International Speedway Corp. (ISCA) filed Quarterly Report for the period ended 2009-08-31.
International Speedway Corporation's operations consist principally of racing events at its motorsports facilities which generate revenue primarily through sales of admissions to racing events television broadcast rights fees sponsorship fees hospitality rentals royalties from licenses of trademarks and provides catering souvenir and food concession services at certain facilities. International Speedway Corp. has a market cap of $1.29 billion; its shares were traded at around $26.54 with a P/E ratio of 11.2 and P/S ratio of 1.6. The dividend yield of International Speedway Corp. stocks is 0.5%. International Speedway Corp. had an annual average earning growth of 16.8% over the past 10 years. GuruFocus rated International Speedway Corp. the business predictability rank of 3-star.
Highlight of Business Operations:
Our 50.0 percent portion of MA’s operating results was equity in net loss of approximately ($3.2) million for the three months ended August 31, 2009 as compared to equity in net income of approximately $196,000 for the same period of the prior year and equity in net loss of approximately ($6.6) million for the nine months ending August 31, 2009 as compared to equity in net income of approximately $5.0 million for the same period of the prior year and are included in Equity in Net Income (Loss) From Equity Investments in our consolidated statements of operations. MA’s performance in 2008 benefited significantly from product sales associated with a new team, car number and sponsor for MA’s most significant license and, primarily in the first fiscal quarter of 2008, the 50th running of the Daytona 500. MA did not benefit from similar unique opportunities for the sale of licensed merchandise in the same fiscal periods of 2009. In addition, MA’s performance has been impacted by unprecedented adverse economic trends, particularly the decline in consumer confidence and the rise in unemployment that began to manifest in early fiscal 2008 and has increasingly contributed to the decrease in attendance for motorsports entertainment events during the three and nine months ended August 31, 2009. As with our core business, we expect these adverse economic trends to continue through fiscal 2009 and into fiscal 2010.
In December 2006 we implemented a share repurchase program under which we are authorized to purchase up to $150.0 million of our outstanding Class A common shares. In February 2008 we announced that our Board of Directors had authorized an incremental $100.0 million share repurchase program. Collectively these programs are described as the “Stock Purchase Plans.” The Stock Purchase Plans allow us to purchase up to $250.0 million of our outstanding Class A common shares. The timing and amount of any shares repurchased under the Stock Purchase Plans will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability and other market conditions. The Stock Purchase Plans may be suspended or discontinued at any time without prior notice. No shares have been or will be knowingly purchased from Company insiders or their affiliates.
Since inception of the Stock Purchase Plans through August 31, 2009, we have purchased 4,842,730 shares of our Class A common shares, for a total of approximately $210.8 million. Included in these totals are the purchases of 112,251 shares of our Class A common shares during the nine months ended August 31, 2009, at an average cost of approximately $24.71 per share (including commissions), for a total of approximately $2.8 million. These transactions occurred in open market purchases and pursuant to a trading plan under Rule 10b5-1. At August 31, 2009, we have approximately $39.2 million remaining repurchase authority under the current Stock Purchase Plans.
Effective May 28, 2009, we entered into a definitive settlement agreement (the “Settlement”) with the Internal Revenue Service (the “Service”) in connection with the previously disclosed federal income tax examination for the 1999 through 2005 fiscal years. As a result of the Settlement, on June 17, 2009, we received approximately $97.4 million of the $117.9 million in deposits that we had previously made with the Service, beginning in fiscal 2005, in order to prevent incurring additional interest. In addition, we received approximately $14.6 million in cash for interest earned on the deposited funds which were ultimately returned to us. Our fiscal 2009 second quarter results reflect this interest income, net of tax, totaling approximately $8.9 million, or $0.18 per diluted share, in the income tax expense of our consolidated statement of operations.
Domestic broadcast and ancillary media rights fees revenues are an important component of our revenue and earnings stream. Starting in 2007, NASCAR entered into new combined eight-year agreements with FOX, ABC/ESPN, TNT and SPEED for the domestic broadcast and related rights for its three national touring series — Sprint Cup, Nationwide and Camping World Truck. The agreements total approximately $4.5 billion over the eight-year period from 2007 through 2014. This results in an approximate $560.0 million gross average annual rights fee for the industry, a more than 40.0 percent increase over the previous contract average of $400.0 million annually. The industry rights fees were approximately $515.0 million for 2008, and will increase, on average, by approximately three percent per year through the 2014 season. The annual increase is expected to vary between two and four percent per year over the period.
These long-term contracts give significant cash flow visibility to us, race teams and NASCAR over the contract period. Television broadcast and ancillary rights fees from continuing operations received from NASCAR for the NASCAR Sprint Cup, Nationwide and Camping World Truck series events conducted at our wholly owned facilities under these agreements, and recorded as part of motorsports related revenue, were approximately $69.6 million and $60.0 million for the three months ended August 31, 2008 and 2009, respectively, and approximately $191.8 million and $182.6 million for the nine months ended August 31, 2008 and 2009, respectively. Operating income generated by these media rights were approximately $51.4 million and $43.9 million for the three months ended August 31, 2008 and 2009, respectively, and approximately $134.4 million and $126.2 million for the nine months ended August 31, 2008 and 2009, respectively.
ISCA is in the portfolios of David Dreman of Dreman Value Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
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