United States
Securities And Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 26, 2018
Dover Motorsports, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number 1-11929
Delaware | 51-0357525 | |
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) | |
1131 N. DuPont Highway Dover, Delaware |
19901 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (302) 883-6500
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
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. ☐
Item 2.02 Results of Operations and Financial Condition and
Item 7.01 Regulation FD Disclosure.
The following information is furnished pursuant to Item 2.02 Results of Operations and Financial Condition and Item 7.01 Regulation FD Disclosure.
On July 26, 2018, we issued a press release announcing our financial results for the second quarter ended June 30, 2018. A copy of our press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 | Press Release dated July 26, 2018 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, we have duly caused this report to be signed on our behalf by the undersigned hereunto duly authorized.
Dover Motorsports, Inc. |
/s/ Denis McGlynn |
Denis McGlynn |
President and Chief Executive Officer |
Dated: July 26, 2018
Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: | |||
Timothy R. Horne Sr. Vice President Finance | ||||
Dover, Delaware, July 26, 2018 |
(302) 857-3292 |
DOVER MOTORSPORTS, INC.
REPORTS RESULTS FOR THE SECOND QUARTER OF 2018
Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2018.
The Company promoted a NASCAR triple-header and hosted the Firefly Music Festival in Dover during the second quarter of 2018 and 2017. The Company leases a portion of its facility to the promoter of Firefly, provides logistical assistance and handles certain concessions for which the Company retains a percentage of the gross sales.
Revenues for the second quarter of 2018 increased to $25,812,000 from $25,587,000 for the second quarter of 2017. The increase is primarily from the scheduled increase in broadcasting revenue and higher commissions from Firefly, partially offset by lower admissions revenue for the NASCAR weekend.
Operating and marketing expenses increased to $14,234,000 in the second quarter of 2018 from $14,100,000 in the second quarter of 2017. The increase was due to the scheduled increase in purse and sanction fees for the NASCAR weekend offset by lower other race related expenses.
General and administrative expenses of $1,799,000 in the second quarter of 2018 remained consistent compared to $1,796,000 in the second quarter of 2017.
Net interest expense decreased to $33,000 in the second quarter of 2018 from $68,000 in the second quarter of 2017 due to lower outstanding borrowings.
Provision for contingent obligation was $69,000 during the second quarter of 2018 compared to $11,000 during the second quarter of 2017 primarily due to changes in discount rates.
Earnings before income taxes for the second quarter of 2018 were $8,879,000 compared with $8,808,000 for the second quarter of 2017.
Income tax expense during the second quarter of 2018 decreased to $2,371,000 from $3,605,000 in the second quarter of 2017. The decrease is primarily due to the impact of the Tax Cuts and Jobs Act of 2017 which lowered federal income tax rates beginning in 2018.
Net earnings for the second quarter of 2018 were $6,508,000 or $0.18 per diluted share compared to $5,203,000 or $0.14 per diluted share in the second quarter of 2017.
As previously reported, we closed on the sale of a parcel of land in Nashville during the first quarter of 2018 for net proceeds of approximately $5 million after closing costs, resulting in a gain of $2,512,000. 225 acres of our Nashville Speedway property are under option for a total purchase price of approximately $12.4 million. The Company continues to hold over 1,000 acres of prime commercial real estate.
During the second quarter this year, the Company repurchased 54,565 shares of its common stock on the open market at an average price of $2.10 per share, not including nominal brokerage commissions.
The Companys financial position continues to improve. At June 30, 2018, the Company had no outstanding indebtedness and more than $5 million in available cash. During the first six months of 2018 the Company has contributed another $1,000,000 to its defined benefit pension plan.
* * *
This release contains or may contain forward-looking statements based on managements beliefs and assumptions. Such statements are subject to various risks and uncertainties which could cause results to vary materially. Please refer to the Companys SEC filings for a discussion of such factors.
Dover Motorsports, Inc. is a leading promoter of NASCAR sanctioned and other motorsports events in the United States whose subsidiaries own and operate Dover International Speedway in Dover, Delaware and Nashville Superspeedway near Nashville, Tennessee. For further information, log on to dovermotorsports.com.
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
Three Months Ended June 30, |
Six Months Ended June 30, |
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2018 | 2017 | 2018 | 2017 | |||||||||||||
Revenues: |
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Admissions |
$ | 2,853 | $ | 3,446 | $ | 2,853 | $ | 3,446 | ||||||||
Event-related |
4,830 | 4,634 | 5,056 | 4,744 | ||||||||||||
Broadcasting |
18,128 | 17,505 | 18,128 | 17,505 | ||||||||||||
Other |
1 | 2 | 1 | 2 | ||||||||||||
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25,812 | 25,587 | 26,038 | 25,697 | |||||||||||||
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Expenses: |
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Operating and marketing |
14,234 | 14,100 | 15,385 | 15,154 | ||||||||||||
General and administrative |
1,799 | 1,796 | 3,754 | 3,816 | ||||||||||||
Depreciation |
825 | 823 | 1,703 | 1,644 | ||||||||||||
Costs to remove long-lived assets |
| | | 286 | ||||||||||||
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16,858 | 16,719 | 20,842 | 20,900 | |||||||||||||
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Gain on sale of land |
| | 2,512 | | ||||||||||||
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Operating earnings |
8,954 | 8,868 | 7,708 | 4,797 | ||||||||||||
Interest expense, net |
(33 | ) | (68 | ) | (73 | ) | (116 | ) | ||||||||
Provision for contingent obligation |
(69 | ) | (11 | ) | (136 | ) | (52 | ) | ||||||||
Other income |
27 | 19 | 31 | 71 | ||||||||||||
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Earnings before income taxes |
8,879 | 8,808 | 7,530 | 4,700 | ||||||||||||
Income tax expense |
(2,371 | ) | (3,605 | ) | (2,014 | ) | (1,902 | ) | ||||||||
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Net earnings |
$ | 6,508 | $ | 5,203 | $ | 5,516 | $ | 2,798 | ||||||||
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Net earnings per common share: |
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Basic |
$ | 0.18 | $ | 0.14 | $ | 0.15 | $ | 0.08 | ||||||||
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Diluted |
$ | 0.18 | $ | 0.14 | $ | 0.15 | $ | 0.08 | ||||||||
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Weighted average shares outstanding: |
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Basic |
36,160 | 36,308 | 36,196 | 36,307 | ||||||||||||
Diluted |
36,160 | 36,308 | 36,196 | 36,307 |
DOVER MOTORSPORTS, INC.
RECONCILIATION OF GAAP EARNINGS BEFORE INCOME TAXES
TO ADJUSTED EARNINGS BEFORE INCOME TAXES
AND RECONCILIATION OF GAAP NET EARNINGS TO ADJUSTED NET EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
Three Months Ended June 30, |
Six Months Ended June 30, |
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2018 | 2017 | 2018 | 2017 | |||||||||||||
GAAP earnings before income taxes |
$ | 8,879 | $ | 8,808 | $ | 7,530 | $ | 4,700 | ||||||||
Gain on sale of land (1) |
| | (2,512 | ) | | |||||||||||
Costs to remove long-lived assets (2) |
| | | 286 | ||||||||||||
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Adjusted earnings before income taxes |
$ | 8,879 | $ | 8,808 | $ | 5,018 | $ | 4,986 | ||||||||
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GAAP net earnings |
$ | 6,508 | $ | 5,203 | $ | 5,516 | $ | 2,798 | ||||||||
Gain on sale of land, net of income taxes (1) |
| | (1,984 | ) | | |||||||||||
Costs to remove long-lived assets, net of income taxes (2) |
| | | 167 | ||||||||||||
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Adjusted net earnings |
$ | 6,508 | $ | 5,203 | $ | 3,532 | $ | 2,965 | ||||||||
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GAAP net earnings per common share basic and diluted |
$ | 0.18 | $ | 0.14 | $ | 0.15 | $ | 0.08 | ||||||||
Gain on sale of land, net of income taxes (1) |
| | (0.05 | ) | | |||||||||||
Costs to remove long-lived assets, net of income taxes (2) |
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Adjusted net earnings per common share basic and diluted |
$ | 0.18 | $ | 0.14 | $ | 0.10 | $ | 0.08 | ||||||||
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(1) | During the first quarter of 2018, we closed on the sale of a parcel of land at our Nashville Superspeedway facility resulting in a gain on sale. |
(2) | Costs to remove long-lived assets represents costs incurred to remove and dispose of certain grandstand seating at our Dover International Speedway facility. |
The above financial information is presented using other than generally accepted accounting principles (non-GAAP), and is reconciled to comparable information presented using GAAP. Non-GAAP adjusted earnings before income taxes, adjusted net earnings and adjusted net earnings per common share basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned gain on sale of land and costs to remove long-lived assets. Income taxes are based on our approximate statutory tax rates applicable to each of these items. We believe such non-GAAP information is useful and meaningful to investors, and is used by investors and us to assess core operations. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to earnings before income taxes, net earnings or net earnings per common share basic and diluted, which are determined in accordance with GAAP.
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
June 30, 2018 |
June 30, 2017 |
December 31, 2017 |
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ASSETS |
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Current assets: |
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Cash |
$ | 5,257 | $ | 1 | $ | 1 | ||||||
Accounts receivable |
2,177 | 14,453 | 476 | |||||||||
Inventories |
19 | 17 | 15 | |||||||||
Prepaid expenses and other |
921 | 995 | 1,119 | |||||||||
Income taxes receivable |
| | 562 | |||||||||
Assets held for sale |
| 2,455 | 2,455 | |||||||||
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Total current assets |
8,374 | 17,921 | 4,628 | |||||||||
Property and equipment, net |
49,827 | 52,800 | 51,000 | |||||||||
Nashville Superspeedway facility |
23,567 | 23,545 | 23,545 | |||||||||
Other assets |
1,091 | 1,068 | 1,107 | |||||||||
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Total assets |
$ | 82,859 | $ | 95,334 | $ | 80,280 | ||||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
$ | 239 | $ | 874 | $ | 61 | ||||||
Accrued liabilities |
2,822 | 4,077 | 3,049 | |||||||||
Payable to Dover Downs Gaming & Entertainment, Inc. |
19 | 33 | 7 | |||||||||
Income taxes payable |
1,185 | 1,666 | | |||||||||
Contract liabilities |
1,700 | 2,252 | 1,249 | |||||||||
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Total current liabilities |
5,965 | 8,902 | 4,366 | |||||||||
Revolving line of credit, net |
| 11,200 | 3,240 | |||||||||
Liability for pension benefits |
1,708 | 3,887 | 2,819 | |||||||||
Provision for contingent obligation |
2,096 | 1,854 | 1,960 | |||||||||
Deferred income taxes |
8,534 | 12,692 | 8,673 | |||||||||
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Total liabilities |
18,303 | 38,535 | 21,058 | |||||||||
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Stockholders equity: |
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Common stock |
1,821 | 1,838 | 1,825 | |||||||||
Class A common stock |
1,851 | 1,851 | 1,851 | |||||||||
Additional paid-in capital |
101,613 | 101,988 | 101,844 | |||||||||
Accumulated deficit |
(37,269 | ) | (45,542 | ) | (42,858 | ) | ||||||
Accumulated other comprehensive loss |
(3,460 | ) | (3,336 | ) | (3,440 | ) | ||||||
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Total stockholders equity |
64,556 | 56,799 | 59,222 | |||||||||
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Total liabilities and stockholders equity |
$ | 82,859 | $ | 95,334 | $ | 80,280 | ||||||
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DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
Six Months Ended June 30, |
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2018 | 2017 | |||||||
Operating activities: |
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Net earnings |
$ | 5,516 | $ | 2,798 | ||||
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: |
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Depreciation |
1,703 | 1,644 | ||||||
Amortization of credit facility fees |
32 | 32 | ||||||
Stock-based compensation |
171 | 245 | ||||||
Deferred income taxes |
(160 | ) | (258 | ) | ||||
Provision for contingent obligation |
136 | 52 | ||||||
Losses on equity investments |
6 | | ||||||
Gain on sale of land |
(2,512 | ) | | |||||
Changes in assets and liabilities: |
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Accounts receivable |
(1,701 | ) | (14,034 | ) | ||||
Inventories |
(4 | ) | | |||||
Prepaid expenses and other |
182 | 46 | ||||||
Accounts payable |
178 | 561 | ||||||
Accrued liabilities |
(227 | ) | 1,139 | |||||
Payable to Dover Downs Gaming & Entertainment, Inc. |
12 | 26 | ||||||
Income taxes payable/receivable |
1,748 | 1,449 | ||||||
Contract liabilities |
451 | 897 | ||||||
Liability for pension benefits |
(1,038 | ) | (172 | ) | ||||
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Net cash provided by (used in) operating activities |
4,493 | (5,575 | ) | |||||
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Investing activities: |
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Capital expenditures |
(530 | ) | (1,675 | ) | ||||
Proceeds from sale of land, net |
4,945 | | ||||||
Purchases of equity investments |
(62 | ) | (126 | ) | ||||
Proceeds from sale of equity investments |
56 | 121 | ||||||
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Net cash provided by (used in) investing activities |
4,409 | (1,680 | ) | |||||
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Financing activities: |
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Borrowings from revolving line of credit |
9,400 | 12,140 | ||||||
Repayments on revolving line of credit |
(12,640 | ) | (4,780 | ) | ||||
Repurchase of common stock |
(406 | ) | (105 | ) | ||||
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Net cash (used in) provided by financing activities |
(3,646 | ) | 7,255 | |||||
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Net increase in cash |
5,256 | | ||||||
Cash, beginning of period |
1 | 1 | ||||||
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Cash, end of period |
$ | 5,257 | $ | 1 | ||||
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