Exhibit 99.1
FOR IMMEDIATE RELEASE | For further information, call: | |
Timothy R. Horne – Sr. Vice President - Finance | ||
Dover, Delaware, April 24, 2008 | (302) 857-3292 |
DOVER MOTORSPORTS, INC. REPORTS RESULTS
FOR THE QUARTER ENDED MARCH 31, 2008
Dover Motorsports, Inc. (NYSE – Symbol: DVD) today reported its results for the quarter ended March 31, 2008.
Revenues for the quarter were $2,512,000 compared with $882,000 in the first quarter of 2007. One major motorsports event was held during the first quarter of 2008 – the Pepsi 300 NASCAR Nationwide Series event at Nashville Superspeedway. No major events were held during the first quarter of 2007. Partially offsetting the increase in revenues from the Nationwide Series event was a decrease in revenues from track rental and weekly racing events due to inclement weather at our Memphis Motorsports Park facility in the first quarter of 2008.
The Company historically reports a loss in the first quarter due to the seasonality of our motorsports business. Net loss for the quarter ended March 31, 2008 was $4,148,000 or $.12 per diluted share compared with $3,560,000 or $.10 per diluted share for the comparable period of the prior year. Depreciation and amortization increased by $133,000 in the first quarter of 2008 primarily due to the additional skyboxes placed in service in Dover in June of 2007. Net interest expense increased by $184,000 in the first quarter of 2008 primarily due to an $86,000 increase in interest expense relating to FIN #48,Accounting for Uncertainty in Income Taxes, and additional borrowings under the Company’s credit line to fund its previously announced capital improvement program.
Operating and marketing expenses for the quarter ended March 31, 2008 were $4,610,000 compared with $2,394,000 last year, with the increase primarily attributable to the Nationwide Series event held during the quarter.
Loss before income tax benefit for the quarter ended March 31, 2008 was $7,997,000 compared with $7,098,000 in the first quarter of 2007.
The effective income tax rate for the first quarter of 2008 was 48.1% compared with 49.8% in the prior year. This 2008 rate reflects what we currently expect the effective rate to be for the full year.
The financial condition of the Company remained strong during the first quarter of 2008. Despite the pre-tax loss in the first quarter, cash flow provided by operations was $2,624,000. Capital spending was $1,598,000 in the first quarter of 2008 compared with $3,004,000 in the first quarter of 2007. The majority of the capital spending in the first quarter represented various phases of the Monster Makeover in Dover. The Company expects to spend approximately $4,600,000 during the remainder of the year on this project.
At March 31, 2008, the Company’s indebtedness was $46,398,000 compared with $45,307,000 at March 31, 2007.
The Company announced yesterday that its Board of Directors declared a regular quarterly dividend of $.015 per share. The dividend is payable on June 10, 2008 to shareholders of record at the close of business on May 10, 2008.
* * *
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 near Memphis, Tennessee; and Nashville Superspeedway near Nashville, Tennessee. For further information log on to www.dovermotorsports.com.
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
In Thousands, Except Per Share Amounts
(Unaudited)
Three Months Ended March 31, | ||||||||
2008 | 2007 | |||||||
Revenues: | ||||||||
Admissions | $ | 800 | $ | 87 | ||||
Event-related | 965 | 784 | ||||||
Broadcasting | 709 | — | ||||||
Other | 38 | 11 | ||||||
2,512 | 882 | |||||||
Expenses: | ||||||||
Operating and marketing | 4,610 | 2,394 | ||||||
General and administrative | 3,167 | 3,171 | ||||||
Depreciation and amortization | 1,662 | 1,529 | ||||||
9,439 | 7,094 | |||||||
Operating loss | (6,927 | ) | (6,212 | ) | ||||
Interest income | 31 | 43 | ||||||
Interest expense | (1,101 | ) | (929 | ) | ||||
Loss before income tax benefit | (7,997 | ) | (7,098 | ) | ||||
Income tax benefit | 3,849 | 3,538 | ||||||
Net loss | $ | (4,148 | ) | $ | (3,560 | ) | ||
Net loss per common share: | ||||||||
Basic | $ | (0.12 | ) | $ | (0.10 | ) | ||
Diluted | $ | (0.12 | ) | $ | (0.10 | ) | ||
Weighted average shares outstanding: | ||||||||
Basic | 35,903 | 35,866 | ||||||
Diluted | 35,903 | 35,866 |
DOVER MOTORSPORTS, INC.
CONSOLIDATED BALANCE SHEETS
In Thousands
(Unaudited)
March 31, 2008 | March 31, 2007 | December 31, 2007 | ||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 956 | $ | 1,312 | $ | 327 | ||||||
Accounts receivable | 5,127 | 5,209 | 1,722 | |||||||||
Inventories | 305 | 289 | 185 | |||||||||
Prepaid expenses and other | 3,142 | 4,550 | 1,773 | |||||||||
Receivable from Dover Downs Gaming & Entertainment, Inc. | — | 55 | 18 | |||||||||
Income taxes receivable | 177 | — | — | |||||||||
Deferred income taxes | 196 | 203 | 186 | |||||||||
Total current assets | 9,903 | 11,618 | 4,211 | |||||||||
Property and equipment, net | 159,142 | 153,986 | 157,748 | |||||||||
Restricted cash | 3,823 | 2,590 | 4,169 | |||||||||
Other assets, net | 1,531 | 1,175 | 1,578 | |||||||||
Deferred income taxes | 97 | — | — | |||||||||
Total assets | $ | 174,496 | $ | 169,369 | $ | 167,706 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 2,938 | $ | 838 | $ | 945 | ||||||
Accrued liabilities | 2,690 | 2,635 | 3,464 | |||||||||
Payable to Dover Downs Gaming & Entertainment, Inc. | 40 | — | — | |||||||||
Income taxes payable | — | 108 | 257 | |||||||||
Current portion of bonds payable | 1,130 | — | 111 | |||||||||
Deferred revenue | 22,294 | 24,340 | 8,689 | |||||||||
Total current liabilities | 29,092 | 27,921 | 13,466 | |||||||||
Revolving line of credit | 42,300 | 41,100 | 42,300 | |||||||||
Bonds payable | 2,968 | 4,207 | 4,098 | |||||||||
Liability for pension benefits | 805 | 865 | 736 | |||||||||
Other liabilities | 1,693 | 391 | 1,202 | |||||||||
Non current income taxes payable | 9,686 | 8,718 | 9,687 | |||||||||
Deferred income taxes | 16,651 | 15,957 | 20,101 | |||||||||
Total liabilities | 103,195 | 99,159 | 91,590 | |||||||||
Stockholders’ equity: | ||||||||||||
Common stock | 1,684 | 1,647 | 1,672 | |||||||||
Class A common stock | 1,952 | 1,977 | 1,952 | |||||||||
Additional paid-in capital | 99,911 | 99,496 | 99,849 | |||||||||
Accumulated deficit | (31,197 | ) | (32,175 | ) | (26,503 | ) | ||||||
Accumulated other comprehensive loss | (1,049 | ) | (735 | ) | (854 | ) | ||||||
Total stockholders’ equity | 71,301 | 70,210 | 76,116 | |||||||||
Total liabilities and stockholders’ equity | $ | 174,496 | $ | 169,369 | $ | 167,706 | ||||||
DOVER MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
(Unaudited)
Three Months Ended March 31, | ||||||||
2008 | 2007 | |||||||
Operating activities: | ||||||||
Net loss | $ | (4,148 | ) | $ | (3,560 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,662 | 1,529 | ||||||
Amortization of credit facility fees | 48 | 45 | ||||||
Stock-based compensation | 160 | 124 | ||||||
Deferred income taxes | (3,426 | ) | (3,088 | ) | ||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (3,405 | ) | (2,274 | ) | ||||
Inventories | (120 | ) | (45 | ) | ||||
Prepaid expenses and other | (1,416 | ) | (2,781 | ) | ||||
Receivable from/payable to Dover Downs Gaming & Entertainment, Inc. | 58 | (46 | ) | |||||
Income taxes receivable/payable | (434 | ) | (370 | ) | ||||
Accounts payable | 552 | (1,100 | ) | |||||
Accrued liabilities | (774 | ) | (765 | ) | ||||
Deferred revenue | 13,605 | 14,332 | ||||||
Other liabilities | 262 | 94 | ||||||
Net cash provided by operating activities | 2,624 | 2,095 | ||||||
Investing activities: | ||||||||
Capital expenditures | (1,598 | ) | (3,004 | ) | ||||
Restricted cash | 346 | 1,094 | ||||||
Net cash used in investing activities | (1,252 | ) | (1,910 | ) | ||||
Financing activities: | ||||||||
Borrowings from revolving line of credit | 3,500 | 6,300 | ||||||
Repayments on revolving line of credit | (3,500 | ) | (4,200 | ) | ||||
Repayments of bonds payable | (111 | ) | (699 | ) | ||||
Dividends paid | (546 | ) | (544 | ) | ||||
Repurchase of common stock | (95 | ) | (25 | ) | ||||
Excess tax benefit (expense) on stock awards | 9 | (3 | ) | |||||
Net cash (used in) provided by financing activities | (743 | ) | 829 | |||||
Net increase in cash and cash equivalents | 629 | 1,014 | ||||||
Cash and cash equivalents, beginning of period | 327 | 298 | ||||||
Cash and cash equivalents, end of period | $ | 956 | $ | 1,312 | ||||