Speedway Motorsports Announces Record Earnings From Continuing Operations
CONCORD, N.C., Feb. 11 -- Speedway Motorsports,
Inc. announced today record full year earnings from continuing
operations, and that fourth quarter and full year 2002 results meet consensus
expectations.
The Company also announced that fiscal 2002 revenues and income and
diluted earnings per share from continuing operations increased over 2001,
with admission revenues increasing 4%. The Company also provided additional
guidance on estimated operating results for fiscal 2003.
The fiscal and fourth quarter 2002 results are not directly comparable to
those for 2001 because:
* Texas Motor Speedway hosted NASCAR Craftsman Truck and Indy Racing
League Series racing events in the fourth quarter 2001 which were held
in the third quarter 2002;
* fourth quarter 2001 results also reflect a gain from settlement of a
cancelled Championship Auto Racing Teams (CART) race at Texas Motor
Speedway;
* fiscal year 2002 results reflect an accounting change for goodwill
impairment; and
* fourth quarter and fiscal year 2002 results reflect the new ten year
food and beverage agreement with Levy Restaurants and Compass Group USA
(Levy/Compass) whereby associated net operating profits are now reported
as net event related and other operating revenue.
For fiscal year 2002 as compared to 2001:
* total revenues increased $710,000 to $376.0 million, with admissions
revenue increasing 4% or $5.0 million to $141.3 million, and
* other expense and the loss on early debt redemption aggregating $3.5
million in 2002 increased $7.8 million when compared to other income and
the cancelled CART race settlement aggregating $4.3 million in 2001;
therefore,
* income from continuing operations before the cumulative effect of an
accounting change increased 5% or $2.8 million to $61.2 million,
* diluted earnings per share from continuing operations before accounting
change increased 5% or $0.07 to $1.43, consistent with consensus
expectations,
* net income decreased 2% or $1.4 million to $56.2 million, and
* diluted earnings per share decreased 1% or $0.02 to $1.32.
For fourth quarter 2002 as compared to 2001:
* total revenues decreased 10% or $7.8 million to $72.9 million, and
* other expense of $1.0 million in 2002 increased $5.7 million when
compared to other expense and the cancelled CART race settlement
aggregating $4.7 million in 2001; therefore,
* income from continuing operations decreased 22% or $2.4 million to $8.5
million, and
* net income decreased 20% or $2.1 million to $8.5 million; however,
* diluted earnings per share of $0.20 was consistent with consensus
expectations.
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 NAPA 500 NASCAR Winston Cup
Series and Aaron's 312 Busch Series racing events. Attendance and associated
event related revenues of weekend events at both Atlanta and Lowe's Motor
Speedways were negatively impacted by poor weather.
"Reporting our third consecutive year of record income and earnings per
share from continuing operations gives me great pride," stated H.A. "Humpy"
Wheeler, chief operating officer and president of Speedway Motorsports.
"These 2002 results, and importantly our admissions revenues, reflect year-
over-year increases which are particularly encouraging given SMI faced
continuing challenges with the economy, reduced travel, declines in corporate
spending and poor weather conditions."
"We are extremely proud that Winston Cup television ratings and household
viewers increased for the second consecutive year of the new broadcasting
agreement, and we believe SMI is exceptionally well positioned in proven top
markets to capitalize on the continuing growth of NASCAR, motorsports and the
anticipated upturn in the general economy," stated Mr. Wheeler.
"We made significant strides in 2002 by strengthening SMI's balance sheet
through reducing debt, strong cash flow from long-term contracted revenue
streams, paying SMI's first annual dividend and disposing of an under-
performing operation," stated Mr. O. Bruton Smith, chairman and chief
executive officer of Speedway Motorsports. "The marketing and broadcasting
appeal of SMI's premier facilities and venues is clearly demonstrated through
long-term strategic naming rights alliances for our newly-modernized and
expanded Infineon Raceway, Lowe's Motor Speedway, and our successful first
year with Levy/Compass, the market leader in premium foodservice at sports and
entertainment facilities. The percentage of our revenues contracted in
advance on a longer-term basis from such relationships has increased
significantly in the past few years."
Mr. Smith continued, "We are extremely proud of being instrumental in
elevating NASCAR and motorsports racing to its current national prominence and
look forward to building an even stronger future with audience growth
remaining unmatched by other professional sports. Our core fan base has made
this the most stable sport in America, and we remain committed first to them."
William R. Brooks, chief financial officer of Speedway Motorsports, stated
"Assuming current industry and economic trends continue, the Company estimates
2003 total revenues of $390-$410 million, net income of $66-$70 million,
depreciation and interest of $58-$62 million and diluted earnings per share of
$1.55-$1.65."
Fiscal year 2002 results reflect a pre-tax charge of $1.2 million,
$751,000 net of tax or $0.02 per diluted share, related to the early
redemption of $53.7 million of convertible subordinated debentures in April
2002. The fourth quarter and fiscal year 2001 results reflect pre-tax income
of $4.8 million and $1.4 million, $2.9 million and $826,000 net of tax, or
$0.07 and $0.02 per diluted share, respectively, related to settlement of the
cancelled CART race.
The Company adopted Statement of Financial Accounting Standards No. 142
"Goodwill and Other Intangible Assets" as of January 1, 2002. The fiscal 2002
results reflect the cumulative effect of an accounting change for goodwill
impairment of $4.3 million, net of taxes of $297,000 or $0.10 per diluted
share, associated with certain non-motorsports related reporting units. Also,
amortization of $444,000 and $1.8 million on goodwill and other intangible
assets recorded as of December 31, 2001 was not reflected in the fourth
quarter and fiscal 2002 under the new accounting guidelines.
The Company disposed of the operations of SoldUSA in the second quarter
2002 due to continuing difficult market conditions for internet auction and e-
commerce companies. The Company's results reflect losses, net of taxes, from
SoldUSA's discontinued operations and disposal of $297,000, or $0.01 per
diluted share, for the fourth quarter 2001, and $686,000 and $817,000, or
$0.01 and $0.02 per diluted share, for fiscal years 2002 and 2001,
respectively. There were no such losses in the fourth quarter 2002.
Changes in racing schedules, and operating arrangements such as the
Levy/Compass agreement, can lessen the comparability of operating results
between quarterly financial statements of successive years.
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, Las Vegas Motor Speedway, Infineon Raceway and Texas
Motor Speedway. The Company provides souvenir merchandising services through
its SMI Properties 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 http://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, litigation, insurance, 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.
Note: Speedway Motorsports will host a conference call and web-cast today
at 11:00 a.m. ET. The call and web-cast are open to all participants. To
participate in the conference call, you may dial 800-446-1671 for domestic
calls or 1-847-413-3362 for international calls. The reference number is
6559929. To participate in the web-cast, you may visit the Company's website
at http://www.gospeedway.com. Participating in the call and web-cast will be H.A.
Wheeler, Chief Operating Officer and President; William R. Brooks, Chief
Financial Officer; and Marylaurel E. Wilks, Vice President, Communications and
General Counsel.
Speedway Motorsports, Inc. and Subsidiaries
Selected Financial Data - Unaudited
For The Three and Twelve Months Ended December 31, 2002 and 2001
(in thousands except per share amounts)
Three Months Ended Twelve Months Ended
INCOME STATEMENT DATA 12/31/2002 12/31/2001 12/31/2002 12/31/2001
REVENUES:
Admissions $23,213 $26,476 $141,315 $136,362
Event related revenue 27,396 31,654 122,172 133,289
NASCAR broadcasting revenue 14,970 12,719 77,936 67,488
Other operating revenue 7,314 9,823 34,537 38,111
Total Revenues 72,893 80,672 375,960 375,250
EXPENSES AND OTHER:
Direct expense of events 11,619 16,236 69,297 76,579
NASCAR purse and sanction
fees 12,323 10,830 61,217 54,479
Other direct operating
expenses 8,597 10,750 31,032 35,787
General and administrative 12,295 15,519 57,235 59,331
Depreciation and amortization 7,970 8,397 31,720 32,747
Interest expense, net 5,058 5,730 21,199 24,316
Loss on early debt redemption -- -- 1,237 --
Cancelled CART race settlement,
net -- (4,830) -- (1,361)
Other expense (income), net 1,048 93 2,239 (2,907)
Total Expenses and Other 58,910 62,725 275,176 278,971
Income From Continuing
Operations
Before Income Taxes and
Cumulative
Effect of Accounting Change 13,983 17,947 100,784 96,279
Income Tax Provision 5,497 7,050 39,609 37,870
Income From Continuing
Operations
Before Cumulative Effect of
Accounting Change 8,486 10,897 61,175 58,409
Loss From Operations and
Disposal of
Discontinued Business -- (297) (686) (817)
Income Before Cumulative Effect
of Accounting Change 8,486 10,600 60,489 57,592
Cumulative Effect of Accounting
Change for Goodwill Impairment -- -- (4,273) --
NET INCOME $8,486 $10,600 $56,216 $57,592
Basic Earnings Per Share:
Continuing Operations Before
Accounting Change $0.20 $0.26 $1.44 $1.40
Discontinued Operations -- (0.01) (0.01) (0.02)
Accounting Change -- -- (0.10) --
Basic Earnings Per Share $0.20 $0.25 $1.33 $1.38
Weighted average shares
outstanding 42,245 41,770 42,114 41,753
Diluted Earnings Per Share:
Continuing Operations Before
Accounting Change $0.20 $0.26 $1.43 $1.36
Discontinued Operations -- (0.01) (0.01) (0.02)
Accounting Change -- -- (0.10) --
Diluted Earnings Per Share $0.20 $0.25 $1.32 $1.34
Weighted average shares
outstanding 42,581 44,249 43,001 44,367
Consolidated
BALANCE SHEET DATA 12/31/02 12/31/01
Cash and cash equivalents $112,638 $93,980
Total current assets 153,566 140,735
Property and equipment, net 857,146 813,154
Goodwill and other intangible assets, net 51,990 56,742
Total assets 1,105,740 1,063,578
Current liabilities 131,240 106,054
Revolving credit facility borrowings 90,000 90,000
Deferred race event income, net 85,565 71,578
Total long-term debt 342,225 397,313
Total liabilities 614,568 624,689
Total stockholders' equity $491,172 $438,889