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Dover Motorsports Inc.$1.93$.042.12%

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 Dover Motorsports, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2016
   Thursday, January 26, 2017 6:55:01 AM ET

Dover Motorsports, Inc. (DVD ) today reported its results for the fourth quarter and year ended December 31, 2016.

The Company’s NASCAR fall race weekend was held from September 30, 2016, through October 2, 2016. The K&N Pro Series East event was held during the third quarter of 2016 while the NASCAR XFINITY Series and NASCAR Sprint Cup Series races were held during the fourth quarter of 2016. The entire fall race weekend was held during the fourth quarter of 2015.

Revenues for the fourth quarter of 2016 were $20,112,000 compared with $21,016,000 in the fourth quarter of 2015.

Weather was again an issue for the Fall NASCAR weekend. Saturday’s NASCAR XFINITY race was rained out and moved to Sunday, contributing to lower admissions revenue. Additionally, we experienced lower sponsorship sales partially offset by higher Broadcast revenues compared to last year.

Operating and Marketing Expenses were lower than last year, as higher Purse and Sanction Fees were offset by lower other race weekend expenses.

General and administrative expenses decreased $89,000 to $1,826,000 for the fourth quarter of 2016, primarily from lower employee costs.

Costs to remove long-lived assets in 2016 represents costs incurred during the fourth quarter to remove a portion of grandstands, seats and structures that were taken out of service and written off in 2015. We expect to spend approximately $300,000 during the first quarter of 2017 to complete the removal of these structures.

Depreciation expense decreased to $842,000 in the fourth quarter of 2016 compared to $949,000 in the fourth quarter of 2015. The fourth quarter of 2015 includes additional depreciation expense due to the decision 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.

Earnings before income taxes for the fourth quarter of 2016 decreased $703,000 from $6,159,000 for the fourth quarter of 2015 to $5,456,000 in the fourth quarter of 2016. The decrease is primarily due to the race weekend results and the costs to remove long-lived assets.

Net earnings for the fourth quarter of 2016 were $3,245,000 or $.09 per diluted share compared to $3,791,000 or $.10 per diluted share for the fourth quarter of 2015.

For the year ended December 31, 2016, total revenues were $45,873,000 compared with $46,539,000 in the prior year. The decrease was from lower admissions, lower corporate sales for the fall weekend, and from the cancellation of the Big Barrel Country Music Festival in 2016, partially offset by higher broadcasting and other revenue.

Income from assets held for sale of $2,900,000 in 2015 represents non-refundable payments received to extend the closing date under a now expired agreement to sell our Nashville facility.

Net earnings for the year ended December 31, 2016 were $3,801,000 or $.10 per diluted share compared to $5,285,000 or $.14 per diluted share for the year ended December 31, 2015. The current year’s annual results include a pre-tax charge of $203,000 compared to $40,000 in the prior year for costs associated with the removal of grandstand seats. The current year’s annual results also include additional depreciation expense of $208,000 relating to renovations of certain facilities resulting in a change in the useful lives of the facilities. The 2015 results 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. Excluding both charges and the $2,900,000 income from assets held for sale, 2016 adjusted net earnings were $4,045,000 or $.11 per diluted share compared to $4,739,000 or $.13 per diluted share for 2015.

As previously announced, on August 25, 2016, we entered into a definitive agreement to sell our Nashville Superspeedway facility along with some related equipment and other assets. The agreement provides for an aggregate purchase price of $27.5 million in cash plus the assumption by the purchaser of our obligations under certain Variable Rate Tax Exempt Infrastructure Revenue Bonds issued by the Sports Authority of the County of Wilson, Tennessee. The Bonds, which have a remaining principal balance of $16,300,000, are secured by a letter of credit provided by us which will be replaced by a letter of credit provided by the potential purchaser. An amendment was signed on January 22, 2017 to extend the agreement 60 days. Closing is now anticipated during the second quarter of 2017. The assets of Nashville Superspeedway are reported as assets held for sale in our consolidated balance sheet at December 31, 2016 and 2015.

The Company’s financial position continued to strengthen during 2016. Total borrowings outstanding decreased to $3,840,000 at December 31, 2016 from $5,900,000 at December 31, 2015. In December 2016 and 2015, the Company paid annual cash dividends on both classes of common stock of $.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 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
                                                                                                                                                In Thousands, Except Per Share Amounts
                                                                                                                                                              (Unaudited)
 
 
                                                                                                  Three Months Ended                                                                                                           Years Ended
                                                                                                                        December 31,                                                                                                                                December 31,
                                                                   ----------------------------------------------------------------------------------------------------------------                            ----------------------------------------------------------------------------------------------------------------
                                                                                         2016                                               2015                                                                  2016                                               2015
                                                                   -------------------------------------------------                     -------------------------------------------------                     -------------------------------------------------                     -------------------------------------------------
Revenues:
   Admissions                                                                         $  3,173                                                              $  3,755                                                              $  6,937                                                              $  7,967
   Event-related                                                                         2,972                                                                 3,794                                                                 7,938                                                                 8,617
   Broadcasting                                                                         13,962                                                                13,463                                                                30,984                                                                29,949
   Other                                                                  5                               4                              14                               6  
                                                                   -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                     20,112                          21,016                          45,873                          46,539  
                                                                   -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                      
Expenses:
   Operating and marketing                                                              11,757                                                                11,940                                                                28,197                                                                27,818
   General and administrative                                                            1,826                                                                 1,915                                                                 7,399                                                                 7,414
   Costs to remove long-lived assets                                                       203                                                                     -                                                                   203                                                                    40
   Depreciation                                                         842                             949                           3,433                           5,326  
                                                                   -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                     14,628                          14,804                          39,232                          40,598  
                                                                   -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                      
Income from assets held for sale                                          -                               -                               -                           2,900  
                                                                   -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                      
Operating earnings                                                                       5,484                                                                 6,212                                                                 6,641                                                                 8,841
                                                                                                                                                                                                                                                                                      
Interest expense, net                                                                      (33 )                                                                 (43 )                                                                (199 )                                                                (323 )
(Provision) benefit for contingent obligation                                               (2 )                                                                  (4 )                                                                 (75 )                                                                  86
Other income (expense)                                                    7                              (6 )                                               23                              (5 )
                                                                   -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                      
Earnings before income taxes                                                             5,456                                                                 6,159                                                                 6,390                                                                 8,599
                                                                                                                                                                                                                                                                                      
Income tax expense                                                   (2,211 )                                           (2,368 )                                           (2,589 )                                           (3,314 )
                                                                   -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                      
Net earnings                                                                          $  3,245                                           $  3,791                                           $  3,801                                           $  5,285  
                                                                   ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================
                                                                                                                                                                                                                                                                                      
Net earnings per common share:
   Basic                                                                              $   0.09                                           $   0.10                                           $   0.10                                           $   0.14  
                                                                   ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================
   Diluted                                                                            $   0.09                                           $   0.10                                           $   0.10                                           $   0.14  
                                                                   ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================                      ==================== ====== ====================
                                                                                                                                                                                                                                                                                      
Weighted average shares outstanding:
   Basic                                                                                36,216                                                                36,157                                                                36,232                                                                36,156
   Diluted                                                                              36,216                                                                36,157                                                                36,232                                                                36,156
                                                                                                                                                                                                                                                                                                                  
 
                                                                                                                               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                                                                          Years Ended
                                                                                                                   December 31,                                                                                               December 31,
                                                                                    ----------------------------------------------------------------------                          -------------------------------------------------------------------------------------------
                                                                                               2016                         2015                                            2016                                    2015
                                                                                    ---------------------------                     ---------------------------                     ---------------------------                     -------------------------------------------------
                                                                                                                                                                                                                                     
GAAP earnings before income taxes                                                                      $ 5,456                                         $ 6,159                                         $ 6,390                                         $  8,599
                                                                                                                                                                                                                                     
   Accelerated depreciation (1)                                                                             24                                             177                                             208                                            2,216
                                                                                                                                                                                                                                     
   Income from assets held for sale (2)                                                                      -                                               -                                               -                                           (2,900 )
                                                                                                                                                                                                                                     
   Costs to remove long-lived assets (3)                                                203                            -                          203                            40  
                                                                                    -------------------- -----                      -------------------- -----                      -------------------- -----                      -------------------- ------ --------------------
                                                                                                                                                                                                                                     
Adjusted earnings before income taxes                                                                  $ 5,683                                         $ 6,336                                         $ 6,801                                         $  7,955  
                                                                                    ==================== =====                      ==================== =====                      ==================== =====                      ==================== ====== ====================
                                                                                                                                                                                                                                     
GAAP net earnings                                                                                      $ 3,245                                         $ 3,791                                         $ 3,801                                         $  5,285
                                                                                                                                                                                                                                     
   Accelerated depreciation, net of income taxes (1)                                                        14                                             105                                             123                                            1,316
                                                                                                                                                                                                                                     
   Income from assets held for sale, net of income taxes (2)                                                 -                                               -                                               -                                           (1,886 )
                                                                                                                                                                                                                                     
   Costs to remove long-lived assets, net of income taxes (3)                           121                            -                          121                            24  
                                                                                    -------------------- -----                      -------------------- -----                      -------------------- -----                      -------------------- ------ --------------------
                                                                                                                                                                                                                                     
Adjusted net earnings                                                                                  $ 3,380                                         $ 3,896                                         $ 4,045                                         $  4,739  
                                                                                    ==================== =====                      ==================== =====                      ==================== =====                      ==================== ====== ====================
                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                     
GAAP net earnings per common share - basic and diluted                                                 $  0.09                                         $  0.10                                         $  0.10                                         $   0.14
                                                                                                                                                                                                                                     
   Accelerated depreciation, net of income taxes (1)                                                         -                                               -                                               -                                             0.04
                                                                                                                                                                                                                                     
   Income from assets held for sale, net of income taxes (2)                                                 -                                               -                                               -                                            (0.05 )
                                                                                                                                                                                                                                     
   Costs to remove long-lived assets, net of income taxes (3)                             -                            -                            -                             -  
                                                                                    -------------------- -----                      -------------------- -----                      -------------------- -----                      -------------------- ------ --------------------
                                                                                                                                                                                                                                     
Adjusted net earnings per common share - basic and diluted (4)                                         $  0.09                                         $  0.11                                         $  0.11                                         $   0.13  
                                                                                    ==================== =====                      ==================== =====                      ==================== =====                      ==================== ====== ====================
 
______________________
(1)       During the first quarter of 2016, we began a renovation project of
                             certain track related assets at our Dover International Speedway
                             facility which will take approximately one year to complete. As a
                             result, we shortened the service lives of these assets which
                             resulted in accelerated depreciation being recorded in 2016.
                              
                             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)                          Costs to remove long-lived assets represents costs incurred to
                             remove and dispose of certain grandstand seating at our Dover
                             International Speedway facility.
                              
(4)                          The components of earnings per common share for the year ended
                             December 31, 2016 and 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 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 costs to remove long-lived assets. Income taxes are
                             based on our approximate statutory tax rates applicable to each of
                             these items. 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.
                              
 
                                                                                          DOVER MOTORSPORTS, INC.
                                                                                        CONSOLIDATED BALANCE SHEETS
                                                                                               In Thousands
                                                                                                (Unaudited)
 
 
                                                                                 December 31,                                        December 31,
                                                                                                        2016                                                                   2015
                                                                                 -----------------------------------------------                        -----------------------------------------------
                                                                                                                                                         
ASSETS
Current assets:
   Cash                                                                                             $       1                                                              $       1
   Accounts receivable                                                                                    419                                                                    173
   Inventories                                                                                             17                                                                     72
   Prepaid expenses and other                                                                           1,104                                                                  1,136
   Receivable from Dover Downs Gaming & Entertainment, Inc.                                                 -                                                                     44
   Income taxes receivable                                                                                  -                                                                      1
   Deferred income taxes                                                                                    -                                                                     79
   Assets held for sale                                                             26,000                           26,000  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total current assets                                                                             27,541                                                                 27,506
                                                                                                                                                         
Property and equipment, net                                                                            52,723                                                                 53,542
Other assets                                                                                            1,022                                                                    851
Deferred income taxes                                                                    -                              549  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total assets                                                                                  $  81,286                                           $  82,448  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                         
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
   Accounts payable                                                                                 $     347                                                              $     137
   Accrued liabilities                                                                                  2,858                                                                  3,215
   Payable to Dover Downs Gaming & Entertainment, Inc.                                                      7                                                                      -
   Income taxes payable                                                                                   218                                                                      -
   Deferred revenue                                                                  1,355                            1,278  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total current liabilities                                                                         4,785                                                                  4,630
                                                                                                                                                         
Revolving line of credit, net                                                                           3,840                                                                  5,900
Liability for pension benefits                                                                          4,143                                                                  3,790
Provision for contingent obligation                                                                     1,802                                                                  1,727
Deferred income taxes                                                               12,911                           14,408  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total liabilities                                                             27,481                           30,455  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                         
Stockholders’ equity:
   Common stock                                                                                         1,828                                                                  1,822
   Class A common stock                                                                                 1,851                                                                  1,851
   Additional paid-in capital                                                                         101,858                                                                101,742
   Accumulated deficit                                                                                (48,340 )                                                              (50,301 )
   Accumulated other comprehensive loss                                             (3,392 )                                            (3,121 )
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total stockholders’ equity                                                    53,805                           51,993  
                                                                                 -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total liabilities and stockholders’ equity                                                    $  81,286                                           $  82,448  
                                                                                 ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                      
 
                                                                                                 DOVER MOTORSPORTS, INC.
                                                                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                      In Thousands
                                                                                                       (Unaudited)
 
 
                                                                                                                                   Years Ended
                                                                                                                                                     December 31,
                                                                                               ------------------------------------------------------------------------------------------------------------------
                                                                                                                      2016                                                2015
                                                                                               --------------------------------------------------                     --------------------------------------------------
                                                                                                                                                                       
Operating activities:
Net earnings                                                                                                      $   3,801                                                              $   5,285
Adjustments to reconcile net earnings to net cash provided by
operating activities:
   Depreciation                                                                                                       3,433                                                                  5,326
   Amortization of credit facility fees                                                                                  87                                                                     96
   Stock-based compensation                                                                                             284                                                                    316
   Excess tax benefits from stock-based compensation                                                                    (27 )                                                                    -
   Deferred income taxes                                                                                               (661 )                                                                 (828 )
   Provision (benefit) for contingent obligation                                                                         75                                                                    (86 )
   Income from assets held for sale                                                                                       -                                                                 (2,900 )
   Changes in assets and liabilities:
      Accounts receivable                                                                                              (246 )                                                                  (34 )
      Inventories                                                                                                        55                                                                     (2 )
      Prepaid expenses and other                                                                                        (44 )                                                                 (125 )
      Accounts payable                                                                                                  176                                                                     64
      Accrued liabilities                                                                                              (457 )                                                                  (86 )
      Payable to/receivable from Dover Downs Gaming & Entertainment, Inc.                                                51                                                                    (66 )
      Income taxes payable/receivable                                                                                   223                                                                    182
      Deferred revenue                                                                                                   77                                                                    (70 )
      Liability for pension benefits                                                                 (17 )                                                (9 )
                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
Net cash provided by operating activities                                                          6,810                            7,063  
                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                       
Investing activities:
   Capital expenditures                                                                                              (2,580 )                                                               (1,448 )
   Purchases of available-for-sale securities                                                                          (293 )                                                                  (40 )
   Proceeds from sale of available-for-sale securities                                                                  203                                                                     20
   Non-refundable payments received related to assets held for sale                                    -                            1,200  
                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
Net cash used in investing activities                                                             (2,670 )                                              (268 )
                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                       
Financing activities:
   Borrowings from revolving line of credit                                                                          28,820                                                                 29,740
   Repayments on revolving line of credit                                                                           (30,880 )                                                              (34,600 )
   Dividends paid                                                                                                    (1,840 )                                                               (1,837 )
   Repurchase of common stock                                                                                          (189 )                                                                 (121 )
   Excess tax benefits from stock-based compensation                                                                     27                                                                      -
   Credit facility fees                                                                              (78 )                                                 -  
                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
Net cash used in financing activities                                                             (4,140 )                                            (6,818 )
                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                       
Net decrease in cash                                                                                                      -                                                                    (23 )
Cash, beginning of year                                                                                1                               24  
                                                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
Cash, end of year                                                                                                 $       1                                           $       1  
                                                                                               ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                                                                                    

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170126005220r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170126005220/en/

SOURCE: Dover Motorsports, Inc.

Dover Motorsports, Inc. 
Timothy R. Horne - Sr. Vice President-Finance 
302-857-3292


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