Penske Motorsports Reports Record Second Quarter 1997 Results
5 August 1997
Penske Motorsports Reports Record Second Quarter 1997 Results
DETROIT, Aug. 5 -- Penske Motorsports, Inc. (PMI)
today announced record revenues, earnings, and earnings per
share for the second quarter of 1997. Second quarter revenues were up 88% to
$46.3 million, versus $24.7 million in the comparable quarter of 1996. Net
income for the period was up 63% to $10.9 million, compared to $6.7 million in
1996. On a per common share basis, earnings were $0.80 compared to $0.52 in
the second quarter of 1996, after a 5% increase in average shares outstanding.
Six month revenues were $51.7 million, up 82%, and net earnings increased 64%
to $9.4 million, or $0.70 per share, compared to $0.51 per share in the first
six months of 1996.
PMI reported that its record financial performance resulted from growth in
all of its businesses and the successful grand opening of California Speedway
in June. Admissions revenue for the period doubled reflecting a 60% increase
in attendance. Other Speedway event revenues, which includes food,
merchandise, corporate sponsorship, hospitality, and broadcast rights, were up
over 100%.
The Company's Merchandise, Tires and Accessories (MT&A) business also
experienced record growth with revenues up 51% over the second quarter 1996.
MT&A gains were driven by strong catalog sales, expanded product lines, and
exceptional demand for California Speedway inaugural merchandise.
Greg Penske, President of PMI, said, "I am pleased with our Company's
financial performance in the first half of 1997, particularly with the
successful grand opening of California Speedway. We also announced two
important acquisitions which will enhance our growth going forward. During
April we completed our purchase of a 70% interest in North Carolina Motor
Speedway (NCMS), which currently hosts two major NASCAR Winston Cup Series
events and two NASCAR Busch Series Grand National Division races. In July,
we acquired a 40% interest in the Homestead-Miami Speedway, which operates a
45,000 seat, state-of-the-art motorsports complex."
Mr. Penske went on to say, "Our current expansion uniquely positions the
Company in the motorsports entertainment industry. PMI speedways are now
located in five of the most attractive and diversified U.S. markets. At the
same time, our financial condition has strengthened, allowing us to pursue new
growth opportunities. Since year-end, our equity has increased 25% to $182
million, and our debt-to-capitalization is only 10%."
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; and
California Speedway near Los Angeles, California. PMI also has a majority
ownership of the North Carolina Motor Speedway near Rockingham, North Carolina
and holds a 40% interest in Homestead-Miami Speedway, LLC. In addition, PMI
produces and markets motorsports-related merchandise and accessories such as
apparel, souvenirs and collectibles, and 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, AG Kuhnle, Kopp and Kausch, 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 INCOME
(In thousands except for share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
REVENUE:
Speedway admissions $19,696 $9,780 $19,696 $9,780
Other speedway revenue 15,699 7,658 15,750 7,694
Merchandise, tires and
accessories 10,901 7,226 16,225 10,905
TOTAL REVENUES 46,296 24,664 51,671 28,379
EXPENSES:
Operating 14,028 6,964 16,314 8,970
Cost of sales 6,226 4,416 9,402 6,515
Depreciation and
amortization 1,524 813 2,313 1,473
Selling, general and
administrative 6,553 2,642 8,283 3,113
OPERATING EXPENSES 28,331 14,835 36,312 20,071
OPERATING INCOME 17,965 9,829 15,359 8,308
INTEREST INCOME (EXPENSE), net (48) 762 77 756
INCOME BEFORE INCOME TAXES 17,917 10,591 15,436 9,064
INCOME TAXES 6,988 3,874 6,018 3,337
NET INCOME $10,929 $6,717 $9,418 $5,727
NET INCOME PER SHARE $.80 $.52 $.70 $.51
WEIGHTED AVERAGE NUMBER OF
SHARES 13,670,164 12,987,500 13,457,164 11,232,960
PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31,
ASSETS 1997 1996
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $6,973 $27,862
Receivables 12,135 2,365
Inventories 4,432 2,060
Prepaid expenses 1,254 1,272
TOTAL CURRENT ASSETS 24,794 33,559
PROPERTY AND EQUIPMENT, net 209,771 140,402
GOODWILL, net 30,099 6,918
OTHER ASSETS 2,146 3,118
TOTAL $266,810 $183,997
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $13,620 $1,738
Accounts payable 18,026 8,223
Accrued expenses 10,661 1,715
Deferred revenue, net 25,189 14,125
TOTAL CURRENT LIABILITIES 67,496 25,801
LONG-TERM DEBT, less current portion 5,287 3,825
MINORITY INTEREST 2,101
DEFERRED TAXES 9,910 8,969
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 share:
Authorized 50,000,000 shares
Issued and outstanding 14,148,340
shares in 1997 and 13,241,798
in 1996 141 132
Additional paid-in-capital 157,721 130,534
Retained earnings 24,154 14,736
TOTAL STOCKHOLDERS' EQUITY 182,016 145,402
TOTAL $266,810 $183,997
SOURCE Penske Motorsports, Inc.