SMI Maintains Earnings Outlook Despite 34% Decline In Q1 Profit

Smith Maintains SMI's Earnings Outlook For '09

SMI yesterday reported a Q1 profit of $20.3M, down 34.3% from $30.9M in the year-ago period, but the company "maintained its earnings outlooks for the year, with executives saying the lower income actually was better than expected," according to Jefferson George of the CHARLOTTE OBSERVER. SMI posted total revenues of $133.6M, down 14%, as admissions revenues dropped 13% and event-related revenue fell 24%. SMI venues held five NASCAR Sprint Cup races in Q1, "compared with six in the same period" for '08. Investors yesterday "responded positively," as SMI shares closed at $20.08, up 31% from the $15.35 open, marking the "first time since September that the closing price topped $20." George notes SMI, in response to a "pullback in fan spending" at races and for NASCAR merchandise, has "ramped up ticket promotions this season and is planning sweeping improvements at its newly acquired Kentucky Speedway" (CHARLOTTE OBSERVER, 5/7). In Cincinnati, Kevin Kelly notes SMI cited "overhead and interest expenses associated with owning" Kentucky Speedway as "influences" on its Q1 performance. SMI acquired the track in December for $78.3M, assuming $63.3M in debt. SMI Vice Chair & CFO William Brooks yesterday said that the company "expects to spend [$40-50M] on capital expenditures this year, and a quarter of that could be spent at Kentucky Speedway." Brooks said that plans include "adding as many as 50,000 seats to the 66,089 grandstand seats already there and infrastructure to support that expansion and building a new garage area" (CINCINNATI ENQUIRER, 5/7). At presstime, SMI shares were trading at $19.36, down 3.6% from yesterday's close (THE DAILY).