DVD Dover Motorsports

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

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 .

 
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 obligation

 

59

 

 

(638

)

 

171

 

 

(1,005

)

Other income

 

67

 

 

51

 

 

182

 

 

269

 

 
(Loss) earnings before income taxes

 

(3,377

)

 

3,809

 

 

7,420

 

 

7,286

 

 
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 common share:
Basic

$

(0.05

)

$

0.08

 

$

0.21

 

$

0.15

 

Diluted

$

(0.05

)

$

0.08

 

$

0.21

 

$

0.15

 

 
Weighted average shares outstanding:
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 TAXES
TO ADJUSTED (LOSS) EARNINGS BEFORE INCOME TAXES
AND RECONCILIATION OF GAAP NET (LOSS) EARNINGS TO ADJUSTED NET (LOSS) EARNINGS
In 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

 

(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.

DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
 
 

December 31,

 

December 31,

 

2020

 

 

 

2019

 

 
ASSETS
Current 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' EQUITY
Current 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 FLOWS
In Thousands
(Unaudited)
 

Years Ended

December 31,

 

2020

 

 

 

2019

 

 
Operating activities:
Net earnings

$

7,482

 

$

5,500

 

Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation

 

3,046

 

 

4,353

 

Amortization of credit facility fees

 

56

 

 

61

 

Stock-based compensation

 

311

 

 

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 receivable

 

44

 

 

31

 

Inventories

 

-

 

 

3

 

Prepaid expenses and other

 

(398

)

 

(181

)

Income taxes receivable/payable

 

215

 

 

(380

)

Accounts payable

 

710

 

 

(8

)

Accrued liabilities

 

(383

)

 

407

 

Payable to Dover Downs Gaming & Entertainment, Inc.

 

-

 

 

(9

)

Contract liabilities

 

419

 

 

(164

)

Liability for pension benefits

 

(137

)

 

(63

)

Net cash provided by operating activities

 

3,684

 

 

6,775

 

 
Investing activities:
Capital expenditures

 

(1,998

)

 

(6,446

)

Proceeds from sale of land and equipment, net

 

5,960

 

 

7,224

 

Non-refundable deposit received

 

500

 

 

500

 

Purchases of equity investments

 

(361

)

 

(51

)

Proceeds from sale of equity investments

 

337

 

 

40

 

Net cash provided by investing activities

 

4,438

 

 

1,267

 

 
Financing activities:
Borrowings from revolving line of credit

 

3,880

 

 

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 cash

 

5,482

 

 

3,626

 

Cash, beginning of year

 

7,577

 

 

3,951

 

Cash, end of year

$

13,059

 

$

7,577

 

 

EN
28/01/2021

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