Churchill Downs' Quarterly Loss Improves

Edited release from Churchill Downs
Churchill Downs Incorporated reported a loss for the first quarter ended March 31, 2003, that was better than previously projected provided by the company.

Net revenues were $33.8 million, up 9.0 percent compared with $31.0 million for the same period of the prior year. CDI reported a net loss of $11.5 million, or 87 cents per share, compared with a net loss of $12.0 million, or 92 cents per share, in the first quarter of 2002.

According to the company, the decrease in net loss year-over-year was a function primarily of lower interest expense, ongoing cost containment, and increased revenues from Arlington Park as a result of a favorable Illinois regulatory decision concerning simulcasting. These gains were partially offset by the impact of the Illinois harness racing strike and a reduction in the riverboat subsidy at Hoosier Park. CDI historically does not generate a profit for the first quarter because it conducts very few live racing events at any of its racetracks during the period.

Thomas H. Meeker, CDI's president and chief executive officer, said, "While regulatory decisions had an impact on our business, our racing calendar remains the greatest single influence on our first quarter financial results. With the absence of significant live racing events and revenues during this period, we continued to focus on 'best practices' efforts in expense management to curtail our loss for the quarter. We expect two key developments during the first quarter to deliver ongoing returns in the quarters ahead. Phase I of our Master Plan reached partial completion, which allowed us to provide and fill the new fourth-floor Jockey Club luxury suites above the grandstand for the Kentucky Derby weekend. This phase will be completed later in the year and offer a total of 64 suites on three floors, as well as meeting rooms and banquet facilities that will enable us to provide premium accommodations while maximizing the use of our facility. In addition, during the quarter we laid the groundwork for a refinancing completed in April that will offer us ready access to capital at competitive rates."

Meeker added, "Looking ahead, we are pleased with the results of the Kentucky Derby weekend that included a 13.8-percent increase in total wagering on the 12-race Derby card on Saturday and a 8.2-percent increase in total wagering on the Kentucky Oaks 11-race card on Friday. The $140 million wagered on Derby Day set a new North American record for wagering on a single race day event. While five of our six tracks will run during the second quarter, it is too early in our racing season to support a definitive operating forecast. At present, we anticipate earnings for the second quarter will range from $2.00 to $2.07 per diluted share. That range exceeds the $1.73 per diluted share earned in the year-earlier period and is largely a result of the shift of Arlington Park's 2003 racing calendar from the fourth quarter to the second quarter, which will add 19 days of racing in the second quarter of 2003 versus the same period in 2002. Our guidance for earnings for the full year remains at approximately $1.80 per diluted share, compared to $1.57 per share in 2002 after the asset impairment loss at Ellis Park that reduced earnings by $0.21."