Speedway Motorsports, Inc. 2003 Annual Report Pewymtrprs N
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2003 Major Corporate Partners Speedway Motorsports, Inc. 2003 Annual Report Speedway Motorsports, Inc. Opportunity At Every Turn 2003 Annual Report OPPORTUNITYAT EVERY TURN 704.455.3239 Speedway Motorsports, Inc. PO Box 600, Concord, NC 28026 • 5555 Concord Parkway South, Concord, NC 28027 www.gospeedway.com Board of Directors O. Bruton Smith Edwin R. Clark* James P. Holden** Chairman and Executive Vice President Retired President and Chief Executive Officer Speedway Motorsports, Inc. Chief Executive Officer Speedway Motorsports, Inc. Charlotte, NC DaimlerChrysler Charlotte, NC President and General Manager Bloomfield Hills, MI Atlanta Motor Speedway H.A. Wheeler Atlanta, GA Robert L. Rewey Chief Operating Officer Retired Group Vice President and President Marcus G. Smith** Ford Motor Company Speedway Motorsports, Inc. Executive Vice President Palm Beach, FL President and General Manager National Sales and Marketing Lowe’s Motor Speedway Speedway Motorsports, Inc. Tom E. Smith Concord, NC Concord, NC Retired Chairman Chief Executive Officer William R. Brooks William P. Benton and President BUSINESS DESCRIPTION Chief Financial Officer Retired Vice President of Food Lion Stores, Inc. Speedway Motorsports, Inc. (SMI) is a leading marketer and promoter of motorsports entertainment in Executive Vice President Marketing Worldwide Salisbury, NC the United States. SMI owns six speedways in growing markets across the country and has one of the and Treasurer Ford Motor Company largest total permanent seating capacities in the motorsports industry. Speedway Motorsports provides Speedway Motorsports, Inc. Palm Beach, FL **Board Member Emeritus upon the election of Marcus G. souvenir merchandising through SMI Properties, manufactures and distributes smaller-scale, modified Smith at the Annual Meeting on April 21, 2004. Charlotte, NC **Director nominee, subject to shareholder approval at the racing cars through 600 Racing, as well as broadcasts syndicated racing programs through Performance Mark M. Gambill Annual Meeting on April 21, 2004. Racing Network. Speedway Motorsports is headquartered in Concord, NC and is listed on the NYSE Managing Member under the symbol TRK. Cary Street Partners Richmond, VA FINANCIAL HIGHLIGHTS (Dollars in millions, except per share amounts) Investor Information Corporate Website Investor Relations Transfer Agent and Registrar Year ended December 31, 2003 2002 Growth Information pertaining to the Inquiries are welcome and should for Common Stock Total revenue $ 404.5 $376.6 7% Company can be viewed and down- be directed to: Wachovia Bank loaded at gospeedway.com 1525 West WT Harris Boulevard Net income 58.5 56.2 4% Marylaurel E. Wilks 3C3-NC1153 Vice President Non-GAAP net income(1) 67.9 61.9 10% Annual Meeting Charlotte, NC 28288-1153 Communications and The Annual Meeting will be held Diluted earnings per share 1.37 1.32 4% General Counsel at 9:00 am, Wednesday, April 21, Independent Auditor Speedway Motorsports, Inc. Non-GAAP diluted earnings per share(1) $1.59 $ 1.45 10% 2004, at the Company’s headquar- Deloitte & Touche LLP P.O. Box 600 ters at Lowe’s Motor Speedway, Charlotte, NC Concord, NC 28026-0600 Designed and produced by Corporate Reports Inc./Atlanta www.corporatereport.com Concord, NC. (1) For reconciliation to GAAP equivalent measures and further explanation, see the Selected Financial Data in the accompanying Form 10-K. 704-455-3239 [email protected] Securities Listing Speedway Motorsports common stock is listed on the New York Stock Exchange under the symbol TRK. Just as the driver looks to exploit every opportunity on the track, Speedway is constantly searching for new ways to unlock opportunities for growth. Speedway 1.5-Mile Quad Oval Opened in 1997 Permanent Seating 158,000/194 Suites Sponsors Samsung/RadioShack 500 “It’s one of those places where I love going. New Race International Race of Champions PEEDWAY Fast Fact In a year’s time at TMS, 9,546 pounds S It’s a really, really fast track, which I love.” of nacho chips are dipped in over 937 gallons Dale Earnhardt Jr. on Texas Motor Speedway of Old El Paso® cheese sauce and topped with OTOR 424 gallons of jalapenos. M Texas ‘‘ ’’ Speedway 2.52 Miles Built in 1968 Permanent Seating 47,000/27 Suites “You drive like you were a teenager with a car Sponsors Dodge/Save Mart 350 and your parents aren’t watching.” ACEWAY Fast Fact As part of a modernization R program, the track created a special Jeff Burton on Infineon Raceway wine-tasting pavilion with its Preferred Partners. All proceeds from the program go to the Speedway Children’s Charities. ‘‘ ’’ Infineon Turn #1 It’s All Finesse and Muscle The Hottest Sport in America is Getting Hotter Seventy-five million Americans identify them- selves as NASCAR fans, representing one-third of the adult population of the United States. Forty percent of those are female, 58% are between the ages of 18 and 44 and 42% annu- ally earn in excess of $50,000. Our ticket buyers come from all 50 states and 12 foreign countries. Our average ticket-buying customer travels more than 200 miles round trip to attend our major events and spends up to $425 for a ticket. In 1997, our admissions represented nearly half of our revenue, whereas today’s admissions represent slightly more than a third. While admissions remain as important as ever to our Company, other sources of revenue, particularly NASCAR broadcast and sponsorship revenue, have increased markedly. Turn #2 Running Tight and Fast in Thunder Valley More Fans, More TV and More Sponsors Equal More Revenue NASCAR is the second highest-rated sport on Lowe’s Home Improvement Warehouse, Infineon television. About 189 million households tuned Technologies, Coca-Cola, Dodge, RadioShack, in to the 2003 NASCAR NEXTEL Cup Series up Samsung, Newell/Rubbermaid, Golden Corral, 58% from 2000. These 2003 broadcast rights Bass Pro Shops, MBNA America and others. earned us nearly $91 million in revenue, a With an increasing portion of revenue from con- 16% increase over the prior year. tracted sources – broadcast and sponsorships More viewers mean better ratings and eventually currently comprise almost a third of our total more fans. Additional media attention heightens revenues – revenues and earnings become much awareness among ticket buyers and sponsors. more predictable, affording opportunities to Our sponsorship revenue has grown almost 35% further drive business. since 1999, and now includes long-term partners Speedway .533-Mile Oval Built in 1961 Permanent Seating 156,000/159 Suites Sponsors Food City 500, Sharpie 500 New Race NHRA O’Reilly Auto Parts Junior “There’s ‘fast’ and then there’s ‘fast fast.’ Dragster Eastern Conference Finals PEEDWAY Bristol is definitely ‘fast fast.’” S Fast Fact Bristol holds the “Speedway In Lights” Joe Nemechek on Bristol Motor Speedway holiday light show every season with 142 miles OTOR of wiring and over one million lights, raising M $250,000 for Speedway Children’s Charities. Bristol ‘‘ ’’ Turn #3 There’s No Bad Groove, Whether You’re on the Paint or Scraping the Wall From T-Shirts to Race Cars, We’re Finding New Growth Just as drivers are not limited to one groove and PRN’s “Racing Country USA.” With over around a speedway, we are not limited to one 725 affiliated stations, PRN is one of the largest revenue channel of business. Our business broadcasting networks in the United States. portfolio contains souvenir merchandising, a SMI Properties provides merchandising and radio network and race car manufacturing, souvenir services to all SMI speedways, non- each complementing our core operations. SMI speedways and non-traditional distribution Performance Racing Network (PRN) is a radio channels. In addition, 600 Racing manufactures network that broadcasts the NASCAR NEXTEL and sells Legends Cars, Bandoleros and Thunder Cup Series races run at our speedways. PRN Roadsters that continue to be popular among also broadcasts weekly and daily motorsports grassroots and entry-level racers. Several young programming including “Raybestos Fast Talk NASCAR NEXTEL Cup drivers raced these vehi- with Benny Parsons,” “The Alltel Pit Reporters,” cles while coming up through the ranks. Speedway 1.5-Mile Quad Oval Built in 1959 Permanent Seating 162,000/113 Suites “We definitely put on a great show for them Sponsors Coca-Cola 600, NASCAR NEXTEL All-Star Challenge, UAW-GM Quality 500 under the lights at Lowe’s, but it can be a very PEEDWAY S New Race Freestyle Motocross Championship nerve-wracking race for the drivers.” Fast Fact At the center of the stock car Ward Burton on Lowe’s Motor Speedway OTOR racing world, over 90% of all NASCAR M teams are based within a 60-mile radius of Lowe’s Motor Speedway. ‘‘ ’’ Lowe’s Speedway 1.54-Mile Quad Oval Built in 1960 Permanent Seating 124,000/137 Suites Sponsors Golden Corral 500, Bass Pro Shops MBNA 500 “You can run high or low. You can get in New Races NASCAR Craftsman Truck Series, PEEDWAY S a rhythm here and run well.” International Race of Champions Fast Fact Patrons consume 11,750 hamburgers Jimmy Spencer on Atlanta Motor Speedway and hot dogs at a typical AMS race, or enough OTOR to feed a family of four, three meals a day for M almost three years. Atlanta ‘‘ ’’ Turn #4 Where All Eyes Are on the Finish A Proven Record Behind the Wheel The year 2003 was yet another good year for Speedway Motorsports. Total revenues increased 7% or $28.0 million to $404.5 million. Net income increased 4% or $2.3 million to $58.5 million and GAAP diluted earnings per share increased 4% or $0.05 to $1.37. Non-GAAP diluted earnings per share increased 10% or $0.14 to $1.59 compared with $1.45 last year.* These outstanding results were derived from the Company’s philosophy of consistently investing in premier facilities, building the best fan experience, generating as much return as possible for our shareholders, and improving the financial strength of the Company.