Dover Motorsports (DVD) 8-K Dover Motorsports, Inc. Reports a 64% Increase

Exhibit 99.1

FOR IMMEDIATE RELEASE	For further information, call:
	Patrick J. Bagley, Sr. Vice President-Finance
Dover, Delaware, October 27, 2005	(302) 857-3745

DOVER MOTORSPORTS, INC. REPORTS A 64% INCREASE

IN NET EARNINGS FOR THE THIRD QUARTER

Dover Motorsports, Inc. (NYSE-Symbol: DVD) today reported its results for the third quarter ended September 30, 2005.

Net earnings for the quarter ended September 30, 2005 increased by 64% to $6,772,000 compared with $4,136,000 for the same period last year. Earnings from continuing operations per diluted share increased by 55% for the quarter ended September 30, 2005 to $.17 compared with $.11 for the same period last year. Earnings from continuing operations before income taxes for the quarter ended September 30, 2005 increased by $1,969,000, or 18%, to $12,936,000 compared with $10,967,000 in the comparable quarter of the prior year. Improvements at the Company’s fall Dover NASCAR weekend events and the inclusion of Gateway’s NASCAR Busch Series event contributed to the increase in earnings from continuing operations before income taxes.

Revenues increased by $5,409,000 to $42,822,000 for the quarter ended September 30, 2005 compared with $37,413,000 in the third quarter of 2004. The Company promoted a total of seven major motorsports events in the third quarter of 2005 compared with six events in the third quarter of 2004. The extra event in 2005 was the Gateway NASCAR Busch Series event, which was held during the second quarter of 2004. In addition, the Gateway Craftsman Truck Series event that was held in the third quarter of 2004 was promoted in the second quarter of 2005 and the Memphis Truck event that was held in the second quarter of 2004 was promoted this year in the third quarter. Broadcasting and admissions revenues for comparable NASCAR events all increased over the same period of the prior year.

Operating and marketing expenses were $23,436,000 for the quarter ended September 30, 2005 compared with $19,634,000 in the comparable quarter of 2004. Direct operating expenses from those third quarter events that were not in the prior year’s third quarter represented $2,648,000 of the increase in operating expense.

General and administrative expenses were $3,324,000 in the third quarter of 2005 compared with $3,498,000 for the same quarter last year. Administrative expenses in 2004 included $267,000 for a judgment entered into against the Company related to a claim from a prior year.

Net interest expense was $268,000 lower in the third quarter of 2005 compared with the same quarter of the prior year primarily due to lower average amounts outstanding on the Company’s bank credit facility during most of the third quarter of 2005. On September 10, the Company closed on a self-tender offer, which required borrowings of approximately $28 million. The impact of higher short-term interest rates in 2005 was virtually offset by narrower spreads on the Company’s bank facility during this period. Interest expense in the third quarter of 2004 also included $115,000 of pre-judgment interest related to the claim mentioned earlier.

The Company’s effective income tax rates in the third quarter of 2005 and 2004 were 47.6% and 58.8%, respectively. The decrease in the effective income tax rate from the comparable period in the prior year was due to an increase in the Company’s estimated annual consolidated pre-tax earnings for 2005 as compared to 2004.

For the nine months ended September 30, 2005, revenues were $87,749,000 compared with $81,220,000 in the prior year. The Company promoted 14 major events in the first nine months of both years. For the nine months ended September 30, 2005 net earnings increased by 83% to $11,174,000 compared with $6,113,000 for the prior year. Earnings from continuing operations per diluted share increased by 53% to $.26 compared with $.17 last year.

The Company’s financial position during the first nine months of 2005 remained stable. Cash flow from continuing operations was $16,591,000 compared with $14,259,000 for the first nine months of last year. At September 30, 2005, indebtedness was $56,285,000, compared with $46,288,000 that was outstanding a year earlier. The increase in debt was primarily due to the tender offer mentioned earlier.

Capital spending was $8,582,000 for the nine month period ended September 30, 2005 compared with $2,657,000 in the same period of the prior year.

* * *

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; Nashville Superspeedway near Nashville, Tennessee; Gateway International Raceway near St. Louis, Missouri; and Memphis Motorsports Park in Memphis, Tennessee.

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENT OF EARNINGS

In Thousands, Except Per Share Amounts

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Revenues:
Admissions	$	18,427		$	15,790		$	36,383		$	33,684
Event-related		12,625			12,468			25,444			25,836
Broadcasting		11,618			9,133			25,619			21,638
Other		152			22			303			62
		42,822			37,413			87,749			81,220
Expenses:
Operating and marketing		23,436			19,634			48,366			45,375
General and administrative		3,324			3,498			9,714			9,828
Depreciation and amortization		2,386			2,306			7,053			6,884
		29,146			25,438			65,133			62,087
Operating earnings		13,676			11,975			22,616			19,133
Interest income		7			1			15			485
Interest expense		(747	)		(1,009	)		(2,432	)		(3,102	)
Earnings from continuing operations before income taxes		12,936			10,967			20,199			16,516
Income taxes		6,164			6,453			9,626			9,492
Earnings from continuing operations		6,772			4,514			10,573			7,024
(Loss) earnings from discontinued operation (including gain on disposal of $5,143 for the nine months ended September 30, 2005), net of income taxes of $3,574 for the nine months ended September 30, 2005, and income tax benefits of $204 and $514 for the three and nine months ended September 30, 2004		—			(378	)		601			(911	)
Net earnings	$	6,772		$	4,136		$	11,174		$	6,113
Earnings per common share - basic:
Continuing operations	$	0.17		$	0.11		$	0.26		$	0.17
Discontinued operation		—			(0.01	)		0.02			(0.02	)
Net earnings	$	0.17		$	0.10		$	0.28		$	0.15
Earnings per common share - diluted:
Continuing operations	$	0.17		$	0.11		$	0.26		$	0.17
Discontinued operation		—			(0.01	)		0.02			(0.02	)
Net earnings	$	0.17		$	0.10		$	0.28		$	0.15
Average shares outstanding:
- Basic		39,407			40,037			39,851			40,008
- Diluted		39,656			40,052			40,011			40,027

DOVER MOTORSPORTS, INC.

CONSOLIDATED BALANCE SHEET

In Thousands

(Unaudited)

	September 30, 2005			September 30, 2004			December 31, 2004
ASSETS
Current assets:
Cash and cash equivalents	$	1,930		$	857		$	134
Accounts receivable		10,038			9,108			2,336
Inventories		205			240			208
Prepaid expenses and other		1,566			1,535			1,812
Receivable from Dover Downs Gaming & Entertainment, Inc.		—			105			—
Deferred income taxes		426			379			675
Current assets of discontinued operation		13			1,671			2,593
Total current assets		14,178			13,895			7,758
Property and equipment, net		223,280			221,073			220,949
Restricted cash		3,217			3,568			3,571
Other assets, net		1,326			1,390			1,385
Deferred income taxes		45			46			46
Goodwill		2,487			2,487			2,487
Non-current assets of discontinued operation		—			11,908			12,054
Total assets	$	244,533		$	254,367		$	248,250
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,703		$	1,688		$	1,898
Accrued liabilities		6,112			6,024			5,323
Payable to Dover Downs Gaming & Entertainment, Inc.		—			—			2
Income taxes payable		1,866			1,049			324
Current portion of long-term debt		875			805			805
Deferred revenue		4,865			5,266			9,306
Current liabilities of discontinued operation		355			1,874			2,633
Total current liabilities		16,776			16,706			20,291
Notes payable to banks		38,600			27,800			27,000
Long-term debt		16,810			17,683			17,684
Other liabilities		42			64			64
Deferred income taxes		51,942			49,528			44,745
Stockholders’ equity:
Common stock		1,544			1,688			1,695
Class A common stock		2,092			2,330			2,324
Additional paid-in capital		101,537			128,483			128,542
Retained earnings		16,597			10,909			6,834
Accumulated other comprehensive loss		(525	)		(403	)		(527	)
Deferred compensation		(882	)		(421	)		(402	)
Total stockholders’ equity		120,363			142,586			138,466
Total liabilities and stockholders’ equity	$	244,533		$	254,367		$	248,250

DOVER MOTORSPORTS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

In Thousands

(Unaudited)

	Nine Months Ended September 30,
	2005			2004
Operating activities:
Net earnings	$	11,174		$	6,113
Adjustments to reconcile net earnings to net cash provided by operating activities of continuing operations:
Depreciation and amortization		7,053			6,884
Amortization of credit facility fees		117			220
Amortization of deferred compensation		156			32
Tax benefit of stock options exercised		—			6
Deferred income taxes		7,447			7,674
(Earnings) loss of discontinued operation, net		(601	)		911
Changes in assets and liabilities:
Accounts receivable		(7,702	)		(7,348	)
Inventories		3			(25	)
Prepaid expenses and other		273			(62	)
Accounts payable		805			(1,598	)
Accrued liabilities		789			1,880
Payable to/receivable from Dover Downs Gaming & Entertainment, Inc.		(2	)		(9	)
Income taxes payable/receivable		1,542			3,547
Deferred revenue		(4,441	)		(3,945	)
Other liabilities		(22	)		(21	)
Net cash provided by operating activities of continuing operations		16,591			14,259
Investing activities:
Capital expenditures		(8,582	)		(2,657	)
Proceeds from sale of discontinued operation, net of transaction costs		15,132			—
Restricted cash		354			(135	)
Net cash provided by (used in) investing activities of continuing operations		6,904			(2,792	)
Financing activities:
Borrowings from (repayments on) notes payable to banks, net		11,600			(15,245	)
Repayments of long-term debt		(804	)		(744	)
Repurchase of common stock		(28,518	)		—
Proceeds from stock options exercised		494			259
Credit facility origination and amendment fees		(145	)		(332	)
Dividends paid		(1,411	)		(1,203	)
Net cash used in financing activities of continuing operations		(18,784	)		(17,265	)
Net cash (used in) provided by discontinued operation		(2,915	)		3,307
Net increase (decrease) in cash and cash equivalents		1,796			(2,491	)
Cash and cash equivalents, beginning of period		134			3,348
Cash and cash equivalents, end of period	$	1,930		$	857