Speedway Motorsports, Inc. Today reported second quarter 2007 total revenues of $180.8 million, net income of $40.3 million and diluted earnings per share of $0.92. Six month 2007 results include total revenues of $332.9 million, net income of $72.2 million and diluted earnings per share of $1.64. Also, SMI reaffirmed its full year 2007 earnings guidance of $2.43 to $2.53 per diluted share.
Second quarter and year-to-date 2007 results as compared to 2006 were impacted by, among other factors, the following:
lower revenues under NASCAR’s new broadcasting rights agreement as expected;
higher effective income tax rates as expected;
postponement of a major National Hot Rod Association (NHRA) racing event at Bristol Motor Speedway from the second to the third quarter 2007 for racing surface repairs;
cancellation of NASCAR NEXTEL Cup Series qualifying at Texas Motor Speedway in the second quarter 2007 due to poor weather; and
Texas Motor Speedway hosted an International Race of Champions (IROC) racing event in the second quarter 2006 that was not held in the second quarter 2007 due to IROC Series delays.
Second Quarter Comparison
For the second quarter 2007 as compared to 2006:
total revenues were $180.8 million in 2007 compared to $183.3 million in 2006;
net income was $40.3 million in 2007 compared to $45.5 million in 2006; and
diluted earnings per share were $0.92 in 2007 compared to $1.03 in 2006.
Year-to-Date Comparison
For the six month 2007 period as compared to 2006:
total revenues were $332.9 million in 2007 compared to $334.4 million in 2006;
net income was $72.2 million in 2007 compared to $77.7 million in 2006; and
diluted earnings per share were $1.64 in 2007 compared to $1.76 in 2006.
2007 Earnings Guidance Reaffirmed
The Company reaffirmed its previous full year 2007 guidance of $2.43 to $2.53 per diluted share, assuming current industry and economic trends continue, and excluding its 50% share of Motorsports Authentics joint venture operating results, changes in its non-core businesses, capital expenditures exceeding current plans, or the impact of further increases in fuel prices, interest rates, geopolitical conflicts, poor weather surrounding events or other unforeseen factors.
2007 Second Quarter Highlights
Similar to its first quarter, SMI’s second quarter highlights include continuing record levels of corporate marketing and other event related revenues for NASCAR racing events. Although somewhat similar to or increased over last year, SMI believes high fuel prices, higher interest rates and declines in consumer spending negatively impacted admissions, concessions, souvenir merchandising and certain other event related revenues in the quarter.
Texas Motor Speedway attracted strong attendance at its NASCAR Samsung 500 NEXTEL Cup and O’Reilly 300 Busch Series racing events, and Lowe’s Motor Speedway attracted increased attendance at its Coca-Cola 600 NEXTEL Cup Series, and strong attendance at its NASCAR NEXTEL All-Star Challenge and CARQUEST Auto Parts 300 NASCAR Busch Series, racing events. Other highlights include Infineon Raceway’s Toyota/Save Mart 350 NASCAR NEXTEL Cup Series racing weekend attracting higher attendance, and Texas Motor Speedway’s Bombardier Learjet 550 IndyCar and Sam’s Town 400 NASCAR Craftsman Truck Series racing events attracting large crowds.
Stock Repurchase Program
During the six months ended June 30, 2007, the Company repurchased 130,000 shares of common stock for approximately $5.1 million under its previously announced stock repurchase program. As of June 30, 2007, the Company has repurchased a total of 889,000 shares since adoption of the program in April 2005. In February 2007, the Company’s Board of Directors increased the authorized total number of shares that can be repurchased under the program from one million to two million shares.
Other Comments
“Our second quarter 2007 results show significant increases in most event related revenue categories, with particularly strong increases in sponsorship, advertising, radio broadcasting, camping and other corporate revenues. Also, attendance was higher at Lowe’s Motor Speedway’s Coca-Cola 600 and Infineon Raceway’s Toyota/Save Mart 350 NEXTEL Cup Series racing events, ” stated H. A. Wheeler, chief operating officer and president of Speedway Motorsports. “Even with high fuel prices and interest rates, SMI’s year-to-date results are reflecting higher admission and event related revenues. Those increases, along with our second quarter 2007 admissions and event related revenues, would have been even higher without Bristol Motor Speedway postponing its NHRA racing event to the third quarter 2007, or Texas Motor Speedway cancelling its NASCAR NEXTEL Cup Series qualifying racing event in the second quarter 2007 due to poor weather. “
“SMI’s 2007 motorsports business remains strong as demonstrated by our year-over-year increases in most revenue categories, except for NASCAR broadcasting revenues which declined as expected, ” stated O. Bruton Smith, chairman and chief executive officer of Speedway Motorsports. “Also, the trends in advance ticket sales and other event related revenues continue ahead of last year. Most 2007 and 2008 event entitlement sponsorships are already contracted. Many favorable industry dynamics beginning to unfold position us for strong long-term growth visibility, such as the ongoing refinements to the NEXTEL Cup championship race, the ‘Car of Tomorrow’, widening demographics and new marketing opportunities. ”
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