Speedway Motorsports reports record revenues and earnings for the third quarter of 2002. CONCORD, N.C., Nov. 12 -- Speedway Motorsports, Inc. (NYSE:TRK) today reported record revenues and earnings for the third quarter and nine months ended ...
Speedway Motorsports reports record revenues and earnings for the third quarter of 2002.
CONCORD, N.C., Nov. 12 -- Speedway Motorsports, Inc. (NYSE:TRK) today reported record revenues and earnings for the third quarter and nine months ended September 30, 2002.
Speedway Motorsports (SMI) also announced that for the 2002 third quarter as compared to 2001:
* total revenues increased 12% or $6.5 million to $58.9 million,
* income from continuing operations increased $3.0 million to $869,000,
* net income increased $3.1 million to $869,000, and
* diluted earnings per share increased $0.07 to $0.02.
For the 2002 nine-month period as compared to 2001:
* total revenues increased 3% or $8.5 million to $303.1 million,
* income from continuing operations before the cumulative effect of an
* accounting change increased 11% or $5.2 million to $52.7 million,
* net income increased 2% or $738,000 to $47.7 million,
* diluted earnings per share from continuing operations before accounting change increased 11% or $0.12 to $1.22, and
* diluted earnings per share increased 2% or $0.02 to $1.11.
The third quarter 2002 results are not directly comparable to 2001 because Texas Motor Speedway hosted NASCAR Craftsman Truck and Indy Racing League Series racing events in the third quarter 2002 which were held in the fourth quarter 2001. Also, the three and nine month results for 2002 reflect the new long-term food and beverage agreement with Levy Restaurants and Compass Group USA in which associated operating profits are reported as net event related and other operating revenue. The gross revenues and expenses associated with those services provided by the Company in 2001 are reflected in event related and other operating revenue, direct expense of events, and other direct operating and general and administrative expense. Changes in racing schedules, and operating arrangements such as those with the Levy Restaurants and Compass Group, can lessen the comparability of operating results between quarterly financial statements of successive years.
The nine month results for 2002 reflect a pre-tax charge of $1.2 million, $751,000 net of tax or $0.02 per diluted share, related to the early redemption of $53.7 million of convertible subordinated debentures in April 2002. The nine month results for 2001 reflect a pre-tax charge of $3.5 million, $2.1 million net of tax or $0.05 per diluted share, related to cancellation of a Championship Auto Racing Teams (CART) race originally scheduled at Texas Motor Speedway.
The Company adopted Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets" as of January 1, 2002. The nine month results for 2002 reflect the cumulative effect of an accounting change for goodwill impairment of $4.3 million, net of taxes of $297,000 or $0.10 per diluted share, associated with certain non-motorsports related reporting units. Also, amortization of $445,000 and $1.3 million on goodwill and other intangible assets recorded as of December 31, 2001 was not reflected in the three and nine months ended September 30, 2002 under the new accounting guidelines.
The Company disposed of the operations of SoldUSA in the second quarter 2002 due to continuing difficult market conditions for internet auction and e-commerce companies. The Company's results reflect losses, net of taxes, from SoldUSA's discontinued operations and disposal of $143,000, or $0.00 per diluted share, for the third quarter 2001, and $686,000 and $520,000, or $0.01 per diluted share, for the nine months ended September 30, 2002 and 2001, respectively. Such losses in the third quarter 2002 were insignificant.
Bristol Motor Speedway hosted the only major NASCAR race weekend in the third quarter with sold-out capacity crowds at its Sharpie 500 NASCAR Winston Cup Series, and record attendance at its Food City 250 NASCAR Busch Series, racing events. Third quarter highlights also include Texas Motor Speedway hosting near record attendance at its NASCAR Craftsman Truck Series Silverado 350 and Indy Racing League Series (IRL) Chevy 500 racing events this quarter. In addition, newly modernized and expanded Infineon Raceway hosted near record attendance at its National Hot Rod Association (NHRA) Nationals weekend racing event.
"Our strong third quarter results reflect the growing success of major events hosted at our Bristol and Texas Motor Speedways," stated O. Bruton Smith, chairman and chief executive officer of Speedway Motorsports. "Despite ongoing economic, travel and corporate spending challenges, our record results demonstrate the long-term merits of owning first-class facilities in premier markets. This strategic advantage has allowed us to enter into long-term marketing alliances, including our naming rights agreements. We continue to be amazed by the resilience of our core racing fans.
"Because demand for 'the favorite ticket in NASCAR' continues at Bristol Motor Speedway, we are again expanding its permanent seating capacity by approximately 8,000 seats and 24 luxury suites. These new seats and luxury suites are already sold-out for our 2003 season."
"The increasing predictability of cash flows from our long-term revenue agreements, coupled with our strengthening balance sheet, including fiscal 2002 debt reduction, allowed us to announce SMI's first annual dividend payable in this year's fourth quarter," stated H.A. "Humpy" Wheeler, chief operating officer and president of Speedway Motorsports. "We believe annual dividends can provide significant increased return on investment and value for our shareholders."
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, Las Vegas Motor Speedway, Infineon Raceway and Texas Motor Speedway. The Company provides souvenir merchandising services through its SMI Properties subsidiary, and manufactures and distributes smaller-scale, modified racing cars through its 600 Racing subsidiary. The Company also owns Performance Racing Network which broadcasts syndicated motorsports programming to more than 750 stations nationwide. For more information, visit the Company's Website at http://www.gospeedway.com/.
This news release contains forward-looking statements, particularly statements with regard to the Company's future operations and financial results. There are many factors that affect future events and trends of the Company's business including, but not limited to, consumer and corporate spending sentiment, air travel, governmental regulations, military actions, national or local catastrophic events, the success of and weather surrounding NASCAR, IRL, NHRA and other racing events, the success of expense reduction efforts, litigation, insurance, and economic conditions. These factors and other factors, including those contained in Exhibit 99.1 to the Company's Annual Report on Form 10-K, involve certain risks and uncertainties that could cause actual results or events to differ materially from management's views and expectations. Inclusion of any information or statement in this news release does not necessarily imply that such information or statement is material. The Company does not undertake any obligation to release publicly revised or updated forward-looking information, and such information included in this news release is based on information currently available and may not be reliable after this date.
<pre> Speedway Motorsports, Inc. and Subsidiaries Selected Financial Data - Unaudited For The Three and Nine Months Ended September 30, 2002 and 2001 (In thousands except per share amounts)
Three Months Ended Nine Months Ended INCOME STATEMENT DATA 9/30/2002 9/30/2001 9/30/2002 9/30/2001
REVENUES: Admissions $24,309 $20,147 $118,102 $109,886 Event related revenue 19,683 16,344 94,776 101,634 NASCAR broadcasting revenue 8,180 7,032 62,966 54,770 Other operating revenue 6,710 8,904 27,223 28,288 Total Revenues 58,882 52,427 303,067 294,578 EXPENSES AND OTHER: Direct expense of events 15,420 13,054 57,678 60,343 NASCAR purse and sanction fees 6,919 5,618 48,894 43,649 Other direct operating expenses 5,689 8,942 22,435 25,037 General and administrative 14,663 13,936 44,940 43,812 Depreciation and amortization 7,943 8,004 23,750 24,350 Interest expense, net 5,349 6,443 16,141 18,586 Loss on early debt redemption -- -- 1,237 -- Expenses of cancelled CART race -- -- -- 3,469 Other expense (income), net 1,468 (77) 1,191 (3,000) Total Expenses and Other 57,451 55,920 216,266 216,246 Income (Loss) From Continuing Operations Before Income Taxes and Cumulative Effect of Accounting Change 1,431 (3,493) 86,801 78,332 Income Tax Provision (Benefit) 562 (1,361) 34,112 30,820 Income (Loss) From Continuing Operations Before Cumulative Effect of Accounting Change 869 (2,132) 52,689 47,512 Loss From Operations and Disposal of Discontinued Business -- (143) (686) (520) Income (Loss) Before Cumulative Effect of Accounting Change 869 (2,275) 52,003 46,992 Cumulative Effect of Accounting Change for Goodwill Impairment -- -- (4,273) -- NET INCOME (LOSS) $869 ($2,275) $47,730 $46,992
Basic Earnings (Loss) Per Share: Continuing Operations Before Accounting Change $0.02 ($0.05) $1.24 $1.14 Discontinued Operations -- -- (0.01) (0.01) Accounting Change -- -- (0.10) -- Basic Earnings (Loss) Per Share $0.02 ($0.05) $1.13 $1.13 Weighted average shares outstanding 42,213 41,757 42,071 41,747
Diluted Earnings (Loss) Per Share: Continuing Operations Before Accounting Change $0.02 ($0.05) $1.22 $1.10 Discontinued Operations -- -- (0.01) (0.01) Accounting Change -- -- (0.10) -- Diluted Earnings (Loss) Per Share $0.02 ($0.05) $1.11 $1.09 Weighted average shares outstanding 42,532 44,332 43,141 44,415
Computations of diluted loss per share were anti-dilutive for the three months ended September 30, 2001; therefore, reported basic and diluted loss per share are the same.
Consolidated BALANCE SHEET DATA 9/30/02 12/31/01
Cash and cash equivalents $100,635 $93,980 Total current assets 146,089 140,735 Property and equipment, net 842,423 813,154 Goodwill and other intangible assets, net 52,035 56,742 Total assets 1,083,058 1,063,578
Current liabilities 129,066 106,054 Revolving credit facility borrowings 90,000 90,000 Deferred race event income, net 69,264 71,578 Total long-term debt 342,347 397,313 Total liabilities 590,065 624,689 Total stockholders' equity $492,993 $438,889