DOVER MOTORSPORTS, INC. REPORTS IMPROVED RESULTS
FOR THE QUARTER ENDED MARCH 31, 2007
Dover Motorsports, Inc. (NYSE-Symbol: DVD) today reported its results for the quarter ended March 31, 2007.
Our net loss for the quarter ended March 31, 2007 was $ 3,560,000 or $ .10 per diluted share compared with $ 4,393,000 or $ .12 per diluted share for the compared period of the prior year.
The Company historically reports a loss in the first quarter due to the seasonality of the motorsports business. No major motorsports events were held during the first quarter of either 2007 or 2006. Track rentals and weekly drag racing events represented the majority of revenues in the first quarter of both years. For the quarter ended March 31, 2007, revenues were $ 882,000 compared with $ 801,000 in the first quarter of 2006.
Operating and marketing expenses for the quarter ended March 31, 2007 were $ 2,394,000 compared with $ 2,218,000 last year. Higher payroll and related benefit costs and utilities caused the increase in 2007.
In the quarter general and administrative expenses increased by $ 152,000 to $ 3,171,000 compared with $ 3,019,000 in the prior year. Most administrative expense categories experienced minor changes from the prior year, except real estate taxes, which increased by $ 192,000 from last year. Excluding real estate taxes, general and administrative expenses were slightly lower in the first quarter of 2007 than in the prior year.
Depreciation and amortization decreased by $ 854,000 in the first quarter of 2007 primarily due to the impact of an impairment charge at the Company’s three Midwest facilities recorded in September 2006. Net interest expense decreased by $ 228,000 in the first quarter of 2007 primarily due to lower average levels of indebtedness in 2007 as compared with 2006.
Loss before income tax benefit for the quarter ended March 31, 2007 was $ 7,098,000 compared with $ 7,933,000 in the prior year. The lower loss in 2007 was largely due to lower depreciation and interest expense.
The effective income tax rate for the first quarter of 2007 was 49.8% compared with 44.6% in the prior year. This 2007 rate reflects the estimated rate for the full year. The increase in the effective tax rate from the comparable period in the prior year was due to a change in the estimated annual consolidated pre-tax earnings for 2007 as compared to 2006 and the impact of a reversal of a tax contingency accrual in 2006.
The financial condition of the Company remained strong during the first quarter of 2007. Despite the pre-tax loss in the first quarter, cash flow provided by operations was a positive $ 2,095,000. Capital spending was $ 3,004,000 in the first quarter of 2007 compared with $ 787,000 in the first quarter of 2006. A substantial amount of capital spending in the first quarter represented various phases of the previously announced “Monster Makeover” in Dover. Also, the Company expects to spend approximately $ 6.0 – 7.0 million during the remainder of the year on this project.
At March 31, 2007, the Company’s indebtedness was $ 45,307,000 compared with $ 53,004,000 at March 31, 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. (NYSE: DVD) is a leading promoter of NASCAR sanctioned motorsports events whose subsidiaries own and operate Dover International Speedway in Dover, Del., and Nashville Superspeedway near Nashville. The company also plays host to the Firefly Music Festival, produced by Red Frog Events and Goldenvoice. For more information, visit www.DoverMotorsports.com.