Dover Motorsports, Inc. Reports Results for the Third Quarter of 2020

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

   

Contacts:

Timothy R. Horne – Sr. Vice President - Finance
(302) 883-6592

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