Dover Motorsports, Inc. (NYSE: DVD) today reported results for
the three months ended September 30, 2020.
As previously disclosed, the COVID-19 pandemic caused the
postponement of the Company’s scheduled May NASCAR weekend. The
three NASCAR events originally scheduled for May were instead held
in combination with our scheduled August NASCAR events. All six of
the races were held without fans. No major events were held during
the third quarter of 2019. Accordingly, the results for the third
quarter of 2020 are not comparable to last year.
Revenues for the third quarter of 2020 were $38,044,000 compared
to $202,000 for the third quarter of 2019.
Operating and marketing expenses were $22,425,000 compared to
$1,347,000 in the third quarter of 2019.
General and administrative expenses of $1,878,000 in the third
quarter of 2020 were comparable to $1,888,000 in the third quarter
of 2019.
Depreciation expense decreased to $756,000 from $1,669,000 in
the third quarter of 2019. The decrease is primarily due to our
decision during the third quarter of 2019 to remove grandstand
seats at our Dover facility 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.
As previously disclosed, in July of 2020 we sold approximately
97 acres of land in Nashville for proceeds less closing costs of
approximately $6,460,000, resulting in a gain of $4,843,000. The
purchaser had previously paid to us a $500,000 deposit that was
credited to the purchase price.
During the third quarter of 2019, we closed on the sale of
approximately 133 acres of land in Nashville for net proceeds of
approximately $6,397,000 after closing costs, resulting in a gain
of $4,186,000.
The adjustment to the contingent obligation was a benefit of
$128,000 in the third quarter of 2020 compared to an expense of
$121,000 in the third quarter of 2019, primarily the result of
lower estimated interest rates.
Earnings before income taxes for the third quarter of 2020 were
$18,025,000 compared to loss before income taxes of ($588,000) in
the third quarter of 2019. The 2020 results include the $4,843,000
gain on sale, and the 2019 results include the $4,186,000 gain on
sale and $879,000 of accelerated depreciation. On an adjusted
basis, excluding these items, earnings before income taxes were
$13,182,000 for the third quarter of 2020 compared to a loss before
income tax benefit of ($3,895,000) for the third quarter of
2019.
Net earnings for the third quarter of 2020 were $13,190,000 or
$.36 per diluted share compared to net loss of ($414,000) or ($.01)
per diluted share for the third quarter of 2019. Net earnings,
adjusted for the aforementioned items, were $9,364,000 in 2020
compared to net loss of ($3,087,000) in 2019.
As of September 30, 2020, the Company had no outstanding
indebtedness and approximately $21.3 million in available cash.
The Company announced yesterday that its Board of Directors
declared an annual cash dividend on both classes of common stock of
$.07 per share. The dividend will be payable on December 10, 2020
to shareholders of record at the close of business on November 10,
2020.
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
(LOSS) In Thousands, Except Per Share Amounts (Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Revenues: Admissions
$
-
$
-
$
-
$
2,502
Event-related
2,394
202
2,708
3,784
Broadcasting
35,646
-
35,646
18,878
Other
4
-
4
5
38,044
202
38,358
25,169
Expenses: Operating and marketing
22,425
1,347
24,225
16,986
General and administrative
1,878
1,888
5,742
5,630
Depreciation
756
1,669
2,289
3,256
Cost to remove long-lived assets
-
-
341
-
25,059
4,904
32,597
25,872
Gain on sale of land
4,843
4,186
4,843
4,325
Operating earnings (loss)
17,828
(516
)
10,604
3,622
Interest (expense) income
(21
)
20
(34
)
4
Benefit (provision) for contingent obligation
128
(121
)
112
(367
)
Other income
90
29
115
218
Earnings (loss) before income taxes
18,025
(588
)
10,797
3,477
Income tax (expense) benefit
(4,835
)
174
(1,436
)
(880
)
Net earnings (loss)
$
13,190
$
(414
)
$
9,361
$
2,597
Net earnings (loss) per common share: Basic
$
0.36
$
(0.01
)
$
0.26
$
0.07
Diluted
$
0.36
$
(0.01
)
$
0.26
$
0.07
Weighted average shares outstanding: Basic
35,836
35,952
35,836
35,998
Diluted
35,836
35,952
35,836
35,998
DOVER MOTORSPORTS, INC. RECONCILIATION OF GAAP EARNINGS
(LOSS) BEFORE INCOME TAXES TO ADJUSTED EARNINGS (LOSS) BEFORE
INCOME TAXES AND RECONCILIATION OF GAAP NET EARNINGS (LOSS) TO
ADJUSTED NET EARNINGS (LOSS) In Thousands, Except Per Share Amounts
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
GAAP earnings (loss) before income taxes
$
18,025
$
(588
)
$
10,797
$
3,477
Gain on sale of land (1)
(4,843
)
(4,186
)
(4,843
)
(4,325
)
Cost to remove long-lived assets (2)
-
-
341
-
Accelerated depreciation (3)
-
879
-
879
Adjusted earnings (loss) before income taxes
$
13,182
$
(3,895
)
$
6,295
$
31
GAAP net earnings (loss)
$
13,190
$
(414
)
$
9,361
$
2,597
Gain on sale of land, net of income taxes (1)
(3,826
)
(3,307
)
(3,826
)
(3,417
)
Cost to remove long-lived assets, net of income taxes (2)
-
-
246
-
Accelerated depreciation, net of income taxes (3)
-
634
-
634
Adjusted net earnings (loss)
$
9,364
$
(3,087
)
$
5,781
$
(186
)
GAAP net earnings (loss) per common share - basic and
diluted
$
0.36
$
(0.01
)
$
0.26
$
0.07
Gain on sale of land, net of income taxes (1)
(0.11
)
(0.09
)
(0.11
)
(0.09
)
Cost to remove long-lived assets, net of income taxes (2)
-
-
0.01
-
Accelerated depreciation, net of income taxes (3)
-
0.02
-
0.02
Adjusted net earnings (loss) per common share - basic and
diluted(4)
$
0.26
$
(0.09
)
$
0.16
$
(0.01
)
(1)
During the third quarter of 2020,
we closed on the sale of a parcel of land at our Nashville
Superspeedway facility resulting in a gain of $4,843,000.
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 first quarter of 2019,
we closed on sale of a parcel of land at our Nashville
Superspeedway facility resulting in a gain of $139,000.
These transactions were tax
effected using our federal statutory rate as we had available state
net operating losses.
(2)
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.
(3)
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 $879,000 of accelerated depreciation
being recorded in the third quarter of 2019. This amount was tax
effected using our federal and state statutory rates.
(4)
The components of the GAAP net
earnings (loss) per common share for the three months ended
September 30, 2020 and nine months ended September 30, 2019 do not
add to the adjusted net earnings (loss) 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
(loss) before income taxes, adjusted net earnings (loss) and
adjusted net earnings (loss) per common share - basic and diluted
are derived by adjusting amounts determined in accordance with GAAP
for the aforementioned gains on sale of land, costs to remove
long-lived assets and accelerated depreciation. 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 (loss) before income
taxes, net earnings (loss) or net earnings (loss) 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,
2020
2019
2019
ASSETS Current assets: Cash
$
21,327
$
4,784
$
7,577
Accounts receivable
1,232
1,866
645
Inventories
18
20
18
Prepaid expenses and other
994
6,184
1,186
Income taxes receivable
-
95
283
Total current assets
23,571
12,949
9,709
Property and equipment, net
68,125
72,035
71,357
Right of use asset
131
206
188
Other assets
1,205
1,170
1,212
Total assets
$
93,032
$
86,360
$
82,466
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable
$
793
$
1,631
$
119
Accrued liabilities
3,559
3,184
3,710
Income taxes payable
2,674
-
-
Contract liabilities
1,425
4,526
976
Total current liabilities
8,451
9,341
4,805
Revolving line of credit
-
-
-
Liability for pension benefits
786
614
1,016
Lease liability
53
131
112
Non-refundable deposit
-
500
500
Provision for contingent obligation
3,276
2,751
3,389
Deferred income taxes
6,888
7,743
8,676
Total liabilities
19,454
21,080
18,498
Stockholders' equity: Common stock
1,786
1,793
1,782
Class A common stock
1,851
1,851
1,851
Additional paid-in capital
101,152
101,143
100,994
Accumulated deficit
(27,607
)
(36,229
)
(36,968
)
Accumulated other comprehensive loss
(3,604
)
(3,278
)
(3,691
)
Total stockholders' equity
73,578
65,280
63,968
Total liabilities and stockholders' equity
$
93,032
$
86,360
$
82,466
DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF
CASH FLOWS In Thousands (Unaudited)
Nine Months Ended
September 30,
2020
2019
Operating activities: Net
earnings
$
9,361
$
2,597
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation
2,289
3,256
Amortization of credit facility fees
42
47
Stock-based compensation
256
243
Deferred income taxes
(1,822
)
(659
)
(Benefit) Provision for contingent obligation
(112
)
367
Gains on equity investments
(4
)
(125
)
Gain on sale of land
(4,843
)
(4,325
)
Changes in assets and liabilities: Accounts
receivable
(587
)
(1,190
)
Inventories
-
1
Prepaid expenses and other
171
(5,159
)
Income taxes receivable/payable
2,957
(213
)
Accounts payable
658
129
Accrued liabilities
(266
)
38
Payable to Dover Downs Gaming & Entertainment, Inc.
-
(9
)
Contract liabilities
449
3,386
Liability for pension benefits
(109
)
(48
)
Net cash used in operating activities
8,440
(1,664
)
Investing activities: Capital
expenditures
(545
)
(4,651
)
Proceeds from sale of land and equipment, net
5,960
7,224
Non-refundable deposit received
-
500
Purchases of equity investments
(316
)
(14
)
Proceeds from sale of equity investments
305
1
Net cash provided by investing activities
5,404
3,060
Financing activities: Borrowings
from revolving line of credit
3,880
4,120
Repayments on revolving line of credit
(3,880
)
(4,120
)
Repurchase of common stock
(94
)
(528
)
Credit facility fees
-
(35
)
Net cash used in financing activities
(94
)
(563
)
Net increase in cash
13,750
833
Cash, beginning of period
7,577
3,951
Cash, end of period
$
21,327
$
4,784
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029005220/en/
Timothy R. Horne – Sr. Vice President - Finance (302)
883-6592
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