NEWS
Churchill turns profit in normally slow first quarter
Posted: Tuesday, May 06, 2008 6:23 PM
Churchill Downs Inc. recorded an $800,000 profit in the first three months of 2008 after losing $8.4-million in the same period last year.
The company historically has lost money in the first quarter, since Fair Grounds is its only racetrack with live racing in January, February, and March.
A pre-tax gain of $17.2-million in insurance recovery related to Hurricane Katrina helped put Churchill in the black. The company also cited growth in its advance-deposit-wagering platforms, although corporate expenses rose as a result of higher marketing and compensation costs.
Revenue increased 37.3%, from $47.84-million in last year’s first quarter to $65.72-million this year. Operating expenses rose 43.6%, from $52.93-million to $68.18-million.
“During the first quarter of 2008, we saw our strategic investments in gaming and [advance-deposit-wagering] operations produce a positive return, while also managing our expenses and growing our margins,” Churchill Chief Executive Officer Robert Evans said. “During the period, TwinSpires.com handled $61.7-million, and our combined [advance-deposit-wagering] and data services businesses generated $14.1-million in net revenue. While the insurance recoveries recorded by our Louisiana operations were the primary driver for our 2008 first-quarter earnings, our slot-machine gaming operations in Louisiana continue to exceed our expectations, with our average net win per unit climbing to $250 for the quarter. During the quarter, we also used cash generated from operations to pay down long-term debt.”
Churchill originally planned to detail plans for a slot-machine facility at Calder Race Course after the first quarter, but Evans said plans would remain on hold while the company is mired in a dispute with Florida horsemen regarding a purse contract.
