DVD Dover Motorsports Inc

Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2017.

The Company promoted a NASCAR triple-header and hosted the Firefly Music Festival in Dover during the second quarter of 2017 and 2016. The Company leases a portion of its Dover facility to the promoter of Firefly, provides logistical assistance and handles certain concessions for which the Company retains a percentage of the gross sales.

Revenues for the second quarter of 2017 increased slightly to $25,587,000 from $25,253,000 for the second quarter of 2016. The increase is primarily from the scheduled increase in broadcasting revenue, partially offset by lower admissions revenue for the Dover NASCAR weekend.

Operating and marketing expenses were $14,100,000 in the second quarter of 2017 compared to $13,847,000 in the second quarter of 2016. The increase was due to the scheduled increase in purse and sanction fees for the Dover NASCAR weekend.

General and administrative expenses decreased slightly to $1,783,000 in the second quarter of 2017 from $1,820,000 in the second quarter of 2016.

Depreciation expense decreased slightly to $823,000 in the second quarter of 2017 from $867,000 in the second quarter of 2016. The 2016 expense includes $68,000 of accelerated depreciation from a change in the estimated useful lives of facilities we decided to renovate during 2016.

Net interest expense of $68,000 in the second quarter of 2017 remained consistent compared to $66,000 in the second quarter of 2016.

Provision for contingent obligation was $11,000 during the second quarter of 2017 compared to $70,000 during the second quarter of 2016 primarily due to changes in discount rates.

Earnings before income taxes for the second quarter of 2017 were $8,808,000 compared with $8,575,000 for the second quarter of 2016.

Net earnings for the second quarter of 2017 were $5,203,000 or $0.14 per diluted share compared to $5,066,000 or $0.14 per diluted share in the second quarter of 2016.

At June 30, 2017, the Company’s total indebtedness was $11,200,000 compared with $1,500,000 at June 30, 2016. The increase is attributable to the timing of receipt of our share of broadcast revenue. The Company received its broadcast revenue from NASCAR in July of 2017. In 2016, broadcast revenues were received in June.

As previously reported, on July 21, 2017 we extended our agreement for the sale of our Nashville facility for an additional thirty days to allow for time to finalize agreements for a restructured transaction that contemplates the immediate sale of 150 acres at $35,000 per acre and the grant of a three year option on an additional 150 acres at $55,000 per acre. Assuming both transactions close, we would still have more than 1,000 acres and the speedway would remain intact while we continue to explore future development options.

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 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 In Thousands, Except Per Share Amounts (Unaudited)           Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Revenues: Admissions $ 3,446 $ 3,682 $ 3,446 $ 3,682 Event-related 4,634 4,674 4,744 4,813 Broadcasting 17,505 16,890 17,505 16,890 Other   2     7     2     7     25,587     25,253     25,697     25,392     Expenses: Operating and marketing 14,100 13,847 15,154 15,053 General and administrative 1,783 1,820 3,791 3,774 Costs to remove long-lived assets - - 286 - Depreciation   823     867     1,644     1,763     16,706     16,534     20,875     20,590     Operating earnings 8,881 8,719 4,822 4,802   Interest expense, net (68 ) (66 ) (116 ) (125 ) Provision for contingent obligation (11 ) (70 ) (52 ) (56 ) Other income (expense)   6     (8 )   46     (8 )   Earnings before income taxes 8,808 8,575 4,700 4,613   Income tax expense   (3,605 )   (3,509 )   (1,902 )   (1,890 )   Net earnings $ 5,203   $ 5,066   $ 2,798   $ 2,723     Net earnings per common share: Basic $ 0.14   $ 0.14   $ 0.08   $ 0.07   Diluted $ 0.14   $ 0.14   $ 0.08   $ 0.07     Weighted average shares outstanding: Basic 36,308 36,245 36,307 36,248 Diluted 36,308 36,245 36,307 36,248           DOVER MOTORSPORTS, INC. RECONCILIATION OF GAAP EARNINGS BEFORE INCOME TAXES TO ADJUSTED EARNINGS BEFORE INCOME TAXES AND RECONCILIATION OF GAAP NET EARNINGS TO ADJUSTED NET EARNINGS In Thousands, Except Per Share Amounts (Unaudited)     Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016   GAAP earnings before income taxes $ 8,808 $ 8,575 $ 4,700 $ 4,613   Accelerated depreciation (1) - 68 - 159   Costs to remove long-lived assets (2)   -   -   286   -   Adjusted earnings before income taxes $ 8,808 $ 8,643 $ 4,986 $ 4,772   GAAP net earnings $ 5,203 $ 5,066 $ 2,798 $ 2,723   Accelerated depreciation, net of income taxes (1) - 40 - 94   Costs to remove long-lived assets, net of income taxes (2)   -   -   167   -   Adjusted net earnings $ 5,203 $ 5,106 $ 2,965 $ 2,817     GAAP net earnings per common share - basic and diluted $ 0.14 $ 0.14 $ 0.08 $ 0.07   Accelerated depreciation, net of income taxes (1) - - - -   Costs to remove long-lived assets, net of income taxes (2)   -   -   -   -   Adjusted net earnings per common share - basic and diluted $ 0.14 $ 0.14 $ 0.08 $ 0.07 _________________________ (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 and second quarters 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.

   

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 before income taxes, adjusted net earnings and adjusted net earnings 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 earnings before income taxes, net earnings or net earnings per common share - basic and diluted, which are determined in accordance with GAAP.

        DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEETS In Thousands (Unaudited)     June 30, June 30, December 31, 2017 2016 2016   ASSETS Current assets: Cash $ 1 $ 1 $ 1 Accounts receivable 14,453 1,565 419 Inventories 17 16 17 Prepaid expenses and other 995 977 1,104 Assets held for sale   26,000     26,000     26,000   Total current assets 41,466 28,559 27,541   Property and equipment, net 52,800 53,502 52,723 Other assets   1,068     914     1,022   Total assets $ 95,334   $ 82,975   $ 81,286     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 874 $ 647 $ 347 Accrued liabilities 4,036 3,079 2,858 Payable to Dover Downs Gaming & Entertainment, Inc. 33 14 7 Income taxes payable 1,666 1,405 218 Deferred revenue   2,252     2,403     1,355   Total current liabilities 8,861 7,548 4,785   Revolving line of credit, net 11,200 1,500 3,840 Liability for pension benefits 3,928 3,668 4,143 Provision for contingent obligation 1,854 1,783 1,802 Deferred income taxes   12,692     13,703     12,911   Total liabilities   38,535     28,202     27,481     Stockholders' equity: Common stock 1,838 1,829 1,828 Class A common stock 1,851 1,851 1,851 Additional paid-in capital 101,988 101,747 101,858 Accumulated deficit (45,542 ) (47,578 ) (48,340 ) Accumulated other comprehensive loss   (3,336 )   (3,076 )   (3,392 ) Total stockholders' equity   56,799     54,773     53,805   Total liabilities and stockholders' equity $ 95,334   $ 82,975   $ 81,286       DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands (Unaudited)     Six Months Ended June 30, 2017 2016   Operating activities: Net earnings $ 2,798 $ 2,723

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

Depreciation 1,644 1,763 Amortization of credit facility fees 32 48 Stock-based compensation 245 171 Excess tax benefits from stock-based compensation - (27 ) Deferred income taxes (258 ) (80 ) Provision for contingent obligation 52 56 Changes in assets and liabilities: Accounts receivable (14,034 ) (1,392 ) Inventories - 56 Prepaid expenses and other 46 143 Accounts payable 561 459 Accrued liabilities 1,098 (136 ) Payable to/receivable from Dover Downs Gaming & Entertainment, Inc. 26 58 Income taxes payable/prepaid income taxes 1,449 1,405 Deferred revenue 897 1,125 Liability for pension benefits   (131 )   (63 ) Net cash (used in) provided by operating activities   (5,575 )   6,309     Investing activities: Capital expenditures (1,675 ) (1,671 ) Purchases of available-for-sale securities (126 ) (103 ) Proceeds from sale of available-for-sale securities   121     24   Net cash used in investing activities   (1,680 )   (1,750 )   Financing activities: Borrowings from revolving line of credit 12,140 12,720 Repayments on revolving line of credit (4,780 ) (17,120 ) Repurchase of common stock (105 ) (186 ) Excess tax benefits from stock-based compensation   -     27   Net cash provided by (used in) financing activities   7,255     (4,559 )   Net change in cash - - Cash, beginning of period   1     1   Cash, end of period $ 1   $ 1    

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Dover Motorsports, Inc.Timothy R. Horne – Sr. Vice President - Finance302-857-3292