DVD Dover Motorsports Inc

Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the fourth quarter and year ended December 31, 2017.

Our fall NASCAR event weekend, which consists of a K&N Pro Series East event, a NASCAR XFINITY Series event and a NASCAR Monster Energy Cup Series event was held on September 29 to October 1 in 2017 and September 30 to October 2 in 2016. As a result, the XFINITY Series event was held during the third quarter of 2017 and the fourth quarter of 2016.

Revenues for the fourth quarter of 2017 were $18,305,000 compared to $20,112,000 in the fourth quarter of 2016. Operating and marketing expenses were $10,125,000 in the fourth quarter of 2017 compared to $11,757,000 in the fourth quarter of 2016. Both decreases were primarily from the timing of the XFINITY Series races previously mentioned.

The overall results for our fall 2017 race weekend were comparable with last year. Higher broadcast revenue was offset by slightly lower event related revenue and higher purses and marketing expense.

General and administrative expenses of $1,753,000 in the fourth quarter of 2017 were slightly lower compared to $1,826,000 in the fourth quarter of 2016, primarily due to lower employee costs.

Costs to remove long-lived assets in 2016 represents costs incurred during the fourth quarter of 2016 to remove a portion of grandstands, seats and structures that were taken out of service and written off in 2015. We spent an additional $286,000 during the first quarter of 2017 to complete the removal of these structures.

Depreciation expense in the fourth quarter of 2017 increased to $1,059,000 from $842,000 in the fourth quarter of 2016. The fourth quarter of 2017 includes $186,000 of accelerated depreciation expense as a result of the Company’s decision to not complete certain improvements at our Dover facility.

Provision for contingent obligation was $117,000 during the fourth quarter of 2017 compared to $2,000 in the fourth quarter of 2016 primarily due to a lower discount rate.

Earnings before income taxes for the fourth quarter of 2017 were $5,233,000 compared to $5,456,000 in the fourth quarter of 2016.

Income tax benefit was $2,410,000 for the fourth quarter of 2017 compared to an expense of $2,211,000 in the fourth quarter of 2016. The Tax Cuts and Jobs Act was signed into law in December 2017. The fourth quarter of 2017 and full-year 2017 results reflect the impact of the new tax law which resulted in an income tax benefit of $4,531,000, or $.13 per share, primarily from revaluing the Company’s net deferred tax liabilities to reflect the recently enacted 21% federal corporate rate.

Net earnings in the fourth quarter of 2017 were $7,643,000 or $.21 per diluted share compared to $3,245,000 or $.09 per diluted share for the fourth quarter of 2016. Net earnings, excluding the tax benefit, were $3,112,000 or $.08 per diluted share in the fourth quarter of 2017.

For the year ended December 31, 2017, total revenues were $46,742,000 compared to $45,873,000 in the prior year. The increase was from higher broadcasting revenue, partially offset by lower admissions revenue and music festival related revenue.

Net earnings for the year ended December 31, 2017 were $8,426,000 or $.23 per diluted share compared to $3,801,000 or $.10 per diluted share for the year ended December 31, 2016. Net earnings for 2017, excluding the aforementioned tax benefit, were $3,895,000 or $.10 per diluted share.

On August 17, 2017, we entered into an agreement with an entity owned by Panattoni Development Company, an international commercial real estate development company, relative to the sale of approximately 147 acres at our Nashville Superspeedway at a purchase price of $35,000 per acre. Closing is expected to occur during the first quarter of 2018. Additionally, we granted the prospective buyer a three-year option on an additional 87 acres at $55,000 per acre. We will continue with our effort to sell the approximately 1,150 acres of Nashville Superspeedway property that would remain after these transactions.

The Company’s financial position continued to strengthen during 2017. Total borrowings outstanding decreased to $3,240,000 at December 31, 2017 from $3,840,000 at December 31, 2016. The Company funded $1.2 million towards its pension obligations in 2017. During the fourth quarter this year, the Company repurchased 52,045 shares of its common stock on the open market at an average price of $2.05 per share, bringing total repurchases for the year to 130,741 shares at an average price of $2.11 per share. In December 2017 the Company paid annual cash dividends on both classes of common stock of $.08 per share compared to $.05 per share in December 2016. Due to the seasonal nature of our business, we will evaluate dividends annually.

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 EndedDecember 31,   Years EndedDecember 31, 2017   2016 2017   2016 Revenues: Admissions $ 2,786 $ 3,173 $ 6,657 $ 6,937 Event-related 2,564 3,166 8,303 8,264 Broadcasting 12,951 13,768 31,775 30,658 Other   4     5     7     14     18,305     20,112     46,742     45,873     Expenses: Operating and marketing 10,125 11,757 28,764 28,197 General and administrative 1,753 1,826 7,314 7,399 Costs to remove long-lived assets - 203 286 203 Depreciation   1,059     842     3,566     3,433     12,937     14,628     39,930     39,232     Operating earnings 5,368 5,484 6,812 6,641   Interest expense, net (19 ) (33 ) (169 ) (199 ) Provision for contingent obligation (117 ) (2 ) (158 ) (75 ) Other income   1     7     52     23     Earnings before income taxes 5,233 5,456 6,537 6,390   Income tax benefit (expense)   2,410     (2,211 )   1,889     (2,589 )   Net earnings $ 7,643   $ 3,245   $ 8,426   $ 3,801     Net earnings per common share: Basic $ 0.21   $ 0.09   $ 0.23   $ 0.10   Diluted $ 0.21   $ 0.09   $ 0.23   $ 0.10     Weighted average shares outstanding: Basic 36,206 36,216 36,275 36,232 Diluted 36,206 36,216 36,275 36,232     DOVER MOTORSPORTS, INC.

RECONCILIATION OF GAAP NET EARNINGS TO ADJUSTED NET EARNINGS

In Thousands, Except Per Share Amounts (Unaudited)      

Three Months EndedDecember 31,

  Years EndedDecember 31, 2017   2016 2017   2016   GAAP net earnings $ 7,643 $ 3,245 $ 8,426 $ 3,801  

Federal income tax reform (1)

  (4,531 )   -   (4,531 )   -   Adjusted net earnings $ 3,112   $ 3,245 $ 3,895   $ 3,801     GAAP net earnings per common share - basic and diluted $ 0.21 $ 0.09 $ 0.23 $ 0.10   Federal income tax reform (1)   (0.13 )   -   (0.13 )   -   Adjusted net earnings per common share - basic and diluted $ 0.08   $ 0.09 $ 0.10   $ 0.10

 

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  The passage of the Tax Cuts and Jobs Act in December 2017 lowered our future federal income tax rate to 21% requiring us to revalue net deferred federal tax liabilities.   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 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 federal income tax reform. 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 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)       December 31,2017   December 31,2016   ASSETS Current assets: Cash $ 1 $ 1 Accounts receivable 476 419 Inventories 15 17 Prepaid expenses and other 1,119 1,104 Income taxes receivable 562 - Assets held for sale   2,455     2,455   Total current assets 4,628 3,996   Property and equipment, net 51,000 52,723 Nashville Superspeedway facility 23,545 23,545 Other assets   1,107     1,022   Total assets $ 80,280   $ 81,286     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 61 $ 347 Accrued liabilities 3,049 2,955 Payable to Dover Downs Gaming & Entertainment, Inc. 7 7 Income taxes payable - 218 Deferred revenue   1,249     1,355   Total current liabilities 4,366 4,882   Revolving line of credit, net 3,240 3,840 Liability for pension benefits 2,819 4,046 Provision for contingent obligation 1,960 1,802 Deferred income taxes   8,673     12,911   Total liabilities   21,058     27,481     Stockholders' equity: Common stock 1,825 1,828 Class A common stock 1,851 1,851 Additional paid-in capital 101,844 101,858 Accumulated deficit (42,858 ) (48,340 ) Accumulated other comprehensive loss   (3,440 )   (3,392 ) Total stockholders' equity   59,222     53,805   Total liabilities and stockholders' equity $ 80,280   $ 81,286       DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands (Unaudited)       Years EndedDecember 31, 2017   2016   Operating activities: Net earnings $ 8,426 $ 3,801

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation 3,566 3,433 Amortization of credit facility fees 65 87 Stock-based compensation 364 284 Excess tax benefits from stock-based compensation - (27 ) Deferred income taxes (4,286 ) (661 ) Provision for contingent obligation 158 75 Changes in assets and liabilities: Accounts receivable (57 ) (246 ) Inventories 2 55 Prepaid expenses and other (97 ) (44 ) Income taxes receivable/payable (699 ) 223 Accounts payable (252 ) 176 Accrued liabilities (3 ) (442 ) Payable to/receivable from Dover Downs Gaming & Entertainment, Inc. - 51 Deferred revenue (106 ) 77 Liability for pension benefits   (1,248 )   (32 ) Net cash provided by operating activities   5,833     6,810     Investing activities: Capital expenditures (1,877 ) (2,580 ) Purchases of available-for-sale securities (176 ) (293 ) Proceeds from sale of available-for-sale securities   145     203   Net cash used in investing activities   (1,908 )   (2,670 )   Financing activities: Borrowings from revolving line of credit 25,680 28,820 Repayments on revolving line of credit (26,280 ) (30,880 ) Dividends paid (2,944 ) (1,840 ) Repurchase of common stock (381 ) (189 ) Excess tax benefits from stock-based compensation - 27 Credit facility fees   -     (78 ) Net cash used in financing activities   (3,925 )   (4,140 )   Net change in cash - - Cash, beginning of year   1     1   Cash, end of year $ 1   $ 1    

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