International Speedway Corporation reported financial results for its fiscal second quarter ended May 31, 2015. Total revenue was approximately $164 million, compared to revenue of approximately $190.3 million in the prior-year period.
Article continues below
Operating income was approximately $19.2 million during the period compared to operating income of approximately $34.7 million in the second quarter of fiscal 2014.
For the second quarter of fiscal 2015, ISC recognized revenue and expense related to merchandise operations of approximately $3.9 million and $2.7 million, respectively.
Included in this amount are approximately $1.4 million of commission from Fanatics, non-recurring transactions of approximately $1.2 million for inventory sold to Fanatics and approximately $1.2 million of wholesale transactions by MA, which drive a total of approximately $2.3 million in expense, including product costs associated with the non-recurring transactions, and other non-recurring costs related to the transition of trackside merchandise operations to Fanatics.
This compares to the second quarter of fiscal 2014, where ISC recognized revenue and expense related to merchandise operations of approximately $14.4 million and $11 million, respectively, which included direct sales of trackside merchandise.
During the three months ended May 31, 2015, the company recognized approximately $0.4 million, or less than $0.01 per diluted share, in marketing and consulting costs that are included in general and administrative expense related to DAYTONA Rising.
During the three months ended May 31, 2015, the company recognized approximately $2.1 million, or $0.03 per diluted share, of accelerated depreciation that was recorded due to shortening the service lives of certain assets associated with DAYTONA Rising and other projects. The company recognized approximately $3.0 million, or $0.04 per diluted share, of similar costs related to DAYTONA Rising and capacity management initiatives;
During the three months ended May 31, 2015, the company recognized approximately $4.7 million, or $0.06 per diluted share, of losses primarily attributable to demolition and/or asset relocation costs in connection with DAYTONA Rising and other capital improvements.
During the three months ended May 31, 2015, the company capitalized approximately $1.3 million, or $0.02 per diluted share, of interest related to DAYTONA Rising. During the three months ended May 31, 2014, the company recognized approximately $1.4 million, or $0.02 per diluted share, of similar interest capitalization.
Net income for the second quarter ended May 31, 2015 was approximately $13.4 million, or $0.29 per diluted share, compared to net income of approximately $21.5 million, or $0.46 per diluted share, in the prior year period.
Excluding certain marketing and consulting costs incurred associated with DAYTONA Rising, accelerated depreciation, losses associated with the retirements of certain other long-lived assets, DAYTONA Rising project capitalized interest, and net gain on sale of certain assets, non-GAAP net income for the second quarter of 2015 was $16.5 million, or $0.35 per diluted share.
Non-GAAP net income for the fiscal second quarter of 2014 was $23.4 million, or $0.50 per diluted share.
The year-over-year decrease in non-GAAP net income and diluted earnings per share is driven primarily by the change in timing of the Darlington NASCAR events, non-recurring net revenues and expenses related to the transition of merchandise operations to Fanatics and depreciation expense for assets placed in service during 2015 related to DAYTONA Rising prior to the completion of renovations in 2016. ■