- Company Refines Full Year Revenue and Earnings Guidance - DAYTONA
BEACH, Fla., July 6 /PRNewswire-FirstCall/ -- International
Speedway Corporation (Nasdaq Global Select Market: ISCA; OTC
Bulletin Board: ISCB) ("ISC") today reported record results for the
fiscal second quarter ended May 31, 2006. "Television and media
revenues combined with higher corporate sponsorship, hospitality
and attendance-related revenues helped drive our record results for
the second quarter," commented ISC President Lesa France Kennedy.
"Broadcast rights fees for the NASCAR NEXTEL Cup and Busch series
increased approximately 15 percent over the prior year. In
addition, an increase in other motorsports-related revenue
contributed to overall top line growth. We hosted several very
successful NASCAR NEXTEL Cup events during the quarter, including
the Dodge Charger 500, which achieved the earliest sellout in
Darlington's long history. Looking to the remainder of 2006,
overall consumer demand remains strong for our events and we
continue on pace for another year of record results." Second
Quarter Comparison Total revenues for the second quarter increased
to $172.1 million, compared to revenues of $157.4 million in the
prior-year period. Operating income was $52.2 million during the
period compared to $46.9 million in the second quarter of fiscal
2005. Net income was $30.7 million, or $0.58 per diluted share,
compared to net income of $26.5 million, or $0.50 per diluted
share, in the prior year. Year-to-Date Comparison For the six
months ended May 31, 2006, total revenues increased to $366.0
million from $336.9 million in 2005. Operating income for the
six-month period was $130.6 million compared to $118.7 million in
the prior year. Net income was $74.7 million, or $1.40 per diluted
share, in 2006. In the first six months of 2005, net income was
$67.6 million, or $1.27 per diluted share. 2006 Second Quarter
Highlights An overview of the significant major event weekends held
in the second quarter of 2006 includes: -- A successful Bike Week
was held at Daytona International Speedway in early March,
highlighted by a double-digit increase in overall event attendance.
-- Homestead-Miami Speedway hosted increased crowds for its
open-wheel and Grand American racing weekend, anchored by the IRL's
kick-off race for the 2006 season, the Toyota Indy 300. --
Martinsville Speedway hosted a weekend of NASCAR Craftsman Truck
and NEXTEL Cup racing, highlighted by a sold-out crowd for the
NEXTEL Cup DirecTV 500 and a nearly 30 percent increase in
attendance for the Craftsman Truck Kroger 250. -- Phoenix
International Raceway hosted a successful weekend of NEXTEL Cup and
Busch racing, with a near capacity crowd on-hand for the NEXTEL Cup
SUBWAY Fresh 500. The weekend also featured the debut of the
facility's new Turn 1 grandstand and suite structure, including a
new club seating area which provides a luxurious fan experience.
The club area combines high-end cuisine with spectacular views of
racing action and the surrounding landscape in a plush environment.
Fan response was outstanding. -- Talladega Superspeedway's NEXTEL
Cup and Busch series weekend was anchored by the NEXTEL Cup Aaron's
499, which was postponed to the next day because of inclement
weather. Positively impacting the results of the weekend were
increased attendance for the Aaron's 312 Busch event, and higher
concessions and caterings sales. -- Richmond International Raceway
hosted another successful weekend of NEXTEL Cup and Busch racing,
highlighted by the facility's 29th consecutive sellout for the
NEXTEL Cup Crown Royal 400. The on-track competition was
outstanding as Dale Earnhardt Jr. captured his first win of the
season. -- Darlington Raceway hosted a sold-out NEXTEL Cup Dodge
Charger 500, the earliest sellout in Darlington's history including
the recent net addition of approximately 3,000 seats. The facility
also posted a double-digit attendance increase for the Diamond Hill
Plywood 200 Busch race on Friday. The Company's second quarter
results were also driven by increased corporate partner spending.
ISC secured major entitlement agreements during the quarter for
several NASCAR events, including Crown Royal, General Motors,
Carfax and Goody's Headache Powder. ISC has titled all of its 2006
Busch races and has only one NEXTEL Cup race entitlement
sponsorship open for 2006. The Company is in discussions with
interested parties for the position. "Corporate partner spending
continues to boost our results quarter after quarter," Ms. France
Kennedy continued. "Sponsors increasingly recognize the value of an
ISC partnership due to our broad national reach and ability to
deliver a fully-integrated marketing platform including media
production, hospitality planning, and activation strategies. They
can also leverage our significant expertise to help maximize their
at-track presence and generate brand awareness. We continue to
expect strong growth in corporate sponsorship and hospitality for
the next several years." Recent Developments To date in the fiscal
third quarter, the Company has hosted IRL IndyCar weekends at
Watkins Glen International and Richmond. In addition, Kansas
Speedway hosted a successful IRL/Craftsman Truck weekend,
highlighted by Sam Hornish Jr.'s 0.0793-second win over pole sitter
Dan Wheldon in the Kansas Lottery Indy 300. Michigan International
Speedway hosted a NEXTEL Cup, Craftsman Truck and ARCA weekend in
June, with overall attendance-related results falling short of
Company expectations. ISC believes weak economic conditions in
Michigan and the mid-west region of the country, particularly due
to challenges in the automotive industry and the related high
unemployment rate, contributed to the lower results. In addition,
forecasted inclement weather during race week and rain on race day
also impacted attendance levels for the weekend, as the 3M
Performance 400 was shortened to only 129 of the scheduled 200
laps. Daytona hosted a weekend of NEXTEL Cup, Busch and Grand
American racing anchored by the 48th NEXTEL Cup Pepsi 400. Despite
outstanding on-track competition highlighted by Tony Stewart's
repeat victory in the Pepsi 400 and a visit by Vice President Dick
Cheney, attendance-related results for the weekend were below
expectations. The Company believes inclement weather trends
experienced during this event over the last several years and rain
during race week had a negative impact on ticket sales for this
year's race. For the remainder of the third quarter, Chicagoland
Speedway, Watkins Glen and Michigan will host NEXTEL Cup and Busch
series weekends. In addition, Michigan will host an IRL IndyCar
weekend and Martinsville will host a Busch race weekend. "We
believe the factors impacting our events at Michigan and Daytona's
Pepsi 400 weekend are not indicative of broader industry trends,
and our nation-wide footprint helps reduce their impact on our
overall results," added Ms. France Kennedy. "Michigan is struggling
with high unemployment compounded by well-documented issues facing
the automotive industry. And, we do not think the results of the
Pepsi 400 represent an overall softening of the Daytona market. In
fact, overall attendance increased for Speedweeks 2006 and the
Daytona 500 sold out earlier than recent years. Our outlook for
consumer demand remains positive, supported by strong overall
advanced ticket sales for our remaining events for the year." ISC
continues to make important progress on its facility development
projects. In New York, the Company is proceeding with next steps in
the land-use change process, including re-scheduling the required
public scoping meeting. Concurrently, ISC is proceeding with its
site improvement work as part of its overall construction plan.
Importantly, this work also improves the marketability of the site
should the Company decide not to proceed with the speedway project.
In the State of Washington, ISC continues to generate local and
statewide support for its proposed facility development project.
Company representatives and project supporters held a successful
work session with the Legislative Committee on Economic Development
and International Relations on May 31, during which they discussed
the details and merits of the proposed motorsports and multi-use
recreational facility project. ISC continues to solicit additional
grassroots and legislative support for the project, and expects to
decide on the best course of action later in the fiscal year
including introduction of the necessary public financing
legislation in the 2007 session of the Washington State
Legislature. Regarding the civil action filed in July 2005 by the
Kentucky Speedway, LLC, against both NASCAR and ISC, the Company is
moving forward with discovery and proceeding with preparation of
its defense. Now that ISC is further along in the process and has
better visibility, the Company expects related litigation costs to
approximate $0.05 to $0.06 per diluted share in earnings for fiscal
2006. Based on evidentiary materials reviewed to date, ISC
continues to believe the lawsuit is without merit, and intends to
continue to vigorously defend itself. Finally, the Company recently
closed on a $300 million credit facility (the "Facility"), which
replaced its previous $300 million credit facility. ISC elected to
take advantage of favorable market conditions to secure the
Facility, while maintaining its financial flexibility to capitalize
on future growth opportunities. Outlook Primarily driven by the
previously discussed lower than expected results at Michigan and
Daytona, ISC anticipates its previous internal estimate for third
quarter earnings will be impacted by approximately $0.10 to $0.12
per diluted share. The Company now expects third quarter earnings
before interest, taxes, depreciation and amortization ("EBITDA")(1)
and operating margins to range from 37 to 38 percent and 29 to 30
percent, respectively, of total revenues. Partially offsetting the
third quarter decrease is the Company's anticipated strong fourth
quarter results, supported by overall advance ticket sales trends
that are currently almost ten percent ahead of last year. As ISC
has now reported six months of actual results, the Company is
refining its 2006 full year guidance for total revenues to range
between $785 and $795 million, driven by growth in all major
categories. As a result, full year earnings are estimated at $3.20
to $3.25 per diluted share. At this point in the fiscal year, the
Company is currently more comfortable at the lower end of the
estimated range of earnings. (1). EBITDA is a non-GAAP financial
measure used by the Company as an important indicator of its
operating margin. "Despite some regional challenges in the third
quarter, we are very excited with our prospects for the remainder
of the year and continue to expect full year record results," Ms.
France Kennedy concluded. "Consumer demand remains strong, and we
expect growth in corporate partner sponsorship and hospitality to
contribute to our overall revenue and earnings growth. In addition,
we continue to make progress in our efforts to maximize
efficiencies by leveraging our scale and reducing operating costs
moving into fiscal 2007 and beyond. We are excited about the
remainder of this fiscal year and remain focused on enhancing
long-term shareholder value." 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, ID number
7536549. 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, July 13, 2006.
To access, dial toll free 877-519-4471 and enter the code 7536549,
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 percent 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." In addition, the Company has an indirect 50 percent
interest in a business called Motorsports Authentics, which markets
and distributes motorsports-related merchandise licensed by certain
competitors in NASCAR racing. 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. Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts) (Unaudited) Three Months
Ended Six Months Ended May 31, 2005 May 31, 2006 May 31, 2005 May
31, 2006 REVENUES: Admissions, net $48,510 $49,279 $104,294
$104,799 Motorsports related 88,700 101,925 188,969 216,247 Food,
beverage and merchandise 17,911 18,162 38,860 40,025 Other 2,326
2,717 4,756 4,945 157,447 172,083 336,879 366,016 EXPENSES: Direct
expenses: Prize and point fund monies and NASCAR sanction fees
31,625 34,566 63,109 69,101 Motorsports related 31,292 32,453
59,727 63,266 Food, beverage and merchandise 12,007 11,404 24,639
24,570 General and administrative 23,071 27,705 46,242 51,198
Depreciation and amortization 12,586 13,779 24,449 27,242 110,581
119,907 218,166 235,377 Operating income 46,866 52,176 118,713
130,639 Interest income 1,368 1,087 2,338 2,021 Interest expense
(3,305) (2,832) (6,360) (6,900) Equity in net loss from equity
investments (1,371) (2,186) (2,902) (4,683) Income from continuing
operations before income taxes 43,558 48,245 111,789 121,077 Income
taxes 17,018 17,518 44,131 46,219 Income from continuing operations
26,540 30,727 67,658 74,858 Loss from discontinued operations, net
of income tax benefits of $62, $65, $126 and $148, respectively
(39) (40) (92) (118) Net income $26,501 $30,687 $67,566 $74,740
Basic earnings per share: Income from continuing operations $0.50
$0.58 $1.27 $1.41 Loss from discontinued operations -- -- -- -- Net
income $0.50 $0.58 $1.27 $1.41 Diluted earnings per share: Income
from continuing operations $0.50 $0.58 $1.27 $1.40 Loss from
discontinued operations -- -- -- -- Net income $0.50 $0.58 $1.27
$1.40 Dividends per share $0.06 $0.08 $0.06 $0.08 Basic weighted
average shares outstanding 53,127,314 53,165,845 53,114,430
53,155,050 Diluted weighted average shares outstanding 53,231,643
53,266,521 53,227,585 53,258,199 Consolidated Balance Sheets (In
Thousands) (Unaudited) November 30, 2005 May 31, 2006 ASSETS
Current Assets: Cash and cash equivalents $130,758 $86,583
Short-term investments 8,200 35,300 Receivables, less allowance of
$1,500 in 2005 and 2006 45,557 75,927 Inventories 6,528 7,390
Prepaid expenses and other current assets 6,335 17,844 Total
Current Assets 197,378 223,044 Property and Equipment, net of
accumulated depreciation of $315,313 and $342,330, respectively
1,178,682 1,206,962 Other Assets: Equity investments 51,160 170,926
Intangible assets, net 149,464 149,386 Goodwill 99,507 99,507
Deposits with Internal Revenue Service 96,913 96,913 Other 23,965
23,053 421,009 539,785 Total Assets $1,797,069 $1,969,791
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current
portion of long-term debt $635 $635 Accounts payable 19,274 26,198
Deferred income 123,870 202,816 Income taxes payable 20,067 25,212
Other current liabilities 18,645 20,052 Total Current Liabilities
182,491 274,913 Long-Term Debt 368,387 368,241 Deferred Income
Taxes 194,825 203,693 Long-Term Deferred Income 11,342 11,313 Other
Long-Term Liabilities 69 41 Commitments and Contingencies -- --
Shareholders' Equity: Class A Common Stock, $.01 par value,
80,000,000 shares authorized; 29,215,778 and 30,868,468 issued and
outstanding at November 30, 2005 and May 31, 2006, respectively 292
308 Class B Common Stock, $.01 par value, 40,000,000 shares
authorized; 23,928,058 and 22,309,102 issued and outstanding at
November 30, 2005 and May 31, 2006, respectively 239 223 Additional
paid-in capital 695,658 696,936 Retained earnings 343,766 414,123
Total Shareholders' Equity 1,039,955 1,111,590 Total Liabilities
and Shareholders' Equity $1,797,069 $1,969,791 Consolidated
Statements of Cash Flows (In Thousands) (Unaudited) Six Months
Ended May 31, 2005 May 31, 2006 OPERATING ACTIVITIES Net income
$67,566 $74,740 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
24,449 27,242 Stock-based compensation 915 1,283 Amortization of
financing costs 288 282 Deferred income taxes 4,790 8,868 Loss from
equity investments 2,902 4,683 Other, net 431 (105) Changes in
operating assets and liabilities: Receivables, net (14,233)
(30,370) Inventories, prepaid expenses and other assets (11,018)
(12,437) Accounts payable and other liabilities (9,825) 2,824
Deferred income 67,061 78,917 Income taxes (3,429) 5,157 Net cash
provided by operating activities 129,897 161,084 INVESTING
ACTIVITIES Capital expenditures (166,157) (54,290) Proceeds from
asset disposals 29 161 Purchase of equity investments -- (124,577)
Acquisition of businesses (764) -- Proceeds from affiliate 487 128
Proceeds from short-term investments 208,390 50,600 Purchases of
short-term investments (231,150) (77,700) Other, net 178 549 Net
cash used in investing activities (188,987) (205,129) FINANCING
ACTIVITIES Proceeds under credit facility -- 80,000 Payments under
credit facility -- (80,000) Payment of long-term debt (7,000) --
Exercise of Class A common stock options 285 145 Excess tax
benefits relating to stock-based compensation -- 185 Reacquisition
of previously issued common stock (511) (460) Deferred financing
costs (10) -- Net cash used in financing activities (7,236) (130)
Net decrease in cash and cash equivalents (66,326) (44,175) Cash
and cash equivalents at beginning of period 160,978 130,758 Cash
and cash equivalents at end of period $94,652 $86,583 DATASOURCE:
International Speedway Corporation CONTACT: Wes Harris, Senior
Director, Corporate and Investor Communications of International
Speedway Corporation, +1-386-947-6465 Web site:
http://www.iscmotorsports.com/
Copyright