Attached files
| file | filename |
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| 8-K - DOVER MOTORSPORTS INC--FORM 8-K - DOVER MOTORSPORTS INC | d8k.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE | For further information, call: | |
| Timothy R. Horne – Sr. Vice President - Finance | ||
| Dover, Delaware, July 28, 2011 | (302) 857-3292 |
DOVER MOTORSPORTS, INC.
REPORTS RESULTS FOR THE SECOND QUARTER OF 2011
Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2011.
As previously reported, the assets, liabilities and operating results of the Company’s Gateway facility have been reclassified in the accompanying consolidated financial statements to report Gateway separately as a discontinued operation.
The Company promoted five major events during the second quarter of 2011 compared to six major events during the second quarter of 2010. A NASCAR Nationwide Series event promoted at Nashville Superspeedway in the second quarter of 2010 was held in the third quarter of 2011.
Revenues for the quarter ended June 30, 2011 were $26,381,000 compared with $29,946,000 in the second quarter of 2010. The decrease in revenues was primarily due to the schedule change noted above and from lower admissions and event related revenues at the Company’s NASCAR triple-header in Dover.
Operating and marketing expenses were $15,488,000 in the second quarter of 2011 as compared to $18,197,000 in the second quarter of 2010. The decrease was also primarily due to promoting one less event in the second quarter 2011, as well as from lower expenses during the Dover NASCAR weekend.
General and administrative expenses of $2,146,000 in the second quarter of 2011 were down from $2,338,000 for the same quarter last year. The decrease is due primarily to lower employee costs and lower costs resulting from the sale of the Memphis facility.
Net interest expense was $592,000 for the quarter ended June 30, 2011 compared to $793,000 in the second quarter of 2010. The decrease was due to lower borrowing costs as a result of the April 2011 refinancing of the Company’s credit facility and lower average outstanding borrowings in the second quarter of 2011 compared to 2010. Loss on extinguishment of debt relates to the write-off of $67,000 of debt issuance costs associated with the previous credit facility.
Earnings from continuing operations before income tax expense for the quarter ended June 30, 2011 were $6,748,000 compared with $7,216,000 in the second quarter of 2010.
The effective tax rate for the second quarter of 2011 was 42.2% compared to 42.7% in the prior year.
Earnings from continuing operations for the second quarter of 2011 were $3,901,000 or $.11 per diluted share compared to $4,137,000 or $.11 per diluted share for the second quarter of 2010.
For the second quarter of 2010, loss from discontinued operations, net of income tax benefit, was $5,822,000 or $.16 per diluted share. That loss included a non-cash impairment charge, net of income tax benefit, of $5,176,000 to write-down the carrying value of the Gateway facility to fair value.
Net earnings were $3,901,000 or $0.11 per diluted share compared to a net loss of ($1,685,000) or $(0.05) per diluted share for the same period last year.
At June 30, 2011, the Company’s total indebtedness was $31,400,000 compared to $35,800,000 at June 30, 2010.
* * *
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 motorsports events whose subsidiaries own and operate 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 June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: |
||||||||||||||||
| Admissions |
$ | 6,716 | $ | 8,565 | $ | 6,716 | $ | 8,565 | ||||||||
| Event-related |
4,548 | 6,047 | 4,578 | 6,101 | ||||||||||||
| Broadcasting |
15,115 | 15,334 | 15,115 | 15,334 | ||||||||||||
| Other |
2 | — | 102 | 1 | ||||||||||||
| 26,381 | 29,946 | 26,511 | 30,001 | |||||||||||||
| Expenses: |
||||||||||||||||
| Operating and marketing |
15,488 | 18,197 | 16,776 | 19,592 | ||||||||||||
| General and administrative |
2,146 | 2,338 | 4,297 | 4,824 | ||||||||||||
| Depreciation and amortization |
1,340 | 1,402 | 2,753 | 2,817 | ||||||||||||
| 18,974 | 21,937 | 23,826 | 27,233 | |||||||||||||
| Operating earnings |
7,407 | 8,009 | 2,685 | 2,768 | ||||||||||||
| Interest income |
4 | 4 | 8 | 7 | ||||||||||||
| Interest expense |
(596 | ) | (797 | ) | (1,441 | ) | (1,558 | ) | ||||||||
| Other income |
— | — | 4 | — | ||||||||||||
| Loss on extinguishment of debt |
(67 | ) | — | (67 | ) | — | ||||||||||
| Earnings from continuing operations before income tax expense |
6,748 | 7,216 | 1,189 | 1,217 | ||||||||||||
| Income tax expense |
2,847 | 3,079 | 786 | 852 | ||||||||||||
| Earnings from continuing operations |
3,901 | 4,137 | 403 | 365 | ||||||||||||
| Loss from discontinued operation, net of income tax benefit |
— | (5,822 | ) | (68 | ) | (6,649 | ) | |||||||||
| Net earnings (loss) |
$ | 3,901 | $ | (1,685 | ) | $ | 335 | $ | (6,284 | ) | ||||||
| Net earnings (loss) per common share - basic: |
||||||||||||||||
| Continuing operations |
$ | 0.11 | $ | 0.11 | $ | 0.01 | $ | 0.01 | ||||||||
| Discontinued operation |
— | (0.16 | ) | — | (0.18 | ) | ||||||||||
| Net earnings (loss) |
$ | 0.11 | $ | (0.05 | ) | $ | 0.01 | $ | (0.17 | ) | ||||||
| Net earnings (loss) per common share - diluted: |
||||||||||||||||
| Continuing operations |
$ | 0.11 | $ | 0.11 | $ | 0.01 | $ | 0.01 | ||||||||
| Discontinued operation |
— | (0.16 | ) | — | (0.18 | ) | ||||||||||
| Net earnings (loss) |
$ | 0.11 | $ | (0.05 | ) | $ | 0.01 | $ | (0.17 | ) | ||||||
| Weighted average shares outstanding: |
||||||||||||||||
| Basic |
36,195 | 36,096 | 36,194 | 36,091 | ||||||||||||
| Diluted |
36,195 | 36,096 | 36,194 | 36,091 | ||||||||||||
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
| June 30, 2011 |
June 30, 2010 |
December 31, 2010 |
||||||||||
| ASSETS |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
$ | 355 | $ | 1,151 | $ | 69 | ||||||
| Accounts receivable |
2,796 | 2,316 | 743 | |||||||||
| Inventories |
268 | 268 | 232 | |||||||||
| Prepaid expenses and other |
1,633 | 1,542 | 1,713 | |||||||||
| Prepaid income taxes |
97 | — | — | |||||||||
| Deferred income taxes |
230 | 124 | 242 | |||||||||
| Current assets held for sale |
— | 2,800 | 1,875 | |||||||||
| Current assets of discontinued operation |
— | 807 | 115 | |||||||||
| Total current assets |
5,379 | 9,008 | 4,989 | |||||||||
| Property and equipment, net |
113,768 | 119,224 | 116,330 | |||||||||
| Restricted cash |
— | 2,217 | — | |||||||||
| Other assets, net |
911 | 474 | 527 | |||||||||
| Deferred income taxes |
112 | 139 | 206 | |||||||||
| Non current assets of discontinued operation |
— | 2,082 | 233 | |||||||||
| Total assets |
$ | 120,170 | $ | 133,144 | $ | 122,285 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||||||
| Current liabilities: |
||||||||||||
| Accounts payable |
$ | 471 | $ | 1,277 | $ | 142 | ||||||
| Accrued liabilities |
2,255 | 2,369 | 2,470 | |||||||||
| Payable to Dover Downs Gaming & Entertainment, Inc. |
4 | 8 | 18 | |||||||||
| Income taxes payable |
— | 30 | 123 | |||||||||
| Deferred revenue |
7,991 | 8,335 | 3,644 | |||||||||
| Current liabilities of discontinued operation |
49 | 4,793 | 685 | |||||||||
| Total current liabilities |
10,770 | 16,812 | 7,082 | |||||||||
| Revolving line of credit |
31,400 | 35,800 | 38,200 | |||||||||
| Liability for pension benefits |
1,683 | 1,784 | 2,291 | |||||||||
| Other liabilities |
132 | 989 | 121 | |||||||||
| Non current income taxes payable |
1,241 | 2,501 | 1,241 | |||||||||
| Deferred income taxes |
19,474 | 18,528 | 18,843 | |||||||||
| Non current liabilities of discontinued operation |
— | 395 | — | |||||||||
| Total liabilities |
64,700 | 76,809 | 67,778 | |||||||||
| Stockholders’ equity: |
||||||||||||
| Common stock |
1,830 | 1,821 | 1,820 | |||||||||
| Class A common stock |
1,851 | 1,851 | 1,851 | |||||||||
| Additional paid-in capital |
101,709 | 101,217 | 101,541 | |||||||||
| Accumulated deficit |
(48,832 | ) | (47,278 | ) | (49,167 | ) | ||||||
| Accumulated other comprehensive loss |
(1,088 | ) | (1,276 | ) | (1,538 | ) | ||||||
| Total stockholders’ equity |
55,470 | 56,335 | 54,507 | |||||||||
| Total liabilities and stockholders’ equity |
$ | 120,170 | $ | 133,144 | $ | 122,285 | ||||||
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
| Six Months Ended June 30, |
||||||||
| 2011 | 2010 | |||||||
| Operating activities: |
||||||||
| Net earnings (loss) |
$ | 335 | $ | (6,284 | ) | |||
| Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
2,753 | 3,151 | ||||||
| Amortization of credit facility fees |
269 | 186 | ||||||
| Stock-based compensation |
230 | 339 | ||||||
| Deferred income taxes |
296 | (3,319 | ) | |||||
| Loss on extinguishment of debt |
67 | — | ||||||
| Impairment charge of discontinued operation |
— | 7,964 | ||||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable |
(1,957 | ) | (1,422 | ) | ||||
| Inventories |
(36 | ) | (36 | ) | ||||
| Prepaid expenses and other |
(181 | ) | (510 | ) | ||||
| Prepaid income taxes/income taxes payable |
(87 | ) | 53 | |||||
| Accounts payable |
325 | 1,127 | ||||||
| Accrued liabilities |
(613 | ) | 1,064 | |||||
| Payable to Dover Downs Gaming & Entertainment, Inc. |
(14 | ) | 3 | |||||
| Deferred revenue |
4,347 | 3,858 | ||||||
| Other liabilities |
152 | 277 | ||||||
| Net cash provided by operating activities |
5,886 | 6,451 | ||||||
| Investing activities: |
||||||||
| Capital expenditures |
(191 | ) | (345 | ) | ||||
| Proceeds from the sale of property and equipment |
1,875 | — | ||||||
| Restricted cash |
— | 1,376 | ||||||
| Proceeds from the sale of available-for-sale securities |
69 | 158 | ||||||
| Purchase of available-for-sale securities |
(70 | ) | (160 | ) | ||||
| Net cash provided by investing activities |
1,683 | 1,029 | ||||||
| Financing activities: |
||||||||
| Borrowings from revolving line of credit |
49,560 | 14,100 | ||||||
| Repayments on revolving line of credit |
(56,360 | ) | (19,300 | ) | ||||
| Repayments of bonds payable |
— | (1,234 | ) | |||||
| Repurchase of common stock |
(52 | ) | (50 | ) | ||||
| Credit facility fees |
(431 | ) | — | |||||
| Net cash used in financing activities |
(7,283 | ) | (6,484 | ) | ||||
| Net increase in cash and cash equivalents |
286 | 996 | ||||||
| Cash and cash equivalents, beginning of period |
69 | 155 | ||||||
| Cash and cash equivalents, end of period |
$ | 355 | $ | 1,151 | ||||