Dover Motorsports, Inc. Reports Results for the Second Quarter of 2020 and Closing of Nashville Land Sale

July 30, 2020

DOVER, Del.–(BUSINESS WIRE)–Dover Motorsports, Inc. (NYSE: DVD) today reported results for the three months ended June 30, 2020.

The COVID-19 pandemic caused the postponement of the Company’s scheduled May NASCAR weekend and the cancelation of the Firefly Music Festival (“Firefly”). The three NASCAR events originally scheduled to be held in May will now be held without fans in combination with our already scheduled August NASCAR weekend events. Firefly will not be rescheduled in 2020, though it is expected to return in 2021. The Company promoted a NASCAR triple-header and hosted Firefly in Dover during the second quarter of 2019. Accordingly, the results for the second quarter of 2020 are not comparable to last year.

Revenues for the second quarter of 2020 were $110,000 compared to $24,838,000 for the second quarter of 2019. The decrease is primarily from the schedule changes described above.

Operating and marketing expenses decreased to $812,000 in the second quarter of 2020 from $14,584,000 in the second quarter of 2019. The decrease is also from the schedule changes and cost cutting efforts implemented at the onset of the pandemic.

General and administrative expenses were $1,877,000 in the second quarter of 2020 compared to $1,826,000 in the second quarter of 2019.

The adjustment to the contingent obligation was a benefit of $353,000 in the second quarter of 2020 compared to an expense of $135,000 during the second quarter of 2019, primarily from changed sales tax assumptions associated with the planned reopening of Nashville Superspeedway.

Other income increased to $163,000 in the second quarter of 2020 from $57,000 in the second quarter of 2019, primarily from higher gains on equity investments.

Loss before income taxes for the second quarter of 2020 was ($2,844,000) compared to earnings before income taxes of $7,546,000 for the second quarter of 2019.

The Company’s effective income tax rate was a benefit of 75.8% in the second quarter of 2020 and is the result of reversing a portion of a previously booked valuation allowance on Tennessee state deferred tax assets, which we now expect to realize with the reopening of the Nashville Superspeedway next year.

Net loss for the second quarter of 2020 was ($689,000) or ($0.02) per diluted share compared to net earnings for the second quarter of 2019 of $5,501,000 or $0.15 per diluted share.

On July 29, 2020, we closed on the sale of approximately 97 acres of property near our Nashville Superspeedway pursuant to an option agreement with an entity owned by Panattoni Development Company. Proceeds from the sale, less closing costs, were approximately $6.5 million. The purchaser had previously paid to us a $500,000 deposit that was credited to the purchase price. Net proceeds after taxes are estimated to be approximately $5.3 million. None of the acreage sold extends to the land on which our superspeedway is sited and the Company continues to hold approximately 1,000 acres of commercial real estate, including the superspeedway.

At June 30, 2020, the Company had no outstanding indebtedness and almost $2.9 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 EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Revenues:
Admissions	$	–		$	2,502		$	–		$	2,502
Event-related		110			3,453			314			3,582
Broadcasting		–			18,878			–			18,878
Other		–			5			–			5
		110			24,838			314			24,967

Expenses:
Operating and marketing		812			14,584			1,800			15,639
General and administrative		1,877			1,826			3,864			3,742
Depreciation		765			794			1,533			1,587
Cost to remove long-lived assets		–			–			341			–
		3,454			17,204			7,538			20,968

Gain on sale of land		–			–			–			139

Operating (loss) earnings		(3,344	)		7,634			(7,224	)		4,138

Interest expense, net		(16	)		(10	)		(13	)		(16	)
Benefit (provision) for contingent obligation		353			(135	)		(16	)		(246	)
Other income, net		163			57			25			189

(Loss) earnings before income taxes		(2,844	)		7,546			(7,228	)		4,065

Income tax benefit (expense)		2,155			(2,045	)		3,399			(1,054	)

Net (loss) earnings	$	(689	)	$	5,501		$	(3,829	)	$	3,011

Net (loss) earnings per common share:
Basic	$	(0.02	)	$	0.15		$	(0.11	)	$	0.08
Diluted	$	(0.02	)	$	0.15		$	(0.11	)	$	0.08

Weighted average shares outstanding:
Basic		35,836			36,010			35,835			36,021
Diluted		35,836			36,010			35,835			36,021

DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)


	June 30,			June 30,			December 31,
	2020			2019			2019

ASSETS
Current assets:
Cash	$	2,886		$	8,989		$	7,577
Accounts receivable		1,035			1,449			645
Inventories		18			20			18
Prepaid expenses and other		1,493			933			1,186
Income taxes receivable		353			–			283
Assets held for sale		1,622			2,203			–
Total current assets		7,407			13,594			9,709

Property and equipment, net		68,398			69,881			71,357
Right of use asset		150			231			188
Other assets		1,156			1,169			1,212
Total assets	$	77,111		$	84,875		$	82,466

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	26		$	712		$	119
Accrued liabilities		2,948			3,053			3,710
Income taxes payable		–			1,149			–
Contract liabilities		3,676			2,008			976
Non-refundable deposit		500			–			–
Total current liabilities		7,150			6,922			4,805

Liability for pension benefits		863			666			1,016
Lease liability		73			157			112
Non-refundable deposit		–			500			500
Provision for contingent obligation		3,404			2,630			3,389
Deferred income taxes		5,300			8,074			8,676
Total liabilities		16,790			18,949			18,498

Stockholders’ equity:
Common stock		1,788			1,809			1,782
Class A common stock		1,851			1,851			1,851
Additional paid-in capital		101,112			101,388			100,994
Accumulated deficit		(40,797	)		(35,815	)		(36,968	)
Accumulated other comprehensive loss		(3,633	)		(3,307	)		(3,691	)
Total stockholders’ equity		60,321			65,926			63,968
Total liabilities and stockholders’ equity	$	77,111		$	84,875		$	82,466

DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)

	Six Months Ended
	June 30,
	2020			2019

Operating activities:
Net (loss) earnings	$	(3,829	)	$	3,011
Adjustments to reconcile net (loss) earnings to net cash (used in) provided by operating activities:
Depreciation		1,533			1,587
Amortization of credit facility fees		28			31
Stock-based compensation		218			176
Deferred income taxes		(3,399	)		(317	)
Provision for contingent obligation		16			246
Losses (gains) on equity investments		50			(113	)
Gain on sale of land		–			(139	)
Changes in assets and liabilities:
Accounts receivable		(390	)		(773	)
Inventories		–			1
Prepaid expenses and other		(321	)		58
Accounts payable		(93	)		555
Accrued liabilities		(762	)		(104	)
Payable to Dover Downs Gaming & Entertainment, Inc.		–			(9	)
Income taxes payable/receivable		(70	)		1,031
Contract liabilities		2,700			868
Liability for pension benefits		(73	)		(36	)
Net cash (used in) provided by operating activities		(4,392	)		6,073

Investing activities:
Capital expenditures		(196	)		(2,154	)
Proceeds from sale of land and equipment, net		–			827
Non-refundable deposit received		–			500
Purchases of equity investments		(240	)		(9	)
Proceeds from sale of equity investments		231			1
Net cash used in investing activities		(205	)		(835	)

Financing activities:
Borrowings from revolving line of credit		180			4,060
Repayments on revolving line of credit		(180	)		(4,060	)
Repurchase of common stock		(94	)		(200	)
Net cash used in financing activities		(94	)		(200	)

Net (decrease) increase in cash		(4,691	)		5,038
Cash, beginning of period		7,577			3,951
Cash, end of period	$	2,886		$	8,989