Speedway Motorsports Reports Record Results
CONCORD, N.C., Feb. 12 Speedway Motorsports, Inc. today reported record revenues and earnings for 2001. Total revenues for the fourth quarter increased 5% or $4.2 million to $80.9 million compared to last year. Net income increased 8% or $542,000 to $7.7 million, and diluted earnings per share increased $0.01 or 6% to $0.18 exceeding revised expectations, excluding current quarter non-recurring pre-tax income of $4.8 million, $2.9 million net of tax or $0.07 per diluted share, related to settlement of a cancelled Championship Auto Racing Teams (CART) race at Texas Motor Speedway. Including such non-recurring income, fourth quarter 2001 net income increased $3.5 million or 49% to $10.6 million and diluted earnings per share increased $0.08 or 47% to $0.25.
For the year ended December 31, 2001, total revenues increased 6% or $22.4 million to $376.7 million, net income increased 23% or $10.7 million to $57.6 million, and diluted earnings per share increased 22% or $0.24 to $1.34, compared to last year. Excluding non-recurring amounts in fiscal 2001 and 2000, and the cumulative effect of an accounting change in 2000, full year net income increased 13% or $6.7 million and diluted earnings per share increased 13% or $0.15. Fiscal year 2001 results reflect non-recurring pre-tax income of $1.4 million, $826,000 net of tax or $0.02 per diluted share, related to the CART settlement net of associated race expenses reported in the second quarter 2001. Fiscal year 2000 results reflect a non-recurring pre-tax charge of $3.2 million, $1.9 million net of tax or $0.04 per diluted share, related to the resolution of concession contract rights at Sears Point Raceway. The accounting change affected revenue recognition for Speedway Club membership fees and reduced net income by $1.3 million and diluted earnings per share by $0.03 in fiscal 2000.
In the fourth quarter, Lowe's Motor Speedway hosted the UAW-GM Quality 500 NASCAR Winston Cup Series and Little Trees 300 NASCAR Busch Series racing events, and Atlanta Motor Speedway hosted the season finale NAPA 500 NASCAR Winston Cup Series and companion PORK - The Other White Meat ARCA Series 400 racing events. Also, Texas Motor Speedway hosted the NASCAR Craftsman Truck Series Silverado 350 and Indy Racing Northern Light Series (IRL) Chevy 500 racing events rescheduled from the third quarter following the September 11, 2001 incidents.
``The fourth quarter turned out well despite our racing events being hosted under a combination of circumstances never before encountered,'' stated H.A. ``Humpy'' Wheeler, chief operating officer and president of Speedway Motorsports. Attendance and corporate spending were negatively impacted by public concerns over additional incidents, air travel, and difficult economic conditions, as well as the substantial lead by Jeff Gordon in the Winston Cup Series championship points race. Despite these challenges, we continue to report consecutive year-over-year revenue and operating growth. These results prove to us that our traditional core fan base remains solid.``
``We, like most, are glad to have 2001 behind us, and are looking forward to 2002 with more enthusiasm and determination than ever,'' stated O. Bruton Smith, chairman and chief executive officer of Speedway Motorsports. ``We are extremely excited about showcasing our newly-modernized and expanded Sears Point Raceway and beginning our partnership with Levy Restaurants, the market leader in premium foodservice at sports and entertainment facilities. The 38% year-over-year growth in Winston Cup television ratings, along with a 36% increase in the number of households, clearly demonstrate that the ongoing strength of motorsports racing is attracting ever-larger and widening demographic audiences. We are well positioned for the inevitable future upturn in economic conditions and to capitalize on the industry's next growth cycle.''
``Challenging economic conditions and air travel concerns continue to affect near-term consumer and corporate spending sentiment and earnings visibility,'' stated William R. Brooks, chief financial officer of Speedway Motorsports. ``Assuming current industry and economic trends continue, the Company estimates 2002 total revenues of $360-$380 million, net income of $59-$62 million, depreciation and interest of $60-$65 million and diluted earnings per share of $1.40-$1.45. Our estimates of 2002 quarterly diluted earnings per share range from $0.36-$0.40 in the first quarter, $0.77-$0.81 in the second quarter, $0.00-$0.04 in the third quarter, and $0.16-$0.20 in the fourth quarter. Full year revenue estimates reflect the recently announced long-term food and beverage agreement with Levy Restaurants and Compass Group assuming the contract closes as scheduled in the first quarter of 2002.''
The Company is adopting Statement of Financial Accounting Standards (SFAS) No. 142 ``Goodwill and Other Intangible Assets'' as of January 1, 2002. The estimated 2002 results above reflect the effects of eliminating goodwill amortization of approximately $1.5 million or $0.02 per diluted share in adopting SFAS No. 142. The Company continues to assess the effects of SFAS No. 142, and has until June 30, 2002 to assess initial goodwill impairment under transitional rules. The estimated 2002 results do not reflect non-recurring charges, if any, resulting from such assessment. The potential exists that approximately $5 million of goodwill associated with certain non-motorsports related reporting units of the Company, that were not considered impaired under previous accounting standards, could be considered impaired under the new accounting guidelines. Initial impairment, if any, would be reported as a non-cash cumulative effect of a change in accounting principle.
Speedway Motorsports is a leading marketer and promoter of motorsports entertainment in the United States. The Company owns and operates the following premier facilities: Atlanta Motor Speedway, Bristol Motor Speedway, Lowe's Motor Speedway at Charlotte, Las Vegas Motor Speedway, Sears Point Raceway and Texas Motor Speedway. The Company provides event food, beverage, and souvenir merchandising services through its Finish Line Events subsidiary, and manufactures and distributes smaller-scale, modified racing cars through its 600 Racing subsidiary. The Company also owns Performance Racing Network which broadcasts syndicated motorsports programming to over 750 stations nationwide. For more information, visit the Company's Website at www.gospeedway.com.
This news release contains forward-looking statements, particularly statements with regard to the Company's future operations and financial results. There are many factors that affect future events and trends of the Company's business including, but not limited to, consumer and corporate spending sentiment, air travel, governmental regulations, military actions, national or local catastrophic events, the success of and weather surrounding NASCAR, IRL, NHRA and other racing events, the success of expense reduction efforts, and economic conditions. These factors and other factors, including those contained in Exhibit 99.1 to the Company's Annual Report on Form 10-K, involve certain risks and uncertainties that could cause actual results or events to differ materially from management's views and expectations. Inclusion of any information or statement in this news release does not necessarily imply that such information or statement is material. The Company does not undertake any obligation to release publicly revised or updated forward-looking information, and such information included in this news release is based on information currently available and may not be reliable after this date
- Speedway Motorsports, Inc. and Subsidiaries
- Selected Financial Data - Unaudited
- For The Three and Twelve Months Ended December 31, 2001 and 2000
- (In thousands except per share amounts)
Three Months Twelve Months
Ended Ended
INCOME STATEMENT DATA 12/31/2001 12/31/2000 12/31/2001 12/31/2000
REVENUES:
Admissions $26,476 $29,683 $136,362 $142,160
Event related revenue 44,373 33,566 201,520 163,634
Other operating revenue 10,040 13,465 38,796 48,503
Total Revenues 80,889 76,714 376,678 354,297
EXPENSES AND OTHER:
Direct expense of events 27,066 25,153 131,801 117,229
Other direct operating expenses 10,953 13,358 36,292 44,432
General and administrative 15,827 14,331 60,313 53,794
Depreciation and amortization 8,536 7,576 33,182 31,192
Interest expense, net 5,745 6,602 24,382 26,973
Cancelled CART race
settlement, net (4,830) -- (1,361) --
Concession contract rights
resolution -- 48 -- 3,185
Other income, net 134 (910) (2,864) (1,740)
Total Expenses and Other 63,431 66,158 281,745 275,065
Income Before Income Taxes and
Cumulative Effect of
Accounting Change 17,458 10,556 94,933 79,232
Income Tax Provision 6,858 3,459 37,341 31,100
Income Before Cumulative Effect of
Accounting Change 10,600 7,097 57,592 48,132
Cumulative Effect of Accounting
Change for Club
Membership Fees -- -- -- (1,257)
NET INCOME $10,600 $7,097 $57,592 $46,875
Basic Earnings Per Share:
Before Cumulative Effect of
Accounting Change $0.25 $0.17 $1.38 $1.16
Accounting Change -- -- -- (0.03)
Basic Earnings Per Share $0.25 $0.17 $1.38 $1.13
Weighted average shares
outstanding 41,770 41,680 41,753 41,663
Diluted Earnings Per Share:
Before Cumulative Effect of
Accounting Change $0.25 $0.17 $1.34 $1.13
Accounting Change -- -- -- (0.03)
Diluted Earnings Per Share $0.25 $0.17 $1.34 $1.10
Weighted average shares
outstanding 44,249 44,559 44,374 44,715
Note: The Company changed its revenue recognition policies for Speedway
Club membership fees in 2000. As discussed in the Company's Annual
Report on Form 10-K for fiscal 2000, the operating results for the
twelve months ended December 31, 2000 reflect the cumulative effect
of the accounting change as of January 1, 2000.
Speedway Motorsports, Inc. and Subsidiaries
Selected Financial Data - Unaudited
As of December 31, 2001 and 2000
(In thousands)
Consolidated
BALANCE SHEET DATA 12/31/01 12/31/00
Cash and cash equivalents $93,980 $30,737
Total current assets 148,132 83,303
Property and equipment, net 813,154 798,481
Goodwill and other intangible assets, net 56,742 59,105
Total assets 1,063,578 991,957
Current liabilities 106,054 105,183
Revolving credit facility borrowings 90,000 90,000
Deferred race event income, net 71,578 72,052
Senior and convertible subordinated
long-term debt 306,061 318,788
Total long-term debt 397,313 410,097
Total liabilities 624,689 612,616
Total stockholders' equity $438,889 $379,341