INDIANAPOLIS, Nov. 14 -- Championship Auto Racing Teams, Inc. (NYSE:MPH) today announced financial results for its third quarter ended September 30, 2002. The number of events held in a particular quarter affects the comparability of earnings ...
INDIANAPOLIS, Nov. 14 -- Championship Auto Racing Teams, Inc. (NYSE:MPH) today announced financial results for its third quarter ended September 30, 2002.
The number of events held in a particular quarter affects the comparability of earnings information from quarter to quarter. CART conducted eight events in the second quarter of 2002, compared with nine events in the corresponding 2001 period. In addition, race promotion expenses associated with the Grand Prix of the Americas event held October 6, 2002, have been recorded in the third quarter. Toyota Atlantics conducted six races in the third quarter of 2002 and 2001. Indy Lights, which was discontinued for 2002, conducted four races in the third quarter of 2001.
For the three months ended September 30, 2002, total revenues were $18.5 million, compared with $29.6 million in the same prior-year period. Total expenses for the 2002 third quarter declined to $32.2 million from $34.0 million in the corresponding 2001 quarter. "As part of CART's changing business model, we took on greater opportunities and risks with our television arrangements and by self-promoting and co-promoting selected races," said Thomas Carter, Chief Financial Officer of CART. "As a result of these actions, revenues and expenses are not comparable to prior-year results, particularly television, sanction fee and race promotion revenues and expenses."
The company reported a net loss for the 2002 third quarter of $8.3 million, or $0.56 per share, compared with a net loss of $1.7 million, or $0.11 per share, in the 2001 third quarter.
"We continue to make important progress in this transition year rebuilding the CART brand and organization and establishing a stable foundation for future growth," said Christopher R. Pook, CART's President and Chief Executive Officer. "The recently announced incentive program authorizing management to commit up to $30 million in additional financial support for the 2003 CART Championship Series season, on top of the previously announced Entrant Support Program, is testament to our confidence and commitment to invest in the future of our racing product."
Attendance levels to date also demonstrate the popularity and vitality of the CART Championship Series. The company's NAFTA venues, including Monterrey, Mexico and all three Canadian events, drew in record crowds. In Australia, additional grandstands were built to accommodate record ticket sales for the increasingly popular Honda Indy 300. The Australian event also recorded the two-millionth fan to attend a CART series event for the 2002 season. "These results underscore the tremendous potential of the CART series as a global marketing vehicle for multi-national corporations," said Pook.
Additionally, Pook noted that the marketing potential of the CART series was recently enhanced by an increase in SPEED Channel's total committed subscriber count to nearly 67 million. "With improved television ratings, increased broadcast time and greater overall exposure time for our sponsors, we believe CART is better positioned to benefit from our television contracts," added Pook.
"Currently we are focusing on setting the stage for the 2003 CART Championship season. Extending and enhancing our relationship with Bridgestone, as they become our presenting sponsor in 2003, is an important first step in setting the foundation for future success. We are in discussions with current and potential sponsors, teams and drivers as to their participation for next year. We are excited at the level of interest that we have received from these potential partners and we will provide additional information as we finalize discussions," Pook said.
For the nine months ended September 30, 2002, CART conducted 15 FedEx Championship races compared with 16 events in the first nine months of 2001. Total revenues were $43.4 million versus $55.8 million in the 2001 nine-month period. Total expenses for the current year-to-date rose to $65.9 million from $57.9 million a year ago. Expenses for 2002 include a one-time relocation expense of $1.3 million for the company's move to Indianapolis, Indiana from Troy, Michigan.
CART implemented FASB Statement No. 142, effective January 1, 2002. As a result of the implementation, CART's results for the nine months ended September 30, 2002, include a write-off of $1.5 million for impairment of goodwill. The company does not anticipate future write-offs of its intangible assets, but will conduct annual reviews as required.
Before the cumulative effect of the accounting change, CART recorded a net loss of $12.6 million, or $0.85 per share, for the first three quarters of 2002, compared with net income of $2.3 million, or $0.15 per diluted share, a year ago. After the cumulative effect of the accounting change, the company's net loss totaled $13.5 million, or $0.92 per share, for the nine months ended September 30, 2002.
Carter noted that at the close of the 2002 third quarter, CART's balance sheet continued to be strong with cash and short-term investments of $103.0 million, working capital of $97.8 million and no debt.
Championship Auto Racing Teams, Inc. (NYSE:MPH) owns, operates and markets the CART FedEx Championship Series. Newly-crowned 2002 CART FedEx Championship Series champion Cristiano da Matta is among the open-wheel stars competing with teams such as Newman/Haas Racing, Player's/Forsythe Racing, Team Rahal, Fernandez Racing, Patrick Racing, Herdez Competition, Mo Nunn Racing, Walker Racing and others. CART Champ Cars are thoroughbred racing machines that reach speeds in excess of 200 miles per hour, showcasing the technical expertise of manufacturers such as Ford Motor Company, Lola Cars, Reynard Motorsport and Bridgestone/Firestone North American Tire, LLC. The 19-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.