DVD Dover Motorsports Inc

Dover Motorsports, Inc. Reports Results for the Quarter Ended March 31, 2004 DOVER, Del., April 29 /PRNewswire-FirstCall/ -- Dover Motorsports, Inc. today reported its results for the quarter ended March 31, 2004. 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 2004. Loss before income tax benefit for the quarter ended March 31, 2004 was $8,387,000, which was a $1,599,000 improvement over the prior year primarily due to a loss sustained at the 2003 St. Petersburg event, but also due to better results from other events and track rentals in 2004. Revenues were $1,160,000 compared with $3,967,000 in the first quarter of 2003. The decrease in revenues in 2004 was entirely due to the absence of the St. Petersburg event. Revenue from the Company's weekly and other events and track rentals in the first quarter of 2004 increased by 24% over the prior year's first quarter. Operating and marketing expenses for the quarter ended March 31, 2004 decreased by $4,145,000, principally as a result of not promoting the St. Petersburg event. On a comparable basis, operating and marketing expenses not associated with the St. Petersburg event were $74,000 higher than the prior year. For the quarter ended March 31, 2004, general and administrative expenses were $82,000 higher than the prior year. General and administrative expenses included $253,000 of costs from offices that have since been closed in St. Petersburg and Denver. Depreciation and amortization decreased by $234,000 in the first quarter of 2004 primarily due to a lower property and equipment base resulting from the write-off of assets at Denver and St. Petersburg in December 2003. Net interest expense decreased by $109,000 in the first quarter of 2004 due to lower average levels of indebtedness in 2004. The income tax benefit for the quarter ended March 31, 2004 was $5,201,000, which was the result of using the Company's expected estimated effective income tax rate of 62.0% for the full year. The increase in the effective tax rate from the comparable period in the prior year is principally due to an increase in state income tax expense attributable to valuation allowances established on state net operating losses. Net loss for the quarter ended March 31, 2004 was $3,186,000 or $.08 per diluted share compared with $4,993,000 or $.13 per diluted share for the comparable period of the prior year. The financial condition of the Company improved during the first quarter. Despite the expected seasonal loss from operations, cash flow from operations was a positive $8,712,000 in the first quarter of 2004. Virtually all of the Company's excess cash flow was used to reduce indebtedness, which decreased by $7,809,000 during the first quarter. Deferred revenue, an indicator of future ticket and sponsor sales, was $32,396,000 at March 31, 2004, up almost 4% from a year earlier. Capital spending was $799,000 in the first quarter of 2004 compared with $1,823,000 in the first quarter of 2003. At March 31, 2004, the Company's indebtedness was $54,468,000 compared with $61,000,000 a year ago and $78,636,000 at April 1, 2002, the date the Company spun-off its gaming operations. 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 marketer and promoter of motorsports entertainment 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, IRL, CART 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. 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, 2004 2003 Revenues $1,160 $3,967 Expenses: Operating and marketing 2,325 6,470 General and administrative 3,693 3,611 Depreciation and amortization 2,392 2,626 8,410 12,707 Operating loss (7,250) (8,740) Interest expense, net (1,137) (1,246) Loss before income tax benefit (8,387) (9,986) Income tax benefit 5,201 4,993 Net loss $(3,186) $(4,993) Net loss per common share: - Basic $(0.08) $(0.13) - Diluted $(0.08) $(0.13) Average shares outstanding: - Basic 39,994 39,734 - Diluted 39,994 39,734 DOVER MOTORSPORTS, INC. CONSOLIDATED BALANCE SHEET In Thousands (Unaudited) March 31, March 31, December 31, 2004 2003 2003 ASSETS Current assets: Cash and cash equivalents $4,336 $3,266 $3,348 Accounts receivable 10,000 9,820 2,643 Inventories 343 585 259 Prepaid expenses and other 4,954 4,459 1,691 Receivable from Dover Downs Gaming & Entertainment, Inc. - - 96 Income taxes receivable 363 5,385 5,819 Deferred income taxes 337 450 548 Total current assets 20,333 23,965 14,404 Property and equipment, net 228,031 244,183 229,603 Restricted cash 1,810 1,916 3,433 Other assets, net 1,563 1,990 1,434 Deferred income taxes 90 2,202 90 Goodwill 8,521 21,883 8,521 Total assets $260,348 $296,139 $257,485 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $2,798 $4,417 $3,333 Accrued liabilities 3,377 4,139 4,587 Payable to Dover Downs Gaming & Entertainment, Inc. 3 1,490 - Current portion of long-term debt 805 745 745 Deferred revenue 32,396 31,230 11,304 Total current liabilities 39,379 42,021 19,969 Notes payable to banks 35,980 41,770 43,045 Long-term debt 17,683 18,485 18,487 Other liabilities 64 107 85 Deferred income taxes 33,456 38,524 38,527 Stockholders' equity: Common stock 1,662 1,638 1,656 Class A common stock 2,338 2,345 2,344 Additional paid-in capital 127,783 127,235 127,783 Retained earnings 2,413 24,344 5,999 Accumulated other comprehensive loss (410) (330) (410) Total stockholders' equity 133,786 155,232 137,372 Total liabilities and stockholders' equity $260,348 $296,139 $257,485 DOVER MOTORSPORTS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS In Thousands (Unaudited) Three Months Ended March 31, 2004 2003 Operating activities: Net loss $(3,186) $(4,993) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,392 2,626 Amortization and write-off of credit facility fees 98 220 Deferred income taxes (4,840) 873 Changes in assets and liabilities: Accounts receivable (7,357) (6,294) Inventories (84) (203) Prepaid expenses and other (3,193) (567) Income taxes receivable 5,436 521 Accounts payable (535) 1,975 Accrued liabilities (1,210) (1,186) Payable to/receivable from Dover Downs Gaming & Entertainment, Inc. 99 697 Deferred revenue 21,092 19,150 Net cash provided by operating activities 8,712 12,819 Investing activities: Capital expenditures (799) (1,823) Restricted cash 1,623 1,767 Net cash provided by (used in) investing activities 824 (56) Financing activities: Repayments on revolving debt agreement, net (7,065) (9,745) Repayments of long-term debt (744) (684) Proceeds from stock options exercised - 90 Other liabilities (21) - Credit facility origination and amendment fees (318) (245) Dividends paid (400) (398) Net cash used in financing activities (8,548) (10,982) Net increase in cash and cash equivalents 988 1,781 Cash and cash equivalents, beginning of period 3,348 1,485 Cash and cash equivalents, end of period $4,336 $3,266 DATASOURCE: Dover Motorsports, Inc. CONTACT: Patrick J. Bagley, Sr. Vice President-Finance of Dover Motorsports, +1-302-857-3745 Web site: http://www.dovermotorsportsinc.com/

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