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Press Release

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.    

 

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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