Penske Motorsports Announces Third Quarter Results
30 October 1998
Penske Motorsports Announces Third Quarter Results
DETROIT, Oct. 29 -- Penske Motorsports, Inc. (PMI)
today announced results for the quarter ending September 30,
1998. Third quarter revenues of $35.2 million compared to 1997 third quarter
revenues of $44.0 million. For the first nine months of the year, revenues
were $91.4 million, compared to $95.6 million through the first nine months of
1997. The Company's net income for the third quarter was $3.5 million, or
$.25 per basic share, compared to net income of $8.8 million, or $.63 per
basic share for the prior year third quarter. Net income for the first nine
months of 1998 was $12.8 million, or $.90 per basic share, compared to
$18.3 million, or $1.33 per basic share in the first nine months of 1997.
The Company's results for the third quarter and nine months ended
September 30, 1998 are not comparable with the corresponding periods in 1997,
because of changes in the CART FedEx Championship Series race schedule this
year. The Marlboro 500 Presented by Toyota is now the season-ending race and
will be run in the fourth quarter of 1998, while it occurred in the third
quarter last year. Also, the Kenwood Home and Audio 300 Busch Series event
and the No Fear Challenge Craftsman Truck Series event were held in the third
quarter of 1998, as opposed to the fourth quarter of 1997.
Greg Penske, President of PMI, said, "The highlight of our third quarter
was the tremendous success of our Winston Cup event at Michigan Speedway, the
Pepsi 400 Presented by DeVilbiss. We hosted a record Sunday crowd in excess
of 140,000 guests who, in addition to enjoying an exciting race, benefited
from a new traffic flow plan which significantly reduced the time it took to
enter and exit the Speedway. The success of this improved plan will allow us
to further expand our seating capacity at the Speedway in an attempt to meet
the incredible demand for NASCAR racing." Mr. Penske further commented,
"Another important event in the third quarter was the awarding of a 1999
Winston Cup race to Homestead-Miami Speedway, our joint venture with
International Speedway Corporation. Adding this coveted date to the NASCAR
schedule confirms our belief in the importance of the vibrant South Florida
market to the sport, sponsors and the media. We are excited about the
continued growth potential at this world-class facility. In anticipation of
this event, we are currently undertaking a major expansion project at the
Homestead-Miami Speedway which will almost double the current seating capacity
to over 70,000 and add desirable club-level seating."
Penske Motorsports will conclude its 1998 race schedule in the fourth
quarter with major race weekends at North Carolina Speedway and California
Speedway. On November 1, North Carolina Speedway will host the AC Delco 400
Winston Cup Series event, and on the same day California Speedway will host
the Marlboro 500 Presented by Toyota CART FedEx Championship Series event.
The seating capacity has been increased at both of these facilities since last
year. At North Carolina Speedway, a new grandstand with 11,000 additional
premier seats has been constructed, while 15,000 seats have been added at
California Speedway since last year.
Penske Motorsports, Inc. is a leading promoter and marketer of
professional motorsports in the United States. PMI owns and operates the
following facilities through its wholly-owned subsidiaries: Michigan Speedway
in Brooklyn, Michigan; Nazareth Speedway in Nazareth, Pennsylvania; California
Speedway in San Bernardino County, California; and North Carolina Speedway
near Rockingham, North Carolina. PMI also holds a 45% interest in Homestead-
Miami Speedway, LLC, near Miami, Florida. In addition, PMI produces and
markets motorsports-related merchandise and accessories such as apparel,
souvenirs and collectibles through its subsidiary, Motorsports International
Corp.; and a subsidiary of PMI 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. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except for share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
REVENUES:
Speedway admissions $15,077 $20,343 $39,287 $40,039
Other speedway revenues 11,702 13,381 32,039 29,131
Merchandise, tires and
accessories 8,439 10,250 20,116 26,475
TOTAL REVENUES 35,218 43,974 91,442 95,645
EXPENSES:
Operating 14,947 14,715 36,189 31,029
Cost of sales 5,136 6,009 12,257 15,411
Depreciation and
amortization 2,883 2,840 8,285 5,153
Selling, general and
administrative 4,503 5,115 10,798 13,398
TOTAL EXPENSES 27,469 28,679 67,529 64,991
OPERATING INCOME 7,749 15,295 23,913 30,654
EQUITY IN LOSS OF AFFILIATES (1,161) (727) (1,571) (727)
GAIN ON SALE OF INVESTMENT 1,108
INTEREST EXPENSE, net (818) (766) (2,486) (689)
INCOME BEFORE INCOME TAXES 5,770 13,802 20,964 29,238
INCOME TAXES 2,260 4,957 8,210 10,975
NET INCOME $3,510 $8,845 $12,754 $18,263
BASIC NET INCOME PER SHARE $.25 $.63 $.90 $1.33
DILUTED NET INCOME PER SHARE $.25 $.62 $.90 $1.33
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 14,183,143 14,148,340 14,200,219 13,690,088
DILUTED WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 14,183,143 14,189,747 14,229,886 13,718,297
PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
1998 1997
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $567 $249
Receivables 6,404 4,787
Inventories 2,556 2,433
Prepaid expenses and other assets 1,877 2,082
TOTAL CURRENT ASSETS 11,404 9,551
PROPERTY AND EQUIPMENT, net 244,482 224,666
INVESTMENTS 12,491 15,366
GOODWILL, net 39,666 40,112
OTHER ASSETS 1,795 2,077
TOTAL $309,838 $291,772
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $511 $1,017
Accounts payable 6,915 3,868
Accrued expenses 4,335 2,343
Other payables 9,956
Deferred revenues, net 14,595 22,529
TOTAL CURRENT LIABILITIES 26,356 39,713
LONG-TERM DEBT, less current portion 64,939 47,278
DEFERRED REVENUES, net 738 738
DEFERRED TAXES 19,558 13,349
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $ .01 share:
Authorized 50,000,000 shares
Issued 14,208,898 shares 142 142
Additional paid-in-capital 159,371 159,371
Retained earnings 43,935 31,181
203,448 190,694
Less treasury stock, at cost: 242,500 shares 5,201
TOTAL STOCKHOLDERS' EQUITY 198,247 190,694
TOTAL $309,838 $291,772