Dover Motorsports, Inc. Reports Results For The Second Quarter Of 2012

Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2012.

Net earnings for the second quarter of 2012 improved 28.6% to $5,018,000 or $.14 per diluted share compared to $3,901,000 or $.11 per diluted share for the second quarter of 2011.

The Company promoted three major events during the second quarter of 2012 compared to five major events during the second quarter of 2011. The Company’s Nashville facility had promoted a NASCAR Nationwide Series event and a Truck Series event in the second quarter of 2011.

We previously announced that the Company’s Nashville facility notified NASCAR that it did not seek 2012 sanction agreements for its two Nationwide Series and two Camping World Truck Series events. We are hosting race team testing during 2012 at Nashville and we will continue to evaluate all of our options for the facility.

Revenues for the second quarter of 2012 were $23,719,000 compared with $26,381,000 in the second quarter of 2011. The decrease in revenues was primarily due to the schedule change noted above and from lower average ticket prices for the Company’s NASCAR triple-header in Dover which offset slightly higher attendance.

Operating and marketing expenses were $12,528,000 in the second quarter of 2012 compared to $15,488,000 in the second quarter of 2011. The decrease was also primarily due to not promoting the two races in Nashville in the second quarter 2012, as well as from lower expenses during the Dover NASCAR weekend.

General and administrative expenses of $1,765,000 in the second quarter of 2012 were down from $2,146,000 in the second quarter of 2011. The decrease is due primarily to lower employee costs in Dover and lower costs resulting from the reduced operations at the Nashville facility.

Net interest expense was $372,000 for the second quarter of 2012 compared to $592,000 in the second quarter of 2011. The decrease was due to lower borrowing costs and lower average outstanding borrowings in the second quarter of 2012 compared to 2011.

Earnings from continuing operations before income tax expense for the second quarter of 2012 were $8,477,000 compared with $6,748,000 in the second quarter of 2011.

Denis McGlynn, President and CEO, stated, “We are encouraged by the significant improvement in our results and working diligently to continue the trend that we’ve experienced over the last several quarters. Our focus is on generating cash flow at our flagship facility in Dover and we continue to look for ways to increase top line revenue growth while keeping a watchful eye on the expense line as we navigate through a very challenging economic cycle.”

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 own Nashville Superspeedway near Nashville, Tennessee. For further information, log on to  www.dovermotorsports.com.
       
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
 
 
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
Revenues:
Admissions $ 5,323 $ 6,716 $ 5,323 $ 6,716
Event-related 3,962 4,548 4,081 4,578
Broadcasting 14,434 15,115 14,434 15,115
Other   -     2     7     102  
  23,719     26,381     23,845     26,511  
 
Expenses:
Operating and marketing 12,528 15,488 13,628 16,776
General and administrative 1,765 2,146 3,735 4,297
Depreciation   830     1,340     1,667     2,753  
  15,123     18,974     19,030     23,826  
 
Operating earnings 8,596 7,407 4,815 2,685
 
Interest expense, net (372 ) (592 ) (773 ) (1,433 )
Provision for contingent obligation 249 - 289 -
Other income 4 - 4 4
Loss on extinguishment of debt   -     (67 )   -     (67 )
 

Earnings from continuing operations before income tax expense
8,477 6,748 4,335 1,189
 
Income tax expense   3,459     2,847     1,940     786  
 
Earnings from continuing operations 5,018 3,901 2,395 403
 
Loss from discontinued operation, net of income tax benefit
  -     -     -     (68 )
 
Net earnings $ 5,018   $ 3,901   $ 2,395   $ 335  
 
Net earnings per common share - basic:
Continuing operations $ 0.14 $ 0.11 $ 0.06 $ 0.01
Discontinued operation   -     -     -     -  
Net earnings $ 0.14   $ 0.11   $ 0.06   $ 0.01  
 
Net earnings per common share - diluted:
Continuing operations $ 0.14 $ 0.11 $ 0.06 $ 0.01
Discontinued operation   -     -     -     -  
Net earnings $ 0.14   $ 0.11   $ 0.06   $ 0.01  
 
Weighted average shares outstanding:
Basic 36,300 36,195 36,299 36,194
Diluted 36,300 36,195 36,299 36,194
 
     
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
 
 
June 30, June 30, December 31,
2012 2011 2011
 
ASSETS
Current assets:
Cash $ 7 $ 355 $ 15
Accounts receivable 11,727 2,796 689
Inventories 134 268 115
Prepaid expenses and other 1,233 1,633 1,255
Receivable from Dover Downs Gaming & Entertainment, Inc. - - 11
Prepaid income taxes 7 97 -
Deferred income taxes   70     230     67  
Total current assets 13,178 5,379 2,152
 
Property and equipment, net 94,933 113,768 96,380
Other assets 710 911 783
Deferred income taxes   439     112     496  
Total assets $ 109,260   $ 120,170   $ 99,811  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 470 $ 471 $ 116
Accrued liabilities 2,674 2,255 2,584
Payable to Dover Downs Gaming & Entertainment, Inc. 2 4 -
Income taxes payable - - 145
Deferred revenue 5,925 7,991 3,129
Current liabilities of discontinued operation   -     49     -  
Total current liabilities 9,071 10,770 5,974
 
Revolving line of credit 31,900 31,400 29,160
Liability for pension benefits 2,609 1,683 2,713
Other liabilities 1,965 132 2,250
Non current income taxes payable - 1,241 -
Deferred income taxes   16,189     19,474     14,765  
Total liabilities   61,734     64,700     54,862  
 
Stockholders' equity:
Common stock 1,838 1,830 1,828
Class A common stock 1,851 1,851 1,851
Additional paid-in capital 102,020 101,709 101,888
Accumulated deficit (55,957 ) (48,832 ) (58,352 )
Accumulated other comprehensive loss   (2,226 )   (1,088 )   (2,266 )
Total stockholders' equity   47,526     55,470     44,949  
Total liabilities and stockholders' equity $ 109,260   $ 120,170   $ 99,811  
 
     
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
 
Six Months Ended
June 30,
2012 2011
 
Operating activities:
Net earnings $ 2,395 $ 335
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
 
Depreciation 1,667 2,753
Amortization of credit facility fees 112 269
Stock-based compensation 169 230
Deferred income taxes 1,451 296
Provision for contingent obligation (289 ) -
Loss on extinguishment of debt - 67
Changes in assets and liabilities:
Accounts receivable (11,038 ) (1,957 )
Inventories (19 ) (36 )
Prepaid expenses and other 9 (181 )
Prepaid income taxes/income taxes payable (151 ) (87 )
Accounts payable 354 325
Accrued liabilities 90 (613 )
Payable to/receivable from Dover Downs Gaming & Entertainment, Inc. 13 (14 )
Deferred revenue 2,796 4,347
Other liabilities   (60 )   152  
Net cash (used in) provided by operating activities   (2,501 )   5,886  
 
Investing activities:
Capital expenditures (220 ) (191 )
Proceeds from the sale of property and equipment - 1,875
Proceeds from the sale of available-for-sale securities - 69
Purchase of available-for-sale securities   -     (70 )

Net cash (used in) provided by investing activities

 

 

 

(220

)

 

1,683

 
 
Financing activities:
Borrowings from revolving line of credit 9,080 49,560
Repayments on revolving line of credit (6,340 ) (56,360 )
Repurchase of common stock (27 ) (52 )
Credit facility fees   -     (431 )
Net cash provided by (used in) financing activities   2,713     (7,283 )
 
Net (decrease) increase in cash (8 ) 286
Cash, beginning of period   15     69  
Cash, end of period $ 7   $ 355  
 

Copyright Business Wire 2010

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