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Edited Transcript of DVD earnings conference call or presentation 27-Apr-17 2:30pm GMT

Thomson Reuters StreetEvents

Q1 2017 Dover Motorsports Inc Earnings Call

DOVER Apr 30, 2017 (Thomson StreetEvents) -- Edited Transcript of Dover Motorsports Inc earnings conference call or presentation Thursday, April 27, 2017 at 2:30:00pm GMT

TEXT version of Transcript


Corporate Participants


* Denis L. McGlynn

Dover Motorsports, Inc. - CEO, President and Executive Director

* Timothy R. Horne

Dover Motorsports, Inc. - CFO, SVP of Finance and Director




Operator [1]


Welcome, everyone, and thank you for standing by. (Operator Instructions) This call is being recorded. If you have any objections, you may disconnect at this time.

I would now like to turn the call over to Mr. Denis McGlynn. You may now begin.


Denis L. McGlynn, Dover Motorsports, Inc. - CEO, President and Executive Director [2]


Thank you, and good morning, everyone. Tim Horne, our CFO, is here with me this morning. And after Tim reads our forward-looking statement disclaimer, we'll get underway with our review of the quarter.


Timothy R. Horne, Dover Motorsports, Inc. - CFO, SVP of Finance and Director [3]


In order to help you understand the company and its results, we may make certain forward-looking statements. It is possible the company's actual results might differ from any predictions we make today. Additional information regarding factors that could cause such differences appear in the company's SEC filings.


Denis L. McGlynn, Dover Motorsports, Inc. - CEO, President and Executive Director [4]


Thanks, Tim. As is normal for our first quarter of the year, there were no major events scheduled, and except for some expense related to the removal of grandstands, our results were similar to last year. And Tim will have more on that in a minute.

As we announced last quarter, our major capital project this year is the installation of SAFER Barriers to additional portions of the Speedway here at Dover. The project is underway and scheduled for completion prior to our spring race weekend. We're also completing renovations on 2 restrooms on the frontstretch grandstands.

We've secured title sponsors for 4 of our 6 NASCAR races this year and are in discussions for the remaining 2. And as for the season to date, we are happy with the racing NASCAR is delivering this year because. The new stage racing format introduced this season, along with the emergence of several young drivers, is delivering the level of intensity we've been hoping for and seems to be contributing to the recovery of TV ratings in the important 18-to-34 age demographic as well as helping to grow NASCAR's digital performance.

A quick update on Nashville before I turn it over to Tim. Due diligence is substantially complete, and the buyer reports progress is being made with certain necessary approvals from the county. They remain fully committed to the close at the earliest possible date, which will likely be in the third quarter.

I'm going to turn it over to Tim now for his review of the first quarter financials.


Timothy R. Horne, Dover Motorsports, Inc. - CFO, SVP of Finance and Director [5]


Thanks, Denis. My remarks will be fairly brief. We held no events in the first quarter of either 2017 or 2016. So if you look at the first quarter statement of earnings, you'll see our revenues were $110,000 compared to $139,000 last year, with last year's revenue primarily from adjustments to the final ancillary rights revenue from NASCAR for 2015 and this year's revenue from rentals, primarily out in Nashville.

Our operating and marketing expenses were lower this year, primarily from lower wages, benefits and incentives, while G&A expenses were slightly higher than last year at just over $2 million.

We had costs to remove long-lived assets this quarter as we finished the project started in prior years to deconstruct seats in Turn 3. As previously disclosed, this project had a total cost of about $500,000, some of which was recorded in the fourth quarter of '16. And, as you can see, $286,000 was recorded this quarter to wrap up the project.

Depreciation expense is down at $821,000 versus $896,000 last year as last year had some accelerated depreciation in the quarter.

Net interest was down compared to last year at $48,000 versus $59,000 last year. And that was from lower average outstanding borrowings, offset by slightly higher rates.

And our net loss for the quarter was approximately $2.4 million or $0.07 per diluted share compared with a net loss of approximately $2.3 million in the first quarter of last year or $0.06 per share, a little higher given the grandstand removal cost this year.

Attached is a non-GAAP presentation that removes these unusual costs that shows a slightly lower net loss this year on that basis.

Looking at the March 31 balance sheet, our financial position remains strong. Our outstanding loan balance was $6.36 million at March 31 compared to $7.58 million in March 31 of last year.

Our deferred revenue was down somewhat compared to last year's March 31 balance sheet. Much of this is from a spring ticket due date in April this year as opposed to March of last year, some also from a later billing than last year for certain sponsors and also from ticket sales that are a little behind last year at this point.

Also included is the cash flow statement for the quarter ended, where you'll see our net cash used in operating activities was a little more than $2.1 million. And that was more than last year, primarily from the deferred revenue comments I just made.

Our capital expenditures were $235,000 for the quarter, the biggest peach (sic) [piece] of which is the beginning of our SAFER wall additions and miscellaneous equipment purchases and facility upgrades. The result of all that is that we borrowed $2.5 million during the quarter.

Our plan for capital spending in 2017 is for just over $2 million in total, the biggest components of -- component of which are the additional NASCAR-mandated SAFER Barriers, with the balance being other facility improvements.

That concludes our prepared remarks and our first quarter update. And thank you for your interest.


Operator [6]


That concludes today's conference. Thank you for your participation. You may now disconnect.