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ISC Q1 Shows Uptick In Overall Revenue, Slight Decrease In Track Admissions Revenue

ISC this morning announced results for Q1, showing an uptick in overall revenue, but a slight decrease in admissions revenue. ISC’s Q1 is largely based around the Daytona 500 and preceeding Speedweek events. The Daytona-based track operator saw total revenues for Q1 of $148M, up about 4% from the same period last year. This increase was largely on the back of contractually slated upticks in broadcasting revenue, and to a lesser extent due to corporate sponsorships, track rentals and Daytona Int'l Speedway’s hosting of the Ferrari World Finals event, for which there was no comparable event in Q1 of ’16. However, ISC saw an approximately $500,000 decline (2%) in admissions revenue, from $31.34M this year to $31.86M last year. That comes despite the fact that the Daytona 500 saw an increase in attendance and revenue, and is largely due to softness in ticket sales for the Advanced Auto Parts Clash and Can-Am Duels, according to ISC President John Saunders. On a positive front, Saunders said youth admissions were up 5% for the Daytona 500 -- something he attributed in part to Monster Energy’s new entitlement. That dovetails with growth that Fox is seeing so far this year in the male 18-34 demo, despite Fox’ overall decline in linear ratings after six Cup Series races. Corporate sales continue to be a bedrock of the balance sheet for ISC, though the operator is slightly behind in the deals it has in place for ’17. Thus far, ISC has secured 89% of the marketing partnership revenue target for this year, compared to having secured 92% at this time last year. ISC currently has all but three Cup Series race entitlements sold, and those three entitlements are in Q3 and Q4 this year. At this time last year, ISC had one Cup race open. Saunders said he expects no issues filling those entitlements.

LOOKING FORWARD: ISC also addressed how things are going in Q2, where ISC has experienced softness in recent years. Saunders said the rate of decline ISC saw last year in Q2 has slowed, but the operator still saw a combined 7% downtick in attendance for races at Phoenix, Auto Club and Martinsville. Advanced ticket sales for Q2 races at Richmond, Talladega and Kansas are also down 7%. Asked about this during the Q&A session of the earnings call, Saunders said, “When you look at our outlook for this Q2, we’re seeing the rate of decline slow (compared to Q2 ’16) -- which is good news. We’re just in this transition with new drivers coming online, younger drivers resonating with younger audiences, but we’re very committed to the consumer initiatives and we’re starting to see them bear fruit particularly in younger demo. In venue and on broadcast for the first time are seeing double digit increase in 18-34; that bodes well for us and for the broadcasters. So some real bright spots there; a lot of work to do but the team is on it but we remain optimistic that we’re going to stabilize it and grow it from there.” 

ONE DAYTONA: Meanwhile, regarding ISC’s One Daytona mixed-use development being built across the street from DIS, Saunders said Bass Pro Shops and Cobb Theaters execs have iterated to ISC leadership that early results of the stores are exceeding expectations. Saunders did reveal during the call that some construction related to the Marriott Autograph Collection hotel being built on the property and ancillary retail dining entertainment is “taking a little bit longer” than expected, but he added that “there’s no concern there from a budgetary standpoint or return standpoint.

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