Contact: DIRT MotorSports d/b/a World Racing Group
Brian Carter, Chief Executive Officer
Chris Dolack, VP Public Relations
704-795-7223 " cdolack@dirtcar.com
World Racing Group Reports $8.1 Million Third Quarter Revenue, Improved Operating Results and New Management Alignment
Files Third Quarter 2007 Results
CONCORD, N.C. - BUSINESS WIRE - November 15, 2007 - DIRT Motor Sports, Inc. d/b/a The World Racing Group (OTCBB: DMSP) announced today that it has filed its quarterly report for the three and nine month periods ending September 30, 2007.
Some of the Company's financial achievements through September 30, 2007, which are qualified in their entirety by the financial statements included in the Company's quarterly report on Form 10QSB which can be found at www.sec.gov:
Third quarter highlights:
- Revenue increase of 32% to $8.1 million from $6.1 million
- Decrease of operating loss before non-cash stock compensation and depreciation of 44% to $1.4 million from $2.6 million
- Operating loss decrease of 35% to $2.2 million from $3.4 million
- Decrease in net loss by 31% to $2.4 million from $3.5 million
Year to date highlights:
- Revenue increase of 36% to $16.7 million from $12.3 million
- Decrease of operating loss before non-cash stock compensation and depreciation of 33% to $5.4 million from $8.1 million
- Operating loss decrease of 30% to $7.5 million from $10.8 million
- Decrease in net loss by 54% to $8.6 million from $18.8 million
Additionally, the Company announced today a more streamlined executive management team. Brian Carter, will serve as the Company's Chief Executive Officer and Chief Financial Officer, Tom Deery will serve as President and Chief Operating Officer and Ben Geisler will serve as Chief Marketing Officer.
"The skills of each member of the management team have been aligned with the critical areas for success in 2008. Tom's vast experience, both managing NASCAR's weekly series and regional touring and his long history in track operations makes him the perfect person to manage the operations of our business," said Mr. Carter. "Ben's experience in managing and placing over $100 million in sponsorship and activation spending in his previous role with Next Marketing and his involvement with the operations of the business for the past couple seasons makes him very well suited to effectively attract and retain long term marketing partners."
Carter concluded with, "I am confident that all aspects of our business will thrive under the new management structure. I expect that the improvements made in 2007 will accelerate in 2008, building on the measurable growth in our racing and event operations and stronger growth in our sponsorship and advertising revenues. The continued revenue growth and decreases in our operating losses in the third quarter, in spite of spending $1.4 million on our television programming and production costs are very encouraging as we look forward to 2008."
About DIRT MotorSports, Inc., d/b/a World Racing Group
Based in Concord, N.C., World Racing Group (WRG) is a national sanctioning body, real-estate operator, and sports entertainment company serving the dirt racing industry. WRG sanctions sprint car racing under the World of Outlaws® banner, late model racing under the World of Outlaws Late Model Series(SM), big block modified racing under the Advance Auto Parts Super DIRTcar Series™ banner and sanctions more than 4,000-races a year under the DIRTcar™ Racing banner. In addition, WRG owns and operates seven speedways. To learn more about World Racing Group, visit worldracinggroup.com.
Safe Harbor Statement
This release may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are economic, competitive and other factors effecting the company's operations, events and markets, as well as other factors detailed in the company's filings with the Securities and Exchange Commission, which can be found at www.sec.gov.
(Tables follow)
DIRT Motor Sports, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2007 and 2006
(Unaudited)
| Three Months Ended: | Nine Months Ended: |
| 2007 | 2006 | 2007 | 2006 |
Revenues | | | | |
Race sanctioning and event fees | $ 3,764,432 | $ 2,470,954 | $ 7,395,722 | $ 4,242,586 |
Admission fees and ticket sales | 2,259,395 | 2,601,057 | 5,814,994 | 5,671,771 |
Sponsorship and advertising revenue | 1,844,047 | 694,370 | 3,043,977 | 1,646,940 |
Merchandise sales | 237,730 | 240,632 | 422,517 | 506,835 |
Other revenue | 11,810 | 126,386 | 69,586 | 215,299 |
Total revenues | 8,117,414 | 6,133,399 | 16,746,796 | 12,283,431 |
| | | | |
Operating expenses | | | | |
Track and event operations | 8,589,833 | 7,592,261 | 18,860,886 | 16,446,929 |
Sales and marketing | 405,860 | 446,737 | 1,284,036 | 945,926 |
Merchandise operations and cost of sales | 98,958 | 257,835 | 235,848 | 724,317 |
General and administrative | 473,948 | 431,731 | 1,749,351 | 2,246,878 |
Non-cash stock compensation | 553,924 | 627,840 | 1,493,796 | 2,112,322 |
Depreciation and amortization | 206,932 | 187,521 | 615,675 | 579,867 |
Total operating expenses | 10,329,455 | 9,543,925 | 24,239,592 | 23,056,239 |
| | | | |
Loss from operations | (2,212,041) | (3,410,526) | (7,492,796) | (10,772,808) |
| | | | |
Other (Expenses) Income | | | | |
Interest expense, net | (180,652) | (47,653) | (1,124,829) | (7,979,706) |
Total Other Expense | (180,652) | (47,653) | (1,124,829) | (7,979,706) |
| | | | |
Net (Loss) | $ (2,392,693) | $ (3,458,179) | $ (8,617,625) | $ (18,752,514) |
| | | | |
Dividends on preferred stock: | | | | |
Stated dividends, Series D | (530,520) | - | (792,146) | - |
Issuance costs, Series D Preferred Stock | - | - | - | (1,326,335) |
Exchange of Series C Preferred Stock | - | - | - | (1,250,000) |
| | | | |
Net loss applicable to common stock | $ (2,923,213) | $ (3,458,179) | $ (9,409,771) | $ (21,328,849) |
| | | | |
Net loss applicable to common stock
per common share - Basic and diluted | $ (0.20) | $ (0.25) | $ (0.64) | $ (1.65) |
Weighted average common shares outstanding - Basic and diluted | 14,729,873 | 14,042,408 | 14,619,777 | 12,890,746 |
| | | | |
DIRT Motor Sports, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2007 and December 31, 2006
(Unaudited)
| September 30, 2007 | December 31, 2006 |
ASSETS | | |
Current assets | | |
Cash and cash equivalents | $ 6,180,476 | $ 532,230 |
Accounts receivable - trade | 930,728 | 223,065 |
Inventory | 61,391 | 110,077 |
Prepaid expenses and other current assets | 1,839,267 | 330,943 |
Total current assets | 9,011,862 | 1,196,315 |
Land, buildings and equipment, net | 10,398,392 | 10,447,633 |
Trademarks | 100,000 | 100,000 |
Goodwill, net of impairment of $10,320,537 | - | - |
Prepaid Expenses - long term | 41,666 | 166,667 |
Other assets, net of amortization of $69,002 in 2007 and $55,331 in 2006 | 645,727 | 140,122 |
Total assets | $ 20,197,647 | $ 12,050,737 |
| | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | |
Current liabilities | | |
Accounts payable | $ 1,170,250 | $ 474,781 |
Accrued liabilities | 3,085,269 | 1,147,749 |
Deferred revenues | 532,206 | 129,424 |
Notes payable | 185,368 | 713,008 |
Total current liabilities | 4,973,093 | 2,464,962 |
Notes payable, long-term, net of discount of $2,795,517 at September 30, 2007 | 13,357,506 | 4,001,711 |
Total liabilities | 18,330,599 | 6,466,673 |
| | |
Stockholders' Equity | | |
Series D Preferred stock, $0.01 par value; 20,000 shares authorized; 17,684 and
17,875 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively |
53,844,452
| 53,624,538 |
Series E Preferred stock, $0.01 par value; 50,000 shares authorized; 3,374 shares issued and
outstanding at September 30, 2007 | 34 | - |
Common stock, $0.0001 par value; 100,000,000 shares authorized;16,498,990
and 14,374,496 shares issued and outstanding at September 30, 2007 and
December 31, 2006, respectively | 1,650 | 1,438 |
Additional paid-in capital | 17,364,500 | 12,684,051 |
Accumulated deficit | (69,343,588) | (60,725,963) |
Total stockholders' equity | 1,867,048 | 5,584,064 |
Total liabilities and stockholders' equity | $ 20,197,647 | $ 12,050,737 |
