Penske Motorsports Reports First Quarter Results
30 April 1999
Penske Motorsports Reports First Quarter Results
DETROIT, April 29 -- Penske Motorsports, Inc. (PMI)
today announced results for the quarter ending March 31, 1999.
First quarter revenues increased 27% to $12.9 million, versus $10.1 million in
the prior year period. The Company's net loss for the period was $2.9
million, or $.21 per share, compared to a net loss of $1.6 million, or $.12
per share for the first quarter of 1998, which included an after-tax gain of
$681,000 from the Company's sale of its 7.3% interest in Grand Prix
Association of Long Beach in March of 1998. Excluding this gain, the net loss
would have been $2.3 million, or $.16 per share for the prior year period.
The increase in revenues for the first quarter of 1999 was primarily a
result of increased television rights fees, hospitality, sponsorship, and
other speedway revenues for the February race weekend at North Carolina
Speedway. Also, an increase in merchandise, tires and accessories revenues
was primarily the result of strong tire sales in the southeast United States
and the addition of merchandise sales at North Carolina Speedway.
Greg Penske, President of PMI, said, "We are pleased with the first
quarter results. We hosted two event weekends during the quarter, including
the Dura-Lube/Big Kmart 400 at North Carolina Speedway, as well as the season-
opening events on both the CART FedEx Championship Series and NASCAR Craftsman
Truck Series schedules at Homestead-Miami Speedway, our joint venture
partnership with International Speedway Corporation. Unseasonably cold
weather affected our Sunday attendance at North Carolina, however increased
attendance for the Saturday ALLTEL 200 Busch event, as well as strong
corporate hospitality and merchandise sales helped contribute to a successful
weekend, and resulted in overall record attendance. We also announced the
formation of a new relationship with General Mills to sponsor the Winston Cup
Series race to be held on October 24 at North Carolina Speedway. The race
will be called the Pop Secret Microwave Popcorn 400, and represents the first-
ever title event sponsorship by General Mills."
Mr. Penske added, "As we look forward to the start of the racing season at
our other facilities, we are undergoing several expansion projects to meet the
increasing demand for motorsports entertainment. We are in the process of
adding over 13,000 grandstand seats at Michigan Speedway, and over 25,000
grandstand seats at Homestead-Miami Speedway. In response to strong corporate
demand, we will be adding 28 luxury skybox suites at California Speedway in
time for the season ending Marlboro 500 Presented by Toyota CART event, and
have added temporary suites at Nazareth Speedway."
The Company's racing schedule for the second quarter includes two NASCAR
Winston Cup Series, one CART FedEx Championship Series, two Busch Series Grand
National Division, one Dayton PPG Indy Lights, and one International Race of
Champions (IROC) event.
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 OPERATIONS
(In thousands, except share and per share data)
THREE MONTHS ENDED MARCH 31,
1999 1998
REVENUES:
Speedway admissions $3,243 $3,238
Other speedway revenues 4,754 2,953
Merchandise, tires and accessories 4,856 3,946
TOTAL REVENUES 12,853 10,137
EXPENSES:
Operating 7,749 6,190
Cost of sales 3,145 2,462
Depreciation and amortization 3,039 2,675
Selling, general and administrative 3,042 2,252
OPERATING EXPENSES 16,975 13,579
OPERATING LOSS (4,122) (3,442)
EQUITY IN INCOME OF AFFILIATES 356 512
GAIN ON SALE OF INVESTMENT 1,108
INTEREST EXPENSE (1,039) (859)
LOSS BEFORE INCOME TAXES (4,805) (2,681)
INCOME TAX BENEFIT 1,884 1,033
NET LOSS $(2,921) $(1,648)
BASIC NET LOSS PER SHARE $(.21) $(.12)
DILUTED NET LOSS PER SHARE $(.21) $(.12)
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 13,854,998 14,208,898
DILUTED WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 13,909,117 14,216,214
PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31,
1999 1998
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $1,368 $1,311
Receivables 14,552 4,398
Inventories 3,217 3,085
Prepaid expenses and other assets 2,756 1,614
TOTAL CURRENT ASSETS 21,893 10,408
PROPERTY AND EQUIPMENT, net 248,582 247,421
INVESTMENTS 13,021 12,679
GOODWILL, net 39,345 39,497
OTHER ASSETS 983 529
TOTAL $323,824 $310,534
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $514 $512
Accounts payable 3,695 3,915
Accrued expenses 1,566 2,933
Deferred revenues, net 47,544 19,573
TOTAL CURRENT LIABILITIES 53,319 26,933
LONG-TERM DEBT, less current portion 49,916 61,442
DEFERRED TAXES 23,763 22,413
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $ .01 share:
Authorized 50,000,000 shares
Issued and outstanding 14,208,898
shares in 1999 and 1998 142 142
Additional paid-in-capital 159,371 159,371
Retained earnings 44,848 47,768
204,361 207,281
Treasury stock, at cost,
353,900 shares (7,535) (7,535)
TOTAL STOCKHOLDERS' EQUITY 196,826 199,746
TOTAL $323,824 $310,534