Penske Motorsports Announces Record Revenues and Earnings for 1998
5 February 1999
Penske Motorsports Announces Record Revenues and Earnings for 1998
DETROIT, Feb. 4 -- Penske Motorsports, Inc. (PMI)
today announced record revenues and earnings for the three
months ended December 31, 1998. Revenues increased 79% to $25.4 million,
compared to $14.2 million in the same period of 1997, while net income for the
fourth quarter increased to $3.8 million, or $.28 per diluted share, compared
to a loss of $1.8 million, or $.13 loss per diluted share for the prior year
fourth quarter. The increases in revenues and net income in the fourth
quarter of 1998 were due to a change in the date of the CART FedEx
Championship Series race at California Speedway from the third to the fourth
quarter, as well as increased attendance at the AC Delco 400 Winston Cup event
at North Carolina Speedway.
For the year ended December 31, 1998, revenues increased 6% to $116.9
million and net income was up 1% to $16.6 million. After a 2% increase in
average shares outstanding, 1998 earnings were $1.17 per diluted share
compared to $1.19 per diluted share in 1997. For the full year, operating
income increased 8% to $31.1 million, versus $28.9 million in the prior year.
Greg Penske, President of PMI, said, "In addition to record operating
performance by the Company in 1998, there were several significant events
which made the year a tremendous success and have us poised for strong growth
in the future. We expanded the capacity at our existing facilities and ended
the year with over 300,000 reserved seats. New attendance records were set at
our Michigan, California, and North Carolina Speedways, and once again we
hosted the largest single-day sporting events in the states of Michigan and
California. Several new sponsors were introduced in 1998, including Pepsi and
VISA, and we look forward to expanding our relationship with them. Finally,
our belief in the importance of the South Florida racing market was confirmed
in the third quarter when a 1999 Winston Cup race was awarded to Homestead-
Miami Speedway, our joint venture with International Speedway Corporation. We
are excited about the contribution of this joint venture to our future
operating results."
Mr. Penske added, "In 1999, we will continue to leverage on the growth
opportunities at our existing speedways, through both facility expansion and
enhancements to our race schedules. In response to the overwhelming demand
for NASCAR racing at Michigan Speedway we will be increasing the seating
capacity by a net 14,000 seats, and will host a Craftsman Truck Series event
for the first time. Due to the strong corporate hospitality demand at
California Speedway, we will be adding 28 skybox suites in time for our
October 31 CART FedEx Championship Series event, and at Nazareth Speedway we
will accommodate increased corporate hospitality demand by constructing
temporary trackside suites. In 1999, including our partnership in Miami, we
will host six NASCAR Winston Cup Series, four CART FedEx Championship Series,
four NASCAR Craftsman Truck Series, and six NASCAR Busch Series Grand National
Division events."
The Penske Motorsports racing schedule begins at North Carolina Speedway
on February 20th with the running of the ALLTEL 200 Busch Series Grand
National Division event, followed by the Dura-Lube/Big Kmart 400 Winston Cup
Series event on February 21.
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, L.L.C. 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 per share data)
Three Months Ended Year Ended
December 31, December 31,
1998 1997 1998 1997
Revenues:
Speedway admissions $ 12,048 $ 5,511 $ 51,335 $ 45,550
Other speedway revenues 9,772 4,795 41,811 33,926
Merchandise, tires and
accessories 3,596 3,865 23,712 30,340
Total Revenues 25,416 14,171 116,858 109,816
Expenses:
Operating expenses 9,962 9,370 46,151 40,399
Cost of sales 1,715 1,543 13,972 16,954
Depreciation and amortization 2,904 2,059 11,189 7,212
Selling, general and
administrative 3,667 2,981 14,465 16,379
Total Expenses 18,248 15,953 85,777 80,944
Operating Income (Loss) 7,168 (1,782) 31,081 28,872
Equity in Income/(Loss) of
Affiliates 189 (133) (1,382) (860)
Gain on Sale of Investment 1,108
Interest Expense (1,037) (869) (3,523) (1,558)
Income (Loss) Before Income
Taxes 6,320 (2,784) 27,284 26,454
Income Taxes (Benefit) 2,487 (966) 10,697 10,009
Net Income (Loss) $ 3,833 $ (1,818) $ 16,587 $ 16,445
Basic Net Income (Loss)
Per Share $ .28 $ (.13) $ 1.17 $ 1.19
Diluted Net Income (Loss) Per
Share $ .28 $ (.13) $ 1.17 $ 1.19
Basic Weighted Average Number
Of Shares Outstanding 13,873,998 14,168,087 14,117,993 13,810,570
Diluted Weighted Average Number
Of Shares Outstanding 13,873,998 14,183,608 14,134,041 13,832,358
Penske Motorsports, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands)
December 31,
1998 1997
ASSETS
Current Assets:
Cash and cash equivalents $ 1,311 $ 249
Receivables 4,398 4,787
Inventories 3,085 2,433
Prepaid expenses 1,246 1,769
Deferred taxes 368 313
Total Current Assets 10,408 9,551
Property and Equipment, net 247,421 224,666
Investments 12,679 15,366
Goodwill, net 39,497 40,112
Other Assets 529 2,077
Total $ 310,534 $ 291,772
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 512 $ 1,017
Accounts payable 3,915 3,868
Accrued expenses 2,933 2,343
Other payables - 9,956
Deferred revenues, net 19,204 22,529
TOTAL CURRENT LIABILITIES 26,564 39,713
Long-Term Debt, less current portion 61,442 47,278
Deferred Revenues, net 369 738
Deferred Taxes 22,413 13,349
Commitments and Contingencies
Stockholders' Equity:
Common stock, par value $ .01 share:
Authorized 50,000,000 shares
Issued and outstanding 14,208,898 shares
in 1998 and 1997 142 142
Additional paid-in-capital 159,371 159,371
Retained earnings 47,768 31,181
207,281 190,694
Less treasury stock, at cost,
353,900 shares 7,535 -
Total Stockholders' Equity 199,746 190,694
Total $ 310,534 $ 291,772