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Edited Transcript of ISCA earnings conference call or presentation 4-Oct-18 1:00pm GMT

Q3 2018 International Speedway Corp Earnings Call

DAYTONA BEACH Oct 6, 2018 (Thomson StreetEvents) -- Edited Transcript of International Speedway Corp earnings conference call or presentation Thursday, October 4, 2018 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Gregory S. Motto

International Speedway Corporation - Executive VP, CFO & Treasurer

* John R. Saunders

International Speedway Corporation - President

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Conference Call Participants

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* Gregory R. Pendy

Sidoti & Company, LLC - Research Analyst

* Jaime M. Katz

Morningstar Inc., Research Division - Equity Analyst

* Spencer Christian Hanus

Citigroup Inc, Research Division - Associate

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Presentation

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Operator [1]

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Good morning, and welcome to the International Speedway Corporation 2018 Third Quarter Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded on Thursday, October 4, 2018.

With us on this morning's call are John Saunders, President; and Greg Motto, Executive Vice President and Chief Financial Officer. After formal remarks, John Saunders and Greg Motto will conduct a question-and-answer period. (Operator Instructions)

Before we start, the company would like to address forward-looking statements that may be addressed on the call. Forward-looking statements involve risks and uncertainties and assumptions. Actual future performance, outcomes and results may differ materially from those expressed in these forward-looking statements. Please refer to the documents filed by International Speedway Corporation with the SEC, specifically the most recent reports on Form 10-K and 10-Q, which identify important risk factors, which could cause actual results to differ from those contained in these forward-looking statements.

So with these formalities out of the way, I will now turn the conference over to Mr. John Saunders. Mr. Saunders?

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John R. Saunders, International Speedway Corporation - President [2]

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Thank you, and good morning, everyone, and thanks for joining us today on our third quarter call. Overall, third quarter financial results are in line with expectations and the 2018 outlook despite certain attendance-related headwinds that impacted admissions revenue. Our non-GAAP earnings improved to $0.26 per share from $0.06 per share in the third quarter of 2017. Key to this improved performance was the date realignment at Chicagoland from the fourth quarter of 2017 to the third quarter of 2018.

During the quarter, we hosted 5 NASCAR Cup weekends and 1 IMSA event. Attendance for the comparable NASCAR events was down approximately 14% on average, and the average ticket price decreased to $83.88, or approximately 2.5%. Contributing to the attendance declines were an inclement weather forecast and subsequent rain delay at Michigan and extreme heat impacting the area at Chicagoland. These weather-related impacts were compounded by current headwinds in the ticket sales facing the sport. On a bright note, Watkins Glen announced the fourth consecutive sellout of reserved grandstand seats for its Monster Energy NASCAR Cup Series event held during the quarter.

Looking into the fourth quarter, we hosted the Bojangles' Southern 500, the fourth annual throwback weekend at Darlington. Attendance was near capacity and the event continues to be well received and engaging with fans and stakeholders, bringing together the storied past of the sport with NASCAR's most competitive drivers. Also in September, the Monster Energy NASCAR Cup Series visited Richmond, where the event is now part of the Cup Series playoffs. At the event, Richmond debuted the DC Solar Fangrounds, which left fans star struck as they got closer to the action and their favorite drivers. For the first time, fans gained access to the garage area and watched the race teams strategize as they geared up for competition. This is an experience unmatched by any other facility.

We have 5 Monster Energy NASCAR Cup Series events remaining at ISC facilities for the quarter. While we face continued pressure on advance sales, we remain optimistic our consumer-focused marketing and sales initiatives are working to bring ticket sales in line to deliver stronger admission and admission-related results. Our initiatives will continue to target new and lapsed customers through all traditional media, social and digital channels, the overall objective to spark interest in demand and to drive growth in fan engagement. Our strategies are focused on value-added options that enhance the live motorsports experience, including exclusive VIP hospitality experiences and driver appearances. We have included ticket packages aimed at youth and younger demographics with kid pricing and family-targeted promotions.

Recently, we announced the ISC weather protection program, which allows guests who purchase a grandstand ticket the ability to exchange tickets for a rescheduled NASCAR event at an ISC facility for a future NASCAR event within the ISC portfolio. Additionally, fans can ensure their ticket purchase from other travel-related encumbrances through FanShield, a travel insurance product offered through our partnership with TicketGuardian. We believe this comprehensive program will encourage fans to purchase tickets earlier in the sales cycle, providing financial assurance when planning a ticket purchase.

Our new Sales Academy, a program to attract and develop top sales talent, continues to ring the bell. The academy focuses on targeting sales resources towards at-risk or lapsed accounts by establishing account relationships and custom packages. Also the recent realignment of certain ISC and NASCAR officers has resulted in new and innovative revenue opportunities aimed to narrow the industry focus and promotional asset inventory toward 2 primary objectives: attendance and viewership. We expect this integrated sales culture to boost revenues for the sport going forward.

Our financial position is strengthened by our contracted corporate sales and broadcast agreements that provide long-term visibility. NASCAR is a powerful brand with a loyal fan base that we believe is aware of, appreciates and supports corporate participation to a greater extent than fans in any other sports property. We continue to drive the business forward with corporate partnerships. Nearly half of Fortune 100 companies and 25% of Fortune 500 companies invest in NASCAR.

Currently, we have agreements in place for approximately 95% of our 2018 goal and secured race entitlements for all 2018 NASCAR Cup and XFINITY Series events. From a broadcast perspective, the Monster Energy NASCAR Series remains strong with over 43 million unique viewers rated the #1 or #2 sport event of the weekend 14 times in 2018 through Richmond. NASCAR digital platforms have delivered strong growth. Total consumption across digital platforms is up 10% year-to-date. We are also seeing an increase in participation of NASCAR Fantasy Play, up 135% versus 2017. Domestic broadcast rights fees, which include digital streaming, continue to provide significant cash flow visibility to us, race teams and NASCAR over the contract term through 2024. We believe we are well positioned to navigate the evolving media landscape through our long-term partnerships with industry leaders, NBC and Fox.

We remain sharply focused on facility optimization. Matching supply and demand improves yield, and as importantly, compromised or outdated inventory is removed, allowing our tracks to repurpose such areas to elevate the guest experience with innovative offerings that generate more revenue. We recently completed facility optimization projects at 6 tracks in 2018. Construction at ISM Raceway is progressing on schedule as we anticipate the opening in November for the Can-Am 500 NASCAR Semi-Final Weekend. The redevelopment focuses on new and upgraded seating areas, vertical transportation options, new concourses and enhanced hospitality offerings and an intimate infield fan experience with greater accessibility to prerace activities. The previously announced partnerships with ISM Connect and DC Solar have positioned the project well to achieve the desired result. The cost of the project will be approximately $178 million, which includes approximately $60 million of critical maintenance.

Recently, our Board of Directors approved a project for the renovation of the infield at Talladega. This redevelopment project will offer new attractions and enhanced amenities for fans, sponsors, teams and stakeholders in the famous historic Talladega infield. The redevelopment project will include new interactive Garage Fan Zone Experience, a paddock club to enhance the experience of our fans and corporate guests, new Gatorade Victory Lane with up-close fan view, expanded premium RV camping on the frontstretch and near the Alabama Gang Superstretch, and a new turn 3 vehicle tunnel providing unobstructed ingress/egress access to the infield for haulers and RVs. The approximately $50 million project is included in our 5-year $500 million capital allocation plan, covering fiscal years 2017 through 2021. Construction is expected to commence in the fall of 2018 and be complete in the fall of 2019.

We continue to seek opportunities that increase utilization of our facilities on a year-round basis. In the third quarter, we hosted the fourth consecutive Faster Horses Country Music Festival at Michigan and HARD summer electric music festival at Auto Club Speedway. The economics of both agreements provide a risk-free partnership for ISC, while participating in upside of ticket sales at net concessions revenue. Development at ONE DAYTONA continues to gain momentum as tenants complete construction and commence operations. Recently, GameTime, the ultimate destination for family entertainment, opened its 35,000-square-foot location, providing guests with many entertainment options, including bowling, arcade games and a full-service restaurant and sports bar.

The DAYTONA, the Marriott Autograph Collection Hotel, is progressing with an anticipated opening in the early 2019. Entertainment continues to be the focus for ONE DAYTONA, with Victory Circle fast becoming the development's focal point, already hosting events from live music and car shows to meet and greets and community festivals. We anticipate ONE DAYTONA to be a desirable destination for retail, dining and entertainment in the Daytona Beach area.

ISC maintains strong visibility of future cash flow with half -- with over half of its revenue secured through the industry's 10-year broadcast agreement and multiyear partnership agreements. We will continue our strategic focus on consumer marketing initiatives to deliver growth through our core business. We will seek opportunities for increased utilization of our facilities through ancillary events. In addition, investments in qualified developments like the Hollywood Casino and ONE DAYTONA will provide further growth and shareholder value.

I will now turn the call over to Greg to give you the financial review for our quarter and the outlook for 2018. Greg?

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Gregory S. Motto, International Speedway Corporation - Executive VP, CFO & Treasurer [3]

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Thanks, John, and good morning, everyone. Before reviewing the financial results, it's important to note several items impacting fiscal year-over-year third quarter comparability. These include the Monster Energy NASCAR Cup, XFINITY and Truck series events were held at Chicagoland Speedway in the third quarter of fiscal 2018 compared to fourth quarter of fiscal 2017. We hosted a music festival at Auto Club Speedway in the third quarter of fiscal 2018. We received rents and incurred operating expenses related to ONE DAYTONA as a result of certain tenants commencing operations in 2018. In the third quarter 2017, we recognized a gain on sale of certain assets, accelerated depreciation and removal of assets not fully depreciated related to the redevelopment project at ISM Raceway, the infield project at Richmond and facility optimization projects at certain tracks; capitalized interest associated with ISM Raceway and ONE DAYTONA; and we recorded a nonrecurring noncash charge to income tax expense of approximately $2.1 million in the third quarter of 2017 related to the impairment of a deferred tax asset. And in 2018, we have a lower effective tax rate associated with the Tax Cuts and Jobs Act. All of these are outlined in the earnings news release and are included in the GAAP to non-GAAP reconciliation where appropriate.

Now looking at the income statement. Admissions revenue for the third quarter was $24.4 million, an increase of approximate $1.6 million compared to the same period in 2017. The approximate 7% increase is primarily related to the aforementioned events at Chicagoland Speedway in the third quarter of fiscal 2018 as compared to the fourth quarter of fiscal '17. Partially offsetting this increase were lower attendance and admissions for NASCAR and other events held during the period, some of which were impacted by inclement weather.

The increase in motorsports and other event-related revenues to $117.4 million is primarily due to the aforementioned events at Chicagoland Speedway as well as increased TV broadcast rights and advertising, partially offset by track rentals and certain sponsorships and other related revenues. ISC's domestic television broadcast and ancillary revenues were $80.1 million for the quarter. The increase in food, beverage and merchandise revenue to $12.2 million is primarily related to the aforementioned music festival at Auto Club Speedway, slightly offset by lower attendance for certain NASCAR and other events. The increase in other revenue to $5.3 million is primarily related to rents received from tenants at ONE DAYTONA.

NASCAR event management fees increased to $44.3 million. The increase is predominantly due to the aforementioned events at Chicagoland Speedway as well as variable costs driven by higher television broadcast rights for NASCAR Monster Energy Cup, XFINITY and Camping World Truck Series events and contracted increases in non-TV NASCAR event management fees.

Motorsports and other event-related expense increased to $37.3 million, primarily due to the aforementioned events at Chicagoland Speedway. Also contributing to the increase were costs related to certain sponsor activation and guest amenities to our NASCAR and other events. Food, beverage and merchandise expense increased to $9.9 million. The increase is related to the aforementioned music festival at Auto Club Speedway, slightly offset by lower attendance for certain NASCAR and other events. Other operating expense increased to $2.5 million, primarily related to operating costs associated with ONE DAYTONA.

General and administrative expense decreased to $26.8 million. The decrease is primarily due to reductions of property taxes, rents, supplies and certain administrative costs, partially offset by increases in insurance claims related to storm damage at certain facilities. Depreciation and amortization expense decreased to $26 million for the quarter, largely due to lower accelerated depreciation associated with ISM Raceway and Richmond projects as well as assets that have been fully depreciated or removed from service, partially offsetting our new assets placed in service associated with ONE DAYTONA. Losses on asset retirements increased to $2.2 million, primarily due to removal of assets not fully depreciated in connection with facility optimization initiatives in the ISM Raceway project.

Interest income increased approximately $1 million for the quarter, primarily related to higher yield on short-term investments. Interest expense of $2.6 million decreased slightly as a result of higher capitalized interest for the ISM Raceway project, partially offset by lower capitalized interest related to ONE DAYTONA. Equity and net income from equity investments of approximately $5.8 million represent our 50% interest in the Hollywood Casino at Kansas Speedway, and to a lesser extent, our approximate 33% interest in Fairfield Hotel at ONE DAYTONA. This compares to approximately $4.6 million in the third quarter of 2017. The increase is primarily due to higher operating profits and lower depreciation for assets fully depreciated at the casino.

The effective tax rate for the third quarter of fiscal 2018 was approximately 17% compared to 94% in the third quarter of '17. This is primarily due to lower federal income tax rate from 35% to 21% associated with the recently enacted Tax Cuts and Jobs Act, and to a lesser extent, lower tax liabilities in certain states. Also in the third quarter '17 includes the aforementioned impairment of the deferred tax asset. For fiscal 2018, we expect the effective tax rate to be between 25% and 26%.

Net income for the 3 months ended August 31, 2018, was $12 million or $0.27 per diluted share on approximately 44.1 million shares outstanding. However, when you exclude certain nonrecurring costs, removal of assets and accelerate depreciation incurred in connection with the ISM Raceway, the infield project at Richmond and facility optimization initiatives, capitalize interest related to ISM Raceway and ONE DAYTONA, and the income tax benefit related to Tax Cuts and Jobs Act, we posted earnings of $0.26 per diluted share for the third quarter of fiscal 2018 compared to non-GAAP net income for the third quarter of 2017 of $0.06 per diluted share. And adjusted EBITDA of $46.9 million for the third quarter of fiscal 2018 compared to $39.4 million for the third quarter of fiscal 2017.

As for the balance sheet and future liquidity. At quarter-end, our combined cash and cash equivalents totaled $278.4 million and shareholders' equity was $1.6 billion. Our deferred income was approximately $72 million, down approximately $12.1 million from the same period in the prior year, primarily due to the aforementioned events at Chicagoland Speedway. At the end of the quarter, total principal outstanding on debt was approximately $260.7 million, which includes $165 million in senior notes, $49.4 million in TIF bonds associated with Kansas Speedway and $46.3 million of 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 9 months ended August 31, 2018, we spent approximately $122.2 million, including capitalized interest and labor. As for our 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 at existing facilities, return of capital through payments of an annual cash dividend and repurchase of our shares under our Stock Purchase Plan. We operate under a 5-year capital allocation plan adopted by our Board of Directors covering fiscal years 2017 through 2021. Components of this plan include capital expenditures at existing facilities, the ONE DAYTONA development project and return of capital to shareholders.

For existing facilities, we expect capital expenditures up to $500 million from fiscal '17 through fiscal '21. These include the previously discussed reinvestment at ISM Raceway and Richmond projects and the recently announced infield renovations at Talladega as well as all other maintenance and guest experience capital expenditures for the remaining existing facilities. While many of these components of the expected projects will exceed weighted average cost of capital, considerable maintenance capital expenditure is estimated at approximately $40 million to $60 million annually will likely result in a blended return on invested capital in the low to mid-single digits.

In addition to the $500 million in capital expenditures for existing facilities, we expect we'll have an additional $107 million of capital expenditures, net of any public incentives related to ONE DAYTONA and the Shoppes at ONE DAYTONA. Since commencement of construction for ONE DAYTONA from fiscal 2016 through the third quarter of fiscal 2018, capital expenditures totaled $102.9 million. At stabilization, which we target to be fiscal 2020, we expect this phase of ONE DAYTONA and the Shoppes to deliver incremental annual EBITDA of approximately $10 million and an unlevered return above our weighted average cost of capital.

For fiscal 2018, we expect total capital expenditures associated with our capital allocation plan to range between $140 million and $150 million. This includes between $120 million and $130 million for existing facilities and an additional approximate $20 million in capital expenditures related to the construction of ONE DAYTONA.

As accounting rules dictate, components of our capital expenditure projects result in accelerated depreciation or removal of existing assets not fully depreciated. Additionally, despite not issuing specific debt to fund our projects, accounting rules dictate that the company capitalize a portion of the interest on existing outstanding debt during the construction period. These amounts are more fully discussed in our earnings release and our 10-Q and 10-K filings with the SEC.

Return of capital to shareholders through dividends and share repurchases is a significant pillar of our capital allocation plan. For 2018, our dividend is $0.47 per share, an increase of 9.3%. We expect dividends to increase in 2019 and beyond by approximately 4% to 5% annually. Through August 31, share repurchases for fiscal 2018 totaled 178,000 shares of ISCA on the open market at a weighted average share price of $41.26 for approximately $7.3 million. At August 31, 2018, we had approximately $164.2 million remaining purchase authority under the current $530 million Stock Purchase Plan.

For fiscal 2017 through 2021, we expect our return of capital program to be approximately $280 million, comprised of close to $100 million in total annual dividends and $180 million open-market repurchase of ISC shares over the 5-year period. At this time, we expect this spending to be evenly allocated per year, although we will scale the repurchase program to buy opportunistically.

In summary, we have built the capital allocation plan based on conservative estimates that will maintain a strong financial position, prudently and disciplined reinvestment in the business and provide stable and growing return to shareholders. And this includes the $500 million capital expenditures for reinvestment in our existing facilities, a net $107 million cash for development of ONE DAYTONA and the Shoppes and $280 million in dividends and share repurchase. Our financial and liquidity position has been enhanced by the Tax Cuts and Jobs Act passed by Congress in 2017, which will lower the single corporate tax rate from 35% to 21%. Further, we will continue to explore development or acquisition opportunities beyond the previously discussed initiatives that build shareholder value and exceed our weighted average cost of capital. Should such initiatives be pursued, we will provide discrete information on the timing, scope, cost, financing and expected returns of such opportunities.

And now for our outlook for 2018. In an effort to enhance the comparability and understandability of our forward-looking financial guidance, we adjust for certain nonrecurring items that will be included in our GAAP reporting. We believe this adjusted information best represents our expectations for our 2018 core business performance. Please refer to our earnings release for the list of items excluded from our fiscal 2018 non-GAAP guidance. So for fiscal 2018, we are narrowing our outlook within previously provided guidance range. Our full year fiscal 2018 guidance includes total revenues to range between $675 million, $680 million. Adjusted EBITDA will range between $235 million and $240 million, which includes adjusted EBITDA $25 million to $26 million pretax distributions of the Hollywood casino. Operating margin for 2018 is estimated between 15% and 15.5%. Our non-GAAP effective tax rate is forecasted at 25% to 26% and non-GAAP earnings of $1.90 to $1.95 per diluted share.

In closing, we maintain a solid financial position developed over many years that affords us the ability to follow our disciplined capital allocation strategy and maintain our leadership in the motorsports industry. We have a long-term capital allocation plan that extends through fiscal 2021, demonstrating our ongoing commitment to building long-term value. For the future, we are well positioned to balance the strategic capital needs of our business with returning capital to shareholders. We look forward to speaking with you on our next earnings conference call in January.

With that, I'll turn it back over to the operator, who will lead us through the Q&A portion of the call. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Jaime Katz with Morningstar.

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Jaime M. Katz, Morningstar Inc., Research Division - Equity Analyst [2]

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So I'm curious, part of the fourth quarter, lower implication for the operating margin would be on the lower admission level, there would be some, maybe, deleverage in the expense metrics. Are there any other puts and takes you can help us with to think about the lowered guidance for EBIT just at least over the remainder of the year and if not, going forward beyond that?

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Gregory S. Motto, International Speedway Corporation - Executive VP, CFO & Treasurer [3]

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Well, for 2018 or 2018 guidance includes what we've incurred year-to-date through the third quarter and the outlook for the fourth quarter. Where we've experienced some headwinds and declines in admissions, we've worked prudently on the cost side of the business to manage margins. There is some compression in the margin guidance. But our fourth quarter's going to be little bit mixed. We talked about the success of the Darlington Weekend and its throwback, the success of opening Richmond, really excited about ISM Raceway opening in November and concluding on a strong championship weekend as we have in the previous years. And then, if we get into our next earnings call, we'll be in a better position to provide you guidance on 2019 and beyond.

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Jaime M. Katz, Morningstar Inc., Research Division - Equity Analyst [4]

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Okay. And then you mentioned the weather protection program and you also mentioned weather as a sort of a headwind in the most recent quarter for a few races. Have you guys tested this program anywhere? And if so, can you offer any insight into how it has worked or how you think it will work if you haven't tested it?

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Gregory S. Motto, International Speedway Corporation - Executive VP, CFO & Treasurer [5]

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Well, the experience we have is, in the last 10 years, this impacts about 5% of the events schedule. So it's very minimal from the exposure side. However, what we do believe, it offers another opportunity for our fans when they're making that ticket purchase decision. We offer a lot of opportunities to make that decision purchase early in the cycle from renewals to -- as we go through the sales cycle, we take pricing. So we're really providing that incentive to make that decision early, which provides us and it provides now our fans as well the assurance that they'll be able to experience a good event whether at the scheduled time or at a rescheduled time.

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Jaime M. Katz, Morningstar Inc., Research Division - Equity Analyst [6]

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Okay. And then I think this is the first time we've seen the commentary about updates at Talladega in the press release. Do you guys have an idea of what the returns are going to be on that project or if there are some incremental EBITDA expectation that you expect to squeeze out of the update? I'm just curious if this falls on the positive ROIC project side or negative ROIC project side versus some of the other projects that you've undertaken?

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Gregory S. Motto, International Speedway Corporation - Executive VP, CFO & Treasurer [7]

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Well, we'll handle it like we handled Richmond. It's covered within our capital allocation plan, Jaime. And there will be incremental revenue to it. There's some considerable components of this with reserved camping and RV. In Talladega, we sell that out. And we're going to be adding spots in some really highly valued areas on the frontstretch at the start/finish line and on the backstretch with the Alabama Gang areas. As well, we're going to be providing a new experience that we've seen success within our infield fan zones and expanding that with some social zones. So these are areas that are providing a return for us and are highly sought after by our guests. This is something that's not provided in many other sports and is unique to us. We saw the huge response in Richmond to the new infield area, and we expect another great response in Phoenix. And so for Talladega, we're highly anticipating a favorable response there as well, and it will provide incremental revenue. Now as far as providing the specifics of that, it'll be included in our 2019 guidance. We won't spike out any specific project returns on it.

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Jaime M. Katz, Morningstar Inc., Research Division - Equity Analyst [8]

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Okay. And then just last, out of curiosity, I saw that you sort of ticked up the expectations very modestly for ONE DAYTONA. I think the EBITDA went up to $10 million from $9 million. Are you guys getting better rents than you expected or have the economics changed from what you originally thought, just to bump you up that modest amount?

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Gregory S. Motto, International Speedway Corporation - Executive VP, CFO & Treasurer [9]

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Well, I think it's -- when we did that, we had -- it's when we expanded scope of ONE DAYTONA with the Shoppe. So ONE DAYTONA is the retail area adjacent to the ONE DAYTONA destination development. And that was an additional $12 million of CapEx. So when our original guidance on ONE DAYTONA was $95 million of net cash, we expanded that with the Shoppes to $107 million of net cash CapEx, and we also expanded the return of -- on EBITDA up to $10 million at that time.

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Operator [10]

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Our next question comes from the line of Gregory Badishkanian with Citi.

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Spencer Christian Hanus, Citigroup Inc, Research Division - Associate [11]

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This is actually Spencer Hanus on for Greg. So I just wanted to ask you in regards to attendance, you mentioned in your prepared remarks that it was down about 14%. And I was just curious what impact you see of stars retiring on that attendance figure and anything that you're doing to help mitigate that effect?

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John R. Saunders, International Speedway Corporation - President [12]

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Spencer, this is John. Certainly, as we experienced in 2016 with Jeff Gordon's retirement, there is a junior factor going on this year. But that said, we're very excited that, as we head into the next round of playoffs, that we have young guns, Ryan Blaney, Alex Bowman, Chase Elliott, Kyle Larson going up against our veterans, which are great storylines as we finish out the season. With regard to what are we doing about it? We're -- I would say, at the top of the list is highly -- a high-intensity alignment with NASCAR and all of the racetracks, not just ISC racetracks and redirecting all of the NASCAR assets and track assets solely focused on viewership and attendance. I mentioned earlier, our Academy, this is new to our company where we are, through account relationships and building loyalty and an elevated sales culture, actually outbounding to lapsed and at-risk fans, creating relationships and they're actually pulling people back into the sport. There are a number of initiatives underway targeting younger demographics. I mentioned the kid pricing and I mentioned collegiate programs. I could go on and on and on. But I think at the pinnacle of all of this, which is really a cultural shift for our sport, is the collaboration that's going on across the entire industry. I will give Marcus Smith a lot of credit for what he pulled off last week through innovation and with the launch of the Roval. And the ratings were up, attendance was up, the digital platforms were up. It's that kind of industry coming together with the teams as well that's going to move the needle going forward.

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Spencer Christian Hanus, Citigroup Inc, Research Division - Associate [13]

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Okay, that's really helpful. And then, I guess, on utilization and kind of expanding outside of motorsports. What has been the biggest headwind to kind of expanding those to different events and how do you see that going forward?

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John R. Saunders, International Speedway Corporation - President [14]

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I'm not sure I understand your question, Spencer.

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Spencer Christian Hanus, Citigroup Inc, Research Division - Associate [15]

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In terms of like you mentioned that you highlighted some of the additional events that you've hosted at your racetracks, I'm just curious what else you can do to kind of expand to different events?

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John R. Saunders, International Speedway Corporation - President [16]

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We have a number of irons in the fire and our facilities lend themselves very well to large mass gathering, events -- outdoor events that have a camping component to it. So we're continuing to look at other festivals and concerts with strategic partners. We're looking at other kinds of sporting events that would fit within the footprint of our triovals and so forth. So it's those kinds of things. We have an entire team dedicated solely to ancillary events, and we've had, as I mentioned in my remarks, great success. Now having said that, we are designing those kinds of business models to be less risky to us where we're participating in the upside and participating in the beverage component.

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Operator [17]

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Our next question comes from the line of Greg Pendy with Sidoti.

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Gregory R. Pendy, Sidoti & Company, LLC - Research Analyst [18]

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Can you just share with us, I guess, on the weather protection program. I know some of the other NASCAR event holders do discounts closer to the events, you do not. But is this something that other NASCAR holders have been offering? And is this comparable to some of the protection plans that, I guess, maybe some of the other NASCAR event holders have?

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John R. Saunders, International Speedway Corporation - President [19]

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Yes, other track operators, specifically SMI has a program similar to it. The differential between our plan and theirs is the travel component, where not only are the fans protected in the event that the race is postponed to another day and they can exchange their ticket for a future event, but they can also ensure their travel-related costs of coming to the event. And so we view it as removing a barrier in terms of driving advanced sales, making that purchase decision further out from the event. But it's not new to the industry, but I believe the travel component is new.

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Gregory R. Pendy, Sidoti & Company, LLC - Research Analyst [20]

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Okay, that's helpful. And then, can you just remind us on stabilization of ONE DAYTONA? That's -- you're looking at that as 4 quarters of EBITDA from which date, I guess?

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Gregory S. Motto, International Speedway Corporation - Executive VP, CFO & Treasurer [21]

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Yes. Greg, this is a Greg Motto. We're looking at stabilization in 2020 for ONE DAYTONA. We'll have -- we expect remaining tenants to open up here soon, and the Autograph Hotel, the DAYTONA to open up in 2019 as well. We'll be breaking ground on the residential apartments really soon. So 2020 is our target year for stabilization of the property.

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Operator [22]

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(Operator Instructions) And at this time, there are no further questions. Are there any closing remarks?

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John R. Saunders, International Speedway Corporation - President [23]

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Yes, thank you, Crystal. This is John. I just want to thank everybody for joining us on the third quarter call, and we look forward to speaking with you again in January. Have a great day. Thank you.

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Gregory S. Motto, International Speedway Corporation - Executive VP, CFO & Treasurer [24]

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Thank you, all. Bye.

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Operator [25]

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This concludes today's conference call. You may now disconnect, and have a wonderful day.