Thursday July 28,2011 : Churchill Downs reports that online business drove quarterly increase in net revenue
The major US horseracing company Churchill Downs Incorporated has reported business results for the second quarter and six months ended June 30, 2011, with online operations making a significant contribution to its improved numbers.
Net revenues from continuing operations for the quarter grew 16 percent compared to the prior-year period–to $249.7 million from $215.4 million–primarily due to the continued expansion and growth of the group's online and gaming business segments. These assets recorded increases in net revenues from continuing operations of $16.7 million (up 56 percent) and $13.6 million (up 38 percent), respectively, when compared to the second quarter of 2010.
The Online segment's results for the second quarter of 2011 include three months of Youbet.com results as opposed to approximately one month of Youbet.com revenues reported during the second quarter of 2010.
CDI's Online and Gaming businesses recorded quarter-over-quarter EBITDA increases of $6.7 million and $6.1 million, respectively.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the second quarter of 2011 grew to $85.0 million, an increase of 41 percent from EBITDA of $60.4 million recorded in the second quarter of 2010.
Racing Operations EBITDA increased $9.0 million quarter over quarter, driven primarily by Kentucky Oaks and Derby Week increases in sponsorship, admissions, corporate hospitality and broadcast right fees that generated an extra $6.4 million of Kentucky Oaks and Derby Week EBITDA compared to the prior year.
During the second quarter, Churchill Downs Racetrack also benefited from a $2.9 million reduction in operating expenses related to a tax-increment financing agreement with the Commonwealth of Kentucky.
Net earnings from continuing operations for the period were $40.0 million, an increase of 41 percent from the $28.3 million recorded in the second quarter of 2010.
"This was the first quarter to fully reflect the impact of our growth-through-diversification strategy that we adopted a few years ago," CDI chairman and chief executive Robert L. Evans said.
"Revenues, EBITDA and net earnings from continuing operations set all-time records. We continue to use the growing free cash flow generated by our operating activities to pay down long-term debt, which decreased by $80.2 million since the end of 2010, while examining other strategic ways in which we can deploy our capital."
Looking ahead, Evans said: "We believe there are opportunities ahead for our online business through the growth of TwinSpires.com, as bettors shift their wagers to the online channel, and through the possible expansion of legal Internet gaming in the United States."
Churchill Downs Incorporated is headquartered in Louisville, Ky., and owns and operates four top Thoroughbred racing facilities. It also owns the online betting operation TwinSpires.com and other advance-deposit wagering providers; United Tote; television production, telecommunications and racing service companies such as Bloodstock Research Information Services; and an interest in the national cable and satellite network, HorseRacing TV.