Despite a decrease in live racing revenue in the third quarter, Churchill Downs Inc. (CHDN: NASDAQ) reported record net revenues of $185.6 million, a 13 percent increase over the same quarter last year.
Chairman and CEO Robert L. Evans said in a statement that he was pleased with the results. Evans and other corporate officials will discuss the earnings report with stock market analysts at 9 a.m. Thursday.
The Louisville racetrack said its first September race meet — dubbed the Homecoming Meet — was a success, but most of the company's revenue gains came from Churchill's casinos, including the Riverwalk Casino Hotel in Mississippi and the Oxford Casino in Maine, which was acquired in July, the company said.
Net revenue from gaming rose 61 percent, or $30.3 million — $12.6 million in net revenues generated by Riverwalk and $17.7 million in net revenues generated by Oxford, Churchill said.
Overall for the quarter, Churchill Downs reported earnings of $9.24 million, or $0.52 per share, up 55 percent from the $5.97 million, or $0.34 per share, reported in the same quarter of 2012.
For the first nine months of the year, Churchill Downs reported earnings of $60.6 million, or $3.39 per share, up 8 percent from the $55.9 million, or $3.20 per share, reported in the same period of 2012.
"In our gaming segment, we closed on the acquisition of the Oxford Casino in Maine in July, and a $3.2 million gaming floor expansion project is now underway," Evans said. "Our joint venture project in Ohio — Miami Valley Racing & Gaming — is now scheduled to open on Dec. 12, in time for the holidays and about three months sooner than originally planned. In Kentucky, we announced our support for Kentucky Wins!, a coalition of over 60 business and civic leaders from across the Commonwealth who believe it's time for expanded gaming."
Betting on TwinSpires.com, Churchill's online advance-deposit wagering platform, also grew 7.3 percent, ahead of overall U.S. Thoroughbred industry handle growth of 1.3 percent, Evans pointed out.
But racing revenues for the quarter were down 19 percent, from $62.9 million in 2012 to $50.7 million in 2013.
The $12.2 million drop came from declines at Calder Race Course in Florida from the loss of hosting revenues and lower revenues from 17 fewer live racing days during the period, Churchill said. That more than offset the favorable impact of the new, 12-day September live race meet at Churchill Downs Racetrack.
"In our racing business, we had a successful, first-ever Homecoming Meet at Churchill Downs Racetrack in September and will again race those 12 additional days in 2014," Evans said. "Our $14.5 million Grandstand Terrace expansion project at Churchill Downs Racetrack is on budget and on schedule to add 2,400 new seats in time for the 140th Kentucky Oaks and Kentucky Derby in 2014. On Oct. 7, we announced the addition of a 15,224-square-foot video board at Churchill Downs Racetrack, a $12 million project that will also be completed in time for the 2014 Kentucky Oaks and Kentucky Derby."
This week, Churchill's board approved a 21 percent increase in the company's annual dividend, from $0.72 to $0.87 per outstanding share that will be paid in January, the third consecutive year of dividend increases of at least 20 percent.
Investors can listen to the Churchill Downs earnings teleconference via webcast on churchilldownsincorporated.com or by dialing (877) 372-0878 and entering the conference ID number 90335059 at least 10 minutes before the appointed time.
Thursday is the deadline to register to buy 2014 Kentucky Derby and Oaks tickets online, Churchill Downs said. Go to Kentuckyderby.com or Churchilldowns.com and click on "2014 Ticket Request" to register.
Seats go on sale online in November, when registrants will be advised via email of a start time for ticket sales.
Registered fans will have a first-come, first-served opportunity to buy two-day packages of Derby and Oaks seating in locations throughout the track.
About 19,000 of more than 55,000 reserved seats at the 2013 Derby and Oaks were bought through the online sale, Churchill said.
There is a limit of six tickets per household.
According to the track, the track refunded more than $1 million in purchases last year from buyers that were determined to have violated the track's ticketing policy to sell them to brokers or on the secondary market.