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Dover Motorsports Inc. (DVD) filed Quarterly Report for the period ended 2011-09-30.
Dover Motorsports has a market cap of $38.3 million; its shares were traded at around $1.04 with and P/S ratio of 0.6.
This is the annual revenues and earnings per share of DVD over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of DVD.
Highlight of Business Operations:
Revenues pertaining to specific events are deferred until the event is held. Concession revenue from concession stand sales and sales of souvenirs are recorded at the time of sale. Revenues and related expenses from barter transactions in which we receive advertising or other goods or services in exchange for sponsorships of motorsports events are recorded at fair value. Barter transactions accounted for $95,000 and $400,000, and $140,000 and $540,000 of total revenues for the three and nine-month periods ended September 30, 2011 and 2010, respectively.Event-related revenue was $1,321,000 in the third quarter of 2011 as compared to $5,487,000 in the third quarter of 2010. The $4,166,000 decrease was primarily related to the changes in our major motorsports event schedule.
Event-related revenue was $5,899,000 in the first nine months of 2011 as compared to $11,588,000 in the first nine months of 2010. The $5,689,000 decrease was primarily related to the change in our major motorsports event schedule at our Dover International Speedway facility and to a lesser extent lower luxury suite rentals, hospitality tent rentals, catering revenues, expo space revenues and concessions and souvenir sales at our May NASCAR event weekend at Dover International Speedway as a result of the lower attendance and the aforementioned economic conditions.
At September 30, 2011, Dover Motorsports, Inc. and its wholly owned subsidiaries Dover International Speedway, Inc. and Nashville Speedway, USA, Inc., as co-borrowers, had a $65,000,000 secured credit agreement with a bank group. There was $34,980,000 outstanding under the credit facility at September 30, 2011, at an interest rate of approximately 3%. The maximum borrowing limit under the facility reduces to $60,000,000 as of March 31, 2012 and $55,000,000 as of March 31, 2013 and the facility expires April 12, 2014. The credit facility provides for seasonal funding needs, capital improvements, letter of credit requirements and other general corporate purposes. Interest is based upon LIBOR plus a margin that varies between 200 and 325 basis points depending on the leverage ratio (275 basis points at September 30, 2011). The terms of the credit facility contain certain covenants including minimum interest coverage and maximum funded debt to earnings before interest, taxes, depreciation and amortization. Material adverse changes in our results of operations could impact our ability to maintain financial ratios necessary to satisfy these requirements. We expect to be in compliance with the financial covenants, and all other covenants, for all measurement periods during the next twelve months. In addition, the credit agreement includes a material adverse change clause, prohibits the payment of dividends by us and provides the lenders with a first lien on all of our assets. The credit facility also provides that if we default under any other loan agreement, that would be a default under this facility. At September 30, 2011, we were in compliance with the terms of the credit facility. After consideration of stand-by letters of credit outstanding, the remaining maximum borrowings available pursuant to the credit facility were $9,380,000 at September 30, 2011; however, in order to maintain compliance with the required quarterly debt covenant calculations as of September 30, 2011 $7,313,000 could have been borrowed as of that date.
As of September 30, 2011 and December 31, 2010, $1,541,000 and $1,200,000, respectively, was available in the sales and incremental property tax fund maintained by the Sports Authority to pay the remaining principal and interest due under the bonds. During the first nine months of 2011, we paid $1,075,000 into the sales and incremental property tax fund and $734,000 was deducted from the fund for principal and interest payments. If we fail to maintain the letter of credit that secures the bonds or we allow an uncured event of default to exist under our reimbursement agreement relative to the letter of credit, the bonds would be immediately redeemable.
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