DAYTONA BEACH, Fla., Dec. 10 /PRNewswire-FirstCall/ — International
Speedway Corporation (Nasdaq: ISCA; OTC Bulletin Board: ISCB) (“ISC”) today
reiterated financial guidance for fiscal 2008 and provided formal financial
guidance for the fiscal year ending November 30, 2009.
“The 2008 NASCAR season featured many highlights, most notably the 50th
running of the Daytona 500 and Jimmie Johnson clinching his historic third
consecutive NASCAR Sprint Cup Championship at Homestead-Miami Speedway,” said
ISC President Lesa France Kennedy. “Millions of fans were treated to exciting
on-track competition that is a hallmark of the sport and we were pleased with
the television viewership increase posted by all three of NASCAR’s national
touring series.”
Ms. France Kennedy continued, “While there were many positives during
2008, the season also had its share of challenges. The economic downturn had
a noticeable effect on attendance-related revenues for the Company.
Hospitality and sponsorship spending by our corporate partners was also
affected, although to a lesser extent. Given the continued difficult
macroeconomic backdrop, we anticipate facing similar challenges in 2009.
“Fortunately, ISC is in good financial shape to weather the economic
downturn. We are the leading promoter of the premier sports property NASCAR,
which boosts 75 million plus fans. Also, we offer companies a nationwide
platform with prominent events in every month of the race season that allows
them to reach the most brand loyal fans in all of sports.”
FULL YEAR 2008 FINANCIAL OUTLOOK
The Company continues to anticipate its 2008 full year total revenues will
range between $780 million and $785 million, and non-GAAP earnings of between
$2.80 and $2.85 per diluted share.
The earnings guidance excludes the impact of accelerated depreciation for
certain office and related buildings in Daytona Beach; impairment charges of
long-lived assets associated with the fill removal process at its Staten
Island property and the net book value of certain assets retired from service;
a tax benefit associated with certain restructuring initiatives; a non-cash
charge to correct the carrying value of certain other assets; and, an
allowance against advances associated with our joint venture project in Kansas
for the development of a gaming and entertainment destination.
FISCAL 2009 FINANCIAL OUTLOOK
Revenues and Earnings Per Share
For the twelve months ending November 30, 2009, ISC anticipates total
revenues for the full year will range between $745 million and $765 million.
Full year earnings are expected to range between $2.35 and $2.45 per diluted
share, with the Company currently more comfortable at the low end of the
earnings range. This earnings guidance excludes the impact of accelerated
depreciation for certain office and related buildings in Daytona Beach, which
is expected to be recorded during the first and second quarters of fiscal
2009.
Major Event Schedule Comparison
Full
First Second Third Fourth Fiscal
Quarter Quarter Quarter Quarter Year
2008 2009 2008 2009 2008 2009 2008 2009 2008 2009
Series Name
NASCAR Sprint Cup 4 4 5 5 6 5 6 7 21 21
NASCAR Nationwide 2 2 4 4 6 5 4 5 16 16
NASCAR Camping World(1) 2 2 2 2 1 2 4 4 9 10
IRL IndyCar 0 0 2 1 2 3 1 1 5 5
ARCA RE/MAX 1 1 1 1 1 2 2 1 5 5
Grand-Am Rolex Sports Car 1 1 1 0 4 4 0 1 6 6
AMA Superbike/Supercross 0 0 3 3 0 0 0 0 3 3
10 10 18 16 20 19 17 20 65 66
(1) Titled the NASCAR Craftsman Truck Series in 2008.
Core Operations
ISC continues to enjoy solid consumer and corporate demand for its
schedule of events, but in light of the current macroeconomic environment the
Company is projecting:
— Attendance-related revenues, including admissions, and food, beverage &
merchandise, to be down in the mid- to high single digits on a percentage
basis as compared to estimated fiscal 2008; and,
— Other motorsports-related revenues (not including domestic television
and ancillary media right which is discussed below), which is primarily
comprised of sponsorship, hospitality, advertising and other related revenues,
to be down in the mid-single digits compared to 2008.
— Partially offsetting the decrease is the domestic television and
ancillary media rights fees revenue which will increase approximately 2.5
percent compared to 2008.
In response to this lower revenue outlook, ISC is aggressively managing
controllable expenses with ongoing cost containment initiatives. The Company
is balancing any cost containment initiatives with the risk of damaging the
quality of the guest experience, which would have a detrimental effect on
ticket renewals and customer retention.
Margins
ISC is projecting its collective 2009 controllable event and
administrative expenses will be flat year-over-year and EBITDA margins to be
comparable with 2008.
Quarter Quarter Quarter Quarter Year
Ending Ending Ending Ending Ending
02/28/09 05/31/09 08/31/09 11/30/09 11/30/09
EBITDA (1) 42% - 43% 33% - 34% 33% - 34% 38% - 39% 37% - 38%
Operating 32% - 33% 23% - 24% 23% - 24% 30% - 31% 27% - 28%
(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.
Other Items
The Company’s full year earnings guidance includes a number of significant
assumptions that are subject to change depending on the availability of
financing on acceptable terms. Specifically, ISC has assumed it will have the
ability to refinance its $150 million in Senior Notes prior to their maturity
in April 2009, at a blended rate of no more than 8.5 percent for a term of 10
years. Given the anticipated refinancing, the Company is assuming it will
fund from operating cash flow between $65 million and $70 million for capital
spending at its existing facilities and a similar amount for open market share
repurchases. Lastly, the projections do not anticipate cash inflows from the
sale of ISC’s Staten Island property or a settlement in the ongoing appeals
process with the IRS.
At the beginning of October, taking into consideration of the uncertainty
in the credit markets, the Company drew down $150 million from its revolving
credit facility (the “Revolver”) to ensure its ability to meet the Senior
Notes maturity in April. In a scenario where ISC cannot secure terms for an
acceptable long term financing in early 2009, it will use its Revolver
capacity to bridge to a more favorable credit market or, in a worse case,
utilize operating cash flow to pay down the balance on the Revolver. In such
a scenario, the Company will decrease spending at its existing facilities to
approximately $50 million, which is the minimum amount of investment necessary
for maintenance capital expenditures, safety and regulatory requirements, and
preserving the guest experience at its events. Also, ISC would be very
limited in its ability to buyback shares through its share repurchase program.
It is important to note that the $65 million to $70 million capital
expenditure estimate does not include approximately $15 million in 2009
spending for ISC’s joint venture for the development of Daytona Live!, a
retail, entertainment, office and residential project near Daytona
International Speedway. The office building phase of Daytona Live!, which is
fully financed, is under construction with a scheduled opening in the latter
part of the 2009 fourth quarter.
In addition, the Company’s capital expenditures guidance does not include
any spending for its 50/50 joint venture to develop a Hard Rock Hotel & Casino
adjacent to Kansas Speedway. The joint venture, in September, was awarded the
casino management contract for Wyandotte County, Kansas, by the Kansas Lottery
Gaming Facility Review Board. However, on December 5, 2008, the joint venture
withdrew its application for Lottery Gaming Facility Manager for the Northeast
Kansas gaming zone due to the uncertainty in the global financial markets and
the expected inability to debt finance the full project at reasonable rates.
Once the Kansas Lottery Commission re-opens the bidding for the Northeast
zone, the joint venture will re-apply with a proposal that factors in phasing
in the non-gaming components of the development. At this point, the Company
does not have clarity as to when the Kansas Lottery Commission will begin
accepting bids or the timetable for the selection process.
Ms. France Kennedy concluded, “A benefit of being in business for more
than 50 years is that the Company and the sport have persevered through many
challenging economic periods. One key to our continued success has been our
execution of a proven long-term business plan supported by a strong financial
profile. While we will continue to keep a close eye on national economic
trends and their impact on consumer and corporate spending, we remain
confident that we will get through these times as a stronger, better operated
company.”
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 financial guidance call, identification number 76108412. A live
Webcast will also be available at that time on the Company’s Web site,
www.iscmotorsports.com, under the “Investor Relations” section.
A replay will be available two hours after the end of the call through
midnight Wednesday, December 24, 2008. To access, dial (800) 642-1687 and
enter the code 76108412, 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.
The Company also owns and operates MRN(R) Radio, the nation’s largest
independent sport 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
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.
