~ Company Maintains Full Year Revenue and Earnings Financial
Outlook ~ DAYTONA BEACH, Fla., Oct. 5 /PRNewswire-FirstCall/ --
International Speedway Corporation (NASDAQ:ISCA)(OTC:ISCB)
(BULLETIN BOARD: ISCB) ("ISC") today reported results for the
fiscal third quarter ended August 31, 2006. "We are pleased to
report record total revenues for the third quarter," said ISC
President Lesa France Kennedy. "Double-digit increases in
sponsorship, television broadcast rights, hospitality and
advertising fees helped significantly offset less than expected
attendance-related revenues for certain events during the quarter."
Third Quarter Comparison Total revenues for the third quarter
increased to $178.9 million, compared to revenues of $166.5 million
in the prior-year period. Operating income was $51.8 million during
the period compared to $56.0 million in the third quarter of fiscal
2005. Net income was $34.3 million, or $0.64 per diluted share,
compared to net income of $36.8 million, or $0.69 per diluted
share, in the prior year. Results for the 2006 third quarter
include certain lower margin events, including the IRL IndyCar
Series event at Watkins Glen International (conducted in the fourth
quarter of 2005) and a new NASCAR Busch Series event held at
Martinsville Speedway in 2006. Also impacting year-over-year
comparability are certain litigation expenses and other
non-comparable costs. Year-to-Date Comparison For the nine months
ended August 31, 2006, total revenues increased to $544.9 million
from $503.4 million in 2005. Operating income for the nine- month
period was $182.4 million compared to $174.7 million in the prior
year. Net income was $109.0 million, or $2.05 per diluted share, in
2006. In the first nine months of 2005, net income was $104.3
million, or $1.96 per diluted share. 2006 Third Quarter Highlights
An overview of the significant major event weekends held in the
third quarter of 2006 includes: * Four weekends of exciting IRL
IndyCar racing at Watkins Glen, Richmond International Raceway,
Kansas Speedway and Michigan International Speedway. * Michigan
hosted a NASCAR NEXTEL Cup, NASCAR Craftsman Truck and ARCA weekend
in June that posted lower than anticipated attendance-related
revenue. Impacting the weekend's ticket sales were weak economic
conditions in the region and inclement weather during race day. *
In July, Daytona International Speedway hosted the NEXTEL Cup Pepsi
400, which once again produced an outstanding show for fans.
Despite the strong on-track competition, attendance-related results
for the weekend fell below expectations. ISC believes that weather
trends experienced over the last several years, as well as
inclement weather during race week, had a negative impact on
advance and walk-up ticket sales. * Chicagoland Speedway hosted
exciting NEXTEL Cup and Busch racing highlighted by Jeff Gordon's
75th career victory in the USG Sheetrock 400. The weekend marked
the sixth consecutive sellout for the facility on a season ticket
basis. * Watkins Glen hosted a successful NEXTEL Cup and Busch
series weekend in August. Kevin Harvick took the checkered flag in
the AMD at The Glen to capture his first NEXTEL Cup road course
victory. * Michigan hosted a NEXTEL Cup and Busch series weekend in
August. Overall results were slightly impacted again due to the
previously discussed economic factors in the region. However, a
near-capacity crowd was on hand to watch Matt Kenseth hold off Jeff
Gordon to win the GFS Marketplace 400. The Company's third quarter
results were also driven by double-digit increases in corporate
marketing partner spending. During the quarter, ISC secured its
sole remaining 2006 NEXTEL Cup race entitlement by concluding an
agreement with AMD at Watkins Glen. Also, the Company continues to
successfully reach official status agreements, signing the
well-known watchmaker Tissot as Official Timekeeper and Watch at
Michigan, Homestead- Miami Speedway, California Speedway and
Richmond. More recently, ISC secured John Deere for the entitlement
of Talladega Superspeedway's inaugural NASCAR Craftsman Truck
Series event. "The sport continues to generate significant fan and
media awareness, which has also helped drive increased sponsor
spending," continued Ms. France Kennedy. "Our national footprint of
premier events and facilities positions us to provide major
advertisers and corporate partners the resources and reach to
maximize their investment in motorsports. We also continue to work
closely with our partners to identify new and innovative programs
to help build their brand. Looking ahead, we expect ongoing
strength in corporate partner spending for both the near and
long-term." Recent Developments To date in the fiscal fourth
quarter, California hosted an exciting weekend of NEXTEL Cup and
Busch series racing, anchored by the Sony HD 500. The weekend was
also highlighted by the debut of California's newly renovated
midway area and Wolfgang Puck's Apex, a high-end eatery featuring
cuisine by the world renowned chef. Fan response to the midway was
very positive. While overall results for the weekend fell below
expectations, attendance for the Sony HD 500 remained stronger than
the spring NEXTEL Cup event, which indicates continued solid fan
interest in the nation's number two media market. ISC continues to
believe in the long-term prospects for the region and is building
fan and media awareness to successfully grow the facility's events.
Richmond hosted another successful NEXTEL Cup and Busch weekend in
September, highlighted by its 30th consecutive sellout for the
NEXTEL Cup Chevy Rock and Roll 400. This final race before the
Chase for the Championship produced an outstanding show for fans as
Kevin Harvick passed Kurt Busch in the final lap to capture his
third victory of the season. The same weekend, Chicagoland hosted
the IRL IndyCar Series finale weekend, which was sold-out as part
of the previously discussed facility season ticket package. Kansas
Speedway hosted a successful and sold-out weekend of NEXTEL Cup and
Busch series racing. Tony Stewart took the checkered flag for the
Banquet 400, despite running out of fuel on the final lap of the
race. For the remainder of the fourth quarter, Talladega will host
a NEXTEL Cup, Craftsman Truck and ARCA weekend, highlighted by the
debut of the newly repaved racing surface. Martinsville will host a
weekend of NEXTEL Cup and Craftsman Truck racing, followed by
consecutive weekends of NEXTEL Cup, Busch and Craftsman Truck
series racing at Phoenix International Raceway and the Ford
Championship Weekend at Homestead-Miami. "We are very excited for
our remaining events in the 2006 race season," added Ms. France
Kennedy. "Overall advanced ticket sales for the fourth quarter are
trending ahead of the prior year, demonstrating strong consumer
demand for our events. In addition, sales for the up to 4,000
temporary seats to be added at Homestead-Miami are going well, and
we look forward to another successful season-ending Ford
Championship Weekend." The Company continues to make progress on
its development efforts. In the state of Washington, ISC continues
to generate local and statewide support for its proposed facility
development project, including an aggressive grassroots campaign
and meetings with legislators throughout the state to discuss the
merits of the proposal. These efforts have produced significant
resident and local business support. ISC will continue the outreach
into the 2007 Washington State Legislative Session, at which time
the Company hopes to have the necessary financing proposal
introduced. The Company remains optimistic for the prospects of
this project, and looks forward to racing in 2011. On Staten
Island, last month the New York State Department of Environmental
Conservation ("DEC") and the New York City Department of Sanitation
("DOS"), which provide oversight of fill operations for the
project, communicated certain issues that we are currently
reviewing. As such, the Company has ceased fill operations at the
project site, in compliance with applicable requirements, while we
address these items. ISC is working with DEC and DOS to reach a
mutually agreeable plan for moving forward and will continue to
cooperate with them to the fullest. The Company remains committed
to developing a motorsports entertainment facility in the nation's
number one media market, and will continue to work closely with
state and local officials, as well as community leaders, during the
land use approval process. Regarding the civil action filed in July
2005 by the Kentucky Speedway, LLC, against NASCAR and ISC, the
Company is moving forward with discovery and proceeding with
preparation of its defense. ISC continues to expect that litigation
costs will approximate a $0.05 to $0.06 per diluted share reduction
in earnings for fiscal 2006. Based on evidentiary materials
reviewed to date, the Company maintains the lawsuit is without
merit and intends to continue to vigorously defend itself. Lastly,
earlier this week ISC announced it entered into a partnership with
Groupe Motorise International to organize, promote and hold certain
racing events at the historic Circuit Gilles Villeneuve in
Montreal, Quebec. The events are scheduled for the first weekend of
August 2007, and will feature the NASCAR Busch and Grand American
Rolex Sports Car series. This partnership marks the Company's first
entry into the international markets. Montreal has a very strong
racing fan base and long racing tradition, and ISC is optimistic
for the long-term success of the race weekend. Outlook ISC expects
fourth quarter earnings before interest, taxes, depreciation and
amortization ("EBITDA")(1) and operating margins to range from 46
to 47 percent and 40 to 41 percent, respectively, of total
revenues. In addition, the Company reaffirms its 2006 full year
guidance for total revenues to range between $785 and $795 million,
and full year earnings of $3.20 to $3.25 per diluted share. This
earnings range includes the aforementioned charges related to the
Kentucky litigation. Taking into consideration actual results for
the first nine months of fiscal 2006, ISC remains more comfortable
at the low end of the estimated range of earnings. "We look forward
to a successful fourth quarter, driven by strong consumer demand
for our remaining events and higher sponsorship revenue, and
another record full year for ISC," concluded Ms. France Kennedy.
"Looking ahead to 2007, while we are in the midst of our planning
process, we are anticipating a strong year for the Company
primarily driven by increased attendance-related revenue and
corporate partner spending. We remain committed to implementing our
sound strategies for both internal and external growth to further
build shareholder value." 1. EBITDA is a non-GAAP financial measure
used by the Company as an important indicator of its operating
margin. 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 7858572. 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 12, 2006. To access, dial
toll free 877-519-4471 and enter the code 7858572, 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. In addition, ISC is a limited partner with Group Motorise
International in the organization and promotion of certain events
at Circuit Gilles Villeneuve in Montreal, Canada. 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, ISC 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 Nine Months Ended
August 31, August 31, August 31, August 31, 2005 2006 2005 2006
REVENUES: Admissions, net $58,911 $56,918 $163,205 $161,718
Motorsports related 85,219 100,541 274,188 316,788 Food, beverage
and merchandise 20,316 19,410 59,176 59,435 Other 2,073 2,023 6,829
6,969 166,519 178,892 503,398 544,910 EXPENSES: Direct expenses:
Prize and point fund monies and NASCAR sanction fees 26,411 30,320
89,520 99,422 Motorsports related 32,493 41,620 92,220 104,886
Food, beverage and merchandise 13,573 12,430 38,212 37,000 General
and administrative 24,934 28,391 71,176 79,589 Depreciation and
amortization 13,089 14,323 37,538 41,565 110,500 127,084 328,666
362,462 Operating income 56,019 51,808 174,732 182,448 Interest
income 1,224 1,363 3,562 3,384 Interest expense (3,225) (2,713)
(9,585) (9,613) Equity in net income from equity investments 5,938
5,451 3,036 768 Income from continuing operations before income
taxes 59,956 55,909 171,745 176,987 Income taxes 23,152 21,610
67,283 67,829 Income from continuing operations 36,804 34,299
104,462 109,158 Loss from discontinued operations, net of income
tax benefits of $68, $60, $194 and $208, respectively (52) (27)
(144) (146) Net income $36,752 $34,272 $104,318 $109,012 Basic
earnings per share: Income from continuing operations $0.69 $0.64
$1.96 $2.05 Loss from discontinued operations - - - - Net income
$0.69 $0.64 $1.96 $2.05 Diluted earnings per share: Income from
continuing operations $0.69 $0.64 $1.96 $2.05 Loss from
discontinued operations - - - - Net income $0.69 $0.64 $1.96 $2.05
Dividends per share $- $- $0.06 $0.08 Basic weighted average shares
outstanding 53,141,565 53,177,570 53,123,541 53,162,611 Diluted
weighted average shares outstanding 53,254,908 53,272,124
53,236,759 53,262,895 Consolidated Balance Sheets (In Thousands)
(Unaudited) November 30, 2005 August 31, 2006 ASSETS Current
Assets: Cash and cash equivalents $130,758 $42,286 Short-term
investments 8,200 80,300 Receivables, less allowance of $1,500 in
2005 and 2006 45,557 55,401 Inventories 6,528 6,427 Prepaid
expenses and other current assets 6,335 30,213 Total Current Assets
197,378 214,627 Property and Equipment, net of accumulated
depreciation of $315,313 and $356,747, respectively 1,178,682
1,218,056 Other Assets: Equity investments 51,160 176,365
Intangible assets, net 149,464 149,350 Goodwill 99,507 99,507
Deposits with Internal Revenue Service 96,913 96,913 Other 23,965
24,166 421,009 546,301 Total Assets $1,797,069 $1,978,984
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current
portion of long-term debt $635 $635 Accounts payable 19,274 20,630
Deferred income 123,870 180,063 Income taxes payable 20,067 19,545
Other current liabilities 18,645 23,882 Total Current Liabilities
182,491 244,755 Long-Term Debt 368,387 368,168 Deferred Income
Taxes 194,825 208,287 Long-Term Deferred Income 11,342 11,145 Other
Long-Term Liabilities 69 31 Commitments and Contingencies - -
Shareholders' Equity: Class A Common Stock, $.01 par value,
80,000,000 shares authorized; 29,215,778 and 30,935,853 issued and
outstanding at November 30, 2005 and August 31, 2006, respectively
292 309 Class B Common Stock, $.01 par value, 40,000,000 shares
authorized; 23,928,058 and 22,241,717 issued and outstanding at
November 30, 2005 and August 31, 2006, respectively 239 222
Additional paid-in capital 695,658 697,672 Retained earnings
343,766 448,395 Total Shareholders' Equity 1,039,955 1,146,598
Total Liabilities and Shareholders' Equity $1,797,069 $1,978,984
Consolidated Statements of Cash Flows (In Thousands) (Unaudited)
Nine Months Ended August 31, 2005 August 31, 2006 OPERATING
ACTIVITIES Net income $104,318 $109,012 Adjustments to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization 37,538 41,565 Stock-based
compensation 1,436 2,019 Amortization of financing costs 430 410
Deferred income taxes 17,970 13,462 Income from equity investments
(3,036) (768) Excess tax benefits relating to stock-based
compensation - (185) Other, net 431 (105) Changes in operating
assets and liabilities: Receivables, net 4,748 (9,844) Inventories,
prepaid expenses and other assets (25,160) (23,866) Deposits with
Internal Revenue Service (96,913) - Accounts payable and other
liabilities (5,614) 6,957 Deferred income 57,681 55,996 Income
taxes (10,629) (325) Net cash provided by operating activities
83,200 194,328 INVESTING ACTIVITIES Capital expenditures (203,535)
(81,282) Proceeds from asset disposals 29 161 Purchase of equity
investments - (124,565) Acquisition of business (764) - Proceeds
from affiliate 487 128 Proceeds from short-term investments 305,025
52,050 Purchases of short-term investments (284,600) (124,150)
Other, net 114 (374) Net cash used in investing activities
(183,244) (278,032) FINANCING ACTIVITIES Proceeds under credit
facility - 80,000 Payments under credit facility - (80,000) Payment
of long-term debt (7,000) - Cash dividends paid (3,199) (4,270)
Exercise of Class A common stock options 430 145 Excess tax
benefits relating to stock-based compensation - 185 Reacquisition
of previously issued common stock (511) (460) Deferred financing
costs (10) (368) Net cash used in financing activities (10,290)
(4,768) Net decrease in cash and cash equivalents (110,334)
(88,472) Cash and cash equivalents at beginning of period 160,978
130,758 Cash and cash equivalents at end of period $50,644 $42,286
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/
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