Dover Motorsports, Inc. reports results from the quarter ended September 30, 2010
Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the third quarter ended September 30, 2010.
The Company promoted five major events over three weekends in the third quarter of 2010 compared with five major events in the third quarter of 2009.
For the quarter ended September 30, 2010 revenues were $ 28,511,000 compared with $ 31,144,000 in the third quarter of 2009. The decrease in revenues is primarily due to lower attendance at events, resulting in reduced admissions revenue and event-related revenue, and also due to the fact that our Memphis facility was not operating in 2010.
The Company’s NASCAR Fall race weekend in Dover saw lower attendance and lower attendance related revenue as a result of continued weak overall economic conditions. Increased sponsorship and broadcast revenue partially offset the lower attendance related revenue.
Operating and marketing expenses were $ 17,463,000 in the third quarter of 2010 compared to $ 19,159,000 in the third quarter of 2009. The decrease is primarily related to direct and indirect cost savings from the closure of our Memphis facility, reduced purses for NASCAR events and lower costs associated with the decline in event-related revenue.
General and administrative expenses of $ 3,557,000 in the third quarter of 2010 increased from $ 3,062,000 for the same quarter last year. The increase is primarily due to higher real estate taxes at Gateway International Raceway and approximately $ 200,000 of expenses associated with the previously contemplated merger with Dover Downs Gaming & Entertainment, Inc., partially offset by reduced costs from the closure of our Memphis facility.
A $ 298,000 gain was realized related to an insurance settlement on property damage.
Net interest expense was a negative $ 29,000 for the third quarter of 2010 compared to a negative $ 244,000 in the third quarter of 2009. These amounts reflect the reversal of accrued interest ($ 856,000 for the third quarter of 2010 and $ 1,011,000 for the third quarter of 2009) associated with uncertain income tax positions that are no longer required.
The Company purchased and retired the remaining $ 1,751,000 of outstanding SWIDA bonds associated with its Gateway facility during the third quarter of 2010. The Company incurred a loss of $ 208,000 on the extinguishment primarily due to redemption premiums and the write-off of unamortized costs.
Earnings before income taxes for the third quarter of 2010 were $ 6,074,000 compared with $ 83,000 in the comparable quarter of the prior year. The prior year’s results include a non-cash impairment charge of $ 7,478,000 during the third quarter of 2009 to write down the carrying value of the Memphis facility to its fair value. On an adjusted basis, income before income taxes for the third quarter of 2009 was $ 7,561,000. The Company’s financial results are shown on an adjusted basis on the accompanying schedule – “Reconciliation of GAAP Earnings (Loss) to Adjusted Earnings (Loss)”.
The effective income tax rate was 43.8% for the third quarter of 2010. Excluding the effect of the impairment charge, the effective income tax rate was 42.6% in the third quarter of 2009.
Net (loss) earnings for the third quarter of 2010 were $ 3,416,000 or $ .09 per diluted share compared to $ (524,000) or $ (.01) per diluted share for the same period last year. On an adjusted basis, net earnings were $ 4,337,000 or $ .12 per diluted share for the third quarter 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.