DVD Dover Motorsports Inc

Dover Motorsports, Inc. (NYSE:DVD) today reported its results for the second quarter ended June 30, 2009.

The Company promoted seven major events over five weekends in the second quarter of 2009 compared with six major events in 2008. The first NASCAR Nationwide Series event at Nashville Superspeedway was held in the second quarter of 2009 compared with the first quarter of 2008.

For the quarter ended June 30, 2009 revenues were $35,618,000 compared with $39,415,000 in the second quarter of 2008. The decrease in revenues is due to lower attendance resulting in reduced admissions revenue and event-related revenue. The reduced revenues were partially offset by higher broadcasting and other revenues due to promoting an extra event in the second quarter of 2009 compared to 2008.

The Company’s NASCAR triple-header in Dover saw lower attendance, sponsorships and corporate spending as a result of weak overall economic conditions.

Operating and marketing expenses were $23,147,000 in the second quarter of 2009 as compared to $22,108,000 in the second quarter of 2008. The increase is primarily related to the change in our motorsports event calendar discussed above.

General and administrative expenses of $3,099,000 in the second quarter of 2009 were consistent with $3,122,000 for the same quarter last year.

Depreciation and amortization expense was $1,617,000 in the quarter ended June 30, 2009 compared to $1,704,000 for the comparable 2008 period. The decrease resulted primarily from the cessation of depreciation expense at our Memphis track which is currently classified as held-for-sale and a reduction in our depreciable asset base resulting from an impairment charge recorded in the fourth quarter of 2008, partially offset by depreciation on assets placed in service in June of 2008 related to our Monster Makeover project in Dover, Delaware. Net interest expense was $732,000 for the quarter ended June 30, 2009 compared to $1,032,000 in the second quarter of 2008. The decrease was due to lower average interest rates.

Earnings before income taxes decreased to $6,921,000 in the second quarter of 2009 compared with $11,449,000 in the comparable quarter of the prior year.

The effective tax rate for the second quarter of 2009 was 43.8% compared to 48.9% in the prior year. The decrease in the effective tax rate was primarily the result of a reduction in our combined effective state income tax rate based upon the mix of state taxable income (loss) for the current quarter.

Net earnings for the quarter ended June 30, 2009 were $3,888,000 or $0.11 per diluted share compared with $5,847,000 or $0.16 per diluted share for the same period last year.

For the six months ended June 30, 2009, revenues were $35,703,000 compared with $41,927,000 in the prior year. The Company promoted seven major events in the first half of both years. Net (loss) earnings were $(800,000) or $(0.02) per diluted share compared with $1,699,000 or $0.05 per diluted share in the comparable period of the prior year.

For the first half of 2009 cash provided by operations was $9,997,000 compared with $4,644,000 in the prior year. Capital spending, primarily associated with the Monster Makeover project at Dover International Speedway, was $1,817,000 in the first half of 2009 compared with $6,082,000 in the comparable period in the prior year.

As previously reported on Form 8-K dated January 30, 2009 and updated on April 24, 2009 and July 8, 2009, our wholly-owned subsidiary, Midwest Racing, Inc., entered into a stock purchase agreement dated January 28, 2009, to sell Memphis Motorsports Park to Gulf Coast Entertainment, L.L.C. Under the terms of the agreement, Midwest Racing, Inc. will sell all of the stock of its wholly-owned subsidiary, Memphis International Motorsports Corporation, the owner of Memphis Motorsports Park, to Gulf Coast Entertainment for $10 million in cash and a two percent non-dilutable interest in Gulf Coast Entertainment.

Closing under the stock purchase agreement had been scheduled for June 29, 2009, but Gulf Coast has not finalized its project financing. We are currently in the process of negotiating an amendment to the stock purchase agreement which would allow the buyer to extend the closing date to September 29, 2009 for additional consideration.

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 two of the premier sanctioning bodies in motorsports – NASCAR and NHRA. 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 near Memphis, Tennessee.

  DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS In Thousands, Except Per Share Amounts (Unaudited)         Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Revenues: Admissions $ 11,922 $ 13,936 $ 11,953 $ 14,736 Event-related 8,751 11,387 8,779 12,352 Broadcasting 14,938 14,077 14,938 14,786 Other   7     15     33     53     35,618     39,415     35,703     41,927     Expenses: Operating and marketing 23,147 22,108 25,346 26,718 General and administrative 3,099 3,122 6,157 6,289 Depreciation and amortization   1,617     1,704     3,182     3,366     27,863     26,934     34,685     36,373     Operating earnings 7,755 12,481 1,018 5,554   Interest income 3 19 7 50 Interest expense (735 ) (1,051 ) (1,519 ) (2,152 ) Loss on sale of investments   (102 )   -     (102 )   -     Earnings (loss) before income tax expense 6,921 11,449 (596 ) 3,452   Income tax expense   3,033     5,602     204     1,753     Net earnings (loss) $ 3,888   $ 5,847   $ (800 ) $ 1,699     Net earnings (loss) per common share: Basic $ 0.11   $ 0.16   $ (0.02 ) $ 0.05   Diluted $ 0.11   $ 0.16   $ (0.02 ) $ 0.05     Weighted average shares outstanding: Basic 36,021 35,940 36,016 35,922 Diluted 36,021 36,030 36,016 36,021         DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEETS In Thousands (Unaudited)   June 30, June 30, December 31, 2009 2008 2008   ASSETS Current assets: Cash and cash equivalents $ 514 $ 1,118 $ 288 Accounts receivable 2,923 13,172 1,950 Inventories 350 421 273 Prepaid expenses and other 1,902 3,771 1,697 Receivable from Dover Downs Gaming & Entertainment, Inc. 9 - 11 Prepaid income taxes 43 346 - Deferred income taxes 111 203 152 Current assets held for sale   10,798     -     -   Total current assets 16,650 19,031 4,371   Property and equipment, net 133,283 160,387 144,684 Restricted cash 3,894 3,894 5,219 Other assets, net 576 1,548 594 Deferred income taxes   263     83     311   Total assets $ 154,666   $ 184,943   $ 155,179     LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,705 $ 3,086 $ 604 Accrued liabilities 3,518 4,525 2,767 Payable to Dover Downs Gaming & Entertainment, Inc. - 1 - Income taxes payable - - 159 Current portion of bonds payable 1,235 1,130 1,130 Deferred revenue 11,869 17,213 6,962 Current liabilities held for sale   3,442     -     -   Total current liabilities 22,769 25,955 11,622   Revolving line of credit 34,800 45,400 42,200 Bonds payable 1,737 2,969 2,971 Liability for pension benefits 2,680 774 2,555 Other liabilities 1,994 1,620 1,920 Non current income taxes payable 8,837 9,737 9,630 Deferred income taxes   15,479     21,386     16,834   Total liabilities   88,296     107,841     87,732     Stockholders' equity: Common stock 1,812 1,698 1,787 Class A common stock 1,851 1,942 1,851 Additional paid-in capital 100,725 100,256 100,539 Accumulated deficit (35,899 ) (25,896 ) (34,366 ) Accumulated other comprehensive loss   (2,119 )   (898 )   (2,364 ) Total stockholders' equity   66,370     77,102     67,447   Total liabilities and stockholders' equity $ 154,666   $ 184,943   $ 155,179           DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS In Thousands (Unaudited)   Six Months Ended June 30, 2009 2008   Operating activities: Net (loss) earnings $ (800 ) $ 1,699

Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:

Depreciation and amortization 3,182 3,366 Amortization of credit facility fees 80 94 Stock-based compensation 283 317 Deferred income taxes (355 ) 1,262 Changes in assets and liabilities: Accounts receivable (1,245 ) (11,450 ) Inventories (135 ) (236 ) Prepaid expenses and other (577 ) (2,081 ) Receivable from/payable to Dover Downs Gaming & Entertainment, Inc. 2 19 Prepaid income taxes/income taxes payable (132 ) (603 ) Accounts payable 2,152 2,252 Accrued liabilities 1,210 1,061 Deferred revenue 5,831 8,524 Other liabilities   501     420   Net cash provided by operating activities   9,997     4,644     Investing activities: Capital expenditures (1,817 ) (6,082 ) Restricted cash 1,325 275 Proceeds from sale of available-for-sale securities 187 - Purchase of available-for-sale securities   (185 )   (50 ) Net cash used in investing activities   (490 )   (5,857 )   Financing activities: Borrowings from revolving line of credit 15,600 18,600 Repayments on revolving line of credit (23,000 ) (15,500 ) Repayments of bonds payable (1,129 ) (110 ) Dividends paid (733 ) (1,092 ) Repurchase of common stock (19 ) (137 ) Proceeds from stock options exercised - 216 Excess tax benefit on stock awards   -     27   Net cash (used in) provided by financing activities   (9,281 )   2,004     Net increase in cash and cash equivalents 226 791 Cash and cash equivalents, beginning of period   288     327   Cash and cash equivalents, end of period $ 514   $ 1,118