Speedway Motorsports, Inc. (SMI) (NYSE: TRK) today reported
first quarter 2017 total revenues of $80.3 million, a net loss of
$1.9 million or $0.05 per diluted share, and adjusted non-GAAP net
income of $962,000 or $0.02 per diluted share. These results were
within management’s expectations, and SMI reaffirmed its 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.
Management believes many of the Company’s revenue categories
continue to be negatively impacted by economic conditions,
including underemployment and the absence of a stronger middle
class economic recovery, and changing demographics and media
entertainment consumption.
First Quarter Comparison:
- Total revenues of $80.3 million in 2017
compared to $83.2 million in 2016
- Accelerated depreciation and removal
costs on retired assets aggregating $4.6 million pre-tax, $2.9
million after tax or $0.07 per diluted share in 2017
- Net loss of $1.9 million or $0.05 per
diluted share in 2017 compared to net income of $861,000 or $0.02
per diluted share in 2016
- Adjusted non-GAAP net income of
$962,000 or $0.02 per diluted share in 2017 compared to $861,000 or
$0.02 per diluted share in 2016
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 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.
Three Months Ended March 31: 2017 2016 Net
(loss) income using GAAP
$
(1,935 )
$
861 Accelerated depreciation on retired assets and costs of
removal, pre-tax 4,597 -- Income tax effect of non-GAAP adjustment
(1,700 ) -- Adjusted non-GAAP net income $ 962
$ 861 Consolidated diluted (loss) earnings per
share using GAAP $ (0.05 ) $ 0.02 Accelerated depreciation on
retired assets and costs of removal, pre-tax 0.11 -- Income tax
effect of non-GAAP adjustment (0.04 ) --
Adjusted non-GAAP diluted earnings per share $ 0.02 $
0.02
To modernize our facilities for fan enhancements and alternative
marketing purposes, the Company is renovating select seating areas
at Charlotte, Kentucky and New Hampshire Motor Speedways. The
Company recorded non-cash, pre-tax charges for accelerated
depreciation and costs of removal aggregating approximately $4.6
million in the first quarter 2017.
As recently announced, we obtained approval from NASCAR to
realign one Monster Energy Cup Series and one Camping World Truck
Series race from New Hampshire Motor Speedway, and one Xfinity
Series race from Kentucky Speedway, to Las Vegas Motor
Speedway beginning in 2018.
Significant 2017 First Quarter Racing
Events
- Atlanta Motor Speedway - NASCAR Folds
of Honor QuikTrip 500 Monster Energy Cup, Rinnai 250 Xfinity and
Active Pest Control 200 Camping World Truck Series racing
events
- Las Vegas Motor Speedway - NASCAR
Kobalt 400 Monster Energy Cup and Boyd Gaming 300 Xfinity Series
racing events
2017 Earnings Guidance
The Company reaffirmed that first quarter 2017 results are
consistent with its previous full year 2017 non-GAAP earnings
guidance of $0.90-$1.10 per diluted share, excluding non-recurring
and other special items. The range of earnings guidance reflects
the continuing negative impact of uncertain economic conditions and
underemployment, among other factors. Inclement weather can
significantly impact our future results.
Dividends and Stock Repurchase
Program
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, which was paid on March 17,
2017 to shareholders of record as of March 1, 2017. On April 19,
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 June 5, 2017 to shareholders
of record as of May 15, 2017. The Board of Directors plans to
continue to evaluate cash dividends on a quarterly basis in the
future.
During the first quarter 2017, the Company repurchased 62,000
shares of common stock for approximately $1.3 million under its
stock repurchase program. As of March 31, 2017, the Company has
repurchased 4,620,000 shares since adoption of the program in April
2005, and the total number of shares available for future
repurchase as currently authorized is 380,000.
Comments
“SMI’s 2017 racing season is off to a solid start with first
quarter results within our expectations,” stated Speedway
Motorsports Chief Executive Officer and President, Marcus G. Smith.
“The new, more exciting ‘stage-based’ racing format and
championship point structure for all three of NASCAR’s national
series are being well received by fans and drivers. NASCAR’s
continuing focus on improving our sport is clearly paying off with
increased racing competition, fan entertainment and appeal. Our
long-term strategic initiatives of debt reduction, capital
spending, dividends and share repurchases remain a primary focus.
With substantial long-term contracted revenue streams such as the
ten-year NASCAR broadcasting agreements through 2024, our long-term
business model remains solid.”
“Most of our 2017 NASCAR event sponsorships, and many for 2018
and beyond, are already sold. However, the improving economy has
yet to reach many of our core and targeted fans. Many struggle with
underemployment and paying for basic necessities, including high
health-care costs. SMI has maintained many prices, lowered ticket
pricing for families and children, and offers extended payment
terms for many of our 2017 NASCAR events. While facing changing
demographics and media entertainment consumption, the trends in
television ratings for our NASCAR racing are relatively better than
most other sports and sporting venues.”
O. Bruton Smith, Executive Chairman of Speedway Motorsports
stated, “SMI recently announced our Las Vegas Motor Speedway will
host new Monster Energy NASCAR Cup, Xfinity and Camping World Truck
Series races annually starting in 2018. We are extremely proud to
be the only NASCAR venue hosting all three national racing series
twice each year, particularly in the world-renowned travel
destination of Las Vegas. Another exciting recent announcement is
that our Charlotte Motor Speedway’s Monster Energy NASCAR Cup
Saturday night race is returning to traditional Sunday afternoons
beginning this October. Sunday afternoon races should be easier for
families and travelers to attend, and drivers are already excited
about afternoons making for great racing at Charlotte this
fall.”
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, hosting of races, capital projects, expansion, facility
reductions, 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
10130671. 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.
Speedway Motorsports, Inc. and Subsidiaries
Selected Financial Data - Unaudited For The Three Months
Ended March 31, 2017 and 2016 (In thousands except per share
amounts) Three Months Ended
STATEMENT OF OPERATIONS DATA 3/31/2017
3/31/2016 Revenues: Admissions $14,750
$15,439 Event related revenue 18,959 21,730 NASCAR broadcasting
revenue 38,811 37,447 Other operating revenue 7,805
8,560 Total Revenues 80,325
83,176 Expenses and Other: Direct expense of events 12,457
13,060 NASCAR event management fees 23,060 22,298 Other direct
operating expense 5,140 5,589 General and administrative 22,586
24,074 Depreciation and amortization 17,505 13,371 Interest
expense, net 3,005 3,339 Other expense, net 578
68 Total Expenses and Other 84,331
81,799 (Loss) Income Before Income Taxes (4,006)
1,377 Benefit (Provision) for Income Taxes 2,071
(516) Net (Loss) Income ($1,935)
$861 Basic (Loss) Earnings Per Share ($0.05) $0.02
Weighted average shares outstanding 41,087 41,227 Diluted
(Loss) Earnings Per Share ($0.05) $0.02 Weighted average shares
outstanding 41,108 41,244 Major NASCAR-sanctioned Events
Held During Period 4 4
BALANCE SHEET DATA
3/31/2017 12/31/2016 Cash
and cash equivalents $53,585 $79,342 Total current assets 140,947
127,909 Property and equipment, net 992,253 1,000,230 Goodwill and
other intangible assets, net 345,725 345,725 Total assets 1,503,408
1,498,149 Deferred race event and other income, net 69,548
44,782 Total current liabilities 112,250 94,671 Credit facility
borrowings (all term loan) 63,000 66,000 Total long-term debt
(excluding deferred financing costs) 264,049 267,206 Total
liabilities 714,891 700,366 Total stockholders' equity 788,517
797,783
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version on businesswire.com: http://www.businesswire.com/news/home/20170426005241/en/
Speedway Motorsports, Inc.Janet Kirkley, 704-532-3318
Speedway Motorsports (NYSE:TRK)
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