Dover Motorsports, Inc. (DVD) 2020 Q4 法說會逐字稿

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In order to help you understand the company and its results, we may make certain forward-looking statements. It is possible that 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.

Thanks, Tim.

Well, I guess you can say we closed the year with a sense of relief, but also optimism that things will be greatly improved during 2021. As you know from our third quarter call, COVID greatly impacted event revenues and COVID-related schedule changes made quarterly comparisons difficult. We're happy to say that our ability to market excess land at Nashville Superspeedway continues to provide a welcome hedge to downside risk, such as those presented by the pandemic. And at year-end, we're showing a 36% growth in net earnings. Tim will provide more detail on that in a minute.

We think NASCAR did a fantastic job navigating our industry through the COVID waters last year. And as we begin 2021, we've got a lot to look forward to.

Here are the main positives we see: a new NASCAR race schedule, which includes our return to Nashville, plus 4 other new venues; Michael Jordan entering NASCAR as a team owner for popular African-American driver, Bubba Wallace. And while Jordan will likely bolster NASCAR's appeal to Black audiences, another new well-funded team has been put together for Mexican driver, Daniel Suarez. The partner in owning that team is Armando Pérez, a Cuban American rap singer, goes by the name of Pitbull. And being one of the most popular artists in the world, we feel it can help NASCAR's outreach to this Hispanic community. We have Kyle Larson returning from exile to drive for Hendrick Motorsports; and Hailie Deegan, an impressive 19-year-old female driver graduates from NASCAR's ARCA Menards Series to the NASCAR Truck Series to begin what everybody hopes will be a successful major league career.

Netflix is airing a NASCAR-based sitcom called The Crew, starring Kevin James, which we think will appeal to really young audiences as well as core NASCAR fans. And finally, and perhaps hopefully, the thing we look forward to most, a broad distribution of COVID vaccine, allowing us to once again accommodate live crowds at our events.

One more item before I turn it over to Tim. We're making progress at Nashville Superspeedway towards our planned reopening of the track on Father's Day weekend. We now estimate total cost for this project to be in the $10 million range. Ticket sales are robust at this point. And we just recently announced a multiyear agreement with Allied Financial for the sponsorship of our June 20 NASCAR Cup race at Nashville. So right now, we're on track for a successful opening.

With that, I'll turn it over to Tim for his review of the financials.

Thanks, Denis.

As was the case in the third quarter, the fourth quarter results are not comparable to last year, as we held no major events in the fourth quarter this year, whereas we held our second Dover NASCAR Weekend in the fourth quarter of last year.

If you look at the statement of earnings, you'll see our revenues were $185,000 compared to about $20.8 million last year. Our operating and marketing expenses were also significantly lower than last year. In both cases, the decrease is obviously from holding no events compared to holding a race weekend in Q4 of '19.

G&A expenses of $1.934 billion were up slightly compared to last year. They include costs from reopening Nashville, offsetting lower costs here in Dover. Depreciation expense was lower at $757,000 compared to $1.097 million last year, primarily from $293,000 of accelerated depreciation expense recorded in the fourth quarter of last year related to the now removed grandstand seats here in Dover. Related to that, we had almost $1.2 million in cost to remove the grandstand seats in the fourth quarter of last year as well. We recorded a $59,000 benefit to reduce the contingent bond liability this quarter as a result of an increase in the discount rate used to value that liability. We recorded a $638,000 expense to increase that obligation in the fourth quarter of last year from a reduction in the discount rate and lower estimated future property taxes.

Our effective income tax rate was a benefit of just over 44% this quarter, higher than you would expect as a result of reversing a portion of the previously booked valuation allowance on Tennessee deferred tax assets, which we now expect to realize with the recently signed land sale agreement in Nashville.

So our net loss for the quarter was $1.879 million or $0.05 per diluted share compared with net earnings of just over $2.9 million or $0.08 per diluted share last year. We've attached the schedule to the earnings release that removes the impact of the various nonrecurring items for last year's fourth quarter and both annual periods as well.

Looking at the balance sheet. At the end of the year, we had no debt and our available cash was just over $13 million. The assets held for sale represent the book value of the land under contract in Nashville. Also included is a cash flow statement for the year ended December 31, where you'll see our net cash provided by operating activities was just under $3.7 million compared to almost $6.8 million last year. The lower net cash generated was related to the holding of all race events this year without fans as well as from the cancellation of the Firefly Music Festival in 2020, both pandemic related, obviously.

Our capital expenditures were $1.453 million for the quarter and just short of $2 million for the year. Most of which relates to work related to the reopening of Nashville. We had proceeds from the land sale net of expenses of almost $6.5 million this year. We paid just over $2.5 million for the $0.07 per share dividend during the fourth quarter. And the result of all that was an increase in cash of almost $5.5 million for the year.

At this point, we expect total capital spending next year of approximately $11 million, primarily to get Nashville reopened and also adding some additional WiFi capability and other facility improvements at Dover International Speedway.

That concludes our fourth quarter update. Thank you for your interest.