UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended February 28, 1995.
Commission file Number 0-2384
International Speedway Corporation
(Exact name of registrant as specified in its charter.)
Florida, U.S.A. 59-0709342
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1801 West International Speedway Boulevard, Daytona Beach, Florida 32114-1243
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (904) 254-2700
Indicate by check mark whether the registrant(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date:
Common Stock, $0.10 Par Value - 2,293,396 shares as of April 3, 1995.
PART I. - FINANCIAL INFORMATION
Item 1. - Financial Statements
INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Balance Sheets
February 28, August 31,
1995 1994
(Unaudited)
_______________________
(In Thousands)
ASSETS
Current Assets:
Cash and cash equivalents $ 19,044 $ 5,227
Short-term investments 17,703 21,920
Receivables, less allowance of $35 6,662 1,347
Inventories 1,145 1,069
Prepaid expenses and other current assets 1,707 1,800
________________________
Total Current Assets 46,261 31,363
Property and Equipment - at cost - less accumulated
depreciation of $30,505 ($28,320 at August 31) 62,703 58,579
Other Assets:
Cash surrender value of life insurance 476 459
Equity investment 2,207 2,628
Long-term investments 2,885 3,187
Other 222 185
_______________________
5,790 6,459
_______________________
Total Assets $114,754 $ 96,401
=======================
See accompanying notes and accountants' review report.
February 28, August 31,
1995 1994
(Unaudited)
_______________________
(In Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 2,163 $ 1,452
Deferred income 16,721 17,150
Income taxes payable 5,564 52
Other current liabilities 1,810 870
_______________________
Total Current Liabilities 26,258 19,524
Deferred income taxes 9,370 8,600
Shareholders' Equity:
Common stock, $.10 par value, 5,000,000 shares
authorized; 3,502,916 and 3,498,768 issued
at February 28 and August 31, respectively 350 350
Capital in excess of par value 2,350 1,861
Retained earnings 83,034 72,290
_______________________
85,734 74,501
Less: Treasury stock - at cost, 1,209,520 shares 5,599 5,599
Unearned compensation - restricted stock 1,009 625
(Note 5)
_______________________
Total Shareholders' Equity 79,126 68,277
_______________________
Total Liabilities and Shareholders' Equity $114,754 $ 96,401
=======================
See accompanying notes and accountants' review report.
INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Operations
Three Months ended
February 28
1995 1994
(Unaudited) (Unaudited)
_________________________
(In Thousands, Except
for Per Share Amounts)
REVENUES:
Admissions, net $18,859 $16,316
Food, beverage and souvenir income 5,958 4,927
TV broadcast rights fees 4,076 3,909
Other related income 5,839 4,433
Interest income 306 170
_________________________
35,038 29,755
EXPENSES:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees 4,955 4,106
Food, beverage and souvenir expenses 3,129 2,938
Other direct expenses 2,651 2,623
_________________________
10,735 9,667
Promotion, general and administrative expenses 3,703 3,040
Other related expenses 482 498
Depreciation 1,160 880
_________________________
16,080 14,085
_________________________
Income before income taxes 18,958 15,670
Income taxes 7,286 6,015
_________________________
Net Income $11,672 $ 9,655
=========================
Earnings per share (Note 2) $ 5.09 $ 4.22
=========================
Dividends per share $ - $ -
=========================
See accompanying notes and accountants' review report.
INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Operations
Six Months ended
February 28
1995 1994
(Unaudited) (Unaudited)
_________________________
(In Thousands, Except
for Per Share Amounts)
REVENUES:
Admissions, net $21,733 $18,537
Food, beverage and souvenir income 7,340 5,995
TV broadcast rights fees 4,246 4,064
Other related income 7,976 6,451
Interest income 633 402
_________________________
41,928 35,449
EXPENSES:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees 6,080 5,057
Food, beverage and souvenir expenses 4,378 3,957
Other direct expenses 3,475 3,450
_________________________
13,933 12,464
Promotion, general and administrative expenses 7,055 5,963
Other related expenses 1,131 1,184
Depreciation 2,262 1,735
_________________________
24,381 21,346
_________________________
Income before income taxes 17,547 14,103
Income taxes 6,746 5,446
_________________________
Net Income $10,801 $ 8,657
=========================
Earnings per share (Note 2) $ 4.72 $ 3.78
=========================
Dividends per share $ - $ -
=========================
See accompanying notes and accountants' review report.
International Speedway Corporation
Condensed Consolidated Statements of Shareholders' Equity
Unearned
Compen- Total
Capital in sation - Share-
Common Excess of Retained Treasury Restricted holders'
Stock Par Value Earnings Stock Stock Equity
______________________________________________________________
(In Thousands)
Balance at
August 31, 1993 $349 $1,103 $59,383 $(5,599) $ - $55,236
Activity 9/1/93-
2/28/94:
Net Income -
Unaudited - - 8,657 - - 8,657
Reacquisition of
previously issued
stock - unaudited - (1) (230) - - (231)
Restricted stock
granted-unaudited 1 759 - - (760) -
Amortization of
unearned compensa-
tion - unaudited - - - - 25 25
_____________________________________________________________
Balance at
February 28, 1994
- - - Unaudited 350 1,861 67,810 (5,599) (735) 63,687
Activity 3/1/94-
8/31/94:
Net income -
Unaudited - - 5,909 - - 5,909
Cash dividends
($.60 per share)
- unaudited - - (1,374) - - (1,374)
Reacquisition of
previously issued
stock - unaudited - - (55) - - (55)
Amortization of
unearned compensa-
tion - unaudited - - - - 110 110
____________________________________________________________
Balance at
August 31, 1994 350 1,861 72,290 (5,599) (625) 68,277
Activity 9/1/94-
2/28/95:
Net income -
Unaudited - - 10,801 - - 10,801
Reacquisition of
previously issued
stock - unaudited - - (57) - - (57)
Restricted stock
granted-unaudited - 489 - - (489) -
Amortization of
unearned compensa-
tion - unaudited - - - - 105 105
_____________________________________________________________
Balance at
February 28, 1995
- - - Unaudited $350 $2,350 $83,034 $(5,599) $(1,009) $79,126
==============================================================
See accompanying notes and accountants' review report.
International Speedway Corporation
Condensed Consolidated Statements of Cash Flows
Six months ended
February 28
1995 1994
(Unaudited) (Unaudited)
______________________________
(In Thousands)
OPERATING ACTIVITIES
Net income $10,801 $ 8,657
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 2,262 1,735
Amortization of unearned compensation 105 25
Deferred income taxes 770 550
Undistributed loss of affiliate 421 380
Changes in operating assets and liabilities:
Receivables (5,315) (3,599)
Inventories (76) (142)
Prepaid expenses and
other current assets 93 244
Cash surrender value of life insurance (17) (20)
Other assets (44) 50
Accounts payable 711 2,848
Deferred income (429) (1,086)
Income taxes payable 5,512 4,361
Other current liabilities 940 666
_______________________________
Net cash provided by
operating activities 15,734 14,669
INVESTING ACTIVITIES
Acquisition of investments (22,181) (34,923)
Proceeds from maturities of investments 26,700 35,077
Capital expenditures (6,379) (10,362)
_______________________________
Net cash used in investing activities (1,860) (10,208)
FINANCING ACTIVITIES
Reacquisition of previously issued
common stock (57) (231)
______________________________
Net cash used in financing activities (57) (231)
______________________________
Net increase in cash
and cash equivalents 13,817 4,230
Cash and cash equivalents at
beginning of period 5,227 6,123
______________________________
Cash and cash equivalents at
end of period $19,044 $10,353
===============================
See accompanying notes and accountants' review report.
International Speedway Corporation
Notes to Condensed Consolidated Financial Statements
February 28, 1995 and August 31, 1994
(Unaudited - See Accountants' Review Report)
1. Basis of Presentation
The accompanying condensed consolidated financial statements have been
prepared in compliance with Rule 10-01 of Regulation S-X and generally
accepted accounting principles but do not include all of the information and
disclosures required for complete financial statements. The statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company's latest annual report on Form 10-K. The
statements have been reviewed by the Company's independent accountants. In
management's opinion, the statements include all adjustments which are
necessary for a fair presentation of the results for the interim periods. All
such adjustments are of a normal recurring nature. Certain reclassifications
have been made to conform to the financial presentation at February 28, 1995.
Because of the seasonal concentration of racing events, the results of
operations for the three-month and six-month periods ended February 28, 1995
and 1994 are not indicative of the results to be expected for the year.
2. Earnings Per Share
Earnings per share have been computed on the weighted average total number of
common shares outstanding during the respective periods. Weighted average
shares outstanding for the three-month and six-month periods ended February
28, 1995 were 2,291,901 and 2,290,567, respectively. Weighted average shares
outstanding for the three-month and six-month periods ended February 28, 1994
were 2,287,830 and 2,286,051, respectively.
3. Related Party Disclosures and Transactions
All of the racing events that take place during the Company's fiscal year are
sanctioned by various racing organizations such as the Sports Car Club of
America (SCCA), Automobile Racing Club of America (ARCA), American
Motorcyclist Association (AMA), International Motor Sports Association (IMSA),
World Karting Association (WKA), Federation Internationale de l'Automobile
(FIA), Federation Internationale Motorcycliste (FIM), and the National
Association for Stock Car Auto Racing, Inc. (NASCAR). NASCAR, which sanctions
some of the Company's principal racing events, is a member of the France
Family Group which controls in excess of 60% of the outstanding stock of the
Company and some members of which serve as directors and officers. Standard
NASCAR sanction agreements require racetrack operators to pay sanction fees
and prize and point fund monies for each sanctioned event conducted. The
prize and point fund monies are distributed by NASCAR to participants in the
events. Prize and point fund monies paid by the Company to NASCAR for
disbursement to competitors totaled approximately $5.2 million and $4.2
million for the six-month and three-month periods ended February 28, 1995,
respectively, and approximately $4.3 million and $3.5 million for the
six-month and three-month periods ended February 28, 1994, respectively.
4. Supplemental Disclosures of Cash Flow Information
Cash paid for income taxes for the six months ended February 28, 1995 and 1994
is as follows: 1995 1994
______________________________
(Thousands of Dollars)
Income taxes paid $457 $535
==============================
5. Long-Term Incentive Restricted Stock
On January 1, 1995 and 1994, a total of 4,694 and 7,841 restricted shares of
the Company's common stock, respectively, were awarded to certain officers
and managers under the Company's Long Term Incentive Plan. The market value
of shares awarded on January 1, 1995 and 1994 amounted to approximately
$489,000 and $760,000, respectively, and has been recorded as unearned
compensation - restricted stock, which is shown as a separate component of
shareholders' equity in the accompanying condensed consolidated balance
sheets. The unearned compensation is being amortized over the vesting period
of the shares. The total expense charged against operations during the six
months ended February 28, 1995 and 1994 was approximately $105,000 and
$25,000, respectively.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition
Liquidity
Management believes that a high degree of liquidity is desirable due to the
inherent insurance and weather risks associated with the production of large
outdoor sporting and entertainment events. The trend during the past several
years has been for the Company to have increasing liquidity. This trend has
been due to a general increase in interest in motor sports, reflected in
increased live and broadcast audiences, and generally favorable weather
conditions for the events conducted at the Company's facilities. However, the
Company is expected to experience decreasing liquidity as it begins to
utilize its liquid assets to finance the capital projects described below
under the caption "Capital Resources".
The Company's combined position in cash and cash equivalents and short-term
investments at February 28, 1995 increased from August 31, 1994 primarily as a
result of cash flows from operations and proceeds from maturities of long term
investments. The increased cash flows were offset in part by payments made
for capital projects.
The Company's working capital at February 28, 1995 also increased from August
31, 1994 due primarily to the increase in cash and cash equivalents described
above, as well as to an increase in accounts receivable and a decrease in
deferred income related to the successful completion of the February 1995
Daytona events. These working capital increases were offset in part by the
use of cash to finance capital improvements, as well as by an increase in
accounts payable related to the seasonal concentration of racing events and
by an increase in income taxes payable as a result of income from operations
and the timing of estimated tax deposits.
The increase in other current liabilities is due to an increase in sales tax
payable related to revenue generated during the February 1995 Daytona events,
partially offset by a decrease in the payment of compensation accrued at
August 31, 1994.
The Company intends to continue to maintain the policy of investing excess
cash primarily in short-term investments. The staggered maturities of these
short-term investments would provide the Company with sufficient cash to
cover the expenses arising from a delay, postponement or cancellation of an
event due to poor weather conditions or other contingencies.
Management believes that the Company has the ability to generate adequate
amounts of cash through operations and outside financing, if necessary, to
meet the Company's operational needs on both a long- and short-term basis.
Capital Resources
The Company continues to invest in the general improvement and expansion of
its aging facilities. The Company's Board of Directors has approved projects
of this general recurring type with an estimated cost to complete of
approximately $9.1 million at February 28, 1995. These projects consist
primarily of additions and renovations to spectator capacity, paving,
concession facilities and administrative facilities and equipment. Management
anticipates the completion of these projects within the next 24 months based
on the availability of working capital resources.
In addition to the general recurring capital projects described above, the
Company's Board of Directors approved two significant new capital expenditures
in Fiscal 1994 - an addition to the Winston Tower at the Daytona facility, and
the development of a motorsports themed amusement complex at the Daytona
facility to be called "Daytona USA"(R). Commencement of construction is
contingent upon satisfactory completion of negotiations with governmental
agencies, obtaining appropriate permitting and successful finalization of
construction contracts.
The Winston Tower addition will encompass additional grandstands and suites,
as well as catering and concession facilities. Construction is intended to
begin in the summer of 1995. The project is expected to be completed in the
fall of 1996. The total anticipated cost of this project is approximately $10
million.
Daytona USA(R) will combine interactive mediums, theaters and numerous
historical memorabilia and exhibits to form a motorsports themed amusement
complex. The complex will be constructed adjacent to the existing Visitors
Center at Daytona International Speedway. The design and development of
Daytona USA(R) is currently underway. Construction is anticipated to begin in
1995 and opening is scheduled for the summer of 1996. Total costs related to
this project are expected to approximate $18 million.
Based on the Company's current liquidity, cash and investment positions, as
well as the Company's unused lines of credit of approximately $16 million,
management believes that its present capital resources are sufficient to meet
anticipated financing requirements in fiscal 1995. If both the Winston Tower
addition and Daytona USA(R) projects are under construction concurrently, the
Company may negotiate outside financing as needed. In management's opinion,
financing resources are available to provide sufficient liquidity for
continuing operations.
Equity investments decreased from August 31, 1994 as a result of the
recognition of the Company's 50% share of the current loss from operations at
Watkins Glen International. The Company uses the equity method to account for
its investment in Watkins Glen. Due to the concentration of Watkins Glen's
events during the summer months, the results at February 28, 1995 are not
indicative of the results to be expected for the year.
Income Taxes
Due to the seasonal fluctuation of the Company's business, estimated tax
deposits are not required until the third quarter of operations. As a result,
income taxes payable at February 28, 1995 have increased since August 31, 1994.
The deferred income tax liability increased from August 31, 1994 primarily as
a result of differences between financial and tax accounting treatments
relating to depreciation expense.
Inflation
Management does not believe that inflation has had a material impact on
operating costs and earnings of the Company. The Company has demonstrated the
ability to appropriately adjust prices in reaction to changing costs and has
aggressively pursued an ongoing cost improvement effort.
Results Of Operations
Revenues
Admission income increased during the three months and six months ended
February 28, 1995, as compared to the three months and six months ended
February 28, 1994, as a result of increases in certain ticket prices and
increased attendance.
Food, beverage and souvenir income increased for the three months and six
months ended February 28, 1995 compared to the corresponding periods of 1994,
as a result of the expanded catering operations at the Daytona facility by the
Company's wholly-owned subsidiary, Americrown Service Corporation. The
increase is also attributable to increased attendance and related concession
and souvenir sales.
Other related income increased for the three months and six months ended
February 28, 1995, as compared to the three months and six months ended
February 28, 1994, primarily as a result of increased promotional fees,
advertising, and royalties, and increased rentals of the Company's
hospitality facilities.
Interest income increased for the three month and six month periods ended
February 28, 1995, as compared to the corresponding periods of 1994, primarily
due to higher average investment balances and increased interest rates.
Expenses
Prize and point fund monies and NASCAR sanction fees increased in the three-
month and six month periods ended February 28, 1995 as compared to the
corresponding periods of 1994 primarily as a result of increased prize and
point fund monies distributed by NASCAR to participants in events.
Food, beverage and souvenir expenses increased in the three-month and
six-month periods ended February 28, 1995 as compared to three months and six
months ended February 28, 1994, primarily as a result of increased personnel
and payroll costs, and cost of sales related to increased revenues.
Promotion, general and administrative expenses increased during the three-month
and six month periods ended February 28, 1995 as compared to corresponding
periods of 1994, due primarily to increased payroll and personnel costs and
professional fees.
Because of the seasonal concentration of racing events, the results of
operations for the three-month and six-month periods ended February 28, 1995
and 1994 are not indicative of the results to be expected for the year.
Review Report of Independent Certified Public Accountants
The Board of Directors
International Speedway Corporation
We have reviewed the accompanying condensed consolidated balance sheet of
International Speedway Corporation as of February 28, 1995, and the related
condensed consolidated statements of operations for the three-month and six-
month periods ended February 28, 1995 and 1994, and the condensed consolidated
statements of shareholders' equity and cash flows for the six-month periods
ended February 28, 1995 and 1994. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial
statements referred to above for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of August 31, 1994, and the
related consolidated statements of income, shareholders' equity and cash
flows for the year then ended (not presented separately herein) and in our
report dated October 14, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of August 31,
1994, is fairly stated in all material respects in relation to the
consolidated balance sheet from which it has been derived.
/s/ Ernst & Young, LLP
Jacksonville, Florida
April 5, 1995
PART II - OTHER INFORMATION
Item #6 Exhibits and Reports on Form 8-K
a. Exhibits
I. (27) - Article 5 Fin. Data Schedule for 2nd Qtr 10-Q
B. Reports on Form 8-K
No reports have been filed on Form 8-K during this quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL SPEEDWAY CORPORATION
(Registrant)
Date April 11, 1995 /s/ Harry Lee Combs
Harry Lee Combs, CPA, Vice President
and Chief Financial Officer