CDI Reports Slight First Quarter Loss

Revenues rose $19.4 million but company had a loss for first three months.

Churchill Downs Inc. reported April 23 that the racetrack and gaming company's revenues increased $19.4 million to total a record $167.3 million during the first three months of 2014.

However, the company reported a net loss of $700,000, which was $0.04 per share, compared with earnings of $1,058,000 per share during the same period a year ago.

The company said the 13% increase in total revenues over the same period a year ago was primarily due to revenues of $17.5 million from Oxford Casino in Maine, which was acquired July 17, 2013. In addition, online business revenues improved $3.2 million to $46.1 million, an 8.8% increase in organic revenues, and revenues from racing operations rose 10% to $30.6 million as a result of 39 additional race days at Calder Casino & Race Course.

A release said those positives were partially offset by a decline in adjusted EBITDA of $1.5 million at Mississippi and Louisiana gaming properties from continuing regional weaknesses. Despite a 7% increase in revenue, adjusted EBITDA in the online sector decreased $1.4 million from the loss of Texas resident wagering and increased taxes in certain states. Also, adjusted EBITDA decreased $1.1 million due to expenditures related to the development of its internet gaming platform and $600,000 for costs associated with gaming expansion legislative efforts in Kentucky.

In a statement, CDI chairman and CEO Robert L. Evans said the company was pleased with the first-quarter results and was anticipating a record week for the Kentucky Derby Presented by Yum! Brands (gr. I) and Longines Kentucky Oaks (gr. I).

"We're pleased with our record first-quarter revenues of $167.3 million, up 13% over 2013, and record adjusted EBITDA of $24.5 million, up 16% over last year," said Evans. "However, we are more excited by the spectacular unveiling of our new, 15,224-square-foot, 4K-resolution video board, the 'Big Board', on opening night, this Saturday, April 26, which kicks off Kentucky Oaks and Derby week. Our pre-Oaks and Derby week metrics look strong compared to last year and we hope to set many new performance records for Thoroughbred racing's biggest week."

CDI said's handle increased 8.8% during the three-month period ending March 31 as the company resumed accepting wagers from Illinois residents, which had ceased during the three months ending March 31, 2013. But those gains were partially offset by the continued loss of Texas wagering.

CDI said the increased revenues from additional racing at Calder was partially offset by a decline in revenues at Fair Grounds Race Course & Slots of $1.7 million. CDI said inclement weather caused turf races to be moved to the main track during the Fair Grounds meet and negatively impacted wagering and attendance. The company said the racing segment was also negatively impacted by a harsh winter resulting in a decline in simulcasting handle and increased utility costs at its flagship track in Louisville.