Championship Auto Racing Teams Reports Second Quarter 2000 Results
25 July 2000
Championship Auto Racing Teams Reports Second Quarter 2000 Results
DETROIT - Championship Auto Racing Teams, Inc. today announced revenues, net
income and earnings per share for the second quarter and six months ended June
30, 2000.
Revenues for the second quarter of 2000 were $24.9 million, versus
$25.5 million in the comparable quarter in 1999. Prior to an after-tax,
non-recurring charge of $1.8 million related to a severance agreement with
Andrew Craig, the Company's former President and CEO, net income for the
second quarter of 2000 was $7.9 million and earnings per share on a per
diluted common share basis was $0.50. Taking into account the non-recurring
severance charge, net income for the second quarter of 2000 was $6.1 million,
compared to $7.5 million in the second quarter of 1999. On a per diluted
common share basis, earnings were $0.39 in the second quarter of 2000 compared
to $0.47 in the comparable quarter in 1999. The non-recurring severance
expense resulted in a $0.11 per diluted common share charge for the second
quarter of 2000.
For the six-month period ended June 30, 2000, revenues were $32.8 million
versus $32.8 million in 1999. Net income, as a result of the after-tax non-
recurring charge of $1.8 million described above, was $8.1 million for the
six-months ended June 30, 2000, compared to $9.1 million for the six-month
period ended June 30, 1999. On a per diluted common share basis, earnings
were $0.52 compared to $0.58 per diluted common share. The non-recurring
severance expense resulted in a $0.11 per diluted common share charge for the
six-month period of 2000.
The number of events held in a particular quarter will affect the
comparability of earnings information from quarter to quarter. CART conducted
seven events in the second quarter of 2000, which was one less than the
comparable quarter in 1999. The CART events conducted in St. Louis and
Cleveland will be run in the third quarter of 2000 compared to the second
quarter of 1999. The CART event conducted in Detroit was held in the second
quarter of 2000 compared to the third quarter of 1999. For comparability
purposes, CART 's FedEx Championship Series will conduct nine events in the
third quarter of 2000, which was the same number of events as in 1999, and
three races in the fourth quarter of 2000, compared to two races in the fourth
quarter of 1999.
"Despite running one less race in the second quarter of 2000 in comparison
to the second quarter of 1999 and taking into account the non-recurring
charge, CART 's financial results were very strong," said CART CEO, Bobby
Rahal. "The recent addition of races in Texas, Mexico, the United Kingdom,
and Germany for 2001 show the increase demand for CART races worldwide."
Championship Auto Racing Teams, Inc. owns, operates and
markets the FedEx Championship Series. Champions Juan Montoya, Michael
Andretti and Jimmy Vasser are among the drivers who battle for the FedEx
Championship Series title on oval circuits as well as temporary and permanent
road courses. CART also owns and operates its top two development series, the
Dayton Indy Lights Championship and the Toyota Atlantic Championship.
Championship Auto Racing Teams, Inc.
Consolidated Statements of Income
For the Three and Six Months Ended June 30,2000 and 1999
(In Thousands, Except Earnings Per Share)
Qtr ended Qtr ended YTD YTD
June 30, June 30, June 30, June 30,
2000 1999 2000 1999
Revenues
Sanction fees $15,761 $15,743 $17,194 $17,099
Sponsorship revenue 5,127 5,141 10,028 9,338
TV revenue 1,768 2,040 2,028 2,313
Engine leases, rebuilds
and wheel sales 636 563 1,087 1,085
Other 1,610 1,986 2,413 2,987
Total revenues 24,902 25,473 32,750 32,822
Expenses
Race distributions 5,192 6,053 6,012 6,791
Race expenses 2,792 2,187 4,221 3,169
Cost of engine
rebuilds and wheel
sales 245 176 380 357
Administrative and
indirect expenses 5,896 6,475 9,423 10,374
Compensation expense 2,758 -- 2,758 --
Depreciation and
amortization 305 254 592 489
Total expenses 17,188 15,145 23,386 21,180
Operating income 7,714 10,328 9,364 11,642
Interest income (net) 1,798 1,380 3,293 2,617
Income before
income taxes 9,512 11,708 12,657 14,259
Income tax expense 3,388 4,242 4,520 5,154
Net income $6,124 $7,466 $8,137 $9,105
Earnings per share:
Basic $0.39 $0.49 $0.52 $0.60
Diluted $0.39 $0.47 $0.52 $0.58
Weighted average
shares outstanding:
Basic 15,588 15,376 15,587 15,276
Diluted 15,722 15,936 15,732 15,806
Championship Auto Racing Teams, Inc.
Consolidated Balance Sheets
As of June 30, 2000 and December 31, 1999
(In Thousands)
June 30, 2000 December 31, 1999
Assets
Current Assets
Cash and cash equivalents $20,671 $7,216
Short-term investments 104,518 91,758
Accounts receivable 6,873 8,780
Current portion of notes receivable 944 819
Prepaid expenses 495 26
Inventory 286 311
Deferred income taxes 99 114
Total current assets 133,886 109,260
Notes receivable 1,853 2,485
Property and equipment - net 6,240 5,228
Goodwill 7,345 7,442
Other assets 444 472
Total assets $149,768 $124,887
Liabilities and stockholders' equity
Current liabilities
Accounts payable $1,650 $2,131
Accrued liabilities:
Race expenses and point awards 1,269 -
Royalties 287 949
Payroll 1,791 660
Taxes 2,678 358
Other 2,447 801
Deferred revenue 15,260 4,881
Deposits 878 -
Total current liabilities 26,260 9,780
Deferred income taxes 933 777
Stockholders' equity
Common stock 156 156
Additional paid-in capital 99,703 99,671
Retained earnings 22,962 14,825
Unrealized loss on investments (246) (322)
Total stockholders' equity 122,575 114,330
Total liabilities and stockholders' equity $149,768 $124,887