Business Wire | Jul 30, 2020 06:55AM EDT

Dover Motorsports, Inc. Reports Results for the Second Quarter of 2020 and Closing of Nashville Land Sale

Jul. 30, 2020

DOVER, Del.--(BUSINESS WIRE)--Jul. 30, 2020--Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2020.

The COVID-19 pandemic caused the postponement of the Company's scheduled May NASCAR weekend and the cancelation of the Firefly Music Festival ("Firefly"). The three NASCAR events originally scheduled to be held in May will now be held without fans in combination with our already scheduled August NASCAR weekend events. Firefly will not be rescheduled in 2020, though it is expected to return in 2021. The Company promoted a NASCAR triple-header and hosted Firefly in Dover during the second quarter of 2019. Accordingly, the results for the second quarter of 2020 are not comparable to last year.

Revenues for the second quarter of 2020 were $110,000 compared to $24,838,000 for the second quarter of 2019. The decrease is primarily from the schedule changes described above.

Operating and marketing expenses decreased to $812,000 in the second quarter of 2020 from $14,584,000 in the second quarter of 2019. The decrease is also from the schedule changes and cost cutting efforts implemented at the onset of the pandemic.

General and administrative expenses were $1,877,000 in the second quarter of 2020 compared to $1,826,000 in the second quarter of 2019.

The adjustment to the contingent obligation was a benefit of $353,000 in the second quarter of 2020 compared to an expense of $135,000 during the second quarter of 2019, primarily from changed sales tax assumptions associated with the planned reopening of Nashville Superspeedway.

Other income increased to $163,000 in the second quarter of 2020 from $57,000 in the second quarter of 2019, primarily from higher gains on equity investments.

Loss before income taxes for the second quarter of 2020 was ($2,844,000) compared to earnings before income taxes of $7,546,000 for the second quarter of 2019.

The Company's effective income tax rate was a benefit of 75.8% in the second quarter of 2020 and is the result of reversing a portion of a previously booked valuation allowance on Tennessee state deferred tax assets, which we now expect to realize with the reopening of the Nashville Superspeedway next year.

Net loss for the second quarter of 2020 was ($689,000) or ($0.02) per diluted share compared to net earnings for the second quarter of 2019 of $5,501,000 or $0.15 per diluted share.

On July 29, 2020, we closed on the sale of approximately 97 acres of property near our Nashville Superspeedway pursuant to an option agreement with an entity owned by Panattoni Development Company. Proceeds from the sale, less closing costs, were approximately $6.5 million. The purchaser had previously paid to us a $500,000 deposit that was credited to the purchase price. Net proceeds after taxes are estimated to be approximately $5.3 million. None of the acreage sold extends to the land on which our superspeedway is sited and the Company continues to hold approximately 1,000 acres of commercial real estate, including the superspeedway.

At June 30, 2020, the Company had no outstanding indebtedness and almost $2.9 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 EARNINGSIn Thousands, Except Per Share Amounts(Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019

Revenues:Admissions $ - $ 2,502 $ - $ 2,502

Event-related 110 3,453 314 3,582

Broadcasting - 18,878 - 18,878

Other - 5 - 5

110 24,838 314 24,967

Expenses:Operating and marketing 812 14,584 1,800 15,639

General and administrative 1,877 1,826 3,864 3,742

Depreciation 765 794 1,533 1,587

Cost to remove long-lived assets - - 341 -

3,454 17,204 7,538 20,968

Gain on sale of land - - - 139

Operating (loss) earnings (3,344 ) 7,634 (7,224 ) 4,138

Interest expense, net (16 ) (10 ) (13 ) (16 )

Benefit (provision) for contingent 353 (135 ) (16 ) (246 )obligationOther income, net 163 57 25 189

(Loss) earnings before income taxes (2,844 ) 7,546 (7,228 ) 4,065

Income tax benefit (expense) 2,155 (2,045 ) 3,399 (1,054 )

Net (loss) earnings $ (689 ) $ 5,501 $ (3,829 ) $ 3,011

Net (loss) earnings per commonshare:Basic $ (0.02 ) $ 0.15 $ (0.11 ) $ 0.08

Diluted $ (0.02 ) $ 0.15 $ (0.11 ) $ 0.08

Weighted average sharesoutstanding:Basic 35,836 36,010 35,835 36,021

Diluted 35,836 36,010 35,835 36,021

DOVER MOTORSPORTS, INC.CONSOLIDATED BALANCE SHEETSIn Thousands(Unaudited) June 30, June 30, December 31, 2020 2019 2019

ASSETSCurrent assets:Cash $ 2,886 $ 8,989 $ 7,577

Accounts receivable 1,035 1,449 645

Inventories 18 20 18

Prepaid expenses and other 1,493 933 1,186

Income taxes receivable 353 - 283

Assets held for sale 1,622 2,203 -

Total current assets 7,407 13,594 9,709

Property and equipment, net 68,398 69,881 71,357

Right of use asset 150 231 188

Other assets 1,156 1,169 1,212

Total assets $ 77,111 $ 84,875 $ 82,466

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 26 $ 712 $ 119

Accrued liabilities 2,948 3,053 3,710

Income taxes payable - 1,149 -

Contract liabilities 3,676 2,008 976

Non-refundable deposit 500 - -

Total current liabilities 7,150 6,922 4,805

Liability for pension benefits 863 666 1,016

Lease liability 73 157 112

Non-refundable deposit - 500 500

Provision for contingent obligation 3,404 2,630 3,389

Deferred income taxes 5,300 8,074 8,676

Total liabilities 16,790 18,949 18,498

Stockholders' equity:Common stock 1,788 1,809 1,782

Class A common stock 1,851 1,851 1,851

Additional paid-in capital 101,112 101,388 100,994

Accumulated deficit (40,797 ) (35,815 ) (36,968 )

Accumulated other comprehensive loss (3,633 ) (3,307 ) (3,691 )

Total stockholders' equity 60,321 65,926 63,968

Total liabilities and stockholders' $ 77,111 $ 84,875 $ 82,466 equity

DOVER MOTORSPORTS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSIn Thousands(Unaudited) Six Months Ended June 30, 2020 2019

Operating activities:Net (loss) earnings $ (3,829 ) $ 3,011

Adjustments to reconcile net (loss) earnings to netcash (used in) provided by operating activities:Depreciation 1,533 1,587

Amortization of credit facility fees 28 31

Stock-based compensation 218 176

Deferred income taxes (3,399 ) (317 )

Provision for contingent obligation 16 246

Losses (gains) on equity investments 50 (113 )

Gain on sale of land - (139 )

Changes in assets and liabilities:Accounts receivable (390 ) (773 )

Inventories - 1

Prepaid expenses and other (321 ) 58

Accounts payable (93 ) 555

Accrued liabilities (762 ) (104 )

Payable to Dover Downs Gaming & Entertainment, Inc. - (9 )

Income taxes payable/receivable (70 ) 1,031

Contract liabilities 2,700 868

Liability for pension benefits (73 ) (36 )

Net cash (used in) provided by operating activities (4,392 ) 6,073

Investing activities:Capital expenditures (196 ) (2,154 )

Proceeds from sale of land and equipment, net - 827

Non-refundable deposit received - 500

Purchases of equity investments (240 ) (9 )

Proceeds from sale of equity investments 231 1

Net cash used in investing activities (205 ) (835 )

Financing activities:Borrowings from revolving line of credit 180 4,060

Repayments on revolving line of credit (180 ) (4,060 )

Repurchase of common stock (94 ) (200 )

Net cash used in financing activities (94 ) (200 )

Net (decrease) increase in cash (4,691 ) 5,038

Cash, beginning of period 7,577 3,951

Cash, end of period $ 2,886 $ 8,989

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CONTACT: Timothy R. Horne - Sr. Vice President - Finance (302) 883-6592