~Reaffirms Full Year 2018
Guidance~
International Speedway Corporation (NASDAQ Global
Select Market:ISCA) (OTC Bulletin Board:ISCB)
(“ISC”) today reported financial results for its
fiscal second quarter ended May 31, 2018.
"Our overall financial results for second quarter are in line
with expectations and the 2018 outlook, despite admissions
headwinds faced during the quarter," stated Lesa France Kennedy,
ISC Chief Executive Officer. "Revenue for events held during the
quarter was impacted by weather, construction at ISM Raceway, and a
general trend of lower sales at live sporting events. We remain
committed to our consumer focused sales and marketing initiatives,
providing segmented experiences desired by fans for a good value,
which have proven to yield positive results against these
trends."
"The developments at ISM Raceway and Richmond Raceway are
progressing nicely. At ISM Raceway, new renovations are on
schedule, as the last remaining grandstand and media structures
were recently removed. At the spring event in Richmond, fans
experienced a preview of the future infield. These revitalized
facilities will immerse guests into race day activities that can
only be experienced at NASCAR events. Both projects will be
completed in the fourth quarter of 2018."
"Development at ONE DAYTONA continues. Many tenants have
recently completed construction and commenced operations, including
first-to-market brands Hy's Toggery, Kasa Living and Clair de Lune.
We eagerly await additional tenant openings in the near future.
Entertainment is also a focus for ONE DAYTONA, with Victory Circle
fast becoming the development's focal point, already hosting events
from live music and car shows to meet and greets and community
festivals. We anticipate ONE DAYTONA to be the epicenter for
retail, dining and entertainment in the Daytona Beach area."
"During the quarter, we announced a 9.3 percent increase to our
annual dividend for 2018, further demonstrating our commitment to
deliver shareholder value."
Second Quarter Comparison
Total revenues for the three months ended May 31, 2018 were
approximately $171.7 million, compared to revenues of
approximately $165.3 million for the same period in fiscal
2017. Operating income was approximately $17.3 million during
the period compared to approximately $18.4 million for the
same period in fiscal 2017. Period-over-period comparability was
impacted by:
- In the second quarter of fiscal 2018, we hosted the Country 500
music festival at Daytona International Speedway ("Daytona"),
whereby due to certain changes in contractual agreements, a higher
amount of event revenues and expenses was recorded in fiscal 2018
as compared to fiscal 2017. Concessions revenue and expense were
recorded similarly for both periods. Overall attendance and
concession sales in fiscal 2018 were significantly impacted by
tropical storm Alberto, prior to, and during, the event;
- In the second quarter of fiscal 2018, we received lease rents,
and incurred operating expenses, related to ONE DAYTONA as a result
of certain tenants commencing operations in the period, for which
there was no comparable activity in the same period of fiscal 2017
(see "External Growth, Financing-Related and Other Initiatives -
ONE DAYTONA");
- During the three months ended May 31, 2018, we recognized
$1.8 million of revenue related to insurance proceeds. There
was no comparable activity in fiscal 2017;
- During the three months ended May 31, 2017, we received a
favorable settlement relating to certain facility operations of
approximately $1.0 million, or $0.01 per diluted share. There
was no comparable activity in fiscal 2018;
- During the three months ended May 31, 2018, we recognized
approximately $0.1 million, or less than $0.01 per
diluted share, in non-recurring costs that are included in general
and administrative expense related to The ISM Raceway Project (see
"External Growth, Financing-Related and Other Initiatives - The ISM
Raceway Project Powered by DC Solar"). During the three months
ended May 31, 2017, we recognized approximately
$0.1 million, or less than $0.01 per diluted share, in similar
costs related to The ISM Raceway Project;
- During the three months ended May 31, 2018, we recognized
approximately $0.3 million, or $0.01 per diluted share, of
accelerated depreciation due to shortening the service lives of
certain assets associated with The ISM Raceway Project and other
capital improvements, including the infield project at Richmond
Raceway (see "External Growth, Financing-Related and Other
Initiatives - Richmond Raceway"). During the three months ended
May 31, 2017, we recognized $2.0 million, or $0.03 per
diluted share, of similar costs associated with The ISM Raceway
Project;
- During the three months ended May 31, 2018, we recognized
approximately $0.1 million, or less than $0.01 per
diluted share, of asset retirement losses primarily attributable to
demolition and/or asset relocation costs in connection with
facility optimization initiatives and ONE DAYTONA. During the three
months ended May 31, 2017, we recognized approximately
$0.3 million, or less than $0.01 per diluted share of similar
losses related to The ISM Raceway Project;
- During the three months ended May 31, 2018, we recognized
total capitalized interest of approximately $0.8 million, or $0.02
per diluted share, primarily associated with The ISM Raceway
Project and, to a lesser extent, ONE DAYTONA. During the three
months ended May 31, 2017, we capitalized interest of
approximately $0.6 million, or $0.01 per diluted share, associated
with ONE DAYTONA and approximately $0.2 million, or less than $0.01
per diluted share, related to The ISM Raceway Project; and,
- During the three months ended May 31, 2018, our effective
tax rate decreased primarily as a result of tax legislation
associated with the Tax Cuts and Jobs Act, and to a lesser extent,
one-time cumulative reductions in certain state tax
liabilities.
Net income for the three months ended May 31, 2018, was
approximately $16.7 million, or $0.38 per diluted share,
compared to approximately $13.2 million, or $0.29 per diluted
share, in the prior year period. Excluding legal settlement,
non-recurring costs associated with The ISM Raceway Project,
accelerated depreciation related to The ISM Raceway Project and
other capital improvements including the infield project at
Richmond, losses associated with the retirements of certain other
long-lived assets, and capitalized interest associated with ONE
DAYTONA and The ISM Raceway Project, non-GAAP net income, as
defined below, was $16.4 million, or $0.37 per diluted share,
as compared to $13.6 million, or $0.30 per diluted share, for
the three months ended May 31, 2018 and 2017, respectively
(see "GAAP to Non-GAAP Reconciliation").
Year-to-Date Comparison
Total revenues for the six months ended May 31, 2018 were
approximately $320.6 million, compared to revenues of
approximately $313.2 million for the same period in fiscal
2017. Operating income was approximately $49.8 million during
the period compared to approximately $52.2 million for the
same period in fiscal 2017. Period-over-period comparability was
impacted by:
- In the first quarter of fiscal 2017, we hosted the Ferrari
World Finals at Daytona International Speedway, for which there was
no comparable event in fiscal 2018;
- In the second quarter of fiscal 2018, we hosted the Country 500
music festival at Daytona, whereby due to certain changes in
contractual agreements, a higher amount of event revenues and
expenses was recorded in fiscal 2018 as compared to fiscal 2017.
Concessions revenue and expense were recorded similarly for both
periods. Overall attendance and concession sales in fiscal 2018
were significantly impacted by tropical storm Alberto, prior to,
and during, the event;
- During the six months ended May 31, 2018, we received
lease rents, and incurred operating expenses, related to ONE
DAYTONA as a result of certain tenants commencing operations in the
period, for which there was no comparable activity in the same
period of fiscal 2017 (see "External Growth, Financing-Related and
Other Initiatives - ONE DAYTONA");
- During the six months ended May 31, 2018, we recognized
$1.8 million of revenue related to insurance proceeds. There
was no comparable activity in fiscal 2017;
- In the second quarter of fiscal 2017, we received a favorable
settlement relating to certain facility operations of approximately
$1.0 million, or $0.01 per diluted share. There was no
comparable activity in fiscal 2018;
- During the six months ended May 31, 2018, we recognized
approximately $0.2 million, or less than $0.01 per
diluted share, in non-recurring costs that are included in general
and administrative expense related to The ISM Raceway Project (see
"External Growth, Financing-Related and Other Initiatives - The ISM
Raceway Project Powered by DC Solar"). During the six months ended
May 31, 2017, we recognized approximately $0.2 million, or
less than $0.01 per diluted share, in similar costs related to The
ISM Raceway Project;
- During the six months ended May 31, 2018, we recognized
approximately $1.2 million, or $0.02 per diluted share, of
accelerated depreciation due to shortening the service lives of
certain assets associated with The ISM Raceway Project and other
capital improvements, including the infield project at Richmond
Raceway (see \"External Growth, Financing-Related and Other
Initiatives - Richmond Raceway"). During the six months ended
May 31, 2017, we recognized $2.7 million, or $0.04 per
diluted share, of similar costs associated with The ISM Raceway
Project;
- During the six months ended May 31, 2018, we recognized
approximately $1.2 million, or $0.02 per diluted share,
of asset retirement losses primarily attributable to demolition
and/or asset relocation costs in connection with facility
optimization initiatives, and to a lesser extent, ONE DAYTONA.
During the six months ended May 31, 2017, we recognized
approximately $0.3 million, or less than $0.01 per diluted
share, of similar losses related to The ISM Raceway Project;
- During the six months ended May 31, 2018, we recognized
total capitalized interest of approximately $1.7 million, or
$0.03 per diluted share, of which approximately $1.5 million, or
$0.03 per diluted share, was associated with The ISM Raceway
Project and $0.2 million, or less than $0.01 per diluted share,
associated with ONE DAYTONA. During the six months ended
May 31, 2017, we recognized total capitalized interest of
approximately $1.4 million, or $0.02 per diluted share, of which
approximately $1.1 million, or $0.02 per diluted share,
associated with ONE DAYTONA and approximately $0.3 million, or
less than $0.01 per diluted share, related to The ISM Raceway
Project; and
- During the six months ended May 31, 2018, our effective
tax rate decreased primarily as a result of tax legislation
associated with the Tax Cuts and Jobs Act, and to a lesser extent,
one-time cumulative reductions in certain state tax liabilities.
Additionally, in the first quarter of fiscal 2018, we recorded a
non-recurring, non-cash income tax benefit related to the
Tax Cuts and Jobs Act of approximately $143.9
million, or $3.25 per diluted share.
Net income for the six months ended May 31, 2018, was
approximately $186.0 million, or $4.21 per diluted share,
compared to approximately $34.5 million, or $0.77 per diluted
share, in the prior year period. Excluding legal settlement,
non-recurring costs associated with The ISM Raceway Project,
accelerated depreciation related to The ISM Raceway Project and
other capital improvements including the infield project at
Richmond, losses associated with the retirements of certain other
long-lived assets, capitalized interest associated with ONE DAYTONA
and The ISM Raceway Project, and the income tax benefit related to
the Tax Cuts and Jobs Act, non-GAAP net income,
as defined below, was $42.8 million, or $0.97 per diluted
share, as compared to $35.0 million, or $0.78 per diluted
share, for the six months ended May 31, 2018 and 2017,
respectively (see "GAAP to Non-GAAP Reconciliation").
GAAP to Non-GAAP Reconciliation
The following discussion and analysis of our financial condition
and results of operations is presented below using financial
measures other than U.S. generally accepted accounting principles
(“non-GAAP”). Non-GAAP financial measures, such as Adjusted EBITDA
(see below for management interpretation of Adjusted EBITDA),
should not be considered a substitute for, or superior to, measures
of financial performance prepared in accordance with
U.S. generally accepted accounting principles ("GAAP"). The
non-GAAP financial measures disclosed herein do not have standard
meaning and may vary from the non-GAAP financial measures used by
other companies or how we may calculate those measures in other
instances from time to time. The financial information, presented
in the tables that follow, has been reconciled to comparable GAAP
measures (see "Adjusted EBITDA" below).
The non-GAAP financial measures identified in the tables that
follow include adjusted income before taxes, adjusted net income
and adjusted diluted earnings per share. These non-GAAP financial
measures are derived by adjusting amounts for certain items,
presented in the accompanying selected operating statement data
that have been determined in accordance with GAAP. The financial
measures, income before taxes, net income and diluted earnings per
share, should not be construed as an inference by us that our
future results will be unaffected by those items, which have been
excluded to achieve our adjusted, non-GAAP financial measures.
We believe such non-GAAP information is useful and meaningful,
and is used by investors to assess the performance of our core
operations, which primarily consist of the ongoing promotions of
racing events at our major motorsports entertainment facilities.
Such non-GAAP information separately identifies, displays, and
adjusts for items that are not considered to be reflective of our
continuing core operations at our motorsports entertainment
facilities. We believe that such non-GAAP information improves the
comparability of the operating results and provides a better
understanding of the performance of our core operations for the
periods presented.
We use this non-GAAP information to analyze current performance
and trends, and make decisions regarding future ongoing operations.
This non-GAAP financial information may not be comparable to
similarly titled measures used by other entities and should not be
considered as an alternative to operating income, net income or
diluted earnings per share, which are determined in accordance with
GAAP. The presentation of this non-GAAP financial information is
not intended to be considered independent of, or as a substitute
for, results prepared in accordance with GAAP. Management uses both
GAAP and non-GAAP information in evaluating and operating the
business and as such deemed it important to provide such
information to investors.
The following financial information is reconciled to comparable
information presented using GAAP. Non-GAAP net income and diluted
earnings per share below are derived by adjusting amounts
determined in accordance with GAAP for certain items presented in
the accompanying selected operating statement data.
The adjustments for fiscal 2017 relate to non-recurring costs
incurred associated with The ISM Raceway Project, accelerated
depreciation (associated with The ISM Raceway Project), legal
settlement, losses associated with the retirements of certain other
long-lived assets (associated with The ISM Raceway Project), and
capitalized interest (associated with ONE DAYTONA and The ISM
Raceway Project).
The adjustments for fiscal 2018 relate to non-recurring costs
incurred associated with The ISM Raceway Project, losses associated
with the retirements of certain other long-lived assets in
connection with facility optimization initiatives and ONE DAYTONA,
accelerated depreciation (related to The ISM Raceway Project and
other capital improvements including the infield project at
Richmond), capitalized interest related to The ISM Raceway Project
and ONE DAYTONA, and the income tax benefit related to the
Tax Cuts and Jobs Act.
Amounts are in thousands, except per share data, which is shown
net of income taxes, (unaudited):
|
|
|
Three Months Ended May 31, 2017 |
|
Income BeforeTaxes |
Income TaxEffect |
Net Income |
Earnings PerShare |
GAAP |
$ |
21,410 |
|
$ |
8,183 |
|
$ |
13,227 |
|
$ |
0.29 |
|
Adjustments: |
|
|
|
|
The ISM
Raceway Project |
89 |
|
34 |
|
55 |
|
0.00 |
|
Accelerated depreciation |
2,040 |
|
780 |
|
1,260 |
|
0.03 |
|
Losses on
retirements of long-lived assets |
283 |
|
108 |
|
175 |
|
0.00 |
|
Legal
settlement |
(980 |
) |
(375 |
) |
(605 |
) |
(0.01 |
) |
Capitalized interest |
(812 |
) |
(310 |
) |
(502 |
) |
(0.01 |
) |
Non-GAAP |
$ |
22,030 |
|
$ |
8,420 |
|
$ |
13,610 |
|
$ |
0.30 |
|
|
|
|
|
|
|
Three Months Ended May 31, 2018 |
|
Income BeforeTaxes |
Income TaxEffect |
Net Income |
Earnings PerShare |
GAAP |
$ |
21,440 |
|
$ |
4,770 |
|
$ |
16,670 |
|
$ |
0.38 |
|
Adjustments: |
|
|
|
|
The ISM
Raceway Project |
111 |
|
29 |
|
82 |
|
0.00 |
|
Accelerated depreciation |
301 |
|
79 |
|
222 |
|
0.01 |
|
Losses on
retirements of long-lived assets |
132 |
|
33 |
|
99 |
|
0.00 |
|
Capitalized interest |
(844 |
) |
(220 |
) |
(624 |
) |
(0.02 |
) |
Non-GAAP |
$ |
21,140 |
|
$ |
4,691 |
|
$ |
16,449 |
|
$ |
0.37 |
|
|
|
|
|
|
|
Six Months Ended May 31, 2017 |
|
Income BeforeTaxes |
Income TaxEffect |
Net Income |
Earnings PerShare |
GAAP |
$ |
55,732 |
|
$ |
21,232 |
|
$ |
34,500 |
|
$ |
0.77 |
|
Adjustments: |
|
|
|
|
The ISM
Raceway Project |
247 |
|
94 |
|
153 |
|
0.00 |
|
Accelerated depreciation |
2,686 |
|
1,027 |
|
1,659 |
|
0.04 |
|
Legal
settlement |
(980 |
) |
(375 |
) |
(605 |
) |
(0.01 |
) |
Losses on
retirements of long-lived assets |
283 |
|
108 |
|
175 |
|
0.00 |
|
Capitalized interest |
(1,441 |
) |
(550 |
) |
(891 |
) |
(0.02 |
) |
Non-GAAP |
$ |
56,527 |
|
$ |
21,536 |
|
$ |
34,991 |
|
$ |
0.78 |
|
|
|
|
|
|
|
Six Months Ended May 31, 2018 |
|
Income BeforeTaxes |
Income TaxEffect |
Net Income |
Earnings PerShare |
GAAP |
$ |
55,893 |
|
$ |
(130,123 |
) |
$ |
186,016 |
|
$ |
4.21 |
|
Adjustments: |
|
|
|
|
The ISM
Raceway Project |
216 |
|
56 |
|
160 |
|
0.00 |
|
Accelerated depreciation |
1,154 |
|
301 |
|
853 |
|
0.02 |
|
Losses on
retirements of long-lived assets |
1,248 |
|
325 |
|
923 |
|
0.02 |
|
Capitalized interest |
(1,672 |
) |
(436 |
) |
(1,236 |
) |
(0.03 |
) |
Benefit
of income tax law change |
— |
|
143,900 |
|
(143,900 |
) |
(3.25 |
) |
Non-GAAP |
$ |
56,839 |
|
$ |
14,023 |
|
$ |
42,816 |
|
$ |
0.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
In an effort to enhance the comparability and understandability
of certain forward looking financial guidance, we adjust for
certain non-recurring items that will be included in our future
GAAP reporting to provide information that we believe best
represents our expectations for our business performance. We
calculate Adjusted EBITDA, a non-GAAP financial measure, as GAAP
operating income, plus depreciation, amortization,
impairment/losses on retirements of long-lived assets, other
previously stated non-GAAP adjustments, and cash distributions from
equity investments. We have not reconciled the non-GAAP
forward-looking measure to its most directly comparable GAAP
measure, such as those of ONE DAYTONA and The ISM Raceway Project
(see "External Growth, Financing-Related and Other Initiatives").
Such reconciliations would require unreasonable efforts to estimate
and quantify various necessary GAAP components largely because
forecasting or predicting our future operating results is subject
to many factors not in our control or not readily predictable, as
detailed in the Risk Factors section of the Company's previously
publicly filed documents, including Forms 10-K and 10-Q, with the
SEC, any or all of which can significantly impact our future
results. These components, and other factors, could significantly
impact the amount of the future directly comparable GAAP measures,
which may differ significantly from their non-GAAP
counterparts.
The following schedule reconciles the Company's financial
performance prepared in accordance with GAAP to the non-GAAP
financial measure of Adjusted EBITDA (in thousands):
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
May 31, 2017 |
|
May 31, 2018 |
|
May 31, 2017 |
|
May 31, 2018 |
|
|
|
|
|
|
|
|
Net Income
(GAAP) |
$ |
13,227 |
|
|
$ |
16,670 |
|
|
$ |
34,500 |
|
|
$ |
186,016 |
|
Adjustments: |
|
|
|
|
|
|
|
Income
tax expense (benefit) |
8,183 |
|
|
4,770 |
|
|
21,232 |
|
|
(130,123 |
) |
Interest
income |
(251 |
) |
|
(732 |
) |
|
(368 |
) |
|
(1,253 |
) |
Interest
expense |
3,067 |
|
|
2,900 |
|
|
6,319 |
|
|
5,785 |
|
Other |
(2 |
) |
|
— |
|
|
(14 |
) |
|
(15 |
) |
Equity in
net income from equity investments |
(5,799 |
) |
|
(6,351 |
) |
|
(9,426 |
) |
|
(10,659 |
) |
Operating
Income (GAAP) |
$ |
18,425 |
|
|
$ |
17,257 |
|
|
$ |
52,243 |
|
|
$ |
49,751 |
|
Adjustments: |
|
|
|
|
|
|
|
Depreciation and amortization |
28,269 |
|
|
26,859 |
|
|
54,770 |
|
|
53,598 |
|
Impairments/losses on retirements of long-lived assets |
374 |
|
|
195 |
|
|
404 |
|
|
1,357 |
|
Other
Non-GAAP adjustments (1) |
(891 |
) |
|
111 |
|
|
(733 |
) |
|
216 |
|
Cash
distributions from equity investments |
5,600 |
|
|
6,375 |
|
|
9,850 |
|
|
11,625 |
|
Adjusted EBITDA
(non-GAAP) |
$ |
51,777 |
|
|
$ |
50,797 |
|
|
$ |
116,534 |
|
|
$ |
116,547 |
|
(1) Other Non-GAAP adjustments include:
- 2017 adjustments for the three and six month periods relate to
a legal settlement of approximately $1.0 million, offset by
costs associated with The ISM Raceway Project of approximately
$0.1 million and $0.2 million, respectively; and
- 2018 adjustments for the three and six month periods relate to
costs associated with The ISM Raceway Project of approximately $0.1
million and $0.2 million, respectively.
Corporate Sales
NASCAR is a powerful brand with a loyal fan base that we believe
is aware of, appreciates and supports corporate participation to a
greater extent than fans of any other sports property. The
combination of brand power and fan loyalty provides an attractive
platform for robust corporate partnerships. The number of FORTUNE
500 companies invested in NASCAR remains higher than any other
sport. More than one in four FORTUNE 500 companies and nearly half
of the FORTUNE 100 companies use NASCAR as part of their marketing
strategy. The number of FORTUNE 500 companies investing
in NASCAR has either grown or sustained for five consecutive years,
and has increased approximately 30.0 percent since 2008.
For fiscal 2018, we have corporate partnership agreements in
place for approximately 91.0 percent of our gross marketing
partnership revenue target, as compared to approximately 94.0
percent for the same period in fiscal 2017. The fiscal 2018 revenue
target is approximately 8.0 percent greater than fiscal 2017,
primarily related to the ISM Raceway and Richmond Raceway projects.
For fiscal 2018, we sold all race entitlements for Monster Energy
NASCAR Cup series events and have only one NASCAR Xfinity race
entitlement open for an event in the fourth quarter. This is
compared to last year at this time when we had entitlements for one
Monster Energy NASCAR Cup and one NASCAR Xfinity series events
open.
External Growth, Financing-Related and Other
Initiatives
Capital Allocation
We have established a long-term capital allocation plan to
ensure we generate sufficient cash flow from operations to fund our
working capital needs, capital expenditures at existing facilities,
return of capital through payments of an annual cash dividend, and
repurchase of our shares under our Stock Purchase Plan. In
addition, we have used the proceeds from offerings of our
Class A Common Stock, the net proceeds from the issuance of
long-term debt, borrowings under our credit facilities, and state
and local mechanisms to fund acquisitions and development
projects.
We continue to operate under a five-year capital allocation plan
adopted by the Board of Directors, covering fiscal years 2017
through 2021. Components of this plan include:
- Capital expenditures for existing facilities up to $500.0
million from fiscal 2017 through fiscal 2021. This allocation will
fund a reinvestment at ISM Raceway, as well as all other
maintenance and guest experience capital expenditures for the
remaining existing facilities. In 2017 we began the redevelopment
of ISM Raceway (see “The ISM Raceway Project Powered by DC Solar”)
and the infield at Richmond (see "Richmond Raceway") with
completion for both projects targeted in late 2018, therefore, we
expect spending for capital expenditures under this plan to be
somewhat front-loaded. While many components of these expected
projects will exceed weighted average cost of capital, considerable
maintenance capital expenditures, approximately $40.0 million
to $60.0 million annually, will likely result in a blended return
on this invested capital in the low-to-mid single digits;
- In addition to the aforementioned $500.0 million in capital
expenditures for existing facilities, we expect we will have an
additional approximate $107.0 million of capital expenditures,
exclusive of capitalized interest and net of public incentives,
related to phase one of ONE DAYTONA and the Shoppes at ONE DAYTONA
(see "ONE DAYTONA"). We expect the returns of this investment to
exceed our weighted average cost of capital; and
- Return of capital to shareholders through dividends and share
repurchases is a significant pillar of our capital allocation. In
fiscal 2018 we increased our dividend approximately 9.3 percent to
$0.47 per share. We expect dividends to increase in 2019 and
beyond, by approximately four to five percent annually. Concerning
share repurchases, for the six months ended May 31, 2018, we
repurchased 156,241 shares of ISCA on the open market at a weighted
average share price of $41.08 for a total of approximately
$6.4 million. At May 31, 2018, we had approximately
$165.2 million remaining repurchase authority under the current
$530.0 million Stock Purchase Plan.
For fiscal 2017 through 2021 we expect our return of capital
program to be approximately $280.0 million, comprised of close to
$100.0 million in total annual dividends and the balance being open
market repurchase of ISCA shares over the five year period. At this
time, we expect this spending to be evenly allocated per year,
although we will scale the repurchase program to buy
opportunistically.
Our cash position and future liquidity has been further enhanced
by the following:
- In fiscal 2017, we recorded a non-recurring tax benefit of
approximately $48.2 million related to the worthlessness of
ISC's investment in Motorsports Authentics. As a result, our cash
position improved approximately $24.6 million as of fiscal
2017. In the second quarter of fiscal 2018, we received a refund of
estimated payments made during 2017 of approximately $19.8 million.
The balance of approximately $3.8 million will be received in
subsequent periods.
- In December 2017, Congress passed the Tax Cut and Jobs Act
("Tax Act"). We expect the Tax Act to favorably impact our future
liquidity, primarily a result of the lower single corporate tax
rate from 35.0 percent to 21.0 percent, which will lower our
effective tax rate and annual tax liability. Additionally, Tax
Reform provides for 100.0 percent expensing of certain capital
investments through 2022. We will continue to evaluate the details
of Tax Act and the impact on ISC.
We will continue to explore development and/or acquisition
opportunities beyond the initiatives discussed above that build
shareholder value and exceed our weighted average cost of capital.
Should additional development and/or acquisitions be pursued, we
will provide discrete information on timing, scope, cost and
expected returns of such opportunities.
The aforementioned represents certain components of our capital
allocation plan for fiscal 2017 and beyond. This capital allocation
plan is reviewed annually, or more frequently, if necessary, based
on changes in business conditions.
Capital Expenditures
An important strategy for our future growth will come from
investing in our major motorsports facilities to enhance the live
event experience and better enable us to effectively compete with
other entertainment venues for consumer and corporate spending. To
better meet our customers' expectations, we are committed to
improving the guest experience at our facilities through on-going
capital improvements that position us for long-term growth.
Capital expenditures for projects, including those related to
The ISM Raceway Project and ONE DAYTONA, were approximately
$65.0 million for the six months ended May 31, 2018. In
comparison, we spent approximately $40.6 million on capital
expenditures for projects for the same period in fiscal 2017. For
fiscal 2018, we expect capital expenditures associated with the
aforementioned capital allocation plan to range between
approximately $120.0 million and $130.0 million for existing
facilities, including ISM Raceway and Richmond Raceway projects,
and an additional approximate $20.0 million in capital
expenditures related to construction for ONE DAYTONA, excluding the
receipt of public incentives (see "ONE DAYTONA").
We review the capital expenditure program periodically and
modify it as required to meet current business needs.
ONE DAYTONA
Since June 2013, we have pursued development of ONE DAYTONA, a
premier mixed-use and entertainment destination across from Daytona
International Speedway, which has crafted a strategy that will
create synergy with Daytona International Speedway, enhance
customer and partner experiences, monetize real estate on
International Speedway Blvd. and leverage our real estate on a
year-round basis. Complementing ONE DAYTONA is the retail property
adjacent to the development, known as the Shoppes at ONE
DAYTONA.
We have approved land use entitlements for ONE DAYTONA to allow
for up to 1.4 million square feet of
retail/dining/entertainment, a 2,500-seat movie theater, 660 hotel
rooms, 1,350 residential units, 567,000 square feet of
additional office space and 500,000 square feet of
commercial/industrial space.
In March 2015, we announced Legacy Development, a leading
national development group, as development consultant for ONE
DAYTONA. Intensely focused on innovative destination retail and
mixed-use projects, Legacy Development ("Legacy") is working
closely with ISC’s development staff on the project. Legacy's
development team is a natural fit for the project, having served as
the developer for Legends Outlets Kansas City, a mixed-use retail
destination across from our Kansas Speedway.
The design for the first phase of ONE DAYTONA is comprised of
three components: retail, dining and entertainment (“RD&E”);
hotels; and residential.
The RD&E component of phase one is owned 100.0 percent by
us. The expected total square footage for the RD&E first phase
is approximately 300,000 square feet. We expect cash spent to be
approximately $95.0 million in fiscal 2016 through 2019 on the
RD&E component of ONE DAYTONA’s first phase. Other sources of
funding towards the overall ONE DAYTONA project will include the
public incentives discussed below and land contributed to the joint
ventures associated with the project. In September 2016, we
announced VCC had been selected as general contractor to oversee
construction of the RD&E component of phase one including
Victory Circle and the parking garage. VCC has an outstanding
national reputation for quality and a proven track record leading
and managing the development and construction of some of the
country’s most engaging mixed-use developments.
Shaner Hotels and Prime Hospitality Group ("PHG") have been
selected as hotel partners. They have executed a franchise
agreement with Marriott International for an exclusive 145-room
full service Autograph Collection hotel at ONE DAYTONA that will be
known as "The DAYTONA", as well as a 105-room select-service
Fairfield Inn & Suites by Marriott. The Fairfield Inn and
Suites opened in December 2017, while The DAYTONA is currently
under construction and expected to be complete in early fiscal
2019. As part of the partnership agreement, our portion of equity
will be limited to our land contribution and we will share
proportionately in the profits from the joint ventures.
Prime Group has been selected as the partner for ONE DAYTONA’s
residential development. Following an extensive request for
proposal process, ONE DAYTONA chose the Florida developer based on
their command of market demographics, development experience and
expert property management systems. Prime Group is proceeding with
the development in ONE DAYTONA for approximately 276 luxury
apartment rental units that will add critical mass to the overall
ONE DAYTONA campus. Similar to the hotel partnership, our
portion of equity will be limited to our land contribution and we
will share proportionately in the profits from the joint
venture.
In April 2017, our Board approved an additional approximate
$12.0 million of capital expenditures to further develop
Volusia Point, which was previously purchased in 2011. Volusia
Point is our retail property adjacent to ONE DAYTONA and has been
re-branded as the Shoppes at ONE DAYTONA ("the Shoppes"). Several
new tenants have executed lease agreements in the Shoppes as a
result of the revitalization. We expect the improvements to the
Shoppes will generate an incremental EBITDA of approximately $1.0
million to the ONE DAYTONA pro-forma through increased square
footage and securing tenants for currently vacant spaces (see "GAAP
to Non-GAAP Reconciliation - Adjusted EBITDA" for discussion on
Non-GAAP financial forward looking measures).
Several new-to-market tenants have already commenced operations
at ONE DAYTONA with additional tenants commencing operations
throughout fiscal 2018. Bass Pro Shops®, America’s most popular
outdoor store, and Cobb Theatres, the highly respected
Southeastern-based exhibitor, are anchor tenants of ONE DAYTONA.
Leasing remains strong and we are expecting to exceed our lease
occupancy goals for 2018.
At stabilization in fiscal 2020, we expect this first phase of
ONE DAYTONA and the Shoppes to deliver a combined incremental
annual revenue and EBITDA of approximately $13.0 million and
approximately $10.0 million, respectively, and deliver an
unlevered return above our weighted average cost of capital (see
"GAAP to Non-GAAP Reconciliation - Adjusted EBITDA" for discussion
on Non-GAAP financial forward looking measures).
A Community Development District ("CDD") has been established
for the purpose of installing and maintaining public infrastructure
at ONE DAYTONA. The CDD is a local, special purpose government
framework authorized by Chapter 190 of the Florida Statutes for
managing and financing infrastructure to support community
development. The CDD has negotiated agreements with the City of
Daytona Beach and Volusia County for a total of up to $40.0 million
in incentives to finance a portion of the infrastructure required
for the ONE DAYTONA project. The CDD will purchase certain
infrastructure assets, and specific easement rights, from ONE
DAYTONA. ONE DAYTONA expects to receive approximately $22.0 million
of the total incentive amount in cash in fiscal 2018, and the
remaining to be received in annual payments derived from a
long-term note receivable issued by the CDD, with the first payment
of the note receivable expected in fiscal 2019 and the term not to
exceed 30 years.
Total capital expenditures for ONE DAYTONA and the Shoppes,
excluding capitalized interest and net of anticipated public
incentives, are expected to be approximately $107.0 million. From
inception, through May 31, 2018, capital expenditures totaled
approximately $97.4 million, exclusive of capitalized interest and
labor. At this time, there is no project specific financing in
place for ONE DAYTONA. Ultimately, we may secure financing for the
project upon stabilization. However, accounting rules dictate that
we capitalize a portion of the interest on existing outstanding
debt during the construction period. From inception, through
May 31, 2018, we recorded approximately $3.6 million of
capitalized interest related to ONE DAYTONA, and expect
approximately $3.8 million to be recorded by completion of
construction.
Any future phases will be subject to prudent business
considerations for which we will provide discrete cost and return
disclosures.
The ISM Raceway Project Powered by DC Solar
On November 30, 2016, we announced our Board of Directors had
approved a multi-year redevelopment project to elevate the fan
experience at ISM Raceway, our 53-year-old motorsports venue
previously known as Phoenix Raceway. The redevelopment is expected
to focus on new and upgraded seating areas, vertical transportation
options, new concourses, enhanced hospitality offerings and an
intimate infield experience with greater accessibility to pre-race
activities.
Earlier in 2017, we announced a multi-year partnership with DC
Solar that included naming the project 'The ISM Raceway Project
Powered by DC Solar' during the redevelopment phase. Subsequently,
in September 2017, we announced a long-term partnership with ISM
Connect, a pioneer in smart venue technology, which included naming
rights to ISM Raceway. Beginning in fiscal 2018, the venue is now
known as ISM Raceway.
The ISM Raceway Project is included in our aforementioned $500.0
million capital allocation plan covering fiscal years 2017 through
2021. The ISM Raceway Project is expected to cost approximately
$178.0 million, including maintenance capital, before
capitalized interest. Okland Construction ("Okland") has been
selected as general contractor of the project. Effective November
30, 2016, ISM Raceway entered into a Design-Build Agreement with
Okland. The Design-Build Agreement obligates ISM Raceway to pay
Okland approximately $136.0 million for the completion of the
work described in the Design-Build Agreement. This amount is a
guaranteed maximum price to be paid for the work, which may not
change absent a requested change in the scope of work by ISM
Raceway.
Based on our current plans for ISM Raceway, it has identified
existing assets that are expected to be impacted by the
redevelopment and will require accelerated depreciation, totaling
between approximately $6.0 million and $6.5 million in
non-cash charges over the approximate 22-month project time span.
From inception, through May 31, 2018, we recorded
approximately $6.1 million of accelerated depreciation
associated with the project.
Despite not anticipating the need for additional long-term debt
to fund this project, accounting rules dictate that we capitalize a
portion of the interest on existing outstanding debt during the
construction period. We estimate that we will record approximately
$6.0 million to $6.5 million of capitalized interest from fiscal
2017 through fiscal 2018.
From inception, through May 31, 2018, we have incurred
total capital expenditures related to The ISM Raceway Project,
exclusive of capitalized interest and labor, of approximately $90.0
million. From inception, through May 31, 2018, we recorded
approximately $2.8 million of capitalized interest related to
The ISM Raceway Project.
Upon completion, the redevelopment is expected to provide a full
fiscal year incremental lift in ISM Raceway's EBITDA of
approximately $8.5 million to $9.0 million (see "GAAP to
Non-GAAP Reconciliation - Adjusted EBITDA" for discussion on
Non-GAAP financial forward looking measures). We began recognizing
revenue and expense associated with the project, as a result of
assets placed in service and/or benefits provided to partners,
beginning late fiscal 2017. We expect to recognize the full fiscal
year incremental financial lift in fiscal 2019 and sustained
thereafter.
Richmond Raceway
In June 2017, the Board of Directors approved a capex project
for the redevelopment of the infield of Richmond Raceway ("Richmond
Reimagined"). The new infield will offer a variety of enhanced
amenities for fans, teams, sponsors and other stakeholders to the
iconic Richmond infield. Fan access is the focus of Richmond
Reimagined, which will showcase new Monster Energy NASCAR Cup
Series garages with a fan-viewing walkway. The new infield
continues the track’s mission of being the most fan-friendly track
on NASCAR’s schedule.
Richmond Reimagined is included in our aforementioned $500.0
million capital allocation plan covering fiscal years 2017 through
2021. The project is expected to cost approximately
$30.0 million, which includes maintenance capital, before
capitalized interest. Groundbreaking occurred immediately following
the Monster Energy NASCAR Cup Series event in September 2017.
Richmond Reimagined is expected to be completed by September 2018.
Through May 31, 2018, we recorded approximately $1.2 million
of non-cash charges related to accelerated depreciation associated
with the project.
Hollywood Casino at Kansas Speedway
Kansas Entertainment, LLC (“Kansas Entertainment”), a 50/50
joint venture of Penn Hollywood Kansas, Inc. (“Penn”), a subsidiary
of Penn National Gaming, Inc. and Kansas Speedway Development
Corporation (“KSDC”), a wholly owned indirect subsidiary of ISC,
operates the Hollywood-themed casino and branded destination
entertainment facility, overlooking turn two at Kansas Speedway.
Penn is the managing member of Kansas Entertainment and is
responsible for the operations of the casino.
We have accounted for Kansas Entertainment as an equity
investment in the consolidated financial statements as of
May 31, 2017 and 2018. Our 50.0 percent portion of Kansas
Entertainment’s net income, which is before income taxes as the
joint venture is a disregarded entity for income tax purposes, was
approximately $9.4 million and $10.6 million for the six
months ended May 31, 2017 and 2018, respectively, and is
included in Equity in net income from equity investments in the
consolidated statements of operations.
Pre-tax distributions from Kansas Entertainment for the six
months ended May 31, 2018, totaling approximately $11.6
million, consists of approximately $11.1 million received as a
distribution from its profits, included in net cash provided by
operating activities on our consolidated statement of cash flows,
with the remaining approximate $0.5 million received,
recognized as a return of capital from investing activities on our
consolidated statement of cash flows. Pre-tax distributions from
Kansas Entertainment for the six months ended May 31, 2017,
totaling $9.9 million, consisted of approximately $9.9 million
received as a distribution from its profits, included in net cash
provided by operating activities on our consolidated statement of
cash flows.
For fiscal 2018, cash distributions from Kansas Entertainment
are estimated to be approximately $25.0 million to $26.0
million.
Fiscal 2018 Financial Outlook
ISC’s reported quarterly and year to date earnings are presented
under GAAP. In an effort to enhance the comparability and
understandability of our forward looking financial guidance, we
adjust for certain non-recurring items that will be included in our
future GAAP reporting to provide information that we believe best
represents our expectations for our core business performance.
For fiscal 2018, our non-GAAP guidance excludes:
- any non-recurring income statement impact attributable to
the completion of The ISM Raceway Project, including accelerated
depreciation and non-capitalized costs and losses associated with
retirements of certain other long-lived assets, partially offset by
capitalized interest expense;
- any non-recurring and non-capitalized costs or charges and
capitalized interest related to our ONE DAYTONA development;
- accelerated depreciation and future loss on retirements, mostly
non-cash, or relocation of certain long-lived assets, which could
be recorded as part of capital improvements other than The ISM
Raceway Project resulting from removal of assets prior to the end
of their actual useful life;
- start up and/or financing costs should our Hollywood
Casino at Kansas Speedway joint venture pursue
construction of an adjacent hotel;
- any costs or income related to legal settlements;
- gain or loss on sale of other assets; and
- any one-time, non-recurring income tax charges or
benefits.
ISC is reiterating its 2018 full fiscal year non-GAAP guidance.
The earnings outlook is our best estimate of financial results for
fiscal 2018.
- Revenue: $680.0 million to $695.0 million
- Operating margin: 15.5% to 16.5%
- Effective tax rate: 26.0% to 27.0%
- Diluted earnings per share: $1.90 to $2.10
Our guidance for Adjusted EBITDA is to range between $241.0
million to $252.0 million, which includes between $25.0
million and $26.0 million in cash distributions received from our
investment in the Hollywood Casino and approximately
$3.0 million related to ONE DAYTONA, (see "GAAP to Non-GAAP
Reconciliation" for our definition of Adjusted EBITDA and
discussion on Non-GAAP financial forward looking measures).
In closing, Ms. France Kennedy stated, "We maintain a
solid financial position, developed over many years, that affords
us the ability to follow our disciplined capital allocation
strategy and maintain our leadership position in the motorsports
industry. We have a long-term capital allocation plan that extends
through fiscal 2021, demonstrating our ongoing commitment to
building long-term value. For the future, we are well positioned to
balance the strategic capital needs of our business with returning
capital to our shareholders."
Conference Call Details
The management of ISC will host a conference call 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 earnings call, ID number
4459737.
A live Webcast will also be available at that time on our
website, www.internationalspeedwaycorporation.com, under the
“Investor Relations” section. A replay will be available two hours
after the end of the call through midnight Thursday, July 19, 2018.
To access, dial (855) 859-2056 and enter the code 4459737, or visit
the “Investor Relations” section of our website.
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. We own and/or operate 13 of the nation's major
motorsports entertainment facilities, including Daytona
International Speedway® in Florida (home of the DAYTONA 500®);
Talladega Superspeedway® in Alabama; Michigan International
Speedway® located outside Detroit; Richmond Raceway® in Virginia;
Auto Club Speedway of Southern California℠ near Los Angeles;
Kansas Speedway® in Kansas City, Kansas; ISM Raceway near Phoenix,
Arizona; Chicagoland Speedway® and Route 66 Raceway℠ near
Chicago, Illinois; Homestead-Miami Speedway℠ in Florida;
Martinsville Speedway® in Virginia; Darlington Raceway® in South
Carolina; and Watkins Glen International® in New York.
We also own and operate Motor Racing Network℠, the nation's
largest independent sports radio network and Americrown Service
Corporation℠, a subsidiary that provides catering services, and
food and beverage concessions. In addition, we own ONE DAYTONA, the
retail, dining and entertainment development across from Daytona
International Speedway, and have a 50.0 percent interest in the
Hollywood Casino at Kansas Speedway. For more information, visit
our website at www.internationalspeedwaycorporation.com.
Statements made in this release that express ISC'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 ISC's actual results could
differ materially from those contained in or implied by such
forward-looking statements. ISC'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 ISC's SEC filings including, but not limited to, the 10-K
and subsequent 10-Qs. Copies of those filings are available from
ISC and the SEC. ISC 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.
(Tables Follow)
|
Consolidated Statements of
Operations |
(In Thousands, Except Share and Per Share
Amounts) |
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
May 31, 2017 |
|
May 31, 2018 |
|
May 31, 2017 |
|
May 31, 2018 |
|
|
(Unaudited) |
REVENUES: |
|
|
|
|
|
|
|
|
Admissions, net |
|
$ |
28,662 |
|
|
$ |
25,677 |
|
|
$ |
59,997 |
|
|
$ |
56,239 |
|
Motorsports and other event related |
|
122,322 |
|
|
133,328 |
|
|
225,834 |
|
|
239,114 |
|
Food,
beverage and merchandise |
|
9,517 |
|
|
6,906 |
|
|
18,659 |
|
|
14,856 |
|
Other |
|
4,774 |
|
|
5,768 |
|
|
8,739 |
|
|
10,345 |
|
|
|
165,275 |
|
|
171,679 |
|
|
313,229 |
|
|
320,554 |
|
EXPENSES: |
|
|
|
|
|
|
|
|
Direct: |
|
|
|
|
|
|
|
|
NASCAR
event management fees |
|
48,270 |
|
|
50,180 |
|
|
77,246 |
|
|
80,045 |
|
Motorsports and other event related |
|
34,728 |
|
|
44,607 |
|
|
60,783 |
|
|
70,642 |
|
Food,
beverage and merchandise |
|
7,244 |
|
|
5,198 |
|
|
13,269 |
|
|
10,827 |
|
Other
operating expenses |
|
656 |
|
|
1,038 |
|
|
858 |
|
|
2,247 |
|
General
and administrative |
|
27,309 |
|
|
26,345 |
|
|
53,656 |
|
|
52,087 |
|
Depreciation and amortization |
|
28,269 |
|
|
26,859 |
|
|
54,770 |
|
|
53,598 |
|
Losses on
asset retirements |
|
374 |
|
|
195 |
|
|
404 |
|
|
1,357 |
|
|
|
146,850 |
|
|
154,422 |
|
|
260,986 |
|
|
270,803 |
|
Operating income |
|
18,425 |
|
|
17,257 |
|
|
52,243 |
|
|
49,751 |
|
Interest income |
|
251 |
|
|
732 |
|
|
368 |
|
|
1,253 |
|
Interest expense |
|
(3,067 |
) |
|
(2,900 |
) |
|
(6,319 |
) |
|
(5,785 |
) |
Equity in net income
from equity investments |
|
5,799 |
|
|
6,351 |
|
|
9,426 |
|
|
10,659 |
|
Other |
|
2 |
|
|
— |
|
|
14 |
|
|
15 |
|
Income before income
taxes |
|
21,410 |
|
|
21,440 |
|
|
55,732 |
|
|
55,893 |
|
Income tax expense
(benefit) |
|
8,183 |
|
|
4,770 |
|
|
21,232 |
|
|
(130,123 |
) |
Net income |
|
$ |
13,227 |
|
|
$ |
16,670 |
|
|
$ |
34,500 |
|
|
$ |
186,016 |
|
|
|
|
|
|
|
|
|
|
Dividends per
share |
|
$ |
0.43 |
|
|
$ |
0.47 |
|
|
$ |
0.43 |
|
|
$ |
0.47 |
|
Earnings per
share: |
|
|
|
|
|
|
|
|
Basic and
diluted |
|
$ |
0.29 |
|
|
$ |
0.38 |
|
|
$ |
0.77 |
|
|
$ |
4.21 |
|
|
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding |
|
44,857,837 |
|
|
44,158,611 |
|
|
44,960,205 |
|
|
44,177,342 |
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding |
|
44,871,255 |
|
|
44,169,681 |
|
|
44,974,365 |
|
|
44,189,676 |
|
|
|
|
|
|
|
|
|
|
Comprehensive
income |
|
$ |
13,394 |
|
|
$ |
16,870 |
|
|
$ |
34,834 |
|
|
$ |
186,405 |
|
Consolidated Balance Sheets |
(In Thousands, Except Share and Per Share
Amounts) |
|
|
|
November 30, 2017 |
|
May 31, 2017 |
|
May 31, 2018 |
|
|
|
|
(Unaudited) |
ASSETS |
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
256,702 |
|
|
$ |
312,075 |
|
|
$ |
327,133 |
|
Receivables, less allowance |
|
37,269 |
|
|
55,870 |
|
|
52,600 |
|
Income
taxes receivable |
|
21,867 |
|
|
— |
|
|
2,854 |
|
Prepaid
expenses and other current assets |
|
9,749 |
|
|
19,251 |
|
|
23,427 |
|
Total Current
Assets |
|
325,587 |
|
|
387,196 |
|
|
406,014 |
|
|
|
|
|
|
|
|
Property and Equipment,
net |
|
1,479,743 |
|
|
1,448,829 |
|
|
1,510,321 |
|
Other Assets: |
|
|
|
|
|
|
Equity
investments |
|
86,200 |
|
|
91,968 |
|
|
85,234 |
|
Intangible assets, net |
|
178,637 |
|
|
178,634 |
|
|
178,564 |
|
Goodwill |
|
118,400 |
|
|
118,791 |
|
|
118,331 |
|
Other |
|
19,625 |
|
|
15,970 |
|
|
22,517 |
|
|
|
402,862 |
|
|
405,363 |
|
|
404,646 |
|
Total Assets |
|
$ |
2,208,192 |
|
|
$ |
2,241,388 |
|
|
$ |
2,320,981 |
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
Current
portion of long-term debt |
|
$ |
3,854 |
|
|
$ |
3,489 |
|
|
$ |
3,884 |
|
Accounts
payable |
|
23,936 |
|
|
32,271 |
|
|
42,282 |
|
Deferred
income |
|
38,521 |
|
|
91,453 |
|
|
92,360 |
|
Income
taxes payable |
|
— |
|
|
3,541 |
|
|
— |
|
Other
current liabilities |
|
19,249 |
|
|
36,113 |
|
|
36,367 |
|
Total Current
Liabilities |
|
85,560 |
|
|
166,867 |
|
|
174,893 |
|
|
|
|
|
|
|
|
Long-Term Debt |
|
255,612 |
|
|
259,082 |
|
|
255,254 |
|
Deferred Income
Taxes |
|
396,046 |
|
|
406,572 |
|
|
259,328 |
|
Long-Term Deferred
Income |
|
8,251 |
|
|
5,413 |
|
|
8,108 |
|
Other Long-Term
Liabilities |
|
2,801 |
|
|
2,377 |
|
|
2,681 |
|
Commitments and
Contingencies |
|
— |
|
|
— |
|
|
— |
|
Shareholders’
Equity: |
|
|
|
|
|
|
Class A Common Stock, $.01 par value, 80,000,000 shares
authorized |
|
241 |
|
|
246 |
|
|
241 |
|
Class B Common Stock, $.01 par value, 40,000,000 shares
authorized |
|
197 |
|
|
197 |
|
|
197 |
|
Additional paid-in capital |
|
430,114 |
|
|
434,158 |
|
|
430,134 |
|
Retained
earnings |
|
1,031,361 |
|
|
968,801 |
|
|
1,191,747 |
|
Accumulated other comprehensive loss |
|
(1,991 |
) |
|
(2,325 |
) |
|
(1,602 |
) |
Total Shareholders’
Equity |
|
1,459,922 |
|
|
1,401,077 |
|
|
1,620,717 |
|
Total Liabilities and
Shareholders’ Equity |
|
$ |
2,208,192 |
|
|
$ |
2,241,388 |
|
|
$ |
2,320,981 |
|
Consolidated Statements of Cash
Flows |
(In Thousands) |
|
|
|
Six Months Ended |
|
|
May 31, 2017 |
|
May 31, 2018 |
|
|
(Unaudited) |
OPERATING
ACTIVITIES |
|
|
|
|
Net income |
|
$ |
34,500 |
|
|
$ |
186,016 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
54,770 |
|
|
53,598 |
|
Stock-based compensation |
|
1,707 |
|
|
1,585 |
|
Amortization of financing costs |
|
841 |
|
|
806 |
|
Deferred
income taxes |
|
(3,220 |
) |
|
(136,870 |
) |
Income
from equity investments |
|
(9,426 |
) |
|
(10,659 |
) |
Distribution from equity investee |
|
9,850 |
|
|
11,138 |
|
Loss on
retirements of long-lived assets, non-cash |
|
404 |
|
|
2,601 |
|
Other,
net |
|
99 |
|
|
(233 |
) |
Changes
in operating assets and liabilities: |
|
|
|
|
Receivables, net |
|
(20,425 |
) |
|
(15,331 |
) |
Prepaid
expenses and other assets |
|
(7,414 |
) |
|
(16,521 |
) |
Accounts
payable and other liabilities |
|
(10,905 |
) |
|
(7,364 |
) |
Deferred
income |
|
51,462 |
|
|
53,696 |
|
Income
taxes |
|
4,119 |
|
|
19,013 |
|
Net cash provided by
operating activities |
|
106,362 |
|
|
141,475 |
|
INVESTING
ACTIVITIES |
|
|
|
|
Capital
expenditures |
|
(40,568 |
) |
|
(65,019 |
) |
Distribution from equity investee |
|
— |
|
|
487 |
|
Proceeds
from sale of assets |
|
14 |
|
|
418 |
|
Other,
net |
|
(8 |
) |
|
— |
|
Net cash used in
investing activities |
|
(40,562 |
) |
|
(64,114 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
Payment
of long-term debt |
|
(444 |
) |
|
(473 |
) |
Deferred
financing fees |
|
(43 |
) |
|
— |
|
Exercise
of Class A common stock options |
|
358 |
|
|
718 |
|
Reacquisition of previously issued common stock |
|
(17,323 |
) |
|
(7,175 |
) |
Net cash (used in)
provided by financing activities |
|
(17,452 |
) |
|
(6,930 |
) |
Net increase in cash
and cash equivalents |
|
48,348 |
|
|
70,431 |
|
Cash and cash
equivalents at beginning of period |
|
263,727 |
|
|
256,702 |
|
Cash and cash
equivalents at end of period |
|
$ |
312,075 |
|
|
$ |
327,133 |
|
|
|
|
|
|
|
|
|
|
CONTACT:Investor Relations(386) 681-6516
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