DVD Dover Motorsports Inc

Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the three months ended March 31, 2018.

The Company historically reports a loss in the first quarter due to the seasonality of our motorsports business. No major events were promoted during the first quarter of 2018 or 2017; therefore, our revenues were minimal.

Operating and marketing expenses of $1,151,000 in the first quarter of 2018 increased from $1,054,000 in the first quarter of 2017 primarily due to the timing of advertising costs.

General and administrative expenses of $1,955,000 in the first quarter of 2018 decreased slightly from $2,020,000 in the first quarter of 2017 primarily from lower employee costs.

Depreciation expense increased to $878,000 in the first quarter of 2018 from $821,000 in the first quarter of 2017. The increase is due to assets placed in service during the past 12 months.

Costs to remove long-lived assets of $286,000 represent costs incurred during the first quarter of 2017 to remove the remaining grandstands, seats and structures that were taken out of service and written off in 2015.

As previously reported, we closed on the sale of a parcel of land in Nashville for net proceeds of approximately $5 million after closing costs, resulting in a gain of $2,512,000.

Net interest expense was $40,000 in the first quarter of 2018 compared to $48,000 in the first quarter of 2017.

Loss before income taxes was $1,349,000 for the first quarter of 2018 compared to $4,108,000 for the first quarter of 2017. The results for 2018 include the gain on sale of land and the results for 2017 include costs to remove long-lived assets. On an adjusted basis, excluding these items, loss before income taxes was $3,861,000 for the first quarter of 2018 compared to $3,822,000 for the first quarter of 2017.

The Company’s effective income tax rate was 26.5% in the first quarter of 2018 compared with 41.5% in the first quarter of 2017, lower primarily from the impact of the Tax Cuts and Jobs Act.

Net loss for the first quarter of 2018 was $992,000 or $.03 per diluted share compared with a loss of $2,405,000 or $.07 per diluted share in the first quarter of 2017. Net loss, adjusted for the aforementioned items, was $2,976,000 or $.08 per diluted share for the first quarter of 2018 compared to $2,238,000 or $.06 per diluted share for the first quarter of 2017.

At March 31, 2018, the Company’s total indebtedness was $500,000 compared with $6,360,000 at March 31, 2017.

During the first quarter this year, the Company repurchased 92,479 shares of its common stock on the open market at an average price of $2.11 per share.

225 acres of our Nashville Speedway property are under option for a total purchase price of approximately $12.4 million. The Company continues to hold over 1,000 acres of prime commercial real estate.

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 OPERATIONS In Thousands, Except Per Share Amounts (Unaudited)               Three Months Ended March 31, 2018 2017 Revenues: Event-related $ 226   $ 110     Expenses: Operating and marketing 1,151 1,054 General and administrative 1,955 2,020 Depreciation 878 821 Costs to remove long-lived assets   -     286     3,984     4,181     Gain on sale of land   2,512     -     Operating loss (1,246 ) (4,071 )   Interest expense, net (40 ) (48 ) Provision for contingent obligation (67 ) (41 ) Other income   4     52     Loss before income taxes (1,349 ) (4,108 )   Income tax benefit   357     1,703     Net loss $ (992 ) $ (2,405 )   Net loss per common share: Basic $ (0.03 ) $ (0.07 ) Diluted $ (0.03 ) $ (0.07 )   Weighted average shares outstanding: Basic 36,234 36,306 Diluted 36,234 36,306     DOVER MOTORSPORTS, INC. RECONCILIATION OF GAAP LOSS BEFORE INCOME TAXES TO ADJUSTED LOSS BEFORE INCOME TAXES AND RECONCILIATION OF GAAP NET LOSS TO ADJUSTED NET LOSS In Thousands, Except Per Share Amounts (Unaudited)                   Three Months Ended March 31, 2018 2017   GAAP loss before income taxes $ (1,349 ) $ (4,108 )   Gain on sale of land (1) (2,512 ) -   Costs to remove long-lived assets (2)   -     286     Adjusted loss before income taxes $ (3,861 ) $ (3,822 )   GAAP net loss $ (992 ) $ (2,405 )   Gain on sale of land, net of income taxes (1) (1,984 ) -   Costs to remove long-lived assets, net of income taxes (2)   -     167     Adjusted net loss $ (2,976 ) $ (2,238 )

 

  GAAP net loss per common share - basic and diluted $ (0.03 ) $ (0.07 )   Gain on sale of land, net of income taxes (1) (0.05 ) -   Costs to remove long-lived assets, net of income taxes (2)   -     -     Adjusted net loss per common share - basic and diluted (3) $ (0.08 ) $ (0.06 )

 

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(1)    

During the first quarter of 2018, we closed on the sale of a parcel of land at our Nashville Superspeedway facility resulting in a gain on sale.

  (2)

Costs to remove long-lived assets represents costs incurred to remove and dispose of certain grandstand seating at our Dover International Speedway facility.

  (3)

The components of GAAP net loss per common share for the three months ended March 31, 2017 do not add to the adjusted net loss per common share due to rounding.

   

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 before income taxes, adjusted net loss and adjusted net loss per common share - basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned gain on sale of land 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 loss before income taxes, net loss or net loss per common share - basic and diluted, which are determined in accordance with GAAP.

                  DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEETS In Thousands (Unaudited)     March 31, March 31, December 31, 2018 2017 2017   ASSETS Current assets: Cash $ 352 $ 1 $ 1 Accounts receivable 1,935 1,438 476 Inventories 15 18 15 Prepaid expenses and other 1,290 1,515 1,119 Income taxes receivable 562 - 562 Assets held for sale   -     2,455     2,455   Total current assets 4,154 5,427 4,628   Property and equipment, net 50,261 52,326 51,000 Nashville Superspeedway facility 23,567 23,545 23,545 Other assets   1,086     1,052     1,107   Total assets $ 79,068   $ 82,350   $ 80,280     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 166 $ 352 $ 61 Accrued liabilities 2,403 2,263 3,049 Payable to Dover Downs Gaming & Entertainment, Inc. 12 8 7 Income taxes payable - 103 - Contract liabilities   5,298     4,703     1,249   Total current liabilities 7,879 7,429 4,366   Revolving line of credit, net 500 6,360 3,240 Liability for pension benefits 2,263 3,992 2,819 Provision for contingent obligation 2,027 1,843 1,960 Deferred income taxes   8,326     11,223     8,673   Total liabilities   20,995     30,847     21,058     Stockholders' equity: Common stock 1,826 1,838 1,825 Class A common stock 1,851 1,851 1,851 Additional paid-in capital 101,659 101,929 101,844 Accumulated deficit (43,777 ) (50,745 ) (42,858 ) Accumulated other comprehensive loss   (3,486 )   (3,370 )   (3,440 ) Total stockholders' equity   58,073     51,503     59,222   Total liabilities and stockholders' equity $ 79,068   $ 82,350   $ 80,280                       DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands (Unaudited)   Three Months Ended March 31, 2018 2017 Operating activities: Net loss $ (992 ) $ (2,405 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation 878 821 Amortization of credit facility fees 16 16 Stock-based compensation 105 186 Deferred income taxes (357 ) (1,703 ) Provision for contingent obligation 67 41 Losses on equity investments 16 - Gain on sale of land (2,512 ) - Changes in assets and liabilities: Accounts receivable (1,459 ) (1,019 ) Inventories - (1 ) Prepaid expenses and other (180 ) (460 ) Income taxes receivable/payable - (115 ) Accounts payable 105 (184 ) Accrued liabilities (646 ) (595 ) Payable to Dover Downs Gaming & Entertainment, Inc. 5 1 Contract liabilities 4,049 3,348 Liability for pension benefits   (519 )   (109 ) Net cash used in operating activities   (1,424 )   (2,178 )   Investing activities: Capital expenditures (139 ) (235 ) Proceeds from sale of land, net 4,945 - Purchases of equity investments (35 ) (95 ) Proceeds from sale of equity investments   33     93   Net cash provided by (used in) investing activities   4,804     (237 )   Financing activities: Borrowings from revolving line of credit 2,460 3,580 Repayments on revolving line of credit (5,200 ) (1,060 ) Repurchase of common stock   (289 )   (105 ) Net cash (used in) provided by financing activities   (3,029 )   2,415     Net change in cash 351 - Cash, beginning of period   1     1   Cash, end of period $ 352   $ 1    

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