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 March 31, 1999
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 May 12, 1999, there were 41,549,578 shares of common stock outstanding.
<PAGE>
INDEX TO FORM 10-Q
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements - Unaudited 3
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 15
ITEM 3. Quantitative and Qualitative Disclosures About 21
Market Risk
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS.
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
December 31, March 31,
1998 1999
----------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ......................... $ 35,399 $ 41,141
Restricted cash ................................... 258 440
Accounts and notes receivable ..................... 28,924 36,576
Prepaid income taxes .............................. 10,356 9,220
Inventories ....................................... 10,447 10,870
Speedway condominiums held for sale ............... 4,930 4,730
Prepaid expenses .................................. 2,026 2,819
-------- --------
Total Current Assets ............................ 92,340 105,796
-------- --------
PROPERTY AND EQUIPMENT, NET ........................ 730,686 754,583
GOODWILL AND OTHER INTANGIBLE ASSETS, NET .......... 56,903 57,365
OTHER ASSETS:
Marketable equity securities ...................... 1,439 1,667
Notes receivable .................................. 11,420 12,377
Other assets ...................................... 12,089 9,406
-------- --------
Total Other Assets .............................. 24,948 23,450
-------- --------
TOTAL ........................................... $904,877 $941,194
======== ========
See notes to consolidated financial statements.
3
<PAGE>
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
December 31, March 31,
1998 1999
------------ ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt ............. $ 539 $ 548
Accounts payable ................................. 6,592 14,918
Deferred race event income, net .................. 84,713 113,526
Accrued expenses and other liabilities............ 14,772 10,292
-------- --------
106,616 139,284
Revolving credit facility and acquisition loan ... 254,050 254,050
-------- --------
Total Current Liabilities ..................... 360,666 393,334
LONG-TERM DEBT .................................... 199,335 200,208
PAYABLE TO AFFILIATES ............................. 4,134 4,073
DEFERRED INCOME, NET .............................. 16,252 16,434
DEFERRED INCOME TAXES ............................. 35,208 35,187
OTHER LIABILITIES ................................. 2,162 2,698
-------- --------
Total Liabilities ............................. 617,757 651,934
-------- --------
COMMITMENTS (Notes 4 and 9)........................
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 - 41,502,000
in 1998 and 41,512,000 in 1999 .................. 415 415
Additional paid-in capital ....................... 157,216 157,379
Retained earnings ................................ 129,897 131,905
Accumulated other comprehensive loss - unrealized
loss on marketable equity securities ............ (408) (439)
-------- --------
Total Stockholders' Equity .................... 287,120 289,260
-------- --------
TOTAL ......................................... $904,877 $941,194
======== ========
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
-------------------
March 31,
1998 1999
-------- ---------
REVENUES:
Admissions ................................... $ 5,688 $19,826
Event related revenue ........................ 8,469 27,956
Other operating revenue ...................... 3,803 5,322
------- -------
Total Revenues ............................ 17,960 53,104
------- -------
OPERATING EXPENSES:
Direct expense of events ..................... 5,953 19,769
Other direct operating expense ............... 2,222 3,527
General and administrative ................... 8,174 10,800
Depreciation and amortization ................ 4,758 7,119
------- -------
Total Operating Expenses .................. 21,107 41,215
------- -------
OPERATING INCOME (LOSS)........................ (3,147) 11,889
Interest expense, net ......................... (2,748) (6,327)
Acquisition loan cost amortization ............ -- (2,263)
Other income, net ............................. 1,044 174
------- -------
INCOME (LOSS) BEFORE INCOME TAXES ............. (4,851) 3,473
Income tax provision (benefit)................. (1,928) 1,465
------- -------
NET INCOME (LOSS).............................. $(2,923) $ 2,008
======= =======
PER SHARE DATA:
Basic earnings (loss) per share ............. $ (0.07) $ 0.05
======= =======
Weighted average shares outstanding ........ 41,461 41,507
Diluted earnings (loss) per share ........... $ (0.07) $ 0.05
======= =======
Weighted average shares outstanding ........ 44,613 44,872
See notes to consolidated financial statements.
5
<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> <C>
BALANCE - JANUARY 1, 1999 .............. 41,502 $415 $157,216 $129,897 $(408) $287,120
Net income.............................. -- -- -- 2,008 -- 2,008
Exercise of stock options .............. 10 -- 163 -- -- 163
Net unrealized loss on marketable
equity securities ..................... -- -- -- -- (31) (31)
------ ---- -------- -------- ----- --------
BALANCE - MARCH 31, 1999................ 41,512 $415 $157,379 $131,905 $(439) $289,260
====== ==== ======== ======== ===== ========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
SPEEDWAY MOTORSPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
March 31,
1998 1999
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) .................................... $(2,923) $ 2,008
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization ....................... 4,758 7,119
Gain on sale of marketable equity securities and
investments ........................................ (131) (133)
Amortization of acquisition loan costs............... -- 2,263
Amortization of deferred income...................... (68) (81)
Changes in operating assets and liabilities:
Restricted cash.................................... 1,392 (182)
Accounts receivable................................ (2,301) (8,519)
Prepaid and accrued income taxes................... (1,928) 1,136
Inventories ....................................... (2,084) (348)
Condominiums held for sale......................... 12,873 200
Accounts payable................................... (5,152) 8,326
Deferred race event income......................... 30,333 28,813
Accrued expenses and other liabilities............. (5,073) (4,480)
Deferred income.................................... 2,364 263
Other assets and liabilities....................... (2,956) 11
------- -------
Net cash provided by operating activities ....... 29,104 36,396
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt.................. (18,291) (131)
Issuance of long-term debt............................ 25,000 --
Exercise of common stock options...................... 389 163
------- -------
Net cash provided by financing activities ....... 7,098 32
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................................. (36,478) (30,484)
Purchases of marketable equity securities and other
investments.......................................... (100) (644)
Proceeds from sales of marketable equity securities
and other investments................................ 517 532
Increase in notes and other receivables............... (1,305) (1,021)
Repayment of notes and other receivables.............. -- 931
------- -------
Net cash used in investing activities ........... 37,366) (30,686)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS... (1,164) 5,742
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD....... 28,148 35,399
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............. $26,984 $41,141
======= =======
</TABLE>
See notes to consolidated financial statements.
7
<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 by use
of such terms as "estimates", "anticipates", "believes", "approximates",
"expects", "intends", "hopes", or "projected", and variations of such words and
similar expressions. 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 cause actual results to
differ, 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 (LMSC), Las Vegas Motor Speedway LLC (LVMS), SPR
Acquisition Corp. d/b/a Sears Point Raceway (SPR), Texas Motor Speedway, Inc.
(TMS), Speedway Systems LLC d/b/a Finish Line Events and subsidiaries (FLE),
Oil-Chem Research Corp. and subsidiary (ORC), SoldUSA, Inc., Speedway Funding
Corp. and Sonoma Funding Corp. (collectively, the Company).
See Note 1 to the December 31, 1998 Consolidated Financial Statements for
further description of the Company's business operations, properties and
scheduled events.
LVMS ACQUISITION (see Note 8) - On December 1, 1998, the Company acquired
certain tangible and intangible assets, including the real and personal property
and operations of LVMS, an industrial park and certain adjacent unimproved land
for approximately $215.0 million, consisting principally of net cash outlay of
$210.4 million and assumed associated deferred revenue. The acquisition was
financed with borrowings under the Company's revolving credit facility and
acquisition loan (see Note 5).
NAMING RIGHTS AGREEMENT - In February 1999, the Company entered into a ten
year naming rights agreement whereby Charlotte Motor Speedway has been renamed
Lowe's Motor Speedway (at Charlotte) for gross fees aggregating approximately
$35,000,000 over the agreement term. The agreement specifies, among other
things, that essentially all promotional signage, souvenirs, marketing and other
associated materials, formerly bearing Charlotte Motor Speedway insignia, be
renamed Lowe's Motor Speedway (at Charlotte). Fee revenues, net of associated
expenses, will be recognized ratably over the ten year agreement term.
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,
8
<PAGE>
which is expected to include 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, 1998 included in its 1998 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 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
March 27-29, 1998 and April 9-11, 1999. A major NASCAR sanctioned racing event
occurred at TMS on the weekends of April 3-5, 1998 and March 26-28, 1999. Also,
a major NASCAR sanctioned racing event occurred, and is scheduled to occur, at
SPR on the weekends of June 27-28, 1998 and June 26-27, 1999. Accordingly, the
revenues and direct expenses of these race events are recognized in the second
quarter of both calendar years, and the reporting periods for the three months
ended March 31, 1998 and 1999 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 as of March 31, 1998. Rescheduling did not
materially impact revenues and operating expenses as reported for the three
months ended March 31, 1998.
SPEEDWAY CONDOMINIUMS HELD FOR SALE - The Company has constructed 46
condominiums at AMS and 76 condominiums at TMS, of which 42 and 66,
respectively, have been sold or contracted for sale as of March 31, 1999.
Speedway condominiums held for sale represent 4 condominiums at AMS and 10
condominiums at TMS which are substantially complete and are being marketed.
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
9
<PAGE>
allowances for unrealized losses of $408,000 and $439,000, net of $272,000 and
$293,000 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, 1998 and March 31, 1999, respectively.
DEFERRED FINANCING COSTS AND ACQUISITION LOAN COST AMORTIZATION -
Acquisition loan cost amortization results from financing costs incurred in
obtaining an amended credit facility and acquisition loan to fund the Company's
acquisition of LVMS in December 1998 (see Note 5). Associated deferred financing
costs of $4,050,000 are being amortized over the loan term which matures May 31,
1999.
DEFERRED INCOME - Deferred income as of December 31, 1998 and March 31, 1999
consisted of the following (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1998 1999
------------ ---------
<S> <C> <C>
TMS Preferred Seat License fee deposits, net............. $12,624 $12,685
Deferred gain on TMS condominium sales................... 2,817 3,015
Deferred LMSC Speedway Club membership income and other.. 811 734
------- -------
Total.................................................. $16,252 $16,434
======= =======
</TABLE>
Fees received under Preferred Seat License (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 facility upon its opening. After May 31, 1999, license agreements are
transferrable once each year subject to certain terms and conditions. PSL fee
deposits are reported net of expenses of $1,052,000 at December 31, 1998 and
March 31, 1999. Amortization income recognized in the three months ended March
31, 1998 and 1999 was $126,000 and $62,000.
Certain condominium sales contracts, aggregating approximately $17,300,000
as of March 31, 1999, provide buyers the right to require the Company to
repurchase real estate within three years from the purchase date. Gain
recognition has been deferred until the buyer's right expires. Management
believes the likelihood of buyers exercising such rights, in amounts that at any
one time or in the aggregate would be significant, is remote.
3. INVENTORIES
Inventories as of December 31, 1997 and March 31, 1999 consist of the
following components (in thousands):
<TABLE>
<CAPTION>
December 31, March 31,
1998 1999
------------ ---------
<S> <C> <C>
Souvenirs and apparel................................... $ 5,023 $ 5,649
Finished vehicles, parts and accessories................ 4,409 3,934
Oil additives, food and other........................... 1,015 1,287
------- -------
Total................................................ $10,447 $10,870
======= =======
</TABLE>
4. PROPERTY AND EQUIPMENT
CONSTRUCTION IN PROGRESS - As of March 31, 1999, the Company had 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. For example, BMS is
10
<PAGE>
reconstructing and expanding its dragstrip with permanent grandstand seating,
luxury suites, and extensive fan amenities and facilities. Construction is
expected to be completed before the hosting of BMS's inaugural NHRA-sanctioned
Winston Showdown in July 1999.
As of March 31, 1999, construction of LVMS's 1.4 million square foot
industrial park was nearing completion and is expected to commence operations in
the first half of 1999. The industrial park is expected to be leased under
triple net operating leases primarily to businesses and individuals involved in
racing and related industries. Also, construction of an office and entertainment
complex overlooking TMS, similar to The Smith Tower and Speedway Club at LMSC,
was nearing completion. TMS will derive rental, catering, dining and dues
revenues from the dining-entertainment and health-fitness club complex, The
Texas Motor Speedway Club, which opened March 26, 1999. The estimated aggregate
cost of capital expenditures in 1999 will approximate $60,000,000.
5. LONG-TERM DEBT
BANK CREDIT FACILITY AND ACQUISITION LOAN (SEE NOTE 9) - On November 23,
1998, the Company's credit facility dated August 4, 1997 was amended and
restated in connection with the Company's December 1998 acquisition of LVMS. The
amended credit facility and acquisition loan (the Acquisition Loan) increased
the Company's overall borrowing limit from $175,000,000 to $270,000,000 to fund
the LVMS acquisition and maintain a revolving credit facility for working
capital needs and general corporate purposes. At December 31, 1998 and March 31,
1999, the Company had $254,050,000 in outstanding borrowings under the
Acquisition Loan. Interest is based, at the Company's option, upon (i) LIBOR
plus 1.125% or (ii) the greater of NationsBank's prime rate or the Federal funds
rate plus .5%.
The Acquisition Loan matures May 31, 1999. While the Company does not
believe maturity will result in the use of significant working capital, the
outstanding borrowings of $254,050,000 have been classified as a current
liability in the accompanying balance sheets in accordance with generally
accepted accounting principles. As further described in Note 9, the Company
refinanced a portion of the Acquisition Loan with proceeds from a private
placement offering of 8 1/2% senior subordinated notes in the aggregate
principal amount of $125,000,000 on May 11, 1999. In May 1999, the Company
intends to obtain a replacement revolving credit facility with sufficient
overall borrowing limits to fully repay and retire the Acquisition Loan, and for
working capital and general corporate purposes.
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.
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 are issuable (see Note 6).
Semi-annual interest payments are due on March 31 and September 30.
11
<PAGE>
INTEREST EXPENSE - Interest expense, net for the three months ended March
31, 1998 and 1999 includes interest expense of $3,408,000 and $7,037,000, and
interest income of $660,000 and $710,000. The Company capitalized interest costs
of $905,000 and $943,000 during the three months ended March 31, 1998 and 1999.
The weighted-average interest rate on borrowings under the Credit Facility and
Acquisition Loan during the three months ended March 31, 1998 and 1999 was 6.4%
and 6.3%.
6. PER SHARE DATA
The computations of diluted earnings (loss) per share were anti-dilutive
for the three months ended March 31, 1998 and 1999; therefore, reported basic
and diluted per share amounts are the same.
Diluted earnings per share assumes conversion of the convertible debentures
into common stock and elimination of associated interest expense, net of taxes,
on such debt (see Note 5). The following schedule reconciles basic and diluted
earnings per share(dollars and shares in thousands):
<TABLE>
<CAPTION>
Net Weighted
Income Average Earnings
Three Months Ended: (Loss) Shares Per Share
- ------------------- ------ ------ ---------
<S> <C> <C> <C>
March 31, 1998:
Basic loss per share....................... $(2,923) 41,461 $(0.07)
Dilution adjustments:
Common stock equivalents - stock options. -- 773
5 3/4% Convertible debentures ........... 513 2,379
------- ------
Diluted loss per share..................... $(2,410) 44,613 $(0.07)
======= ======
March 31, 1999:
Basic earnings per share................... $ 2,008 41,507 $0.05
Dilution adjustments:
Common stock equivalents - stock options. -- 986
5 3/4% Convertible debentures ........... 563 2,379
------- -----
Diluted earnings per share................. $ 2,571 44,872 $0.05
======= ======
</TABLE>
7. RELATED PARTY TRANSACTIONS
Notes receivable at December 31, 1998 and March 31, 1999 include a note
receivable of $798,000 and $810,000, respectively, due from a partnership in
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 March 31, 2000, 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 $842,000 at December 31, 1998 and $1,568,000 at
March 31, 1999. 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. Because the Company does not anticipate repayment of the note before
March 31, 2000, the balance has been classified as a noncurrent asset in the
accompanying consolidated balance sheets.
From time to time, the Company paid certain expenses and made cash
12
<PAGE>
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 for $1,040,000 at December 31,
1998 and $909,000 at March 31, 1999. The amounts are classified as short-term
based on expected repayment dates.
Amounts payable to affiliates at December 31, 1998 and March 31, 1999
includes $2,592,000 for acquisition and other expenses paid on behalf of AMS by
Sonic Financial prior to 1996. Of this amount, approximately $1,800,000 bears
interest at 3.83% per annum. The remainder of the amount bears interest at 1%
over prime. The entire amount is classified as long-term based on expected
repayment dates. Amounts payable to affiliates at December 31, 1998 and March
31, 1999 also include $1,542,000 and $1,471,000 owed to a former LVMS
shareholder and executive officer, who is now a LVMS officer and employee, in
equal monthly payments through December 2003 at 6.4% imputed interest.
8. LAS VEGAS MOTOR SPEEDWAY ACQUISITION
As further described in Note 1, the Company acquired Las Vegas Motor
Speedway on December 1, 1998. The LVMS acquisition was accounted for using the
purchase method in accordance with APB No. 16. The results of operations after
the acquisition date are included in the Company's consolidated statements of
income. The purchase price has been allocated to assets and liabilities acquired
at their estimated fair market values at acquisition date. The Company obtained
an independent appraisal of the LVMS property and equipment acquired, the fair
values of which have been used in the accompanying financial statements. In the
near future, the Company plans to obtain an independent appraisal of the fair
value of other LVMS net assets acquired, including identifiable intangibles, if
any. Accordingly, the purchase price allocation is preliminary. However, based
on current information, Company management does not expect the final allocation
of the purchase price to materially differ from that used in the accompanying
consolidated balance sheets.
The following unaudited pro forma financial information presents a summary
of consolidated results of operations as if the LVMS acquisition had occurred as
of January 1, 1998, after giving effect to certain adjustments, including
amortization of goodwill, interest expense on acquisition debt and related
income tax effects. The pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of what would have occurred
had the acquisition been made on that date, nor are they necessarily indicative
of results which may occur in the future.
Pro Forma
(in thousands,except
per share amounts)
Three Months Ended
--------------------
March 31,
1998
--------
Total revenues.............................. $42,898
Net income.................................. 2,238
=======
Basic earnings per share ................... $0.05
Diluted earnings per share ................. $0.05
13
<PAGE>
9. SUBSEQUENT EVENT - ISSUANCE OF SENIOR SUBORDINATED NOTES
SENIOR SUBORDINATED NOTES - On May 11, 1999, the Company completed a
private placement of 8 1/2% senior subordinated notes (the 1999 Senior Notes) in
the aggregate principal amount of $125,000,000. The 1999 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 August 15, 1999. The 1999 Senior Notes are subordinated
to all present and future senior secured indebtedness of the Company. Redemption
prices in fiscal year periods ending August 15 are 104.25% in 2002, 102.83% in
2003, 101.42% in 2004 and 100% in 2005 and thereafter. The Company intends to
file a registration statement to register these notes during the second quarter
of 1999. Net proceeds, after issuance at 103% of face value, commissions and
discounts, were approximately $125,737,000 which will be used to repay a portion
of the outstanding borrowings under the Acquisition Loan.
The Indenture governing the 1999 Senior Notes contains certain specified
restrictive and required financial covenants. The Company has agreed not to
pledge its assets to any third party except under certain limited circumstances.
The Company also has agreed to certain other limitations or prohibitions
concerning the incurrence of other indebtedness, capital stock, guaranties,
asset sales, investments, cash dividends to shareholders, distributions and
redemptions. The Indenture and 1999 Credit Facility agreements will likely
contain cross-default provisions.
BANK CREDIT FACILITY REPLACEMENT - The Company is currently negotiating the
terms of a long-term, secured, senior revolving credit facility with a syndicate
of banks led by NationsBank, N.A. as an agent and lender (the 1999 Credit
Facility). The 1999 Credit Facility is expected to be obtained by May 31, 1999
and to have an overall borrowing limit of $250,000,000, with a sub-limit of
$10,000,000 for standby letters of credit. The 1999 Credit Facility would mature
in 2004 and would be secured by a pledge of the capital stock of all Company
subsidiaries and limited liability company interests. Also, the Company would
likely agree not to pledge its assets to any third party. The 1999 Credit
Facility would be used to fully repay and retire then outstanding borrowings
under the Acquisition Loan after reduction for the application of proceeds from
the 1999 Senior Notes offering, and for working capital and general corporate
purposes.
Interest is expected to be 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 margin applicable to LIBOR borrowings would be
adjusted periodically based upon certain ratios of funded debt to earnings
before interest, taxes, depreciation and amortization (EBITDA). In addition,
among other items, the Company will likely be required to meet certain financial
covenants, including specified levels of net worth and ratios of (i) debt to
EBITDA, and (ii) earnings before interest and taxes (EBIT) to interest expense.
The 1999 Credit Facility also will likely contain certain limitations on cash
expenditures to acquire additional motor speedways without the consent of the
lenders, and limit the Company's consolidated capital expenditures to amounts
not to exceed $125 million annually and $500 million in the aggregate over the
loan term. The Company also would agree to certain other limitations or
prohibitions concerning the incurrence of other indebtedness, transactions with
affiliates, guaranties, asset sales, investments, dividends, distributions and
redemptions.
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 its speedway facilities, from the sale
of food, beverage 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 LMSC, Legends Car
operations, from Oil-Chem, which produces environmentally friendly motor oil
additives, and from Wild Man Industries (WMI), a wholly-owned subsidiary of FLE,
that is a screen printing and embroidery manufacturer and distributor of
wholesale and retail apparel.
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, industrial park
rental, WMI 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 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 souvenir sales,
compensation of certain employees and advertising. "Other direct operating
expense" includes the cost of the Speedway Club and Legends Car sales, and
industrial park rentals, WMI and Oil-Chem revenues.
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.
SEASONALITY AND QUARTERLY RESULTS
In 1998, the Company derived a substantial portion of its total revenues
from admissions and event related revenue attributable to 15 major NASCAR
sanctioned races, four IRL races, three NASCAR Craftsman Truck Series races
15
<PAGE>
and one National Hot Rod Association Nationals racing event. In 1999, the
Company currently will host 17 major NASCAR-sanctioned races, five IRL races,
four NASCAR Craftsman Truck Series and two major National Hot Rod Association
racing events. As a result, the Company's business has been, and is expected to
remain, highly seasonal.
In 1997 and 1998, the Company's second and fourth quarters accounted for
78% and 74%, respectively, of its total annual revenues and 100% and 97%,
respectively, of its total annual operating income. The Company sometimes
produces minimal operating income or losses during its third quarter when it
hosts only one major NASCAR race weekend. In 1999, the Company's operating
results for the first and thirds quarters will be significantly impacted by the
additional scheduled racing events at LVMS. The concentration of 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 or
minimize operating income in future first and third quarters.
Also, race dates at the Company's various facilities may be changed from
time to time, 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 months ended March 31, 1998 and
1999 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 1998 and 1999:
NUMBER OF SCHEDULED MAJOR
NASCAR-SANCTIONED EVENTS
------------------------
1998 1999
---- ----
1st Quarter....................... 1(*) 4
2nd Quarter....................... 8 8
3rd Quarter....................... 2 2
4th Quarter....................... 4(*) 3
-- --
Total........................... 15 17
== ==
(*) Reflects rescheduling of the Busch Grand National series race at AMS from
March to November 1998 due to poor weather conditions.
RESULTS OF OPERATIONS
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 months ended March 31, 1998.
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998
TOTAL REVENUES. Total revenues for the three months ended March 31, 1999
increased by $35.1 million, or 195.7%, to $53.1 million, over such revenues
16
<PAGE>
for the same period in 1998. This improvement was due to increases in all
revenue items, particularly admissions and event related revenues.
ADMISSIONS. Admissions for the three months ended March 31, 1999 increased
by $14.1 million, or 248.6%, over admissions for the same period in 1998. This
increase was due primarily to hosting new NASCAR-sanctioned racing events at
LVMS, which was acquired in December 1998. The increase also was due to growth
in NASCAR-sanctioned racing events held at AMS during the current quarter. The
growth in admissions also reflects the continued increases in attendance and in
ticket prices, and additions to permanent seating capacity.
EVENT RELATED REVENUE. Event related revenue for the three months ended
March 31, 1999 increased by $19.5 million, or 230.1%, over such revenue for the
same period in 1998. This increase was due primarily to hosting
NASCAR-sanctioned racing events at the Company's newly acquired LVMS. The
increase also was due to increases in broadcast rights and sponsorship fees,
and to growth in attendance, including related increases in concessions and
souvenir sales.
OTHER OPERATING REVENUE. Other operating revenue for the three months ended
March 31, 1999 increased by $1.5 million, or 39.9%, over such revenue for the
same period in 1998. This increase was primarily attributable to revenues
derived from WMI, which was acquired in October 1998, and to an increase in
Legend Car revenues of 600 Racing.
DIRECT EXPENSE OF EVENTS. Direct expense of events for the three months
ended March 31, 1999 increased by $13.8 million, or 232.1%, over such expense
for the same period in 1998. This increase was due primarily to hosting
NASCAR-sanctioned racing events at the Company's newly acquired LVMS. The
increase also was due to higher race purses and sanctioning fees required for
NASCAR-sanctioned racing events held at AMS, and to increased operating costs
associated with the growth in attendance, including related increases in
concessions and souvenir sales.
OTHER DIRECT OPERATING EXPENSE. Other direct operating expense for the
three months ended March 31, 1999 increased by $1.3 million, or 58.7%, over such
expense for the same period in 1998. The increase includes expenses associated
with other operating revenues derived from WMI and with the increase in revenues
derived from Legend Cars of 600 Racing.
GENERAL AND ADMINISTRATIVE. General and administrative expense for the
three months ended March 31, 1999 increased by $2.6 million, or 32.1%, over such
expense for the same period in 1998. The increase was primarily attributable to
costs associated with the Company's newly acquired LVMS. The increase also was
due to increases in operating costs associated with the growth and expansion at
the Company's other speedways.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense for
the three months ended March 31, 1999 increased by $2.4 million, or 49.6%, over
such expense for the same period in 1998. This increase was primarily due to
property and equipment and intangible assets related to the LVMS acquisition.
The increase also was due to additions to property and equipment at the
Company's other speedways.
OPERATING INCOME. Operating income for the three months ended March 31,
1999 increased $15.0 million to $11.9 million compared to an operating loss
17
<PAGE>
of $3.1 million for the same period in 1998. This increase was due to the
factors discussed above.
INTEREST EXPENSE, NET. Interest expense, net for the three months ended
March 31, 1999 was $6.3 million compared to $2.7 million for the same period in
1998. This increase was due primarily to higher average borrowings outstanding
during the three months ended March 31, 1999 as compared to the same period in
1998. The increase reflects additional borrowings to fund the LVMS acquisition.
ACQUISITION LOAN COST AMORTIZATION. Acquisition loan cost amortization of
$2.3 million for the three months ended March 31, 1999 represents financing
costs incurred in obtaining the Acquisition Loan to fund the LVMS acquisition.
Associated deferred financing costs of $4.1 million are being amortized over the
loan term which matures May 31, 1999.
OTHER INCOME. Other income for the three months ended March 31, 1999
decreased by $870,000 over such income for the same period in 1998. This
decrease results primarily from gains on sales of eight TMS condominiums in the
three months ended March 31, 1998. No sales of TMS condominiums occurred in the
three months ended March 31, 1999.
INCOME TAX PROVISION. The Company's effective income tax rate for the three
months ended March 31, 1999 and 1998 was 40%.
NET INCOME. Net income for the three months ended March 31, 1999 increased
by $4.9 million to $2.0 million, compared to a net loss of $2.9 million for the
same period in 1998. 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 expended
significant amounts of cash in the first quarter of 1999 for improvements and
expansion at its speedway facilities. Significant changes in the Company's
financial condition and liquidity during the three months ended March 31, 1999
resulted primarily from: (1) net cash generated by operations amounting to $36.4
million and (2) capital expenditures amounting to $30.5 million. As of March 31,
1999, the Company had $254.1 million in outstanding borrowings under the $270.0
million Acquisition Loan.
SENIOR SUBORDINATED NOTES - On May 11, 1999, the Company completed a
private placement of 8 1/2% senior subordinated notes in the aggregate principal
amount of $125,000,000. The 1999 Senior Notes are unsecured, mature in August
2007, and are redeemable at the Company's option after August 15, 2002 at
varying redemption prices. Interest payments are due semi-annually on February
15 and August 15 commencing August 15, 1999. The Company intends to file a
registration statement to register these notes during the second quarter of
1999. Net proceeds, after issuance at 103% of face value, commissions and
discounts, were approximately $125,737,000 which will be used to repay a portion
of the outstanding borrowings under the Acquisition Loan. The Indenture
governing the 1999 Senior Notes contains certain specified restrictive and
required financial covenants.
18
<PAGE>
BANK CREDIT FACILITY REPLACEMENT - The Company is currently negotiating the
terms of a long-term, secured, senior revolving credit facility with a syndicate
of banks led by NationsBank, N.A. as an agent and lender (the 1999 Credit
Facility). The 1999 Credit Facility is expected to be obtained by May 31, 1999
and to have an overall borrowing limit of $250,000,000, with a sub-limit of
$10,000,000 for standby letters of credit. The 1999 Credit Facility would mature
in 2004 and would be secured by a pledge of the capital stock of all Company
subsidiaries and limited liability company interests. Also, the Company would
agreed not to pledge its assets to any third party. The 1999 Credit Facility
would be used to fully repay and retire then outstanding borrowings under the
Acquisition Loan after reduction for the application of proceeds from the 1999
Senior Notes, and for working capital and general corporate purposes.
Interest is expected to be 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 margin applicable to LIBOR borrowings would be
adjusted periodically based upon certain ratios of funded debt to earnings
before interest, taxes, depreciation and amortization (EBITDA). In addition,
among other items, the 1999 Credit Facility will likely require the Company to
meet certain financial covenants and contain certain limitations on cash
expenditures to acquire additional motor speedways without the consent of the
lenders.
Management anticipates that cash from operations, and funds available
through the 1999 Senior Notes and 1999 Credit Facility, will be sufficient to
meet the Company's operating needs through 1999, including planned capital
expenditures at its speedway facilities. Based upon anticipated future growth
and financing requirements, 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 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.
CAPITAL EXPENDITURES
Significant growth in the Company's revenues depends, in 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 1999, AMS plans to continue improving and expanding its on-site roads
and available parking, as well as reconfiguring traffic patterns and entrances,
to ease congestion and improve traffic flow. BMS is reconstructing and expanding
its dragstrip with permanent grandstand seating, luxury suites, and extensive
fan amenities and facilities. Construction of the Bristol Dragway is expected to
be completed in mid-1999. LMSC plans to add approximately 10,000 permanent
seats, further expand concessions, restroom and other fan amenities facilities,
and make other site improvements. In 1999, LVMS plans to add approximately
15,000 permanent seats, expand concessions, restroom and other fan amenities
facilities, and
19
<PAGE>
make other site improvements. SPR plans to further expand and improve seating
and viewing areas to increase spectator comfort and enjoyment. Also in 1999,
pending governmental approvals, the Company expects to begin major renovations
at SPR, including its on-going reconfiguration into a "stadium-style" road
racing course, the addition of approximately 45,000 permanent seats, and
improving and expanding concessions, restroom and other fan amenities
facilities. Construction of the Texas Motor Speedway Club and corporate offices
was substantially completed with their opening in March 1999. In 1999, after
adding approximately 25,000 permanent seats, exclusive of SPR, the Company's
total permanent seating capacity will exceed 690,000 and the total number of
luxury suites will be approximately 659.
The estimated aggregate cost of capital expenditures in 1999 will
approximate $60 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 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 on its common
stock in the foreseeable future. The Company intends to retain its earnings to
provide funds for operations, capital expenditures and expansion. 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 anticipated 1999
Credit Facility, the Senior Notes and the 1999 Senior Notes, and as the Board of
Directors, in its sole discretion, may consider relevant. The 1999 Credit
Facility, the Senior Notes and the 1999 Senior Notes presently preclude the
payment of any dividends by the Company.
YEAR 2000 COMPLIANCE
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 significant third party vendors, suppliers
and customers. The nature of the Company's business does not require significant
reliance on automated systems applications except for its ticketing systems,
which presently are believed to be
20
<PAGE>
compliant. For critical systems, contingency plans may include utilizing
alternative processing methods and manual processes, among others.
Should Year 2000 problems arise, management believes interruption to
Company operations would be limited principally to delays in capital projects
during the first two months of 2000. Also, management is not aware of any
significant potential Year 2000 problems or risks involving third parties based
on the nature of the Company's relationships with third parties such as NASCAR
and other sanctioning bodies, network and cable television companies, major
sponsors, and financial services companies. Management believes that any
potential adverse consequences or risk of financial loss from Year 2000 issues
are substantially mitigated because the Company's first significant racing
event, as presently scheduled, does not occur until March 2000. Although Year
2000 problems could cause temporary minor inconveniences, the Company and third
parties likely would have over two months to resolve any significant Year 2000
matters that might arise.
While no assurances can be given, the Company's assessment has determined
that the potential consequences of Year 2000 problems, if any, would not
materially adversely impact its business, or cause the Company to incur
potential liabilities to third parties if its systems were not Year 2000
compliant. The costs associated with modifying its computer software and other
automated systems for Year 2000 matters has not been, and is not expected to be,
significant. The aggregate incremental costs associated with the Company's Year
2000 compliance are expected to be less than $100,000. In addition, management
is not aware of any Year 2000 issues which would materially adversely affect the
Company's financial condition, liquidity or future results of operations.
MAY 1999 IRL RACE EVENT CANCELLED AFTER ACCIDENT
LMSC cancelled its May 1, 1999 IRL event after three spectators were killed
and eight others injured when debris from an on-track accident at LMSC entered a
grandstand during the race. The Company is investigating this incident and has
not reached any conclusion regarding it. The Company will be providing refunds
to paid ticket holders for the IRL event, and will be pursuing recovery of
associated race purse and sanction fees. The Company is presently unable to
determine whether this incident will result in claims by injured parties or
their representatives or other liabilities that may have a material adverse
effect on the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has no been no significant change in the Company's interest rate risk
or equity price risk as of and during the three months ended March 31, 1999.
21
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
*3.1 Certificate of Incorporation of the Company (incorporated by reference to
Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 33-87740)
of the Company (the "Form S-1")).
*3.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the
Form S-1).
*3.3 Amendment to Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3.3 to the Registration Statement on Form S-3
(File No. 333-13431) of the Company (the "November 1996 Form S-3")).
*3.4 Amendment to Certificate of Incorporation of the Company (incorporated
by reference to Exhibit 3.4 to the Registration Statement of Form S-4
(File No. 333-35091) of the Company (the "September 1997 Form S-4")).
*4.1 Form of Stock Certificate (incorporated by reference to Exhibit 4.1 of the
Form S-1).
*4.2 Indenture dated as of September 1, 1996 between the Company and First
Union National Bank of North Carolina, as Trustee (the "First Union
Indenture") (incorporated by reference to Exhibit 4.1 to the November
1996 Form S-3).
*4.3 Form of 5 3/4% Convertible Subordinated Debenture due 2003 (included in the
First Union Indenture).
*4.4 Indenture dated as of August 4, 1997 between the Company and First
Trust National Association, as Trustee (the "First Trust Indenture")
(incorporated by reference to Exhibit 4.1 to the September 1997 Form
S-4).
*4.5 Form of 8 1/2% Senior Subordinated Notes due 2007 (included in the First
Trust Indenture).
10.1 Naming Rights Agreement dated as of February 9, 1999 by and between
Speedway Motorsports, Inc., Charlotte Motor Speedway, Inc., Lowe's Home
Centers, Inc., Lowe's HIW, Inc., and Sterling Advertising Ltd.
27.0 Financial data schedule for the three month period ended March 31, 1999.
- --------
* Previously filed
(b) The Company filed a report on Form 8-K/A dated February 12, 1999
containing the required audited financial statements and unaudited pro forma
financial information as referenced in the Company's report on Form 8-K dated
December 1, 1998 related to the acquisition of Las Vegas Motor Speedway by
Speedway Motorsports, Inc.
22
<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: May 12, 1999 By: /s/ O. Bruton Smith
----------------- ---------------------------
O. Bruton Smith
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Date: May 12, 1999 By: /s/ William R. Brooks
----------------- ---------------------------
William R. Brooks
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER, TREASURER AND DIRECTOR
(PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
23
<PAGE>
INDEX TO EXHIBITS TO
QUARTERLY REPORT ON FORM 10-Q FOR
SPEEDWAY MOTORSPORTS, INC.
FOR THE QUARTER ENDED MARCH 31, 1999
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ------ -----------------------
27.0 Financial data schedule for the three month period ended March 31,
1999.
24
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SPEEDWAY MOTORSPORTS, INC. FOR THE THREE-MONTHS
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000934648
<NAME> SPEEDWAY MOTORSPORTS, INC.
<MULTIPLIER> 1000
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> MAR-31-1999
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<CASH> 41,581
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<COMMON> 415
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