UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-13582
SPEEDWAY MOTORSPORTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0363307
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
U.S. HIGHWAY 29 NORTH, CONCORD, NORTH CAROLINA 28026
(Address of principal executive offices) (Zip Code)
(704) 455-3239
(Registrant's telephone number, including area code)
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 [ ]
As of August 11, 1998, there were 41,488,899 shares of $0.01 par value common
stock outstanding.
<PAGE>
INDEX TO FORM 10-Q
PART I - FINANCIAL INFORMATION PAGE
ITEM 1. Consolidated Financial Statements - Unaudited ............. 3
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ........... 15
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders ....... 23
ITEM 6. Exhibits and Reports on Form 8-K .......................... 23
SIGNATURES ......................................................... 24
2
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PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
December 31, June 30,
1997 1998
-------- --------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ...................... $ 28,148 $ 32,109
Restricted cash ................................ 2,775 1,226
Accounts and notes receivable .................. 24,452 31,116
Prepaid income taxes ........................... 4,649 --
Inventories (Note 3) ........................... 8,900 10,096
Speedway condominiums held for sale (Note 2) ... 22,908 7,854
Prepaid expenses ............................... 768 1,276
-------- --------
Total current assets ......................... 92,600 83,677
-------- --------
PROPERTY AND EQUIPMENT, NET (Note 4) ............ 436,547 487,567
GOODWILL AND OTHER INTANGIBLE ASSETS, NET ....... 51,300 50,639
OTHER ASSETS:
Marketable equity securities ................... 1,609 1,125
Notes receivable (Note 7) ...................... 5,498 10,708
Other assets ................................... 9,614 9,140
-------- --------
Total other assets ........................... 16,721 20,973
-------- --------
TOTAL ........................................ $597,168 $642,856
======== ========
See notes to consolidated financial statements.
3
<PAGE>
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
December 31, June 30,
1997 1998
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt (Note 5) ....... $ 375 $ 374
Accounts payable .................................... 21,927 11,268
Deferred race event income, net ..................... 58,433 50,345
Accrued income taxes ................................ -- 15,032
Accrued expenses and other liabilities .............. 13,853 15,865
--------- ---------
Total current liabilities ........................ 94,588 92,884
LONG-TERM DEBT (Note 5) .............................. 219,135 234,432
PAYABLE TO AFFILIATED COMPANY (Note 7) ............... 2,603 2,603
DEFERRED INCOME, NET ................................. 13,900 15,567
DEFERRED INCOME TAXES ................................ 18,795 18,778
OTHER LIABILITIES .................................... 4,033 2,286
--------- ---------
Total liabilities ................................ 353,054 366,550
--------- ---------
COMMITMENTS (Note 4)
STOCKHOLDERS' EQUITY:
Preferred stock, $.10 par value, shares
authorized - 3,000,000, no shares issued ........... -- --
Common stock, $.01 par value, shares authorized -
200,000,000, issued and outstanding - 41,433,000
in 1997 and 41,488,000 in 1998 ..................... 414 415
Additional paid-in capital .......................... 156,477 157,001
Retained earnings ................................... 87,526 119,217
Accumulated other comprehensive loss - unrealized
loss on marketable equity securities (Note 2) ...... (303) (327)
--------- ---------
Total stockholders' equity ....................... 244,114 276,306
--------- ---------
TOTAL ............................................ $ 597,168 $ 642,856
========= =========
See notes to consolidated financial statements.
4
<PAGE>
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
Three Months Ended June 30
--------------------
1997 1998
-------- --------
REVENUES:
Admissions ................................... $ 51,249 $ 55,708
Event related revenue ........................ 48,406 57,314
Other operating revenue ...................... 4,486 4,717
-------- --------
Total revenues ............................ 104,141 117,739
-------- --------
OPERATING EXPENSES:
Direct expense of events ..................... 35,186 40,810
Other direct operating expense ............... 2,794 3,038
General and administrative ................... 8,701 8,771
Depreciation and amortization ................ 4,455 4,981
Preoperating expense of new facility (Note 2). 1,850 --
-------- --------
Total operating expenses .................. 52,986 57,600
-------- --------
OPERATING INCOME .............................. 51,155 60,139
Interest expense, net (Note 5)................. (877) (2,864)
Other (expense) income, net ................... (179) 393
-------- --------
INCOME BEFORE INCOME TAXES .................... 50,099 57,668
Income tax provision .......................... 20,582 23,054
-------- --------
NET INCOME .................................... $ 29,517 $ 34,614
======== ========
PER SHARE DATA (Note 6):
Earnings per share - basic .................. $ 0.71 $ 0.83
======== ========
Weighted average shares outstanding ......... 41,306 41,487
Earnings per share - assuming dilution ...... $ 0.67 $ 0.79
======== ========
Weighted average shares outstanding ......... 44,459 44,657
See notes to consolidated financial statements.
5
<PAGE>
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
Six Months Ended June 30
--------------------
1997 1998
-------- --------
REVENUES:
Admissions ................................... $ 56,455 $ 61,396
Event related revenue ........................ 55,117 65,783
Other operating revenue ...................... 8,022 8,520
-------- --------
Total revenues ............................ 119,594 135,699
-------- --------
OPERATING EXPENSES:
Direct expense of events ..................... 39,893 46,763
Other direct operating expense ............... 4,850 5,260
General and administrative ................... 15,792 16,945
Depreciation and amortization ................ 7,119 9,739
Preoperating expense of new facility (Note 2). 1,850 --
-------- --------
Total operating expenses .................. 69,504 78,707
-------- --------
OPERATING INCOME .............................. 50,090 56,992
Interest expense, net (Note 5)................. (382) (5,612)
Other income, net ............................. 22 1,437
-------- --------
INCOME BEFORE INCOME TAXES .................... 49,730 52,817
Income tax provision .......................... 20,476 21,126
-------- --------
NET INCOME .................................... $ 29,254 $ 31,691
======== ========
PER SHARE DATA (Note 6):
Earnings per share - basic .................. $ 0.71 $ 0.76
======== ========
Weighted average shares outstanding ......... 41,305 41,474
Earnings per share - assuming dilution ...... $ 0.67 $ 0.73
======== ========
Weighted average shares outstanding ......... 44,472 44,635
See notes to consolidated financial statements.
6
<PAGE>
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Accumulated Total
Common Stock Additional Other Stock-
------------------------ Paid-In Retained Comprehensive holders'
Shares Amount Capital Earnings Loss Equity
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
BALANCE - DECEMBER 31, 1997 ............ 41,433 $ 414 $ 156,477 $ 87,526 $ (303) $ 244,114
Net income ............................. -- -- -- 31,691 -- 31,691
Issuances of stock under employee stock
purchase plan ........................ 6 -- 136 -- -- 136
Exercise of stock options .............. 49 1 388 -- -- 389
Net unrealized loss on marketable equity
securities (Note 2) .................. -- -- -- -- (24) (24)
--------- --------- --------- --------- --------- ---------
BALANCE - JUNE 30, 1998 ................ 41,488 $ 415 $ 157,001 $ 119,217 $ (327) $ 276,306
========= ========= ========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30
--------------------------------
1997 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .............................................................. $ 29,254 $ 31,691
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization ................................... 7,119 9,739
Gain on sale of marketable equity securities and
investments ........................................................... (61) (150)
Amortization of deferred income ................................. (270) (432)
Changes in operating assets and liabilities:
Restricted cash ........................................... 10,407 1,549
Accounts receivable ....................................... (7,123) (3,991)
Prepaid and accrued income taxes .......................... 11,750 19,681
Inventories ............................................... (1,988) (1,196)
Condominiums held for sale ................................ (8,105) 15,054
Accounts payable .......................................... 5,319 (10,659)
Deferred race event income ................................ (6,765) (8,088)
Accrued expenses and other liabilities .................... 1,565 2,012
Deferred income ........................................... 4,928 2,099
Other assets and liabilities .............................. (951) (3,534)
--------- ---------
Net cash provided by operating activities ............... 45,079 53,775
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt .................................... (184) (18,413)
Issuance of long-term debt .............................................. 78,000 35,000
Issuance of stock under employee stock purchase plan .................... 90 136
Exercise of stock options ............................................... -- 389
--------- ---------
Net cash provided by financing activities ............... 77,906 17,112
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures .................................................... (104,671) (59,635)
Purchases of marketable equity securities and
investments ............................................................ (412) (100)
Proceeds from sales of marketable equity securities
and investments ........................................................ 656 692
Increase in notes and other receivables ................................. (7,913) (7,883)
--------- ---------
Net cash used in investing activities ................... (112,340) (66,926)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS ................................ 10,645 3,961
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ......................... 22,252 28,148
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................... $ 32,897 $ 32,109
========= =========
</TABLE>
See notes to consolidated financial statements.
8
<PAGE>
The following Notes to Unaudited Consolidated Financial Statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations, contain estimates and forward-looking statements as indicated herein
by use of such terms as "estimated", "anticipates", "approximate" or
"projected". Such statements reflect management's current views, are based on
certain assumptions and are subject to risks and uncertainties. No assurance can
be given that actual results or events will not differ materially from those
projected, estimated, assumed or anticipated in any such forward-looking
statements. Important factors that could result in such differences, in addition
to the other factors noted with such forward-looking statements, include:
general economic conditions in the Company's markets, including inflation,
recession, interest rates and other economic factors; casualty to or other
disruption of the Company's facilities and equipment; disruption of the
Company's relationship with NASCAR; and other factors that generally affect the
business of sports and recreational companies.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS
The consolidated financial statements include the accounts of Speedway
Motorsports, Inc. (SMI), and its wholly-owned subsidiaries, Atlanta Motor
Speedway, Inc. (AMS), Bristol Motor Speedway, Inc. (BMS), Charlotte Motor
Speedway, Inc. and subsidiaries (CMS), Sears Point Raceway (SPR), Texas Motor
Speedway, Inc. (TMS), Speedway Systems LLC d/b/a Finish Line Events (FLE),
Oil-Chem Research Corp. and subsidiary (ORC), Speedway Funding Corp. and Sonoma
Funding Corp. (collectively, the Company).
See Note 1 to the December 31, 1997 Consolidated Financial Statements for
further description of the Company's business operations, properties and
scheduled events.
In October 1996, the Company signed a joint management and development
agreement with Quad-Cities International Raceway Park. The Company will serve in
an advisory capacity for the development of a multi-use facility, which includes
a speedway located in northwest Illinois. The agreement also grants the Company
the option to purchase up to 40% equity ownership in the facility. The option
has not been exercised.
2. SIGNIFICANT ACCOUNTING POLICIES
These unaudited consolidated financial statements should be read in
conjunction with the Company's consolidated financial statements for the fiscal
year ended December 31, 1997 included in its 1997 Annual Report on Form 10-K.
In management's opinion, these unaudited consolidated financial statements
contain all adjustments necessary for their fair presentation at interim
periods. All such adjustments are of a normal recurring nature.
The results of operations for interim periods are not necessarily
indicative of operating results that may be expected for the entire year due to
the seasonal aspect of event revenues.
REVENUE RECOGNITION - The Company recognizes revenues and operating
expenses for all events in the calendar quarter in which conducted except for
9
<PAGE>
major NASCAR racing events which occur on the last weekend of a calendar
quarter. When major NASCAR racing events occur on the last weekend of a calendar
quarter, the race event revenues and operating expenses are recognized in the
current or immediately succeeding calendar quarter that corresponds to the
calendar quarter of the prior year in which the same major NASCAR racing event
was conducted. The Company has adopted this accounting policy to help ensure
comparability and consistency between quarterly financial statements of
successive years.
A major NASCAR sanctioned racing event occurred at BMS on the weekends of
April 11-13, 1997 and March 27-29, 1998. Also, a major NASCAR sanctioned racing
event occurred at SPR on the weekends of May 3-4, 1997 and June 27-28, 1998.
Accordingly, the revenues and direct expenses of these race events are
recognized in the second quarter of both calendar years. The last recognition
date for the first quarter of 1998 was March 26, 1998. The recognition period
for the second quarter of 1998 is March 27, 1998 to June 30, 1998. No major
NASCAR race events were held at the Company's speedways on the last weekend of
the calendar quarters ended March 31 or June 30, 1997. As such, the reporting
periods for the three and six months ended June 30, 1997 and 1998 are
comparable.
The Busch Grand National series race at AMS, originally scheduled to be
held March 7, 1998, was rescheduled to November 7, 1998 due to poor weather
conditions. Certain advance revenues and direct expenses related to the
rescheduled Busch race were deferred. Rescheduling did not materially impact
revenues and operating expenses as reported for the three or six months ended
June 30, 1998.
SPEEDWAY CONDOMINIUMS HELD FOR SALE - Speedway condominiums held for sale
represent 46 condominiums at AMS and 76 condominiums at TMS, of which 40 and 67,
respectively, have been sold or contracted for sale as of June 30, 1998. The
remaining condominiums are substantially complete and are in the process of
being sold. CMS has constructed 52 condominiums overlooking the main speedway,
all of which have been sold.
PROPERTY AND EQUIPMENT - In the fourth quarter ended December 31, 1997, the
Company revised the estimated useful lives of certain property and equipment
based on new information obtained from a third party review of applicable lives
for these assets. Management believes the revised lives are more appropriate and
result in better estimates of depreciation. The revised lives decreased
depreciation expense by $1,544,000 and $2,227,000, and increased net income by
$927,000 and $1,336,000, or approximately $0.02 and $0.03 per share, for the
three and six months ended June 30, 1998 compared to using former estimated
lives.
MARKETABLE EQUITY SECURITIES - The Company's marketable equity securities
are classified as "available for sale" and are not bought and held principally
for the purpose of selling them in the near term. Valuation allowances for
unrealized losses of $303,000 and $327,000 (net of $219,000 and $237,000 in tax
benefits), are reflected as a charge to stockholders' equity to reduce the
carrying amount of long-term marketable equity securities to market value as of
December 31, 1997 and June 30, 1998, respectively.
DEFERRED INCOME - Deferred income includes Texas Motor Speedway Preferred
Seat License (PSL) fee deposits of $12,862,000 and $12,650,000, net of
10
<PAGE>
expenses of $1,036,000 and $1,050,000 at December 31, 1997 and June 30, 1998,
respectively. See Note 2 to the December 31, 1997 Consolidated Financial
Statements for discussion of terms and conditions of the PSLs. Fees received
under PSL agreements were deferred prior to TMS hosting its first Winston Cup
race on April 6, 1997. The Company began amortizing net PSL fee revenues into
income over the estimated useful life of TMS's speedway facility upon its
opening. Amortization income recognized in the three and six months ended June
30, 1998 was $238,000 and $364,000, and in the three months ended June 30, 1997
was $133,000.
PREOPERATING EXPENSE OF NEW FACILITY - Preoperating expenses consist of
non-recurring and non-event related costs to develop, organize and open TMS,
which hosted its first racing event on April 6, 1997.
3. INVENTORIES
Inventories as of December 31, 1997 and June 30, 1998 consist of the
following components (in thousands):
December 31, June 30,
1997 1998
------- -------
Souvenirs.......................................... $ 3,839 $ 4,205
Finished vehicles, parts and accessories........... 4,907 5,433
Food and other..................................... 154 458
------- -------
Total $ 8,900 $10,096
======= =======
4. PROPERTY AND EQUIPMENT AND CONSTRUCTION IN PROGRESS
TEXAS MOTOR SPEEDWAY - The construction of TMS, a 1.5-mile, banked,
lighted, quad-oval superspeedway, located on 1,360 acres in Fort Worth, Texas,
was complete at March 31, 1997, with TMS hosting its first major NASCAR Winston
Cup race on April 6, 1997.
CONSTRUCTION IN PROGRESS - At June 30, 1998, the Company has various
construction projects underway to increase and improve grandstand seating
capacity, luxury suites, facilities for fan amenities, and make various other
site improvements at each of its speedways. Also, TMS is constructing an office
and entertainment complex which overlooks the main speedway. Construction is
expected to be completed in 1999, and TMS plans to derive rental, catering,
dining and dues revenues from the dining-entertainment and health-fitness club
complex. The estimated aggregate cost of capital expenditures in 1998, excluding
exercise of the SPR purchase option (see Note 5), will approximate $100,000,000.
5. LONG-TERM DEBT
BANK CREDIT FACILITY - In August 1997, the Company obtained, from a
syndicate of banks led by NationsBank N.A., a long-term, unsecured, senior
revolving credit facility (the Credit Facility) with an overall borrowing limit
of $175,000,000 and a sub-limit of $10,000,000 for standby letters of
11
<PAGE>
credit. Interest is based, at the Company's option, upon (i) LIBOR plus .5% to
1.125% or (ii) the greater of NationsBank's prime rate or the Federal fund rate
plus .5%. The Credit Facility matures in August 2002. At June 30, 1998, there
were $35,000,000 in outstanding borrowings under the Credit Facility. At
December 31, 1997, there were no outstanding borrowings.
SENIOR SUBORDINATED NOTES - In August 1997, the Company issued 8 1/2%
senior subordinated notes (the Senior Notes) in the aggregate principal amount
of $125,000,000. The Senior Notes are unsecured, mature in August 2007 and are
redeemable at the Company's option after August 15, 2002. Interest payments are
due semi-annually on February 15 and August 15, commencing February 15, 1998.
CONVERTIBLE SUBORDINATED DEBENTURES - In October 1996, the Company issued 5
3/4% convertible subordinated debentures in the aggregate principal amount of
$74,000,000. The debentures are unsecured, mature on September 30, 2003, are
convertible into common stock at the holder's option at $31.11 per share until
maturity and are redeemable at the Company's option after September 29, 2000. In
conversion, 2,378,565 shares of common stock would be issuable (see Note 6).
Interest payments are due semi-annually on March 31 and September 30.
See Note 5 to the December 31, 1997 Consolidated Financial Statements for
discussion of additional terms, restrictive loan covenants and conditions of the
Senior Notes, Credit Facility and debentures.
CAPITAL LEASE OBLIGATION AND EXERCISE OF PURCHASE OPTION (SEARS POINT
RACEWAY) - SPR, located on approximately 1,550 acres in Sonoma, California, owns
and operates a 1.9-mile, seven-turn road course, a one-quarter mile dragstrip,
and an 157,000 square foot industrial park. In connection with its SPR asset
acquisition in November 1996 (see Note 1), the Company executed a fourteen year
capital lease, including a purchase option, with the seller for all real
property of the SPR complex. In December 1997, the seller informed the Company
of their intent to accelerate the purchase option. On February 17, 1998, the
purchase transaction was consummated for $18,100,000, net cash outlay, thereby
transferring ownership of the SPR racetrack facilities and real property to the
Company and eliminating its capital lease obligation. The purchase transaction
was funded with borrowings under the Company's Credit Facility, and has been
reflected in the accompanying June 30, 1998 consolidated financial statements.
The purchase option, consisting of the Company's right to purchase the real
property for $38,100,000, was initially acquired for a $3,500,000 payment. This
payment was credited against the purchase price. Also, a security deposit of
$3,000,000 paid at lease inception, and a promissory note receivable of
$13,453,000 due from the seller, was credited against the purchase price.
Because a legal right of offset existed under the lease obligation and note
receivable agreements prior to exercise, the note receivable was netted against
the capital lease obligation in the accompanying December 31, 1997 consolidated
balance sheet. See Note 5 to the December 31, 1997 Consolidated Financial
Statements for discussion of additional terms and conditions of the former
purchase option, capital lease obligation and note receivable.
INTEREST EXPENSE - Interest expense, net for the three months ended June
30, 1997 and 1998 includes interest income of $505,000 and $555,000. Interest
12
<PAGE>
expense was $1,382,000 and $3,419,000 for the three months ended June 30, 1997
and 1998. The Company capitalized interest costs of $1,415,000 and $742,000
during the three months ended June 30, 1997 and 1998.
Interest expense, net for the six months ended June 30, 1997 and 1998
includes interest income of $1,100,000 and $1,215,000. Interest expense was
$1,482,000 and $6,827,000 for the six months ended June 30, 1997 and 1998. The
Company capitalized interest costs of $3,515,000 and $1,647,000 during the six
months ended June 30, 1997 and 1998.
6. PER SHARE DATA
In 1997, the Company adopted SFAS No. 128 "Earnings Per Share", which
specifies the computation, presentation and disclosure requirements for basic
and diluted earnings per share retroactively restated. The impact of adoption
was not significant.
The following schedule reconciles basic and diluted earnings per share for
the three and six months ended June 30, 1997 and 1998. Dilution assumes
conversion of the convertible debentures into common stock and elimination of
interest expense, net of taxes, on such debt (see Note 5). The reconciliation of
basic and diluted earnings per share is as follows:
WEIGHTED
NET AVERAGE EARNINGS
THREE MONTHS ENDED INCOME SHARES PER SHARE
------- ------ -------
(IN THOUSANDS)
June 30, 1997:
Basic earnings per share ................. $29,517 41,306 $0.71
Dilution adjustments:
Common stock equivalents - stock options. -- 774
5 3/4% Convertible debentures (Note 5)... 316 2,379
------- ------
Diluted earnings per share................ $29,833 44,459 $0.67
======= ======
June 30, 1998:
Basic earnings per share.................. $34,614 41,487 $0.83
Dilution adjustments:
Common stock equivalents - stock options. -- 791
5 3/4% Convertible debentures (Note 5)... 516 2,379
------- ------
Diluted earnings per share................ $35,130 44,657 $0.79
======= ======
SIX MONTHS ENDED
June 30, 1997:
Basic earnings per share ................. $29,254 41,305 $0.71
Dilution adjustments:
Common stock equivalents - stock options. -- 788
5 3/4% Convertible debentures (Note 5)... 333 2,379
------- ------
Diluted earnings per share................ $29,587 44,472 $0.67
======= ======
June 30, 1998:
Basic earnings per share................... $31,691 41,474 $0.76
Dilution adjustments:
Common stock equivalents - stock options.. -- 782
5 3/4% Convertible debentures (Note 5).... 1,028 2,379
------- ------
Diluted earnings per share................. $32,719 44,635 $0.73
======= ======
7. RELATED PARTY TRANSACTIONS
Notes receivable at December 31, 1997 and June 30, 1998 include a note
receivable of $747,000 and $772,000, respectively, due from a partnership in
13
<PAGE>
which the Company's Chairman and Chief Executive Officer is a partner. The note
bears interest at 1% over prime, is collateralized by certain partnership land
and is payable on demand. Because the Company does not anticipate repayment of
the note before June 30, 1999, the balance has been classified as a noncurrent
asset in the accompanying consolidated balance sheets.
Notes receivable also include a note receivable from the Company's Chairman
and Chief Executive Officer for $1,876,000 at December 31, 1997 and $754,000 at
June 30, 1998. The principal balance of the note represents premiums paid by the
Company under a split-dollar life insurance trust arrangement on behalf of the
Chairman, in excess of cash surrender value. The note bears interest at 1% over
prime.
From time to time during 1997 and 1998, the Company paid certain expenses
and made cash advances for various corporate purposes on behalf of Sonic
Financial Corp. (Sonic Financial), an affiliate of the Company through common
ownership. The Company had a net receivable from Sonic Financial of
approximately $3,875,000 at December 31, 1997 and $344,000 at June 30, 1998. The
amount due the Company at December 31, 1997 was substantially repaid by Sonic
Financial in January 1998.
Amounts payable to affiliated company of approximately $2,603,000 at
December 31, 1997 and June 30, 1998 represents acquisition and other expenses
paid on behalf of AMS by Sonic Financial in prior years. Of such amounts,
approximately $1,800,000 bears interest at 3.83% per annum. The remainder of the
amount bears interest at prime plus 1%. The entire account balance is classified
as long-term based on expected repayment dates.
8. STOCK OPTION PLANS
1994 STOCK OPTION PLAN - The Company's stockholders approved, at the 1998
annual meeting on May 5, 1998, an amendment to the 1994 Stock Option Plan to
increase the number of shares of common stock issuable under that plan from
2,000,000 to 3,000,000. The amendment allows future grants to key employees. No
options have been granted from January 1, 1998 to June 30, 1998.
FORMULA STOCK OPTION PLAN - On May 5, 1998, the Company's stockholders
approved an amendment to the Formula Stock Option Plan to increase the number of
shares of common stock issuable under that plan from 400,000 to 800,000. The
amendment allows future grants to independent directors. Effective January 2,
1998, the Company granted options to purchase an additional 20,000 shares to
each of the two outside directors at an exercise price per share of $24.81.
EMPLOYEE STOCK PURCHASE PLAN - On May 5, 1998, the Company's stockholders
approved an amendment to the Employee Stock Purchase Plan to increase the number
of shares of common stock issuable under that plan from 200,000 to 400,000. The
amendment allows future grants to employees. Each participant has been granted
an option to purchase up to 500 shares in 1998 at an exercise price per share of
$22.33, or 90% of the fair market value at exercise date if lower, subject to
the terms and conditions of the plan.
See Note 11 to the December 31, 1997 Consolidated Financial Statements for
additional discussion of the terms and conditions of the Company's stock option
plans.
14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements including the Notes thereto.
OVERVIEW
The Company derives revenues principally from the sale of tickets to
automobile races and other events held at each of its speedway facilities, from
the sale of food, beverages and souvenirs during such events, from the sale of
sponsorships to companies that desire to advertise or sell their products or
services at such events, and from the licensing of television, cable network and
radio rights to broadcast such events. The Company derives additional revenue
from The Speedway Club, a dining and entertainment facility at CMS, Legends Car
operations, SPR industrial park rentals, and from Oil-Chem, a wholly-owned
subsidiary, that produces an environmentally friendly motor oil additive that
the Company intends to promote in conjunction with its speedways.
The Company classifies its revenues as admissions, event related revenues
and other operating revenue. "Admissions" includes ticket sales for all of the
Company's events. "Event related revenues" includes food, beverage and souvenir
sales, luxury suite rentals, sponsorship fees and broadcast right fees. "Other
operating revenue" includes the Speedway Club, Legends Car, SPR industrial park
rental and Oil-Chem revenues.
The Company classifies its expenses to include direct expense of events and
other direct operating expense, among other things. "Direct expense of events"
principally consists of race purses, sanctioning fees, cost of concession and
souvenir sales, compensation of certain employees and advertising. "Other direct
operating expense" includes the cost of The Speedway Club and Legends Car sales,
SPR industrial park rentals and Oil-Chem revenues.
The Company's revenue items produce different operating margins.
Sponsorships, broadcast rights, ticket sales and luxury suite rentals produce
higher margins than concessions and souvenir sales, as well as Legends Car
sales.
The Company sponsors and promotes outdoor motorsports events. Weather
conditions affect sales of tickets, concessions and souvenirs, among other
things at these events. Although the Company sells tickets well in advance of
its events, poor weather conditions can have an effect on the Company's results
of operations.
Significant growth in the Company's revenues will depend on consistent
investment in facilities. The Company has several capital projects underway at
each of its speedways.
The Company does not believe that its financial performance has been
materially affected by inflation. The Company has been able to mitigate the
effects of inflation by increasing prices.
15
<PAGE>
AUTOMATED SYSTEMS AND THE YEAR 2000
The ability of automated systems to recognize the date change from December
31, 1999 to January 1, 2000 is commonly referred to as the Year 2000 matter. The
Company has assessed the potential impact of the Year 2000 matter on its
operations based on current and foreseeable computer and other automated system
applications, including those of its third party vendors and customers. The
Company believes any future costs associated with modifying its computer
software and other automated systems for the Year 2000 matter will not be
significant.
SEASONALITY AND QUARTERLY RESULTS
The Company derived a substantial portion of its total revenues from
admissions and event related revenue attributable to 15 NASCAR sanctioned races
held in 1997. In 1998, the Company again is holding 15 NASCAR sanctioned races.
The Company will also sponsor four Indy Racing League ("IRL"), three NASCAR
Craftsman Truck Series and one National Hot Rod Association Nationals, racing
events in 1998. As a result, the Company's business has been, and is expected to
remain, highly seasonal. In 1996 and 1997, the Company's second and fourth
quarters accounted for 75% and 78%, respectively, of its total annual revenues
and 96% and 100%, respectively, of its total annual operating income.
The Company sometimes produces minimal operating income or losses during
its first and third quarters, when it hosts only one NASCAR race weekend. The
concentration of the Company's racing events in the second quarter and the
growth in the Company's operations with attendant increases in overhead expenses
will tend to increase operating losses in future first and third quarters.
Additionally, race dates at the Company's various facilities may from time to
time be changed, lessening the comparability of the financial results of
quarters between years and increasing or decreasing the seasonal nature of the
Company's business.
The results of operations for the three and six months ended June 30, 1997
and 1998 are not indicative of the results that may be expected for the entire
year because of the seasonality discussed above.
Set forth below is certain comparative summary information with respect to
the Company's scheduled major NASCAR-sanctioned racing events for 1997 and 1998:
NUMBER OF SCHEDULED MAJOR
NASCAR-SANCTIONED EVENTS
1997 1998
1st Quarter....................... 2 1(*)
2nd Quarter....................... 8 8
3rd Quarter....................... 2 2
4th Quarter....................... 3 4(*)
-- --
Total........................... 15 15
== ==
(*) Reflects rescheduling of the Busch Grand National series race at AMS from
March to November 1998 due to poor weather conditions.
16
<PAGE>
RESULTS OF OPERATIONS
In 1998, the Company began operating certain food and beverage concession
activities through its wholly-owned subsidiary, Speedway Systems LLC d/b/a
Finish Line Events (FLE), which previously had been procured from a third party.
As a result, revenues and expenses associated with such concession activities
for the three and six months ended June 30, 1998 are included in event related
revenues, direct expense of events and general and administrative expense. For
the three and six months ended June 30, 1997, the Company's operating profits
from such activities under its arrangement with the outside vendor were reported
as event related revenue.
The NASCAR sanctioned Busch Grand National series race at AMS, originally
scheduled to be held March 7, 1998, was rescheduled to November 7, 1998 due to
poor weather conditions. Rescheduling did not materially impact revenues and
operating expenses as reported for the three or six months ended June 30, 1998.
THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30, 1997
TOTAL REVENUES. Total revenues for the three months ended June 30, 1998
increased by $13.6 million, or 13.1%, to $117.7 million, over such revenues for
the same period in 1997. This improvement was due to increases in all revenue
items, particularly admissions and event related revenues.
ADMISSIONS for the three months ended June 30, 1998 increased by $4.5
million, or 8.7%, over admissions for the same period in 1997. This
increase was due primarily to growth in NASCAR sanctioned racing events
held at BMS, CMS, and SPR during the current quarter. The growth in
admissions reflects the continued increases in attendance, additions to
permanent seating capacity and, to a lesser extent, ticket prices.
EVENT RELATED REVENUE for the three months ended June 30, 1998 increased by
$8.9 million, or 18.4%, over such revenue for the same period in 1997. The
increase reflects that the Company now operates certain food and beverage
concession activities previously procured from a third party as further
described above. The increase was also due to the growth in attendance,
including related increases in concessions and souvenir sales, and to
increases in broadcast rights and sponsorship fees.
OTHER OPERATING REVENUE for the three months ended June 30, 1998 increased
by $231,000, or 5.1%, over such revenue for the same period in 1997. This
increase was primarily attributable to an increase in Legend Car revenues
of 600 Racing, a wholly-owned subsidiary of CMS.
DIRECT EXPENSE OF EVENTS. Direct expense of events for the three months
ended June 30, 1998 increased by $5.6 million, or 16.0%, over such expense for
the same period in 1997. This increase reflects that the Company now operates
certain food and beverage concession activities previously procured from a third
party. The Company's operating profits from such activities under its
arrangement with the outside vendor were reported as event related revenue in
1997. This increase was also due to higher race purses and sanctioning fees
required for NASCAR sanctioned racing events held during the current quarter,
and to increased operating costs associated with the growth in attendance and
seating capacity, including related increases in concessions and souvenir sales.
17
<PAGE>
OTHER DIRECT OPERATING EXPENSE. Other direct operating expense for the
three months ended June 30, 1998 increased by $244,000, or 8.7%, over such
expense for the same period in 1997. The increase occurred primarily due to the
expenses associated with the increase in other operating revenues derived from
Legend Cars.
GENERAL AND ADMINISTRATIVE. As a percentage of total revenues, general and
administrative expense decreased from 8.4% for the three months ended June 30,
1997 to 7.4% for the three months ended June 30, 1998. This improvement reflects
continuing scale efficiencies associated with revenue increases outpacing
increases in general and administrative expenses. General and administrative
expense for the three months ended June 30, 1998 increased by $70,000, or 0.8%,
over such expense for the same period in 1997. The increase reflects costs
associated with the Company now operating certain food and beverage concession
activities previously procured from a third party.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for
the three months ended June 30, 1998 increased by $526,000 or 11.8%, over such
expense for the same period in 1997. This increase was primarily due to
additions to property and equipment at AMS, BMS and CMS.
PREOPERATING EXPENSE OF NEW FACILITY. Preoperating expenses for the three
months ended June 30, 1997 of $1.85 million consist of non-recurring and
non-event related costs to develop, organize and open TMS.
OPERATING INCOME. Operating income for the three months ended June 30, 1998
increased by $9.0 million, or 17.6%, over such income for the same period in
1997. This increase was due to the factors discussed above.
INTEREST EXPENSE, NET. Interest expense, net for the three months ended
June 30, 1998 was $2.9 million, compared to $877,000 for the same period in
1997. This change was due to higher average borrowings for construction funding
in the three months ended June 30, 1998 as compared to the same period in 1997.
The change also reflects lower capitalized interest costs of $742,000 during the
three months ended June 30, 1998 as compared to $1.4 million in the same period
in 1997.
OTHER INCOME (EXPENSE), NET. Other income for the three months ended June
30, 1998 was $393,000, compared to other expense of $179,000 for the same period
in 1997. This increase was partially due to gains recognized on sales of three
TMS condominiums during the current quarter. No sales of TMS condominiums were
recognized in the three months ended June 30, 1997. The change also reflects
recognition of the Company's loss from equity method investee of $30,000 in the
three months ended June 30, 1998 compared to $105,000 for the same period in
1997.
INCOME TAX PROVISION. The Company's effective income tax rate for the three
months ended June 30, 1998 and 1997 was 40% and 41%, respectively.
NET INCOME. Net income for the three months ended June 30, 1998 increased
by $5.1 million, or 17.3%, compared to the three months ended June 30, 1997.
This increase was due to the factors discussed above.
SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997
TOTAL REVENUES. Total revenues for the six months ended June 30, 1998
18
<PAGE>
increased by $16.1 million, or 13.5%, to $135.7 million, over such revenues for
the same period in 1997. This improvement was due to increases in all revenue
items, particularly admissions and event related revenues.
ADMISSIONS for the six months ended June 30, 1998 increased by $4.9
million, or 8.8%, over admissions for the same period in 1997. This
increase was due primarily to growth in NASCAR sanctioned racing events
held during the current period. The growth in admissions reflects the
continued increases in attendance, additions to permanent seating capacity
and, to a lesser extent, ticket prices.
EVENT RELATED REVENUE for the six months ended June 30, 1998 increased by
$10.7 million, or 19.4%, over such revenue for the same period in 1997. The
increase reflects that the Company now operates certain food and beverage
concession activities previously procured from a third party. The increase
was also due to the growth in attendance, including related increases in
concessions and souvenir sales, and to increases in broadcast rights and
sponsorship fees.
OTHER OPERATING REVENUE for the six months ended June 30, 1998 increased by
$498,000, or 6.2%, over such revenue for the same period in 1997. This
increase was primarily attributable to an increase in Legend Car revenues
of 600 Racing.
DIRECT EXPENSE OF EVENTS. Direct expense of events for the six months ended
June 30, 1998 increased by $6.9 million, or 17.2%, over such expense for the
same period in 1997. This increase reflects that the Company now operates
certain food and beverage concession activities previously procured from a
third party. This increase was also due to higher race purses and sanctioning
fees required for NASCAR sanctioned racing events held during the current
period, and to increased operating costs associated with the growth in
attendance and seating capacity, including related increases in concessions and
souvenir sales.
OTHER DIRECT OPERATING EXPENSE. Other direct operating expense for the six
months ended June 30, 1998 increased by $410,000, or 8.5%, over such expense for
the same period in 1997. The increase occurred primarily due to the expenses
associated with increased other operating revenues derived from Legend Cars.
GENERAL AND ADMINISTRATIVE. As a percentage of total revenues, general and
administrative expense decreased from 13.2% for the six months ended June 30,
1997 to 12.5% for the six months ended June 30, 1998. General and administrative
expense for the six months ended June 30, 1998 increased by $1.2 million, or
7.3%, over such expense for the same period in 1997. The increase was due
primarily to increases in operating costs associated with the growth and
expansion at AMS, BMS, CMS, and SPR. The increase also reflects costs associated
with the Company now operating certain food and beverage concession activities
previously procured from a third party.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for
the six months ended June 30, 1998 increased by $2.6 million, or 36.8%, over
such expense for the same period in 1997. This increase was primarily due to
property and equipment of TMS placed into service upon hosting of its first
racing event in April 1997, and to additions to property and equipment at AMS,
BMS and CMS.
19
<PAGE>
PREOPERATING EXPENSE OF NEW FACILITY. Preoperating expenses for the six
months ended June 30, 1997 of $1.85 million consist of non-recurring and
non-event related costs to develop, organize and open TMS.
OPERATING INCOME. Operating income for the six months ended June 30, 1998
increased $6.9 million, or 13.8%, compared to the same period in 1997. This
increase was due to the factors discussed above.
INTEREST EXPENSE, NET. Interest expense, net for the six months ended June
30, 1998 was $5.6 million, compared to $382,000 for the same period in 1997.
This increase was due to higher average borrowings for construction funding in
the six months ended June 30, 1998 as compared to the same period in 1997. The
change also reflects lower capitalized interest costs of $1.6 million during the
six months ended June 30, 1998 as compared to $3.5 million in the same period in
1997. The lower capitalized interest results primarily from property and
equipment of TMS being placed into service upon its opening in April 1997.
OTHER INCOME. Other income for the six months ended June 30, 1998 increased
by $1.4 million over such income for the same period in 1997. This increase
resulted primarily from gains recognized on sales of eleven TMS condominiums
held for sale during the six months ended June 30, 1998. No sales of TMS
condominiums were recognized in the six months ended June 30, 1997. In addition,
the increase reflects recognition of the Company's loss from equity method
investee of $60,000 in the six months ended June 30, 1998 compared to $210,000
for the same period in 1997.
INCOME TAX PROVISION. The Company's effective income tax rate for the six
months ended June 30, 1998 and 1997 was 40% and 41%, respectively.
NET INCOME. Net income for the six months ended June 30, 1998 increased by
$2.4 million, or 8.3%, compared to the six months ended June 30, 1997. This
increase was due to the factors discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically met its working capital and capital
expenditure requirements through a combination of cash flow from operations,
bank borrowings and other debt and equity offerings. The Company has expended
significant amounts of cash in the first half of 1998 for improvements and
expansion of BMS, CMS and TMS, and the exercise of the SPR purchase option on
February 17, 1998 as further described below. The Company's financial condition
and liquidity during the six months ended June 30, 1998 remained relatively
comparable with that at December 31, 1997 principally due to: (1) net cash
generated by operations for the six months ended June 30, 1998 amounting to
$54.5 million; (2) net long-term borrowings of $16.6 million during the first
and second quarters; and (3) capital expenditures during the first and second
quarters amounting to $59.6 million.
Company management anticipates that cash from operations and funds
available through the Credit Facility will sustain the Company's operating needs
through 1998, including planned capital expenditures at its speedway facilities.
Based upon the anticipated future growth and financing requirements of the
Company, management expects that the Company will, from time to time, engage in
additional financing of a character and in amounts to be determined. While the
Company expects to continue to generate positive
20
<PAGE>
cash flows from its existing speedway operations, and has generally experienced
improvement in its financial condition, liquidity and credit availability, such
resources, as well as possibly others, could be needed to fund the Company's
continued growth, including the continued expansion and improvement of its
speedway facilities.
EXERCISE OF SPR PURCHASE OPTION
On February 17, 1998, the Company's purchase option on SPR was consummated
for $18,100,000, net cash Company outlay, thereby transferring ownership of the
SPR complex to the Company and eliminating its capital lease obligation. The
purchase transaction was funded with borrowings from the Company's Credit
Facility.
CAPITAL EXPENDITURES
Significant growth in the Company's revenues depends, in a large part, on
consistent investment in facilities. Therefore, the Company expects to continue
to make substantial capital improvements in its facilities to meet increasing
demand and to increase revenue. Currently, a number of significant capital
projects are underway.
In 1998, AMS is installing lighting for its inaugural IRL night race in
August. At BMS, the Company added in 1998 approximately 17,000 permanent seats,
including 42 new luxury suites, and made other site improvements. In 1998, at
CMS, the Company added approximately 12,000 permanent seats, including 12 new
luxury suites. SPR plans to further expand and improve seating and viewing areas
in 1998 to increase spectator comfort and enjoyment. The Company expects in 1998
to begin major renovations at SPR, including its reconfiguration into a
"stadium-style" road racing course, the addition of approximately 44,000
permanent seats, and improving and expanding concessions, restroom facilities
and other fan amenities. Consistent with management's commitment to quality and
customer satisfaction, the Company continues to improve and expand fan amenities
at all its facilities, as well as reconfiguring traffic patterns, entrances, and
expanding on-site roads and significantly increasing available parking to ease
congestion caused by the growth in attendance. In 1998, after adding more than
29,000 permanent seats and 54 luxury suites, exclusive of SPR, the Company's
total permanent seating capacity will exceed 554,000 and the total number of
luxury suites will be approximately 550. Also, TMS is constructing an office and
entertainment complex which overlooks the main speedway. Construction is
expected to be completed in 1999, and TMS plans to derive rental, catering and
dining revenues from the dining-entertainment and health-fitness club complex.
The estimated aggregate cost of capital expenditures in 1998, excluding
exercise of the SPR purchase option, will approximate $100 million. Numerous
factors, many of which are beyond the Company's control, may influence the
ultimate costs and timing of various capital improvements at the Company's
facilities, including undetected soil or land conditions, additional land
acquisition costs, increases in the cost of construction materials and labor,
unforeseen changes in the design, litigation, accidents or natural disasters
affecting the construction site and national or regional economic changes. In
addition, the actual cost could vary materially from the Company's estimates if
the Company's assumptions about the quality of materials or workmanship required
or the cost of financing such construction were to change. Construction is also
subject to state and local permitting processes, which
21
<PAGE>
if changed, could materially affect the ultimate cost.
In addition to expansion and improvements of its existing speedway
facilities and business operations, the Company is continually evaluating new
opportunities that will add value for the Company's stockholders, including the
acquisition and construction of new speedway facilities, the expansion and
development of its existing Legends Cars and Oil-Chem products and markets and
the expansion into complementary businesses.
DIVIDENDS
The Company does not anticipate paying any cash dividends in the
foreseeable future. Any decision concerning the payment of dividends on the
Common Stock will depend upon the results of operations, financial condition and
capital expenditure plans of the Company, as well as such factors as
permissibility under the Credit Facility, the Senior Notes and as the Board of
Directors, in its sole discretion, may consider relevant. The Credit Facility
and Senior Notes presently preclude the payment of any dividends by the Company.
22
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders held on May 5, 1998, O. Bruton Smith
and William P. Benton were elected directors by the Company's stockholders.
Directors whose terms of office continued after the meeting were H.A. Wheeler,
William R. Brooks, Mark M. Gambill and Edwin R. Clark. In addition to election
of two directors, the stockholders approved amendments to increase the
authorized number of shares of common stock issuable under (i) the SMI 1994
Stock Option Plan from 2,000,000 to 3,000,000; (2) the SMI Employee Stock
Purchase Plan from 200,000 to 400,000; and (3) the SMI Formula Stock Option Plan
from 400,000 to 800,000.
<TABLE>
<CAPTION>
Votes Votes
Votes For Against Abstained Unvoted
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Election of O. Bruton Smith ..................................... 39,103,765 0 10,518 2,373,721
Election of William P. Benton ................................... 39,104,273 0 10,010 2,373,721
Approval of amendment to SMI 1994 Stock Option Plan ............. 37,765,458 1,331,039 17,786 2,373,721
Approval of amendment to SMI Employee Stock Purchase Plan ....... 39,035,632 61,423 17,228 2,373,721
Approval of amendment to SMI Formula Stock Option Plan ......... 38,270,788 823,951 19,544 2,373,721
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27. Financial data schedule for the six month period ended June 30, 1998.
(b) No reports were filed on Form 8-K during the fiscal quarter covered by
this Form 10-Q.
23
<PAGE>
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.
SPEEDWAY MOTORSPORTS, INC.
(REGISTRANT)
Date: August 11, 1998 By: /s/ O. Bruton Smith
O. Bruton Smith
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Date: August 11, 1998 By: /s/ William R. Brooks
William R. Brooks
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER, TREASURER AND DIRECTOR
24
<PAGE>
INDEX TO EXHIBITS TO
QUARTERLY REPORT ON FORM 10-Q FOR
SPEEDWAY MOTORSPORTS, INC.
FOR THE QUARTER ENDED JUNE 30, 1998
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
27 Financial data schedule for the six month period ended June 30, 1998.
25
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 33,335
<SECURITIES> 1,125
<RECEIVABLES> 41,824
<ALLOWANCES> 0
<INVENTORY> 10,096
<CURRENT-ASSETS> 83,677
<PP&E> 487,567
<DEPRECIATION> 72,669
<TOTAL-ASSETS> 642,856
<CURRENT-LIABILITIES> 92,884
<BONDS> 234,432
0
0
<COMMON> 415
<OTHER-SE> 275,891
<TOTAL-LIABILITY-AND-EQUITY> 642,856
<SALES> 8,520
<TOTAL-REVENUES> 136,699
<CGS> 5,260
<TOTAL-COSTS> 78,707
<OTHER-EXPENSES> (1,437)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,612
<INCOME-PRETAX> 52,817
<INCOME-TAX> 21,126
<INCOME-CONTINUING> 31,691
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31,691
<EPS-PRIMARY> .76
<EPS-DILUTED> .73
</TABLE>
