DOVER MOTORSPORTS, INC. REPORTS RESULTS
FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2006
Dover Motorsports, Inc. (NYSE-Symbol: DVD) today reported its results for the quarter and year ended December 31, 2006.
The Company’s fourth quarter is a seasonally slow quarter and typically results in a loss. We have historically only promoted one major event in the fourth quarter – the NASCAR Busch Series race at Memphis Motorsports Park.
For the quarter ended December 31, 2006, revenues were $ 3,029,000 compared with
$ 3,250,000 in the fourth quarter of 2005. Revenue from the Memphis Busch event was 8% higher in 2006 primarily due to higher attendance and increased TV broadcast rights fees. Revenue from other activities was lower in the fourth quarter of 2006.
Loss from continuing operations before income tax benefit for the quarter ended December 31, 2006 was $ 7,093,000 compared with $ 11,812,000 in the prior year, which included a $ 3,174,000 loss on early extinguishment of debt. Excluding this item, the fourth quarter loss from continuing operations before income tax benefit in 2006 improved by $ 1,545,000 over the prior year’s fourth quarter results, primarily due to lower administrative expenses, depreciation and interest expense.
For the quarter ended December 31, 2006, general and administrative expenses decreased by $ 773,000 from the comparable quarter last year, principally the result of lower wages, incentives and legal fees.
Depreciation decreased by $ 826,000 in the fourth quarter of 2006 compared with the same quarter last year because the asset base from the Company’s Midwest facilities was lower as a result of an impairment charge in September 2006.
Net interest expense decreased by $ 333,000 in the fourth quarter of 2006 primarily due to a lower average level of debt outstanding during the quarter.
The income tax benefit in the fourth quarter of 2006 was $ 2,287,000, which represented an effective tax rate of 32.2% compared with the prior year’s fourth quarter effective tax rate of 44.1%.
For the quarter ended December 31, 2006, loss from continuing operations was
$ 4,806,000 or $ .13 per diluted share compared with $ 6,598,000 or $ .18 per diluted share for the same period last year. The impact on after-tax results of the early extinguishment of debt in last year’s fourth quarter was $ 1,774,000 or $ .05 per diluted share. The accompanying schedule – “Reconciliation of GAAP (Loss) Earnings from Continuing Operations to Adjusted (Loss) Earnings from Continuing Operations” displays in tabular form the impact of this issue on the Company’s results.
For the year ended December 31, 2006 higher broadcast rights fees increased overall revenue slightly to $ 91,274,000 compared with $ 90,999,000 in the prior year.
For the year ended December 31, 2006 loss from continuing operations before income tax benefit was $ 52,837,000 compared with earnings of $ 8,387,000 in the prior year. The current years’ results included a non-cash impairment charge of $ 64,618,000 related primarily to the write-down of the Company’s Midwest properties. Both years’ results contained unusual items, which are shown on an adjusted basis on the accompanying reconciliation schedule. On an adjusted basis earnings per diluted share was $ .16 in 2006 and $ .15 in 2005.
Net cash flow provided by operating activities of continuing operations for the year ended December 31, 2006 was $ 17,525,000 compared with $ 18,854,000 for the prior year. Capital expenditures were $ 6,331,000 in 2006 compared with $ 8,675,000 last year. Also, the Company spent $ 1,954,000 repurchasing its common stock during 2006. Long-term debt and notes payable to banks decreased by $ 10,972,000 during 2006 to a balance of $ 43,906,000 at December 31, 2006.
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.