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Press Release

DOVER MOTORSPORTS, INC. REPORTS HIGHER RESULTS FOR THE SECOND QUARTER

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

Net earnings for the quarter ended June 30, 2005 were $ 8,284,000 or $ .21 per diluted share compared with $ 5,163,000 or $ .13 per diluted share for the same period last year.  The second quarter 2005 results included $ 956,000 after taxes or $ .02 per diluted share from discontinued operations.  On June 10, 2005 the Company sold its interest in and related assets of the Toyota Grand Prix of Long Beach.  Accordingly, results for Long Beach, as well as the Company’s prior street races in other cities, are shown as discontinued operations for all periods reported.   

Earnings from continuing operations for the quarter ended June 30, 2005 increased by $ 2,160,000 or 41.8% to $ 7,328,000 over the comparable quarter of the prior year.  On a diluted per share basis, earnings from continuing operations in the second quarter of 2005 were $ .19 compared with $ .13 per share in the second quarter of the prior year. 

Overall, for the quarter ended June 30, 2005 revenues decreased by $ 1,309,000 to $ 41,854,000 from $ 43,163,000 in the second quarter of 2004.  The Company promoted six major events in the second quarter of 2005 compared with eight events in the second quarter of 2004.  A NASCAR Craftsman Truck Series event at our Memphis Motorsports Park facility, promoted in the second quarter of 2004 will be promoted in the third quarter of 2005; and the first of two NASCAR Busch Series events in Nashville was promoted in the first quarter in 2005 instead of during the second quarter as it was in the prior year.  In addition, the Gateway International Raceway NASCAR Busch Series event that was held in the second quarter of last year will be promoted in the third quarter this year.  Gateway’s Craftsman Truck Series event was held in the second quarter this year, whereas it was held in the third quarter last year.  The negative revenue impact in the second quarter of 2005 resulting from these changes in the schedule was $ 4,441,000.

For the quarter ended June 30, 2005 operating and marketing expenses decreased to $ 20,662,000 compared with $ 23,985,000 in the comparable quarter of 2004.  The overall decrease in operating expense in the second quarter of 2005 was primarily due to promoting two fewer events and the substitution of a NASCAR Craftsman Truck Series event for a NASCAR Busch Series event in Gateway. 

 General and administrative expenses were $ 3,297,000 in the second quarter of 2005 compared with $ 3,286,000 for the same quarter last year.  Higher wages, fringe benefit costs and outside contractor services in 2005 were primarily offset by lower legal claim costs.

Interest expense was $ 749,000 in the second quarter of 2005 compared with $ 954,000 in the second quarter of 2004.  Lower average amounts of debt outstanding and the reversal of $ 128,000 of interest from a pre-judgment claim in Nashville contributed to the lower expense in the second quarter of 2005.  The prior year’s second quarter results included $ 481,000 of interest income from the IRS related to a prior year income tax refund. 

The income tax provision for the quarter ended June 30, 2005 was $ 7,471,000 compared with $ 7,957,000 in the prior year.  The effective tax rate for the second quarter of 2005 was 50.5% compared with 60.6% in the prior year.  The decrease in the effective income tax rate for 2005 as compared to 2004 is due to an increase in the Company’s estimated annual consolidated pre-tax earnings.  The tax rates in both years were affected by state income tax expenses attributable to valuation allowances established on state net operating losses.

For six months ended June 30, 2005, revenues were $ 44,927,000 compared with $ 43,807,000 in the prior year.  The Company promoted seven major events in the first half of 2005 compared with eight in the first half of 2004.

For the six months ended June 30, 2005 earnings from continuing operations were $ 3,801,000 or $ .10 per diluted share compared with $ 2,510,000 or $ .06 per diluted share in the comparable period of the prior year. 

The Company’s financial position continued to improve during the first half of 2005 as cash provided by continuing operations was $ 11,054,000.  The prior year’s cash provided by continuing operations of $ 14,811,000 included $ 8,698,000 related to income tax refunds.  Cash provided by investing activities of continuing operations included proceeds from the sale of a discontinued operation, net of transaction costs, of $ 15,132,000, which was used principally to reduce indebtedness.  At June 30, 2005, indebtedness was $ 31,785,000, down $ 13,704,000 from the $ 45,489,000 that was outstanding six months earlier.

Capital spending was $ 7,822,000 in the first half of 2005 compared with $ 1,645,000 in the first half of the prior year.  The acquisition of additional land adjacent to our Dover facility represented a substantial portion of 2005’s capital spending.  The Company expects capital spending of $ 1,500,000 to $ 2,000,000 during the second half of the year.

CONSOLIDATED STATEMENT OF EARNINGS, BALANCE SHEET & CASH FLOWS

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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.

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.

 

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