CONCORD, N.C., Aug. 13 -- Speedway Motorsports, Inc. (NYSE:TRK) today reported increased revenues for the first half of 2002 as compared to 2001. Speedway Motorsports (SMI) also announced that the operating results for the second quarter of 2002...
CONCORD, N.C., Aug. 13 -- Speedway Motorsports, Inc. (NYSE:TRK) today reported increased revenues for the first half of 2002 as compared to 2001.
Speedway Motorsports (SMI) also announced that the operating results for the second quarter of 2002 decreased from the second quarter of last year. The decline in the quarter was caused primarily by the running of the NASCAR Winston Cup Series and Busch Series weekend racing events at Bristol Motor Speedway in the first quarter of 2002 rather than the second quarter as in 2001.
For the 2002 six-month period as compared to 2001:
* total revenues increased 1% or $2.0 million to $244.2 million,
* income from continuing operations before the cumulative effect of an accounting change increased 4% or $2.2 million to $51.8 million,
* net income decreased 5% or $2.4 million to $46.9 million,
* diluted earnings per share from continuing operations before accounting change increased 4% or $0.05 to $1.19, and
* diluted earnings per share decreased 4% or $0.05 to $1.08.
As expected, for the 2002 second quarter as compared to 2001:
* total revenues decreased 16% or $27.7 million to $147.6 million,
* income from continuing operations decreased 21% or $8.9 million to $34.5 million,
* net income decreased 20% or $8.7 million to $34.5 million, and
* diluted earnings per share decreased 18% or $0.18 to $0.80.
The second quarter 2002 results are not directly comparable to 2001 because Bristol Motor Speedway hosted NASCAR Winston Cup and Busch Series racing events in the second quarter 2001 which were held in the first quarter 2002. Also, the three and six 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.
The three and six 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 six 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 six 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 $889,000 on goodwill and other intangible assets recorded as of December 31, 2001 was not reflected in the three and six months ended June 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 $192,000, or $0.01 per diluted share, for the second quarter 2001, and $686,000 and $378,000, or $0.01 per diluted share, for the six months ended June 30, 2002 and 2001, respectively. Such losses in the second quarter 2002 were insignificant.
Second quarter highlights include Lowe's Motor Speedway hosting the largest attendance ever at The Winston, near sold-out capacity crowds at its Coca-Cola 600 NASCAR Winston Cup Series racing event, as well as its second largest attendance ever at the CARQUEST Auto Parts 300 NASCAR Busch Series racing event. Despite being rain delayed until Monday, Texas Motor Speedway hosted near sold-out capacity crowds at its Samsung/RadioShack 500 NASCAR Winston Cup Series racing event, as well as its second largest attendance ever at the O'Reilly 300 NASCAR Busch Series racing event. In addition, Infineon Raceway (formerly Sears Point Raceway) unveiled its expanded and modernized facilities to record attendance at the Dodge/Save Mart 350 NASCAR Winston Cup Series weekend racing event.
Also, during the quarter, SMI announced its second long-term facility naming rights agreement with Infineon Technologies North American Corp. renaming Sears Point Raceway as Infineon Raceway for gross fees aggregating approximately $34.6 million over 10 years. Infineon Technologies, the second- largest European-headquartered semi-conductor company, is a leader in chips for computer memory, wireless communications, broadband networking, security and smart cards, and automotive applications. In 1999, SMI obtained the motorsports industry's first facility naming rights agreement with Lowe's Home Improvement Warehouse, the world's second-largest home improvement retailer, for gross fees aggregating approximately $35 million over 10 years.
"We are extremely pleased to report that our second quarter results reflect increased attendance at almost all of our NASCAR Winston Cup and Busch racing events despite the ongoing economic, travel and corporate spending challenges," stated H.A. "Humpy" Wheeler, chief operating officer and president of Speedway Motorsports. "Those results, along with the Infineon Raceway facility naming rights deal, positively indicate that our traditional core fan base remains solid and the marketing appeal of our first class facilities and venues is increasing to a widening demographic base."
"We are very proud of SMI's new naming rights agreement with Infineon Technologies, which superbly showcased our newly-modernized and expanded Infineon Raceway in June. Already, this strategic alliance demonstrates the positive long-term merits of owning modern, leading-edge facilities," stated O. Bruton Smith, chairman and chief executive officer of Speedway Motorsports. "Such strategic commitments, including our valued new partnership with Levy Restaurants and Compass Group, the market leader in premium foodservice at sports and entertainment facilities, illustrate the untapped potential our marketplaces offer as the industry's next growth cycle emerges along with the inevitable future upturn in economic conditions and corporate spending."
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 over 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 Six Months Ended June 30, 2002 and 2001 (In thousands except per share amounts)
Three Months Ended Six Months Ended INCOME STATEMENT DATA 6/30/2002 6/30/2001 6/30/20026/30/2001
REVENUES: Admissions $54,684 $69,761 $93,793 $89,739 Event related revenue 49,029 60,552 75,093 85,290 NASCAR broadcasting revenue 33,211 34,642 54,786 47,738 Other operating revenue 10,693 10,397 20,513 19,384 Total Revenues 147,617 175,352 244,185 242,151 EXPENSES AND OTHER: Direct expense of events 27,375 34,634 42,258 47,289 NASCAR purse and sanction fees 25,154 27,112 41,975 38,031 Other direct operating expenses 8,522 8,925 16,746 16,095 General and administrative 15,922 16,364 30,277 29,876 Depreciation and amortization 7,884 8,116 15,807 16,346 Interest expense, net 4,996 6,128 10,792 12,143 Loss on early debt redemption 1,237 -- 1,237 -- Expenses of cancelled CART race -- 3,469 -- 3,469 Other income, net (268) (906) (277) (2,923) Total Expenses and Other 90,822 103,842 158,815 160,326 Income From Continuing Operations Before Income Taxes and Cumulative Effect of Accounting Change 56,795 71,510 85,370 81,825 Income Tax Provision 22,333 28,115 33,550 32,180 Income From Continuing Operations Before Cumulative Effect of Accounting Change 34,462 43,395 51,820 49,645 Loss From Operations and Disposal of Discontinued Business -- (192) (686) (378) Income Before Cumulative Effect of Accounting Change 34,462 43,203 51,134 49,267 Cumulative Effect of Accounting Change for Goodwill Impairment -- -- (4,273) -- NET INCOME $34,462 $43,203 $46,861 $49,267
Basic Earnings Per Share: Continuing Operations Before Accounting Change $0.82 $1.04 $1.23 $1.19 Discontinued Operations -- (0.01) (0.01) (0.01) Accounting Change -- -- (0.10) -- Basic Earnings Per Share $0.82 $1.03 $1.12 $1.18 Weighted average shares outstanding 42,117 41,744 42,000 41,742
Diluted Earnings Per Share: Continuing Operations Before Accounting Change $0.80 $0.99 $1.19 $1.14 Discontinued Operations -- (0.01) (0.01) (0.01) Accounting Change -- -- (0.10) -- Diluted Earnings Per Share $0.80 $0.98 $1.08 $1.13 Weighted average shares outstanding 43,109 44,387 43,725 44,457
Consolidated BALANCE SHEET DATA 6/30/02 12/31/01
Cash and cash equivalents $85,792 $93,980 Total current assets 143,136 140,735 Property and equipment, net 843,624 813,154 Goodwill and other intangible assets, net 52,065 56,742 Total assets 1,083,204 1,063,578
Current liabilities 130,062 106,054 Revolving credit facility borrowings 90,000 90,000 Deferred race event income, net 58,194 71,578 Total long-term debt 342,500 397,313 Total liabilities 591,292 624,689 Total stockholders' equity $491,912 $438,889