Championship Auto Racing Teams Reports Record Q3 1998 Results
28 October 1998
Championship Auto Racing Teams Reports Record Third Quarter 1998 Results
DETROIT, Oct. 27 -- Championship Auto Racing Teams, Inc.
today announced record revenues, net income and earnings per
share for the third quarter and nine months ended September 30, 1998.
Actual Results
Total revenues for the third quarter of 1998 were up 29% to
$20.0 million from $15.5 million in the comparable quarter in 1997. Net
income for the third quarter of 1998 was up to $4.0 million, compared to a net
loss of ($14.9) million in the third quarter of 1997. On a diluted per common
share basis, earnings were $0.26 in 1998 compared to a loss of ($1.46) in the
third quarter of 1997.
For the nine month period ended September 30, 1998, revenues increased
27% to $50.1 million from $39.6 million. Net income rose to $11.8 million or
$0.84 per diluted share versus a net loss of ($15.2) million, or ($1.49) per
diluted share.
Pro Forma Results
Assuming the American Racing Series, BP Automotive and Pro-Motion Agency
acquisitions had been effective January 1, 1997 and January 1, 1998, and after
eliminating certain non-recurring race team expenses in the third quarter and
nine months ended September 30, 1997, pro forma results for the periods would
have been as follows:
Total revenues for the third quarter of 1998 increased 9% to $20.0 million
from $18.3 million in the comparable quarter in 1997. Net income for the
third quarter of 1998 was $4.0 million compared to a ($8.9) million loss in
the third quarter of 1997. On a diluted per common share basis, earnings were
$0.26 in 1998 compared to a loss of ($0.84) in the third quarter of 1997.
For the nine month period ended September 30, 1998, revenues increased
15% to $51.4 million from $44.9 million. Net income rose to $12.0 million or
$0.83 per diluted share versus a loss of ($2.9) million, or ($0.27) per
diluted share.
The number of events held in a particular quarter will affect the
comparability of earnings information from quarter to quarter. In the third
quarter of 1998, CART conducted seven events compared to eight events in the
third quarter of 1997. Fontana, which was the last race of the 1997 season,
was held in the third quarter 1997. In 1998, the Fontana event will be held
in the fourth quarter, along with the events in Houston and Australia.
"Interest in open-wheel racing remains strong throughout the world and
this is reflected in our record third quarter performance," said Andrew Craig,
CART Chairman and CEO. "A new race in 1999 in Chicago will bring the FedEx
Championship Series to a record 20 events and we anticipate further growth
next year."
Championship Auto Racing Teams, Inc., a New York Stock Exchange listed
company that completed a initial public offering on March 10,
1998, is the leading promoter of open wheel racing in the United States and
owns, operates and markets the FedEx Championship Series, which is comprised
of 19 races in five countries on four continents in 1998. Drivers such as
Michael Andretti, Bobby Rahal, Al Unser, Jr., and 1997 and 1998 champion Alex
Zanardi race 800-plus horsepower, open-wheel cars at speeds of more than 230
miles per hour on some circuits. CART also owns and sanctions the PPG Dayton
Indy Lights Championship as well as the KOOL Toyota Atlantic Championship.
Championship Auto Racing Teams, Inc.
Consolidated Statement of Operations
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
(In Thousands, Except Earnings Per Share)
Qtr ended Qtr ended YTD YTD
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
Revenues:
Sanction Fees 10,143 10,295 25,385 24,248
Sponsorship Revenue 4,942 1,867 12,705 6,186
TV Revenue 1,643 2,409 4,324 5,240
Engine Leases, Rebuilds
and Wheel Sales 767 0 1,721 0
Other 2,515 936 5,940 3,899
Total Revenues 20,010 15,507 50,075 39,573
Expenses
Race and franchise
fund distributions 5,999 13,379 12,873 28,939
Race Expenses 1,830 2,678 3,966 6,117
Cost of Engine Rebuilds
and Wheel Sales 218 0 522 0
Administrative and
indirect expenses 6,441 5,004 15,852 10,653
Compensation Expense 0 12,200 0 12,200
Depreciation and
amortization 228 141 556 362
Minority Interest (71) 12 (107) (205)
Total Expenses 14,645 33,414 33,662 58,066
Operating Income 5,365 (17,907) 16,413 (18,493)
Interest income/(expense) 912 130 2,145 321
Income before
income taxes 6,277 (17,777) 18,558 (18,172)
Income Tax Expense 2,312 (2,919) 6,776 (2,971)
Net Income 3,965 (14,858) 11,782 (15,201)
Earnings per share
Basic $0.26 $(1.46) $0.85 $(1.49)
Diluted $0.26 $(1.46) $0.84 $(1.49)
Weighted Average
Shares Outstanding
Basic 15,172 10,200 13,859 10,200
Diluted 15,438 10,200 14,009 10,200
Championship Auto Racing Teams, Inc.
Consolidated Statement of Operations - Proforma
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
(In Thousands, Except Earnings Per Share)
Qtr Ended Qtr Ended YTD YTD
September 30, September 30, September 30,September 30,
1998 1997 1998 1997
Revenues:
Sanction Fees 10,143 10,295 25,385 24,240
Sponsorship Revenue 4,942 3,032 13,131 8,608
TV Revenue 1,643 2,371 4,324 5,240
Engine Leases, Rebuilds
and Wheel Sales 767 696 2,432 2,355
Other 2,515 1,890 6,136 4,432
Total Revenues 20,010 18,284 51,408 44,875
Expenses
Race and franchise
fund distributions 5,999 6,700 12,887 13,946
Race Expenses 1,830 1,853 4,046 4,075
Cost of Engine Rebuilds
and Wheel Sales 218 187 809 743
Administrative and
indirect expenses 6,441 5,916 16,307 12,629
Compensation Expense -- 12,200 -- 12,200
Depreciation and
amortization 228 231 652 584
Minority Interest (71) (77) (107) (212)
Total Expenses 14,645 27,010 34,594 43,965
Operating Income 5,365 (8,726) 16,814 910
Interest income/(expense) 912 97 2,146 246
Income before
income taxes 6,277 (8,629) 18,960 1,156
Income Tax Expense 2,312 280 6,911 4,030
Net Income 3,965 (8,909) 12,049 (2,874)
Earnings per share
Basic $0.26 $(0.84) $0.84 $(0.27)
Diluted $0.26 $(0.84) $0.83 $(0.27)
Weighted Average
Shares Outstanding
Basic 15,172 10,638 14,296 10,638
Diluted 15,438 10,638 14,446 10,638
Championship Auto Racing Teams, Inc.
Consolidated Balance Sheets
As of September 30, 1998 and December 31, 1997
(In Thousands, Except Earnings Per Share)
September 30, 1998 December 31, 1997
Assets
Current Assets
Cash and Cash Equivalents $54,116 $1,164
Short Term Investments 24,742 --
Accounts Receivable 9,488 3,156
Current Portion of
Notes Receivable 824 --
Prepaid Expenses 985 751
Inventory 133 --
Current Deferred Tax Asset 31 4,683
Total Current Assets 90,319 9,754
Notes Receivable 3,350 49
Property and Equipment - Net 5,139 2,236
Trademark - Net
Noncurrent Deferred Tax -- --
Other Assets 5,547 309
Total Assets $104,355 $12,348
Liabilities and
Stockholders' Equity
Current Liabilities
Accounts Payable $977 $1,889
Accrued Liabilities
Race Expenses and
Point Awards 2,728 9,500
Taxes 2,116 491
Other 3,131 724
Unearned Income 12,505 2,352
Current Portion of
Long Term Debt 130 130
Total Current Liabilities 21,587 15,086
Long Term Debt 217 314
Deferred Federal
Taxes - Noncurrent 250 --
Minority interest (114) (7)
Stockholders'
Equity/Partners' Capital
Capital Stock 151 102
Additional Paid In Capital 89,197 15,975
Retained Earnings (7,341) (19,122)
Unrealized Gain/(Loss)
on Investments 408 --
Total Stockholders'
Equity/Partners' Equity 82,415 (3,045)
Total Liabilities
and Stockholders' Equity $104,355 $12,348