Business Wire | Jan 28, 2021 06:55AM EST

Dover Motorsports, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2020

Jan. 28, 2021

DOVER, Del.--(BUSINESS WIRE)--Jan. 28, 2021--Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the fourth quarter and year ended December 31, 2020.

We held no major events during the fourth quarter this year. During the fourth quarter of 2019, we held our fall NASCAR weekend, which consisted of a K&N Pro Series East event, an Xfinity Series event and a NASCAR Cup Series event. Accordingly, the results for the fourth quarter of 2020 are not comparable to last year.

Revenues for the fourth quarter of 2020 were $185,000 compared to $20,794,000 in the fourth quarter of 2019. Operating and marketing expenses were $996,000 in the fourth quarter of 2020 compared to $12,255,000 in the fourth quarter of 2019. Both decreases were primarily from the aforementioned schedule difference.

General and administrative expenses increased to $1,934,000 in the fourth quarter of 2020 compared to $1,894,000 in the fourth quarter of 2019, primarily from the reopening of Nashville Superspeedway.

Depreciation expense in the fourth quarter of 2020 decreased to $757,000 from $1,097,000 in the fourth quarter of 2019. The decrease is due to $293,000 of accelerated depreciation expense in the fourth quarter of 2019 related to the removal of grandstand seats at our Dover facility.

We incurred $1,170,000 in costs related to the removal of the grandstands during the fourth quarter of 2019.

The adjustment to the contingent obligation was a benefit of $59,000 during the fourth quarter of 2020 compared to an expense of $638,000 in the fourth quarter of 2019. The current year benefit was primarily the result of an increase in the discount rate.

Loss before income taxes for the fourth quarter of 2020 was ($3,377,000) compared to earnings before income taxes of $3,809,000 in the fourth quarter of 2019.

The Company's effective income tax rate was a benefit of 44.4% in the fourth quarter of 2020 and was impacted by the reversal of a portion of a previously booked valuation allowance on Tennessee state deferred tax assets, which we now expect to realize after entering into an agreement during the fourth quarter to sell approximately 350 acres of property near our Nashville Superspeedway facility.

Net loss for the fourth quarter of 2020 was ($1,879,000) or ($.05) per diluted share compared to net earnings of $2,903,000 or $.08 per diluted share in the fourth quarter of 2019. Net earnings for the fourth quarter of 2019, adjusted for the accelerated depreciation and grandstand removal costs, were $3,958,000.

As of December 31, 2020, the Company had no outstanding indebtedness and approximately $13 million in available cash.

* * *

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 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 (LOSS)In Thousands, Except Per Share Amounts(Unaudited) Three Months Ended Years Ended

December 31, December 31,

2020 2019 2020 2019

Revenues:Admissions $ - $ 2,466 $ - $ 4,968

Event-related 177 2,929 2,885 6,713

Broadcasting - 15,389 35,646 34,267

Other 8 10 12 15

185 20,794 38,543 45,963

Expenses:Operating and marketing 996 12,255 25,221 29,241

General and administrative 1,934 1,894 7,676 7,524

Depreciation 757 1,097 3,046 4,353

Cost to remove long-lived assets - 1,170 341 1,170

3,687 16,416 36,284 42,288

Gain on sale of land - - 4,843 4,325

Operating (loss) earnings (3,502 ) 4,378 7,102 8,000

Interest (expense) income (1 ) 18 (35 ) 22

Benefit (provision) for contingent 59 (638 ) 171 (1,005 )obligationOther income 67 51 182 269

(Loss) earnings before income (3,377 ) 3,809 7,420 7,286 taxes Income tax benefit (expense) 1,498 (906 ) 62 (1,786 )

Net (loss) earnings $ (1,879 ) $ 2,903 $ 7,482 $ 5,500

Net (loss) earnings per commonshare:Basic $ (0.05 ) $ 0.08 $ 0.21 $ 0.15

Diluted $ (0.05 ) $ 0.08 $ 0.21 $ 0.15

Weighted average sharesoutstanding:Basic 35,836 35,795 35,836 35,946

Diluted 35,836 35,795 35,836 35,946

DOVER MOTORSPORTS, INC.RECONCILIATION OF GAAP (LOSS) EARNINGS BEFORE INCOME TAXESTO ADJUSTED (LOSS) EARNINGS BEFORE INCOME TAXESAND RECONCILIATION OF GAAP NET (LOSS) EARNINGS TO ADJUSTED NET (LOSS) EARNINGSIn Thousands, Except Per Share Amounts(Unaudited)Three Months Ended

Years Ended

December 31,

December 31,

2020

2019

2020

2019

GAAP (loss) earnings before income taxes$

(3,377

)

$

3,809

$

7,420

$

7,286

Gain on sale of land (1)-

-

(4,843

)

(4,325

)

Cost to remove long-lived assets (2)-

1,170

341

1,170

Accelerated depreciation (3)-

293

-

1,172

Adjusted (loss) earnings before income taxes$

(3,377

)

$

5,272

$

2,918

$

5,303

GAAP net (loss) earnings$

(1,879

)

$

2,903

$

7,482

$

5,500

Gain on sale of land, net of income taxes (1)-

-

(3,826

)

(3,417

)

Cost to remove long-lived assets, net of income taxes (2)-

844

246

844

Accelerated depreciation, net of income taxes (3)-

211

-

845

Adjusted net (loss) earnings$

(1,879

)

$

3,958

$

3,902

$

3,772

GAAP net (loss) earnings per common share - basic and diluted$

(0.05

)

$

0.08

$

0.21

$

0.15

Gain on sale of land, net of income taxes (1)-

-

(0.11

)

(0.09

)

Cost to remove long-lived assets, net of income taxes (2)-

0.02

0.01

0.02

Accelerated depreciation, net of income taxes (3)-

0.01

-

0.02

Adjusted net (loss) earnings per common share - basic and diluted(4)$

(0.05

)

$

0.11

$

0.11

$

0.11

DOVER MOTORSPORTS, INC.RECONCILIATION OF GAAP (LOSS) EARNINGS BEFORE INCOME TAXESTO ADJUSTED (LOSS) EARNINGS BEFORE INCOME TAXESAND RECONCILIATION OF GAAP NET (LOSS) EARNINGS TO ADJUSTED NET (LOSS) EARNINGSIn Thousands, Except Per Share Amounts(Unaudited) Three Months Ended Years Ended

December 31, December 31,

2020 2019 2020 2019

GAAP (loss) earnings before $ (3,377 ) $ 3,809 $ 7,420 $ 7,286 income taxes Gain on sale of land^ (1) - - (4,843 ) (4,325 )

Cost to remove long-lived assets - 1,170 341 1,170 ^ (2) Accelerated depreciation^ (3) - 293 - 1,172

Adjusted (loss) earnings before $ (3,377 ) $ 5,272 $ 2,918 $ 5,303 income taxes GAAP net (loss) earnings $ (1,879 ) $ 2,903 $ 7,482 $ 5,500

Gain on sale of land, net of - - (3,826 ) (3,417 )income taxes^ (1) Cost to remove long-lived - 844 246 844 assets, net of income taxes^ (2) Accelerated depreciation, net of - 211 - 845 income taxes^ (3) Adjusted net (loss) earnings $ (1,879 ) $ 3,958 $ 3,902 $ 3,772

GAAP net (loss) earnings per $ (0.05 ) $ 0.08 $ 0.21 $ 0.15 common share - basic and diluted Gain on sale of land, net of - - (0.11 ) (0.09 )income taxes^ (1) Cost to remove long-lived - 0.02 0.01 0.02 assets, net of income taxes^ (2) Accelerated depreciation, net of - 0.01 - 0.02 income taxes^ (3) Adjusted net (loss) earnings per $ (0.05 ) $ 0.11 $ 0.11 $ 0.11 common share - basic and diluted^(4)(1)

During 2020, we closed on the sale of a parcel of land at our Nashville Superspeedway facility resulting in a gain of $4,843,000.

During 2019, we closed on the sale of parcels of land at our Nashville Superspeedway facility resulting in gains of $4,186,00 and $139,000.

These transactions were tax effected using our federal statutory rate as we had available state net operating losses.

(2)

Related to the decision to remove grandstand seats at Dover International Speedway, we incurred $341,000 and $1,170,000 of costs to remove these assets in 2020 and 2019, respectively. These amounts were tax effected using our federal and state statutory rates.

(3)

During the third quarter of 2019, we made the decision to remove certain grandstand seating at our Dover International Speedway facility at the end of the 2019 race season. As a result, we shortened the service lives of these assets which resulted in $879,000 and $293,000 of accelerated depreciation being recorded in the third quarter and fourth quarter of 2019, respectively. These amounts were tax effected using our federal and state statutory rates.

(4)

The components of the GAAP net earnings per common share for the year ended December 31, 2019 do not add to the adjusted net earnings 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 earnings (loss) before income taxes, adjusted net earnings (loss) and adjusted net earnings (loss) per common share - basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned gains on sale of land, costs to remove long-lived assets and accelerated depreciation. 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 (loss) before income taxes, net earnings (loss) or net earnings (loss) per common share - basic and diluted, which are determined in accordance with GAAP.

^ During 2020, we closed on the sale of a parcel of land at our Nashville(1) Superspeedway facility resulting in a gain of $4,843,000.



During 2019, we closed on the sale of parcels of land at our Nashville Superspeedway facility resulting in gains of $4,186,00 and $139,000.



These transactions were tax effected using our federal statutory rate as we had available state net operating losses.



Related to the decision to remove grandstand seats at Dover International^ Speedway, we incurred $341,000 and $1,170,000 of costs to remove these(2) assets in 2020 and 2019, respectively. These amounts were tax effected using our federal and state statutory rates.



During the third quarter of 2019, we made the decision to remove certain grandstand seating at our Dover International Speedway facility at the end^ of the 2019 race season. As a result, we shortened the service lives of(3) these assets which resulted in $879,000 and $293,000 of accelerated depreciation being recorded in the third quarter and fourth quarter of 2019, respectively. These amounts were tax effected using our federal and state statutory rates.



^ The components of the GAAP net earnings per common share for the year ended(4) December 31, 2019 do not add to the adjusted net earnings 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 earnings (loss) before income taxes, adjusted net earnings (loss) and adjusted net earnings (loss) per common share - basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned gains on sale of land, costs to remove long-lived assets and accelerated depreciation. 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 (loss) before income taxes, net earnings (loss) or net earnings (loss) per common share - basic and diluted, which are determined in accordance with GAAP.

DOVER MOTORSPORTS, INC.CONSOLIDATED BALANCE SHEETSIn Thousands(Unaudited)December 31,

December 31,

2020

2019

ASSETSCurrent assets:Cash$

13,059

$

7,577

Accounts receivable601

645

Inventories18

18

Prepaid expenses and other1,557

1,186

Income taxes receivable24

283

Assets held for sale5,844

-

Total current assets21,103

9,709

Property and equipment, net63,075

71,357

Right of use asset112

188

Deferred income taxes2,425

-

Other assets1,322

1,212

Total assets$

88,037

$

82,466

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$

1,061

$

119

Accrued liabilities3,463

3,710

Contract liabilities1,395

976

Non-refundable deposit500

-

Total current liabilities6,419

4,805

Liability for pension benefits871

1,016

Lease liability33

112

Non-refundable deposit-

500

Provision for contingent obligation3,218

3,389

Deferred income taxes8,469

8,676

Total liabilities19,010

18,498

Stockholders' equity:Common stock1,786

1,782

Class A common stock1,851

1,851

Additional paid-in capital101,207

100,994

Accumulated deficit(32,032

)

(36,968

)

Accumulated other comprehensive loss(3,785

)

(3,691

)

Total stockholders' equity69,027

63,968

Total liabilities and stockholders' equity$

88,037

$

82,466

DOVER MOTORSPORTS, INC.CONSOLIDATED BALANCE SHEETSIn Thousands(Unaudited) December 31, December 31,

2020 2019

ASSETSCurrent assets:Cash $ 13,059 $ 7,577

Accounts receivable 601 645

Inventories 18 18

Prepaid expenses and other 1,557 1,186

Income taxes receivable 24 283

Assets held for sale 5,844 -

Total current assets 21,103 9,709

Property and equipment, net 63,075 71,357

Right of use asset 112 188

Deferred income taxes 2,425 -

Other assets 1,322 1,212

Total assets $ 88,037 $ 82,466

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 1,061 $ 119

Accrued liabilities 3,463 3,710

Contract liabilities 1,395 976

Non-refundable deposit 500 -

Total current liabilities 6,419 4,805

Liability for pension benefits 871 1,016

Lease liability 33 112

Non-refundable deposit - 500

Provision for contingent obligation 3,218 3,389

Deferred income taxes 8,469 8,676

Total liabilities 19,010 18,498

Stockholders' equity:Common stock 1,786 1,782

Class A common stock 1,851 1,851

Additional paid-in capital 101,207 100,994

Accumulated deficit (32,032 ) (36,968 )

Accumulated other comprehensive loss (3,785 ) (3,691 )

Total stockholders' equity 69,027 63,968

Total liabilities and stockholders' equity $ 88,037 $ 82,466

DOVER MOTORSPORTS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSIn Thousands(Unaudited)Years Ended

December 31,

2020

2019

Operating activities:Net earnings$

7,482

$

5,500

Adjustments to reconcile net earnings tonet cash provided by operating activities:Depreciation3,046

4,353

Amortization of credit facility fees56

61

Stock-based compensation311

294

Deferred income taxes(2,552

)

413

(Benefit) provision for contingent obligation(171

)

1,005

Gains on equity investments(115

)

(162

)

Gain on sale of land(4,843

)

(4,325

)

Changes in assets and liabilities:Accounts receivable44

31

Inventories-

3

Prepaid expenses and other(398

)

(181

)

Income taxes receivable/payable215

(380

)

Accounts payable710

(8

)

Accrued liabilities(383

)

407

Payable to Dover Downs Gaming & Entertainment, Inc.-

(9

)

Contract liabilities419

(164

)

Liability for pension benefits(137

)

(63

)

Net cash provided by operating activities3,684

6,775

Investing activities:Capital expenditures(1,998

)

(6,446

)

Proceeds from sale of land and equipment, net5,960

7,224

Non-refundable deposit received500

500

Purchases of equity investments(361

)

(51

)

Proceeds from sale of equity investments337

40

Net cash provided by investing activities4,438

1,267

Financing activities:Borrowings from revolving line of credit3,880

4,180

Repayments on revolving line of credit(3,880

)

(4,180

)

Dividends paid(2,546

)

(3,642

)

Repurchase of common stock(94

)

(739

)

Credit facility fees-

(35

)

Net cash used in financing activities(2,640

)

(4,416

)

Net increase in cash5,482

3,626

Cash, beginning of year7,577

3,951

Cash, end of year$

13,059

$

7,577

View source version on businesswire.com: https://www.businesswire.com/news/home/20210128005259/en/

CONTACT: For further information, call: Timothy R. Horne - Sr. Vice President-Finance (302) 883-6592