DVD Dover Motorsports Inc

Dover Motorsports, Inc. Reports Results for the Quarter Ended March 31, 2005 DOVER, Del., April 28 /PRNewswire-FirstCall/ -- Dover Motorsports, Inc. (NYSE:DVD) today reported its results for the quarter ended March 31, 2005. The first quarter historically results in a loss for the Company due to the seasonality of the motorsports business. One major motorsports event was held during the first quarter of 2005 whereas no major events were held during the first quarter of 2004. A NASCAR Busch Series event was held at Nashville Superspeedway in late March in 2005 rather than in early April as it was in 2004. For the quarter ended March 31, 2005 revenues were $3,549,000 compared with $1,160,000 in the first quarter of 2004. The increase in revenues in 2005 was due to the inclusion of the NASCAR Busch Series event in Nashville, which had a 6% increase in revenue from the prior year event principally due to higher attendance and TV broadcast fees. Operating and marketing expenses for the quarter ended March 31, 2005 increased by $2,421,000 principally due to the inclusion of the Busch Series event in Nashville. For the quarter ended March 31, 2005, general and administrative expenses were $3,533,000 compared with $3,693,000 in the prior year. The decrease resulted from savings realized from previously closed offices in St. Petersburg and Denver of $253,000 partially offset by higher fringe benefit expenses and costs incurred to comply with the Sarbanes-Oxley Act of 2002. Depreciation and amortization increased by $34,000 in the first quarter of 2005 primarily due to minor facility and track improvements at the Company's various locations. Net interest expense decreased by $205,000 in the first quarter of 2005 primarily due to lower average levels of indebtedness in 2005. Loss before income tax benefit for the quarter ended March 31, 2005 was reduced to $8,088,000 compared with $8,387,000 in the prior year. The lower loss was principally due to the contribution from the Nashville Busch Series event in this year's first quarter results. The income tax benefit for the quarter ended March 31, 2005 was $4,206,000 compared with $5,201,000 in the first quarter of 2004. The lower tax benefit in 2005 was the result of a lower pre-tax loss in the quarter compared with the comparable quarter in the prior year and the Company using a lower estimated effective income tax rate of 52.0% in 2005 compared with 62.0% in 2004. Net loss for the quarter ended March 31, 2005 was $3,882,000 or $.10 per diluted share compared with $3,186,000 or $.08 per diluted share for the comparable period of the prior year. The lower effective income tax rate in 2005 negatively affected after-tax results in the first quarter because it yielded a lower tax benefit. Conversely, this lower effective tax rate in 2005 is expected to positively affect the comparisons of after-tax earnings in the profitable second and third quarters. The financial condition of the Company remained strong during the first quarter of 2005. Cash flow from operations was $3,019,000 in the first quarter of 2005 compared with $8,691,000 in the first quarter of 2004. The prior year's first quarter cash flows reflected an income tax refund of $6,156,000. Deferred revenue, an indicator of future ticket and sponsor revenues, was $33,401,000 at March 31, 2005 compared with $32,396,000 at March 31, 2004. This increase was achieved despite the fact that the 2004 Nashville Busch Series event was included in the 2004 amount but no similar amount was included in 2005. On a comparable basis deferred revenue at March 31, 2005 was 7% higher than the prior year. Capital spending was $5,987,000 in the first quarter of 2005 compared with $799,000 in the first quarter of 2004. Capital spending in the first quarter of 2005 primarily related to the acquisition of certain adjoining parcels of property at Dover International Speedway. At March 31, 2005, the Company's indebtedness was $47,684,000 compared with $54,468,000 a year ago. This release contains or may contain forward-looking statements based on management's beliefs and assumptions. Such statements are subject to various risks and uncertainties which could cause results to vary materially. Please refer to the Company's SEC filings for a discussion of such factors. Dover Motorsports, Inc. is a leading promoter of motorsports events in the United States. Its motorsports subsidiaries operate five motorsports tracks (four permanent facilities and one temporary circuit) in four states and promote motorsports events under the auspices of four of the premier sanctioning bodies in motorsports - NASCAR, NHRA, IRL and Champ Car. The Company owns and operates Dover International Speedway in Dover, Delaware; Nashville Superspeedway near Nashville, Tennessee; Gateway International Raceway near St. Louis, Missouri; and Memphis Motorsports Park in Memphis, Tennessee. It also organizes and promotes the Toyota Grand Prix of Long Beach in California. DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENT OF EARNINGS In Thousands, Except Per Share Amounts (Unaudited) Three Months Ended March 31, 2005 2004 Revenues: Admissions $1,203 $88 Event-related revenue 1,107 538 Broadcasting revenue 631 - Other revenue 608 534 3,549 1,160 Expenses: Operating and marketing 4,746 2,325 General and administrative 3,533 3,693 Depreciation and amortization 2,426 2,392 10,705 8,410 Operating loss (7,156) (7,250) Interest income 4 2 Interest expense (936) (1,139) Loss before income tax benefit (8,088) (8,387) Income tax benefit 4,206 5,201 Net loss $(3,882) $(3,186) Net loss per common share: - Basic $(0.10) $(0.08) - Diluted $(0.10) $(0.08) Average shares outstanding: - Basic 40,078 39,994 - Diluted 40,078 39,994 DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEET In Thousands (Unaudited) March 31, March 31, December 31, 2005 2004 2004 ASSETS Current assets: Cash and cash equivalents $499 $4,336 $134 Accounts receivable 11,952 10,000 3,894 Inventories 302 343 223 Prepaid expenses and other 5,768 4,954 2,727 Income taxes receivable 38 363 - Deferred income taxes 781 337 781 Total current assets 19,340 20,333 7,759 Property and equipment, net 228,555 228,031 224,973 Restricted cash 1,925 1,810 3,571 Other assets, net 1,349 1,563 1,385 Deferred income taxes 46 90 46 Goodwill 8,521 8,521 8,521 Total assets $259,736 $260,348 $246,255 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $950 $2,798 $1,947 Accrued liabilities 4,508 3,377 5,550 Payable to Dover Downs Gaming & Entertainment, Inc. 17 3 2 Income taxes payable - - 324 Current portion of long-term debt 875 805 805 Deferred revenue 33,401 32,396 11,663 Total current liabilities 39,751 39,379 20,291 Notes payable to banks 30,000 35,980 27,000 Long-term debt 16,809 17,683 17,684 Other liabilities 42 64 64 Deferred income taxes 38,906 33,456 42,750 Stockholders' equity: Common stock 1,706 1,662 1,695 Class A common stock 2,324 2,338 2,324 Additional paid-in capital 129,201 127,783 128,542 Retained earnings 2,549 2,413 6,834 Accumulated other comprehensive loss (527) (410) (527) Deferred compensation (1,025) - (402) Total stockholders' equity 134,228 133,786 138,466 Total liabilities and stockholders' equity $259,736 $260,348 $246,255 DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS In Thousands (Unaudited) Three Months Ended March 31, 2005 2004 Operating activities: Net loss $(3,882) $(3,186) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,426 2,392 Amortization of credit facility fees 36 98 Amortization of deferred compensation 47 - Deferred income taxes (3,844) (4,840) Changes in assets and liabilities: Accounts receivable (8,058) (7,357) Inventories (79) (84) Prepaid expenses and other (2,957) (3,193) Income taxes receivable/payable (362) 5,436 Accounts payable (997) (535) Accrued liabilities (1,042) (1,210) Payable to/receivable from Dover Downs Gaming & Entertainment, Inc. 15 99 Deferred revenue 21,738 21,092 Other liabilities (22) (21) Net cash provided by operating activities 3,019 8,691 Investing activities: Capital expenditures (5,987) (799) Restricted cash 1,646 1,623 Net cash (used in) provided by investing activities (4,341) 824 Financing activities: Borrowings from/(repayments on) notes payable to banks, net 3,000 (7,065) Repayments of long-term debt (805) (744) Credit facility origination and amendment fees (105) (318) Dividends paid (403) (400) Net cash provided by (used in) financing activities 1,687 (8,527) Net increase in cash and cash equivalents 365 988 Cash and cash equivalents, beginning of period 134 3,348 Cash and cash equivalents, end of period $499 $4,336 DATASOURCE: Dover Motorsports, Inc. CONTACT: Patrick J. Bagley, Sr. Vice President-Finance, Dover Motorsports, +1-302-857-3745 Web site: http://www.dovermotorsportsinc.com/

Copyright