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| 8-K - DOVER MOTORSPORTS INC--FORM 8-K - DOVER MOTORSPORTS INC | d666456d8k.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE | For further information, call: | |
| Timothy R. Horne - Sr. Vice President-Finance | ||
| Dover, Delaware, January 30, 2014 | (302) 857-3292 |
DOVER MOTORSPORTS, INC. REPORTS RESULTS
FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2013
Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the fourth quarter and year ended December 31, 2013.
The Company promoted no major events in the fourth quarters of 2013 and 2012. Revenues were $129,000 for the fourth quarters of both years.
Operating and marketing expenses decreased $132,000 to $853,000 in the fourth quarter of 2013 from $985,000 in the fourth quarter of 2012, primarily due to lower employee and operating costs at Dover.
General and administrative expenses decreased $332,000 to $1,770,000 for the fourth quarter of 2013 from $2,102,000 in the fourth quarter of 2012, also primarily due to lower employee related costs at Dover.
During the quarter, we reviewed the carrying value of the assets located at our Nashville facility for impairment and recorded a non-cash pre-tax charge of $4,329,000 to reduce the carrying value of the assets to their fair value.
Net interest expense was $172,000 for the fourth quarter of 2013 compared to $291,000 in the fourth quarter of 2012. The decrease is primarily due to lower average outstanding borrowings, lower interest rates and lower amortization of deferred financing costs in the fourth quarter of 2013 compared to 2012.
Loss before income taxes for the fourth quarter of 2013 was ($7,765,000). The current quarter’s results include the aforementioned non-cash impairment charge of $4,329,000. On an adjusted basis, excluding the impact of the non-cash impairment charge, loss before income taxes for the fourth quarter of 2013 was ($3,436,000) compared to a loss of ($4,019,000) in the fourth quarter of 2012.
Net loss for the fourth quarter of 2013 was ($4,758,000) or ($.13) per diluted share. On an adjusted basis, net loss for the fourth quarter of 2013 was ($1,944,000) or ($.06) per diluted share compared to a net loss of ($2,356,000) or ($.07) per diluted share in the fourth quarter of 2012.
During the fourth quarter of 2013, the Company repurchased 126,687 shares of its common stock on the open market at prices ranging from approximately $2.33 to $2.43 per share for approximately $310,000.
For the year ended December 31, 2013, total revenues were $46,180,000 compared with $46,747,000 in the prior year. The decrease was primarily due to lower admissions and event related revenue partially offset by higher broadcasting revenue.
Net earnings were $2,024,000 or $.05 per diluted share for the year ended December 31, 2013. As discussed above, the current year’s annual results include a non-cash pre-tax impairment charge of $4,329,000. On an adjusted basis, net earnings were $4,838,000 or $.13 per diluted share for 2013 compared to $4,571,000 or $.12 per diluted share for 2012.
The Company’s financial position continued to improve during 2013. Total borrowings outstanding decreased to $14,820,000 at December 31, 2013 from $19,700,000 at December 31, 2012. In December 2013, the Company paid an increased annual cash dividend on both classes of common stock of $0.05 per share in the amount of $1,831,000. During 2013, the Company repurchased 442,526 shares of its common stock on the open market at prices ranging from $2.05 to $2.48 per share for approximately $1,068,000.
* * *
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 OPERATIONS
In Thousands, Except Per Share Amounts
(Unaudited)
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenues: |
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| Admissions |
$ | — | $ | — | $ | 9,521 | $ | 10,428 | ||||||||
| Event-related |
128 | 100 | 9,190 | 9,889 | ||||||||||||
| Broadcasting |
— | 11 | 27,445 | 26,404 | ||||||||||||
| Other |
1 | 18 | 24 | 26 | ||||||||||||
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| 129 | 129 | 46,180 | 46,747 | |||||||||||||
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| Expenses: |
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| Operating and marketing |
853 | 985 | 26,648 | 26,688 | ||||||||||||
| Impairment charge |
4,329 | — | 4,329 | — | ||||||||||||
| General and administrative |
1,770 | 2,102 | 7,252 | 7,560 | ||||||||||||
| Depreciation |
822 | 823 | 3,291 | 3,314 | ||||||||||||
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| 7,774 | 3,910 | 41,520 | 37,562 | |||||||||||||
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| Operating (loss) earnings |
(7,645 | ) | (3,781 | ) | 4,660 | 9,185 | ||||||||||
| Interest expense, net |
(172 | ) | (291 | ) | (959 | ) | (1,396 | ) | ||||||||
| Provision for contingent obligation |
47 | 53 | 91 | 321 | ||||||||||||
| Other income |
5 | — | 157 | (48 | ) | |||||||||||
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| (Loss) earnings before income taxes |
(7,765 | ) | (4,019 | ) | 3,949 | 8,062 | ||||||||||
| Income tax benefit (expense) |
3,007 | 1,663 | (1,925 | ) | (3,491 | ) | ||||||||||
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| Net (loss) earnings |
$ | (4,758 | ) | $ | (2,356 | ) | $ | 2,024 | $ | 4,571 | ||||||
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| Net (loss) earnings per common share: |
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| Basic |
$ | (0.13 | ) | $ | (0.07 | ) | $ | 0.05 | $ | 0.12 | ||||||
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| Diluted |
$ | (0.13 | ) | $ | (0.07 | ) | $ | 0.05 | $ | 0.12 | ||||||
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| Weighted average shares outstanding: |
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| Basic |
35,999 | 36,300 | 36,252 | 36,299 | ||||||||||||
| Diluted |
35,999 | 36,300 | 36,252 | 36,299 | ||||||||||||
DOVER MOTORSPORTS, INC.
RECONCILIATION OF GAAP (LOSS) EARNINGS TO ADJUSTED (LOSS) EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| GAAP (loss) earnings before income taxes |
$ | (7,765 | ) | $ | (4,019 | ) | $ | 3,949 | $ | 8,062 | ||||||
| Non-cash impairment charge (1) |
4,329 | — | 4,329 | — | ||||||||||||
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| Adjusted (loss) earnings before income taxes |
$ | (3,436 | ) | $ | (4,019 | ) | $ | 8,278 | $ | 8,062 | ||||||
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| GAAP net (loss) earnings |
$ | (4,758 | ) | $ | (2,356 | ) | $ | 2,024 | $ | 4,571 | ||||||
| Non-cash impairment charge, net of income taxes (1) |
2,814 | — | 2,814 | — | ||||||||||||
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| Adjusted net (loss) earnings |
$ | (1,944 | ) | $ | (2,356 | ) | $ | 4,838 | $ | 4,571 | ||||||
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| GAAP net (loss) earnings per common share - diluted |
$ | (0.13 | ) | $ | (0.07 | ) | $ | 0.05 | $ | 0.12 | ||||||
| Non-cash impairment charge, net of income taxes (1) |
0.08 | — | 0.08 | — | ||||||||||||
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| Adjusted net (loss) earnings per common share - diluted (2) |
$ | (0.06 | ) | $ | (0.07 | ) | $ | 0.13 | $ | 0.12 | ||||||
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| (1) | Nashville Superspeedway no longer promotes NASCAR events and did not seek sanction agreements from NASCAR for 2012, 2013 or 2014. We continue to use the track for motorsports race team testing and are currently evaluating all of our options for the facility. We incurred a non-cash impairment charge of $4,329,000 in the fourth quarter of 2013 as a result of economic conditions and their impact on real estate values. |
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 - diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned non-cash impairment charge. 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 - diluted, which are determined in accordance with GAAP.
| (2) | The components of loss per diluted share for the three months ended December 31, 2013 do not add to the adjusted loss per diluted share due to rounding. |
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
| December 31, | December 31, | |||||||
| 2013 | 2012 | |||||||
| ASSETS |
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| Current assets: |
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| Cash |
$ | 4 | $ | 15 | ||||
| Accounts receivable |
28 | 224 | ||||||
| Inventories |
114 | 124 | ||||||
| Prepaid expenses and other |
1,050 | 1,222 | ||||||
| Receivable from Dover Downs Gaming & Entertainment, Inc. |
4 | — | ||||||
| Income taxes receivable |
22 | — | ||||||
| Deferred income taxes |
76 | 78 | ||||||
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| Total current assets |
1,298 | 1,663 | ||||||
| Property and equipment, net |
85,591 | 92,896 | ||||||
| Other assets |
919 | 738 | ||||||
| Deferred income taxes |
336 | 490 | ||||||
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| Total assets |
$ | 88,144 | $ | 95,787 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 25 | $ | 145 | ||||
| Accrued liabilities |
2,887 | 2,903 | ||||||
| Income taxes payable |
— | 132 | ||||||
| Deferred revenue |
1,743 | 2,719 | ||||||
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| Total current liabilities |
4,655 | 5,899 | ||||||
| Revolving line of credit |
14,820 | 19,700 | ||||||
| Liability for pension benefits |
1,521 | 3,065 | ||||||
| Provision for contingent obligation |
1,843 | 1,934 | ||||||
| Deferred income taxes |
16,926 | 17,096 | ||||||
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| Total liabilities |
39,765 | 47,694 | ||||||
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| Stockholders’ equity: |
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| Common stock |
1,802 | 1,836 | ||||||
| Class A common stock |
1,851 | 1,851 | ||||||
| Additional paid-in capital |
101,362 | 102,166 | ||||||
| Accumulated deficit |
(55,063 | ) | (55,256 | ) | ||||
| Accumulated other comprehensive loss |
(1,573 | ) | (2,504 | ) | ||||
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| Total stockholders’ equity |
48,379 | 48,093 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 88,144 | $ | 95,787 | ||||
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DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
| Years Ended | ||||||||
| December 31, | ||||||||
| 2013 | 2012 | |||||||
| Operating activities: |
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| Net earnings |
$ | 2,024 | $ | 4,571 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
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| Depreciation |
3,291 | 3,314 | ||||||
| Amortization of credit facility fees |
219 | 228 | ||||||
| Stock-based compensation |
291 | 313 | ||||||
| Deferred income taxes |
(836 | ) | 2,489 | |||||
| Provision for contingent obligation |
(91 | ) | (321 | ) | ||||
| Impairment charge |
4,329 | — | ||||||
| Gain on sale of property and equipment |
(138 | ) | — | |||||
| Loss on sale of land |
— | 52 | ||||||
| Changes in assets and liabilities: |
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| Accounts receivable |
196 | 465 | ||||||
| Inventories |
10 | (9 | ) | |||||
| Prepaid expenses and other |
(34 | ) | (3 | ) | ||||
| Receivable from Dover Downs Gaming & Entertainment, Inc. |
(4 | ) | 11 | |||||
| Income taxes receivable/payable |
30 | (13 | ) | |||||
| Accounts payable |
(120 | ) | 29 | |||||
| Accrued liabilities |
(39 | ) | 274 | |||||
| Deferred revenue |
(976 | ) | (410 | ) | ||||
| Other liabilities |
(9 | ) | (45 | ) | ||||
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| Net cash provided by operating activities |
8,143 | 10,945 | ||||||
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| Investing activities: |
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| Capital expenditures |
(315 | ) | (468 | ) | ||||
| Proceeds from sale of property and equipment |
138 | 585 | ||||||
| Purchase of available-for-sale securities |
(102 | ) | (100 | ) | ||||
| Proceeds from sale of available-for-sale securities |
90 | — | ||||||
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| Net cash (used in) provided by investing activities |
(189 | ) | 17 | |||||
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| Financing activities: |
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| Borrowings from revolving line of credit |
28,760 | 21,300 | ||||||
| Repayments on revolving line of credit |
(33,640 | ) | (30,760 | ) | ||||
| Dividends paid |
(1,831 | ) | (1,475 | ) | ||||
| Repurchase of common stock |
(1,129 | ) | (27 | ) | ||||
| Credit facility fees |
(125 | ) | — | |||||
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| Net cash used in financing activities |
(7,965 | ) | (10,962 | ) | ||||
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| Net decrease in cash |
(11 | ) | — | |||||
| Cash, beginning of year |
15 | 15 | ||||||
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| Cash, end of year |
$ | 4 | $ | 15 | ||||
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