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): October 25, 2000
CHURCHILL DOWNS INCORPORATED
-----------------------------
(Exact name of registrant as specified in its charter)
Kentucky 0-1469 61-0156015
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation or organization) Identification No.)
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)
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CHURCHILL DOWNS INCORPORATED
I N D E X
ITEM 1-4. Not Applicable
ITEM 5. OTHER EVENTS
Copy of press release is set forth in Exhibit 99 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 Press Release dated October 25, 2000
ITEM 8-9. Not Applicable
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Contact: Chantelle Kammerdiener
(502) 636-4415/(502) 266-8731
chantellek@kyderby.com
CHURCHILL DOWNS INCORPORATED REPORTS
RECORD THIRD-QUARTER RESULTS
Net revenues increased 64 percent to $103.5 million.
Net earnings rose 513 percent to $7.3 million.
Earnings per share increased to a new third-quarter high of 68 cents.
LOUISVILLE, Ky. (Oct. 25, 2000) -- Churchill Downs Incorporated (Nasdaq: CHDN)
("CDI") today reported its financial results for the three months ended Sept.30,
2000, which included record third-quarter revenues and net earnings.
Net revenues for the third quarter were $103.5 million, an increase of
64 percent over $63.1 million reported for the same period last year. Net
earnings for the quarter were $7.3 million, up 513 percent from $1.2 million a
year ago. Diluted earnings per share were 68 cents on 10.7 million average
diluted shares outstanding, compared with 12 cents on 9.6 million average
diluted shares outstanding during the third quarter of 1999. CDI also recorded
sharply higher net revenues and earnings for the nine months ended Sept. 30,
2000, and those results are included in the accompanying tables.
The increases of 12.1 percent and 22.6 percent in the number of average
diluted shares outstanding for the third quarter and nine months, respectively,
were due to the issuance of 3.15 million common shares for the September 2000
merger with Arlington International Racecourse, now doing business as Arlington
Park.
Thomas H. Meeker, CDI's president and chief executive officer, said
that the completion of the Arlington merger highlighted the Company's ongoing
progress during the third quarter and contributed significantly to the
year-to-year gains, especially to the significant increase in net income.
Meeker noted, "As expected, our results during the quarter benefited
from the income from the management contract that was in effect from July 1
through the closing of the merger on Sept. 8. We had indicated in our mid-year
report that we anticipated a significant increment to per-share earnings in the
third quarter from this pre-closing management agreement. We also noted that
this gain would be largely offset in the fourth quarter as we assimilate
Arlington into our operations at a time when the racetrack would not be racing
and there would be significantly more shares outstanding. Our third-quarter
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year-to-year comparisons were also aided by the inclusion of the live racing
portion of Arlington's race meet from the closing of the merger through Sept.
30.
"Our experience to date with Arlington supports our confidence that
this transaction represents another important event in the long-term record of
CDI. It is important to note, however, that our results for the third quarter
were also aided by strong performances by our other operations. We benefited
from a full quarter with Hollywood Park, after being able to only include a few
weeks of their operations during the year-earlier quarter due to the timing of
the acquisition's completion in September 1999. Churchill Downs' results were
impressive beyond the benefit of having the additional week of live racing,
which we transferred from Ellis Park. Our Henderson, Ky., track reduced the
number of live racing days it offered, including the first week in July that was
transferred to Churchill Downs. Ellis Park's total reduction from 61 to 41 days
helped the racetrack to increase its purses, improve the quality of its racing
and produce a superb on-track performance during its race meet this year. We
plan to continue to strengthen all of our racing operations and make rewarding
strides in our plans to build the CSDN brand as the premier simulcast product in
horse racing."
Meeker added, "Although we face a difficult comparison in earnings per
share for the fourth quarter, we expect to meet the published consensus estimate
for the final period, and we believe our earnings for 2000 as a whole will at
least match the $1.72 diluted per share reported for 1999. That achievement will
cap a very successful year in which we absorbed the first full year of
operations of both Calder Race Course and Hollywood Park, completed the
Arlington merger and made substantial investments in the personnel resources
that will be vital to our future expansion. We will end 2000 with an annual
schedule of live racing programs that is triple what we offered just three years
ago, and we are excited about the prospect for continued growth that our
momentum offers in 2001.
A conference call regarding this release is scheduled for Thursday,
Oct. 26, at 9 a.m. EDT. Interested parties can access the live call in
listen-only mode by calling (719) 457-2604 or using the Internet at
www.kentuckyderby.com or www.streetevents.com. A telephone replay will be
available for five days beginning at noon on Oct. 26. To access the replay, dial
(719) 457-0820, code 404211. Additionally, the call will be archived for a
maximum of 30 days on the Web sites listed above.
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 will host the race's 127th
running on May 5, 2001. The Company owns additional racetracks in Kentucky,
Illinois, California and Florida and has interests in a pari-mutuel operation in
Indiana as well as various racing services companies. CDI trades on the Nasdaq
National Market under the symbol CHDN and can be found on the Internet at
www.kentuckyderby.com.
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This news 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 financial
performance of Arlington International Racecourse; litigation surrounding the
Rosemont, Ill., riverboat casino; market reaction to our merger agreement with
Arlington; changes in Illinois law that impact revenues of the racing operations
in Illinois; 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.
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CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF EARNINGS
for the nine and three months ended September 30,
(Unaudited)
(In thousands, except per share data)
Nine Months Ended Three Months Ended
September 30, September 30,
------------------- -------------------
2000 1999 2000 1999
---- ---- ---- ----
Net revenues $261,120 $164,879 $103,536 $63,076
Operating expenses 200,954 129,482 80,282 54,662
--------- --------- --------- --------
Gross profit 60,166 35,397 23,254 8,414
Selling, general and
administrative expenses 20,394 11,668 7,430 4,779
--------- --------- --------- --------
Operating income 39,772 23,729 15,824 3,635
--------- --------- --------- --------
Other income (expense):
Interest income 774 566 269 204
Interest expense (11,353) (4,162) (3,683) (1,953)
Miscellaneous, net (513) 293 (97) 169
--------- --------- --------- --------
(11,092) (3,303) (3,511) (1,580)
--------- --------- --------- --------
Earnings before income
tax provision 28,680 20,426 12,313 2,055
--------- --------- --------- --------
Federal and state income
tax provision (11,802) (8,579) (5,010) (863)
--------- --------- --------- --------
Net earnings $ 16,878 $ 11,847 $ 7,303 $ 1,192
========= ========= ========= ========
Earnings per common
share data:
Basic $1.67 $1.45 $0.69 $0.13
Diluted $1.66 $1.43 $0.68 $0.12
Weighted average shares
outstanding:
Basic 10,121 8,175 10,649 9,455
Diluted 10,176 8,297 10,707 9,552
Certain financial statement amounts have been reclassified in the prior years to
conform to current year presentation.
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CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION BY OPERATING UNIT
for the nine and three months ended September 30,
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
------------------- -------------------
(In thousands) 2000 1999 2000 1999
---- ---- ---- ----
Net revenues:
Churchill Downs $ 73,639 $ 66,653 $ 8,960 $ 5,520
Hollywood Park 75,003 1,117 24,124 1,117
Calder Race Course 42,556 39,053 28,888 27,352
Arlington 9,171 - 9,171 -
Hoosier Park 38,090 37,514 13,872 13,256
Ellis Park 14,947 18,491 12,265 15,528
Other investments 11,524 4,378 8,011 1,667
--------- --------- --------- --------
264,930 167,206 105,291 64,440
Corporate revenues* 651 - 46 -
Eliminations (4,461) (2,327) (1,801) (1,364)
--------- --------- --------- --------
$261,120 $164,879 $103,536 $63,076
========= ========= ========= ========
EBITDA:
Churchill Downs $ 21,502 $ 18,001 $ (2,361) $(4,013)
Hollywood Park 13,380 (542) 3,909 (542)
Calder Race Course 7,001 8,865 7,746 6,977
Arlington 2,093 - 2,093 -
Hoosier Park 4,939 5,131 1,497 1,744
Ellis Park 1,534 2,834 2,581 3,637
Other investments 7,137 1,115 6,437 454
--------- --------- --------- --------
57,586 35,404 21,902 8,257
Corporate expenses* (6,129) (3,949) (1,940) (1,404)
--------- ---------- --------- --------
$ 51,457 $ 31,455 $ 19,962 $ 6,853
========= ========= ========= ========
Operating income (loss):
Churchill Downs $ 18,721 $ 15,328 $ (3,282) $(4,883)
Hollywood Park 10,082 (795) 2,767 (795)
Calder Race Course 4,307 7,364 6,834 6,062
Arlington 1,960 - 1,960 -
Hoosier Park 3,942 4,183 1,164 1,417
Ellis Park 442 1,842 2,211 3,292
Other investments 6,146 (244) 6,169 (54)
--------- --------- --------- --------
45,600 27,678 17,823 5,039
Corporate expenses* (5,828) (3,949) (1,999) (1,404)
--------- --------- --------- --------
$ 39,772 $ 23,729 $ 15,824 $ 3,635
========= ========= ========= =======
* As a result of a reorganization for internal reporting during 2000, the
Company's segment disclosures are presented on a new basis to correspond with
internal reporting for corporate revenues and expenses. Corporate revenues and
expenses for the nine and three months ended September 30, 2000 and 1999 are
reported separately.
Certain financial statement amounts have been reclassified in the prior periods
to conform to current period presentation.
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CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
September 30, December 31, September 30,
ASSETS 2000 1999 1999
---- ---- ----
Current assets:
Cash and cash equivalents $ 11,359 $ 29,060 $27,936
Restricted cash 9,270 - -
Accounts receivable 35,096 24,279 14,812
Other current assets 4,627 2,751 3,110
--------- --------- ---------
Total current assets 60,352 56,090 45,858
Other assets 7,390 4,740 6,167
Plant and equipment, net 339,593 274,882 275,631
Intangible assets, net 64,346 62,334 61,899
--------- --------- ---------
$471,681 $398,046 $389,555
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 34,572 $ 14,794 $ 19,616
Accrued expenses 38,025 23,821 18,102
Dividends payable - 4,927 -
Income taxes payable 1,774 336 1,529
Deferred revenue 5,386 10,860 3,094
Long-term debt, current portion 2,277 552 465
--------- -------- ---------
Total current liabilities 82,034 55,290 42,806
Long-term debt 157,183 180,898 186,104
Other liabilities 10,299 8,263 4,836
Deferred income taxes 15,565 15,474 15,938
Commitments and contingencies - - -
Shareholders' equity:
Preferred stock, no par value;
250 shares authorized; no
shares issued - - -
Common stock, no par value; 50,000
shares authorized; issued:
13,015 shares September 30,
2000, and 9,854 shares
December 31, 1999 and
September 30, 1999 123,149 71,634 71,634
Retained earnings 83,545 66,667 68,446
Deferred compensation costs (29) (115) (144)
Note receivable for common stock (65) (65) (65)
--------- --------- ---------
206,600 138,121 139,871
--------- ---------- ---------
$471,681 $398,046 $389,555
========= ========= =========
Certain financial statement amounts have been reclassified in the prior years to
conform to current year presentation.
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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
October 25, 2000 /s/Robert L. Decker
-----------------------------------
Robert L. Decker
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
October 25, 2000 /s/Michael E. Miller
-----------------------------------
Michael E. Miller
Senior Vice President, Finance
(Principal Accounting Officer)
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