Magna Entertainment, the publicly-held racetrack and off-track betting company, reported that revenues increased to $248.8 million during the first quarter of fiscal 2002, compared with $244.5 million for the same period one year ago.
Net income for the quarter that ended March 31 fell to $18.6 million ($0.22 per share) from a year-earlier figure of $22.5 million ($0.28 per share). Excluding the ongoing sale of non-core real estate, however, Magna had net income of $18.4 million ($0.22 per share), compared with $15.3 million ($0.19) for the same period in 2001.
"We expect that the balance of 2002 will see continued improvements in the operating and financial performance of the racetrack segment of our business through the ongoing integration of our strategic acquisitions and growth in our account wagering operations," said Magna president and chief operating officer Jim McAlpine. "We will also continue to benefit from the sale of our remaining non-core real estate our racetracks operate for prescribed periods each year. As a result, our racetrack revenues and operating results for any quarter will not be indicative of our revenues and operating results for the year. We expect that these seasonal fluctuations will reduce over time as the full impact of our acquisition, off-track betting and account wagering initiatives are realized.
McAlpine said the higher revenues in the first quarter of 2002 reflect primarily the acquisition of MEC Pennsylvania, the additional live race days at Gulfstream, the lease of Portland Meadows, and the launch of XpressBet in the California market and improved results at Santa Anita Park.
Magna reported revenue of $600,000 on the sale of non-core real estate in the first quarter of 2002, resulting in EBITDA (earnings before interest, taxes, depreciation, and amortization) of $400,000, compared to revenue in the first quarter of 2001 of $26.2 million and EBITDA of $12.1 million. McAlpine said Magna would continue to market its remaining non-core real estate, however, the timing of future sales is uncertain.
With a 23 million share stock offering completed last month generating approximately $143.0 million and having increased our its bank lines of credit by arranging a short-term credit facility in the amount of $75.0 million, Magna continues to pursuing acquisitions.
"We are continuing to pursue strategic acquisitions and make strategic investments in our racetracks and related operations, including entertainment operations, to grow and enhance our racing business," McAlpine said. "On a pro-forma basis, after adjustment for the net proceeds from our recent share offering, we have cash balances at March 31, 2002 of $188.9 million and unused and available credit facilities of $85.0 million, aggregating $273.9 million, to pursue our strategic plan.
"Over the balance of the year, we will continue to focus on earnings growth through the implementation, throughout our operations, of best practices and common systems, utilization of our corporate purchasing power to reduce costs, improved production and distribution of our simulcast program, growth of our account wagering business and sales of non-core real estate holdings," McAlpine said.