~Reiterates Full Year Financial Outlook~ DAYTONA BEACH, Fla., July
9 /PRNewswire-FirstCall/ -- International Speedway Corporation
(NASDAQ Global Select Market: ISCA; OTC Bulletin Board: ISCB)
("ISC") today reported results for the fiscal second quarter and
six months ended May 31, 2008. "We hosted nearly one million paid
attendees at our events during the second quarter, which
demonstrates that consumers continue to view motorsports,
particularly NASCAR, as an important part of their lifestyle
despite the current economic environment," said ISC President Lesa
France Kennedy. "Supported by ISC's strong breadth of assets and
solid financial footing, we remain well positioned to successfully
execute our long-term strategic initiatives." Ms. France Kennedy
added, "We held several successful weekends of racing during the
second quarter highlighted by sold-out NASCAR Sprint Cup Series
events at Richmond and Darlington. And, while the economic
environment will continue to impact attendance-related revenues,
our 2008 full year results are expected to benefit from increased
sponsorship, hospitality, television and certain other motorsports
related revenues. Also fueling our anticipated full year results
are the ongoing prudent management of our controllable expenses,
the successful turnaround of our equity investment in Motorsports
Authentics, and an aggressive return of capital through share
repurchases." Second Quarter Comparison Total revenues for the
second quarter were $174.9 million, compared to revenues of $181.0
million in the prior-year period. Operating income increased to
$42.9 million during the period compared to $35.0 million in the
second quarter of fiscal 2007. Quarter-over-quarter comparability
was impacted by: -- A 2008 second quarter impairment charge of $1.2
million, or $0.01 per diluted share after tax, primarily related to
charges for the fill removal process on the Company's Staten Island
property and, to a lesser extent, the net book value of certain
assets retired from service. The second quarter of 2007 included
impairment charges of $9.1 million, or $0.11 per diluted share
after-tax, primarily attributable to ISC's decision to discontinue
speedway development efforts in Kitsap County, Washington. To a
lesser extent, the impairment charges included estimated costs for
fill removal on the Staten Island property. -- Accelerated
depreciation of $0.5 million, or $0.01 per diluted share after tax,
in the second quarter of 2008 for certain office and related
buildings in Daytona Beach associated with the Company's previously
announced Daytona Live! project. The 2007 second quarter included
Daytona Live!-related accelerated depreciation charges of $4.6
million, or $0.05 per diluted share after tax. Net income for the
second quarter of 2008 increased to $26.0 million, or $0.52 per
diluted share, compared to net income of $18.4 million, or $0.35
per diluted share, in the prior year's second quarter. Excluding
discontinued operations and the aforementioned accelerated
depreciation and impairment charges, non-GAAP (defined below) net
income for the second quarter of 2008 was $27.0 million, or $0.54
per diluted share. Non-GAAP net income for the second quarter of
2007 was $27.1 million, or $0.51 per diluted share. Year-to-Date
Comparison For the six months ended May 31, 2008, total revenues
were $368.8 million, compared to $365.8 million in 2007. Operating
income for the six-month period was $109.8 million compared to
$100.8 million in the prior year. Year-over-year comparability was
impacted by: -- 2008 impairment charges of $1.9 million, or $0.02
per diluted share after tax, associated with the previously
discussed fill removal costs on Staten Island and net book value of
certain assets retired from service. Year-to-date results for 2007
included the aforementioned 2007 second quarter impairment charges
for the Company's speedway development efforts in Kitsap County,
Washington, and Staten Island. -- Accelerated depreciation charges
in 2008 of $1.0 million, or $0.02 per diluted share after tax,
associated with the previously discussed Daytona Live! project.
Results for the six months ended May 31, 2007, included Daytona
Live!-related accelerated depreciation charges of $7.2 million, or
$0.09 per diluted share after tax. -- A 2008 first quarter non-cash
charge of $3.8 million, or $0.07 per diluted share after tax, to
correct the carrying value of certain other assets as of November
30, 2007. Net income for the six months ended May 31, 2008, was
$62.2 million, or $1.23 per diluted share, compared to $54.2
million, or $1.02 per diluted share in 2007. Excluding discontinued
operations, the aforementioned impairment and related charges,
accelerated depreciation and the correction of certain other
assets' carrying value amounts, non-GAAP (defined below) net income
for the six months ended May 31, 2008, was $67.8 million, or $1.34
per diluted share. This is compared to non-GAAP net income for the
first six months of 2007 of $64.6 million, or $1.22 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 2007 adjustment relates to: additional depreciation associated
with building structures in the Company's office complex in Daytona
Beach; and, impairment charges associated with ISC's decision to
discontinue speedway development efforts in Kitsap County,
Washington, and, to a lesser extent, fill removal costs on the
Company's Staten Island property. The adjustments for 2008 relate
to: accelerated depreciation for certain office and related
buildings in Daytona Beach; the impairment of long-lived assets
associated with the fill removal process on the Staten Island
property and the net book value of certain assets retired from
service; and, a non-cash charge to correct the carrying value of
certain other assets. 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 Six Months
Ended May 31, May 31, May 31, May 31, 2007 2008 2007 2008 Net
income $18,390 $25,972 $54,209 $62,183 Net loss from discontinued
operations, net of tax 6 36 26 67 Income from continuing operations
18,396 26,008 54,235 62,250 Adjustments, net of tax: Additional
depreciation 2,856 320 4,449 640 Impairment of long-lived assets
5,869 706 5,869 1,154 Correction of certain other assets' carrying
value - - - 3,758 Non-GAAP net income $27,121 $27,034 $64,553
$67,802 Per share data: Diluted earnings per share $0.35 $0.52
$1.02 $1.23 Net loss from discontinued operations, net of tax - - -
- Income from continuing operations 0.35 0.52 1.02 1.23
Adjustments, net of tax: Additional depreciation 0.05 0.01 0.09
0.02 Impairment of long-lived assets 0.11 0.01 0.11 0.02 Correction
of certain other assets' carrying value - - - 0.07 Non-GAAP diluted
earnings per share $0.51 $0.54 $1.22 $1.34 2008 Second Quarter
Highlights An overview of the significant major event weekends held
in the second quarter of 2008 includes: -- Daytona International
Speedway hosted Bike Week in early March highlighted by the AMA
Supercross and 67th running of the Daytona 200, both presented by
Honda. Results were impacted by inclement weather, which
substantially limited walk-up sales for both events. --
Homestead-Miami Speedway hosted the 2008 IRL IndyCar Series season
opener GAINSCO Auto Insurance Indy 300, the historic first race of
the IndyCar Series and Champ Car reunification, as well as the
Grand-Am Rolex Sports Car Series Grand Prix of Miami race. --
Martinsville Speedway hosted a weekend of NASCAR Craftsman Truck
and Sprint Cup racing, highlighted by the Goody's Cool Orange 500.
Despite exciting on-track competition, attendance-related revenues
were impacted, in part, due to inclement weather. -- Phoenix
International Raceway hosted a successful weekend of NASCAR
Nationwide and Sprint Cup racing, highlighted by Jimmie Johnson
winning the Subway Fresh Fit 500, his second consecutive Sprint Cup
Series win at the facility. -- Talladega Superspeedway hosted a
NASCAR Nationwide and Sprint Cup race weekend, which featured Joe
Gibbs Racing sweeping the two-race Aaron's Dream Weekend. -- Kansas
Speedway hosted a successful ARCA RE/MAX, NASCAR Craftsman Truck
and IRL IndyCar weekend, with Dan Wheldon becoming the first driver
to win two IndyCar races at the Speedway. -- Richmond International
Raceway recorded its 17th consecutive sellout for its spring NASCAR
Sprint Cup event with Clint Bowyer winning the Crown Royal Presents
The Dan Lowry 400. The track also hosted a successful NASCAR
Nationwide Lipton Tea 250. -- Darlington Raceway hosted an exciting
weekend of NASCAR Nationwide and Sprint Cup competition,
highlighted by the fourth consecutive sellout of the Dodge
Challenger 500. During the 2008 second quarter, lower
attendance-related revenues contributed to total revenue results
that were below expectations. As expected, the challenging
macro-economic environment is impacting consumer spending, and the
Company anticipates these trends to continue through the remainder
of the year. Corporate marketing partner spending remains healthy.
While the Company anticipates being slightly behind budget for the
year, it continues to expect year-over-year revenue growth. Looking
specifically at event entitlements, ISC is in negotiations with
multiple companies for Kansas Speedway's Sprint Cup race scheduled
for late September. "Corporate sponsors continue to view NASCAR as
an important piece of their overall marketing programs," Ms. France
Kennedy added. "And, while the current economic environment has
made the process of securing deals more time consuming, ISC's
national presence in key markets continues to position us as the
partner of choice with local, regional and Fortune 500 companies."
ISC's 2008 second quarter results include approximately $3.0
million in equity income associated with its 50/50 joint venture in
Motorsports Authentics ("MA"). The Company remains optimistic about
MA's multi-faceted turnaround plan designed to grow top line
revenue while controlling expenses. Although the results for the
first two quarters of 2008 are encouraging, given the current
economic environment ISC reiterates its guidance of break-even
financial results for MA for the 2008 full year. Third Quarter
Events To date in the fiscal third quarter: -- Watkins Glen
International hosted a successful weekend of sports car racing in
June, highlighted by the fourth Grand Am Rolex Series Daytona
Prototype victory of the season for Scott Pruett and Memo Rojas in
the 27th running of the Sahlen's Six Hours of The Glen. -- Route 66
Raceway held the 11th annual Torco Racing Fuels Route 66 NHRA
Nationals. Fans were treated to four days of exciting racing and
watched Funny Car driver Tony Pedregon win for the second time this
season and the 38th time in his career. -- Michigan International
Speedway hosted the NASCAR Sprint Cup, Craftsman Truck and ARCA
RE/MAX series in mid-June. Fans were treated to an exciting weekend
of racing that culminated with fan-favorite Dale Earnhardt Jr.
winning the Sprint Cup LifeLock 400. -- Richmond held a successful
weekend of IRL IndyCar racing highlighted by a record crowd for the
SunTrust Indy Challenge. -- Daytona hosted a Sprint Cup, Nationwide
and Grand-Am racing weekend, highlighted by a thrilling
green-white-checkered finish in The Coke Zero 400 Powered by
Coca-Cola that resulted in Kyle Busch's first Sprint Cup victory at
the historic facility. -- Watkins Glen hosted an exciting weekend
of IndyCar racing, which featured increased attendance for the
Camping World Grand Prix at The Glen and Ryan Hunter-Reay's first
IRL IndyCar series victory. For the remainder of the third quarter,
ISC will host Sprint Cup and Nationwide series weekends at
Chicagoland Speedway, Watkins Glen, Michigan and Auto Club
Speedway. In addition, through its 50/50 limited partnership with
Group Motorise International, the second annual NASCAR Nationwide
and Grand-Am Rolex race weekend will be held at Circuit Gilles
Villeneuve in Montreal, Canada. External Growth and Related
Initiatives Construction has begun on the office building component
of Daytona Live!, the mixed-use entertainment destination
development that ISC is pursuing in a 50/50 joint venture with The
Cordish Company ("Cordish"). In the second quarter, the Company
announced that Cobb Theatres will anchor Daytona Live! with a
65,000 square-foot, 14-screen theater featuring digital projection
with 3D capabilities, stadium seating, and a premium level
providing 350 reserved seats and a full-service restaurant and bar
area. ISC is also partnered in a joint venture with Cordish on the
development of a Hard Rock Hotel & Casino on property adjacent
to the Kansas Speedway. The joint venture has submitted one of
several competing proposals to the State of Kansas. The Kansas
Lottery Commission has evaluated the proposals and forwarded them
to the Lottery Gaming Facility Review Board (the "Review Board"),
which has final approval in selecting the company to construct and
manage the casino. The Review Board will hold public meetings on
the proposals with a final decision anticipated in September 2008.
On Staten Island, ISC is in discussions with interested buyers for
the 676 acre parcel. The property is being marketed for sale and
the Company has received significant interest from multiple
parties. Share Repurchase Program In the 2008 second quarter, ISC
purchased approximately 967,000 shares of its Class A Common Stock
for $40 million. From initiation of the program in December 2006
through May 2008, the Company purchased a total of 3.8 million
shares for $171 million, leaving $79 million in remaining capacity
on its $250 million authorization at May 31, 2008. ISC continues to
believe its capital allocation strategy reflects a balanced
approach that enhances shareholder value and further positions the
Company for long-term success. Outlook ISC has narrowed its
financial guidance for fiscal 2008. The Company now expects full
year total revenues to range between $805 million and $815 million.
ISC also anticipates its fiscal 2008 non-GAAP earnings guidance to
range from $3.05 to $3.10 per diluted share. Given the current
economic environment, ISC is more comfortable at the low end of the
earnings range. ISC expects non-GAAP earnings before interest,
taxes, depreciation and amortization ("EBITDA")(1) margins,
operating margins, and effective income tax rates for the 2008
third quarter, fourth quarter and full year to range as follows:
Quarter Quarter Year Ending Ending Ending 8/31/2008 11/30/2008
11/30/2008 EBITDA margin 37% - 38% 43% - 44% 40% - 41% Operating
margin 29% - 30% 36% - 37% 31% - 32% Effective tax rate 38% - 39%
37% - 38% 38% - 39% 1. EBITDA is a non-GAAP financial measure used
by the Company as an important indicator of its operating margin.
Impacting year-over-year quarterly comparability is the timing of
Auto Club Speedway's Labor Day weekend, which will be held in the
2008 third quarter. The 2007 race weekend was held in the fourth
quarter. Ms. France Kennedy concluded, "Motorsports remains a
stable and growing industry with a compelling long-term outlook. No
other professional sport attracts the huge crowds that NASCAR does
on a weekly basis. Furthermore, television ratings year-to-date for
the three national NASCAR touring series are up compared to last
year. Fueled by a core fan profile that displays the strongest
brand loyalty in all of major sports, corporate partners continue
to view NASCAR as the preferred vehicle to reach consumers. This is
hugely important given the current economic environment we are
facing, and ISC remains in an optimal financial position with
significant cash flow and earnings visibility to weather the
downturn. With this backdrop, it is essential that we execute on
our proven business plan. These strategies include efforts to
remain focused on providing guests and partners with unparalleled
service and valued entertainment, while enhancing shareholder value
through a meaningful return of capital program." 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 54181900. 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 two
hours after the end of the call through midnight Wednesday, July
16, 2008. To access, dial toll free (800) 642-1687 and enter the
code 54181900, 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; Auto Club Speedway of
Southern California(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 sport radio network;
the Daytona 500 Experience(SM), the "Ultimate Motorsports
Attraction" in Daytona Beach, Florida, and 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 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. (Tables
Follow) Consolidated Statements of Operations (In Thousands, Except
Per Share Amounts) Three Months Ended Six Months Ended 5/31/2007
5/31/2008 5/31/2007 5/31/2008 (Unaudited) REVENUES: Admissions, net
$57,238 $53,432 $112,548 $109,545 Motorsports related 101,383
101,240 209,498 214,085 Food, beverage and merchandise 20,201
17,738 39,365 40,428 Other 2,130 2,527 4,402 4,738 180,952 174,937
365,813 368,796 EXPENSES: Direct: Prize and point fund monies and
NASCAR sanction fees 33,812 34,728 66,274 67,781 Motorsports
related 38,254 38,688 68,879 74,024 Food, beverage and merchandise
12,052 11,747 22,901 24,531 General and administrative 31,496
28,269 58,744 55,980 Depreciation and amortization 21,241 17,436
39,148 34,753 Impairment of long-lived assets 9,076 1,150 9,076
1,881 145,931 132,018 265,022 258,950 Operating income 35,021
42,919 100,791 109,846 Interest income and other 939 384 2,297
(2,676) Interest expense (3,700) (3,294) (7,740) (6,887) Equity in
net (loss) income from equity investments (294) 2,960 (4,611) 4,754
Income from continuing operations before income taxes 31,966 42,969
90,737 105,037 Income taxes 13,570 16,961 36,502 42,787 Income from
continuing operations 18,396 26,008 54,235 62,250 Loss from
discontinued operations, net of income tax benefits (6) (36) (26)
(67) Net income $18,390 $25,972 $54,209 $62,183 Basic earnings per
share: Income from continuing operations $0.35 $0.52 $1.02 $1.23
Loss from discontinued operations - - - - Net income $0.35 $0.52
$1.02 $1.23 Diluted earnings per share: Income from continuing
operations $0.35 $0.52 $1.02 $1.23 Loss from discontinued
operations - - - - Net income $0.35 $0.52 $1.02 $1.23 Dividends per
share $0.10 $0.12 $0.10 $0.12 Basic weighted average shares
outstanding 52,813,292 49,836,724 52,952,076 50,379,656 Diluted
weighted average shares outstanding 52,923,911 49,927,320
53,068,615 50,479,717 Consolidated Balance Sheets (In Thousands)
November 30, 2007 May 31, 2008 (Unaudited) ASSETS Current Assets:
Cash and cash equivalents $57,316 $81,096 Short-term investments
39,250 200 Receivables, less allowance of $1,200 in 2007 and 2008,
respectively 46,860 72,364 Inventories 4,508 5,655 Deferred income
taxes 1,345 1,476 Prepaid expenses and other current assets 10,547
17,570 Total Current Assets 159,826 178,361 Property and Equipment,
net of accumulated depreciation of $410,192 and $439,372,
respectively 1,303,178 1,327,147 Other Assets: Equity investments
76,839 80,869 Intangible assets, net 178,984 178,912 Goodwill
118,791 118,791 Deposits with Internal Revenue Service 117,936
117,936 Other 26,563 25,108 519,113 521,616 Total Assets $1,982,117
$2,027,124 LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities: Current portion of long-term debt $2,538 $152,901
Accounts payable 37,508 22,734 Deferred income 128,631 200,139
Income taxes payable 22,179 15,408 Other current liabilities 21,447
24,082 Total Current Liabilities 212,303 415,264 Long-Term Debt
375,009 223,264 Deferred Income Taxes 214,109 80,794 Long-Term Tax
Liabilities - 160,656 Long-Term Deferred Income 15,531 14,798 Other
Long-Term Liabilities 6,077 5,931 Commitments and Contingencies - -
Shareholders' Equity: Class A Common Stock, $.01 par value,
80,000,000 shares authorized; 30,010,422 and 28,028,972 issued and
outstanding in 2007 and 2008, respectively 300 280 Class B Common
Stock, $.01 par value, 40,000,000 shares authorized; 21,593,025 and
21,444,416 issued and outstanding in 2007 and 2008, respectively
216 214 Additional paid-in capital 621,528 532,618 Retained
earnings 537,044 593,305 Total Shareholders' Equity 1,159,088
1,126,417 Total Liabilities and Shareholders' Equity $1,982,117
$2,027,124 Consolidated Statements of Cash Flows (In Thousands) Six
Months Ended 5/31/2007 5/31/2008 (Unaudited) OPERATING ACTIVITIES
Net income $54,209 $62,183 Adjustments to reconcile net income to
net cash provided by operating activities: Depreciation and
amortization 39,148 34,753 Stock-based compensation 1,470 1,616
Amortization of financing costs 259 259 Deferred income taxes 7,883
7,304 Loss (income) from equity investments 4,611 (4,754) Excess
tax benefits relating to stock-based compensation (131) (7)
Impairment of long-lived assets, non-cash 6,143 460 Other, net 729
3,778 Changes in operating assets and liabilities: Receivables, net
(24,271) (25,504) Inventories, prepaid expenses and other assets
(13,188) (8,798) Deposits with Internal Revenue Service (7,123) -
Accounts payable and other liabilities 1,029 (7,598) Deferred
income 85,693 70,775 Income taxes 3,013 13,034 Net cash provided by
operating activities 159,474 147,501 INVESTING ACTIVITIES Capital
expenditures (56,112) (69,844) Acquisition of business, net of cash
acquired (87,093) - Proceeds from affiliate 67 - Advance to
affiliate - (1,296) Proceeds from short-term investments 83,450
41,500 Purchases of short-term investments (24,635) (2,450)
Purchases of equity investments - (81) Other, net 54 75 Net cash
used in investing activities (84,269) (32,096) FINANCING ACTIVITIES
Proceeds under credit facility 65,000 20,000 Payments under credit
facility (65,000) (20,000) Payment of long-term debt (28,679)
(1,235) Exercise of Class A common stock options 272 - Excess tax
benefits relating to stock-based compensation 131 7 Reacquisition
of previously issued common stock (26,519) (90,397) Net cash used
in financing activities (54,795) (91,625) Net increase in cash and
cash equivalents 20,410 23,780 Cash and cash equivalents at
beginning of period 59,681 57,316 Cash and cash equivalents at end
of period $80,091 $81,096 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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