- Motorsports Authentics' Acquisition of Action Performance
Proceeding as Planned - DAYTONA BEACH, Fla., Oct. 6
/PRNewswire-FirstCall/ -- International Speedway Corporation
(NASDAQ:ISCA) (OTC:ISCB) (BULLETIN BOARD: ISCB) ("ISC") today
reported record revenue for the third quarter and nine months ended
August 31, 2005. "We are pleased to report another solid quarter of
financial results, highlighted by growth in the majority of our
revenue categories," stated Lesa France Kennedy, President of ISC.
"Broadcast rights fees and media related revenue significantly
contributed to the increase. In addition, higher overall
admissions, hospitality and sponsorship revenues benefited top and
bottom line results." Third Quarter Comparison Total revenues for
the third quarter increased to $166.5 million, compared to revenues
of $154.8 million in the prior-year period. Operating income was
$56.0 million during the period compared to $51.0 million in the
third quarter of fiscal 2004. Net income was $36.8 million, or
$0.69 per diluted share, compared to net income of $68.1 million,
or $1.28 per diluted share, in the prior year. Results for the 2004
third quarter include, net of tax, a $36.3 million, or $0.68 per
diluted share, gain on the sale of North Carolina Speedway's
assets. Contributing to 2005 third quarter results was the
inclusion of the NASCAR Busch Series event at Watkins Glen
International, which was realigned to Watkins Glen from Nazareth
Speedway. The long-lived assets of Nazareth are held for sale as of
August 31, 2005. Therefore, its results are recorded as
discontinued operations, net of tax, for all periods presented. In
addition, prior year financial statements reflect the discontinued
operations, net of tax, of North Carolina Speedway, which was sold
in July 2004. Third quarter 2004 results also include a $0.7
million pre-tax non-cash charge for the net book value of assets
removed related to Daytona International Speedway's infield
renovation project, which was completed earlier this year. Year to
Date Comparison For the nine months ended August 31, 2005, total
revenues increased to $503.4 million from $416.6 million in 2004.
Operating income for the nine- month period was $174.7 million
compared to $135.8 million in the prior year. Net income for the
nine months ended August 31, 2005, was $104.3 million, or $1.96 per
diluted share, and was impacted by the following: * Phoenix
International Raceway hosted its inaugural spring NEXTEL Cup/Busch
weekend in the 2005 second quarter. These events were realigned
from Darlington Raceway, and were held in the fourth quarter of
2004. * California Speedway's NASCAR Craftsman Truck event was held
in the second quarter of 2005, as compared to the fourth quarter of
2004. * The July 2004 acquisition of Martinsville Speedway resulted
in an incremental NEXTEL Cup and Craftsman Truck weekend in the
second quarter of 2005. * The 2005 second quarter recovery of
approximately $1.8 million, or $0.02 per diluted share after-tax,
associated with ISC's allowable claim in the CART bankruptcy. The
claim was based on the failure to return ISC's sanction fee paid to
CART, less allowable expenses, for the 2003 event scheduled at
California Speedway, which CART canceled because of the state of
emergency due to wildfires in Southern California at the time. *
The aforementioned inclusion of the NASCAR Busch Series event at
Watkins Glen in the 2005 third quarter, which was realigned from
Nazareth. Net income for the nine months ended August 31, 2004 was
$101.9 million, or $1.92 per diluted share, and includes a combined
pre-tax charge included in the 2004 second quarter of $6.6 million,
or $0.08 per diluted share after-tax, associated with refinancing
the Company's Senior Notes, and the previously discussed gain on
the sale of the assets of North Carolina and non-cash charge
related to the Daytona infield renovation project. 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; and (3) 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)
(Unaudited) Three Months Ended Nine Months Ended August 31, August
31, August 31, August 31, 2004 2005 2004 2005 Net income $68,090
$36,752 $101,942 $104,318 Net (income) loss, net of tax, from:
Discontinued operations of North Carolina and Nazareth 57 52 6,250
144 Gain on the sale of discontinued operations (36,337) --
(36,337) -- Income from continuing operations 31,810 36,804 71,855
104,462 Adjustments, net of tax: Interim interest on debt redeemed
-- -- 995 -- Loss on early redemption of debt -- -- 3,028 --
Non-GAAP net income $31,810 $36,804 $75,878 $104,462 Diluted
earnings per share $1.28 $0.69 $1.92 $1.96 Net (income) loss, net
of tax, from: Discontinued operations of North Carolina and
Nazareth -- -- 0.11 -- Gain on the sale of discontinued operations
(0.68) -- (0.68) -- Income from continuing operations 0.60 0.69
1.35 1.96 Adjustments, net of tax: Interim interest on debt
redeemed -- -- 0.02 -- Loss on early redemption of debt -- -- 0.06
-- Non-GAAP diluted earnings per share $0.60 $0.69 $1.43 $1.96 2005
Third Quarter Highlights An overview of the major event weekends
held in the third quarter of 2005 includes: * Michigan
International Speedway hosted a successful NEXTEL Cup, Craftsman
Truck and ARCA weekend, highlighted by a sold-out Batman Begins 400
NEXTEL Cup race. * Richmond International Raceway hosted a
successful open-wheel weekend highlighted by a near double-digit
percent attendance increase for the SunTrust Indy Challenge. *
Kansas Speedway posted sold-out attendance for its IndyCar,
Craftsman Truck and ARCA weekend. * Daytona hosted both the NEXTEL
Cup and Busch series in July. Despite inclement weather, the NEXTEL
Cup Pepsi 400 capped off a very successful weekend that resulted in
increased overall attendance and record revenues. * Chicagoland
Speedway hosted sold out attendance for its NEXTEL Cup and Busch
weekend, marking the fifth straight year of selling the facility
out on a season-ticket basis. * Michigan hosted a successful
weekend of open-wheel racing, including increased attendance for
the Indy Firestone 400. * Watkins Glen hosted a weekend of NASCAR
racing in August, marking the first return of the NASCAR Busch
series to the facility since 2001. Attendance for both events was
strong, including increased attendance for the weekend anchored by
the Sirius at the Glen NEXTEL Cup race. * Michigan extended its
streak of consecutive sold-out NEXTEL Cup events to 30, with the
GFS Marketplace 400. Average household viewership for the weekend's
events was notably higher over the prior year, including a 16
percent increase for the Cup race and a 30 percent increase for the
Busch Series race. Revenue growth for the third quarter of fiscal
2005 was partially driven by increased spending by corporations at
ISC's events. ISC benefited from recently signed multi-track,
multi-year official status agreements with several major brands
including AAA and Crown Royal. ISC also secured a multi- year race
entitlement agreement with Sony for California's Labor Day NEXTEL
Cup event. As a result, the Company has once again secured
entitlement sponsors for its entire NEXTEL Cup inventory. "Driven
by NASCAR's continued increase in popularity and expansion into new
and larger markets, a growing number of major corporations are
taking note of the benefits of motorsports sponsorship," continued
Ms. France Kennedy. "Our stable of facilities and premier events
continues to make us the partner of choice for significant
advertisers looking to reach a nationwide audience throughout the
entire race season. In addition, our considerable focus on
partnership management enables our sponsors to maximize their
return on investment, while leveraging our significant expertise to
identify incremental sponsorship opportunities across our
portfolio." Recent Developments To date in the fourth quarter: *
California hosted near-capacity crowds for its Labor Day NASCAR
NEXTEL Cup race. Television viewership was again strong for the
weekend, as the Ameriquest 300 Busch Series race posted a 28
percent increase in average households. In addition, the Sony HD
500 posted record broadcast ratings for a Labor Day weekend Cup
race. * The following weekend, the field for the NASCAR NEXTEL Cup
Chase for the Championship was set at Richmond. A capacity crowd
was on hand for the NEXTEL Cup Chevy Rock and Roll 400. In
addition, the facility once again hosted record attendance for its
Busch Series event, demonstrating the positive impact an early Cup
sellout has on support event ticket sales. * Chicagoland hosted a
weekend of exciting IRL and ARCA racing, highlighted by sold-out
admissions for both events. * Open-wheel racing returned to Watkins
Glen in September. Attendance and revenue for the weekend was
significantly ahead of the prior year, when the events were held at
Nazareth. * Talladega hosted NEXTEL Cup and ARCA racing highlighted
by exciting on- track competition including 50 lead changes for the
UAW-Ford 500 NEXTEL Cup event. Unfortunately, attendance-related
revenue was below expectations for the weekend, primarily due to
the impacts of the recent hurricanes on the Gulf Coast, a key
selling region for the facility. For the remainder of the fourth
quarter, ISC will host a NEXTEL Cup and Busch weekend at Kansas, an
IRL weekend at California, NEXTEL Cup and Craftsman Truck racing at
Martinsville, and consecutive NASCAR Triple Header weekends at
Phoenix and Homestead-Miami Speedway. The Company has already
announced sold out Cup races at Kansas and Homestead-Miami. In
addition, advanced ticket sales for ISC's non-sold out Cup events,
as well as support races remaining for the quarter, are trending
ahead of the prior year. In Seattle, ISC is continuing with its
ongoing detailed project due diligence to evaluate total project
costs, feasibility of a public/private partnership, and
environmental impacts including traffic, noise, air quality and
others, if necessary. A recently released study estimated the
economic impact from the construction and annual operation of a
motorsports facility in Washington to be approximately $500 million
and $140 million, respectively. In Metro New York, the Company
continues to meet with local civic and government organizations on
Staten Island, while proceeding with the land use approval process
and other aspects of its feasibility study. In addition,
preliminary work is underway, including debris removal and
obtaining regulatory approval for adding fill, to improve the
overall quality of the site. Ms. France Kennedy stated, "Important
progress continues in our external development efforts. In Seattle,
a recent study documented the significant economic impact our
project represents to the region, and we continue to meet with
local and state officials to explore the best possible
public/private partnership for funding the construction of the
facility. In New York, our outreach continues with local civic and
government organizations to discuss the merits and benefits of our
project. We remain optimistic for the prospects of both of these
significant long-term growth opportunities for ISC." Regarding the
Company's joint venture with Speedway Motorsports Inc., and its
acquisition of Action Performance Companies, Inc. ("Action"), on
September 20, 2005 the required notification and forms under the
Hart-Scott-Rodino Act were filed for regulatory approval. The
transaction is expected to close by the end of calendar 2005.
Finally, in terms of capital spending, ISC has increased its
outlook for fiscal 2005 capital spending at its existing facilities
to range between $110 and $120 million. The increase from the
previous estimate of approximately $100 million is primarily
associated with certain land purchases and related improvements at
the Company's facilities. Approximately two- thirds of the 2005
annual spending estimate is for revenue generating projects
including the Daytona infield renovation, the Michigan front
stretch renovation, the construction of 16 new luxury suites, 800
club seats and lighting at Homestead-Miami and other projects
designed to enhance the fan experience. Outlook ISC reiterates its
2005 fourth quarter guidance of revenues between $225 and $230
million, and income from continuing operations of $0.99 to $1.01
per diluted share. Given the Company's commitment of charitable
contributions of approximately $1 million in funds and services for
the Gulf Coast hurricane relief efforts and less than expected
results at Talladega due to the impact from the hurricanes, the
Company is currently more comfortable at the lower end of the
revenue and earnings ranges of estimates. "We are on-track to once
again post record financial results for fiscal 2005," Ms. France
Kennedy concluded. "Consumer demand for our future events remains
strong, despite the recent increase in fuel prices, and we look
forward to an exciting end to this outstanding NASCAR racing
season. In addition, we continue to see strong indicators of the
sport's ongoing growth in popularity, particularly in year over
year television viewership results. Like others in the industry, we
eagerly await an announcement regarding NASCAR's next television
agreements toward the end of 2005 or early 2006. Looking ahead to
fiscal 2006, while we are still in the budgeting process, we
anticipate another strong year for the Company. Given our portfolio
of premier facilities and events, coupled with our sound business
plan and long- term growth opportunities, ISC remains well
positioned for continued future 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 toll free
888-693-3477 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. A replay will be available one hour after the
end of the call through midnight Thursday, October 13, 2005. To
access, dial toll free 877-519-4471 and enter the code 6527763, 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 racing events annually as well as numerous other
motorsports-related activities. The Company owns and/or operates 11
of the nation's major motorsports entertainment 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
motorsports entertainment facility 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) (Unaudited) Three Months Ended Nine Months Ended
August 31, August 31, August 31, August 31, 2004 2005 2004 2005
REVENUES: Admissions, net $56,085 $58,911 $146,157 $163,205
Motorsports related 74,821 85,219 209,696 274,188 Food, beverage
and merchandise 22,027 20,316 55,713 59,176 Other 1,911 2,073 5,028
6,829 154,844 166,519 416,594 503,398 EXPENSES: Direct expenses:
Prize and point fund monies and NASCAR sanction fees 23,278 26,411
68,825 89,520 Motorsports related 31,401 32,493 77,588 92,220 Food,
beverage and merchandise 14,960 13,573 35,846 38,212 General and
administrative 22,999 24,934 65,722 71,176 Depreciation and
amortization 11,158 13,089 32,777 37,538 103,796 110,500 280,758
328,666 Operating income 51,048 56,019 135,836 174,732 Interest
income 1,062 1,224 2,820 3,562 Interest expense (4,833) (3,225)
(17,301) (9,585) Loss on early redemption of debt -- -- (4,988) --
Equity in net income from equity investments 5,253 5,938 2,318
3,036 Income from continuing operations before income taxes 52,530
59,956 118,685 171,745 Income taxes 20,720 23,152 46,830 67,283
Income from continuing operations 31,810 36,804 71,855 104,462 Loss
from discontinued operations, net of income taxes of ($160) and
($68), and ($3,368) and ($194), respectively (57) (52) (6,250)
(144) Gain on the sale of discontinued operations, net of income
taxes of $27,589 36,337 -- 36,337 -- Net income $68,090 $36,752
$101,942 $104,318 Basic earnings per share: Income from continuing
operations $0.60 $0.69 $1.35 $1.96 Loss from discontinued
operations -- -- (0.11) -- Gain on sale of discontinued operations
0.68 -- 0.68 -- Net income $1.28 $0.69 $1.92 $1.96 Diluted earnings
per share: Income from continuing operations $0.60 $0.69 $1.35
$1.96 Loss from discontinued operations -- -- (0.11) -- Gain on
sale of discontinued operations 0.68 -- 0.68 -- Net income $1.28
$0.69 $1.92 $1.96 Dividends per share $-- $-- $0.06 $0.06 Basic
weighted average shares outstanding 53,092,962 53,141,565
53,079,888 53,123,541 Diluted weighted average shares outstanding
53,194,807 53,254,908 53,175,098 53,236,759 Consolidated Balance
Sheets (In Thousands) (Unaudited) November 30, August 31, 2004 2005
ASSETS Current Assets: Cash and cash equivalents $160,978 $50,644
Short-term investments 115,000 94,575 Receivables, less allowance
of $1,500 in 2004 and 2005 52,798 48,113 Inventories 7,267 9,947
Prepaid expenses and other current assets 5,032 27,446 Total
Current Assets 341,075 230,725 Property and Equipment, net of
accumulated depreciation of $265,489 and $302,504, respectively
969,095 1,137,967 Other Assets: Equity investments 36,489 39,038
Intangible assets, net 148,989 149,502 Goodwill 99,265 99,507
Deposits with Internal Revenue Service -- 96,913 Other 24,597
23,685 309,340 408,645 Total Assets $1,619,510 $1,777,337
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current
portion of long-term debt $7,505 $505 Accounts payable 28,854
19,803 Deferred income 114,518 172,100 Income taxes payable 25,241
14,465 Other current liabilities 15,078 21,717 Total Current
Liabilities 191,196 228,590 Long-Term Debt 369,315 369,096 Deferred
Income Taxes 165,617 183,587 Long-Term Deferred Income 11,503
11,602 Other Long-Term Liabilities 141 81 Commitments and
Contingencies -- -- Shareholders' Equity: Class A Common Stock,
$.01 par value, 80,000,000 shares authorized; 28,858,934 and
29,333,291 issued and outstanding at November 30, 2004 and August
31, 2005, respectively 289 294 Class B Common Stock, $.01 par
value, 40,000,000 shares authorized; 24,409,903 and 23,988,778
issued and outstanding at November 30, 2004 and August 31, 2005,
respectively 244 240 Additional paid-in capital 696,882 699,865
Retained earnings 187,689 288,723 Accumulated other comprehensive
loss (22) -- 885,082 989,122 Less: unearned compensation-
restricted stock 3,344 4,741 Total Shareholders' Equity 881,738
984,381 Total Liabilities and Shareholders' Equity $1,619,510
$1,777,337 Consolidated Statements of Cash Flows (In Thousands)
(Unaudited) Nine Months Ended August 31, August 31, 2004 2005
OPERATING ACTIVITIES Net income $101,942 $104,318 Adjustments to
reconcile net income to net cash provided by operating activities:
Gain on sale of discontinued operations (63,926) -- Depreciation
and amortization 32,777 37,538 Discontinued operations depreciation
1,245 -- Amortization of unearned compensation 1,270 1,436
Amortization of financing costs 91 430 Deferred income taxes 48,069
17,970 Undistributed income from equity investments (2,318) (3,036)
Impairment of long-lived assets 13,217 -- Loss on early redemption
of debt 4,988 -- Other, net 608 431 Changes in operating assets and
liabilities: Receivables, net (4,267) 4,748 Inventories, prepaid
expenses and other assets (17,861) (25,160) Deposits with Internal
Revenue Service -- (96,913) Accounts payable and other liabilities
6,117 (5,614) Deferred income 48,785 57,681 Income taxes (3,152)
(10,629) Net cash provided by operating activities 167,585 83,200
INVESTING ACTIVITIES Capital expenditures (71,524) (203,535)
Proceeds from asset disposals 85 29 Acquisition of businesses
(193,745) (764) Proceeds from sale of discontinued operations
100,391 -- Proceeds from affiliate -- 487 Proceeds from short-term
investments 225 305,025 Purchases of short-term investments
(205,225) (284,600) Other, net (477) 114 Net cash used in investing
activities (370,270) (183,244) FINANCING ACTIVITIES Proceeds from
long-term debt 299,570 -- Payment of long-term debt (231,500)
(7,000) Payment of long-term debt redemption premium (5,340) --
Proceeds from interest rate swaps 2,771 -- Cash dividends paid
(3,196) (3,199) Deferred financing fees (2,473) (10) Reacquisition
of previously issued common stock (386) (511) Exercise of Class A
common stock options 399 430 Net cash provided by (used in)
financing activities 59,845 (10,290) Net decrease in cash and cash
equivalents (142,840) (110,334) Cash and cash equivalents at
beginning of period 223,973 160,978 Cash and cash equivalents at
end of period $81,133 $50,644 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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