Magna Entertainment reported an 11% increase in revenue for the second quarter of the year, the first full quarter to include all of the company's operations.
Revenue for the three-month period ending June 30 was nearly $113.2 million compared to $102.3 million for the same period of 2000. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 21% for the quarter to just over $11 million up from $9.1 million a year ago. Net income declined by 19% to $2.2 million, down from $2.7 million a year ago, and earnings per share was steady at 3 cents per share.
"The improvement represents the continued consolidation of strategic racetracks and the sale of non-core real estate, offset somewhat by fewer live racing days at some of California tracks and a weaker U.S. economy," said Jim McAlpine, president and chief executive officer for Magna Entertainment (Nasdaq:MIEC).
McAlpine said for the rest of year Magna will continue pursuing other acquisitions while keeping focused on improving the properties it owns.
"These activities will give us a strong content position from which we can expand our interactive electronic wagering initiatives utilizing telephones, the Internet, and interactive television," he said.
Magna spent $6.8 million in cash on investments during the quarter. The Ontario-based company spent $21 million on the Ladbroke Pennsylvania acquisition, which included the Call-A-Bet telephone account wagering system, and spent another $12.2 million on real estate and other fixed assets. Real estates sales totaling $26.4 million helped offset the expenditures.
The previous six months, Magna reported a 24% increase in revenue to $357.7 million, a 56% increase in EBITDA to $55.6 million, and a 68% increase in net income. Earnings per share for the first six months of the years was 30 cents per share compared with 18 cents per share for the same period of 2000.
Magna's board of directors also approved the acquisition of Multnomah Greyhound Park east of Portland, Ore. Magna is positioning itself to assume full control of all simulcasting in Oregon. The company has been granted a racing license to operate the Portland Meadows horse track, for which Magna is leasing the operating rights for a minimum of three years. The way simulcasting is set up in Oregon, whichever racetrack that is not running live controls the simulcasting throughout the state. Live racing throughout the year is divided between Portland Meadows and Multnomah.
Magna owns eight racetracks including Santa Anita Park, Gulfstream Park, Golden Gate Fields, Bay Meadows, Thistledown, Great Lakes Downs, Remington Park, and The Meadows harness track.