CART - already hit by years of negative cash flow - saw total revenues for the three months ended March 31 reach $6.2m, compared with $5.6m a year earlier. But total expenses for the first three months rose to $20.6m compared to just $7.6m in the same prior-year period.
Net loss for the 2003 first quarter was $9m or $0.61 per fully diluted share, compared to a net loss of $1.6m, or $0.11 per fully diluted share, in the comparable period a year ago.
Most notably - and in the long-term most worryingly - is the continual erosion of the $100m cash fund held by CART since it went public. The cash mountain has always been seen as CART's major strength. However, the continual decline in funds has led many to speculate on the long-term future of the series and project ahead to a time when the cash runs out and outgoings continues to outweigh incomings.
CART balance sheet with cash and short-term investments now stands at $70.6m and working capital of $75.1m.
Said CART CEO Chris Pook: "We continue to face challenges on many fronts especially in the face of a weak economy and global events.
"However, we have strengthened our sales efforts and continue to make strides in promoting CART's advantages as a powerful marketing tool for multi-national companies interested in exploiting the global market place."
Race distributions for the three months was $11m compared to $1m in the same period in the prior year.
Race distributions consist of purse payments, year-end point fund, participation payments, and new in 2003, entrant support payments and team assistance.
Purse and year-end point fund expenses remain the same as in 2002. Race participation payments were increased from the prior year's amount of $10,000 per race, per entrant to $20,000 in 2003.
In 2003, the company began making entrant support payments to participating teams as part of a financial incentive plan to attract and retain teams to compete in the series; the payments are $22,500 per race, per entrant.
Team assistance payments are being made to ensure that there are a sufficient number of race cars competing in our series.
As of March 31, CART had expensed $8m in team assistance. The increase was also partially due to holding one additional race in the three months.
Added Thomas Carter, CART CFO: "The increase in expenses highlights our commitment to invest in our most valuable asset - our teams. This commitment helps to ensure we have a sufficient number of viable teams competing in our series for 2003."
The quarterly results also reflect a change in CART's television agreement with Speed Channel.
In 2003, CART pays for television production and is responsible for selling the advertising inventory, while in 2002 Speed Channel paid for production and received the advertising inventory for races broadcast on their network.
Said the financial statement: "Administrative and indirect expenses were higher than in the previous year's quarter partially due to increases in insurance expense, legal expenses and the timing of certain marketing and promotional initiatives that fell into the 2003 first quarter."
Added Carter: "The increase in administrative and indirect expenses for the first quarter of 2003 is not indicative of what we expect for the year."
In March of this year, CART acquired promotion company Raceworks - its operations have been included in the consolidated financial statements since that date.
