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): JULY 24, 2001
CHURCHILL DOWNS INCORPORATED
(Exact name of registrant as specified in its charter)
|
Kentucky (State or other jurisdiction of incorporation or organization) |
0-1469 Commission file number |
61-0156015 (IRS Employer 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 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 July 24, 2001 | ||
ITEM 8-9. |
Not Applicable |
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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 | |
July 25, 2001 |
/s/Robert L. Decker |
| Robert L. Decker | |
| Executive Vice President and Chief Financial Officer | |
| (Principal Accounting Officer) | |
July 25, 2001 |
/s/Michael E. Miller |
| Michael E. Miller | |
| Senior Vice President, Finance | |
| (Principal Accounting Officer) |
| FOR IMMEDIATE RELEASE | Contact: Chantelle Kammerdiener |
| (502) 636-4415, office | |
| (502) 836-1225, cellular | |
| chantellek@kyderby.com |
CHURCHILL DOWNS INCORPORATED REPORTS SECOND QUARTER RESULTS
LOUISVILLE, Ky. (July 24, 2001) – Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) today reported results for the second quarter ended June 30, 2001, which included record quarterly revenues, a new quarterly high in net income and lower diluted earnings per share due to a significant increase in the average number of shares outstanding.
Net revenues for the second quarter reached a record $163.3 million, an increase of 24.0 percent, compared with $132.2 million for the same period last year. Net earnings for the quarter were a record $21.9 million, a 19.7 percent increase over $18.3 million in 2000. Diluted earnings per share totaled $1.66 on 13.2 million shares outstanding, compared with $1.85 on 9.9 million shares outstanding for the second quarter of 2000. Results for the first half of 2001 are outlined in the accompanying tables.
The increase of 33 percent in the number of average shares outstanding for the second 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’s growth in net revenues and operating income for the quarter included favorable year-to-year comparisons from Churchill Downs and Calder Race Course and a positive contribution from Arlington Park, which opened its 2001 live racing meet on June 13. Hollywood Park, which has been affected by the impact of the energy-related problems on the West Coast, benefited from having eight more racing days in the second quarter this year due to a shift in the calendar. These days were historically run in the third quarter.
“ We believe the second-quarter results provide strong testament to the ongoing success of our operating strategy,” Meeker said. “We not only are facing steadily increasing competition in other gaming and entertainment offerings but also are having to surmount the impact this year of the economic slowdown. We were pleased with the performance of Churchill Downs, which benefited from an increase of nearly 6 percent in wagering from the simulcast of its signal, as well as the first-time inclusion of Arlington Park for this period. Our simulcast vehicle, the Churchill Downs Simulcast Network (“CDSN”), has become a vital contributor to the success of each of our tracks. CDSN markets all of our signals under a common brand, and
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we are benefiting this year from an increased marketing effort to raise the awareness of CDSN in the simulcast market as well as the addition of the Arlington Park racing programs.”
Meeker added, “The higher net income for the quarter was aided by our cost-reduction actions that we initiated earlier this year. We are maintaining a comprehensive program to contain expenses while still emphasizing the long-term benefits of adopting best practices throughout our organization, especially in the area of customer service.
“The strong start for Arlington Park’s 2001 meet offers encouraging support to our prospects for the second half. Our third quarter results will benefit from the inclusion of Arlington Park for a full three months this year; but because of the increased number of shares outstanding, we expect earnings per share for the period will range from 55 cents to 57 cents. Our forecast for the full year remains for an approximate 20 percent increase in net earnings, up from $19.2 million for 2000. We also continue to expect a moderate gain in diluted earnings per share for 2001 as a whole, in line with the percentage increase we realized in 2000 due to the higher number of average shares outstanding.”
Meeker concluded, “We began 2001 against a backdrop of significant economic uncertainty with the resolve to execute well to reach the financial goals that we had set for the year. We recognized that the substantial increase in the average number of shares would restrict the progress we could attain in earnings per share, but our objective was still to achieve a year in which our overall performance further validated our growth strategy. Our organization has adapted well to the difficulties of the current environment, and we believe that the results for the full year will serve as a solid platform for future gains.”
A conference call regarding this release is scheduled for Wednesday, July 25, 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.churchilldownsincorporated.com or www.streetevents.com or by calling (913) 981-5571 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 591913 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 will host the race’s 128th running on May 4, 2002. 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.churchilldownsincorporated.com.
Thisnews 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.
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CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
for the six and three months ended June 30,
(Unaudited)
(In thousands, except per share data)
Six Months Ended June 30, Three Months Ended June 30,
------------------------ ---------------------------
2001 2000 2001 2000
---- ---- ---- ----
Net revenues $194,972 $158,103 $163,257 $132,184
Operating expenses 154,065 121,873 114,802 90,505
--------- -------- --------- --------
Gross profit 40,907 36,230 48,455 41,679
Selling, general and administrative expenses 15,948 12,282 8,032 6,191
--------- -------- --------- --------
Operating income 24,959 23,948 40,423 35,488
Other income (expense):
Interest income 332 506 219 240
Interest expense (6,956) (7,671) (3,441) (3,920)
Miscellaneous, net 43 (416) (88) (458)
--------- -------- --------- ---------
(6,581) (7,581) (3,310) (4,138)
--------- -------- --------- ---------
Earnings before provision for income taxes 18,378 16,367 37,113 31,350
Provision for income taxes (7,443) (6,792) (15,218) (13,010)
--------- -------- --------- ---------
Net earnings $ 10,935 $ 9,575 $ 21,895 $ 18,340
========= ======== ========= =========
Earnings per common share data:
Basic $0.84 $0.97 $1.67 $1.86
Diluted $0.83 $0.97 $1.66 $1.85
Weighted average shares outstanding:
Basic 13,065 9,854 13,084 9,854
Diluted 13,185 9,908 13,217 9,906
Certain financial statement amounts have been reclassified in the prior periods to conform to current period presentation.
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CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION BY OPERATING UNIT
for the six and three months ended June 30,
(Unaudited)
(In thousands)
Six Months Ended June 30, Three Months Ended June 30,
------------------------ ---------------------------
2001 2000 2001 2000
---- ---- ---- ----
Net revenues:
Churchill Downs $ 68,186 $ 64,678 $ 63,937 $ 60,121
Hollywood Park 54,867 50,879 49,378 45,120
Calder Race Course 14,180 13,669 12,858 11,792
Arlington Park 27,661 - 21,269 -
Hoosier Park 26,318 24,217 13,885 13,032
Ellis Park 3,016 3,202 1,593 1,616
Other investments 2,683 3,514 1,768 2,207
--------- --------- --------- ---------
196,911 160,159 164,688 133,888
Corporate revenues 863 605 862 592
Eliminations (2,802) (2,661) (2,293) (2,296)
--------- --------- --------- ---------
$194,972 $158,103 $163,257 $132,184
========= ========= ========= =========
EBITDA:
Churchill Downs $ 26,376 $ 23,863 $ 30,090 $ 27,393
Hollywood Park 11,246 9,472 12,781 11,093
Calder Race Course (830) (745) 1,575 1,284
Arlington Park (108) - 1,440 -
Hoosier Park 3,151 3,442 1,434 1,555
Ellis Park (1,327) (1,047) (724) (656)
Other investments 848 700 620 565
--------- --------- --------- ---------
39,356 35,685 47,216 41,234
Corporate expenses (4,559) (4,189) (2,011) (2,181)
--------- --------- --------- ---------
$ 34,797 $ 31,496 $ 45,205 $ 39,053
========= ========= ========= =========
Operating income (loss):
Churchill Downs $ 24,202 $ 22,003 $ 29,000 $ 26,456
Hollywood Park 8,678 7,315 11,482 9,995
Calder Race Course (2,578) (2,527) 725 392
Arlington Park (1,217) - 886 -
Hoosier Park 2,360 2,778 1,039 1,222
Ellis Park (1,994) (1,769) (1,038) (1,018)
Other investments 67 (24) 335 261
--------- --------- --------- ---------
29,518 27,776 42,429 37,308
Corporate expenses (4,559) (3,828) (2,006) (1,820)
--------- --------- --------- ---------
$ 24,959 $ 23,948 $ 40,423 $ 35,488
========= ========= ========= =========
Certain financial statement amounts have been reclassified in the prior periods to conform to current period presentation.
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CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31, June 30,
2001 2000 2000
---- ---- ----
ASSETS (unaudited) (unaudited)
Current assets:
Cash and cash equivalents $ 22,515 $ 10,807 $ 21,931
Restricted cash 18,455 9,006 30,438
Accounts receivable, net 43,083 32,535 24,176
Other current assets 5,365 2,932 3,741
--------- --------- ---------
Total current assets 89,418 55,280 80,286
Other assets 9,313 8,116 6,988
Plant and equipment, net 343,402 342,767 275,692
Intangible assets, net 62,653 63,841 61,216
--------- --------- ---------
$504,786 $470,004 $424,182
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 73,490 $ 34,894 $ 50,462
Accrued expenses 34,993 30,617 22,230
Dividends payable - 6,508 -
Income taxes payable 6,517 1,091 5,990
Deferred revenue 4,052 11,353 2,334
Long-term debt, current portion 2,461 2,324 2,904
--------- --------- ---------
Total current liabilities 121,513 86,787 83,920
Long-term debt, due after one year 143,036 155,716 166,658
Other liabilities 12,475 9,837 11,001
Deferred income taxes 15,133 15,179 14,920
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: 13,084 shares June 30, 2001,
13,019 shares December 31, 2000, and 9,854
shares June 30, 2000 124,485 123,227 71,634
Retained earnings 90,256 79,323 76,172
Accumulated other comprehensive loss (2,047) - -
Deferred compensation costs - - (58)
Note receivable for common stock (65) (65) (65)
--------- --------- ---------
212,629 202,485 147,683
--------- --------- ---------
$504,786 $470,004 $424,182
========= ========= =========
Certain financial statement amounts have been reclassified in the prior periods to conform to current period presentation.
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