CDI: Revenues Up, Earnings Down
by Ryan Conley
Date Posted: 5/6/2009 5:41:58 PM
Last Updated: 5/7/2009 2:18:25 PM

Citing the absence of insurance payments received in 2008, Churchill Downs Inc. reported a net loss of $4.8 million in the first quarter of the year, but said a 12% increase in net revenues were attributed to strength in its Louisiana gaming business and on-line wagering operation.

The net loss, which compared to an estimated $742,000 profit in the same period a year ago, was weighted by $17.2 million in insurance recoveries the company received in 2008 from damage by Hurricane Katrina to its Fair Grounds Race Course & Slots operation. CDI pegged its net loss from continuing operations at $5.1 million during 2009’s first quarter.

Net revenues increased 12% to $73.7 million, the company reported. Revenues from its gaming business at Fair Grounds rose 43% to $17.9 million, while revenues for its online business, which includes Internet wagering platforms consolidated under Twinspires.com, Bloodstock Research Information Services, and the companies investment in HRTV, saw an 18% increase in net revenues to $16.7 million.

“Although our online and gaming businesses continue to gain market share and post strong numbers, we believe the soft economy contributed to a 6% decline in our pari-mutuel handle,” CDI president and chief executive officer Robert L. Evans said in a news release.

In a separate quarterly filing with the Securities and Exchange Commission, CDI's company-wide racing handle was reported at $460.9 million, down 6% from $491.3 million during the same period of 2008.

Individual quarterly handle totals for its racetrack properties included: Churchill Downs, down 12% to $17.1 million; Arlington Park, down 9% to $93 million; Calder, down 20% to $30.3 million; and Fair Grounds, down 8% to $252.1 million. Fair Grounds conducted live racing during the period, with Calder only live for a few days. Twinspire.com's handle was up 25% to $76.7 million.

CDI also said it received $4.3 million in source market fees from the National Thoroughbred Racing Association, which the organization held in escrow on behalf of Arlington Park. In its SEC filing, CDI said NTRA held the funds, which were designated for Arlington Park for wagers made through TVG from 1997-2007, because of “regulatory uncertainty concerning the receipt of source market fees in Illinois.” The company said it reached an agreement in February with the Illinois Thoroughbred Horsemen’s Association that half of the fees would go to purses.

Evans in the release said CDI is continuing to pursue legislation in Kentucky and Illinois that would allow for expanded gaming, “in an effort to remain competitive with surrounding states and with other gaming opportunities available to our customers.”

Shares of CDI stock closed May 6 trading at $32.68, down 3.7% against a 0.3% increase realized by the Nasdaq Composite Index.



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