International Speedway Reports Record 2004 First Quarter Results
- Revenue and Net Income Post Double-Digit Increase -
DAYTONA BEACH, Fla., April 6 -- International Speedway Corporation ("ISC") (BULLETIN BOARD: ISCB) today reported record results for the first quarter ended February 29, 2004.
Total revenues for the first quarter increased more than ten percent to $144.2 million compared to revenues of $130.9 million in the prior-year period. Operating income was $52.3 million during the period compared to $48.8 million in the first quarter of fiscal 2003. Net income for the first quarter of fiscal 2004 was $27.8 million, or $0.52 per diluted share, compared to net income of $25.4 million, or $0.48 per diluted share, in the first quarter of 2003. Included in the prior year's first quarter results was a revenue contribution to ISC's Food, Beverage, and Merchandise Income of approximately $1.6 million, or $0.02 per diluted share after-tax, related to the Company's ongoing activities to audit third party vendors' sales reports for prior years.
The first quarter of fiscal 2004 was highlighted by an exciting Speedweeks at Daytona, culminating in the sold-out 46th running of the NASCAR NEXTEL Cup Series Daytona 500. Over 33 million viewers, the second highest in the event's history, tuned in to watch Dale Earnhardt Jr. take the checkered flag for his first victory in "The Great American Race." In addition, the NASCAR Craftsman Truck Series Florida Dodge Dealer's 250 ran under the lights for the first time in 2004. The event posted a more than 15 percent attendance increase and 70 percent higher average household television viewership as compared to 2003. Contributing to the quarter's results was North Carolina's NEXTEL Cup and Busch series weekend, which posted a strong double-digit increase in attendance over 2003, when the Busch race was postponed due to rain. Homestead-Miami hosted a successful open-wheel weekend anchored by the IRL IndyCar Series Toyota Indy 300. This event posted a double-digit increase in attendance compared to the prior year, when it was held in the second quarter. Finally, rain forced the postponement of Daytona's NASCAR Busch Series Hershey's Kisses 300 until the following Monday, adversely impacting attendance-related revenues for this year's event.
"We are very pleased with our record performance during the first quarter," commented Lesa France Kennedy, President of ISC. "Domestic television revenue, which is expected to grow at 21 percent for 2004, continues to drive top-line growth. In addition, increased sponsorship and hospitality revenue, as well as higher attendance at several events, helped drive the quarter's results. The year has started on a very strong note, and we continue to expect growth in all of our major revenue categories for 2004. Finally, we are already seeing positive results from Nextel's debut as Cup series sponsor in terms of increased exposure for the sport, and we look forward to additional benefits this year from other NASCAR initiatives, including schedule realignment and the new Chase for the NASCAR NEXTEL Cup format."
In addition to benefiting from new multi-track official status and display rights agreements, ISC secured several event title sponsorships during the first quarter, including a multi-year partnership with Gordon Food Services for Michigan's August NASCAR NEXTEL Cup Series event, as well as agreements with Funai and Goody's Powder for NASCAR Busch Series races at Richmond and North Carolina, respectively.
To date in the second quarter, ISC has hosted several successful event weekends, including Bike Week at Daytona, a NASCAR NEXTEL Cup and Busch series weekend at Darlington and an IRL IndyCar Series weekend at Phoenix. Daytona's motorcycle events posted higher attendance than in the prior year, when inclement weather impacted several events. Darlington's Cup and Busch weekend also posted year-over-year attendance growth, highlighted by exciting racing and a record crowd for the NASCAR NEXTEL Cup Series Carolina Dodge Dealer's 400. It is important to note that Darlington's Busch event in 2003 was postponed due to inclement weather. Finally, Phoenix's successful IRL weekend included increased attendance for the Indy Car event as compared to the prior year.
For the remainder of the second quarter, the Company will host NASCAR NEXTEL Cup and Busch series weekends at Talladega, California and Richmond. Overall advanced ticket sales for the remaining events in the quarter are trending ahead of 2003 highlighted by Talladega's event weekend, which is ahead of the prior year due to an improved economy and aggressive consumer marketing initiatives implemented in the second half of last year. In addition, advanced ticket sales for Richmond's Busch event are more than 50 percent ahead of 2003 levels. Finally, Richmond's Cup race in May marks the 25th straight sold-out Cup event at the storied facility.
Ms. France Kennedy concluded, "We are extremely optimistic for the remainder of the year. Total advanced ticket sales are trending ahead of 2003 and we have already announced sell-outs at Richmond and Kansas. We are seeing continued strength in corporate spending for our events, and maintain our expectation of mid- to high single-digit growth in this category for 2004. The industry is growing and we are in an excellent position to capitalize on new opportunities. We look forward to a successful second quarter and balance of 2004."
The Company reiterates its previously announced financial guidance of second quarter revenue and earnings of $125 to $130 million and $0.31 to $0.33 per diluted share, respectively, and full year fiscal 2004 revenue and earnings of $615 to $635 million and $2.30 to $2.38 per diluted share, respectively.
The management of ISC 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.
Statements made in this release that express the Company's or management's beliefs or expectations and which are not historical facts or which are applied prospectively are forward-looking statements. It is important to note that the Company's actual results could differ materially from those contained in or implied by such forward-looking statements. The Company's results could be impacted by risk factors, including, but not limited to, weather surrounding racing events, government regulations, economic conditions, consumer and corporate spending, military actions, air travel and national or local catastrophic events. 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. The Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be needed to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by International Speedway or any other person that the events or circumstances described in such statement are material.
(Tables Follow)
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
Three Months Ended
February 28, February 29,
2003 2004
(Unaudited)
REVENUES:
Admissions, net $47,048 $47,269
Motorsports related income 66,465 79,141
Food, beverage and merchandise income 16,022 16,347
Other income 1,347 1,415
130,882 144,172
EXPENSES:
Direct expenses:
Prize and point fund monies and NASCAR
sanction fees 23,534 26,333
Motorsports related expenses 19,362 22,585
Food, beverage and merchandise expenses 8,041 9,583
General and administrative expenses 20,551 21,889
Depreciation and amortization 10,553 11,497
82,041 91,887
Operating income 48,841 52,285
Interest income 222 659
Interest expense (5,933) (5,475)
Equity in net loss from equity investments (1,550) (1,681)
Income before income taxes 41,580 45,788
Income taxes 16,216 17,995
Net income $25,364 $27,793
Basic earnings per share $0.48 $0.52
Diluted earnings per share $0.48 $0.52
Dividends per share $0.00 $0.00
Basic weighted average shares outstanding 53,041,210 53,065,938
Diluted weighted average shares outstanding 53,120,970 53,162,847
Consolidated Statements of Cash Flows
(In Thousands)
November 30, February 29,
2003 2004
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $223,973 $251,071
Short-term investments 201 201
Receivables, less allowance of $1,500 in
2003 and 2004 37,996 83,833
Inventories 5,496 8,033
Prepaid expenses and other current assets 4,078 11,237
Total Current Assets 271,744 354,375
Property and Equipment, net of accumulated
depreciation of $235,672
and $247,092, respectively 884,623 895,318
Other Assets:
Equity investments 33,706 32,024
Goodwill 92,542 92,542
Other 21,177 21,121
147,425 145,687
Total Assets $1,303,792 $1,395,380
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $232,963 $233,554
Accounts payable 15,739 20,824
Deferred income 106,998 147,637
Income taxes payable 6,877 14,638
Other current liabilities 13,928 20,290
Total Current Liabilities 376,505 436,943
Long-Term Debt 75,168 68,188
Deferred Income Taxes 113,414 123,064
Long-Term Deferred Income 11,894 11,933
Other Long-Term Liabilities 346 515
Commitments and Contingencies -- --
Shareholders' Equity:
Class A Common Stock, $.01 par value,
80,000,000 shares authorized; 28,359,173
and 28,417,522 issued and outstanding at
November 30, 2003 and February 29, 2004,
respectively 283 284
Class B Common Stock, $.01 par value,
40,000,000 shares authorized; 24,858,610 and
24,800,261 issued and outstanding at
November 30, 2003 and February 29, 2004,
respectively 249 248
Additional paid-in capital 694,719 694,719
Retained earnings 34,602 62,395
Accumulated other comprehensive loss (333) (258)
729,520 757,388
Less: unearned compensation-restricted stock 3,055 2,651
Total Shareholders' Equity 726,465 754,737
Total Liabilities and Shareholders' Equity $1,303,792 $1,395,380
Consolidated Statements of Cash Flows
(In Thousands)
Three Months Ended
February 28, February 29,
2003 2004
(Unaudited)
OPERATING ACTIVITIES
Net income $25,364 $27,793
Adjustments to reconcile net income to
net cash provided by
operating activities:
Depreciation and amortization 10,553 11,497
Amortization of unearned compensation 407 404
Amortization of financing costs 80 (6)
Deferred income taxes 9,016 9,650
Undistributed loss from equity investments 1,550 1,681
Other, net (50) 4
Changes in operating assets and
liabilities:
Receivables, net (49,803) (45,837)
Inventories, prepaid expenses and
other current assets (10,254) (9,712)
Accounts payable and other liabilities 6,240 11,646
Deferred income 53,305 40,678
Income taxes payable 6,847 7,761
Net cash provided by operating activities 53,255 55,559
INVESTING ACTIVITIES
Capital expenditures (12,145) (22,177)
Proceeds from asset disposals 50 5
Proceeds from affiliate 4,075 --
Other, net (256) (333)
Net cash used in investing activities (8,276) (22,505)
FINANCING ACTIVITIES
Payment of long-term debt (5,500) (6,500)
Proceeds from interest rate swap -- 544
Net cash used in financing activities (5,500) (5,956)
Net increase in cash and cash equivalents 39,479 27,098
Cash and cash equivalents at beginning
of period 109,263 223,973
Cash and cash equivalents at end of period $148,742 $251,071