UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

 
FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
       Date of Report (Date of earliest event reported):    March 1, 2017
 
SPEEDWAY MOTORSPORTS, INC.
(Exact Name of Registrant as Specified in Charter)
 
Delaware	 	1-13582	 	51-0363307	
(State or other jurisdiction	 	(Commission	 	(IRS Employer	
of incorporation)	 	File Number)	 	Identification No.)	

5555 Concord Parkway South , Concord, North Carolina	28027	
(Address of principal executive offices)	(Zip Code)	
 
Registrant's telephone number, including area code:     (704) 455-3239

 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 	
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 
 
Item 2.02 Results of Operations and Financial Condition.
 
     On March 1, 2017, we issued a press release announcing our financial results for our fiscal quarter and fiscal year ended December 31, 2016, and providing guidance for fiscal year 2017. A copy of the press release is attached to this Form 8-K as Exhibit 99.1.
 
Item 9.01 Financial Statement and Exhibits.
 
( d) Exhibits.
 
Exhibit Number	 	Description	
 	 	 	
99.1	 	Press Release dated March 1, 2017	

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	SPEEDWAY MOTORSPORTS, INC.	 	

Date: March 1, 2017	By:	/s/ William R. Brooks	 	
 	 	William R. Brooks	 	
 	 	Vice Chairman and Chief Financial Officer	 	

 	
Exhibit 99.1

 
 
 	Contact: Janet Kirkley,	
 	704-532-3318	
 	—For Immediate Release—	

Speedway Motorsports Reports Results for Fourth Quarter and
Year Ended December 31, 201 6 and Provides Full Year 201 7 Guidance
 
CONCORD, NC (March 1 , 201 7 ) – Speedway Motorsports, Inc. (SMI) (NYSE: TRK) today reported fourth quarter 2016 total revenues of $82.6 million, and net income and adjusted non-GAAP net income of $271,000 or $0.01 per diluted share. Full year 2016 total revenues were $512.2 million, net income was $39.5 million or $0.96 per diluted share, and adjusted non-GAAP net income was $39.2 million or $0.95 per diluted share. These results were within management’s expectations. SMI also provided full year 2017 non-GAAP earnings guidance of $0.90 to $1.10 per diluted share as further described below. Non-GAAP items are further discussed and reconciled with comparable GAAP amounts below.
 
Starting in 2017, Monster Energy replaced Sprint as NASCAR’s premiere racing Cup Series entitlement sponsor under a multi-year agreement. That naming convention is used throughout this release. Monster Energy is a widely known brand, and popular with younger and changing demographic groups – important targeted markets for all involved in NASCAR motorsports. We believe that Monster Energy plans to commit sizable resources in promoting their expanded involvement in NASCAR, working closely with industry stakeholders and the broadcasters to widen the marketing reach of NASCAR racing in general.
 
As presented below in the Selected Financial Data, o ur 2016 race season experienced an unusually high number of event weekends with significant poor weather. Eight events during our 13 NASCAR Cup Series race weekends were negatively impacted. The Company’s admissions, certain event related revenues and operating costs were negatively impacted by poor weather in each 2016 quarter. Management believes many of the Company’s revenue categories continue to be negatively impacted by economic conditions, including underemployment and an absence of a stronger middle class economic recovery .
 
Speedway Motorsports hosted two collegiate football games, including the sold-out, hugely successful “Battle at Bristol” and large preceding Kenny Chesney concert in the third quarter 2016. These events had a material positive effect on our 2016 operating results, and associated revenues and direct expenses are reflected in Other Operating Revenue and Other Direct Operating Expense in the accompanying Selected Financial Data. The Company has begun to explore conducting similar events in the future. However, no additional football games are scheduled at this time.
 
Fourth Quarter Comparison
●	Total revenues of $82.6 million in 2016 compared to $87.7 million in 2015	
●	Ac celerated depreciation and removal costs on retired assets aggregating $2.2 million pre-tax, $1.4 million after tax or $0.03 per diluted share in 2015	
●	Income taxes from various adjustments associated with discontinued operations of $1.3 million or $0.03 per diluted share in 2015	
●	Net income of $271,000 or $0.01 per diluted share in 2016 compared to a net loss of $3.3 million or $0.08 per diluted share in 2015	
●	Adjusted n on-GAAP net income of $271,000 or $0.01 per diluted share in 2016 compared to adjusted non-GAAP loss of $710,000 or $0.02 per diluted share in 2015	
 
Full Year Comparison  
●	Total revenues of $ 512.2 million in 2016 compared to $496.5 million in 2015	
●	A ccelerated depreciation and removal costs on retired assets aggregating $357,000 pre-tax, $225,000 after tax or $0.01 per diluted share in 2016 compared to $9.7 million pre-tax, $6.1 million after tax or $0.15 per diluted share in 2015	
 
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●	Non-recurring benefits from state tax law changes of $5 46,000 or $0.01 per diluted share in 2016 compared to $610,000 or $0.01 per diluted share in 2015	
●	In 2015:	
 	o	Impairment charge for other intangible assets and goodwill of $98.9 million pre-tax, $63.4 million after tax or $1.54 per diluted share	
 	o	Loss on early debt redemption and refinancing of $8.4 million pre-tax, $5.3 million after tax or $0.13 per diluted share	
 	o	Interim interest expense associated with early debt redemption of $1.7 million pre-tax, $1.1 million after tax or $0.03 per diluted share	
 	o	Income taxes from various adjustments associated with discontinued operations of $1.3 million or $0.03 per diluted share in 2015	
●	Net income of $39. 5 million or $0.96 per diluted share in 2016 compared to a net loss of $34.4 million or $0.83 per diluted share in 2015	
●	Adjusted non-GAAP net income of $39. 2 million or $0.95 per diluted share in 2016 compared to $42.1 million or $1.02 per diluted share in 2015	
 
Non-GAAP Financial Information and Reconciliation
Net income and diluted earnings per share as adjusted and set forth below are non-GAAP (other than generally accepted accounting principles) financial measures presented as supplemental disclosures to their individual corresponding GAAP basis amounts. The following schedule reconciles those non-GAAP financial measures to their most directly comparable information presented using GAAP. Management believes such non-GAAP information is useful and meaningful to investors and helps in understanding, using and comparing the Company ’s operating results.
 
We have not reconciled 2017 non-GAAP forward-looking earnings per diluted share to its most directly comparable GAAP measure, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K. Such reconciliations would require unreasonable efforts to estimate and quantify various necessary GAAP components largely because, as indicated by our relatively wide range of earnings guidance, forecasting or predicting our future operating results is subject to many factors out of our control or not readily predictable. Such factors include weather conditions surrounding our events, the seasonal popularity or success of NASCAR racing in general, the impact of geopolitical factors on travel plans and spending sentiment, and fluctuating costs of food, gas, health-care and other basic necessities, any or all of which can significantly impact our future results. These components and other factors could significantly impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.
 
Management uses the non-GAAP information to assess the Company ’s operations for the periods presented, analyze performance trends and make decisions regarding future operations because it believes this separate information better reflects ongoing operating results. This non-GAAP financial information is not intended to be considered independent of or a substitute for results prepared in accordance with GAAP. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as alternatives to net income or loss, or diluted earnings or loss per share, determined in accordance with GAAP. Individual quarterly per share amounts may not be additive due to rounding. Amounts below are in thousands except per share amounts.
 
 	 	Three Months Ended	 	 	Full Year Ended	 	
 	 	Dec ember 31:	 	 	Dece mber 31:	 	
 	 	2016	 	 	2015	 	 	2016	 	 	2015	 	
Net income (loss) using GAAP	 	$	271	 	 	$	(3,338	)	 	$	39,545	 	 	$	(34,363	)	
Accelerated depreciation on retired assets and costs of removal, pre-tax	 	 	--	 	 	 	2,195	 	 	 	357	 	 	 	9,664	 	
Non-recurring benefit of state income tax law changes	 	 	--	 	 	 	--	 	 	 	(546	)	 	 	(610	)	
Impairment of other intangible assets and goodwill, pre-tax	 	 	--	 	 	 	--	 	 	 	--	 	 	 	98,868	 	
Loss on early debt redemption and refinancing, pre-tax	 	 	--	 	 	 	--	 	 	 	--	 	 	 	8,372	 	
Interim interest expense, pre-tax	 	 	--	 	 	 	--	 	 	 	--	 	 	 	1,688	 	
Income tax from adjustments associated with discontinued operation	 	 	--	 	 	 	1,259	 	 	 	--	 	 	 	1,259	 	
Aggregate income tax effect of non-GAAP adjustments	 	 	--	 	 	 	(826	)	 	 	(132	)	 	 	(42,791	)	
Adjusted non-GAAP net income (loss)	 	$	271	 	 	$	(710	)	 	$	39,224	 	 	$	42,087	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings (loss) per share using GAAP	 	$	0.01	 	 	$	(0.08	)	 	$	0.96	 	 	$	(0.83	)	
Accelerated depreciation on retired assets and costs of removal, pre-tax	 	 	--	 	 	 	0.05	 	 	 	0.01	 	 	 	0.23	 	
Non-recurring benefit of state income tax law changes	 	 	--	 	 	 	--	 	 	 	(0.01	)	 	 	(0.01	)	
Impairment of other intangible assets and goodwill, pre-tax	 	 	--	 	 	 	--	 	 	 	--	 	 	 	2.39	 	
Loss on early debt redemption and refinancing, pre-tax	 	 	--	 	 	 	--	 	 	 	--	 	 	 	0.20	 	
Interim interest expense, pre-tax	 	 	--	 	 	 	--	 	 	 	--	 	 	 	0.04	 	
Income tax from adjustments associated with discontinued operation	 	 	--	 	 	 	0.03	 	 	 	--	 	 	 	0.03	 	
Aggregate income tax effect of non-GAAP adjustments	 	 	--	 	 	 	(0.02	)	 	 	(0.00	)	 	 	(1.04	)	
Adjusted Non-GAAP diluted earnings (loss) per share	 	$	0.01	 	 	$	(0.02	)	 	$	0.95	 	 	$	1.02	 	
 
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Significant Fourth Quarter 2016 Racing Events
●	Charlotte Motor Speedway – NASCAR Bank of America 500 Monster Energy Cup and Drive for the Cure 300 Presented by Blue Cross Blue Shield of North Carolina Xfinity Series racing events	
●	Las Vegas Motor Speedway – NASCAR DC Solar 350 Camping World Truck Series and NHRA Toyota Nationals racing events, and Red Bull Air Race World Championship event	
●	Texas Motor Speedway – NASCAR AAA Texas 500 Monster Energy Cup, O’Reilly Auto Parts Challenge Xfinity, and Striping Technology 350 Camping World Truck Series racing events	
 
201 7 Earnings Guidance
The Company estimates 201 7 total revenues of $475-500 million, net income of $37-45 million, depreciation, amortization and interest expense of $66-71 million, and non-GAAP diluted earnings per share of $0.90-1.10, excluding non-recurring items and other special items. The range of earnings guidance reflects the continuing negative impact of uncertain economic conditions, among other factors. Inclement weather, potential higher fuel and health-care costs, and continued underemployment could significantly impact our future results. The Company’s estimated total capital expenditures in 2017 are $20-30 million.
 
For managing facility capacity and alternative development purposes, the Company began repurposing c ertain seating at Charlotte, Kentucky and New Hampshire Motor Speedways in the first quarter 2017. The Company anticipates recording non-cash, pre-tax charges for accelerated depreciation and costs of removal aggregating approximately $5 - 7 million in the first quarter 2017.
 
Dividends and Stock Repurchase Program
During the full year 201 6, the Company declared and paid cash dividends of $0.15 per share of common stock each quarter for a combined aggregate of approximately $24.8 million. On February 15, 2017, the Company’s Board of Directors declared a quarterly cash dividend of $0.15 per share of common stock aggregating approximately $6.2 million, payable on March 17, 2017 to shareholders of record as of March 1, 2017. The Board of Directors plans to continue to evaluate cash dividends on a quarterly basis in the future.
 
During the full year 201 6, the Company repurchased 252,000 shares of common stock for approximately $4.7 million under its stock repurchase program. As of December 31, 2016, the Company has repurchased 4,558,000 shares since adoption of the program in April 2005, and the total number of shares available for future repurchase as currently authorized is 442,000.
 
Comments
“ SMI’s full year 2016 results were within our expectations, notwithstanding an unusually high number of our events contending with poor weather,” stated Marcus G. Smith, Chief Executive Officer and President of Speedway Motorsports. “Eight events during our 13 NASCAR Cup race weekends in 2016 were negatively impacted, including Hurricane Matthew at Charlotte Motor Speedway in October and shortened racing at Texas Motor Speedway in November. Looking forward, the 2017 racing season has some of the most exciting and promising changes in recent years. An exciting new “stage-based” race format for all three of NASCAR’s national series is being introduced. This new format has championship implications and awarded points depending on driver running order at the end of each stage, and the “playoff” bonus structure has been expanded and extended. Drivers must now compete for spots early in races rather than focusing towards the end of a race and over the entire racing season.”
 
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“ Most of our NASCAR event sponsorships for 2017, and many for 2018 and beyond, are already sold. And it deserves repeating that, along with the ten-year NASCAR broadcasting agreements through 2024, SMI has many other long-term contracted revenue streams in place. We continue to make significant progress on our strategic initiatives of stable share repurchases, dividend programs, ongoing debt reduction, as well as restrained capital spending and managing facility capacity for pricing power and marketing appeal. Our long-term business model remains solid.”
 
“ Most sports, and sporting venues, are facing similar trends in admissions and various event related revenues reflecting the changing demographics and consumption of media entertainment – NASCAR and racing in general are clearly not alone. SMI has a long-standing history of providing our fans with entertainment experiences and enjoyment value – second to none in motorsports. Our sizable investments, such as three of the world’s largest high-definition video boards at Bristol, Charlotte and Texas Motor Speedways, our new distributed antenna systems for high-speed wireless performance, and the latest in digital and mobile phone applications, provide our fans with exciting entertainment that cannot be duplicated at home or other venues. SMI, NASCAR, the NBC Sports Group and FOX Sports Media Group, and now Monster Energy, are all working hard to capture the attention of sports fans everywhere.”
 
O. Bruton Smith, Executive Chairman of Speedway Motorsports stated, “Our 2016 results reflect the tremendously successful “Battle at Bristol” collegiate football game and large concert. SMI proudly displayed our excellent execution and ability to provide the finest in entertainment, and is working to schedule additional games with top ranked college teams. Our Charlotte Motor Speedway has essentially completed expansion and reconfiguration of its road course. Located inside Charlotte’s superspeedway, we now have multiple exciting race configurations possible, including combined use of both their superspeedway and road course. We believe many fans will find such racing configuration novel and appealing, providing increased racing competition and new desirable sightlines and viewing areas.”
 
Speedway Motorsports is a leading marketer and promoter of motorsports entertainment in the United States. The Company, through its subsidiaries, owns and operates the following premier facilities: Atlanta Motor Speedway, Bristol Motor Speedway, Charlotte Motor Speedway, Kentucky Speedway, Las Vegas Motor Speedway, New Hampshire Motor Speedway, Sonoma Raceway and Texas Motor Speedway. The Company provides souvenir merchandising services through its SMI Properties subsidiaries; manufactures and distributes smaller-scale, modified racing cars and parts through its US Legend Cars International subsidiary; and produces and broadcasts syndicated motorsports programming to radio stations nationwide through its Performance Racing Network subsidiary. For more information, visit the Company's website at www.speedwaymotorsports.com .
 
This news release contains forward-looking statements, particularly statements with regard to our future operations and financial results. There are many factors that affect future events and trends of our business including, but not limited to, economic factors, weather, the success of NASCAR and others as sanctioning bodies, capital projects and expansion, financing needs, income taxes and a host of other factors both within and outside of management control. These factors and other factors, including those contained in our Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q, involve certain risks and uncertainties that could cause actual results or events to differ materially from management's views and expectations. Inclusion of any information or statement in this news release does not necessarily imply that such information or statement is material. The Company does not undertake any obligation to release publicly revised or updated forward-looking information, and such information included in this news release is based on information currently available and may not be reliable after this date.
 
Note: Speedway Motorsports will host a conference call and webcast today at 10:00 AM (ET) open to the public. To participate in the conference call, you may dial 877-201-0168 (US / Canada / toll-free) or 647-788-4901 (international). The reference number is 5 5359210. A webcast of the call can be accessed at the Company's website at www.speedwaymotorsports.com under “Investors”. Participating in the call will be Marcus G. Smith, Chief Executive Officer and President, and William R. Brooks, Vice Chairman, Chief Financial Officer and Treasurer.
 
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Speedway Motorsports, Inc. and Subsidiaries	
Selected Financial Data - Unaudited	
For The Three and Twelve Months Ended December 31, 2016 and 2015	
(In thousands except per share amounts)	
 
 	 	Three Months Ended	 	 	Twelve Months Ended	 	
STATEMENT OF OPERATIONS DATA 	 	12/31/2016	 	 	12/31/2015	 	 	12/31/2016	 	 	12/31/2015	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Admissions	 	$	15,868	 	 	$	18,431	 	 	$	90,639	 	 	$	100,694	 	
Event related revenue	 	 	28,605	 	 	 	31,014	 	 	 	136,900	 	 	 	146,980	 	
NASCAR broadcasting revenue	 	 	31,774	 	 	 	30,816	 	 	 	224,227	 	 	 	217,469	 	
Other operating revenue (a)	 	 	6,384	 	 	 	7,484	 	 	 	60,390	 	 	 	31,320	 	
Total Revenues	 	 	82,631	 	 	 	87,745	 	 	 	512,156	 	 	 	496,463	 	
Expenses and Other:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Direct expense of events	 	 	18,420	 	 	 	19,584	 	 	 	102,786	 	 	 	104,303	 	
NASCAR event management fees	 	 	21,864	 	 	 	21,301	 	 	 	137,727	 	 	 	133,682	 	
Other direct operating expense (a)	 	 	4,244	 	 	 	4,653	 	 	 	43,784	 	 	 	19,541	 	
General and administrative	 	 	21,553	 	 	 	23,033	 	 	 	100,144	 	 	 	98,289	 	
Depreciation and amortization	 	 	13,411	 	 	 	14,950	 	 	 	54,368	 	 	 	61,964	 	
Interest expense, net	 	 	3,228	 	 	 	3,450	 	 	 	13,148	 	 	 	16,811	 	
Impairment of other intangible assets and goodwill	 	 	-	 	 	 	-	 	 	 	-	 	 	 	98,868	 	
Loss on early debt redemption and refinancing	 	 	-	 	 	 	-	 	 	 	-	 	 	 	8,372	 	
Other (income) expense, net	 	 	(111	)	 	 	459	 	 	 	(997	)	 	 	875	 	
Total Expenses and Other	 	 	82,609	 	 	 	87,430	 	 	 	450,960	 	 	 	542,705	 	
Income (Loss) Before Income Taxes	 	 	22	 	 	 	315	 	 	 	61,196	 	 	 	(46,242	)	
Income Tax Provision	 	 	249	 	 	 	(3,653	)	 	 	(21,651	)	 	 	11,879	 	
Net Income (Loss)	 	$	271	 	 	$	(3,338	)	 	$	39,545	 	 	$	(34,363	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic Earnings (Loss) Per Share	 	$	0.01	 	 	$	(0.08	)	 	$	0.96	 	 	$	(0.83	)	
Weighted average shares outstanding	 	 	41,076	 	 	 	41,219	 	 	 	41,152	 	 	 	41,284	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted Earnings (Loss) Per Share	 	$	0.01	 	 	$	(0.08	)	 	$	0.96	 	 	$	(0.83	)	
Weighted average shares outstanding	 	 	41,096	 	 	 	41,238	 	 	 	41,167	 	 	 	41,312	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Major NASCAR-sanctioned Events Held During Period	 	 	4	 	 	 	4	 	 	 	24	 	 	 	24	 	
 
Certain Race Schedule Changes:	
• Poor weather resulted in delaying the start of the Monster Energy NASCAR Cup race held at Las Vegas Motor Speedway in the first quarter 2016	
• Poor weather resulted in delays in starting or completing or shortening two Monster Energy NASCAR Cup races held at Texas Motor Speedway (TMS) in the second and fourth quarters 2016	
• Poor weather resulted in cancellation of a portion of the major NHRA weekend racing event held at Charlotte Motor Speedway (CMS) in the second quarter 2016	
• Poor weather resulted in delays in starting and completing the NASCAR All-Star race, and next day rescheduling of one NASCAR Camping World Truck Series race, held at at CMS in the second quarter 2016	
• Poor weather resulted in delays in starting and completing one IndyCar race at TMS, which was rescheduled from the second quarter 2016 and held in the third quarter 2016 	
• Poor weather resulted in postponing and rescheduling one Monster Energy NASCAR Cup race held at Bristol Motor Speedway in the third quarter 2016	
• TMS held one Red Bull Air Race in the third quarter 2015 that was not held in 2016 	
• Hurricane Matthew resulted in postponing and rescheduling one Monster Energy NASCAR Cup and one Xfinity Series race held at CMS in the fourth quarter 2016	
 	
(a) Includes revenues and direct expenses associated with "the Battle at Bristol" collegiate football game and preceding concert held in the third quarter 2016.	
 
BALANCE SHEET DATA 	 	12/31/2016	 	 	12/31/2015	 	
 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	79,342	 	 	$	82,010	 	
Total current assets	 	 	127,909	 	 	 	142,886	 	
Property and equipment, net	 	 	1,000,230	 	 	 	1,019,650	 	
Goodwill and other intangible assets, net	 	 	345,725	 	 	 	345,736	 	
Total assets	 	 	1,503,300	 	 	 	1,539,197	 	
 	 	 	 	 	 	 	 	 	
Deferred race event and other income, net	 	 	44,782	 	 	 	57,549	 	
Total current liabilities	 	 	94,671	 	 	 	108,369	 	
Credit facility borrowings (all term loan)	 	 	66,000	 	 	 	120,000	 	
Total long-term debt	 	 	267,206	 	 	 	321,383	 	
Total liabilities	 	 	705,517	 	 	 	754,357	 	
Total stockholders' equity	 	 	797,783	 	 	 	784,840	 	

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