Dover Motorsports, Inc. Reports Results for the Third Quarter
DOVER, Del., Oct. 24, 2002 -- Dover Motorsports, Inc. today reported its results for the third quarter ended September 30, 2002.Revenues were $41,622,000 in the quarter ended September 30, 2002 compared with $35,891,000 for the third quarter of 2001. An increase in admissions and other revenue at Dover International Speedway's fall NASCAR weekend and revenue from the inaugural Grand Prix race in Denver contributed to the increase in revenue for the quarter. The Company experienced a decline in admissions and other related revenue at its IRL and NASCAR Craftsman Truck Series events in Nashville and its NASCAR Busch Series event at Gateway International Raceway in the third quarter.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter ended September 30, 2002 were $11,492,000 compared with $14,052,000 in the comparable quarter of the prior year. Earnings before income taxes were $7,687,000 compared with $10,877,000 in the comparable period last year. The earnings decline in the third quarter of 2002 was the result of several factors. The impact of lower admissions and other related revenue at the three events mentioned above contributed $1,508,000 to the decline in earnings. Administrative expenses related to the Company's inaugural Grand Prix event in Denver and its upcoming inaugural event in St. Petersburg also represented $345,000 of the decline in earnings. Higher insurance, real estate and other non-income taxes and other administrative expenses represented $909,000 of the earnings decline compared with last year. Interest expense increased by $906,000 in the third quarter of 2002 as compared with the third quarter of 2001.
Net earnings for the quarter ended September 30, 2002 were $3,731,000 or $.10 per diluted share compared with $6,093,000 or $.16 per diluted share for the same period last year.
For the nine months ended September 30, 2002, revenues increased to $91,259,000 compared with $83,473,000 for the comparable period in the prior year. Excluding the impact of the Denver Grand Prix event, which was the only new event in the third quarter of 2002, revenue increased by more than 2%. Earnings before income taxes for the nine months ended September 30, 2002 were $12,662,000 compared with $20,783,000 for the comparable period last year. The factors affecting the decline in earnings in the third quarter also were relevant for the nine months ending September 30, 2002.
The Company's financial position remained strong at September 30, 2002. Cash flow from operations was $15,648,000 during the first nine months of the year compared with $14,116,000 for the comparable period in the prior year. During the third quarter, the Company enhanced its financial position with the issuance of common stock for net proceeds of $6,213,000. The proceeds were used entirely to reduce indebtedness. Capital expenditures in the third quarter of $4,323,000 included $4,023,000 for the Denver and St. Petersburg Grand Prix events. During the nine months ended September 30, 2002, the Company repaid $11,186,000 of indebtedness.
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 motorsports events in the United States. Its motorsports subsidiaries operate seven motorsports tracks (four permanent facilities and three temporary circuits) in six states and promote motorsports events under the auspices of four of the premier sanctioning bodies in motorsports -- NASCAR, CART, IRL and NHRA. The Company owns and operates Dover International Speedway in Dover, Delaware; Nashville Superspeedway near Nashville, Tennessee; Gateway International Raceway near St. Louis, Missouri; and Memphis Motorsports Park near Memphis, Tennessee. It also organizes and promotes the Toyota Grand Prix of Long Beach in California, the Shell Grand Prix of Denver in Colorado and the Grand Prix of St. Petersburg in Florida.
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENT OF EARNINGS
In Thousands, Except Per Share Amounts
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2002 2001 2002 2001
Revenues $41,622 $35,891 $91,259 $83,473
Expenses:
Operating 25,933 18,896 56,472 45,816
General and administration 4,197 2,943 11,594 8,321
30,130 21,839 68,066 54,137
Earnings from continuing
operations before interest,
income taxes, depreciation
and amortization and cumulative
effect of accounting change
(EBITDA) 11,492 14,052 23,193 29,336
Depreciation and amortization 2,475 2,751 7,204 7,393
Interest expense, net 1,330 424 3,327 1,160
Earnings from continuing
operations before income taxes
and cumulative effect of
accounting change 7,687 10,877 12,662 20,783
Income taxes 3,956 4,784 5,912 9,083
Earnings from continuing
operations before cumulative
effect of accounting change 3,731 6,093 6,750 11,700
Earnings from discontinued
operation, net of income taxes
of $3,631 for the three months
ended September 30, 2001, and
$3,542 and $11,270 for the nine
months ended September 30, 2002
and 2001, respectively - 5,298 5,168 16,441
Direct costs of spin-off, net of
income tax benefit of $90 - - (691) -
Earnings before cumulative
effect of accounting change 3,731 11,391 11,227 28,141
Cumulative effect of accounting
change for goodwill impairment - - (28,606) -
Net earnings (loss) $3,731 $11,391 $(17,379) $28,141
Earnings (loss) per common share
- basic:
Continuing operations before
accounting change $.10 $.16 $.18 $.31
Discontinued operation - .14 .12 .43
Accounting change - - (.75) -
Net earnings (loss) $.10 $.30 $(.45) $.74
Earnings (loss) per common share
- diluted:
Continuing operations before
accounting change $.10 $.16 $.17 $.31
Discontinued operation - .14 .12 .43
Accounting change - - (.74) -
Net earnings (loss) $.10 $.30 $(.45) $.74
Average shares outstanding:
- Basic 38,853 37,975 38,325 37,942
- Diluted 39,165 38,312 38,701 38,244
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEET
In Thousands
(Unaudited)
September 30, September 30,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $1,776 $ -
Accounts receivable 13,022 10,633
Inventories 415 444
Prepaid expenses and other 2,551 3,380
Income taxes receivable 4,127 -
Deferred income taxes 139 128
Total current assets 22,030 14,585
Property and equipment, net 245,204 255,046
Restricted cash 2,466 3,704
Other assets, net 1,834 1,523
Goodwill, net 21,883 50,852
Net assets of discontinued operation - 97,999
Total assets $293,417 $423,709
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,753 $6,686
Accrued liabilities 7,023 5,256
Income taxes payable - 1,838
Payable to Dover Downs Gaming &
Entertainment, Inc. - 8,401
Current portion of long-term debt 685 635
Notes payable to banks - 99,950
Deferred revenue 7,055 5,824
Total current liabilities 18,516 128,590
Notes payable to banks 55,050 -
Long-term debt 19,229 19,905
Other liabilities 107 132
Deferred income taxes 34,819 21,524
Stockholders' equity:
Common stock 1,590 1,417
Class A common stock 2,361 2,380
Additional paid-in capital 126,276 119,452
Retained earnings 35,469 130,309
Total stockholders' equity 165,696 253,558
Total liabilities and stockholders'
equity $293,417 $423,709