Dover Motorsports, Inc. Reports Results for the Second Quarter Of 2019

DOVER, Del.--()--Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2019.

The Company promoted a NASCAR triple-header and hosted the Firefly Music Festival (“Firefly”) in Dover during the second quarter of both 2019 and 2018. The Company leases a portion of its facility to the promoter of Firefly, provides logistical assistance and handles certain concessions for which the Company retains a percentage of the gross sales.

Revenues for the second quarter of 2019 were $24,838,000 compared to $25,812,000 for the second quarter of 2018. The decrease is primarily from lower corporate spending and admissions revenue at our rain delayed spring NASCAR weekend, and lower commissions from Firefly, partially offset by the scheduled increase in broadcasting revenue.

Operating and marketing expenses increased to $14,584,000 in the second quarter of 2019 from $14,234,000 in the second quarter of 2018. The increase was primarily due to the scheduled increase in purse and sanction fees for the NASCAR weekend.

General and administrative expenses of $1,826,000 in the second quarter of 2019 remained consistent compared to $1,799,000 in the second quarter of 2018.

Net interest expense decreased to $10,000 in the second quarter of 2019 from $33,000 in the second quarter of 2018 due to lower outstanding borrowings.

Provision for contingent obligation was $135,000 during the second quarter of 2019 compared to $69,000 during the second quarter of 2018 primarily due to a lower discount rate used to value the liability.

Earnings before income taxes for the second quarter of 2019 were $7,546,000 compared with $8,879,000 for the second quarter of 2018.

Net earnings for the second quarter of 2019 were $5,501,000 or $0.15 per diluted share compared to $6,508,000 or $0.18 per diluted share in the second quarter of 2018.

As previously reported, we closed on the sale of a parcel of land in Nashville during the first quarter of 2018 for net proceeds of approximately $5 million after closing costs, resulting in a gain of $2,512,000. 225 acres of our Nashville Superspeedway property were under option for a total purchase price of approximately $12.4 million. We sold 7.6 acres of the option land during the first quarter of 2019 for net proceeds of approximately $267,000, resulting in a gain of $139,000.

During June 2019, we amended the option agreement and the buyer exercised its option to purchase two of the parcels, comprising approximately 133 acres, for gross proceeds of approximately $6,400,000. Closing on these parcels is expected to occur by the end of July. In addition, the option for the remaining parcel of approximately 97 acres was extended until March 1, 2022. The buyer has paid $500,000 for the extension which would be credited to the purchase price at closing. The Company continues to hold approximately 1,000 acres of commercial real estate in Nashville.

The Company’s financial position strengthened during the quarter. At June 30, 2019, the Company had no outstanding indebtedness and almost $9 million in available cash.

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,

2019

 

2018

 

2019

 

2018

Revenues:

Admissions

$

2,502

 

$

2,853

 

$

2,502

 

$

2,853

 

Event-related

 

3,453

 

 

4,830

 

 

3,582

 

 

5,056

 

Broadcasting

 

18,878

 

 

18,128

 

 

18,878

 

 

18,128

 

Other

 

5

 

 

1

 

 

5

 

 

1

 

 

24,838

 

 

25,812

 

 

24,967

 

 

26,038

 

 
Expenses:

Operating and marketing

 

14,584

 

 

14,234

 

 

15,639

 

 

15,385

 

General and administrative

 

1,826

 

 

1,799

 

 

3,742

 

 

3,754

Depreciation

 

794

 

 

825

 

 

1,587

 

 

1,703

 

 

17,204

 

 

16,858

 

 

20,968

 

 

20,842

 

 
Gain on sale of land

 

-

 

 

-

 

 

139

 

 

2,512

 

 
Operating earnings

 

7,634

 

 

8,954

 

 

4,138

 

 

7,708

 

 
Interest expense

 

(10

)

 

(33

)

 

(16

)

 

(73

)

Provision for contingent obligation

 

(135

)

 

(69

)

 

(246

)

 

(136

)

Other income

 

57

 

 

27

 

 

189

 

 

31

 

 
Earnings before income taxes

 

7,546

 

 

8,879

 

 

4,065

 

 

7,530

 

 
Income tax expense

 

(2,045

)

 

(2,371

)

 

(1,054

)

 

(2,014

)

 
Net earnings

$

5,501

 

$

6,508

 

$

3,011

 

$

5,516

 

 
Net earnings per common share:

Basic

$

0.15

 

$

0.18

 

$

0.08

 

$

0.15

 

Diluted

$

0.15

 

$

0.18

 

$

0.08

 

$

0.15

 

 
Weighted average shares outstanding:
Basic

 

36,010

 

 

36,160

 

 

36,021

 

 

36,196

 

Diluted

 

36,010

 

 

36,160

 

 

36,021

 

 

36,196

 

 

DOVER MOTORSPORTS, INC.

RECONCILIATION OF GAAP EARNINGS BEFORE INCOME TAXES

TO ADJUSTED EARNINGS BEFORE INCOME TAXES

AND RECONCILIATION OF GAAP NET EARNINGS TO ADJUSTED NET EARNINGS

In Thousands, Except Per Share Amounts

(Unaudited)

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

2019

 

2018

 

2019

 

2018

 
GAAP earnings before income taxes

$

7,546

$

8,879

$

4,065

 

$

7,530

 

 

Gain on sale of land (1)

 

-

 

-

 

(139

)

 

(2,512

)

 
Adjusted earnings before income taxes

$

7,546

$

8,879

$

3,926

 

$

5,018

 

 
GAAP net earnings

$

5,501

$

6,508

$

3,011

 

$

5,516

 

 

Gain on sale of land, net of income taxes (1)

 

-

 

-

 

(110

)

 

(1,984

)

 
Adjusted net earnings

$

5,501

$

6,508

$

2,901

 

$

3,532

 

 
 
GAAP net earnings per common share - basic and diluted

$

0.15

$

0.18

$

0.08

 

$

0.15

 

 

Gain on sale of land, net of income taxes (1)

 

-

 

-

 

-

 

 

(0.05

)

 
Adjusted net earnings per common share - basic and diluted

$

0.15

$

0.18

$

0.08

 

$

0.10

 

_________________________

(1)

 

During the first quarter of 2019 and 2018, we closed on sales of parcels of land at our Nashville Superspeedway facility resulting in gains of $139,000 and $2,512,000, respectively.

 

 

 

 

 

The above financial information is presented using other than generally accepted accounting principles ("non-GAAP"), and is reconciled to comparable information presented using GAAP. Non-GAAP adjusted earnings before income taxes, adjusted net earnings and adjusted net earnings per common share - basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned gain on sale of land. Income taxes are based on our approximate statutory tax rates. We believe such non-GAAP information is useful and meaningful to investors, and is used by investors and us to assess core operations. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to earnings before income taxes, net earnings or net earnings per common share - basic and diluted, which are determined in accordance with GAAP.

 
DOVER MOTORSPORTS, INC.  
CONSOLIDATED BALANCE SHEETS  
In Thousands  
(Unaudited)  
   
   

June 30,

 

June 30,

 

December 31,

 

2019

 

2018

 

2018

 
   

ASSETS

 

Current assets:

 
Cash

$

8,989

 

$

5,257

 

$

3,951

 

Accounts receivable

 

1,449

 

 

2,177

 

 

676

 

Inventories

 

20

 

 

19

 

 

21

 

Prepaid expenses and other

 

933

 

 

921

 

 

1,055

 

Assets held for sale

2,203

-

531

 
Total current assets

13,594

8,374

6,234

 
   
Property and equipment, net

 

48,559

 

 

49,827

 

 

48,137

 

Nashville Superspeedway facility

 

21,322

 

 

23,567

 

 

23,567

 

Right of use asset

 

231

 

 

-

 

 

-

 

Other assets

 

1,169

 

 

1,091

 

 

1,015

 

Total assets

$

84,875

 

$

82,859

 

$

78,953

 

   
LIABILITIES AND STOCKHOLDERS' EQUITY  
Current liabilities:  
Accounts payable

$

712

 

$

239

 

$

187

 

Accrued liabilities

 

3,053

 

 

2,822

 

 

3,083

 

Payable to Dover Downs Gaming & Entertainment, Inc.

 

-

 

 

19

 

 

9

 

Income taxes payable

 

1,149

 

 

1,185

 

 

118

 

Contract liabilities

 

2,008

 

 

1,700

 

 

1,140

 

Total current liabilities

 

6,922

 

 

5,965

 

 

4,537

 

   
Liability for pension benefits

 

666

 

 

1,708

 

 

773

 

Lease liability

 

157

 

 

-

 

 

-

 

Non-refundable deposit

 

500

 

 

-

 

 

-

 

Provision for contingent obligation

 

2,630

 

 

2,096

 

 

2,384

 

Deferred income taxes

 

8,074

 

 

8,534

 

 

8,371

 

Total liabilities

 

18,949

 

 

18,303

 

 

16,065

 

   
Stockholders' equity:  
Common stock

 

1,809

 

 

1,821

 

 

1,805

 

Class A common stock

 

1,851

 

 

1,851

 

 

1,851

 

Additional paid-in capital

 

101,388

 

 

101,613

 

 

101,416

 

Accumulated deficit

 

(35,815

)

 

(37,269

)

 

(38,826

)

Accumulated other comprehensive loss

 

(3,307

)

 

(3,460

)

 

(3,358

)

Total stockholders' equity

 

65,926

 

 

64,556

 

 

62,888

 

Total liabilities and stockholders' equity

$

84,875

 

$

82,859

 

$

78,953

 

 
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 

Six Months Ended

June 30,

2019

 

2018

 
Operating activities:
Net earnings

$

3,011

 

$

5,516

 

Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation

 

1,587

 

 

1,703

 

Amortization of credit facility fees

 

31

 

 

32

 

Stock-based compensation

 

176

 

 

171

 

Deferred income taxes

 

(317

)

 

(160

)

Provision for contingent obligation

 

246

 

 

136

 

(Gains) losses on equity investments

 

(113

)

 

6

 

Gain on sale of land

 

(139

)

 

(2,512

)

Changes in assets and liabilities:
Accounts receivable

 

(773

)

 

(1,701

)

Inventories

 

1

 

 

(4

)

Prepaid expenses and other

 

58

 

 

182

 

Accounts payable

 

555

 

 

178

 

Accrued liabilities

 

(104

)

 

(227

)

Payable to Dover Downs Gaming & Entertainment, Inc.

 

(9

)

 

12

 

Income taxes payable

 

1,031

 

 

1,748

 

Contract liabilities

 

868

 

 

451

 

Liability for pension benefits

 

(36

)

 

(1,038

)

Net cash provided by operating activities

 

6,073

 

 

4,493

 

 
Investing activities:
Capital expenditures

 

(2,154

)

 

(530

)

Proceeds from sale of land and equipment, net

 

827

 

 

4,945

 

Non-refundable deposit received

 

500

 

 

-

 

Purchases of equity investments

 

(9

)

 

(62

)

Proceeds from sale of equity investments

 

1

 

 

56

 

Net cash (used in) provided by investing activities

 

(835

)

 

4,409

 

 
Financing activities:
Borrowings from revolving line of credit

 

4,060

 

 

9,400

 

Repayments on revolving line of credit

 

(4,060

)

 

(12,640

)

Repurchase of common stock

 

(200

)

 

(406

)

Net cash used in financing activities

 

(200

)

 

(3,646

)

 
Net increase in cash

 

5,038

 

 

5,256

 

Cash, beginning of period

 

3,951

 

 

1

 

Cash, end of period

$

8,989

 

$

5,257

 

 

 

Contacts

Timothy R. Horne – Sr. Vice President - Finance
(302) 883-6592

Contacts

Timothy R. Horne – Sr. Vice President - Finance
(302) 883-6592