The Aurora, Ontario-based Magna Entertainment Corp., one of North America's leading owners of Thoroughbred tracks, announced Tuesday that its third quarter losses reached $50.3 million.
Results for the nine-month period ending Sept. 30, 2004 included a non-cash write-down of long-lived assets of $26.7 million related to the redevelopments in progress at Gulfstream Park in South Florida and Laurel Park in Maryland.
The company reported a 2.1% revenue dip during the quarter from $104.5 million to $102.3 million. The $50.3 million loss for the quarter ending Sept. 30 represents a 47 cents a share margin as compared with a $15.5 million, or 14 cents a share loss the company reported for the same period in 2003.
"The third quarter results for 2004 are disappointing," said MEC president and chief executive officer Jim McAlpine said in a written statement.
"Despite only a small decline in revenues, or EBITDA (pre-tax and interest) loss has been impacted by MEC continuing to incur significant costs ahead of revenues as we position ourselves to achieve our strategic objectives and by higher costs in the pursuit of alternative gaming opportunities and regulatory reform."
MEC President Frank Stronach also announced Tuesday that the company's board of directors has appointed an 'executive management committee,' and slated former politician Dennis Mills to chair the group, which will include McAlpine, executive vice president and chief operating officer Don Amos, Tom Hodgson, president of Strategic Analysis Corp. and member of the board of directors of MEC's parent company Magna International Developments (MID), and John Barnett, former president and chief executive officer of Molson Breweries.
"In order to fully implement our long-term strategy, which includes the redevelopment of Gulfstream Park," the statement said, "we will be required to seek additional debt, equity and other financing, (and) may also decide to sell some of our real estate holdings and other assets and/or enter into leases or similar arrangements in order to fund certain portions of our strategic plan."
MEC cited the ongoing redevelopment of Gulfstream Park, the completion of a HorseRacing TV agreement with the DISH Network, and the passage of slots in Pennsylvania as positive developments that occured since the end of the second quarter.
MEC is one of several companies owned by Stronach--prominent horse breeder and winner of this year's Breeders' Cup Classic-Powered by Dodge (gr. I) with Adena Springs homebred Ghostzapper--under the banner of his auto parts conglomerate Magna International.
MEC lists as among its holdings: Gulfstream Park, Lone Star Park in Texas, Laurel Park and Pimlico Race Course in Maryland, The Meadows near Pittsburgh, and Santa Anita Park and Golden Gates Field, and a leased interest in Bay Meadows Race Course through the end of 2004, in California.