DAYTONA BEACH, Fla., Jan. 29 /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, 2008. "Given the
impact the economic environment had on consumers and our corporate
partners in 2008, we were pleased with our overall results," said
ISC President Lesa France Kennedy. "NASCAR fans remain the most
avid and brand loyal in all of sports, and continue to attend live
events in huge numbers. They are attracted to a sport that provides
thrilling on-track competition by teams of highly-skilled athletes,
which has been a hallmark of NASCAR racing for the last 60 years
and will continue into the future. This backdrop will serve us well
as we operate in a continued challenging landscape during 2009."
Ms. France Kennedy continued, "Clearly we are sensitive to the
financial pressures many of our fans are experiencing. To address
this, we recently reduced ticket prices on over 150,000 seats, or
15 percent of capacity, for Sprint Cup events across the Company.
Additionally, we are working closely with community partners to
lower the overall race weekend cost for fans, such as reducing the
number of minimum night stays at local hotels. We have seen a
strong and favorable response to our efforts, and will continue to
look for opportunities to support our fans during these
unprecedented times." Fourth Quarter Comparison Total revenues for
the fourth quarter were $205.3 million, compared to revenues of
$252.8 million in the prior-year period. Operating income decreased
to $64.9 million during the period compared to $92.7 million in the
fourth quarter of fiscal 2007. In addition to adverse economic
conditions affecting consumer and corporate spending,
quarter-over-quarter comparability was impacted by: -- The NASCAR
Sprint Cup and Nationwide series race weekend at Auto Club Speedway
which was conducted in the third quarter of 2008 as compared to the
fourth quarter of 2007. -- Accelerated depreciation of $0.5
million, or $0.01 per diluted share after tax, in the fourth
quarter of 2008 for certain office and related buildings in Daytona
Beach associated with the Company's previously announced Daytona
Live! project. The 2007 fourth quarter included accelerated
depreciation charges of $0.5 million, or $0.01 per diluted share
after tax. -- 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. By
comparison, the 2008 fourth quarter includes impairment charges of
approximately $323,000 to remove the net book value of certain
assets retired from service. -- 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. -- 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 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. -- The 2008 fourth quarter includes a charge to provide
for working capital advances of $2.3 million, or $0.03 per diluted
share after tax, associated with our joint venture project in
Kansas for the development of a gaming and entertainment
destination. Net income for the fourth quarter of 2008 increased to
$33.6 million, or $0.69 per diluted share, compared to net income
of $22.5 million, or $0.43 per diluted share, in the prior year's
fourth quarter. Excluding discontinued operations and the
aforementioned accelerated deprecation associated with the Daytona
Live! project, impairment of long-lived assets and allowances
against working capital advances associated with the development of
a gaming and entertainment destination, non-GAAP (defined below)
net income for the fourth quarter of 2008 was $35.6 million, or
$0.73 per diluted share. This is compared to non-GAAP net income
for the fourth quarter of 2007 of $57.6 million, or $1.11 per
diluted share. Full Year Comparison For the year ended November 30,
2008, total revenues were $787.3 million, compared to $814.2
million in 2007. Operating income for the fiscal year was $235.8
million compared to $241.7 million in the prior year.
Year-over-year comparability was impacted by: -- Accelerated
depreciation charges in fiscal 2008 of $2.1 million, or $0.02 per
diluted share after tax, associated with the previously discussed
Daytona Live! project. Results for the year ended November 30,
2007, included accelerated depreciation charges of $14.7 million,
or $0.17 per diluted share after tax. -- 2008 impairment charges of
$2.2 million, or $0.03 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. Results for
the year ended November 30, 2007, included an impairment charge of
$13.1 million, or $0.16 per diluted share after tax related to the
Company's decision to discontinue speedway development efforts in
Kitsap County, Washington, and to a lesser extent, estimated costs
for fill removal on the Company's Staten Island property. -- The
aforementioned 2007 fourth quarter impairments combined with the
2007 third quarter write-down by MA of certain inventory and
related assets, which was included in ISC's equity losses totaled
$47.2 million, or $0.88 per diluted share after tax. -- The
recognition of a tax benefit of $3.5 million, or $0.07 per diluted
share after tax, associated with certain restructuring initiatives
in the third quarter of 2008. -- A 2008 first quarter non-cash
charge of $3.8 million, or $0.08 per diluted share after tax, to
correct the carrying value of certain other assets as of November
30, 2007. -- The aforementioned 2008 fourth quarter costs of $2.3
million, or $0.03 per diluted share after tax, associated with the
pursuit of a casino management contract at Wyandotte County,
Kansas. Net income for the year ended November 30, 2008, was $134.6
million, or $2.71 per diluted share, compared to $86.2 million, or
$1.64 per diluted share in 2007. Excluding discontinued operations
and the aforementioned accelerated depreciation, impairment of
long-lived assets, the recognition of a tax benefit, the correction
of certain other assets' carrying value amounts, and allowances
against working capital advances associated with the development of
a gaming and entertainment destination, non-GAAP net income for the
year ended November 30, 2008, was $139.1 million, or $2.80 per
diluted share. This is compared to non-GAAP net income for the 2007
fiscal year end of $150.0 million, or $2.85 per diluted share. GAAP
to Non-GAAP Reconciliation The following financial information is
presented below using other than U.S. 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 adjustments relate to accelerated depreciation of certain
office and related building structures in Daytona Beach; impairment
of long-lived assets primarily related to ISC's decision to
discontinue speedway development efforts in Kitsap County,
Washington, and, to a lesser extent, fill removal costs related to
the Company's Staten Island property; increased deferred income tax
expense related to the change in Michigan state tax laws; and, the
impairment of goodwill and intangible assets and write-down of
certain inventory and related assets at MA. The adjustments for
2008 relate to accelerated depreciation of certain office and
related buildings in Daytona Beach; the impairment of long-lived
assets associated with the fill removal process of the Staten
Island property and the net book value of certain assets retired
from service; a tax benefit associated with certain restructuring
initiatives; a non-cash charge to correct the carrying value of
certain other assets; and, an allowance against working capital
advances associated with our joint venture project in Kansas for
the development of a gaming and entertainment destination. The
Company believes such non-GAAP information is useful and meaningful
to investors, and is used by investors and ISC to assess core
operations. This non-GAAP financial information may not be
comparable to similarly titled measures used by other entities and
should not be considered as an alternative to operating income, net
income or diluted earnings per share, which are determined in
accordance with GAAP. (In Thousands, Except Per Share Amounts)
(Unaudited) Three Months Ended Twelve Months Ended Nov. 30, Nov.
30, Nov. 30, Nov. 30, 2007 2008 2007 2008 -------------------
------------------- Net income $22,474 $33,621 $86,201 $134,595 Net
loss from discontinued operations 34 45 90 163 --- --- --- ---
Income from continuing operations 22,508 33,666 86,291 134,758
Adjustments, net of tax: Additional depreciation 320 319 9,009
1,278 Impairment of long- lived assets 2,455 198 8,390 1,374 MA
impairment and inventory-related write down of equity investment
33,913 - 46,327 - Tax benefit associated with restructuring
initiatives - - - (3,477) Michigan income tax (1,595) - - -
Correction of certain other assets' carrying value - - - 3,758
Allowance against advances to Kansas joint venture - 1,409 - 1,409
---- ---- ---- ---- Non-GAAP net income $57,601 $35,592 $150,017
$139,100 ======= ======= ======== ======== Per share data: Diluted
earnings per share $0.43 $0.69 $1.64 $2.71 Net loss from
discontinued operations - - - - --- --- --- ---Income from
continuing operations 0.43 0.69 1.64 2.71 Adjustments, net of tax:
Additional depreciation 0.01 0.01 0.17 0.02 Impairment of long-
lived assets 0.05 - 0.16 0.03 MA impairment and inventory-related
write down of equity investment 0.65 - 0.88 - Tax benefit
associated with restructuring initiatives - - - (0.07) Michigan
income tax (0.03) - - - Correction of certain other assets'
carrying value - - - 0.08 Allowance against advances to Kansas
joint venture - 0.03 - 0.03 ---- ---- ---- ---- Non-GAAP diluted
earnings per share $1.11 $0.73 $2.85 $2.80 ===== ===== ===== =====
Event Weekends ISC hosted seven major motorsports event weekends in
the fourth quarter, which included six NASCAR Sprint Cup events;
four NASCAR Nationwide events; four NASCAR Craftsman Truck events;
one IRL IndyCar event; and two ARCA RE/MAX events. The 2008 NASCAR
season ended on a historic note, with Jimmie Johnson capturing his
third consecutive NASCAR Sprint Cup Championship, a feat that
hasn't been accomplished in 30 years. In the first quarter, ISC
will host four major motorsports event weekends, which includes
four NASCAR Sprint Cup events; two NASCAR Nationwide events; two
NASCAR Camping World Truck events (previously entitled the NASCAR
Craftsman Truck series); one Grand-Am series event; and one ARCA
RE/MAX series event. Daytona International Speedway opened the 2009
race season with its annual lineup of events known as DIRECTV
Speedweeks, which combines the best sports car, stock car and truck
racing in the world. DIRECTV Speedweeks' first event was the 47th
running of the Grand-Am Rolex 24 at Daytona. The event ended with
the closest margin of victory in the history of the Rolex 24 with
the No. 58 Brumos Racing Porsche Riley winning by 0.167 seconds.
DIRECTV Speedweeks concludes on February 15, with the 51st running
of the Daytona 500, the most prestigious motorsports race in North
America. ISC was successful in securing significant corporate
partnerships during 2008. Most notably, the Company secured a
multi-year, multi-million dollar naming rights agreement with the
Auto Club of Southern California. In addition, ISC has been
successful, in light of the current economy, in brining new
sponsors into the sport, such as ServiceMaster Clean and NextEra
Energy Resources. Also, ISC secured title sponsors for all of its
major events in 2008 and has agreements in place for almost 80
percent of its 2009 events. External Growth and Related Initiatives
MA, the Company's motorsports-related merchandise 50/50 joint
venture with Speedway Motorsports, contributed $1.6 million to
equity income for the year. This is a significant turnaround from
2007, when MA posted a non-GAAP operating loss of $19.6 million,
and ISC recorded a $9.8 million equity loss to reflect its 50
percent portion. As previously announced in September, Kansas
Entertainment, LLC ("KE"), ISC's 50/50 joint venture with The
Cordish Company ("Cordish"), was awarded the casino management
contract for Wyandotte County, Kansas, by the Kansas Lottery Gaming
Facility Review Board. However, on December 5, 2008, KE withdrew
its proposed Hard Rock Hotel & Casino at Kansas Speedway
application for Lottery Gaming Facility Manager for the Northeast
Kansas gaming zone due to the uncertainty in the global financial
markets and the expected inability to finance the project at
reasonable rates. The State of Kansas has re-opened the bidding
process for the casino management contract and KE expects to
resubmit a proposal to include a phased approach for the non-gaming
amenities. In addition, KE's proposal will include a commitment to
petition NASCAR to realign a second date to Kansas from one of
ISC's existing facilities as well as build a state-of-the-art road
course in the infield at Kansas Speedway. Daytona Live!, a
mixed-use entertainment destination development that ISC is also
pursuing in a 50/50 joint venture with Cordish, is moving forward.
The eight-story office building that will serve as ISC, NASCAR and
Grand-Am's corporate headquarters is currently under construction
with completion expected late in the fourth quarter of 2009. The
retail, dining, and entertainment component of Daytona Live is
being actively marketed by Cordish. Cobb Theaters has already
announced its intention to anchor the complex with a state of the
art, 65,000 square foot theater. Cordish is having productive
conversations with other potential tenants. The Company is also
having productive conversations concerning a settlement with the
Internal Revenue Service and the sale of its 676 acre parcel on
Staten Island and remains hopeful that a transaction will occur in
2009. Share Repurchase Program In the 2008 fourth quarter, ISC
purchased approximately 182,000 shares of its Class A Common Stock
for $7.5 million. From initiation of the program in December 2006
through November 30, 2008, the Company purchased a total of 4.7
million shares for $208.0 million, leaving $42.0 million in
remaining capacity on its $250 million authorization as of November
30, 2008. ISC ceased repurchasing shares in September 2008 as a
result of the turbulent credit markets and its desire to conserve
cash given its $150 million in Senior Notes due this April. Once
the Company is able to refinance at an acceptable rate, it expects
to resume the repurchase program as it is viewed as a critical
component in the Company's long-term capital allocation strategy
designed to build shareholder value. Ms. France Kennedy concluded,
"Although these are challenging times, we are fortunate to be
aligned with a leading sports property that is healthy and
supported by tens of millions of passionate fans. The NASCAR Sprint
Cup series remains the largest spectator sport in the country and
the second most watched on television. This provides an excellent
backdrop as we move through the coming year. "More importantly, ISC
remains a dynamic company uniquely positioned to prosper well into
the future as our business model is supported by a solid foundation
of contracted revenues. Combined with prudent cost containment
measures and a well-planned capital allocation strategy, we expect
to continue to generate substantial cash flow that can be
reinvested in value-added opportunities, including returning cash
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 (888) 694-4641 five to ten
minutes prior to the scheduled start time and request to be
connected to the ISC earnings call, identification number 81320872.
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 Thursday, February 5, 2009. To
access, dial (800) 642-1687 and enter the code 81320872, 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. 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(SM), 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 Twelve
Months Ended Nov. 30, Nov. 30, Nov. 30, Nov. 30, 2007 2008 2007
2008 --------- --------- --------- --------- (Unaudited) REVENUES:
Admissions, net $78,167 $63,863 $253,685 $236,105 Motorsports
related 143,016 119,178 465,469 462,835 Food, beverage and
merchandise 27,135 19,298 84,163 78,119 Other 4,531 2,911 10,911
10,195 ----- ----- ------ ------ 252,849 205,250 814,228 787,254
EXPENSES: Direct: Prize and point fund monies and NASCAR sanction
fees 49,970 42,798 151,311 154,655 Motorsports related 45,144
41,135 160,387 166,047 Food, beverage and merchandise 14,984 11,958
48,490 48,159 General and administrative 28,855 25,808 118,982
109,439 Depreciation and amortization 17,232 18,293 80,205 70,911
Impairment of long-lived assets 3,926 323 13,110 2,237 ----- ---
------ ----- 160,111 140,315 572,485 551,448 ------- -------
------- ------- Operating income 92,738 64,935 241,743 235,806
Interest income and other 1,291 648 4,990 (1,630) Interest expense
(3,847) (4,962) (15,628) (15,861) Minority interest - 194 - 324
Equity in net loss from equity investments (36,391) (5,817)
(58,147) (1,203) ------- ------ ------- ------ Income from
continuing operations before income taxes 53,791 54,998 172,958
217,436 Income taxes 31,283 21,332 86,667 82,678 ------ ------
------ ------ Income from continuing operations 22,508 33,666
86,291 134,758 Loss from discontinued operations (34) (45) (90)
(163) --- --- --- ---- Net income $22,474 $33,621 $86,201 $134,595
------- ------- ------- -------- Basic earnings per share: Income
from continuing operations $0.43 $0.69 $1.64 $2.71 Loss from
discontinued operations - - - - --- --- --- --- Net income $0.43
$0.69 $1.64 $2.71 ----- ----- ----- ----- Diluted earnings per
share: Income from continuing operations $0.43 $0.69 $1.64 $2.71
Loss from discontinued operations - - - - --- --- --- --- Net
income $0.43 $0.69 $1.64 $2.71 ----- ----- ----- ----- Dividends
per share $- $- $0.10 $0.12 --- --- ----- ----- Basic weighted
average shares outstanding 51,853,828 48,560,549 52,557,550
49,589,465 ---------- ---------- ---------- ---------- Diluted
weighted average shares outstanding 51,959,612 48,670,245
52,669,934 49,688,909 ---------- ---------- ---------- ----------
Consolidated Balance Sheets (In Thousands) November 30, November
30, 2007 2008 ------------- ------------- ASSETS Current Assets:
Cash and cash equivalents $57,316 $218,920 Short-term investments
39,250 200 Restricted cash - 2,405 Receivables, less allowance of
$1,200 in 2007 and 2008 46,860 47,558 Inventories 4,508 3,763
Deferred income taxes 1,345 1,838 Prepaid expenses and other
current assets 10,547 7,194 ------ ----- Total Current Assets
159,826 281,878 Property and Equipment, net 1,303,178 1,331,231
Other Assets: Long-term restricted cash and investments - 40,187
Equity investments 76,839 77,613 Intangible assets, net 178,984
178,841 Goodwill 118,791 118,791 Deposits with Internal Revenue
Service 117,936 117,936 Other 26,563 34,342 ------ ------ 519,113
567,710 ------- ------- Total Assets $1,982,117 $2,180,819
---------- ---------- LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities: Current portion of long-term debt $2,538 $153,002
Accounts payable 37,508 26,393 Deferred income 128,631 103,549
Income taxes payable 22,179 8,659 Other current liabilities 21,447
18,035 ------ ------ Total Current Liabilities 212,303 309,638
Long-Term Debt 375,009 422,045 Deferred Income Taxes 214,109
104,172 Long-Term Tax Liabilities - 161,834 Long-Term Deferred
Income 15,531 13,646 Other Long-Term Liabilities 6,077 28,125
Commitments and Contingencies - - Shareholders' Equity: Class A
Common Stock, $.01 par value, 80,000,000 shares authorized;
30,010,422 and 27,397,924 issued and outstanding in 2007 and 2008,
respectively 300 274 Class B Common Stock, $.01 par value,
40,000,000 shares authorized; 21,593,025 and 21,150,471 issued and
outstanding in 2007 and 2008, respectively 216 211 Additional
paid-in capital 621,528 497,277 Retained earnings 537,044 665,405
Accumulated other comprehensive loss - (21,808) --- ------- Total
Shareholders' Equity 1,159,088 1,141,359 --------- --------- Total
Liabilities and Shareholders' Equity $1,982,117 $2,180,819
---------- ---------- Consolidated Statements of Cash Flows (In
Thousands) Twelve Months Ended November 30, November 30, 2007 2008
------------- ------------- OPERATING ACTIVITIES Net income $86,201
$134,595 Adjustments to reconcile net income to net cash provided
by Operating activities: Depreciation and amortization 80,205
70,911 Minority interest - (324) Stock-based compensation 4,046
3,282 Amortization of financing costs 517 517 Deferred income taxes
23,374 30,753 Loss from equity investments 58,147 1,203 Impairment
of long-lived assets 8,170 784 Excess tax benefits relating to
stock-based compensation (170) - Other, net 154 3,921 Changes in
operating assets and liabilities: Receivables, net 7,525 (698)
Inventories, prepaid expenses and other assets (2,142) 4,117
Deposits with Internal Revenue Service (7,123) - Accounts payable
and other liabilities 5,045 (8,233) Deferred income (5,712)
(26,967) Income taxes (121) 7,030 ---- ----- Net cash provided by
operating activities 258,116 220,891 INVESTING ACTIVITIES Capital
expenditures (96,060) (107,036) Acquisition of business, net of
cash acquired (87,111) - Proceeds from affiliate 67 4,700 Advance
to affiliate (200) (18,450) Increase in restricted cash - (42,592)
Proceeds from short-term investments 105,320 41,700 Purchases of
short-term investments (66,570) (2,650) Purchases of equity
investments - (81) Other, net 264 700 --- --- Net cash used in
investing activities (144,290) (123,709) FINANCING ACTIVITIES
Proceeds under credit facility 65,000 170,000 Payments under credit
facility (65,000) (20,000) Proceeds of long-term debt - 51,300
Payment of long-term debt (29,910) (3,505) Exercise of Class A
common stock options 357 - Cash dividends paid (5,292) (5,960)
Excess tax benefits relating to stock-based compensation 170 -
Reacquisition of previously issued common stock (81,516) (127,413)
------- -------- Net cash (used in) provided by financing
activities (116,191) 64,422 -------- ------ Net (decrease) increase
in cash and cash equivalents (2,365) 161,604 Cash and cash
equivalents at beginning of period 59,681 57,316 ------ ------ Cash
and cash equivalents at end of period $57,316 $218,920 -------
-------- 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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