This summary is based on the first quarter fiscal 2008 earnings call conducted by International Speedway Corporation (ISCA: chart) on April 9, 2008.
Executive Vice President and Chief Operating Officer: John Saunders
Vice President and Chief Financial Officer: Dan Houser
Senior Director of Corporate and Investor Communications: Wes Harris
Key Investors Issues
- The earnings per share increased from 71 cents to 67 cents in the prior year quarter.
- Quarterly revenue grew from $184.9 million in last year to $193.9 million.
- During Q1, the firm purchased 1.2 million shares of class A stock for $50 million.
- The firm reiterated its revenue guidance of between $805 million and $825 million for fiscal 2008.
First Quarter Fiscal 2008 Financial Highlights
Total revenues for the first quarter increased to $193.9 million, compared to revenues of $184.9 million in the prior-year period.
The
admissions revenue increased to $56.1 million. This was primarily due to increased overall attendance for Daytona Speed Weeks event. Partially offsetting this increase was lower attendance for the Auto Club Speedway, Nationwide and Craftsman Truck Series events that were impacted by inclement weather.
The increase in Motorsports related income to $112.8 million was primarily associated with increased sponsorship, television and ancillary media rights for the NASCAR events at Daytona and Auto Club Speedway. Higher Sprint fans, hospitality and other race related revenues at Daytona also contributed to the increase. For first quarter, ISC’s domestic television broadcast and ancillary rights were $63 million, $60.3 million for domestic broadcast and $2.7 million for ancillary rights.
Food, beverage and merchandise revenue increased to $22.7 million and was primarily attributable to the success of Speed Weeks and the increased merchandise sales around the 50th running of the Daytona 500.
The increase in NASCAR direct expenses to $33.1 million was primarily attributable to higher television broadcast rights fees, a percentage of which are paid as part of prize money.
Motorsports related expense increased to $35.3 million, with the majority of the increase associated with the promotional and advertising spending for the 50th Daytona 500. To a lesser extent advertising and additional race related expenses were driven by inclement weather during the Auto Club Race weekend also contributed to the increase.
- Food, beverage and merchandise expenses increased to $12.8 million for the quarter primarily due to variable costs associated with higher sales.
- General and administrative expenses increased to $27.7 million. The increase was primarily related to a full quarter of expenses for Chicagoland Speedway and Route 66 Raceway as compared to only one month during the first quarter of 2007. Property taxes and costs related to our ongoing business also contributed to the increase. Partially offsetting the increase were lower costs for the Kentucky litigation as compared to the first quarter of 2007.
- Depreciation and amortization during the quarter decreased to $17.3 million. The decrease was largely driven by lower accelerated depreciation associated with Daytona Live project as compared to the first quarter of 2007. Partially offsetting the decrease was a full quarter of depreciation for Chicagoland Speedway and Route 66 Raceway.
- The $731,000 impairment of long live assets is primarily attributable to an increase in the estimated costs of fill removal related to the company’s Staten Island property. To a lesser extent, impairment of certain other long live assets also contributed to the charge.
The net loss of $3.1 million and interest income was primarily due to the company recording a non-cash charge totaling approximately $3.8 million or 7 cents per share to correct the carrying value of certain life insurance agreements for certain officers.
The cumulative adjustment for tax exempt interest income recognized covers the six and a half year period through the end of fiscal 2007.
- Interest expense for the quarter decreased to approximately $3.6 million due to higher capitalized interest and lower average borrowings on the firm’s revolving credit facility in the current period.
- The equity and net income from equity investments of $1.8 million is related to the company’s 50% interest in Motorsports Authentics.
- The effective tax rate for this quarter increased to 41.6%. The increase is a primarily result of the tax exempt nature of the non-cash adjustment to interest income. The firm anticipates its full year effective tax rate will be approximately 39%.
As discussed in previous calls, last June the IRS commenced the administrative appeals process.
The company expects that the process could take up to 12 months to complete.
