SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 9, 2000
CHURCHILL DOWNS INCORPORATED
(Exact name of registrant as specified in its charter)
Kentucky 0-1469 61-0156015
(State or other (Commission File Number) (IRS Employer Identification
jurisdiction of No.)
incorporation or
organization)
700 Central Avenue, Louisville, KY 40208
(Address of principal executive offices)
(Zip Code)
(502) 636-4400
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
CHURCHILL DOWNS INCORPORATED
I N D E X
ITEM 1-4. Not Applicable
ITEM 5. OTHER EVENTS
A copy of a press release is set forth in Exhibit 99.1 to this
filing and is incorporated herein by reference
ITEM 6. Not Applicable
ITEM 7. Financial Statements and Exhibits
(a) Financial statements of business acquired
Not Applicable
(b) Pro forma financial information Not Applicable
(c) Exhibits
Exhibit 99.1 Press Release dated May 9, 2000
ITEM 8-9. Not Applicable
Contact: Chantelle Kammerdiener
(502) 636-4415/(502) 266-8731
chantellek@kyderby.com
CHURCHILL DOWNS INCORPORATED REPORTS FIRST QUARTER RESULTS
LOUISVILLE, Ky. (May 9, 2000) - Churchill Downs Incorporated (Nasdaq: CHDN)
("CDI") today reported results for the first quarter ended March 31, 2000.
Net revenues were $25.6 million, an increase of 45 percent, compared
with $17.7 million in the year-earlier period. The Company reported a net loss
of $8.8 million, or 89 cents per share diluted, compared with a net loss of $3.0
million, or 40 cents per share diluted, in the first quarter of 1999.
The per-share loss reflects a 32-percent increase in the number of
diluted weighted average shares outstanding, which was due principally to the
public offering of 2.3 million common shares in July 1999. In the first quarter
of 2000, diluted weighted average shares outstanding were 9.9 million, compared
with 7.5 million in 1999.
"We were expecting a significantly larger loss for the first quarter
compared with a year ago," said Thomas H. Meeker, CDI's president and chief
executive officer. "The first three months of the year historically have not
been a profitable period for us because our tracks are not racing then. We
anticipated that our acquisitions last year of Calder Race Course and Hollywood
Park would significantly increase our loss during this period. We now offer
approximately 260 days of live racing each year, yet only two racing days at
Calder occurred in the first quarter. This seasonality, combined with the
interest expense associated with our acquisitions, predictably impacted our
first-quarter results.
"We believe that we will achieve positive comparisons to last year's
results in subsequent periods this year due to the incremental contribution of
live racing days at Hollywood Park and from the synergies of having all of our
operations together for one full year. We have substantially expanded the size
and scope of our racing operations, and we have invested in people and
management talent to oversee these new operations and position our Company for
continued growth. Our immediate focus remains on uniting our various racing
operations to achieve the highest efficiency. We are very pleased with the
progress realized to date as we continue to implement our best practices
Company-wide.
"The outstanding on-track attendance and wagering on the Kentucky Oaks
and the Kentucky Derby last week underscore the strength of our Company and the
racing industry. By leveraging these events, we continue to build the Churchill
Downs brand around our combined live racing operations and maintain our position
as the leading content provider in the industry."
Churchill Downs Incorporated, headquartered in Louisville, Ky., is one
of the world's leading horse racing companies. Its flagship operation, Churchill
Downs, is home of the Kentucky Derby and hosted its 126th running on May 6,
2000. The Company owns additional racetracks in Kentucky, California and Florida
and has interests in an Indiana pari-mutuel operation as well as various racing
services companies. Churchill Downs Incorporated can be found on the Internet at
www.kentuckyderby.com.
A conference call regarding this release is scheduled for 9 a.m. EDT on
Wednesday, May 10, 2000. Interested parties can access the call in listen-only
mode by calling (913) 981-5510 or using the Internet at www.kentuckyderby.com.
This press release contains forward-looking statements made pursuant to
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. The reader is cautioned that such forward-looking statements involve risks
and uncertainties that could cause our actual operating results and financial
condition to differ materially. Forward-looking statements are typically
identified by the use of terms such as "may," "will," "expect," "anticipate,"
"estimate," 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 our expectations include: the impact of
gaming competition (including lotteries and riverboat, cruise ship and
land-based casinos) and other sports and entertainment options in those markets
in which we operate; a substantial change in law or regulations affecting our
pari-mutuel activities; a substantial change in allocation of live racing days;
a decrease in riverboat admissions revenue from our Indiana operations; the
impact of an additional racetrack near our Indiana operations; our continued
ability to effectively compete for the country's top horses and trainers
necessary to field high-quality horse racing; our continued ability to grow our
share of the interstate simulcast market; the impact of interest rate
fluctuations; our ability to execute our acquisition strategy and to complete or
successfully operate planned expansion projects; our ability to adequately
integrate acquired businesses; the loss of our totalisator companies or their
inability to keep their technology current; our accountability for environmental
contamination; the loss of key personnel and the volatility of our stock price.
CHURCHILL DOWNS INCORPORATED CONSOLIDATED
STATEMENTS OF EARNINGS
for the three months ended March 31,
(Unaudited)
(In thousands, except per share data)
2000 1999
---- ----
Net revenues $ 25,645 $ 17,663
Operating expenses 31,004 19,157
---------- ---------
Gross loss (5,359) (1,494)
Selling, general and administrative expenses 6,181 3,303
---------- ---------
Operating loss (11,540) (4,797)
---------- ---------
Other income (expense):
Interest income 266 147
Interest expense (3,751) (435)
Miscellaneous, net 42 44
---------- ---------
(3,443) (244)
---------- ---------
Loss before income tax benefit (14,983) (5,041)
---------- ---------
Income tax benefit 6,218 2,031
---------- ---------
Net loss $ (8,765) $ (3,010)
========== =========
Basic and diluted net loss per common share $(0.89) $(0.40)
Basic and diluted weighted average shares
outstanding 9,854 7,525
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION BY OPERATING UNIT
for the three months ended March 31,
(Unaudited)
(In thousands)
2000 1999
---- ----
Net revenues:
Churchill Downs $ 4,557 $ 4,643
Hollywood Park 5,759 -
Calder Race Course 1,877 -
Hoosier Park 11,185 10,948
Ellis Park 1,312 1,166
Other investments 1,320 1,214
---------- ---------
26,010 17,971
Eliminations (365) (308)
---------- ---------
$ 25,645 $ 17,663
EBITDA:
Churchill Downs $ (3,530) $ (3,283)
Hollywood Park (1,621) -
Calder Race Course (2,029) -
Hoosier Park 1,887 1,678
Ellis Park (391) (382)
Other investments 135 329
---------- ---------
(5,549) (1,658)
Corporate expenses * (2,008) (1,192)
---------- ---------
$ (7,557) $ (2,850)
Operating income (loss):
Churchill Downs $ (4,453) $ (4,198)
Hollywood Park (2,680) -
Calder Race Course (2,919) -
Hoosier Park 1,556 1,377
Ellis Park (751) (702)
Other investments (285) (82)
--------- ---------
(9,532) (3,605)
Corporate expenses * (2,008) (1,192)
---------- ---------
$ (11,540) $ (4,797)
* As a result of a reorganization for internal reporting during 2000, the
Company's operating unit disclosures are presented on a new basis to correspond
with internal reporting for corporate expenses. Corporate expenses for the three
months ended March 31, 1999 and 2000 are reported separately.
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
ASSETS March 31, Decemberh 31, March 31,
2000 1999 1999
---- ---- ----
Current assets:
Cash and cash equivalents $ 8,577 $ 29,060 $12,590
Accounts receivable 12,555 24,279 8,402
Prepaid income taxes 5,788 - 2,375
Other current assets 4,107 2,751 950
--------- --------- ---------
Total current assets 31,027 56,090 24,317
Other assets 7,229 4,740 5,427
Plant and equipment, net 276,712 274,882 85,827
Intangible assets, net 61,813 62,334 11,407
--------- --------- ---------
$376,781 $398,046 $126,978
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,743 $ 14,794 $ 11,330
Accrued expenses 14,231 23,821 5,308
Dividends payable - 4,927 -
Income taxes payable - 336 -
Deferred revenue 18,576 10,860 15,462
Long-term debt, current portion 511 552 570
--------- --------- ---------
Total current liabilities 48,061 55,290 32,670
Long-term debt 175,075 180,898 21,236
Other liabilities 8,726 8,263 3,810
Deferred income taxes 15,534 15,474 7,012
Shareholders' equity:
Preferred stock, no par value;
250 shares authorized; no
shares issued - - -
Common stock, no par value; 50,000
shares authorized; issued:
9,854 shares March 31, 2000
and December 31, 1999, and
7,525 shares March 31, 1999 71,634 71,634 8,927
Retained earnings 57,902 66,667 53,589
Deferred compensation costs (86) (115) (201)
Note receivable for common stock (65) (65) (65)
--------- --------- ---------
129,385 138,121 62,250
--------- --------- ---------
$376,781 $398,046 $126,978
========= ========= =========
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHURCHILL DOWNS INCORPORATED
May 10, 2000 \s\Robert L. Decker
------------------------------------
Robert L. Decker
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
May 10, 2000 \s\Michael E. Miller
------------------------------------
Michael E. Miller
Senior Vice President, Finance
(Principal Accounting Officer)