Attached files
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| 8-K - FORM 8-K - DOVER MOTORSPORTS INC | d811126d8k.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE
Dover, Delaware, October 30, 2014 |
For further information, call: Timothy R. Horne – Sr. Vice President - Finance (302) 857-3292 |
DOVER MOTORSPORTS, INC.
REPORTS RESULTS FOR THE THIRD QUARTER OF 2014
Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended September 30, 2014.
The Company promoted a NASCAR triple-header in Dover during the third quarter of 2014 and 2013. Revenues for the third quarter of 2014 were $21,061,000 compared with $21,470,000 in the third quarter of 2013. The slight decrease in revenues was primarily due to lower motorsports admissions and event-related revenue, partially offset by the contracted increase in broadcasting revenue.
Operating and marketing expenses were $11,878,000 in the third quarter of 2014 compared to $11,618,000 in the third quarter of 2013. The increase was primarily due to higher purse and sanction fees and increased promotion and security costs during the Dover Fall NASCAR weekend.
General and administrative expenses of $1,724,000 in the third quarter of 2014 were comparable to $1,732,000 in the third quarter of 2013.
The Company decided to remove certain grandstand sections during the third quarter of 2014 to reduce excess capacity at Dover International Speedway and is exploring alternative uses for these sections. The Company recorded a pre-tax loss on disposal of long-lived assets of $2,403,000 in the third quarter of 2014 attributable to the removal and disposal of the grandstands which were not fully depreciated.
Net interest expense decreased to $71,000 in the third quarter of 2014 from $237,000 for the third quarter of 2013. The decrease was due to lower outstanding borrowings, lower interest rates and lower fees.
Earnings before income tax expense decreased to $4,182,000 for the third quarter of 2014 from $7,111,000 for the third quarter of 2013. The results for 2014 include the $2,403,000 loss on disposal associated with the grandstand removal at Dover International Speedway. On an adjusted basis, excluding this loss on disposal, earnings before income tax expense for the third quarter of 2014 were $6,585,000. The decrease in 2014 from 2013 is primarily due to lower results from Dover’s Fall NASCAR race weekend discussed above.
Net earnings for the third quarter of 2014 decreased to $2,601,000 or $0.07 per diluted share from $4,158,000 or $.11 per diluted share for the third quarter of 2013. On an adjusted basis, excluding the loss on disposal, net earnings were $4,048,000 or $.11 per diluted share for the third quarter of 2014.
The Company announced yesterday that its Board of Directors declared an annual cash dividend on both classes of common stock of $.05 per share. The dividend will be payable on December 10, 2014 to shareholders of record at the close of business on November 10, 2014. Due to the seasonal nature of our business, we will evaluate dividends annually.
At September 30, 2014, the Company’s total indebtedness was $14,720,000 compared with $18,080,000 at September 30, 2013.
On October 7, 2014, we entered into an amendment to extend closing under our May 28, 2014 agreement to sell Nashville Superspeedway. The purchaser made a $200,000 non-refundable payment to us in consideration for the amendment and closing is now expected to take place in the fourth quarter.
* * *
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 September 30, |
Nine Months Ended September 30, |
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| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenues: |
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| Admissions |
$ | 4,254 | $ | 4,657 | $ | 8,727 | $ | 9,521 | ||||||||
| Event-related |
3,945 | 4,422 | 8,312 | 9,062 | ||||||||||||
| Broadcasting |
12,857 | 12,379 | 28,463 | 27,445 | ||||||||||||
| Other |
5 | 12 | 15 | 23 | ||||||||||||
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| 21,061 | 21,470 | 45,517 | 46,051 | |||||||||||||
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| Expenses: |
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| Operating and marketing |
11,878 | 11,618 | 26,181 | 25,795 | ||||||||||||
| General and administrative |
1,724 | 1,732 | 5,360 | 5,482 | ||||||||||||
| Loss on disposal of long-lived assets |
2,403 | — | 2,403 | — | ||||||||||||
| Depreciation |
805 | 820 | 2,448 | 2,469 | ||||||||||||
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| 16,810 | 14,170 | 36,392 | 33,746 | |||||||||||||
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| Operating earnings |
4,251 | 7,300 | 9,125 | 12,305 | ||||||||||||
| Interest expense, net |
(71 | ) | (237 | ) | (335 | ) | (787 | ) | ||||||||
| (Provision) benefit for contingent obligation |
(8 | ) | 41 | — | 44 | |||||||||||
| Other income |
10 | 7 | 27 | 152 | ||||||||||||
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| Earnings before income taxes |
4,182 | 7,111 | 8,817 | 11,714 | ||||||||||||
| Income tax expense |
(1,581 | ) | (2,953 | ) | (3,490 | ) | (4,932 | ) | ||||||||
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| Net earnings |
$ | 2,601 | $ | 4,158 | $ | 5,327 | $ | 6,782 | ||||||||
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| Net earnings per common share: |
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| Basic |
$ | 0.07 | $ | 0.11 | $ | 0.15 | $ | 0.18 | ||||||||
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| Diluted |
$ | 0.07 | $ | 0.11 | $ | 0.15 | $ | 0.18 | ||||||||
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| Weighted average shares outstanding: |
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| Basic |
36,042 | 36,242 | 36,049 | 36,337 | ||||||||||||
| Diluted |
36,042 | 36,242 | 36,049 | 36,337 | ||||||||||||
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 September 30, |
Nine Months Ended September 30, |
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| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| GAAP earnings before income taxes |
$ | 4,182 | $ | 7,111 | $ | 8,817 | $ | 11,714 | ||||||||
| Loss on disposal of long-lived assets(1) |
2,403 | — | 2,403 | — | ||||||||||||
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| Adjusted earnings before income taxes |
$ | 6,585 | $ | 7,111 | $ | 11,220 | $ | 11,714 | ||||||||
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| GAAP net earnings |
$ | 2,601 | $ | 4,158 | $ | 5,327 | $ | 6,782 | ||||||||
| Loss on disposal of long-lived assets, net of income taxes(1) |
1,447 | — | 1,447 | — | ||||||||||||
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| Adjusted net earnings |
$ | 4,048 | $ | 4,158 | $ | 6,774 | $ | 6,782 | ||||||||
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| GAAP net earnings per common share - diluted |
$ | 0.07 | $ | 0.11 | $ | 0.15 | $ | 0.18 | ||||||||
| Loss on disposal of long-lived assets, net of income taxes(1) |
0.04 | — | 0.04 | — | ||||||||||||
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| Adjusted net earnings per common share - diluted(2) |
$ | 0.11 | $ | 0.11 | $ | 0.18 | $ | 0.18 | ||||||||
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| (1) | Loss on disposal of long-lived assets is attributable to the decision 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 - diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned loss on disposal of long-lived assets. 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 - diluted, which are determined in accordance with GAAP.
| (2) | The components of earnings per diluted share for the nine months ended September 30, 2014 do not add to the adjusted earnings per diluted share due to rounding. |
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
| September 30, 2014 |
September 30, 2013 |
December 31, 2013 |
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| ASSETS |
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| Current assets: |
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| Cash |
$ | 89 | $ | 35 | $ | 4 | ||||||
| Accounts receivable |
9,883 | 10,550 | 28 | |||||||||
| Inventories |
84 | 123 | 114 | |||||||||
| Prepaid expenses and other |
800 | 882 | 1,050 | |||||||||
| Receivable from Dover Downs Gaming & Entertainment, Inc. |
— | — | 4 | |||||||||
| Prepaid income taxes |
— | — | 22 | |||||||||
| Deferred income taxes |
84 | 85 | 76 | |||||||||
| Assets held for sale |
26,000 | — | — | |||||||||
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| Total current assets |
36,940 | 11,675 | 1,298 | |||||||||
| Property and equipment, net |
56,775 | 90,674 | 85,591 | |||||||||
| Other assets |
917 | 844 | 919 | |||||||||
| Deferred income taxes |
317 | 462 | 336 | |||||||||
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| Total assets |
$ | 94,949 | $ | 103,655 | $ | 88,144 | ||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY |
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| Current liabilities: |
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| Accounts payable |
$ | 921 | $ | 83 | $ | 25 | ||||||
| Accrued liabilities |
4,802 | 4,865 | 2,887 | |||||||||
| Payable to Dover Downs Gaming & Entertainment, Inc. |
29 | 12 | — | |||||||||
| Income taxes payable |
1,081 | 3,326 | — | |||||||||
| Deferred revenue |
125 | 112 | 1,743 | |||||||||
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| Total current liabilities |
6,958 | 8,398 | 4,655 | |||||||||
| Revolving line of credit |
14,720 | 18,080 | 14,820 | |||||||||
| Liability for pension benefits |
1,364 | 2,979 | 1,521 | |||||||||
| Provision for contingent obligation |
1,843 | 1,890 | 1,843 | |||||||||
| Deferred income taxes |
16,229 | 17,956 | 16,926 | |||||||||
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| Total liabilities |
41,114 | 49,303 | 39,765 | |||||||||
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| Stockholders’ equity: |
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| Common stock |
1,812 | 1,816 | 1,802 | |||||||||
| Class A common stock |
1,851 | 1,851 | 1,851 | |||||||||
| Additional paid-in capital |
101,451 | 101,600 | 101,362 | |||||||||
| Accumulated deficit |
(49,736 | ) | (48,474 | ) | (55,063 | ) | ||||||
| Accumulated other comprehensive loss |
(1,543 | ) | (2,441 | ) | (1,573 | ) | ||||||
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| Total stockholders’ equity |
53,835 | 54,352 | 48,379 | |||||||||
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| Total liabilities and stockholders’ equity |
$ | 94,949 | $ | 103,655 | $ | 88,144 | ||||||
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DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
| Nine Months Ended September 30, |
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| 2014 | 2013 | |||||||
| Operating activities: |
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| Net earnings |
$ | 5,327 | $ | 6,782 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
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| Depreciation |
2,448 | 2,469 | ||||||
| Amortization of credit facility fees |
72 | 189 | ||||||
| Stock-based compensation |
221 | 233 | ||||||
| Deferred income taxes |
(778 | ) | 654 | |||||
| Benefit for contingent obligation |
— | (44 | ) | |||||
| Loss on disposal of long-lived assets, non-cash |
2,045 | — | ||||||
| Gain on sale of property and equipment |
— | (138 | ) | |||||
| Changes in assets and liabilities: |
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| Accounts receivable |
(9,855 | ) | (10,326 | ) | ||||
| Inventories |
30 | 1 | ||||||
| Prepaid expenses and other |
190 | 85 | ||||||
| Accounts payable |
679 | (62 | ) | |||||
| Accrued liabilities |
1,915 | 1,962 | ||||||
| Payable to/receivable from Dover Downs Gaming & Entertainment, Inc. |
33 | 12 | ||||||
| Income taxes payable/prepaid income taxes |
1,182 | 3,378 | ||||||
| Deferred revenue |
(1,618 | ) | (2,607 | ) | ||||
| Other liabilities |
(113 | ) | (15 | ) | ||||
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| Net cash provided by operating activities |
1,778 | 2,573 | ||||||
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| Investing activities: |
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| Capital expenditures |
(1,460 | ) | (247 | ) | ||||
| Proceeds from sale of property and equipment |
— | 138 | ||||||
| Purchases of available-for-sale securities |
(81 | ) | (78 | ) | ||||
| Proceeds from sale of available-for-sale securities |
77 | 73 | ||||||
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| Net cash used in investing activities |
(1,464 | ) | (114 | ) | ||||
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| Financing activities: |
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| Borrowings from revolving line of credit |
28,480 | 22,280 | ||||||
| Repayments on revolving line of credit |
(28,580 | ) | (23,900 | ) | ||||
| Repurchase of common stock |
(129 | ) | (819 | ) | ||||
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| Net cash used in financing activities |
(229 | ) | (2,439 | ) | ||||
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| Net increase in cash |
85 | 20 | ||||||
| Cash, beginning of period |
4 | 15 | ||||||
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| Cash, end of period |
$ | 89 | $ | 35 | ||||
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