10-Q

United States

Securities and Exchange Commission

Washington, D.C.  20549

Form 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2019

Commission file number 1-11929

Dover Motorsports, Inc.

(Exact name of registrant as specified in its charter)

Delaware	51-0357525
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

1131 North DuPont Highway, Dover, Delaware  19901

(Address of principal executive offices)

(302) 883-6500

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Class	Trading Symbol(s)	Name of Exchange on Which Registered
Common Stock, $.10 Par Value	DVD	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes x   No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,”  “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o	Non-accelerated filer o	Smaller reporting company x
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o   No x

As of October 28, 2019, the number of shares of each class of the registrant’s common stock outstanding is as follows:

Common Stock -	17,931,403 shares
Class A Common Stock -	18,509,975 shares

Part I — Financial Information

Item 1. Financial Statements

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS

AND COMPREHENSIVE (LOSS) INCOME

In Thousands, Except Per Share Amounts

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenues:
Admissions	$	—		$	—		$	2,502		$	2,853
Event-related	202			227			3,784			5,283
Broadcasting	—			—			18,878			18,128
Other	—			—			5			1
	202			227			25,169			26,265
Expenses:
Operating and marketing	1,347			1,599			16,986			16,984
General and administrative	1,888			1,798			5,630			5,552
Depreciation	1,669			793			3,256			2,496
	4,904			4,190			25,872			25,032
Gain (loss) on sale of land	4,186			(99		)	4,325			2,413
Operating (loss) earnings	(516		)	(4,062		)	3,622			3,646
Interest income (expense), net	20			(2		)	4			(75		)
(Provision) benefit for contingent obligation	(121		)	4			(367		)	(132		)
Other income	29			46			218			77
(Loss) earnings before income taxes	(588		)	(4,014		)	3,477			3,516
Income tax benefit (expense)	174			1,315			(880		)	(699		)
Net (loss) earnings	(414		)	(2,699		)	2,597			2,817
Change in net actuarial loss and prior service cost, net of income taxes	29			28			80			81
Comprehensive (loss) income	$	(385	)	$	(2,671	)	$	2,677		$	2,898
Net (loss) earnings per common share:
Basic	$	(0.01	)	$	(0.07	)	$	0.07		$	0.08
Diluted	$	(0.01	)	$	(0.07	)	$	0.07		$	0.08

The Notes to the Consolidated Financial Statements are an integral part of these consolidated financial statements.

2

DOVER MOTORSPORTS, INC.

CONSOLIDATED BALANCE SHEETS

In Thousands, Except Share and Per Share Amounts

(Unaudited)

	September 30,			December 31,
	2019			2018
ASSETS
Current assets:
Cash	$	4,784		$	3,951
Accounts receivable	1,866			676
Inventories	20			21
Prepaid expenses and other	6,184			1,055
Income taxes receivable	95			—
Assets held for sale	—			531
Total current assets	12,949			6,234
Property and equipment, net	50,743			48,137
Nashville Superspeedway facility	21,292			23,567
Right of use asset	206			—
Other assets	1,170			1,015
Total assets	$	86,360		$	78,953
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,631		$	187
Accrued liabilities	3,184			3,083
Payable to Dover Downs Gaming & Entertainment, Inc.	—			9
Income taxes payable	—			118
Contract liabilities	4,526			1,140
Total current liabilities	9,341			4,537
Liability for pension benefits	614			773
Lease liability	131			—
Non-refundable deposit	500			—
Provision for contingent obligation	2,751			2,384
Deferred income taxes	7,743			8,371
Total liabilities	21,080			16,065
Commitments and contingencies (see Notes to the Consolidated Financial Statements)
Stockholders’ equity:
Preferred stock, $0.10 par value; 1,000,000 shares authorized; shares issued and outstanding: none	—			—
Common stock, $0.10 par value; 75,000,000 shares authorized; shares issued and outstanding: 17,931,403 and 18,045,276, respectively	1,793			1,805
Class A common stock, $0.10 par value; 55,000,000 shares authorized; shares issued and outstanding: 18,509,975 and 18,509,975, respectively	1,851			1,851
Additional paid-in capital	101,143			101,416
Accumulated deficit	(36,229		)	(38,826		)
Accumulated other comprehensive loss	(3,278		)	(3,358		)
Total stockholders’ equity	65,280			62,888
Total liabilities and stockholders’ equity	$	86,360		$	78,953

The Notes to the Consolidated Financial Statements are an integral part of these consolidated financial statements.

3

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)

	Nine Months Ended September 30,
	2019			2018
Operating activities:
Net earnings	$	2,597		$	2,817
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation	3,256			2,496
Amortization of credit facility fees	47			47
Stock-based compensation	243			237
Deferred income taxes	(659		)	(690		)
Provision for contingent obligation	367			132
Gains on equity investments	(125		)	(15		)
Gain on sale of land	(4,325		)	(2,413		)
Changes in assets and liabilities:
Accounts receivable	(1,190		)	(257		)
Inventories	1			(4		)
Prepaid expenses and other	(5,159		)	(4,731		)
Income taxes receivable/payable	(213		)	(290		)
Accounts payable	129			549
Accrued liabilities	38			(145		)
Payable to Dover Downs Gaming & Entertainment, Inc.	(9		)	(1		)
Contract liabilities	3,386			3,279
Liability for pension benefits	(48		)	(1,811		)
Net cash used in operating activities	(1,664		)	(800		)
Investing activities:
Capital expenditures	(4,651		)	(762		)
Proceeds from sale of land and equipment, net	7,224			4,945
Non-refundable deposit	500			—
Purchases of equity investments	(14		)	(100		)
Proceeds from sale of equity investments	1			90
Net cash provided by investing activities	3,060			4,173
Financing activities:
Borrowings from revolving line of credit	4,120			10,200
Repayments on revolving line of credit	(4,120		)	(12,840		)
Repurchase of common stock	(528		)	(547		)
Credit facility fees	(35		)	—
Net cash used in financing activities	(563		)	(3,187		)
Net increase in cash	833			186
Cash, beginning of period	3,951			1
Cash, end of period	$	4,784		$	187
Supplemental information:
Interest (received) paid	$	(10	)	$	62
Income tax payments	$	1,752		$	1,679
Change in accounts payable for capital expenditures	$	1,315		$	128

The Notes to the Consolidated Financial Statements are an integral part of these consolidated financial statements.

4

DOVER MOTORSPORTS, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — Basis of Presentation

References in this document to “we,” “us” and “our” mean Dover Motorsports, Inc. and/or its wholly owned subsidiaries, as appropriate.

The accompanying consolidated financial statements have been prepared in compliance with Rule 10-01 of Regulation S-X and U.S. generally accepted accounting principles, and accordingly do not include all of the information and disclosures required for audited financial statements.  These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our latest Annual Report on Form 10-K filed on March 1, 2019.  In the opinion of management, these consolidated financial statements include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods presented. Operating results for the three and nine-month periods ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 due to the seasonal nature of our business.

NOTE 2 — Business Operations

Dover Motorsports, Inc. is a public holding company that is a leading marketer and promoter of motorsports entertainment in the United States.  Through our subsidiaries, we own and operate Dover International Speedway® in Dover, Delaware and Nashville Superspeedway® near Nashville, Tennessee.  In 2019, we celebrate our 50th anniversary of racing and, as of the date of this filing, our Dover facility promoted the following six events during 2019, all of which were under the auspices of the premier sanctioning body in motorsports - the National Association for Stock Car Auto Racing (“NASCAR”):

·2 NASCAR Monster Energy Cup Series events (May and October);

·2 NASCAR Xfinity Series events (May and October);

·1 NASCAR Gander Outdoors Truck Series event (May); and

·1 NASCAR K&N Pro Series East event (October).

A NASCAR Monster Energy Cup Series event, a NASCAR Xfinity Series event and a NASCAR Gander Outdoors Truck Series event were held at Dover International Speedway during the second quarter of 2019 and 2018.  A NASCAR Monster Energy Cup Series event, a NASCAR Xfinity Series event and a NASCAR K&N Pro Series East event were held at Dover International Speedway during the fourth quarter of 2019 and 2018.

We have hosted the Firefly Music Festival (“Firefly”) on our property in Dover, Delaware for eight consecutive years and it is scheduled to return on June 18-21, 2020.  The inaugural three day festival with 40 musical acts was held in July 2012 and the 2019 event was held on June 21-23, 2019 with over 120 musical acts.  In September 2014, Red Frog Events LLC formed RFGV Festivals LLC - a joint venture with Goldenvoice that promotes Firefly.  Goldenvoice is a company of AEG Presents, LLC, a subsidiary of Anschutz Entertainment Group, Inc.  AEG Presents, one of the world’s largest presenters of live music and entertainment events, announced on July 18, 2018 that it had acquired the remainder of RFGV Festivals LLC from Red Frog.  Our amended agreement with RFGV Festivals grants them two 5 year options to extend our facility rental agreement through 2032 in exchange for a rental commitment to secure our property.  In addition to the facility rental fee, we also receive a percentage of the concession sales we manage at the events.

Nashville Superspeedway no longer promotes motorsports events and has not entered into sanction agreements with NASCAR since 2011.  We lease the facility on a short term basis to third parties from time to time.    On August 17, 2017, we entered into an agreement with an entity owned by Panattoni Development Company (“buyer”)

5

relative to the sale of approximately 147 acres of land at a purchase price of $35,000 per acre.  On March 2, 2018, we closed on the sale of the property with proceeds, less closing costs, of $4,945,000.  Net proceeds after taxes were approximately $4,150,000.  On September 1, 2017, we also awarded to the buyer a three year option for 88.03 additional acres at a purchase price of $55,000 per acre.  That option agreement has been amended twice since: first, on February 9, 2018, to extend its term and to add additional acreage; and second, on June 25, 2019, in connection with the purchaser’s exercise of its option on two parcels, we adjusted the acreage and further extended the term of the option on a third parcel.  On July 26, 2019, the purchaser closed on the first two parcels, comprising approximately 133 acres, which yielded to us proceeds, less closing costs, of $6,397,000.  Net proceeds after taxes were approximately $5,314,000 resulting in a gain of $4,186,000.  One parcel of 97.17 acres remains under the option agreement with a purchase price of $66,685 per acre.  The purchaser paid to us $500,000 for the extension of this option until March 1, 2022, and this non-refundable payment would be credited to the purchase price at the closing of that option parcel.  While management remains committed to selling the remaining Nashville Superspeedway property which consists of approximately 1,000 acres, we do not believe it is probable that the remaining property will be sold within the next twelve months.  At September 30, 2019 and December 31, 2018, $21,292,000 and $23,567,000 was reported as long term assets in our consolidated balance sheets, respectively.  At December 31, 2018, $531,000 was reported as assets held for sale in our consolidated balance sheet.

On February 28, 2019, we entered into an agreement to sell 7.63 acres of land at our Nashville facility for proceeds, less closing costs, of $267,000.  The sale closed in the first quarter of 2019 and resulted in a gain of $139,000, which we have reported as gain on sale of land in our consolidated statements of (loss) earnings.

During September 2018, we entered into negotiations to sell the last remaining parcel of land we owned near St. Louis.  The sale resulted in a loss of $99,000, which we reported as loss on sale of land in our consolidated statements of (loss) earnings.  The sale closed in the first quarter of 2019 with proceeds, less closing costs, of $531,000.  At December 31, 2018, the fair value of the land was reported as assets held for sale in our consolidated balance sheet.

NOTE 3 — Summary of Significant Accounting Policies

Property and equipment—Property and equipment is stated at cost.  Depreciation is provided using the straight-line method over the asset’s estimated useful life.  Accumulated depreciation was $66,232,000 and $63,042,000 as of September 30, 2019 and December 31, 2018, respectively.

In the third quarter of 2019, management approved plans to remove certain grandstand seating following the completion of our 2019 race season.  As a result, we adjusted the service lives of those assets to properly reflect their shortened estimated useful life.  We recorded accelerated depreciation expense of $879,000 in the three and nine-month periods ended September 30, 2019 related to these assets.  We expect to record additional depreciation expense of approximately $293,000 during the fourth quarter of 2019 related to these assets, at which point the assets will be fully depreciated.

Leases—Effective January 1, 2019, we account for leases under Accounting Standards Codification 842, Leases.  Under this guidance, arrangements meeting the definition of a lease are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or our incremental borrowing rate.

During the second quarter of 2019, we entered into certain operating leases with 36 month terms.  At September 30, 2019, our consolidated balance sheet included a right of use asset of $206,000, a long-term lease liability of $131,000, and a short-term lease liability, which is included in accrued liabilities, of $75,000.

Revenue recognition—We classify our revenues as admissions, event-related, broadcasting and other.  “Admissions” revenue includes ticket sales for our events.  “Event-related” revenue includes amounts received from sponsorship fees; luxury suite rentals; hospitality tent rentals and catering; concessions and vendor commissions for the right to sell concessions and souvenirs at our events; sales of programs; track rentals; broadcasting rights other than domestic television broadcasting revenue, and other event-related revenues.  Additionally, event related revenue includes amounts received for the use of our property and a portion of the concession sales we manage from

6

the Firefly Music Festival.  “Broadcasting” revenue includes rights fees obtained for domestic television broadcasts of events held at our speedway.

All of our revenues are based on contracts with customers and, with the exception of certain track rentals, relate to two NASCAR event weekends and the Firefly Music Festival held at our Dover facility.  Our contracts are typically for specific events or a racing season.  We have several multi-year sponsorship contracts for our racing events and our contract with the promoter of the Firefly Music Festival is multi-year.  Revenues pertaining to specific events are deferred and recorded as contract liabilities in our consolidated balance sheets until the event is held.  As of September 30, 2019, contract liabilities in our consolidated balance sheets of $4,279,000 and $247,000 relate to 2019 and 2020 events, respectively.  As of December 31, 2018, contract liabilities in our consolidated balance sheets relate to 2019 events.  Concession and souvenir revenues are recorded at the time of sale.  Revenues and related expenses from barter transactions in which we provide sponsorship packages in exchange for goods or services are recorded at fair value.  Barter transactions accounted for $261,000 and $239,000 of total revenues for the nine-month periods ended September 30, 2019 and 2018, respectively.

The following table summarizes the liability activity related to contracts with customers for the three and nine-month periods ended September 30, 2019 and 2018:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019			2018
Balance, beginning of period	$	2,008	$	1,700	$	1,140		$	1,249
Reductions from beginning balance	—		—		(739		)	(778		)
Additional liabilities recorded during the period	2,518		2,828		7,715			8,525
Reduction of additional liabilities recorded during the period, not from beginning balance	—		—		(3,590		)	(4,468		)
Balance, end of period	$	4,526	$	4,528	$	4,526		$	4,528

We have contracted future revenues representing unsatisfied performance obligations.  These contracts contain initial terms typically ranging from one to three years, with some for longer periods, excluding renewal options.  We have excluded unsatisfied performance obligations for future NASCAR broadcasting revenue with contract terms through 2024. We anticipate recognizing unsatisfied performance obligations for the calendar year ending 2020 and beyond of approximately $3,852,000 at September 30, 2019.

Under the terms of our sanction agreements with NASCAR, we receive a portion of the broadcast revenue NASCAR negotiates with various television networks.  NASCAR typically remits payment to us for the broadcast revenue within 30 days of the event being held.  NASCAR retains 10% of the gross broadcast rights fees allocated to each NASCAR-sanctioned event as a component of its sanction fee.  The remaining 90% is recorded as revenue.  We are required to pay 25% of the gross broadcast rights fees to the event as part of the awards to the competitors, which are recorded as operating expenses.

Expense recognition—The cost of advertising is expensed as incurred.  Advertising expenses were $465,000 and $1,011,000, and $539,000 and $1,144,000 for the three and nine-month periods ended September 30, 2019 and 2018, respectively.  Certain direct expenses pertaining to specific events, including prize and point fund monies and sanction fees paid to NASCAR, and other expenses associated with our racing events are deferred until the event is held, at which point they are expensed.

7

Net (loss) earnings per common share—Nonvested share-based payment awards that include rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities, and the two-class method of computing basic and diluted net (loss) earnings per common share (“EPS”) is applied for all periods presented.  The following table sets forth the computation of EPS (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019		2018
Net (loss) earnings per common share — basic and diluted:
Net (loss) earnings	$	(414	)	$	(2,699	)	$	2,597	$	2,817
Allocation to nonvested restricted stock awards	—			—			42		45
Net (loss) earnings available to common stockholders	$	(414	)	$	(2,699	)	$	2,555	$	2,772
Weighted-average shares outstanding — basic and diluted	35,952			36,102			35,998		36,165
Net (loss) earnings per common share — basic and diluted	$	(0.01	)	$	(0.07	)	$	0.07	$	0.08

There were no options outstanding and we paid no dividends during the nine months ended September 30, 2019 or 2018.

On October 23, 2019, our Board of Directors declared an annual cash dividend on both classes of common stock of $.10 per share to be paid on December 10, 2019.

Accounting for stock-based compensation—We recorded total stock-based compensation expense for our restricted stock awards of $67,000 and $243,000, and $66,000 and $237,000 as general and administrative expenses for the three and nine-month periods ended September 30, 2019 and 2018, respectively.  We recorded income tax benefits of $19,000 and $57,000, and $18,000 and $64,000 for the three and nine-month periods ended September 30, 2019 and 2018, respectively, related to vesting of our restricted stock awards.

Recent accounting pronouncements—In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General. This new standard makes changes to the disclosure requirements for sponsors of defined benefit pension and/or other postretirement benefit plans to improve effectiveness of notes to the financial statements.  ASU 2018-14 is effective for fiscal years ending after December 15, 2020, and requires retrospective adoption.  Early adoption is permitted.  We are currently analyzing the impact of this ASU and we do not expect it to have a significant impact on our financial statement disclosures.

NOTE 4 — Long-Term Debt

At September 30, 2019, Dover Motorsports, Inc. and its wholly owned subsidiaries Dover International Speedway, Inc. and Nashville Speedway, USA, Inc., as co-borrowers had a $30,000,000 credit agreement with a bank group.  On September 24, 2019, we modified the credit agreement to: extend the maturity date to January 1, 2022; and reduce the total available borrowings under the facility from $35,000,000 to $30,000,000.  Interest is based upon LIBOR plus a margin that varies between 125 and 175 basis points depending on the leverage ratio.  At September 30, 2019, there were no borrowings outstanding under the credit facility.  The credit facility contains certain covenants including maximum funded debt to earnings before interest, taxes, depreciation and amortization (“leverage ratio”) and a minimum fixed charge coverage ratio.  Material adverse changes in our results of operations could impact our ability to maintain financial ratios necessary to satisfy these requirements.  In addition, the credit agreement includes a material adverse change clause.  The credit facility also provides that if we default under any other loan agreement, that would be a default under this facility.  At September 30, 2019, we were in compliance with the terms of the credit facility.  The credit facility provides for seasonal funding needs, capital improvements, letter of credit requirements and other general corporate purposes.  After consideration of stand-by letters of credit outstanding, the remaining maximum borrowings available pursuant to the credit facility were $16,375,000 at September 30, 2019.  We expect to be in compliance with the financial covenants, and all other covenants, for all measurement periods during the next twelve months.

8

NOTE 5 — Pension Plans

We maintain a non-contributory tax qualified defined benefit pension plan that has been frozen since July 2011.  All of our full time employees were eligible to participate in the qualified plan.  Benefits provided by our qualified pension plan were based on years of service and employees’ remuneration over their employment period.  Compensation earned by employees up to July 31, 2011 is used for purposes of calculating benefits under our pension plan with no future benefit accruals after this date.  We also maintain a non-qualified, non-contributory defined benefit pension plan, the excess plan, for certain employees that has been frozen since July 2011.  This excess plan provided benefits that would otherwise be provided under the qualified pension plan but for maximum benefit and compensation limits applicable under federal tax law.  The cost associated with the excess plan is determined using similar actuarial methods and assumptions as those used for our qualified pension plan.  The assets for the excess plan aggregate $1,134,000 and $995,000 as of September 30, 2019 and December 31, 2018, respectively, and are recorded in other assets in our consolidated balance sheets (see NOTE 7 — Fair Value Measurements).

The components of net periodic pension benefit for our defined benefit pension plans are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Interest cost	$	130,000		$	116,000		$	387,000		$	346,000
Expected return on plan assets	(183,000		)	(179,000		)	(546,000		)	(519,000		)
Recognized net actuarial loss	40,000			40,000			111,000			112,000
	$	(13,000	)	$	(23,000	)	$	(48,000	)	$	(61,000	)

The net periodic pension benefit is included in other income in our consolidated statements of (loss) earnings.

While we have no minimum required pension contributions for 2019, we will consider making contributions during the remainder of the year.  We contributed $750,000 and $1,750,000 to our defined benefit pension plans during the three and nine-month periods ended September 30, 2018, respectively.

We also maintain a non-elective, non-qualified supplemental executive retirement plan (“SERP”) which provides deferred compensation to certain highly compensated employees that approximates the value of benefits lost by the freezing of the pension plan which are not offset by our enhanced matching contributions in our 401(k)  plan.  The SERP is a discretionary defined contribution plan and contributions made to the SERP in any given year are not guaranteed and will be at the sole discretion of our Compensation and Stock Incentive Committee.  In the three and nine-month periods ended September 30, 2019 and 2018, we recorded expenses of $27,000 and $81,000, and $21,000 and $68,000, respectively, related to the SERP.  During the three and nine-month periods ended September 30, 2019 and 2018, we contributed $0 and $108,000, and $0 and $85,000 to the plan, respectively.  The liability for SERP pension benefits was $81,000 and $108,000 as of September 30, 2019 and December 31, 2018, respectively, and is included in accrued liabilities in our consolidated balance sheets.

We maintain a defined contribution 401(k) plan that permits participation by substantially all employees.  Our matching contributions to the 401(k) plan were $31,000 and $90,000, and $35,000 and $101,000 in the three and nine-month periods ended September 30, 2019 and 2018, respectively.

9

NOTE 6 — Stockholders’ Equity

Changes in the components of stockholders’ equity for the nine-months ending September 30, 2019 are as follows (in thousands):

	Common Stock			Class A Common Stock		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss
Balance at December 31, 2018	$	1,805		$	1,851	$	101,416		$	(38,826	)	$	(3,358	)
Net loss	—			—		—			(2,490		)	—
Issuance of restricted stock awards, net of forfeitures	14			—		(14		)	—			—
Stock-based compensation	—			—		108			—			—
Repurchase and retirement of common stock	(10		)	—		(190		)	—			—
Change in net actuarial loss and prior service cost, net of income tax expense of $10	—			—		—			—			25
Balance at March 31, 2019	1,809			1,851		101,320			(41,316		)	(3,333		)
Net earnings	—			—		—			5,501			—
Stock-based compensation	—			—		68			—			—
Change in net actuarial loss and prior service cost, net of income tax expense of $10	—			—		—			—			26
Balance at June 30, 2019	1,809			1,851		101,388			(35,815		)	(3,307		)
Net loss	—			—		—			(414		)	—
Stock-based compensation	—			—		67			—			—
Repurchase and retirement of common stock	(16		)	—		(312		)	—			—
Change in net actuarial loss and prior service cost, net of income tax expense of $11	—			—		—			—			29
Balance at September 30, 2019	$	1,793		$	1,851	$	101,143		$	(36,229	)	$	(3,278	)

Changes in the components of stockholders’ equity for the nine-months ending September 30, 2018 are as follows (in thousands):

	Common Stock			Class A Common Stock		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss
Balance at December 31, 2017	$	1,825		$	1,851	$	101,844		$	(42,858	)	$	(3,440	)
Adoption of ASU 2016-01	—			—		—			73			(73		)
Net loss	—			—		—			(992		)	—
Issuance of restricted stock awards, net of forfeitures	15			—		(15		)	—			—
Stock-based compensation	—			—		105			—			—
Repurchase and retirement of common stock	(14		)	—		(275		)	—			—
Change in net actuarial loss and prior service cost, net of income tax expense of $10	—			—		—			—			27
Balance at March 31, 2018	1,826			1,851		101,659			(43,777		)	(3,486		)
Net earnings	—			—		—			6,508			—
Stock-based compensation	—			—		66			—			—
Repurchase and retirement of common stock	(5		)	—		(112		)	—			—
Change in net actuarial loss and prior service cost, net of income tax expense of $10	—			—		—			—			26
Balance at June 30, 2018	1,821			1,851		101,613			(37,269		)	(3,460		)
Net loss	—			—		—			(2,699		)	—
Stock-based compensation	—			—		66			—			—
Repurchase and retirement of common stock	(7		)	—		(134		)	—			—
Change in net actuarial loss and prior service cost, net of income tax expense of $11	—			—		—			—			28
Balance at September 30, 2018	$	1,814		$	1,851	$	101,545		$	(39,968	)	$	(3,432	)

10

As of September 30, 2019 and December 31, 2018, accumulated other comprehensive loss, net of income taxes, consists of the following:

	September 30, 2019			December 31, 2018
Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $2,319,000 and $2,350,000, respectively	$	(3,278,000	)	$	(3,358,000	)

On July 28, 2004, our Board of Directors authorized the repurchase of up to 2,000,000 shares of our outstanding common stock.  The purchases may be made in the open market or in privately negotiated transactions as conditions warrant.  The repurchase authorization has no expiration date, does not obligate us to acquire any specific number of shares and may be suspended at any time.  During the first nine months of 2019 and 2018, we purchased and retired 208,416 and 212,082 shares of our outstanding common stock at an average purchase price of $2.03 and $2.09 per share, respectively, not including nominal brokerage commissions.  At September 30, 2019, we had remaining repurchase authority of 492,233 shares.

We have a stock incentive plan, adopted in 2014, which provides for the grant of up to 2,000,000 shares of common stock to our officers and key employees through stock options and/or awards valued in whole or in part by reference to our common stock, such as nonvested restricted stock awards.  Under the plan, nonvested restricted stock vests an aggregate of twenty percent each year beginning on the second anniversary date of the grant.  The aggregate market value of the nonvested restricted stock at the date of issuance is being amortized on a straight-line basis over the six-year period.  We granted 143,000 and 151,000 stock awards under this plan during the nine months ended September 30, 2019 and 2018.  As of September 30, 2019, there were 1,327,473 shares available for granting options or stock awards.

During the nine months ended September 30, 2019 and 2018, we purchased and retired 48,457 and 47,236 shares of our outstanding common stock at an average purchase price of $1.99 and $2.00 per share, respectively.  These purchases were made from employees in connection with the vesting of restricted stock awards under our Stock Incentive Plan and were not pursuant to the aforementioned repurchase authorization.  Since the vesting of a restricted stock award is a taxable event to our employees for which income tax withholding is required, the plan allows employees to surrender to us some of the shares that would otherwise have transferred to the employee in satisfaction of their tax liability.  The surrender of these shares is treated by us as a purchase of the shares.

NOTE 7 — Fair Value Measurements

Our financial instruments are classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table summarizes the valuation of our financial instrument pricing levels as of September 30, 2019 and December 31, 2018:

	Total		Level 1		Level 2		Level 3
September 30, 2019
Equity investments	$	1,134,000	$	1,134,000	$	—	$	—
December 31, 2018
Equity investments	$	995,000	$	995,000	$	—	$	—

11

Our equity investments consist of mutual funds.  These investments are included in other assets in our consolidated balance sheets.  Gains on our equity investments for the three and nine-month periods ended September 30, 2019 and 2018, respectively, are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018			2019		2018
Net gains recognized during the period on equity investments	$	12,000	$	21,000		$	125,000	$	15,000
Less: net gains recognized during the period on equity investments sold during the period	—		(2,000		)	—		(15,000		)
Unrealized gains recognized during the period on equity investments still held at period end	$	12,000	$	19,000		$	125,000	$	—

The carrying amounts of other financial instruments reported in our consolidated balance sheets for current assets and current liabilities approximate their fair values because of the short maturity of these instruments.

NOTE 8 — Related Party Transactions

During the nine-month period ended September 30, 2019 and the three and nine-month periods ended September 30, 2018, Dover Downs Gaming & Entertainment, Inc. (“Gaming”), a company previously related through common ownership, allocated costs of $430,000, and $440,000 and $1,325,000, respectively, to us for certain administrative and operating services, including leased space.  We allocated certain administrative and operating service costs of $110,000, and $22,000 and $162,000, respectively, to Gaming for the nine-month period ended September 30, 2019 and the three and nine-month periods ended September 30, 2018.  The allocations were based on an analysis of each company’s share of the costs.  In connection with our 2018 spring NASCAR event weekend at Dover International Speedway, Gaming provided certain services, primarily catering, for which we were invoiced $10,000 and $401,000 during the three and nine-month periods ended September 30, 2018.  Additionally, we invoiced Gaming $15,000, and $26,000 and $141,000, respectively, during the nine-month period ended September 30, 2019 and the three and nine-month periods ended September 30, 2018 for tickets, our commission for suite catering and other services to the NASCAR events.  As of December 31, 2018, our consolidated balance sheets included $9,000 of payables to Gaming for the aforementioned items.  We settled this item in January of 2019.  Effective March 28, 2019, Gaming became part of Twin River Worldwide Holdings, Inc. as a result of a merger, and therefore, was no longer related through common ownership.  The net costs incurred by each company for these services are not necessarily indicative of the costs that would have been incurred if the companies had been unrelated entities and/or had otherwise independently managed these functions; however, management believes that these costs are reasonable.

Prior to the spin-off of Gaming from our company in 2002, both companies shared certain real property in Dover, Delaware.  At the time of the spin-off, some of this real property was transferred to Gaming to ensure that the real property holdings of each company was aligned with its past uses and future business needs.  During its harness racing season, Gaming has historically used the 5/8-mile harness racing track that is located on our property and is on the inside of our one-mile motorsports superspeedway.  In order to continue this historic use, we granted a perpetual easement to the harness track to Gaming at the time of the spin-off.  This perpetual easement allows Gaming to have exclusive use of the harness track during the period beginning November 1 of each year and ending April 30 of the following year, together with set up and tear down rights for the two weeks before and after such period.  The easement requires that Gaming maintain the harness track but does not require the payment of any rent.

Various easements and agreements relative to access, utilities and parking have also been entered into between us and Gaming relative to our respective Dover, Delaware facilities.  We pay rent to Gaming for the lease of our principal executive office space.

Henry B. Tippie, Chairman of our Board of Directors, controls in excess of fifty percent of our voting power.  Mr. Tippie’s voting control emanates from his direct and indirect holdings of common stock and Class A common stock and from his status as a trustee of the RMT Trust, our largest stockholder.  This means that Mr. Tippie has the ability to determine the outcome of the election of directors and to determine the outcome of many significant corporate transactions, many of which only require the approval of a majority of our voting power.

12

NOTE 9 — Commitments and Contingencies

In September 1999, the Sports Authority of the County of Wilson (Tennessee) issued $25,900,000 in Variable Rate Tax Exempt Infrastructure Revenue Bonds, Series 1999, to acquire, construct and develop certain public infrastructure improvements which benefit Nashville Superspeedway, of which $13,400,000 was outstanding at September 30, 2019.  Annual principal payments range from $1,100,000 in September 2020 to $1,600,000 in 2029 and are payable solely from sales taxes and incremental property taxes generated from the facility.  These bonds are direct obligations of the Sports Authority, and therefore, have historically not been required to be recorded on our consolidated balance sheets.  If the sales taxes and incremental property taxes (“applicable taxes”) are insufficient for the payment of principal and interest on the bonds, we would become responsible for the difference.  In the event we were unable to make the payments, they would be made pursuant to a $13,625,000 irrevocable direct-pay letter of credit issued by our bank group.  We are exposed to fluctuations in interest rates for these bonds.

As of September, 2019 and December 31, 2018, $724,000 and $1,052,000, respectively, was available in the sales and incremental property tax fund maintained by the Sports Authority to pay the remaining principal and interest due under the bonds.  During the first nine months of 2019, we paid $981,000 into the sales and incremental property tax fund and $1,309,000 was deducted from the fund for debt service.  If we fail to maintain the letter of credit that secures the bonds or we allow an uncured event of default to exist under our reimbursement agreement relative to the letter of credit, the bonds would be immediately redeemable.

Nashville Superspeedway no longer promotes motorsports events and has not entered into sanction agreements with NASCAR since 2011.  We lease the facility on a short term basis to third parties from time to time.  In 2011, we recorded a $2,250,000 provision for contingent obligation reflecting the present value of the estimated portion of the revenue bonds debt service that may not be covered by the projected sales and incremental property taxes from the facility.  Due to changing interest rates, the provision for contingent obligation increased (decreased) by $121,000 and $367,000, and ($4,000) and $132,000 in the three and nine-month periods ended September 30, 2019 and 2018, respectively, and is $2,751,000 at September 30, 2019.  An increase in the bonds’ interest rates would result in an increase in the portion of debt service not covered by applicable taxes, and therefore, an increase in our liability.

We are also a party to ordinary routine litigation incidental to our business.  Management does not believe that the resolution of any of these matters is likely to have a material adverse effect on our results of operations, financial position or cash flows.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion is based upon and should be read together with the consolidated financial statements and notes thereto included elsewhere in this document.

Results of Operations

Three Months Ended September 30, 2019 vs. Three Months Ended September 30, 2018

We promoted no events during the third quarter of 2019 or 2018; therefore, revenues were minimal.

Operating and marketing expenses were $1,347,000 in the third quarter of 2019 as compared to $1,599,000 in the third quarter of 2018.  The decrease was primarily related to lower wages and benefit expenses and the timing of advertising expenses for our fall race weekend.

General and administrative expenses were $1,888,000 in the third quarter of 2019 as compared to $1,798,000 in the third quarter of 2018.  The increase was primarily due to higher wages and benefit expenses.

13

Depreciation expense increased to $1,669,000 in the third quarter of 2019 from $793,000 in the third quarter of 2018.  The increase was due to shortening of the useful lives of certain track related assets that will be retired at the end of the 2019 racing season as a result of our planned reduction of grandstand seating.  We recorded $879,000 of accelerated depreciation expense on these assets in the third quarter of 2019 and expect to record an additional $293,000 of depreciation expense in the fourth quarter of 2019.

Gain on sale of land in the third quarter of 2019 relates to the sales of approximately 133 acres of land at our Nashville facility.  The 2018 loss resulted from the sale of a parcel of land we owned near St. Louis, Missouri.

Net interest income was $20,000 in the third quarter of 2019 as compared to net interest expense of $2,000 in the third quarter of 2018 and resulted from lower average outstanding borrowings and interest income on invested cash in 2019.

Provision for contingent obligation was $121,000 in the third quarter of 2019 as compared to a benefit of $4,000 in the third quarter of 2018 primarily as a result of a decrease in the discount rate.

Other income of $29,000 in the third quarter of 2019 primarily represents gains on equity investments of $12,000 and pension benefits of $13,000.  Other income of $46,000 in the third quarter of 2018 primarily represents pension benefits of $23,000 and gains on equity investments of $21,000.

Our effective income tax rates for the third quarter of 2019 and 2018 were 29.6% and 32.8%, respectively.  The 2018 rate was impacted by deductions for additional contributions made to our pension plan in 2018.

Nine Months Ended September 30, 2019 vs. Nine Months Ended September 30, 2018

Admissions revenue was $2,502,000 in the first nine months of 2019 as compared to $2,853,000 in the first nine months of 2018.  The $351,000 decrease was related to lower attendance at our 2019 spring NASCAR event weekend at Dover International Speedway.  Inclement weather negatively impacted our Sunday Cup series event causing us to hold it on Monday.

Event-related revenue was $3,784,000 in the first nine months of 2019 as compared to $5,283,000 in the first nine months of 2018.  The $1,499,000 decrease was primarily due to lower sponsorship revenues, the hiring of a company to manage our concession sales so that we now receive a percentage of the sales, and lower luxury suite rentals and hospitality at our 2019 spring NASCAR event weekend and lower revenues from the 2019 Firefly Music Festival.  We believe the inclement weather negatively impacted our event-related revenue.

Broadcasting revenue increased to $18,878,000 in the first nine months of 2019 as compared to $18,128,000 in the first nine months of 2018 due to contractual increases in NASCAR’s broadcasting rights agreement.

Operating and marketing expenses were $16,986,000 in the first nine months of 2019 as compared to $16,984,000 in the first nine months of 2018.

General and administrative expenses increased to $5,630,000 in the first nine months of 2019 from $5,552,000 in the first nine months of 2018. The increase was primarily due to higher wages and benefit expenses.

Depreciation expense increased to $3,256,000 in the first nine months of 2019 from $2,496,000 in the first nine months of 2018.  The increase was due to shortening of the useful lives of certain track related assets that will be retired at the end of the 2019 racing season as a result of our planned reduction of grandstand seating.  We recorded $879,000 of accelerated depreciation expense on these assets in the third quarter of 2019 and expect to record an additional $293,000 of depreciation expense in the fourth quarter of 2019.

Gain on sale of land in the first nine months of 2019 and 2018 relates to the sales of approximately 141 and 147 acres of land at our Nashville facility, respectively.  The 2018 gain was partially offset by a loss on the sale of a parcel of land we owned near St. Louis, Missouri.

14

Net interest income was $4,000 in the first nine months of 2019 as compared to net interest expense of $75,000 in the first nine months of 2018 and resulted from lower average outstanding borrowings and interest income on invested cash in 2019.

Provision for contingent obligation increased to $367,000 in the first nine months of 2019 from $132,000 in the first nine months of 2018 primarily as a result of a decrease in the discount rate.

Other income of $218,000 in the first nine months of 2019 primarily represents gains on equity investments of $125,000 and pension benefits of $48,000.  Other income of $77,000 in the first nine months of 2018 primarily represents pension benefits of $61,000 and gains on equity investments of $15,000.

Our effective income tax rates for the first nine months of 2019 and 2018 were 25.3% and 19.9%, respectively.  The 2018 rate was impacted by deductions for additional contributions made to our pension plan in 2018.

Liquidity and Capital Resources

Our operations and cash flows from operating activities are seasonal in nature.

Net cash used in operating activities was $1,664,000 for the first nine months of 2019 as compared to $800,000 for the first nine months of 2018.  The increase was primarily due to the lower earnings, excluding the gain on sale of land, the timing of invoicing to and payments received from customers, and the timing of payments for certain fall race weekend expenses.  Partially offsetting these increases were lower pension contributions.  We contributed $1,750,000 to our defined benefit pension plan in the first nine months of 2018.  We made no pension contributions during the first nine months of 2019.

Net cash provided by investing activities was $3,060,000 for the first nine months of 2019 as compared to $4,173,000 for the first nine months of 2018.  Capital expenditures of $4,651,000 in the first nine months of 2019 related primarily to costs associated with replacing our Monster Energy NASCAR Cup Series garage and other improvements at our Dover facility.  Capital expenditures of $762,000 in the first nine months of 2018 related primarily to improvements at our Dover facility and equipment purchases.  In 2019, we closed on the sale of approximately 141 acres of land at our Nashville Superspeedway facility for proceeds of $6,664,000, net of closing costs.  Also in the first quarter of 2019, we closed on the sale of a parcel of land we owned near St. Louis for proceeds of $531,000, net of closing costs.  In March 2018, we closed on the sale of approximately 147 acres of land at our Nashville Superspeedway facility for proceeds of $4,945,000, net of closing costs.  In June 2019, we extended an option to purchase land at our Nashville facility and received a $500,000 non-refundable deposit in return — see further discussion below.

Net cash used in financing activities was $563,000 for the first nine months of 2019 as compared to $3,187,000 for the first nine months of 2018.  During the first nine months of 2019, we borrowed $4,120,000 from our revolving line of credit all of which was repaid during the same period.  We had net repayments on our outstanding line of credit of $2,640,000 in the first nine months of 2018.  During the first nine months of 2019 and 2018, we purchased and retired 208,416 and 212,082 shares of our outstanding common stock for $432,000 and $453,000 from the open market, respectively.  Additionally, we purchased and retired 48,457 and 47,236 shares of our outstanding common stock for $96,000 and $94,000 during the first nine months of 2019 and 2018, respectively, from employees in connection with the vesting of restricted stock awards under our stock incentive plan.  As a result of amending our credit agreement in September 2019, we paid $35,000 in bank fees.

At September 30, 2019, Dover Motorsports, Inc. and its wholly owned subsidiaries Dover International Speedway, Inc. and Nashville Speedway, USA, Inc., as co-borrowers had a $30,000,000 credit agreement with a bank group.  On September 24, 2019, we modified the credit agreement to: extend the maturity date to January 1, 2022; and reduce the total available borrowings under the facility from $35,000,000 to $30,000,000.  Interest is based upon LIBOR plus a margin that varies between 125 and 175 basis points depending on the leverage ratio.  At September 30, 2019, there were no borrowings outstanding under the credit facility.  The credit facility contains certain covenants including maximum funded debt to earnings before interest, taxes, depreciation and amortization (“leverage ratio”) and a minimum fixed charge coverage ratio.  Material adverse changes in our results of operations could impact our ability to maintain financial ratios necessary to satisfy these requirements.  In addition, the credit agreement includes

15

a material adverse change clause.  The credit facility also provides that if we default under any other loan agreement, that would be a default under this facility.  At September 30, 2019, we were in compliance with the terms of the credit facility.  The credit facility provides for seasonal funding needs, capital improvements, letter of credit requirements and other general corporate purposes.  After consideration of stand-by letters of credit outstanding, the remaining maximum borrowings available pursuant to the credit facility were $16,375,000 at September 30, 2019.  We expect to be in compliance with the financial covenants, and all other covenants, for all measurement periods during the next twelve months.

Nashville Superspeedway no longer promotes motorsports events and has not entered into sanction agreements with NASCAR since 2011.  We lease the facility on a short term basis to third parties from time to time.On August 17, 2017, we entered into an agreement with an entity owned by Panattoni Development Company (“buyer”) relative to the sale of approximately 147 acres of land at a purchase price of $35,000 per acre.  On March 2, 2018, we closed on the sale of the property with proceeds, less closing costs, of $4,945,000.  Net proceeds after taxes were approximately $4,150,000.  On September 1, 2017, we also awarded to the buyer a three year option for 88.03 additional acres at a purchase price of $55,000 per acre.  That option agreement has been amended twice since: first, on February 9, 2018, to extend its term and to add additional acreage; and second, on June 25, 2019, in connection with the purchaser’s exercise of its option on two parcels, we adjusted the acreage and further extended the term of the option on a third parcel.  On July 26, 2019, the purchaser closed on the first two parcels, comprising approximately 133 acres, which yielded to us proceeds, less closing costs, of $6,397,000.  Net proceeds after taxes were approximately $5,314,000 resulting in a gain of $4,186,000.  One parcel of 97.17 acres remains under the option agreement with a purchase price of $66,685 per acre.  The purchaser paid to us $500,000 for the extension of this option until March 1, 2022, and this non-refundable payment would be credited to the purchase price at the closing of that option parcel.  While management remains committed to selling the remaining Nashville Superspeedway property which consists of approximately 1,000 acres, we do not believe it is probable that the remaining property will be sold within the next twelve months.  At September 30, 2019 and December 31, 2018, $21,292,000 and $23,567,000 was reported as long term assets in our consolidated balance sheets, respectively.  At December 31, 2018, $531,000 was reported as assets held for sale in our consolidated balance sheet.

On February 28, 2019, we entered into an agreement to sell 7.63 acres of land at our Nashville facility for proceeds, less closing costs, of $267,000.  The sale closed in the first quarter of 2019 and resulted in a gain of $139,000, which we have reported as gain on sale of land in our consolidated statements of (loss) earnings.

During September 2018, we entered into negotiations to sell the last remaining parcel of land we owned near St. Louis.  The sale closed in the first quarter of 2019 with proceeds, less closing costs, of $531,000.  At December 31, 2018, the fair value of the land was reported as assets held for sale in our consolidated balance sheet.

We promoted three racing events in the first nine months of 2019 and three more during the fourth quarter of 2019.  We promoted six racing events in 2018 (five national series events and one regional series event), all of which were sanctioned by NASCAR and held at our Dover International Speedway facility.  We have entered into five year sanction agreements with NASCAR for each of the five national series events for 2016-2020.  NASCAR’s regional series events are sanctioned on an annual basis.

Broadcasting revenues continue to be a significant long-term revenue source for our business.  Management believes this long-term contracted revenue helps stabilize our financial strength, earnings and cash flows. Also, NASCAR ratings can impact attendance at our events and sponsorship opportunities. A substantial portion of our profits in recent years has resulted from television revenues received from NASCAR under its agreements with various television networks, which is expected to continue for the foreseeable future.  Our share of these television broadcast revenues and purse and sanction fees are fixed under our NASCAR sanction agreements through the year 2020.  We are obligated to conduct events in the manner stipulated under the terms and conditions of these sanctioning agreements.

NASCAR is operating under a ten-year, multi-platform agreement with FOX Sports Media Group (“FOX”) for the broadcasting and digital rights to 16 NASCAR Cup Series races, 14 Xfinity Series races and the entire Gander Outdoors Truck Series (along with practice and qualifying) from 2015 through 2024. The agreement includes “TV Everywhere” rights that allow live-streaming of all FOX races, before and after race coverage, in-progress and finished race highlights, and replays of FOX-televised races to a Fox Sports-affiliated website which began in 2013.

16

The agreement also allows re-telecast of races on a FOX network and via video-on-demand for 24 hours and other ancillary programming, including a nightly NASCAR news and information show and weekend at-track shows. NASCAR and FOX Deportes, the number one US Latino sports network, have teamed up to provide our sport’s most expansive Spanish-language broadcast offering ever with coverage of 15 NASCAR Cup Series races which started in 2013.

NASCAR also operates under a ten-year comprehensive agreement with NBC Sports Group granting NBCUniversal (“NBC”) exclusive rights to 20 NASCAR Cup Series races, 19 NASCAR Xfinity Series events, select NASCAR Regional & Touring Series events and other live content which began in 2015.  Further, NBC has been granted Spanish-language rights, certain video-on-demand rights and exclusive ‘TV Everywhere’ rights for its NASCAR Cup Series and NASCAR Xfinity Series events.

Looking forward, our sanction agreements with NASCAR contain annual increases of between 3 and 4 percent in media rights fees for each sanctioned event conducted, and provide a specific percentage of media rights fees to be paid to competitors. The sanction agreements also provide for annual increases in sanction fees and non-media rights related prize and point fund monies (to be paid to competitors) of between 4 and 4.5 percent annually over the term of the agreements.

We have hosted the Firefly Music Festival (“Firefly”) on our property in Dover, Delaware for eight consecutive years and it is scheduled to return on June 18-21, 2020.  The inaugural three day festival with 40 musical acts was held in July 2012 and the 2019 event was held on June 21-23, 2019 with over 120 musical acts.  In September 2014, Red Frog Events LLC formed RFGV Festivals LLC - a joint venture with Goldenvoice that promotes Firefly.  Goldenvoice is a company of AEG Presents, LLC, a subsidiary of Anschutz Entertainment Group, Inc.  AEG Presents, one of the world’s largest presenters of live music and entertainment events, announced on July 18, 2018 that it had acquired the remainder of RFGV Festivals LLC from Red Frog.  Our amended agreement with RFGV Festivals grants them two 5 year options to extend our facility rental agreement through 2032 in exchange for a rental commitment to secure our property.  In addition to the facility rental fee, we also receive a percentage of the concession sales we manage at the events.

We believe that our net cash flows from operating activities and funds available from our credit facility will be sufficient to provide for our working capital needs, capital spending requirements, stock repurchases, as well as any cash dividends our Board of Directors may declare at least through the next twelve months and also provide for our long-term liquidity.  On October 23, 2019, our Board of Directors declared an annual cash dividend on both classes of common stock of $.10 per share to be paid on December 10, 2019.  Based on current business conditions, we expect to spend approximately $1,500,000 on capital expenditures during the remainder of 2019.  While we have no minimum required pension contributions for 2019, we will consider making contributions during the remainder of 2019.

Contractual Obligations

At September 30, 2019, we had the following contractual obligations and other commercial commitments:

			Payments Due by Period
	Total		2019		2020 – 2021		2022 – 2023		Thereafter
Contingent obligation(a)	$	2,751,000	$	—	$	—	$	—	$	2,751,000
Purchase obligation(b)	1,462,000		731,000		731,000		—		—
Lease payments	217,000		20,000		163,000		34,000		—
Total contractual cash obligations	$	4,430,000	$	751,000	$	894,000	$	34,000	$	2,751,000

(a) In September 1999, the Sports Authority of the County of Wilson (Tennessee) issued $25,900,000 in Variable Rate Tax Exempt Infrastructure Revenue Bonds, Series 1999, to acquire, construct and develop certain public infrastructure improvements which benefit Nashville Superspeedway, of which $13,400,000 was outstanding at September 30, 2019.  Annual principal payments range from $1,100,000 in September 2020 to $1,600,000 in 2029 and are payable solely from sales taxes and incremental property taxes generated from the facility.  These bonds are direct obligations of the Sports Authority, and therefore, have historically not been required to be recorded on our consolidated balance sheet.  If the sales taxes and incremental property taxes (“applicable taxes”) are

17

insufficient for the payment of principal and interest on the bonds, we would become responsible for the difference.  In the event we were unable to make the payments, they would be made pursuant to a $13,625,000 irrevocable direct-pay letter of credit issued by our bank group.  We are exposed to fluctuations in interest rates for these bonds.

As of September 30, 2019 and December 31, 2018, $724,000 and $1,052,000, respectively, was available in the sales and incremental property tax fund maintained by the Sports Authority to pay the remaining principal and interest due under the bonds.  During the first nine months of 2019, we paid $981,000 into the sales and incremental property tax fund and $1,309,000 was deducted from the fund for debt service.  If we fail to maintain the letter of credit that secures the bonds or we allow an uncured event of default to exist under our reimbursement agreement relative to the letter of credit, the bonds would be immediately redeemable.

Nashville Superspeedway no longer promotes motorsports events and has not entered into sanction agreements with NASCAR since 2011.  We lease the facility on a short term basis to third parties from time to time.  In 2011 we recorded a $2,250,000 provision for contingent obligation reflecting the present value of the estimated portion of the revenue bonds debt service that may not be covered by the projected sales and incremental property taxes from the facility.  Due to changing interest rates, the provision for contingent obligation increased (decreased) by $121,000 and $367,000, and ($4,000) and $132,000 in the three and nine-month periods ended September 30, 2019 and 2018, respectively, and is $2,751,000 at September 30, 2019.  See NOTE 9 — Commitments and Contingencies of the consolidated financial statements included elsewhere in this document for further discussion.

(b)  In the third quarter of 2019, management approved plans to remove certain grandstand seating following the completion of our 2019 race season and entered into a contract for the removal of that grandstand seating, which is occurring in the fourth quarter of 2019 and first quarter of 2020.

Related Party Transactions

See NOTE 8 — Related Party Transactions of the consolidated financial statements included elsewhere in this document.

Critical Accounting Policies

For a summary of our critical accounting policies and the means by which we develop estimates thereon, see “Part II - Item 7. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations” in our 2018 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies from those included in our 2018 Annual Report on Form 10-K.

Recent Accounting Pronouncements

See NOTE 3 — Summary of Significant Accounting Policies to our consolidated financial statements included elsewhere in this document for a full description of recent accounting pronouncements that affect us.

Factors That May Affect Operating Results; Forward-Looking Statements

This report and the documents incorporated by reference may contain forward-looking statements.  In Item 1A. Risk Factors of our 2018 Annual Report on Form 10-K, we disclose the important factors that could cause our actual results to differ from our expectations.  There have been no material changes to our risk factors from those included in our 2018 Annual Report on Form 10-K.

Item 3.           Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

18

Item 4.           Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that relevant, material information is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors.

Based on their evaluation as of September 30, 2019, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information we are required to disclose in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the fiscal quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II — Other Information

Item 1.           Legal Proceedings

We are a party to ordinary routine litigation incidental to our business.  Management does not believe that the resolution of any of these matters is likely to have a material adverse effect on our results of operations, financial condition or cash flows.

Item 1A.        Risk Factors

Not applicable.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

On July 28, 2004, our Board of Directors authorized the repurchase of up to 2,000,000 shares of our outstanding common stock.  The purchases may be made in the open market or in privately negotiated transactions as conditions warrant.  The repurchase authorization has no expiration date, does not obligate us to acquire any specific number of shares and may be suspended at any time.  During the third quarter of 2019 and 2018, we purchased 158,196 and 65,038 shares of our outstanding common stock at an average purchase price of $2.04 and $2.12 per share, respectively, not including nominal brokerage commissions.  At September 30, 2019, we had remaining repurchase authority of 492,233 shares.

Item 3.           Defaults Upon Senior Securities

None.

Item 4.           Mine Safety Disclosures

Not applicable.

Item 5.           Other Information

None.

19

Item 6.           Exhibits

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Sec. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Sec. 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following materials from the Dover Motorsports, Inc. quarterly report on Form 10-Q for the quarter ended September 30, 2019, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of (Loss) Earnings and Comprehensive (Loss) Income for the three and nine months ended September 30, 2019 and 2018; (ii) Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018; (iii) Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018; and (iv)  Notes to the Consolidated Financial Statements.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DATED:	November 1, 2019	Dover Motorsports, Inc.
		Registrant
		/s/ Denis McGlynn
		Denis McGlynn
		President, Chief Executive Officer and Director
		(Principal Executive Officer)
		/s/ Timothy R. Horne
		Timothy R. Horne
		Senior Vice President-Finance,
		Chief Financial Officer and Director
		(Principal Financial and Accounting Officer)

20

EX-31.1

Exhibit 31.1

Certification

I, Denis McGlynn, President, Chief Executive Officer and Director of Dover Motorsports, Inc. (the “registrant”), certify that:

1.I have reviewed this quarterly report on Form 10-Q of the registrant;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s Board of Directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2019

/s/ Denis McGlynn

Denis McGlynn

President, Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

Certification

I, Timothy R. Horne, Senior Vice President-Finance and Chief Financial Officer of Dover Motorsports, Inc. (the “registrant”), certify that:

1.I have reviewed this quarterly report on Form 10-Q of the registrant;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the Audit Committee of the registrant’s Board of Directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2019

/s/ Timothy R. Horne

Timothy R. Horne

Senior Vice President-Finance, Chief Financial Officer and Director

EX-32.1

Exhibit 32.1

Dover Motorsports, Inc.

Certification Pursuant to 18 U.S.C. Sec. 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Dover Motorsports, Inc., a Delaware corporation (the “Company”), on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Denis McGlynn, President, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 1, 2019

/s/ Denis McGlynn

Denis McGlynn

President, Chief Executive Officer and Director

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

EX-32.2

Exhibit 32.2

Dover Motorsports, Inc.

Certification Pursuant to 18 U.S.C. Sec. 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Dover Motorsports, Inc., a Delaware corporation (the “Company”), on Form 10-Q for the period ended September 30, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Timothy R. Horne, Senior Vice President-Finance and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 1, 2019

/s/ Timothy R. Horne

Timothy R. Horne

Senior Vice President-Finance,

Chief Financial Officer and Director

This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

XML

Fair Value Measurements (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Gains and losses on equity instruments
Net gains recognized during the period on equity investments	$ 12,000	$ 21,000	$ 125,000	$ 15,000
Less: net gains recognized during the period on equity investments sold during the period		(2,000)		$ (15,000)
Unrealized gains recognized during the period on equity investments still held at period end	12,000	$ 19,000	125,000
Total
Fair Value Measurements
Equity investments	1,134,000		1,134,000		$ 995,000
Level 1
Fair Value Measurements
Equity investments	$ 1,134,000		$ 1,134,000		$ 995,000

XML

Pension Plans - Defined benefit plan (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Components of net periodic pension benefit
Interest cost	$ 130,000,000	$ 116,000,000	$ 387,000,000	$ 346,000,000
Expected return on plan assets	(183,000,000)	(179,000,000)	(546,000,000)	(519,000,000)
Recognized net actuarial loss	40,000,000	40,000,000	111,000,000	112,000,000
Total net periodic pension benefit	(13,000,000)	(23,000,000)	(48,000,000)	(61,000,000)
Minimum required pension contributions for 2019	$ 0		$ 0
Employer contribution		$ 750,000		$ 1,750,000

XML

Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions

Related Party Transactions

NOTE 8 – Related Party Transactions

During the nine-month period ended September 30, 2019 and the three and nine-month periods ended September 30, 2018, Dover Downs Gaming & Entertainment, Inc. (“Gaming”), a company previously related through common ownership, allocated costs of $430,000, and $440,000 and $1,325,000, respectively, to us for certain administrative and operating services, including leased space.  We allocated certain administrative and operating service costs of $110,000, and $22,000 and $162,000, respectively, to Gaming for the nine-month period ended September 30, 2019 and the three and nine-month periods ended September 30, 2018. The allocations were based on an analysis of each company’s share of the costs. In connection with our 2018 spring NASCAR event weekend at Dover International Speedway, Gaming provided certain services, primarily catering, for which we were invoiced $10,000 and $401,000 during the three and nine-month periods ended September 30, 2018. Additionally, we invoiced Gaming $15,000, and $26,000 and $141,000, respectively, during the nine-month period ended September 30, 2019 and the three and nine-month periods ended September 30, 2018 for tickets, our commission for suite catering and other services to the NASCAR events.  As of December 31, 2018, our consolidated balance sheets included $9,000 of payables to Gaming for the aforementioned items.  We settled this item in January of 2019.  Effective March 28, 2019, Gaming became part of Twin River Worldwide Holdings, Inc. as a result of a merger, and therefore, was no longer related through common ownership. The net costs incurred by each company for these services are not necessarily indicative of the costs that would have been incurred if the companies had been unrelated entities and/or had otherwise independently managed these functions; however, management believes that these costs are reasonable.

Prior to the spin-off of Gaming from our company in 2002, both companies shared certain real property in Dover, Delaware.  At the time of the spin-off, some of this real property was transferred to Gaming to ensure that the real property holdings of each company was aligned with its past uses and future business needs.  During its harness racing season, Gaming has historically used the 5/8-mile harness racing track that is located on our property and is on the inside of our one-mile motorsports superspeedway.  In order to continue this historic use, we granted a perpetual easement to the harness track to Gaming at the time of the spin-off.  This perpetual easement allows Gaming to have exclusive use of the harness track during the period beginning November 1 of each year and ending April 30 of the following year, together with set up and tear down rights for the two weeks before and after such period.  The easement requires that Gaming maintain the harness track but does not require the payment of any rent.

Various easements and agreements relative to access, utilities and parking have also been entered into between us and Gaming relative to our respective Dover, Delaware facilities.  We pay rent to Gaming for the lease of our principal executive office space.

Henry B. Tippie, Chairman of our Board of Directors, controls in excess of fifty percent of our voting power.  Mr. Tippie's voting control emanates from his direct and indirect holdings of common stock and Class A common stock and from his status as a trustee of the RMT Trust, our largest stockholder.  This means that Mr. Tippie has the ability to determine the outcome of the election of directors and to determine the outcome of many significant corporate transactions, many of which only require the approval of a majority of our voting power.

XML

Pension Plans (Tables)

9 Months Ended

Sep. 30, 2019

Pension Plans

Schedule of components of net periodic pension benefit for defined benefit pension plans

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Interest cost	$	130,000	$	116,000	$	387,000	$	346,000
Expected return on plan assets		(183,000)		(179,000)		(546,000)		(519,000)
Recognized net actuarial loss		40,000		40,000		111,000		112,000
	$	(13,000)	$	(23,000)	$	(48,000)	$	(61,000)

XML

Business Operations

9 Months Ended

Sep. 30, 2019

Business Operations

Business Operations

NOTE 2 – Business Operations

Dover Motorsports, Inc. is a public holding company that is a leading marketer and promoter of motorsports entertainment in the United States. Through our subsidiaries, we own and operate Dover International Speedway® in Dover, Delaware and Nashville Superspeedway® near Nashville, Tennessee. In 2019, we celebrate our 50th anniversary of racing and, as of the date of this filing, our Dover facility promoted the following six events during 2019, all of which were under the auspices of the premier sanctioning body in motorsports - the National Association for Stock Car Auto Racing (“NASCAR”):

· 2 NASCAR Monster Energy Cup Series events (May and October);

· 2 NASCAR Xfinity Series events (May and October);

· 1 NASCAR Gander Outdoors Truck Series event (May); and

· 1 NASCAR K&N Pro Series East event (October).

A NASCAR Monster Energy Cup Series event, a NASCAR Xfinity Series event and a NASCAR Gander Outdoors Truck Series event were held at Dover International Speedway during the second quarter of 2019 and 2018.  A NASCAR Monster Energy Cup Series event, a NASCAR Xfinity Series event and a NASCAR K&N Pro Series East event were held at Dover International Speedway during the fourth quarter of 2019 and 2018.

We have hosted the Firefly Music Festival (“Firefly”) on our property in Dover, Delaware for eight consecutive years and it is scheduled to return on June 18-21, 2020. The inaugural three day festival with 40 musical acts was held in July 2012 and the 2019 event was held on June 21-23, 2019 with over 120 musical acts. In September 2014, Red Frog Events LLC formed RFGV Festivals LLC - a joint venture with Goldenvoice that promotes Firefly.  Goldenvoice is a company of AEG Presents, LLC, a subsidiary of Anschutz Entertainment Group, Inc. AEG Presents, one of the world’s largest presenters of live music and entertainment events, announced on July 18, 2018 that it had acquired the remainder of RFGV Festivals LLC from Red Frog. Our amended agreement with RFGV Festivals grants them two 5 year options to extend our facility rental agreement through 2032 in exchange for a rental commitment to secure our property. In addition to the facility rental fee, we also receive a percentage of the concession sales we manage at the events.

Nashville Superspeedway no longer promotes motorsports events and has not entered into sanction agreements with NASCAR since 2011. We lease the facility on a short term basis to third parties from time to time. On August 17, 2017, we entered into an agreement with an entity owned by Panattoni Development Company (“buyer”) relative to the sale of approximately 147 acres of land at a purchase price of $35,000 per acre. On March 2, 2018,  we closed on the sale of the property with proceeds, less closing costs, of $4,945,000. Net proceeds after taxes were approximately $4,150,000. On September 1, 2017, we also awarded to the buyer a three year option for 88.03 additional acres at a purchase price of $55,000 per acre. That option agreement has been amended twice since: first, on February 9, 2018, to extend its term and to add additional acreage; and second, on June 25, 2019, in connection with the purchaser's exercise of its option on two parcels, we adjusted the acreage and further extended the term of the option on a third parcel. On July 26, 2019, the purchaser closed on the first two parcels, comprising approximately 133 acres, which yielded to us proceeds, less closing costs, of $6,397,000. Net proceeds after taxes were approximately $5,314,000 resulting in a gain of $4,186,000. One parcel of 97.17 acres remains under the option agreement with a  purchase price of $66,685 per acre. The purchaser paid to us $500,000 for the extension of this option until March 1, 2022, and this non-refundable payment would be credited to the purchase price at the closing of that option parcel. While management remains committed to selling the remaining Nashville Superspeedway property which consists of approximately 1,000 acres, we do not believe it is probable that the remaining property will be sold within the next twelve months. At September 30, 2019 and December 31, 2018, $21,292,000 and $23,567,000 was reported as long term assets in our consolidated balance sheets, respectively. At December 31, 2018, $531,000 was reported as assets held for sale in our consolidated balance sheet.

On February 28, 2019, we entered into an agreement to sell 7.63 acres of land at our Nashville facility for proceeds, less closing costs, of $267,000.  The sale closed in the first quarter of 2019 and resulted in a gain of $139,000, which we have reported as gain on sale of land in our consolidated statements of (loss) earnings.

During September 2018, we entered into negotiations to sell the last remaining parcel of land we owned near St. Louis.  The sale resulted in a loss of $99,000, which we reported as loss on sale of land in our consolidated statements of (loss) earnings.  The sale closed in the first quarter of 2019 with proceeds, less closing costs, of $531,000.  At December 31, 2018, the fair value of the land was reported as assets held for sale in our consolidated balance sheet.

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash	$ 4,784,000	$ 3,951,000
Accounts receivable	1,866,000	676,000
Inventories	20,000	21,000
Prepaid expenses and other	6,184,000	1,055,000
Income taxes receivable	95,000
Assets held for sale		531,000
Total current assets	12,949,000	6,234,000
Property and equipment, net	50,743,000	48,137,000
Nashville Superspeedway facility	21,292,000	23,567,000
Right of use asset	206,000
Other assets	1,170,000	1,015,000
Total assets	86,360,000	78,953,000
Current liabilities:
Accounts payable	1,631,000	187,000
Accrued liabilities	3,184,000	3,083,000
Payable to Dover Downs Gaming & Entertainment, Inc.		9,000
Income taxes payable		118,000
Contract liabilities	4,526,000	1,140,000
Total current liabilities	9,341,000	4,537,000
Liability for pension benefits	614,000	773,000
Lease liability	131,000
Non-refundable deposit	500,000
Provision for contingent obligation	2,751,000	2,384,000
Deferred income taxes	7,743,000	8,371,000
Total liabilities	21,080,000	16,065,000
Commitments and contingencies (see Notes to the Consolidated Financial Statements)
Stockholders' equity:
Preferred stock, $0.10 par value; 1,000,000 shares authorized; shares issued and outstanding: none
Additional paid-in capital	101,143,000	101,416,000
Accumulated deficit	(36,229,000)	(38,826,000)
Accumulated other comprehensive loss	(3,278,000)	(3,358,000)
Total stockholders' equity	65,280,000	62,888,000
Total liabilities and stockholders' equity	86,360,000	78,953,000
Common Stock | Common Stock
Stockholders' equity:
Common stock	1,793,000	1,805,000
Common Stock | Class A Common Stock
Stockholders' equity:
Common stock	1,851,000	1,851,000
Total stockholders' equity	$ 1,851,000	$ 1,851,000

XML

Business Operations - Assets held for sale (Details)					1 Months Ended	3 Months Ended			9 Months Ended
	Jul. 26, 2019 USD ($) a	Feb. 28, 2019 USD ($) a	Mar. 02, 2018 USD ($)	Sep. 01, 2017 USD ($) a	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) a	Mar. 31, 2019 USD ($) a	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) a	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Aug. 17, 2017 USD ($) a
Business Operations
Fair value of land											$ 531,000
Non-refundable deposit						$ 500,000			$ 500,000
Long term assets held for sale						21,292,000			21,292,000		23,567,000
Gain (loss) on sale of land						4,186,000		$ (99,000)	4,325,000	$ 2,413,000
Nashville Superspeedway | Assets held for sale
Business Operations
Acres | a		7.63
Long term assets held for sale						$ 21,292,000			$ 21,292,000		23,567,000
Proceeds, less closing costs		$ 267,000
Gain (loss) on sale of land							$ 139,000
Nashville Superspeedway | Land
Business Operations
Acres | a	133			88.03		97.17			97.17			147
Purchase price (per acre)												$ 35,000
Option purchase price (per acre)				$ 55,000		$ 66,685			$ 66,685
Non-refundable deposit						$ 500,000			$ 500,000
Period of option to execute the agreement				3 years
Long term assets held for sale											23,567,000
Proceeds, less closing costs	$ 6,397,000		$ 4,945,000
Net proceeds after taxes	5,314,000		$ 4,150,000
Gain (loss) on sale of land	$ 4,186,000
Nashville Superspeedway | Land | Assets held for sale
Business Operations
Fair value of land											$ 531,000
Nashville Superspeedway | Land | Minimum | Assets held for sale
Business Operations
Acres | a							1,000
Parcel of land near St. Louis | Assets held for sale
Business Operations
Proceeds, less closing costs							$ 531,000
Gain (loss) on sale of land					$ (99,000)

XML

Summary of Significant Accounting Policies - Expense recognition (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Summary of Significant Accounting Policies
Advertising Expense	$ 465,000	$ 539,000	$ 1,011,000	$ 1,144,000

XML

Pension Plans (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
The excess plan
Pension plans
Fair values of pension assets	$ 1,134,000	$ 995,000

XML

Basis of Presentation

9 Months Ended

Sep. 30, 2019

Basis of Presentation

Basis of Presentation

NOTE 1 – Basis of Presentation

References in this document to “we,” “us” and “our” mean Dover Motorsports, Inc. and/or its wholly owned subsidiaries, as appropriate.

The accompanying consolidated financial statements have been prepared in compliance with Rule 10-01 of Regulation S-X and U.S. generally accepted accounting principles, and accordingly do not include all of the information and disclosures required for audited financial statements.  These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our latest Annual Report on Form 10-K filed on March 1, 2019. In the opinion of management, these consolidated financial statements include all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the results of operations, financial position and cash flows for the interim periods presented. Operating results for the three and nine-month periods ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 due to the seasonal nature of our business.

XML

CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS AND COMPREHENSIVE (LOSS) INCOME - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues:
Revenues	$ 202,000	$ 227,000	$ 25,169,000	$ 26,265,000
Expenses:
Operating and marketing	1,347,000	1,599,000	16,986,000	16,984,000
General and administrative	1,888,000	1,798,000	5,630,000	5,552,000
Depreciation	1,669,000	793,000	3,256,000	2,496,000
Total expenses	4,904,000	4,190,000	25,872,000	25,032,000
Gain (loss) on sale of land	4,186,000	(99,000)	4,325,000	2,413,000
Operating (loss) earnings	(516,000)	(4,062,000)	3,622,000	3,646,000
Interest income (expense), net	20,000	(2,000)	4,000	(75,000)
(Provision) benefit for contingent obligation	(121,000)	4,000	(367,000)	(132,000)
Other income	29,000	46,000	218,000	77,000
(Loss) earnings before income taxes	(588,000)	(4,014,000)	3,477,000	3,516,000
Income tax benefit (expense)	174,000	1,315,000	(880,000)	(699,000)
Net (loss) earnings	(414,000)	(2,699,000)	2,597,000	2,817,000
Change in net actuarial loss and prior service cost, net of income taxes	29,000	28,000	80,000	81,000
Comprehensive (loss) income	$ (385,000)	$ (2,671,000)	$ 2,677,000	$ 2,898,000
Net (loss) earnings per common share:
Basic (in dollars per share)	$ (0.01)	$ (0.07)	$ 0.07	$ 0.08
Diluted (in dollars per share)	$ (0.01)	$ (0.07)	$ 0.07	$ 0.08
Admissions
Revenues:
Revenues			$ 2,502,000	$ 2,853,000
Event-related
Revenues:
Revenues	$ 202,000	$ 227,000	3,784,000	5,283,000
Broadcasting
Revenues:
Revenues			18,878,000	18,128,000
Other
Revenues:
Revenues			$ 5,000	$ 1,000

XML

Long-Term Debt (Details) - Credit Facility - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 24, 2019
Long-Term Debt
Maximum borrowing capacity	$ 30,000,000	$ 35,000,000
Amount outstanding under the credit facility	0
Remaining maximum borrowing capacity	$ 16,375,000
Minimum | LIBOR
Long-Term Debt
Basis points (in percent)	1.25%
Maximum | LIBOR
Long-Term Debt
Basis points (in percent)	1.75%

XML

Business Operations - Dover International Speedway (Details) - item		1 Months Ended	9 Months Ended
	Jun. 23, 2019	Jul. 31, 2012	Sep. 30, 2019
Business Operations
Number of events promoted			6
RFGV Festivals
Business Operations
Number of years Firefly Music Festival hosted			5 years
Number of options granted to extend rent agreement			2
NASCAR Monster Energy Cup Series events
Business Operations
Number of events promoted			2
NASCAR XFINITY Series events
Business Operations
Number of events promoted			2
NASCAR Gander Outdoors Truck Series event
Business Operations
Number of events promoted			1
NASCAR K&N Pro Series East event
Business Operations
Number of events promoted			1
Firefly Music Festival ("Firefly")
Business Operations
Number of years Firefly Music Festival hosted			8 years
Number of days the event is held		3 days
Number of music acts featured in the event	120	40

XML

Summary of Significant Accounting Policies - Revenue (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) item	Sep. 30, 2018 USD ($)
Revenue recognition
Revenues from barter transaction			$ 261,000	$ 239,000
Contract with customer liability rollforward
Balance, beginning of period	$ 2,008,000	$ 1,700,000	1,140,000	1,249,000
Reductions from beginning balance			739,000	778,000
Additional liabilities recorded during the period	2,518,000	2,828,000	7,715,000	8,525,000
Reduction of additional liabilities recorded during the period, not from beginning balance			3,590,000	4,468,000
Balance, end of period	4,526,000	$ 4,528,000	4,526,000	$ 4,528,000
Unsatisfied performance obligations amount	$ 3,852,000		$ 3,852,000
Remittance period (in days)			30 days
Gross broadcast rights fees retained by NASCAR (in percent)	10.00%		10.00%
Gross broadcast rights fees recorded as revenue (in percent)	90.00%		90.00%
Gross broadcast rights fees payable to the event (in percent)	25.00%		25.00%
Minimum
Contract with customer liability rollforward
Contract term (in years)			1 year
Maximum
Contract with customer liability rollforward
Contract term (in years)			3 years
NASCAR
Revenue recognition
Events excluded from revenue based on contract with customers (number) | item			2
Firefly Music Festival ("Firefly")
Revenue recognition
Events excluded from revenue based on contract with customers (number)			1
Events 2019
Revenue recognition
Contract liabilities	$ 4,279,000		$ 4,279,000
Events 2020
Revenue recognition
Contract liabilities	$ 247,000		$ 247,000

XML

Related Party Transactions (Details)	3 Months Ended	9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) mi	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Dover Downs Gaming & Entertainment, Inc.
Related Party Transactions
Payable to related party	$ 440,000	$ 430,000	$ 1,325,000
Receivable from related party	22,000	$ 110,000	162,000
Current payable due to related party				$ 9,000
Harness racing track length (in miles) | mi		0.625
Motorsports superspeedway length (in miles) | mi		1
Period for set up and tear down rights		14 days
Dover Downs Gaming & Entertainment, Inc. | NASCAR
Related Party Transactions
Payable to related party	10,000		401,000
Receivable from related party	$ 26,000	$ 15,000	$ 141,000
Chairman of the Board
Related Party Transactions
Voting rights (in percent)		50.00%

XML

Pension Plans - SERP (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
SERP
Defined contribution plan
Expenses recorded	$ 27,000	$ 21,000	$ 81,000	$ 68,000
Employer contributions	0	0	108,000	85,000
Liability for pension benefits	81,000		81,000		$ 108,000
401(k) plan
Defined contribution plan
Expenses recorded	$ 31,000	$ 35,000	$ 90,000	$ 101,000

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Fair Value Measurements

Fair Value Measurements

NOTE 7 – Fair Value Measurements

Our financial instruments are classified and disclosed in one of the following three categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following table summarizes the valuation of our financial instrument pricing levels as of September 30, 2019 and December 31, 2018:

	Total		Level 1		Level 2		Level 3
September 30, 2019
Equity investments	$	1,134,000	$	1,134,000	$	—	$	—
December 31, 2018
Equity investments	$	995,000	$	995,000	$	—	$	—

Our equity investments consist of mutual funds.  These investments are included in other assets in our consolidated balance sheets. Gains on our equity investments for the three and nine-month periods ended September 30, 2019 and 2018, respectively, are as follows:

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Net gains recognized during the period on equity investments	$	12,000	$	21,000	$	125,000	$	15,000
Less: net gains recognized during the period on equity investments sold during the period		—		(2,000)		—		(15,000)
Unrealized gains recognized during the period on equity investments still held at period end	$	12,000	$	19,000	$	125,000	$	—

The carrying amounts of other financial instruments reported in our consolidated balance sheets for current assets and current liabilities approximate their fair values because of the short maturity of these instruments.

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Summarized liability activity related to contracts with customers

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Balance, beginning of period	$	2,008	$	1,700	$	1,140	$	1,249
Reductions from beginning balance		—		—		(739)		(778)
Additional liabilities recorded during the period		2,518		2,828		7,715		8,525
Reduction of additional liabilities recorded during the period, not from beginning balance		—		—		(3,590)		(4,468)
Balance, end of period	$	4,526	$	4,528	$	4,526	$	4,528

Schedule of the computation of EPS

The following table sets forth the computation of EPS (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Net (loss) earnings per common share – basic and diluted:
Net (loss) earnings	$	(414)	$	(2,699)	$	2,597	$	2,817
Allocation to nonvested restricted stock awards		—		—		42		45
Net (loss) earnings available to common stockholders	$	(414)	$	(2,699)	$	2,555	$	2,772
Weighted-average shares outstanding – basic and diluted		35,952		36,102		35,998		36,165
Net (loss) earnings per common share – basic and diluted	$	(0.01)	$	(0.07)	$	0.07	$	0.08

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Stock | Common Stock
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	17,931,403	18,045,276
Common stock, shares outstanding	17,931,403	18,045,276
Common Stock | Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	55,000,000	55,000,000
Common stock, shares issued	18,509,975	18,509,975
Common stock, shares outstanding	18,509,975	18,509,975

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

NOTE 3 –  Summary of Significant Accounting Policies

Property and equipment—Property and equipment is stated at cost.  Depreciation is provided using the straight-line method over the asset’s estimated useful life.  Accumulated depreciation was $66,232,000 and $63,042,000 as of September 30, 2019 and December 31, 2018, respectively.

In the third quarter of 2019, management approved plans to remove certain grandstand seating following the completion of our 2019 race season.  As a result, we adjusted the service lives of those assets to properly reflect their shortened estimated useful life.  We recorded accelerated depreciation expense of $879,000 in the three and nine-month periods ended September 30, 2019 related to these assets.  We expect to record additional depreciation expense of approximately $293,000 during the fourth quarter of 2019 related to these assets, at which point the assets will be fully depreciated.

Leases—Effective January 1, 2019, we account for leases under Accounting Standards Codification 842, Leases. Under this guidance, arrangements meeting the definition of a lease are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or our incremental borrowing rate.

During the second quarter of 2019, we entered into certain operating leases with 36 month terms. At September 30, 2019, our consolidated balance sheet included a right of use asset of $206,000, a long-term lease liability of $131,000, and a short-term lease liability, which is included in accrued liabilities, of $75,000.

Revenue recognition—We classify our revenues as admissions, event-related, broadcasting and other.  “Admissions” revenue includes ticket sales for our events.  “Event-related” revenue includes amounts received from sponsorship fees; luxury suite rentals; hospitality tent rentals and catering; concessions and vendor commissions for the right to sell concessions and souvenirs at our events; sales of programs; track rentals; broadcasting rights other than domestic television broadcasting revenue, and other event-related revenues.  Additionally, event related revenue includes amounts received for the use of our property and a portion of the concession sales we manage from the Firefly Music Festival.  “Broadcasting” revenue includes rights fees obtained for domestic television broadcasts of events held at our speedway.

All of our revenues are based on contracts with customers and, with the exception of certain track rentals, relate to two NASCAR event weekends and the Firefly Music Festival held at our Dover facility.  Our contracts are typically for specific events or a racing season.  We have several multi-year sponsorship contracts for our racing events and our contract with the promoter of the Firefly Music Festival is multi-year.  Revenues pertaining to specific events are deferred and recorded as contract liabilities in our consolidated balance sheets until the event is held.  As of September 30, 2019, contract liabilities in our consolidated balance sheets of $4,279,000 and $247,000 relate to 2019 and 2020 events, respectively. As of December 31, 2018, contract liabilities in our consolidated balance sheets relate to 2019 events. Concession and souvenir revenues are recorded at the time of sale.  Revenues and related expenses from barter transactions in which we provide sponsorship packages in exchange for goods or services are recorded at fair value. Barter transactions accounted for $261,000 and $239,000 of total revenues for the nine-month periods ended September 30, 2019 and 2018, respectively.

The following table summarizes the liability activity related to contracts with customers for the three and nine-month periods ended September 30, 2019 and 2018:

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Balance, beginning of period	$	2,008	$	1,700	$	1,140	$	1,249
Reductions from beginning balance		—		—		(739)		(778)
Additional liabilities recorded during the period		2,518		2,828		7,715		8,525
Reduction of additional liabilities recorded during the period, not from beginning balance		—		—		(3,590)		(4,468)
Balance, end of period	$	4,526	$	4,528	$	4,526	$	4,528

We have contracted future revenues representing unsatisfied performance obligations.  These contracts contain initial terms typically ranging from one to three years, with some for longer periods, excluding renewal options.  We have excluded unsatisfied performance obligations for future NASCAR broadcasting revenue with contract terms through 2024. We anticipate recognizing unsatisfied performance obligations for the calendar year ending 2020 and beyond of approximately $3,852,000 at September 30, 2019.

Under the terms of our sanction agreements with NASCAR, we receive a portion of the broadcast revenue NASCAR negotiates with various television networks.  NASCAR typically remits payment to us for the broadcast revenue within 30 days of the event being held.  NASCAR retains 10% of the gross broadcast rights fees allocated to each NASCAR-sanctioned event as a component of its sanction fee.  The remaining 90% is recorded as revenue.  We are required to pay 25% of the gross broadcast rights fees to the event as part of the awards to the competitors, which are recorded as operating expenses.

Expense recognition— The cost of advertising is expensed as incurred.  Advertising expenses were $465,000 and $1,011,000,  and $539,000 and $1,144,000 for the three and nine-month periods ended September 30, 2019 and 2018, respectively. Certain direct expenses pertaining to specific events, including prize and point fund monies and sanction fees paid to NASCAR, and other expenses associated with our racing events are deferred until the event is held, at which point they are expensed.

Net (loss) earnings per common share—Nonvested share-based payment awards that include rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities, and the two-class method of computing basic and diluted net (loss) earnings per common share (“EPS”) is applied for all periods presented.  The following table sets forth the computation of EPS (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Net (loss) earnings per common share – basic and diluted:
Net (loss) earnings	$	(414)	$	(2,699)	$	2,597	$	2,817
Allocation to nonvested restricted stock awards		—		—		42		45
Net (loss) earnings available to common stockholders	$	(414)	$	(2,699)	$	2,555	$	2,772
Weighted-average shares outstanding – basic and diluted		35,952		36,102		35,998		36,165
Net (loss) earnings per common share – basic and diluted	$	(0.01)	$	(0.07)	$	0.07	$	0.08

There were no options outstanding and we paid no dividends during the nine months ended September 30, 2019 or 2018.

On October 23, 2019, our Board of Directors declared an annual cash dividend on both classes of common stock of $.10 per share to be paid on December 10, 2019. 

Accounting for stock-based compensation—We recorded total stock-based compensation expense for our restricted stock awards of $67,000 and $243,000, and $66,000 and $237,000 as general and administrative expenses for the three and nine-month periods ended September 30, 2019 and 2018, respectively.  We recorded income tax benefits of $19,000 and $57,000, and $18,000 and $64,000 for the three and nine-month periods ended September 30, 2019 and 2018, respectively, related to vesting of our restricted stock awards.

Recent accounting pronouncements—In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General. This new standard makes changes to the disclosure requirements for sponsors of defined benefit pension and/or other postretirement benefit plans to improve effectiveness of notes to the financial statements.  ASU 2018-14 is effective for fiscal years ending after December 15, 2020, and requires retrospective adoption.  Early adoption is permitted.  We are currently analyzing the impact of this ASU and we do not expect it to have a significant impact on our financial statement disclosures.

XML

Summary of Significant Accounting Policies - Property and equipment (Details) - USD ($)	3 Months Ended	9 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Property and equipment
Accumulated depreciation		$ 66,232,000	$ 63,042,000
Accelerated depreciation expense		$ 879,000
Forecast
Property and equipment
Accelerated depreciation expense	$ 293,000

XML

Summary of Significant Accounting Policies - Net loss per common share (Details) - USD ($)		3 Months Ended		9 Months Ended
	Oct. 23, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net (loss) earnings		$ (414,000)	$ (2,699,000)	$ 2,597,000	$ 2,817,000
Allocation to nonvested restricted stock awards				(42,000)	(45,000)
Net (loss) earnings available to common stockholders		$ (414,000)	$ (2,699,000)	$ 2,555,000	$ 2,772,000
Weighted-average shares outstanding -- basic and diluted		35,952,000	36,102,000	35,998,000	36,165,000
Net (loss) earnings per common share - basic and diluted		$ (0.01)	$ (0.07)	$ 0.07	$ 0.08
Options outstanding (in shares)		0	0	0	0
Dividends paid				$ 0	$ 0
Common Stock | Common Stock
Annual cash dividend declared	$ 0.10
Common Stock | Class A Common Stock
Annual cash dividend declared	$ 0.10

XML

Pension Plans

9 Months Ended

Sep. 30, 2019

Pension Plans

Pension Plans

NOTE 5 – Pension Plans

We maintain a non-contributory tax qualified defined benefit pension plan that has been frozen since July 2011.  All of our full time employees were eligible to participate in the qualified plan.  Benefits provided by our qualified pension plan were based on years of service and employees' remuneration over their employment period.  Compensation earned by employees up to July 31, 2011 is used for purposes of calculating benefits under our pension plan with no future benefit accruals after this date.  We also maintain a non-qualified, non-contributory defined benefit pension plan, the excess plan, for certain employees that has been frozen since July 2011.  This excess plan provided benefits that would otherwise be provided under the qualified pension plan but for maximum benefit and compensation limits applicable under federal tax law.  The cost associated with the excess plan is determined using similar actuarial methods and assumptions as those used for our qualified pension plan.  The assets for the excess plan aggregate $1,134,000 and $995,000 as of September 30, 2019 and December 31, 2018, respectively, and are recorded in other assets in our consolidated balance sheets (see NOTE 7 – Fair Value Measurements).

The components of net periodic pension benefit for our defined benefit pension plans are as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Interest cost	$	130,000	$	116,000	$	387,000	$	346,000
Expected return on plan assets		(183,000)		(179,000)		(546,000)		(519,000)
Recognized net actuarial loss		40,000		40,000		111,000		112,000
	$	(13,000)	$	(23,000)	$	(48,000)	$	(61,000)

The net periodic pension benefit is included in other income in our consolidated statements of (loss) earnings.

While we have no minimum required pension contributions for 2019, we will consider making contributions during the remainder of the year. We contributed $750,000 and $1,750,000 to our defined benefit pension plans during the three and nine-month periods ended September 30, 2018, respectively. 

We also maintain a non-elective, non-qualified supplemental executive retirement plan (“SERP”) which provides deferred compensation to certain highly compensated employees that approximates the value of benefits lost by the freezing of the pension plan which are not offset by our enhanced matching contributions in our 401(k)  plan. The SERP is a discretionary defined contribution plan and contributions made to the SERP in any given year are not guaranteed and will be at the sole discretion of our Compensation and Stock Incentive Committee.  In the three and nine-month periods ended September 30, 2019 and 2018, we recorded expenses of $27,000 and $81,000, and $21,000 and $68,000, respectively, related to the SERP.  During the three and nine-month periods ended September 30, 2019 and 2018, we contributed $0 and $108,000, and $0 and $85,000 to the plan, respectively. The liability for SERP pension benefits was $81,000 and $108,000 as of September 30, 2019 and December 31, 2018, respectively, and is included in accrued liabilities in our consolidated balance sheets.

We maintain a defined contribution 401(k) plan that permits participation by substantially all employees.  Our matching contributions to the 401(k) plan were $31,000 and $90,000, and $35,000 and $101,000 in the three and nine-month periods ended September 30, 2019 and 2018, respectively.

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies

Commitments and Contingencies

NOTE 9 – Commitments and Contingencies

In September 1999, the Sports Authority of the County of Wilson (Tennessee) issued $25,900,000 in Variable Rate Tax Exempt Infrastructure Revenue Bonds, Series 1999, to acquire, construct and develop certain public infrastructure improvements which benefit Nashville Superspeedway, of which $13,400,000 was outstanding at September 30, 2019. Annual principal payments range from $1,100,000 in September 2020 to $1,600,000 in 2029 and are payable solely from sales taxes and incremental property taxes generated from the facility.  These bonds are direct obligations of the Sports Authority, and therefore, have historically not been required to be recorded on our consolidated balance sheets.  If the sales taxes and incremental property taxes (“applicable taxes”) are insufficient for the payment of principal and interest on the bonds, we would become responsible for the difference.  In the event we were unable to make the payments, they would be made pursuant to a $13,625,000 irrevocable direct-pay letter of credit issued by our bank group.  We are exposed to fluctuations in interest rates for these bonds.

As of September, 2019 and December 31, 2018, $724,000 and $1,052,000, respectively, was available in the sales and incremental property tax fund maintained by the Sports Authority to pay the remaining principal and interest due under the bonds.  During the first nine months of 2019, we paid $981,000 into the sales and incremental property tax fund and $1,309,000 was deducted from the fund for debt service.  If we fail to maintain the letter of credit that secures the bonds or we allow an uncured event of default to exist under our reimbursement agreement relative to the letter of credit, the bonds would be immediately redeemable.

Nashville Superspeedway no longer promotes motorsports events and has not entered into sanction agreements with NASCAR since 2011.  We lease the facility on a short term basis to third parties from time to time.  In 2011, we recorded a $2,250,000 provision for contingent obligation reflecting the present value of the estimated portion of the revenue bonds debt service that may not be covered by the projected sales and incremental property taxes from the facility.  Due to changing interest rates, the provision for contingent obligation increased (decreased) by $121,000 and $367,000, and  ($4,000) and $132,000 in the three and nine-month periods ended September 30, 2019 and 2018, respectively, and is $2,751,000 at September 30, 2019. An increase in  the bonds’ interest rates would result in an increase in the portion of debt service not covered by applicable taxes, and therefore, an increase in our liability. 

We are also a party to ordinary routine litigation incidental to our business.  Management does not believe that the resolution of any of these matters is likely to have a material adverse effect on our results of operations, financial position or cash flows.

XML

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2019

Stockholders' Equity

Schedule of the changes in the components of stockholders' equity

Changes in the components of stockholders’ equity for the nine-months ending September 30, 2019 are as follows (in thousands):

									Accumulated
			Class A		Additional				Other
	Common		Common		Paid-in		Accumulated		Comprehensive
	Stock		Stock		Capital		Deficit		Loss
Balance at December 31, 2018	$	1,805	$	1,851	$	101,416	$	(38,826)	$	(3,358)
Net loss		—		—		—		(2,490)		—
Issuance of restricted stock awards, net of forfeitures		14		—		(14)		—		—
Stock-based compensation		—		—		108		—		—
Repurchase and retirement of common stock		(10)		—		(190)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $10		—		—		—		—		25
Balance at March 31, 2019		1,809		1,851		101,320		(41,316)		(3,333)
Net earnings		—		—		—		5,501		—
Stock-based compensation		—		—		68		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $10		—		—		—		—		26
Balance at June 30, 2019		1,809		1,851		101,388		(35,815)		(3,307)
Net loss		—		—		—		(414)		—
Stock-based compensation		—		—		67		—		—
Repurchase and retirement of common stock		(16)		—		(312)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $11		—		—		—		—		29
Balance at September 30, 2019	$	1,793	$	1,851	$	101,143	$	(36,229)	$	(3,278)

Changes in the components of stockholders’ equity for the nine-months ending September 30, 2018 are as follows (in thousands):

									Accumulated
			Class A		Additional				Other
	Common		Common		Paid-in		Accumulated		Comprehensive
	Stock		Stock		Capital		Deficit		Loss
Balance at December 31, 2017	$	1,825	$	1,851	$	101,844	$	(42,858)	$	(3,440)
Adoption of ASU 2016-01		—		—		—		73		(73)
Net loss		—		—		—		(992)		—
Issuance of restricted stock awards, net of forfeitures		15		—		(15)		—		—
Stock-based compensation		—		—		105		—		—
Repurchase and retirement of common stock		(14)		—		(275)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $10		—		—		—		—		27
Balance at March 31, 2018		1,826		1,851		101,659		(43,777)		(3,486)
Net earnings		—		—		—		6,508		—
Stock-based compensation		—		—		66		—		—
Repurchase and retirement of common stock		(5)		—		(112)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $10		—		—		—		—		26
Balance at June 30, 2018		1,821		1,851		101,613		(37,269)		(3,460)
Net loss		—		—		—		(2,699)		—
Stock-based compensation		—		—		66		—		—
Repurchase and retirement of common stock		(7)		—		(134)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $11		—		—		—		—		28
Balance at September 30, 2018	$	1,814	$	1,851	$	101,545	$	(39,968)	$	(3,432)

Schedule of accumulated other comprehensive loss, net of income taxes

	September 30, 2019		December 31, 2018
Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $2,319,000 and $2,350,000, respectively	$	(3,278,000)	$	(3,358,000)

XML

Stockholders' Equity - Stock incentive plan (Details) - $ / shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Jul. 28, 2004
Stockholders Equity
Maximum number of shares authorized for grant	2,000,000
Options granted (in shares)	143,000	151,000
Number of shares available for granting options or stock awards	1,327,473
Share Repurchase Authorization 2004
Stockholders Equity
Number of shares of common stock authorized to be repurchased			2,000,000
Number of shares purchased and retired	208,416	212,082
Average purchase price of shares purchased and retired (in dollars per share)	$ 2.03	$ 2.09
Remaining number of shares authorized to be repurchased	492,233
Restricted Stock
Stockholders Equity
Vesting rights percentage each year beginning on the second anniversary date of the grant	20.00%
Service period over which the aggregate market value of stock is being amortized	6 years
Number of shares purchased and retired	48,457	47,236
Average purchase price of shares purchased and retired (in dollars per share)	$ 1.99	$ 2.00

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Measurements

Summary of the valuation of financial instrument pricing levels

	Total		Level 1		Level 2		Level 3
September 30, 2019
Equity investments	$	1,134,000	$	1,134,000	$	—	$	—
December 31, 2018
Equity investments	$	995,000	$	995,000	$	—	$	—

Schedule of gains and losses on equity investments

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Net gains recognized during the period on equity investments	$	12,000	$	21,000	$	125,000	$	15,000
Less: net gains recognized during the period on equity investments sold during the period		—		(2,000)		—		(15,000)
Unrealized gains recognized during the period on equity investments still held at period end	$	12,000	$	19,000	$	125,000	$	—

XML

Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Stockholders' Equity

Stockholders' Equity

NOTE 6 – Stockholders’ Equity

Changes in the components of stockholders’ equity for the nine-months ending September 30, 2019 are as follows (in thousands):

									Accumulated
			Class A		Additional				Other
	Common		Common		Paid-in		Accumulated		Comprehensive
	Stock		Stock		Capital		Deficit		Loss
Balance at December 31, 2018	$	1,805	$	1,851	$	101,416	$	(38,826)	$	(3,358)
Net loss		—		—		—		(2,490)		—
Issuance of restricted stock awards, net of forfeitures		14		—		(14)		—		—
Stock-based compensation		—		—		108		—		—
Repurchase and retirement of common stock		(10)		—		(190)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $10		—		—		—		—		25
Balance at March 31, 2019		1,809		1,851		101,320		(41,316)		(3,333)
Net earnings		—		—		—		5,501		—
Stock-based compensation		—		—		68		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $10		—		—		—		—		26
Balance at June 30, 2019		1,809		1,851		101,388		(35,815)		(3,307)
Net loss		—		—		—		(414)		—
Stock-based compensation		—		—		67		—		—
Repurchase and retirement of common stock		(16)		—		(312)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $11		—		—		—		—		29
Balance at September 30, 2019	$	1,793	$	1,851	$	101,143	$	(36,229)	$	(3,278)

Changes in the components of stockholders’ equity for the nine-months ending September 30, 2018 are as follows (in thousands):

									Accumulated
			Class A		Additional				Other
	Common		Common		Paid-in		Accumulated		Comprehensive
	Stock		Stock		Capital		Deficit		Loss
Balance at December 31, 2017	$	1,825	$	1,851	$	101,844	$	(42,858)	$	(3,440)
Adoption of ASU 2016-01		—		—		—		73		(73)
Net loss		—		—		—		(992)		—
Issuance of restricted stock awards, net of forfeitures		15		—		(15)		—		—
Stock-based compensation		—		—		105		—		—
Repurchase and retirement of common stock		(14)		—		(275)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $10		—		—		—		—		27
Balance at March 31, 2018		1,826		1,851		101,659		(43,777)		(3,486)
Net earnings		—		—		—		6,508		—
Stock-based compensation		—		—		66		—		—
Repurchase and retirement of common stock		(5)		—		(112)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $10		—		—		—		—		26
Balance at June 30, 2018		1,821		1,851		101,613		(37,269)		(3,460)
Net loss		—		—		—		(2,699)		—
Stock-based compensation		—		—		66		—		—
Repurchase and retirement of common stock		(7)		—		(134)		—		—
Change in net actuarial loss and prior service cost, net of income tax expense of $11		—		—		—		—		28
Balance at September 30, 2018	$	1,814	$	1,851	$	101,545	$	(39,968)	$	(3,432)

As of September 30, 2019 and December 31, 2018, accumulated other comprehensive loss, net of income taxes, consists of the following:

	September 30, 2019		December 31, 2018
Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $2,319,000 and $2,350,000, respectively	$	(3,278,000)	$	(3,358,000)

On July 28, 2004, our Board of Directors authorized the repurchase of up to 2,000,000 shares of our outstanding common stock.  The purchases may be made in the open market or in privately negotiated transactions as conditions warrant.  The repurchase authorization has no expiration date, does not obligate us to acquire any specific number of shares and may be suspended at any time. During the first nine months of 2019 and 2018, we purchased and retired 208,416 and 212,082 shares of our outstanding common stock at an average purchase price of $2.03 and $2.09 per share, respectively, not including nominal brokerage commissions.  At September 30, 2019, we had remaining repurchase authority of 492,233 shares.

We have a stock incentive plan, adopted in 2014, which provides for the grant of up to 2,000,000 shares of common stock to our officers and key employees through stock options and/or awards valued in whole or in part by reference to our common stock, such as nonvested restricted stock awards.  Under the plan, nonvested restricted stock vests an aggregate of twenty percent each year beginning on the second anniversary date of the grant.  The aggregate market value of the nonvested restricted stock at the date of issuance is being amortized on a straight-line basis over the six-year period. We granted 143,000 and 151,000  stock awards under this plan during the nine months ended September 30, 2019 and 2018. As of September 30, 2019, there were 1,327,473 shares available for granting options or stock awards.

During the nine months ended September 30, 2019 and 2018, we purchased and retired 48,457 and 47,236 shares of our outstanding common stock at an average purchase price of $1.99 and $2.00 per share, respectively. These purchases were made from employees in connection with the vesting of restricted stock awards under our Stock Incentive Plan and were not pursuant to the aforementioned repurchase authorization.  Since the vesting of a restricted stock award is a taxable event to our employees for which income tax withholding is required, the plan allows employees to surrender to us some of the shares that would otherwise have transferred to the employee in satisfaction of their tax liability.  The surrender of these shares is treated by us as a purchase of the shares.

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Summary of Significant Accounting Policies

Property and equipment

Property and equipment—Property and equipment is stated at cost.  Depreciation is provided using the straight-line method over the asset’s estimated useful life.  Accumulated depreciation was $66,232,000 and $63,042,000 as of September 30, 2019 and December 31, 2018, respectively.

In the third quarter of 2019, management approved plans to remove certain grandstand seating following the completion of our 2019 race season.  As a result, we adjusted the service lives of those assets to properly reflect their shortened estimated useful life.  We recorded accelerated depreciation expense of $879,000 in the three and nine-month periods ended September 30, 2019 related to these assets.  We expect to record additional depreciation expense of approximately $293,000 during the fourth quarter of 2019 related to these assets, at which point the assets will be fully depreciated.

Leases

Leases—Effective January 1, 2019, we account for leases under Accounting Standards Codification 842, Leases. Under this guidance, arrangements meeting the definition of a lease are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or our incremental borrowing rate.

During the second quarter of 2019, we entered into certain operating leases with 36 month terms. At September 30, 2019, our consolidated balance sheet included a right of use asset of $206,000, a long-term lease liability of $131,000, and a short-term lease liability, which is included in accrued liabilities, of $75,000.

Revenue recognition

Revenue recognition—We classify our revenues as admissions, event-related, broadcasting and other.  “Admissions” revenue includes ticket sales for our events.  “Event-related” revenue includes amounts received from sponsorship fees; luxury suite rentals; hospitality tent rentals and catering; concessions and vendor commissions for the right to sell concessions and souvenirs at our events; sales of programs; track rentals; broadcasting rights other than domestic television broadcasting revenue, and other event-related revenues.  Additionally, event related revenue includes amounts received for the use of our property and a portion of the concession sales we manage from the Firefly Music Festival.  “Broadcasting” revenue includes rights fees obtained for domestic television broadcasts of events held at our speedway.

All of our revenues are based on contracts with customers and, with the exception of certain track rentals, relate to two NASCAR event weekends and the Firefly Music Festival held at our Dover facility.  Our contracts are typically for specific events or a racing season.  We have several multi-year sponsorship contracts for our racing events and our contract with the promoter of the Firefly Music Festival is multi-year.  Revenues pertaining to specific events are deferred and recorded as contract liabilities in our consolidated balance sheets until the event is held.  As of September 30, 2019, contract liabilities in our consolidated balance sheets of $4,279,000 and $247,000 relate to 2019 and 2020 events, respectively. As of December 31, 2018, contract liabilities in our consolidated balance sheets relate to 2019 events. Concession and souvenir revenues are recorded at the time of sale.  Revenues and related expenses from barter transactions in which we provide sponsorship packages in exchange for goods or services are recorded at fair value. Barter transactions accounted for $261,000 and $239,000 of total revenues for the nine-month periods ended September 30, 2019 and 2018, respectively.

The following table summarizes the liability activity related to contracts with customers for the three and nine-month periods ended September 30, 2019 and 2018:

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2019		2018		2019		2018
Balance, beginning of period	$	2,008	$	1,700	$	1,140	$	1,249
Reductions from beginning balance		—		—		(739)		(778)
Additional liabilities recorded during the period		2,518		2,828		7,715		8,525
Reduction of additional liabilities recorded during the period, not from beginning balance		—		—		(3,590)		(4,468)
Balance, end of period	$	4,526	$	4,528	$	4,526	$	4,528

We have contracted future revenues representing unsatisfied performance obligations.  These contracts contain initial terms typically ranging from one to three years, with some for longer periods, excluding renewal options.  We have excluded unsatisfied performance obligations for future NASCAR broadcasting revenue with contract terms through 2024. We anticipate recognizing unsatisfied performance obligations for the calendar year ending 2020 and beyond of approximately $3,852,000 at September 30, 2019.

Under the terms of our sanction agreements with NASCAR, we receive a portion of the broadcast revenue NASCAR negotiates with various television networks.  NASCAR typically remits payment to us for the broadcast revenue within 30 days of the event being held.  NASCAR retains 10% of the gross broadcast rights fees allocated to each NASCAR-sanctioned event as a component of its sanction fee.  The remaining 90% is recorded as revenue.  We are required to pay 25% of the gross broadcast rights fees to the event as part of the awards to the competitors, which are recorded as operating expenses.

Expense recognition

Expense recognition— The cost of advertising is expensed as incurred.  Advertising expenses were $465,000 and $1,011,000,  and $539,000 and $1,144,000 for the three and nine-month periods ended September 30, 2019 and 2018, respectively. Certain direct expenses pertaining to specific events, including prize and point fund monies and sanction fees paid to NASCAR, and other expenses associated with our racing events are deferred until the event is held, at which point they are expensed.

Net earnings per common share

Net (loss) earnings per common share—Nonvested share-based payment awards that include rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities, and the two-class method of computing basic and diluted net (loss) earnings per common share (“EPS”) is applied for all periods presented.  The following table sets forth the computation of EPS (in thousands, except per share amounts):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
Net (loss) earnings per common share – basic and diluted:
Net (loss) earnings	$	(414)	$	(2,699)	$	2,597	$	2,817
Allocation to nonvested restricted stock awards		—		—		42		45
Net (loss) earnings available to common stockholders	$	(414)	$	(2,699)	$	2,555	$	2,772
Weighted-average shares outstanding – basic and diluted		35,952		36,102		35,998		36,165
Net (loss) earnings per common share – basic and diluted	$	(0.01)	$	(0.07)	$	0.07	$	0.08

There were no options outstanding and we paid no dividends during the nine months ended September 30, 2019 or 2018.

On October 23, 2019, our Board of Directors declared an annual cash dividend on both classes of common stock of $.10 per share to be paid on December 10, 2019. 

Accounting for stock-based compensation

Accounting for stock-based compensation—We recorded total stock-based compensation expense for our restricted stock awards of $67,000 and $243,000, and $66,000 and $237,000 as general and administrative expenses for the three and nine-month periods ended September 30, 2019 and 2018, respectively.  We recorded income tax benefits of $19,000 and $57,000, and $18,000 and $64,000 for the three and nine-month periods ended September 30, 2019 and 2018, respectively, related to vesting of our restricted stock awards.

Recent accounting pronouncements

Recent accounting pronouncements—In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General. This new standard makes changes to the disclosure requirements for sponsors of defined benefit pension and/or other postretirement benefit plans to improve effectiveness of notes to the financial statements.  ASU 2018-14 is effective for fiscal years ending after December 15, 2020, and requires retrospective adoption.  Early adoption is permitted.  We are currently analyzing the impact of this ASU and we do not expect it to have a significant impact on our financial statement disclosures.

XML

Commitments and Contingencies (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2011	Dec. 31, 2018	Sep. 30, 1999
Contingent obligation
Contingent obligation beginning balance			$ 2,384,000
Provision for contingent obligation	$ 121,000	$ (4,000)	367,000	$ 132,000	$ 2,250,000
Provision for contingent obligation at period end	2,751,000		2,751,000
Variable Rate Tax Exempt Infrastructure Revenue Bonds | Indirect Guarantee of Indebtedness
Commitments and Contingencies
Debt issued							$ 25,900,000
Outstanding amount	13,400,000		13,400,000
Balance available in the sales and incremental property tax fund	724,000		724,000			$ 1,052,000
Amount paid into the sales and incremental property tax fund			981,000
Debt service fee	1,309,000		1,309,000
Variable Rate Tax Exempt Infrastructure Revenue Bonds | Irrevocable direct-pay letter of credit
Commitments and Contingencies
Irrevocable direct-pay letter of credit issued	13,625,000		13,625,000
Variable Rate Tax Exempt Infrastructure Revenue Bonds | Minimum | Indirect Guarantee of Indebtedness
Commitments and Contingencies
Annual payment range	1,100,000		1,100,000
Variable Rate Tax Exempt Infrastructure Revenue Bonds | Maximum | Indirect Guarantee of Indebtedness
Commitments and Contingencies
Annual payment range	$ 1,600,000		$ 1,600,000

XML

Stockholders' Equity (Details) - USD ($)	3 Months Ended						9 Months Ended		12 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Changes in the components of stockholders' equity
Balance at the beginning of the period			$ 62,888,000				$ 62,888,000
Net earnings (loss)	$ (414,000)			$ (2,699,000)			2,597,000	$ 2,817,000
Change in net actuarial loss and prior service cost, net of income tax expense	29,000			28,000			80,000	81,000
Balance at the end of the period	65,280,000						65,280,000		$ 62,888,000
Income tax benefit (expense) on change in net actuarial loss and prior service cost	11,000	$ 10,000	10,000	11,000	$ 10,000	$ 10,000
Accumulated other comprehensive loss, net of income taxes
Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $2,319,000 and $2,350,000, respectively	(3,278,000)						(3,278,000)		(3,358,000)
Income tax benefit on net actuarial loss and prior service cost not yet recognized in net periodic benefit cost							(2,319,000)		2,350,000
Common Stock | Common Stock
Changes in the components of stockholders' equity
Balance at the beginning of the period	1,809,000	1,809,000	1,805,000	1,821,000	1,826,000	1,825,000	1,805,000	1,825,000	1,825,000
Issuance of restricted stock awards, net of forfeitures			14,000			15,000
Repurchase and retirement of common stock	(16,000)		(10,000)	(7,000)	(5,000)	(14,000)
Balance at the end of the period	1,793,000	1,809,000	1,809,000	1,814,000	1,821,000	1,826,000	1,793,000	1,814,000	1,805,000
Common Stock | Class A Common Stock
Changes in the components of stockholders' equity
Balance at the beginning of the period	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000
Balance at the end of the period	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000	1,851,000
Additional Paid-in Capital
Changes in the components of stockholders' equity
Balance at the beginning of the period	101,388,000	101,320,000	101,416,000	101,613,000	101,659,000	101,844,000	101,416,000	101,844,000	101,844,000
Issuance of restricted stock awards, net of forfeitures			(14,000)			(15,000)
Stock-based compensation	67,000	68,000	108,000	66,000	66,000	105,000
Repurchase and retirement of common stock	(312,000)		(190,000)	(134,000)	(112,000)	(275,000)
Balance at the end of the period	101,143,000	101,388,000	101,320,000	101,545,000	101,613,000	101,659,000	101,143,000	101,545,000	101,416,000
Accumulated Deficit
Changes in the components of stockholders' equity
Balance at the beginning of the period	(35,815,000)	(41,316,000)	(38,826,000)	(37,269,000)	(43,777,000)	(42,858,000)	(38,826,000)	(42,858,000)	(42,858,000)
Net earnings (loss)	(414,000)	5,501,000	(2,490,000)	(2,699,000)	6,508,000	(992,000)
Balance at the end of the period	(36,229,000)	(35,815,000)	(41,316,000)	(39,968,000)	(37,269,000)	(43,777,000)	(36,229,000)	(39,968,000)	(38,826,000)
Accumulated Deficit | ASU 2016-01
Changes in the components of stockholders' equity
Adoption of ASU 2016-01						73,000
Accumulated Other Comprehensive Loss
Changes in the components of stockholders' equity
Balance at the beginning of the period	(3,307,000)	(3,333,000)	(3,358,000)	(3,460,000)	(3,486,000)	(3,440,000)	(3,358,000)	(3,440,000)	(3,440,000)
Change in net actuarial loss and prior service cost, net of income tax expense	29,000	26,000	(25,000)	28,000	26,000	27,000
Balance at the end of the period	$ (3,278,000)	$ (3,307,000)	$ (3,333,000)	$ (3,432,000)	$ (3,460,000)	(3,486,000)	$ (3,278,000)	$ (3,432,000)	$ (3,358,000)
Accumulated Other Comprehensive Loss | ASU 2016-01
Changes in the components of stockholders' equity
Adoption of ASU 2016-01						$ (73,000)

XML

Long-Term Debt

9 Months Ended

Sep. 30, 2019

Long-Term Debt

Long-Term Debt

NOTE 4 – Long-Term Debt

At September 30, 2019, Dover Motorsports, Inc. and its wholly owned subsidiaries Dover International Speedway, Inc. and Nashville Speedway, USA, Inc., as co-borrowers had a $30,000,000 credit agreement with a bank group. On September 24, 2019, we modified the credit agreement to: extend the maturity date to January 1, 2022; and reduce the total available borrowings under the facility from $35,000,000 to $30,000,000. Interest is based upon LIBOR plus a margin that varies between 125 and 175 basis points depending on the leverage ratio. At September 30, 2019, there were no borrowings outstanding under the credit facility. The credit facility contains certain covenants including maximum funded debt to earnings before interest, taxes, depreciation and amortization (“leverage ratio”) and a minimum fixed charge coverage ratio.  Material adverse changes in our results of operations could impact our ability to maintain financial ratios necessary to satisfy these requirements.  In addition, the credit agreement includes a material adverse change clause. The credit facility also provides that if we default under any other loan agreement, that would be a default under this facility. At September 30, 2019, we were in compliance with the terms of the credit facility.  The credit facility provides for seasonal funding needs, capital improvements, letter of credit requirements and other general corporate purposes. After consideration of stand-by letters of credit outstanding, the remaining maximum borrowings available pursuant to the credit facility were $16,375,000 at September 30, 2019. We expect to be in compliance with the financial covenants, and all other covenants, for all measurement periods during the next twelve months.

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities:
Net earnings	$ 2,597,000	$ 2,817,000
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation	3,256,000	2,496,000
Amortization of credit facility fees	47,000	47,000
Stock-based compensation	243,000	237,000
Deferred income taxes	(659,000)	(690,000)
Provision for contingent obligation	367,000	132,000
Gains on equity investments	(125,000)	(15,000)
Gain on sale of land	(4,325,000)	(2,413,000)
Changes in assets and liabilities:
Accounts receivable	(1,190,000)	(257,000)
Inventories	1,000	(4,000)
Prepaid expenses and other	(5,159,000)	(4,731,000)
Income taxes receivable/payable	(213,000)	(290,000)
Accounts payable	129,000	549,000
Accrued liabilities	38,000	(145,000)
Payable to Dover Downs Gaming & Entertainment, Inc.	(9,000)	(1,000)
Contract liabilities	3,386,000	3,279,000
Liability for pension benefits	(48,000)	(1,811,000)
Net cash used in operating activities	(1,664,000)	(800,000)
Investing activities:
Capital expenditures	(4,651,000)	(762,000)
Proceeds from sale of land and equipment, net	7,224,000	4,945,000
Non-refundable deposit	500,000
Purchases of equity investments	(14,000)	(100,000)
Proceeds from sale of equity investments	1,000	90,000
Net cash provided by investing activities	3,060,000	4,173,000
Financing activities:
Borrowings from revolving line of credit	4,120,000	10,200,000
Repayments on revolving line of credit	(4,120,000)	(12,840,000)
Repurchase of common stock	(528,000)	(547,000)
Credit facility fees	(35,000)
Net cash used in financing activities	(563,000)	(3,187,000)
Net increase in cash	833,000	186,000
Cash, beginning of period	3,951,000	1,000
Cash, end of period	4,784,000	187,000
Supplemental information:
Interest (received) paid	(10,000)	62,000
Income tax payments	1,752,000	1,679,000
Change in accounts payable for capital expenditures	$ 1,315,000	$ 128,000

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 28, 2019
Entity Registrant Name	DOVER MOTORSPORTS INC
Entity Central Index Key	0001017673
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Common Stock | Common Stock
Entity Common Stock, Shares Outstanding		17,931,403
Common Stock | Class A Common Stock
Entity Common Stock, Shares Outstanding		18,509,975

XML

Summary of Significant Accounting Policies - Leases (Details)	Sep. 30, 2019 USD ($)
Leases
Right of use asset	$ 206,000
Long term lease liability	131,000
Short term lease liability	$ 75,000

XML

Summary of Significant Accounting Policies - Accounting for stock-based compensation (Details) - Restricted Stock - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Accounting for stock-based compensation
Stock-based compensation expense	$ 67,000	$ 66,000	$ 243,000	$ 237,000
Income tax benefits related to vesting of restricted stock awards	$ 19,000	$ 18,000	$ 57,000	$ 64,000