Dover Motorsports, Inc. Reports Results for the Second Quarter of 2014

DOVER, Del.--()--Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2014.

The Company promoted a NASCAR triple-header and hosted the Firefly Music Festival in Dover during the second quarter of 2014 and 2013. The Company leases a portion of its Dover facility to the promoter, provides logistical assistance and handles certain concessions for which the Company retains a certain percent of the gross sales.

Revenues for the second quarter of 2014 were $24,273,000 compared with $24,465,000 in the second quarter of 2013. The decrease in revenues was primarily due to lower motorsports admissions and event-related revenue, partially offset by the contracted increase in broadcasting revenue for the Dover NASCAR weekend and by slightly higher revenue from the Firefly Music Festival.

Operating and marketing expenses were $13,268,000 in the second quarter of 2014 compared to $13,123,000 in the second quarter of 2013. The increase was primarily due to the scheduled increase in purse and sanction fees and increased promotion and security costs for the Dover NASCAR weekend.

General and administrative expenses decreased to $1,776,000 in the second quarter of 2014 from $1,839,000 in the second quarter of 2013.

Net interest expense decreased to $99,000 in the second quarter of 2014 from $275,000 for the second quarter of 2013. The decrease was due to lower interest rates, lower outstanding borrowings and lower fees.

Earnings before income tax expense for the second quarter of 2014 were $8,256,000 compared with $8,391,000 in the second quarter of 2013.

Net earnings for the second quarter of 2014 were $4,844,000 or $0.13 per diluted share compared to $4,903,000 or $0.13 per diluted share for the second quarter of 2013.

At June 30, 2014, the Company’s total indebtedness was $16,920,000 compared with $23,180,000 at June 30, 2013.

As previously announced, the Company entered into an agreement on May 28, 2014 with NeXovation, Inc. to sell its Nashville Superspeedway facility. The agreement provides for an aggregate purchase price of $27 million in cash plus the assumption by NeXovation, Inc. of the Company’s obligations under certain Variable Rate Tax Exempt Infrastructure Revenue Bonds issued by the Sports Authority of the County of Wilson, Tennessee. The transaction is expected to close during the third quarter and is subject to customary closing conditions.

The Company’s balance sheet includes a $1,835,000 contingent obligation related to the bonds noted above which will be reversed upon the closing of the transaction resulting in an increase in our pre-tax earnings by the amount of the contingent obligation at the date of closing.

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 which could cause results to vary materially. Please refer to the Company's SEC filings for a discussion of such factors.

Dover Motorsports, Inc. is a leading promoter of NASCAR sanctioned and other motorsports events in the United States whose subsidiaries own and operate Dover International Speedway in Dover, Delaware and Nashville Superspeedway near Nashville, Tennessee. For further information, log on to dovermotorsports.com.

     
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
 
 
Three Months Ended Six Months Ended
June 30, June 30,
  2014     2013     2014     2013  
Revenues:
Admissions $ 4,473 $ 4,864 $ 4,473 $ 4,864
Event-related 4,194 4,531 4,367 4,640
Broadcasting 15,606 15,066 15,606 15,066
Other   -     4     10     11  
  24,273     24,465     24,456     24,581  
 
Expenses:
Operating and marketing 13,268 13,123 14,303 14,177
General and administrative 1,776 1,839 3,636 3,750
Depreciation   818     824     1,643     1,649  
  15,862     15,786     19,582     19,576  
 
Operating earnings 8,411 8,679 4,874 5,005
 
Interest expense, net (99 ) (275 ) (264 ) (550 )
(Provision) benefit for contingent obligation (70 ) (19 ) 8 3
Other income   14     6     17     145  
 
Earnings before income taxes 8,256 8,391 4,635 4,603
 
Income tax expense   (3,412 )   (3,488 )   (1,909 )   (1,979 )
 
Net earnings $ 4,844   $ 4,903   $ 2,726   $ 2,624  
 
Net earnings per common share:
Basic $ 0.13   $ 0.13   $ 0.07   $ 0.07  
Diluted $ 0.13   $ 0.13   $ 0.07   $ 0.07  
 
Weighted average shares outstanding:
Basic 36,042 36,373 36,052 36,385
Diluted 36,042 36,373 36,052 36,385
     
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
 
 
June 30, June 30, December 31,
  2014     2013     2013  
 
ASSETS
Current assets:
Cash $ 49 $ 16 $ 4
Accounts receivable 11,930 12,430 28
Inventories 117 183 114
Prepaid expenses and other 1,070 1,138 1,050
Receivable from Dover Downs Gaming & Entertainment, Inc. - 57 4
Prepaid income taxes - - 22
Deferred income taxes 87 83 76
Assets held for sale   26,000     -     -  
Total current assets 39,253 13,907 1,298
 
Property and equipment, net 58,270 91,454 85,591
Other assets 945 826 919
Deferred income taxes   310     464     336  
Total assets $ 98,778   $ 106,651   $ 88,144  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 458 $ 284 $ 25
Accrued liabilities 4,733 3,918 2,887
Payable to Dover Downs Gaming & Entertainment, Inc. 39 - -
Income taxes payable 1,328 377 -
Deferred revenue   4,035     4,976     1,743  
Total current liabilities 10,593 9,555 4,655
 
Revolving line of credit 16,920 23,180 14,820
Liability for pension benefits 1,414 2,988 1,521
Provision for contingent obligation 1,835 1,931 1,843
Deferred income taxes   16,835     18,309     16,926  
Total liabilities   47,597     55,963     39,765  
 
Stockholders' equity:
Common stock 1,812 1,840 1,802
Class A common stock 1,851 1,851 1,851
Additional paid-in capital 101,394 102,094 101,362
Accumulated deficit (52,337 ) (52,632 ) (55,063 )
Accumulated other comprehensive loss   (1,539 )   (2,465 )   (1,573 )
Total stockholders' equity   51,181     50,688     48,379  
Total liabilities and stockholders' equity $ 98,778   $ 106,651   $ 88,144  
   
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Six Months Ended
June 30,
  2014     2013  
 
Operating activities:
Net earnings $ 2,726 $ 2,624

Adjustments to reconcile net earnings to net cash used in operating activities:

Depreciation 1,643 1,649
Amortization of credit facility fees 48 121
Stock-based compensation 164 166
Deferred income taxes (93 ) 1,024
Benefit for contingent obligation (8 ) (3 )
Gain on sale of property and equipment - (138 )
Changes in assets and liabilities:
Accounts receivable (11,902 ) (12,206 )
Inventories (3 ) (59 )
Prepaid expenses and other (64 ) (103 )
Accounts payable 433 139
Accrued liabilities 1,846 1,015
Payable to/receivable from Dover Downs Gaming & Entertainment, Inc. 43 (57 )
Income taxes payable/prepaid income taxes 1,351 429
Deferred revenue 2,292 2,257
Other liabilities   (77 )   (30 )
Net cash used in operating activities   (1,601 )   (3,172 )
 
Investing activities:
Capital expenditures (322 ) (207 )
Proceeds from sale of property and equipment - 138
Purchases of available-for-sale securities (45 ) (38 )
Proceeds from sale of available-for-sale securities   42     34  
Net cash used in investing activities   (325 )   (73 )
 
Financing activities:
Borrowings from revolving line of credit 16,540 14,180
Repayments on revolving line of credit (14,440 ) (10,700 )
Repurchase of common stock   (129 )   (234 )
Net cash provided by financing activities   1,971     3,246  
 
Net increase in cash 45 1
Cash, beginning of period   4     15  
Cash, end of period $ 49   $ 16  

Contacts

Dover Motorsports, Inc.
Timothy R. Horne – Sr. Vice President - Finance
302-857-3292

Sharing

Contacts

Dover Motorsports, Inc.
Timothy R. Horne – Sr. Vice President - Finance
302-857-3292