
General and administrative	1,331			1,328
Depreciation	1,946			1,887
	44,096			44,683
Operating earnings	52			34
Interest expense	(209		)	(229		)
Loss before income taxes	(157		)	(195		)
Income tax expense	(27		)	(44		)
Net loss	$	(184	)	$	(239	)
Net loss per common share:
- Basic	$	(0.01	)	$	(0.01	)
- Diluted	$	(0.01	)	$	(0.01	)
Weighted average shares outstanding:
- Basic	32,319			32,199
- Diluted	32,319			32,199

(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)

	March 31,			December 31,
	2017			2016
ASSETS
Current assets:
Cash	$	10,802		$	11,677
Accounts receivable	2,815			3,507
Due from State of Delaware	1,889			7,285
Inventories	2,107			1,910
Prepaid expenses and other	2,134			2,365
Receivable from Dover Motorsports, Inc.	8			7
Income taxes receivable	242			221
Total current assets	19,997			26,972
Property and equipment, net	139,155			140,714
Other assets	584			594
Deferred income taxes	2,004			2,020
Total assets	$	161,740		$	170,300
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,932		$	3,749
Purses due horsemen	2,084			7,649
Accrued liabilities	8,018			9,732
Deferred revenue	485			361
Revolving line of credit	24,000			25,250
Total current liabilities	38,519			46,741
Liability for pension benefits	7,660			7,897
Total liabilities	46,179			54,638
Stockholders’ equity:
Common stock	1,828			1,814
Class A common stock	1,487			1,487
Additional paid-in capital	5,709			5,669
Retained earnings	111,104			111,288
Accumulated other comprehensive loss	(4,567		)	(4,596		)
Total stockholders’ equity	115,561			115,662
Total liabilities and stockholders’ equity	$	161,740		$	170,300

DOVER DOWNS GAMING & ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)

	Three Months Ended
	March 31,
	2017			2016
Operating activities:
Net loss	$	(184	)	$	(239	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation	1,946			1,887
Amortization of credit facility origination fees	13			26
Stock-based compensation	128			103
Deferred income taxes	(3		)	46
Changes in assets and liabilities:
Accounts receivable	692			(129		)
Due from State of Delaware	5,396			5,289
Inventories	(197		)	(26		)
Prepaid expenses and other	226			559
Receivable from/payable to Dover Motorsports, Inc.	(1		)	(54		)
Income taxes receivable	(21		)	28
Accounts payable	370			562
Purses due horsemen	(5,565		)	(4,723		)
Accrued liabilities	(1,714		)	(848		)
Deferred revenue	124			95
Liability for pension benefits	(186		)	(149		)
Net cash provided by operating activities	1,024			2,427
Investing activities:
Capital expenditures	(574		)	(1,279		)
Purchase of available-for-sale securities	(31		)	(1		)
Proceeds from sale of available-for-sale securities	30			—
Net cash used in investing activities	(575		)	(1,280		)
Financing activities:
Borrowings from revolving line of credit	29,730			15,450
Repayments of revolving line of credit	(30,980		)	(15,950		)
Repurchase of common stock	(74		)	(66		)
Net cash used in financing activities	(1,324		)	(566		)
Net (decrease) increase in cash	(875		)	581
Cash, beginning of period	11,677			10,496
Cash, end of period	$	10,802		$	11,077

EX-99.2

Exhibit 99.2

DOVER DOWNS GAMING & ENTERTAINMENT, INC.

SUPPLEMENTAL DATA

RECONCILIATION OF NET LOSS TO EBITDA

In Thousands

(Unaudited)

	Three Months Ended March 31,
	2017			2016
Reconciliation of net loss to EBITDA:
Net loss	$	(184	)	$	(239	)
Income tax expense	27			44
Loss before income taxes	(157		)	(195		)
Interest expense	209			229
Depreciation	1,946			1,887
EBITDA	$	1,998		$	1,921

We define EBITDA as earnings before interest, taxes, depreciation and amortization.  EBITDA is a supplemental non-GAAP financial measure commonly used by management and industry analysts to evaluate our operations. We believe that EBITDA provides useful information to investors regarding our ability to service debt.  EBITDA should not be construed as an alternative to net earnings (loss) (as an indicator of our operating performance) as determined in accordance with accounting principles generally accepted in the United States of America. Not all companies calculate EBITDA in the same manner, and EBITDA as presented by Dover Downs Gaming & Entertainment, Inc. may not be comparable to similarly titled measures presented by other companies.