~Company Updates Full-Year Financial Guidance~ DAYTONA BEACH, Fla.,
April 7 /PRNewswire-FirstCall/ -- International Speedway
Corporation (NASDAQ Global Select Market: ISCA; OTC Bulletin Board:
ISCB) ("ISC") today reported results for the fiscal first quarter
ended February 28, 2009. "While pleased with the level of
excitement and competition on the track as well as the fans' avid
support of NASCAR, we are not immune to the broader macroeconomic
challenges facing all businesses," said ISC President Lesa France
Kennedy. "We are addressing these challenges on a number of fronts.
Most notably, we are making it more affordable for our fans to
attend our events by reducing ticket prices, providing value-added
opportunities to enhance the guest experience, and working with
community partners to further reduce the overall cost of attending
a race. Also, given the close scrutiny that is being placed on
marketing budgets, we have escalated our efforts to provide our
corporate partners with innovative marketing solutions that deliver
a clearly measurable return on investment." Ms. France Kennedy
continued, "On the expense side, we are aggressively managing our
controllable expenses to scale the events appropriately without
detrimentally impacting the experience for our fans. We have also
undertaken a company-wide initiative to reduce pricing and, when
appropriate, scope of services with vendors and suppliers. All of
these cost control measures are designed to ensure that our
business remains strong and continues to generate substantial cash
flow. Lastly, we are maintaining a solid capital structure that
allows us to weather any short-term volatility while providing us
the flexibility to capitalize on potential opportunities that will
increase shareholder value." First Quarter Comparison Total
revenues for the first quarter decreased to $166.1 million,
compared to revenues of $193.9 million in the prior-year period.
Operating income was $50.0 million during the period compared to
$66.9 million in the first quarter of fiscal 2008. In addition to
the macroeconomic challenges, quarter-over-quarter comparability
was impacted by: -- Exceptionally strong consumer and corporate
demand for the 50th running of the Daytona 500 and surrounding
events in the first quarter of 2008. The historic race provided
unique opportunities to drive revenue above the otherwise strong
appeal of one of sport's most marquee events. -- The 2008 first
quarter also included a 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. In addition, the
first quarter of 2008 included an impairment charge of $0.7
million, or $0.01 per diluted share after tax, 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 first quarter of 2009 included
a $1.6 million, or $0.03 per diluted share after tax, charge for
equity in net loss from equity investments related to Motorsports
Authentics, LLC ("MA"), the Company's motorsports-related
merchandise 50/50 joint venture with Speedway Motorsports Inc. The
2008 first quarter included equity income of $1.1 million, or $0.02
per diluted share after tax, due to the strong product sales
primarily associated with a new team, car number and sponsor for
Dale Earnhardt, Jr., NASCAR's most significant licensee. In
addition, merchandise sales from the 50th running of the Daytona
500 drove strong results for the prior year period. Net income was
$25.1 million, or $0.52 per diluted share, compared to net income
of $36.2 million, or $0.71 per diluted share, in the prior year.
Excluding the aforementioned correction of certain other assets'
carrying value amounts; impairment charges; operating results from
the Company's equity investment; and, accelerated depreciation of
$0.5 million, or $0.01 per diluted share after tax, for certain
office and related buildings in Daytona Beach associated with the
Company's previously announced Daytona Live! project (the 2008
first quarter also included similar accelerated depreciation
charges), non-GAAP (defined below) net income for the first quarter
of 2009 was $27.2 million, or $0.56 per diluted share. Non-GAAP net
income for the first quarter of 2008 was $39.7 million, or $0.78
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 2008 adjustments relate to: a benefit for equity
in net income from equity investment; 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 adjustments
for 2009 relate to: a charge for equity in net loss from equity
investment; accelerated depreciation for certain office and related
buildings in Daytona Beach; and, the impairment of long-lived
assets associated with the net book value of certain assets retired
from service,. 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 February 29, February
28, 2008 2009 ------------- ------------- Net income $36,211
$25,146 Loss from discontinued operations, net of tax 31 42 -- --
Income from continuing operations 36,242 25,188 Equity in net
(income) loss from equity investment, net of tax (1,102) 1,639
------ ----- Consolidated income from continuing operations
excluding equity in net (income) loss from equity investment 35,140
26,827 Adjustments, net of tax: Additional depreciation 320 309
Impairment of long-lived assets 448 33 Correction of certain other
assets' carrying value 3,758 - ----- -- Non-GAAP net income $39,666
$27,169 ======= ======= Per share data: Diluted earnings per share
$0.71 $0.52 Loss from discontinued operations, net of tax - - -- --
Income from continuing operations 0.71 0.52 Equity in net (income)
loss from equity investment (0.02) 0.03 ----- ---- Consolidated
earnings per share from continuing Operations excluding equity in
net (income) loss from equity investment 0.69 0.55 Adjustments, net
of tax: Additional depreciation 0.01 0.01 Impairment of long-lived
assets 0.01 - Correction of certain other assets' carrying value
0.07 - ---- -- Non-GAAP diluted earnings per share $0.78 $0.56
===== ===== Recent Events For the start of the motorsports season,
Daytona hosted its annual lineup of events branded DIRECTV
Speedweeks(R), which combines the best sports car, truck and stock
car racing in the world, and culminates with the Daytona 500(R).
The multi-week lineup began with the prestigious Grand-Am Rolex 24,
which was highlighted by the closest finish in the 47-year history
of the event. DIRECTV Speedweeks(R) continued with several exciting
stock car and truck racing events, culminating with the 51st
running of the Daytona 500(R). While this year's "The Great
American Race(R)" featured some of the most thrilling competition
in recent memory, unfortunately the event was rained shortened to
only 152 of the scheduled 200 laps. The weekend following, NASCAR's
Sprint Cup, Nationwide and Camping World Truck series returned to
Auto Club Speedway, which is located near Los Angeles, the nation's
second largest media market. Subsequent to the fiscal first
quarter, Daytona hosted a successful week of motorcycle racing that
included the Daytona Supercross and the 68th running of the Daytona
200(R). Auto Club Speedway also held a weekend of exciting
motorcycle racing. Finally, the NASCAR Sprint Cup and Camping World
Truck series raced at the historic half-mile short track of
Martinsville Speedway. For the remainder of the second quarter, the
Company will host four Sprint Cup and Nationwide series weekends at
Phoenix International Raceway, Talladega Superspeedway, Richmond
International Raceway and Darlington Raceway. The Talladega weekend
will also include an ARCA/RE-MAX event. In addition, Kansas
Speedway will host an IRL IndyCar and NASCAR Camping World Truck
weekend. From a marketing partnership perspective, ISC recently
signed event entitlement positions for its NASCAR Sprint Cup races
at Watkins Glen International, Darlington and Kansas. As a result,
ISC has only one Sprint Cup and three Nationwide title sponsorships
that are either open or not announced. Even more significantly, the
Company continues to have success in securing multi-year agreements
for official status positions. This combination has resulted in
ISC's ability to have agreements in place for 90 percent of its
current gross marketing partnership revenue target for fiscal 2009.
External Growth, Financing-Related and Other Initiatives The
Company in a joint venture partnership with The Cordish Company
("Cordish") resubmitted a revised joint proposal for the
development of a Hard Rock Casino and certain dining and
entertainment options on property adjacent to the Kansas Speedway
on March 30, 2009. The revised proposal contemplates the
development, depending upon market conditions and demand, of a
hotel, convention facility, and a retail and entertainment
district. The initial phase of the project, which is planned to
comprise approximately 190,000 square feet, would include a 100,000
square foot casino gaming floor with approximately 2,300 slot
machines and 86 table games, a high-energy center bar, and dining
and entertainment options, and is projected to cost approximately
$390 million. The full budget of all potential phases is projected
at approximately $700 million, and would be financed by the joint
venture between ISC and Cordish. Depending upon market conditions,
the 50/50 joint venture anticipates funding the development with
between 20 and 40 percent equity. The remaining portion is expected
to be funded by secured project debt financing obtained by the
joint venture. The Lottery Commission will evaluate the proposals
and will then seek to negotiate management agreements with those
managers it intends to recommend to the Gaming Commission. The
timeline for the Lottery Commission negotiations and review process
is defined as 90 days followed by a review by the Kansas Lottery
Gaming Facility Review Board and background checks by the Kansas
Racing and Gaming Commission. The entire process is expected to be
completed by October 2009. Daytona Live!, a mixed-use entertainment
destination development that the Company is also pursuing in a
50/50 joint venture with Cordish, is expected to have the ISC and
NASCAR headquarters building completed and open in the fourth
quarter of 2009. The retail, dining, and entertainment component of
Daytona Live! is being actively marketed by Cordish. Final design
plans that will include local market studies and further project
analysis for the development of the retail, dining and
entertainment, and hotel components are being completed. These
phases of the development will be market driven, and no
construction will begin until the timing is appropriate. On Staten
Island, ISC continues to have discussions with interested buyers
for the 676 acre parcel, and remains hopeful that a transaction
will occur in 2009. The Company is also continuing through the
audit appeals process with the Internal Revenue Service ("IRS") and
is having very productive conversations concerning a settlement.
Once ISC sells the Staten Island property and/or secures a
favorable settlement with the IRS, the Company will evaluate
opportunities to reduce debt and further invest in the business,
including additional share repurchases. ISC ceased repurchasing
shares in September 2008 as a result of the turbulent credit
markets and its desire to conserve cash. As it relates to the
Company's $150 million Senior Note mid-April 2009 maturity (the
"Maturity"), ISC remains in a favorable financial position and does
not need to access the current turbulent credit markets. As such,
the Maturity will be funded by available cash from its revolving
credit facility borrowings that it drew down in October 2008. The
Company plans to pay down the balance on the credit facility by
mid-2010, which is one year prior to its maturity. Capital Spending
Given its desire to continue to build on its significant cash
position, the Company anticipates spending between $50 million and
$55 million on capital expenditures at its existing facilities.
This is viewed as the minimum amount of investment necessary for
maintenance cap-ex, safety and regulatory requirements, and
preserving the guest experience. Excluded from this estimate is
approximately $45 million in spending for ISC's headquarters
building as part of Daytona Live!, of which approximately $41
million is funded by the construction loan secured in July 2008.
Also excluded is $2 million to $3 million of capitalized costs,
including property taxes, for Staten Island. Financial Guidance The
Company is revising its full year guidance as a result of further
weakening of the macroeconomic environment. ISC now expects 2009
full year total revenue will range between $700 million to $720
million and full year non-GAAP earnings of $1.80 to $2.00 per
diluted share. As it is still early in the year, the Company is
more comfortable at the low end of these ranges. The non-GAAP
earnings per share estimates exclude additional depreciation
associated with the Daytona Live! project, impairment of long-lived
assets associated with the net book value of assets retired from
service, and the operating results from ISC's equity investment in
MA. MA's management team is currently doing a thorough
re-evaluation of the business given the unique challenges facing
the sales of licensed goods in sports as a result of the current
economic landscape. As MA currently has less visibility than ISC's
core business of promoting motorsports events, the Company is not
including MA's results in its 2009 non-GAAP earnings guidance. ISC
currently expects MA will post an operating loss for 2009. As it
relates to margins, ISC currently anticipates the following: Year
Ending 11/30/09 EBITDA (1) 33% - 35% Operating 23% - 25% (1) EBITDA
is a non-GAAP financial measure used by the Company as an important
indicator of its operating margin. It is defined as earnings before
interest, taxes, depreciation and amortization. Outlook "Although
we expect our business will continue to be impacted by a
challenging macroeconomic environment throughout 2009, we enjoy a
business model that benefits from strong consumer support and a
solid foundation of contracted revenues," stated Ms. France
Kennedy. "These significant top-line visibilities combined with
undertaken cost containment measures help ensure that our business
will continue to generate substantial cash flow." Ms. France
Kennedy concluded, "Our success is also predicated on NASCAR racing
which continues to be healthy and popular not only with the tens of
millions of passionate fans but also with corporate America. It
remains the largest spectator sport, second highest rated sport on
television, and leads all major sports properties in sponsor
satisfaction. For the past 60 years, NASCAR racing has offered its
participants one of the most stable and growth-oriented business
models in all of sports, and we expect that trend to continue well
into the future." 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 92154372. 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 Tuesday, April 14, 2009. To
access, dial toll free (800) 642-1687 and enter the code 92154372,
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 promotes major
motorsports activities in Montreal, Quebec, through its wholly
owned subsidiary, Stock-Car Montreal. The Company also owns and
operates MRN(R) Radio, the nation's largest independent sports
radio network; the Daytona 500 Experience(SM), the "Ultimate
Motorsports Attraction" in Daytona Beach, Florida, 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 February
29, February 28, 2008 2009 ------------- ------------- (Unaudited)
REVENUES: Admissions, net $56,113 $47,836 Motorsports related
112,845 102,534 Food, beverage and merchandise 22,690 13,409 Other
2,211 2,340 ----- ----- 193,859 166,119 EXPENSES: Direct expenses:
Prize and point fund monies and NASCAR sanction fees 33,053 34,142
Motorsports related 35,336 29,109 Food, beverage and merchandise
12,784 9,477 General and administrative 27,711 24,935 Depreciation
and amortization 17,317 18,391 Impairment of long-lived assets 731
70 --- -- 126,932 116,124 ------- ------- Operating income 66,927
49,995 Interest income and other (3,060) 464 Interest expense
(3,593) (6,270) Minority interest - 171 Equity in net income (loss)
from equity investments 1,794 (1,639) ----- ------ Income from
continuing operations before income taxes 62,068 42,721 Income
taxes 25,826 17,533 ------ ------ Income from continuing operations
36,242 25,188 Discontinued operations (31) (42) --- --- Net income
$36,211 $25,146 ------- ------- Basic earnings per share: Income
from continuing operations $0.71 $0.52 Loss from discontinued
operations - - -- -- Net income $0.71 $0.52 ----- ----- Diluted
earnings per share: Income from continuing operations $0.71 $0.52
Loss from discontinued operations - - -- -- Net income $0.71 $0.52
----- ----- Basic weighted average shares outstanding 50,928,554
48,548,395 ---------- ---------- Diluted weighted average shares
outstanding 51,038,079 48,677,666 ---------- ----------
Consolidated Balance Sheets (In Thousands) November 30, February
28, 2008 2009 ------------- ------------- (unaudited) ASSETS
Current Assets: Cash and cash equivalents $218,920 $241,011
Short-term investments 200 200 Restricted cash 2,405 1,603
Receivables, less allowance of $1,200 in 2008 and 2009 47,558
119,128 Inventories 3,763 4,317 Deferred income taxes 1,838 2,059
Prepaid expenses and other current assets 7,194 14,596 ----- ------
Total Current Assets 281,878 382,914 Property and Equipment, net
1,331,231 1,336,357 Other Assets: Long-term restricted cash and
investments 40,187 36,394 Equity investments 77,613 76,104
Intangible assets, net 178,841 178,815 Goodwill 118,791 118,791
Deposits with Internal Revenue Service 117,936 117,936 Other 34,342
21,487 ------ ------ 567,710 549,527 ------- ------- Total Assets
$2,180,819 $2,268,798 ---------- ---------- LIABILITIES AND
SHAREHOLDERS' EQUITY Current Liabilities: Current portion of
long-term debt $153,002 $152,994 Accounts payable 26,393 32,146
Deferred income 103,549 148,472 Income taxes payable 8,659 13,523
Other current liabilities 18,035 21,606 ------ ------ Total Current
Liabilities 309,638 368,741 Long-Term Debt 422,045 421,809 Deferred
Income Taxes 104,172 106,977 Long-Term Tax Liabilities 161,834
162,669 Long-Term Deferred Income 13,646 13,878 Other Long-Term
Liabilities 28,125 29,113 Commitments and Contingencies - -
Shareholders' Equity: Class A Common Stock, $.01 par value,
80,000,000 shares authorized; 27,397,924 and 27,741,939 issued and
outstanding in 2008 and 2009, respectively 274 277 Class B Common
Stock, $.01 par value, 40,000,000 shares authorized; 21,150,471 and
20,806,456 issued and outstanding in 2008 and 2009, respectively
211 208 Additional paid-in capital 497,277 497,881 Retained
earnings 665,405 690,380 Accumulated other comprehensive loss
(21,808) (23,135) ------- ------- Total Shareholders' Equity
1,141,359 1,165,611 --------- --------- Total Liabilities and
Shareholders' Equity $2,180,819 $2,268,798 ---------- ----------
Consolidated Statements of Cash Flows (In Thousands) Three Months
Ended February 29, February 28, 2008 2009 -------------
------------- (Unaudited) OPERATING ACTIVITIES Net income $36,211
$25,146 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 17,317 18,391
Minority interest - (171) Stock-based compensation 937 604
Amortization of financing costs 129 129 Deferred income taxes 4,418
2,898 (Income) loss from equity investments (1,794) 1,639
Impairment of long-lived assets, non- cash 328 70 Other, net 3,707
(3) Changes in operating assets and liabilities: Receivables, net
(71,395) (71,570) Inventories, prepaid expenses and other assets
(5,774) (8,296) Accounts payable and other liabilities 5,744 6,021
Deferred income 42,631 45,155 Income taxes 15,188 5,385 ------
----- Net cash provided by operating activities 47,647 25,398
INVESTING ACTIVITIES Capital expenditures (37,981) (20,042)
Proceeds from affiliate - 12,500 Advance from affiliate - (200)
Decrease in restricted cash - 4,595 Proceeds from short-term
investments 41,300 - Purchases of short-term investments (2,250) -
Other, net (781) 10 ---- -- Net cash provided by (used in)
investing activities 288 (3,137) FINANCING ACTIVITIES Proceeds
under credit facility 20,000 - Payments under credit facility
(1,126) -- Payments of long-term debt - (170) Reacquisition of
previously issued common stock (50,000) - ------- -- Net cash used
in financing activities (31,126) (170) ------- ---- Net increase in
cash and cash equivalents 16,809 22,091 Cash and cash equivalents
at beginning of period 57,316 218,920 ------ ------- Cash and cash
equivalents at end of period $74,125 $241,011 ------- --------
DATASOURCE: International Speedway Corporation CONTACT: Wes Harris,
Senior Director, Corporate and Investor Communications,
+1-386-947-6465 Web Site: http://www.iscmotorsports.com/
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