Motorsports Authentics net sales drop 39.5 percent for first half of 2009 fiscal year
Motorsports Authentics, the merchandise arm of Speedway Motorsports Inc. and International Speedway Corp., saw its net sales drop 39.5 percent for the first six months of its 2009 fiscal year.
Sales fell from $117.698 million for the December-May period a year earlier to $71.172 million for 2009, according to a filing by SMI with the U.S. Securities and Exchange Commission on Thursday.
For the first six months of its 2009 fiscal year, the company lost $6.666 million – compared to a profit of $9.548 million for the first six months of 2008. SMI and ISC had originally projected that Motorsports Authentics would break even in 2009.
While a “significant portion” of the company’s revenues and profits relate to sales of Dale Earnhardt Jr. merchandise, the company noted that no driver’s change of teams in 2009 had as much an impact as Earnhardt Jr.’s change in teams and sponsors for the 2008 season.
“There were no similar changes that favorably impacted MA results for the same periods in 2009,” the company wrote. “Also, MA results for 2009 were negatively impacted by decreased attendance at motorsports racing events and ongoing recessionary conditions and reduced discretionary spending, declining sales to mass retail department stores and specialty retailers, and increased competition for products sold under non-exclusive MA licenses.”
ISC and SMI spent approximately $247.5 million in 2005 to buy Team Caliber and Action Performance to form Motorsports Authentics. They combined to write down $69.499 million in 2007 and combined to write down $111.2 million during the second quarter of 2009. A write-down is a devaluation of the company.
SMI indicated its current investment value in Motorsports Authentics, as of June 30, 2009, was $18.1 million. That means it estimates the company’s worth at $36.2 million.
Motorsports Authentics lost $7.878 million in 2006 and $42.975 million in 2007 (not including the $69.499 million write-down) before turning a profit of $3.199 million in 2008.
