Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2011.

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 separately as a discontinued operation.

The Company promoted five major events during the second quarter of 2011 compared to six major events during the second quarter of 2010. A NASCAR Nationwide Series event promoted at Nashville Superspeedway in the second quarter of 2010 was held in the third quarter of 2011.

Revenues for the quarter ended June 30, 2011 were $26,381,000 compared with $29,946,000 in the second quarter of 2010. The decrease in revenues was primarily due to the schedule change noted above and from lower admissions and event related revenues at the Company’s NASCAR triple-header in Dover.

Operating and marketing expenses were $15,488,000 in the second quarter of 2011 as compared to $18,197,000 in the second quarter of 2010. The decrease was also primarily due to promoting one less event in the second quarter 2011, as well as from lower expenses during the Dover NASCAR weekend.

General and administrative expenses of $2,146,000 in the second quarter of 2011 were down from $2,338,000 for the same quarter last year. The decrease is due primarily to lower employee costs and lower costs resulting from the sale of the Memphis facility.

Net interest expense was $592,000 for the quarter ended June 30, 2011 compared to $793,000 in the second quarter of 2010. The decrease was due to lower borrowing costs as a result of the April 2011 refinancing of the Company’s credit facility and lower average outstanding borrowings in the second quarter of 2011 compared to 2010. Loss on extinguishment of debt relates to the write-off of $67,000 of debt issuance costs associated with the previous credit facility.

Earnings from continuing operations before income tax expense for the quarter ended June 30, 2011 were $6,748,000 compared with $7,216,000 in the second quarter of 2010.

The effective tax rate for the second quarter of 2011 was 42.2% compared to 42.7% in the prior year.

Earnings from continuing operations for the second quarter of 2011 were $3,901,000 or $.11 per diluted share compared to $4,137,000 or $.11 per diluted share for the second quarter of 2010.

For the second quarter of 2010, loss from discontinued operations, net of income tax benefit, was $5,822,000 or $.16 per diluted share. That loss included a non-cash impairment charge, net of income tax benefit, of $5,176,000 to write-down the carrying value of the Gateway facility to fair value.

Net earnings were $3,901,000 or $0.11 per diluted share compared to a net loss of ($1,685,000) or $(0.05) per diluted share for the same period last year.

At June 30, 2011, the Company’s total indebtedness was $31,400,000 compared to $35,800,000 at June 30, 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 NASCAR sanctioned motorsports events whose subsidiaries own and operate 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 Six Months Ended
June 30, June 30,
2011 2010 2011 2010
Revenues:
Admissions $ 6,716 $ 8,565 $ 6,716 $ 8,565
Event-related 4,548 6,047 4,578 6,101
Broadcasting 15,115 15,334 15,115 15,334
Other   2     -     102     1  
  26,381     29,946     26,511     30,001  
 
Expenses:
Operating and marketing 15,488 18,197 16,776 19,592
General and administrative 2,146 2,338 4,297 4,824
Depreciation and amortization   1,340     1,402     2,753     2,817  
  18,974     21,937     23,826     27,233  
 
Operating earnings 7,407 8,009 2,685 2,768
 
Interest income 4 4 8 7
Interest expense (596 ) (797 ) (1,441 ) (1,558 )
Other income - - 4 -
Loss on extinguishment of debt   (67 )   -     (67 )   -  
 

Earnings from continuing operations before income tax expense
6,748 7,216 1,189 1,217
 
Income tax expense   2,847     3,079     786     852  
 
Earnings from continuing operations 3,901 4,137 403 365
 

Loss from discontinued operation, net of income tax benefit
  -     (5,822 )   (68 )   (6,649 )
 
Net earnings (loss) $ 3,901   $ (1,685 ) $ 335   $ (6,284 )
 
Net earnings (loss) per common share - basic:
Continuing operations $ 0.11 $ 0.11 $ 0.01 $ 0.01
Discontinued operation   -     (0.16 )   -     (0.18 )
Net earnings (loss) $ 0.11   $ (0.05 ) $ 0.01   $ (0.17 )
 
Net earnings (loss) per common share - diluted:
Continuing operations $ 0.11 $ 0.11 $ 0.01 $ 0.01
Discontinued operation   -     (0.16 )   -     (0.18 )
Net earnings (loss) $ 0.11   $ (0.05 ) $ 0.01   $ (0.17 )
 
Weighted average shares outstanding:
Basic 36,195 36,096 36,194 36,091
Diluted 36,195 36,096 36,194 36,091
 
     
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
 
 
June 30, June 30, December 31,
2011 2010 2010
 
ASSETS
Current assets:
Cash and cash equivalents $ 355 $ 1,151 $ 69
Accounts receivable 2,796 2,316 743
Inventories 268 268 232
Prepaid expenses and other 1,633 1,542 1,713
Prepaid income taxes 97 - -
Deferred income taxes 230 124 242
Current assets held for sale - 2,800 1,875
Current assets of discontinued operation   -     807     115  
Total current assets 5,379 9,008 4,989
 
Property and equipment, net 113,768 119,224 116,330
Restricted cash - 2,217 -
Other assets, net 911 474 527
Deferred income taxes 112 139 206
Non current assets of discontinued operation   -     2,082     233  
Total assets $ 120,170   $ 133,144   $ 122,285  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 471 $ 1,277 $ 142
Accrued liabilities 2,255 2,369 2,470
Payable to Dover Downs Gaming & Entertainment, Inc. 4 8 18
Income taxes payable - 30 123
Deferred revenue 7,991 8,335 3,644
Current liabilities of discontinued operation   49     4,793     685  
Total current liabilities 10,770 16,812 7,082
 
Revolving line of credit 31,400 35,800 38,200
Liability for pension benefits 1,683 1,784 2,291
Other liabilities 132 989 121
Non current income taxes payable 1,241 2,501 1,241
Deferred income taxes 19,474 18,528 18,843
Non current liabilities of discontinued operation   -     395     -  
Total liabilities   64,700     76,809     67,778  
 
Stockholders' equity:
Common stock 1,830 1,821 1,820
Class A common stock 1,851 1,851 1,851
Additional paid-in capital 101,709 101,217 101,541
Accumulated deficit (48,832 ) (47,278 ) (49,167 )
Accumulated other comprehensive loss   (1,088 )   (1,276 )   (1,538 )
Total stockholders' equity   55,470     56,335     54,507  
Total liabilities and stockholders' equity $ 120,170   $ 133,144   $ 122,285  
 
   
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Six Months Ended
June 30,
2011 2010
 
Operating activities:
Net earnings (loss) $ 335 $ (6,284 )

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization 2,753 3,151
Amortization of credit facility fees 269 186
Stock-based compensation 230 339
Deferred income taxes 296 (3,319 )
Loss on extinguishment of debt 67 -
Impairment charge of discontinued operation - 7,964
Changes in assets and liabilities:
Accounts receivable (1,957 ) (1,422 )
Inventories (36 ) (36 )
Prepaid expenses and other (181 ) (510 )
Prepaid income taxes/income taxes payable (87 ) 53
Accounts payable 325 1,127
Accrued liabilities (613 ) 1,064
Payable to Dover Downs Gaming & Entertainment, Inc. (14 ) 3
Deferred revenue 4,347 3,858
Other liabilities   152     277  
Net cash provided by operating activities   5,886     6,451  
 
Investing activities:
Capital expenditures (191 ) (345 )
Proceeds from the sale of property and equipment 1,875 -
Restricted cash - 1,376
Proceeds from the sale of available-for-sale securities 69 158
Purchase of available-for-sale securities   (70 )   (160 )
Net cash provided by investing activities   1,683     1,029  
 
Financing activities:
Borrowings from revolving line of credit 49,560 14,100
Repayments on revolving line of credit (56,360 ) (19,300 )
Repayments of bonds payable - (1,234 )
Repurchase of common stock (52 ) (50 )
Credit facility fees   (431 )   -  
Net cash used in financing activities   (7,283 )   (6,484 )
 
Net increase in cash and cash equivalents 286 996
Cash and cash equivalents, beginning of period   69     155  
Cash and cash equivalents, end of period $ 355   $ 1,151  
 

Copyright Business Wire 2010

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