SMI this morning announced a mixed bag for its Q3 earnings report, as admissions revenue for core events was down but profit from non-core events was up sharply on the back of the Battle at Bristol college football game. For the quarter ended Sept. 30, total revenue was $170.7M, up 16% from last year’s $144.41M, thanks to the Tennessee-Virginia Tech football game on Sept. 10 at Bristol Motor Speedway. SMI reported in this morning’s earnings that it profited between $5-6M from the game. SMI President & CEO Marcus Smith followed up in the earnings call by saying that SMI is “pleased with the results of the game” and is “certainly working to that goal” of adding more major, non-core events of this nature as a result. During the call, SMI Vice Chair & CFO Bill Brooks noted that the earnings “reveal that the strength of the Battle at Bristol masked some of the weakness in some of our racing events.” To that point, Q3 admissions revenue from core events, which included eight races, was down about 6%, from $31.6M in Q3 last year to $29.7M this year. SMI noted that it has continued to be plagued by poor weather at some of its events this season, including Bristol’s Sprint Cup race during Q3, which was postponed a day, and Charlotte’s Cup race, which fell during Q4 and was not included in earnings. During the call, analysts asked Smith about the steps the sport is taking to improve attendance, and he touched on initiatives including this morning’s announcement by NASCAR to limit Cup drivers’ appearances in lower series and SMI’s plan to offer $10 kids tickets to all Cup races starting next year.
EVENT-RELATED REVENUE DOWN: For Q3, event-related revenue from sources including merchandise and concessions was down by about $3.5M or 8.6%, which was attributed to the lower attendance. Brooks was asked about ticket prices and noted they are "probably slightly higher than a year ago, but the decline we see is physical, attendance-based.” As expected, broadcast revenue rose by $2M or 3.1%, as part of the track’s take from NASCAR’s media-rights deals. For the quarter, SMI’s net income was $13.6M, up 59% from $8.5M last year. For the year, SMI has seen $39.3M in net income after taking a $31M loss the year prior. Meanwhile, SMI noted that it has about $35-40M slated for capital expenditures next year; one of those expenditures will be a partial repave of Kentucky Speedway, while other projects have yet to be revealed. SMI’s total long-term debt is down significantly this year, and Brooks noted that SMI “will probably focus on [reducing the debt] for one or two more years, and then we’ll be finished with that process and examine where we’re going to re-direct those funds.”
