Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended September 30, 2020.

As previously disclosed, the COVID-19 pandemic caused the postponement of the Company’s scheduled May NASCAR weekend. The three NASCAR events originally scheduled for May were instead held in combination with our scheduled August NASCAR events. All six of the races were held without fans. No major events were held during the third quarter of 2019. Accordingly, the results for the third quarter of 2020 are not comparable to last year.

Revenues for the third quarter of 2020 were $38,044,000 compared to $202,000 for the third quarter of 2019.

Operating and marketing expenses were $22,425,000 compared to $1,347,000 in the third quarter of 2019.

General and administrative expenses of $1,878,000 in the third quarter of 2020 were comparable to $1,888,000 in the third quarter of 2019.

Depreciation expense decreased to $756,000 from $1,669,000 in the third quarter of 2019. The decrease is primarily due to our decision during the third quarter of 2019 to remove grandstand seats at our Dover facility after our 2019 race season. We changed the estimated useful lives of the impacted assets resulting in $879,000 of accelerated depreciation expense in the third quarter of 2019.

As previously disclosed, in July of 2020 we sold approximately 97 acres of land in Nashville for proceeds less closing costs of approximately $6,460,000, resulting in a gain of $4,843,000. The purchaser had previously paid to us a $500,000 deposit that was credited to the purchase price.

During the third quarter of 2019, we closed on the sale of approximately 133 acres of land in Nashville for net proceeds of approximately $6,397,000 after closing costs, resulting in a gain of $4,186,000.

The adjustment to the contingent obligation was a benefit of $128,000 in the third quarter of 2020 compared to an expense of $121,000 in the third quarter of 2019, primarily the result of lower estimated interest rates.

Earnings before income taxes for the third quarter of 2020 were $18,025,000 compared to loss before income taxes of ($588,000) in the third quarter of 2019. The 2020 results include the $4,843,000 gain on sale, and the 2019 results include the $4,186,000 gain on sale and $879,000 of accelerated depreciation. On an adjusted basis, excluding these items, earnings before income taxes were $13,182,000 for the third quarter of 2020 compared to a loss before income tax benefit of ($3,895,000) for the third quarter of 2019.

Net earnings for the third quarter of 2020 were $13,190,000 or $.36 per diluted share compared to net loss of ($414,000) or ($.01) per diluted share for the third quarter of 2019. Net earnings, adjusted for the aforementioned items, were $9,364,000 in 2020 compared to net loss of ($3,087,000) in 2019.

As of September 30, 2020, the Company had no outstanding indebtedness and approximately $21.3 million in available cash.

The Company announced yesterday that its Board of Directors declared an annual cash dividend on both classes of common stock of $.07 per share. The dividend will be payable on December 10, 2020 to shareholders of record at the close of business on November 10, 2020.

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 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 (LOSS) In Thousands, Except Per Share Amounts (Unaudited)    

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

Revenues: Admissions

$

-

 

$

-

 

$

-

 

$

2,502

 

Event-related

 

2,394

 

 

202

 

 

2,708

 

 

3,784

 

Broadcasting

 

35,646

 

 

-

 

 

35,646

 

 

18,878

 

Other

 

4

 

 

-

 

 

4

 

 

5

 

 

38,044

 

 

202

 

 

38,358

 

 

25,169

 

  Expenses: Operating and marketing

 

22,425

 

 

1,347

 

 

24,225

 

 

16,986

 

General and administrative

 

1,878

 

 

1,888

 

 

5,742

 

 

5,630

 

Depreciation

 

756

 

 

1,669

 

 

2,289

 

 

3,256

 

Cost to remove long-lived assets

 

-

 

 

-

 

 

341

 

 

-

 

 

25,059

 

 

4,904

 

 

32,597

 

 

25,872

 

  Gain on sale of land

 

4,843

 

 

4,186

 

 

4,843

 

 

4,325

 

  Operating earnings (loss)

 

17,828

 

 

(516

)

 

10,604

 

 

3,622

 

  Interest (expense) income

 

(21

)

 

20

 

 

(34

)

 

4

 

Benefit (provision) for contingent obligation

 

128

 

 

(121

)

 

112

 

 

(367

)

Other income

 

90

 

 

29

 

 

115

 

 

218

 

  Earnings (loss) before income taxes

 

18,025

 

 

(588

)

 

10,797

 

 

3,477

 

  Income tax (expense) benefit

 

(4,835

)

 

174

 

 

(1,436

)

 

(880

)

  Net earnings (loss)

$

13,190

 

$

(414

)

$

9,361

 

$

2,597

 

  Net earnings (loss) per common share: Basic

$

0.36

 

$

(0.01

)

$

0.26

 

$

0.07

 

Diluted

$

0.36

 

$

(0.01

)

$

0.26

 

$

0.07

 

  Weighted average shares outstanding: Basic

 

35,836

 

 

35,952

 

 

35,836

 

 

35,998

 

Diluted

 

35,836

 

 

35,952

 

 

35,836

 

 

35,998

 

  DOVER MOTORSPORTS, INC. RECONCILIATION OF GAAP EARNINGS (LOSS) BEFORE INCOME TAXES TO ADJUSTED EARNINGS (LOSS) BEFORE INCOME TAXES AND RECONCILIATION OF GAAP NET EARNINGS (LOSS) TO ADJUSTED NET EARNINGS (LOSS) In Thousands, Except Per Share Amounts (Unaudited)    

Three Months Ended

 

Nine Months Ended

September 30,

 

September 30,

 

2020

 

 

 

2019

 

 

 

2020

 

 

 

2019

 

  GAAP earnings (loss) before income taxes

$

18,025

 

$

(588

)

$

10,797

 

$

3,477

 

  Gain on sale of land (1)

 

(4,843

)

 

(4,186

)

 

(4,843

)

 

(4,325

)

  Cost to remove long-lived assets (2)

 

-

 

 

-

 

 

341

 

 

-

 

  Accelerated depreciation (3)

 

-

 

 

879

 

 

-

 

 

879

 

  Adjusted earnings (loss) before income taxes

$

13,182

 

$

(3,895

)

$

6,295

 

$

31

 

  GAAP net earnings (loss)

$

13,190

 

$

(414

)

$

9,361

 

$

2,597

 

  Gain on sale of land, net of income taxes (1)

 

(3,826

)

 

(3,307

)

 

(3,826

)

 

(3,417

)

  Cost to remove long-lived assets, net of income taxes (2)

 

-

 

 

-

 

 

246

 

 

-

 

  Accelerated depreciation, net of income taxes (3)

 

-

 

 

634

 

 

-

 

 

634

 

  Adjusted net earnings (loss)

$

9,364

 

$

(3,087

)

$

5,781

 

$

(186

)

    GAAP net earnings (loss) per common share - basic and diluted

$

0.36

 

$

(0.01

)

$

0.26

 

$

0.07

 

  Gain on sale of land, net of income taxes (1)

 

(0.11

)

 

(0.09

)

 

(0.11

)

 

(0.09

)

  Cost to remove long-lived assets, net of income taxes (2)

 

-

 

 

-

 

 

0.01

 

 

-

 

  Accelerated depreciation, net of income taxes (3)

 

-

 

 

0.02

 

 

-

 

 

0.02

 

  Adjusted net earnings (loss) per common share - basic and diluted(4)

$

0.26

 

$

(0.09

)

$

0.16

 

$

(0.01

)

(1)

 

During the third quarter of 2020, we closed on the sale of a parcel of land at our Nashville Superspeedway facility resulting in a gain of $4,843,000.

 

 

 

During the third quarter of 2019, we closed on the sale of parcels of land at our Nashville Superspeedway facility resulting in a gain of $4,186,000. 

 

 

During the first quarter of 2019, we closed on sale of a parcel of land at our Nashville Superspeedway facility resulting in a gain of $139,000.

 

 

 

These transactions were tax effected using our federal statutory rate as we had available state net operating losses.

 

(2)

 

Related to the decision to remove grandstand seats at Dover International Speedway, we incurred $341,000 of costs to remove these assets in the first quarter of 2020.  This amount was tax effected using our federal and state statutory rates.

 

(3)

 

During the third quarter of 2019, we made the decision to remove certain grandstand seating at our Dover International Speedway facility at the end of the 2019 race season.  As a result, we shortened the service lives of these assets which resulted in $879,000 of  accelerated depreciation being recorded in the third quarter of 2019. This amount was tax effected using our federal and state statutory rates.

 

(4)

 

The components of the GAAP net earnings (loss)  per common share for the three months ended September 30, 2020 and nine months ended September 30, 2019 do not add to the adjusted net earnings (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 earnings (loss) before income taxes, adjusted net earnings (loss) and adjusted net earnings (loss) per common share - basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned gains on sale of land, costs to remove long-lived assets and accelerated depreciation.  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) before income taxes, net earnings (loss) or net earnings (loss) per common share - basic and diluted, which are determined in accordance with GAAP.

DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEETS In Thousands (Unaudited)    

September 30,

 

September 30,

 

December 31,

 

2020

 

 

 

2019

 

 

 

2019

 

  ASSETS Current assets: Cash

$

21,327

 

$

4,784

 

$

7,577

 

Accounts receivable

 

1,232

 

 

1,866

 

 

645

 

Inventories

 

18

 

 

20

 

 

18

 

Prepaid expenses and other

 

994

 

 

6,184

 

 

1,186

 

Income taxes receivable

 

-

 

 

95

 

 

283

 

Total current assets

 

23,571

 

 

12,949

 

 

9,709

 

  Property and equipment, net

 

68,125

 

 

72,035

 

 

71,357

 

Right of use asset

 

131

 

 

206

 

 

188

 

Other assets

 

1,205

 

 

1,170

 

 

1,212

 

Total assets

$

93,032

 

$

86,360

 

$

82,466

 

  LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable

$

793

 

$

1,631

 

$

119

 

Accrued liabilities

 

3,559

 

 

3,184

 

 

3,710

 

Income taxes payable

 

2,674

 

 

-

 

 

-

 

Contract liabilities

 

1,425

 

 

4,526

 

 

976

 

Total current liabilities

 

8,451

 

 

9,341

 

 

4,805

 

  Revolving line of credit

 

-

 

 

-

 

 

-

 

Liability for pension benefits

 

786

 

 

614

 

 

1,016

 

Lease liability

 

53

 

 

131

 

 

112

 

Non-refundable deposit

 

-

 

 

500

 

 

500

 

Provision for contingent obligation

 

3,276

 

 

2,751

 

 

3,389

 

Deferred income taxes

 

6,888

 

 

7,743

 

 

8,676

 

Total liabilities

 

19,454

 

 

21,080

 

 

18,498

 

  Stockholders' equity: Common stock

 

1,786

 

 

1,793

 

 

1,782

 

Class A common stock

 

1,851

 

 

1,851

 

 

1,851

 

Additional paid-in capital

 

101,152

 

 

101,143

 

 

100,994

 

Accumulated deficit

 

(27,607

)

 

(36,229

)

 

(36,968

)

Accumulated other comprehensive loss

 

(3,604

)

 

(3,278

)

 

(3,691

)

Total stockholders' equity

 

73,578

 

 

65,280

 

 

63,968

 

Total liabilities and stockholders' equity

$

93,032

 

$

86,360

 

$

82,466

 

    DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands (Unaudited)        

Nine Months Ended

 

September 30,

 

 

2020

 

 

 

2019

 

      Operating activities:     Net earnings  

$

9,361

 

 

$

2,597

 

Adjustments to reconcile net earnings to     net cash provided by (used in) operating activities:     Depreciation  

 

2,289

 

 

 

3,256

 

Amortization of credit facility fees  

 

42

 

 

 

47

 

Stock-based compensation  

 

256

 

 

 

243

 

Deferred income taxes  

 

(1,822

)

 

 

(659

)

(Benefit) Provision for contingent obligation  

 

(112

)

 

 

367

 

Gains on equity investments  

 

(4

)

 

 

(125

)

Gain on sale of land  

 

(4,843

)

 

 

(4,325

)

Changes in assets and liabilities:     Accounts receivable  

 

(587

)

 

 

(1,190

)

Inventories  

 

-

 

 

 

1

 

Prepaid expenses and other  

 

171

 

 

 

(5,159

)

Income taxes receivable/payable  

 

2,957

 

 

 

(213

)

Accounts payable  

 

658

 

 

 

129

 

Accrued liabilities  

 

(266

)

 

 

38

 

Payable to Dover Downs Gaming & Entertainment, Inc.  

 

-

 

 

 

(9

)

Contract liabilities  

 

449

 

 

 

3,386

 

Liability for pension benefits  

 

(109

)

 

 

(48

)

Net cash used in operating activities  

 

8,440

 

 

 

(1,664

)

      Investing activities:     Capital expenditures  

 

(545

)

 

 

(4,651

)

Proceeds from sale of land and equipment, net  

 

5,960

 

 

 

7,224

 

Non-refundable deposit received  

 

-

 

 

 

500

 

Purchases of equity investments  

 

(316

)

 

 

(14

)

Proceeds from sale of equity investments  

 

305

 

 

 

1

 

Net cash provided by investing activities  

 

5,404

 

 

 

3,060

 

      Financing activities:     Borrowings from revolving line of credit  

 

3,880

 

 

 

4,120

 

Repayments on revolving line of credit  

 

(3,880

)

 

 

(4,120

)

Repurchase of common stock  

 

(94

)

 

 

(528

)

Credit facility fees  

 

-

 

 

 

(35

)

Net cash used in financing activities  

 

(94

)

 

 

(563

)

      Net increase in cash  

 

13,750

 

 

 

833

 

Cash, beginning of period  

 

7,577

 

 

 

3,951

 

Cash, end of period  

$

21,327

 

 

$

4,784

 

     

 

Timothy R. Horne – Sr. Vice President - Finance (302) 883-6592

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