Dover Motorsports, Inc. (NYSE:DVD) today reported its results
for the second quarter ended June 30, 2009.
The Company promoted seven major events over five weekends in
the second quarter of 2009 compared with six major events in 2008.
The first NASCAR Nationwide Series event at Nashville Superspeedway
was held in the second quarter of 2009 compared with the first
quarter of 2008.
For the quarter ended June 30, 2009 revenues were $35,618,000
compared with $39,415,000 in the second quarter of 2008. The
decrease in revenues is due to lower attendance resulting in
reduced admissions revenue and event-related revenue. The reduced
revenues were partially offset by higher broadcasting and other
revenues due to promoting an extra event in the second quarter of
2009 compared to 2008.
The Company’s NASCAR triple-header in Dover saw lower
attendance, sponsorships and corporate spending as a result of weak
overall economic conditions.
Operating and marketing expenses were $23,147,000 in the second
quarter of 2009 as compared to $22,108,000 in the second quarter of
2008. The increase is primarily related to the change in our
motorsports event calendar discussed above.
General and administrative expenses of $3,099,000 in the second
quarter of 2009 were consistent with $3,122,000 for the same
quarter last year.
Depreciation and amortization expense was $1,617,000 in the
quarter ended June 30, 2009 compared to $1,704,000 for the
comparable 2008 period. The decrease resulted primarily from the
cessation of depreciation expense at our Memphis track which is
currently classified as held-for-sale and a reduction in our
depreciable asset base resulting from an impairment charge recorded
in the fourth quarter of 2008, partially offset by depreciation on
assets placed in service in June of 2008 related to our Monster
Makeover project in Dover, Delaware. Net interest expense was
$732,000 for the quarter ended June 30, 2009 compared to $1,032,000
in the second quarter of 2008. The decrease was due to lower
average interest rates.
Earnings before income taxes decreased to $6,921,000 in the
second quarter of 2009 compared with $11,449,000 in the comparable
quarter of the prior year.
The effective tax rate for the second quarter of 2009 was 43.8%
compared to 48.9% in the prior year. The decrease in the effective
tax rate was primarily the result of a reduction in our combined
effective state income tax rate based upon the mix of state taxable
income (loss) for the current quarter.
Net earnings for the quarter ended June 30, 2009 were $3,888,000
or $0.11 per diluted share compared with $5,847,000 or $0.16 per
diluted share for the same period last year.
For the six months ended June 30, 2009, revenues were
$35,703,000 compared with $41,927,000 in the prior year. The
Company promoted seven major events in the first half of both
years. Net (loss) earnings were $(800,000) or $(0.02) per diluted
share compared with $1,699,000 or $0.05 per diluted share in the
comparable period of the prior year.
For the first half of 2009 cash provided by operations was
$9,997,000 compared with $4,644,000 in the prior year. Capital
spending, primarily associated with the Monster Makeover project at
Dover International Speedway, was $1,817,000 in the first half of
2009 compared with $6,082,000 in the comparable period in the prior
year.
As previously reported on Form 8-K dated January 30, 2009
and updated on April 24, 2009 and July 8, 2009, our
wholly-owned subsidiary, Midwest Racing, Inc., entered into a stock
purchase agreement dated January 28, 2009, to sell Memphis
Motorsports Park to Gulf Coast Entertainment, L.L.C. Under the
terms of the agreement, Midwest Racing, Inc. will sell all of the
stock of its wholly-owned subsidiary, Memphis International
Motorsports Corporation, the owner of Memphis Motorsports Park, to
Gulf Coast Entertainment for $10 million in cash and a two percent
non-dilutable interest in Gulf Coast Entertainment.
Closing under the stock purchase agreement had been scheduled
for June 29, 2009, but Gulf Coast has not finalized its
project financing. We are currently in the process of negotiating
an amendment to the stock purchase agreement which would allow the
buyer to extend the closing date to September 29, 2009 for
additional consideration.
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 motorsports
events in the United States. Its motorsports subsidiaries operate
four motorsports tracks in three states and promote motorsports
events under the auspices of two of the premier sanctioning bodies
in motorsports – NASCAR and NHRA. The Company owns and operates
Dover International Speedway in Dover, Delaware; Nashville
Superspeedway near Nashville, Tennessee; Gateway International
Raceway near St. Louis, Missouri; and Memphis Motorsports Park near
Memphis, Tennessee.
DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS In Thousands, Except Per Share Amounts (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, 2009 2008 2009 2008 Revenues: Admissions $ 11,922
$ 13,936 $ 11,953 $ 14,736 Event-related 8,751 11,387 8,779 12,352
Broadcasting 14,938 14,077 14,938 14,786 Other
7 15
33 53
35,618 39,415
35,703 41,927
Expenses: Operating and marketing 23,147 22,108 25,346 26,718
General and administrative 3,099 3,122 6,157 6,289 Depreciation and
amortization
1,617
1,704 3,182
3,366 27,863
26,934 34,685
36,373 Operating earnings 7,755 12,481
1,018 5,554 Interest income 3 19 7 50 Interest expense (735
) (1,051 ) (1,519 ) (2,152 ) Loss on sale of investments
(102 ) -
(102 ) -
Earnings (loss) before income tax expense 6,921
11,449 (596 ) 3,452 Income tax expense
3,033 5,602
204 1,753 Net
earnings (loss)
$ 3,888
$ 5,847 $
(800 ) $ 1,699
Net earnings (loss) per common share: Basic
$ 0.11 $
0.16 $ (0.02
) $ 0.05 Diluted
$ 0.11 $
0.16 $ (0.02
) $ 0.05
Weighted average shares outstanding: Basic 36,021 35,940 36,016
35,922 Diluted 36,021 36,030 36,016 36,021
DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEETS In
Thousands (Unaudited) June 30, June 30, December 31, 2009
2008 2008 ASSETS Current assets: Cash and cash equivalents $
514 $ 1,118 $ 288 Accounts receivable 2,923 13,172 1,950
Inventories 350 421 273 Prepaid expenses and other 1,902 3,771
1,697 Receivable from Dover Downs Gaming & Entertainment, Inc.
9 - 11 Prepaid income taxes 43 346 - Deferred income taxes 111 203
152 Current assets held for sale
10,798
- - Total
current assets 16,650 19,031 4,371 Property and equipment,
net 133,283 160,387 144,684 Restricted cash 3,894 3,894 5,219 Other
assets, net 576 1,548 594 Deferred income taxes
263 83
311 Total assets
$
154,666 $ 184,943
$ 155,179
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $ 2,705 $ 3,086 $ 604 Accrued liabilities 3,518 4,525 2,767
Payable to Dover Downs Gaming & Entertainment, Inc. - 1 -
Income taxes payable - - 159 Current portion of bonds payable 1,235
1,130 1,130 Deferred revenue 11,869 17,213 6,962 Current
liabilities held for sale
3,442
- - Total current
liabilities 22,769 25,955 11,622 Revolving line of credit
34,800 45,400 42,200 Bonds payable 1,737 2,969 2,971 Liability for
pension benefits 2,680 774 2,555 Other liabilities 1,994 1,620
1,920 Non current income taxes payable 8,837 9,737 9,630 Deferred
income taxes
15,479
21,386 16,834 Total
liabilities
88,296
107,841 87,732
Stockholders' equity: Common stock 1,812 1,698 1,787 Class A
common stock 1,851 1,942 1,851 Additional paid-in capital 100,725
100,256 100,539 Accumulated deficit (35,899 ) (25,896 ) (34,366 )
Accumulated other comprehensive loss
(2,119
) (898 )
(2,364 ) Total stockholders' equity
66,370 77,102
67,447 Total liabilities and
stockholders' equity
$ 154,666
$ 184,943 $
155,179 DOVER
MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In
Thousands (Unaudited) Six Months Ended June 30, 2009 2008
Operating activities: Net (loss) earnings $ (800 ) $ 1,699
Adjustments to reconcile net
(loss) earnings to net cash provided by operating activities:
Depreciation and amortization 3,182 3,366 Amortization of credit
facility fees 80 94 Stock-based compensation 283 317 Deferred
income taxes (355 ) 1,262 Changes in assets and liabilities:
Accounts receivable (1,245 ) (11,450 ) Inventories (135 ) (236 )
Prepaid expenses and other (577 ) (2,081 ) Receivable from/payable
to Dover Downs Gaming & Entertainment, Inc. 2 19 Prepaid income
taxes/income taxes payable (132 ) (603 ) Accounts payable 2,152
2,252 Accrued liabilities 1,210 1,061 Deferred revenue 5,831 8,524
Other liabilities
501
420 Net cash provided by operating activities
9,997 4,644
Investing activities: Capital expenditures (1,817 ) (6,082 )
Restricted cash 1,325 275 Proceeds from sale of available-for-sale
securities 187 - Purchase of available-for-sale securities
(185 ) (50
) Net cash used in investing activities
(490 ) (5,857
) Financing activities: Borrowings from
revolving line of credit 15,600 18,600 Repayments on revolving line
of credit (23,000 ) (15,500 ) Repayments of bonds payable (1,129 )
(110 ) Dividends paid (733 ) (1,092 ) Repurchase of common stock
(19 ) (137 ) Proceeds from stock options exercised - 216 Excess tax
benefit on stock awards
-
27 Net cash (used in) provided by financing
activities
(9,281 )
2,004 Net increase in cash and cash
equivalents 226 791 Cash and cash equivalents, beginning of period
288 327 Cash
and cash equivalents, end of period
$ 514
$ 1,118
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