Dover Motorsports, Inc. (NYSE: DVD) today reported results for
the three months ended September 30, 2019.
No major events were promoted during the third quarter of 2019
or 2018; therefore, our revenues were minimal.
Operating and marketing expenses were $1,347,000 in the third
quarter of 2019 compared to $1,599,000 in the third quarter of
2018. The decrease was primarily the result of lower employee costs
and the timing of advertising spending.
General and administrative expenses of $1,888,000 in the third
quarter of 2019 were comparable to $1,798,000 in the third quarter
of 2018.
Depreciation expense increased to $1,669,000 from $793,000 in
the third quarter of 2018. The increase is due to our decision
during the third quarter to remove additional grandstand seats
after our 2019 race season. We changed the estimated useful lives
of the impacted assets resulting in $879,000 of accelerated
depreciation expense in the third quarter of 2019. We expect to
incur an additional $293,000 of accelerated depreciation expense in
the fourth quarter of 2019.
As previously reported, we closed on the sale of two parcels of
land in Nashville during the third quarter of 2019 for net proceeds
of approximately $6,397,000 after closing costs, resulting in a
gain of $4,186,000. The purchaser has an option to acquire
approximately 97 additional acres for a total purchase price of
approximately $6,480,000 (including a $500,000 non-refundable
deposit previously made). Assuming the exercise of that option, the
Company would continue to hold approximately 1,000 acres of
commercial real estate, including the superspeedway.
Net interest income was $20,000 in the third quarter of 2019
compared to interest expense of $2,000 in the third quarter of 2018
due to lower borrowings and interest earned on higher cash balances
during the third quarter of this year.
Provision for contingent obligation increased $121,000 during
the third quarter of 2019 primarily from changes in the discount
rate and reimbursement of fees.
Loss before income taxes for the third quarter of 2019 was
($588,000) compared to ($4,014,000) in the third quarter of 2018.
The 2019 results include the $4,186,000 gain on sale and $879,000
of accelerated depreciation, and our 2018 results included a
$99,000 loss from the sale of land near St. Louis. On an adjusted
basis, excluding these items, loss before income tax benefit for
the third quarter was ($3,895,000) in 2019 compared to ($3,915,000)
in 2018.
Net loss for the third quarter of 2019 was ($414,000) or ($.01)
per diluted share compared to ($2,699,000) or ($.07) per diluted
share in the third quarter of 2018. Net loss, adjusted for the
aforementioned items, was ($3,087,000) in 2019 compared to
($2,623,000) in 2018.
As of September 30, 2019, the Company had no outstanding
indebtedness and approximately $4.8 million in available cash.
During the third quarter this year, the Company repurchased
158,196 shares of its common stock on the open market at an average
price of $2.04 per share, not including nominal brokerage
commissions. Total repurchases during the first nine months of this
year were 208,416 shares.
The Company announced yesterday that its Board of Directors
declared an increased annual cash dividend on both classes of
common stock of $.10 per share. The dividend will be payable on
December 10, 2019 to shareholders of record at the close of
business on November 11, 2019. Due to the seasonal nature of our
business, we will evaluate dividends annually.
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 (LOSS)
EARNINGS
In Thousands, Except Per Share
Amounts
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Revenues: Admissions
$
-
$
-
$
2,502
$
2,853
Event-related
202
227
3,784
5,283
Broadcasting
-
-
18,878
18,128
Other
-
-
5
1
202
227
25,169
26,265
Expenses: Operating and marketing
1,347
1,599
16,986
16,984
General and administrative
1,888
1,798
5,630
5,552
Depreciation
1,669
793
3,256
2,496
4,904
4,190
25,872
25,032
Gain (loss) on sale of land
4,186
(99
)
4,325
2,413
Operating (loss) earnings
(516
)
(4,062
)
3,622
3,646
Interest income (expense)
20
(2
)
4
(75
)
(Provision) benefit for contingent obligation
(121
)
4
(367
)
(132
)
Other income
29
46
218
77
(Loss) earnings before income taxes
(588
)
(4,014
)
3,477
3,516
Income tax benefit (expense)
174
1,315
(880
)
(699
)
Net (loss) earnings
$
(414
)
$
(2,699
)
$
2,597
$
2,817
Net (loss) earnings per common share:
Basic
$
(0.01
)
$
(0.07
)
$
0.07
$
0.08
Diluted
$
(0.01
)
$
(0.07
)
$
0.07
$
0.08
Weighted average shares outstanding: Basic
35,952
36,102
35,998
36,165
Diluted
35,952
36,102
35,998
36,165
DOVER MOTORSPORTS, INC. RECONCILIATION OF GAAP (LOSS) EARNINGS
BEFORE INCOME TAXES TO ADJUSTED (LOSS) EARNINGS BEFORE INCOME TAXES
AND RECONCILIATION OF GAAP NET (LOSS) EARNINGS TO ADJUSTED NET
(LOSS) EARNINGS In Thousands, Except Per Share Amounts (Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
GAAP (loss) earnings before income taxes
$
(588
)
$
(4,014
)
$
3,477
$
3,516
(Gain) loss on sale of land (1)
(4,186
)
99
(4,325
)
(2,413
)
Accelerated depreciation (2)
879
-
879
-
Adjusted (loss) earnings before income taxes
$
(3,895
)
$
(3,915
)
$
31
$
1,103
GAAP net (loss) earnings
$
(414
)
$
(2,699
)
$
2,597
$
2,817
(Gain) loss on sale of land, net of income taxes (1)
(3,307
)
76
(3,417
)
(1,908
)
Accelerated depreciation, net of income taxes (2)
634
-
634
-
Adjusted net (loss) earnings
$
(3,087
)
$
(2,623
)
$
(186
)
$
909
GAAP net (loss) earnings per common share - basic and
diluted
$
(0.01
)
$
(0.07
)
$
0.07
$
0.08
Gain on sale of land, net of income taxes (1)
(0.09
)
-
(0.09
)
(0.05
)
Accelerated depreciation, net of income taxes (2)
0.02
-
0.02
-
Adjusted net (loss) earnings per common share - basic and
diluted (3)
$
(0.09
)
$
(0.07
)
$
(0.01
)
$
0.02
_________________________
(1)
During the third quarter of 2019,
we closed on the sale of parcels of land at our Nashville
Superspeedway facility resulting in a gain of $4,186,000. During
the third quarter of 2018, we entered negotiations to sell a parcel
of land we owned near St. Louis, Missouri. We adjusted the book
value of the land to reflect the expected sale price resulting in a
$99,000 loss.
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.
(2)
During the third quarter of 2019,
we made the decision to remove certain grandstand seating at our
Dover International Speedway facility at the end of the 2019 race
season. As a result, we shortened the service lives of these assets
which resulted in accelerated depreciation being recorded in the
third quarter of 2019.
(3)
The components of GAAP net (loss)
earnings per common share for the three months ended September 30,
2019 and nine months ended September 30, 2019 and 2018 do not add
to the adjusted net (loss) earnings per common share due to
rounding.
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 (loss) earnings
before income taxes, adjusted net (loss) earnings and adjusted net
(loss) earnings per common share - basic and diluted are derived by
adjusting amounts determined in accordance with GAAP for the
aforementioned gains and losses on sale of land and accelerated
depreciation. 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 (loss) earnings
before income taxes, net (loss) earnings or net (loss) earnings per
common share - basic and diluted, which are determined in
accordance with GAAP.
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
September 30,
September 30,
December 31,
2019
2018
2018
ASSETS Current assets: Cash
$
4,784
$
187
$
3,951
Accounts receivable
1,866
733
676
Inventories
20
19
21
Prepaid expenses and other
6,184
5,827
1,055
Income taxes receivable
95
1,456
-
Assets held for sale
-
531
531
Total current assets
12,949
8,753
6,234
Property and equipment, net
50,743
48,764
48,137
Nashville Superspeedway facility
21,292
23,567
23,567
Right of use asset
206
-
-
Other assets
1,170
1,108
1,015
Total assets
$
86,360
$
82,192
$
78,953
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
1,631
$
738
$
187
Accrued liabilities
3,184
2,904
3,083
Payable to Dover Downs Gaming & Entertainment, Inc.
-
6
9
Income taxes payable
-
-
118
Contract liabilities
4,526
4,528
1,140
Total current liabilities
9,341
8,176
4,537
Revolving line of credit
-
600
-
Liability for pension benefits
614
896
773
Lease liability
131
-
-
Non-refundable deposit
500
-
-
Provision for contingent obligation
2,751
2,092
2,384
Deferred income taxes
7,743
8,618
8,371
Total liabilities
21,080
20,382
16,065
Stockholders' equity: Common stock
1,793
1,814
1,805
Class A common stock
1,851
1,851
1,851
Additional paid-in capital
101,143
101,545
101,416
Accumulated deficit
(36,229
)
(39,968
)
(38,826
)
Accumulated other comprehensive loss
(3,278
)
(3,432
)
(3,358
)
Total stockholders' equity
65,280
61,810
62,888
Total liabilities and stockholders' equity
$
86,360
$
82,192
$
78,953
DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In
Thousands (Unaudited)
Nine Months Ended
September 30,
2019
2018
Operating activities: Net earnings
$
2,597
$
2,817
Adjustments to reconcile net earnings to net cash used in operating
activities: Depreciation
3,256
2,496
Amortization of credit facility fees
47
47
Stock-based compensation
243
237
Deferred income taxes
(659
)
(690
)
Provision for contingent obligation
367
132
Gains on equity investments
(125
)
(15
)
Gain on sale of land
(4,325
)
(2,413
)
Changes in assets and liabilities: Accounts receivable
(1,190
)
(257
)
Inventories
1
(4
)
Prepaid expenses and other
(5,159
)
(4,731
)
Income taxes receivable/payable
(213
)
(290
)
Accounts payable
129
549
Accrued liabilities
38
(145
)
Payable to Dover Downs Gaming & Entertainment, Inc.
(9
)
(1
)
Contract liabilities
3,386
3,279
Liability for pension benefits
(48
)
(1,811
)
Net cash used in operating activities
(1,664
)
(800
)
Investing activities: Capital expenditures
(4,651
)
(762
)
Proceeds from sale of land and equipment, net
7,224
4,945
Non-refundable deposit received
500
-
Purchases of equity investments
(14
)
(100
)
Proceeds from sale of equity investments
1
90
Net cash provided by investing activities
3,060
4,173
Financing activities: Borrowings from revolving line of
credit
4,120
10,200
Repayments on revolving line of credit
(4,120
)
(12,840
)
Repurchase of common stock
(528
)
(547
)
Credit facility fees
(35
)
-
Net cash used in financing activities
(563
)
(3,187
)
Net increase in cash
833
186
Cash, beginning of period
3,951
1
Cash, end of period
$
4,784
$
187
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191024005220/en/
Timothy R. Horne – Sr. Vice President - Finance (302)
883-6592
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