United States
Securities And Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2017
Dover Motorsports, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number 1-11929
Delaware | 51-0357525 | |
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
1131 N. DuPont Highway Dover, Delaware |
19901 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (302) 883-6500
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule l2b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition and |
Item 7.01 | Regulation FD Disclosure. |
The following information is furnished pursuant to Item 2.02 Results of Operations and Financial Condition and Item 7.01 Regulation FD Disclosure.
On April 27, 2017, we issued a press release announcing our financial results for the first quarter ended March 31, 2017. A copy of our press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits |
99.1 | Press Release dated April 27, 2017 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned hereunto duly authorized.
Dover Motorsports, Inc. |
/s/ Denis McGlynn |
Denis McGlynn |
President and Chief Executive Officer |
Dated: April 27, 2017
EXHIBIT INDEX
Exhibit Number |
Description | |
99.1 | Press Release dated April 27, 2017, issued by Dover Motorsports, Inc. |
Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: | |
Timothy R. Horne Sr. Vice President - Finance | ||
Dover, Delaware, April 27, 2017 | (302) 857-3292 |
DOVER MOTORSPORTS, INC. REPORTS RESULTS
FOR THE QUARTER ENDED MARCH 31, 2017
Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the quarter ended March 31, 2017.
The Company historically reports a loss in the first quarter due to the seasonality of our motorsports business. No major events were promoted during the first quarter of 2017 or 2016; therefore, our revenues were minimal.
Operating and marketing expenses of $1,054,000 in the first quarter of 2017 decreased from $1,206,000 in the first quarter of 2016 primarily due to lower employee costs.
General and administrative expenses of $2,008,000 in the first quarter of 2017 were consistent with the $1,954,000 in the first quarter of 2016.
Costs to remove long-lived assets of $286,000 represent costs incurred during the first quarter of 2017 to remove the remaining grandstands, seats and structures that were taken out of service and written off in 2015. We started the removal project during the fourth quarter of 2016 and incurred a total cost of approximately $489,000.
Depreciation expense decreased to $821,000 in the first quarter of 2017 from $896,000 in the first quarter of 2016. The 2016 expense included approximately $91,000 of increased depreciation expense due to a change in the useful life of assets that we decided to renovate during 2016.
Net interest expense was $48,000 in the first quarter of 2017 compared to $59,000 in the first quarter of 2016.
Loss before income taxes was $4,108,000 for the first quarter of 2017 compared to $3,962,000 for the first quarter of 2016. The results for 2017 include the $286,000 of costs to remove long-lived assets while the 2016 results include the $91,000 of accelerated depreciation expense. On an adjusted basis, excluding these items, loss before income taxes was $3,822,000 for the first quarter of 2017 compared to $3,871,000 for the first quarter of 2016.
Net loss for the first quarter of 2017 was $2,405,000 or $.07 per diluted share compared with a loss of $2,343,000 or $.06 per diluted share in the first quarter of 2016. Net loss, adjusted for the aforementioned items, was $2,238,000 or $.06 per diluted share for the first quarter of 2017 compared to $2,289,000 or $.06 per diluted share for the first quarter of 2016. At March 31, 2017, the Companys total indebtedness was $6,360,000 compared with $7,580,000 at March 31, 2016.
As previously announced, on August 25, 2016, we entered into a definitive agreement to sell our Nashville Superspeedway facility along with some related equipment and other assets. A second amendment was signed on March 22, 2017 to extend the agreement. Closing is now anticipated during the third quarter of 2017. The assets of Nashville Superspeedway are reported as assets held for sale in our consolidated balance sheets.
* * *
This release contains or may contain forward-looking statements based on managements beliefs and assumptions. Such statements are subject to various risks and uncertainties which could cause results to vary materially. Please refer to the Companys 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 March 31, |
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2017 | 2016 | |||||||
Revenues: |
||||||||
Event-related |
$ | 110 | $ | 139 | ||||
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|
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|
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Expenses: |
||||||||
Operating and marketing |
1,054 | 1,206 | ||||||
General and administrative |
2,008 | 1,954 | ||||||
Costs to remove long-lived assets |
286 | | ||||||
Depreciation |
821 | 896 | ||||||
|
|
|
|
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4,169 | 4,056 | |||||||
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|
|
|
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Operating loss |
(4,059 | ) | (3,917 | ) | ||||
Interest expense, net |
(48 | ) | (59 | ) | ||||
(Provision) benefit for contingent obligation |
(41 | ) | 14 | |||||
Other income |
40 | | ||||||
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|
|
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Loss before income taxes |
(4,108 | ) | (3,962 | ) | ||||
Income tax benefit |
1,703 | 1,619 | ||||||
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Net loss |
$ | (2,405 | ) | $ | (2,343 | ) | ||
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Net loss per common share: |
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Basic |
$ | (0.07 | ) | $ | (0.06 | ) | ||
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Diluted |
$ | (0.07 | ) | $ | (0.06 | ) | ||
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Weighted average shares outstanding: |
||||||||
Basic |
36,306 | 36,251 | ||||||
Diluted |
36,306 | 36,251 |
DOVER MOTORSPORTS, INC.
RECONCILIATION OF GAAP LOSS BEFORE INCOME TAXES
TO ADJUSTED LOSS BEFORE INCOME TAXES
AND RECONCILIATION OF GAAP NET LOSS TO ADJUSTED NET LOSS
In Thousands, Except Per Share Amounts
(Unaudited)
Three Months Ended March 31, |
||||||||
2017 | 2016 | |||||||
GAAP loss before income taxes |
$ | (4,108 | ) | $ | (3,962 | ) | ||
Accelerated depreciation (1) |
| 91 | ||||||
Costs to remove long-lived assets (2) |
286 | | ||||||
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Adjusted loss before income taxes |
$ | (3,822 | ) | $ | (3,871 | ) | ||
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GAAP net loss |
$ | (2,405 | ) | $ | (2,343 | ) | ||
Accelerated depreciation, net of income taxes (1) |
| 54 | ||||||
Costs to remove long-lived assets, net of income taxes (2) |
167 | | ||||||
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Adjusted net loss |
$ | (2,238 | ) | $ | (2,289 | ) | ||
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GAAP net loss per common share - basic and diluted |
$ | (0.07 | ) | $ | (0.06 | ) | ||
Accelerated depreciation, net of income taxes (1) |
| | ||||||
Costs to remove long-lived assets, net of income taxes (2) |
| | ||||||
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Adjusted net loss per common share - basic and diluted (3) |
$ | (0.06 | ) | $ | (0.06 | ) | ||
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(1) | During the first quarter of 2016, we began a renovation project of certain track related assets at our Dover International Speedway facility which was completed in the first quarter of 2017. As a result, we shortened the service lives of these assets which resulted in accelerated depreciation being recorded in the first quarter of 2016. |
(2) | Costs to remove long-lived assets represents costs incurred to remove and dispose of certain grandstand seating at our Dover International Speedway facility. |
(3) | The components of GAAP net loss per common share for the three months ended March 31, 2017 do not add to the adjusted net loss per common share due to rounding. |
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 - basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned accelerated depreciation and costs to remove long-lived assets. Income taxes are based on our approximate statutory tax rates applicable to each of these items. 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 before income taxes, net loss or net loss per common share - basic and diluted, which are determined in accordance with GAAP.
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
March 31, 2017 |
March 31, 2016 |
December 31, 2016 |
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ASSETS |
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Current assets: |
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Cash |
$ | 1 | $ | 153 | $ | 1 | ||||||
Accounts receivable |
1,438 | 1,430 | 419 | |||||||||
Inventories |
18 | 71 | 17 | |||||||||
Prepaid expenses and other |
1,515 | 1,820 | 1,104 | |||||||||
Prepaid income taxes |
| 2 | | |||||||||
Deferred income taxes |
| 1,408 | | |||||||||
Assets held for sale |
26,000 | 26,000 | 26,000 | |||||||||
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Total current assets |
28,972 | 30,884 | 27,541 | |||||||||
Property and equipment, net |
52,326 | 53,105 | 52,723 | |||||||||
Other assets |
1,052 | 844 | 1,022 | |||||||||
Deferred income taxes |
| 531 | | |||||||||
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Total assets |
$ | 82,350 | $ | 85,364 | $ | 81,286 | ||||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
$ | 352 | $ | 686 | $ | 347 | ||||||
Accrued liabilities |
2,242 | 2,246 | 2,858 | |||||||||
Payable to Dover Downs Gaming & Entertainment, Inc. |
8 | 10 | 7 | |||||||||
Income taxes payable |
103 | | 218 | |||||||||
Deferred revenue |
4,703 | 5,648 | 1,355 | |||||||||
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Total current liabilities |
7,408 | 8,590 | 4,785 | |||||||||
Revolving line of credit, net |
6,360 | 7,580 | 3,840 | |||||||||
Liability for pension benefits |
4,013 | 3,689 | 4,143 | |||||||||
Provision for contingent obligation |
1,843 | 1,713 | 1,802 | |||||||||
Deferred income taxes |
11,223 | 14,087 | 12,911 | |||||||||
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Total liabilities |
30,847 | 35,659 | 27,481 | |||||||||
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Stockholders equity: |
||||||||||||
Common stock |
1,838 | 1,833 | 1,828 | |||||||||
Class A common stock |
1,851 | 1,851 | 1,851 | |||||||||
Additional paid-in capital |
101,929 | 101,764 | 101,858 | |||||||||
Accumulated deficit |
(50,745 | ) | (52,644 | ) | (48,340 | ) | ||||||
Accumulated other comprehensive loss |
(3,370 | ) | (3,099 | ) | (3,392 | ) | ||||||
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Total stockholders equity |
51,503 | 49,705 | 53,805 | |||||||||
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Total liabilities and stockholders equity |
$ | 82,350 | $ | 85,364 | $ | 81,286 | ||||||
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DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
Three Months Ended March 31, |
||||||||
2017 | 2016 | |||||||
Operating activities: |
||||||||
Net loss |
$ | (2,405 | ) | $ | (2,343 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation |
821 | 896 | ||||||
Amortization of credit facility fees |
16 | 24 | ||||||
Stock-based compensation |
186 | 109 | ||||||
Excess tax benefits from stock-based compensation |
| (27 | ) | |||||
Deferred income taxes |
(1,703 | ) | (1,620 | ) | ||||
Provision (benefit) for contingent obligation |
41 | (14 | ) | |||||
Changes in assets and liabilities: |
||||||||
Accounts receivable |
(1,019 | ) | (1,257 | ) | ||||
Inventories |
(1 | ) | 1 | |||||
Prepaid expenses and other |
(460 | ) | (692 | ) | ||||
Accounts payable |
(184 | ) | 422 | |||||
Accrued liabilities |
(616 | ) | (969 | ) | ||||
Payable to/receivable from Dover Downs Gaming & Entertainment, Inc. |
1 | 54 | ||||||
Income taxes payable/prepaid income taxes |
(115 | ) | (1 | ) | ||||
Deferred revenue |
3,348 | 4,370 | ||||||
Liability for pension benefits |
(88 | ) | (72 | ) | ||||
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Net cash used in operating activities |
(2,178 | ) | (1,119 | ) | ||||
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Investing activities: |
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Capital expenditures |
(235 | ) | (332 | ) | ||||
Purchases of available-for-sale securities |
(95 | ) | (2 | ) | ||||
Proceeds from sale of available-for-sale securities |
93 | 1 | ||||||
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Net cash used in investing activities |
(237 | ) | (333 | ) | ||||
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Financing activities: |
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Borrowings from revolving line of credit |
3,580 | 3,100 | ||||||
Repayments on revolving line of credit |
(1,060 | ) | (1,420 | ) | ||||
Repurchase of common stock |
(105 | ) | (103 | ) | ||||
Excess tax benefits from stock-based compensation |
| 27 | ||||||
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Net cash provided by financing activities |
2,415 | 1,604 | ||||||
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Net increase in cash |
| 152 | ||||||
Cash, beginning of period |
1 | 1 | ||||||
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Cash, end of period |
$ | 1 | $ | 153 | ||||
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