Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended September 30, 2018.
Our fall 2018 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 entirely in the fourth quarter of 2018. The 2017 race weekend was held from September 29 to October 1, 2017, therefore, the 2017 K&N Pro Series East event and the XFINITY Series event were held during the third quarter of 2017 and the Monster Energy Cup Series event was held in the fourth quarter of 2017.
As a result of the schedule change, revenues for the third quarter of 2018 were $227,000 compared with $2,740,000 in the third quarter of 2017.
Operating and marketing expenses were $1,599,000 in the third quarter of 2018 compared to $3,485,000 in the third quarter of 2017. The decrease was the result of the schedule change, offset by the timing of advertising expenses for the fall weekend.
General and administrative expenses of $1,798,000 in the third quarter of 2018 were comparable to $1,774,000 in the third quarter of 2017.
Depreciation expense decreased to $793,000 in the third quarter of 2018 from $863,000 in the third quarter of 2017.
Loss on sale of land represents the estimated loss on the pending sale of the last parcel of land we own near Gateway International Raceway. We expect to close on the land sale in the fourth quarter of 2018.
Net interest decreased to $2,000 in the third quarter of 2018 compared to $34,000 in the third quarter of 2017 due to lower borrowings.
Loss before income taxes for the third quarter of 2018 was ($4,014,000) compared to ($3,396,000) in the third quarter of 2017.
Net loss for the third quarter of 2018 was ($2,699,000) or ($.07) per diluted share compared to ($2,015,000) or ($.06) per diluted share in the third quarter of 2017. A lower effective tax rate in the third quarter of 2018 reduced the tax benefit on the loss in 2018 compared to 2017.
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. Currently, 225 acres of our Nashville Speedway property are under option for a total purchase price of approximately $12.4 million. The Company continues to hold over 1,000 acres of prime commercial real estate.
During the third quarter this year, the Company repurchased 65,038 shares of its common stock on the open market at an average price of $2.12 per share, not including nominal brokerage commissions. We have repurchased 212,082 shares during the first nine months of this year.
As of September 30, 2018, the Company had $600,000 of outstanding indebtedness. During the first nine months of 2018, the Company contributed $1,750,000 to its frozen defined benefit pension plan.
The Company announced yesterday that its Board of Directors declared an annual cash dividend on both classes of common stock of $.08 per share. The dividend will be payable on December 10, 2018 to shareholders of record at the close of business on November 12, 2018. 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, | |||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||
| Revenues: | ||||||||||||||||||||||
| Admissions | $ | - | $ | 425 | $ | 2,853 | $ | 3,871 | ||||||||||||||
| Event-related | 227 | 995 | 5,283 | 5,739 | ||||||||||||||||||
| Broadcasting | - | 1,319 | 18,128 | 18,824 | ||||||||||||||||||
| Other | - | 1 | 1 | 3 | ||||||||||||||||||
| 227 | 2,740 | 26,265 | 28,437 | |||||||||||||||||||
| Expenses: | ||||||||||||||||||||||
| Operating and marketing | 1,599 | 3,485 | 16,984 | 18,639 | ||||||||||||||||||
| General and administrative | 1,798 | 1,774 | 5,552 | 5,590 | ||||||||||||||||||
| Depreciation | 793 | 863 | 2,496 | 2,507 | ||||||||||||||||||
| Costs to remove long-lived assets | - | - | - | 286 | ||||||||||||||||||
| 4,190 | 6,122 | 25,032 | 27,022 | |||||||||||||||||||
| (Loss) gain on sale of land | (99 | ) | - | 2,413 | - | |||||||||||||||||
| Operating (loss) earnings | (4,062 | ) | (3,382 | ) | 3,646 | 1,415 | ||||||||||||||||
| Interest expense, net | (2 | ) | (34 | ) | (75 | ) | (150 | ) | ||||||||||||||
| Benefit (provision) for contingent obligation | 4 | 11 | (132 | ) | (41 | ) | ||||||||||||||||
| Other income | 46 | 9 | 77 | 80 | ||||||||||||||||||
| (Loss) earnings before income taxes | (4,014 | ) | (3,396 | ) | 3,516 | 1,304 | ||||||||||||||||
| Income tax benefit (expense) | 1,315 | 1,381 | (699 | ) | (521 | ) | ||||||||||||||||
| Net (loss) earnings | $ | (2,699 | ) | $ | (2,015 | ) | $ | 2,817 | $ | 783 | ||||||||||||
| Net (loss) earnings per common share: | ||||||||||||||||||||||
| Basic | $ | (0.07 | ) | $ | (0.06 | ) | $ | 0.08 | $ | 0.02 | ||||||||||||
| Diluted | $ | (0.07 | ) | $ | (0.06 | ) | $ | 0.08 | $ | 0.02 | ||||||||||||
| Weighted average shares outstanding: | ||||||||||||||||||||||
| Basic | 36,102 | 36,282 | 36,165 | 36,299 | ||||||||||||||||||
| Diluted | 36,102 | 36,282 | 36,165 | 36,299 | ||||||||||||||||||
| 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, | |||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||
| GAAP (loss) earnings before income taxes | $ | (4,014 | ) | $ | (3,396 | ) | $ | 3,516 | $ | 1,304 | ||||||||||||||
| Loss (gain) on sale of land (1) | 99 | - | (2,413 | ) | - | |||||||||||||||||||
| Costs to remove long-lived assets (2) | - | - | - | 286 | ||||||||||||||||||||
| Adjusted (loss) earnings before income taxes | $ | (3,915 | ) | $ | (3,396 | ) | $ | 1,103 | $ | 1,590 | ||||||||||||||
| GAAP net (loss) earnings | $ | (2,699 | ) | $ | (2,015 | ) | $ | 2,817 | $ | 783 | ||||||||||||||
| Loss (gain) on sale of land, net of income taxes (1) | 76 | - | (1,908 | ) | - | |||||||||||||||||||
| Costs to remove long-lived assets, net of income taxes (2) | - | - | - | 167 | ||||||||||||||||||||
| Adjusted net (loss) earnings | $ | (2,623 | ) | $ | (2,015 | ) | $ | 909 | $ | 950 | ||||||||||||||
| GAAP net (loss) earnings per common share - basic and diluted | $ | (0.07 | ) | $ | (0.06 | ) | $ | 0.08 | $ | 0.02 | ||||||||||||||
| Loss (gain) on sale of land, net of income taxes (1) | - | - | (0.05 | ) | - | |||||||||||||||||||
| Costs to remove long-lived assets, net of income taxes (2) | - | - | - | - | ||||||||||||||||||||
| Adjusted net (loss) earnings per common share - basic and diluted (3) | $ | (0.07 | ) | $ | (0.06 | ) | $ | 0.02 | $ | 0.02 | ||||||||||||||
_________________________ | |||
| (1) | During the third quarter of 2018, we entered negotiations to sell a parcel of land we own 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 2018, we closed on the sale of a parcel of land at our Nashville Superspeedway facility resulting in a gain on sale. | |||
| (2) | Costs to remove long-lived assets represents costs incurred to remove and dispose of certain grandstand seating at our Dover International Speedway facility. | ||
| (3) | The components of GAAP net earnings per common share for the nine months ended September 30, 2017 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 (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 gain on sale of land and costs to remove long-lived assets. Income taxes are based on our approximate statutory tax rates applicable to each of these items. 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, | ||||||||||||||
| 2018 | 2017 | 2017 | ||||||||||||||
| ASSETS | ||||||||||||||||
| Current assets: | ||||||||||||||||
| Cash | $ | 187 | $ | 146 | $ | 1 | ||||||||||
| Accounts receivable | 733 | 2,420 | 476 | |||||||||||||
| Inventories | 19 | 16 | 15 | |||||||||||||
| Prepaid expenses and other | 5,827 | 4,352 | 1,119 | |||||||||||||
| Receivable from Dover Downs Gaming & Entertainment, Inc. | - | 27 | - | |||||||||||||
| Income taxes receivable | 1,456 | 982 | 562 | |||||||||||||
| Assets held for sale | 531 | 2,455 | 2,455 | |||||||||||||
| Total current assets | 8,753 | 10,398 | 4,628 | |||||||||||||
| Property and equipment, net | 48,764 | 51,968 | 51,000 | |||||||||||||
| Nashville Superspeedway facility | 23,567 | 23,545 | 23,545 | |||||||||||||
| Other assets | 1,108 | 1,065 | 1,107 | |||||||||||||
| Total assets | $ | 82,192 | $ | 86,976 | $ | 80,280 | ||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
| Current liabilities: | ||||||||||||||||
| Accounts payable | $ | 738 | $ | 129 | $ | 61 | ||||||||||
| Accrued liabilities | 2,904 | 3,237 | 3,049 | |||||||||||||
| Payable to Dover Downs Gaming & Entertainment, Inc. | 6 | - | 7 | |||||||||||||
| Contract liabilities | 4,528 | 4,702 | 1,249 | |||||||||||||
| Total current liabilities | 8,176 | 8,068 | 4,366 | |||||||||||||
| Revolving line of credit, net | 600 | 5,880 | 3,240 | |||||||||||||
| Liability for pension benefits | 896 | 3,704 | 2,819 | |||||||||||||
| Provision for contingent obligation | 2,092 | 1,843 | 1,960 | |||||||||||||
| Deferred income taxes | 8,618 | 12,778 | 8,673 | |||||||||||||
| Total liabilities | 20,382 | 32,273 | 21,058 | |||||||||||||
| Stockholders' equity: | ||||||||||||||||
| Common stock | 1,814 | 1,830 | 1,825 | |||||||||||||
| Class A common stock | 1,851 | 1,851 | 1,851 | |||||||||||||
| Additional paid-in capital | 101,545 | 101,887 | 101,844 | |||||||||||||
| Accumulated deficit | (39,968 | ) | (47,557 | ) | (42,858 | ) | ||||||||||
| Accumulated other comprehensive loss | (3,432 | ) | (3,308 | ) | (3,440 | ) | ||||||||||
| Total stockholders' equity | 61,810 | 54,703 | 59,222 | |||||||||||||
| Total liabilities and stockholders' equity | $ | 82,192 | $ | 86,976 | $ | 80,280 | ||||||||||
| DOVER MOTORSPORTS, INC. | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| In Thousands | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Nine Months Ended | |||||||||||||||||
| September 30, | |||||||||||||||||
| 2018 | 2017 | ||||||||||||||||
| Operating activities: | |||||||||||||||||
| Net earnings | $ | 2,817 | $ | 783 | |||||||||||||
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: | |||||||||||||||||
| Depreciation | 2,496 | 2,507 | |||||||||||||||
| Amortization of credit facility fees | 47 | 48 | |||||||||||||||
| Stock-based compensation | 237 | 305 | |||||||||||||||
| Deferred income taxes | (690 | ) | (272 | ) | |||||||||||||
| Provision for contingent obligation | 132 | 41 | |||||||||||||||
| Gains on equity investments | (15 | ) | - | ||||||||||||||
| Gain on sale of land | (2,413 | ) | - | ||||||||||||||
| Changes in assets and liabilities: | |||||||||||||||||
| Accounts receivable | (257 | ) | (2,001 | ) | |||||||||||||
| Inventories | (4 | ) | 1 | ||||||||||||||
| Prepaid expenses and other | (4,731 | ) | (3,302 | ) | |||||||||||||
| Receivable from/payable to Dover Downs Gaming & Entertainment, Inc. | (1 | ) | (34 | ) | |||||||||||||
| Income taxes receivable/payable | (290 | ) | (1,119 | ) | |||||||||||||
| Accounts payable | 549 | (191 | ) | ||||||||||||||
| Accrued liabilities | (145 | ) | 379 | ||||||||||||||
| Contract liabilities | 3,279 | 3,347 | |||||||||||||||
| Liability for pension benefits | (1,811 | ) | (326 | ) | |||||||||||||
| Net cash (used in) provided by operating activities | (800 | ) | 166 | ||||||||||||||
| Investing activities: | |||||||||||||||||
| Capital expenditures | (762 | ) | (1,779 | ) | |||||||||||||
| Proceeds from sale of land, net | 4,945 | - | |||||||||||||||
| Purchases of equity investments | (100 | ) | (142 | ) | |||||||||||||
| Proceeds from sale of equity investments | 90 | 134 | |||||||||||||||
| Net cash provided by (used in) investing activities | 4,173 | (1,787 | ) | ||||||||||||||
| Financing activities: | |||||||||||||||||
| Borrowings from revolving line of credit | 10,200 | 20,660 | |||||||||||||||
| Repayments on revolving line of credit | (12,840 | ) | (18,620 | ) | |||||||||||||
| Repurchase of common stock | (547 | ) | (274 | ) | |||||||||||||
| Net cash (used in) provided by financing activities | (3,187 | ) | 1,766 | ||||||||||||||
| Net increase in cash | 186 | 145 | |||||||||||||||
| Cash, beginning of period | 1 | 1 | |||||||||||||||
| Cash, end of period | $ | 187 | $ | 146 | |||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181025005177/en/
Contacts:
Timothy R. Horne – Sr. Vice President -
Finance
302-857-3292
