CART Reports Income Down $16 Million
DETROIT, Feb. 6 Championship Auto Racing Teams, Inc. today announced financial results for the fourth quarter and year-ended December 31, 2001.
The number of events held in a particular quarter will affect the comparability of earnings information from quarter to quarter. CART conducted four events in the fourth quarter of 2001 compared to three events in the same period in the prior year.
Fourth Quarter 2001
Total revenues for the fourth quarter of 2001 were $14.5 million, similar to total revenues of $14.5 million for the same quarter of 2000.
Total expenses for the fourth quarter of 2001 were $20.8 million, an increase of $2.9 million, or 16%, from the comparable quarter of 2000. Included in this increase was a pre-tax charge of $2.9 million resulting from severance agreements with former employees as CART takes its first steps in repositioning itself as a marketing-driven company under the experienced leadership of new President and CEO, Christopher R. Pook.
``We are being responsive to our promoters, sponsors and teams and aggressively moving forward in turning CART into the marketing services company that it should be,'' Pook said.
Net loss for the fourth quarter of 2001 was $3.3 million compared to net loss of $754,000 in the fourth quarter of 2000. On a diluted per common share basis, the loss is $0.22 in 2001 compared to a loss of $0.05 in the fourth quarter of 2000. The severance charges for the fourth quarter resulted in a $.13 per diluted share charge, net of taxes.
``Total revenues for the quarter were less than our previous guidance due to a reduction in sponsorship revenue,'' stated Thomas Carter CART's CFO. ``The reduction resulted from a renegotiation clause in one of our sponsorship contracts, and we are now moving forward in a new relationship with this sponsor.''
Year-End 2001
For the year ended December 31, 2001, revenues decreased 6% to $70.3 million from $75.0 million. Total expenses increased 34% to $78.8 million from $58.8 million. Net loss for the year was $950,000 compared to net income for 2000 of $15.2 million. On a diluted per common share basis, loss was $0.06 for the year ended December 31, 2001 compared to income of $0.97 for the year-ended December 31, 2000.
Included in the 2001 expenses was a pre-tax charge of $3.5 million ($0.15 per diluted share, net of taxes), including expenses, resulting from a litigation settlement with Texas Motor Speedway related to the canceled race in April 2001. In addition, the 2001 expenses include a charge of $8.5 million ($0.36 per diluted share, net of taxes) from the discontinuance of the Dayton Indy Lights Championship (American Racing Series, Inc.) comprised of non-cash impairment charges for goodwill and equipment and other strategic charges. The 2001 and 2000 expenses also include severance charges of $4.3 million ($0.18 per diluted share, net of taxes) and $2.8 million ($.11 per diluted share, net of taxes), respectively, relating to both voluntary and involuntary terminations of certain employees.
``Despite the challenges of the past year, we are repositioning ourselves to put all of these hurdles behind us,'' Pook, stated. ``We are looking forward to entering new markets in 2002 in Mexico City, Mexico, Denver, Colorado and Montreal, Quebec, as well as continuing to investigate future events in additional key markets with our promoter partners. In addition, we will focus our efforts on retaining and attracting sponsors for our series and our teams by demonstrating the value of investment in the FedEx Championship Series. Our new management team is determined to deliver 'results' to our shareholders, and to do that, we believe we must deliver 'results' to all our constituents.''
2002 Guidance
Management of Championship Auto Racing Teams, Inc. will provide 2002 guidance at the end of this month. The specific date and time will be given in a later release.
Championship Auto Racing Teams, Inc. will hold a teleconference today at 11:00 a.m. ET. Those interested in participating in the conference call should dial 1-888-995-9712 from both the United States and Canada. International participants should call 1-712-257-2768. 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 5:00 p.m. ET February 13, 2002, by dialing 1-888-566-0120 from the United States and Canada (International callers, 1-402-998-1210).
Championship Auto Racing Teams, Inc. (NYSE: MPH - news) owns, operates and markets the FedEx Championship Series. Former series champions Michael Andretti and Jimmy Vasser are among the stars who will battle for the 2002 FedEx Championship Series title on ovals, temporary street circuits and permanent road courses. The 2002 CART FedEx Championship Series season kicks off March 10 at Monterrey, Mexico and the 19-race schedule will be broadcast by new television partners, CBS and Fox Cable Networks Group, including Speedvision/Speed Channel. CART also owns and operates its top development series, the CART Toyota Atlantic Championship. Learn more about CART's open- wheel racing series at 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 Statements of Operations
For the Three Months Ended December 31, 2001 and 2000
(In Thousands, Except Loss Per Share)
(Unaudited)
Qtr ended Qtr ended
December 31, December 31,
2001 2000
Revenues
Sanction fees $9,592 $7,097
Sponsorship revenue 2,204 5,282
TV revenue 1,023 875
Engine leases, rebuilds and wheel sales 378 412
Other 1,282 876
Total revenues 14,479 14,542
Expenses
Race distributions 4,839 2,387
Race expenses 2,819 2,195
Cost of engine rebuilds and wheel sales 5 34
Administrative and indirect expenses 12,838 6,526
Bad debt - 6,320
Depreciation and amortization 342 445
Total expenses 20,843 17,907
Operating loss (6,364) (3,365)
Interest income (net) 1,333 2,182
Loss before income tax benefit (5,031) (1,183)
Income tax benefit (1,761) (429)
Net loss $(3,270) $(754)
Earnings (loss) per share
Basic $(0.22) $(0.05)
Diluted $(0.22) $(0.05)
Weighted average shares outstanding
Basic 14,718 15,731
Diluted 14,718 15,746
Championship Auto Racing Teams, Inc.
Consolidated Statements of Operations
For the Twelve Months Ended December 31, 2001 and 2000
(In Thousands, Except Earnings (Loss) Per Share)
YTD YTD
December 31, December 31,
2001 2000
Revenues
Sanction fees $47,226 $38,902
Sponsorship revenue 12,314 21,063
TV revenue 5,228 5,501
Engine leases, rebuilds and wheel sales 1,286 2,122
Other 4,209 7,460
Total revenues 70,263 75,048
Expenses
Race distributions 18,599 15,370
Race expenses 10,618 9,869
Cost of engine rebuilds and wheel sales 348 652
Administrative and indirect expenses 35,605 25,275
Bad debt - 6,320
Litigation expense 3,547 -
Asset impairment and strategic charges 8,548 -
Depreciation and amortization 1,493 1,352
Total expenses 78,758 58,838
Operating income (loss) (8,495) 16,210
Interest income (net) 7,033 7,463
Income (loss) before income taxes (1,462) 23,673
Income tax expense (benefit) (512) 8,520
Net income (loss) $(950) $15,153
Earnings (loss) per share
Basic $(0.06) $0.97
Diluted $(0.06) $0.97
Weighted average shares outstanding
Basic 15,289 15,624
Diluted 15,289 15,657
Championship Auto Racing Teams, Inc.
Consolidated Balance Sheets
As of December 31, 2001 and 2000
(In Thousands)
December 31, December 31,
2001 2000
Assets
Current assets
Cash and cash equivalents $27,765 $19,504
Short-term investments 87,621 98,206
Accounts receivable - net 5,195 5,578
Current portion of notes receivable - 2,535
Prepaid expenses 2,805 567
Inventory 70 151
Deferred income taxes 2,856 2,485
Total current assets 126,312 129,026
Notes receivable - 147
Property and equipment - net 4,832 7,327
Goodwill - net 1,470 7,248
Other Assets 327 353
Total Assets $132,941 $144,101
Liabilities and stockholders' equity
Current liabilities
Accounts payable $3,009 $1,975
Accrued liabilities
Royalties 222 162
Payroll 4,298 1,571
Taxes 110 819
Other 5,558 1,316
Deferred revenue 1,511 2,452
Deposits - 778
Total current liabilities 14,708 9,073
Deferred income taxes 297 1,134
Stockholders' equity
Capital stock 147 158
Additional paid-In capital 87,765 103,130
Retained earnings 29,028 29,978
Unrealized gain on investments 996 628
Total stockholders' equity 117,936 133,894
Total liabilities and stockholders' equity $132,941 $144,101