Dover Motorsports, Inc. (NYSE: DVD) today reported its results
for the three months ended March 31, 2020.
The Company historically reports a loss in the first quarter due
to the seasonality of our motorsports business. No major events
were promoted during the first quarter of 2020 or 2019; therefore,
our revenues were minimal.
Operating and marketing expenses decreased to $988,000 in the
first quarter of 2020 from $1,055,000 in the first quarter of 2019,
primarily from lower employee related costs.
General and administrative expenses of $1,987,000 in the first
quarter of 2020 increased from $1,916,000 in the first quarter of
2019, primarily from higher corporate insurance and real estate
taxes.
Depreciation expense decreased slightly to $768,000 in the first
quarter of 2020 from $793,000 in the first quarter of 2019.
We incurred $341,000 in costs to complete the removal of
grandstands during the first quarter of 2020.
Provision for contingent obligation was $369,000 during the
first quarter of 2020 compared to $111,000 for the first quarter of
2019, primarily due to a reduction in the discount rate used to
value the contingent liability.
Loss before income taxes was $4,384,000 for the first quarter of
2020 compared to $3,481,000 for the first quarter of 2019. The 2020
results include $341,000 in grandstand removal costs while the 2019
results include a gain on the sale of land of $139,000. On an
adjusted basis, excluding these items, loss before income taxes for
the first quarter of 2020 was $4,043,000 compared to $3,620,000 in
2019.
Net loss for the first quarter of 2020 was $3,140,000 or $.09
per diluted share compared with a loss of $2,490,000 or $.07 per
diluted share in the first quarter of 2019. Net loss, adjusted for
the aforementioned items, was $2,894,000 or $.08 per diluted share
for the first quarter of 2020 compared to $2,600,000 or $.07 per
diluted share for the first quarter of 2019.
Looking forward, the world economy has been dramatically
affected by the COVID-19 pandemic, and our business is no
exception. Our first priority with regard to the COVID-19 pandemic
is to comply with governmental guidelines and do everything we can
to ensure the safety and health of our employees, customers,
sponsors and others with whom we partner in our business
activities. As there is no way to currently know how long the
pandemic will last, we are unable to predict the long-term impact
of the pandemic on our business at this time.
The State of Delaware issued a State of Emergency which
currently extends until May 15, 2020 and our facility in Dover is
currently closed since it is classified as a non-essential
business. Our May NASCAR weekend has been postponed. While we do
not yet have a date for the rescheduling of our races, we know
NASCAR is continually working on contingency plans to run all
previously scheduled events. It is possible that our May NASCAR Cup
Series event will be moved to August and that we hold a double
header with back to back NASCAR Cup Series events held on Saturday
and Sunday. It is also possible that none of these events are held
or that they are held without fans present in the stands.
The June Firefly festival held annually on our Dover, Delaware
property was canceled. The Firefly festival will not be rescheduled
in 2020, though it is expected to return in 2021.
We have taken certain steps to reduce indirect costs, have
initiated a limited number of furloughs for employees that are
unable to work from home and have reduced our capital spending
plans for the year.
The Company’s financial condition remains strong, with no
outstanding borrowings and more than $5 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 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 OPERATIONS In
Thousands, Except Per Share Amounts (Unaudited)
Three Months Ended
March 31,
2020
2019
Revenues: Event-related
$
204
$
129
Expenses: Operating and marketing
988
1,055
General and administrative
1,987
1,916
Depreciation
768
793
Costs to remove long-lived assets
341
-
4,084
3,764
Gain on sale of land
-
139
Operating loss
(3,880
)
(3,496
)
Interest income (expense), net
3
(6
)
Provision for contingent obligation
(369
)
(111
)
Other (expense) income, net
(138
)
132
Loss before income taxes
(4,384
)
(3,481
)
Income tax benefit
1,244
991
Net loss
$
(3,140
)
$
(2,490
)
Net loss per common share: Basic
$
(0.09
)
$
(0.07
)
Diluted
$
(0.09
)
$
(0.07
)
Weighted average shares outstanding: Basic
35,834
36,032
Diluted
35,834
36,032
DOVER MOTORSPORTS, INC. RECONCILIATION OF GAAP LOSS BEFORE
INCOME TAXES TO ADJUSTED LOSS BEFORE INCOME TAXES AND
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED NET LOSS In Thousands,
Except Per Share Amounts (Unaudited)
Three Months Ended
March 31,
2020
2019
GAAP loss before income taxes
$
(4,384
)
$
(3,481
)
Cost to remove long-lived assets (1)
341
-
Gain on sale of land (2)
-
(139
)
Adjusted loss before income taxes
$
(4,043
)
$
(3,620
)
GAAP net loss
$
(3,140
)
$
(2,490
)
Cost to remove long-lived assets, net of income taxes (1)
246
-
Gain on sale of land, net of income taxes (2)
-
(110
)
Adjusted net loss
$
(2,894
)
$
(2,600
)
GAAP net loss per common share - basic and diluted
$
(0.09
)
$
(0.07
)
Cost to remove long-lived assets (1)
0.01
-
Gain on sale of land, net of income taxes (2)
-
-
Adjusted net loss per common share - basic and diluted
$
(0.08
)
$
(0.07
)
_________________________
(1)
Related to the decision to remove grandstand
seats at Dover International Speedway, we incurred $341,000 of
costs to remove these assets in the first quarter of 2020. This
amount was tax effected using our federal and state statutory
rates.
(2)
During the first quarter of 2019 we closed on
sales of a parcel of land at our Nashville Superspeedway facility
resulting in a gain of $139,000. This transaction was tax effected
using our federal statutory rates as we had available state net
operating losses.
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 before income taxes, adjusted
net loss and adjusted net loss per common share - basic and diluted
are derived by adjusting amounts determined in accordance with GAAP
for the aforementioned gain on sale of land 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 loss before
income taxes, net loss or net loss per common share - basic and
diluted, which are determined in accordance with GAAP.
DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEETS In
Thousands (Unaudited)
March 31,
March 31,
December 31,
2020
2019
2019
ASSETS Current assets: Cash
$
5,032
$
2,552
$
7,577
Accounts receivable
777
1,844
645
Inventories
18
21
18
Prepaid expenses and other
1,265
1,268
1,186
Income taxes receivable
283
-
283
Total current assets
7,375
5,685
9,709
Property and equipment, net
49,430
47,599
50,075
Nashville Superspeedway facility
21,274
23,505
21,282
Right of use asset
169
-
188
Other assets
1,033
1,098
1,212
Total assets
$
79,281
$
77,887
$
82,466
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
104
$
99
$
119
Accrued liabilities
2,680
2,238
3,710
Income taxes payable
-
118
-
Contract liabilities
2,909
4,496
976
Total current liabilities
5,693
6,951
4,805
Liability for pension benefits
939
720
1,016
Lease liability
93
-
112
Non-refundable deposit
500
-
500
Provision for contingent obligation
3,757
2,495
3,389
Deferred income taxes
7,444
7,390
8,676
Total liabilities
18,426
17,556
18,498
Stockholders' equity: Common stock
1,790
1,809
1,782
Class A common stock
1,851
1,851
1,851
Additional paid-in capital
100,984
101,320
100,994
Accumulated deficit
(40,108
)
(41,316
)
(36,968
)
Accumulated other comprehensive loss
(3,662
)
(3,333
)
(3,691
)
Total stockholders' equity
60,855
60,331
63,968
Total liabilities and stockholders' equity
$
79,281
$
77,887
$
82,466
DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH
FLOWS In Thousands (Unaudited)
Three Months Ended
March 31,
2020
2019
Operating activities: Net loss
$
(3,140
)
$
(2,490
)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation
768
793
Amortization of credit facility fees
14
15
Stock-based compensation
92
108
Deferred income taxes
(1,244
)
(991
)
Provision for contingent obligation
369
111
Losses (gains) on equity investments
176
(87
)
Gain on sale of land
-
(139
)
Changes in assets and liabilities: Accounts
receivable
(132
)
(1,168
)
Prepaid expenses and other
(86
)
(222
)
Accounts payable
(15
)
(39
)
Accrued liabilities
(1,030
)
(845
)
Payable to Dover Downs Gaming & Entertainment, Inc.
-
(9
)
Contract liabilities
1,933
3,356
Liability for pension benefits
(37
)
(18
)
Net cash used in operating activities
(2,332
)
(1,625
)
Investing activities: Capital
expenditures
(115
)
(398
)
Proceeds from sale of land and equipment, net
-
827
Purchases of equity investments
(196
)
(4
)
Proceeds from sale of equity investments
192
1
Net cash (used in) provided by investing activities
(119
)
426
Financing activities: Borrowings
from revolving line of credit
180
-
Repayments on revolving line of credit
(180
)
-
Repurchase of common stock
(94
)
(200
)
Net cash used in financing activities
(94
)
(200
)
Net decrease in cash
(2,545
)
(1,399
)
Cash, beginning of period
7,577
3,951
Cash, end of period
$
5,032
$
2,552
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200430005078/en/
Timothy R. Horne – Sr. Vice President - Finance (302)
883-6592
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