Churchill Announces Quarterly Net Earnings Loss

Churchill Downs Inc. officially reported Tuesday that its results for the third quarter that ended Sept. 30 would be down from its earlier projections.

Net revenues for the quarter totaled $122.2 million, down 1.4% compared with the $124 million for the same period a year ago. Net loss for the quarter was $3.8 million, compared to earnings of $7.9 million in 2003. This included impairment charges of $6.2 million for Ellis Park.

Thomas H. Meeker, CDI's president and chief executive officer, said in a release the third quarter results also reflect the impact of the company's investment in potential growth opportunities. "We made it clear that 2004 would be a repositioning year in which we invested in initiatives such as Customer Relationship Management (CRM) and alternative gaming efforts that could increase earnings going forward. During the third quarter, we spent aggressively in support of ballot initiatives in California and Florida that, if approved, would benefit our operations in those states.

"Looking ahead, we believe that our actions in 2004 position us well for renewed growth in 2005 and beyond," added Meeker. "Our initiative supporting alternative gaming in Florida is on the ballot for November, and we believe significant progress was made by the racing industry in California. We anticipate returns next year from CRM and our completed Master Plan renovation at Churchill Downs. In addition, with the acquisition of Fair Grounds Race Course, we have supplemented our racing calendar and for the first time will introduce alternative forms of gaming into our core business."

Churchill stated its third quarter loss was primarily the result of two key factors: increased spending on alternative gaming ballot initiatives and the impairment charges at Ellis Park, triggered by softness in business at the racetrack.