Churchill Downs Reports 3Q Results

Oct 31, 2009 (Close-Up Media via COMTEX) -- CHDN | Quote | Chart | News | PowerRating -- Churchill Downs (CDI) has reported results for the third quarter and nine months ended September 30.

In a release dated October 28, the company stated:

- Net revenues from continuing operations for the third quarter of 2009 totaled $100.9 million, an increase of $1.3 million, or 1 percent, over the $99.6 million recorded during the third quarter of 2008 primarily due to increased wagering through the company's Online Business and increased Gaming revenues from the slot operations at Fair Grounds, which opened its permanent facility during November 2008. Partially offsetting these increases was a decline in pari-mutuel revenues primarily at Arlington Park and Calder Race Course coupled with other weakness in sponsorship, group and concession revenues that we believe was caused by continued weakness in the U.S. economy.

- Total EBITDA from continuing operations for the third quarter of 2009 declined $1.4 million, or 12 percent, to $9.7 million compared to $11.1 million during the third quarter of 2008. Growth in Online Business EBITDA was more than offset during this period by a decline in EBITDA of Racing Operations.

- Net loss from continuing operations for the quarter was $1.2 million, a decrease of $3.5 million from net earnings of $2.3 million recorded during the third quarter of 2008. During the third quarter of 2009, the company recognized $2.3 million of income tax expense associated with proposed adjustments that arose during an audit of the company's income tax returns for the years 2004 through 2007 by the Internal Revenue Service.

- The company's Online Business continued to grow rapidly. Handle wagered through TwinSpires.com during the third quarter of 2009 increased 43 percent over the third quarter of 2008. The growth was driven by access to new racing content that was not available in the third quarter of 2008, an increase in customers and higher average daily wagering.

- On a continuing operations basis, year-to-date net revenues increased 3 percent, year-to-date EBITDA decreased 13 percent, and year-to-date net earnings decreased 25 percent over the first nine months of 2008. EBITDA and net earnings from continuing operations for the nine months ended September 30, 2008 included $17.2 million of insurance recoveries.

President and Chief Executive Officer Robert L. Evans said, "Total pari-mutuel handle for the U.S. thoroughbred industry, according to figures published by Equibase, declined 10 percent during the third quarter compared to the same period in 2008. While we outperformed the industry, with our total pari-mutuel handle down only 3 percent during the third quarter, gains in our other business segments didn't offset the decline in racing.

"Our introduction of night racing at Churchill Downs Racetrack and high-definition live racing video from our racetracks, the NTRA Safety & Integrity Alliance accreditation of our racetracks, and our recently announced $1.5 million supplemental purse contribution at Churchill Downs Racetrack are significant investments intended to improve the performance of our Racing Operations.

"But, given the economy and industry handle declines, it is increasingly difficult to earn an acceptable return on those investments."

Churchill Downs, headquartered in Louisville, Ky., owns and operates horse racing venues throughout the United States.

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