Speedway Motorsports Reports Results For The First Quarter 2006 and Reaffirms Full Year 2006 Guidance
CONCORD, N.C.--May 3, 2006--Speedway Motorsports, Inc. (SMI) today reported record first quarter 2006 total revenues of $151.1 million, net income of $32.2 million and diluted earnings per share of $0.73, and reaffirmed its full year 2006 earnings guidance of $2.45 to $2.55 per diluted share.The first quarter 2006 results are not directly comparable to 2005 because of NASCAR NEXTEL Cup and Busch Series racing events at Bristol Motor Speedway held in the first quarter 2006 that were held in the second quarter 2005. Changes in race schedules at the Company's speedways from time to time lessen the comparability of operating results between quarterly financial statements of successive years. Quarterly operating results are impacted principally from: (i) variable revenues and costs directly related to held events and (ii) certain fixed costs that do not change when race dates change.
First Quarter Comparison
The following increases in first quarter 2006 results are largely attributable to reporting NASCAR racing events at Bristol Motor Speedway in the first quarter 2006 that were reported in the second quarter 2005. For the first quarter 2006 as compared to 2005:
-- total revenues increased 59% or $55.8 million to $151.1 million;
-- net income increased 130% or $18.2 million to $32.2 million; and
-- diluted earnings per share increased 128% or $0.41 to $0.73.
2006 Earnings Guidance Reaffirmed
The Company reiterated these first quarter 2006 earnings are consistent with its previous full year 2006 guidance of $2.45 to $2.55 per diluted share, assuming current industry and economic trends continue, and excluding our 50% share of Motorsports Authentics joint venture operating results, changes in the Company's non-core businesses, capital expenditures exceeding its current plans and other unforeseen factors.
2006 First Quarter Highlights
First quarter highlights include Las Vegas Motor Speedway again hosting record sold-out capacity crowds at its NASCAR UAW-DaimlerChrysler 400 NEXTEL Cup Series, and its second highest attendance at the Sam's Town 300 Busch Series, racing events despite unusually cold weather. Atlanta Motor Speedway attracted strong attendance at its NASCAR Golden Corral 500 NEXTEL Cup Series racing event despite being rescheduled to Monday because of poor weather, and record attendance at the Nicorette 300 Busch Series racing event. Also, Bristol Motor Speedway again hosted sold-out capacity crowds at its NASCAR Food City 500 NEXTEL Cup Series racing event, and large crowds at the Sharpie Mini 300 Busch Series racing event despite being delayed because of poor weather.
Stock Repurchase Program
During the quarter ended March 31, 2006, the Company repurchased 155,000 shares of common stock for approximately $5.6 million under its previously announced stock repurchase program authorizing the repurchase of up to 1.0 million shares. The Company has repurchased a total of 437,500 shares since adoption of the program in April 2005.
Motorsports Authentics Joint Venture
The Company's share of operating results of Motorsports Authentics (MA), an equally-owned motorsports merchandising joint venture with International Speedway Corporation, for December 1, 2005 through February 28, 2006 are included in the Company's first quarter 2006 consolidated statement of income and were not significant. MA has a November 30 fiscal year end which the Company adopted for reporting its share of MA's operating results so that reporting periods coincide. The Company records its 50% share of MA's net income or loss based on MA's most recent quarterly financial statements using the equity method of accounting.
"Our first quarter 2006 results show significant increases in all revenue categories, with particularly strong increases in sponsorship, luxury suite rentals, advertising and other corporate revenues, on a comparable event basis if the results of Bristol Motor Speedway's second quarter 2005 NASCAR NEXTEL and Busch Series racing events were included," stated H.A. Wheeler, chief operating officer and president of Speedway Motorsports. "However, unusually cold or poor weather at all of our major NASCAR event weekends held this quarter negatively impacted our events, particularly food, beverage and souvenir sales. For our upcoming events, all of our 2006, and most of our 2007 NASCAR NEXTEL Cup and Busch event sponsorships are already sold. Also, pre-sales for SMI's other corporate event related revenues are showing strong year-over-year increases with marketing interest and promotional spending continuing to broaden and gain momentum."
O. Bruton Smith, chairman and chief executive officer of Speedway Motorsports, stated "These strong first quarter results demonstrate the overwhelming demand for NASCAR racing at Las Vegas Motor Speedway and the untapped potential of its entertainment factor. We believe these and other factors illustrate the merits of SMI investing in new leading-edge media center, garage, fan zone and other entertainment facilities at Las Vegas. The superspeedway banking is also being reprofiled to offer fans the exciting competition inherent in high-bank racing, all of which SMI plans to showcase in 2007.
"Our Atlanta Motor Speedway also demonstrated its resilience with strong attendance over the NASCAR racing weekend despite rescheduling the Golden Corral 500 NEXTEL Cup Series race to Monday because of bad weather. For Atlanta's upcoming NASCAR racing weekend in October 2006, we plan to complete construction of approximately 12,000 new luxury front-stretch and premium club-style seats. Atlanta Motor Speedway is a state-of-the-art speedway facility located in one of the nation's top media markets. With roadway expansion leading into and surrounding our speedway continuing, and its long-standing reputation of offering fans some of the best on-track competition in NASCAR, we strongly believe Atlanta Motor Speedway provides us, along with advertisers and broadcasters, excellent long-term growth opportunities."
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 730 radio stations nationwide. For more information, visit the Company's website at www.speedwaymotorsports.com.
Speedway Motorsports, Inc. and Subsidiaries
Selected Financial Data - Unaudited
For The Three Months Ended March 31, 2006 and 2005
(In thousands except per share amounts)
Three Months Ended
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INCOME STATEMENT DATA 3/31/2006 3/31/2005
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Revenues:
Admissions $54,195 $32,207
Event related revenue 44,378 27,878
NASCAR broadcasting revenue 42,120 25,210
Other operating revenue 10,428 10,036
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Total Revenues 151,121 95,331
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Expenses and Other:
Direct expense of events 25,104 15,086
NASCAR purse and sanction fees 27,671 17,141
Other direct operating expense 7,694 8,610
General and administrative 20,479 17,224
Depreciation and amortization 10,070 9,268
Interest expense, net 5,872 5,949
Other expense (income), net 1,275 (920)
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Total Expenses and Other 98,165 72,358
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Income Before Income Taxes 52,956 22,973
Income Tax Provision 20,727 8,937
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NET INCOME $32,229 $14,036
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BASIC EARNINGS PER SHARE $0.74 $0.32
Weighted average shares outstanding 43,827 43,915
DILUTED EARNINGS PER SHARE $0.73 $0.32
Weighted average shares outstanding 44,040 44,216
Major NASCAR-sanctioned Events Held During
Period 6 4
Significant Race Schedule Changes:
-- Bristol Motor Speedway held one NASCAR NEXTEL Cup and one
Busch Series racing event in the first quarter 2006 that were
reported in the second quarter 2005
BALANCE SHEET DATA 3/31/2006 12/31/2005
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Cash, cash equivalents and short-term
investments $118,743 $120,910
Total current assets 262,189 201,288
Property and equipment, net 988,524 979,652
Equity investments in associated entities 138,676 136,842
Goodwill and other intangible assets, net 159,897 159,929
Total assets 1,584,297 1,514,426
Deferred race event income, net 119,556 101,966
Total current liabilities 220,021 160,663
Revolving credit facility borrowings 50,000 50,000
Total long-term debt 430,183 430,235
Total liabilities 824,863 788,278
Total stockholders' equity $759,434 $726,148
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