Market Overview

Dover Motorsports, Inc. Reports Results for the Second Quarter of 2018

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Dover Motorsports, Inc. (NYSE:DVD) today reported results for the three
months ended June 30, 2018.

The Company promoted a NASCAR triple-header and hosted the Firefly Music
Festival in Dover during the second quarter of 2018 and 2017. 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 2018 increased to $25,812,000 from
$25,587,000 for the second quarter of 2017. The increase is primarily
from the scheduled increase in broadcasting revenue and higher
commissions from Firefly, partially offset by lower admissions revenue
for the NASCAR weekend.

Operating and marketing expenses increased to $14,234,000 in the second
quarter of 2018 from $14,100,000 in the second quarter of 2017. The
increase was due to the scheduled increase in purse and sanction fees
for the NASCAR weekend offset by lower other race related expenses.

General and administrative expenses of $1,799,000 in the second quarter
of 2018 remained consistent compared to $1,796,000 in the second quarter
of 2017.

Net interest expense decreased to $33,000 in the second quarter of 2018
from $68,000 in the second quarter of 2017 due to lower outstanding
borrowings.

Provision for contingent obligation was $69,000 during the second
quarter of 2018 compared to $11,000 during the second quarter of 2017
primarily due to changes in discount rates.

Earnings before income taxes for the second quarter of 2018 were
$8,879,000 compared with $8,808,000 for the second quarter of 2017.

Income tax expense during the second quarter of 2018 decreased to
$2,371,000 from $3,605,000 in the second quarter of 2017. The decrease
is primarily due to the impact of the Tax Cuts and Jobs Act of 2017
which lowered federal income tax rates beginning in 2018.

Net earnings for the second quarter of 2018 were $6,508,000 or $0.18 per
diluted share compared to $5,203,000 or $0.14 per diluted share in the
second quarter of 2017.

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 Speedway property are under
option for a total purchase price of approximately $12.4 million. The
Company continues to hold over 1,000 acres of prime commercial real
estate.

During the second quarter this year, the Company repurchased 54,565
shares of its common stock on the open market at an average price of
$2.10 per share, not including nominal brokerage commissions.

The Company's financial position continues to improve. At June 30, 2018,
the Company had no outstanding indebtedness and more than $5 million in
available cash. During the first six months of 2018 the Company has
contributed another $1,000,000 to its defined benefit pension plan.

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,
2018   2017 2018   2017  
Revenues:
Admissions $ 2,853 $ 3,446 $ 2,853 $ 3,446
Event-related 4,830 4,634 5,056 4,744
Broadcasting 18,128 17,505 18,128 17,505
Other   1     2     1     2  
  25,812     25,587     26,038     25,697  
 
Expenses:
Operating and marketing 14,234 14,100 15,385 15,154
General and administrative 1,799 1,796 3,754 3,816
Depreciation 825 823 1,703 1,644
Costs to remove long-lived assets   -     -     -     286  
  16,858     16,719     20,842     20,900  
 
Gain on sale of land   -     -     2,512     -  
 
Operating earnings 8,954 8,868 7,708 4,797
 
Interest expense, net (33 ) (68 ) (73 ) (116 )
Provision for contingent obligation (69 ) (11 ) (136 ) (52 )
Other income   27     19     31     71  
 
Earnings before income taxes 8,879 8,808 7,530 4,700
 
Income tax expense   (2,371 )   (3,605 )   (2,014 )   (1,902 )
 
Net earnings $ 6,508   $ 5,203   $ 5,516   $ 2,798  
 
Net earnings per common share:

Basic

$ 0.18   $ 0.14   $ 0.15   $ 0.08  

Diluted

$ 0.18   $ 0.14   $ 0.15   $ 0.08  
 
Weighted average shares outstanding:
Basic 36,160 36,308 36,196 36,307
Diluted 36,160 36,308 36,196 36,307
 
 
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,
2018   2017 2018   2017
 
GAAP earnings before income taxes $ 8,879 $ 8,808 $ 7,530 $ 4,700
 
Gain on sale of land (1) - - (2,512 ) -
 
Costs to remove long-lived assets (2)   -   -   -     286
 

Adjusted earnings before income taxes

$ 8,879 $ 8,808 $ 5,018   $ 4,986
 
GAAP net earnings $ 6,508 $ 5,203 $ 5,516 $ 2,798
 
Gain on sale of land, net of income taxes (1) - - (1,984 ) -
 
Costs to remove long-lived assets, net of income taxes (2)   -   -   -     167
 
Adjusted net earnings $ 6,508 $ 5,203 $ 3,532   $ 2,965
 
 
GAAP net earnings per common share - basic and diluted $ 0.18 $ 0.14 $ 0.15 $ 0.08
 
Gain on sale of land, net of income taxes (1) - - (0.05 ) -
 
Costs to remove long-lived assets, net of income taxes (2)   -   -   -     -
 
Adjusted net earnings per common share - basic and diluted $ 0.18 $ 0.14 $ 0.10   $ 0.08
 
 

(1)

During the first quarter of 2018, we closed on the sale of a
parcel of land at our Nashville Superspeedway facility resulting
in a gain on sale.

 

(2)

Costs to remove long-lived assets represents costs incurred to
remove and dispose of certain grandstand seating at our Dover
International Speedway facility.

 

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
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 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,
2018 2017 2017
 
ASSETS
Current assets:
Cash $ 5,257 $ 1 $ 1
Accounts receivable 2,177 14,453 476
Inventories 19 17 15
Prepaid expenses and other 921 995 1,119
Income taxes receivable - - 562

Assets held for sale

  -     2,455     2,455  

Total current assets

8,374 17,921 4,628
 
Property and equipment, net 49,827 52,800 51,000
Nashville Superspeedway facility 23,567 23,545 23,545
Other assets   1,091     1,068     1,107  
Total assets $ 82,859   $ 95,334   $ 80,280  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 239 $ 874 $ 61
Accrued liabilities 2,822 4,077 3,049
Payable to Dover Downs Gaming & Entertainment, Inc. 19 33 7
Income taxes payable 1,185 1,666 -
Contract liabilities   1,700     2,252     1,249  

Total current liabilities

5,965 8,902 4,366
 
Revolving line of credit, net - 11,200 3,240
Liability for pension benefits 1,708 3,887 2,819
Provision for contingent obligation 2,096 1,854 1,960
Deferred income taxes   8,534     12,692     8,673  
Total liabilities   18,303     38,535     21,058  
 
Stockholders' equity:
Common stock 1,821 1,838 1,825
Class A common stock 1,851 1,851 1,851
Additional paid-in capital 101,613 101,988 101,844
Accumulated deficit (37,269 ) (45,542 ) (42,858 )
Accumulated other comprehensive loss   (3,460 )   (3,336 )   (3,440 )
Total stockholders' equity   64,556     56,799     59,222  
Total liabilities and stockholders' equity $ 82,859   $ 95,334   $ 80,280  
 
 
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 

 

  Six Months Ended
June 30,
2018     2017
 
Operating activities:
Net earnings $ 5,516 $ 2,798

Adjustments to reconcile net earnings to net cash provided by
(used in) operating activities:

Depreciation 1,703 1,644
Amortization of credit facility fees 32 32
Stock-based compensation 171 245
Deferred income taxes (160 ) (258 )
Provision for contingent obligation 136 52
Losses on equity investments 6 -
Gain on sale of land (2,512 ) -
Changes in assets and liabilities:
Accounts receivable (1,701 ) (14,034 )
Inventories (4 ) -
Prepaid expenses and other 182 46
Accounts payable 178 561
Accrued liabilities (227 ) 1,139
Payable to Dover Downs Gaming & Entertainment, Inc. 12 26
Income taxes payable/receivable 1,748 1,449
Contract liabilities 451 897
Liability for pension benefits   (1,038 )   (172 )
Net cash provided by (used in) operating activities   4,493     (5,575 )
 
Investing activities:
Capital expenditures (530 ) (1,675 )
Proceeds from sale of land, net 4,945 -
Purchases of equity investments (62 ) (126 )
Proceeds from sale of equity investments   56     121  
Net cash provided by (used in) investing activities   4,409     (1,680 )
 
Financing activities:
Borrowings from revolving line of credit 9,400 12,140
Repayments on revolving line of credit (12,640 ) (4,780 )
Repurchase of common stock   (406 )   (105 )

Net cash (used in) provided by financing activities

  (3,646 )   7,255  
 
Net increase in cash 5,256 -
Cash, beginning of period   1     1  
Cash, end of period $ 5,257   $ 1  
 

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