Churchill Downs Inc. reported July 30 that the track and casino company had record second quarter net revenues of $303.7 million, up 7% over the $283.6 million figure for the same period a year ago.
In a release, the company said the strong results were due to the acquisition of a casino in Oxford, Miss., and an $8.8 million increase over 2013 in revenues from Kentucky Derby Presented by Yum! Brands (gr. I) and Kentucky Oaks (gr. I) week.
By category of business operations, CDI's gaming revenues increased 23% to $82 million ($66.9 million in 2013), online revenues were up 9% to $57.1 million ($52.5 million), and racing revenues rose 1% to $159.4 million ($157.4 million).
The results mirrored trends seen in recent years as the company has morphed from a racing enterprise to a gaming company. Overall wagering on racing was down 17% at CDI tracks during the quarter, with online wagering up 5%.
CDI said those numbers resulted in record net earnings per common share of $3.21, an increase of 14% compared to the prior period.
During the second quarter, CDI entered into an agreement with The Stronach Group for that racetrack entity to lease and manage the live racing operations at Florida's Calder Casino and Race Course. During the quarter, Calder recognized a decline in Adjusted EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) of $2 million on lost host simulcast revenues and 10 fewer race days, CDI reported.
"Our second-quarter results were solid considering the soft regional gaming market with record net revenues up 7%, and record Adjusted EBITDA up 12% over second-quarter 2013," said Robert L. Evans, chairman and CEO, in the release.
"(The) 2014 Oaks and Derby week Adjusted EBITDA increased $8.8 million over 2013 to a new record, with broad-based gains in premium tickets and admissions, pari-mutuel wagering, media rights, food and beverage, and merchandise," Evans added. "In addition, TwinSpires' handle continued to outperform U.S. Thoroughbred handle trends despite our 2013 departure from Texas. Finally, in late June, we completed the repurchase of 691,000 shares of stock for $61.6 million."
Evans said three strategic initiatives undertaken during the second quarter of fiscal 2014 are designed to boost CDI's bottom line in the future.
"First, we signed an agreement with The Stronach Group to lease Calder Race Course and operate live racing through 2020, which will improve Calder's future Adjusted EBITDA performance as well as offer a viable long-term solution to preserving racing in South Florida on a year-round basis.
"Second, we submitted an application to develop and operate a casino in East Greenbush, N.Y., near Albany, with our joint venture partner Saratoga Harness Racing, Inc. Finally, we signed a binding term sheet to manage Saratoga Casino and Raceway in Saratoga Springs, N.Y., and Saratoga Casino Black Hawk in Black Hawk, Colo. As part of the agreement, we intend to acquire a 25% stake in Saratoga Harness Racing, Inc., which owns these properties along with a minority position in other assets."
Details of CDI's second quarter business results are at the following link:
Headquartered in Louisville, Ky., CDI owns and operates the Churchill Downs Racetrack; Calder racetrack and casino in Miami Gardens, Fla.; Fair Grounds Race Course & Casino, and video poker operations in New Orleans, La.; Arlington International Racecourse in Arlington Heights, Ill.; a casino resort in Greenville, Miss.; a casino hotel in Vicksburg, Miss.; a casino in Oxford, Maine; and a 50%-owned joint venture, Miami Valley Gaming and Racing, in Lebanon, Ohio.
CDI also owns online wagering company, TwinSpires.com; the totalisator company, United Tote; online bingo gaming company Luckity.com; Bluff Media, an Atlanta-based multimedia poker company; and a collection of racing-related telecommunications and data companies.