Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2019.
The Company promoted a NASCAR triple-header and hosted the Firefly Music Festival (“Firefly”) in Dover during the second quarter of both 2019 and 2018. The Company leases a portion of its facility to the promoter of Firefly, provides logistical assistance and handles certain concessions for which the Company retains a percentage of the gross sales.
Revenues for the second quarter of 2019 were $24,838,000 compared to $25,812,000 for the second quarter of 2018. The decrease is primarily from lower corporate spending and admissions revenue at our rain delayed spring NASCAR weekend, and lower commissions from Firefly, partially offset by the scheduled increase in broadcasting revenue.
Operating and marketing expenses increased to $14,584,000 in the second quarter of 2019 from $14,234,000 in the second quarter of 2018. The increase was primarily due to the scheduled increase in purse and sanction fees for the NASCAR weekend.
General and administrative expenses of $1,826,000 in the second quarter of 2019 remained consistent compared to $1,799,000 in the second quarter of 2018.
Net interest expense decreased to $10,000 in the second quarter of 2019 from $33,000 in the second quarter of 2018 due to lower outstanding borrowings.
Provision for contingent obligation was $135,000 during the second quarter of 2019 compared to $69,000 during the second quarter of 2018 primarily due to a lower discount rate used to value the liability.
Earnings before income taxes for the second quarter of 2019 were $7,546,000 compared with $8,879,000 for the second quarter of 2018.
Net earnings for the second quarter of 2019 were $5,501,000 or $0.15 per diluted share compared to $6,508,000 or $0.18 per diluted share in the second quarter of 2018.
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. 225 acres of our Nashville Superspeedway property were under option for a total purchase price of approximately $12.4 million. We sold 7.6 acres of the option land during the first quarter of 2019 for net proceeds of approximately $267,000, resulting in a gain of $139,000.
During June 2019, we amended the option agreement and the buyer exercised its option to purchase two of the parcels, comprising approximately 133 acres, for gross proceeds of approximately $6,400,000. Closing on these parcels is expected to occur by the end of July. In addition, the option for the remaining parcel of approximately 97 acres was extended until March 1, 2022. The buyer has paid $500,000 for the extension which would be credited to the purchase price at closing. The Company continues to hold approximately 1,000 acres of commercial real estate in Nashville.
The Company’s financial position strengthened during the quarter. At June 30, 2019, the Company had no outstanding indebtedness and almost $9 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 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 EARNINGS | |||||||||||||||
| In Thousands, Except Per Share Amounts | |||||||||||||||
| (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
| Revenues: | |||||||||||||||
Admissions | $ | 2,502 | $ | 2,853 | $ | 2,502 | $ | 2,853 | |||||||
Event-related | 3,453 | 4,830 | 3,582 | 5,056 | |||||||||||
Broadcasting | 18,878 | 18,128 | 18,878 | 18,128 | |||||||||||
Other | 5 | 1 | 5 | 1 | |||||||||||
24,838 | 25,812 | 24,967 | 26,038 | ||||||||||||
| Expenses: | |||||||||||||||
Operating and marketing | 14,584 | 14,234 | 15,639 | 15,385 | |||||||||||
General and administrative | 1,826 | 1,799 | 3,742 | 3,754 | |||||||||||
Depreciation | 794 | 825 | 1,587 | 1,703 | |||||||||||
17,204 | 16,858 | 20,968 | 20,842 | ||||||||||||
| Gain on sale of land | - | - | 139 | 2,512 | |||||||||||
| Operating earnings | 7,634 | 8,954 | 4,138 | 7,708 | |||||||||||
| Interest expense | (10 | ) | (33 | ) | (16 | ) | (73 | ) | |||||||
| Provision for contingent obligation | (135 | ) | (69 | ) | (246 | ) | (136 | ) | |||||||
| Other income | 57 | 27 | 189 | 31 | |||||||||||
| Earnings before income taxes | 7,546 | 8,879 | 4,065 | 7,530 | |||||||||||
| Income tax expense | (2,045 | ) | (2,371 | ) | (1,054 | ) | (2,014 | ) | |||||||
| Net earnings | $ | 5,501 | $ | 6,508 | $ | 3,011 | $ | 5,516 | |||||||
| Net earnings per common share: | |||||||||||||||
Basic | $ | 0.15 | $ | 0.18 | $ | 0.08 | $ | 0.15 | |||||||
| Diluted | $ | 0.15 | $ | 0.18 | $ | 0.08 | $ | 0.15 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 36,010 | 36,160 | 36,021 | 36,196 | |||||||||||
| Diluted | 36,010 | 36,160 | 36,021 | 36,196 | |||||||||||
DOVER MOTORSPORTS, INC. | |||||||||||||||||||
RECONCILIATION OF GAAP EARNINGS BEFORE INCOME TAXES | |||||||||||||||||||
TO ADJUSTED EARNINGS BEFORE INCOME TAXES | |||||||||||||||||||
AND RECONCILIATION OF GAAP NET EARNINGS TO ADJUSTED NET EARNINGS | |||||||||||||||||||
In Thousands, Except Per Share Amounts | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||||||
| GAAP earnings before income taxes | $ | 7,546 | $ | 8,879 | $ | 4,065 | $ | 7,530 | |||||||||||
Gain on sale of land (1) | - | - | (139 | ) | (2,512 | ) | |||||||||||||
| Adjusted earnings before income taxes | $ | 7,546 | $ | 8,879 | $ | 3,926 | $ | 5,018 | |||||||||||
| GAAP net earnings | $ | 5,501 | $ | 6,508 | $ | 3,011 | $ | 5,516 | |||||||||||
Gain on sale of land, net of income taxes (1) | - | - | (110 | ) | (1,984 | ) | |||||||||||||
| Adjusted net earnings | $ | 5,501 | $ | 6,508 | $ | 2,901 | $ | 3,532 | |||||||||||
| GAAP net earnings per common share - basic and diluted | $ | 0.15 | $ | 0.18 | $ | 0.08 | $ | 0.15 | |||||||||||
Gain on sale of land, net of income taxes (1) | - | - | - | (0.05 | ) | ||||||||||||||
| Adjusted net earnings per common share - basic and diluted | $ | 0.15 | $ | 0.18 | $ | 0.08 | $ | 0.10 | |||||||||||
| _________________________ | ||
(1) | During the first quarter of 2019 and 2018, we closed on sales of parcels of land at our Nashville Superspeedway facility resulting in gains of $139,000 and $2,512,000, respectively. | |
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 before income taxes, adjusted net earnings and adjusted net 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. Income taxes are based on our approximate statutory tax rates. 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 before income taxes, net earnings or net earnings per common share - basic and diluted, which are determined in accordance with GAAP. | ||
| DOVER MOTORSPORTS, INC. | |||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||
| In Thousands | |||||||||||||
| (Unaudited) | |||||||||||||
June 30, | June 30, | December 31, | |||||||||||
2019 | 2018 | 2018 | |||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
| Cash | $ | 8,989 | $ | 5,257 | $ | 3,951 | |||||||
| Accounts receivable | 1,449 | 2,177 | 676 | ||||||||||
| Inventories | 20 | 19 | 21 | ||||||||||
| Prepaid expenses and other | 933 | 921 | 1,055 | ||||||||||
Assets held for sale | 2,203 | - | 531 | ||||||||||
| Total current assets | 13,594 | 8,374 | 6,234 | ||||||||||
| Property and equipment, net | 48,559 | 49,827 | 48,137 | ||||||||||
| Nashville Superspeedway facility | 21,322 | 23,567 | 23,567 | ||||||||||
| Right of use asset | 231 | - | - | ||||||||||
| Other assets | 1,169 | 1,091 | 1,015 | ||||||||||
Total assets | $ | 84,875 | $ | 82,859 | $ | 78,953 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| Current liabilities: | |||||||||||||
| Accounts payable | $ | 712 | $ | 239 | $ | 187 | |||||||
| Accrued liabilities | 3,053 | 2,822 | 3,083 | ||||||||||
| Payable to Dover Downs Gaming & Entertainment, Inc. | - | 19 | 9 | ||||||||||
| Income taxes payable | 1,149 | 1,185 | 118 | ||||||||||
| Contract liabilities | 2,008 | 1,700 | 1,140 | ||||||||||
| Total current liabilities | 6,922 | 5,965 | 4,537 | ||||||||||
| Liability for pension benefits | 666 | 1,708 | 773 | ||||||||||
| Lease liability | 157 | - | - | ||||||||||
| Non-refundable deposit | 500 | - | - | ||||||||||
| Provision for contingent obligation | 2,630 | 2,096 | 2,384 | ||||||||||
| Deferred income taxes | 8,074 | 8,534 | 8,371 | ||||||||||
| Total liabilities | 18,949 | 18,303 | 16,065 | ||||||||||
| Stockholders' equity: | |||||||||||||
| Common stock | 1,809 | 1,821 | 1,805 | ||||||||||
| Class A common stock | 1,851 | 1,851 | 1,851 | ||||||||||
| Additional paid-in capital | 101,388 | 101,613 | 101,416 | ||||||||||
| Accumulated deficit | (35,815 | ) | (37,269 | ) | (38,826 | ) | |||||||
| Accumulated other comprehensive loss | (3,307 | ) | (3,460 | ) | (3,358 | ) | |||||||
| Total stockholders' equity | 65,926 | 64,556 | 62,888 | ||||||||||
| Total liabilities and stockholders' equity | $ | 84,875 | $ | 82,859 | $ | 78,953 | |||||||
| DOVER MOTORSPORTS, INC. | |||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| In Thousands | |||||||||||||
| (Unaudited) | |||||||||||||
Six Months Ended | |||||||||||||
June 30, | |||||||||||||
2019 | 2018 | ||||||||||||
| Operating activities: | |||||||||||||
| Net earnings | $ | 3,011 | $ | 5,516 | |||||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||||
| Depreciation | 1,587 | 1,703 | |||||||||||
| Amortization of credit facility fees | 31 | 32 | |||||||||||
| Stock-based compensation | 176 | 171 | |||||||||||
| Deferred income taxes | (317 | ) | (160 | ) | |||||||||
| Provision for contingent obligation | 246 | 136 | |||||||||||
| (Gains) losses on equity investments | (113 | ) | 6 | ||||||||||
| Gain on sale of land | (139 | ) | (2,512 | ) | |||||||||
| Changes in assets and liabilities: | |||||||||||||
| Accounts receivable | (773 | ) | (1,701 | ) | |||||||||
| Inventories | 1 | (4 | ) | ||||||||||
| Prepaid expenses and other | 58 | 182 | |||||||||||
| Accounts payable | 555 | 178 | |||||||||||
| Accrued liabilities | (104 | ) | (227 | ) | |||||||||
| Payable to Dover Downs Gaming & Entertainment, Inc. | (9 | ) | 12 | ||||||||||
| Income taxes payable | 1,031 | 1,748 | |||||||||||
| Contract liabilities | 868 | 451 | |||||||||||
| Liability for pension benefits | (36 | ) | (1,038 | ) | |||||||||
| Net cash provided by operating activities | 6,073 | 4,493 | |||||||||||
| Investing activities: | |||||||||||||
| Capital expenditures | (2,154 | ) | (530 | ) | |||||||||
| Proceeds from sale of land and equipment, net | 827 | 4,945 | |||||||||||
| Non-refundable deposit received | 500 | - | |||||||||||
| Purchases of equity investments | (9 | ) | (62 | ) | |||||||||
| Proceeds from sale of equity investments | 1 | 56 | |||||||||||
| Net cash (used in) provided by investing activities | (835 | ) | 4,409 | ||||||||||
| Financing activities: | |||||||||||||
| Borrowings from revolving line of credit | 4,060 | 9,400 | |||||||||||
| Repayments on revolving line of credit | (4,060 | ) | (12,640 | ) | |||||||||
| Repurchase of common stock | (200 | ) | (406 | ) | |||||||||
| Net cash used in financing activities | (200 | ) | (3,646 | ) | |||||||||
| Net increase in cash | 5,038 | 5,256 | |||||||||||
| Cash, beginning of period | 3,951 | 1 | |||||||||||
| Cash, end of period | $ | 8,989 | $ | 5,257 | |||||||||
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Contacts:
(302) 883-6592
