Not exactly a surprise. Disastrous fourth quarter plus a dividend cut. Table games up and running two weeks ago in MD. Unlikely they will show a profit at all for the year. Completely dead money for as far as the eye can see. No reason to own.
DDE says in the current 10Q that they expect to breach current bank covenants in the third quarter. That means the dividend just paid is probably the last. It looks dire over there. Is it possible this will be a catalyst for value creation in DVD? They have to go to ISCA or someone else and offer up the whole thing to get out from under it? At the right price a quality operator could make a combination work...they just don't have many options. Thank heavens for the banks..without them there would be no chance for value to be realized. The tracks now look very very good compared to the gaming side. Just reduced SGA looks like a savings of about 1.5-2 million annualized.
Robotti got his position from Cibelli's sale in December it looks like. Two smart guys. If Robotti is involved now there is a reason. Light at the end of the tunnel- despite inept management. The only reason Nashville is open is there is hope it might pay some of the debt servicing costs on the outstanding bonds. Lets see- the purported attendance last weekend for the nationwide race was 18,000. Take that and multiply it by the Dover Motorsports management performance ratio of .02- (Since they sell what they buy for 2 cent on the dollar) That means attendance probably wasn't 18,000;-). On Youtube the video of the truck race was interesting- no one in the stands.
Earnings tanked again. Big surprise they tried to scoop up DVD with its quality franchise and improving cash flow in 2011 to prop this mess up.
Will they cover the dividend this year? You be the judge- 2 cents per share of earnings in the fourth quarter and a 3 cent quarterly dividend. Does not look good does it?
It will be interesting to see how many executive vice presidents etc. they think they need going forward. How many execs does it take to run two tracks with no prospect or need for any growth planning- because they will never own more than ONE moneymaking track! G&A expense will be huge as a % of revenue unless they clear the decks.
To the banks' patience as evidenced by the banana republic terms they are having to abide by in their credit agreement. One way or another they have to reduce the leverage ratio in half by this time next year. This won't happen just through operational improvements so look for more slashing of expenses and the application of all sale proceeds from Memphis and possibly Gateway towards debt repayment. Basically in a sale they will have to swallow a 20 million dollar haircut because of the outstanding Nashville bonds. A legacy to hubris and stupidity.
Of money going down the toilet in this arrogant folly that incorrectly assumed that more cup dates would be granted. The only good thing is any proceeds will have to be applied to current debt per bank agreements.
In Perryville, MD the Hollywood casino opened to huge crowds on September 30. It will be the first of many. Only an hour from DDE's facility.
If their margins are down in a big way in the last 2 years explain to me how they will ever recover now. Simple answer..they won't. They even have buses started from Milford, DE among their long long list of bus operators. By the way there is no hotel to take care of - just a huge new casino to keep locals from ever having a need to visit DDE again. All of this my opinion of course...but the writing is on the wall.
So with Memphis and Gateway either sold or closed in the next year...any guesses on the amount of SGA/other expenses that will be taken off the income statement on an annualized basis?
Well time will tell but none of the insiders including him have ever bought the non voting stock on the open market the way they have in the last year. This man doesn't need the money and when he buys like he has something is up. It may take awhile but something will happen within the next 12-18 months I think.
I don't know where you'd be hearing that. They wrote it down to 2.8 million. No prospect of a cup date EVER..these orphan race tracks tracks are a losing proposition. There won't be any buyer.
When the money man- finance guy buys some stock that says one of two things about this company. Either the closure of Memphis will lead to enough cost saving for an earnings surprise or they will reinstate the dividend. Don't have to have a sale of the company for the stock to do better.
I honestly don't know what they think their end game is here. Clearly Mario was right- scale has played into things in a big way. They are unable to offer sponsors what ISCA and TRK can. One thing is for sure they clearly have destroyed even more shareholder wealth by not selling. It was not that long ago that Mario valued this at low double digits. Now he says 4-6 bucks. There has been a sea change here..if they were not able to fill the stands after 911 it stands to reason now that it might not happen again in our life time. Time to wise up and explore alternatives.
Michelle Rollins is thinking...why don't I have any of the super voting shares? If you look at the Proxy statement she only has the public stock..none of the supervoting shares...so although she has the right name she doesn't appear to have any power.