SBD/Issue 94/Finance

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  • ISC Says Investment In Motorsports Authentics Has Lost All Value

    Int'l Speedway Corp. announced this morning that its $122.5M investment in Motorsports Authentics had completely lost its value, based on declining sales and the lack of potential for a turnaround. ISC, which wrote down the value of MA to zero, will not record any future profits or losses from the merchandise and apparel company that it jointly owns with Speedway Motorsports Inc. Bankruptcy remains an option for MA if it cannot renegotiate the terms of its licensing deals with several NASCAR teams. Those contracts are in default, ISC said, because MA has not been making payments on the full amount of the guarantees. The management at MA continues to negotiate with the teams to create new terms that would allow MA to be successful. ISC President John Saunders: "In my view, time is of the essence. There is an element of urgency. The longer this goes on, the more uncomfortable people become that something can get done. There are a number of stakeholders at the table and getting everyone on the same page is complex. We expect some resolution in the next 3-6 months." ISC's net income dropped 95% from $134.6M in '08 to $6.8M in '09, with its stake in MA costing a total of $77.6M.

    RUNNING ON EMPTY: In ISC's earnings report this morning, the company said admissions revenue for '09 was $195.5M, down from $236.1M in '08. The only change in the number of events was one fewer IRL race. Total attendance for ISC's 21 NASCAR Sprint Cup races and other events was 3.1 million, down from 3.7 million in '08. Further dips are expected in '10, as ISC projects admissions revenue to drop year over year in the mid-to-high single digits. Sponsorship revenue is expected to be down in the mid-single digits and hospitality will be down in the high single digits to the low teens. Four Sprint Cup races and three Nationwide Series races in '10 remain without a title sponsor, which is consistent with last year. ISC's total revenue is projected to be down in the low single digits. Still, ISC reports encouraging signs from the corporate sales front, citing recently signed deals with UAW, Valvoline, HP Hood and Hershey's Milk.

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  • Under Armour Sees Revenue Increases Over '08 For Q4, Full Year

     
    Under Armour for Q4 of FY '09 saw net revenues increase 24% to $222.2M from $179.3M for the year-ago period. Net apparel revenues for the period ending December 31 climbed 26% to $192.1M from $152.4M in the year-ago period, while net footwear revenues fell 5.4% to $8.7M from $9.2M last year. Operating income for the quarter grew 17.8% to $26.9M from $22.9M in the year-ago period, and gross margin for Q4 increased to 51.4%, compared with 50.7% the previous year. Meanwhile, Under Armour's net revenues for FY '09 climbed 18.1% to $856.4M from $725.2M in '08, ahead of the company's previously provided outlook of $830-835M. Apparel net revenues for FY '09 grew 12.6% to $651.8M from $578.9M last year, while footwear net revenues for the year increased 60.6% to $136.2M from $84.8M in '08. Operating income for the year grew 10.9% and totaled $85.3M, up from $76.9M last year (Under Armour). At presstime, shares of Under Armour were trading at $26.11, down 6.5% from yesterday's close of $27.91 (THE DAILY).

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