EX-99.1 2 d429974dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

LOGO

 

FOR IMMEDIATE RELEASE    For further information, call:
   Timothy R. Horne - Sr. Vice President - Finance
Dover, Delaware, October 25, 2012    (302) 857-3292

DOVER MOTORSPORTS, INC.

REPORTS RESULTS FOR THE THIRD QUARTER OF 2012

Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the third quarter ended September 30, 2012.

Results for this quarter are not comparable to the prior year’s quarter due to the timing of Dover’s fall NASCAR race weekend, the decision not to promote NASCAR sanctioned events at the Company’s Nashville facility after the 2011 season and the prior year charges that resulted from that decision.

The Company’s fall NASCAR race weekend in Dover was held entirely in the third quarter of 2012 while only the K&N Pro Series East event was held during the third quarter of 2011. The NASCAR Nationwide Series and Sprint Cup Series races were held during the fourth quarter of 2011. Also, the Company promoted a tandem NASCAR Nationwide Series and NASCAR Truck Series weekend in Nashville in July of 2011. These events were not held in 2012.

The Company promoted three major events over one weekend in the third quarter of 2012 compared to three major events over two weekends in the third quarter of 2011. Also, the Company hosted the inaugural Firefly Music Festival from July 20-22, 2012 on the Company’s parking grounds. The Company’s involvement included renting the land to the promoter, providing logistical assistance and handling certain concessions.

For the quarter ended September 30, 2012 revenues were $22,773,000 compared with $2,916,000 in the third quarter of 2011. The increase in revenues was primarily due to the timing of Dover’s fall NASCAR race weekend mentioned above and to a lesser extent, from concessions revenue and rental income from the Firefly Music Festival, offset by the fact that events are no longer promoted in Nashville.

Operating and marketing expenses were $12,075,000 in the third quarter of 2012 compared to $4,382,000 in the third quarter of 2011. The increase is primarily from the aforementioned changes.

General and administrative expenses of $1,723,000 in the third quarter of 2012 decreased from $2,200,000 for the same quarter last year. The decrease is due to the reduced operations at the Nashville facility and lower costs in Dover.

During the third quarter of 2011, we reviewed the carrying value of the Nashville facility for impairment and recorded a non-cash charge of $15,687,000 to reduce the carrying value of the Nashville facility to its fair value.

Depreciation and amortization expense of $824,000 in the third quarter of 2012 decreased from $992,000 in the third quarter of 2011 primarily due to the impairment of all depreciable assets of the Nashville facility during the third quarter of last year.

Net interest expense was $332,000 for the third quarter of 2012 compared to $381,000 in the third quarter of 2011. The decrease was due to lower average outstanding borrowings and lower rates in the third quarter of 2012 compared to 2011.

Provision for contingent obligation represents the estimated shortfall in future sales taxes and incremental property taxes used to satisfy certain bonds which were used for public infrastructure improvements near the Company’s Nashville facility. We estimated that the existing bond fund balance and future funding from taxes will be insufficient to satisfy the remaining obligation starting in 2021 as a result of the reduced operations at the Nashville facility. As such, we recorded an initial charge of $2,245,000 during the third quarter of 2011 reflecting the estimated shortfall that we would be responsible for.

Earnings from continuing operations before income tax expense were $7,746,000 for the third quarter of 2012 compared to a loss before income tax benefit of ($22,958,000) for the third quarter of 2011. The prior year’s results include the aforementioned non-cash impairment charge of $15,687,000 to write down the carrying value of the Nashville facility to its fair value and the provision for contingent obligation of $2,245,000. On an adjusted basis, loss from continuing operations before income tax benefit for the third quarter of 2011 was ($5,026,000). The improvement in 2012 is primarily due to the timing of Dover’s fall NASCAR race weekend discussed above.

Net earnings for the third quarter of 2012 were $4,532,000 or $.12 per diluted share compared to a net loss of ($14,581,000) or ($.40) per diluted share for the same period last year. On an adjusted basis, loss from continuing operations was ($3,049,000) or ($.08) per diluted share for the third quarter of 2011.

The Company announced yesterday that its Board of Directors declared an annual cash dividend on both classes of common stock of $.04 per share. The dividend will be payable on December 10, 2012 to shareholders of record at the close of business on November 10, 2012. Due to the seasonal nature of our business, we will evaluate dividends annually.

* * *

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 own 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
September 30,		     Nine Months Ended
September 30,		  
     2012     2011     2012     2011  

Revenues:

         

Admissions

    $ 5,105      $ 752      $ 10,428      $ 7,468   

Event-related

      5,708        1,321        9,789        5,899   

Broadcasting

      11,959        841        26,393        15,956   

Other

      1        2        8        104   
  

 

 

    

 

 

    

 

 

    

 

 

  
     22,773        2,916        46,618        29,427   
  

 

 

    

 

 

    

 

 

    

 

 

  

Expenses:

         

Operating and marketing

      12,075        4,382        25,703        21,158   

Impairment charge

      —          15,687        —          15,687   

General and administrative

      1,723        2,200        5,458        6,497   

Depreciation

      824        992        2,491        3,745   
  

 

 

    

 

 

    

 

 

    

 

 

  
     14,622        23,261        33,652        47,087   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating earnings (loss)

      8,151        (20,345 )      12,966        (17,660 ) 

Interest expense, net

      (332 )      (381 )      (1,105 )      (1,814 ) 

Provision for contingent obligation

      (21 )      (2,245 )      268        (2,245 ) 

Other (expense) income

      (52 )      13        (48 )      17   

Loss on extinguishment of debt

      —          —          —          (67 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Earnings (loss) from continuing operations before income tax (expense) benefit

      7,746        (22,958 )      12,081        (21,769 ) 

Income tax (expense) benefit

      (3,214 )      8,379        (5,154 )      7,593   
  

 

 

    

 

 

    

 

 

    

 

 

  

Earnings (loss) from continuing operations

      4,532        (14,579 )      6,927        (14,176 ) 

Loss from discontinued operation, net of income tax benefit

      —          (2 )      —          (70 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings (loss)

    $ 4,532      $ (14,581 )    $ 6,927      $ (14,246 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings (loss) per common share - basic:

         

Continuing operations

    $ 0.12      $ (0.40 )    $ 0.19      $ (0.39 ) 

Discontinued operation

      —          —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings (loss)

    $ 0.12      $ (0.40 )    $ 0.19      $ (0.39 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings (loss) per common share - diluted:

         

Continuing operations

    $ 0.12      $ (0.40 )    $ 0.19      $ (0.39 ) 

Discontinued operation

      —          —          —          —     
  

 

 

    

 

 

    

 

 

    

 

 

  

Net earnings (loss)

    $ 0.12      $ (0.40 )    $ 0.19      $ (0.39 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average shares outstanding:

         

Basic

      36,300        36,195        36,299        36,194   

Diluted

      36,300        36,195        36,299        36,194   

DOVER MOTORSPORTS, INC.

RECONCILIATION OF GAAP EARNINGS (LOSS) TO ADJUSTED EARNINGS (LOSS)

In Thousands, Except Per Share Amounts

(Unaudited)

 

     Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
     2012      2011     2012     2011  

GAAP earnings (loss) from continuing operations before income taxes

    $ 7,746       $ (22,958 )    $ 12,081      $ (21,769 ) 

Non-cash impairment charge (1)

      —           15,687        —          15,687   

Provision for contingent obligation (1)

      21         2,245        (268 )      2,245   
  

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted earnings (loss) from continuing operations before income taxes

    $ 7,767       $ (5,026 )    $ 11,813      $ (3,837 ) 
  

 

 

     

 

 

    

 

 

    

 

 

  

GAAP earnings (loss) from continuing operations

    $ 4,532       $ (14,579 )    $ 6,927      $ (14,176 ) 

Non-cash impairment charge, net of income taxes (1)

      —           10,197        —          10,197   

Provision for contingent obligation, net of income taxes (1)

      12         1,333        (159 )      1,333   
  

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted earnings (loss) from continuing operations

    $ 4,544       $ (3,049 )    $ 6,768      $ (2,646 ) 
  

 

 

     

 

 

    

 

 

    

 

 

  

GAAP earnings (loss) per common share from continuing operations - diluted

    $ 0.12       $ (0.40 )    $ 0.19      $ (0.39 ) 

Non-cash impairment charge, net of income taxes (1)

      —           0.28        —          0.28   

Provision for contingent obligation, net of income taxes (1)

      —           0.04        —          0.04   
  

 

 

     

 

 

    

 

 

    

 

 

  

Adjusted earnings (loss) per common share from continuing operations - diluted

    $ 0.12       $ (0.08 )    $ 0.19      $ (0.07 ) 
  

 

 

     

 

 

    

 

 

    

 

 

  

 

(1) 

On August 3, 2011, we announced that our wholly-owned subsidiary Nashville Superspeedway notified NASCAR that it would not seek 2012 sanction agreements for its two Nationwide Series and two Camping World Truck Series events and therefore we no longer promote NASCAR events at this facility. We continue to use the track for NASCAR team testing and are currently evaluating all of our options for the facility. We incurred a non-cash impairment charge of $15,687,000 in the third quarter of 2011 as a result of this event. Additionally, we recorded a $2,245,000 provision for contingent obligation reflecting the estimated shortfall on the Wilson County bonds debt service not covered by the projected sales and incremental property taxes.

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 (loss) from continuing operations before income taxes, adjusted earnings (loss) from continuing operations and adjusted earnings (loss) per common share from continuing operations - diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned non-cash impairment charge and the provision for contingent obligation. 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 (loss) from continuing operations before income taxes, earnings (loss) from continuing operations or diluted earnings (loss) per share from continuing operations, which are determined in accordance with GAAP.

DOVER MOTORSPORTS, INC.

CONSOLIDATED BALANCE SHEETS

In Thousands

(Unaudited)

 

     September 30,
2012		     September 30,
2011		     December 31,
2011		  

ASSETS

       

Current assets:

       

Cash

    $ 775      $ 399      $ 15   

Accounts receivable

      9,413        782        689   

Inventories

      126        283        115   

Prepaid expenses and other

      1,040        5,787        1,255   

Receivable from Dover Downs Gaming & Entertainment, Inc.

      —          —          11   

Prepaid income taxes

      —          600        —     

Deferred income taxes

      71        105        67   
  

 

 

    

 

 

    

 

 

  

Total current assets

      11,425        7,956        2,152   

Property and equipment, net

      93,715        97,193        96,380   

Other assets

      780        809        783   

Deferred income taxes

      460        316        496   
  

 

 

    

 

 

    

 

 

  

Total assets

    $ 106,380      $ 106,274      $ 99,811   
  

 

 

    

 

 

    

 

 

  

LIABILITIES AND STOCKHOLDERS’ EQUITY

       

Current liabilities:

       

Accounts payable

    $ 87      $ 497      $ 116   

Accrued liabilities

      4,413        2,408        2,584   

Payable to Dover Downs Gaming & Entertainment, Inc.

      —          4        —     

Income taxes payable

      798        —          145   

Deferred revenue

      1,278        11,066        3,129   
  

 

 

    

 

 

    

 

 

  

Total current liabilities

      6,576        13,975        5,974   

Revolving line of credit

      24,620        34,980        29,160   

Liability for pension benefits

      2,573        1,359        2,713   

Other liabilities

      1,987        2,256        2,250   

Deferred income taxes

      18,465        12,762        14,765   
  

 

 

    

 

 

    

 

 

  

Total liabilities

      54,221        65,332        54,862   
  

 

 

    

 

 

    

 

 

  

Stockholders’ equity:

       

Common stock

      1,838        1,829        1,828   

Class A common stock

      1,851        1,851        1,851   

Additional paid-in capital

      102,098        101,797        101,888   

Accumulated deficit

      (51,425 )      (63,413 )      (58,352 ) 

Accumulated other comprehensive loss

      (2,203 )      (1,122 )      (2,266 ) 
  

 

 

    

 

 

    

 

 

  

Total stockholders’ equity

      52,159        40,942        44,949   
  

 

 

    

 

 

    

 

 

  

Total liabilities and stockholders’ equity

    $ 106,380      $ 106,274      $ 99,811   
  

 

 

    

 

 

    

 

 

  

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)

 

     Nine Months Ended
September 30,		  
     2012     2011  

Operating activities:

     

Net earnings (loss)

    $ 6,927      $ (14,246 ) 

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

     

Depreciation

      2,491        3,745   

Amortization of credit facility fees

      170        319   

Stock-based compensation

      247        317   

Deferred income taxes

      3,689        (7,733 ) 

Impairment charge

      —          15,687   

Provision for contingent obligation

      (268 )      2,245   

Loss on extinguishment of debt

      —          67   

Loss on sale of land

      52        —     

Changes in assets and liabilities:

     

Accounts receivable

      (8,724 )      57   

Inventories

      (11 )      (82 ) 

Prepaid expenses and other

      194        (4,344 ) 

Accounts payable

      (29 )      351   

Accrued liabilities

      1,829        (546 ) 

Payable to/receivable from Dover Downs Gaming & Entertainment, Inc.

      11        (14 ) 

Income taxes payable/prepaid income taxes

      654        (589 ) 

Deferred revenue

      (1,851 )      7,422   

Other liabilities

      (75 )      (266 ) 
  

 

 

    

 

 

  

Net cash provided by operating activities

      5,306        2,390   
  

 

 

    

 

 

  

Investing activities:

     

Capital expenditures

      (464 )      (229 ) 

Proceeds from the sale of property and equipment

      585        1,875   

Proceeds from the sale of available-for-sale securities

      —          311   

Purchase of available-for-sale securities

      (100 )      (314 ) 
  

 

 

    

 

 

  

Net cash provided by investing activities

      21        1,643   
  

 

 

    

 

 

  

Financing activities:

     

Borrowings from revolving line of credit

      15,820        56,340   

Repayments on revolving line of credit

      (20,360 )      (59,560 ) 

Repurchase of common stock

      (27 )      (52 ) 

Credit facility fees

      —          (431 ) 
  

 

 

    

 

 

  

Net cash used in financing activities

      (4,567 )      (3,703 ) 
  

 

 

    

 

 

  

Net increase in cash

      760        330   

Cash, beginning of period

      15        69   
  

 

 

    

 

 

  

Cash, end of period

    $ 775      $ 399