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Press Release

Dover Motorsports, Inc. reports results for the quarter ended Sept. 20, 2009

  Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the third quarter ended September 30, 2009.

 

The Company promoted five major events over four weekends in the third quarter of 2009 compared with seven major events in the third quarter of 2008.  The NHRA event at Memphis Motorsports Park which was held in the third quarter of 2008 will be held in the fourth quarter of 2009.  Also, the Indy Racing League event at the Nashville Superspeedway that was promoted during the third quarter of 2008 was not held in 2009.

 

For the quarter ended September 30, 2009 revenues were $ 31,144,000 compared with $ 39,791,000 in the third quarter of 2008.  The decrease in revenues is due to promoting two fewer events in 2009 compared to 2008, lower attendance resulting in reduced admissions revenue and event-related revenue and to reduced corporate sponsorships. 

 

The Company’s NASCAR Fall race weekend in Dover saw lower attendance, sponsorships and corporate spending as a result of weak macroeconomic conditions and less than optimal weather.

 

Operating and marketing expenses were $ 19,159,000 in the third quarter of 2009 as compared to $ 24,083,000 in the third quarter of 2008.  The decrease is primarily related to the change in our motorsports event calendar discussed above, as well as from lower expenses for most major events held during the quarter.

 

General and administrative expenses of $ 3,062,000 in the third quarter of 2009 were down slightly from $ 3,131,000 for the same quarter last year. 

 

Depreciation and amortization expense was $ 1,606,000 in the third quarter of 2009 compared to $ 1,773,000 for the comparable 2008 period.  The decrease resulted primarily from the cessation of depreciation expense at our Memphis track which was classified as held-for-sale and a reduction in our depreciable asset base resulting from an impairment charge recorded in the fourth quarter of 2008, partially offset by depreciation on assets placed in service since September of 2008 related to our Monster Makeover project at Dover International Speedway. 

 

As previously reported on October 30, 2009, the Company announced that it is ceasing all operations at Memphis Motorsports Park and that it will not promote any events in Memphis in 2010 .  The Memphis facility had been under an agreement of sale to Gulf Coast Entertainment but Gulf Coast was unable to secure financing .  Because the sale of our Memphis facility was not completed, the Company concluded in the third quarter that it was necessary to review the carrying value of the long-lived assets of its Memphis facility for impairment.  As a result of this review, the Company recorded a non-cash impairment charge of $ 7,478,000 to write down the carrying value of the Memphis facility to fair value.

 

 

Net interest expense was a negative 4,000 for the third quarter of 2009 compared to 7,000 in the third quarter of 2008.  The decrease in expense was primarily due to the reversal of ,011,000 of accrued interest associated with certain unrecognized income tax benefits that are no longer required.  Additionally, both average borrowings and interest rates were lower during the third quarter of 2009 than during the third quarter of 2008.

 

Earnings before income taxes were $ 83,000 in the third quarter of 2009 compared with $ 9,857,000 in the comparable quarter of the prior year.  The current years’ results include the aforementioned non-cash impairment charge of $ 7,478,000. The Company’s financial results are shown on an adjusted basis on the accompanying schedule – “Reconciliation of GAAP (Loss) Earnings to Adjusted (Loss) Earnings”.

 

On an adjusted basis, income before income taxes for the third quarter of 2009 was $ 7,561,000 compared with $ 9,857,000 for the third quarter of last year.

 

The income tax provision for the third quarter of 2009 is the result of the mix of taxable income and losses within our various subsidiaries.  Certain subsidiaries had state taxable income which resulted in state income tax expense; however, other subsidiaries with state tax losses have no state income tax benefits based upon the valuation allowances that we have recorded in connection with state net operating loss carryforwards.  Excluding the effect of the impairment charge, the effective income tax rate was 42.6% in the third quarter of 2009 compared to 52.3% in the 2008 period. 

 

Net (loss) earnings for the third quarter of 2009 were $ (524,000) or $ (.01) per diluted share compared to $ 4,699,000 or $ .13 per diluted share for the same period last year.

 

On an adjusted basis, net earnings were $ 4,337,000 or $ .12 per diluted share in the third quarter of 2009 compared with $ 4,699,000 or $ .13 per diluted share for the same period last year.    

 

For the nine months ended September 30, 2009, revenues were $ 66,847,000 compared with $ 81,718,000 in the prior year.  The Company promoted 12 major events in the first nine months of 2009 compared to 14 major events in the comparable 2008 period.  

 

Net (loss) earnings were $ (1,324,000) or $ (.04) per diluted share for the first nine months of 2009 compared with $ 6,398,000 of <>.18 per diluted share in the comparable period last year.  On an adjusted basis, net earnings were $ 3,537,000 or $ .09 per diluted share for the first nine months of 2009 compared with
$ 6,398,000 or $ .18 per diluted share in the comparable 2008 period.

 

Cash provided by operations for the first nine months of 2009 was $ 6,350,000 compared with $ 10,906,000 in the prior year.  Capital spending, primarily associated with the Monster Makeover project at Dover International Speedway, was
$ 1,896,000 during the first nine months of 2009. 

   

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. (NYSE: DVD) is a leading promoter of NASCAR sanctioned motorsports events whose subsidiaries own and operate Dover International Speedway in Dover, Del., and Nashville Superspeedway near Nashville. The company also plays host to the Firefly Music Festival, produced by Red Frog Events and Goldenvoice. For more information, visit www.DoverMotorsports.com.

 

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