Penske Motorsports Announces Record Earnings for 1997
5 February 1998
DETROIT -- Penske Motorsports, Inc. (PMI) today announced record revenues, earnings, and earnings per share for the year ended December 31, 1997. Revenues for 1997 increased 99% to $109.8 million and net income was up 51% to $16.4 million. After a 14% increase in average shares outstanding, 1997 earnings were $1.19 per share compared to $.90 per share in 1996, an increase of 32%.For the three months ended December 31, 1997, the Company reported revenues of $14.2 million, compared to $3.0 million in the same period of 1996. The increase in revenues in the fourth quarter of 1997 was due primarily to the addition of races at the Company's North Carolina Speedway and California Speedway. The Company also reported a net loss of $1.8 million or $.13 per share versus a net loss of $1.3 million or $.10 per share in 1996.
A combination of factors drove the record financial performance in 1997. The Company's continued aggressive expansion, including the opening of the California Speedway, the acquisition of the North Carolina Speedway, and expansion of seating capacities at Michigan Speedway and Nazareth Speedway collectively resulted in a 125% increase in admissions revenue. Other speedway revenues, including concessions, sponsorship, hospitality, and broadcast rights, were up over 160%, and strong demand for the Company's California Speedway merchandise helped increase merchandise, tires and accessories revenues by 39%.
Greg Penske, President of PMI, stated, "I am extremely pleased with the record performance of the Company in 1997. Our results are an indication of the continued growing popularity of motorsports and the strong demand for event sponsorship and broadcast rights."
Mr. Penske further stated, "In addition to the new seats and events, we improved the geographic diversity of the Company, adding world class facilities in some of the most attractive markets in the United States. Additionally, our acquisitions of 40% of Homestead-Miami Speedway and 7% of Grand Prix Association of Long Beach have positioned the Company to capitalize on the increasing national popularity of professional motorsports. In 1998, including our partnership in Miami, we will host fifteen premier event weekends compared to ten last year. Our schedule includes five NASCAR Winston Cup Series, four CART FedEx Championship Series, three NASCAR Craftsman Truck Series, and six NASCAR Busch Series Grand National Division events."
Mr. Penske added, "We look forward to continued growth in 1998. To achieve our long-term growth objectives and improve our guests' overall racing experience, we expect to spend $22 million on seat expansion and other upgrades to make our facilities the finest entertainment venues in the industry."
The Penske Motorsports racing schedule begins at North Carolina Speedway on February 21st with the running of the GM Goodwrench Service Plus 200, a Busch Series Grand National Division event, followed by the GM Goodwrench Service Plus 400 Winston Cup Series event on February 22nd. Penske Motorsports, Inc. is a leading promoter and marketer of professional motorsports in the United States. PMI owns and operates the following through its wholly owned subsidiaries: Michigan Speedway in Brooklyn, Michigan; Nazareth Speedway in Nazareth, Pennsylvania; California Speedway near Los Angeles, California; and North Carolina Speedway near Rockingham, North Carolina. PMI also holds a 40% interest in Homestead-Miami Speedway, LLC, near Miami, Florida, and has a minority interest in Grand Prix Association of Long Beach, Inc. In addition, PMI produces and markets motorsports-related merchandise and accessories such as apparel, souvenirs and collectibles; and it distributes and sells Goodyear brand racing tires in the Midwest and Southeast regions of the United States.
Penske Motorsports' major shareholder is a majority-owned subsidiary of Penske Corporation, a closely held, diversified transportation services company which conducts its business through a number of wholly or partially owned companies, including Penske Truck Leasing Company, Detroit Diesel Corporation, Diesel Technology Company, Penske Automotive Group, Inc., Penske Auto Centers, Inc., and Penske Capital Partners. The Penske group of businesses has annual revenues exceeding $6 billion and employs more than 28,000 around the world.
PENSKE MOTORSPORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for share and per share data)
Three Months Ended Year
Ended
December 31,
December 31,
1997 1996 1997
1996
REVENUES:
Speedway admissions $5,511 $45,550
$20,248
Other speedway revenues 4,795 $52 33,926
13,041
Merchandise, tires
and accessories 3,865 2,905 30,340
21,886
TOTAL REVENUES 14,171 2,957 109,816
55,175
EXPENSES:
Operating 9,370 2,065 40,399
18,067
Cost of sales 1,543 1,564 16,954
12,834
Depreciation and
amortization 2,059 871 7,212
3,167
Selling, general
and administrative 2,981 1,041 16,379
6,185
TOTAL EXPENSES 15,953 5,541 80,944
40,253
OPERATING INCOME (LOSS) (1,782) (2,584) 28,872
14,922
EQUITY IN LOSS OF AFFILIATES (133) (860)
INTEREST INCOME (EXPENSE), net (869) 368 (1,558)
1,950
INCOME (LOSS) BEFORE
INCOME TAXES (2,784) (2,216) 26,454
16,872
INCOME TAXES (BENEFIT) (966) (870) 10,009
5,992
NET INCOME (LOSS) $(1,818) $(1,346) $16,445
$10,880
NET INCOME (LOSS) PER SHARE $(.13) $(.10) $1.19
PRO FORMA NET INCOME PER SHARE
$.90
WEIGHTED AVERAGE NUMBER
OF SHARES 14,168,087 13,042,782 13,810,570
PRO FORMA WEIGHTED AVERAGE NUMBER OF SHARES
12,128,920
PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31,
ASSETS 1997 1996
CURRENT ASSETS:
Cash and cash equivalents $249 $27,862
Receivables 4,787 2,365
Inventories 2,433 2,060
Prepaid expenses 1,769 1,272
TOTAL CURRENT ASSETS 9,238 33,559
PROPERTY AND EQUIPMENT, net 224,666 140,402
INVESTMENTS 15,366
GOODWILL, net 40,067 6,918
OTHER ASSETS 2,077 3,118
TOTAL $291,414 $183,997
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $1,017 $1,738
Accounts payable 3,868 8,223
Accrued expenses 2,343 1,715
Other payables 9,956
Deferred revenues, net 22,529 14,125
TOTAL CURRENT LIABILITIES 39,713 25,801
LONG-TERM DEBT, less current portion 47,278 3,825
DEFERRED REVENUES 738
DEFERRED TAXES 13,036 8,969
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $ .01 share:
Authorized 50,000,000 shares
Issued and outstanding
14,208,898 shares in 1997
and 13,241,798 in 1996 142 132
Additional paid-in-capital 159,371 130,534
Retained earnings 31,136 14,736
TOTAL STOCKHOLDERS' EQUITY 190,649 145,402
TOTAL $291,414 $183,997
SOURCE Penske Motorsports, Inc.