Meeker Says Churchill Focusing on Alternative Gaming, Customer Relations

Churchill Downs president/CEO Thomas Meeker said Wednesday that the track-operating company will be focusing on securing favorable legislation to allow alternative gaming in some states and a company-wide Customer Relations Management program during the remainder of 2004.

Speaking during a teleconference Wednesday to address Churchill's first-quarter earnings report, Meeker said the legislative push for legalized alternative gaming and the CRM initiative, as well as the company's construction at its flagship track, contributed to a slightly higher net loss during the first quarter that ended March 31.

Churchill reported net revenues of $37.7-million for the first three months of this year represented a 5.6% gain over the comparable period one year ago. The net loss for the quarter was $11.7-million ($0.89 per share), compared with a net loss of $11.5-million ($0.87 per share). The company, which historically registers a first-quarter loss because its tracks have nominal amoung of live racing during the period, had forecast a quarterly loss of $0.92 per share.

"I was pleased with the first-quarter loss," Meeker said.

In addressing the quarterly numbers and Churchill's plans for 2004, Meeker said the company will continue to push for alternative gaming in such critical states as California, Illinois, Kentucky, and Pennsylvania. Meeker said there is also the possibility of a statewide alternative gaming referendum in Florida this year, which Churchill would support.

Reiterating Churchill's off-stated reluctance to discuss pending racetrack acquisitions, Meeker did not address the company's ongoing bid to purchase the Fair Grounds racetrack in New Orleans. Although Churchill does not comment on possible acquisitions until the deals are done to the point "we can deliver," Meeker said Churchill continues to seek racetracks that can be added to the company's wagering stream, especially in the first quarter. The dates historically raced by Fair Grounds from late fall to spring would bridge the gap that currently exists in Churchill's racing/wagering menu.

Meeker said Churchill is projecting earnings during the current second quarter of between $2.10 and $2.15 per share, noting that the recently concluded Kentucky Derby-Oaks weekend was successful despite the fact the main Churchill Downs clubhouse is in the midst of a major renovation and that the track was deluged with about an inch of rainfall shortly before the Derby was run Saturday.

"Preliminary data related to Derby weekend are not in, but are very encouraging for both the company and the racing industry," Meeker said. "The logistics associated with this year's Derby weekend were the most challenging I have seen in 20 years with the company."

Wagering on the Derby and Derby Day card were North American records and the on-track attendance fell only 2% for the weekend, for which Churchill had programmed a 5% dropoff, Meeker said. While the attendance and wagering results were good, Meeker said the most impressive statistic from the weekend was the 2.5 million unique visitors to the kentuckyderby.com Web site.