NYSE: TRK +0.00 ( +0% ) Volume: 7,485
August 21, 2019

Speedway Motorsports Reports Increased Revenues for First Half of 2002

08/13/2002

CONCORD, N.C., Aug. 13 /PRNewswire-FirstCall/ -- 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 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.

Note: Speedway Motorsports will host a conference call today at 11:00 a.m. ET. The call is open to all participants. To participate in the conference call, you may dial 800-446-2782 for domestic calls or 1-847-413-3235 for international calls. The reservation number is 5996866. Participating in the call will be H.A. Wheeler, Chief Operating Officer and President; William R. Brooks, Chief Financial Officer; and Marylaurel E. Wilks, Vice President, Communications and General Counsel.

    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


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SOURCE Speedway Motorsports, Inc.
Web site: http: //www.gospeedway.com /Web site: http://www.speedwaymotorsports.com
CONTACT: Lauri Wilkes of Speedway Motorsports, Inc., +1-704-455-3239

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