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8-K - FORM 8-K - DOVER MOTORSPORTS INCd287713d8k.htm

Exhibit 99.1

LOGO

 

FOR IMMEDIATE RELEASE    For further information, call:
   Timothy R. Horne - Sr. Vice President-Finance
Dover, Delaware, January 26, 2012    (302) 857-3292

DOVER MOTORSPORTS, INC. REPORTS RESULTS

FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2011

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
December 31,
    Years Ended
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
December 31,
    Years Ended
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,
2011
    December 31,
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