Churchill Downs Inc. reported May 5 that revenue from the newly opened Calder Casino and revenue growth at TwinSpires.com boosted net revenues from continuing operations to a record total of $75.1 million for the first quarter of 2010.
That represented an increase of 2% over net revenues from continuing operations of $73.7 million during the first quarter of 2009, which included non-recurrence of $4.3 million in source market fee revenue that had been received by Arlington Park.
In its earnings report released after the stock market closed, CDI reported it "typically records a net loss from continuing operations in the first quarter as it conducts minimal live racing during that period."
CDI reported that its net loss from continuing operations for the period was $8.4 million, or $0.62 per diluted common share, compared to a net loss from continuing operations of $5.1 million, or $0.37 per diluted common share, in the same period of 2009.
The company added that total EBITDA (earnings before interest, taxes, depreciation, and amortization) was negative $5.5 million in the first quarter, compared to negative $0.9 million for the first quarter of 2009.
"The increased EBITDA loss was caused primarily by the following items: the first quarter 2009 recognition of Arlington Park source market fee income, net of purses of $2.1 million; expenses related to the Youbet.com, Inc. merger of $1.1 million; and pre-opening expenses related to the Calder Casino of $1.1 million," according to the press release.
"We are generally pleased with the performance of our core business in the first quarter of 2010," CDI president and CEO Robert Evans said in a statement. "Operations at the Calder Casino, which opened Jan. 22, 2010, continue to progress. Of the five pari-mutuel slot operators in Florida, month-to-date as of the April 18 reporting period, we are now second in the market with approximately 20% of net gaming revenue and approximately 22% of the total number of Florida gaming machines offered for play.
Evans said CDI believes the "Calder Casino will operate at between $80 million and $100 million in gross gaming revenue on an ongoing, annualized basis."
He noted that effective July 1, 2010, the tax rate on Calder Casino slots revenue will be reduced by 15 percentage points. Of that, 10 percentage points accrue to CDI, with the balance going to purses at Calder Race Course. The newly enacted legislation also reduces the Calder Casino’s annual license fee by $500,000 effective July 1, 2010, and by an additional $500,000 effective July 1, 2011."
Evans said CDI online business revenues grew 8% in the quarter, primarily due to an 8% increase in handle recorded by TwinSpires.com.
He reported that the company’s pending acquisition of Youbet.com, Inc. continues to proceed through the U.S. Department of Justice’s review process and that the transaction will likely close during the second quarter of 2010.
Churchill Downs is coming off its biggest weekend of the year, with the April 30 Kentucky Oaks (gr. I) and May 1 Kentucky Derby Presented by Yum! Brands (gr. I). The track reported a two-day attendance of a record 271,850, an increase of 5% two-day all-sources handle of $198.7 million on the Churchill Downs race cards was up 7% and was less than 1.5% below the all-time record set in 2007.
"While still preliminary, we estimate the contribution of Kentucky Derby week to our racing operations EBITDA will likely increase $3 million or more over 2009," Evans said in the statement.
The Oaks and Derby results will be reflected in CDI’s second quarter report.
