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): April 30, 2020

 

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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Class Trading Symbol(s) Name of Exchange on Which Registered
Common Stock, $.10 Par Value DVD New York Stock Exchange

 

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 April 30, 2020, we issued a press release announcing our financial results for the first quarter ended March 31, 2020. 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 April 30, 2020

 

 

 

 

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: April 30, 2020

 

 

 

 

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE For further information, call:
  Timothy R. Horne – Sr. Vice President - Finance
Dover, Delaware, April 30, 2020 (302) 883-6592

 

DOVER MOTORSPORTS, INC. REPORTS RESULTS

FOR THE FIRST QUARTER ENDED MARCH 31, 2020

 

Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the three months ended March 31, 2020.

 

The Company historically reports a loss in the first quarter due to the seasonality of our motorsports business. No major events were promoted during the first quarter of 2020 or 2019; therefore, our revenues were minimal.

 

Operating and marketing expenses decreased to $988,000 in the first quarter of 2020 from $1,055,000 in the first quarter of 2019, primarily from lower employee related costs.

 

General and administrative expenses of $1,987,000 in the first quarter of 2020 increased from $1,916,000 in the first quarter of 2019, primarily from higher corporate insurance and real estate taxes.

 

Depreciation expense decreased slightly to $768,000 in the first quarter of 2020 from $793,000 in the first quarter of 2019.

 

We incurred $341,000 in costs to complete the removal of grandstands during the first quarter of 2020.

 

Provision for contingent obligation was $369,000 during the first quarter of 2020 compared to $111,000 for the first quarter of 2019, primarily due to a reduction in the discount rate used to value the contingent liability.

 

Loss before income taxes was $4,384,000 for the first quarter of 2020 compared to $3,481,000 for the first quarter of 2019. The 2020 results include $341,000 in grandstand removal costs while the 2019 results include a gain on the sale of land of $139,000. On an adjusted basis, excluding these items, loss before income taxes for the first quarter of 2020 was $4,043,000 compared to $3,620,000 in 2019.

 

Net loss for the first quarter of 2020 was $3,140,000 or $.09 per diluted share compared with a loss of $2,490,000 or $.07 per diluted share in the first quarter of 2019. Net loss, adjusted for the aforementioned items, was $2,894,000 or $.08 per diluted share for the first quarter of 2020 compared to $2,600,000 or $.07 per diluted share for the first quarter of 2019.

 

 

 

 

Looking forward, the world economy has been dramatically affected by the COVID-19 pandemic, and our business is no exception. Our first priority with regard to the COVID-19 pandemic is to comply with governmental guidelines and do everything we can to ensure the safety and health of our employees, customers, sponsors and others with whom we partner in our business activities. As there is no way to currently know how long the pandemic will last, we are unable to predict the long-term impact of the pandemic on our business at this time.

 

The State of Delaware issued a State of Emergency which currently extends until May 15, 2020 and our facility in Dover is currently closed since it is classified as a non-essential business. Our May NASCAR weekend has been postponed. While we do not yet have a date for the rescheduling of our races, we know NASCAR is continually working on contingency plans to run all previously scheduled events. It is possible that our May NASCAR Cup Series event will be moved to August and that we hold a double header with back to back NASCAR Cup Series events held on Saturday and Sunday. It is also possible that none of these events are held or that they are held without fans present in the stands.

 

The June Firefly festival held annually on our Dover, Delaware property was canceled. The Firefly festival will not be rescheduled in 2020, though it is expected to return in 2021.

 

We have taken certain steps to reduce indirect costs, have initiated a limited number of furloughs for employees that are unable to work from home and have reduced our capital spending plans for the year.

 

The Company’s financial condition remains strong, with no outstanding borrowings and more than $5 million in available cash.

 

* * *

 

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 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 Ended 
   March 31, 
   2020   2019 
         
Revenues:        
Event-related  $204   $129 
           
Expenses:          
Operating and marketing   988    1,055 
General and administrative   1,987    1,916 
Depreciation   768    793 
Costs to remove long-lived assets   341    - 
    4,084    3,764 
           
Gain on sale of land   -    139 
           
Operating loss   (3,880)   (3,496)
           
Interest income (expense), net   3    (6)
Provision for contingent obligation   (369)   (111)
Other (expense) income, net   (138)   132 
           
Loss before income taxes   (4,384)   (3,481)
           
Income tax benefit   1,244    991 
           
Net loss  $(3,140)  $(2,490)
           
Net loss per common share:          
Basic  $(0.09)  $(0.07)
Diluted  $(0.09)  $(0.07)
           
Weighted average shares outstanding:          
Basic   35,834    36,032 
Diluted   35,834    36,032 

 

 

 

 

DOVER MOTORSPORTS, INC.

RECONCILIATION OF GAAP LOSS BEFORE INCOME TAXES

TO ADJUSTED LOSS BEFORE INCOME TAXES

AND RECONCILIATION OF GAAP NET LOSS TO ADJUSTED NET LOSS

In Thousands, Except Per Share Amounts

(Unaudited)  

 

   Three Months Ended 
   March 31, 
   2020   2019 
GAAP loss before income taxes  $(4,384)  $(3,481)
           
Cost to remove long-lived assets (1)   341    - 
           

Gain on sale of land (2)

   -    (139)
           
Adjusted loss before income taxes  $(4,043)  $(3,620)
           
GAAP net loss  $(3,140)  $(2,490)
           
Cost to remove long-lived assets, net of income taxes (1)   246    - 
           
Gain on sale of land, net of income taxes (2)   -    (110)
           
Adjusted net loss  $(2,894)  $(2,600)
           
GAAP net loss per common share - basic and diluted  $(0.09)  $(0.07)
           
Cost to remove long-lived assets (1)   0.01    - 
           
Gain on sale of land, net of income taxes (2)   -    - 
           
Adjusted net loss per common share - basic and diluted  $(0.08)  $(0.07)

 

 

 

(1) Related to the decision to remove grandstand seats at Dover International Speedway, we incurred $341,000 of costs to remove these assets in the first quarter of 2020. This amount was tax effected using our federal and state statutory rates.
   
(2) During the first quarter of 2019 we closed on sales of a parcel of land at our Nashville Superspeedway facility resulting in a gain of $139,000. This transaction was tax effected using our federal statutory rates as we had available state net operating losses.
   
  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 before income taxes, adjusted net loss and adjusted net loss 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 cost to remove 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 loss before income taxes, net loss or net loss per common share - basic and diluted, which are determined in accordance with GAAP

 

 

 

 

DOVER MOTORSPORTS, INC.

CONSOLIDATED BALANCE SHEETS

In Thousands

(Unaudited)

 

   March 31,   March 31,   December 31, 
   2020   2019   2019 
                
ASSETS               
Current assets:               
Cash  $5,032   $2,552   $7,577 
Accounts receivable   777    1,844    645 
Inventories   18    21    18 
Prepaid expenses and other   1,265    1,268    1,186 
Income taxes receivable   283    -    283 
Total current assets   7,375    5,685    9,709 
                
Property and equipment, net   49,430    47,599    50,075 
Nashville Superspeedway facility   21,274    23,505    21,282 
Right of use asset   169    -    188 
Other assets   1,033    1,098    1,212 
Total assets   $79,281   $77,887   $82,466 
                
LIABILITIES AND STOCKHOLDERS' EQUITY               
Current liabilities:               
Accounts payable  $104   $99   $119 
Accrued liabilities   2,680    2,238    3,710 
Income taxes payable   -    118    - 
Contract liabilities   2,909    4,496    976 
Total current liabilities   5,693    6,951    4,805 
                
Liability for pension benefits   939    720    1,016 
Lease liability   93    -    112 
Non-refundable deposit   500    -    500 
Provision for contingent obligation   3,757    2,495    3,389 
Deferred income taxes   7,444    7,390    8,676 
Total liabilities   18,426    17,556    18,498 
                
Stockholders' equity:               
Common stock   1,790    1,809    1,782 
Class A common stock   1,851    1,851    1,851 
Additional paid-in capital   100,984    101,320    100,994 
Accumulated deficit   (40,108)   (41,316)   (36,968)
Accumulated other comprehensive loss   (3,662)   (3,333)   (3,691)
Total stockholders' equity   60,855    60,331    63,968 
Total liabilities and stockholders' equity  $79,281   $77,887   $82,466 

 

 

 

 

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

In Thousands

(Unaudited)

 

   Three Months Ended 
   March 31, 
   2020   2019 
           
Operating activities:          
Net loss  $(3,140)  $(2,490)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation   768    793 
Amortization of credit facility fees   14    15 
Stock-based compensation   92    108 
Deferred income taxes   (1,244)   (991)
Provision for contingent obligation   369    111 
Losses (gains) on equity investments   176    (87)
Gain on sale of land   -    (139)
Changes in assets and liabilities:          
Accounts receivable   (132)   (1,168)
Prepaid expenses and other   (86)   (222)
Accounts payable   (15)   (39)
Accrued liabilities   (1,030)   (845)
Payable to Dover Downs Gaming & Entertainment, Inc.   -    (9)
Contract liabilities   1,933    3,356 
Liability for pension benefits   (37)   (18)
Net cash used in operating activities   (2,332)   (1,625)
           
Investing activities:          
Capital expenditures   (115)   (398)
Proceeds from sale of land and equipment, net   -    827 
Purchases of equity investments   (196)   (4)
Proceeds from sale of equity investments   192    1 
Net cash (used in) provided by investing activities   (119)   426 
           
Financing activities:          
Borrowings from revolving line of credit   180    - 
Repayments on revolving line of credit   (180)   - 
Repurchase of common stock   (94)   (200)
Net cash used in financing activities   (94)   (200)
           
Net decrease in cash   (2,545)   (1,399)
Cash, beginning of period   7,577    3,951 
Cash, end of period  $5,032   $2,552