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 8, 2001
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
Copy of press release is set forth in Exhibit 99 to this filing and
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 May 8, 2001
ITEM 8-9. Not Applicable
FOR IMMEDIATE RELEASE Contact: Chantelle Kammerdiener
(502) 636-4415, office
(502) 836-1225, cellular
chantellek@kyderby.com
CHURCHILL DOWNS INCORPORATED REPORTS FIRST QUARTER RESULTS
LOUISVILLE, Ky. (May 8, 2001) - Churchill Downs Incorporated (Nasdaq: CHDN)
("CDI") today reported results for the first quarter ended March 31, 2001.
Net revenues were $31.7 million, an increase of 22 percent, compared with
$25.9 million for the same period last year. The Company reported a net loss of
$11.0 million, or 84 cents per share on 13.0 million average shares outstanding,
compared with a net loss of $8.8 million, or 89 cents per share on 9.9 million
average shares outstanding, in the first quarter of 2000.
The increase of 32 percent in the number of average shares outstanding
for the first quarter was due principally 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 the
Company has historically incurred a loss for the first quarter because of the
seasonality of its business and that the loss was less than published estimates.
"With the exception of two days of Thoroughbred racing at Calder and 19
days of Standardbred racing at Hoosier Park at Anderson, we did not conduct any
live racing during the first quarter," Meeker said. "As expected, the addition
of Arlington Park to our operations for the first time during this period
contributed to a larger loss, which was offset by the increase in average shares
outstanding compared to a year ago. The increase in net revenues for the quarter
also was primarily due to the inclusion of Arlington Park, which has been
conducting simulcast wagering at its off-track betting facilities.
"Excluding the contribution from Arlington Park, revenues for the first
quarter were down 2.3 percent from a year ago principally due to lower handle on
incoming signals at our simulcast facilities. We attribute this decline to the
impact of a national economic slowdown, which we had expected would curtail
discretionary spending by consumers, and we likely will continue to face this
factor over the remainder of the year.
"Our second-quarter results will benefit from one of the most successful
Kentucky Derby weekends on record as well as the live racing offered at five of
our tracks during this period. At this time, we believe that earnings for the
quarter will range from $1.67 to $1.70 per diluted share. Although compared with
$1.85 per diluted share in the year-earlier period, the per share results for
the current quarter will be based on approximately 32 percent more outstanding
shares, and we will have the benefit of live racing at Arlington Park for only
two weeks of the period."
Meeker added, "In anticipation of a slowing economy, we implemented a
company-wide cost-reduction program in the first quarter to reduce operating
expenses. Accordingly, we continue to believe that we will meet our earlier
forecast for an approximate 20 percent increase in net earnings for the full
year, up from $19.2 million for 2000. As we have previously indicated, the
expected gain in earnings per share for 2001 as a whole will be more moderate
and in line with the percentage increase we realized in 2000 due to the higher
number of average shares outstanding.
"We believe the year holds strong, fundamental potential for our Company.
We are already implementing significant operating efficiencies and innovative
ideas generated by our employees through our best practices program, `Winning
Colors.' These initiatives, coupled with the strategic synergies and marketing
capability we are realizing through our simulcast vehicle -- the Churchill Downs
Simulcast Network (CDSN) -- reinforce our expectation that 2001 will mark
another year of meaningful progress."
A conference call regarding this release is scheduled for Wednesday, May 9,
at 9 a.m. EDT. Investors and other interested parties may listen to the
teleconference by accessing the online, real-time webcast and broadcast of the
call at www.kentuckyderby.com or www.streetevents.com or by calling (913)
981-5591 at least 10 minutes before the appointed time. The online replay will
be available at approximately 11 a.m. EDT and continue for two weeks. An
eight-day telephonic replay will be available two hours after the call ends by
dialing (719) 457-0820 and entering 427841 when prompted for the access code.
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 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.
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," "believe," "could,"
"intend," "might," "plan," "predict," "project," "should," "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 our racing operations; litigation
surrounding the
Rosemont, Ill., riverboat casino; changes in Illinois law that impact
revenues of racing operations in Illinois; the economic environment; 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 subsidy 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; market reaction to our expansion projects; 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the three months ended March 31,
(Unaudited)
(In thousands, except per share data)
2001 2000
---- ----
Net revenues $ 31,715 $25,919
Operating expenses 39,263 31,368
--------- --------
Gross loss (7,548) (5,449)
Selling, general and administrative expenses 7,916 6,091
--------- --------
Operating loss (15,464) (11,540)
--------- --------
Other income (expense):
Interest income 113 266
Interest expense (3,515) (3,751)
Miscellaneous, net 131 42
--------- --------
(3,271) (3,443)
--------- --------
Loss before income tax benefit (18,735) (14,983)
--------- -------
Income tax benefit 7,775 6,218
--------- --------
Net loss $(10,960) $(8,765)
========= ========
Basic and diluted net loss per common share $(0.84) $(0.89)
Basic and diluted weighted average shares
outstanding 13,045 9,854
Certain financial statement amounts have been reclassified in the prior years to
conform to current year presentation.
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION BY OPERATING UNIT
for the three months ended March 31,
(Unaudited)
(In thousands)
2001 2000
---- ----
Net revenues:
Churchill Downs $ 4,249 $ 4,557
Hollywood Park 5,489 5,759
Calder Race Course 1,322 1,877
Arlington Park 6,392 -
Hoosier Park 12,433 11,185
Ellis Park 1,423 1,585
Other investments 915 1,308
--------- ---------
32,223 26,271
Corporate revenues* 1 13
Eliminations (509) (365)
--------- ---------
$ 31,715 $ 25,919
========= =========
EBITDA:
Churchill Downs $ (3,714) $ (3,530)
Hollywood Park (1,535) (1,621)
Calder Race Course (2,405) (2,029)
Arlington Park (1,548) -
Hoosier Park 1,717 1,887
Ellis Park (603) (391)
Other investments 228 135
--------- ---------
(7,860) (5,549)
Corporate expenses (2,548) (2,008)
--------- ---------
$(10,408) $ (7,557)
========= =========
Operating income (loss):
Churchill Downs $ (4,798) $ (4,453)
Hollywood Park (2,804) (2,680)
Calder Race Course (3,303) (2,919)
Arlington Park (2,103) -
Hoosier Park 1,321 1,556
Ellis Park (956) (751)
Other investments (268) (285)
--------- ---------
(12,911) (9,532)
Corporate expenses (2,553) (2,008)
--------- ---------
$(15,464) $(11,540)
========= =========
*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 revenues. Corporate revenues for the three
months ended March 31, 2001 and 2000 are reported separately.
Certain financial statement amounts have been reclassified in the prior years to
conform to current year presentation.
CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
ASSETS March 31, December 31, March 31,
2001 2000 2000
---- ---- ----
(unaudited) (unaudited)
Current assets:
Cash and cash equivalents $ 8,066 $ 10,807 $ 8,577
Restricted cash 651 9,006 -
Accounts receivable 15,099 32,535 12,555
Prepaid income taxes 7,692 - 5,788
Other current assets 4,743 2,932 4,107
--------- --------- ---------
Total current assets 36,251 55,280 31,027
Other assets 8,546 8,116 7,229
Plant and equipment, net 342,629 342,767 276,712
Intangible assets, net 63,331 63,841 61,813
--------- --------- ---------
$450,757 $470,004 $376,781
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 22,010 $ 34,597 $ 12,797
Accrued expenses 25,963 30,914 14,926
Dividends payable - 6,508 -
Income taxes payable - 1,091 -
Deferred revenue 20,581 11,353 18,576
Long-term debt, current portion 2,541 2,324 511
--------- --------- ---------
Total current liabilities 71,095 86,787 46,810
Long-term debt 160,774 155,716 175,075
Other liabilities 14,290 9,837 9,977
Deferred income taxes 13,959 15,179 15,534
Shareholders' equity:
Preferred stock, no par value;
250 shares authorized; no shares
issued - - -
Common stock, no par value; 50,000
shares authorized; issued: 13,084
shares March 31, 2001, 13,019
shares December 31, 2000, and
9,854 shares March 31, 2000 124,485 123,227 71,634
Retained earnings 68,363 79,323 57,902
Accumulated other comprehensive loss (2,144) - -
Deferred compensation costs - - (86)
Note receivable for common stock (65) (65) (65)
--------- --------- ---------
190,639 202,485 129,385
--------- --------- ---------
$450,757 $470,004 $376,781
========= ========= =========
Certain financial statement amounts have been reclassified in the prior years to
conform to current year presentation.
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, 2001 /s/Robert L. Decker
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Robert L. Decker
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
May 10, 2001 /s/Michael E. Miller
----------------------------------
Michael E. Miller
Senior Vice President, Finance
(Principal Accounting Officer)