International Speedway Posts Record Results For The Fourth Quarter
And Full Year Of Fiscal 2004 ~ Full Year Revenues Increase 18
Percent Over Prior Year ~ ~ Company Reiterates First Quarter 2005
Guidance ~ DAYTONA BEACH, Fla., Jan. 27 /PRNewswire-FirstCall/ --
International Speedway Corporation (NASDAQ:ISCA)(OTC:ISCB)
(BULLETIN BOARD: ISCB) ("ISC") today reported record results for
the fourth quarter and twelve months ended November 30, 2004.
Fourth Quarter Comparison Total revenues for the fourth quarter
were $231.3 million compared to revenues of $152.1 million in the
prior-year period. Operating income was $92.6 million during the
period compared to $51.8 million in the fourth quarter of fiscal
2003. Net income for the fourth quarter of fiscal 2004 was $54.4
million, or $1.02 per diluted share, compared to net income of
$31.6 million, or $0.60 per diluted share, in the prior-year
period. Prior period financial statements have been restated to
reflect discontinued operations, net of tax, related to the
previously announced sale of North Carolina Speedway. In addition,
the long-lived assets of Nazareth Speedway are held for sale as of
November 30, 2004 and its results are also recorded as discontinued
operations, net of tax, for all periods presented. Significantly
contributing to quarterly results was the impact of NASCAR's
Realignment initiative, the timing of certain events and the
acquisition of Martinsville Speedway. These collective changes
resulted in three additional NEXTEL Cup weekends in the 2004 fourth
quarter. Specifically, the 2003 Labor Day Cup/Busch weekend at
Darlington Raceway was included in third quarter 2003 results,
while the 2004 Labor Day Cup/Busch weekend was held at California
Speedway during the fourth quarter of 2004. Also as a result of
Realignment, Darlington's fall 2004 NEXTEL Cup weekend was held in
November, the historical date for North Carolina's NEXTEL Cup
weekend. However, the 2003 fourth quarter NEXTEL Cup weekend held
at North Carolina is included in discontinued operations for that
period. Finally, the July 2004 acquisition of Martinsville resulted
in an incremental NEXTEL Cup weekend in the fourth quarter of 2004.
Also impacting quarterly comparisons was a $2.5 million pre-tax
charge, or $0.03 per diluted share, included in the 2003 fourth
quarter to reflect CART's refusal to return the organization and
rights fee paid by ISC for California's event, which was cancelled
due to wildfires in the region at that time. CART subsequently
filed for bankruptcy. The Company continues to pursue CART in the
bankruptcy court to recover at least a portion of the $2.5 million
through the bankruptcy process. Full Year Comparison For the twelve
months ended November 30, 2004, total revenues increased to $647.8
million from $549.1 million in 2003. Operating income for the
twelve- month period was $228.4 million compared to $186.8 million
in the prior year. Prior period financial statements have been
restated to reflect discontinued operations, net of tax, for North
Carolina and Nazareth. Full year net income was $156.3 million, or
$2.94 per diluted share, in 2004, which includes: * A combined
loss, net of tax, from the discontinued operations of North
Carolina and Nazareth of $6.3 million, or $0.11 per diluted share,
which includes a non-cash after tax charge of $8.6 million, or
$0.16 per diluted share, for the impairment of Nazareth's
long-lived assets; * the after-tax gain of $36.3 million, or $0.68
per diluted share, on the sale of North Carolina; * a combined
pre-tax charge of $6.6 million, or $0.08 per diluted share,
associated with refinancing the Company's Senior Notes; and * a
combined pre-tax non-cash charge of $1.0 million, or $0.01 per
diluted share, for the net book value of assets removed related to
the Daytona infield renovation and Michigan frontstretch
reconfiguration projects. Net income for the fiscal year ended
November 30, 2003, was $105.4 million, or $1.98 per diluted share,
which includes: * Combined income, net of tax, from the
discontinued operations of North Carolina and Nazareth of $3.5
million, or $0.06 per diluted share; * a non-cash pre-tax charge of
$2.8 million, or $0.03 per diluted share, for the net book value of
assets removed at Homestead-Miami Speedway; * the aforementioned
pre-tax charge of $2.5 million, or $0.03 per diluted share,
associated with the non-return of the organization and rights fee
for California's CART event; and * a revenue contribution to ISC's
Food, Beverage and Merchandise Income of $1.6 million, or $0.02 per
diluted share, related to the Company's ongoing activities to audit
third party vendors' sales reports for prior years. GAAP to
Non-GAAP Reconciliation The following financial information is
presented below using other than generally accepted accounting
principles ("non-GAAP"), and is reconciled to comparable
information presented using GAAP. Non-GAAP net income and diluted
earnings per share below are derived by adjusting amounts
determined in accordance with GAAP for certain items presented in
the accompanying selected operating statement data, net of taxes.
The adjustments relate to: (1) the presentation of the operations
of North Carolina Speedway and Nazareth Speedway as discontinued;
(2) the presentation of the sale of North Carolina as discontinued;
(3) the write-off of the net book value of certain undepreciated
assets removed in connection with major track
reconfiguration/renovation projects at Homestead-Miami Speedway,
Daytona International Speedway and Michigan International Speedway;
and (4) charges associated with refinancing the majority of the
Company's long-term debt. We believe such non-GAAP information is
useful and meaningful to investors, and is used by investors and us
to assess our core operations. This non-GAAP financial information
may not be comparable to similarly titled measures used by other
entities and should not be considered as an alternative to
operating income, net income or diluted earnings per share, which
are determined in accordance with GAAP. (In Thousands, Except Per
Share Amounts) Three Months Ended Year Ended November 30, November
30, 2003 2004 2003 2004 Net income $31,639 $54,376 $105,448
$156,318 Net (income) loss, net of tax, from: Discontinued
operations of North Carolina and Nazareth (2,826) 65 (3,483) 6,315
Gain on sale of North Carolina -- -- -- (36,337) Income from
continuing operations 28,813 54,441 101,965 126,296 Adjustments,
net of tax: Track reconfiguration/renovation projects at
Homestead-Miami, Daytona and Michigan -- 204 1,726 608 Interim
interest on debt redeemed -- -- -- 995 Loss on early redemption of
debt -- -- -- 3,028 Non-GAAP net income $28,813 $54,645 $103,691
$130,927 Diluted earnings per share $0.60 $1.02 $1.98 $2.94 Net
(income) loss, net of tax, from: Discontinued operations of North
Carolina and Nazareth (0.06) -- (0.06) 0.11 Gain on sale of North
Carolina -- -- -- (0.68) Income from continuing operations 0.54
1.02 1.92 2.37 Adjustments, net of tax: Track
reconfiguration/renovation projects at Homestead-Miami, Daytona and
Michigan -- -- 0.03 0.01 Interim interest on debt redeemed -- -- --
0.02 Loss on early redemption of debt -- -- -- 0.06 Non-GAAP
diluted earnings per share $0.54 $1.02 $1.95 $2.46 2004 Fourth
Quarter Highlights Highlights of the fourth quarter of 2004
include: * As a result of NASCAR's Realignment initiatives,
California successfully hosted its inaugural Labor Day NEXTEL Cup
and Busch weekend, posting a more than 65 percent increase in Cup
attendance as compared to the event held during the Labor Day
weekend at Darlington in 2003. * Richmond International Raceway
posted increased attendance for its NASCAR Triple Header Weekend,
highlighted by record Busch attendance and a 15 percent increase in
average household television viewership for the sold out NEXTEL Cup
Chevy Rock and Roll 400. * Chicagoland Speedway recorded sold-out
attendance for its IRL IndyCar and ARCA racing weekend, and
California hosted a successful NASCAR Craftsman Truck/IRL IndyCar
series weekend. * Talladega Superspeedway posted increased
attendance for its NEXTEL Cup/ARCA weekend. * Kansas Speedway
hosted another sold-out NEXTEL Cup and Busch racing weekend
showcasing exciting on-track competition. The fourth race in the
NASCAR NEXTEL Cup Chase for the Championship also posted strong
viewership results with a five percent increase in average
households over the prior year. * Martinsville hosted a successful
NEXTEL Cup and Craftsman Truck weekend highlighted by a capacity
crowd on-hand for the Subway 500 NEXTEL Cup event, which also
posted a ten percent increase in average household viewership. *
Phoenix International Raceway once again hosted a sold-out Checker
Auto Parts 500 NEXTEL Cup race with Dale Earnhardt Jr. returning to
victory lane for the sixth time of the 2004 season. Television
viewership for the eighth race in the Chase for the Championship
increased five percent over the prior year. * A near capacity crowd
was on-hand for Darlington's NEXTEL Cup series Mountain Dew
Southern 500 to watch Jimmie Johnson record his series-leading
eighth victory of the season. In addition, more than 5.5 million
households tuned in to witness the second to last race of the
season. * Homestead-Miami hosted a highly successful Ford
Championship NASCAR finale weekend, highlighted by a sold-out crowd
for the Ford 400 Cup race and increased attendance for the Busch
and Craftsman Truck events. Broadcast performance for the Ford 400
surged ahead of the prior year, posting a 40 percent increase in
average household viewership and garnering the highest rating ever
for a Cup race broadcast in direct competition with the NFL. "The
fourth quarter concluded a very strong year for the Company,"
commented Lesa France Kennedy, President of ISC. "Revenue growth
for the quarter was driven by increased broadcast rights revenue as
well as stronger admissions, sponsorship, hospitality, and food and
beverage revenue. While the timing of the Labor Day weekend, our
mid-year acquisition of Martinsville and the impact of schedule
realignment significantly contributed to fourth quarter results, it
is important to note that on a comparable event basis, we
experienced top line growth across all major revenue categories."
Contributing to year-over-year revenue growth was the acquisition
of Martinsville and the realignment of a NASCAR NEXTEL Cup Series
weekend from North Carolina to California for 2004. In addition, a
21 percent increase in domestic television rights fees for
comparable Cup and Busch events and higher sponsor spending
contributed to full year 2004 results. ISC leveraged agreements
with more than 350 marketing partners in 2004, including new
sponsorships with Nextel, Unilever, Sunoco and AOL, to name a few.
The Company also renewed its significant multi-track partnership
with Pepsi, the largest marketing agreement announced by ISC to
date, excluding Nextel's collective ten-year agreements with its
facilities. Finally, the Company posted an overall increase in
hospitality revenue for comparable events during the year. "Our
ongoing success in securing multi-year, multi-track sponsorship
agreements with major corporate partners validates the appeal of
ISC's nationwide footprint," Ms. France Kennedy continued. "Our
portfolio of events provides continuity and enables advertisers to
reach consumers in key markets throughout the entire racing season.
In addition, our unwavering commitment to enhancing partner
relationships contributes to sponsor satisfaction, a key
contributor for securing future sponsorship agreements." Speedweeks
kicks off on February 5, 2005, with the 24-hour Grand American
Rolex 24 at Daytona. SPEED Channel is scheduled to air 14 1/2 hours
of live coverage of the country's premier sports car endurance
race. Speedweeks culminates with the 47th running of the Daytona
500 on February 20th. FOX and FX will partner to broadcast major
Speedweeks events including the NASCAR NEXTEL Cup Series Budweiser
Shootout, Gatorade Duel and Daytona 500, as well as the NASCAR
Busch Series Hershey's TAKE 5 300. In addition, SPEED Channel will
provide continuous live coverage from Speedweeks, including the
NASCAR Craftsman Truck Series Florida Dodge Dealers 250, which will
once again run "under the lights". The Company is also making
progress on its external development initiatives. In the New York
borough of Staten Island, ISC's majority owned subsidiary, 380
Development Corp., recently closed on the $9 million purchase of a
236-acre parcel of land from Duke Energy. The acquisition completes
the total acreage required for a proposed motorsports and retail
development project that ISC is pursuing with Related Retail
Corporation (minority member of 380 Development Corp.). However,
the ultimate decision to develop a motorsports facility will be
based on the overall results of an ongoing detailed feasibility
study and analysis of estimated construction cost (currently
estimated between $550 and $600 million, including land costs),
availability of public incentives, permitting considerations,
traffic and transportation analyses, and other necessary project
reviews. The Company remains optimistic for its prospects to bring
NASCAR racing to New York City. In the Pacific Northwest, ISC
continues to evaluate suitable locations for the development of a
motorsports facility in the region. Interest in the project is
strong from several municipalities as well as state
representatives. The Company is optimistic of its prospects in this
underserved region of the country and anticipates continued
progress in the near future. Outlook ISC reiterates its previously
issued 2005 fiscal year first quarter guidance for revenues of $170
to $175 million and earnings of $0.69 to $0.71 per diluted share.
In addition, full year guidance remains unchanged with revenues
expected between $705 and $725 million and earnings of $2.77 to
$2.85 per diluted share. "We are very excited and optimistic for
the beginning of the 2005 racing season," Ms. France Kennedy
continued. "Overall advanced ticket sales are trending ahead of
last year and we look forward to posting solid results for the
first quarter. In addition, we recently began construction on the
frontstretch renovation at Michigan. The project will create a more
festive and fan-friendly concourse area around the entrance of the
facility as well as a new suite/club seat structure that will
include 900 club seats and six incremental luxury suites. We expect
capital spending at our existing facilities to approximate $100
million for 2005, which includes the Michigan renovation project,
the addition of 1,600 grandstand seats at Kansas, and other
projects either approved by ISC's Board of Directors or expected to
be approved in the coming months." Ms. France Kennedy concluded,
"Building off the momentum of 2004 and supported by our sound
business fundamentals and aggressive marketing initiatives, we
anticipate another record year in 2005. In addition to event
realignment at several of our facilities and our mid-year
acquisition of Martinsville in 2004, we expect growth in NASCAR
television rights fees, as well as attendance-related and corporate
marketing revenues to positively impact our full year results. The
sport of NASCAR has experienced a significant increase in
popularity due to recent industry initiatives including the
entrance of Nextel, schedule realignment and the NEXTEL Cup Chase
for the Championship, all of which benefit the sport's
constituents. Moreover, due to our strengthened nationwide
footprint, portfolio of premier events, and ongoing progress in our
development projects in New York and the Pacific Northwest, we are
strongly positioned for future long-term growth." Conference Call
Details The management of ISC will host a conference call today
with investors at 9:00 a.m. Eastern time. To participate, dial
(973) 582-2710 five to ten minutes prior to the scheduled start
time and request to be connected to the ISC earnings call. A live
webcast will also be available at that time on the Company's Web
site, http://www.iscmotorsports.com/, under the "Investor
Relations" section. This section has been expanded to include a
full range of company, financial, corporate governance and other
data that is useful to the financial community. A replay will be
available one hour after the end of the call through midnight
Thursday, February 3, 2005. To access, dial (973) 341-3080 and
enter the code 5610601, or visit the "Investor Relations" section
of the Company's Web site. International Speedway Corporation is a
leading promoter of motorsports activities in the United States,
currently promoting more than 100 events annually. The Company owns
and/or operates 11 of the nation's major motorsports facilities,
including Daytona International Speedway in Florida (home of the
Daytona 500); Talladega Superspeedway in Alabama; Michigan
International Speedway located outside Detroit; Richmond
International Raceway in Virginia; California Speedway near Los
Angeles; Kansas Speedway in Kansas City, Kansas; Phoenix
International Raceway in Arizona; Homestead-Miami Speedway in
Florida; Martinsville Speedway in Virginia; Darlington Raceway in
South Carolina; and Watkins Glen International in New York. Other
track ownership includes an indirect 37.5% interest in Raceway
Associates, LLC, which owns and operates Chicagoland Speedway and
Route 66 Raceway near Chicago, Illinois. The Company also owns and
operates MRN Radio, the nation's largest independent sports radio
network; DAYTONA USA, the "Ultimate Motorsports Attraction" in
Daytona Beach, Florida, the official attraction of NASCAR; and
subsidiaries which provide catering services, food and beverage
concessions, and produce and market motorsports-related merchandise
under the trade name "Americrown." For more information, visit the
Company's Web site at http://www.iscmotorsports.com/. Statements
made in this release that express the Company's or management's
beliefs or expectations and which are not historical facts or which
are applied prospectively are forward-looking statements. It is
important to note that the Company's actual results could differ
materially from those contained in or implied by such
forward-looking statements. The Company's results could be impacted
by risk factors, including, but not limited to, weather surrounding
racing events, government regulations, economic conditions,
consumer and corporate spending, military actions, air travel and
national or local catastrophic events. Additional information
concerning factors that could cause actual results to differ
materially from those in the forward looking statements is
contained from time to time in the Company's SEC filings including,
but not limited to, the 10-K and subsequent 10-Qs. Copies of those
filings are available from the Company and the SEC. The Company
undertakes no obligation to release publicly any revisions to these
forward-looking statements that may be needed to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. The inclusion of any statement in this
release does not constitute an admission by International Speedway
or any other person that the events or circumstances described in
such statement are material. (Tables Follow) Consolidated
Statements of Operations (In Thousands, Except Per Share Amounts)
Three Months Ended Year Ended November 30, November 30, 2003 2004
2003 2004 REVENUES: Admissions, net $53,851 $76,388 $203,699
$222,545 Motorsports related income 75,127 125,247 265,209 334,943
Food, beverage and merchandise income 21,320 27,523 74,075 83,236
Other income 1,770 2,096 6,072 7,124 152,068 231,254 549,055
647,848 EXPENSES: Direct expenses: Prize and point fund monies and
NASCAR sanction fees 29,152 50,497 96,882 119,322 Motorsports
related expenses 25,216 35,412 97,988 113,098 Food, beverage and
merchandise expenses 11,703 16,512 41,250 52,260 General and
administrative expenses 23,555 24,585 82,403 90,307 Depreciation
and amortization 10,609 11,666 40,860 44,443 Homestead-Miami
Speedway track reconfiguration -- -- 2,829 -- 100,235 138,672
362,212 419,430 Operating income 51,833 92,582 186,843 228,418
Interest income 546 1,233 1,789 4,053 Interest expense (5,562)
(4,422) (23,179) (21,723) Loss on early redemption of debt -- -- --
(4,988) Equity in net income from equity investments 399 436 2,553
2,754 Income from continuing operations before income taxes 47,216
89,829 168,006 208,514 Income taxes 18,403 35,388 66,041 82,218
Income from continuing operations 28,813 54,441 101,965 126,296
Income (loss) from discontinued operations, net of income taxes
2,826 (65) 3,483 (6,315) Gain on sale of discontinued operations,
net of income taxes -- -- -- 36,337 Net income $31,639 $54,376
$105,448 $156,318 Basic earnings per share: Income from continuing
operations $0.54 $1.03 $1.92 $2.38 Income (loss) from discontinued
operations 0.06 (0.01) 0.07 (0.12) Gain on sale of discontinued
operations -- -- -- 0.68 Net income $0.60 $1.02 $1.99 $2.94 Diluted
earnings per share Income from continuing operations $0.54 $1.02
$1.92 $2.37 Income (loss) from discontinued operations 0.06 -- 0.06
(0.11) Gain on sale of discontinued operations -- -- -- 0.68 Net
income $0.60 $1.02 $1.98 $2.94 Dividends per share $0.00 $0.00
$0.06 $0.06 Basic weighted average shares outstanding 53,065,583
53,098,185 53,057,077 53,084,437 Diluted weighted average shares
outstanding 53,150,004 53,205,911 53,133,282 53,182,776
Consolidated Balance Sheets (In Thousands) November 30, 2003
November 30, 2004 ASSETS Current Assets: Cash and cash equivalents
$223,973 $275,778 Short-term investments 201 200 Receivables, less
allowance of $1,500 in 2003 and 2004 37,996 52,798 Inventories
5,496 7,267 Prepaid expenses and other current assets 4,078 5,032
Total Current Assets 271,744 341,075 Property and Equipment, net
884,623 969,095 Other Assets: Equity investments 33,706 38,468
Intangible assets, net 1,033 148,989 Goodwill 92,542 99,265 Other
20,144 22,618 147,425 309,340 Total Assets $1,303,792 $1,619,510
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current
portion of long-term debt $232,963 $7,505 Accounts payable 15,739
28,854 Deferred income 106,998 114,518 Income taxes payable 6,877
25,241 Other current liabilities 13,928 15,078 Total Current
Liabilities 376,505 191,196 Long-Term Debt 75,168 369,315 Deferred
Income Taxes 113,414 165,617 Long-Term Deferred Income 11,894
11,503 Other Long-Term Liabilities 346 141 Commitments and
Contingencies -- -- Shareholders' Equity: Class A Common Stock,
$.01 par value, 80,000,000 shares authorized; 28,359,173 and
28,858,934 issued and outstanding in 2003 and 2004, respectively
283 289 Class B Common Stock, $.01 par value, 40,000,000 shares
authorized; 24,858,610 and 24,409,903 issued and outstanding in
2003 and 2004, respectively 249 244 Additional paid-in capital
694,719 696,882 Retained earnings 34,602 187,689 Accumulated other
comprehensive loss (333) (22) 729,520 885,082 Less unearned
compensation- restricted stock 3,055 3,344 Total Shareholders'
Equity 726,465 881,738 Total Liabilities and Shareholders' Equity
$1,303,792 $1,619,510 Consolidated Statements of Cash Flows Year
Ended November 30, 2003 2004 (In Thousands) OPERATING ACTIVITIES
Net income $105,448 $156,318 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 44,171 45,687 Amortization of financing costs 294 250
Amortization of unearned compensation 1,695 1,734 Deferred income
taxes 38,471 52,146 Undistributed income from equity investments
(2,553) (2,754) Impairment of long-lived assets -- 13,217 Gain on
sale of discontinued operations -- (63,926) Loss on early
redemption of debt -- 4,988 Homestead-Miami Speedway track
reconfiguration 2,829 -- Other, net (37) 1,028 Changes in operating
assets and liabilities: Receivables, net (7,439) (10,959)
Inventories, prepaid expenses and other assets (990) (2,569)
Accounts payable and other liabilities 1,040 9,215 Deferred income
8,868 3,187 Income taxes payable 2,939 18,424 Net cash provided by
operating activities 194,736 225,986 INVESTING ACTIVITIES Capital
expenditures (72,587) (135,218) Proceeds from asset disposals 178
86 Acquisition of businesses -- (195,325) Proceeds from sale of
discontinued operations -- 100,391 Equity investment -- (2,008)
Proceeds from short-term investments 400 400 Purchases of
short-term investments (400) (400) Proceeds from affiliate 4,075 --
Other, net (1,552) (1,442) Net cash used in investing activities
(69,886) (233,516) FINANCING ACTIVITIES Proceeds from long-term
debt -- 299,570 Payment of long-term debt (5,775) (231,890) Payment
of long-term debt redemption premium -- (5,340) Deferred financing
fees (820) (2,626) Proceeds from interest rate swaps -- 2,771 Cash
dividends paid (3,193) (3,196) Reacquisition of previously issued
common stock (352) (396) Exercise of Class A common stock options
-- 442 Net cash (used in) provided by financing activities (10,140)
59,335 Net increase in cash and cash equivalents 114,710 51,805
Cash and cash equivalents at beginning of period 109,263 223,973
Cash and cash equivalents at end of period $223,973 $275,778
DATASOURCE: International Speedway Corporation CONTACT: Wes Harris,
Senior Director, Investor Relations, International Speedway
Corporation, +1-386-947-6465 Web site:
http://www.iscmotorsports.com/
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