Championship Auto Racing Teams, Inc. reports first quarter 2002 results DETROIT, April 24 -- Championship Auto Racing Teams, Inc. (NYSE:MPH) today announced financial results for its first quarter ended March 31, 2002, in line with management ...
Championship Auto Racing Teams, Inc. reports first quarter 2002 results
DETROIT, April 24 -- Championship Auto Racing Teams, Inc. (NYSE:MPH) today announced financial results for its first quarter ended March 31, 2002, in line with management expectations, as adjusted.
The number of events held in a particular quarter affects the comparability of earnings information from quarter to quarter. CART conducted one event in the first quarter of 2002 and 2001. Indy Lights, which was discontinued for 2002, conducted one race in the first quarter of 2001. Toyota Atlantics conducted one race in the first quarter of 2002 compared to no races in the same period in the prior year.
Total revenues for the first quarter of 2002 were $5.6 million, a decrease of $836,000, or 13%, from the comparable quarter of 2001.
Total expenses for the first quarter of 2002 were $7.6 million, a decrease of $684,000, or 8%, from the comparable quarter of 2001. The decrease primarily reflected a timing difference in the company's marketing expenditures in 2002 compared to 2001, as well as a decrease in recruiting and strategic planning consulting expenses. The decrease was also partially attributable to a pre-tax, non-recurring charge of $386,000 in 2001 that resulted from an employee severance agreement. These decreases were partially offset by an increase in race distributions due to a participation fee paid to all of the CART teams. Net loss for the first quarter of 2002 was $594,000, or $0.04 per share, compared with net income of $81,000, or $0.01 per share, in the first quarter of 2001.
"First quarter results are on track with our plan," said Thomas L. Carter, CART's chief financial officer. "Because of CART's changed business model, especially as it relates to television revenues and expenses, these results are not necessarily comparable to our performance in 2001. Revenues, as expected, reflect lower contributions from television and sponsorships, as well as from engine leases, rebuilds and wheel sales. Also, the first quarter reflects just one race of our 20-race season."
CART's first race of the season, the Tecate/Telmex Monterrey Grand Prix, on March 10, in Monterrey, Mexico, boasted a three-day estimated attendance of 236,000 fans. Subsequent to the close of the quarter, the Toyota Grand Prix of Long Beach, on April 14, drew a three-day record crowd estimated at 250,000 fans.
Christopher R. Pook, CART's president and chief executive officer said, "Our turnaround of CART has just started. We have moved quickly in the first three months of 2002 to strengthen our management team, streamline the organization, energize a new marketing-driven environment and enhance our racing schedule. We see 2002 as a transition year, and we are just beginning to unlock the great potential of CART as a powerful sports entertainment and marketing vehicle."
During the first quarter, CART commenced new television agreements with Fox Networks, Speed Channel and CBS; announced new race venues in Florida -- the Grand Prix of the Americas in Miami and the Grand Prix of St. Petersburg (commencing in 2003); and renewed several sponsorships. For 2002, the company has also added a second race in Mexico, the Mexico Gran Premio in Mexico City, and a third race in Canada, the Molson Indy Montreal, in addition to the Grand Prix of Denver, while reducing the concentration of races in the Midwest.
In April, CART announced MG Rover Group as the first manufacturer to officially confirm participation in CART under the organization's new rules that call for 3.5-liter V-8 racing engines commencing with the 2003 season. Management also confirmed that they are continuing discussions with additional manufacturers.
Carter noted that at the close of the 2002 first quarter, CART's balance sheet continued to be strong with cash and short-term investments of $121.4 million, working capital of $109.0 million and no debt.
2002 Financial Guidance
CART announced financial guidance for 2002 on March 6. In addition, CART reported anticipated expenditures of $1.2 million for the company's pending move to Indianapolis, Indiana, in its most recent 10-K filing. These relocation expenses are forecast to have a $780,000 after-tax effect, or $0.05 per diluted share. At this time, because of the very early stage of the racing season, the company is not updating the previous guidance, as adjusted for the Indianapolis relocation. As the season progresses and the company gains more experience with its new business model and/or as events of significance change or provide more insight for the performance of the company, guidance will be reiterated or updated.
Championship Auto Racing Teams, Inc. (NYSE:MPH) owns, operates and markets the CART FedEx Championship Series. Former series champions Michael Andretti and Jimmy Vasser are among the stars who will battle for the 2002 FedEx Championship Series title on ovals, temporary street circuits and permanent road courses. CART Champ Cars are thoroughbred racing machines that travel at speeds in excess of 200 miles per hour, showcasing the technical expertise of manufacturers such as American Honda, Ford Motor Company, Toyota, Lola Cars, Reynard Motorsport and Bridgestone/Firestone North American Tire, LLC. The 20-race 2002 CART FedEx Championship Series will be broadcast by new television partners, CBS, FOX and SPEED Channel. CART also owns and operates its top development series, the CART Toyota Atlantic Championship. Learn more about CART's open-wheel racing series at www.CART.com .
Statements made in this news 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. Among the risks and uncertainties to be considered include, but are not limited to, CART's new co- promoted and self-promoted events; new television and advertising arrangements; the success of races in new venues; the current uncertain economic environment and weak advertising market; among others. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in the company's SEC filings made from time to time, including, but not limited to, the Form 10-Ks and subsequent 10-Qs. Copies of those filings are available from the company and the SEC.