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International Speedway Corporation Reports Financial RESULTS FOR THE FIRST QUARTER OF FISCAL 2016

The following excerpt is from the company's SEC filing.

~Reaffirms Full Year 2016 Guidance~

DAYTONA BEACH, Fla. - April 5, 2016 - International Speedway Corporation (NASDAQ Global Select Market: ISCA; OTC Bulletin Board: ISCB) (“ISC”)

today reported financial results for its fiscal

quarter ended

February 29, 2016

"Our first quarter was one for the record books," stated Lesa France Kennedy, ISC Chief Executive Officer. "DAYTONA Rising completed its transformation of the Daytona International Speedway into the world's first motorsports stadium welcoming fans, industry partners and stakeholders to an unparalleled motorsports entertain ment experience. A sold out crowd witnessed a spectacular photo finish awarding both Denny Hamlin and Toyota their first coveted DAYTONA 500 victory."

"Financial results for the first quarter 2016 exceeded expectations with growth in all areas of the core business. DAYTONA Rising was the driving force behind the success, providing new and unique marketing platforms for partners and new fan amenities, including, exclusive hospitality experiences, branded concessions and a completely remodeled midway that featured Fanatics' merchandise pavilion, completely reinventing the shopping experience."

"The Hollywood Casino at Kansas Speedway further contributed to the year over year first quarter earnings as we continue to increase market share in the region."

"ONE DAYTONA, our mixed use real estate development, is now underway. We have begun clearing land and preparing for vertical construction. Our strategy for ONE DAYTONA is to create synergy with DAYTONA Rising, enhance customer and partner experiences, leverage our real estate on a year-round basis and build value for our shareholders. We are targeting phase one completion in late 2017.

"We recently announced the sale of the interest in our Staten Island property. This additional capital further strengthens our financial position and contributes to the foundation of our long-term capital allocation for future investment in our business and returning capital to shareholders."

International Speedway Corporation - 1Q Fiscal 2016 Financial Results

First Quarter Comparison

Total revenues for the

were approximately

$142.6 million

, compared to revenues of approximately

$136.6 million

quarter of fiscal

. Operating income was approximately

$31.2 million

during the period compared to approximately

$21.6 million

. Quarter-over-quarter comparability was impacted by:

Quarter-over-quarter increases in operating revenues and expenses are significantly driven by the completion of the DAYTONA Rising project for the first quarter events at Daytona International Speedway;

For the first quarter of fiscal 2015, we had recognized non-recurring transactions of approximately $4.9 million of inventory sold to Fanatics and $2.9 million of wholesale transactions by Motorsports Authentics ("MA"), which drove a total of $8.3 million in expense including product costs associated with these transactions, costs related to the transition of trackside merchandise operations to Fanatics, as well as partial period operating expenses incurred prior to the transition of Americrown and MA merchandise operations, for which there was no related revenue. There were no comparable transactions in the same period of fiscal 2016;

During the

months ended

, we recognized approximately

$0.8 million

per diluted share, in non-recurring, pre-opening costs that are included in general and administrative expense related to DAYTONA Rising. During the

February 28, 2015

$0.3 million

, or less than $0.01 per diluted share, of similar costs;

$3.9 million

per diluted share, of accelerated depreciation that was recorded due to shortening the service lives of certain assets associated with DAYTONA Rising and other projects. There were no similar costs during the

$0.9 million

per diluted share, of losses primarily attributable to demolition and/or asset relocation costs in connection with capacity management initiatives and facility capital improvements. During the

$1.6 million

per diluted share, of similar losses in connection with DAYTONA Rising and capacity management initiatives; and

, we capitalized approximately

$0.6 million

per diluted share, of interest related to DAYTONA Rising. During the

$2.6 million

per diluted share, of similar interest capitalization.

Net income for the

quarter was approximately

$19.8 million

per diluted share, compared to net income of approximately

$15.0 million

per diluted share, in the prior year period. Excluding non-recurring, pre-opening costs associated with DAYTONA Rising, losses associated with the retirements of certain other long-lived assets, DAYTONA Rising project capitalized interest and a de minimis net gain on sale of certain

assets, non-GAAP (defined below) net income for the

$20.5 million

per diluted share. Non-GAAP net income for the

$16.9 million

GAAP to Non-GAAP Reconciliation

The following financial information is presented below using other than U.S. generally accepted accounting principles ("non-GAAP"), and is reconciled to comparable information presented using GAAP. Non-GAAP net income and diluted earnings per share below are derived by adjusting amounts determined in accordance with GAAP for certain items presented in the accompanying selected operating statement data, net of taxes.

We believe such non-GAAP information is useful and meaningful, and is used by investors to assess our core operations, which consist of the ongoing promotion of racing events at our major motorsports entertainment facilities. Such non-GAAP information identifies and separately displays and adjusts for items that are not considered to be reflective of our continuing core operations at our motorsports entertainment facilities. We believe that such non-GAAP information improves the comparability of the operating results and provides a better understanding of the performance of our core operations for the periods presented. We use this non-GAAP information to analyze the current performance and trends and make decisions regarding future ongoing operations. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to operating income, net income or diluted earnings per share, which are determined in accordance with GAAP. The presentation of this non-GAAP financial information is not intended to be considered independent of or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating the business and, as such, deemed it important to provide such information to investors.

The adjustments for 2015 relate to non-recurring, pre-opening costs incurred associated with DAYTONA Rising, accelerated depreciation, losses associated with the retirements of certain other long-lived assets, DAYTONA Rising project capitalized interest, and net gain on sale of certain assets.

The adjustments for 2016 relate to non-recurring, pre-opening costs incurred associated with DAYTONA Rising, losses associated with the retirements of certain other long-lived assets, DAYTONA Rising project capitalized interest, and net gain on sale of certain assets.

Three Months Ended


( In Thousands, Except Per Share Amounts )



Adjustments, net of tax:

Accelerated depreciation

Losses on retirements of long-lived assets


Loss on early redemption of debt

Net gain on sale of certain assets



Per share data:

Diluted earnings per share

Non-GAAP diluted earnings per share

NASCAR is a powerful brand with a loyal fan base that we believe is aware of, appreciates and supports corporate participation to a greater extent than fans of any other sports property. The combination of brand power and fan loyalty provides an attractive platform for robust corporate partnerships. The number of FORTUNE 500 companies invested in NASCAR remains higher than any other sport. More than one-in-four FORTUNE 500 companies, and one-in-two FORTUNE 100 companies, use NASCAR as part of their marketing strategy and the trend is increasing. The number of FORTUNE 500 companies investing in NASCAR increased seven percent in 2015 versus prior year; and is a 20 percent improvement versus 2008.

For fiscal 2016, we have agreements in place for approximately 92.0 percent of our gross marketing partnership revenue target, which is projected to increase approximately 11.0 percent compared to 2015, primarily related to DAYTONA Rising. We have one of our available 20 NASCAR Sprint Cup Series event entitlements either open or not announced and two of our fourteen NASCAR Xfinity Series event entitlements either open or not announced. This is compared to last year at this time when we had approximately 88.0 percent of our gross marketing partnership revenue target sold and had entitlements for one NASCAR Sprint Cup and two NASCAR Xfinity entitlements either open or not announced. With the vast majority of our event entitlements secured, we can focus more resources on official status categories, which will better position us to meet our gross marketing partnership revenue target for 2016.

External Growth, Financing-Related and Other Initiatives

Capital Allocation

We have established a long-term capital allocation plan to ensure we generate sufficient cash flow from operations to fund our working capital needs, capital expenditures at existing facilities, return of capital through payments of an annual cash dividend, and repurchase of our shares under our Stock Purchase Plan. In addition, we have used the proceeds from offerings of our Class A Common Stock, the net proceeds from the issuance of long-term debt, borrowings under our credit facilities, and state and local mechanisms to fund acquisitions and development projects.

The current capital allocation plan contemplates the following:

Capital expenditures remaining under the existing $600.0 million capital expenditure plan adopted by our Board of Directors in June 2013, total approximately $170.0 million for fiscal 2016 and 2017, consisting of remaining payments to contractors for the completion of DAYTONA Rising and certain planned capital projects at our remaining 12 motorsports facilities (see "Capital Expenditures"). This plan will be evaluated over the next 12 months and refined to include years subsequent to 2017 based on business requirements;

Additional capital expenditures related to phase one of the ONE DAYTONA project, should it proceed, will be approximately $120.0 million to $150.0 million in fiscal 2016 through 2017. Sources of funds will include, in addition to between $90.0 million to $100.0 million ultimately financed with borrowings, the public incentives discussed below and land to be contributed to the project. Additional guidance will be provided as costs and returns for the first phase of the project are finalized; and

Returning capital to shareholders is an important component of the overall capital allocation strategy. In February 2016, we announced we amended the price parameters of our share repurchase program with intention to make up to...