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Championship Auto Racing Teams, Inc. (NYSE: MPH) today
announced financial results for its first quarter ended March
31, 2002, in line with management expectations, as adjusted.
The number of events held in a particular quarter affects the
comparability of earnings information from quarter to quarter.
CART conducted one event in the first quarter of 2002 and
2001. Indy Lights, which was discontinued for 2002, conducted
one race in the first quarter of 2001. Toyota Atlantics
conducted one race in the first quarter of 2002 compared to no
races in the same period in the prior year.
Total revenues for the first quarter of 2002 were $5.6
million, a decrease of $836,000, or 13%, from the comparable
quarter of 2001.
Total expenses for the first quarter of 2002 were $7.6
million, a decrease of $684,000, or 8%, from the comparable
quarter of 2001. The decrease primarily reflected a timing
difference in the company's marketing expenditures in 2002
compared to 2001, as well as a decrease in recruiting and
strategic planning consulting expenses. The decrease was also
partially attributable to a pre-tax, non-recurring charge of
$386,000 in 2001 that resulted from an employee severance
agreement. These decreases were partially offset by an
increase in race distributions due to a participation fee paid
to all of the CART teams. Net loss for the first quarter of
2002 was $594,000, or $0.04 per share, compared with net
income of $81,000, or $0.01 per share, in the first quarter of
2001.
"First quarter results are on track with our plan," said
Thomas L. Carter, CART's chief financial officer. "Because of
CART's changed business model, especially as it relates to
television revenues and expenses, these results are not
necessarily comparable to our performance in 2001. Revenues,
as expected, reflect lower contributions from television and
sponsorships, as well as from engine leases, rebuilds and
wheel sales. Also, the first quarter reflects just one race of
our 20-race season."
CART's first race of the season, the Tecate/Telmex Monterrey
Grand Prix, on March 10, in Monterrey, Mexico, boasted a
three-day estimated attendance of 236,000 fans. Subsequent to
the close of the quarter, the Toyota Grand Prix of Long Beach,
on April 14, drew a three-day record crowd estimated at
250,000 fans.
Christopher R. Pook, CART's president and chief executive
officer said, "Our turnaround of CART has just started. We
have moved quickly in the first three months of 2002 to
strengthen our management team, streamline the organization,
energize a new marketing-driven environment and enhance our
racing schedule. We see 2002 as a transition year, and we are
just beginning to unlock the great potential of CART as a
powerful sports entertainment and marketing vehicle."
During the first quarter, CART commenced new television
agreements with Fox Networks, Speed Channel and CBS; announced
new race venues in Florida -- the Grand Prix of the Americas
in Miami and the Grand Prix of St. Petersburg (commencing in
2003); and renewed several sponsorships. For 2002, the company
has also added a second race in Mexico, the Mexico Gran Premio
in Mexico City, and a third race in Canada, the Molson Indy
Montreal, in addition to the Grand Prix of Denver, while
reducing the concentration of races in the Midwest.
In April, CART announced MG Rover Group as the first
manufacturer to officially confirm participation in CART under
the organization's new rules that call for 3.5-liter V-8
racing engines commencing with the 2003 season. Management
also confirmed that they are continuing discussions with
additional manufacturers.
Carter noted that at the close of the 2002 first quarter,
CART's balance sheet continued to be strong with cash and
short-term investments of $121.4 million, working capital of
$109.0 million and no debt.
2002 Financial Guidance
CART announced financial guidance for 2002 on March 6. In
addition, CART reported anticipated expenditures of $1.2
million for the company's pending move to Indianapolis,
Indiana, in its most recent 10-K filing. These relocation
expenses are forecast to have a $780,000 after-tax effect, or
$0.05 per diluted share. At this time, because of the very
early stage of the racing season, the company is not updating
the previous guidance, as adjusted for the Indianapolis
relocation. As the season progresses and the company gains
more experience with its new business model and/or as events
of significance change or provide more insight for the
performance of the company, guidance will be reiterated or
updated.
--CART--
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Ricardo González
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