Dover Motorsports, Inc. Reports Results for the Third Quarter of 2012
Dover Motorsports, Inc. (NYSE: DVD) today reported its results for the third quarter ended September 30, 2012.
Results for this quarter are not comparable to the prior yearís quarter due to the timing of Doverís fall NASCAR race weekend, the decision not to promote NASCAR sanctioned events at the Companyís Nashville facility after the 2011 season and the prior year charges that resulted from that decision.
The Companyís fall NASCAR race weekend in Dover was held entirely in the third quarter of 2012 while only the K&N Pro Series East event was held during the third quarter of 2011. The NASCAR Nationwide Series and Sprint Cup Series races were held during the fourth quarter of 2011. Also, the Company promoted a tandem NASCAR Nationwide Series and NASCAR Truck Series weekend in Nashville in July of 2011. These events were not held in 2012.
The Company promoted three major events over one weekend in the third quarter of 2012 compared to three major events over two weekends in the third quarter of 2011. Also, the Company hosted the inaugural Firefly Music Festival from July 20-22, 2012 on the Companyís parking grounds. The Companyís involvement included renting the land to the promoter, providing logistical assistance and handling certain concessions.
For the quarter ended September 30, 2012 revenues were $ 22,773,000 compared with $ 2,916,000 in the third quarter of 2011. The increase in revenues was primarily due to the timing of Doverís fall NASCAR race weekend mentioned above and to a lesser extent, from concessions revenue and rental income from the Firefly Music Festival, offset by the fact that events are no longer promoted in Nashville.
Operating and marketing expenses were $ 12,075,000 in the third quarter of 2012 compared to $ 4,382,000 in the third quarter of 2011. The increase is primarily from the aforementioned changes.
General and administrative expenses of $ 1,723,000 in the third quarter of 2012 decreased from $ 2,200,000 for the same quarter last year. The decrease is due to the reduced operations at the Nashville facility and lower costs in Dover.
During the third quarter of 2011, we reviewed the carrying value of the Nashville facility for impairment and recorded a non-cash charge of $ 15,687,000 to reduce the carrying value of the Nashville facility to its fair value.
Depreciation and amortization expense of $ 824,000 in the third quarter of 2012 decreased from $ 992,000 in the third quarter of 2011 primarily due to the impairment of all depreciable assets of the Nashville facility during the third quarter of last year.
Net interest expense was $ 332,000 for the third quarter of 2012 compared to $ 381,000 in the third quarter of 2011. The decrease was due to lower average outstanding borrowings and lower rates in the third quarter of 2012 compared to 2011.
Provision for contingent obligation represents the estimated shortfall in future sales taxes and incremental property taxes used to satisfy certain bonds which were used for public infrastructure improvements near the Companyís Nashville facility. We estimated that the existing bond fund balance and future funding from taxes will be insufficient to satisfy the remaining obligation starting in 2021 as a result of the reduced operations at the Nashville facility. As such, we recorded an initial charge of $ 2,245,000 during the third quarter of 2011 reflecting the estimated shortfall that we would be responsible for.
Earnings from continuing operations before income tax expense were $ 7,746,000 for the third quarter of 2012 compared to a loss before income tax benefit of ($ 22,958,000) for the third quarter of 2011. The prior yearís results include the aforementioned non-cash impairment charge of $ 15,687,000 to write down the carrying value of the Nashville facility to its fair value and the provision for contingent obligation of $ 2,245,000. On an adjusted basis, loss from continuing operations before income tax benefit for the third quarter of 2011 was ($ 5,026,000). The improvement in 2012 is primarily due to the timing of Doverís fall NASCAR race weekend discussed above.
Net earnings for the third quarter of 2012 were $ 4,532,000 or $ .12 per diluted share compared to a net loss of ($ 14,581,000) or ($ .40) per diluted share for the same period last year. On an adjusted basis, loss from continuing operations was ($ 3,049,000) or ($ .08) per diluted share for the third quarter of 2011.
The Company announced yesterday that its Board of Directors declared an annual cash dividend on both classes of common stock of $ .04 per share. The dividend will be payable on December 10, 2012 to shareholders of record at the close of business on November 10, 2012. Due to the seasonal nature of our business, we will evaluate dividends annually.
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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.