International Speedway Reports Record Results for the First Quarter of Fiscal 2005
~First Quarter Revenue and Earnings Increase 37% and 48%, Respectively, Over 2004~
~Company Raises Second Quarter and Full Year Fiscal 2005 Guidance~
DAYTONA BEACH, Fla., April 5 -- International Speedway Corporation (BULLETIN BOARD: ISCB) ("ISC") today reported record results for the first quarter ended February 28, 2005.
First Quarter Comparison
Total revenues for the first quarter were $179.4 million compared to revenues of $130.6 million in the prior-year period. Operating income was $71.8 million during the period compared to $47.1 million in the first quarter of fiscal 2004. Net income for the first quarter of fiscal 2005 was $41.1 million, or $0.77 per diluted share, compared to net income of $27.8 million, or $0.52 per diluted share, in the prior-year period. Prior year financial statements reflect the discontinued operations, net of tax, of North Carolina Speedway, which was sold in July 2004. In addition, the long- lived assets of Nazareth Speedway are held for sale as of November 30, 2004, and its results are recorded as discontinued operations, net of tax, for all periods presented. Significantly contributing to the 2005 first quarter results was the realignment of California Speedway's spring NASCAR NEXTEL Cup Series weekend from the second to the first quarter. Partially offsetting the increases for the quarter was the timing of Homestead-Miami Speedway's IRL IndyCar Series weekend, which was held in the first quarter of 2004 but scheduled for the second quarter of 2005.
"We are pleased to report record first quarter results that exceeded our expectations," commented Lesa France Kennedy, President of ISC. "The strong momentum of 2004 has continued into this year, underscored by the increased attendance and television viewership seen to date for the majority of our first quarter events. The realignment of California's Spring NASCAR weekend significantly contributed to our outstanding results. For comparable events, we posted increases across all major revenue streams led primarily by higher television and media revenue, strong sponsorship and hospitality income, and increased attendance-related revenues. In addition, we were extremely pleased with the highly successful debut of the renovated infield at Daytona International Speedway. The new infield was also a financial success, as NEXTEL FANZONE admissions sold out for the Daytona 500 and many guests enjoyed the unparalleled hospitality amenities of the new Daytona 500 Club."
2005 First Quarter Highlights Highlights of the first quarter of 2005 include:
* The Grand American Road Racing Series Rolex 24 at Daytona kicked off 2005 Speedweeks in dramatic fashion. The country's premier sports car endurance race featured more than 60 entries and numerous world-renowned drivers, including several NEXTEL Cup Champions. More notably, the event posted a more than 25% increase in attendance over the prior year.
* The following weekend, the Bud Shootout posted a more than 20% increase in attendance as fans watched Jimmie Johnson claim his first victory at Daytona. In addition, the Gatorade Duel, the twin qualifying races for the Daytona 500, hosted larger crowds as compared to the prior year, as did the Crown Royal IROC and Florida Dodge Dealers 250 NASCAR Craftsman Truck races.
* Continuing the Company's success at Daytona, increased attendance was also recorded for the Hershey's Take 5 300 Busch Series event. Highlighted by thrilling racing action, Tony Stewart battled from 17th position in the closing laps to capture his first ever Busch Series victory. The 2004 race was postponed due to inclement weather and held on the following Monday.
* A capacity crowd witnessed one of the most exciting Daytona 500s in the event's history. Ending in the race's first ever green-white-checkered finish, Jeff Gordon emerged from a pack of top drivers, including Kurt Busch and Dale Earnhardt Jr., to capture his third Daytona 500. More than 35 million viewers nationwide tuned in to watch NASCAR's richest, most prestigious event. The 2005 Daytona 500 tied for the highest broadcast rating in the event's history and drew the largest audience ever for a NASCAR race broadcast on FOX.
* Speedweeks was also highlighted by the successful debut of Daytona's newly renovated infield. Thousands of guests enjoyed the NEXTEL FANZONE, which featured specialty cuisine from the upscale "Bistro," various forms of entertainment, live national television and radio broadcasts and interactive displays. Fans also received behind-the-scenes viewing access to pre-race activities from atop the NEXTEL Cup garages and watched their favorite teams in action through garage windows amidst the festive atmosphere. In addition, fans enjoyed Daytona's new signature structure, the Daytona 500 Club, which overlooks the new Gatorade Victory lane.
* California hosted a NASCAR triple-header weekend for the second weekend of the season. The Craftsman Truck and Busch series races both finished in East coast prime time and posted strong television viewership results. In addition, the Auto Club 500 recorded the second-highest broadcast rating ever for a non-Daytona 500 Cup event. Partially offsetting the significant positives of the weekend was lower-than-expected ticket sales. With the addition of a second Cup weekend beginning in the fall of 2004 and a shorter selling window for the 2005 spring weekend, the Company expected ticket sales to be challenging. However, attendance was further impacted by record- breaking rainfall during the final month leading up to the race weekend.
During the first quarter, the Company benefited from new multi-year official status agreements with several well-known companies, including Checkers/Rally's Restaurants, American Automobile Association, ConAgra Foods, Goodyear and XM Satellite Radio. 2005 first quarter results also include the impact of renewed or expanded agreements with companies such as UPS and Valvoline, and ISC expanded its Nextel relationship to include entitlement of Daytona's FANZONE and pre-race activities. In addition, ISC signed multi-year entitlement agreements with the United Auto Workers and Ford for Talladega Superspeedway's fall Cup event, and the Automobile Club of Southern California for California's spring Cup race. Including the positive impact of an additional Martinsville Speedway Cup weekend, the Company continues to expect growth in sponsorship and hospitality revenue in the low to mid double-digits for fiscal 2005.
Ms. France Kennedy commented, "We continue to see strong interest from corporations seeking to leverage our national footprint and desirable fan demographics to further expand their brand awareness and customer base. During the quarter, we signed several noteworthy multi-track agreements, including our first Quick Service Restaurant official status category partnership with Checkers and Rally's Restaurants. We are also seeing an increase of non-traditional motorsports sponsors as a result of the sport's expanding appeal. Finally, given our portfolio of premier events and facilities, and significant attention to sponsor satisfaction, we can effectively tailor marketing partnerships to meet the needs of large national corporations as well as smaller regional businesses."
Recent Developments
To date in the second quarter, Daytona hosted Bike Week in early March. In addition, Homestead-Miami Speedway held a successful IRL IndyCar weekend, highlighted by exciting wheel-to-wheel racing as Dan Wheldon took the checkered flag in the IRL IndyCar season opener. Finally, Phoenix International Raceway's IndyCar weekend featured thrilling on-track competition as Sam Hornish Jr. held off a charging field to win in a green- white-checkered finish.
Upcoming second quarter events include a NASCAR NEXTEL Cup and Craftsman Truck weekend at Martinsville, followed by four consecutive NEXTEL Cup and Busch weekends at Phoenix, Talladega, Darlington Raceway and Richmond International Raceway. Advanced ticket sales for upcoming events continue to be strong. A sold out crowd is expected at Martinsville for the NEXTEL Cup Advance Auto Parts 500, and the Company anticipates strong attendance for the inaugural SUBWAY Fresh 500 Cup event at Phoenix, which will finish "under the lights" during East coast prime time. Talladega is experiencing a significant increase in advanced ticket sales for its Aaron's 499 Cup weekend, as is Darlington for the Dodge Charger 500. Lastly, Richmond anticipates strong weekend attendance, and the Chevy American Revolution 400 NEXTEL Cup event is expected to sell out.
The Company continues to make progress in its facility development efforts in the New York City borough of Staten Island. ISC has begun the permitting process with the city of New York, while concurrently proceeding with its detailed feasibility study to further evaluate project costs, public incentives availability, environmental impact assessments and remediation required, if any. In addition, Company representatives continue to meet with local resident groups and public officials to discuss the proposed project.
In the Pacific Northwest, ISC continues to evaluate suitable locations for the development of a motorsports facility. Several municipalities, along with State representatives, continue to indicate a high level of interest in the project, and the Company remains optimistic of its prospects in this underserved region of the country.
Lastly, the Company recently reached settlement with the CART Liquidation Trust ("the Trust") that allows a claim in ISC's favor of $2.0 million in the CART bankruptcy. The claim is based on the failure to return ISC's sanction fee paid to CART, less allowable expenses, for the 2003 event scheduled in California that was canceled because of the state of emergency due to wildfires in Southern California at the time. Once the U.S. Bankruptcy Court, Southern District of Indiana, has approved the good faith settlement at a hearing scheduled for mid-April, the Company will be positioned to recover the first $1.5 million of the claim. If there are not sufficient funds remaining in the Trust to fully satisfy the allowed claim of $2.0 million, the Company will pursue the remaining funds, or up to $500,000, from Champ Car World Series (formerly Open Wheel Racing Series), as represented and agreed to at the CART bankruptcy hearing held in January 2004.
Outlook
ISC reiterates its 2005 second quarter revenue guidance of $150 to $155 million. However, as a result of the anticipated $1.5 million before-tax CART settlement, ISC is raising its second quarter earnings guidance to $0.47 to $0.49 per diluted share. ISC is also increasing its full year guidance, with revenue expected between $715 and $730 million and earnings of $2.87 to $2.93 per diluted share.
"ISC posted an exceptional first quarter, and we are on track for continued success," Ms. France Kennedy continued. "We look forward to hosting several successful events this quarter, particularly the realigned spring Cup weekend at Phoenix. We believe the Western U.S. is a growing market for motorsports, and an additional Cup race in the region will continue to cultivate that fan base and further strengthen our national footprint. We are excited for the future growth prospects this area of the country represents for ISC and the industry."
Ms. France Kennedy concluded, "We anticipate solid growth across all major revenue streams for 2005, resulting in another record year for the Company. We also we remain optimistic for our development projects in New York and the Pacific Northwest, which will provide additional opportunities for long-term growth. At the industry level, NASCAR's increasing popularity continues to lead to higher television viewership and event attendance, as well as increased corporate participation at all levels of the sport. The industry's outlook is positive and, combined with our internal growth initiatives and solid business fundamentals, we remain excited about our future."
Conference Call Details
The management of ISC will host a conference call today with investors at 9:00 a.m. Eastern time. To participate, dial (973) 582-2710 five to ten minutes prior to the scheduled start time and request to be connected to the ISC earnings call. A live webcast will also be available at that time on the Company's Web site, http://www.iscmotorsports.com/ , under the "Investor Relations" section. This section has been expanded to include a full range of company, financial, corporate governance and other data that is useful to the financial community.
A replay will be available one hour after the end of the call through midnight Tuesday, April 12, 2005. To access, dial (973) 341-3080 and enter the code 5869645, or visit the "Investor Relations" section of the Company's Web site.
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 11 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; Martinsville Speedway in Virginia; Darlington Raceway in South Carolina; and Watkins Glen International in New York. Other track ownership includes 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 http://www.iscmotorsports.com/ .
(Tables Follow)
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
Three Months Ended
Feb. 29, 2004 Feb. 28, 2005
(Unaudited)
REVENUES:
Admissions, net $44,433 $55,784
Motorsports related 68,489 100,269
Food, beverage and merchandise 16,290 20,949
Other 1,413 2,430
130,625 179,432
EXPENSES:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees 20,788 31,484
Motorsports related 21,218 28,435
Food, beverage and merchandise 9,583 12,632
General and administrative 21,222 23,171
Depreciation and amortization 10,746 11,863
83,557 107,585
Operating income 47,068 71,847
Interest income 654 970
Interest expense (5,475) (3,055)
Equity in net loss from equity
investments (1,681) (1,531)
Income from continuing operations
before income taxes 40,566 68,231
Income taxes 16,116 27,113
Income from continuing operations 24,450 41,118
Income (loss) from discontinued
operations, net of income
taxes of $1,879 and $(64) 3,343 (53)
Net income $27,793 $41,065
Basic earnings per share:
Income from continuing operations $0.46 $0.77
Income (loss) from discontinued
operations 0.06 --
Net income $0.52 $0.77
Diluted earnings per share:
Income from continuing operations $0.46 $0.77
Income (loss) from discontinued
operations 0.06 --
Net income $0.52 $0.77
Dividends per share $0.00 $0.00
Basic weighted average shares
outstanding 53,065,938 53,101,260
Diluted weighted average shares
outstanding 53,162,847 53,223,241
Consolidated Balance Sheets
(In Thousands)
Nov. 30, 2004 Feb. 28, 2005
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $160,978 $106,059
Short-term investments 115,000 84,645
Receivables, less allowance of
$1,500 in 2004 and 2005 52,798 107,260
Inventories 7,267 9,779
Prepaid expenses and other
current assets 5,032 15,050
Total Current Assets 341,075 322,793
Property and Equipment, net of
accumulated depreciation of $265,489 969,095 1,088,618
and $277,174, respectively
Other Assets:
Equity investments 36,489 34,471
Intangible assets, net 148,989 149,580
Goodwill 99,265 99,331
Other 24,597 24,389
309,340 307,771
Total Assets $1,619,510 $1,719,182
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $7,505 $505
Accounts payable 28,854 29,324
Deferred income 114,518 163,207
Income taxes payable 25,241 26,178
Other current liabilities 15,078 20,460
Total Current Liabilities 191,196 239,674
Long-Term Debt 369,315 369,242
Deferred Income Taxes 165,617 175,306
Long-Term Deferred Income 11,503 11,428
Other Long-Term Liabilities 141 107
Commitments and Contingencies -- --
Shareholders' Equity:
Class A Common Stock, $.01 par value,
80,000,000 shares authorized;
28,858,934 and 29,048,327 issued and
outstanding at November 30, 2004 and
February 28, 2005, respectively 289 291
Class B Common Stock, $.01 par value,
40,000,000 shares authorized;
24,409,903 and 24,224,360 issued and
outstanding at November 30, 2004 and
February 28, 2005, respectively 244 242
Additional paid-in capital 696,882 697,029
Retained earnings 187,689 228,754
Accumulated other comprehensive
loss (22) --
885,082 926,316
Less: unearned compensation-
restricted stock 3,344 2,891
Total Shareholders' Equity 881,738 923,425
Total Liabilities and Shareholders'
Equity $1,619,510 $1,719,182
Consolidated Statements of Cash Flows
(In Thousands)
Three Months Ended
Feb. 29, 2004 Feb. 28, 2005
(Unaudited)
OPERATING ACTIVITIES
Net income $27,793 $41,065
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 11,497 11,863
Amortization of unearned compensation 404 453
Amortization of financing costs (6) 148
Deferred income taxes 9,650 9,689
Undistributed losses from
equity investments 1,681 1,531
Other, net 4 13
Changes in operating assets
and liabilities:
Receivables, net (45,837) (54,399)
Inventories, prepaid expenses
and other assets (9,712) (12,548)
Accounts payable and other
liabilities 11,646 4,695
Deferred income 40,678 48,614
Income taxes payable 7,761 937
Net cash provided by operating activities 55,559 52,061
INVESTING ACTIVITIES
Capital expenditures (22,177) (130,211)
Proceeds from asset disposals 5 27
Acquisition of businesses -- (764)
Proceeds from affiliate -- 487
Proceeds from short-term investments -- 99,040
Purchases of short-term investments -- (68,685)
Other, net (333) (11)
Net cash used in investing activities (22,505) (100,117)
FINANCING ACTIVITIES
Payment of long-term debt (6,500) (7,000)
Proceeds from interest rate swap 544 --
Exercise of Class A common stock options -- 147
Other, net -- (10)
Net cash used in financing activities (5,956) (6,863)
Net increase (decrease) in cash and
cash equivalents 27,098 (54,919)
Cash and cash equivalents at
beginning of period 223,973 160,978
Cash and cash equivalents at end of
period $251,071 $106,059
Audio: http://www.iscmotorsports.com/