Dover Motorsports, Inc. (NYSE: DVD) today reported results for
the three months ended June 30, 2011.
As previously reported, the assets, liabilities and operating
results of the Company’s Gateway facility have been reclassified in
the accompanying consolidated financial statements to report
Gateway separately as a discontinued operation.
The Company promoted five major events during the second quarter
of 2011 compared to six major events during the second quarter of
2010. A NASCAR Nationwide Series event promoted at Nashville
Superspeedway in the second quarter of 2010 was held in the third
quarter of 2011.
Revenues for the quarter ended June 30, 2011 were $26,381,000
compared with $29,946,000 in the second quarter of 2010. The
decrease in revenues was primarily due to the schedule change noted
above and from lower admissions and event related revenues at the
Company’s NASCAR triple-header in Dover.
Operating and marketing expenses were $15,488,000 in the second
quarter of 2011 as compared to $18,197,000 in the second quarter of
2010. The decrease was also primarily due to promoting one less
event in the second quarter 2011, as well as from lower expenses
during the Dover NASCAR weekend.
General and administrative expenses of $2,146,000 in the second
quarter of 2011 were down from $2,338,000 for the same quarter last
year. The decrease is due primarily to lower employee costs and
lower costs resulting from the sale of the Memphis facility.
Net interest expense was $592,000 for the quarter ended June 30,
2011 compared to $793,000 in the second quarter of 2010. The
decrease was due to lower borrowing costs as a result of the April
2011 refinancing of the Company’s credit facility and lower average
outstanding borrowings in the second quarter of 2011 compared to
2010. Loss on extinguishment of debt relates to the write-off of
$67,000 of debt issuance costs associated with the previous credit
facility.
Earnings from continuing operations before income tax expense
for the quarter ended June 30, 2011 were $6,748,000 compared with
$7,216,000 in the second quarter of 2010.
The effective tax rate for the second quarter of 2011 was 42.2%
compared to 42.7% in the prior year.
Earnings from continuing operations for the second quarter of
2011 were $3,901,000 or $.11 per diluted share compared to
$4,137,000 or $.11 per diluted share for the second quarter of
2010.
For the second quarter of 2010, loss from discontinued
operations, net of income tax benefit, was $5,822,000 or $.16 per
diluted share. That loss included a non-cash impairment charge, net
of income tax benefit, of $5,176,000 to write-down the carrying
value of the Gateway facility to fair value.
Net earnings were $3,901,000 or $0.11 per diluted share compared
to a net loss of ($1,685,000) or $(0.05) per diluted share for the
same period last year.
At June 30, 2011, the Company’s total indebtedness was
$31,400,000 compared to $35,800,000 at June 30, 2010.
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 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 Six Months Ended June
30, June 30, 2011 2010 2011 2010 Revenues: Admissions $ 6,716 $
8,565 $ 6,716 $ 8,565 Event-related 4,548 6,047 4,578 6,101
Broadcasting 15,115 15,334 15,115 15,334 Other
2 -
102 1
26,381 29,946
26,511 30,001
Expenses: Operating and marketing 15,488 18,197 16,776 19,592
General and administrative 2,146 2,338 4,297 4,824 Depreciation and
amortization
1,340
1,402 2,753
2,817 18,974
21,937 23,826
27,233 Operating earnings 7,407 8,009
2,685 2,768 Interest income 4 4 8 7 Interest expense (596 )
(797 ) (1,441 ) (1,558 ) Other income - - 4 - Loss on
extinguishment of debt
(67 )
- (67 )
-
Earnings from continuing operations before
income tax expense
6,748 7,216 1,189 1,217 Income tax expense
2,847 3,079
786 852
Earnings from continuing operations 3,901 4,137 403 365
Loss from discontinued operation, net of
income tax benefit
- (5,822
) (68 )
(6,649 ) Net earnings (loss)
$ 3,901 $
(1,685 ) $ 335
$ (6,284 ) Net
earnings (loss) per common share - basic: Continuing operations $
0.11 $ 0.11 $ 0.01 $ 0.01 Discontinued operation
- (0.16 )
- (0.18
) Net earnings (loss)
$ 0.11
$ (0.05 )
$ 0.01 $
(0.17 ) Net earnings (loss) per
common share - diluted: Continuing operations $ 0.11 $ 0.11 $ 0.01
$ 0.01 Discontinued operation
-
(0.16 ) -
(0.18 ) Net earnings (loss)
$ 0.11 $
(0.05 ) $ 0.01
$ (0.17 )
Weighted average shares outstanding: Basic 36,195 36,096 36,194
36,091 Diluted 36,195 36,096 36,194 36,091
DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEETS In
Thousands (Unaudited) June 30, June 30, December 31,
2011 2010 2010 ASSETS Current assets: Cash and cash
equivalents $ 355 $ 1,151 $ 69 Accounts receivable 2,796 2,316 743
Inventories 268 268 232 Prepaid expenses and other 1,633 1,542
1,713 Prepaid income taxes 97 - - Deferred income taxes 230 124 242
Current assets held for sale - 2,800 1,875 Current assets of
discontinued operation
-
807 115 Total
current assets 5,379 9,008 4,989 Property and equipment, net
113,768 119,224 116,330 Restricted cash - 2,217 - Other assets, net
911 474 527 Deferred income taxes 112 139 206 Non current assets of
discontinued operation
-
2,082 233 Total
assets
$ 120,170 $
133,144 $ 122,285
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 471 $ 1,277 $ 142 Accrued
liabilities 2,255 2,369 2,470 Payable to Dover Downs Gaming &
Entertainment, Inc. 4 8 18 Income taxes payable - 30 123 Deferred
revenue 7,991 8,335 3,644 Current liabilities of discontinued
operation
49 4,793
685 Total current liabilities
10,770 16,812 7,082 Revolving line of credit 31,400 35,800
38,200 Liability for pension benefits 1,683 1,784 2,291 Other
liabilities 132 989 121 Non current income taxes payable 1,241
2,501 1,241 Deferred income taxes 19,474 18,528 18,843 Non current
liabilities of discontinued operation
-
395 - Total
liabilities
64,700
76,809 67,778
Stockholders' equity: Common stock 1,830 1,821 1,820 Class A common
stock 1,851 1,851 1,851 Additional paid-in capital 101,709 101,217
101,541 Accumulated deficit (48,832 ) (47,278 ) (49,167 )
Accumulated other comprehensive loss
(1,088
) (1,276 )
(1,538 ) Total stockholders' equity
55,470 56,335
54,507 Total liabilities and
stockholders' equity
$ 120,170
$ 133,144 $
122,285 DOVER MOTORSPORTS,
INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands (Unaudited)
Six Months Ended June 30, 2011 2010 Operating
activities: Net earnings (loss) $ 335 $ (6,284 )
Adjustments to reconcile net earnings
(loss) to net cash provided by operating activities:
Depreciation and amortization 2,753 3,151 Amortization of credit
facility fees 269 186 Stock-based compensation 230 339 Deferred
income taxes 296 (3,319 ) Loss on extinguishment of debt 67 -
Impairment charge of discontinued operation - 7,964 Changes in
assets and liabilities: Accounts receivable (1,957 ) (1,422 )
Inventories (36 ) (36 ) Prepaid expenses and other (181 ) (510 )
Prepaid income taxes/income taxes payable (87 ) 53 Accounts payable
325 1,127 Accrued liabilities (613 ) 1,064 Payable to Dover Downs
Gaming & Entertainment, Inc. (14 ) 3 Deferred revenue 4,347
3,858 Other liabilities
152
277 Net cash provided by operating activities
5,886 6,451
Investing activities: Capital expenditures (191 ) (345 )
Proceeds from the sale of property and equipment 1,875 - Restricted
cash - 1,376 Proceeds from the sale of available-for-sale
securities 69 158 Purchase of available-for-sale securities
(70 ) (160
) Net cash provided by investing activities
1,683 1,029
Financing activities: Borrowings from revolving line of credit
49,560 14,100 Repayments on revolving line of credit (56,360 )
(19,300 ) Repayments of bonds payable - (1,234 ) Repurchase of
common stock (52 ) (50 ) Credit facility fees
(431 ) - Net
cash used in financing activities
(7,283
) (6,484 ) Net
increase in cash and cash equivalents 286 996 Cash and cash
equivalents, beginning of period
69
155 Cash and cash equivalents, end of
period
$ 355 $
1,151
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