CONCORD, N.C.--(BUSINESS WIRE)--
Speedway Motorsports, Inc. (SMI) (NYSE: TRK) today reported fourth
quarter 2016 total revenues of $82.6 million, and net income and
adjusted non-GAAP net income of $271,000 or $0.01 per diluted share.
Full year 2016 total revenues were $512.2 million, net income was $39.5
million or $0.96 per diluted share, and adjusted non-GAAP net income was
$39.2 million or $0.95 per diluted share. These results were within
management’s expectations. SMI also provided full year 2017 non-GAAP
earnings guidance of $0.90 to $1.10 per diluted share as further
described below. Non-GAAP items are further discussed and reconciled
with comparable GAAP amounts below.
Starting in 2017, Monster Energy replaced Sprint as NASCAR’s premiere
racing Cup Series entitlement sponsor under a multi-year agreement. That
naming convention is used throughout this release. Monster Energy is a
widely known brand, and popular with younger and changing demographic
groups – important targeted markets for all involved in NASCAR
motorsports. We believe that Monster Energy plans to commit sizable
resources in promoting their expanded involvement in NASCAR, working
closely with industry stakeholders and the broadcasters to widen the
marketing reach of NASCAR racing in general.
As presented below in the Selected Financial Data, our 2016 race season
experienced an unusually high number of event weekends with significant
poor weather. Eight events during our 13 NASCAR Cup Series race weekends
were negatively impacted. The Company’s admissions, certain event
related revenues and operating costs were negatively impacted by poor
weather in each 2016 quarter. Management believes many of the Company’s
revenue categories continue to be negatively impacted by economic
conditions, including underemployment and an absence of a stronger
middle class economic recovery.
Speedway Motorsports hosted two collegiate football games, including the
sold-out, hugely successful “Battle at Bristol” and large preceding
Kenny Chesney concert in the third quarter 2016. These events had a
material positive effect on our 2016 operating results, and associated
revenues and direct expenses are reflected in Other Operating Revenue
and Other Direct Operating Expense in the accompanying Selected
Financial Data. The Company has begun to explore conducting similar
events in the future. However, no additional football games are
scheduled at this time.
Fourth Quarter Comparison
-
Total revenues of $82.6 million in 2016 compared to $87.7 million in
2015
-
Accelerated depreciation and removal costs on retired assets
aggregating $2.2 million pre-tax, $1.4 million after tax or $0.03 per
diluted share in 2015
-
Income taxes from various adjustments associated with discontinued
operations of $1.3 million or $0.03 per diluted share in 2015
-
Net income of $271,000 or $0.01 per diluted share in 2016 compared to
a net loss of $3.3 million or $0.08 per diluted share in 2015
-
Adjusted non-GAAP net income of $271,000 or $0.01 per diluted share in
2016 compared to adjusted non-GAAP loss of $710,000 or $0.02 per
diluted share in 2015
Full Year Comparison
-
Total revenues of $512.2 million in 2016 compared to $496.5 million in
2015
-
Accelerated depreciation and removal costs on retired assets
aggregating $357,000 pre-tax, $225,000 after tax or $0.01 per diluted
share in 2016 compared to $9.7 million pre-tax, $6.1 million after tax
or $0.15 per diluted share in 2015
-
Non-recurring benefits from state tax law changes of $546,000 or $0.01
per diluted share in 2016 compared to $610,000 or $0.01 per diluted
share in 2015
-
In 2015:
-
Impairment charge for other intangible assets and goodwill of
$98.9 million pre-tax, $63.4 million after tax or $1.54 per
diluted share
-
Loss on early debt redemption and refinancing of $8.4 million
pre-tax, $5.3 million after tax or $0.13 per diluted share
-
Interim interest expense associated with early debt redemption of
$1.7 million pre-tax, $1.1 million after tax or $0.03 per diluted
share
-
Income taxes from various adjustments associated with discontinued
operations of $1.3 million or $0.03 per diluted share in 2015
-
Net income of $39.5 million or $0.96 per diluted share in 2016
compared to a net loss of $34.4 million or $0.83 per diluted share in
2015
-
Adjusted non-GAAP net income of $39.2 million or $0.95 per diluted
share in 2016 compared to $42.1 million or $1.02 per diluted share in
2015
Non-GAAP Financial Information and Reconciliation
Net income and diluted earnings per share as adjusted and set forth
below are non-GAAP (other than generally accepted accounting principles)
financial measures presented as supplemental disclosures to their
individual corresponding GAAP basis amounts. The following schedule
reconciles those non-GAAP financial measures to their most directly
comparable information presented using GAAP. Management believes such
non-GAAP information is useful and meaningful to investors and helps in
understanding, using and comparing the Company’s operating results.
We have not reconciled 2017 non-GAAP forward-looking earnings per
diluted share to its most directly comparable GAAP measure, as permitted
by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would
require unreasonable efforts to estimate and quantify various necessary
GAAP components largely because, as indicated by our relatively wide
range of earnings guidance, forecasting or predicting our future
operating results is subject to many factors out of our control or not
readily predictable. Such factors include weather conditions surrounding
our events, the seasonal popularity or success of NASCAR racing in
general, the impact of geopolitical factors on travel plans and spending
sentiment, and fluctuating costs of food, gas, health-care and other
basic necessities, any or all of which can significantly impact our
future results. These components and other factors could significantly
impact the amount of the future directly comparable GAAP measures, which
may differ significantly from their non-GAAP counterparts.
Management uses the non-GAAP information to assess the Company’s
operations for the periods presented, analyze performance trends and
make decisions regarding future operations because it believes this
separate information better reflects ongoing operating results. This
non-GAAP financial information is not intended to be considered
independent of or a substitute for results prepared in accordance with
GAAP. This non-GAAP financial information may not be comparable to
similarly titled measures used by other entities and should not be
considered as alternatives to net income or loss, or diluted earnings or
loss per share, determined in accordance with GAAP. Individual quarterly
per share amounts may not be additive due to rounding. Amounts below are
in thousands except per share amounts.
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Three Months Ended
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Full Year Ended
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December 31:
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December 31:
|
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|
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2016
|
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2015
|
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2016
|
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2015
|
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Net income (loss) using GAAP
|
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$
|
271
|
|
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$
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(3,338
|
)
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$
|
39,545
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$
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(34,363
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)
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Accelerated depreciation on retired assets and costs of removal,
pre-tax
|
|
|
--
|
|
|
|
2,195
|
|
|
|
357
|
|
|
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9,664
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Non-recurring benefit of state income tax law changes
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--
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--
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(546
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)
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(610
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)
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Impairment of other intangible assets and goodwill, pre-tax
|
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--
|
|
|
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--
|
|
|
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--
|
|
|
|
98,868
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Loss on early debt redemption and refinancing, pre-tax
|
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--
|
|
|
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--
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--
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8,372
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Interim interest expense, pre-tax
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--
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--
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--
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1,688
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Income tax from adjustments associated with discontinued operation
|
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--
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1,259
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--
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1,259
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Aggregate income tax effect of non-GAAP adjustments
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--
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(826
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)
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(132
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)
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(42,791
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)
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Adjusted non-GAAP net income (loss)
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$
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271
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$
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(710
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)
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$
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39,224
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$
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42,087
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Diluted earnings (loss) per share using GAAP
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$
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0.01
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$
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(0.08
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)
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$
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0.96
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$
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(0.83
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)
|
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Accelerated depreciation on retired assets and costs of removal,
pre-tax
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--
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|
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0.05
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|
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0.01
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0.23
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|
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Non-recurring benefit of state income tax law changes
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--
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--
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(0.01
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)
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(0.01
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)
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Impairment of other intangible assets and goodwill, pre-tax
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--
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--
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--
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2.39
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Loss on early debt redemption and refinancing, pre-tax
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--
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--
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--
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0.20
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Interim interest expense, pre-tax
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--
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--
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|
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--
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|
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0.04
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Income tax from adjustments associated with discontinued operation
|
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--
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|
|
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0.03
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|
|
|
--
|
|
|
|
0.03
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Aggregate income tax effect of non-GAAP adjustments
|
|
|
--
|
|
|
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(0.02
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)
|
|
|
(0.00
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)
|
|
|
(1.04
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)
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Adjusted Non-GAAP diluted earnings (loss) per share
|
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$
|
0.01
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$
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(0.02
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)
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$
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0.95
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$
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1.02
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Significant Fourth Quarter 2016 Racing Events
-
Charlotte Motor Speedway – NASCAR Bank of America 500 Monster Energy
Cup and Drive for the Cure 300 Presented by Blue Cross Blue Shield of
North Carolina Xfinity Series racing events
-
Las Vegas Motor Speedway – NASCAR DC Solar 350 Camping World Truck
Series and NHRA Toyota Nationals racing events, and Red Bull Air Race
World Championship event
-
Texas Motor Speedway – NASCAR AAA Texas 500 Monster Energy Cup,
O’Reilly Auto Parts Challenge Xfinity, and Striping Technology 350
Camping World Truck Series racing events
2017 Earnings Guidance
The Company estimates 2017 total revenues of $475-500 million, net
income of $37-45 million, depreciation, amortization and interest
expense of $66-71 million, and non-GAAP diluted earnings per share of
$0.90-1.10, excluding non-recurring items and other special items. The
range of earnings guidance reflects the continuing negative impact of
uncertain economic conditions, among other factors. Inclement weather,
potential higher fuel and health-care costs, and continued
underemployment could significantly impact our future results. The
Company’s estimated total capital expenditures in 2017 are $20-30
million.
For managing facility capacity and alternative development purposes, the
Company began repurposing certain seating at Charlotte, Kentucky and New
Hampshire Motor Speedways in the first quarter 2017. The Company
anticipates recording non-cash, pre-tax charges for accelerated
depreciation and costs of removal aggregating approximately $5-7 million
in the first quarter 2017.
Dividends and Stock Repurchase Program
During the full year 2016, the Company declared and paid cash dividends
of $0.15 per share of common stock each quarter for a combined aggregate
of approximately $24.8 million. On February 15, 2017, the Company’s
Board of Directors declared a quarterly cash dividend of $0.15 per share
of common stock aggregating approximately $6.2 million, payable on March
17, 2017 to shareholders of record as of March 1, 2017. The Board of
Directors plans to continue to evaluate cash dividends on a quarterly
basis in the future.
During the full year 2016, the Company repurchased 252,000 shares of
common stock for approximately $4.7 million under its stock repurchase
program. As of December 31, 2016, the Company has repurchased 4,558,000
shares since adoption of the program in April 2005, and the total number
of shares available for future repurchase as currently authorized is
442,000.
Comments
“SMI’s full year 2016 results were within our expectations,
notwithstanding an unusually high number of our events contending with
poor weather,” stated Marcus G. Smith, Chief Executive Officer and
President of Speedway Motorsports. “Eight events during our 13 NASCAR
Cup race weekends in 2016 were negatively impacted, including Hurricane
Matthew at Charlotte Motor Speedway in October and shortened racing at
Texas Motor Speedway in November. Looking forward, the 2017 racing
season has some of the most exciting and promising changes in recent
years. An exciting new “stage-based” race format for all three of
NASCAR’s national series is being introduced. This new format has
championship implications and awarded points depending on driver running
order at the end of each stage, and the “playoff” bonus structure has
been expanded and extended. Drivers must now compete for spots early in
races rather than focusing towards the end of a race and over the entire
racing season.”
“Most of our NASCAR event sponsorships for 2017, and many for 2018 and
beyond, are already sold. And it deserves repeating that, along with the
ten-year NASCAR broadcasting agreements through 2024, SMI has many other
long-term contracted revenue streams in place. We continue to make
significant progress on our strategic initiatives of stable share
repurchases, dividend programs, ongoing debt reduction, as well as
restrained capital spending and managing facility capacity for pricing
power and marketing appeal. Our long-term business model remains solid.”
“Most sports, and sporting venues, are facing similar trends in
admissions and various event related revenues reflecting the changing
demographics and consumption of media entertainment – NASCAR and racing
in general are clearly not alone. SMI has a long-standing history of
providing our fans with entertainment experiences and enjoyment value –
second to none in motorsports. Our sizable investments, such as three of
the world’s largest high-definition video boards at Bristol, Charlotte
and Texas Motor Speedways, our new distributed antenna systems for
high-speed wireless performance, and the latest in digital and mobile
phone applications, provide our fans with exciting entertainment that
cannot be duplicated at home or other venues. SMI, NASCAR, the NBC
Sports Group and FOX Sports Media Group, and now Monster Energy, are all
working hard to capture the attention of sports fans everywhere.”
O. Bruton Smith, Executive Chairman of Speedway Motorsports stated, “Our
2016 results reflect the tremendously successful “Battle at Bristol”
collegiate football game and large concert. SMI proudly displayed our
excellent execution and ability to provide the finest in entertainment,
and is working to schedule additional games with top ranked college
teams. Our Charlotte Motor Speedway has essentially completed expansion
and reconfiguration of its road course. Located inside Charlotte’s
superspeedway, we now have multiple exciting race configurations
possible, including combined use of both their superspeedway and road
course. We believe many fans will find such racing configuration novel
and appealing, providing increased racing competition and new desirable
sightlines and viewing areas.”
Speedway Motorsports is a leading marketer and promoter of motorsports
entertainment in the United States. The Company, through its
subsidiaries, owns and operates the following premier facilities:
Atlanta Motor Speedway, Bristol Motor Speedway, Charlotte Motor
Speedway, Kentucky Speedway, Las Vegas Motor Speedway, New Hampshire
Motor Speedway, Sonoma Raceway and Texas Motor Speedway. The Company
provides souvenir merchandising services through its SMI Properties
subsidiaries; manufactures and distributes smaller-scale, modified
racing cars and parts through its US Legend Cars International
subsidiary; and produces and broadcasts syndicated motorsports
programming to radio stations nationwide through its Performance Racing
Network subsidiary. For more information, visit the Company's website at www.speedwaymotorsports.com.
This news release contains forward-looking statements, particularly
statements with regard to our future operations and financial results.
There are many factors that affect future events and trends of our
business including, but not limited to, economic factors, weather, the
success of NASCAR and others as sanctioning bodies, capital projects and
expansion, financing needs, income taxes and a host of other factors
both within and outside of management control. These factors and other
factors, including those contained in our Annual Report on Form 10-K and
subsequently filed Quarterly Reports on Form 10-Q, 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 and webcast today
at 10:00 AM (ET) open to the public. To participate in the conference
call, you may dial 877-201-0168 (US / Canada / toll-free) or
647-788-4901 (international). The reference number is 55359210. A
webcast of the call can be accessed at the Company's website at www.speedwaymotorsports.com
under “Investors”. Participating in the call will be Marcus G. Smith,
Chief Executive Officer and President, and William R. Brooks, Vice
Chairman, Chief Financial Officer and Treasurer.
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Speedway Motorsports, Inc. and Subsidiaries
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Selected Financial Data - Unaudited
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For The Three and Twelve Months Ended December 31, 2016 and 2015
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(In thousands except per share amounts)
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Three Months Ended
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Twelve Months Ended
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STATEMENT OF OPERATIONS DATA
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12/31/2016
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12/31/2015
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12/31/2016
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12/31/2015
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Revenues:
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Admissions
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$15,868
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$18,431
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$90,639
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$100,694
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Event related revenue
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28,605
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31,014
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136,900
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146,980
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NASCAR broadcasting revenue
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31,774
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30,816
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224,227
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|
217,469
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Other operating revenue (a)
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|
6,384
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7,484
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|
60,390
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31,320
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Total Revenues
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82,631
|
|
87,745
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|
512,156
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496,463
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Expenses and Other:
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|
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|
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Direct expense of events
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18,420
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19,584
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|
102,786
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|
104,303
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NASCAR event management fees
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|
21,864
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|
21,301
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|
137,727
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|
133,682
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Other direct operating expense (a)
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|
4,244
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|
4,653
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43,784
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|
19,541
|
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General and administrative
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21,553
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23,033
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100,144
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|
98,289
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Depreciation and amortization
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|
13,411
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|
14,950
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54,368
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|
61,964
|
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Interest expense, net
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3,228
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|
3,450
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|
13,148
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|
16,811
|
|
Impairment of other intangible assets and goodwill
|
|
-
|
|
-
|
|
-
|
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98,868
|
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Loss on early debt redemption and refinancing
|
|
-
|
|
-
|
|
-
|
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8,372
|
|
Other (income) expense, net
|
|
(111)
|
|
459
|
|
(997)
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|
875
|
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Total Expenses and Other
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82,609
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|
87,430
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450,960
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542,705
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Income (Loss) Before Income Taxes
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22
|
|
315
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61,196
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(46,242)
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Income Tax Provision
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249
|
|
(3,653)
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|
(21,651)
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|
11,879
|
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Net Income (Loss)
|
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$271
|
|
($3,338)
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|
$39,545
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($34,363)
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Basic Earnings (Loss) Per Share
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$0.01
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($0.08)
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$0.96
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($0.83)
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Weighted average shares outstanding
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41,076
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41,219
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41,152
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41,284
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Diluted Earnings (Loss) Per Share
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$0.01
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|
($0.08)
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$0.96
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($0.83)
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Weighted average shares outstanding
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41,096
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|
41,238
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|
41,167
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|
41,312
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|
|
|
|
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Major NASCAR-sanctioned Events Held During Period
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4
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4
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|
24
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24
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Certain Race Schedule Changes:
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• Poor weather resulted in delaying the start of the Monster Energy
NASCAR Cup race held at Las Vegas Motor Speedway in the first
quarter 2016
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• Poor weather resulted in delays in starting or completing or
shortening two Monster Energy NASCAR Cup races held at Texas Motor
Speedway (TMS) in the second and fourth quarters 2016
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• Poor weather resulted in cancellation of a portion of the major
NHRA weekend racing event held at Charlotte Motor Speedway (CMS) in
the second quarter 2016
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• Poor weather resulted in delays in starting and completing the
NASCAR All-Star race, and next day rescheduling of one NASCAR
Camping World Truck Series race, held at CMS in the second quarter
2016
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• Poor weather resulted in delays in starting and completing one
IndyCar race at TMS, which was rescheduled from the second quarter
2016 and held in the third quarter 2016
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• Poor weather resulted in postponing and rescheduling one Monster
Energy NASCAR Cup race held at Bristol Motor Speedway in the third
quarter 2016
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• TMS held one Red Bull Air Race in the third quarter 2015 that was
not held in 2016
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• Hurricane Matthew resulted in postponing and rescheduling one
Monster Energy NASCAR Cup and one Xfinity Series race held at CMS in
the fourth quarter 2016
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(a) Includes revenues and direct expenses associated with "the
Battle at Bristol" collegiate football game and preceding concert
held in the third quarter 2016.
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|
|
|
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BALANCE SHEET DATA
|
|
12/31/2016
|
|
12/31/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$79,342
|
|
$82,010
|
|
|
|
|
|
Total current assets
|
|
127,909
|
|
142,886
|
|
|
|
|
|
Property and equipment, net
|
|
1,000,230
|
|
1,019,650
|
|
|
|
|
|
Goodwill and other intangible assets, net
|
|
345,725
|
|
345,736
|
|
|
|
|
|
Total assets
|
|
1,503,300
|
|
1,539,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred race event and other income, net
|
|
44,782
|
|
57,549
|
|
|
|
|
|
Total current liabilities
|
|
94,671
|
|
108,369
|
|
|
|
|
|
Credit facility borrowings (all term loan)
|
|
66,000
|
|
120,000
|
|
|
|
|
|
Total long-term debt
|
|
267,206
|
|
321,383
|
|
|
|
|
|
Total liabilities
|
|
705,517
|
|
754,357
|
|
|
|
|
|
Total stockholders' equity
|
|
797,783
|
|
784,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170301005437/en/
Source: Speedway Motorsports, Inc.