Dover Motorsports, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2012

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Dover Motorsports, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2012

DOVER, Del.--(BUSINESS WIRE)-- Dover Motorsports, Inc. (NYS: DVD) today reported its results for the fourth quarter and year ended December 31, 2012.

On an adjusted basis, earnings from continuing operations for the year improved 81.1% to $4,381,000 from $2,419,000 in 2011.


Results for this quarter are not comparable to the prior year's quarter due to the timing of Dover's fall NASCAR race weekend. Dover's 2012 fall NASCAR race weekend was held entirely in the third quarter of 2012 while the 2011 fall NASCAR Nationwide Series and Sprint Cup Series races were held during the fourth quarter of 2011. Also, the results for the year ended December 31, 2011 include the results of two NASCAR Nationwide Series and two NASCAR Truck Series races at the Company's Nashville facility. The Company did not promote these races in 2012.

For the quarter ended December 31, 2012, revenues were $129,000 compared with $22,443,000 in the fourth quarter of 2011. The decrease in revenues was due to the schedule change discussed above.

Operating and marketing expenses were $985,000 in the fourth quarter of 2012 compared to $10,768,000 in the fourth quarter of 2011. The decrease is also from the aforementioned changes.

General and administrative expenses of $2,102,000 in the fourth quarter of 2012 increased from $1,832,000 for the same quarter last year. The increase is primarily due to higher employee related costs at Dover.

Net interest expense was $291,000 for the fourth quarter of 2012 compared to $431,000 in the fourth quarter of 2011. The decrease is primarily due to lower average outstanding borrowings and lower interest rates in the fourth quarter of 2012 compared to 2011.

(Loss) earnings from continuing operations before tax benefit (expense) for the fourth quarter of 2012 were ($4,019,000) compared with $8,562,000 for the fourth quarter of 2011.

Net (loss) earnings for the fourth quarter of 2012 were ($2,356,000) or ($.07) per diluted share compared to $5,061,000 or $.14 per diluted share for the same period last year.

For the year ended December 31, 2012, total revenues were $46,747,000 compared with $51,870,000 in the prior year. The decrease was primarily due to no longer promoting the four NASCAR races at the Company's Nashville facility. Lower Dover NASCAR related revenues were partially offset by rental and related revenues from the inaugural Firefly Music Festival held in July 2012 on the Company's Dover parking grounds.

Net earnings were $4,571,000 or $.12 per diluted share for the year ended December 31, 2012 compared to a net loss of ($9,185,000) or ($0.25) per diluted share for 2011. The prior year's annual results include a non-cash impairment charge of $15,687,000 to write down the carrying value of the Nashville facility to its fair value, a provision for contingent obligation of $2,250,000 and a loss from discontinued operation of $71,000 while the results for 2012 includes a credit of $321,000 related to the contingent obligation. On an adjusted basis, earnings from continuing operations were $4,381,000 or $.12 per diluted share for 2012 compared to $2,419,000 or $.07 per diluted share for 2011.

The Company's financial position has also improved during 2012. Total borrowings outstanding were $19,700,000 at December 31, 2012 compared to $29,160,000 at December 31, 2011. In December 2012, the Company paid an annual cash dividend on both classes of common stock of $0.04 per share in the amount of $1,475,000.

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 OPERATIONS
In Thousands, Except Per Share Amounts
(Unaudited)
 
 
Three Months EndedYears Ended
December 31,December 31,
2012201120122011
Revenues:
Admissions$-$6,165$10,428$13,633
Event-related1004,4109,88910,309
Broadcasting1111,82226,40427,778
Other 18  46  26  150 
 129  22,443  46,747  51,870 
 
Expenses:
Operating and marketing98510,76826,68831,926
Impairment charge---15,687
General and administrative2,1021,8327,5608,329
Depreciation 823  843  3,314  4,588 
 3,910  13,443  37,562  60,530 
 
Operating (loss) earnings(3,781)9,0009,185(8,660)
 
Interest expense, net(291)(431)(1,396)(2,245)
Provision for contingent obligation53(5)321(2,250)
Other (expense) income-(2)(48)15
Loss on extinguishment of debt -  -  -  (67)
 

(Loss) earnings from continuing operations before income tax benefit (expense)

(4,019)8,5628,062(13,207)
 
Income tax benefit (expense) 1,663  (3,500) (3,491) 4,093 
 
(Loss) earnings from continuing operations(2,356)5,0624,571(9,114)
 

Loss from discontinued operation, net of income tax benefit

 -  (1) -  (71)
 
Net (loss) earnings$(2,356)$5,061 $4,571 $(9,185)
 
Net (loss) earnings per common share - basic:
Continuing operations$(0.07)$0.14$0.12$(0.25)
Discontinued operation -  -  -  - 
Net (loss) earnings$(0.07)$0.14 $0.12 $(0.25)
 
Net (loss) earnings per common share - diluted:
Continuing operations$(0.07)$0.14$0.12$(0.25)
Discontinued operation -  -  -  - 
Net (loss) earnings$(0.07)$0.14 $0.12 $(0.25)
 
Weighted average shares outstanding:
Basic36,30036,19536,29936,194
Diluted36,30036,19536,29936,194
 
    
DOVER MOTORSPORTS, INC.
RECONCILIATION OF GAAP (LOSS) EARNINGS TO ADJUSTED (LOSS) EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
 
 
Three Months EndedYears Ended

December 31, (1)

December 31,
2012201120122011
 

GAAP (loss) earnings from continuing operations before income taxes

$(4,019)$8,562$8,062$(13,207)
 
Non-cash impairment charge (2)---15,687
 
Provision for contingent obligation (2) (53) 5 (321) 2,250 
 

Adjusted (loss) earnings from continuing operations before income taxes

$(4,072)$8,567$7,741 $4,730 
 
GAAP (loss) earnings from continuing operations$(2,356)$5,062$4,571$(9,114)
 
Non-cash impairment charge, net of income taxes (2)---10,197
 
Provision for contingent obligation, net of income taxes (2) (31) 3 (190) 1,336 
 
Adjusted (loss) earnings from continuing operations$(2,387)$5,065$4,381 $2,419 
 

GAAP (loss) earnings per common share from continuing operations - diluted

$(0.07)$0.14$0.12$(0.25)
 
Non-cash impairment charge, net of income taxes (2)---0.28
 
Provision for contingent obligation, net of income taxes (2) -  - -  0.04 
 

Adjusted (loss) earnings per common share from continuing operations - diluted

$(0.07)$0.14$0.12 $0.07 
 

(1)

Our fall NASCAR Sprint Cup Series event was held in September of 2012 compared to October of 2011.
 

(2)

On August 3, 2011, we announced that our wholly-owned subsidiary Nashville Superspeedway notified NASCAR that it would not seek 2012 sanction agreements and therefore we no longer promote NASCAR events at this facility. We continue to use the track for motorsports race team testing and are currently evaluating all of our options for the facility. We incurred a non-cash impairment charge of $15,687,000 in the third quarter of 2011 as a result of our decision to no longer promote NASCAR events at this facility. Additionally, we recorded a $2,245,000 provision for contingent obligation reflecting the present value of the estimated portion of the Wilson County 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 (decreased) increased by ($316,000) and $5,000 in 2012 and 2011, respectively.
 
The above financial information is presented using other than generally accepted accounting principles ("non-GAAP"), and is reconciled to comparable information presented using GAAP. Non-GAAP adjusted (loss) earnings from continuing operations before income taxes, adjusted (loss) earnings from continuing operations and adjusted (loss) earnings per common share from continuing operations - diluted are derived by adjusting amounts determined in accordance with GAAP for the aforementioned non-cash impairment charge and the provision for contingent obligation. We believe such non-GAAP information is useful and meaningful to investors, and is used by investors and us to assess core operations. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to (loss) earnings from continuing operations before income taxes, (loss) earnings from continuing operations or diluted (loss) earnings per share from continuing operations, which are determined in accordance with GAAP.
  
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
 
 
December 31,December 31,
20122011
 
ASSETS
Current assets:
Cash$15$15
Accounts receivable224
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