Business Wire | Oct 29, 2020 06:55AM EDT

Dover Motorsports, Inc. Reports Results for the Third Quarter of 2020

Oct. 29, 2020

DOVER, Del.--(BUSINESS WIRE)--Oct. 29, 2020--Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended September 30, 2020.

As previously disclosed, the COVID-19 pandemic caused the postponement of the Company's scheduled May NASCAR weekend. The three NASCAR events originally scheduled for May were instead held in combination with our scheduled August NASCAR events. All six of the races were held without fans. No major events were held during the third quarter of 2019. Accordingly, the results for the third quarter of 2020 are not comparable to last year.

Revenues for the third quarter of 2020 were $38,044,000 compared to $202,000 for the third quarter of 2019.

Operating and marketing expenses were $22,425,000 compared to $1,347,000 in the third quarter of 2019.

General and administrative expenses of $1,878,000 in the third quarter of 2020 were comparable to $1,888,000 in the third quarter of 2019.

Depreciation expense decreased to $756,000 from $1,669,000 in the third quarter of 2019. The decrease is primarily due to our decision during the third quarter of 2019 to remove grandstand seats at our Dover facility after our 2019 race season. We changed the estimated useful lives of the impacted assets resulting in $879,000 of accelerated depreciation expense in the third quarter of 2019.

As previously disclosed, in July of 2020 we sold approximately 97 acres of land in Nashville for proceeds less closing costs of approximately $6,460,000, resulting in a gain of $4,843,000. The purchaser had previously paid to us a $500,000 deposit that was credited to the purchase price.

During the third quarter of 2019, we closed on the sale of approximately 133 acres of land in Nashville for net proceeds of approximately $6,397,000 after closing costs, resulting in a gain of $4,186,000.

The adjustment to the contingent obligation was a benefit of $128,000 in the third quarter of 2020 compared to an expense of $121,000 in the third quarter of 2019, primarily the result of lower estimated interest rates.

Earnings before income taxes for the third quarter of 2020 were $18,025,000 compared to loss before income taxes of ($588,000) in the third quarter of 2019. The 2020 results include the $4,843,000 gain on sale, and the 2019 results include the $4,186,000 gain on sale and $879,000 of accelerated depreciation. On an adjusted basis, excluding these items, earnings before income taxes were $13,182,000 for the third quarter of 2020 compared to a loss before income tax benefit of ($3,895,000) for the third quarter of 2019.

Net earnings for the third quarter of 2020 were $13,190,000 or $.36 per diluted share compared to net loss of ($414,000) or ($.01) per diluted share for the third quarter of 2019. Net earnings, adjusted for the aforementioned items, were $9,364,000 in 2020 compared to net loss of ($3,087,000) in 2019.

As of September 30, 2020, the Company had no outstanding indebtedness and approximately $21.3 million in available cash.

The Company announced yesterday that its Board of Directors declared an annual cash dividend on both classes of common stock of $.07 per share. The dividend will be payable on December 10, 2020 to shareholders of record at the close of business on November 10, 2020.

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 Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

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

Event-related 2,394 202 2,708 3,784

Broadcasting 35,646 - 35,646 18,878

Other 4 - 4 5

38,044 202 38,358 25,169

Expenses:Operating and marketing 22,425 1,347 24,225 16,986

General and administrative 1,878 1,888 5,742 5,630

Depreciation 756 1,669 2,289 3,256

Cost to remove long-lived assets - - 341 -

25,059 4,904 32,597 25,872

Gain on sale of land 4,843 4,186 4,843 4,325

Operating earnings (loss) 17,828 (516 ) 10,604 3,622

Interest (expense) income (21 ) 20 (34 ) 4

Benefit (provision) for 128 (121 ) 112 (367 )contingent obligationOther income 90 29 115 218

Earnings (loss) before income 18,025 (588 ) 10,797 3,477 taxes Income tax (expense) benefit (4,835 ) 174 (1,436 ) (880 )

Net earnings (loss) $ 13,190 $ (414 ) $ 9,361 $ 2,597

Net earnings (loss) per commonshare:Basic $ 0.36 $ (0.01 ) $ 0.26 $ 0.07

Diluted $ 0.36 $ (0.01 ) $ 0.26 $ 0.07

Weighted average sharesoutstanding:Basic 35,836 35,952 35,836 35,998

Diluted 35,836 35,952 35,836 35,998

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

Nine Months Ended

September 30,

September 30,

2020

2019

2020

2019

GAAP earnings (loss) before income taxes$

18,025

$

(588

)

$

10,797

$

3,477

Gain on sale of land (1)(4,843

)

(4,186

)

(4,843

)

(4,325

)

Cost to remove long-lived assets (2)-

-

341

-

Accelerated depreciation (3)-

879

-

879

Adjusted earnings (loss) before income taxes$

13,182

$

(3,895

)

$

6,295

$

31

GAAP net earnings (loss)$

13,190

$

(414

)

$

9,361

$

2,597

Gain on sale of land, net of income taxes (1)(3,826

)

(3,307

)

(3,826

)

(3,417

)

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

-

246

-

Accelerated depreciation, net of income taxes (3)-

634

-

634

Adjusted net earnings (loss)$

9,364

$

(3,087

)

$

5,781

$

(186

)

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

0.36

$

(0.01

)

$

0.26

$

0.07

Gain on sale of land, net of income taxes (1)(0.11

)

(0.09

)

(0.11

)

(0.09

)

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

-

0.01

-

Accelerated depreciation, net of income taxes (3)-

0.02

-

0.02

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

0.26

$

(0.09

)

$

0.16

$

(0.01

)

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

September 30, September 30,

2020 2019 2020 2019

GAAP earnings (loss) before $ 18,025 $ (588 ) $ 10,797 $ 3,477 income taxes Gain on sale of land^ (1) (4,843 ) (4,186 ) (4,843 ) (4,325 )

Cost to remove long-lived - - 341 - assets^ (2) Accelerated depreciation^ - 879 - 879 (3) Adjusted earnings (loss) $ 13,182 $ (3,895 ) $ 6,295 $ 31 before income taxes GAAP net earnings (loss) $ 13,190 $ (414 ) $ 9,361 $ 2,597

Gain on sale of land, net of (3,826 ) (3,307 ) (3,826 ) (3,417 )income taxes^ (1) Cost to remove long-lived - - 246 - assets, net of income taxes^(2) Accelerated depreciation, - 634 - 634 net of income taxes^ (3) Adjusted net earnings (loss) $ 9,364 $ (3,087 ) $ 5,781 $ (186 )

GAAP net earnings (loss) per $ 0.36 $ (0.01 ) $ 0.26 $ 0.07 common share - basic anddiluted Gain on sale of land, net of (0.11 ) (0.09 ) (0.11 ) (0.09 )income taxes^ (1) Cost to remove long-lived - - 0.01 - assets, net of income taxes^(2) Accelerated depreciation, - 0.02 - 0.02 net of income taxes^ (3) Adjusted net earnings (loss) $ 0.26 $ (0.09 ) $ 0.16 $ (0.01 )per common share - basic anddiluted^(4)(1)

During the third quarter of 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 the third quarter of 2019, we closed on the sale of parcels of land at our Nashville Superspeedway facility resulting in a gain of $4,186,000.

During the first quarter of 2019, we closed on sale of a parcel of land at our Nashville Superspeedway facility resulting in a gain of $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 of costs to remove these assets in the first quarter of 2020. This amount was 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 of accelerated depreciation being recorded in the third quarter of 2019. This amount was tax effected using our federal and state statutory rates.

(4)

The components of the GAAP net earnings (loss) per common share for the three months ended September 30, 2020 and nine months ended September 30, 2019 do not add to the adjusted net earnings (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 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 the third quarter of 2020, we closed on the sale of a parcel of(1) land at our Nashville Superspeedway facility resulting in a gain of $4,843,000.

During the third quarter of 2019, we closed on the sale of parcels of land at our Nashville Superspeedway facility resulting in a gain of $4,186,000.

During the first quarter of 2019, we closed on sale of a parcel of land at our Nashville Superspeedway facility resulting in a gain of $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(2) Speedway, we incurred $341,000 of costs to remove these assets in the first quarter of 2020. This amount was 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(3) end of the 2019 race season. As a result, we shortened the service lives of these assets which resulted in $879,000 of accelerated depreciation being recorded in the third quarter of 2019. This amount was tax effected using our federal and state statutory rates.

The components of the GAAP net earnings (loss) per common share for the(4) three months ended September 30, 2020 and nine months ended September 30, 2019 do not add to the adjusted net earnings (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 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)September 30,

September 30,

December 31,

2020

2019

2019

ASSETSCurrent assets:Cash$

21,327

$

4,784

$

7,577

Accounts receivable1,232

1,866

645

Inventories18

20

18

Prepaid expenses and other994

6,184

1,186

Income taxes receivable-

95

283

Total current assets23,571

12,949

9,709

Property and equipment, net68,125

72,035

71,357

Right of use asset131

206

188

Other assets1,205

1,170

1,212

Total assets$

93,032

$

86,360

$

82,466

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable$

793

$

1,631

$

119

Accrued liabilities3,559

3,184

3,710

Income taxes payable2,674

-

-

Contract liabilities1,425

4,526

976

Total current liabilities8,451

9,341

4,805

Revolving line of credit-

-

-

Liability for pension benefits786

614

1,016

Lease liability53

131

112

Non-refundable deposit-

500

500

Provision for contingent obligation3,276

2,751

3,389

Deferred income taxes6,888

7,743

8,676

Total liabilities19,454

21,080

18,498

Stockholders' equity:Common stock1,786

1,793

1,782

Class A common stock1,851

1,851

1,851

Additional paid-in capital101,152

101,143

100,994

Accumulated deficit(27,607

)

(36,229

)

(36,968

)

Accumulated other comprehensive loss(3,604

)

(3,278

)

(3,691

)

Total stockholders' equity73,578

65,280

63,968

Total liabilities and stockholders' equity$

93,032

$

86,360

$

82,466

DOVER MOTORSPORTS, INC.CONSOLIDATED BALANCE SHEETSIn Thousands(Unaudited) September September December 30, 30, 31,

2020 2019 2019

ASSETSCurrent assets:Cash $ 21,327 $ 4,784 $ 7,577

Accounts receivable 1,232 1,866 645

Inventories 18 20 18

Prepaid expenses and other 994 6,184 1,186

Income taxes receivable - 95 283

Total current assets 23,571 12,949 9,709

Property and equipment, net 68,125 72,035 71,357

Right of use asset 131 206 188

Other assets 1,205 1,170 1,212

Total assets $ 93,032 $ 86,360 $ 82,466

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable $ 793 $ 1,631 $ 119

Accrued liabilities 3,559 3,184 3,710

Income taxes payable 2,674 - -

Contract liabilities 1,425 4,526 976

Total current liabilities 8,451 9,341 4,805

Revolving line of credit - - -

Liability for pension benefits 786 614 1,016

Lease liability 53 131 112

Non-refundable deposit - 500 500

Provision for contingent obligation 3,276 2,751 3,389

Deferred income taxes 6,888 7,743 8,676

Total liabilities 19,454 21,080 18,498

Stockholders' equity:Common stock 1,786 1,793 1,782

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

Additional paid-in capital 101,152 101,143 100,994

Accumulated deficit (27,607 ) (36,229 ) (36,968 )

Accumulated other comprehensive loss (3,604 ) (3,278 ) (3,691 )

Total stockholders' equity 73,578 65,280 63,968

Total liabilities and stockholders' $ 93,032 $ 86,360 $ 82,466 equity DOVER MOTORSPORTS, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSIn Thousands(Unaudited)Nine Months Ended

September 30,

2020

2019

Operating activities:Net earnings$

9,361

$

2,597

Adjustments to reconcile net earnings tonet cash provided by (used in) operating activities:Depreciation2,289

3,256

Amortization of credit facility fees42

47

Stock-based compensation256

243

Deferred income taxes(1,822

)

(659

)

(Benefit) Provision for contingent obligation(112

)

367

Gains on equity investments(4

)

(125

)

Gain on sale of land(4,843

)

(4,325

)

Changes in assets and liabilities:Accounts receivable(587

)

(1,190

)

Inventories-

1

Prepaid expenses and other171

(5,159

)

Income taxes receivable/payable2,957

(213

)

Accounts payable658

129

Accrued liabilities(266

)

38

Payable to Dover Downs Gaming & Entertainment, Inc.-

(9

)

Contract liabilities449

3,386

Liability for pension benefits(109

)

(48

)

Net cash used in operating activities8,440

(1,664

)

Investing activities:Capital expenditures(545

)

(4,651

)

Proceeds from sale of land and equipment, net5,960

7,224

Non-refundable deposit received-

500

Purchases of equity investments(316

)

(14

)

Proceeds from sale of equity investments305

1

Net cash provided by investing activities5,404

3,060

Financing activities:Borrowings from revolving line of credit3,880

4,120

Repayments on revolving line of credit(3,880

)

(4,120

)

Repurchase of common stock(94

)

(528

)

Credit facility fees-

(35

)

Net cash used in financing activities(94

)

(563

)

Net increase in cash13,750

833

Cash, beginning of period7,577

3,951

Cash, end of period$

21,327

$

4,784

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