Dover Motorsports, Inc. Reports Results for the Quarter and Year Ended December 31, 2002
DOVER, Del., Jan. 30 -- Dover Motorsports, Inc.
today reported its results for the quarter and year ended
December 31, 2002.
Revenues were $2,472,000 for the quarter ended December 31, 2002 compared
with $3,078,000 in the fourth quarter of 2001. The Company promoted one major
motorsports event during the quarter in each year, which was the NASCAR Busch
Series event at Memphis Motorsports Park. Loss from continuing operations
before cumulative effect of accounting change for goodwill impairment for the
quarter ended December 31, 2002 was $5,339,000 or $.13 per diluted share
compared with $4,829,000 or $.13 per diluted share for the same quarter of the
prior year.
The NASCAR Busch Series event in Memphis was affected by rain in both
years. The 2002 event was postponed from Saturday to Sunday, which increased
operating expenses and reduced ancillary revenue. An increase in general and
administrative expenses for the quarter ended December 31, 2002 included
higher wages, benefits and insurance based on a stand-alone Company. General
and administrative expenses also included $820,000 reserved for the potential
settlement of two claims against the Company including one for legal fees in
connection with the Company's unsuccessful attempt to acquire additional land
at its Gateway International Raceway facility. Legal fees of $274,000 for the
quarter ended December 31, 2002 were substantially higher than the prior year.
Net interest expense increased by $726,000 in the fourth quarter as the prior
year amount reflected a pre-spin-off capital structure. Further, the Company
reduced the number of employees by 10% during the fourth quarter, combined
certain administrative functions and continued to reduce its fixed costs.
For the year ended December 31, 2002, revenues were $93,731,000 compared
with $86,551,000 in 2001. Revenues from the Grand Prix of Denver and the
Company's second NASCAR Busch Series event in Nashville, both new events in
2002, together with additional broadcast revenues at the Company's Dover
International Speedway subsidiary, contributed to the higher revenues in 2002.
Earnings from continuing operations before interest, income taxes,
depreciation and amortization and cumulative effect of accounting change
(EBITDA) were $16,556,000 in 2002 compared with $24,261,000 in 2001. Earnings
from continuing operations before cumulative effect of accounting change for
the year ended December 31, 2002 were $1,411,000 or $.04 per diluted share
compared with $6,871,000 or $.18 per diluted share in 2001.
Lower attendance, sponsorship and other ancillary revenues from the
Company's non-Winston Cup events, together with higher sanction fees,
insurance, real estate taxes, benefits and other administrative expenses,
caused the decline in earnings for the year.
The Company's financial position improved during the fourth quarter as
$6,130,000 of cash flow from operations, primarily from advance ticket sales
and collection of accounts receivable, allowed the Company to reduce its
indebtedness by $3,535,000. At December 31, 2002, the Company's indebtedness
was $71,429,000, down $7,207,000 since March 31, 2002, the date that Dover
Motorsports, Inc. spun-off its gaming operations. Despite the decline in
earnings in 2002, the Company's cash flow from operations for the year ended
December 31, 2002 improved to $21,778,000 compared with $16,002,000 in 2001.
Capital expenditures were $9,167,000 in 2002, down 50% from $18,445,000 in the
prior year.
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 marketer and promoter of motorsports
entertainment 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 Year Ended
December 31, December 31,
2002 2001 2002 2001
Revenues $2,472 $3,078 $93,731 $86,551
Expenses:
Operating and marketing 4,590 5,066 61,062 50,882
General and administrative 4,519 3,087 16,113 11,408
9,109 8,153 77,175 62,290
(Loss) earnings from
continuing operations before
interest, income taxes,
depreciation and amortization
and cumulative effect of
accounting change (EBITDA) (6,637) (5,075) 16,556 24,261
Depreciation and amortization 2,582 2,630 9,786 10,023
Interest expense, net 1,180 454 4,507 1,614
(Loss) earnings from
continuing operations before
income taxes and cumulative
effect of accounting
change (10,399) (8,159) 2,263 12,624
Income tax (benefit) expense (5,060) (3,330) 852 5,753
(Loss) earnings from
continuing operations
before cumulative effect
of accounting change (5,339) (4,829) 1,411 6,871
Earnings from discontinued
operation, net of income
taxes of $3,229 for the
three months ended
December 31, 2001, and
$3,542 and $14,499 for
the years ended December 31,
2002 and 2001, respectively - 4,654 5,168 21,095
Direct costs of spin-off,
net of income tax benefit
of $90 - - (691) -
(Loss) earnings before
cumulative effect of
accounting change (5,339) (175) 5,888 27,966
Cumulative effect of
accounting change for
goodwill impairment - - (28,606) -
Net (loss) earnings $(5,339) $(175) $(22,718) $27,966
(Loss) earnings per
common share - basic:
Continuing operations
before accounting change $(.13) $(.13) $.04 $.18
Discontinued operation - .13 .11 .56
Accounting change - - (.74) -
Net (loss) earnings $(.13) $- $(.59) $.74
(Loss) earnings per
common share - diluted:
Continuing operations
before accounting change $(.13) $(.13) $.04 $.18
Discontinued operation - .13 .11 .55
Accounting change - - (.73) -
Net (loss) earnings $(.13) $- $(.58) $.73
Average shares outstanding:
- Basic 39,553 37,993 38,634 37,955
- Diluted 39,553 37,993 38,980 38,254
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEET
In Thousands
(Unaudited)
December 31, December 31,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $454 $2,948
Accounts receivable 4,139 4,170
Inventories 382 423
Prepaid expenses and other 4,088 3,127
Income taxes receivable 5,906 3,819
Deferred income taxes 810 120
Total current assets 15,779 14,607
Property and equipment, net 244,965 245,143
Restricted cash 3,683 3,161
Other assets, net 1,790 1,503
Goodwill, net 21,883 50,489
Net assets of discontinued operation - 102,653
Total assets $288,100 $417,556
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,411 $1,024
Accrued liabilities 6,731 3,394
Current portion of long-term debt 685 635
Notes payable to banks - 110,610
Deferred revenue 12,080 12,912
Total current liabilities 20,907 128,575
Notes payable to banks 51,515 -
Long-term debt 19,229 19,905
Other liabilities 107 131
Deferred income taxes 35,809 24,426
Stockholders' equity:
Common stock 1,614 1,428
Class A common stock 2,345 2,376
Additional paid-in capital 127,169 120,080
Retained earnings 29,735 128,425
Minimum pension liability (330) -
160,533 252,309
Receivable from Dover Downs Gaming
& Entertainment, Inc. - (7,790)
Total stockholders' equity 160,533 244,519
Total liabilities and
stockholders' equity $288,100 $417,556