This summary is based on the fourth quarter fiscal 2008 earnings call conducted by Speedway Motorsports Inc. (TRK) on March 11, 2009.
Management:
President and COO: Marcus G. Smith
Vice Chairman and CFO: William R. Brooks
Key Investor Issues:
- Full year revenues increased from $561.6 million to $611 million.
- Year-on-year income from continuing operations rose $54.3 million to $105.9 million or $2.44 per share versus $51.6 million or $1.17 per share in 2007.
Fourth Quarter Financial Highlights:
The company recorded Q4 total revenues of $130.6 million and income from continuing operations of $18.1 million or 42 cents per diluted share.
- Full year 2008 results include total revenues of $611 million and income from continuing operations of $105.9 million or $2.44 per diluted share.
- The full year 2009 earnings guidance is $1.70 to $1.90 per diluted share.
- The Q4 events held include the Lowe’s Motor Speedway event, the Bank of America 500 NASCAR Sprint Cup Series event and the Dollar General 300 NASCAR Nationwide Series event.
- At Atlanta Motor Speedway, the company had a successful weekend with Pep Boys 500 in October and the American Commercial Lines 200 NASCAR Camping World Series Truck Race.
- For 2009 in Atlanta, the company will host NASCAR’s very special and historically significant Labor Day weekend race on Saturday night.
- This is instead of the October weekend that the company has traditionally had at Atlanta Motor Speedway.
- At Texas Motor Speedway, the company hosted NASCAR’s largest crowd and the chase for the Sprint Cup in the final ten races of the season where the company had the Dickies 500 NASCAR Sprint Cup weekend.
In early 2008, the company purchased New Hampshire Motor Speedway.
- The management reported very successful year of operating the speedway and was accretive to earnings.
- The company also acquired Kentucky Speedway in December 2008.
- The company also completed construction of NHRA’s biggest and best drag way, zMAX Dragway at Lowe’s Motor Speedway.
The management reported that weather did play a factor in some of the events in 2008.
- The company had three NASCAR qualifying days canceled due to weather; one in Atlanta, one in Bristol and one in New Hampshire.
- Motorsports Authentics was significantly different from 2007 to 2008.
- The management was able to capitalize on Dale Jr.’s move to a new car, a new number and a new sponsor, as well as other events throughout the season.
- This helped turn around significantly the results at Motorsports Authentics in spite of the sour economy.
- The management also announced having put the oil and gas business into discontinued operations.
In corporate spending, all of the Sprint Cup entitlements have been sold for 2009.
- All of the Nationwide and Truck Series entitlements are sold as well.
- The management reported good results in renewals and extensions of the partnership relationships.
- Several of the partnerships are in ten year plus stages.
- The admissions continued to trickle down over the last year.
- For the first quarter 2009, the company has hosted two NASCAR Sprint Cup Series weekends.
Depreciation and interest was forecasted to be $85 million to $90 million but came in at $84 million.
- The diluted earnings per share from continuing operations were forecasted at $2.40 to $2.50.
- The company achieved $2.44.
The comparison of the 2008 results with 2007 results was impacted by the acquisition of the New Hampshire Speedway.
- The admissions were up $8 million for the year and the vast majority of that was from the New Hampshire Speedway.
- Without the New Hampshire Speedway, the ticket revenues would be down and most of the decline was in the fourth quarter.
The event related revenues for the year grew almost $14 million and about 7% over the same revenues for 2007.
- A lot of this is from the New Hampshire Speedway.
- Some were lesser impact from the NHRA event at Lowe’s.
- The broadcast revenues increased by $25.6 million or 18%, again mostly from the New Hampshire Speedway acquisition.
- The net revenue increased by about $650,000 or 9% over 2007.
- This was primarily due to better results at the non-event Motorsports merchandising and the Oil Chem Research Corporation.
For the year, direct expense of events increased about $13 million.
- The majority of the increase was due to hosting the New Hampshire Speedway.
- The other important factor was the NHRA Drag Racing at Lowe’s.
