Championship Auto Racing Teams Reports Fourth Quarter and
Year-End 2000 Results
DETROIT, Feb. 23 Championship Auto Racing Teams, Inc.
today announced revenues, expenses, net income and earnings per
share for the fourth quarter and year-ended December 31, 2000.
The number of events held in a particular quarter will effect the
comparability of earnings information from quarter to quarter. CART conducted
three events in the fourth quarter of 2000 compared to two events in the same
period in the prior year.
Total revenues for the fourth quarter of 2000 were $14.5 million, an
increase of $3.5 million, or 32%, from the comparable quarter of 1999.
Total expenses for the fourth quarter of 2000 were $17.9 million, an
increase of $10.6 million, or 144%, from the comparable quarter of 1999.
Included in this increase was a pre-tax non-recurring charge of $6.3 million.
The $6.3 million charge resulted from a minimum guarantee commitment from
ISL Marketing AG (ISL) for 2000, which was payable in January 2001. In 1998,
ISL signed a nine (9) year contract to become CART's exclusive marketing agent
for solicitation of sponsorship agreements. The contract guaranteed CART a
minimum amount of sponsorship revenue for each year of the agreement.
Following recent discussions with ISL, it has been determined that ISL does
not intend to fulfill its commitment with respect to the remaining years of
the agreement under its original terms and collectability of the guarantee for
2000 is uncertain.
Net loss for the fourth quarter of 2000 was ($754,000) compared to net
income of $3.2 million in the fourth quarter of 1999. On a diluted per common
share basis, the loss is ($0.05) in 2000 compared to earnings of $0.20 in the
fourth quarter of 1999.
For the year ended December 31, 2000, revenues increased 9% to
$75.0 million from $68.8 million. Total expenses increased 33% to
$58.8 million from $44.3 million. The increase was partially attributable to
the charge regarding the ISL minimum guarantee as described previously and a
$2.8 million pre-tax non-recurring charge related to a severance agreement
with the Company's former President and CEO. Net income decreased 20% to
$15.2 million from $18.9 million. On a diluted per common share basis,
earnings were $0.97 compared to $1.19 for the year-ended December 31, 1999.
CART has added one additional race to the CART FedEx Championship Series
schedule and will have four inaugural races in 2001. The inaugural races will
be held in Mexico, Germany, England and Dallas, Texas. In addition, CART
expects to have 30 or more cars racing for the championship in 2001, an
increase of 20% from an average of 25 cars for the 2000 season.
"The addition of four inaugural race venues, additional teams, cars and
drivers show the increase in popularity and demand for CART races both
domestically and worldwide. We believe that this increased demand can provide
the impetus to expand CART's television presence on a worldwide basis and
attract new domestic and international sponsors," stated Joe Heitzler, the
Company's President/CEO. "As the worldwide appeal of our product continues to
expand, we remain confident that we have a strong base on which to grow our
sport and business in the future."
Championship Auto Racing Teams, Inc. will hold a teleconference today at
5:30pm ET. Those interested in participating in the conference call should
dial 1-888-790-1641 from both the United States and Canada. International
participants should call 712-257-3876. The password for the call is
"Championship" and the leader is Thomas Carter. Callers are asked to dial in
approximately five minutes prior to the starting time. An instant replay of
the call will be available until 11:59pm ET March 2, 2001, by dialing
1-800-685-0912.
Championship Auto Racing Teams, Inc. owns, operates and
markets the FedEx Championship Series. Champions Michael Andretti, Gil de
Ferran, Alex Zanardi and Jimmy Vasser are among the drivers who battle for the
FedEx Championship Series title on oval circuits as well as temporary and
permanent road courses. CART also owns and operates its top two development
series, the Dayton Indy Lights Championship and the Toyota Atlantic
Championship. Learn more about CART's open-wheel racing series at
http://www.cart.com.
Statements made in this release that state the Company's or management's
beliefs or expectations and which are not historical facts or which apply
prospectively are forward-looking statements. It is important to note that
the Company's actual results could differ materially from those contained or
implied by such forward-looking statements. Additional information concerning
factors that could cause actual results to differ materially from those in the
forward-looking statements is contained from time to time in the Company's SEC
filings including, but not limited to, the 10-K and subsequent 10-Q's. Copies
of those filings are available from the Company and the SEC.
Championship Auto Racing Teams, Inc.
Consolidated Balance Sheets
As of December 31, 2000 and 1999
(In Thousands)
December 31, December 31,
2000 1999
Assets
Current assets
Cash and cash equivalents $19,504 $7,216
Short-term investments 98,206 91,758
Accounts receivable - net 5,578 8,780
Current portion of notes receivable 2,535 819
Prepaid expenses 567 262
Inventory 151 311
Deferred income taxes 2,485 114
Total current assets 129,026 109,260
Notes receivable 147 2,485
Property and equipment - net 7,327 5,228
Goodwill - net 7,248 7,442
Other Assets 353 472
Total Assets $144,101 $124,887
Liabilities and stockholders' equity
Current liabilities
Accounts payable $1,975 $2,131
Accrued liabilities
Royalties 162 949
Payroll 1,571 660
Taxes 819 358
Other 1,316 801
Deferred revenue 2,452 4,881
Deposits 778 --
Total current liabilities 9,073 9,780
Deferred income taxes 1,134 777
Stockholders' equity
Capital stock 158 156
Additional paid-In capital 103,130 99,671
Retained earnings 29,978 14,825
Unrealized gain (loss) on investments 628 (322)
Total stockholders' equity 133,894 114,330
Total liabilities and stockholders' equity $144,101 $124,887
Championship Auto Racing Teams, Inc.
Consolidated Statement of Operations
For the Three and Twelve Months Ended December 31, 2000 and 1999
(in Thousands, Except Earnings (Loss) Per Share)
(Unaudited)
Qtr ended Qtr ended YTD YTD
December 31, December 31, December 31, December 31,
2000 1999 2000 1999
Revenues
Sanction fees $7,097 $4,491 $38,902 $35,689
Sponsorship revenue 5,282 4,147 21,063 19,150
TV revenue 875 476 5,501 5,018
Engine leases, rebuilds
and wheel sales 412 379 2,122 2,054
Other 876 1,546 7,460 6,865
Total revenues 14,542 11,039 75,048 68,776
Expenses
Race distributions 2,387 1,576 15,370 15,334
Race expenses 2,195 1,052 9,869 6,670
Cost of engine rebuilds
and wheel sales 34 70 652 610
Administrative and indirect
expenses 6,526 4,361 22,517 20,646
Bad debt 6,320 -- 6,320 --
Compensation expense -- -- 2,758 --
Depreciation and
amortization 445 285 1,352 1,048
Total expenses 17,907 7,344 58,838 44,308
Operating income
(loss) (3,365) 3,695 16,210 24,468
Interest income (net) 2,182 1,267 7,463 5,255
Income (loss) before
income taxes (1,183) 4,962 23,673 29,723
Income tax expense
(benefit) (429) 1,774 8,520 10,865
Net income (loss) $(754) $3,188 $15,153 18,858
Earnings (loss) per share
Basic $(0.05) $0.21 $0.97 $1.22
Diluted $(0.05) $0.20 $0.97 $1.19
Weighted average shares outstanding
Basic 15,731 15,427 15,624 15,427
Diluted 15,746 15,908 15,657 15,908
