Dover Motorsports, Inc. (NYSE: DVD) today reported its results
for the fourth quarter and year ended December 31, 2019.
Our fall NASCAR event weekend, which consisted of a K&N Pro
Series East event, an Xfinity Series event, and a Monster Energy
Cup Series event, was held during the fourth quarter of both 2019
and 2018.
Revenues for the fourth quarter of 2019 were $20,794,000
compared to $20,751,000 in the fourth quarter of 2018. Operating
and marketing expenses were $12,255,000 in the fourth quarter of
2019 compared to $12,293,000 in the fourth quarter of 2018.
Operating results for our fall 2019 race weekend were comparable
with last year. Higher broadcast and sponsorship revenue was offset
by lower admissions revenue and higher purses.
General and administrative expenses increased to $1,894,000 in
the fourth quarter of 2019 compared to $1,758,000 in the fourth
quarter of 2018, primarily from higher employee benefits cost and
real estate taxes.
Depreciation expense in the fourth quarter of 2019 increased to
$1,097,000 from $789,000 in the fourth 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
$293,000 of accelerated depreciation expense in the fourth quarter
of 2019.
We incurred $1,170,000 in costs related to the removal of the
grandstands during the fourth quarter of 2019. The total cost of
removal is estimated to be approximately $1.5 million.
Provision for contingent obligation was $638,000 during the
fourth quarter of 2019 compared to $292,000 in the fourth quarter
of 2018 primarily due to a reduction in the discount rate and a
reduction in estimated future property tax increases.
Earnings before income taxes for the fourth quarter of 2019 were
$3,809,000 compared to $5,551,000 in the fourth quarter of
2018.
The 2019 results include $293,000 of accelerated depreciation
and $1,170,000 of grandstand removal costs. On an adjusted basis,
excluding these items, earnings before income taxes for the fourth
quarter were $5,272,000 in 2019 compared to $5,551,000 in 2018.
Net earnings for the fourth quarter of 2019 were $2,903,000 or
$.08 per diluted share compared to $4,072,000 or $.11 per diluted
share in the fourth quarter of 2018. Net earnings for the fourth
quarter, adjusted for the aforementioned items, were $3,958,000 in
2019 compared to $4,072,000 in 2018, or $.11 per diluted share in
each quarter.
As of December 31, 2019, the Company had no outstanding
indebtedness and approximately $7.6 million in available cash.
During the fourth quarter this year, the Company repurchased
107,424 shares of its common stock on the open market at an average
price of $1.92 per share, not including nominal brokerage
commissions. Total repurchases for the year were 315,840
shares.
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 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
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Revenues: Admissions
$
2,466
$
2,841
$
4,968
$
5,694
Event-related
2,929
3,127
6,713
8,410
Broadcasting
15,389
14,777
34,267
32,905
Other
10
6
15
7
20,794
20,751
45,963
47,016
Expenses: Operating and marketing
12,255
12,293
29,241
29,277
General and administrative
1,894
1,758
7,524
7,310
Depreciation
1,097
789
4,353
3,285
Costs to remove long-lived assets
1,170
-
1,170
-
16,416
14,840
42,288
39,872
Gain on sale of land
-
-
4,325
2,413
Operating earnings
4,378
5,911
8,000
9,557
Interest income (expense), net
18
13
22
(62
)
Provision for contingent obligation
(638
)
(292
)
(1,005
)
(424
)
Other income (expense), net
51
(81
)
269
(4
)
Earnings before income taxes
3,809
5,551
7,286
9,067
Income tax expense
(906
)
(1,479
)
(1,786
)
(2,178
)
Net earnings
$
2,903
$
4,072
$
5,500
$
6,889
Net earnings per common share: Basic
$
0.08
$
0.11
$
0.15
$
0.19
Diluted
$
0.08
$
0.11
$
0.15
$
0.19
Weighted average shares outstanding: Basic
35,795
36,027
35,946
36,130
Diluted
35,795
36,027
35,946
36,130
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
Years Ended
December 31,
December 31,
2019
2018
2019
2018
GAAP earnings before income taxes
$
3,809
$
5,551
$
7,286
$
9,067
Gain on sale of land (1)
-
-
(4,325
)
(2,413
)
Accelerated depreciation (2)
293
-
1,172
-
Cost to remove long-lived assets (3)
1,170
-
1,170
-
Adjusted earnings before income taxes
$
5,272
$
5,551
$
5,303
$
6,654
GAAP net earnings
$
2,903
$
4,072
$
5,500
$
6,889
Gain on sale of land, net of income taxes (1)
-
-
(3,417
)
(1,908
)
Accelerated depreciation, net of income taxes (2)
211
-
845
-
Cost to remove long-lived assets, net of income taxes (3)
844
-
844
-
Adjusted net earnings
$
3,958
$
4,072
$
3,772
$
4,981
GAAP net earnings per common share - basic and
diluted
$
0.08
$
0.11
$
0.15
$
0.19
Gain on sale of land, net of income taxes (1)
-
-
(0.09
)
(0.05
)
Accelerated depreciation, net of income taxes (2)
0.01
-
0.02
-
Cost to remove long-lived assets, net of income taxes (3)
0.02
-
0.02
-
Adjusted net earnings per common share - basic and diluted
$
0.11
$
0.11
$
0.11
$
0.14
_________________________
(1)
During
2019, we closed on the sale of parcels of land at our Nashville
Superspeedway facility resulting in a gains of $4,186,000 and
$139,000.
During
2018, we closed on sales of parcels of land at or Nashville
Superspeedway facility resulting in a gain of $2,512,000. Also
during 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. Each of these transactions were tax effected using our
federal statutory rates as we had available state net operating
losses.
(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 of $879,000 and $293,000 being recorded in the third
quarter and fourth quarter of 2019, respectively. These amounts
were tax effected using our federal and state statutory
rates.
(3)
Related
to the decision to remove grandstand seats at Dover International
Speedway, we incurred $1,170,000 of costs to remove these assets in
the fourth quarter of 2019. This amount was tax effected using our
federal and state statutory rates.
The
components of GAAP net earnings per common share for the year ended
December 31, 2019 do not add to the adjusted net 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
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 gains and losses on sale of land, accelerated
depreciation and cost to remove long-lived assets. 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)
December 31,
December 31,
2019
2018
ASSETS Current assets: Cash
$
7,577
$
3,951
Accounts receivable
645
676
Inventories
18
21
Prepaid expenses and other
1,186
1,055
Income taxes receivable
283
-
Assets held for sale
-
531
Total current assets
9,709
6,234
Property and equipment, net
50,065
48,137
Nashville Superspeedway facility
21,292
23,567
Right of use asset
188
-
Other assets
1,212
1,015
Total assets
$
82,466
$
78,953
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
119
$
187
Accrued liabilities
3,710
3,083
Payable to Dover Downs Gaming & Entertainment, Inc.
-
9
Income taxes payable
-
118
Contract liabilities
976
1,140
Total current liabilities
4,805
4,537
Revolving line of credit, net
-
-
Liability for pension benefits
1,016
773
Lease liability
112
-
Non-refundable deposit
500
-
Provision for contingent obligation
3,389
2,384
Deferred income taxes
8,676
8,371
Total liabilities
18,498
16,065
Stockholders' equity: Common stock
1,782
1,805
Class A common stock
1,851
1,851
Additional paid-in capital
100,994
101,416
Accumulated deficit
(36,968
)
(38,826
)
Accumulated other comprehensive loss
(3,691
)
(3,358
)
Total stockholders' equity
63,968
62,888
Total liabilities and stockholders' equity
$
82,466
$
78,953
DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH
FLOWS In Thousands (Unaudited)
Years Ended
December 31,
2019
2018
Operating activities: Net earnings
$
5,500
$
6,889
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation
4,353
3,285
Amortization of credit facility fees
61
63
Stock-based compensation
294
302
Deferred income taxes
413
(966
)
Provision for contingent obligation
1,005
424
(Gains) losses on equity investments
(162
)
90
Gain on sale of land
(4,325
)
(2,413
)
Changes in assets and liabilities: Accounts receivable
31
(200
)
Inventories
3
(6
)
Prepaid expenses and other
(181
)
37
Accounts payable
(8
)
66
Accrued liabilities
407
38
Payable to Dover Downs Gaming & Entertainment, Inc.
(9
)
2
Income taxes payable/receivable
(380
)
1,284
Contract liabilities
(164
)
(109
)
Liability for pension benefits
(63
)
(1,835
)
Net cash provided by operating activities
6,775
6,951
Investing activities: Capital expenditures
(6,446
)
(992
)
Proceeds from sale of land and equipment, net
7,224
4,945
Non-refundable deposit received
500
-
Purchases of equity investments
(51
)
(124
)
Proceeds from sale of equity investments
40
90
Net cash provided by investing activities
1,267
3,919
Financing activities: Borrowings from revolving line of
credit
4,180
12,260
Repayments on revolving line of credit
(4,180
)
(15,500
)
Dividends paid
(3,642
)
(2,930
)
Repurchase of common stock
(739
)
(750
)
Credit facility fees
(35
)
-
Net cash used in financing activities
(4,416
)
(6,920
)
Net increase in cash
3,626
3,950
Cash, beginning of year
3,951
1
Cash, end of year
$
7,577
$
3,951
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200130005171/en/
Timothy R. Horne - Sr. Vice President-Finance (302) 883-6592
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