Churchill Posts Slight Increase in Earnings

Second quarter up despite drop in handle.

Churchill Downs Inc. released its second-quarter results after the close of the stock market July 29, with a slight increase in earnings due to its advance deposit wagering system and slot-machine gaming.

The company had net income during the quarter of $30.9 million, or $2.20 per share, an increase from the comparable quarter in 2008 when it showed net income $29.4 million, or $2.11 per share. Revenue increased from $179.3 million to $180 million.

The company reported declines at its four racetracks: the flagship Churchill Downs in Louisville, Ky.; Fair Grounds in New Orleans; Arlington Park north of Chicago; and Calder Race Course near Miami.

The areas that showed an increase during the quarter were the company’s advance deposit wagering system and slot machine gaming. Total handle at the tracks fell 3% during the second quarter, compared to 11% across North America. Slots revenue increased from $11.8 million to $15.4 million.

"Our signature racing events, the Kentucky Derby and Kentucky Oaks (both gr. I), were not immune to the ongoing recession as many of our corporate clients elected to reduce their 2009 Derby-related marketing and hospitality expenditures," Churchill Downs president and CEO Robert L. Evans said in a release. "As a result, our profitability from Kentucky Derby week declined by $3.2 million compared to one year ago. We believe this decline occurred under extraordinary economic conditions, and we remain encouraged by the strength of Derby weekend’s other key metrics."

Churchill officials will conduct a teleconference to discuss the earnings report the morning of July 30.