Motorsports Authentics, the biggest seller of NASCAR merchandise, will lose $15 million to $20 million in 2007, International Speedway Corp. announced today, thanks in large part to Dale Earnhardt Jr.'s planned team switch next season.
In reporting its second-quarter earnings, ISC reported that the move of Dale Earnhardt Jr. from Dale Earnhardt Inc. to Hendrick Motorsports will heavily impact the Motorsports Authentics' performance. Motorosports Authentics is 50 percent owned by ISC and 50 percent by Speedway Motorsports Inc.
"More than half of the decline is associated with Dale Earnhardt Jr.'s decision to leave DEI at the end of 2007, resulting in lower merchandise sales in multiple distribution channels," the company said in its news release. "To a lesser extent, some of the shortfall is driven by a more challenging consumer economic environment than was anticipated at the beginning of the year by the joint venture.
"Despite the lowered outlook, ISC continues to believe Motorsports Authentics has significant potential for generating solid growth in earnings and cash flow over the longer term."
ISC, which owns several race tracks and whose majority of voting stock is owned by the France family, also predicts that it will spend $6 million to $7 million in litigation costs associated with Kentucky Speedway's antitrust lawsuit against NASCAR and ISC.
"ISC believes more strongly than ever that the vague allegations of the complaint are totally without merit," the company said. "At this point the company also believes the likelihood of a materially adverse result appears to be remote, although there is always a level of uncertainty."
The company also reported lower than expected performance from its recent Michigan and Daytona race weekends. Michigan was impacted by the sluggish economy in the region and Daytona was impacted by weather in recent years.
ISC reported second-quarter net income of $18.4 million, compared to $30.7 million last year. The difference is in part because television rights fees are lower this season as well as ISC's buying out Raceway Associates' portion of Chicagoland Speedway; ISC's decision to discontinue speedway development in Kitsap County, Wash.; ISC's continued fill of the land for the failed Staten Island project in order to sell it; and accelerated depreciation of existing offices and buildings expected to be razed in the next couple of years.
ISC also announced that it expects total earnings to be $2.80-$2.90 per diluted share compared to a projection of $3.05-$3.15 per diluted share when the year began.
http://www.scenedaily.com/stories/2007/07/09/scene_daily1247.html?from_rss=1
In reporting its second-quarter earnings, ISC reported that the move of Dale Earnhardt Jr. from Dale Earnhardt Inc. to Hendrick Motorsports will heavily impact the Motorsports Authentics' performance. Motorosports Authentics is 50 percent owned by ISC and 50 percent by Speedway Motorsports Inc.
"More than half of the decline is associated with Dale Earnhardt Jr.'s decision to leave DEI at the end of 2007, resulting in lower merchandise sales in multiple distribution channels," the company said in its news release. "To a lesser extent, some of the shortfall is driven by a more challenging consumer economic environment than was anticipated at the beginning of the year by the joint venture.
"Despite the lowered outlook, ISC continues to believe Motorsports Authentics has significant potential for generating solid growth in earnings and cash flow over the longer term."
ISC, which owns several race tracks and whose majority of voting stock is owned by the France family, also predicts that it will spend $6 million to $7 million in litigation costs associated with Kentucky Speedway's antitrust lawsuit against NASCAR and ISC.
"ISC believes more strongly than ever that the vague allegations of the complaint are totally without merit," the company said. "At this point the company also believes the likelihood of a materially adverse result appears to be remote, although there is always a level of uncertainty."
The company also reported lower than expected performance from its recent Michigan and Daytona race weekends. Michigan was impacted by the sluggish economy in the region and Daytona was impacted by weather in recent years.
ISC reported second-quarter net income of $18.4 million, compared to $30.7 million last year. The difference is in part because television rights fees are lower this season as well as ISC's buying out Raceway Associates' portion of Chicagoland Speedway; ISC's decision to discontinue speedway development in Kitsap County, Wash.; ISC's continued fill of the land for the failed Staten Island project in order to sell it; and accelerated depreciation of existing offices and buildings expected to be razed in the next couple of years.
ISC also announced that it expects total earnings to be $2.80-$2.90 per diluted share compared to a projection of $3.05-$3.15 per diluted share when the year began.
http://www.scenedaily.com/stories/2007/07/09/scene_daily1247.html?from_rss=1