DOVER MOTORSPORTS INC - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - DOVER MOTORSPORTS, INC. -- FORM 8-K - DOVER MOTORSPORTS INC	d8k.htm

Exhibit 99.1

LOGO


FOR IMMEDIATE RELEASE		For further information, call:
		Timothy R. Horne - Sr. Vice President-Finance
Dover, Delaware, January 27, 2011		(302) 857-3292

DOVER MOTORSPORTS, INC. REPORTS RESULTS

FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2010

Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the quarter and year ended December 31, 2010.

The Company’s fourth quarter is a seasonally slow quarter and typically results in a loss. We only promoted a NASCAR Nationwide Series event at Gateway International Raceway (Gateway) during the fourth quarter of 2010. We promoted two major events in the fourth quarter of 2009 – a NASCAR Nationwide Series event and the NHRA Full Throttle Racing Series event, both held at Memphis Motorsports Park (Memphis).

For the quarter ended December 31, 2010, revenues were $1,772,000 compared with $4,031,000 in the fourth quarter of 2009. The decrease was primarily related to the change in our motorsports events calendar discussed above and due to lower attendance and race related revenue at Gateway’s Nationwide Series race. Operating and marketing expenses in the 2010 quarter were $3,791,000 compared to $5,961,000 in the 2009 quarter primarily due to the change in the events calendar and lower costs related to the NASCAR Nationwide Series race.

General and administrative expenses of $3,154,000 in the fourth quarter of 2010 increased from $2,955,000 for the same quarter last year. The increase is primarily due to higher real estate taxes at Gateway, partially offset by savings from the closure of our Memphis facility.

As previously reported, we auctioned all real and personal property of Memphis with net proceeds of approximately $2,000,000 anticipated. Closing on the real property is scheduled for January 31, 2011. A non-cash impairment charge of $809,000 was recognized in the fourth quarter of 2010 to reduce the carrying value of Memphis to the sales price.

Also as previously reported, the Company has ceased all operations at Gateway and the facility is closed. The Company is evaluating all options regarding the final disposition of the facility. The Company recognized expense of $589,000 in the fourth quarter of 2010 to record a liability for the estimated fair value of Gateway’s future net lease obligations.

Depreciation and amortization was $1,500,000 during the fourth quarter of 2010 compared with $1,679,000 in the fourth quarter of 2009. The decrease is primarily due to a reduction in our depreciable asset base resulting from an impairment charge recorded in the second quarter of 2010.

The results for the fourth quarter of 2010 include the aforementioned non-cash impairment charge to write down the carrying value of Memphis to its fair value and the charge for future lease obligations at Gateway. The Company’s financial results are shown on an adjusted basis on the accompanying schedule – “Reconciliation of GAAP Loss to Adjusted Loss”.

Loss before income tax benefit for the fourth quarter of 2010 was $7,417,000 on an adjusted basis compared with $7,396,000 for the fourth quarter of last year.

Net loss was $4,569,000 or $.13 per diluted share on an adjusted basis in the fourth quarter of 2010 compared with $4,571,000 or $.13 per diluted share for the same period last year.

For the year ended December 31, 2010, total revenues were $62,960,000 compared with $70,878,000 in the prior year. We promoted one less major event in 2010 then we did in 2009.

On an adjusted basis, net loss was $2,261,000 or $.06 per diluted share for the year ended 2010 compared with $1,034,000 or $.03 per diluted share in 2009.

* * *

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 motorsports events in the United States. Its motorsports subsidiaries operate two motorsports tracks in two states and promote NASCAR sanctioned and other motorsports events. The Company owns and operates Dover International Speedway in Dover, Delaware and Nashville Superspeedway near Nashville, Tennessee. For further information, log on to www.dovermotorsports.com.

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

In Thousands, Except Per Share Amounts

(Unaudited)


	Three Months Ended December 31,						Years Ended December 31,
	2010			2009			2010			2009
Revenues:
Admissions	$	494		$	1,592		$	19,251		$	24,741
Event-related		561			1,711			15,010			17,971
Broadcasting		702			715			28,681			27,999
Other		15			13			18			167

		1,772			4,031			62,960			70,878

Expenses:
Operating and marketing		3,791			5,961			43,641			50,466
General and administrative		3,154			2,955			13,254			12,174
Impairment charges		809			—			8,773			7,478
Facility exit costs		589			—			589			—
Depreciation and amortization		1,500			1,679			6,190			6,467

		9,843			10,595			72,447			76,585


Gain from insurance settlement		100			—			398			—


Operating loss		(7,971	)		(6,564	)		(9,089	)		(5,707	)

Interest income		6			7			17			14
Interest expense		(853	)		(849	)		(2,477	)		(2,124	)
Gain (loss) on sale of investments		3			10			6			(92	)
Loss on extinguishment of debt		—			—			(208	)		—


Loss before income tax benefit		(8,815	)		(7,396	)		(11,751	)		(7,909	)

Income tax benefit		3,337			2,825			3,405			2,014


Net loss	$	(5,478	)	$	(4,571	)	$	(8,346	)	$	(5,895	)


Net loss per common share:
Basic	$	(0.15	)	$	(0.13	)	$	(0.23	)	$	(0.16	)

Diluted	$	(0.15	)	$	(0.13	)	$	(0.23	)	$	(0.16	)


Weighted average shares outstanding:
Basic		36,099			36,025			36,095			36,021
Diluted		36,099			36,025			36,095			36,021

DOVER MOTORSPORTS, INC.

RECONCILIATION OF GAAP LOSS TO ADJUSTED LOSS

In Thousands, Except Per Share Amounts

(Unaudited)


	Three Months Ended December 31,						Years Ended December 31,
	2010			2009			2010			2009

GAAP loss before income taxes	$	(8,815	)	$	(7,396	)	$	(11,751	)	$	(7,909	)

Non-cash impairment charge ⁽¹⁾		809			—			8,773			7,478

Facility exit costs ⁽²⁾		589			—			589			—


Adjusted loss before income taxes	$	(7,417	)	$	(7,396	)	$	(2,389	)	$	(431	)


GAAP net loss	$	(5,478	)	$	(4,571	)	$	(8,346	)	$	(5,895	)

Non-cash impairment charge, net of income taxes ⁽¹⁾		526			—			5,702			4,861

Facility exit costs, net of income taxes ⁽²⁾		383			—			383			—


Adjusted net loss	$	(4,569	)	$	(4,571	)	$	(2,261	)	$	(1,034	)


GAAP net loss per common share - diluted	$	(0.15	)	$	(0.13	)	$	(0.23	)	$	(0.16	)

Non-cash impairment charge, net of income taxes ⁽¹⁾		0.01			—			0.16			0.13

Facility exit costs, net of income taxes ⁽²⁾		0.01			—			0.01			—


Adjusted net loss per common share - diluted	$	(0.13	)	$	(0.13	)	$	(0.06	)	$	(0.03	)

⁽¹⁾

We held an auction for the real and personal property comprising our Memphis Motorsports Park facility on December 14, 2010. The high bidder for the real estate bid $1,875,000. Since the carrying amount of the long-lived assets of the Memphis facility exceeded the sales price, we recognized a non-cash impairment charge of $809,000 in the fourth quarter of 2010.

During the second quarter of 2010, we reviewed the long-lived assets of our Gateway International Raceway facility for impairment. Based on the results of this analysis, we recorded a non-cash impairment charge of $7,964,000 to write-down the carrying value of long-lived assets at our Gateway facility to fair value.

During the third quarter of 2009, we reviewed the long-lived assets of our Memphis Motorsports Park facility for impairment. Based on the results of this analysis, we recorded a non-cash impairment charge of $7,478,000 to write-down the carrying value of long-lived assets at our Memphis facility to fair value.

⁽²⁾

During the fourth quarter of 2010, we announced the closing of our Gateway facility. We have long-term leases for approximately 160 acres of land at the facility and upon closing the facility we recognized expense of $589,000 to record a liability for the extimated fair value of Gateway’s future net lease obligations.

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 before income taxes, adjusted net loss and adjusted net loss per common share - diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned non-cash impairment charge and the facility exit costs. 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 operating loss, net loss or diluted loss per share, which are determined in accordance with GAAP.

DOVER MOTORSPORTS, INC.

CONSOLIDATED BALANCE SHEETS

In Thousands

(Unaudited)


	December 31, 2010			December 31, 2009

ASSETS
Current assets:
Cash and cash equivalents	$	69		$	155
Accounts receivable		839			1,260
Inventories		232			277
Prepaid expenses and other		1,732			1,528
Deferred income taxes		120			118
Assets held for sale		1,875			2,800

Total current assets		4,867			6,138

Property and equipment, net		116,563			130,182
Restricted cash		—			5,333
Other assets, net		526			712
Deferred income taxes		206			164

Total assets	$	122,162		$	142,529


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	146		$	456
Accrued liabilities		3,064			2,986
Payable to Dover Downs Gaming & Entertainment, Inc.		18			5
Income taxes payable		123			199
Current portion of bonds payable		—			1,235
Deferred revenue		3,644			5,931

Total current liabilities		6,995			10,812

Revolving line of credit		38,200			41,000
Bonds payable		—			1,739
Liability for pension benefits		2,291			1,695
Other liabilities		473			875
Non current income taxes payable		1,241			3,269
Deferred income taxes		18,628			20,850

Total liabilities		67,828			80,240


Stockholders’ equity:
Common stock		1,820			1,806
Class A common stock		1,851			1,851
Additional paid-in capital		101,541			100,943
Accumulated deficit		(49,340	)		(40,994	)
Accumulated other comprehensive loss		(1,538	)		(1,317	)

Total stockholders’ equity		54,334			62,289

Total liabilities and stockholders’ equity	$	122,162		$	142,529

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)


	Years Ended December 31,
	2010			2009

Operating activities:
Net loss	$	(8,346	)	$	(5,895	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		6,190			6,467
Amortization of credit facility fees		501			229
Stock-based compensation		662			495
Deferred income taxes		(4,220	)		(2,934	)
Impairment charges		8,773			7,478
Gain from insurance settlement		(398	)		—
Loss on extinguishment of debt		208			—
Facility exit costs		589			—
Changes in assets and liabilities:
Accounts receivable		421			690
Inventories		32			(4	)
Prepaid expenses and other		(132	)		212
Accounts payable		(223	)		(148	)
Accrued liabilities		(253	)		(69	)
Payable to/receivable from Dover Downs Gaming & Entertainment, Inc.		13			16
Income taxes payable/receivable		3			40
Deferred revenue		(2,287	)		(1,031	)
Other liabilities		(567	)		(293	)

Net cash provided by operating activities		966			5,253


Investing activities:
Capital expenditures		(488	)		(1,912	)
Insurance proceeds		398			—
Proceeds from sale of assets		129			—
Restricted cash		5,333			(114	)
Proceeds from sale of available-for-sale securities		179			335
Purchase of available-for-sale securities		(185	)		(333	)

Net cash provided by (used in) investing activities		5,366			(2,024	)


Financing activities:
Borrowings from revolving line of credit		32,600			37,050
Repayments on revolving line of credit		(35,400	)		(38,250	)
Repayments of bonds payable		(2,986	)		(1,127	)
Premium and fees on extinguisment of debt		(167	)		—
Dividends paid		—			(733	)
Repurchase of common stock		(50	)		(19	)
Credit facility fees		(415	)		(283	)

Net cash used in financing activities		(6,418	)		(3,362	)


Net decrease in cash and cash equivalents		(86	)		(133	)
Cash and cash equivalents, beginning of year		155			288

Cash and cash equivalents, end of year	$	69		$	155

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