CDI Reports 13% Increase in Net Revenues

Loss of hosting revenues at Calder negatively impacted racing operations.

Churchill Downs Inc. on Oct. 30 reported net revenues for the third quarter increased 13%, or $20.8 million, to $185.6 million from $164.9 million, during the same period of the prior year.

In a release, the company said the increase was due primarily to the expansion of CDI's gaming segment with the additions of Riverwalk Casino Hotel's and Oxford Casino's revenues.

In a statement, Robert L. Evans, CDI chairman and CEO, said the company's board of directors approved a 21% increase in our annual dividend, from $0.72 to $0.87 per outstanding share that will be paid on Jan. 6, 2014, to stockholders of the company on record as of Dec. 6, 2013.

"This marks our third consecutive year of dividend increases of at least 20%," Evans said.

The CDI release noted's handle grew 7.3% during the three-month period, contributing to a 31% increase in our Online segment's adjusted EBITDA.

Racing operations adjusted EBITDA decreased $3 million for the quarter primarily due to a $4.2 million decline in adjusted EBITDA at Calder Casino & Race Course, of which $2.7 million was associated with the loss of hosting revenues and $1.3 million was associated with the 17 fewer live race days in the quarter. Also, Arlington Park adjusted EBITDA declined $1.0 million due to two fewer live race days, inclement weather, and smaller race fields. These decreases were partially offset by the new 12-day September live race meet at Churchill Downs, which generated an increase in adjusted EBITDA of $2.3 million compared to the same period last year.

“In our racing business, we had a successful, first-ever Homecoming Meet at Churchill Downs in September and will again race those 12 additional days in 2014,” said Robert Evans, chairman and CEO. “Our $14.5 million Grandstand Terrace expansion project at Churchill Downs is on budget and on schedule to add 2,400 new seats in time for the 140th Kentucky Oaks and Kentucky Derby in 2014.”

CDI's gaming net revenues increased 61%, or $30.3 million, reflecting $12.6 million in net revenues generated by Riverwalk and $17.7 million in net revenues generated by Oxford, which was acquired on July 17, 2013.

Online business adjusted EBITDA increased $3.1 million compared to the same period of the previous year due to 7.3% increase in pari-mutuel handle from continued growth in average customer wagering. In addition. Velocity's adjusted EBITDA also increased due to higher wagering from existing customers and the addition of a new high-volume customer. This segment also benefited from a reduction in spending related to the prior year development of

Net earnings from continuing operations for the three months ended Sept. 30, 2013, were $9.2 million, or $0.51 per diluted common share, an increase in net earnings of 53%, as compared to net earnings of $6.0 million or $0.34 per diluted common share.