DOVER, Del.--(BUSINESS WIRE)--Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the fourth quarter and year ended December 31, 2015.
Results for this quarter are not comparable to the prior year’s quarter due to the timing of Dover’s fall NASCAR race weekend which was promoted in the fourth quarter in 2015 compared to the third quarter in 2014.
Revenues for the fourth quarter of 2015 were $21,016,000 compared with $157,000 in the fourth quarter of 2014. Operating and marketing expenses were $11,940,000 in the fourth quarter of 2015 compared to $990,000 in the fourth quarter of 2014. Both increases are due to the timing of our 2015 fall NASCAR race weekend.
The Company’s fall NASCAR weekend was negatively impacted by the forecast of a potential hurricane, the postponement of all Friday activities, and threatening weather for the balance of the weekend, causing a reduction in admissions revenue and concession and merchandise sales. Broadcast revenue and sponsorship sales both improved compared to last year’s fall weekend.
General and administrative expenses increased $129,000 from $1,786,000 for the fourth quarter of 2014 to $1,915,000 for the fourth quarter of 2015. The increase is primarily from higher employee costs.
Depreciation expense increased to $949,000 in the fourth quarter of 2015 compared to $814,000 in the fourth quarter of 2014. The increase is due to the decision earlier in 2015 to remove certain grandstand seats and structures after our 2015 race season. We changed the estimated useful lives of the impacted assets resulting in a $177,000 increase in our fourth quarter 2015 depreciation expense.
Net interest expense decreased to $43,000 in the fourth quarter of 2015 from $132,000 for the fourth quarter of 2014. The decrease was primarily due to lower outstanding borrowings and lower letter of credit fees.
Earnings before income taxes for the fourth quarter of 2015 were $6,159,000 compared with a loss before income taxes of ($3,536,000) in the fourth quarter of 2014. The increase is due to the timing of the 2015 fall NASCAR race weekend.
Net earnings for the fourth quarter of 2015 were $3,791,000 or $.10 per diluted share compared to net loss of ($2,182,000) or ($.06) per diluted share for the fourth quarter of 2014.
For the year ended December 31, 2015, total revenues were $46,539,000 compared with $45,674,000 in the prior year. The increase was primarily due to higher broadcasting revenue and higher rent and concessions revenue related to hosting the Firefly and the inaugural Big Barrel music festivals. These increases were offset by lower admissions and concession revenue from our weather impacted fall NASCAR race weekend.
Income from assets held for sale of $2,900,000 represents non-refundable payments made to extend the closing date under a now expired agreement to sell our Nashville facility.
Net earnings for the year ended December 31, 2015 were $5,285,000 or $.14 per diluted share compared to $3,145,000 or $.09 per diluted share for the year ended December 31, 2014. The current year’s annual results include a pre-tax charge of $40,000 compared to $2,403,000 in the prior year for the removal of grandstand seats which were not fully depreciated. The current year’s annual results also include additional depreciation expense of $2,216,000 from the previously mentioned change in useful lives of grandstand seats and structures we decided to remove after the completion of the 2015 race season. On an adjusted basis, excluding both charges and the income from assets held for sale, 2015 net earnings were $4,739,000 or $.13 per diluted share compared to $4,592,000 or $.13 per diluted share for 2014.
The Company’s financial position strengthened during 2015. Total borrowings outstanding decreased to $5,900,000 at December 31, 2015 from $10,760,000 at December 31, 2014. In December 2015 and 2014, the Company paid annual cash dividends on both classes of common stock of $0.05 per share. Due to the seasonal nature of our business, we will evaluate dividends annually.
This release contains or may contain forward-looking statements based on management's beliefs and assumptions. Such statements are subject to various risks and uncertainties which could cause results to vary materially. Please refer to the Company's SEC filings for a discussion of such factors.
Dover Motorsports, Inc. is a leading promoter of NASCAR sanctioned and other motorsports events in the United States whose subsidiaries own and operate Dover International Speedway in Dover, Delaware and Nashville Superspeedway near Nashville, Tennessee. For further information, log on to dovermotorsports.com.
| DOVER MOTORSPORTS, INC. | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) | ||||||||||||||||
| In Thousands, Except Per Share Amounts | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenues: | ||||||||||||||||
| Admissions | $ | 3,755 | $ | - | $ | 7,967 | $ | 8,727 | ||||||||
| Event-related | 3,794 | 138 | 8,617 | 8,450 | ||||||||||||
| Broadcasting | 13,463 | - | 29,949 | 28,463 | ||||||||||||
| Other | 4 | 19 | 6 | 34 | ||||||||||||
| 21,016 | 157 | 46,539 | 45,674 | |||||||||||||
| Expenses: | ||||||||||||||||
| Operating and marketing | 11,940 | 990 | 27,818 | 27,171 | ||||||||||||
| General and administrative | 1,915 | 1,786 | 7,414 | 7,146 | ||||||||||||
| Loss on disposal of long-lived assets | - | - | 40 | 2,403 | ||||||||||||
| Depreciation | 949 | 814 | 5,326 | 3,262 | ||||||||||||
| 14,804 | 3,590 | 40,598 | 39,982 | |||||||||||||
| Income from assets held for sale | - | - | 2,900 | - | ||||||||||||
| Operating earnings (loss) | 6,212 | (3,433 | ) | 8,841 | 5,692 | |||||||||||
| Interest expense, net | (43 | ) | (132 | ) | (323 | ) | (467 | ) | ||||||||
| (Provision) benefit for contingent obligation | (4 | ) | 30 | 86 | 30 | |||||||||||
| Other (expense) income | (6 | ) | (1 | ) | (5 | ) | 26 | |||||||||
| Earnings (loss) before income taxes | 6,159 | (3,536 | ) | 8,599 | 5,281 | |||||||||||
| Income tax (expense) benefit | (2,368 | ) | 1,354 | (3,314 | ) | (2,136 | ) | |||||||||
| Net earnings (loss) | $ | 3,791 | $ | (2,182 | ) | $ | 5,285 | $ | 3,145 | |||||||
| Net earnings (loss) per common share: | ||||||||||||||||
| Basic | $ | 0.10 | $ | (0.06 | ) | $ | 0.14 | $ | 0.09 | |||||||
| Diluted | $ | 0.10 | $ | (0.06 | ) | $ | 0.14 | $ | 0.09 | |||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 36,157 | 36,042 | 36,156 | 36,047 | ||||||||||||
| Diluted | 36,157 | 36,042 | 36,156 | 36,047 | ||||||||||||
| DOVER MOTORSPORTS, INC. | ||||||||||||||
| RECONCILIATION OF GAAP EARNINGS (LOSS) BEFORE INCOME TAXES TO | ||||||||||||||
| ADJUSTED EARNINGS (LOSS) BEFORE INCOME TAXES | ||||||||||||||
| AND RECONCILIATION OF GAAP NET EARNINGS (LOSS) TO ADJUSTED NET EARNINGS (LOSS) | ||||||||||||||
| In Thousands, Except Per Share Amounts | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||
| GAAP earnings (loss) before income taxes | $ | 6,159 | $ | (3,536 | ) | $ | 8,599 | $ | 5,281 | |||||
| Accelerated depreciation (1) | 177 | - | 2,216 | - | ||||||||||
| Income from assets held for sale (2) | - | - | (2,900 | ) | - | |||||||||
| Loss on disposal of long-lived assets (3) | - | - | 40 | 2,403 | ||||||||||
| Adjusted earnings (loss) before income taxes | $ | 6,336 | $ | (3,536 | ) | $ | 7,955 | $ | 7,684 | |||||
| GAAP net earnings (loss) | $ | 3,791 | $ | (2,182 | ) | $ | 5,285 | $ | 3,145 | |||||
| Accelerated depreciation, net of income taxes (1) | 105 | - | 1,316 | - | ||||||||||
|
Income from assets held for sale, net of income taxes (2) |
- | - | (1,886 | ) | - | |||||||||
| Loss on disposal of long-lived assets, net of income taxes (3) | - | - | 24 | 1,447 | ||||||||||
| Adjusted net earnings (loss) | $ | 3,896 | $ | (2,182 | ) | $ | 4,739 | $ | 4,592 | |||||
| GAAP net earnings (loss) per common share - basic and diluted | $ | 0.10 | $ | (0.06 | ) | $ | 0.14 | $ | 0.09 | |||||
| Accelerated depreciation, net of income taxes (1) | - | - | 0.04 | - | ||||||||||
| Income from assets held for sale, net of income taxes (2) | - | - | (0.05 | ) | - | |||||||||
| Loss on disposal of long-lived assets, net of income taxes (3) | - | - | - | 0.04 | ||||||||||
| Adjusted net earnings (loss) per common share - basic and diluted (4) | $ | 0.11 | $ | (0.06 | ) | $ | 0.13 | $ | 0.13 | |||||
|
_________________________ |
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|
(1) |
During the first quarter of 2015, we made the decision to remove certain grandstand seating at our Dover International Speedway facility at the end of the 2015 race season. As a result, we shortened the service lives of these assets which resulted in accelerated depreciation being recorded in 2015. | |
|
(2) |
On May 29, 2014, we entered into an agreement to sell our Nashville Superspeedway facility. The potential buyer made several payments to us to extend the closing date of settlement. The sale agreement expired on July 27, 2015 and all payments made to us have been recognized as income from assets held for sale. | |
|
(3) |
Loss on disposal of long-lived assets is attributable to the decision to remove and dispose of certain grandstand seating at our Dover International Speedway facility. | |
|
(4) |
The components of earnings per common share for the three months ended December 31, 2015 do not add to the adjusted earnings per common share due to rounding. | |
| The above financial information is presented using other than generally accepted accounting principles ("non-GAAP"), and is reconciled to comparable information presented using GAAP. Non-GAAP adjusted earnings (loss) before income taxes, adjusted net earnings (loss) and adjusted net earnings (loss) per common share - basic and diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned accelerated depreciation, income from assets held for sale and loss on disposal of long-lived assets. 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 (loss) before income taxes, net earnings (loss) or net earnings (loss) per common share - basic and diluted, which are determined in accordance with GAAP. | ||
| DOVER MOTORSPORTS, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2015 | 2014 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 1 | $ | 24 | ||||
| Accounts receivable | 173 | 139 | ||||||
| Inventories | 72 | 70 | ||||||
| Prepaid expenses and other | 1,136 | 1,042 | ||||||
| Receivable from Dover Downs Gaming & Entertainment, Inc. | 44 | - | ||||||
| Income taxes receivable | 1 | 170 | ||||||
| Deferred income taxes | 79 | 79 | ||||||
| Assets held for sale | 26,000 | 26,000 | ||||||
| Total current assets | 27,506 | 27,524 | ||||||
| Property and equipment, net | 53,542 | 58,236 | ||||||
| Other assets | 851 | 925 | ||||||
| Deferred income taxes | 549 | 580 | ||||||
| Total assets | $ | 82,448 | $ | 87,265 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 137 | $ | 889 | ||||
| Accrued liabilities | 3,215 | 4,944 | ||||||
| Payable to Dover Downs Gaming & Entertainment, Inc. | - | 22 | ||||||
| Deferred revenue | 1,278 | 1,348 | ||||||
| Total current liabilities | 4,630 | 7,203 | ||||||
| Revolving line of credit | 5,900 | 10,760 | ||||||
| Liability for pension benefits | 3,790 | 4,231 | ||||||
| Provision for contingent obligation | 1,727 | 1,813 | ||||||
| Deferred income taxes | 14,408 | 15,163 | ||||||
| Total liabilities | 30,455 | 39,170 | ||||||
| Stockholders' equity: | ||||||||
| Common stock | 1,822 | 1,812 | ||||||
| Class A common stock | 1,851 | 1,851 | ||||||
| Additional paid-in capital | 101,742 | 101,508 | ||||||
| Accumulated deficit | (50,301 | ) | (53,749 | ) | ||||
| Accumulated other comprehensive loss | (3,121 | ) | (3,327 | ) | ||||
| Total stockholders' equity | 51,993 | 48,095 | ||||||
| Total liabilities and stockholders' equity | $ | 82,448 | $ | 87,265 | ||||
| DOVER MOTORSPORTS, INC. | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| In Thousands | ||||||||
| (Unaudited) | ||||||||
| Years Ended | ||||||||
| December 31, | ||||||||
| 2015 | 2014 | |||||||
| Operating activities: | ||||||||
| Net earnings | $ | 5,285 | $ | 3,145 | ||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
| Depreciation | 5,326 | 3,262 | ||||||
| Amortization of credit facility fees | 96 | 96 | ||||||
| Stock-based compensation | 316 | 278 | ||||||
| Deferred income taxes | (828 | ) | (881 | ) | ||||
| Benefit for contingent obligation | (86 | ) | (30 | ) | ||||
| Income from assets held for sale | (2,900 | ) | - | |||||
| Loss on disposal of long-lived assets, non-cash | - | 2,045 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (34 | ) | (111 | ) | ||||
| Inventories | (2 | ) | 44 | |||||
| Prepaid expenses and other | (125 | ) | (60 | ) | ||||
| Receivable from/payable to Dover Downs Gaming & Entertainment, Inc. | (66 | ) | 26 | |||||
| Income taxes receivable | 182 | (69 | ) | |||||
| Accounts payable | 64 | 48 | ||||||
| Accrued liabilities | (86 | ) | 190 | |||||
| Deferred revenue | (70 | ) | (395 | ) | ||||
| Liability for pension benefits | (9 | ) | (90 | ) | ||||
| Net cash provided by operating activities | 7,063 | 7,498 | ||||||
| Investing activities: | ||||||||
| Capital expenditures | (1,448 | ) | (3,136 | ) | ||||
| Purchases of available-for-sale securities | (40 | ) | (99 | ) | ||||
| Proceeds from sale of available-for-sale securities | 20 | 77 | ||||||
| Non-refundable payments received related to assets held for sale | 1,200 | 1,700 | ||||||
| Net cash used in investing activities | (268 | ) | (1,458 | ) | ||||
| Financing activities: | ||||||||
| Borrowings from revolving line of credit | 29,740 | 35,520 | ||||||
| Repayments on revolving line of credit | (34,600 | ) | (39,580 | ) | ||||
| Dividends paid | (1,837 | ) | (1,831 | ) | ||||
| Repurchase of common stock | (121 | ) | (129 | ) | ||||
| Net cash used in financing activities | (6,818 | ) | (6,020 | ) | ||||
| Net (decrease) increase in cash | (23 | ) | 20 | |||||
| Cash, beginning of year | 24 | 4 | ||||||
| Cash, end of year | $ | 1 | $ | 24 | ||||