International Speedway Reports Fourth Quarter And Year-End Results
DAYTONA BEACH, Fla., Jan. 22, 2004 -- International Speedway Corporation (BULLETIN BOARD: ISCB) ("ISC") today reported results for the fourth quarter and year ended November 30, 2003.
Total revenue for the 2003 fourth quarter was $164.7 million, compared to $171.7 million in 2002. Operating income for the fourth quarter was $56.5 million compared to $65.3 million for the prior year. Net income was $31.6 million, or $0.60 per diluted share, compared to $37.0 million, or $0.70 per diluted share, in the fourth quarter of 2002. Results for the fourth quarter of 2003 were impacted by the timing of Darlington's fall Winston Cup event, which was held in the fourth quarter of 2002 and the third quarter of 2003. In addition, this year's fourth quarter results include a $2.5 million pre-tax charge, or $0.03 per diluted share after-tax, to reflect CART's refusal to return the organization and rights fee previously paid by ISC for the California Speedway event. As previously announced, California's CART event was cancelled due to wildfires in the region at that time. Actual 2003 fourth quarter revenue and earnings results are at the upper end of the Company's previous range of guidance, before the aforementioned $0.03 per diluted share after-tax charge stemming from the cancelled CART race at California.
For the full year ended November 30, 2003, total revenue increased to a record $575.7 million from $550.6 million in the prior year. Operating income for 2003 was $191.7 million, as compared to $194.2 million in 2002. Net income was $105.4 million, or $1.98 per diluted share, in 2003. The 2003 results include a $0.03 per diluted share after-tax charge relating to a track reconfiguration project at Homestead-Miami Speedway and the aforementioned $0.03 per diluted share after-tax charge for California's cancelled CART race. For 2002, income before the cumulative effect of an accounting change was $106.3 million, or $2.00 per diluted share. Net loss for the year ended November 30, 2002 was $411.0 million, or $7.74 per diluted share, which included a one-time charge of $517.2 million, or $9.74 per diluted share, associated with the adoption of Statement of Financial Accounting Standards No. 142.
ISC hosted eight major motorsports event weekends during the fourth quarter of fiscal 2003, six of which were anchored by NASCAR Winston Cup Series races. Highlights of the quarter included sold-out attendance for the NASCAR Winston Cup and Busch series weekend at Kansas and the IRL/ARCA weekend at Chicagoland. ISC also hosted capacity crowds for the Cup events in Richmond, Phoenix and Homestead-Miami, as well as a record crowd for Richmond's Busch Series race. In addition, increased attendance was posted for North Carolina's Cup and Busch events, California's IRL IndyCar and NASCAR Craftsman Truck races, and the Busch events at Homestead-Miami and Phoenix. While results from Talladega were less than expected, the weekend's Winston Cup and ARCA events showcased outstanding racing and the Cup series EA Sports 500 generated the highest television rating ever for a Winston Cup race broadcast in direct competition with the NFL.
"The fourth quarter of 2003 closed out a challenging, yet successful year for the Company," commented Lesa France Kennedy, President of International Speedway Corporation. "NASCAR's domestic television broadcast rights fees were the biggest driver of our record total revenue for 2003 and increases in corporate spending for both sponsorship and hospitality also contributed to full year results. Looking at the fourth quarter, the biggest news occurred at the Ford Championship Weekend at Homestead-Miami, with the successful debut of that facility's newly reconfigured racing surface. Driver and fan response was overwhelmingly positive, as evidenced by the outstanding on-track competition and 15 percent increase in weekend attendance. In fact, the Cup series Ford 400 sold out for the first time since 1999. In addition to our success at Homestead-Miami, we posted increased event attendance at nearly all of our facilities during the quarter, which we believe is an indication of improving consumer spending trends."
Speedweeks kicks off on January 31, 2004, with the Grand American Rolex 24 at Daytona, and culminates with the 46th running of the Daytona 500 on February 15. TNT and NBC are teamed up to broadcast several Speedweeks events including the NASCAR NEXTEL Cup Series Budweiser Shootout, Gatorade 125s and Daytona 500, as well as the NASCAR Busch Series Hershey's Kisses 300. In addition, SPEED Channel will provide over 70 hours of coverage from Speedweeks, including the NASCAR Craftsman Truck Series Florida Dodge Dealers 250, which will run "under the lights" for the first time this year.
Ms. France Kennedy concluded, "We are looking forward to the start of the 2004 racing season and are very optimistic in our outlook for the coming year. We expect the NASCAR domestic broadcast television rights revenue increase of 21 percent to be the main driver of top-line growth. In addition, solid increases in corporate spending and attendance-related revenue for our events are expected to fuel growth. Several initiatives put in place in 2003 will also contribute to our success. The realigned NASCAR NEXTEL Cup weekend in California will result in incremental revenue and earnings for ISC, as well as increased exposure for our broadcast and marketing partners. In addition, Nextel's title sponsorship is expected to increase consumer and corporate awareness of NASCAR racing, which will benefit all involved. Finally, we believe we are in an excellent strategic and financial position to move quickly to capitalize on external growth opportunities."
The Company reiterates its full-year guidance for fiscal 2004 of total revenue between $615 and $635 million and earnings between $2.30 and $2.38 per diluted share. The Company also reiterates its guidance for the fiscal 2004 first quarter of total revenue between $140 and $145 million and earnings between $0.51 and $0.53 per diluted share.
ISC management will host a conference call today with investors at 9:00 a.m. Eastern Time which may be accessed via the Internet at the Company's Web site, www.iscmotorsports.com, under the "Investor Relations" section.
International Speedway Corporation is a leading promoter of motorsports activities in the United States, currently promoting more than 100 events annually. The Company owns and/or operates 12 of the nation's major motorsports facilities, including Daytona International Speedway in Florida (home of the Daytona 500); Talladega Superspeedway in Alabama; Michigan International Speedway located outside Detroit; Richmond International Raceway in Virginia; California Speedway near Los Angeles; Kansas Speedway in Kansas City, Kansas; Phoenix International Raceway in Arizona; Homestead-Miami Speedway in Florida; North Carolina Speedway in Rockingham; Darlington Raceway in South Carolina; Watkins Glen International in New York; and Nazareth Speedway in Pennsylvania. Other track interests include an indirect 37.5% interest in Raceway Associates, LLC, which owns and operates Chicagoland Speedway and Route 66 Raceway near Chicago, Illinois.
The Company also owns and operates MRN Radio, the nation's largest independent sports radio network; DAYTONA USA, the "Ultimate Motorsports Attraction" in Daytona Beach, Florida, the official attraction of NASCAR; and subsidiaries which provide catering services, food and beverage concessions, and produce and market motorsports-related merchandise under the trade name "Americrown." For more information, visit the Company's Web site at www.iscmotorsports.com.
(Tables Follow)
International Speedway Corporation
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
Three Months Ended Year Ended
November 30, November 30,
2002 2003 2002 2003
(Unaudited)
REVENUES:
Admissions, net $62,088 $57,159 $213,255 $210,535
Motorsports related
income 86,353 84,346 259,609 284,902
Food, beverage and
merchandise income 21,715 21,380 70,396 74,199
Other income 1,494 1,783 7,292 6,109
171,650 164,668 550,552 575,745
EXPENSES:
Direct expenses:
Prize and point
fund monies and
NASCAR sanction
fees 34,568 34,121 97,290 107,821
Motorsports
related expenses 28,374 26,319 99,441 102,231
Food, beverage
and merchandise
expenses 11,162 11,703 38,109 41,250
General and
administrative
expenses 21,746 24,383 80,325 85,773
Depreciation and
amortization 10,513 11,671 41,154 44,171
Homestead-Miami
Speedway track
reconfiguration -- -- -- 2,829
106,363 108,197 356,319 384,075
Operating income 65,287 56,471 194,233 191,670
Interest income 290 552 1,211 1,821
Interest expense (5,997) (5,562) (24,277) (23,179)
Equity in net income from
equity investments 647 399 1,907 2,553
Income before income taxes
and cumulative effect of
accounting change 60,227 51,860 173,074 172,865
Income taxes 23,244 20,221 66,803 67,417
Income before cumulative
effect of accounting
change 36,983 31,639 106,271 105,448
Cumulative effect of
accounting change -
company operations -- -- (513,827) --
Cumulative effect of
accounting change -
equity investment -- -- (3,422) --
Net income (loss) $36,983 $31,639 $(410,978) $105,448
Basic earnings per share
before cumulative effect
of accounting change $0.70 $0.60 $2.00 $1.99
Cumulative effect of
accounting change -- -- (9.75) --
Basic earnings (loss) per
share $0.70 $0.60 $(7.75) $1.99
Diluted earnings per share
before cumulative effect
of accounting change $0.70 $0.60 $2.00 $1.98
Cumulative effect of
accounting change -- -- (9.74) --
Diluted earnings (loss)
per share $0.70 $0.60 $(7.74) $1.98
Dividends per share $0.00 $0.00 $0.06 $0.06
Basic weighted average
shares outstanding 53,041,210 53,065,583 53,036,552 53,057,077
Diluted weighted average
shares outstanding 53,111,507 53,150,004 53,101,535 53,133,282
Consolidated Balance Sheets
November 30,
2002 2003
(In Thousands)
ASSETS
Current Assets:
Cash and cash equivalents $109,263 $223,973
Short-term investments 200 201
Receivables, less allowance of
$1,500 in 2002 and 2003 30,557 37,996
Inventories 4,799 5,496
Prepaid expenses and other
current assets 3,784 4,078
Total Current Assets 148,603 271,744
Property and Equipment, net of
accumulated depreciation of
$192,433 and $235,672, respectively 859,096 884,623
Other Assets:
Equity investments 31,152 33,706
Goodwill 92,542 92,542
Other 24,578 21,177
148,272 147,425
Total Assets $1,155,971 $1,303,792
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term
debt $5,775 $232,963
Accounts payable 17,506 15,739
Deferred income 98,315 106,998
Income taxes payable 3,939 6,877
Other current liabilities 10,968 13,928
Total Current Liabilities 136,503 376,505
Long-Term Debt 309,606 75,168
Deferred Income Taxes 74,943 113,414
Long-Term Deferred Income 11,709 11,894
Other Long-Term Liabilities 885 346
Commitments and Contingencies -- --
Shareholders' Equity:
Class A Common Stock, $.01 par
value, 80,000,000 shares authorized;
25,319,221 and 28,359,173 issued
and outstanding in 2002 and 2003,
respectively 253 283
Class B Common Stock, $.01 par
value, 40,000,000 shares authorized;
27,867,456 and 24,858,610 issued and
outstanding in 2002 and 2003,
respectively 279 249
Additional paid-in capital 693,463 694,719
Retained (deficit) earnings (67,641) 34,602
Accumulated other comprehensive
loss (874) (333)
625,480 729,520
Less unearned compensation-
restricted stock 3,155 3,055
Total Shareholders' Equity 622,325 726,465
Total Liabilities and Shareholders'
Equity $1,155,971 $1,303,792
Consolidated Statements of Cash Flows
Year Ended November 30,
2002 2003
(In Thousands)
OPERATING ACTIVITIES
Net (loss) income $(410,978) $105,448
Adjustments to reconcile net
(loss) income to net cash
provided by operating activities:
Cumulative effect of
accounting change 517,249 --
Depreciation and amortization 41,154 44,171
Deferred income taxes 29,461 38,471
Homestead-Miami Speedway
track reconfiguration -- 2,829
Amortization of unearned
compensation 1,485 1,695
Amortization of financing
costs 1,332 294
Undistributed income from
equity investments (1,907) (2,553)
Other, net (1,634) (37)
Changes in operating assets
and liabilities:
Receivables, net (5,415) (7,439)
Inventories, prepaid
expenses and other
current assets 2,209 (990)
Accounts payable and
other current
liabilities 2,873 1,040
Income taxes payable 4,544 2,939
Deferred income (1,759) 8,868
Net cash provided by operating
activities 178,614 194,736
INVESTING ACTIVITIES
Capital expenditures (53,521) (72,587)
Proceeds from affiliate 4,045 4,075
Proceeds from short-term
investments 400 400
Purchases of short-term
investments (400) (400)
Proceeds from asset disposals 3,836 178
Proceeds from STAR bonds 5,589 --
Proceeds from restricted
investments 1,263 --
Other, net (1,533) (1,552)
Net cash used in investing activities (40,321) (69,886)
FINANCING ACTIVITIES
Payment of long-term debt (9,225) (5,775)
Cash dividends paid (3,191) (3,193)
Reacquisition of previously
issued common stock (831) (352)
Deferred financing fees -- (820)
Payments under credit facilities (90,000) --
Proceeds from interest rate swap 3,213 --
Net cash used in financing activities (100,034) (10,140)
Net increase in cash and cash
equivalents 38,259 114,710
Cash and cash equivalents at
beginning of period 71,004 109,263
Cash and cash equivalents at end of
period $109,263 $223,973