“Financial results for the second quarter are in line with our 2019 outlook,” stated
“In April, we opened the Marriott Autograph Collection hotel, The
“Construction on the redevelopment of the iconic infield at Talladega Superspeedway continues. The redevelopment will immerse fans into the sport of
“We believe prudent reinvestment in our facilities and strategic developments will continue to position ISC for long-term growth and deliver shareholder value.”
Second Quarter Comparison
Total revenues for the three months ended May 31, 2019 were approximately
- During our second quarter of fiscal 2019, in accordance with our contracts, we terminated the sponsorship agreements and related sublease agreements with one of our marketing partners that filed for bankruptcy. As a result, we experienced lower admissions and sponsorship revenues related to the sponsorship agreements and lower rental expense related to the sublease agreements during the three months ended May 31, 2019 as compared to the same period in fiscal 2018;
- In the second quarter of fiscal 2018, we hosted an IndyCar event at
ISM Raceway , for which there was no comparable event in fiscal 2019;
- In the second quarter of fiscal 2018, we hosted the Country 500 music festival at
Daytona , for which there was no comparable event in fiscal 2019;
- During the three months ended May 31, 2019, we recognized revenue and expense recorded in the respective food, beverage and merchandise accounts related to the acquisition of
Racing Electronics , for which there was no comparable activity in the same period of the prior year;
- During the three months ended May 31, 2019, we received certain lease rents, and incurred operating expenses, related to ONE DAYTONA as a result of certain tenants commencing operations in the current period, for which there was no comparable activity in the same period of the prior year (see “ONE DAYTONA”);
- During the three months ended May 31, 2019, we recognized approximately
$0.1 million , or less than $0.01 per diluted share, of costs incurred associated with the Agreement and Plan of Merger (“Merger Agreement”) entered into onMay 22, 2019 by ISC withNASCAR Holdings, Inc. andNova Merger Sub, Inc. , a wholly owned subsidiary ofNASCAR . There were no comparable costs for the three months ended May 31, 2018;
- During the three months ended May 31, 2019, we incurred approximately
$0.4 million , or less than$0.01 per diluted share, of a one-time, non-cash charge related to terminated agreements associated with non-motorsports operations. There were no comparable costs during the three months ended May 31, 2018;
- During the three months ended May 31, 2018, we recognized
$0.3 million , or$0.01 per diluted share, of accelerated depreciation due to shortening the service lives of certain assets associated withThe ISM Raceway Project and the infield project at Richmond. There were no comparable costs during the three months ended May 31, 2019;
- During the three months ended May 31, 2019, we recognized
$0.5 million , or$0.01 per diluted share, of asset retirement losses primarily attributable to demolition and/or asset relocation costs in connection with the infield project at Talladega. During the three months ended May 31, 2018, we recognized$0.1 million , or less than $0.01 per diluted share, of asset retirement losses primarily attributable to demolition and/or asset relocation costs in connection with ONE DAYTONA, facility optimization initiatives, and other capital improvements including the infield project at Richmond;
- During the three months ended May 31, 2018, we recognized approximately
$0.1 million , or less than $0.01 per diluted share, in non-recurring costs that are included in general and administrative expense related toThe ISM Raceway Project . There were no comparable costs during the three months ended May 31, 2019; and
- During the three months ended May 31, 2018, we capitalized approximately
$0.8 million , or$0.02 per diluted share, of interest, primarily relating toThe ISM Raceway Project , and to a lesser extent, ONE DAYTONA. We did not capitalize any interest related to these projects for the three months ended May 31, 2019.
Net income for the three months ended May 31, 2019, was approximately
Year-to-Date Comparison
Total revenues for the six months ended May 31, 2019 were approximately
- In the first quarter of fiscal 2019, we were informed of a bankruptcy proceeding related to one of our marketing partners. During our second quarter of fiscal 2019, in accordance with our contracts, we terminated the sponsorship agreements and related sublease agreements with this entity. As a result, we experienced lower admissions and sponsorship revenues related to the sponsorship agreements and lower rental expense related to the sublease agreements during the six months ended May 31, 2019 as compared to the same period in fiscal 2018;
- In the second quarter of fiscal 2018, we hosted an IndyCar event at
ISM Raceway , for which there was no comparable event in fiscal 2019;
- In the second quarter of fiscal 2018, we hosted the Country 500 music festival at
Daytona , for which there was no comparable event in fiscal 2019;
- During the six months ended May 31, 2019, we recognized revenue and expense recorded in the respective food, beverage and merchandise accounts related to the acquisition of
Racing Electronics , for which there was no comparable activity in the same period of the prior year;
- During the six months ended May 31, 2019, we received certain lease rents, and incurred operating expenses, related to ONE DAYTONA as a result of certain tenants commencing operations in the current period, for which there was no comparable activity in the same period of the prior year (see “ONE DAYTONA”);
- During the six months ended May 31, 2019, we recognized approximately
$2 .9 million, or$0.05 per diluted share, of costs incurred associated with the Merger Agreement. There were no comparable costs for the six months ended May 31, 2018;
- During the six months ended May 31, 2019, we incurred approximately $0.3 million, or less than
$0.01 per diluted share, of non-capitalized, non-recurring acquisition costs related to the purchase of certain assets fromRacing Electronics . There were no comparable costs during the six months ended May 31, 2018;
- During the six months ended May 31, 2019, we incurred approximately
$0.4 million , or less than$0.01 per diluted share, of a one-time, non-cash charge related to terminated agreements associated with non motorsports operations. There were no comparable costs during the three months ended May 31, 2018;
- During the six months ended May 31, 2019, we recognized $0.9 million, or
$0.02 per diluted share, of accelerated depreciation due to shortening of the service lives of certain assets associated with the infield project at Talladega. During the six months ended May 31, 2018, we recognized$1 .2 million, or$0.02 per diluted share, of accelerated depreciation due to shortening the service lives of certain assets associated withThe ISM Raceway Project and the infield project at Richmond;
- During the six months ended May 31, 2019, we recognized $0.8 million, or
$0.02 per diluted share, of asset retirement losses primarily attributable to demolition and/or asset relocation costs in connection with the infield project at Talladega. During the six months ended May 31, 2018, we recognized$1 .2 million, or $0.02 per diluted share, of asset retirement losses primarily attributable to demolition and/or asset relocation costs in connection with ONE DAYTONA, facility optimization initiatives, and other capital improvements including the infield project at Richmond;
- During the six months ended May 31, 2018, we recognized approximately $0.2 million, or less than $0.01 per diluted share, in non-recurring costs that are included in general and administrative expense related to
The ISM Raceway Project . There were no comparable costs during the six months ended May 31, 2019;
- During the six months ended May 31, 2018, we capitalized approximately
$1.7 million , or$0.03 per diluted share, of interest, primarily relating toThe ISM Raceway Project , and to a lesser extent, ONE DAYTONA. We did not capitalize any interest related to these projects for the six months ended May 31, 2019; and
- During the six months ended May 31, 2018, we recorded approximately
$143.9 million , or$3 .25 per diluted share, of a non-recurring, non-cash income tax benefit related to the Tax Cuts and Jobs Act of 2017. There were no comparable benefits for the six months ended May 31, 2019.
Net income for the six months ended May 31, 2019, was approximately
GAAP to Non-GAAP Reconciliation
The following discussion and analysis of our financial condition and results of operations is presented below using financial measures other than U.S. generally accepted accounting principles (“non-GAAP”). Non-GAAP financial measures, such as Adjusted EBITDA (see below for management interpretation of Adjusted EBITDA), should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The non-GAAP financial measures disclosed herein do not have standard meaning and may vary from the non-GAAP financial measures used by other companies or how we may calculate those measures in other instances from time to time. The financial information, presented in the tables that follow, have been reconciled to comparable GAAP measures (see “Adjusted EBITDA” below).
The non-GAAP financial measures identified in the tables that follow include adjusted income before taxes, adjusted net income and adjusted diluted earnings per share. These non-GAAP financial measures are derived by adjusting amounts for certain items, presented in the accompanying selected operating statement data that have been determined in accordance with GAAP. The financial measures, income before taxes, net income and diluted earnings per share, should not be construed as an inference by us that our future results will be unaffected by those items, which have been excluded to achieve our adjusted, non-GAAP financial measures.
We believe such non-GAAP information is useful and meaningful, and is used by investors to assess the performance of our core operations, which primarily consist of the ongoing promotions of racing events at our major motorsports entertainment facilities. Such non-GAAP information separately identifies, displays, and adjusts for items that are not considered to be reflective of our continuing core operations at our motorsports entertainment facilities. We believe that such non-GAAP information improves the comparability of the operating results and provides a better understanding of the performance of our core operations for the periods presented.
We use this non-GAAP information to analyze current performance and trends, and make decisions regarding future ongoing operations. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to operating income, net income or diluted earnings per share, which are determined in accordance with GAAP. The presentation of this non-GAAP financial information is not intended to be considered independent of, or as a substitute for, results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating the business and as such deemed it important to provide such information to investors.
The following financial information is reconciled to comparable information presented using GAAP. Non-GAAP net income and diluted earnings per share below are derived by adjusting amounts determined in accordance with GAAP for certain items presented in the accompanying selected operating statement data.
The adjustments for fiscal 2018 relate to non-recurring costs incurred associated with
The adjustments for fiscal 2019 relate to losses associated with the retirements of certain other long-lived assets in connection with the infield project at Talladega, accelerated depreciation associated with the infield project at Talladega, non-recurring, non-capitalized costs related to the purchase of certain assets from
Amounts are in thousands, except per share data, which is shown net of income taxes, (unaudited):
Three Months Ended May 31, 2018 | ||||||||||||
Income Before Taxes |
Income Tax Effect |
Net Income | Earnings Per Share |
|||||||||
GAAP | $ | 21,440 | $ | 4,770 | $ | 16,670 | $ | 0.38 | ||||
Adjustments: | ||||||||||||
The ISM Raceway Project | 111 | 29 | 82 | 0.00 | ||||||||
Accelerated depreciation | 301 | 79 | 222 | 0.01 | ||||||||
Losses on retirements of long-lived assets | 132 | 33 | 99 | 0.00 | ||||||||
Capitalized interest | (844 | ) | (220 | ) | (624 | ) | (0.02 | ) | ||||
Non-GAAP | $ | 21,140 | $ | 4,691 | $ | 16,449 | $ | 0.37 | ||||
Three Months Ended May 31, 2019 | ||||||||||||
Income Before Taxes |
Income Tax Effect |
Net Income | Earnings Per Share |
|||||||||
GAAP | $ | 19,551 | $ | 4,478 | $ | 15,073 | $ | 0.35 | ||||
Adjustments: | ||||||||||||
Losses on retirements of long-lived assets | 507 | 123 | 384 | 0.01 | ||||||||
Merger Agreement costs | 99 | 24 | 75 | 0.00 | ||||||||
Non-capitalized costs related to business combination | 35 | 9 | 26 | 0.00 | ||||||||
Terminated agreements | 389 | 94 | 295 | 0.00 | ||||||||
Non-GAAP | $ | 20,581 | $ | 4,728 | $ | 15,853 | $ | 0.36 | ||||
Six Months Ended May 31, 2018 | ||||||||||||
Income Before Taxes |
Income Tax Effect |
Net Income | Earnings Per Share |
|||||||||
GAAP | $ | 55,893 | $ | (130,123 | ) | $ | 186,016 | $ | 4.21 | |||
Adjustments: | ||||||||||||
The ISM Raceway Project | 216 | 56 | 160 | 0.00 | ||||||||
Accelerated depreciation | 1,154 | 301 | 853 | 0.02 | ||||||||
Losses on retirements of long-lived assets | 1,248 | 325 | 923 | 0.02 | ||||||||
Capitalized interest | (1,672 | ) | (436 | ) | (1,236 | ) | (0.03 | ) | ||||
Net tax benefit | — | 143,900 | (143,900 | ) | (3.25 | ) | ||||||
Non-GAAP | $ | 56,839 | $ | 14,023 | $ | 42,816 | $ | 0.97 | ||||
Six Months Ended May 31, 2019 | ||||||||||||
Income Before Taxes |
Income Tax Effect |
Net Income | Earnings Per Share |
|||||||||
GAAP | $ | 48,103 | $ | 11,475 | $ | 36,628 | $ | 0.84 | ||||
Adjustments: | ||||||||||||
Losses on retirements of long-lived assets | 782 | 193 | 589 | 0.02 | ||||||||
Accelerated depreciation | 943 | 231 | 712 | 0.02 | ||||||||
Merger Agreement costs | 2,903 | 710 | 2,193 | 0.05 | ||||||||
Non-capitalized costs related to business combination | 256 | 62 | 194 | 0.00 | ||||||||
Terminated agreements | 389 | 94 | 295 | 0.00 | ||||||||
Non-GAAP | $ | 53,376 | $ | 12,765 | $ | 40,611 | $ | 0.93 | ||||
Adjusted EBITDA
In an effort to enhance the comparability and understandability of certain forward looking financial guidance, we adjust for certain non-recurring items that will be included in our future GAAP reporting to provide information that we believe best represents our expectations for our business performance. We calculate Adjusted EBITDA, a non-GAAP financial measure, as GAAP operating income, plus depreciation, amortization, impairment/losses on retirements of long-lived assets, other previously stated non-GAAP adjustments, and cash distributions from equity investments. We have not reconciled non-GAAP forward-looking measures to their most directly comparable GAAP measure as such reconciliations would require unreasonable efforts to estimate and quantify various necessary GAAP components largely because forecasting or predicting our future operating results is subject to many factors not in our control or not readily predictable, as detailed in the “Risk Factors” section of our previously publicly filed documents, including Forms 10-K and 10-Q, with the
The following schedule reconciles our financial performance prepared in accordance with GAAP to the non-GAAP financial measure of Adjusted EBITDA (in thousands):
Three Months Ended | Six Months Ended | ||||||||||||||
May 31, 2018 | May 31, 2019 | May 31, 2018 | May 31, 2019 | ||||||||||||
Net Income (GAAP) | $ | 16,670 | $ | 15,073 | $ | 186,016 | $ | 36,628 | |||||||
Adjustments: | |||||||||||||||
Income tax (benefit) expense | 4,770 | 4,478 | (130,123 | ) | 11,475 | ||||||||||
Interest income | (732 | ) | (1,339 | ) | (1,253 | ) | (2,572 | ) | |||||||
Interest expense | 2,900 | 3,716 | 5,785 | 7,438 | |||||||||||
Other | — | — | (15 | ) | — | ||||||||||
Equity in net income from equity investments | (6,351 | ) | (6,425 | ) | (10,659 | ) | (11,937 | ) | |||||||
Operating Income (GAAP) | $ | 17,257 | $ | 15,503 | $ | 49,751 | $ | 41,032 | |||||||
Adjustments: | |||||||||||||||
Depreciation and amortization | 26,859 | 28,809 | 53,598 | 58,068 | |||||||||||
Impairments/losses on retirements of long-lived assets | 195 | 640 | 1,357 | 1,021 | |||||||||||
Other Non-GAAP adjustments (1) | 111 | 523 | 216 | 3,548 | |||||||||||
Cash distributions from equity investments | 6,375 | 6,588 | 11,625 | 12,772 | |||||||||||
Adjusted EBITDA (non-GAAP) | $ | 50,797 | $ | 52,063 | $ | 116,547 | $ | 116,441 |
(1) Other Non-GAAP adjustments include:
- 2018 adjustments for the three and six month periods relate to costs associated with
The ISM Raceway Project of approximately $0.1 million and $0.2 million, respectively; and - 2019 adjustments for the three and six month periods relate to costs associated with terminated agreements of approximately $0.4 million for both periods, the Merger Agreement of approximately $0.1 million and
$2 .9 million, respectively, and non-capitalized, non-recurring acquisition costs ofRacing Electronics of approximately$35 .0 thousand and $0.3 million, respectively.
Corporate Sales
For fiscal 2019, we have corporate partnership agreements in place for approximately 91.0 percent of our gross marketing partnership revenue target and we have sold all Monster Energy NASCAR Cup entitlements. This compares to approximately 91.5 percent for the same period in fiscal 2018.
External Growth, Financing-Related and Other Initiatives
Capital Allocation
We have established a long-term capital allocation plan to ensure we generate sufficient cash flow from operations to fund our working capital needs, capital expenditures at existing facilities, return of capital through payments of an annual cash dividend, and repurchase of our shares under our Stock Purchase Plan. In addition, we have used the proceeds from offerings of our Class A Common Stock, the net proceeds from the issuance of long-term debt, borrowings under our credit facilities, and state and local mechanisms to fund acquisitions and development projects.
We continue to operate under a five-year capital allocation plan adopted by the Board of Directors, covering fiscal years 2017 through 2021. Components of this plan include:
- Capital expenditures for existing facilities up to
$500.0 million from fiscal 2017 through fiscal 2021. This allocation will fund reinvestments for impact capital projects, (see “The ISM Raceway Project”, “Richmond Raceway” and “Talladega Infield Project”), as well as all other maintenance and guest experience capital expenditures for the remaining existing facilities. While many components of these expected projects will exceed weighted average cost of capital, considerable maintenance capital expenditures of approximately$40.0 million to $60 .0 million annually, will likely result in a blended return of this invested capital in the low-to-mid single digits;
- In addition to the aforementioned
$500.0 million in capital expenditures for existing facilities, we expect we will have an additional approximate$111.0 million of capital expenditures, exclusive of capitalized interest and net of public incentives, related to ONE DAYTONA and the Shoppes at ONE DAYTONA (see “ONE DAYTONA”). We expect the returns of this investment to exceed our weighted average cost of capital; and
- Approximately
$280.0 million return of capital to shareholders through dividends and share repurchases. In fiscal 2019, we increased our dividend approximately 4.3 percent to$0.49 per share. We expect dividends to increase in 2020 and beyond, by approximately four to five percent annually. Concerning share repurchases, for the six months ended May 31, 2019, we did not repurchase any shares of ISCA on the open market. At May 31, 2019, we had approximately$138.7 million remaining repurchase authority under the current$530.0 million Stock Purchase Plan. Transactions occur in open market purchases made pursuant to a trading plan under Rule 10b5-1. We currently have no active Rule 10b5-1 plans.
Our cash position and future liquidity has been further enhanced by the Tax Cut and Jobs Act of 2017 (“Tax Act”) passed by
We will continue to explore development and/or acquisition opportunities beyond the initiatives discussed above that build shareholder value and exceed our weighted average cost of capital. Should additional development and/or acquisitions be pursued, we will provide discrete information on timing, scope, cost and expected returns of such opportunities.
The aforementioned represents certain components of our capital allocation plan for fiscal years 2017 through 2021. This capital allocation plan is reviewed annually, or more frequently if necessary, based on changes in business conditions.
Capital Expenditures
An important strategy for our future growth will come from investing in our major motorsports facilities to enhance the live event experience and better enable us to effectively compete with other entertainment venues for consumer and corporate spending. To better meet our customers’ expectations, we are committed to improving the guest experience at our facilities through on-going capital improvements that position us for long-term growth.
Capital expenditures for projects were approximately
We review the capital expenditure program periodically and modify it as required to meet current business needs.
ONE
ONE
We have approved land use entitlements for ONE DAYTONA to allow for up to 1.4 million square feet of retail, dining, and entertainment (“RD&E”), a 2,500-seat movie theater, 660 hotel rooms, 1,350 residential units, 567,000 square feet of additional office space and 500,000 square feet of commercial/industrial space.
The RD&E component of phase one is owned 100.0 percent by ISC. The expected total square footage for the RD&E first phase is approximately 300,000 square feet. We expect cash spent to be approximately
In fiscal 2018, our Board approved the purchase of property and an office building adjacent to ONE DAYTONA, strategically located with roadside frontage to
A
Total capital expenditures for ONE DAYTONA and the Shoppes, excluding capitalized interest and net of public incentives, are expected to be approximately
Any future phases will be subject to prudent business considerations for which we will provide discrete cost and return disclosures.
On
From inception, through May 31, 2019, we have incurred total capital expenditures related to
In
Richmond Reimagined is included in our aforementioned
Talladega Superspeedway
In
The infield redevelopment project is included in our aforementioned
We have accounted for
Pre-tax distributions from
For fiscal 2019, cash distributions from
Fiscal 2019 Financial Outlook
Our reported quarterly and year to date earnings are presented under GAAP. In an effort to enhance the comparability and understandability of our forward looking financial guidance, we adjust for certain non-recurring items that will be included in our future GAAP reporting to provide information that we believe best represents our expectations for our core business performance.
For fiscal 2019, our non-GAAP guidance excludes:
- costs incurred related to the Merger Agreement;
- non-recurring, non-capitalized costs related to the purchase of certain assets from
Racing Electronics ;
- one-time, non-cash charge related to terminated agreements associated with non-motorsports operations;
- accelerated depreciation and future loss on retirements, mostly non-cash, or relocation of certain long-lived assets, which could be recorded as part of capital improvements resulting in removal of assets prior to the end of their actual useful life, partially offset by capitalized interest;
- start up and/or financing costs should our Hollywood Casino at Kansas Speedway joint venture pursue construction of an adjacent hotel;
- any costs or income related to legal settlements; and
- gain or loss on sale of other assets.
We are reaffirming our 2019 full fiscal year non-GAAP guidance as follows:
- Revenue: $685.0 million to
$705.0 million ;
- Operating margin: 13.5% to 16.0%;
- Effective tax rate: 25.0% to 26.0%; and
- Diluted earnings per share: $1.85 to
$2.15 .
The Company’s guidance for Adjusted EBITDA is estimated to range between $230.0 million and
In closing, Ms. France Kennedy stated, “We maintain a solid financial position, developed over many years, that affords us the ability to follow our disciplined capital allocation strategy and maintain our leadership position in the motorsports industry. We have a long-term capital allocation plan that extends through fiscal 2021, demonstrating our ongoing commitment to building long-term value. For the future, we are well positioned to balance the strategic capital needs of our business with returning capital to our shareholders.”
Conference Call Details
The management of ISC will host a conference call with investors at
A live Webcast will also be available at that time on our website, www.internationalspeedwaycorporation.com, under the “Investor Relations” section. A replay will be available two hours after the end of the call through midnight
We also own and operate Motor Racing NetworkSM, the nation’s largest independent sports radio network,
Statements made in this release that express ISC’s or management’s beliefs or expectations and which are not historical facts or which are applied prospectively are forward-looking statements. It is important to note that ISC’s actual results could differ materially from those contained in or implied by such forward-looking statements. ISC’s results could be impacted by risk factors, including, but not limited to, weather surrounding racing events, government regulations, economic conditions, consumer and corporate spending, military actions, air travel and national or local catastrophic events. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in ISC’s
(Tables Follow)
Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Amounts)
Three Months Ended | Six Months Ended | |||||||||||||||
May 31, 2018 | May 31, 2019 | May 31, 2018 | May 31, 2019 | |||||||||||||
(Unaudited) | ||||||||||||||||
REVENUES: | ||||||||||||||||
Admissions, net | $ | 25,677 | $ | 24,388 | $ | 56,239 | $ | 53,722 | ||||||||
Motorsports and other event related | 133,328 | 126,783 | 239,114 | 233,424 | ||||||||||||
Food, beverage and merchandise | 6,906 | 11,364 | 14,856 | 20,616 | ||||||||||||
Other | 5,768 | 5,549 | 10,345 | 10,873 | ||||||||||||
171,679 | 168,084 | 320,554 | 318,635 | |||||||||||||
EXPENSES: | ||||||||||||||||
Direct: | ||||||||||||||||
NASCAR event management fees | 50,180 | 52,280 | 80,045 | 83,180 | ||||||||||||
Motorsports and other event related | 44,607 | 31,993 | 70,642 | 58,381 | ||||||||||||
Food, beverage and merchandise | 5,198 | 8,117 | 10,827 | 14,695 | ||||||||||||
Other operating expenses | 1,038 | 1,862 | 2,247 | 3,770 | ||||||||||||
General and administrative | 26,345 | 28,880 | 52,087 | 58,488 | ||||||||||||
Depreciation and amortization | 26,859 | 28,809 | 53,598 | 58,068 | ||||||||||||
Losses on asset retirements | 195 | 640 | 1,357 | 1,021 | ||||||||||||
154,422 | 152,581 | 270,803 | 277,603 | |||||||||||||
Operating income | 17,257 | 15,503 | 49,751 | 41,032 | ||||||||||||
Interest income | 732 | 1,339 | 1,253 | 2,572 | ||||||||||||
Interest expense | (2,900 | ) | (3,716 | ) | (5,785 | ) | (7,438 | ) | ||||||||
Equity in net income from equity investments | 6,351 | 6,425 | 10,659 | 11,937 | ||||||||||||
Other | — | — | 15 | — | ||||||||||||
Income before income taxes | 21,440 | 19,551 | 55,893 | 48,103 | ||||||||||||
Income tax (benefit) expense | 4,770 | 4,478 | (130,123 | ) | 11,475 | |||||||||||
Net income | $ | 16,670 | $ | 15,073 | $ | 186,016 | $ | 36,628 | ||||||||
Dividends per share | $ | 0.47 | $ | 0.49 | $ | 0.47 | $ | 0.49 | ||||||||
Earnings per share: | ||||||||||||||||
Basic and diluted | $ | 0.38 | $ | 0.35 | $ | 4.21 | $ | 0.84 | ||||||||
Basic weighted average shares outstanding | 44,158,611 | 43,441,350 | 44,177,342 | 43,431,283 | ||||||||||||
Diluted weighted average shares outstanding | 44,169,681 | 43,449,109 | 44,189,676 | 43,439,004 | ||||||||||||
Comprehensive income | $ | 16,870 | $ | 15,278 | $ | 186,405 | $ | 37,037 | ||||||||
Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Amounts)
November 30, 2018 | May 31, 2018 | May 31, 2019 | ||||||||||
(Unaudited) | ||||||||||||
ASSETS | ||||||||||||
Current Assets: | ||||||||||||
Cash and cash equivalents | $ | 269,011 | $ | 327,133 | $ | 338,747 | ||||||
Receivables, less allowance | 42,833 | 52,600 | 42,220 | |||||||||
Income taxes receivable | — | 2,854 | — | |||||||||
Prepaid expenses and other current assets | 10,611 | 23,427 | 28,253 | |||||||||
Total Current Assets | 322,455 | 406,014 | 409,220 | |||||||||
Property and Equipment, net | 1,515,041 | 1,510,321 | 1,501,365 | |||||||||
Other Assets: | ||||||||||||
Equity investments | 81,225 | 85,234 | 82,018 | |||||||||
Intangible assets, net | 178,563 | 178,564 | 179,828 | |||||||||
Goodwill | 118,331 | 118,331 | 118,872 | |||||||||
Other | 33,745 | 22,517 | 30,225 | |||||||||
411,864 | 404,646 | 410,943 | ||||||||||
Total Assets | $ | 2,249,360 | $ | 2,320,981 | $ | 2,321,528 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Current Liabilities: | ||||||||||||
Current portion of long-term debt | $ | 4,284 | $ | 3,884 | $ | 4,522 | ||||||
Accounts payable | 31,508 | 42,282 | 24,726 | |||||||||
Deferred income | 36,801 | 92,360 | 79,436 | |||||||||
Income taxes payable | 2,535 | — | 2,111 | |||||||||
Other current liabilities | 15,551 | 36,367 | 37,010 | |||||||||
Total Current Liabilities | 90,679 | 174,893 | 147,805 | |||||||||
Long-Term Debt | 251,381 | 255,254 | 250,784 | |||||||||
Deferred Income Taxes | 260,666 | 259,328 | 260,504 | |||||||||
Long-Term Deferred Income | 7,575 | 8,108 | 7,182 | |||||||||
Other Long-Term Liabilities | 3,101 | 2,681 | 2,910 | |||||||||
Commitments and Contingencies | — | — | — | |||||||||
Shareholders’ Equity: | ||||||||||||
Class A Common Stock, $.01 par value, 80,000,000 shares authorized | 234 | 241 | 235 | |||||||||
Class B Common Stock, $.01 par value, 40,000,000 shares authorized | 196 | 197 | 196 | |||||||||
Additional paid-in capital | 425,233 | 430,134 | 425,886 | |||||||||
Retained earnings | 1,211,499 | 1,191,747 | 1,226,821 | |||||||||
Accumulated other comprehensive loss | (1,204 | ) | (1,602 | ) | (795 | ) | ||||||
Total Shareholders’ Equity | 1,635,958 | 1,620,717 | 1,652,343 | |||||||||
Total Liabilities and Shareholders’ Equity | $ | 2,249,360 | $ | 2,320,981 | $ | 2,321,528 | ||||||
Consolidated Statements of Cash Flows
(In Thousands)
Six Months Ended | ||||||||
May 31, 2018 | May 31, 2019 | |||||||
(Unaudited) | ||||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 186,016 | $ | 36,628 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 53,598 | 58,068 | ||||||
Stock-based compensation | 1,585 | 1,663 | ||||||
Amortization of financing costs | 806 | 827 | ||||||
Deferred income taxes | (136,870 | ) | (294 | ) | ||||
Income from equity investments | (10,659 | ) | (11,937 | ) | ||||
Distribution from equity investee | 11,138 | 12,650 | ||||||
Loss on retirements of long-lived assets, non-cash | 2,601 | 1,021 | ||||||
Other, net | (233 | ) | (29 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Receivables, net | (15,331 | ) | 613 | |||||
Prepaid expenses and other assets | (16,521 | ) | (16,350 | ) | ||||
Accounts payable and other liabilities | (7,364 | ) | (2,772 | ) | ||||
Deferred income | 53,696 | 42,242 | ||||||
Income taxes | 19,013 | (424 | ) | |||||
Net cash provided by operating activities | 141,475 | 121,906 | ||||||
INVESTING ACTIVITIES | ||||||||
Capital expenditures | (65,019 | ) | (42,562 | ) | ||||
Distribution from equity investee | 487 | 122 | ||||||
Proceeds from sale of assets | 418 | 30 | ||||||
Acquisition of assets | — | (7,969 | ) | |||||
Other, net | — | (279 | ) | |||||
Net cash used in investing activities | (64,114 | ) | (50,658 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Payment of long-term debt | (473 | ) | (503 | ) | ||||
Exercise of Class A common stock options | 718 | — | ||||||
Reacquisition of previously issued common stock | (7,175 | ) | (1,009 | ) | ||||
Net cash used in financing activities | (6,930 | ) | (1,512 | ) | ||||
Net increase in cash and cash equivalents | 70,431 | 69,736 | ||||||
Cash and cash equivalents at beginning of period | 256,702 | 269,011 | ||||||
Cash and cash equivalents at end of period | $ | 327,133 | $ | 338,747 |
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