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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190725005152/en/
Timothy R. Horne – Sr. Vice President - Finance (302)
883-6592
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