Speedway Motorsports Reports Results for Q3 and Nine Months
9 November 1999
Speedway Motorsports Reports Results for the Third Quarter and Nine Months Ended September 30, 1999
CONCORD, N.C., Nov. 9 -- Speedway Motorsports, Inc.
today reported total revenues for the third quarter increased
16% or $6.9 million to $48.6 million, compared to last year. Net earnings
decreased $6.7 million to a net loss of $4.8 million, or diluted loss per
share of $.11, which was below expectations, compared to diluted earnings per
share of $.05 last year. The quarterly results are not readily comparable to
last year because of the acquisition of Las Vegas Motor Speedway in December
1998 and changes in the Company's 1999 racing schedule from last year.
The Indy Racing League and NASCAR-sanctioned Craftsman Truck Series racing
events hosted at Texas Motor Speedway in the fourth quarter of 1999 were held
in the third quarter of 1998. Also, the IRL racing event hosted at Lowe's
Motor Speedway at Charlotte in the second quarter of 1999 was held in the
third quarter of 1998. Changes in racing schedules can lessen the
comparability of operating results between quarterly financial statements of
successive years.
For the nine months ended September 30, 1999, total revenues increased
36% or $64.3 million to $241.8 million, and operating income increased 28% or
$17.5 million to $80.4 million, over last year. Net income, excluding non-
recurring charges for financing costs attributable to the Las Vegas Motor
Speedway acquisition, increased 9% or $3.1 million to $36.7 million, and
diluted earnings per share increased $.06 to $.85, over last year. Net income
including non-recurring charges was $34.6 million or diluted earnings per
share of $.81.
Bristol Motor Speedway hosted the only NASCAR Winston Cup and Busch Series
weekend for the third quarter. The Goody's Headache Powder 500 hosted sold-
out capacity crowds and the Food City 250 was attended by a record number of
fans. The Company also announced the addition of 13,000 seats to Bristol, the
world's fastest half-mile, for the spring 2000 Winston Cup weekend. All
13,000 seats were sold within hours of going on sale, demonstrating the excess
demand for tickets at Bristol.
"We are pleased to announce record results for the nine months ended
September 30, 1999. However, the results for the third quarter are
disappointing," stated Bruton Smith, chairman and chief executive officer.
"We continue to experience growth in our core business as evidenced by our
record NASCAR Winston Cup and Busch Series events at Bristol, and our other
speedways this year. SMI is well positioned in top markets with first class
facilities and venues in America's fastest growing sport. We are particularly
excited with the current NASCAR television broadcast negotiations."
Less than expected attendance and event related revenues for the IRL
racing events at Atlanta and Las Vegas Motor Speedways resulted in
approximately $3 million of the third quarter earnings shortfall. Rain
plagued the inaugural Winston Showdown NHRA event at the new Bristol Dragway
forcing delay, contributing another $1 million to the shortfall because of
reduced admissions and increased direct event expenses. Also, continued
carrying costs of the 1.4 million-square-foot Las Vegas Motor Speedway
Industrial Park contributed $1 million to the shortfall, and startup
promotional and marketing expenses of Oil-Chem Research Corp. contributed
another $1 million.
"Strong actions to correct these factors are underway," stated H.A.
Wheeler, chief operating officer and president. "We plan to lessen the risk
of financial losses from IRL and NHRA events by renegotiating our agreements
with the sanctioning bodies and restructuring our events to improve their
profitability. These shortfalls should not occur in the future."
The Company intends to maximize the sales value of the Las Vegas Motor
Speedway Industrial Park by continuing to lease up the facility as area real
estate markets develop. In addition, Oil-Chem expects to commence retail
sales for zMax, the metal moisturizer, in early 2000. Oil-Chem will continue
to experience losses in 1999 as marketing expenses are incurred in preparation
for retail sales.
"Notwithstanding the third quarter shortfalls, it is important to note
that for the nine months ended September 30, 1999, total revenues increased
36% and operating income increased 28% over last year," stated H.A. Wheeler.
"SMI has reported 18 consecutive quarters of year-over-year revenue growth
including the current quarter."
"More significantly, even with this year's revised forecast results of
$1.01 per share, before non-recurring charges for financing costs attributable
to the Las Vegas Motor Speedway acquisition, and along with diluted earnings
per share estimates for fiscal 2000 of $1.30 to $1.35, SMI's compounded annual
growth rate in earnings per share approximates 20% for the 5 year period 1996
to 2000," stated William R. Brooks, chief financial officer. "Many growth
oriented companies experience aberrations like we are experiencing in 1999.
But when viewed in a longer-term perspective, SMI's compound annual earnings
growth rate for any five year period approximates 20%. Such long-term growth
rates clearly demonstrate SMI's continuing operational strengths and
enhancement of shareholder value."
Speedway Motorsports is a leading marketer and promoter of motorsports
entertainment in the United States. The Company owns and operates the
following premier facilities: Atlanta Motor Speedway, Bristol Motor Speedway,
Lowe's Motor Speedway at Charlotte, Las Vegas Motor Speedway, Sears Point
Raceway and Texas Motor Speedway. The Company also provides event food,
beverage, and souvenir merchandising services through its Finish Line Events
subsidiary, and manufactures and distributes smaller-scale, modified racing
cars through its 600 Racing subsidiary.
This news release contains forward looking statements, including
statements with regard to the Company's growth potential and future operations
and financial results. There are many factors that affect future events and
trends of its business including, but not limited to, the success of IRL and
NHRA racing events, zMax, and real estate markets. These factors and others
factors set forth in the Company's filings with the Securities and Exchange
Commission involve certain risks and uncertainties that could cause actual
results or events to differ materially from management's views and
expectations.
Note: Speedway Motorsports will host a conference call today at 11:00 a.m.
EST. The call is open to all participants. Please dial (719) 457-2629 to
connect to the call. The confirmation number is 811613. Participating in the
call will be H.A. Wheeler, Chief Operating Officer and President; William R.
Brooks, Chief Financial Officer; and Marylaurel E. Wilks, Vice President,
Communications and General Counsel.
Speedway Motorsports, Inc. and Subsidiaries
Selected Financial Data - Unaudited
For The Three and Nine Months Ended September 30, 1999 and 1998
(In thousands except per share amounts)
Three Months Ended Nine Months Ended
INCOME STATEMENT DATA 9/30/99 9/30/98 9/30/99 9/30/98
REVENUES:
Admissions $19,691 $20,761 $102,568 $82,157
Event related revenue 17,461 16,891 114,794 82,674
Other operating
revenue
11,468 4,096 24,416 12,616
Total revenues 48,620 41,748 241,778 177,447
OPERATING EXPENSES:
Direct expense
of events 19,636 19,369 85,963 66,132
Other direct
operating expenses 10,955 2,878 20,165 8,138
General and
administrative 11,102 8,541 33,420 25,486
Depreciation and
amortization 7,584 5,108 21,843 14,847
Total operating
expenses 49,277 35,896 161,391 114,603
OPERATING INCOME (LOSS) (657) 5,852 80,387 62,844
Interest expense, net (7,624) (2,871) (20,276) (8,483)
Acquisition loan cost
amortization -- -- (3,398) --
Other income, net 310 189 605 1,626
Income (loss) before
income taxes (7,971) 3,170 57,318 55,987
Income tax provision
(benefit) (3,193) 1,275 22,676 22,401
NET INCOME (LOSS) ($4,778) $1,895 $34,642 $33,586
Basic earnings (loss)
per share ($0.11) $0.05 $0.83 $0.81
Weighted average number
of shares outstanding 41,599 41,488 41,552 41,479
Diluted earnings
(loss) per share ($0.11) $0.05 $0.81 $0.79
Weighted average number
of shares outstanding 45,025 44,527 44,963 44,599
Note: Computations of diluted earnings (loss) per share were anti-dilutive
for the three months ended September 30, 1999 and 1998; therefore, reported
basic and diluted earnings (loss) per share are the same.
Speedway Motorsports, Inc. and Subsidiaries
Selected Financial Data - Unaudited
As of September 30, 1999 and December 31, 1998
(In thousands)
Consolidated
Balance Sheet Data 9/30/99 12/31/98
Cash and cash equivalents $26,584 $35,399
Total current assets 74,712 92,340
Property and equipment, net 776,851 730,686
Goodwill and other
intangible assets, net 58,817 56,903
Total assets 941,459 904,877
Current liabilities 100,502 106,616
Revolving credit facility
and acquisition loan 130,000 254,050
Senior and convertible
subordinated long-term debt 327,313 198,708
Total long-term debt 458,638 453,924
Total liabilities 616,534 617,757
Total stockholders' equity $324,925 $287,120