CDI Reports First-Quarter Gain in Earnings
by Tom LaMarra
Date Posted: 5/8/2012 7:59:48 AM
Last Updated: 5/9/2012 2:21:42 PM

Photo: File Photo

Churchill Downs Inc. reported net earnings of $1.4 million in the first quarter of 2012, a reversal from a $3.2 million loss during the first three months of 2011.

The racetrack and gaming company issued its first-quarter earnings report May 7. CDI said 20% growth in its online segment helped increase net revenue 5%, from $131.6 for the first quarter of 2011 to $138.2 million this year.

CDI said “new customer growth” for its TwinSpires.com advance deposit wagering system led to a 15.2% increase in pari-mutuel handle for the first quarter.

The company’s gaming segment experienced a $2.9 million, or 16%, bump in earnings before interest, taxes, depreciation, and amortization.

“All three of our business segments—racing, gaming, and online—showed improved EBITDA performance in the first quarter leading to positive first-quarter earnings from continuing operations,” CDI chairman and chief executive officer Bob Evans said. “Historically, the seasonal nature of our racing operations resulted in losses for the quarter, but the diversification of our business model into our gaming and online businesses more than offset first-quarter losses from racing.”

The company’s online business is currently based solely on horse racing and pari-mutuel handle, though it separates ADW from wagering at its racetracks and offtrack betting facilities. CDI regularly says it loses money on the “racing” side but doesn’t offer figures in its financial reports.

Meanwhile, Evans said record-setting Kentucky Oaks and Kentucky Derby Presented by Yum! Brands (both gr. I) programs May 4-5 figure to provide record EBITDA for CDI, perhaps $4.5 million to $5.5 million higher than last year.

During a May 8 conference call on earnings, Evans discussed preliminary numbers for Derby week (April 28—opening day of the Churchill Downs spring meet—through May 5). He said total attendance for six racing programs was 349,700, down 3% from 2011, but all-sources wagering of $253.5 million was up 9% from last year.

Handle and attendance for the opening-night program were down for the opening-night program because of a storm that forced a delay in racing and probably kept some people home, Evans said. Handle for the program was down 27% compared with the comparable program last year.

About $20 million was wagered on Churchill races the Tuesday, Wednesday, and Thursday of Derby week, about the same as in 2011, Evans said.

Evans noted the Kentucky Oaks is the third-biggest attended race in North America, and has the sixth-highest handle. He said the Oaks and Derby show “there is a financially viable market for high-quality Thoroughbred racing.”

Wagering through TwinSpires.com on Oaks and Derby days was $23.8 million, up 19.3% from last year, Evans said.



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