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Churchill Downs Incorporated Reports 2010 Third Quarter Results

LOUISVILLE, Ky., Nov. 3, 2010 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated ("CDI"), (Nasdaq:CHDN) today reported results for the third quarter and nine months ended September 30, 2010.
/ Source: GlobeNewswire

    LOUISVILLE, Ky., Nov. 3, 2010 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated ("CDI"), (Nasdaq:CHDN) today reported results for the third quarter and nine months ended September 30, 2010.

    Net revenues from continuing operations for the third quarter of 2010 totaled $135.7 million, an increase of 35 percent over net revenues from continuing operations of $100.9 million recorded during the third quarter of 2009. Net revenues from continuing operations for the quarter were positively affected by the acquisition of ("Youbet") and United Tote, which contributed $25.0 million in net revenues from external customers, and Calder Casino, which contributed $13.2 million of net revenues from external customers. Racing Operations' net revenues from external customers declined $5.9 million.      

    Net earnings from continuing operations for the third quarter were $3.7 million or $0.22 per diluted common share, compared to a net loss from continuing operations of $1.2 million, or $(0.09) per diluted common share, during the third quarter of 2009. Results of Churchill Downs Entertainment, LLC, were accounted for as discontinued operations during the quarter and experienced a net loss of $4.4 million. As a result, CDI experienced a total net loss per diluted common share of $(0.04), compared to a net loss per diluted common share of $(0.17) during the third quarter of 2009.

    CDI's EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations for the third quarter increased 75 percent year over year from $9.7 million in 2009 to $17.1 million in 2010. Significant items positively affecting CDI's quarterly EBITDA from continuing operations included a $4.0 million increase in Gaming EBITDA driven primarily by the generation of $2.4 million of EBITDA at Calder Casino, which opened in January of this year. Additionally, Online Business EBITDA increased $3.0 million, reflecting the addition of Youbet, which contributed $1.6 million of EBITDA during the quarter, and the continued growth of We remain on track to achieve our projected $12 million in annualized cost savings from personnel and other cost synergies related to the Youbet and United Tote acquisition integration.

    "This was the quarter in which we first saw the earnings power of the diversification strategy we've been pursuing for the last few years," said Robert L. Evans, CDI President and Chief Executive Officer. "The decline in Racing Operations net revenues and EBITDA from continuing operations was more than offset by net revenue and EBITDA growth in our Online and Gaming businesses."

    "We have been pursuing diversification into our Gaming and Online business segments and the results of that strategy are clear and increasingly important to our overall financial performance," added Evans. "While the third quarter showed that the business of operating race tracks remains in decline, we feel a great sense of optimism as the popularity and profitability of the Kentucky Derby and Kentucky Oaks continue to grow and as we execute on our diversification strategy with the integration of and the planned acquisition of Harlow's Casino Resort & Hotel in Greenville, Mississippi." 

    A conference call regarding this news release is scheduled for Thursday, November 4, 2010, at 9:00 a.m. ET. Investors and other interested parties may listen to the conference call by accessing the online, real-time webcast of the call at or by dialing toll-free: 877-372-0878 or if dialing internationally, using the toll number 253-237-1169, at least 10 minutes before the appointed time. The conference ID number for this call is 96477917. The online replay will be available within 90 minutes from the conclusion of the conference call, and will continue to be available for one year.  A copy of this news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at .

    In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), CDI has provided a non-GAAP measurement, which presents a financial measure of earnings before interest, taxes, depreciation and amortization ("EBITDA"). CDI uses EBITDA as a key performance measure of results of operations for purposes of evaluating performance internally. CDI believes the use of this measure enables management and investors to evaluate and compare, from period to period, CDI's operating performance in a meaningful and consistent manner. This non-GAAP measurement is not intended to replace the presentation of CDI's financial results in accordance with GAAP.

    Churchill Downs Incorporated ("CDI"), headquartered in Louisville, Ky., owns and operates four world renowned Thoroughbred racing facilities: Arlington Park in Illinois, Calder Casino and Race Course in Florida, Churchill Downs Racetrack in Kentucky, and Fair Grounds Race Course & Slots in Louisiana. CDI operates slot and gaming operations in Louisiana and Florida. CDI tracks are host to many of North America's most prestigious races, including the Arlington Million, the Kentucky Derby and the Kentucky Oaks, the Louisiana Derby and the Princess Rooney, along with hosting the Breeders' Cup World Championships for a record seventh time on Nov. 5-6, 2010 and eighth time on Nov. 4-5, 2011. CDI also owns off-track betting platforms, and other advance-deposit wagering providers; United Tote; television production, telecommunications and racing service companies such as BRIS; and a 50-percent interest in the national cable and satellite network HorseRacing TV, which supports CDI's network of simulcasting and racing operations. CDI has entered into a definitive purchase agreement to acquire Harlow's Casino Resort & Hotel in Greenville, MS, on Sept. 13, 2010.  CDI trades on the NASDAQ Global Select Market under the symbol CHDN. More information can be found at

    Information set forth in this press release contains various "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 (the "Act") provides certain "safe harbor" provisions for forward-looking statements. All forward-looking statements made in this press release are made pursuant to the Act. The reader is cautioned that such forward-looking statements are based on information available at the time and/or management's good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date the statement was made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "should," "will," and similar words, although some forward-looking statements are expressed differently. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include: the effect of global economic conditions, including any disruptions in the credit markets; the effect (including possible increases in the cost of doing business) resulting from future war and terrorist activities or political uncertainties; the overall economic environment; the impact of increasing insurance costs; the impact of interest rate fluctuations; the effect of any change in our accounting policies or practices; the financial performance of our racing operations; the impact of gaming competition (including lotteries, online gaming and riverboat, cruise ship and land-based casinos) and other sports and entertainment options in the markets in which we operate; the impact of live racing day competition with other Florida, Illinois and Louisiana racetracks within those relevant markets; the impact of higher purses and other incentives in states that compete with our racetracks; costs associated with our efforts in support of alternative gaming initiatives; costs associated with customer relationship management initiatives; a substantial change in law or regulations affecting pari-mutuel and gaming activities; a substantial change in allocation of live racing days; changes in Kentucky, Florida, Illinois or Louisiana law or regulations that impact revenues or costs of racing operations in those states; the presence of wagering and gaming operations at Indiana and other states' racetracks and casinos near our operations; our continued ability to effectively compete for the country's horses and trainers necessary to achieve full field horse races; our continued ability to grow our share of the interstate simulcast market and obtain the consents of horsemen's groups to interstate simulcasting; our ability to execute our acquisition strategy and to complete or successfully operate planned expansion projects; our ability to successfully complete any divestiture transaction; market reaction to our expansion projects; the loss of our totalisator companies or their inability to provide us assurance of the reliability of their internal control processes through Statement on Auditing Standards No. 70 audits or to keep their technology current; the need for various alternative gaming approvals in Florida and Louisiana; our accountability for environmental contamination; the loss of key personnel; the impact of natural and other disasters on our operations and our ability to adjust the casualty losses through our property and business interruption insurance coverage; our ability to integrate Youbet and other businesses we acquire, including our ability to maintain revenues at historic levels and achieve anticipated cost savings; the impact of wagering laws, including changes in laws or enforcement of those laws by regulatory agencies; the outcome of pending or threatened litigation; changes in our relationships with horsemen's groups and their memberships; our ability to reach agreement with horsemen's groups on future purse and other agreements (including, without limiting, agreements on sharing of revenues from gaming and advance deposit wagering); the effect of claims of third parties to intellectual property rights; and the volatility of our stock price.

    CONTACT: Churchill Downs Incorporated Liz Harris, Vice President 502-641-5879