DOVER MOTORSPORTS, INC.
REPORTS RESULTS FOR THE SECOND QUARTER
Dover Motorsports, Inc. (NYSE-Symbol: DVD) today reported its results for the second quarter ended June 30, 2007.
For the quarter ended June 30, 2007 revenues were ,806,000 compared with $ 45,003,000 in the second quarter of 2006. Earnings before income taxes were $ 11,285,000 compared with $ 15,012,000 in the comparable quarter of the prior year.
The Company promoted seven major events over five weekends in the second quarter of both 2007 and 2006. Adverse weather affected four of the five event weekends in 2007. Doverís Spring NASCAR NEXTEL Cup race was rained out on Sunday for the first time in 32 years. The impact of postponing our June Cup race from Sunday to Monday, together with the previously reported decrease in our television broadcast rights fees under the initial years of NASCARís new broadcast agreement, adversely affected our results. Decreased revenues from admissions, sponsorship, program sales, concessions and merchandise as well as higher expenses from an extra dayís activities resulted in a decrease in profitability. Results from Doverís Spring Friday and Saturday events were not impacted by weather and were comparable to the prior year.
For the quarter ended June 30, 2007 operating and marketing expenses were $ 23,780,000 compared with $ 23,272,000 in the comparable quarter of 2006. Higher advertising and promotional activities and the additional cost of operating the Dover facility over a four day weekend contributed to the increase in operating expense. General and administrative expenses of $ 3,135,000 in the second quarter of 2007 were 1% lower than the $ 3,173,000 for the same quarter last year.
The income tax provision for the quarter ended June 30, 2007 was $ 5,692,000 compared with $ 6,683,000 in the prior year. The effective tax rate for the second quarter was 50.4% in 2007 compared with 44.5% in the prior year. The higher rate in 2007 was due to the impact of a reversal of a tax contingency accrual in 2006 and a decrease in the Companyís estimated 2007 annual consolidated pre-tax earnings. The tax rates in both years were affected by state income tax expenses attributable to valuation allowances established on certain state net operating losses.
Net earnings for the quarter ended June 30, 2007 were $ 5,593,000 or $ .16 per diluted share compared with $ 8,329,000 or $ .23 per diluted share for the same period last year. The lower TV broadcast rights fees and the higher effective income tax rate each affected earnings by $ .02 per diluted share.
For six months ended June 30, 2007, revenues were $ 41,688,000 compared with $ 45,804,000 in the prior year. The Company promoted seven major events in the first half of both years. Net earnings were $ 2,033,000 or $ .06 per diluted share compared with $ 3,936,000 or $ .11 per diluted share in the comparable period of the prior year.
For the first half of 2007 cash provided by operations was $ 4,801,000 compared with $ 7,178,000 in the prior year. At June 30, 2007, indebtedness was $ 49,007,000 compared with $ 51,204,000 that was outstanding a year earlier.
Capital spending, primarily from the Monster Makeover project, was $ 8,745,000 in the first half of 2007 compared with $ 2,038,000 in the prior year. The Company expects capital spending of $ 1,500,000 to $ 2,000,000 during the second half of the 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. (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.