Bad weather at BMS spring race hurt SMI’s bottom line
SMI wrote off a whopping $100 million dollars in their most recent quarter, primarily due to New Hampshire Motor Speedway. Seems they finally realized they way overpaid for that track back in '08. They also cite foreseeing increasing economic pressure due to changing demographics, alternative entertainment options, the increasing appealing at home viewing experience, and (wait for it) the newly announced NASCAR trackside merchandising model. Wow.
No, SMI didn't lose $30 million this quarter because of bad weather at one track n one weekend. They lost it because they wrote off $100 million due to the realities of being a NASCAR track owner and the state of NASCAR today. The times they are a changin'. Bill Gerken, Sandusky, OH
07/30/15 Economic conditions and bad weather — including a washed out Sprint Cup race at Bristol Motor Speedway — negatively impacted Speedway Motorsports’ (SMI) bottom line in this year’s first half, SMI reported Wednesday.
SMI’s second quarter revenues were $179.3 million this year compared to $175.9 million in the second quarter of 2014.
Based in Concord, N.,C., SMI reported a net loss of $32.2 million or $0.78 per diluted share. Six month total revenues were $264.6 million, however, compared to $260.4 million in 2014, but the net loss was $36.6 million or $0.89 per diluted share, according to SMI.
"Management believes many of the company’s revenue categories continue to be negatively impacted by economic conditions, including underemployment and high food and health-care costs," the company said in a prepared release.
"Also, many parts of the East Coast of the United States experienced a particularly harsh or longer-lasting winter in 2015. Management believes admissions and certain event related revenues and expenses were negatively impacted by poor weather surrounding certain NASCAR racing events held at Atlanta Motor Speedway in the first quarter 2015 and at Bristol Motor Speedway in the second quarter 2015, including its rain delayed Sprint Cup race."
SMI owns and operates more than a half dozen race tracks in the U.S., including BMS.
SMI advised that even though the same number of major racing events were held in this year’s first half compared to last year, the profitability of similar series events, particularly NASCAR Sprint Cup events, can vary substantially because of differences in broadcasting revenues, seating capacity and demand, media markets, and weather conditions.
Still, SMI Executive Chairman O. Bruton Smith was upbeat in his remarks in the report.
"SMI continues to successfully execute on strengthening our long-term financial position with ongoing debt and interest cost reduction, constrained capital spending and other strategic initiatives," he said. "Our past investments in first class, premium facilities allow us to focus on providing our unrivaled fans with new appealing entertainment and high-end customer service choices, all for their highest possible enjoyment and value. NASCAR’s ongoing changes and improvements to our sport continue to bring increased on-track racing excitement and competition. The NBC Sports Group and FOX Sports Media Group powerhouses continue to intensify their media coverage and entertainment under the new NASCAR broadcasting rights agreements in place through 2024.
"We, NASCAR and those media powerhouses are all working hard to capture the next generation of race fans, including our many largely untapped demographic markets. We strongly believe SMI and our sport have tremendous long-term marketing opportunities, and are well positioned for renewed growth and profitability."
SMI President and CEO Marcus G. Smith said most of the company’s NASCAR event sponsorships for 2015, and many for 2016 and beyond, are already sold.
The company also reaffirmed that second quarter 2015 results are consistent with its previous full year 2015 earnings guidance of $0.90-$1.10 per diluted share, excluding non-recurring and other special items. Kingsport Times News