SMI Sees Q2 Loss Largely Due To Scheduling Changes, Decreased Ticket Prices
A combination of scheduling changes and decreased ticket prices triggered a decline in quarterly revenue at Speedway Motorsports Inc. The company, which today announced its Q2 earnings, posted a net loss of $28.3M in '11 compared to a net income of $23M in '10. It had total revenues of $153.1M, down $24.6M from the same period last year. The revenues decreased largely because SMI held three fewer events in Q2 '11 than it did in '10. New Hampshire Motor Speedway (NHMS) held a NASCAR Sprint Cup and a Nationwide Series race in the Q2 '10 that were held in Q3 this year. Admissions and event-related revenues decreased $9.8M and $3M, respectively, because of race schedule changes. The company said attendance has stabilized but ticket sales continue to be affected by the economy, high fuel prices and unemployment. It is watching the sales of its Bristol Motor Speedway race on Aug. 27 closely. SMI Vice Chair, Treasurer & CFO William Brooks said ticket sales for that race to date are below last year but have picked up in recent weeks. Brooks: "We're hopeful that trend will continue through the race. If it does, we'll see a quarter in which our attendance is flat with the prior year." Total expenses in the quarter rose by $30.2M from last year to $167.4M, largely because of a $48.6M writedown it made on the value of NHMS, which it bought in '07 for $340M. The company increased its capital expense estimate by $10M to the $50-60M range in anticipation that it may need to make some improvements at Kentucky Motor Speedway. SMI President & COO Marcus Smith said the company has developed plans to improve access to the track, which saw traffic jams as long as 21 miles for its inaugural Sprint Cup race last month. He expects those improvements to be made prior to the speedway hosting an IndyCar race in October. Smith said, "We had excellent attendance (at the Kentucky Sprint Cup race), however, we did have challenges with traffic. ... The good news is we know how to fix it and we're in progress now to make those things happen."