Exhibit 99.1
| FOR IMMEDIATE RELEASE | For further information, call: | |
| Timothy R. Horne – Sr. Vice President – Finance | ||
| Dover, Delaware, July 30, 2009 | (302) 857-3292 |
DOVER MOTORSPORTS, INC.
REPORTS RESULTS FOR THE SECOND QUARTER
Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the second quarter ended June 30, 2009.
The Company promoted seven major events over five weekends in the second quarter of 2009 compared with six major events in 2008. The first NASCAR Nationwide Series event at Nashville Superspeedway was held in the second quarter of 2009 compared with the first quarter of 2008.
For the quarter ended June 30, 2009 revenues were $35,618,000 compared with $39,415,000 in the second quarter of 2008. The decrease in revenues is due to lower attendance resulting in reduced admissions revenue and event-related revenue. The reduced revenues were partially offset by higher broadcasting and other revenues due to promoting an extra event in the second quarter of 2009 compared to 2008.
The Company’s NASCAR triple-header in Dover saw lower attendance, sponsorships and corporate spending as a result of weak overall economic conditions.
Operating and marketing expenses were $23,147,000 in the second quarter of 2009 as compared to $22,108,000 in the second quarter of 2008. The increase is primarily related to the change in our motorsports event calendar discussed above.
General and administrative expenses of $3,099,000 in the second quarter of 2009 were consistent with $3,122,000 for the same quarter last year.
Depreciation and amortization expense was $1,617,000 in the quarter ended June 30, 2009 compared to $1,704,000 for the comparable 2008 period. The decrease resulted primarily from the cessation of depreciation expense at our Memphis track which is currently classified as held-for-sale and a reduction in our depreciable asset base resulting from an impairment charge recorded in the fourth quarter of 2008, partially offset by depreciation on assets placed in service in June of 2008 related to our Monster Makeover project in Dover, Delaware. Net interest expense was $732,000 for the quarter ended June 30, 2009 compared to $1,032,000 in the second quarter of 2008. The decrease was due to lower average interest rates.
Earnings before income taxes decreased to $6,921,000 in the second quarter of 2009 compared with $11,449,000 in the comparable quarter of the prior year.
The effective tax rate for the second quarter of 2009 was 43.8% compared to 48.9% in the prior year. The decrease in the effective tax rate was primarily the result of a reduction in
Exhibit 99.1
our combined effective state income tax rate based upon the mix of state taxable income (loss) for the current quarter.
Net earnings for the quarter ended June 30, 2009 were $3,888,000 or $0.11 per diluted share compared with $5,847,000 or $0.16 per diluted share for the same period last year.
For the six months ended June 30, 2009, revenues were $35,703,000 compared with $41,927,000 in the prior year. The Company promoted seven major events in the first half of both years. Net (loss) earnings were $(800,000) or $(0.02) per diluted share compared with $1,699,000 or $0.05 per diluted share in the comparable period of the prior year.
For the first half of 2009 cash provided by operations was $9,997,000 compared with $4,644,000 in the prior year. Capital spending, primarily associated with the Monster Makeover project at Dover International Speedway, was $1,817,000 in the first half of 2009 compared with $6,082,000 in the comparable period in the prior year.
As previously reported on Form 8-K dated January 30, 2009 and updated on April 24, 2009 and July 8, 2009, our wholly-owned subsidiary, Midwest Racing, Inc., entered into a stock purchase agreement dated January 28, 2009, to sell Memphis Motorsports Park to Gulf Coast Entertainment, L.L.C. Under the terms of the agreement, Midwest Racing, Inc. will sell all of the stock of its wholly-owned subsidiary, Memphis International Motorsports Corporation, the owner of Memphis Motorsports Park, to Gulf Coast Entertainment for $10 million in cash and a two percent non-dilutable interest in Gulf Coast Entertainment.
Closing under the stock purchase agreement had been scheduled for June 29, 2009, but Gulf Coast has not finalized its project financing. We are currently in the process of negotiating an amendment to the stock purchase agreement which would allow the buyer to extend the closing date to September 29, 2009 for additional consideration.
* * *
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 motorsports events in the United States. Its motorsports subsidiaries operate four motorsports tracks in three states and promote motorsports events under the auspices of two of the premier sanctioning bodies in motorsports – NASCAR and NHRA. The Company owns and operates Dover International Speedway in Dover, Delaware; Nashville Superspeedway near Nashville, Tennessee; Gateway International Raceway near St. Louis, Missouri; and Memphis Motorsports Park near Memphis, Tennessee.
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
In Thousands, Except Per Share Amounts
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenues: | ||||||||||||||||
Admissions | $ | 11,922 | $ | 13,936 | $ | 11,953 | $ | 14,736 | ||||||||
Event-related | 8,751 | 11,387 | 8,779 | 12,352 | ||||||||||||
Broadcasting | 14,938 | 14,077 | 14,938 | 14,786 | ||||||||||||
Other | 7 | 15 | 33 | 53 | ||||||||||||
| 35,618 | 39,415 | 35,703 | 41,927 | |||||||||||||
Expenses: | ||||||||||||||||
Operating and marketing | 23,147 | 22,108 | 25,346 | 26,718 | ||||||||||||
General and administrative | 3,099 | 3,122 | 6,157 | 6,289 | ||||||||||||
Depreciation and amortization | 1,617 | 1,704 | 3,182 | 3,366 | ||||||||||||
| 27,863 | 26,934 | 34,685 | 36,373 | |||||||||||||
Operating earnings | 7,755 | 12,481 | 1,018 | 5,554 | ||||||||||||
Interest income | 3 | 19 | 7 | 50 | ||||||||||||
Interest expense | (735 | ) | (1,051 | ) | (1,519 | ) | (2,152 | ) | ||||||||
Loss on sale of investments | (102 | ) | — | (102 | ) | — | ||||||||||
Earnings (loss) before income tax expense | 6,921 | 11,449 | (596 | ) | 3,452 | |||||||||||
Income tax expense | 3,033 | 5,602 | 204 | 1,753 | ||||||||||||
Net earnings (loss) | $ | 3,888 | $ | 5,847 | $ | (800 | ) | $ | 1,699 | |||||||
Net earnings (loss) per common share: | ||||||||||||||||
Basic | $ | 0.11 | $ | 0.16 | $ | (0.02 | ) | $ | 0.05 | |||||||
Diluted | $ | 0.11 | $ | 0.16 | $ | (0.02 | ) | $ | 0.05 | |||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 36,021 | 35,940 | 36,016 | 35,922 | ||||||||||||
Diluted | 36,021 | 36,030 | 36,016 | 36,021 | ||||||||||||
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
| June 30, 2009 | June 30, 2008 | December 31, 2008 | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 514 | $ | 1,118 | $ | 288 | ||||||
Accounts receivable | 2,923 | 13,172 | 1,950 | |||||||||
Inventories | 350 | 421 | 273 | |||||||||
Prepaid expenses and other | 1,902 | 3,771 | 1,697 | |||||||||
Receivable from Dover Downs Gaming & Entertainment, Inc. | 9 | — | 11 | |||||||||
Prepaid income taxes | 43 | 346 | — | |||||||||
Deferred income taxes | 111 | 203 | 152 | |||||||||
Current assets held for sale | 10,798 | — | — | |||||||||
Total current assets | 16,650 | 19,031 | 4,371 | |||||||||
Property and equipment, net | 133,283 | 160,387 | 144,684 | |||||||||
Restricted cash | 3,894 | 3,894 | 5,219 | |||||||||
Other assets, net | 576 | 1,548 | 594 | |||||||||
Deferred income taxes | 263 | 83 | 311 | |||||||||
Total assets | $ | 154,666 | $ | 184,943 | $ | 155,179 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 2,705 | $ | 3,086 | $ | 604 | ||||||
Accrued liabilities | 3,518 | 4,525 | 2,767 | |||||||||
Payable to Dover Downs Gaming & Entertainment, Inc. | — | 1 | — | |||||||||
Income taxes payable | — | — | 159 | |||||||||
Current portion of bonds payable | 1,235 | 1,130 | 1,130 | |||||||||
Deferred revenue | 11,869 | 17,213 | 6,962 | |||||||||
Current liabilities held for sale | 3,442 | — | — | |||||||||
Total current liabilities | 22,769 | 25,955 | 11,622 | |||||||||
Revolving line of credit | 34,800 | 45,400 | 42,200 | |||||||||
Bonds payable | 1,737 | 2,969 | 2,971 | |||||||||
Liability for pension benefits | 2,680 | 774 | 2,555 | |||||||||
Other liabilities | 1,994 | 1,620 | 1,920 | |||||||||
Non current income taxes payable | 8,837 | 9,737 | 9,630 | |||||||||
Deferred income taxes | 15,479 | 21,386 | 16,834 | |||||||||
Total liabilities | 88,296 | 107,841 | 87,732 | |||||||||
Stockholders’ equity: | ||||||||||||
Common stock | 1,812 | 1,698 | 1,787 | |||||||||
Class A common stock | 1,851 | 1,942 | 1,851 | |||||||||
Additional paid-in capital | 100,725 | 100,256 | 100,539 | |||||||||
Accumulated deficit | (35,899 | ) | (25,896 | ) | (34,366 | ) | ||||||
Accumulated other comprehensive loss | (2,119 | ) | (898 | ) | (2,364 | ) | ||||||
Total stockholders’ equity | 66,370 | 77,102 | 67,447 | |||||||||
Total liabilities and stockholders’ equity | $ | 154,666 | $ | 184,943 | $ | 155,179 | ||||||
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2009 | 2008 | |||||||
Operating activities: | ||||||||
Net (loss) earnings | $ | (800 | ) | $ | 1,699 | |||
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 3,182 | 3,366 | ||||||
Amortization of credit facility fees | 80 | 94 | ||||||
Stock-based compensation | 283 | 317 | ||||||
Deferred income taxes | (355 | ) | 1,262 | |||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (1,245 | ) | (11,450 | ) | ||||
Inventories | (135 | ) | (236 | ) | ||||
Prepaid expenses and other | (577 | ) | (2,081 | ) | ||||
Receivable from/payable to Dover Downs Gaming & Entertainment, Inc. | 2 | 19 | ||||||
Prepaid income taxes/income taxes payable | (132 | ) | (603 | ) | ||||
Accounts payable | 2,152 | 2,252 | ||||||
Accrued liabilities | 1,210 | 1,061 | ||||||
Deferred revenue | 5,831 | 8,524 | ||||||
Other liabilities | 501 | 420 | ||||||
Net cash provided by operating activities | 9,997 | 4,644 | ||||||
Investing activities: | ||||||||
Capital expenditures | (1,817 | ) | (6,082 | ) | ||||
Restricted cash | 1,325 | 275 | ||||||
Proceeds from sale of available-for-sale securities | 187 | — | ||||||
Purchase of available-for-sale securities | (185 | ) | (50 | ) | ||||
Net cash used in investing activities | (490 | ) | (5,857 | ) | ||||
Financing activities: | ||||||||
Borrowings from revolving line of credit | 15,600 | 18,600 | ||||||
Repayments on revolving line of credit | (23,000 | ) | (15,500 | ) | ||||
Repayments of bonds payable | (1,129 | ) | (110 | ) | ||||
Dividends paid | (733 | ) | (1,092 | ) | ||||
Repurchase of common stock | (19 | ) | (137 | ) | ||||
Proceeds from stock options exercised | — | 216 | ||||||
Excess tax benefit on stock awards | — | 27 | ||||||
Net cash (used in) provided by financing activities | (9,281 | ) | 2,004 | |||||
Net increase in cash and cash equivalents | 226 | 791 | ||||||
Cash and cash equivalents, beginning of period | 288 | 327 | ||||||
Cash and cash equivalents, end of period | $ | 514 | $ | 1,118 | ||||