DETROIT (October 15, 2001) - Championship Auto Racing Teams, Inc. (NYSE: MPH) conducted its annual analyst and investor conference this weekend in conjunction with its yearly visit to Mazda Raceway at Laguna Seca and presented its five-year ...
DETROIT (October 15, 2001) - Championship Auto Racing Teams, Inc. (NYSE: MPH) conducted its annual analyst and investor conference this weekend in conjunction with its yearly visit to Mazda Raceway at Laguna Seca and presented its five-year strategic plan for the first time to the financial community.
CART Chairman and CEO Joseph F. Heitzler, CFO Thomas Carter, Senior Vice President of Race Operations John Lopes and Senior Vice President of Marketing Richard Henley each offered insight into the company's strategic direction.
"We remain confident that the course we are charting for CART will result in growth for our company," said Heitzler. "We believe the direction we have identified will allow us to build our sport through increased attendance at race events and increased television ratings, which ultimately will lead to greater sponsorship and increased revenue opportunities for our sport."
Heitzler reiterated CART's six key strategic components around which the company is building plans to grow its business in 2002 and beyond:
* CART's core racing product - "The Most Advanced Form of American Auto Racing."
* Defined fan segments to pursue and build on the fan base.
* Focus on venues that offer the largest attendance opportunities and greatest potential to increase TV viewership.
* Investment in the entertainment value of events.
* Enhanced promotion of the stars of CART racing.
* Increased awareness through television and branding, with CART agency partner Arnold Worldwide, which presented preliminary creative concepts for 2002.
The company noted that sanction fees, which account for the majority of the auto racing sanctioning organization's revenues, are expected to increase by nine percent when compared to 2001. Carter noted that CART is looking to create, in certain situations, arrangements in which it will co-promote or serve as race event promoter in the future. CART is working to complete its 2002 schedule but the forecast indicated the sanction fee growth is based on the 20 races on which CART has commitments for next year. The list includes four overseas venues and 16 races in North America. The rundown did not include event dates.
Heitzler also noted that CART is working closely with Fox Cable Networks/Speedvision on developing its television package for 2002. CART's international television rights are being negotiated and those revenues will be included in future projections.
The new domestic television package is comprised of 224 hours of programming, an increase of 61 percent over the current arrangement. Much of the new television content will focus on the personalities of the drivers, building their stories and the CART brand.
Carter noted that revenues from sponsorship are expected to increase slightly in 2002 and that indications are that all current sponsors are prepared to renew.
"We determined that the best way to sell sponsorships is to approach it from an in-house perspective and we are adding a new Vice President of Sponsorship Sales and Strategic Partnerships who will lead those efforts," said Carter. "We are currently in renewal discussions with several sponsors."
Carter also noted that projections indicate other revenues will decrease approximately 10 percent in 2002, due primarily to certain non-recurring revenues and consolidation of CART's efforts behind one, top-level developmental series. CART also expects to increase race distributions by approximately 15 percent next season. Those increases will be due to a larger purse payout for the Toyota Atlantic Championship as well as increased expense reimbursements to CART's Champ Car teams for the FedEx Championship Series' European races. Other race expenses are expected to remain flat for 2002.
Administrative and indirect expenses are forecast to increase, due primarily to increased investment in the company's strategic marketing initiatives. Depreciation and amortization is forecast to be flat, and interest income, due to declining interest rates, is forecast to decrease. Carter added that additional, more specific guidance for 2002 will be forthcoming when international television negotiations are completed, sponsorship contracts are renewed, a final race schedule is announced and the integrated marketing plan is completed.
"Attendance at our races in 2001 is up from a year ago and we continue to see a high level of interest from would-be promoters in conducting CART events," said Heitzler. "Our racing is as competitive as it has ever been and we believe the excitement and entertainment value associated with each and every CART event will grow as we move ahead in 2002 and beyond."
Statements made in this release that state the Company's or management's beliefs or expectations and which are not historical facts or which apply prospectively are forward-looking statements. It is important to note that the Company's actual results could differ materially from those contained or implied by such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's SEC filings including, but not limited to, the 10-K and subsequent 10-Q's. Copies of those filings are available from the Company and the SEC.
Championship Auto Racing Teams, Inc. (NYSE: MPH) owns, operates and markets the FedEx Championship Series. Series champions Gil de Ferran, Jimmy Vasser and Michael Andretti 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 development series, the Dayton Indy Lights Championship and the Toyota Atlantic Championship. Learn more about CART's open-wheel racing series at www.cart.com.