Speedway Motorsports Reports Record Results For The Three and Nine Months Ended September 30, 2005
CONCORD, N.C.--Nov. 2, 2005--Speedway Motorsports, Inc. (SMI) today reported record results for the three and nine months ended September 30, 2005. Third quarter 2005 results include total revenues of $79.1 million, net income of $4.4 million and diluted earnings per share of $0.10. Nine month 2005 results include total revenues of $390.6 million, net income of $74.0 million and diluted earnings per share of $1.67.Third Quarter Comparison
For the third quarter 2005 as compared to 2004:
-- total revenues increased 11% or $8.1 million to $79.1 million;
-- net income increased $8.9 million to $4.4 million;
-- diluted earnings per share increased $0.20 to $0.10;
-- non-GAAP(a) net income increased 58% or $1.6 million to $4.4 million; and
-- non-GAAP(a) diluted earnings per share increased 67% or $0.04 to $0.10.
Year-to-Date Comparison
For the nine month 2005 period as compared to 2004:
-- total revenues increased 9% or $32.6 million to $390.6 million;
-- net income increased 23% or $13.8 million to $74.0 million;
-- diluted earnings per share increased 21% or $0.29 to $1.67;
-- non-GAAP(a) net income increased 10% or $6.6 million to $74.0 million; and
-- non-GAAP(a) diluted earnings per share increased 8% or $0.13 to $1.67.
(a) The non-GAAP results exclude a third quarter 2004 after tax charge of $7.3 million or $0.16 per diluted share related to the resolution of the Ferko litigation with NASCAR and International Speedway Corporation (ISC). A reconciliation of GAAP and non-GAAP results is provided below.
Three Months Nine Months
Ended Sept 30: Ended Sept 30:
-------------------------------
2005 2004 2005 2004
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(in thousands, except per share
amounts)
Net Income (Loss) $4,402 $(4,498)$73,954 $60,114
Non-GAAP adjustment for Ferko
litigation settlement, net of tax (1) -- 7,278 -- 7,278
------ ------- ------- -------
Non-GAAP Net Income $4,402 $ 2,780 $73,954 $67,392
====== ======= ======= =======
Diluted Earnings (Loss) Per Share $ 0.10 $ (0.10)$ 1.67 $ 1.38
Non-GAAP adjustment for Ferko
litigation settlement (1) -- 0.16 -- 0.16
------ ------- ------- -------
Non-GAAP Diluted Earnings Per Share $ 0.10 $ 0.06 $ 1.67 $ 1.54
====== ======= ======= =======
(1) Represents a third quarter 2004 charge associated with the settlement of litigation between SMI, NASCAR and ISC resolving a lawsuit filed by Francis Ferko, as a SMI shareholder, against NASCAR and ISC. The Company was named as a necessary party to the lawsuit since the lawsuit was brought on the Company's behalf by a shareholder. Applicable law required SMI to reimburse the plaintiff for litigation expenses incurred in successfully bringing this suit on behalf of SMI.
2005 Third Quarter Highlights
Third quarter highlights include Bristol Motor Speedway again hosting sold-out capacity crowds at its Sharpie 500 NASCAR NEXTEL Cup Series, and record attendance at its Food City 250 NASCAR Busch Series, racing events. Other third quarter highlights include Las Vegas Motor Speedway hosting large crowds at its Hurricane Relief 400 Champ Car World Series and Las Vegas 350 NASCAR Craftsman Truck Series racing events, and Infineon Raceway hosting strong attendance at its new Argent Mortgage Indy Racing League racing event. Changes in racing schedules can lessen the comparability of operating results between quarterly financial statements of successive years.
Formation of Motorsports Authentics Joint Venture with International Speedway Corporation
As previously announced, in August 2005, the Company and ISC entered into an equally-owned joint venture operating under the name Motorsports Authentics to produce, market and sell motorsports licensed merchandise. Also announced was the entry by Motorsports Authentics into a definitive agreement to purchase Action Performance Companies, Inc. (Action) for $13.00 per common share, or approximately $245 million, in cash. The acquisition is expected to close by December 31, 2005 subject to certain conditions including Action shareholder approval and obtaining consents and certificates from various counterparties to Action's material contracts. Action is the leader in design, promotion, marketing and distribution of licensed merchandise with products including a broad range of motorsports related die-cast replica collectibles, apparel, gifts and other memorabilia. Approximately 70% of Action's 2004 product sales are related to NASCAR-sanctioned motorsports due to its license agreements with many top teams and drivers.
The Company uses the equity method of accounting for its 50% ownership in Motorsports Authentics. As of September 30, 2005, the Company's share of the operating results of Motorsports Authentics was not significant.
Atlanta Motor Speedway Tornado Damage Update
On July 6, 2005, a tornado struck Atlanta Motor Speedway causing significant damage to its facilities. The 2005 results reflect a $500,000 pre-tax charge based on the Company's assessment of damages, established restoration plans and insurance coverage. Further losses, if any, are not expected to exceed insurance coverage limits. Restoration progressed sufficiently to allow AMS to conduct its NASCAR NEXTEL Cup Series and other races as scheduled in October 2005.
2005 Earnings Guidance Reaffirmed
The Company reiterated these third quarter 2005 earnings are consistent with its previous full year 2005 guidance of $2.15 to $2.25 per diluted share.
Stock Repurchase Program
During the nine months ended September 30, 2005, the Company has repurchased 180,000 shares of common stock for approximately $6.6 million under its previously announced stock repurchase program authorizing the repurchase of up to 1.0 million shares.
"Our record third quarter 2005 results reflect Bristol Motor Speedway's highest attendance ever at its NASCAR NEXTEL Cup and Busch Series events, as well as the ongoing increases in company-wide sponsorship, luxury suite rentals, advertising and other corporate revenues," stated H.A. Wheeler, chief operating officer and president of Speedway Motorsports. "Despite rising fuel prices with the effects of Hurricanes Katrina and Rita, ticket sales for our comparable fourth quarter 2005 racing events are near or above last year's levels with corporate promotional spending and marketing interest trending well ahead of last year. We are excited about teaming with International Speedway Corporation to form Motorsports Authentics. This joint venture allows us the opportunity to strategically market and distribute motorsports licensed merchandise, and provides us significant growth opportunities for increasing business synergies and expanding long-term marketing alliances."
"The continuing growth in spectator interest and marketing appeal of motorsports is shown by new highs in the 2005 season broadcast television and cable ratings with sizable year-over-year increases for the NASCAR NEXTEL Cup and Busch Series," stated O. Bruton Smith, chairman and chief executive officer of Speedway Motorsports. "Restoration for tornado damage has turned Atlanta Motor Speedway into a state-of-the-art facility located in one of the nation's top media markets. These features, along with the recent expansion of various roadways surrounding and leading into AMS, provide tremendous long-term marketing opportunities for us as well as advertisers and broadcasters. We are well positioned for strong growth visibility in 2006 and beyond with these and other factors such as the strong interest developing in Texas Motor Speedway's new NASCAR triple header weekend, our event and official sponsorships for 2006 which are trending well ahead of this year, and merchandising opportunities from Motorsports Authentics."
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, Infineon Raceway, Las Vegas Motor Speedway, Lowe's Motor Speedway and Texas Motor Speedway. The Company provides souvenir merchandising services through its SMI Properties subsidiaries and Motorsports Authentics joint venture, 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 710 radio stations nationwide. For more information, visit the Company's website at www.gospeedway.com.
Speedway Motorsports, Inc. and Subsidiaries
Selected Financial Data - Unaudited
For The Three and Nine Months Ended September 30, 2005 and 2004
(In thousands except per share amounts)
Three Months Ended Nine Months Ended
---------------------------------------------
INCOME STATEMENT DATA 9/30/2005 9/30/2004 9/30/2005 9/30/2004
------------------------- ---------- ----------- ---------- ----------
REVENUES:
Admissions $ 26,982 $ 25,888 $ 133,705 $ 128,692
Event related revenue 28,719 23,225 119,557 106,904
NASCAR broadcasting
revenue 13,659 11,611 105,337 88,930
Other operating
revenue 9,744 10,239 32,012 33,466
------------------------- ---------- ----------- ---------- ----------
Total Revenues 79,104 70,963 390,611 357,992
------------------------- ---------- ----------- ---------- ----------
EXPENSES AND OTHER:
Direct expense of
events 20,240 16,548 71,601 64,397
NASCAR purse and
sanction fees 9,949 9,072 70,604 63,113
Other direct operating
expense 7,890 9,638 27,217 30,182
General and
administrative 17,972 16,915 55,619 51,006
Depreciation and
amortization 9,569 8,969 28,141 26,746
Interest expense, net 5,551 6,014 16,479 14,342
Ferko litigation
settlement - 11,800 - 11,800
Other expense
(income), net 728 (582) (88) (2,807)
------------------------- ---------- ----------- ---------- ----------
Total Expenses and
Other 71,899 78,374 269,573 258,779
------------------------- ---------- ----------- ---------- ----------
Income (Loss) Before
Income Taxes 7,205 (7,411) 121,038 99,213
Income Tax Provision
(Benefit) 2,803 (2,913) 47,084 39,099
------------------------- ---------- ----------- ---------- ----------
NET INCOME (LOSS) $ 4,402 ($4,498) $ 73,954 $ 60,114
------------------------- ---------- ----------- ---------- ----------
BASIC EARNINGS (LOSS)
PER SHARE $ 0.10 ($0.10) $ 1.68 $ 1.39
Weighted average shares
outstanding 43,942 43,468 43,913 43,211
DILUTED EARNINGS (LOSS)
PER SHARE $ 0.10 ($0.10) $ 1.67 $ 1.38
Weighted average shares
outstanding 44,240 43,724 44,195 43,529
Major NASCAR-sanctioned
Events Held During
Period 2 2 14 13
Significant Race
Schedule Changes:
- Atlanta Motor Speedway held one NASCAR Busch Series racing event
in the first quarter 2005 that was held in the fourth quarter
2004.
- Infineon Raceway hosted a new Indy League Racing event in the
third quarter 2005.
BALANCE SHEET DATA 9/30/2005 12/31/2004
----------------------------------------------- ---------- -----------
Cash and cash equivalents $ 256,168 $ 216,731
Total current assets 366,572 288,025
Property and equipment, net 961,058 913,987
Goodwill and other intangible assets, net 161,274 157,917
Total assets 1,538,587 1,398,343
Deferred race event income, net 103,611 99,589
Total current liabilities 187,811 142,887
Revolving credit facility borrowings 50,000 50,000
Total long-term debt 430,306 427,149
Total liabilities 832,684 765,018
Total stockholders' equity $ 705,903 $ 633,325
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