Form 8-K DOVER MOTORSPORTS INC For: Jul 30

 

 

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 30, 2015

 

 

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)

Registrant’s 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))

 

 

 

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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 30, 2015, we issued a press release announcing our financial results for the second quarter ended June 30, 2015. 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 30, 2015

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.

 

Dated: July 30, 2015

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release dated July 30, 2015, issued by Dover Motorsports, Inc.

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE		For further information, call:
		Timothy R. Horne – Sr. Vice President – Finance
Dover, Delaware, July 30, 2015		(302) 857-3292

DOVER MOTORSPORTS, INC.

REPORTS IMPROVED RESULTS FOR THE SECOND QUARTER OF 2015

Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2015.

The Company promoted a NASCAR triple-header and hosted the Firefly Music Festival in Dover during the second quarter of 2015 and 2014. In addition, the Company also hosted the inaugural Big Barrel Country Music Festival during the second quarter of 2015. The Company leases a portion of its Dover facility to the promoter of Firefly and Big Barrel, provides logistical assistance and handles certain concessions for which the Company retains a certain percent of the gross sales.

Revenues for the second quarter of 2015 increased 4.6% to $25,380,000 compared with $24,273,000 in the second quarter of 2014. The increase in revenues was primarily due to the contracted increase in broadcasting revenue for the Dover NASCAR weekend and by rental and concession revenue from Big Barrel, partially offset by lower admissions and revenue from track rentals.

Operating and marketing expenses were $13,629,000 in the second quarter of 2015 compared to $13,268,000 in the second quarter of 2014. The increase was primarily due to the scheduled increase in purse and sanction fees for the Dover NASCAR weekend.

General and administrative expenses increased slightly to $1,811,000 in the second quarter of 2015 from $1,776,000 in the second quarter of 2014.

Depreciation expense increased to $1,422,000 in the second quarter of 2015 compared to $818,000 in the second 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 $655,000 increase in our second quarter 2015 depreciation expense.

Net interest expense decreased to $86,000 in the second quarter of 2015 from $99,000 in the second quarter of 2014 as a result of lower outstanding borrowings.

Earnings before income tax expense for the second quarter of 2015 were $9,163,000 compared with $8,256,000 in the second quarter of 2014. The results for the second quarter of 2015 include the $655,000 of accelerated depreciation and $606,000 of income from assets held for sale (see below). On an adjusted basis, excluding these items, earnings before income tax expense for the second quarter of 2015 were $9,212,000, an 11.6% increase from the second quarter of 2014.

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Net earnings for the second quarter of 2015 were $5,494,000 or $0.15 per diluted share compared to $4,844,000 or $0.13 per diluted share for the second quarter of 2014. Net earnings, adjusted for the aforementioned items, increased 13.3% to $5,489,000.

At June 30, 2015, the Company’s total indebtedness was $2,800,000 compared with $16,920,000 at June 30, 2014.

Income from assets held for sale of $606,000 represents non-refundable payments made in 2015 to extend the closing date under a now expired agreement to sell our Nashville facility. On May 29, 2014, we entered into an agreement to sell the Nashville facility for $27 million in cash and the assumption by the buyer of obligations of ours under certain Variable Rate Tax Exempt Infrastructure Revenue Bonds. The sales agreement was amended several times extending the closing date. In consideration for these amendments, during 2014 we received $1,700,000 in non-refundable deposits from the buyer which was to be applied against the purchase price at closing. In the first six months of 2015, we received $1,200,000 in non-refundable deposits to extend closing under the agreement, a portion of which was to be applied against the purchase price depending on the closing date. During the three and six-month periods ended June 30, 2015, $606,000 and $1,033,000, respectively, was recorded as income from assets held for sale in our consolidated statements of earnings as those amounts were not to be applied against the purchase price at closing based on the terms of the amendments. On June 1, 2015, the buyer defaulted under the agreement and did not subsequently cure the default. The amended closing date under the agreement was July 27, 2015; therefore, the agreement has now expired by its terms. Accordingly, we will record as income the remaining deposits of $1,867,000 in the third quarter of 2015, which are recorded in accrued liabilities in our consolidated balance sheet at June 30, 2015. We have expanded our sales efforts and are in discussions with additional prospective buyers. The assets of Nashville Superspeedway are reported as assets held for sale in our consolidated balance sheet at June 30, 2015 and December 31, 2014.

* * *

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.

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DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

In Thousands, Except Per Share Amounts

(Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2015				2014				2015				2014
Revenues:
Admissions		$	4,212			$	4,473			$	4,212			$	4,473
Event-related			4,681				4,194				4,691				4,367
Broadcasting			16,486				15,606				16,486				15,606
Other			1				—				1				10
			25,380				24,273				25,390				24,456
Expenses:
Operating and marketing			13,629				13,268				14,738				14,303
General and administrative			1,811				1,776				3,751				3,636
Loss on disposal of long-lived assets			—				—				40				—
Depreciation			1,422				818				2,967				1,643
			16,862				15,862				21,496				19,582
Income from assets held for sale			606				—				1,033				—
Operating earnings			9,124				8,411				4,927				4,874
Interest expense, net			(86	)			(99	)			(233	)			(264	)
Benefit (provision) for contingent obligation			125				(70	)			102				8
Other income			—				14				1				17
Earnings before income taxes			9,163				8,256				4,797				4,635
Income tax expense			(3,669	)			(3,412	)			(1,907	)			(1,909	)
Net earnings		$	5,494			$	4,844			$	2,890			$	2,726
Net earnings per common share:
Basic		$	0.15			$	0.13			$	0.08			$	0.07
Diluted		$	0.15			$	0.13			$	0.08			$	0.07
Weighted average shares outstanding:
Basic			36,157				36,042				36,155				36,052
Diluted			36,157				36,042				36,155				36,052

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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,
		2015				2014				2015				2014
GAAP earnings before income taxes		$	9,163			$	8,256			$	4,797			$	4,635
Accelerated depreciation (1)			655				—				1,384				—
Income from assets held for sale (2)			(606	)			—				(1,033	)			—
Loss on disposal of long-lived assets (3)			—				—				40				—
Adjusted earnings before income taxes		$	9,212			$	8,256			$	5,188			$	4,635
GAAP net earnings		$	5,494			$	4,844			$	2,890			$	2,726
Accelerated depreciation, net of income taxes (1)			389				—				822				—
Income from assets held for sale, net of income taxes (2)			(394	)							(672	)
Loss on disposal of long-lived assets, net of income taxes (3)			—				—				24				—
Adjusted net earnings		$	5,489			$	4,844			$	3,064			$	2,726
GAAP net earnings per common share—basic and diluted		$	0.15			$	0.13			$	0.08			$	0.07
Accelerated depreciation, net of income taxes (1)			0.01				—				0.02				—
Income from assets held for sale, net of income taxes (2)			(0.01	)			—				(0.02	)			—
Loss on disposal of long-lived assets, net of income taxes (3)			—				—				—				—
Adjusted net earnings per common share—basic and diluted		$	0.15			$	0.13			$	0.08			$	0.07

 

(1)

During the first quarter of 2015, we made the decision to remove certain grandstand seating at our Dover International Speedway facility. These assets will remain in service until 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 the first six months of 2015.

(2)

On May 29, 2014, we entered into an agreement to sell our Nashville Superspeedway facility. Income from assets held for sale relates to payments we received in 2015 from the potential buyer to extend the closing date of settlement that were not to be applied to the purchase price at closing based on the terms of the related amendments to the agreement. The sale agreement expired on July 27, 2015.

(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.

 

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 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 before income taxes, net earnings or net earnings per common share—basic and diluted, which are determined in accordance with GAAP.

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DOVER MOTORSPORTS, INC.

CONSOLIDATED BALANCE SHEETS

In Thousands

(Unaudited)

 

		June 30, 2015				June 30, 2014				December 31, 2014
ASSETS
Current assets:
Cash		$	480			$	49			$	24
Accounts receivable			1,299				11,930				139
Inventories			116				117				70
Prepaid expenses and other			1,162				1,070				1,042
Prepaid income taxes			—				—				170
Deferred income taxes			82				87				79
Assets held for sale			26,000				26,000				26,000
Total current assets			29,139				39,253				27,524
Property and equipment, net			55,698				58,270				58,236
Other assets			903				945				925
Deferred income taxes			561				310				580
Total assets		$	86,301			$	98,778			$	87,265
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	554			$	458			$	889
Accrued liabilities			5,630				4,733				4,944
Payable to Dover Downs Gaming & Entertainment, Inc.			22				39				22
Income taxes payable			1,840				1,328				—
Deferred revenue			4,107				4,035				1,348
Total current liabilities			12,153				10,593				7,203
Revolving line of credit			2,800				16,920				10,760
Liability for pension benefits			4,132				1,414				4,231
Provision for contingent obligation			1,711				1,835				1,813
Deferred income taxes			14,354				16,835				15,163
Total liabilities			35,150				47,597				39,170
Stockholders’ equity:
Common stock			1,822				1,812				1,812
Class A common stock			1,851				1,851				1,851
Additional paid-in capital			101,622				101,394				101,508
Accumulated deficit			(50,859	)			(52,337	)			(53,749	)
Accumulated other comprehensive loss			(3,285	)			(1,539	)			(3,327	)
Total stockholders’ equity			51,151				51,181				48,095
Total liabilities and stockholders’ equity		$	86,301			$	98,778			$	87,265

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DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)

 

		Six Months Ended June 30,
		2015				2014
Operating activities:
Net earnings		$	2,890			$	2,726
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
Depreciation			2,967				1,643
Amortization of credit facility fees			48				48
Stock-based compensation			196				164
Deferred income taxes			(772	)			(93	)
Benefit for contingent obligation			(102	)			(8	)
Income from assets held for sale			(1,033	)			—
Changes in assets and liabilities:
Accounts receivable			(1,160	)			(11,902	)
Inventories			(46	)			(3	)
Prepaid expenses and other			(132	)			(64	)
Accounts payable			348				433
Accrued liabilities			519				1,846
Payable to/receivable from Dover Downs Gaming & Entertainment, Inc.			—				43
Income taxes payable/prepaid income taxes			2,006				1,351
Deferred revenue			2,759				2,292
Liability for pension benefits			(36	)			(77	)
Net cash provided by (used in) operating activities			8,452				(1,601	)
Investing activities:
Capital expenditures			(1,112	)			(322	)
Purchases of available-for-sale securities			(8	)			(45	)
Proceeds from sale of available-for-sale securities			5				42
Non-refundable payments received related to assets held for sale			1,200				—
Net cash provided by (used in) investing activities			85				(325	)
Financing activities:
Borrowings from revolving line of credit			12,640				16,540
Repayments on revolving line of credit			(20,600	)			(14,440	)
Repurchase of common stock			(121	)			(129	)
Net cash (used in) provided by financing activities			(8,081	)			1,971
Net increase in cash			456				45
Cash, beginning of period			24				4
Cash, end of period		$	480			$	49

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