Churchill's Revenues, Earnings Soar

Churchill Downs reported Wednesday that net revenues increased 57% to $131.9 million and net earnings rose 34% to $18.3 million during the second quarter of fiscal year 2000. The Louisville, Ky.-based track operating company reported earnings per share increased to a new quarterly high of $1.85 for the three-month period ending June 30, 2000. During the same period in 1999, net revenues totaled $84.1 million, with net earnings of $13.7 million.

As a result of a public offering of 2.3 million common shares in July 1999, Churchill had increases of 30% and 29% in the number of diluted weighted average shares outstanding for the second quarter and six months, respectively. At the end of the second quarter of 2000, diluted weighted average shares outstanding were 9.9 million, compared with 7.6 million in 1999.

Churchill Downs Inc. president and chief executive officer Tom Meeker said the company's strong financial performance for the quarter was highlighted by the addition of Hollywood Park, which CDI acquired in September 1999, and a record spring meet at Churchill Downs.

“The second quarter of 2000 was the best period in our company's 126-year history,” Meeker said. “This year is the first in which we have had the benefit of Hollywood Park's spring/summer meet. Additionally, four of our racetracks were racing during the second quarter, and we were able to launch the Churchill Downs simulcast network in conjunction with our business strategy. We were especially pleased with the performance of Churchill Downs, where better-than-expected handle numbers allowed us to increase purses during the race meet.”

Meeker said Churchill's proposed merger with Arlington International Racecourse is progressing as planned, with a scheduled closing in September.

“The timing of that closing will likely have a material impact on our quarterly per-share results over the remainder of this year,” Meeker said. “During the third quarter, we expect a significant contribution to earnings from the contract we have with Arlington, which is currently in effect. That expected increment to per-share earnings, however, will be largely offset in the fourth quarter because we will be integrating Arlington at a time when the racetrack will not be racing and, after shareholder approval, we will have significantly more shares outstanding. Our earnings for the third quarter should also reflect a gain from the anticipated closing of our sale of 26% of Hoosier Park.”

Churchill reported the positive revenue and earnings news after the close of the stock market. The company's stock closed at 22 5/16, down 1/16.