Forum: HoseHeads Sprint Car General Forum (go)
Moderators: dirtonly  /  dmantx  /  hosehead

Sheesh Gojira is that "c.y.a. clause" all what's got your knickers in a knot? FYI - DIRT's had that blurb in their filings for at least a couple of years. The well has nearly gone dry a few times before but somehow they keep finding enough water to keep themselves afloat and quench my thirst for racing.

Am I the only one that finds it odd that you just joined yesterday -- apparently for the sole purpose of bashing DIRT's financial statements and yet you claim to be a fan of the sport. You wouldn't happen to be carrying a man-purse full of sour grapes would ya?

Phil Taylor

home-theater-systems-advice.com

The thing I don't understand about some of the posts in this thread is that if those financial statements were from any other company besides one involved in racing, nearly everyone on here would look at them and have serious reservations about the future of the company.

I am not an accountant, but my degree is in business administration. In college, I took financial accounting, managerial accounting, cost accounting, financial management and multinational financial management. All of those classes deal extensively with corporate financial statements and capital budgeting. Unlike one of the earlier posts suggested, I have enough of an accounting background to understand what I am looking at in the WRG balance sheet, income statement and statement of retained earnings.

The "CYA clause" in the WRG filings is not there because the company is just trying to cover their ass. No publicly traded company would ever do that, since it would scare off any potential investors. The wording contained in the WRG filings is there because the accounting firm preparing the financial statements for WRG sincerely believes that the company is in danger of not having enough cash to meet its obligations. That is the main reason the stock price has fallen to just a pennies a share. No company's stock price falls to pennies a share unless there is very bad news in the firm's financial statements and financial analysts don't believe the company can turn things around.

A public company lives and dies by its stock price. That is one of the basic principles of any finance course. The number one goal of any executive in a publicly trade company, above everything else, is to maximize that stock price. The reason for this is that if the stock price falls too low and the company is seen as being undervalued, the company would be seen as an attractive target for a hostile takeover. When that happens, all the current management of the company would be forced out in the takeover.

I am not saying that to bash the WoO. I am just giving an honest opinion as someone who does have some background looking at financial statements.

Hey Godzilla.............

Coincidence or not?

Race the car three races.  If you don't like it , for 
any reason, return it, without damage, and we'll 
refund all your money, build you a new car, or better 
yet, bring me someone else's design and I'll use that 
to build your next ride!

I find it interesting that you mentioned hostile take over. It seems from the proxy statement that the reverse split is an attempt to prevent just that . I have seen 1-2 or 1-3 reverse splits in the past. They are talking about anywhere between a 1-5 to 1-12 reverse split. I just do not have any faith in the current management. They have slowed the rate of losses but not reverse the fortune of the company. Bottom line is that the money on hand is not enough to cover another year of losses if the rate of loss remains the same. A hostile take over is exactly what the WoO needs right now. Someone who can take over the company sell off the parts of it that are not profitable and then take it back private. I believe if seperate from the rest of the company the WoO sprints would be profitable. I believe they own 5 other racing series along with 5-6 tracks. I tell you who this stock reminds me of and the owners have adopted some of the business practices of the company also. It reminds me a lot of the old CART series.

How dare they provide a product at below cost....

If a hostile take over happened and they sold the non profitable parts they would probably wind up selling the Sprint Car portion.

You say you don't have any faith in the current management. Why? And more importantly why do you even care? Are you heavily invested? Do you even go to the WOO Sprint races? Do you even like sprint car racing?

I ask those questions because if you are not invested in the company, and I am not talking a couple hundred dollars, than their financial statements don't mean squat to you. If you like sprint car racing and going to the races then they are doing everything that is expected of them. Like I said, they are not perfect but they are still the best thing going. Very few sprint car drivers or owners would not compete in the WOO if money were no object. Why some fans have such a problem with whoever the current management has been for the last 6-7 years is beyond me.

Kenny - The statement made that if they improve the company they get more in return is actually quite true. They may not have all the right answers and they do screw things up from time to time but I am sure everything they do is with the intention of increasing the net worth of the company thereby increasing their own worth. Thinking they are doing what ever they do to destroy sprint car racing is what is laughable.

Can you explain the USAC comment? I may have missed something there.

John, it has nothing to do with providing a product at below cost. It WRG was providing a product at below cost, that would mean they had a positive net income and positive cash flow. In my previous post, I was just trying to explain why it does matter that a company's stock price has dropped to virtually nothing. NO company wants their stock price to drop to pennies. Only bad things can happen when that occurs. Sometimes a company's stock price falls so low that it is profitable for someone to buy up all the stock just to sell the assets in pieces.

I know some of you guys hate what Gojira is saying because you think it is just negative about the WoO, but the guy has been correct in everything he has said in terms of how the WRG financial statements and tiny stock price really do matter if you are a Sprint Car fan.

"Sometimes a company's stock price falls so low that it is profitable for someone to buy up all the stock just to sell the assets in pieces."

Happen to me a couple of times as a vender to companies that declared bankruptcy, someone comes in buys the assets and leaves the venders out in the cold.

Singlefile - I think you misunderstood. I was being sarcastic first off. Second, I meant it was costing them more to provide us a WOO show than they recoup.

I don't disagree with the financial statements either. I just don't see how they matter. People have been claiming doom and despair since they took over. They still put on races and still pay the bills. As long as there are races to go to (and there always will be) then what does there financial statement have to do with the time of day? And if these guys are so bad, then wouldn't you want a hostile takeover? Then someone ????? who only cares about making a profit can take over and get rid of everything that does not. Sprint car racing can be handed back to the tracks blah blah blah.

Then everyone can have a new batch of people to bitch about.

Like I said, I just don't see how the finances of the company effects me as a fan.

OK, here's what I don't understand. You have an organization that has, within the past two years under its current management, paid ALL of its obligations to its raceteams (purse, point fund (the largest in the history of the sport), ect.), bought and paid for the most viewed TV package for sprint car racing, ever, helped organize the sport in relation to rules by bringing in the variious sanctions and tracks to discuss the state of the sport and its future, races 90 times a year with the most teams in the organization's history, and now has successfully brought on a series title sponsor. Oh, and made it through the troubles of "the split"

Just what is it you want that isn't already available or that isn't being worked on daily by the management? More has been accomplished over the last two years than in the last ten, at least. Yes, some things have changed. It's not TJ's WoO anymore. Some things are done differently because they have to be done differently to survive and grow.

Tell me this...how do the finacial stats, good, bad or indifferent, affect the quality of the product and ticket sales? I don't own any stock in the company and I would think those who do have a reason for investing and know what they are doing. The World of Outlaws has existed for thirty years and most of those years people have been scratching their heads and wondered how. But, the WoO is still here.

Again, the quality of the product on and off the track, ticket sales and being a leader for the growth of the sport, locally and nationally...that's what I'm interested in. Maybe somebody can show me where I'm wrong....

John, the way it affects you as a fan is that there are financial analysts sitting all over the country that spend their entire day looking at the stock price of companies and then comparing what the assets are worth if they would be liquidated compared to that stock price. If another company would come in and stage a hostile takeover of WRG, that company almost certainly would not be doing so because they think they could provide a better racing product to fans. A hostile take over would likely occur because the acquiring company thinks the assets would be worth more by selling them than by presenting racing all over the country.

Although I highly doubt we will ever see that happen, I would put a paycheck on the fact that if it did, within 30 days there would be a new national touring series on the road.

There will always be racing (sprint cars included) regardless of what happens to the sanctioning body.

John, If you read my USAC, I was using that as my example of what tics me off. I have my grips just like everyone else. It's OK.... I've said it before, loved em when they came and liked it when they left. This time they stayed and in my opinion messed up one of the best rivalry's ever and---never mind LOL

To me the OUTLAWS is just a name. This group running as "OUTLAWS" is about as far away from the original outlaws it is laughable. I still like to see the best of the winged boys keeping the show going though. Soooooo, who can name a driver today that runs the closes to the old spirit of the outlaws?

Kenny

Half the lies they tell about me aren't true. 

Hockett

Sorry Kenny, just did not understand. I see your meaning now.

To answer your question. Next year I will have to say, Tim Kaeding and the Tom Rolfe trucking #10. Same for the later part of this year.

The first time I saw Hockett on the big 1/2 at manzy in the AZ#2 in a hot lap session, I started asking everyone around me who in the hell was in that car. I just couldn't believe it was this kid from Missouri and as far as anyone knew his first time at Manzy. I've seen the best non-wing drivers that have ever wheeled a car around Manzy and Ascot and trust me this guy is special. He did run with more than a few sanctioning bodys and ran wings as well. There must be a old timer out there that just shows up just for the money shows though..mmmmmmm

Kenny

Half the lies they tell about me aren't true. 

How long is it going to be before dirt motorsports starts selling off tracks, series or whatever? If it has not already stated happening.

The huge difference between the WoO under Ted and WRG is that it is now a public company. Everything changes when a company goes public. When a company goes public, all their financial statements are made public for the world to see. When you have a private business, like Ted did, you can take the night's sanctioning fee to the casino and drop it all and not have to answer to anyone.

I don't doubt for one second that there will be another national sanctioning body to step up and fill the void if WRG does eventually go bankrupt. I just wanted to clarify some things that were said in this thread that were very inaccurate about GAAP (Generally Accepted Accounting Principles). That blurb in the WRG SEC filings about the company possibly not enough cash to sustain operations is not just there for the hell of it. Any time a line like that appears in a company's SEC filings, it is a signal to possible investors that they should run as far away as they can from that company.

Whatever......I'm offically sick of this shit!  Ted Johnson, Tom Deery......who really gives a rip one?  Neither one of them were/are fit to wipe the sweat from Fred Brownfield's brow.

I'll miss a "national" series in sprint car racing if DIRT/WRG folds, and do not think, especially in light of the NST's premature demise, that anyone else is soon to pick up the challenge. 

So, says I, thank God for Advanced Auto Parts!

Hey.....ya think we can apply GAAP to Boundless/DIRT/WRG's cash flow problems as it correlates to Richard Petty's departure from the "rival" venture in late 2005?

Merry Christmas Lonnie Parsons, Don Lamberti, Guy Stockbridge, Debbie Brownfield........Steve Kinser, I hope Santa brings you a bag of rocks!

"As long as I can have a fast boat, a margarita 
machine and can light my hair on fire, I'll be just 
fine."

Jason Giambi

"There must be a old timer out there that just shows up just for the money shows though..mmmmmmm"
Winged, Non-Winged or both?

Hockett! He was quite a surprise to the SCRA boys in 04 when he took their money at Lakeside.

John you are correct in some of your statements. They have paid their bills so far and have purchased a top television package with ESPN. The company has from the beginning and is still operating in the red with net losses for the first three quarter of 2007 around $8 million. The fourth quarter ended on Dec 30th and the fourth quarter filings are not due out till after the stock holders meeting. Although they may release the numbers by the meeting on Thursday. In the past the company covered it's losses and paid it's bills by use of the IPO (initial public offering) money and by issuing Class D preferred stock. Part of the refinancing package being voted on at the shareholders meeting is to convert all of the class D preferred stock to common stock and or Class E preferred. With the class D stock the company is required to pay dividends until they are redeemed. The company is also required to buy back all of the class D stock if the company becomes profitable. At the end of the third quarter the company had $6 million cash on hand. This is not factoring any losses for the fourth quarter of 2007. The fourth quarter loss for 2006 was $4 million. The company has slowed the rate of loss so the losses for the fourth quarter most likely will not be $4 million. Even if the loss is only half of the 2006 fourth quarter that will mean a $2 million loss for the final quarter. Bringing the cash on hand down to $4 million for 2008. Even with the Title sponsor the cash on hand will be at most $5 million. That would require the company to cut it's losses in half in 2008 compared to 2007 to prevent it from running out of cash. The Outlaws will remain a viable series, but it is not beyond the realm of possibilities that the company may look to chapter 11 protection to allow it to reorganize. The shareholders meeting will have some interesting moments. The main item will be to approve the reverse split. The company needs to get the 1-12 reverse split while the price is still above $.34. A 1-12 reverse split at $.34 will raise the stock price to $4.08. The target price is $4.00 so the company is eligible to be listed on the NASDAQ. Two weeks ago someone went on a buying spree purchasing almost 400,000 shares and shot the stock price up to $.60. But once the effect of the buying spree was over it was only a couple of trading days before it was back to it's old price level. It is trading today at $.36, but if it goes and stays below the $.34 price then any possible gains from the reverse split are lost. Another interesting item is that the company will officially change it's name to Worlds Racing Corp and remove the words DIRT from it's name.