Earnhardt’s Move To Hendrick May Result In 2007 Loss

DAYTONA BEACH, Fla. — International Speedway Corp. reported a successful fiscal second quarter to its shareholders last week.
“We hosted several successful event weekends during the second quarter, highlighted by solid corporate and consumer demand,” said ISC President Lesa France Kennedy in a statement. “As a result, we recorded higher total revenues on a comparable event basis, excluding the impact of lower television broadcast rights revenue. This growth was driven by increased sponsorship, admissions, advertising and hospitality revenues, and our outlook remains positive for the future.”
ISC’s revenues for the second quarter increased to $181.5 million, compared to revenues of $172.1 million in the prior-year period. Operating income was $35.0 million during the period compared to $52.2 million in the second quarter of fiscal 2006.
Net income for the second quarter of 2007 was $18.4 million, or $0.35 per diluted share, compared to net income of $30.7 million, or $0.58 per diluted share, in the prior year. Excluding the accelerated depreciation and impairment charges, non-GAAP net income for the 2007 second quarter was $27.1 million, or $0.51 per diluted share.
For the six months ended May 31, 2007, total revenues were $366.7 million, compared to $366.0 million in 2006. Operating income for the six-month period was $100.8 million, compared to $130.6 million in the prior year.
Net income for the six months ended May 31, 2007, was $54.2 million, or $1.02 per diluted share. In the first six months of 2006, net income was $74.7 million, or $1.40 per diluted share. Excluding the accelerated depreciation and impairment charges, non-GAAP net income for the first six months of 2007 was $64.6 million, or $1.21 per diluted share.
ISC’s statement confirmed the company will continue to work toward developing a motorsports facility in the Denver market and that while it is disappointed its proposal in Kitsap County, Wash., didn’t come to fruition, ISC still has great interest in building a track in the Pacific Northwest.
The statement also stated that ISC is continuing to identify potential race- track sites in the metropolitan New York region.
“No specific proposals have been offered or received, and the company does not have a predetermined timetable for concluding potential site evaluation efforts in the region. ISC strongly believes a premier facility in the nation's number-one media market is a significant long-term opportunity,” read the statement.
ISC expects fiscal 2007 litigation costs, including its defense in the Kentucky Speedway lawsuit, to range between $6 million and $7 million.
Motorsports Authentics, which ISC co-owns with Speedway Motorsports, expects to lose between $15 million and $20 million for fiscal 2007. Interestingly, while much was made of the high rate of sale of Dale Earnhardt, Jr. merchandise after he announced he would leave Dale Earnhardt, Inc., the ISC statement regarding Motorsports Authentics states, “More than half of the decline is associated with Dale Earnhardt, Jr.’s decision to leave DEI at the end of 2007, resulting in lower merchandise sales in multiple distribution channels.”
Finally, ISC announced its Board of Directors has increased the authorized limit for ISC's previously announced share repurchase program to $150 million.