Speedway Motorsports, Inc. (SMI) (NYSE: TRK) today reported
third quarter 2016 total revenues of $170.7 million, net income of
$13.7 million or $0.33 per diluted share, and adjusted non-GAAP net
income of $13.4 million or $0.33 per diluted share. Nine month 2016
total revenues were $429.5 million, net income was $39.3 million or
$0.95 per diluted share, and adjusted non-GAAP net income was $39.0
million or $0.95 per diluted share. The results were within
management’s expectations, and SMI reaffirmed its full year 2016
non-GAAP earnings guidance of $0.90 to $1.10 per diluted share as
further described below. Non-GAAP items are further discussed, and
reconciled with comparable GAAP amounts, below.
Speedway Motorsports hosted two collegiate football games,
including the sold-out, hugely successful “Battle at Bristol” and
large preceding concert in the third quarter 2016. These events had
a material positive effect on our 2016 operating results, and
associated revenues and direct expenses are reflected in Other
Operating Revenue and Other Direct Operating Expense in the
accompanying Selected Financial Data. The Company has begun to
explore conducting similar events in the future. However, no
additional football games are scheduled at this time, and these
results are not indicative of future results that can be expected
or forecast. Prior year amounts reflect the Company's revision of
previously issued financial statements in 2015.
The Company’s admissions, certain event related revenues and
operating costs were negatively impacted by poor weather
surrounding several of its events in each 2016 quarter, including
Bristol Motor Speedway’s rain postponed and rescheduled NASCAR
Sprint Cup series racing event in August 2016. Race schedule
changes, in 2016 as compared to 2015, including racing events
impacted by poor weather, are presented below in the Selected
Financial Data.
Management believes many of the Company’s revenue categories
continue to be negatively impacted by economic conditions,
including underemployment and the absence of a stronger middle
class economic recovery, lower travel and spending by certain fans
and customers due to ongoing geopolitical events, and high food and
health-care costs.
Third Quarter Comparison
- Total revenues of $170.7 million in
2016 compared to $144.1 million in 2015
- After tax accelerated depreciation and
removal costs on retired assets aggregating $225,000 or $0.01 per
diluted share in 2016 and $4.7 million or $0.11 per diluted share
in 2015
- Non-recurring benefits from state tax
law changes of $507,000 or $0.01 per diluted share in 2016 and
$610,000 or $0.01 per diluted share in 2015
- Net income of $13.7 million or $0.33
per diluted share in 2016 compared to $8.6 million or $0.21 per
diluted share in 2015
- Adjusted non-GAAP net income of $13.4
million or $0.33 per diluted share in 2016 compared to $12.6
million or $0.31 per diluted share in 2015
Year-to-Date Comparison
- Total revenues of $429.5 million in
2016 compared to $408.7 million in 2015
- After tax accelerated depreciation and
removal costs on retired assets aggregating $225,000 or $0.01 per
diluted share in 2016 and $4.7 million or $0.11 per diluted share
in 2015
- Non-recurring benefits from state tax
law changes of $507,000 or $0.01 per diluted share in 2016 and
$610,000 or $0.01 per diluted share in 2015
- In 2015 (after tax items):
- Impairment charge for other intangible
assets and goodwill of $63.4 million or $1.54 per diluted
share
- Loss on early debt redemption and
refinancing of $5.3 million or $0.13 per diluted share
- Interim interest expense associated
with early debt redemption of $1.1 million or $0.03 per diluted
share
- Net income of $39.3 million or $0.95
per diluted share in 2016 compared to a net loss of $31.0 million
or $0.75 per diluted share in 2015
- Adjusted non-GAAP net income of $39.0
million or $0.95 per diluted share in 2016 compared to $42.8
million or $1.04 per diluted share in 2015
Non-GAAP Financial Information and
Reconciliation
Net income and diluted earnings per share as adjusted and set
forth below are non-GAAP (other than generally accepted accounting
principles) financial measures presented as supplemental
disclosures to their individual corresponding GAAP basis amounts.
The following schedule reconciles those non-GAAP financial measures
to their most directly comparable information presented using GAAP.
Management believes such non-GAAP information is useful and
meaningful to investors and helps in understanding, using and
comparing the Company’s operating results.
We have not reconciled 2016 non-GAAP forward-looking earnings
per diluted share to its most directly comparable GAAP measure, as
permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such
reconciliations would require unreasonable efforts to estimate and
quantify various necessary GAAP components largely because, as
indicated by our relatively wide range of earnings guidance,
forecasting or predicting our future operating results is subject
to many factors out of our control or not readily predictable. Such
factors include weather conditions surrounding our events, the
seasonal popularity or success of NASCAR and other racing in
general, the impact of geopolitical factors on travel plans, and
fluctuating costs of food, gas, health-care and other basic
necessities, any or all of which can significantly impact our
admissions, certain event related revenues and associated direct
expense of events. 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.
Management uses the non-GAAP information to assess the Company’s
operations for the periods presented, analyze performance trends
and make decisions regarding future operations because it believes
this separate information better reflects ongoing operating
results. This non-GAAP financial information is not intended to be
considered independent of or a substitute for results prepared in
accordance with GAAP. This non-GAAP financial information may not
be comparable to similarly titled measures used by other entities
and should not be considered as alternatives to net income or loss,
or diluted earnings or loss per share, determined in accordance
with GAAP. Individual quarterly per share amounts may not be
additive due to rounding. Amounts below are in thousands except per
share amounts.
Three Months Ended Nine Months Ended September 30: September 30:
2016 2015 2016 2015 Net income (loss) using GAAP $
13,666 $ 8,553 $ 39,274 $ (31,025 ) Accelerated
depreciation on retired assets and costs of removal, pre-tax 357
7,469 357 7,469 Non-recurring benefit of state income tax law
changes (507 ) (610 ) (507 ) (610 ) Impairment of other intangible
assets and goodwill, pre-tax -- -- -- 98,868 Loss on early debt
redemption and refinancing, pre-tax -- -- -- 8,372 Interim interest
expense, pre-tax -- -- -- 1,688 Aggregate income tax effect of
non-GAAP adjustments (132 ) (2,779 )
(132 ) (41,965 ) Non-GAAP net income $
13,384 $ 12,633 $ 38,992 $ 42,797
Diluted earnings (loss) per share using GAAP $ 0.33 $
0.21 $ 0.95 $ (0.75 ) Accelerated depreciation on retired
assets and costs of removal, pre-tax 0.01 0.18 0.01 0.18
Non-recurring benefit of state income tax law changes (0.01 ) (0.01
) (0.01 ) (0.01 ) Impairment of other intangible assets and
goodwill, pre-tax -- -- -- 2.39 Loss on early debt redemption and
refinancing, pre-tax -- -- -- 0.20 Interim interest expense,
pre-tax -- -- -- 0.04 Aggregate income tax effect of non-GAAP
adjustments 0.00 (0.07 )
0.00 (1.02 ) Non-GAAP diluted earnings per share $
0.33 $ 0.31 $ 0.95 $ 1.04
Significant 2016 Third Quarter
Events
- Bristol Motor Speedway – NASCAR Bass
Pro Shops NRA Night Race Sprint Cup, Food City 300 Xfinity and UNOH
200 Camping World Truck Series racing events
- Bristol Motor Speedway hosted “the
Battle at Bristol” collegiate football game and large preceding
concert
- zMAX Dragway at Charlotte Motor
Speedway – NHRA Carolina Nationals racing event
- Kentucky Speedway – NASCAR Quaker State
400 presented by Advance Auto Parts Sprint Cup, Alsco 300 Xfinity,
VisitMyrtleBeach.com 300 Xfinity and Buckle Up in Your Truck 225
Camping World Truck, and Crosley Brands 150 Automobile Racing Club
of America Series racing events
- New Hampshire Motor Speedway – NASCAR
New Hampshire 301 Sprint Cup, Bad Boy Off Road 300 Sprint Cup,
AutoLotto 200 Xfinity and UNOH 175 Camping World Truck Series
racing events
- Sonoma Raceway – Toyota NHRA Sonoma
Nationals and GoPro Grand Prix of Sonoma IndyCar Series racing
events
- Texas Motor Speedway – IndyCar
Firestone 600 Series racing event (previously postponed and
rescheduled from the second quarter 2016 due to poor weather)
2016 Earnings Guidance
The Company reaffirmed that third quarter 2016 results are
consistent with its previous full year 2016 non-GAAP earnings
guidance of $0.90-$1.10 per diluted share, excluding non-recurring
and other special items. The range of earnings guidance reflects
the continuing negative impact of uncertain economic conditions,
among other factors. Inclement weather, potential higher fuel,
health-care and food costs, and continued underemployment could
significantly impact our future results.
Dividends and Stock Repurchase
Program
During the nine months ended September 30, 2016, the Company
declared and paid cash dividends of $0.15 per share of common stock
each quarter for a combined aggregate of approximately $18.6
million. On October 19, 2016, the Company’s Board of Directors
declared a quarterly cash dividend of $0.15 per share of common
stock, aggregating approximately $6.2 million, payable on December
2, 2016 to shareholders of record as of November 11, 2016. The
Board of Directors plans to continue to evaluate cash dividends on
a quarterly basis in the future.
During the nine months ended September 30, 2016, the Company
repurchased 189,000 shares of common stock for approximately $3.4
million under this program. As of September 30, 2016, the Company
has repurchased 4,495,000 shares since adoption of the program in
April 2005, and the total number of shares available for future
repurchase as currently authorized is 505,000.
Comments
“Our strong third quarter and year-to-date 2016 results reflect
the hugely successful “Battle at Bristol” collegiate football game
and large concert the evening before,” stated Marcus G. Smith,
Chief Executive Officer and President of Speedway Motorsports.
“However, our 2016 results continue to be significantly impacted by
poor weather surrounding many of our larger events. Bristol Motor
Speedway’s NASCAR Sprint Cup race in the third quarter 2016 was
rescheduled due to poor weather, and both Charlotte Motor
Speedway’s NASCAR Sprint Cup and Xfinity races in the fourth
quarter 2016 were rescheduled due to Hurricane Matthew. Our results
also reflect the trends that many entertainment companies,
including most sporting venues and motorsports in general, continue
to face for admissions and various event related revenues.
Notwithstanding, SMI is making significant progress on its
strategic initiatives, including shareholder returns through stable
share repurchase and dividend programs, ongoing debt reduction, and
restrained capital spending.”
O. Bruton Smith, Executive Chairman of Speedway Motorsports,
stated, “I could not have been prouder over the resounding success
of our “Battle at Bristol” football game and concert. Years in the
making, SMI demonstrated our unparalleled level of execution and
ability to provide the finest in entertainment and enjoyment. Along
with being the first to play in a motorsports ‘stadium’, SMI also
set a new world record for the highest ever football game
attendance. SMI has always been a leader in marketing innovation
and delivering unique, high-end entertainment value. We want to do
more and are already working on it. SMI remains steadfast in its
never-ending commitment to provide our faithful fans - new and old
- with fresh, innovative entertainment value and customer service
that cannot be duplicated at home or other venues - and that is
second to none.”
Speedway Motorsports is a leading marketer and promoter of
motorsports entertainment in the United States. The Company,
through its subsidiaries, owns and operates the following premier
facilities: Atlanta Motor Speedway, Bristol Motor Speedway,
Charlotte Motor Speedway, Kentucky Speedway, Las Vegas Motor
Speedway, New Hampshire Motor Speedway, Sonoma Raceway and Texas
Motor Speedway. The Company provides souvenir merchandising
services through its SMI Properties subsidiaries; manufactures and
distributes smaller-scale, modified racing cars and parts through
its US Legend Cars International subsidiary; and produces and
broadcasts syndicated motorsports programming to radio stations
nationwide through its Performance Racing Network subsidiary. For
more information, visit the Company's website at
www.speedwaymotorsports.com.
This news release contains forward-looking statements,
particularly statements with regard to our future operations and
financial results. There are many factors that affect future events
and trends of our business including, but not limited to, economic
factors, weather, the success of NASCAR and others as sanctioning
bodies, capital projects and expansion, financing needs, income
taxes and a host of other factors both within and outside of
management control. These factors and other factors, including
those contained in our Annual Report on Form 10-K and subsequently
filed Quarterly Reports on Form 10-Q, involve certain risks and
uncertainties that could cause actual results or events to differ
materially from management's views and expectations. Inclusion of
any information or statement in this news release does not
necessarily imply that such information or statement is material.
The Company does not undertake any obligation to release publicly
revised or updated forward-looking information, and such
information included in this news release is based on information
currently available and may not be reliable after this date.
Note: Speedway Motorsports will host a conference call and
webcast today at 10:00 AM (ET) open to the public. To participate
in the conference call, you may dial 877-201-0168 (US / Canada /
toll-free) or 647-788-4901 (international). The reference number is
98682392. A webcast of the call can be accessed at the Company's
website at www.speedwaymotorsports.com under “Investors”.
Participating in the call will be Marcus G. Smith, Chief Executive
Officer and President, and William R. Brooks, Vice Chairman, Chief
Financial Officer and Treasurer.
Speedway Motorsports, Inc. and
Subsidiaries Selected Financial Data - Unaudited For
The Three and Nine Months Ended September 30, 2016 and 2015
(In thousands except per share amounts)
Three Months Ended
Nine Months Ended
STATEMENT OF OPERATIONS DATA 9/30/2016
9/30/2015 9/30/2016 9/30/2015 (a)
Revenues: Admissions $29,698 $31,607 $74,771 $82,263 Event
related revenue 37,226 40,717 108,295 115,966 NASCAR broadcasting
revenue 65,839 63,855 192,453 186,653 Other operating revenue (b)
37,898 7,944 54,006 23,836 Total Revenues
170,661 144,123 429,525 408,718 Expenses and
Other: Direct expense of events 36,576 35,251 84,366 84,719 NASCAR
event management fees 41,087 39,758 115,863 112,381 Other direct
operating expense (b) 28,996 4,796 39,540 14,888 General and
administrative 27,205 26,712 78,591 75,256 Depreciation and
amortization 14,016 20,304 40,957 47,014 Interest expense, net
3,290 3,511 9,920 13,361 Impairment of other intangible assets and
goodwill - - - 98,868 Loss on early debt redemption and refinancing
- - - 8,372 Other (income) expense, net (941) 749
(886) 416 Total Expenses and Other 150,229
131,081 368,351 455,275 Income (Loss) Before Income Taxes
20,432 13,042 61,174 (46,557) Income Tax Provision (6,766)
(4,489) (21,900) 15,532 Net Income (Loss)
$13,666 $8,553 $39,274 ($31,025) Basic
Earnings (Loss) Per Share $0.33 $0.21 $0.95 ($0.75) Weighted
average shares outstanding 41,123 41,267 41,178 41,306
Diluted Earnings (Loss) Per Share $0.33 $0.21 $0.95 ($0.75)
Weighted average shares outstanding 41,135 41,288 41,191 41,336
Major NASCAR-sanctioned Events Held During Period 8 8 20 20
Certain Race Schedule Changes: • Poor weather
resulted in delaying the start of the NASCAR Sprint Cup race held
at Las Vegas Motor Speedway in the first quarter 2016
• Poor weather resulted in cancellation of
a portion of the major NHRA weekend racing event held at Charlotte
Motor Speedway (CMS) in the second quarter 2016
• Poor weather resulted in delays in
starting and completing the NASCAR Sprint Cup race at Texas Motor
Speedway (TMS) and Sprint All-Star race at CMS, and next day
rescheduling of one NASCAR Camping World Truck Series race at CMS,
in the second quarter 2016
• Poor weather resulted in delays in starting and completing one
IndyCar race at TMS, which was rescheduled from the second quarter
2016 and held in the third quarter 2016 • Poor weather resulted in
postponing and rescheduling one NASCAR Sprint Cup race held at
Bristol Motor Speedway in the third quarter 2016 • TMS held one Red
Bull Air Race in the third quarter 2015 that was not held in 2016
(a) Prior year amounts reflect the Company's revision of
previously issued financial statements in 2015.
(b) Includes revenues and direct expenses
associated with "the Battle at Bristol" collegiate football game
and preceding concert held in the third quarter 2016.
BALANCE SHEET DATA 9/30/2016
12/31/2015 Cash and cash equivalents $82,308 $82,010
Total current assets 138,950 142,886 Property and equipment, net
1,012,230 1,019,650 Goodwill and other intangible assets, net
345,728 345,736 Total assets 1,526,801 1,539,197 Deferred
race event and other income, net 36,567 57,549 Total current
liabilities 110,210 108,369 Credit facility borrowings (all term
loan) 68,000 120,000 Total long-term debt 269,206 321,383 Total
liabilities 722,356 754,357 Total stockholders' equity 804,445
784,840
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version on businesswire.com: http://www.businesswire.com/news/home/20161026005331/en/
Speedway Motorsports, Inc.Janet Kirkley, 704-532-3318
Speedway Motorsports (NYSE:TRK)
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