Dover Motorsports, Inc. (DVD) 2020 Q1 法說會逐字稿

Good morning, everyone. I'm joined by Tim Horne, our CFO, who's going to read our forward-looking statements disclaimer, and then we'll get underway.

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.

Thanks, Tim. This was our usual quiet first quarter with no major events. And after a few extraordinary items, which Tim will be reviewing with you, the results were within our expectations.

During the quarter, we remained in active regular contact with our ticket buyers, sponsors and third-party providers, all of whom understand the circumstances created by the coronavirus. We look forward to communicating our plans for the rest of the year once we hear from NASCAR as to the plans for -- their plans for starting up the season again.

The emerging success of iRacing on television has caught everybody by surprise. And the 1.5-hour telecasts have actually been very entertaining as NASCAR stars compete against relatively unknown drivers who have considerable skills on the computer-based racing platform. By the way, Dover's iRace will be aired this Sunday at 1:00 p.m. on Fox and FS1. You ought to tune in. It's going to be very entertaining.

We view this format as helpful towards keeping the support on NASCAR in front of national audiences while also possibly introducing NASCAR to new audiences. While we wait for clarity on our schedule for the remainder of the year, we've trimmed indirect and capital expense budget significantly, including reducing our workforce by 25%.

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

Thanks, Denis. As Denis mentioned, in response to the COVID pandemic, we have furloughed some hourly employees that cannot work remotely and have been reducing indirect expenses wherever possible. As for direct event expenses, we've shut down all advanced advertising and any other spending for race weekend until we get clarity on how the NASCAR schedule will play out.

Our original capital spending plans for 2020 were approximately $1 million for various facility improvements in equipment here in Dover. Given the current environment, we have since reduced that by about half.

Back to the first quarter, we held no major events in the first quarter of 2020 or 2019. If you look at the statement of earnings, you'll see our revenues were $204,000 compared to $129,000 last year. This year reflects increased rental revenue in Nashville, while last year included a positive adjustment for NASCAR's revised estimate of ancillary rights revenue we received for the previous year.

Our operating and marketing expenses were lower than last year primarily from lower employee-related costs from open positions. G&A expenses were up a little compared to last year at just over $1.9 million from higher insurance costs and higher real estate taxes.

Depreciation expense was down slightly at 680 -- $768,000. Cost to remove long-lived assets relates to finishing the grandstand removal project we started last year and there were $341,000 in this quarter, and that project is now complete. The provision for the contingent bond liability increased by $369,000 this quarter driven entirely by the historically low 10-year rate used to value that liability.

We had other expense this year versus other income last year, with the change being primarily driven by pension asset losses this year compared with gains last year given the equity market performance to date. So our net loss for the quarter was just over $3.1 million or $0.09 per diluted share compared with a net loss of approximately $2.5 million or $0.07 per diluted share last year.

We've attached the schedule that removes this year's grandstand removal costs and last year's gain on land sale, where you can see adjusted net loss of approximately $2.9 million this year versus $2.6 million last year, with the difference primarily being this year's loss on equity investments and the higher provision for the contingent obligation.

Looking at the March 31 balance sheet, we had no debt at quarter end, and our available cash was just over $5 million. Contract liabilities are lower as we effectively shut down our ticket sales operation until we get more clarity on the NASCAR schedule going forward.

Also included is a cash flow statement for the quarter ended March 31, where you'll see our net cash used in operating activities was just over $2.3 million compared to just over $1.6 million last year, a little higher use of cash from the lower advanced revenue collections and the payment of the grandstand cost this year as well.

Capital expenditures were $115,000 for the quarter primarily for equipment purchases. And the result of all that was a decrease in cash of just over $2.5 million this year.

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