This summary is based on the fourth quarter fiscal 2007 earnings call conducted by International Speedway Corporation (ISCA: chart) on January 24, 2008.
Management:
COO: John R Saunders
Investor Relations: (I.R.): Wes Harris
CAO: Dan W Houser
Key Investor Issues:
- Acquisition of balance 62.5% interest in RA completed.
- Earnings per share from continuing operations eased to $1.64 from $2.20 last year.
- The company reported $36.4 million net loss from equity investments mainly from the MA investment.
- Non-GAAP net income for the year was weaker at $2.85 per diluted share against $3.24 per share in 2006.
- The company raised its fiscal 2008 earnings guidance to between $3.05 and $3.15 per share.
Full Year 2007 Highlights:
- Total revenue firmed to $816.6 million from the previous year’s $798.4 million.
- Top line growth was also enhanced by higher corporate sponsorship in the year.
- Kroger partnership resulted in the launch of largest in-store retail promotion in the history of motorsports at nearly 2,500 outlets within Kroger’s family of stores.
Ten-year multi-track sponsorship agreement with Coca-Cola is expected to commence.
- The company spent approximately $75 million on CapEx at existing facilities.
- Net income for 2007 was $86.2 million, or $1.64 per diluted share, compared with 2006 figure of $116.8 million, or $2.20 per diluted share.
- The company spent $5.2 million, or 6 cents per diluted share after tax, on litigation.
- The company now forecasts annual revenue in the range of $805 million to $825 million.
Fourth Quarter Financial Highlights:
Fourth quarter revenues marginally increased to $253.5 million while operating income was $92.7 million during the quarter compared with $16.7 million in the same quarter last year.
Net income for the quarter of $22.5 million, or 43 cents per diluted share, was higher compared with the 2006 fourth quarter’s figure of $7.8 million, or 15 cents per diluted share.
Admissions revenue increased to $78.2 million during the quarter. This was due to the consolidation of Chicagoland and Route 66. However, the increase was partly offset by lower attendances for the California and Talladega Cup weekends.
Motorsports related income dipped for the fourth quarter to $143.7 million partly due to the 12% decline in NASCAR broadcast rights for the quarter.
Revenue from food, beverage and merchandise softened to $27.1 million because of lower concessions revenue for the rain delay cup event at Kansas and lower attendances for cup weekends at California and Tallageda. The revenue was shored up mainly by inflows from Chicagoland and Route 66 races.
Several major event weekends were held during the quarter.
The company hosted eight major event weekends, seven of which were anchored by NASCAR NEXTEL Cup races with Richmond International Raceway posting its 32nd consecutive NEXTEL Cup sellout.
California Speedway hosted NASCAR NEXTEL Cup and NASCAR Busch series events on Labor Day weekend. Regrettably, the weekend realized less than anticipated results due to an intense 100 degree heat wave in the period before the races. A record 113 degrees was recorded on race day.
Attendance for the Emerson Radio 250 Busch series race was 8% higher compared with past year figures and the Kansas Speedway recorded sold-out attendance for both its NEXTEL Cup and Busch weekend events. A capacity crowd was in attendance at the successful NASCAR Ford Championship weekend.
Impairment charge of approximately $34.8 million at Motorsports Authentics’ (MA) resulted in reduced fourth quarter GAAP earnings by an estimated 65 cents per diluted share.
