Dover Motorsports Inc. (DVD, Financial) filed Quarterly Report for the period ended 2010-06-30.
Dover Motorsports Inc. has a market cap of $57 million; its shares were traded at around $1.55 with and P/S ratio of 0.8. DVD is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Net cash provided by investing activities was $1,029,000 for the six months ended June 30, 2010 as compared to net cash used in investing activities of $490,000 for the six months ended June 30, 2009. Capital expenditures were $345,000 for the six months ended June 30, 2010, down from $1,817,000 for the six months ended June 30, 2009. The 2010 additions related primarily to payments for concessions equipment and facility improvements. The 2009 additions related primarily to the Monster Makeover project, consisting primarily of racetrack improvements at our Dover facility. Decreases in our restricted cash accounts were $1,376,000 and $1,325,000 for the six month periods ended June 30, 2010 and 2009, respectively.
Net cash used in financing activities was $6,484,000 for the six months ended June 30, 2010 as compared to $9,281,000 for the six months ended June 30, 2009. We had net repayments on our outstanding line of credit of $5,200,000 in the first six months of 2010 as compared to $7,400,000 in the first six months of 2009. Repayments of our outstanding SWIDA bonds were $1,234,000 for the first six months of 2010 as compared to $1,129,000 for the first six months of 2009. We paid $733,000 in cash dividends in the first six months of 2009. No dividends were paid in the first six months of 2010.
Material adverse changes in our results of operations could impact our ability to maintain financial ratios necessary to satisfy these requirements. There was $35,800,000 outstanding under the credit facility at June 30, 2010, at a weighted average interest rate of 4.44%. After consideration of stand-by letters of credit outstanding, the remaining maximum borrowings available pursuant to the credit facility were $15,136,000 at June 30, 2010 (which reduced to $10,136,000 on July 1, 2010); however, in order to maintain compliance with the required quarterly debt covenant calculations as of June 30, 2010 only $1,841,000 could have been borrowed as of that date. On August 3, 2010, the credit agreement was amended to revise certain financial covenants effective for the June 30, 2010 period and for all subsequent periods through the end of the agreement, extended the agreement to January 1, 2012, provided mandatory reductions in the maximum borrowing limit to $65,000,000 as of June 1, 2011 and $63,000,000 as of October 1, 2011, provided mandatory reductions in the maximum borrowing limit from proceeds from the sales of certain property and equipment, and increased the interest rate we pay by 50 basis points. As a result of the amendment, we were in compliance with the financial covenants, and all other covenants, as of June 30, 2010. Additionally, we expect to be in compliance with the financial covenants, and all other covenants, for all measurement periods during the next twelve months.
Cash provided by operating activities is expected to substantially fund our capital expenditures. Based on current business conditions, we expect to spend approximately $150,000 on capital expenditures for the remainder of 2010. On May 24, 2006, we announced plans for a five-year capital improvement project, referred to as the Monster Makeover, that is providing new offerings and upgraded amenities for fans, competitors and the media. The project is expected to take approximately five years to complete at an estimated total cost of approximately $25,000,000 to $30,000,000, of which approximately $20,800,000 was spent as of June 30, 2010. We continue to review the amount and timing of capital expenditures in light of our current earnings level. Additionally, we expect to contribute approximately $500,000 to our pension plans for 2010, of which $65,000 was contributed during the six months ended June 30, 2010. We expect continued cash flows from operating activities and funds available from our credit agreement to provide for our working capital needs and capital spending requirements at least through the next twelve months and also provide for our long-term liquidity.
On July 21, 2010, we redeemed all of the outstanding SWIDA bonds for $1,995,000 (including a $158,000 premium to the bondholders, accrued interest and professional fees). We wrote-off $29,000 of deferred bond costs as a result of the redemption. The redemption resulted in a loss on extinguishment of debt of $208,000 in the third quarter. Subsequent to redeeming the SWIDA bonds, all of the restricted cash was returned to us by the trustee and we used approximately $2,000,000 of those funds to repay outstanding borrowings on our credit facility.
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Dover Motorsports Inc. has a market cap of $57 million; its shares were traded at around $1.55 with and P/S ratio of 0.8. DVD is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net interest expense was $1,642,000 in the first six months of 2010 as compared to $1,512,000 in the first six months of 2009. Excluding the interest expense we record on certain unrecognized income tax benefits, our net interest expense was $1,533,000 in the first six months of 2010 as compared to $1,263,000 in the first six months of 2009. The increase was due primarily to a higher average interest rate on our credit facility.Net cash provided by investing activities was $1,029,000 for the six months ended June 30, 2010 as compared to net cash used in investing activities of $490,000 for the six months ended June 30, 2009. Capital expenditures were $345,000 for the six months ended June 30, 2010, down from $1,817,000 for the six months ended June 30, 2009. The 2010 additions related primarily to payments for concessions equipment and facility improvements. The 2009 additions related primarily to the Monster Makeover project, consisting primarily of racetrack improvements at our Dover facility. Decreases in our restricted cash accounts were $1,376,000 and $1,325,000 for the six month periods ended June 30, 2010 and 2009, respectively.
Net cash used in financing activities was $6,484,000 for the six months ended June 30, 2010 as compared to $9,281,000 for the six months ended June 30, 2009. We had net repayments on our outstanding line of credit of $5,200,000 in the first six months of 2010 as compared to $7,400,000 in the first six months of 2009. Repayments of our outstanding SWIDA bonds were $1,234,000 for the first six months of 2010 as compared to $1,129,000 for the first six months of 2009. We paid $733,000 in cash dividends in the first six months of 2009. No dividends were paid in the first six months of 2010.
Material adverse changes in our results of operations could impact our ability to maintain financial ratios necessary to satisfy these requirements. There was $35,800,000 outstanding under the credit facility at June 30, 2010, at a weighted average interest rate of 4.44%. After consideration of stand-by letters of credit outstanding, the remaining maximum borrowings available pursuant to the credit facility were $15,136,000 at June 30, 2010 (which reduced to $10,136,000 on July 1, 2010); however, in order to maintain compliance with the required quarterly debt covenant calculations as of June 30, 2010 only $1,841,000 could have been borrowed as of that date. On August 3, 2010, the credit agreement was amended to revise certain financial covenants effective for the June 30, 2010 period and for all subsequent periods through the end of the agreement, extended the agreement to January 1, 2012, provided mandatory reductions in the maximum borrowing limit to $65,000,000 as of June 1, 2011 and $63,000,000 as of October 1, 2011, provided mandatory reductions in the maximum borrowing limit from proceeds from the sales of certain property and equipment, and increased the interest rate we pay by 50 basis points. As a result of the amendment, we were in compliance with the financial covenants, and all other covenants, as of June 30, 2010. Additionally, we expect to be in compliance with the financial covenants, and all other covenants, for all measurement periods during the next twelve months.
Cash provided by operating activities is expected to substantially fund our capital expenditures. Based on current business conditions, we expect to spend approximately $150,000 on capital expenditures for the remainder of 2010. On May 24, 2006, we announced plans for a five-year capital improvement project, referred to as the Monster Makeover, that is providing new offerings and upgraded amenities for fans, competitors and the media. The project is expected to take approximately five years to complete at an estimated total cost of approximately $25,000,000 to $30,000,000, of which approximately $20,800,000 was spent as of June 30, 2010. We continue to review the amount and timing of capital expenditures in light of our current earnings level. Additionally, we expect to contribute approximately $500,000 to our pension plans for 2010, of which $65,000 was contributed during the six months ended June 30, 2010. We expect continued cash flows from operating activities and funds available from our credit agreement to provide for our working capital needs and capital spending requirements at least through the next twelve months and also provide for our long-term liquidity.
On July 21, 2010, we redeemed all of the outstanding SWIDA bonds for $1,995,000 (including a $158,000 premium to the bondholders, accrued interest and professional fees). We wrote-off $29,000 of deferred bond costs as a result of the redemption. The redemption resulted in a loss on extinguishment of debt of $208,000 in the third quarter. Subsequent to redeeming the SWIDA bonds, all of the restricted cash was returned to us by the trustee and we used approximately $2,000,000 of those funds to repay outstanding borrowings on our credit facility.
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