Dover Motorsports, Inc. DVD today reported results for the three months ended September 30, 2017.
Our fall NASCAR event weekend, which consists of a K&N Pro Series East event, an XFINITY Series event, and a Monster Energy Cup Series event was held on September 29, 2017 to October 1, 2017 and September 30, 2016 to October 2 in 2016. As a result, the XFINITY Series event was held during the third quarter of 2017 and the fourth quarter of 2016.
Revenues for the third quarter of 2017 were $2,740,000 compared with $369,000 in the third quarter of 2016. Operating and marketing expenses were $3,485,000 in the third quarter of 2017 compared to $1,387,000 in the third quarter of 2016. Both increases were primarily from the timing of the XFINITY Series races previously mentioned.
General and administrative expenses of $1,770,000 in the third quarter of 2017 were comparable to $1,799,000 in the third quarter of 2016.
Depreciation expense increased to $863,000 in the third quarter of 2017 compared to $828,000 in the third quarter of 2016.
Net interest expense of $34,000 in the third quarter of 2017 was comparable to $41,000 in the third quarter of 2016.
Loss before income taxes for the third quarter of 2017 was ($3,396,000) compared to ($3,679,000) in the third quarter of 2016.
Net loss for the third quarter of 2017 was ($2,015,000) or ($0.06) per diluted share compared to ($2,167,000) or ($0.06) per diluted share for the third quarter of 2016.
At September 30, 2017, the Company's total indebtedness was $5,880,000 compared with $8,060,000 at September 30, 2016.
On August 17, 2017, we entered into an agreement with an entity owned by Panattoni Development Company, an international commercial real estate development company, relative to the sale of approximately 150 acres at our Nashville Superspeedway at a purchase price of $35,000 per acre. Closing under this agreement is scheduled to occur by the end of the year, subject to extension if certain milestones have been met (which could delay closing until the first quarter of 2018). Additionally, we granted the prospective buyer a three-year option on an additional 87 acres at $55,000 per acre. We will continue with our effort to sell the approximately 1,150 acres of Nashville Superspeedway property that would remain after these transactions.
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, 2017 to shareholders of record at the close of business on November 10, 2017. 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, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues: | ||||||||||||||||
| Admissions | $ | 425 | $ | 82 | $ | 3,871 | $ | 3,764 | ||||||||
| Event-related | 995 | 285 | 5,739 | 5,098 | ||||||||||||
| Broadcasting | 1,319 | - | 18,824 | 16,890 | ||||||||||||
| Other | 1 | 2 | 3 | 9 | ||||||||||||
| 2,740 | 369 | 28,437 | 25,761 | |||||||||||||
| Expenses: | ||||||||||||||||
| Operating and marketing | 3,485 | 1,387 | 18,639 | 16,440 | ||||||||||||
| General and administrative | 1,770 | 1,799 | 5,561 | 5,573 | ||||||||||||
| Costs to remove long-lived assets | - | - | 286 | - | ||||||||||||
| Depreciation | 863 | 828 | 2,507 | 2,591 | ||||||||||||
| 6,118 | 4,014 | 26,993 | 24,604 | |||||||||||||
| Operating (loss) earnings | (3,378 | ) | (3,645 | ) | 1,444 | 1,157 | ||||||||||
| Interest expense, net | (34 | ) | (41 | ) | (150 | ) | (166 | ) | ||||||||
| Benefit (provision) for contingent obligation | 11 | (17 | ) | (41 | ) | (73 | ) | |||||||||
| Other income | 5 | 24 | 51 | 16 | ||||||||||||
| (Loss) earnings before income taxes | (3,396 | ) | (3,679 | ) | 1,304 | 934 | ||||||||||
| Income tax benefit (expense) | 1,381 | 1,512 | (521 | ) | (378 | ) | ||||||||||
| Net (loss) earnings | $ | (2,015 | ) | $ | (2,167 | ) | $ | 783 | $ | 556 | ||||||
| Net (loss) earnings per common share: | ||||||||||||||||
| Basic | $ | (0.06 | ) | $ | (0.06 | ) | $ | 0.02 | $ | 0.02 | ||||||
| Diluted | $ | (0.06 | ) | $ | (0.06 | ) | $ | 0.02 | $ | 0.02 | ||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 36,282 | 36,216 | 36,299 | 36,238 | ||||||||||||
| Diluted | 36,282 | 36,216 | 36,299 | 36,238 | ||||||||||||
| 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, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| GAAP (loss) earnings before income taxes | $ | (3,396 | ) | $ | (3,679 | ) | $ | 1,304 | $ | 934 | ||||||
| Accelerated depreciation (1) | - | 25 | - | 184 | ||||||||||||
| Costs to remove long-lived assets (2) | - | - | 286 | - | ||||||||||||
| Adjusted (loss) earnings before income taxes | $ | (3,396 | ) | $ | (3,654 | ) | $ | 1,590 | $ | 1,118 | ||||||
| GAAP net (loss) earnings | $ | (2,015 | ) | $ | (2,167 | ) | $ | 783 | $ | 556 | ||||||
| Accelerated depreciation, net of income taxes (1) | - | 15 | - | 109 | ||||||||||||
| Costs to remove long-lived assets, net of income taxes (2) | - | - | 167 | - | ||||||||||||
| Adjusted net (loss) earnings | $ | (2,015 | ) | $ | (2,152 | ) | $ | 950 | $ | 665 | ||||||
| GAAP net (loss) earnings per common share - basic and diluted | $ | (0.06 | ) | $ | (0.06 | ) | $ | 0.02 | $ | 0.02 | ||||||
| Accelerated depreciation, net of income taxes (1) | - | - | - | - | ||||||||||||
| Costs to remove long-lived assets, net of income taxes (2) | - | - | - | - | ||||||||||||
| Adjusted net (loss) earnings per common share - basic and diluted (3) | $ | (0.06 | ) | $ | (0.06 | ) | $ | 0.03 | $ | 0.02 | ||||||
|
_________________________ |
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| (1) |
During the first quarter of 2016, we began a renovation project of certain track related assets at our Dover International Speedway facility which was completed in the first quarter of 2017. As a result, we shortened the service lives of these assets which resulted in accelerated depreciation being recorded in the first nine months of 2016. |
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(2) |
Costs to remove long-lived assets represents costs incurred to remove and dispose of certain grandstand seating at our Dover International Speedway facility. |
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(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. |
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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 accelerated depreciation 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. |
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| DOVER MOTORSPORTS, INC. | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| In Thousands | ||||||||||||
| (Unaudited) | ||||||||||||
| September 30, | September 30, | December 31, | ||||||||||
| 2017 | 2016 | 2016 | ||||||||||
| ASSETS | ||||||||||||
| Current assets: | ||||||||||||
| Cash | $ | 146 | $ | 215 | $ | 1 | ||||||
| Accounts receivable | 2,420 | 521 | 419 | |||||||||
| Inventories | 16 | 16 | 17 | |||||||||
| Prepaid expenses and other | 4,352 | 5,692 | 1,104 | |||||||||
| Receivable from Dover Downs Gaming & Entertainment, Inc. | 27 | - | - | |||||||||
| Prepaid income taxes | 982 | 1,600 | - | |||||||||
| Assets held for sale | 2,555 | 2,555 | 2,555 | |||||||||
| Total current assets | 10,498 | 10,599 | 4,096 | |||||||||
| Property and equipment, net | 51,968 | 53,393 | 52,723 | |||||||||
| Nashville Superspeedway facility | 23,445 | 23,445 | 23,445 | |||||||||
| Other assets | 1,065 | 976 | 1,022 | |||||||||
| Total assets | $ | 86,976 | $ | 88,413 | $ | 81,286 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 129 | $ | 574 | $ | 347 | ||||||
| Accrued liabilities | 3,176 | 2,804 | 2,858 | |||||||||
| Payable to Dover Downs Gaming & Entertainment, Inc. | - | 44 | 7 | |||||||||
| Income taxes payable | - | - | 218 | |||||||||
| Deferred revenue | 4,702 | 5,314 | 1,355 | |||||||||
| Total current liabilities | 8,007 | 8,736 | 4,785 | |||||||||
| Revolving line of credit, net | 5,880 | 8,060 | 3,840 | |||||||||
| Liability for pension benefits | 3,765 | 3,650 | 4,143 | |||||||||
| Provision for contingent obligation | 1,843 | 1,800 | 1,802 | |||||||||
| Deferred income taxes | 12,778 | 13,477 | 12,911 | |||||||||
| Total liabilities | 32,273 | 35,723 | 27,481 | |||||||||
| Stockholders' equity: | ||||||||||||
| Common stock | 1,830 | 1,829 | 1,828 | |||||||||
| Class A common stock | 1,851 | 1,851 | 1,851 | |||||||||
| Additional paid-in capital | 101,887 | 101,806 | 101,858 | |||||||||
| Accumulated deficit | (47,557 | ) | (49,745 | ) | (48,340 | ) | ||||||
| Accumulated other comprehensive loss | (3,308 | ) | (3,051 | ) | (3,392 | ) | ||||||
| Total stockholders' equity | 54,703 | 52,690 | 53,805 | |||||||||
| Total liabilities and stockholders' equity | $ | 86,976 | $ | 88,413 | $ | 81,286 | ||||||
| DOVER MOTORSPORTS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| Operating activities: | ||||||||
| Net earnings | $ | 783 | $ | 556 | ||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
| Depreciation | 2,507 | 2,591 | ||||||
| Amortization of credit facility fees | 48 | 71 | ||||||
| Stock-based compensation | 305 | 233 | ||||||
| Excess tax benefits from stock-based compensation | - | (27 | ) | |||||
| Deferred income taxes | (272 | ) | (328 | ) | ||||
| Provision for contingent obligation | 41 | 73 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (2,001 | ) | (348 | ) | ||||
| Inventories | 1 | 56 | ||||||
| Prepaid expenses and other | (3,302 | ) | (4,567 | ) | ||||
| Receivable from/payable to Dover Downs Gaming & Entertainment, Inc. | (34 | ) | 88 | |||||
| Prepaid income taxes/income taxes payable | (1,119 | ) | (1,594 | ) | ||||
| Accounts payable | (191 | ) | (82 | ) | ||||
| Accrued liabilities | 318 | (411 | ) | |||||
| Deferred revenue | 3,347 | 4,036 | ||||||
| Liability for pension benefits | (265 | ) | (48 | ) | ||||
| Net cash provided by operating activities | 166 | 299 | ||||||
| Investing activities: | ||||||||
| Capital expenditures | (1,779 | ) | (1,923 | ) | ||||
| Purchases of available-for-sale securities | (142 | ) | (267 | ) | ||||
| Proceeds from sale of available-for-sale securities | 134 | 185 | ||||||
| Net cash used in investing activities | (1,787 | ) | (2,005 | ) | ||||
| Financing activities: | ||||||||
| Borrowings from revolving line of credit | 20,660 | 22,500 | ||||||
| Repayments on revolving line of credit | (18,620 | ) | (20,340 | ) | ||||
| Repurchase of common stock | (274 | ) | (189 | ) | ||||
| Excess tax benefits from stock-based compensation | - | 27 | ||||||
| Credit facility fees | - | (78 | ) | |||||
| Net cash provided by financing activities | 1,766 | 1,920 | ||||||
| Net increase in cash | 145 | 214 | ||||||
| Cash, beginning of period | 1 | 1 | ||||||
| Cash, end of period | $ | 146 | $ | 215 | ||||
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