International Speedway Corp. (NASDAQ:ISCA) Q1 2019 Earnings Conference Call - Final Transcript
Apr 04, 2019 • 09:00 am ET
Greg S. Motto
lower capitalized interest associated with the ISM and ONE DAYTONA projects in the prior year. Equity in net income from equity investments of approximately $5.5 million represents our 50% interest in the Hollywood Casino at Kansas Speedway and to a lesser extent, our approximate 33% equity interest in the Fairfield Inn hotel at ONE DAYTONA. This compares to approximately $4.3 million in the first quarter of 2018. The increase is primarily due to higher operating profits at the casino. For the quarter, we received cash distributions from the casino totaling $6.2 million. The effective tax rate for the first quarter of fiscal 2019 was 24.5% compared to a benefit of 391.5% in the first quarter of 2018.
In the first quarter of fiscal 2018, we recorded a one-time non-cash material reduction in our deferred income tax liability as a result of the lower federal tax rate associated with the Tax Cuts and Jobs Act of 2017. Excluding this benefit, the effective tax rate for the first quarter of 2018 was 26.1%. Net income for the three months ended February 28, 2019 was $21.6 million or $0.50 per diluted share on approximately 43.4 million shares outstanding. However, when you exclude non-capitalized non-recurring acquisition costs related to the purchase of assets of Racing Electronics, costs associated with the NASCAR offer, and certain non-recurring costs for the removal of assets and accelerated depreciation incurred in connection with the infield project at Talladega; we posted earnings of $0.57 per diluted share for the first quarter of fiscal 2019 compared to non-GAAP net income for the first quarter of 2018 of $0.60 per diluted share and adjusted EBITDA was $64.4 million for the first quarter of fiscal 2019 compared to $65.8 million in the first quarter of fiscal 2018.
As for the balance sheet and future liquidity, at quarter-end our combined cash and cash equivalents totaled $273.2 million and shareholders' equity was $1.7 billion. Our deferred income was $71.3 million, down approximately $26.5 million from the same period in the prior year. The decrease in deferred income is primarily due to the change in accounting associated with the new revenue recognition standard, which requires netting of certain accounts receivable and deferred income items and unearned sponsorship revenue deemed uncollectible associated with a sponsor that recently filed Chapter 7 bankruptcy. At the end of the quarter, total principal outstanding on debt was approximately $257.1 million, which includes $165 million in senior notes, $46.3 million in TIF bonds associated with the Kansas Speedway, and $45.8 million for our term loan on our headquarters office building.
We currently have no borrowings drawn on our $300 million revolving credit facility. As it relates to capital spending; for the three months ended February 28, 2019, we spent approximately $25 million including capitalized interest and labor. Now for capital allocation. Our plan remains as previously communicated. We have established a long-term capital allocation plan to ensure we generate sufficient cash flow from operations to fund our working capital needs, capital expenditures