Dover Motorsports, Inc. (NYSE: DVD) today reported its results
for the quarter and year ended December 31, 2011.
Results for this quarter are not comparable to the prior year’s
quarter due to a race schedule change to the Company’s NASCAR fall
race weekend in Dover, which was held from September 30, 2011
through October 2, 2011. The K&N Pro Series East event was held
during the third quarter of 2011 while the NASCAR Nationwide Series
and Sprint Cup Series races were held during the fourth quarter of
2011. The entire fall race weekend was held during the third
quarter of 2010. Accordingly, the Company promoted two major events
in the fourth quarter of 2011 compared with none in the fourth
quarter of 2010.
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 as a discontinued operation. We also previously announced
that the Company’s Nashville facility had notified NASCAR that it
will not seek 2012 sanction agreements for its two Nationwide
Series and two Camping World Truck Series events. We expect to host
race team testing during 2012 at Nashville and we will continue to
evaluate all of our options for the facility.
For the quarter ended December 31, 2011, revenues were
$22,443,000 compared with $19,000 in the fourth quarter of 2010.
The increase in revenues was due to the Dover International
Speedway schedule change discussed above.
Operating and marketing expenses were $10,768,000 in the fourth
quarter of 2011 compared to $1,266,000 in the fourth quarter of
2010. The increase is due to the schedule change offset by savings
realized from the reduction in operations at the Nashville
facility.
General and administrative expenses of $1,832,000 in the fourth
quarter of 2011 decreased from $2,290,000 for the same quarter last
year. The decrease is primarily due to lower employee costs at
Dover and from savings from the closure of our Nashville
facility.
Depreciation and amortization expense of $843,000 in the fourth
quarter of 2011 decreased from $1,500,000 in the fourth quarter of
2010 primarily due to the previously recorded impairment in the
third quarter of 2011 of all depreciable assets of the Nashville
facility.
Net interest expense was $431,000 for the fourth quarter of 2011
compared to $847,000 in the fourth quarter of 2010. The decrease is
primarily due to lower average outstanding borrowings and lower
interest rates in the fourth quarter of 2011 compared to 2010.
Earnings (loss) from continuing operations before income taxes
for the fourth quarter of 2011 were $8,562,000 compared with
($6,590,000) for the fourth quarter of 2010. The results for the
fourth quarter of 2010 include a non-cash impairment charge of
$809,000 to write down the carrying value of Company’s former
Memphis facility to its fair value. On an adjusted basis, loss from
continuing operations before income taxes for the fourth quarter of
2010 was ($5,781,000). The increase is primarily due to the
schedule change for Dover’s fall race weekend discussed above. The
Company’s financial results are shown on an adjusted basis on the
accompanying schedule – “Reconciliation of GAAP Earnings (Loss) to
Adjusted Earnings (Loss)”.
For the fourth quarter of 2011, loss from discontinued
operation, net of income tax benefit, was ($1,000), compared to
($1,272,000) or ($.04) per diluted share for the fourth quarter of
2010.
Net earnings for the fourth quarter of 2011 were $5,061,000 or
$.14 per diluted share compared to a loss of ($5,305,000) or ($.15)
per diluted share for the same period last year.
For the year ended December 31, 2011, total revenues were
$51,870,000 compared with $54,844,000 in the prior year.
Net loss was ($9,185,000) or ($0.25) per diluted share for the
year ended December 31, 2011 compared to a net loss of ($8,173,000)
or ($0.23) per diluted share for 2010. The current year’s annual
results include a non-cash impairment charge of $15,687,000 to
write down the carrying value of the Nashville facility to its fair
value, a provision for contingent obligation of $2,250,000 and a
loss from discontinued operations of $71,000 while the results for
2010 include the previously mentioned impairment charge of $809,000
and a loss from discontinued operations of $8,885,000. On an
adjusted basis, net income from continuing operations was
$2,419,000 or $.07 per diluted share for the year ended 2011
compared with $1,238,000 or $.03 per diluted share in 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 motorsports
events in the United States. Its motorsports subsidiaries operate
two motorsports tracks in two states and promote NASCAR sanctioned
and other motorsports events. The Company owns and operates 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 Years Ended December 31, December 31,
2011 2010 2011 2010 Revenues: Admissions $ 6,165 $ - $ 13,633 $
16,363 Event-related 4,410 6 10,309 11,594 Broadcasting 11,822 -
27,778 26,872 Other
46
13 150
15 22,443
19 51,870
54,844 Expenses: Operating and marketing
10,768 1,266 31,926 34,286 General and administrative 1,832 2,290
8,329 9,786 Impairment charge - 809 15,687 809 Depreciation and
amortization
843
1,500 4,588
5,825 13,443
5,865 60,530
50,706 Gain from insurance settlement
- 100
- 398
Operating earnings (loss) 9,000 (5,746 ) (8,660 ) 4,536
Interest expense, net (431 ) (847 ) (2,245 ) (2,360 ) Other
(expense) income (2 ) 3 15 6 Provision for contingent obligation (5
) - (2,250 ) - Loss on extinguishment of debt
-
- (67
) -
Earnings (loss) from continuing operations
before income tax (expense) benefit
8,562 (6,590 ) (13,207 ) 2,182 Income tax (expense) benefit
(3,500 ) 2,557
4,093 (1,470
) Earnings (loss) from continuing operations
5,062 (4,033 ) (9,114 ) 712
Loss from discontinued operation, net of
income tax benefit
(1 ) (1,272
) (71 )
(8,885 ) Net earnings (loss)
$ 5,061 $
(5,305 ) $
(9,185 ) $
(8,173 ) Net earnings (loss) per
common share - basic: Continuing operations $ 0.14 $ (0.11 ) $
(0.25 ) $ 0.02 Discontinued operation
-
(0.04 ) -
(0.25 ) Net earnings (loss)
$ 0.14 $
(0.15 ) $ (0.25
) $ (0.23 )
Net earnings (loss) per common share - diluted: Continuing
operations $ 0.14 $ (0.11 ) $ (0.25 ) $ 0.02 Discontinued operation
- (0.04
) -
(0.25 ) Net earnings (loss)
$ 0.14 $
(0.15 ) $ (0.25
) $ (0.23 )
Weighted average shares outstanding: Basic 36,195 36,099
36,194 36,095 Diluted 36,195 36,099 36,194 36,095
DOVER MOTORSPORTS, INC. RECONCILIATION OF GAAP EARNINGS (LOSS) TO
ADJUSTED EARNINGS (LOSS) In Thousands, Except Per Share Amounts
(Unaudited) Three
Months Ended Years Ended December 31, December 31, 2011 2010 2011
2010
GAAP earnings (loss) from continuing
operations before income taxes
$ 8,562 $ (6,590 ) $ (13,207 ) $ 2,182 Non-cash impairment
charge (1) - 809 15,687 809 Provision for contingent
obligation (1)
5 -
2,250 -
Adjusted earnings (loss) from continuing
operations before income taxes
$ 8,567 $
(5,781 ) $
4,730 $ 2,991
GAAP earnings (loss) from continuing operations $ 5,062 $
(4,033 ) $ (9,114 ) $ 712 Non-cash impairment charge, net of
income taxes (1) - 526 10,197 526 Provision for contingent
obligation, net of income taxes (1)
3
- 1,336
- Adjusted earnings (loss) from
continuing operations
$ 5,065
$ (3,507 ) $
2,419 $ 1,238
GAAP earnings (loss) per common share from
continuing operations - diluted
$ 0.14 $ (0.11 ) $ (0.25 ) $ 0.02 Non-cash impairment
charge, net of income taxes (1) - 0.01 0.28 0.01 Provision
for contingent obligation, net of income taxes (1)
- -
0.04 -
Adjusted earnings (loss) per common share
from continuing operations - diluted
$ 0.14 $
(0.10 ) $ 0.07
$ 0.03
(1) On August 3, 2011, we announced that our
wholly-owned subsidiary Nashville Superspeedway had notified NASCAR
that it will not seek 2012 sanction agreements for its two
Nationwide Series and two Camping World Truck Series events. We
conducted the weekly events we had scheduled for the remainder of
2011 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 $2,250,000 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 from the Nashville facility. We
held an auction for the real and personal property comprising our
Memphis Motorsports Park facility on December 14, 2010. The high
bidder for the real estate bid $1,875,000. Since the carrying
amount of the long-lived assets of the Memphis facility exceeded
the sales price, we recognized a non-cash impairment charge of
$809,000 in the fourth quarter of 2010. 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) earnings
from continuing operations before income taxes, adjusted (loss)
earnings from continuing operations and adjusted (loss) earnings
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 (loss)
earnings from continuing operations before income taxes, (loss)
earnings from continuing operations or diluted (loss) earnings per
share from continuing operations, which are determined in
accordance with GAAP. DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS In Thousands (Unaudited)
December 31, December 31, 2011 2010
ASSETS Current assets: Cash $ 15 $ 69 Accounts receivable 689 743
Inventories 115 232 Prepaid expenses and other 1,255 1,713
Receivable from Dover Downs Gaming & Entertainment, Inc. 11 -
Deferred income taxes 67 242 Current assets held for sale - 1,875
Current assets of discontinued operation
-
115 Total current assets 2,152
4,989 Property and equipment, net 96,380 116,330 Other
assets, net 783 527 Deferred income taxes 496 206 Non current
assets of discontinued operation
-
233 Total assets
$
99,811 $ 122,285
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $ 116 $ 142 Accrued liabilities 2,584
2,470 Payable to Dover Downs Gaming & Entertainment, Inc. - 18
Income taxes payable 145 123 Deferred revenue 3,129 3,644 Current
liabilities of discontinued operation
-
685 Total current liabilities 5,974
7,082 Revolving line of credit 29,160 38,200 Liability for
pension benefits 2,713 2,291 Other liabilities 2,250 121 Non
current income taxes payable - 1,241 Deferred income taxes
14,765 18,843 Total
liabilities
54,862
67,778 Stockholders' equity: Common
stock 1,828 1,820 Class A common stock 1,851 1,851 Additional
paid-in capital 101,888 101,541 Accumulated deficit (58,352 )
(49,167 ) Accumulated other comprehensive loss
(2,266 ) (1,538
) Total stockholders' equity
44,949 54,507 Total
liabilities and stockholders' equity
$
99,811 $ 122,285
DOVER MOTORSPORTS, INC. CONSOLIDATED
STATEMENTS OF CASH FLOWS In Thousands (Unaudited)
Years Ended December 31, 2011 2010
Operating activities: Net loss $ (9,185 ) $ (8,173 )
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 4,588 6,190 Amortization of credit
facility fees 382 501 Stock-based compensation 407 662 Deferred
income taxes (4,935 ) (4,128 ) Gain from insurance settlement -
(398 ) Loss on extinguishment of debt 67 208 Facility exit costs -
324 Impairment charge 15,687 8,773 Provision for contingent
obligation 2,250 - Changes in assets and liabilities: Accounts
receivable 150 421 Inventories 86 32 Prepaid expenses and other 174
(132 ) Receivable from/payable to Dover Downs Gaming &
Entertainment, Inc. (29 ) 13 Accounts payable (30 ) (223 ) Accrued
liabilities (965 ) (253 ) Income taxes payable 21 3 Deferred
revenue (515 ) (2,287 ) Other liabilities
(295
) (567 ) Net cash
provided by operating activities
7,858
966 Investing activities: Capital
expenditures (258 ) (488 ) Proceeds from the sale of assets 1,875
129 Insurance proceeds - 398 Restricted cash - 5,333 Proceeds from
the sale of available-for-sale securities 526 179 Purchase of
available-for-sale securities
(532
) (185 ) Net cash
provided by investing activities
1,611
5,366 Financing activities:
Borrowings from revolving line of credit 60,700 32,600 Repayments
on revolving line of credit (69,740 ) (35,400 ) Repayments of bonds
payable - (2,986 ) Premium and fees on extinguishment of debt -
(167 ) Repurchase of common stock (52 ) (50 ) Credit facility fees
(431 ) (415
) Net cash used in financing activities
(9,523 ) (6,418
) Net decrease in cash (54 ) (86 ) Cash,
beginning of period
69
155 Cash, end of period
$
15 $ 69
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