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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 25, 2000
CHAMPIONSHIP AUTO RACING TEAMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13925 38-3389456
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
755 West Big Beaver Road, Suite 800
Troy, Michigan 48084
(Address of principal executive offices, with zip code)
Registrant's telephone number, including area code: (248) 362-8800
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ITEM 5. OTHER EVENTS.
On July 25, 2000, Championship Auto Racing Teams, Inc. (the "Company")
issued a news release with respect to earnings for the quarter ended June 30,
2000, a copy of which is attached hereto as Appendix A, and incorporated herein
by this reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) None
(b) None
(c) Exhibit 99.1 - Severance Agreement and Release by and between the
Company and Andrew H. Craig dated as of June 30, 2000.
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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 hereunto duly authorized on this 25th day of July, 2000.
CHAMPIONSHIP AUTO RACING TEAMS, INC.
By: /s/ Randy K. Dzierzawski
---------------------------------
Randy K. Dzierzawski,
Chief Financial Officer
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APPENDIX A
FOR IMMEDIATE RELEASE
Contact: Randy Dzierzawski, Executive Vice President & CFO, (248) 362-8800,
ext. 225
Ron Richards, Vice President of Communications, (248) 362-8800,
ext. 264
CHAMPIONSHIP AUTO RACING TEAMS
REPORTS SECOND QUARTER 2000 RESULTS
DETROIT (July 25, 2000) - Championship Auto Racing Teams, Inc. (NYSE: MPH) today
announced revenues, net income and earnings per share for the second quarter and
six months ended June 30, 2000.
Revenues for the second quarter of 2000 were $24.9 million, versus $25.5 million
in the comparable quarter in 1999. Prior to an after-tax, non-recurring charge
of $1.8 million related to a severance agreement with Andrew Craig, the
Company's former President and CEO, net income for the second quarter of 2000
was $7.9 million and earnings per share on a per diluted common share basis was
$0.50. Taking into account the non-recurring severance charge, net income for
the second quarter of 2000 was $6.1 million, compared to $7.5 million in the
second quarter of 1999. On a per diluted common share basis, earnings were $0.39
in the second quarter of 2000 compared to $0.47 in the comparable quarter in
1999. The non-recurring severance expense resulted in a $0.11 per diluted common
share charge for the second quarter of 2000.
For the six-month period ended June 30, 2000, revenues were $32.8 million versus
$32.8 million in 1999. Net income, as a result of the after-tax non-recurring
charge of $1.8 million described above, was $8.1 million for the six-months
ended June 30, 2000, compared to $9.1 million for the six-month period ended
June 30, 1999. On a per diluted common share basis, earnings were $0.52 compared
to $0.58 per diluted common share. The non-recurring severance expense resulted
in a $0.11 per diluted common share charge for the six-month period of 2000.
The number of events held in a particular quarter will affect the comparability
of earnings information from quarter to quarter. CART conducted seven events in
the second quarter of 2000, which was one less than the comparable quarter in
1999. The CART events conducted in St. Louis and Cleveland will be run in the
third quarter of 2000 compared to the second quarter of 1999. The CART event
conducted in Detroit was held in the second quarter of 2000 compared to the
third quarter of 1999. For comparability purposes, CART 's FedEx Championship
Series will conduct nine events in the third quarter of 2000, which was the same
number of events as in 1999, and three races in the fourth quarter of 2000,
compared to two races in the fourth quarter of 1999.
"Despite running one less race in the second quarter of 2000 in comparison to
the second quarter of 1999 and taking into account the non-recurring charge,
CART 's financial results were very strong," said CART CEO, Bobby Rahal. "The
recent addition of races in Texas, Mexico, the United Kingdom, and Germany for
2001 show the increase demand for CART races worldwide."
Championship Auto Racing Teams, Inc. (NYSE:MPH) owns, operates and markets the
FedEx Championship Series. Champions Juan Montoya, Michael Andretti and Jimmy
Vasser are among the drivers who battle for the FedEx Championship Series title
on oval circuits as well as temporary and permanent road courses. CART also owns
and operates its top two development series, the Dayton Indy Lights Championship
and the Toyota Atlantic Championship. Learn more about CART's open-wheel racing
series at www.cart.com.
Statements made in this release that state the Company's or management's beliefs
or expectations and which are not historical facts or which apply prospectively
are forward-looking statements. It is important to note that the Company's
actual results could differ materially from those contained or implied by such
forward-looking statements. 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 the Company's SEC filings
including, but not limited to, the 10-K and subsequent 10-Q's. Copies of those
filings are available from the Company and the SEC.
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<TABLE>
Championship Auto Racing Teams, Inc
Consolidated Balance Sheets
As of June 30, 2000 and December 31, 1999
(In Thousands)
<CAPTION>
June 30, 2000 December 31, 1999
------------- -----------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 20,671 $ 7,216
Short-term investments 104,518 91,758
Accounts receivable 6,873 8,780
Current portion of notes receivable 944 819
Prepaid expenses 495 262
Inventory 286 311
Deferred income taxes 99 114
-------- --------
Total current assets 133,886 109,260
Notes receivable 1,853 2,485
Property and equipment - net 6,240 5,228
Goodwill 7,345 7,442
Other assets 444 472
-------- --------
Total assets $149,768 $124,887
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 1,650 $ 2,131
Accrued liabilities:
Race expenses and point awards 1,269 --
Royalties 287 949
Payroll 1,791 660
Taxes 2,678 358
Other 2,447 801
Deferred revenue 15,260 4,881
Deposits 878 --
-------- --------
Total current liabilities 26,260 9,780
Deferred income taxes 933 777
Stockholders' equity
Common stock 156 156
Additional paid-in capital 99,703 99,671
Retained earnings 22,962 14,825
Unrealized loss on investments (246) (322)
-------- --------
Total stockholders' equity 122,575 114,330
-------- --------
Total liabilities and stockholders' equity $149,768 $124,887
======== ========
</TABLE>
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<TABLE>
Championship Auto Racing Teams, Inc.
Consolidated Statements of Income
For the Three and Six Months Ended June 30, 2000 and 1999
(In Thousands, Except Earnings Per Share)
<CAPTION>
Qtr ended Qtr ended YTD YTD
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES
Sanction fees $15,761 $15,743 $17,194 $17,099
Sponsorship revenue 5,127 5,141 10,028 9,338
TV revenue 1,768 2,040 2,028 2,313
Engine leases, rebuilds and wheel sales 636 563 1,087 1,085
Other 1,610 1,986 2,413 2,987
------- ------- ------- -------
Total revenues 24,902 25,473 32,750 32,822
EXPENSES
Race distributions 5,192 6,053 6,012 6,791
Race expenses 2,792 2,187 4,221 3,169
Cost of engine rebuilds and wheel sales 245 176 380 357
Administrative and indirect expenses 5,896 6,475 9,423 10,374
Compensation expense 2,758 -- 2,758 --
Depreciation and amortization 305 254 592 489
------- ------- ------- -------
Total expenses 17,188 15,145 23,386 21,180
------- ------- ------- -------
OPERATING INCOME 7,714 10,328 9,364 11,642
Interest income (net) 1,798 1,380 3,293 2,617
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 9,512 11,708 12,657 14,259
Income tax expense 3,388 4,242 4,520 5,154
------- ------- ------- -------
NET INCOME $ 6,124 $ 7,466 $ 8,137 $ 9,105
======= ======= ======= =======
EARNINGS PER SHARE:
BASIC $ 0.39 $ 0.49 $ 0.52 $ 0.60
======= ======= ======= =======
DILUTED $ 0.39 $ 0.47 $ 0.52 $ 0.58
======= ======= ======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 15,588 15,376 15,587 15,276
======= ======= ======= =======
DILUTED 15,722 15,936 15,732 15,806
======= ======= ======= =======
</TABLE>
