Churchill reports record second-quarter revenues on strong Kentucky Oaks, Derby week

The Kentucky Derby and Oaks were very good to Churchill Downs Inc. this year.

On Wednesday, the Louisville-based racetrack and casino company released second-quarter earnings showing record gains.

For the quarter that ended June 30, earnings were up 14 percent to $57.3 million, or $3.21 per diluted share, up from $50.3 million, or $2.81 per diluted share, in the same quarter of 2013.

For the first six months of the year, earnings were up 10 percent to $56.7 million, or $3.17 per share, up from $51.4 million, or $2.87 per share, in the same period last year.

"Our second-quarter results were solid considering the soft regional gaming market, with record net revenues up 7 percent, and record adjusted EBITDA up 12 percent over second quarter 2013," Robert L. Evans, chairman and CEO of Churchill Downs Inc., said in a news release.

Oaks and Derby week adjusted earnings were up $8.8 million, a record, Evans said, with "broad-based gains in premium tickets and admissions, pari-mutuel wagering, media rights, food and beverage, and merchandise."

Churchill's online betting platform, TwinSpires, continues to outperform Thoroughbred betting trends nationally, Evans said.

Evans did not address handicappers' protest of an increase in Churchill's take-out rates, which has resulted in a costly boycott of betting on Churchill.

Net revenues were up more than $20 million, primarily from the acquisition of the Oxford Casino in July 2013, Evans said. Overall, net revenue from gaming were up 23 percent, or $15 million. Revenue from racing operations was up $2 million, or 1 percent. Revenue from online business, including TwinSpires, rose $4.5 million, or 9 percent.

The strong Kentucky Oaks and Derby week was partially offset by continuing economic weakness in Mississippi and Louisiana that resulted in a decline of $1.4 million, he said.

Churchill Downs invested $800,000 in its development of an Internet gambling platform and $500,000 in its joint bid with Saratoga Harness Racing for a New York casino license.

During the quarter, Churchill Downs Inc. also repurchased 691,000 shares for $61.6 million under a $100 million stock buy-back plan.

Evans will discuss the results in a conference call with analysts Thursday morning. The webcast is available on