CART Posts Q2 1998 Results
3 August 1998
Championship Auto Racing Teams Reports Second Quarter 1998 Results
DETROIT, Aug. 3 -- Championship Auto Racing Teams, Inc.
today announced record revenues, net income and earnings per share
for the second quarter and six months ended June 30, 1998.
Actual Results
Total revenues for the second quarter of 1998 were up 7% to $20.0 million
from $18.7 million in the comparable quarter in 1997. Net income for the
second quarter of 1998 was up to $5.0 million, compared to a net loss of
$1.2 million in the second quarter of 1997. On a diluted per common share
basis, earnings were $0.32 in 1998 compared to a loss of $(0.12) in the second
quarter of 1997.
For the six month period ended June 30, 1998, revenues increased 25% to
$30.1 million from $24.1 million. Net income rose to $7.8 million or $0.59
per diluted share versus a net loss of $0.3 million, or $(0.03) per diluted
share.
Pro Forma Results
Assuming the American Racing Series, BP Automotive and Pro-Motion Agency
acquisitions had been effective January 1, 1997 and January 1, 1998, and after
eliminating certain non-recurring race team expenses in the second quarter and
six months ended June 30, 1997, pro forma results for the periods would have
been as follows:
Total revenues for the second quarter of 1998 decreased 4% to
$20.0 million from $20.8 million in the comparable quarter in 1997. Net
income for the second quarter of 1998 decreased 2% to $5.0 million, compared
to $5.1 million in the second quarter of 1997. On a diluted per common share
basis, earnings were $0.32 in 1998 compared to $0.48 in the second quarter of
1997.
For the six month period ended June 30, 1998, revenues increased 18% to
$31.4 million from $26.6 million. Net income rose 34% to $8.1 million or
$0.59 per diluted share versus $6.0 million, or $.57 per diluted share.
The number of events held in a particular quarter will affect the
comparability of earnings information from quarter to quarter. In the second
quarter of 1998, CART conducted 7 events, which was one event less than the
comparable quarter in 1997. The CART event conducted in Australia moved out
of the second quarter and will be run in the fourth quarter on October 18,
1998.
Andrew Craig, CART Chairman and CEO, stated, "despite running one less
event in the second quarter, revenues and earnings were comparable with the
previous year, primarily due to a 60% increase in sponsorship revenue which is
attributable to the addition in 1998 of FedEx as the title sponsor of the
series. We continued to control and contain costs which allowed the company
to exceed analyst estimates for the quarter.
"During the second quarter, the company continued to grow and enhance the
business by adding to its ladder system with the acquisition of Pro-Motion
Agency, which runs the KOOL/Toyota Atlantic Championship. In addition, we
announced a new venue for 1999 in Chicago, Illinois at the Chicago Motor
Speedway and completed a marketing representation agreement with ISL
Worldwide, which secures minimum sponsorship revenues of $215-235 million
dollars over the next nine years."
Championship Auto Racing Teams, Inc., a New York Stock Exchange listed
company that completed a initial public offering on March 10,
1998, is the leading promoter of open wheel racing in the United States and
owns, operates and markets the FedEx Championship Series, which is comprised
of 19 races in five countries on four continents in 1998. Drivers such as
Michael Andretti, Bobby Rahal, Al Unser, Jr., and 1997 champion Alex Zanardi
race 800-plus horsepower, open-wheel cars at speeds of more than 230 per hour
on some circuits. CART also owns and sanctions the PPG Dayton Indy Lights
Championship as well as the KOOL Toyota Atlantic Championship.
Championship Auto Racing Teams, Inc.
Consolidated Statement of Operations
For the Three and Six Months Ended June 30, 1998 and 1997
(Unaudited)
(In Thousands, Except Earnings Per Share)
QTR ended QTR ended YTD YTD
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
Revenues:
Sanction Fees $10,251 $12,546 $15,243 $13,953
Sponsorship Revenue 4,603 2,342 7,763 4,319
TV Revenue 1,911 2,276 2,458 2,627
Engine Leases, Rebuilds
and Wheel Sales 755 -- 954 --
Other 2,514 1,540 3,647 3,168
Total Revenues 20,034 18,704 30,065 24,067
Expenses
Race and franchise fund
distributions 5,486 13,919 6,874 15,560
Race Expenses 1,304 2,321 2,135 3,440
Cost of Engine Rebuilds
and Wheel Sales 241 -- 304 --
Administrative and
indirect expenses 5,966 3,972 9,411 5,650
Depreciation and
amortization 188 117 329 220
Minority Interest 17 (15) (37) (217)
Total Expenses 13,202 20,314 19,016 21,653
Operating Income 6,832 (1,610) 11,049 (586)
Interest income/(expense) 968 140 1,234 192
Income before income taxes7,800 (1,470) 12,283 (394)
Income Tax Expense 2,847 (240) 4,465 (52)
Net Income $4,953 $(1,230) $7,818 $(342)
Earnings per share
Basic $0.33 $(0.12) $0.59 $(0.03)
Diluted $0.32 $(0.12) $0.59 $(0.03)
Weighted Average Shares
Outstanding
Basic 15,172 10,200 13,191 10,200
Diluted 15,336 10,200 13,291 10,200
Championship Auto Racing Teams, Inc.
Consolidated Statement of Operations-Proforma
For the Three and Six Months ended June 30, 1998 and 1997
(Unaudited)
(In Thousands, Except Earnings Per Share)
QTR Ended QTR Ended YTD YTD
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
Revenues:
Sanction Fees $10,251 $12,546 $15,243 $13,963
Sponsorship Revenue 4,603 2,876 8,189 5,575
TV Revenue 1,911 2,369 2,458 2,665
Engine Leases, Rebuilds
and Wheel Sales 755 978 1,665 1,659
Other 2,514 2,073 3,843 2,747
Total Revenues 20,034 20,842 31,398 26,599
Expenses
Race and franchise
fund distributions 5,486 6,231 6,888 7,246
Race Expenses 1,304 1,436 2,215 2,222
Cost of Engine Rebuilds
and Wheel Sales 241 356 591 556
Administrative and
indirect expenses 5,939 4,437 9,868 6,722
Depreciation and
amortization 188 214 424 352
Minority Interest 17 64 (37) (123)
Total Expenses 13,175 12,738 19,949 16,975
Operating Income 6,859 8,104 11,449 9,624
Interest income/(expense) 968 128 1,235 148
Income before income taxes7,827 8,232 12,684 9,772
Income Tax Expense 2,847 3,130 4,600 3,749
Net Income $4,980 $5,102 $8,084 $6,023
Earnings per share
Basic $0.33 $0.48 $0.59 $0.57
Diluted $0.32 $0.48 $0.59 $0.57
Weighted Average Shares
Outstanding
Basic 15,172 10,638 13,629 10,638
Diluted 15,336 10,638 13,728 10,638
Championship Auto Racing Teams, Inc.
Consolidated Balance Sheets
As of June 30, 1998 and December 31, 1997
(In Thousands)
June 30, December 31,
1998 1997
Assets
Current Assets
Cash and Cash Equivalents $39,931 $1,164
Short Term Investments 32,066 --
Accounts Receivable 12,367 3,156
Current Portion of
Notes Receivable 945 --
Prepaid Expenses 667 751
Inventory 110 --
Current Deferred Tax Asset 376 4,683
Total Current Assets 86,362 9,754
Notes Receivable 3,432 49
Property and Equipment-Net 5,191 2,236
Trademark-Net -- --
Noncurrent Deferred Tax -- --
Other Assets 5,598 309
Total Assets $100,583 $12,348
Liabilities and
Stockholders' Equity
Current Liabilities
Accounts Payable $1,890 $1,889
Accrued Liabilities
Race Expenses and Point Awards1,653 9,500
Taxes 593 491
Other 1,907 724
Unearned Income 16,022 2,352
Current Portion of Long Term Debt130 130
Total Current Liabilities 22,195 15,086
Long Term Debt 249 314
Deferred Federal Taxes-Noncurrent 54 --
Minority interest (44) (7)
Stockholders' Equity/Partners' Capital
Capital Stock 151 102
Additional Paid In Capital 89,221 15,975
Retained Earnings (11,304) (19,122)
Unrealized Gain/(Loss)
on Investments 61 --
Total Stockholders'
Equity/Partners' Equity 78,129 (3,045)
Total Liabilities and
Stockholders' Equity $100,583 $12,348