Note 7 - Related Party Transactions

6 Months Ended

Jun. 30, 2019

RELATED PARTY TRANSACTIONS

The Company and Sonic Financial Corporation (Sonic Financial), a Company affiliate through common ownership by our Executive Chairman and our Chief Executive Officer, and by a member of our Board of Directors, share various expenses in the ordinary course of business under a shared services agreement. We incurred expenses of

$329,000

and

$460,000

in the

three

months ended

June 30, 2019

and

2018,

and

$736,000

and

$735,000

in the

six

months ended

June 30, 2019

and

2018

under the shared services agreement.

amounts were due from or payable to Sonic Financial at

June 30, 2019

and

December 31, 2018.

The Company and certain SMI subsidiaries lease office and warehouse facilities from companies affiliated through common ownership by our Executive Chairman and Chief Executive Officer, and by a member of our Board of Directors, under annually renewable lease agreements. Rent expense amounted to

$181,000

and

$180,000

in the

three

months ended

June 30, 2019

and

2018,

and

$364,000

and

$362,000

in the

six

months ended

June 30, 2019

and

2018.

Amounts owed to these affiliated companies at

June 30, 2019

December

31,

2018

were

not

significant.

Various SMI subsidiaries purchased new and used vehicles for operations and employee use from certain subsidiary dealerships of Sonic Automotive, Inc., an entity in which our Executive Chairman is a controlling stockholder, and our Chief Executive Officer and a member of our Board of Directors are affiliated through common ownership, for an aggregate of

$19,000

and

$26,000

in the

three

months ended

June 30, 2019

and

2018,

and

$184,000

and

$185,000

in the

six

months ended

June 30, 2019

and

2018.

There were

vehicles sold to SAI in the

three

six

months ended

June 30, 2019

and

2018.

Also, SMI sold through certain speedways and its SMIP merchandising subsidiary various event related inventory and merchandise to SAI totaling

$167,000

and

$231,000

in the

three

months ended

June 30, 2019

and

2018,

and

$451,000

and

$452,000

in the

six

months ended

June 30, 2019

and

2018.

June 30, 2019

and

December

31,

2018,

approximately

$167,000

and

$142,000

was due from SAI and is reflected in current assets.

Oil-Chem sold zMAX micro-lubricant

product to certain SAI dealerships for resale to service customers of the dealerships in the ordinary course of business. Total purchases from Oil-Chem by SAI dealerships were

$422,000

and

$392,000

in the

three

months ended

June 30, 2019

and

2018,

and

$769,000

and

$830,000

in the

six

months ended

June 30, 2019

and

2018.

June 30, 2019

and

December

31,

2018,

approximately

$123,000

and

$217,000

was due from SAI and is reflected in current assets.

The foregoing related party balances as of

June 30, 2019

and

December 31, 2018,

and transactions for the

three

months ended

June 30, 2019

and

2018,

are summarized below (in thousands):

		June 30, 2019				December 31, 2018
Accounts receivable		$	290			$	359

	Three Months Ended June 30:				Six Months Ended June 30:
	2019		2018		2019		2018
Merchandise and vehicle purchases	$	19	$	26	$	184	$	185
Shared services expense		329		460		736		735
Merchandise sales		638		623		1,220		1,282
Rent expense		181		180		364		362

SPEEDWAY MOTORSPORTS INC 10-Q