DOVER, Del., April 27 /PRNewswire-FirstCall/ -- Dover Motorsports,
Inc. (NYSE:DVD) today reported its results for the quarter ended
March 31, 2006. The first quarter historically results in a loss
for the Company due to the seasonality of the motorsports business.
No major motorsports events were held during the first quarter of
2006 whereas one major event was held during the first quarter of
2005 - a NASCAR Busch Series event at Nashville Superspeedway. For
the quarter ended March 31, 2006, revenues were $801,000 compared
with $3,073,000 in the first quarter of 2005. The decrease in
revenues in 2006 was primarily due to the schedule change affecting
the timing of the NASCAR Busch Series event in Nashville, which was
held on April 15 this year. Operating and marketing expenses for
the quarter ended March 31, 2006 decreased by $2,050,000 for the
same reason. Excluding expenses related to the 2005 Busch event,
operating and marketing expenses were slightly higher in 2006
because of additional sales initiatives and higher maintenance
expenses. For the quarter ended March 31, 2006, general and
administrative expenses decreased by $74,000 to $3,019,000 compared
with $3,093,000 in the prior year. Lower real estate taxes more
than offset higher wages and stock-based compensation expenses in
the first quarter of 2006. Stock-based compensation expense
increased primarily as a result of the Company adopting Financial
Accounting Standards Board Statement No. 123 (Revised 2004),
Share-Based Payment. Depreciation and amortization increased by
$67,000 in the first quarter of 2006 primarily due to facility and
track improvements at the Company's various locations. Net interest
expense increased by $182,000 in the first quarter of 2006
primarily due to higher average levels of indebtedness in 2006,
which resulted principally from $29,674,000 of borrowings related
to stock repurchased since September 2005. Loss from continuing
operations before income tax benefit for the quarter ended March
31, 2006 was $7,933,000 compared with $7,536,000 in the prior year.
The higher loss in 2006 was largely due to the absence of the
Nashville Busch Series event in this year's first quarter and
increased interest expense. Despite a higher pre-tax loss in the
first quarter of 2006, the income tax benefit of $3,540,000 in the
first quarter was $469,000 lower than the income tax benefit in the
first quarter of 2005. This reduced tax benefit in 2006 was the
result of a lower estimated annual effective income tax rate of
44.6% compared with 53.2% in 2005. This lower rate will benefit the
full year's results, but it had a negative impact on the first
quarter's results. Loss from continuing operations for the quarter
ended March 31, 2006 was $4,393,000 or $.12 per diluted share
compared with $3,527,000 or $.09 per diluted share for the
comparable period of the prior year. The earnings per share
calculation reflected the impact of a self tender in September 2005
in which approximately 10% of the Company's outstanding stock was
retired and the repurchase of 215,393 shares of stock in the first
quarter of 2006 noted below. The fewer shares outstanding in 2006
will benefit earnings per share for the full year, but also
negatively affected per share results in the first quarter. The
financial condition of the Company remained strong during the first
quarter of 2006. Despite the pre-tax loss in the first quarter,
cash flow from operations was a positive $3,464,000. Capital
spending was $787,000 in the first quarter of 2006 compared with
$5,960,000 in the first quarter of 2005, which included the
acquisition of certain adjoining parcels of property at Dover
International Speedway. At March 31, 2006, the Company's
indebtedness was $53,004,000 compared with $54,878,000 at December
31, 2005. The March 31, 2006 indebtedness level reflected the
impact of the Company purchasing 215,393 shares of its common stock
for $1,112,000 during the first quarter of 2006. 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 four motorsports tracks in three
states and promote motorsports events under the auspices of three
of the premier sanctioning bodies in motorsports - NASCAR, IRL, and
NHRA. The Company owns and operates Dover International Speedway in
Dover, Delaware; Gateway International Raceway near St. Louis,
Missouri; Memphis Motorsports Park in Memphis, Tennessee; and
Nashville Superspeedway near Nashville, Tennessee. For further
information log on to http://www.dovermotorsports.com/. DOVER
MOTORSPORTS, INC. CONSOLIDATED STATEMENT OF EARNINGS AND
COMPREHENSIVE EARNINGS In Thousands, Except Per Share Amounts
(Unaudited) Three Months Ended March 31, 2006 2005 Revenues:
Admissions $85 $1,203 Event-related 690 1,107 Broadcasting - 631
Other 26 132 801 3,073 Expenses: Operating and marketing 2,218
4,268 General and administrative 3,019 3,093 Depreciation and
amortization 2,383 2,316 7,620 9,677 Operating loss (6,819) (6,604)
Interest income 12 4 Interest expense (1,126) (936) Loss from
continuing operations before income tax benefit (7,933) (7,536)
Income tax benefit 3,540 4,009 Loss from continuing operations
(4,393) (3,527) Loss from discontinued operation, net of income tax
benefit of $197 for the three months ended March 31, 2005 - (355)
Net loss (4,393) (3,882) Unrealized gain on interest rate swap, net
of income taxes of $120 176 - Comprehensive loss $(4,217) $(3,882)
Loss per common share - basic: Continuing operations $(0.12)
$(0.09) Discontinued operation - (0.01) Net loss $(0.12) $(0.10)
Loss per common share - diluted: Continuing operations $(0.12)
$(0.09) Discontinued operation - (0.01) Net loss $(0.12) $(0.10)
Average shares outstanding: - Basic 36,099 40,078 - Diluted 36,099
40,078 DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEET In
Thousands (Unaudited) March 31, March 31, December 31, 2006 2005
2005 ASSETS Current assets: Cash and cash equivalents $1,175 $499
$953 Accounts receivable 6,512 10,667 2,366 Inventories 249 235 230
Prepaid expenses and other 3,045 2,699 1,705 Income taxes
receivable 98 38 - Deferred income taxes 563 669 517 Current assets
of discontinued operation - 4,533 - Total current assets 11,642
19,340 5,771 Property and equipment, net 219,419 224,544 221,005
Restricted cash 2,070 1,925 3,200 Other assets, net 1,139 1,349 963
Deferred income taxes - 46 - Goodwill 2,487 2,487 2,487 Non-current
assets of discontinued operation - 12,227 - Total assets $236,757
$261,918 $233,426 LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $984 $941 $1,477 Accrued liabilities
3,456 4,184 5,421 Payable to Dover Downs Gaming &
Entertainment, Inc. 11 17 15 Income taxes payable - - 290 Current
portion of long-term debt 695 875 875 Deferred revenue 26,274
27,901 9,522 Current liabilities of discontinued operation 103
5,833 144 Total current liabilities 31,523 39,751 17,744 Notes
payable to banks 48,100 30,000 49,100 Long-term debt 4,209 16,809
4,903 Other liabilities 21 42 42 Deferred income taxes 45,375
41,088 48,360 Stockholders' equity: Common stock 1,640 1,706 1,650
Class A common stock 1,992 2,324 1,992 Additional paid-in capital
99,946 129,201 101,757 Retained earnings 4,512 2,549 9,453
Accumulated other comprehensive loss (561) (527) (737) Deferred
compensation - (1,025) (838) Total stockholders' equity 107,529
134,228 113,277 Total liabilities and stockholders' equity $236,757
$261,918 $233,426 DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENT OF
CASH FLOWS In Thousands (Unaudited) Three Months Ended March 31,
2006 2005 Operating activities: Net loss $(4,393) $(3,882)
Adjustments to reconcile net loss to net cash provided by operating
activities of continuing operations: Depreciation and amortization
2,383 2,316 Amortization of credit facility fees 63 36 Stock-based
compensation 139 47 Deferred income taxes (3,151) (3,646) Loss from
discontinued operation, net - 355 Changes in assets and
liabilities: Accounts receivable (4,146) (8,331) Inventories (19)
(27) Prepaid expenses and other (1,293) (803) Accounts payable
(493) (957) Accrued liabilities (1,965) (1,139) Payable to Dover
Downs Gaming & Entertainment, Inc. (4) 15 Income taxes
payable/receivable (388) (362) Deferred revenue 16,752 18,595 Other
liabilities (21) (22) Net cash provided by operating activities of
continuing operations 3,464 2,195 Net cash (used in) provided by
operating activities of discontinued operation (41) 824 Investing
activities: Capital expenditures (787) (5,960) Restricted cash
1,130 1,646 Net cash provided by (used in) investing activities of
continuing operations 343 (4,314) Net cash used in investing
activities of discontinued operation - (27) Financing activities:
(Repayments on) borrowings from notes payable to banks, net (1,000)
3,000 Repayments of long-term debt (874) (805) Dividends paid (548)
(403) Repurchase of common stock (1,112) - Credit facility
origination and amendment fees - (105) Other (10) - Net cash (used
in) provided by financing activities of continuing operations
(3,544) 1,687 Net increase in cash and cash equivalents 222 365
Cash and cash equivalents, beginning of period 953 134 Cash and
cash equivalents, end of period $1,175 $499 DATASOURCE: Dover
Motorsports, Inc. CONTACT: Patrick J. Bagley, Sr. Vice
President-Finance, Dover Motorsports, +1-302-857-3745 Web site:
http://www.dovermotorsports.com/
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