Dover Motorsports, Inc. Reports Results for the Third Quarter of 2017

Dover Motorsports, Inc.

DOVER, DE – October 26, 2017 – (Motor Sports Newswire) – Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended September 30, 2017.

Our fall NASCAR event weekend, which consists of a K&N Pro Series East event, an XFINITY Series event, and a Monster Energy Cup Series event was held on September 29, 2017 to October 1, 2017 and September 30, 2016 to October 2 in 2016. As a result, the XFINITY Series event was held during the third quarter of 2017 and the fourth quarter of 2016.

Revenues for the third quarter of 2017 were $2,740,000 compared with $369,000 in the third quarter of 2016. Operating and marketing expenses were $3,485,000 in the third quarter of 2017 compared to $1,387,000 in the third quarter of 2016. Both increases were primarily from the timing of the XFINITY Series races previously mentioned.

General and administrative expenses of $1,770,000 in the third quarter of 2017 were comparable to $1,799,000 in the third quarter of 2016.

Depreciation expense increased to $863,000 in the third quarter of 2017 compared to $828,000 in the third quarter of 2016.

Net interest expense of $34,000 in the third quarter of 2017 was comparable to $41,000 in the third quarter of 2016.

Loss before income taxes for the third quarter of 2017 was ($3,396,000) compared to ($3,679,000) in the third quarter of 2016.

Net loss for the third quarter of 2017 was ($2,015,000) or ($0.06) per diluted share compared to ($2,167,000) or ($0.06) per diluted share for the third quarter of 2016.

At September 30, 2017, the Company’s total indebtedness was $5,880,000 compared with $8,060,000 at September 30, 2016.

On August 17, 2017, we entered into an agreement with an entity owned by Panattoni Development Company, an international commercial real estate development company, relative to the sale of approximately 150 acres at our Nashville Superspeedway at a purchase price of $35,000 per acre. Closing under this agreement is scheduled to occur by the end of the year, subject to extension if certain milestones have been met (which could delay closing until the first quarter of 2018). Additionally, we granted the prospective buyer a three-year option on an additional 87 acres at $55,000 per acre. We will continue with our effort to sell the approximately 1,150 acres of Nashville Superspeedway property that would remain after these transactions.

The Company announced yesterday that its Board of Directors declared an annual cash dividend on both classes of common stock of $.08 per share. The dividend will be payable on December 10, 2017 to shareholders of record at the close of business on November 10, 2017. Due to the seasonal nature of our business, we will evaluate dividends annually.

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 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 (LOSS) EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Revenues:
Admissions $ 425 $ 82 $ 3,871 $ 3,764
Event-related 995 285 5,739 5,098
Broadcasting 1,319 18,824 16,890
Other 1 2 3 9
2,740 369 28,437 25,761
Expenses:
Operating and marketing 3,485 1,387 18,639 16,440
General and administrative 1,770 1,799 5,561 5,573
Costs to remove long-lived assets 286
Depreciation 863 828 2,507 2,591
6,118 4,014 26,993 24,604
Operating (loss) earnings (3,378 ) (3,645 ) 1,444 1,157
Interest expense, net (34 ) (41 ) (150 ) (166 )
Benefit (provision) for contingent obligation 11 (17 ) (41 ) (73 )
Other income 5 24 51 16
(Loss) earnings before income taxes (3,396 ) (3,679 ) 1,304 934
Income tax benefit (expense) 1,381 1,512 (521 ) (378 )
Net (loss) earnings $ (2,015 ) $ (2,167 ) $ 783 $ 556
Net (loss) earnings per common share:
Basic $ (0.06 ) $ (0.06 ) $ 0.02 $ 0.02
Diluted $ (0.06 ) $ (0.06 ) $ 0.02 $ 0.02
Weighted average shares outstanding:
Basic 36,282 36,216 36,299 36,238
Diluted 36,282 36,216 36,299 36,238
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 Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
GAAP (loss) earnings before income taxes $ (3,396 ) $ (3,679 ) $ 1,304 $ 934
Accelerated depreciation (1) 25 184
Costs to remove long-lived assets (2) 286
Adjusted (loss) earnings before income taxes $ (3,396 ) $ (3,654 ) $ 1,590 $ 1,118
GAAP net (loss) earnings $ (2,015 ) $ (2,167 ) $ 783 $ 556
Accelerated depreciation, net of income taxes (1) 15 109
Costs to remove long-lived assets, net of income taxes (2) 167
Adjusted net (loss) earnings $ (2,015 ) $ (2,152 ) $ 950 $ 665
GAAP net (loss) earnings per common share – basic and diluted $ (0.06 ) $ (0.06 ) $ 0.02 $ 0.02
Accelerated depreciation, net of income taxes (1)
Costs to remove long-lived assets, net of income taxes (2)
Adjusted net (loss) earnings per common share – basic and diluted (3) $ (0.06 ) $ (0.06 ) $ 0.03 $ 0.02

_________________________

(1)

During the first quarter of 2016, we began a renovation project of certain track related assets at our Dover International Speedway facility which was completed in the first quarter of 2017. As a result, we shortened the service lives of these assets which resulted in accelerated depreciation being recorded in the first nine months of 2016.

(2)

Costs to remove long-lived assets represents costs incurred to remove and dispose of certain grandstand seating at our Dover International Speedway facility.

(3)

The components of GAAP net earnings per common share for the nine months ended September 30, 2017 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 (loss) earnings before income taxes, adjusted net (loss) earnings and adjusted net (loss) earnings per common share – basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned accelerated depreciation and costs to remove long-lived assets. Income taxes are based on our approximate statutory tax rates applicable to each of these items. 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 (loss) earnings before income taxes, net (loss) earnings or net (loss) earnings per common share – basic and diluted, which are determined in accordance with GAAP.

DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
September 30, September 30, December 31,
2017 2016 2016
ASSETS
Current assets:
Cash $ 146 $ 215 $ 1
Accounts receivable 2,420 521 419
Inventories 16 16 17
Prepaid expenses and other 4,352 5,692 1,104
Receivable from Dover Downs Gaming & Entertainment, Inc. 27
Prepaid income taxes 982 1,600
Assets held for sale 2,555 2,555 2,555
Total current assets 10,498 10,599 4,096
Property and equipment, net 51,968 53,393 52,723
Nashville Superspeedway facility 23,445 23,445 23,445
Other assets 1,065 976 1,022
Total assets $ 86,976 $ 88,413 $ 81,286
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 129 $ 574 $ 347
Accrued liabilities 3,176 2,804 2,858
Payable to Dover Downs Gaming & Entertainment, Inc. 44 7
Income taxes payable 218
Deferred revenue 4,702 5,314 1,355
Total current liabilities 8,007 8,736 4,785
Revolving line of credit, net 5,880 8,060 3,840
Liability for pension benefits 3,765 3,650 4,143
Provision for contingent obligation 1,843 1,800 1,802
Deferred income taxes 12,778 13,477 12,911
Total liabilities 32,273 35,723 27,481
Stockholders’ equity:
Common stock 1,830 1,829 1,828
Class A common stock 1,851 1,851 1,851
Additional paid-in capital 101,887 101,806 101,858
Accumulated deficit (47,557 ) (49,745 ) (48,340 )
Accumulated other comprehensive loss (3,308 ) (3,051 ) (3,392 )
Total stockholders’ equity 54,703 52,690 53,805
Total liabilities and stockholders’ equity $ 86,976 $ 88,413 $ 81,286
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
Nine Months Ended
September 30,
2017 2016
Operating activities:
Net earnings $ 783 $ 556

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

Depreciation 2,507 2,591
Amortization of credit facility fees 48 71
Stock-based compensation 305 233
Excess tax benefits from stock-based compensation (27 )
Deferred income taxes (272 ) (328 )
Provision for contingent obligation 41 73
Changes in assets and liabilities:
Accounts receivable (2,001 ) (348 )
Inventories 1 56
Prepaid expenses and other (3,302 ) (4,567 )
Receivable from/payable to Dover Downs Gaming & Entertainment, Inc. (34 ) 88
Prepaid income taxes/income taxes payable (1,119 ) (1,594 )
Accounts payable (191 ) (82 )
Accrued liabilities 318 (411 )
Deferred revenue 3,347 4,036
Liability for pension benefits (265 ) (48 )
Net cash provided by operating activities 166 299
Investing activities:
Capital expenditures (1,779 ) (1,923 )
Purchases of available-for-sale securities (142 ) (267 )
Proceeds from sale of available-for-sale securities 134 185
Net cash used in investing activities (1,787 ) (2,005 )
Financing activities:
Borrowings from revolving line of credit 20,660 22,500
Repayments on revolving line of credit (18,620 ) (20,340 )
Repurchase of common stock (274 ) (189 )
Excess tax benefits from stock-based compensation 27
Credit facility fees (78 )
Net cash provided by financing activities 1,766 1,920
Net increase in cash 145 214
Cash, beginning of period 1 1
Cash, end of period $ 146 $ 215

Source: Dover Motorsports, Inc.

Dover Motorsports, Inc.

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