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

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

Business Wire

DOVER, Del. -- January 24, 2013

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      (872   )     3,510      8,466       9,170
taxes
                                                                     
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
                                                                     

________________________
         Gaming revenues from the Company’s slot machine and table game
         operations include the total win from such operations. The Delaware
^(1)    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.
         Other operating revenues do not include the retail amount of
^(2)     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              -             214
securities
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   
                                                                  

Contact:

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