DAYTONA BEACH, Fla., Jan. 25 /PRNewswire-FirstCall/ --
International Speedway Corporation (NASDAQ:ISCA)(OTC:ISCB)
(BULLETIN BOARD: ISCB) ("ISC") today reported results for the
fiscal fourth quarter and full year ended November 30, 2006.
"Fiscal 2006 was another successful year for the Company, anchored
by a strong fourth quarter," said ISC President Lesa France
Kennedy. "Increased television broadcast rights, sponsorship and
hospitality revenues resulted in record top-line results for the
quarter. Consumer demand also remained solid, evidenced by sellouts
at five of our last seven NASCAR NEXTEL Cup events of the year."
Fourth Quarter Comparison Total revenues for the fourth quarter
increased to $253.5 million, compared to revenues of $236.7 million
in the prior-year period. Operating income was $16.7 million
compared to $90.5 million in the fourth quarter of fiscal 2005.
Impacting year-over-year comparability are pre-tax, non-cash
charges of $87.1 million, or $1.04 per diluted share after tax, for
the impairment of long-lived assets. These impairments are
substantially related to the Company's decision to discontinue its
speedway development project on Staten Island. Results were further
impacted by an IRL IndyCar Series event at Watkins Glen
International (conducted in the third quarter of 2006 versus the
fourth quarter of 2005), an IRL IndyCar Series event at California
Speedway in 2005 that was not held in 2006, and increased
litigation expenses. Net income for the fiscal 2006 fourth quarter
was $7.8 million, or $0.15 per diluted share, which includes
pre-tax expenses of approximately $1.5 million, or $0.02 per
diluted share, related to the Company's defense in the Kentucky
litigation, and $750,000, or $0.01 per diluted share after tax,
related to the dismantling and transfer of grandstand seating
structures from Nazareth Speedway to Michigan International
Speedway. Excluding the aforementioned impairment charges, net
income for the 2006 fourth quarter was $63.2 million, or $1.19 per
diluted share. Net income for the three months ended November 30,
2005 was $55.0 million, or $1.03 per diluted share. Full Year
Comparison For the twelve months ended November 30, 2006, total
revenues increased to $798.4 million from $740.1 million in 2005.
Operating income for the twelve- month period was $199.2 million
compared to $265.3 million in the prior year. Results for 2006 were
primarily impacted by the aforementioned pre-tax, non- cash charges
of $87.1 million, or $1.04 per diluted share after tax, for the
impairment of long-lived assets. Net income was $116.8 million, or
$2.19 per diluted share, in 2006, which includes a pre-tax expense
of $5.5 million, or $0.06 per diluted share, related to the
Company's defense in the Kentucky litigation. Excluding the
aforementioned impairment charges, net income for fiscal 2006 was
$172.2 million, or $3.23 per diluted share. Net income for the
twelve months ended November 30, 2005 was $159.4 million, or $2.99
per diluted share. 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 adjustment relates to the impairment of
long-lived assets in the fourth quarter. These impairments are
substantially related to the previously announced decision by the
Company to discontinue pursuit of a speedway development project on
Staten Island. The Company believes such non-GAAP information is
useful and meaningful to investors, and is used by investors and
ISC to assess 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 Twelve Months Ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30, 2005 2006 2005 2006 Net income
$55,044 $7,792 $159,361 $116,804 Net loss (income), net of tax,
from: Discontinued operations (432) 30 (289) 176 Income from
continuing operations 54,612 7,822 159,072 116,980 Adjustments, net
of tax: Impairment of long-lived assets - 55,441 - 55,441 Non-GAAP
net income $54,612 $63,263 $159,072 $172,421 Per share data:
Diluted earnings per share $1.03 $0.15 $2.99 $2.19 Net loss
(income), net of tax, from: Discontinued operations - - - 0.01
Income from continuing operations 1.03 0.15 2.99 2.20 Adjustments,
net of tax: Impairment of long-lived assets - 1.04 - 1.04 Non-GAAP
diluted earnings per share $1.03 $1.19 $2.99 $3.24 2006 Fourth
Quarter Highlights An overview of the significant major event
weekends held in the fourth quarter of 2006 includes: - California
hosted an exciting weekend of NASCAR NEXTEL Cup and Busch series
racing, anchored by the Sony HD 500. The weekend was also
highlighted by the debut of California's Opportunity, California
FanZone and Wolfgang Puck's Apex, a high-end eatery featuring
cuisine by the world renowned chef. - Richmond International
Raceway 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. Richmond also posted increased
attendance for the Emerson 250 NASCAR Busch Series race. -
Chicagoland Speedway hosted the IRL IndyCar Series finale weekend,
which was sold-out as part of the facility's 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. - Talladega Superspeedway held a successful event
weekend in early October, featuring the inaugural NASCAR Craftsman
Truck Series John Deere 250, which was realigned from Richmond in
2006. Attendance for both weekend events was very strong, and the
NEXTEL Cup UAW Ford 500 drew one of the largest crowds in recent
years. The weekend also featured the debut of Talladega's newly
repaved racing surface, which resulted in outstanding on-track
competition. - Martinsville Speedway hosted a successful Craftsman
Truck and NEXTEL Cup weekend, posting its second NEXTEL Cup sellout
of the year for the Subway 500. Jimmie Johnson captured the
checkered flag to begin his drive to ultimately become the 2006
NASCAR NEXTEL Cup Champion. - Phoenix International Raceway hosted
a very successful weekend of Craftsman Truck, Busch and NEXTEL Cup
series racing in early November, highlighted by a sold-out crowd
for the Checker Auto Parts 500. The facility's support events also
posted increased attendance over the prior year. Kevin Harvick held
off Jimmie Johnson to complete his 2006 sweep at Phoenix. -
Homestead-Miami Speedway closed out the 2006 racing season with the
highly successful NASCAR Ford Championship weekend. Attendance
increased for both the Ford 200 Craftsman Truck and Ford 300 Busch
series races. In addition, demand for NEXTEL Cup Ford 400 was
strong, with the race posting a near five-month advanced sellout.
As a result, an additional 4,000 temporary grandstand seats were
installed behind Turn 4, which were sold as well. The Company's
results were also driven by increased corporate marketing partner
spending. For the full year, partner spending for the Company's
events, including sponsorship and hospitality, grew at a
double-digit rate as compared to the prior year. Fueling this
increase were several significant official status agreements with
Anheuser Busch, Bank of America, Unilever, and others. In addition,
the Company sold its entire inventory of NASCAR NEXTEL Cup and
Busch race entitlements for 2006. "Corporate marketers continue to
recognize the significant business- building opportunities that
exist in motorsports," continued Ms. France Kennedy. "These
advertisers increasingly choose to partner with ISC because of our
nationwide footprint of premier events and facilities, as well as
our significant attention to partnership management. We work
closely with our partners to help them realize the highest possible
return on their investments. In addition, we will continue to
leverage all of our assets to drive future growth in
sponsor-related revenue." Recent Developments The Company continues
to make progress on its development efforts. In the state of
Washington, ISC expects the necessary legislation, which creates
the public funding mechanism for the project, to be introduced into
the 2007 State Legislative Session within the next few weeks. The
Company has been working closely with state legislators to secure
sponsors for the bill and believes it has assembled a strong team
of supporters. The 2007 Session is scheduled to run through April
2007, with the potential for extension into May. ISC is optimistic
for the passage of the legislation, and looks forward to racing in
Washington by 2011. In the New York metropolitan area, ISC
continues to search for a suitable site for a potential speedway
development. The Company continues to believe that a premier
facility in the nation's number one media market represents a
significant long-term opportunity. In addition, ISC is also
evaluating alternative strategies for the 676 acres currently owned
on Staten Island, including sale of the acreage in parcels or as a
whole, or its potential development with a third party. ISC
believes the acreage, which represents the largest undeveloped
parcel of land in the five boroughs of New York City, will be
valued in excess of $100 million once it is filled and ready to
sell in the next couple of years. 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. As previously discussed, legal expenses
for fiscal 2006 related to the litigation were $5.5 million, or
$0.06 per diluted share. The Company anticipates incurring legal
expenses in fiscal 2007 of between $3.5 million and $4.5 million,
or a $0.04 to $0.05 per diluted share reduction in earnings. Based
on evidentiary materials reviewed to date, the Company maintains
the lawsuit is without merit and intends to continue to vigorously
defend itself. The Company is also proceeding with its previously
announced acquisition of Raceway Associates, LLC, owner and
operator of Chicagoland Speedway and Route 66 Raceway in Joliet,
Illinois. The acquisition remains on track to close by February 28,
2007. Outlook Speedweeks 2007 kicks off on January 27 with the 45th
running of the Grand Am Rolex 24 at Daytona. Both FOX and SPEED
Channel will air a total of 15 hours of live coverage, marking the
first ever network broadcast of the country's premier endurance
race. SPEED will also air the Craftsman Truck Series Chevy
Silverado HD 250 from Daytona. Speedweeks culminates with the 49th
annual Daytona 500, the Great American Race. FOX and SPEED have
partnered to broadcast the NEXTEL Cup Budweiser Shootout, Gatorade
Duel at Daytona and the Daytona 500. ESPN2 will begin its NASCAR
coverage by broadcasting the Orbitz 300 Busch race during
Speedweeks. ISC reiterates its prior financial estimates for the
2007 full fiscal year of revenues between $755 and $775 million,
and net income of $3.05 to $3.15 per diluted share. In addition,
the Company expects first quarter earnings before interest, taxes,
depreciation and amortization ("EBITDA")(1) and operating margins
to range from 44 to 45 percent and 36 to 37 percent, respectively.
It is important to note that the full year guidance does not
include the consolidated results of Chicagoland Speedway and Route
66 Raceway. Upon the close of the transactions, the Company will
update its financial outlook for fiscal 2007. "We eagerly await the
start of the 2007 race season and the 49th running of the Daytona
500," concluded Ms. France Kennedy. "Our sound consumer and
corporate marketing initiatives will help drive increased corporate
partner and attendance-related revenue for the long-term. We will
also continue to capitalize on our internal and external growth
initiatives to help further drive the popularity of NASCAR racing
throughout North America. In addition, several significant industry
developments, including ESPN's return to NASCAR, the Car of
Tomorrow and the entry of Toyota into the NASCAR NEXTEL Cup and
Busch series, are expected to continue expanding the sport's
popularity, further raising awareness among fans and media. We are
excited about the future prospects for the Company, and remain
committed to growing 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 888-562-3356 five to
ten minutes prior to the scheduled start time and request to be
connected to the ISC earnings call, ID number 8340788. 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, February 1, 2007. To
access, dial toll free 877-519-4471 and enter the code 8340788, 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 and
other sports. 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 Twelve Months Ended
Nov. 30, Nov. 30, Nov. 30, Nov. 30, 2005 2006 2005 2006 REVENUES:
Admissions, net $71,563 $73,533 $234,768 $235,251 Motorsports
related 134,325 149,307 408,514 466,095 Food, beverage and
merchandise 28,093 27,853 87,269 87,288 Other 2,749 2,766 9,578
9,735 236,730 253,459 740,129 798,369 EXPENSES: Direct expenses:
Prize and point fund monies and NASCAR sanction fees 47,296 51,781
136,816 151,203 Motorsports related 42,173 39,559 134,395 144,445
Food, beverage and merchandise 18,561 16,141 56,773 53,141 General
and administrative 24,812 26,908 95,987 106,497 Depreciation and
amortization 13,355 15,268 50,893 56,833 Impairment of long- lived
assets - 87,084 - 87,084 146,197 236,741 474,864 599,203 Operating
income 90,533 16,718 265,265 199,166 Interest income 1,299 1,928
4,860 5,312 Interest expense (3,107) (2,736) (12,693) (12,349)
Equity in net income (loss) from equity investments 480 (450) 3,516
318 Income from continuing operations before income taxes 89,205
15,460 260,948 192,447 Income taxes 34,593 7,638 101,876 75,467
Income from continuing operations 54,612 7,822 159,072 116,980
Income (loss) from discontinued operations, net of income taxes of
$195, $(60), 0 and $(268), respectively 432 (30) 289 (176) Net
income $55,044 $7,792 $159,361 $116,804 Basic earnings per share:
Income from continuing operations $1.03 $0.15 $2.99 $2.20 Income
(loss) from discontinued operations 0.01 - 0.01 - Net income $1.04
$0.15 $3.00 $2.20 Diluted earnings per share: Income from
continuing operations $1.03 $0.15 $2.99 $2.20 Income (loss) from
discontinued operations - - - (0.01) Net income $1.03 $0.15 $2.99
$2.19 Dividends per share $- $- $0.06 $0.08 Basic weighted average
shares outstanding 53,143,565 53,178,043 53,128,533 53,166,458
Diluted weighted average shares outstanding 53,250,512 53,293,850
53,240,183 53,270,623 Consolidated Balance Sheets (In Thousands)
(Unaudited) November 30, 2005 2006 ASSETS Current Assets: Cash and
cash equivalents $130,758 $59,681 Short-term investments 8,200
78,000 Receivables, less allowance of $1,500 in 2005 and $1,000 in
2006 45,557 52,699 Inventories 6,528 3,976 Deferred income taxes -
995 Prepaid expenses and other current assets 6,335 8,251 Total
Current Assets 197,378 203,602 Property and Equipment, net
1,178,682 1,157,313 Other Assets: Equity investments 51,160 175,915
Intangible assets, net 149,464 149,314 Goodwill 99,507 99,507
Deposits with Internal Revenue Service 96,913 110,813 Other 23,965
25,595 421,009 561,144 Total Assets $1,797,069 $1,922,059
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current
portion of long-term debt $635 $770 Accounts payable 19,274 29,577
Deferred income 123,870 124,254 Income taxes payable 20,067 22,477
Other current liabilities 18,645 19,226 Total Current Liabilities
182,491 196,304 Long-Term Debt 368,387 367,324 Deferred Income
Taxes 194,825 191,642 Long-Term Deferred Income 11,342 10,808 Other
Long-Term Liabilities 69 866 Commitments and Contingencies - -
Shareholders' Equity: Class A Common Stock, $.01 par value,
80,000,000 shares authorized; 29,215,778 and 31,078,307 issued and
outstanding in 2005 and 2006, respectively 292 311 Class B Common
Stock, $.01 par value, 40,000,000 shares authorized; 23,928,058 and
22,100,263 issued and outstanding in 2005 and 2006, respectively
239 221 Additional paid-in capital 695,658 698,396 Retained
earnings 343,766 456,187 Total Shareholders' Equity 1,039,955
1,155,115 Total Liabilities and Shareholders' Equity $1,797,069
$1,922,059 Consolidated Statements of Cash Flows (In Thousands)
(Unaudited) Year Ended November 30, November 30, 2005 2006
OPERATING ACTIVITIES Net income $159,361 $116,804 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation and amortization 50,893 56,833 Stock-based
compensation 1,953 2,700 Amortization of financing costs 569 538
Deferred income taxes 29,208 (4,178) Income from equity investments
(3,516) (318) Impairment of long-lived assets - 87,084 Excess tax
benefits relating to stock-based compensation - (185) Other, net
(248) 23 Changes in operating assets and liabilities: Receivables,
net 7,304 (7,142) Inventories, prepaid expenses and other assets
(644) 336 Deposits with Internal Revenue Service (96,913) (13,900)
Accounts payable and other liabilities (5,359) 345 Deferred income
9,191 (150) Income taxes (5,027) 2,607 Net cash provided by
operating activities 146,772 241,397 INVESTING ACTIVITIES Capital
expenditures (248,850) (110,374) Proceeds from asset disposals 31
182 Acquisition of business (12,660) - Purchase of equity
investments (11,642) (124,565) Proceeds from short-term investments
430,950 80,855 Purchases of short-term investments (324,150)
(150,655) Advance to affiliate - (3,000) Proceeds from affiliate
487 128 Other, net (377) 314 Net cash used in investing activities
(166,211) (307,115) FINANCING ACTIVITIES Proceeds under credit
facility - 80,000 Payments under credit facility - (80,000) Payment
of long-term debt (7,505) (635) Deferred financing fees (10) (368)
Cash dividends paid (3,199) (4,270) Reacquisition of previously
issued common stock (511) (460) Exercise of Class A common stock
options 444 189 Excess tax benefits relating to stock-based
compensation - 185 Net cash used in financing activities (10,781)
(5,359) Net decrease in cash and cash equivalents (30,220) (71,077)
Cash and cash equivalents at beginning of year 160,978 130,758 Cash
and cash equivalents at end of year $130,758 $59,681 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