Churchill Downs Reports Revenue Increase in 2006

(Edited Churchill Downs press release)
Churchill Downs reported net revenues of $376.67 million for 2006, a 5.71% increase over 2005, according to financial data released March 12.

Net revenues from continuing operations during the fourth quarter of 2006 were $80.27 million, an increase of 13.65% over net revenues from continuing operations of $70.63 million during the fourth quarter of 2005.

Net earnings for 2006 were $29.81 million, or $2.19 per diluted share, compared to net earnings of $78.91 million, or $5.86 per diluted share, in 2005. Churchill Downs’ 2005 full-year results included the company’s one-time gain on the sale of the assets of Hollywood Park of $69.90 million. The company recorded insurance recoveries, net of losses, of $19.23 million in 2006 and $2.20 million in 2005 related to hurricane damage sustained by its racing operations in Louisiana and Florida during 2005.

During the fourth quarter of 2006, Churchill Downs had a net loss of $2.02 million, or $0.15 per diluted share, which was comprised of a net loss per diluted share from discontinued operations of $0.33 and net earnings per diluted share from continuing operations of $0.18.

The company’s 2006 fourth-quarter performance was an improvement over the similar period in 2005 when Churchill Downs reported a net loss of $3.02 million, or $0.23 per diluted share, which was comprised of a net loss per diluted share from discontinued operations of $0.01 and a net loss per diluted share from continuing operations of $0.22.

The company recorded an impairment charge of $7.87 million, included in discontinued operations, during the fourth quarter of 2006 to write down the long-lived assets of Hoosier Park to their estimated fair value in connection with the pending sale of the company’s majority interest in the track and its three Indiana OTBs to Centaur Inc. The sale has received the necessary regulatory approvals and is expected to close during the first quarter of 2007.

Churchill Downs president and CEO Robert L. Evans said the company is well positioned to move forward with a number of growth initiatives.

“With the sale of two racetracks, the restoration of our Louisiana Operations, and the appointment of a new CEO, the previous year was certainly a transitional one for our company. Nonetheless, we are pleased with the EBITDA growth we experienced year-over-year at our continuing operations and with the continued strength of our balance sheet.”