Dover Motorsports, Inc. Reports Results for the Second Quarter of 2014

DOVER, Del.--(BUSINESS WIRE)--

Dover Motorsports, Inc. DVD today reported results for the three months ended June 30, 2014.

The Company promoted a NASCAR triple-header and hosted the Firefly Music Festival in Dover during the second quarter of 2014 and 2013. The Company leases a portion of its Dover facility to the promoter, provides logistical assistance and handles certain concessions for which the Company retains a certain percent of the gross sales.

Revenues for the second quarter of 2014 were $24,273,000 compared with $24,465,000 in the second quarter of 2013. The decrease in revenues was primarily due to lower motorsports admissions and event-related revenue, partially offset by the contracted increase in broadcasting revenue for the Dover NASCAR weekend and by slightly higher revenue from the Firefly Music Festival.

Operating and marketing expenses were $13,268,000 in the second quarter of 2014 compared to $13,123,000 in the second quarter of 2013. The increase was primarily due to the scheduled increase in purse and sanction fees and increased promotion and security costs for the Dover NASCAR weekend.

General and administrative expenses decreased to $1,776,000 in the second quarter of 2014 from $1,839,000 in the second quarter of 2013.

Net interest expense decreased to $99,000 in the second quarter of 2014 from $275,000 for the second quarter of 2013. The decrease was due to lower interest rates, lower outstanding borrowings and lower fees.

Earnings before income tax expense for the second quarter of 2014 were $8,256,000 compared with $8,391,000 in the second quarter of 2013.

Net earnings for the second quarter of 2014 were $4,844,000 or $0.13 per diluted share compared to $4,903,000 or $0.13 per diluted share for the second quarter of 2013.

At June 30, 2014, the Company's total indebtedness was $16,920,000 compared with $23,180,000 at June 30, 2013.

As previously announced, the Company entered into an agreement on May 28, 2014 with NeXovation, Inc. to sell its Nashville Superspeedway facility. The agreement provides for an aggregate purchase price of $27 million in cash plus the assumption by NeXovation, Inc. of the Company's obligations under certain Variable Rate Tax Exempt Infrastructure Revenue Bonds issued by the Sports Authority of the County of Wilson, Tennessee. The transaction is expected to close during the third quarter and is subject to customary closing conditions.

The Company's balance sheet includes a $1,835,000 contingent obligation related to the bonds noted above which will be reversed upon the closing of the transaction resulting in an increase in our pre-tax earnings by the amount of the contingent obligation at the date of closing.

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,
		2014				2013				2014				2013
Revenues:
Admissions	$	4,473			$	4,864			$	4,473			$	4,864
Event-related		4,194				4,531				4,367				4,640
Broadcasting		15,606				15,066				15,606				15,066
Other		-				4				10				11
		24,273				24,465				24,456				24,581
Expenses:
Operating and marketing		13,268				13,123				14,303				14,177
General and administrative		1,776				1,839				3,636				3,750
Depreciation		818				824				1,643				1,649
		15,862				15,786				19,582				19,576
Operating earnings		8,411				8,679				4,874				5,005
Interest expense, net		(99	)			(275	)			(264	)			(550	)
(Provision) benefit for contingent obligation		(70	)			(19	)			8				3
Other income		14				6				17				145
Earnings before income taxes		8,256				8,391				4,635				4,603
Income tax expense		(3,412	)			(3,488	)			(1,909	)			(1,979	)
Net earnings	$	4,844			$	4,903			$	2,726			$	2,624
Net earnings per common share:
Basic	$	0.13			$	0.13			$	0.07			$	0.07
Diluted	$	0.13			$	0.13			$	0.07			$	0.07
Weighted average shares outstanding:
Basic		36,042				36,373				36,052				36,385
Diluted		36,042				36,373				36,052				36,385

DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
		June 30,				June 30,				December 31,
			2014				2013				2013
ASSETS
Current assets:
Cash		$	49			$	16			$	4
Accounts receivable			11,930				12,430				28
Inventories			117				183				114
Prepaid expenses and other			1,070				1,138				1,050
Receivable from Dover Downs Gaming & Entertainment, Inc.			-				57				4
Prepaid income taxes			-				-				22
Deferred income taxes			87				83				76
Assets held for sale			26,000				-				-
Total current assets			39,253				13,907				1,298
Property and equipment, net			58,270				91,454				85,591
Other assets			945				826				919
Deferred income taxes			310				464				336
Total assets		$	98,778			$	106,651			$	88,144
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	458			$	284			$	25
Accrued liabilities			4,733				3,918				2,887
Payable to Dover Downs Gaming & Entertainment, Inc.			39				-				-
Income taxes payable			1,328				377				-
Deferred revenue			4,035				4,976				1,743
Total current liabilities			10,593				9,555				4,655
Revolving line of credit			16,920				23,180				14,820
Liability for pension benefits			1,414				2,988				1,521
Provision for contingent obligation			1,835				1,931				1,843
Deferred income taxes			16,835				18,309				16,926
Total liabilities			47,597				55,963				39,765
Stockholders' equity:
Common stock			1,812				1,840				1,802
Class A common stock			1,851				1,851				1,851
Additional paid-in capital			101,394				102,094				101,362
Accumulated deficit			(52,337	)			(52,632	)			(55,063	)
Accumulated other comprehensive loss			(1,539	)			(2,465	)			(1,573	)
Total stockholders' equity			51,181				50,688				48,379
Total liabilities and stockholders' equity		$	98,778			$	106,651			$	88,144

DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
		Six Months Ended
		June 30,
			2014				2013
Operating activities:
Net earnings		$	2,726			$	2,624
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation			1,643				1,649
Amortization of credit facility fees			48				121
Stock-based compensation			164				166
Deferred income taxes			(93	)			1,024
Benefit for contingent obligation			(8	)			(3	)
Gain on sale of property and equipment			-				(138	)
Changes in assets and liabilities:
Accounts receivable			(11,902	)			(12,206	)
Inventories			(3	)			(59	)
Prepaid expenses and other			(64	)			(103	)
Accounts payable			433				139
Accrued liabilities			1,846				1,015
Payable to/receivable from Dover Downs Gaming & Entertainment, Inc.			43				(57	)
Income taxes payable/prepaid income taxes			1,351				429
Deferred revenue			2,292				2,257
Other liabilities			(77	)			(30	)
Net cash used in operating activities			(1,601	)			(3,172	)
Investing activities:
Capital expenditures			(322	)			(207	)
Proceeds from sale of property and equipment			-				138
Purchases of available-for-sale securities			(45	)			(38	)
Proceeds from sale of available-for-sale securities			42				34
Net cash used in investing activities			(325	)			(73	)
Financing activities:
Borrowings from revolving line of credit			16,540				14,180
Repayments on revolving line of credit			(14,440	)			(10,700	)
Repurchase of common stock			(129	)			(234	)
Net cash provided by financing activities			1,971				3,246
Net increase in cash			45				1
Cash, beginning of period			4				15
Cash, end of period		$	49			$	16