Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the fourth quarter and year ended December 31, 2020.
We held no major events during the fourth quarter this year. During the fourth quarter of 2019, we held our fall NASCAR weekend, which consisted of a K&N Pro Series East event, an Xfinity Series event and a NASCAR Cup Series event. Accordingly, the results for the fourth quarter of 2020 are not comparable to last year.
Revenues for the fourth quarter of 2020 were $185,000 compared to $20,794,000 in the fourth quarter of 2019. Operating and marketing expenses were $996,000 in the fourth quarter of 2020 compared to $12,255,000 in the fourth quarter of 2019. Both decreases were primarily from the aforementioned schedule difference.
General and administrative expenses increased to $1,934,000 in the fourth quarter of 2020 compared to $1,894,000 in the fourth quarter of 2019, primarily from the reopening of Nashville Superspeedway.
Depreciation expense in the fourth quarter of 2020 decreased to $757,000 from $1,097,000 in the fourth quarter of 2019. The decrease is due to $293,000 of accelerated depreciation expense in the fourth quarter of 2019 related to the removal of grandstand seats at our Dover facility.
We incurred $1,170,000 in costs related to the removal of the grandstands during the fourth quarter of 2019.
The adjustment to the contingent obligation was a benefit of $59,000 during the fourth quarter of 2020 compared to an expense of $638,000 in the fourth quarter of 2019. The current year benefit was primarily the result of an increase in the discount rate.
Loss before income taxes for the fourth quarter of 2020 was ($3,377,000) compared to earnings before income taxes of $3,809,000 in the fourth quarter of 2019.
The Company’s effective income tax rate was a benefit of 44.4% in the fourth quarter of 2020 and was impacted by the reversal of a portion of a previously booked valuation allowance on Tennessee state deferred tax assets, which we now expect to realize after entering into an agreement during the fourth quarter to sell approximately 350 acres of property near our Nashville Superspeedway facility.
Net loss for the fourth quarter of 2020 was ($1,879,000) or ($.05) per diluted share compared to net earnings of $2,903,000 or $.08 per diluted share in the fourth quarter of 2019. Net earnings for the fourth quarter of 2019, adjusted for the accelerated depreciation and grandstand removal costs, were $3,958,000.
As of December 31, 2020, the Company had no outstanding indebtedness and approximately $13 million in available cash.
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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 | Years Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
| Revenues: | |||||||||||||||
| Admissions | $ | - | $ | 2,466 | $ | - | $ | 4,968 | |||||||
| Event-related | 177 | 2,929 | 2,885 | 6,713 | |||||||||||
| Broadcasting | - | 15,389 | 35,646 | 34,267 | |||||||||||
| Other | 8 | 10 | 12 | 15 | |||||||||||
185 | 20,794 | 38,543 | 45,963 | ||||||||||||
| Expenses: | |||||||||||||||
| Operating and marketing | 996 | 12,255 | 25,221 | 29,241 | |||||||||||
| General and administrative | 1,934 | 1,894 | 7,676 | 7,524 | |||||||||||
| Depreciation | 757 | 1,097 | 3,046 | 4,353 | |||||||||||
| Cost to remove long-lived assets | - | 1,170 | 341 | 1,170 | |||||||||||
3,687 | 16,416 | 36,284 | 42,288 | ||||||||||||
| Gain on sale of land | - | - | 4,843 | 4,325 | |||||||||||
| Operating (loss) earnings | (3,502 | ) | 4,378 | 7,102 | 8,000 | ||||||||||
| Interest (expense) income | (1 | ) | 18 | (35 | ) | 22 | |||||||||
| Benefit (provision) for contingent obligation | 59 | (638 | ) | 171 | (1,005 | ) | |||||||||
| Other income | 67 | 51 | 182 | 269 | |||||||||||
| (Loss) earnings before income taxes | (3,377 | ) | 3,809 | 7,420 | 7,286 | ||||||||||
| Income tax benefit (expense) | 1,498 | (906 | ) | 62 | (1,786 | ) | |||||||||
| Net (loss) earnings | $ | (1,879 | ) | $ | 2,903 | $ | 7,482 | $ | 5,500 | ||||||
| Net (loss) earnings per common share: | |||||||||||||||
| Basic | $ | (0.05 | ) | $ | 0.08 | $ | 0.21 | $ | 0.15 | ||||||
| Diluted | $ | (0.05 | ) | $ | 0.08 | $ | 0.21 | $ | 0.15 | ||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 35,836 | 35,795 | 35,836 | 35,946 | |||||||||||
| Diluted | 35,836 | 35,795 | 35,836 | 35,946 | |||||||||||
| 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 | Years Ended | |||||||||||||
December 31, | December 31, | |||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||
| GAAP (loss) earnings before income taxes | $ | (3,377 | ) | $ | 3,809 | $ | 7,420 | $ | 7,286 | |||||
| Gain on sale of land (1) | - | - | (4,843 | ) | (4,325 | ) | ||||||||
| Cost to remove long-lived assets (2) | - | 1,170 | 341 | 1,170 | ||||||||||
| Accelerated depreciation (3) | - | 293 | - | 1,172 | ||||||||||
| Adjusted (loss) earnings before income taxes | $ | (3,377 | ) | $ | 5,272 | $ | 2,918 | $ | 5,303 | |||||
| GAAP net (loss) earnings | $ | (1,879 | ) | $ | 2,903 | $ | 7,482 | $ | 5,500 | |||||
| Gain on sale of land, net of income taxes (1) | - | - | (3,826 | ) | (3,417 | ) | ||||||||
| Cost to remove long-lived assets, net of income taxes (2) | - | 844 | 246 | 844 | ||||||||||
| Accelerated depreciation, net of income taxes (3) | - | 211 | - | 845 | ||||||||||
| Adjusted net (loss) earnings | $ | (1,879 | ) | $ | 3,958 | $ | 3,902 | $ | 3,772 | |||||
| GAAP net (loss) earnings per common share - basic and diluted | $ | (0.05 | ) | $ | 0.08 | $ | 0.21 | $ | 0.15 | |||||
| Gain on sale of land, net of income taxes (1) | - | - | (0.11 | ) | (0.09 | ) | ||||||||
| Cost to remove long-lived assets, net of income taxes (2) | - | 0.02 | 0.01 | 0.02 | ||||||||||
| Accelerated depreciation, net of income taxes (3) | - | 0.01 | - | 0.02 | ||||||||||
| Adjusted net (loss) earnings per common share - basic and diluted(4) | $ | (0.05 | ) | $ | 0.11 | $ | 0.11 | $ | 0.11 | |||||
(1) | During 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 2019, we closed on the sale of parcels of land at our Nashville Superspeedway facility resulting in gains of $4,186,00 and $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 and $1,170,000 of costs to remove these assets in 2020 and 2019, respectively. These amounts were 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 and $293,000 of accelerated depreciation being recorded in the third quarter and fourth quarter of 2019, respectively. These amounts were tax effected using our federal and state statutory rates. |
(4) | The components of the 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 (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) | |||||||
December 31, | December 31, | ||||||
2020 | 2019 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash | $ | 13,059 | $ | 7,577 | |||
| Accounts receivable | 601 | 645 | |||||
| Inventories | 18 | 18 | |||||
| Prepaid expenses and other | 1,557 | 1,186 | |||||
| Income taxes receivable | 24 | 283 | |||||
| Assets held for sale | 5,844 | - | |||||
| Total current assets | 21,103 | 9,709 | |||||
| Property and equipment, net | 63,075 | 71,357 | |||||
| Right of use asset | 112 | 188 | |||||
| Deferred income taxes | 2,425 | - | |||||
| Other assets | 1,322 | 1,212 | |||||
| Total assets | $ | 88,037 | $ | 82,466 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,061 | $ | 119 | |||
| Accrued liabilities | 3,463 | 3,710 | |||||
| Contract liabilities | 1,395 | 976 | |||||
| Non-refundable deposit | 500 | - | |||||
| Total current liabilities | 6,419 | 4,805 | |||||
| Liability for pension benefits | 871 | 1,016 | |||||
| Lease liability | 33 | 112 | |||||
| Non-refundable deposit | - | 500 | |||||
| Provision for contingent obligation | 3,218 | 3,389 | |||||
| Deferred income taxes | 8,469 | 8,676 | |||||
| Total liabilities | 19,010 | 18,498 | |||||
| Stockholders' equity: | |||||||
| Common stock | 1,786 | 1,782 | |||||
| Class A common stock | 1,851 | 1,851 | |||||
| Additional paid-in capital | 101,207 | 100,994 | |||||
| Accumulated deficit | (32,032 | ) | (36,968 | ) | |||
| Accumulated other comprehensive loss | (3,785 | ) | (3,691 | ) | |||
| Total stockholders' equity | 69,027 | 63,968 | |||||
| Total liabilities and stockholders' equity | $ | 88,037 | $ | 82,466 | |||
| DOVER MOTORSPORTS, INC. | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| In Thousands | |||||||
| (Unaudited) | |||||||
Years Ended | |||||||
December 31, | |||||||
2020 | 2019 | ||||||
| Operating activities: | |||||||
| Net earnings | $ | 7,482 | $ | 5,500 | |||
| Adjustments to reconcile net earnings to | |||||||
| net cash provided by operating activities: | |||||||
| Depreciation | 3,046 | 4,353 | |||||
| Amortization of credit facility fees | 56 | 61 | |||||
| Stock-based compensation | 311 | 294 | |||||
| Deferred income taxes | (2,552 | ) | 413 | ||||
| (Benefit) provision for contingent obligation | (171 | ) | 1,005 | ||||
| Gains on equity investments | (115 | ) | (162 | ) | |||
| Gain on sale of land | (4,843 | ) | (4,325 | ) | |||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | 44 | 31 | |||||
| Inventories | - | 3 | |||||
| Prepaid expenses and other | (398 | ) | (181 | ) | |||
| Income taxes receivable/payable | 215 | (380 | ) | ||||
| Accounts payable | 710 | (8 | ) | ||||
| Accrued liabilities | (383 | ) | 407 | ||||
| Payable to Dover Downs Gaming & Entertainment, Inc. | - | (9 | ) | ||||
| Contract liabilities | 419 | (164 | ) | ||||
| Liability for pension benefits | (137 | ) | (63 | ) | |||
| Net cash provided by operating activities | 3,684 | 6,775 | |||||
| Investing activities: | |||||||
| Capital expenditures | (1,998 | ) | (6,446 | ) | |||
| Proceeds from sale of land and equipment, net | 5,960 | 7,224 | |||||
| Non-refundable deposit received | 500 | 500 | |||||
| Purchases of equity investments | (361 | ) | (51 | ) | |||
| Proceeds from sale of equity investments | 337 | 40 | |||||
| Net cash provided by investing activities | 4,438 | 1,267 | |||||
| Financing activities: | |||||||
| Borrowings from revolving line of credit | 3,880 | 4,180 | |||||
| Repayments on revolving line of credit | (3,880 | ) | (4,180 | ) | |||
| Dividends paid | (2,546 | ) | (3,642 | ) | |||
| Repurchase of common stock | (94 | ) | (739 | ) | |||
| Credit facility fees | - | (35 | ) | ||||
| Net cash used in financing activities | (2,640 | ) | (4,416 | ) | |||
| Net increase in cash | 5,482 | 3,626 | |||||
| Cash, beginning of year | 7,577 | 3,951 | |||||
| Cash, end of year | $ | 13,059 | $ | 7,577 | |||
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Contacts:
Timothy R. Horne - Sr. Vice President-Finance
(302) 883-6592
