International Speedway Corporation (NASDAQ:ISCA)
(OTCBB:ISCB)
(“ISC”) today reported financial
results for its fiscal fourth quarter and full-year ended
November 30, 2017.
"We are pleased to report solid financial results for 2017,"
stated Lesa France Kennedy, ISC Chief Executive Officer.
"Revenue increased to the highest level since 2010, driven by the
strength of our corporate and broadcast partnerships. Growth
in earnings per share is the result of successful integration of
our strategic investments in our facilities and development
projects. Consumer sales strategies continue to take root
resulting in increased admissions for our fourth quarter and sold
out grandstands at four of our Cup events in 2017."
Ms. France Kennedy continued, "On-track competition for the 2017
season was highlighted with action packed racing from the new stage
format. The Furniture Row Racing team and Martin Truex Jr.
accumulated the most stage wins and playoff points, eight event
wins and ultimately secured their first Monster Energy NASCAR Cup
Series championship. As we bid farewell to Dale Jr., voted
NASCAR's fan favorite for the past 15 years, we are excited to see
rising stars that will provide for great excitement and thrilling
competition entering the 2018 season."
"On the development front, ONE DAYTONA has become the
entertainment destination it was designed to be. Several tenants
have opened for business and exceeded sales expectations, as they
were embraced by visitors and the Daytona Beach community.
The Fairfield Inn and Suites, our joint-venture partnership,
recently opened with great success. All rooms have been sold
for the upcoming Rolex 24 and Daytona 500 events. We will
have more tenants open throughout early 2018, and expect The
DAYTONA Hotel to open by the end of the year."
"Construction at ISM Raceway in Phoenix is progressing.
The New ISM Raceway will feature a reconfigured track design, new
amenities for our guests and unmatched access to garage areas,
getting our fans the up close experience as teams prepare for the
competition. The project will be completed in time for the
playoff race at ISM Raceway in November."
"We believe these projects will continue to position ISC for
long-term growth and deliver shareholder value."
Fourth Quarter Comparison
Total revenues for the fourth quarter ended November 30,
2017 were approximately $226.3 million, compared to revenues of
approximately $221.8 million in the fourth quarter of fiscal
2016. Operating income was approximately $41.8 million during
the period compared to approximately $51.2 million in the fourth
quarter of fiscal 2016. Quarter-over-quarter comparability
was impacted by:
- During the fourth quarter of fiscal 2017, the Hollywood Casino
at Kansas Speedway recognized a reduction in depreciation expense
of approximately $1.3 million as a result of certain assets that
have been fully depreciated, as compared to the same period in the
prior year;
- During the fourth quarter of fiscal 2017, we recognized
approximately $0.2 million, or less than $0.01 per diluted
share, in non-recurring, pre-opening costs that are included in
general and administrative expense related to the ISM Raceway
Project Powered by DC Solar that could not be capitalized. During
the same period of fiscal 2016, we recognized $0.2 million, or less
than $0.01 per diluted share of similar costs;
- During the fourth quarter of fiscal 2017, we recognized
approximately $1.4 million, or $0.02 per diluted share, of
accelerated depreciation that was recorded due to the shortening
the service lives of certain assets associated with the ISM Raceway
Project Powered by DC Solar and certain other capital improvements.
There were no comparable costs during the same period in fiscal
2016;
- During the fourth quarter of fiscal 2017, we recognized
approximately $9.9 million, or $0.14 per diluted share, of mostly
non-cash losses associated with asset retirements and demolition
and/or asset relocation costs in connection with capacity
optimization initiatives and other facility capital improvements.
Included in these losses were approximately $0.6 million of
expenditures related to demolition and/or asset relocation costs,
the remaining charges were non-cash charges. During fiscal
2016, we recognized approximately $1.8 million, or $0.02 per
diluted share, of similar charges, in connection with facility
capital improvements. Included in these losses were approximately
$0.3 million of expenditures related to demolition and/or
asset relocation costs, the remaining charges were non-cash
charges;
- During the fourth quarter of fiscal 2017, we capitalized
approximately $1.4 million, or $0.02 per diluted share, of
interest related to ONE DAYTONA and the ISM Raceway Project Powered
by DC Solar. During fiscal 2016, we recognized approximately
$0.5 million, or $0.01 per diluted share, of similar interest
capitalization related to ONE DAYTONA and the ISM Raceway Project
Powered by DC Solar;
- During the fourth quarter of fiscal 2016, we recognized a
non-cash gain related to the transition of merchandise operations
of approximately $0.8 million, or $0.01 per diluted share. There
was no comparable transaction in fiscal 2017, and
- In fiscal 2017, we recorded a non-recurring net tax benefit of
approximately $48.2 million, or $1.09 per diluted share,
associated with the worthlessness of our investment in Motorsports
Authentics, Inc. ("MA") There was no comparable transaction in
fiscal 2016.
Net income for the fourth quarter was approximately $76.1
million, or $1.72 per diluted share, compared to net income of
approximately $32.4 million, or $0.72 per diluted share, in the
prior year period. Excluding capitalized interest and costs
related to certain track redevelopment projects, losses associated
with the retirements of certain other long-lived assets,
accelerated depreciation, non-cash gain related to the transition
of merchandise operations, net gain on sale of certain assets, and
a non-recurring net tax benefit related to our investment in MA,
non-GAAP (defined below) net income for the fourth quarter of 2017
was $34.2 million, or $0.77 per diluted share. Non-GAAP
net income for the fourth quarter of fiscal 2016 was
$32.8 million, or $0.72 per diluted share.
Full-Year Comparison
For the year ended November 30, 2017, total revenues were
$671.4 million, compared to $661.0 million in 2016. Operating
income for the full-year period was $96.2 million compared to
$109.8 million in the prior year.
Year-over-year comparability was impacted by:
- In the first quarter of fiscal 2017, we hosted the Ferrari
World Finals at Daytona International Speedway, for which there was
no comparable event in fiscal 2016;
- In the second quarter of fiscal 2017, the Hollywood Casino at
Kansas Speedway began recognizing a reduction in depreciation
expense as a result of certain assets that have been fully
depreciated, as compared to the same period in the prior
year. For the fiscal year ended November 30, 2017, our
50.0 share of the reduction in depreciation expense was
approximately $4.0 million;
- During fiscal 2017, we received a favorable settlement relating
to certain facility operations of approximately $1.0 million,
or $0.01 per diluted share. In fiscal 2016, we received a
favorable settlement relating to certain facility operations of
approximately $1.1 million, or $0.02 per diluted share.
- In fiscal 2017, we recognized approximately $0.6 million,
or $0.01 per diluted share, in non-recurring, pre-opening costs
that are included in general and administrative expense related to
The Phoenix Raceway Project that could not be capitalized.
During fiscal 2016, we recognized approximately $1.0 million,
or $0.02 per diluted share, of similar costs, predominately related
to DAYTONA Rising and the ISM Raceway Project Powered by DC Solar
projects;
- During fiscal 2017, we recognized approximately
$6.2 million, or $0.08 per diluted share, of accelerated
depreciation that was recorded due to the shortening the service
lives of certain assets associated with the ISM Raceway Project
Powered by DC Solar and certain other capital improvements. There
were no comparable costs during fiscal 2016;
- In fiscal 2017, we recognized approximately $10.3 million,
or $0.14 per diluted share, of mostly non-cash losses associated
with asset retirements and demolition and/or asset relocation costs
in connection with capacity optimization initiatives and the ISM
Raceway Project Powered by DC Solar. Included in these losses were
approximately $0.9 million of expenditures related to
demolition and/or asset relocation costs, the remaining charges
were non-cash charges. During fiscal 2016, we recognized
approximately $2.9 million, or $0.04 per diluted share,
of similar charges, in connection with DAYTONA Rising and capacity
optimization initiatives. Included in these losses were
approximately $0.5 million of expenditures related to
demolition and/or asset relocation costs, the remaining charges
were non-cash charges;
- During fiscal 2017, we capitalized approximately
$3.9 million, or $0.05 per diluted share, of interest related
to ONE DAYTONA and The Phoenix Raceway Project. During fiscal 2016,
we recognized approximately $1.5 million, or $0.02 per diluted
share, of similar interest capitalization related to ONE DAYTONA,
the ISM Raceway Project Powered by DC Solar and DAYTONA
Rising;
- During fiscal 2016, we completed an assignment of all rights,
title and interest in the mortgage and underlying promissory note
of our Staten Island property. As a result, we recorded a gain of
approximately $13.6 million, or 0.18 per diluted share,
comprised of deferred gain, interest, and other consideration paid.
The deferred gain of $1.9 million is included in Other
operating revenue in our consolidated statement of operations, and
the interest, and additional consideration, received is included in
Other in our consolidated statement of operations. There was no
comparable transaction in fiscal 2017;
- During fiscal 2017, we recognized approximately
$0.3 million, or $0.01 per diluted share, of net gain on sale
of certain assets. During fiscal 2016, we recognized
$0.4 million, or $0.01 of similar net gains.
- During fiscal 2016, we recognized a non-cash gain related to
the transition of merchandise operations of approximately $0.8
million, or $0.01 per diluted share. There was no comparable
transaction in fiscal 2017; and
- In fiscal 2017, we recorded a non-recurring net tax benefit of
approximately $46.0 million, or $1.03 per diluted share,
including approximately $48.2 million, or $1.09 per diluted
share, associated with the worthlessness of our investment in MA,
partially offset by an impairment of a deferred tax asset of
approximately $2.1 million, or $0.05 per diluted share.
Net income for the year-ended November 30, 2017, was $110.8
million, or $2.48 per diluted share, compared to a net income of
$76.3 million, or $1.66 per diluted share in 2016. Excluding
adjustments for legal settlements, costs related to certain track
redevelopment projects, marketing and consulting costs incurred
associated with DAYTONA Rising and the ISM Raceway Project Powered
by DC Solar, accelerated depreciation, losses associated with the
retirements of certain other long-lived assets, capitalized
interest related to certain track redevelopment projects, gain on
sale of Staten Island, gain on transition of merchandise
operations, a net gain on sale of certain assets, and a
non-recurring net tax benefit primarily related to our investment
in MA, non-GAAP (defined below) net income for fiscal 2017, was
$72.1 million, or $1.61 per diluted share. This is
compared to non-GAAP net income for fiscal 2016 of
$68.1 million, or $1.48 per diluted share.
GAAP to Non-GAAP Reconciliation
The following discussion and analysis of our financial condition
and results of operations is presented below using other than U.S.
generally accepted accounting principles (“non-GAAP”) and includes
certain non-GAAP financial measures as identified in the
reconciliation below. The non-GAAP financial measures disclosed
herein do not have standard meaning and may vary from the non-GAAP
financial measures used by other companies or how we may calculate
those measures in other instances from time to time. Non-GAAP
financial measures, such as EBITDA (see below for management
interpretation of EBITDA), should not be considered a substitute
for, or superior to, measures of financial performance prepared in
accordance with U.S. generally accepted accounting principles
("GAAP"). Also, our “core” financial measures should not be
construed as an inference by us that our future results will be
unaffected by those items, which are excluded from our “core”
financial measures.
We believe such non-GAAP information is useful and meaningful,
and is used by investors to assess the performance of our core
operations, which primarily consists of the ongoing promotions of
racing events at our major motorsports entertainment facilities.
Such non-GAAP information separately identifies, displays, and
adjusts for items that are not considered to be reflective of our
continuing core operations at our motorsports entertainment
facilities. We believe that such non-GAAP information improves the
comparability of the operating results and provides a better
understanding of the performance of our core operations for the
periods presented.
We use this non-GAAP information to analyze the current
performance and trends and make decisions regarding future ongoing
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. The presentation of this non-GAAP financial
information is not intended to be considered independent of or as a
substitute for results prepared in accordance with GAAP. Management
uses both GAAP and non-GAAP information in evaluating and operating
the business and as such deemed it important to provide such
information to investors.
The following financial information 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.
The adjustments for 2016 relate to a legal settlement, certain
track redevelopment projects, non-recurring, pre-opening costs
incurred associated with DAYTONA Rising, losses associated with the
retirements of certain other long-lived assets related to capacity
optimization initiatives (which predominately include the removal
of grandstands at Richmond) and other facility capital
improvements, capitalized interest related to DAYTONA Rising, ONE
DAYTONA and the ISM Raceway Project Powered by DC Solar, gain on
sale of Staten Island property, non-cash gain related to the
transition of merchandise operations, and net gain on sale of
certain assets (predominately associated with the sale of trailers
in association with the transition of merchandise operations).
The adjustments for fiscal 2017 relate to non-recurring costs
incurred associated with the ISM Raceway Project Powered by DC
Solar, accelerated depreciation (predominately associated with the
ISM Raceway Project Powered by DC Solar and other capital
improvements including the infield project at Richmond), legal
settlement, losses associated with the retirements of certain other
long-lived assets related to the ISM Raceway Project Powered by DC
Solar and capacity optimization initiatives, capitalized interest
related to ONE DAYTONA and the ISM Raceway Project Powered by DC
Solar, net gain on sale of certain assets, and a non-recurring net
tax benefit predominately due to our investment in MA.
|
|
|
|
|
For the Three Months Ended November 30,
2016 |
|
|
Income Before Taxes |
|
Income Tax Effect |
|
Net Income |
|
Earnings Per Share |
GAAP |
|
$ |
52,243 |
|
|
$ |
19,807 |
|
|
$ |
32,436 |
|
|
$ |
0.72 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Track
redevelopment projects |
|
240 |
|
|
93 |
|
|
147 |
|
|
0.00 |
|
Losses on
retirements of long-lived assets |
|
1,799 |
|
|
694 |
|
|
1,105 |
|
|
0.02 |
|
Capitalized interest |
|
(502 |
) |
|
(194 |
) |
|
(308 |
) |
|
(0.01 |
) |
Gain on
transition of merchandise operations |
|
(797 |
) |
|
(308 |
) |
|
(489 |
) |
|
(0.01 |
) |
Net
(gain) loss on sale of certain assets |
|
(99 |
) |
|
(38 |
) |
|
(61 |
) |
|
0.00 |
|
Non-GAAP |
|
$ |
52,884 |
|
|
$ |
20,054 |
|
|
$ |
32,830 |
|
|
$ |
0.72 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended November 30,
2017 |
|
|
Income Before Taxes |
|
Income Tax Effect |
|
Net Income |
|
Earnings Per Share |
GAAP |
|
$ |
44,841 |
|
|
$ |
(31,217 |
) |
|
$ |
76,058 |
|
|
$ |
1.72 |
|
Adjustments: |
|
|
|
|
|
|
|
|
The
Phoenix Raceway Project |
|
247 |
|
|
94 |
|
|
153 |
|
|
0.00 |
|
Accelerated depreciation |
|
1,414 |
|
|
540 |
|
|
874 |
|
|
0.02 |
|
Losses on
retirements of long-lived assets |
|
9,930 |
|
|
3,795 |
|
|
6,135 |
|
|
0.14 |
|
Capitalized interest |
|
(1,376 |
) |
|
(525 |
) |
|
(851 |
) |
|
(0.02 |
) |
Net tax
benefit |
|
— |
|
|
48,151 |
|
|
(48,151 |
) |
|
(1.09 |
) |
Non-GAAP |
|
$ |
55,056 |
|
|
$ |
20,838 |
|
|
$ |
34,218 |
|
|
$ |
0.77 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended November 30,
2016 |
|
|
Income Before Taxes |
|
Income Tax Effect |
|
Net Income |
|
Earnings Per Share |
GAAP |
|
$ |
124,069 |
|
|
$ |
47,731 |
|
|
$ |
76,338 |
|
|
$ |
1.66 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Legal
settlement |
|
(1,084 |
) |
|
(418 |
) |
|
(666 |
) |
|
(0.02 |
) |
Track
redevelopment projects |
|
240 |
|
|
93 |
|
|
147 |
|
|
0.01 |
|
DAYTONA
Rising project |
|
787 |
|
|
304 |
|
|
483 |
|
|
0.01 |
|
Losses on
retirements of long-lived assets |
|
2,905 |
|
|
1,122 |
|
|
1,783 |
|
|
0.04 |
|
Capitalized interest |
|
(1,489 |
) |
|
(575 |
) |
|
(914 |
) |
|
(0.02 |
) |
Gain on
sale of Staten Island |
|
(13,631 |
) |
|
(5,262 |
) |
|
(8,369 |
) |
|
(0.18 |
) |
Gain on
transition of merchandise operations |
|
(797 |
) |
|
(308 |
) |
|
(489 |
) |
|
(0.01 |
) |
Non-GAAP |
|
$ |
110,624 |
|
|
$ |
42,542 |
|
|
$ |
68,082 |
|
|
$ |
1.48 |
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended November 30,
2017 |
|
|
Income Before Taxes |
|
Income Tax Effect |
|
Net Income |
|
Earnings Per Share |
GAAP |
|
$ |
105,198 |
|
|
$ |
(5,625 |
) |
|
$ |
110,823 |
|
|
$ |
2.48 |
|
Adjustments: |
|
|
|
|
|
|
|
|
The
Phoenix Raceway Project |
|
551 |
|
|
211 |
|
|
340 |
|
|
0.01 |
|
Accelerated depreciation |
|
6,154 |
|
|
2,352 |
|
|
3,802 |
|
|
0.08 |
|
Legal
settlement |
|
(980 |
) |
|
(375 |
) |
|
(605 |
) |
|
(0.01 |
) |
Losses on
retirements of long-lived assets |
|
10,278 |
|
|
3,928 |
|
|
6,350 |
|
|
0.14 |
|
Capitalized interest |
|
(3,864 |
) |
|
(1,477 |
) |
|
(2,387 |
) |
|
(0.05 |
) |
Net tax
benefit |
|
— |
|
|
46,038 |
|
|
(46,038 |
) |
|
(1.03 |
) |
Net
(gain) loss on sale of certain assets |
|
(330 |
) |
|
(126 |
) |
|
(204 |
) |
|
(0.01 |
) |
Non-GAAP |
|
$ |
117,007 |
|
|
$ |
44,926 |
|
|
$ |
72,081 |
|
|
$ |
1.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In an effort to enhance the comparability and understandability
of certain forward looking financial guidance, such as ONE DAYTONA
and the ISM Raceway Project Powered by DC Solar (see "External
Growth, Financing-Related and Other Initiatives"), we adjust for
certain non-recurring items that will be included in our future
GAAP reporting to provide information that we believe best
represents our expectations for our core business performance.
Non-GAAP financial measures, such as EBITDA, which we interpret to
be calculated as GAAP operating income, plus depreciation,
amortization, impairment/losses on retirements of long-lived
assets, other non-GAAP adjustments, and cash distributions from
equity investments, are used in our analysis. We have not
reconciled the non-GAAP forward-looking measure to its most
directly comparable GAAP measure. Such reconciliations would
require unreasonable efforts to estimate and quantify various
necessary GAAP components largely because forecasting or predicting
our future operating results is subject to many factors not in our
control or not readily predictable, as detailed in the Risk Factors
section of the Company's previously publicly filed documents,
including Forms 10-K and 10-Q, with the SEC, any or all of which
can significantly impact our future results. These components, and
other factors, could significantly impact the amount of the future
directly comparable GAAP measures, which may differ significantly
from their non-GAAP counterparts.
The following schedule reconciles the Company's financial
performance prepared in accordance with GAAP to the non-GAAP
financial measure of EBITDA (in thousands):
|
|
|
|
|
For the Year Ended November 30, |
|
|
|
2016 |
|
2017 |
|
|
|
|
|
|
Net Income
(GAAP) |
|
|
$ |
76,338 |
|
|
$ |
110,823 |
|
Adjustments: |
|
|
|
|
|
Income
taxes |
|
|
47,731 |
|
|
(5,625 |
) |
Interest
income |
|
|
(270 |
) |
|
(1,220 |
) |
Interest
expense |
|
|
13,837 |
|
|
11,633 |
|
Other |
|
|
(12,896 |
) |
|
(344 |
) |
Equity in
net income from equity investments |
|
|
(14,913 |
) |
|
(19,111 |
) |
Operating
Income (GAAP) |
|
|
$ |
109,827 |
|
|
$ |
96,156 |
|
Adjustments: |
|
|
|
|
|
Depreciation and amortization |
|
|
102,156 |
|
|
109,733 |
|
Impairments/losses on retirements of long-lived assets |
|
|
2,905 |
|
|
10,552 |
|
Other
Non-GAAP adjustments (1) |
|
|
(1,965 |
) |
|
(429 |
) |
Cash
distributions from equity investments |
|
|
25,900 |
|
|
25,450 |
|
EBITDA
(non-GAAP) |
|
|
$ |
238,823 |
|
|
$ |
241,462 |
|
(1) Other Non-GAAP adjustments include:
- fiscal year 2016 adjustments related to a legal settlement of
approximately ($1.1) million, gain on the sale of Staten Island of
approximately ($1.9) million, and consulting costs incurred
associated with the DAYTONA Rising project and other track
redevelopment projects of approximately $1.0 million; and
- fiscal year 2017 adjustments related to a legal settlement of
approximately ($1.0) million and costs associated with The Phoenix
Raceway Project of approximately $0.6 million.
Corporate Sales
From a marketing partnership perspective, we sold all but one of
our 2017 NASCAR Cup and one Xfinity series event entitlements
coming in less than one percent shy of our gross marketing
partnership revenue target for the year, and approximately equal to
2016, which included revenue for the final year of Sprint as
NASCAR's premiere series sponsor.
NASCAR is a powerful brand with a loyal fan base that we believe
is aware of, appreciates and supports corporate participation to a
greater extent than fans of any other sports property. The
combination of brand power and fan loyalty provides an attractive
platform for robust corporate partnerships. The number
of FORTUNE 500 companies invested in NASCAR remains
higher than any other sport. More than one-in-four FORTUNE
500 companies, and one-in-two FORTUNE 100 companies,
use NASCAR as part of their marketing strategy and the trend is
increasing. The number of FORTUNE 500 companies investing in
NASCAR has either grown or sustained for the last five consecutive
years and is currently up nearly 30 percent over 2008.
In 2017, Monster Energy replaced Sprint as only the third
sponsor of NASCAR's premiere series. The partnership
established a new brand identity for NASCAR's historically premiere
racing series, that is modern, yet embraces the heritage of NASCAR
racing. Monster Energy's first year as NASCAR premiere series
entitlement partner was a rousing success and exceeded sponsorship
metrics across the board.
For fiscal 2018, we have agreements in place for approximately
75.0 percent of our gross marketing partnership revenue target.
We have three of our Monster Energy NASCAR Cup Series event
entitlements either open or not announced and two NASCAR Xfinity
Series event entitlements either open or not announced. This
is compared to last year at this time when we had approximately
76.0 percent of our gross marketing partnership revenue target sold
and had entitlements for two Monster Energy NASCAR Cup and three
NASCAR Xfinity entitlements either open or not announced. For
2018, we expect gross marketing revenue to increase in the
mid-single digit percentages over prior year as a result of
anticipated sponsor deals that accompany our projects at Richmond
and Phoenix as well as other innovative sponsor platforms.
With the vast majority of our event entitlements secured, we can
focus more resources on official status categories, which will
better position us to meet our gross marketing partnership revenue
target for fiscal 2018.
External Growth, Financing-Related and Other
Initiatives
Capital Allocation
We have established a long-term capital allocation plan to
ensure we generate sufficient cash flow from operations to fund our
working capital needs, capital expenditures at existing facilities,
and return of capital through payments of an annual cash dividend
and repurchase of our shares under our Stock Purchase Plan.
In addition, we have used the proceeds from offerings of our
Class A Common Stock, the net proceeds from the issuance of
long-term debt, borrowings under our credit facilities and state
and local mechanisms to fund acquisitions and development
projects.
We continue to operate under a five-year capital allocation plan
adopted by the Board of Directors, covering fiscal years 2017
through 2021. Components of this plan include:
- Capital expenditures for existing facilities up to $500.0
million from fiscal 2017 through fiscal 2021. This allocation
will fund a reinvestment at Phoenix, as well as all other
maintenance and guest experience capital expenditures for the
remaining existing facilities. In 2017 we began the
redevelopment of Phoenix ("ISM Raceway Redevelopment") (see “ISM
Raceway Project Powered by DC Solar”) and the infield at Richmond
(see "Richmond Raceway") with completion for both projects targeted
in late 2018, therefore, we expect spending to be somewhat
front-loaded. While many components of these expected
projects will exceed weighted average cost of capital, considerable
maintenance capital expenditures, approximately $40.0 million to
$60.0 million annually, will likely result in a blended return of
this invested capital in the low-to-mid single digits;
- In addition to the aforementioned $500.0 million in capital
expenditures for existing facilities, we expect we will have an
additional $95.0 million of capital expenditures, exclusive of
capitalized interest and net of public incentives, related to ONE
DAYTONA. Construction for ONE DAYTONA commenced in fiscal
2016. In April 2017, our Board approved an additional approximate
$12.0 million of capital expenditures to further develop
Volusia Point, previously purchased in 2011. Volusia Point is
our retail property adjacent to ONE DAYTONA and will be re-branded
the Shoppes at ONE DAYTONA (see "ONE DAYTONA"). As a result of this
additional capital expenditure approval, the total investment in
ONE DAYTONA and the Shoppes at ONE DAYTONA, exclusive of
capitalized interest and net of anticipated public incentives, will
be approximately $107.0 million. We expect the returns of this
investment to exceed our weighted average cost of capital.
- Return of capital to shareholders through dividends and share
repurchases is a significant pillar of our capital
allocation. In fiscal 2017 we increased our dividend
approximately 4.9 percent to $0.43 per share. We expect
dividends to increase in 2018 and beyond, by approximately four to
five percent annually. For the year ended November 30, 2017,
we repurchased 979,328 shares of ISCA on the open market at a
weighted average share price of $35.76 for a total of approximately
$35.0 million. At November 30, 2017, we had
approximately $171.6 million remaining repurchase authority under
the current $530.0 million Stock Purchase Plan. For fiscal
2017 through 2021 we expect our return of capital program to be
approximately $280.0 million, comprised of close to $100.0
million in total annual dividends and the balance being open market
repurchase of ISCA shares over the five year period. At this
time we expect this spending to be evenly allocated per year,
although we will scale the repurchase program to buy
opportunistically.Our cash position and future liquidity has been
further enhanced by the following:
- In fiscal 2017, we recorded a non-recurring tax benefit of
approximately $48.2 million related to the worthlessness of
ISC's investment in MA. As a result, our cash position
improved approximately $24.6 million as of November 30,
2017. In the first quarter 2018, we expect to receive a
refund of estimated payments made during 2017 of approximately
$19.8 million. The balance of approximately $3.9 million
will be received in subsequent periods.
- In December 2017, Congress passed the Tax Cut and Jobs Act
("Tax Reform"). We expect Tax Reform to favorably impact our
future liquidity, primarily a result of the lower single corporate
tax rate from 35.0 percent to 21.0 percent, which will lower
our effective tax rate and annual tax liability.
Additionally, Tax Reform provides for 100.0 percent expensing of
certain capital investments through 2022. We will continue to
evaluate the details of Tax Reform and the impact on ISC.
We will continue to explore development and/or acquisition
opportunities beyond the initiatives discussed above that build
shareholder value and exceed our weighted average cost of
capital. Should additional development and/or acquisitions be
pursued, we will provide discrete information on timing, scope,
cost and expected returns of such opportunities.
The aforementioned represents certain components of our capital
allocation plan for fiscal 2018 and beyond. This capital
allocation plan is reviewed annually, or more frequently, and can
be revised, if necessary, based on changes in business
conditions.
Capital Spending
An important strategy for our future growth will come from
investing in our major motorsports facilities to enhance the live
event experience and better enable us to effectively compete with
other entertainment venues for consumer and corporate spending.
Capital expenditures for projects, including those related to
the ISM Raceway Redevelopment and ONE DAYTONA, were approximately
$145.1 million for the year ended November 30, 2017. In
comparison, the Company spent approximately $140.8 million on
capital expenditures for projects for the same period in fiscal
2016, primarily related to DAYTONA Rising, ONE DAYTONA, and the
repave at Watkins Glen. For fiscal 2018, we expect capital
expenditures associated with the aforementioned capital allocation
plan to range between approximately $120.0 million and $130.0
million for existing facilities, including the ISM Raceway
Redevelopment, and an additional approximate $20.0 million in
capital expenditures related to construction for ONE DAYTONA,
excluding the receipt of public incentives (see "ONE DAYTONA").
ONE DAYTONA
Since June 2013, we have pursued development of ONE DAYTONA, a
premier mixed use and entertainment destination across from the
Daytona International Speedway, which has crafted a strategy that
will create synergy with the Speedway, enhance customer and partner
experiences, monetize real estate on International Speedway Blvd
and leverage our real estate on a year-round basis.
We have approved land use entitlements for ONE DAYTONA to allow
for up to 1.4 million square feet of
retail/dining/entertainment, a 2,500-seat movie theater, 660 hotel
rooms, 1,350 residential units, 567,000 square feet of
additional office space and 500,000 square feet of
commercial/industrial space.
In March 2015, we announced Legacy Development, a leading
national development group, as development consultant for ONE
DAYTONA. Intensely focused on innovative destination retail
and mixed-use projects, Legacy Development ("Legacy") is working
closely with ISC’s development staff on the project. Legacy's
development team is a natural fit for the project, having served as
the developer for Legends Outlets Kansas City, a mixed-use retail
destination across from our Kansas Speedway.
The design for the first phase of ONE DAYTONA is comprised of
three components: retail, dining and entertainment (“RD&E”);
hotels; and residential.
The RD&E component of phase one will be owned 100.0 percent
by us. The expected total square footage for the RD&E first
phase is approximately 300,000 square feet. We expect cash
spent to be approximately $95.0 million in fiscal 2016 through
2018 on the RD&E component of ONE DAYTONA’s first phase.
Other sources of funding towards the overall ONE DAYTONA project
will include the public incentives discussed below and land
contributed to the joint ventures associated with the
project. In September 2016, we announced VCC had been
selected as general contractor to oversee construction of the
RD&E component of phase one including Victory Circle and the
parking garage. VCC has an outstanding national reputation for
quality and a proven track record leading and managing the
development and construction of some of the country’s most engaging
mixed-use developments.
Bass Pro Shops®, America’s most popular outdoor store, and Cobb
Theatres, the highly respected Southeastern-based exhibitor, are
anchor tenants of ONE DAYTONA. Lease agreements have also
been executed with other tenants including P.F. Chang’s, Hy’s
Toggery, Kilwins Confections, Guitar Center, Tervis, IT’SUGAR,
Jeremiah’s Italian Ice, Venetian Nail Spa, Sunglass World, Oklahoma
Joe’s BBQ, Rock Bottom Restaurant & Brewery, MidiCi: The
Neapolitan Pizza Company, Lindbergh, Designers Market, GameTime,
Claire de Lune, Kasa Living, BUILT Custom Burgers, Sprint, Ben
& Jerry’s, Pink Narcissus and Miami Grill. Leasing remains
strong and we are exceeding our leasing goals for the project.
Shaner Hotels and Prime Hospitality Group ("PHG") have been
selected as hotel partners. They have executed a franchise
agreement with Marriott International for an exclusive 145-room
full service Autograph Collection hotel at ONE DAYTONA that will be
known as The DAYTONA as well as a 105-room select-service Fairfield
Inn & Suites by Marriott. The Fairfield Inn and Suites opened
in December 2017, while The DAYTONA is currently under construction
with completion scheduled for late fiscal 2018. As part of the
partnership agreement, our portion of equity will be limited to our
land contribution and we will share proportionately in the profits
from the joint venture.
Prime Group has been selected as the partner for ONE DAYTONA’s
residential development. Following an extensive request for
proposal process, ONE DAYTONA chose the Florida developer based on
their command of market demographics, development experience and
expert property management systems. Prime Group is proceeding with
the development in ONE DAYTONA for approximately 276 luxury
apartment rental units that will add critical mass to the overall
ONE DAYTONA campus. Similar to the hotel partnership, our
portion of equity will be limited to our land contribution and we
will share proportionately in the profits from the joint
venture.
In April 2017, our Board approved an additional approximate
$12.0 million of capital expenditures to further develop
Volusia Point, which was previously purchased in 2011. Volusia
Point is our retail property adjacent to ONE DAYTONA and will be
re-branded the Shoppes at ONE DAYTONA ("the Shoppes"). New tenants
include Fantastic Sams that opened in March 2017, along with Zen
Nails planned to open in fourth quarter 2017, and new-to-market
First Watch with 3,500-square-feet planned. We expect the
improvements to the Shoppes will generate an incremental EBITDA of
approximately $1.0 million to the ONE DAYTONA pro-forma through
increased square footage and securing tenants for currently vacant
spaces (see "GAAP to Non-GAAP Reconciliation" for discussion on
Non-GAAP financial forward looking measures).
Cobb Daytona Luxury Theatres opened in December 2016, Bass Pro
Shops opened in February 2017, and Guitar Center opened in October
2017. The Fairfield Inn & Suites, P.F. Chang’s and IT’SUGAR
opened in December 2017. We are targeting substantial completion of
the remaining RD&E, with additional tenants commencing
operations in early fiscal 2018. Completion of The Daytona is
scheduled for late fiscal 2018. At stabilization we expect this
first phase of ONE DAYTONA and the Shoppes to deliver a combined
incremental annual revenue and EBITDA of approximately
$13.0 million and approximately $10.0 million, respectively,
and deliver an unlevered return above our weighted average cost of
capital (see "GAAP to Non-GAAP Reconciliation" for discussion on
Non-GAAP financial forward looking measures). We expect to add
leverage to ONE DAYTONA’s phase one post-stabilization.
A Community Development District ("CDD") has been established
for the purpose of installing and maintaining public infrastructure
at ONE DAYTONA. The CDD is a local, special purpose government
framework authorized by Chapter 190 of the Florida Statutes for
managing and financing infrastructure to support community
development. The CDD has negotiated agreements with the City of
Daytona Beach and Volusia County for a total of $40.0 million in
incentives to finance a portion of the infrastructure required for
the ONE DAYTONA project. The CDD will purchase certain
infrastructure assets, and obtain specific easement rights, from
ONE DAYTONA. ONE DAYTONA expects to receive approximately $22.0
million of the total incentive amount in cash, and the remaining to
be received in annual payments derived from a long-term note
receivable issued by the CDD, with the first payment expected in
fiscal 2019 and the term not to exceed 30 years.
Total capital expenditures for ONE DAYTONA and the Shoppes,
excluding capitalized interest and net of anticipated public
incentives, are expected to be approximately $107.0 million. From
inception, through November 30, 2017, capital expenditures
totaled approximately $80.3 million, exclusive of capitalized
interest and labor. We anticipate additional spending on ONE
DAYTONA and the Shoppes of approximately $27.0 million in fiscal
2018 and 2019, net of the aforementioned public incentives.
At this time, there is no project specific financing in place for
ONE DAYTONA. Ultimately, we may secure financing for the
project upon stabilization. However, accounting rules dictate
that we capitalize a portion of the interest on existing
outstanding debt during the construction period. Through November
30, 2017, we recorded approximately $4.1 million of capitalized
interest related to ONE DAYTONA, since inception, and expect
approximately $4.3 million to be recorded by completion of
construction.
Any future phases will be subject to prudent business
considerations for which we will provide discrete cost and return
disclosures.
ISM Raceway Project Powered by DC
Solar
On November 30, 2016, we announced our Board of Directors had
approved a multi-year redevelopment project to elevate the fan and
spectator experience at Phoenix, the company’s 52-year-old
motorsports venue. The redevelopment is expected to focus on new
and upgraded seating areas, vertical transportation options, new
concourses, enhanced hospitality offerings and an intimate infield
experience with greater accessibility to pre-race activities.
Earlier in 2017, we announced a multi-year partnership with DC
Solar that included official partner for the track during the
redevelopment phase, and in September 2017, we announced a
long-term partnership with ISM Connect, a pioneer in smart venue
technology, which included naming rights to Phoenix Raceway.
Beginning in 2018, the venue is known as ISM Raceway.
The ISM Raceway Project Powered by DC Solar is included in our
aforementioned $500.0 million capital allocation plan covering
fiscal years 2017 through 2021. The ISM Raceway Redevelopment is
expected to cost approximately $178.0 million, including
maintenance capital, before capitalized interest. Okland
Construction ("Okland") has been selected as general contractor of
the project. Effective November 30, 2016, Phoenix entered
into a Design-Build Agreement with Okland. The Design-Build
Agreement obligates Phoenix to pay Okland approximately
$136.0 million for the completion of the work described in the
Design-Build Agreement. This amount is a guaranteed maximum price
to be paid for the work, which may not change absent a requested
change in the scope of work by Phoenix.
Construction commenced in early fiscal 2017. Completion is
expected to be in fall of 2018, with components having gone in
service as early as fall of 2017. Based on our current plans for
Phoenix, we have identified existing assets that are expected to be
impacted by the redevelopment and will require accelerated
depreciation, or losses on asset retirements, totaling
approximately $6.1 million in non-cash charges over the approximate
22-month project time span. Through November 30, 2017, we recorded
approximately $5.0 million of accelerated depreciation associated
with the project.
From inception, through November 30, 2017, we have incurred
capital expenditures related to the ISM Raceway Redevelopment,
exclusive of capitalized interest and labor, of approximately $72.6
million. Despite the Company not anticipating the need for
additional long-term debt to fund this project, accounting rules
dictate that the Company capitalize a portion of the interest on
existing outstanding debt during the construction period. We
estimate that we will record approximately $6.0 million to $6.5
million of capitalized interest from fiscal 2017 through fiscal
2018. Through November 30, 2017, we recorded approximately $1.3
million of capitalized interest related to the ISM Raceway
Redevelopment.
Upon completion, the redevelopment is expected to provide a full
fiscal year incremental lift in Phoenix's EBITDA of approximately
$8.5 million to $9.0 million (see "GAAP to Non-GAAP
Reconciliation" for discussion on Non-GAAP financial forward
looking measures). We anticipate recognizing revenue and expense
associated with the project, as a result of assets placed in
service and/or benefits provided to partners, beginning late fiscal
2017. We expect the full fiscal year incremental financial lift in
fiscal 2019 and sustained thereafter.
Richmond Raceway
In June 2017, the Board of Directors approved a capital project
for the redevelopment of the infield of Richmond Raceway ("Richmond
Reimagined"). The new infield will offer a variety of
enhanced amenities for fans, teams, sponsors and other stakeholders
to the iconic Richmond infield. Fan access is the focus of Richmond
Reimagined, which will showcase new Monster Energy NASCAR Cup
Series garages with a fan-viewing walkway. The new infield
continues the track’s mission of being the most fan-friendly track
on NASCAR’s schedule.
Richmond Reimagined is included in our aforementioned $500.0
million capital allocation plan covering fiscal years 2017 through
2021. The project is expected to cost approximately
$30.0 million, which includes maintenance capital, before
capitalized interest. Groundbreaking occurred immediately
following the Monster Energy NASCAR Cup Series event in September
2017. Based on our current plans for Richmond, we have
identified existing assets that are expected to be impacted by the
redevelopment and will require accelerated depreciation, or losses
on asset retirements, over the project time span. Through November
30, 2017, we recorded approximately $1.1 million of non-cash
charges related to accelerated depreciation associated with the
project. Richmond Reimagined is expected to be completed by
September 2018.
Hollywood Casino at Kansas Speedway
Kansas Entertainment, LLC, (“Kansas Entertainment”) a 50/50
joint venture of Penn Hollywood Kansas, Inc. (“Penn”), a subsidiary
of Penn National Gaming, Inc. and Kansas Speedway Development
Corporation (“KSDC”), a wholly owned indirect subsidiary of ISC,
operates the Hollywood-themed casino and branded destination
entertainment facility, overlooking turn two at Kansas Speedway.
Penn is the managing member of Kansas Entertainment and is
responsible for the operations of the casino.
We have accounted for Kansas Entertainment as an equity
investment in our financial statements as of November 30,
2017. Our 50.0 percent portion of Kansas Entertainment’s net
income was approximately $19.1 million and $14.9 million for
fiscal years 2017 and 2016, respectively, and is included in equity
in net income from equity investments in our consolidated
statements of operations.
We have received pre-tax cash distributions from the casino
totaling $25.5 million and $25.9 million for fiscal years 2017 and
2016, respectively. For fiscal 2018, cash distributions from
the casino joint venture will be approximately $26.0 million to
$27.0 million.
Fiscal 2018 Financial Outlook
ISC’s reported quarterly and year to date earnings are presented
under GAAP. In an effort to enhance the comparability and
understandability of our forward looking financial guidance, we
adjust for certain non-recurring items that will be included in our
future GAAP reporting to provide information that we believe best
represents our expectations for our core business performance.
For fiscal 2018, our non-GAAP guidance excludes:
- any non-recurring pre-opening income statement
impact attributable to the completion of the ISM Raceway
Redevelopment, including accelerated depreciation and
non-capitalized costs and losses associated with retirements of
certain other long-lived assets, partially offset by capitalized
interest expense;
- any non-recurring and non-capitalized costs or charges and
capitalized interest that could be recognized related to our ONE
DAYTONA development;
- accelerated depreciation and future loss on retirements, mostly
non-cash, or relocation of certain long-lived assets, which could
be recorded as part of capital improvements other than the ISM
Raceway Redevelopment resulting in removal of assets prior to the
end of their actual useful life;
- start up and/or financing costs should our Hollywood
Casino at Kansas Speedway joint venture pursue
construction of an adjacent hotel;
- any costs or income related to legal settlements;
- gain or loss on sale of other assets; and
- any one-time non-recurring costs or benefits related the Tax
Cut and Jobs Act of 2017 ("Tax Reform").
The following table outlines our fiscal 2018 full-year non-GAAP
financial guidance. Our earnings guidance for fiscal 2018
includes the phase-in opening of ONE DAYTONA, partial year
recognition from completion of ISM Raceway and Richmond
redevelopment projects and the impact of lower corporate tax rates
from Tax Reform. This earnings outlook is our best estimate
of financial results for fiscal 2018.
- Revenue: $680.0 million to $695.0 million
- Operating margin: 15.5% to 16.5%
- Effective tax rate: 26.0% to 27.0%, compared to 38.4% in
2017
- Diluted earnings per share: $1.90 to $2.10
For fiscal 2018, Broadcast rights for NASCAR's top three racing
series are expected to increase approximately 3.6 percent to
approximately $348.3 million.
We expect revenue related to admissions, food, beverage and
merchandise and corporate sales to increase approximately 2.5
percent, including revenue related to the completion of ISM Raceway
and Richmond redevelopment projects in the fourth quarter.
We expect certain expense increases for the year, including an
approximate 3.8 percent increase in NASCAR's Event Management
Fees, resulting from an approximate 3.6 percent increase in
broadcast revenue and an approximate 4.1 percent increase from
contracted five-year sanction agreements. We expect
motorsports and other event related expenses, as well as, general
and administrative expenses to increase approximately 3.0 percent
compared to 2017, including expenses associated with ISM Raceway
and Richmond.
For ONE DAYTONA and the Shoppes at ONE DAYTONA, we expect
revenue to range between $8.0 million and $9.0 million and
expense, excluding depreciation, to range between $4.3 million and
$4.8 million, to be reported in Other revenue and Other operating
expense, respectively.
The Company's guidance for EBITDA is estimated to range
between $241.0 million and $252.0 million, which includes
pre-tax cash distributions between $26.0 million and $27.0 million
from equity investments in the Hollywood Casino (see "GAAP to
Non-GAAP Reconciliation"), .
Depreciation is estimated to be approximately $109.0
million. Equity income related to ISC's 50% share of the
Hollywood Casino is estimated to be between $21.0 million and $22.0
million, compared to $19.1 million in 2017. The increase is
largely attributable to lower depreciation due to assets that have
been fully depreciated. Interest expense on a non-GAAP basis,
excluding capitalized interest related to Phoenix Redevelopment and
ONE DAYTONA projects, is estimated to be between $15.0 million to
$15.5 million on a non-GAAP basis.
Event Schedule
|
First Quarter |
|
Second Quarter |
|
Third Quarter |
|
Fourth Quarter |
|
Full Fiscal Year |
Series Name |
2018 |
2017 |
|
2018 |
2017 |
|
2018 |
2017 |
|
2018 |
2017 |
|
2018 |
2017 |
Monster Energy NASCAR
Cup |
3 |
|
3 |
|
|
6 |
|
6 |
|
|
5 |
|
4 |
|
|
7 |
|
8 |
|
|
21 |
|
21 |
|
NASCAR Xfinity |
1 |
|
1 |
|
|
4 |
|
4 |
|
|
4 |
|
3 |
|
|
5 |
|
6 |
|
|
14 |
|
14 |
|
NASCAR Camping
World |
1 |
|
1 |
|
|
2 |
|
2 |
|
|
2 |
|
1 |
|
|
4 |
|
5 |
|
|
9 |
|
9 |
|
IndyCar Series |
0 |
|
0 |
|
|
1 |
|
1 |
|
|
0 |
|
0 |
|
|
0 |
|
1 |
|
|
1 |
|
2 |
|
ARCA Racing Series |
1 |
|
1 |
|
|
1 |
|
1 |
|
|
2 |
|
1 |
|
|
1 |
|
2 |
|
|
5 |
|
5 |
|
IMSA WeatherTech
SportsCar Championship Series |
1 |
|
1 |
|
|
0 |
|
0 |
|
|
1 |
|
1 |
|
|
0 |
|
0 |
|
|
2 |
|
2 |
|
AMA
Superbike/Supercross |
0 |
|
0 |
|
|
1 |
|
1 |
|
|
0 |
|
0 |
|
|
0 |
|
0 |
|
|
1 |
|
1 |
|
|
7 |
|
7 |
|
|
15 |
|
15 |
|
|
14 |
|
10 |
|
|
17 |
|
22 |
|
|
53 |
|
54 |
|
- Chicagoland's Monster Energy NASCAR Cup weekend, which includes
NASCAR Xfinity, NASCAR Camping World and ARCA series events, will
move from the fourth quarter in 2017 to the third quarter in
2018.
- Watkins Glen's Indy Car event held in the fourth quarter of
2017 will not return in 2018.
In closing, Ms. France Kennedy stated, "We maintain a solid
financial position, developed over many years, that affords us the
ability to follow our disciplined capital allocation strategy and
maintain our leadership position in the motorsports industry.
We have extended our allocation plan through fiscal 2021,
demonstrating our ongoing commitment to building long-term
value. For the future, we are well positioned to balance the
strategic capital needs of our business with returning capital to
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 99892340.
A live Webcast will also be available at that time on the
Company's Web site, www.internationalspeedwaycorporation.com, under
the “Investor Relations” section. A replay will be available
two hours after the end of the call through midnight Thursday,
February 8, 2018. To access, dial (855) 859-2056 and enter
the code 99892340, 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® in Florida (home of the DAYTONA
500®); Talladega Superspeedway® in Alabama; Michigan International
Speedway® located outside Detroit; Richmond Raceway® in Virginia;
Auto Club Speedway of Southern CaliforniaSM near Los Angeles;
Kansas Speedway® in Kansas City, Kansas; ISM RacewaySM near
Phoenix, Arizona; Chicagoland Speedway® and Route 66 RacewaySM near
Chicago, Illinois; Homestead-Miami SpeedwaySM in Florida;
Martinsville Speedway® in Virginia; Darlington Raceway® in South
Carolina; and Watkins Glen International® in New York.
The Company also owns and operates Motor Racing NetworkSM, the
nation's largest independent sports radio network and Americrown
Service CorporationSM, a subsidiary that provides catering
services, and food and beverage concessions. In addition, the
Company owns ONE DAYTONA, the retail, dining and entertainment
development across from Daytona International Speedway, and has a
50.0 percent interest in the Hollywood Casino at Kansas
Speedway. For more information, visit the Company's Web site
at www.internationalspeedwaycorporation.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 Share and Per Share
Amounts) |
|
|
|
Three Months Ended |
|
Year Ended |
|
|
November 30, 2016 |
|
November 30, 2017 |
|
November 30, 2016 |
|
November 30, 2017 |
|
|
(Unaudited) |
REVENUES: |
|
|
|
|
|
|
|
|
Admissions, net |
|
$ |
38,358 |
|
|
$ |
38,741 |
|
|
$ |
123,521 |
|
|
$ |
121,505 |
|
Motorsports and other event related |
|
167,227 |
|
|
171,803 |
|
|
477,197 |
|
|
491,664 |
|
Food,
beverage and merchandise |
|
12,518 |
|
|
11,516 |
|
|
41,968 |
|
|
41,293 |
|
Other |
|
3,736 |
|
|
4,204 |
|
|
18,330 |
|
|
16,971 |
|
|
|
221,839 |
|
|
226,264 |
|
|
661,016 |
|
|
671,433 |
|
EXPENSES: |
|
|
|
|
|
|
|
|
Direct: |
|
|
|
|
|
|
|
|
NASCAR event management fees |
|
65,942 |
|
|
68,629 |
|
|
171,836 |
|
|
178,403 |
|
Motorsports and other event related |
|
40,402 |
|
|
41,128 |
|
|
133,322 |
|
|
134,136 |
|
Food,
beverage and merchandise |
|
7,784 |
|
|
7,215 |
|
|
30,142 |
|
|
29,593 |
|
Other
operating expenses |
|
109 |
|
|
430 |
|
|
483 |
|
|
1,581 |
|
General
and administrative |
|
29,430 |
|
|
29,929 |
|
|
110,345 |
|
|
111,279 |
|
Depreciation and amortization |
|
25,128 |
|
|
27,150 |
|
|
102,156 |
|
|
109,733 |
|
Losses on
retirements of long-lived assets |
|
1,799 |
|
|
10,021 |
|
|
2,905 |
|
|
10,552 |
|
|
|
170,594 |
|
|
184,502 |
|
|
551,189 |
|
|
575,277 |
|
Operating income |
|
51,245 |
|
|
41,762 |
|
|
109,827 |
|
|
96,156 |
|
Interest income |
|
113 |
|
|
521 |
|
|
270 |
|
|
1,220 |
|
Interest expense |
|
(3,439 |
) |
|
(2,482 |
) |
|
(13,837 |
) |
|
(11,633 |
) |
Other |
|
896 |
|
|
— |
|
|
12,896 |
|
|
344 |
|
Equity in net income
from equity investments |
|
3,428 |
|
|
5,040 |
|
|
14,913 |
|
|
19,111 |
|
Income before income
taxes |
|
52,243 |
|
|
44,841 |
|
|
124,069 |
|
|
105,198 |
|
Income taxes |
|
19,807 |
|
|
(31,217 |
) |
|
47,731 |
|
|
(5,625 |
) |
Net income |
|
$ |
32,436 |
|
|
$ |
76,058 |
|
|
$ |
76,338 |
|
|
$ |
110,823 |
|
|
|
|
|
|
|
|
|
|
Dividends per
share |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.41 |
|
|
$ |
0.43 |
|
Earnings per
share: |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
0.72 |
|
|
$ |
1.72 |
|
|
$ |
1.66 |
|
|
$ |
2.48 |
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding |
|
45,350,507 |
|
|
44,189,258 |
|
|
45,981,471 |
|
|
44,648,586 |
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding |
|
45,363,741 |
|
|
44,198,357 |
|
|
45,995,691 |
|
|
44,660,177 |
|
|
|
|
|
|
|
|
|
|
Comprehensive
income |
|
$ |
32,602 |
|
|
$ |
76,225 |
|
|
$ |
77,002 |
|
|
$ |
111,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets |
(In Thousands, Except Share and Per Share Amounts) |
|
|
|
|
|
|
|
November 30, 2016 |
|
November 30, 2017 |
|
|
(Unaudited) |
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
263,727 |
|
|
$ |
256,702 |
|
Receivables, less allowance |
|
35,445 |
|
|
37,269 |
|
Income
taxes receivable |
|
189 |
|
|
21,867 |
|
Prepaid
expenses and other current assets |
|
13,759 |
|
|
9,749 |
|
Total Current
Assets |
|
313,120 |
|
|
325,587 |
|
|
|
|
|
|
Property and Equipment,
net |
|
1,455,506 |
|
|
1,479,743 |
|
Other Assets: |
|
|
|
|
Equity
investments |
|
92,392 |
|
|
86,200 |
|
Intangible assets, net |
|
178,629 |
|
|
178,637 |
|
Goodwill |
|
118,791 |
|
|
118,400 |
|
Other |
|
14,222 |
|
|
19,625 |
|
|
|
404,034 |
|
|
402,862 |
|
Total Assets |
|
$ |
2,172,660 |
|
|
$ |
2,208,192 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
Current
Liabilities: |
|
|
|
|
Current
portion of long-term debt |
|
$ |
3,404 |
|
|
$ |
3,854 |
|
Accounts
payable |
|
29,770 |
|
|
23,936 |
|
Deferred
income |
|
39,416 |
|
|
38,521 |
|
Other
current liabilities |
|
22,728 |
|
|
19,249 |
|
Total Current
Liabilities |
|
95,318 |
|
|
85,560 |
|
|
|
|
|
|
Long-Term Debt |
|
259,416 |
|
|
255,612 |
|
Deferred Income
Taxes |
|
409,585 |
|
|
396,046 |
|
Long-Term Deferred
Income |
|
5,988 |
|
|
8,251 |
|
Other Long-Term
Liabilities |
|
1,993 |
|
|
2,801 |
|
Commitments and
Contingencies |
|
— |
|
|
— |
|
Shareholders’
Equity: |
|
|
|
|
Class A Common Stock, $.01 par value, 80,000,000 shares
authorized |
|
249 |
|
|
241 |
|
Class B Common Stock, $.01 par value, 40,000,000 shares
authorized |
|
197 |
|
|
197 |
|
Additional paid-in capital |
|
437,292 |
|
|
430,114 |
|
Retained
earnings |
|
965,281 |
|
|
1,031,361 |
|
Accumulated other comprehensive loss |
|
(2,659 |
) |
|
(1,991 |
) |
Total Shareholders’
Equity |
|
1,400,360 |
|
|
1,459,922 |
|
Total Liabilities and
Shareholders’ Equity |
|
$ |
2,172,660 |
|
|
$ |
2,208,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash
Flows |
(In Thousands) |
|
|
|
Year Ended |
|
|
November 30, 2016 |
|
November 30, 2017 |
|
|
(Unaudited) |
OPERATING
ACTIVITIES |
|
|
|
|
Net income |
|
$ |
76,338 |
|
|
$ |
110,823 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Gain on
sale of Staten Island property |
|
(13,631 |
) |
|
— |
|
Depreciation and amortization |
|
102,156 |
|
|
109,733 |
|
Stock-based compensation |
|
3,706 |
|
|
2,731 |
|
Amortization of financing costs |
|
1,745 |
|
|
1,682 |
|
Interest
and other consideration received on Staten Island note
receivable |
|
1,162 |
|
|
— |
|
Deferred
income taxes |
|
72,936 |
|
|
(13,953 |
) |
Income
from equity investments |
|
(14,913 |
) |
|
(19,111 |
) |
Distribution from equity investee |
|
16,067 |
|
|
20,274 |
|
Losses on
retirements of long-lived assets, non-cash |
|
2,399 |
|
|
9,648 |
|
Other,
net |
|
(277 |
) |
|
(177 |
) |
Changes
in operating assets and liabilities |
|
|
|
|
Receivables, net |
|
6,667 |
|
|
(1,824 |
) |
Prepaid
expenses and other assets |
|
(14,751 |
) |
|
(1,536 |
) |
Accounts
payable and other liabilities |
|
4,837 |
|
|
(6,996 |
) |
Deferred
income |
|
192 |
|
|
1,368 |
|
Income
taxes |
|
1,255 |
|
|
(21,275 |
) |
Net cash provided by
operating activities |
|
245,888 |
|
|
191,387 |
|
INVESTING
ACTIVITIES |
|
|
|
|
Capital
expenditures |
|
(140,793 |
) |
|
(145,133 |
) |
Distribution from equity investee and affiliate |
|
9,833 |
|
|
5,176 |
|
Equity
investments and advances to affiliate |
|
(130 |
) |
|
(147 |
) |
Proceeds
from sale of Staten Island property |
|
66,728 |
|
|
— |
|
Proceeds
from sale of assets |
|
560 |
|
|
750 |
|
Other,
net |
|
(6 |
) |
|
(9 |
) |
Net cash used in
investing activities |
|
(63,808 |
) |
|
(139,363 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
Payment
of long-term debt |
|
(3,408 |
) |
|
(3,738 |
) |
Deferred
financing fees |
|
(1,058 |
) |
|
(249 |
) |
Exercise
of Class A common stock options |
|
136 |
|
|
528 |
|
Cash
dividends paid |
|
(18,859 |
) |
|
(19,241 |
) |
Reacquisition of previously issued common stock |
|
(55,712 |
) |
|
(36,349 |
) |
Net cash used in
financing activities |
|
(78,901 |
) |
|
(59,049 |
) |
Net (decrease) increase
in cash and cash equivalents |
|
103,179 |
|
|
(7,025 |
) |
Cash and cash
equivalents at beginning of year |
|
160,548 |
|
|
263,727 |
|
Cash and cash
equivalents at end of year |
|
$ |
263,727 |
|
|
$ |
256,702 |
|
|
|
|
|
|
|
|
|
|
Investor Relations(386) 681-6516
International Speedway (NASDAQ:ISCA)
Historical Stock Chart
From Jun 2024 to Jul 2024
International Speedway (NASDAQ:ISCA)
Historical Stock Chart
From Jul 2023 to Jul 2024