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Churchill reports Q1 loss despite record revenues

Thanks in part to the opening of the Calder Casino in Florida, Churchill Downs Inc. reported record first-quarter revenue of $75.1 million. But it wasn't enough to move earnings into positive territory.

Churchill Downs Inc. reported a first-quarter loss of $8.4 million, or $0.62 per share, compared with a loss of $5.1 million, or $0.37 million per share, in the same quarter of 2009. Churchill traditionally posts losses in the first quarter because the racetrack company has little live racing in the first three months of the year.

Churchill shares closed at $37.88, down 1.17 percent, Wednesday.

According to the company, this year's figures were affected by a non-recurring 2009 $2.1 million source market fee at Arlington Park; expenses this year of $1.1 million related to Churchill's planned merger with Youbet.com; and expenses this year of $1.1 million related to the Calder Casino opening in January.

Churchill's president and CEO, Bob Evans, said in the news release that the company is "generally pleased" with the results.

He said Calder's casino is now in second place in gambling revenue with 20 percent of the market.

"We continue to believe the Calder Casino will operate at between $80 million and $100 million in gross gaming revenue on an ongoing, annualized basis," Evans said.

The company also credited revenue growth at TwinSpires.com, Churchill's advance-deposit wagering platform, with boosting revenue. TwinSpires.com handle was up 8 percent in the quarter, Evans said.

He said the pending acquisition of Youbet.com is proceeding through the U.S. Department of Justice's review process and a second-quarter closing is still anticipated.

Next quarter should be helped by rosy Derby Week figures, according to the release:

■ Combined attendance was up over 5 percent to 271,850, a new two-day record.

■ Two-day all-sources handle was up 7 percent to $198.7 million.

■ Despite bad weather, 155,804 people, the sixth-largest crowd ever, came to Churchill on Derby Day, on Saturday.

■ 16.5 million, the largest viewing audience in 21 years, watched on NBC.

Evans said the week's contribution to earnings is expected to be up more than $3 million over last year.

"The growing strength of both the Kentucky Oaks and Kentucky Derby is remarkable," he said.

Evans will discuss the quarter with analysts in a conference call Thursday morning. Details are available at www.ChurchillDownsIncorporated.com.

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