DAYTONA BEACH, Fla., Jan. 24 /PRNewswire-FirstCall/ --
International Speedway Corporation (NASDAQ:ISCA)(OTC:ISCB)
(BULLETIN BOARD: ISCB) ("ISC") today reported results for the
fourth quarter and full year ended November 30, 2007. "We are
pleased to report record revenues for the 2007 fourth quarter and
full year," said ISC President Lesa France Kennedy. "While the
consolidation of results from events at Chicagoland Speedway and
Route 66 Raceway was an important driver of top-line growth, we
also benefited from higher corporate partner spending for
sponsorship, hospitality and advertising for our comparable events
during the full year. In addition, we enjoyed solid overall
consumer demand during 2007, despite a challenging economic
backdrop." Fourth Quarter Comparison Total revenues for the fourth
quarter of 2007 increased slightly to $253.5 million. Operating
income was $92.7 million during the 2007 fourth quarter compared to
$16.7 million in the fourth quarter of fiscal 2006. Year-over-year
comparability was impacted by: -- A 2006 fourth quarter pre-tax,
non-cash charge of $87.1 million, or $1.04 per diluted share after
tax, for the impairment of long-lived assets. These impairments
were substantially related to the Company's decision to discontinue
its speedway development project on Staten Island. The fourth
quarter of 2007 includes impairment charges of $3.9 million, or
$0.05 per diluted share after tax, for costs associated with the
fill removal process on the Staten Island property and the
impairment of certain other long-lived assets. -- Lower television
broadcast rights fees from NASCAR's consolidated contracts that
began in 2007. -- The February 2007 acquisition of the remaining
62.5 percent interest of Raceway Associates LLC (owner and operator
of Chicagoland Speedway and Route 66 Raceway). -- A 2007 fourth
quarter recognition of a deferred income tax credit of $1.6
million, or $0.03 per diluted share after tax, attributable to a
revision to the recently enacted income-based tax system in the
State of Michigan. In accordance with the enacted legislation, the
credit was equal to the deferred income tax liability recognized in
ISC's 2007 third quarter results. -- Accelerated depreciation of
$0.5 million, or $0.01 per diluted share after tax, in the fourth
quarter of 2007 associated with the Company's previously announced
Daytona Live! project. -- The 2007 fourth quarter impairment of
Motorsports Authentics' ("MA") goodwill and intangible assets as of
November 30, 2007. ISC's 50 percent portion was $34.8 million, or
$0.65 per diluted share after tax, and is included in ISC's equity
investment losses. Net income for the 2007 fourth quarter was $22.5
million, or $0.43 per diluted share, compared to net income of $7.8
million, or $0.15 per diluted share, in the prior year. Excluding
the aforementioned impairment charges, deferred income tax expense
reversal, accelerated depreciation, and impairment charge at MA,
non-GAAP (defined below) net income for the 2007 fourth quarter was
$57.6 million, or $1.11 per diluted share. Non-GAAP net income for
the fourth quarter of 2006 was $63.3 million, or $1.19 per diluted
share. Full Year Comparison For the twelve months ended November
30, 2007, total revenues increased to $816.6 million from $798.4
million in 2006. Operating income for the twelve months ended
November 30, 2007, was $241.7 million compared to $199.2 million in
the prior year. Year-over-year comparability was impacted by: --
The previously discussed 2006 fourth quarter pre-tax, non-cash
charge of $87.1 million, or $1.04 per diluted share after tax, for
the impairment of long-lived assets. Full year results for 2007
include impairment charges of $13.1 million, or $0.16 per diluted
share after tax, primarily attributable to ISC's previously
announced decision to discontinue speedway development efforts in
Kitsap County, Washington, and costs for fill removal on the
Company's Staten Island property. -- The aforementioned decrease in
NASCAR television rights fees. -- The previously discussed
acquisition and consolidation of Raceway Associates LLC. --
Accelerated depreciation of $14.7 million, or $0.17 per diluted
share after tax, for certain office and related buildings in
Daytona Beach, which was substantially related to the Company's
Daytona Live! project. -- Motorsports Authentics' previously
discussed impairment charge and the write-down of certain inventory
and related assets in 2007. ISC's 50 percent portion was $47.2
million, or $0.88 per diluted share after tax, and is included in
ISC's equity investment losses. Net income was $86.2 million, or
$1.64 per diluted share, for fiscal 2007. Net income for fiscal
2006 was $116.8 million, or $2.19 per diluted share. Excluding the
aforementioned impairment charges, accelerated depreciation, and
impairment and inventory-related charges at MA, non-GAAP (defined
below) net income for fiscal 2007 was $150.0 million, or $2.85 per
diluted share. Non- GAAP net income for fiscal 2006 was $172.4
million, or $3.24 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 2006 adjustment relates
to the impairment of long-lived assets as a result of the Company's
decision to discontinue its speedway development project on Staten
Island. The net adjustments for 2007 relate to: -- Accelerated
depreciation for certain office and related buildings in Daytona
Beach; -- The impairment of long-lived assets primarily related to
the Company's decision to discontinue development efforts in Kitsap
County, Washington, and costs related to fill removal on ISC's
Staten Island property; and -- The impairment of goodwill and
intangible assets, and write-down of certain inventory and related
assets by Motorsports Authentics. 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 11/30/2006 11/30/2007 11/30/2006 11/30/2007 Net income
$7,792 $22,475 $116,804 $86,201 Net loss, net of tax, from:
Discontinued operations 30 34 176 90 Income from continuing
operations 7,822 22,509 116,980 86,291 Adjustments, net of tax:
Additional depreciation - 319 - 9,009 Impairment of long-lived
assets 55,441 2,455 55,441 8,390 Michigan income tax - (1,595) - -
MA impairment and inventory-related write-down of equity investment
- 33,913 - 46,327 Non-GAAP net income $63,263 $57,601 $172,421
$150,017 Per share data: Diluted earnings per share $0.15 $0.43
$2.19 $1.64 Net loss, net of tax, from: Discontinued operations - -
0.01 - Income from continuing operations 0.15 0.43 2.20 1.64
Adjustments, net of tax: Additional depreciation - 0.01 - 0.17
Impairment of long-lived assets 1.04 0.05 1.04 0.16 Michigan income
tax - (0.03) - - MA impairment and inventory-related write-down of
equity investment - 0.65 - 0.88 Non-GAAP diluted earnings per share
$1.19 $1.11 $3.24 $2.85 2007 Fourth Quarter Highlights An overview
of the significant major event weekends held in the fourth quarter
of 2007 includes: -- California Speedway hosted NASCAR NEXTEL Cup
and NASCAR Busch series events on Labor Day weekend. Despite very
exciting racing, the weekend posted less than anticipated results
primarily due to inclement weather. The region experienced an
intense heat wave with temperatures of 100 degrees and higher
during the week leading up to the races, including a record 113
degrees on the day of the Cup race. -- Richmond International
Raceway hosted a weekend of exciting NEXTEL Cup and Busch series
racing, anchored by the Chevy Rock and Roll 400. The facility
posted its 32nd consecutive NEXTEL Cup sellout, including a net
additional 5,000 grandstand seats for 2007. Also, attendance for
the Emerson Radio 250 Busch race posted more than an eight percent
increase over the prior year. -- Chicagoland Speedway hosted an
exciting season finale weekend for the IRL IndyCar Series, and
Kansas Speedway recorded sold-out attendance for both its NEXTEL
Cup and Busch events, despite a rain-shortened NEXTEL Cup LifeLock
400. -- The on-track competition for Talladega Superspeedway's
NASCAR and ARCA race weekend was outstanding, and was highlighted
by Jeff Gordon's thrilling move on the final lap to pass Jimmie
Johnson and win the NEXTEL Cup UAW-Ford 500. Despite the exciting
racing action, attendance-related results for the weekend were
lower than the prior year due to certain unique factors for the
2006 race weekend, including the debut of the new racing surface,
the track's inaugural NASCAR Craftsman Truck event, and the
significant national promotion for the 2006 release of the hit
movie "Talladega Nights." -- Martinsville Speedway hosted a
successful NASCAR Craftsman Truck and NEXTEL Cup weekend,
highlighted by Jimmie Johnson's third consecutive victory at the
historic half-mile facility. -- Phoenix International Raceway
hosted an exciting NASCAR triple-header weekend, featuring a
sold-out crowd for the NEXTEL Cup Checker Auto Parts 500. --
Homestead-Miami Speedway closed out the 2007 racing season with a
very successful NASCAR Ford Championship weekend. A capacity crowd
was on- hand to witness Jimmie Johnson capture his second
consecutive Cup series championship. The Ford Championship weekend
is one of the most sought after and premier weekends in all of
major sports, and Homestead-Miami is continuing to work closely
with Ford, NASCAR, and the facility's other marketing partners to
elevate awareness for NASCAR's national touring series' finale
weekend. Corporate partner spending remains strong for ISC, and the
Company sold its entire 2007 inventory of NEXTEL Cup and Busch
series race entitlements. In addition, ISC continues to secure
marketing partnerships with companies attracted to the brand
loyalty of NASCAR fans and ISC's unique portfolio of premier events
in key markets across the country. Contributing to the Company's
2007 full year results were several multi-year official status
relationships with a significant number of well-known brands,
including Bank of America, DeWalt, Gatorade, Home Depot, Office
Depot, Sprint, Texas Instruments, and UPS, to name a few. External
Growth Initiatives ISC is making important progress on Daytona
Live!, a mixed-use entertainment destination development the
Company is pursuing in a 50/50 joint venture with The Cordish
Company ("Cordish"). The project recently received zoning approval
from the local government in the form of a Planned Master
Development. While there are permitting and local project analyses
to complete, community support has been strong and construction is
slated to begin later this year. In April 2007, the Kansas State
Legislature authorized four land-based casino licenses, including
one for Wyandotte County. Kansas Speedway and Cordish have
submitted a joint venture proposal to the Unified Government of
Kansas City and Wyandotte County to develop a casino, hotel and
retail entertainment project on property adjacent to Kansas
Speedway. The initial development is expected to be branded as a
Hard Rock Hotel & Casino. In December, the Unified Government
endorsed the proposal and certain others to the Kansas Lottery
Commission for further consideration. The Kansas Lottery Commission
is evaluating the proposals and will recommend one or more to the
Kansas Gaming Commission, which has final approval in selecting the
company to manage the casino. By statute, the timeline for the
process should take between 150 and 270 days, with an outside
selection date of October 2008. On Staten Island, ISC is continuing
with its site remediation efforts and is in discussions with
interested buyers for the 676 acre parcel. The Company looks
forward to securing an agreement in the coming months. Dismissal of
Litigation In January 2008, the United States District Court (the
"Court") in Kentucky dismissed, in its entirety, the civil
anti-trust action brought by Kentucky Speedway LLC against ISC and
NASCAR. From the beginning, the Company has said the case was
without legal or factual merit, and the ruling reaffirms the
validity of a business model that has significantly benefited the
sport's fans and the industry as a whole. Kentucky Speedway has
appealed the Court's ruling. While the appeals process could take
more than a year to complete, ISC is confident in its ultimate
success. Share Repurchase Program In the 2007 fourth quarter, the
Company purchased approximately 646,000 shares of its Class A
Common Stock for $30.0 million, bringing the total number of shares
purchased to over 1.6 million since the program was initiated in
December 2006 through November 30, 2007. As of November 30, there
was $69.0 million in remaining capacity on ISC's current $150
million authorization. ISC is evaluating options for a more
aggressive share repurchase program during fiscal 2008, which would
require the authorization of additional funds by the Company's
Board of Directors. ISC believes its capital allocation strategy
reflects a balanced approach that will enhance shareholder value
and further position the Company for long-term success. Outlook ISC
reiterates its 2008 total revenue guidance range of $805 million to
$825 million. In addition, the Company is maintaining its fiscal
2008 earnings guidance range of $3.05 to $3.15 per diluted share.
ISC is currently more comfortable at the lower end of the earnings
range. "We are extremely pleased with the Court's decision to
dismiss the case in Kentucky and look forward to focusing all of
our attention on the 2008 race season," Ms. France Kennedy
continued. "NASCAR's entitlement changes to the Sprint Cup and the
Nationwide series are driving increased awareness for the sport,
and the full-time introduction of the Car of Tomorrow in the Sprint
Cup series should result in more exciting, side-by-side competition
that is a hallmark of NASCAR racing. Looking specifically at ISC,
DIRECTTV Speedweeks at Daytona is shaping up nicely, and the very
strong level of corporate and consumer demand for the 50th running
of the Daytona 500 bodes well for our first quarter results." Ms.
France Kennedy concluded, "We remain focused on providing a premium
experience for our fans and delivering a strong return for
marketing partners who continue to invest heavily in the sport.
And, while we are closely monitoring consumer spending and broader
macro-economic factors, it is important to note that our business
model is one that provides substantial earnings and cash flow
visibility, as a significant portion of our earnings are associated
with multi-year contracts with staggered maturities. For example,
approximately 75 percent of our earnings per diluted share guidance
for fiscal 2008 is associated with NASCAR's domestic television
broadcast and ancillary media rights. Visibility becomes
substantially higher when you layer in advance sales for tickets,
sponsorship, advertising, hospitality and other revenues already
under agreement for 2008. As a result, we remain positive on the
outlook of our business and the opportunity to build long-term
value for our shareholders." 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) 694-4641
five to ten minutes prior to the scheduled start time and request
to be connected to the ISC earnings call, ID number 9494769. 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, January 31, 2008. To
access, dial toll free (800) 642-1687 and enter the code 9494769,
or visit the "Investor Relations" section of the Company's Web
site. International Speedway Corporation is a leading promoter of
motorsports activities, currently promoting more than 100 racing
events annually as well as numerous other motorsports-related
activities. The Company owns and/or operates 13 of the nation's
major motorsports entertainment facilities, including Daytona
International Speedway(R) in Florida (home of the Daytona 500(R));
Talladega Superspeedway(R) in Alabama; Michigan International
Speedway(R) located outside Detroit; Richmond International
Raceway(R) in Virginia; California Speedway(SM) near Los Angeles;
Kansas Speedway(R) in Kansas City, Kansas; Phoenix International
Raceway(R) in Arizona; Chicagoland Speedway(R) and Route 66
Raceway(SM) near Chicago, Illinois; Homestead-Miami Speedway(SM) in
Florida; Martinsville Speedway(R) in Virginia; Darlington
Raceway(R) in South Carolina; and Watkins Glen International(R) in
New York. 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(R) Radio, the nation's largest independent
sports radio network; the Daytona 500 Experience(SM), the "Ultimate
Motorsports Attraction" in Daytona Beach, Florida, the official
attraction of NASCAR(R); and Americrown Service Corporation, a
subsidiary that provides catering services, food and beverage
concessions, and produces and markets motorsports-related
merchandise. In addition, ISC has an indirect 50 percent interest
in a business called Motorsports Authentics(R), 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) Three Months Ended Twelve
Months Ended 11/30/2006 11/30/2007 11/30/2006 11/30/2007
(Unaudited) REVENUES: Admissions, net $73,533 $78,167 $235,251
$253,685 Motorsports related 149,307 143,709 466,095 467,804 Food,
beverage and merchandise 27,853 27,135 87,288 84,163 Other 2,766
4,531 9,735 10,911 253,459 253,542 798,369 816,563 EXPENSES: Direct
expenses: Prize and point fund monies and NASCAR sanction fees
51,781 49,970 151,203 151,311 Motorsports related 39,559 45,836
144,445 162,722 Food, beverage and merchandise 16,141 14,984 53,141
48,490 General and administrative 26,908 28,855 106,497 118,982
Depreciation and amortization 15,268 17,232 56,833 80,205
Impairment of long- lived assets 87,084 3,926 87,084 13,110 236,741
160,803 599,203 574,820 Operating income 16,718 92,739 199,166
241,743 Interest income 1,928 1,291 5,312 4,990 Interest expense
(2,736) (3,847) (12,349) (15,628) Equity in net (loss) income from
equity investments (450) (36,391) 318 (58,147) Income from
continuing operations before income taxes 15,460 53,792 192,447
172,958 Income taxes 7,638 31,283 75,467 86,667 Income from
continuing operations 7,822 22,509 116,980 86,291 Loss from
discontinued operations, net of income tax benefits of $60 and $41,
and $268 and $166, respectively (30) (34) (176) (90) Net income
$7,792 $22,475 $116,804 $86,201 Basic earnings per share: Income
from continuing operations $0.15 $0.43 $2.20 $1.64 Loss from
discontinued operations - - - - Net income $0.15 $0.43 $2.20 $1.64
Diluted earnings per share: Income from continuing operations $0.15
$0.43 $2.20 $1.64 Loss from discontinued operations - - (0.01) -
Net income $0.15 $0.43 $2.19 $1.64 Dividends per share $- $- $0.08
$0.10 Basic weighted average shares outstanding 53,178,043
51,853,828 53,166,458 52,557,550 Diluted weighted average shares
outstanding 53,293,850 51,959,612 53,270,623 52,669,934
Consolidated Balance Sheets (In Thousands) November 30, 2006 2007
ASSETS Current Assets: Cash and cash equivalents $59,681 $57,316
Short-term investments 78,000 39,250 Receivables, less allowance of
$1,000 in 2006 and $1,200 in 2007 52,699 46,860 Inventories 3,976
4,508 Deferred income taxes 995 1,345 Prepaid expenses and other
current assets 8,251 10,547 Total Current Assets 203,602 159,826
Property and Equipment, net 1,157,313 1,303,178 Other Assets:
Equity investments 175,915 76,839 Intangible assets, net 149,314
178,984 Goodwill 99,507 118,791 Deposits with Internal Revenue
Service 110,813 117,936 Other 25,595 26,563 561,144 519,113 Total
Assets $1,922,059 $1,982,117 LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities: Current portion of long-term debt $770 $2,538
Accounts payable 29,577 37,508 Deferred income 124,254 128,631
Income taxes payable 22,477 22,179 Other current liabilities 19,226
21,447 Total Current Liabilities 196,304 212,303 Long-Term Debt
367,324 375,009 Deferred Income Taxes 191,642 214,109 Long-Term
Deferred Income 10,808 15,531 Other Long-Term Liabilities 866 6,077
Commitments and Contingencies - - Shareholders' Equity: Class A
Common Stock, $.01 par value, 80,000,000 shares authorized;
31,078,307 and 30,010,422 issued and outstanding in 2006 and 2007,
respectively 311 300 Class B Common Stock, $.01 par value,
40,000,000 shares authorized; 22,100,263 and 21,593,025 issued and
outstanding in 2006 and 2007, respectively 221 216 Additional
paid-in capital 698,396 621,528 Retained earnings 456,187 537,044
Total Shareholders' Equity 1,155,115 1,159,088 Total Liabilities
and Shareholders' Equity $1,922,059 $1,982,117 Consolidated
Statements of Cash Flows (In Thousands) Year Ended November 30,
2006 2007 OPERATING ACTIVITIES Net income $116,804 $86,201
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 56,833 80,205
Stock-based compensation 2,700 4,046 Amortization of financing
costs 538 517 Deferred income taxes (4,178) 23,374 (Income) loss
from equity investments (318) 58,147 Impairment of long-lived
assets 87,084 8,170 Excess tax benefits relating to stock-based
compensation (185) (170) Other, net 23 154 Changes in operating
assets and liabilities: Receivables, net (7,142) 7,525 Inventories,
prepaid expenses and other assets 336 (2,142) Deposits with
Internal Revenue Service (13,900) (7,123) Accounts payable and
other liabilities 345 5,045 Deferred income (150) (5,712) Income
taxes 2,607 (121) Net cash provided by operating activities 241,397
258,116 INVESTING ACTIVITIES Capital expenditures (110,374)
(96,060) Acquisition of business, net of cash acquired - (87,111)
Purchase of equity investments (124,565) - Proceeds from short-term
investments 80,855 105,320 Purchases of short-term investments
(150,655) (66,570) Proceeds from affiliate 128 67 Advance to
affiliate (3,000) (200) Other, net 496 264 Net cash used in
investing activities (307,115) (144,290) FINANCING ACTIVITIES
Proceeds under credit facility 80,000 65,000 Payments under credit
facility (80,000) (65,000) Payment of long-term debt (635) (29,910)
Deferred financing fees (368) - Cash dividends paid (4,270) (5,292)
Reacquisition of previously issued common stock (460) (81,516)
Exercise of Class A common stock options 189 357 Excess tax
benefits relating to stock-based compensation 185 170 Net cash used
in financing activities (5,359) (116,191) Net decrease in cash and
cash equivalents (71,077) (2,365) Cash and cash equivalents at
beginning of period 130,758 59,681 Cash and cash equivalents at end
of period $59,681 $57,316 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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