10/26/2011 4:42PM

Churchill Downs Inc. posts $19M income for third quarter on record income

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Largely because of a one-time gain from a favorable court ruling, Churchill Downs Inc. had net income of $19.8 million in the third quarter of 2011, up significantly from a $700,000 loss in the third quarter of last year, according to financial results released late on Wednesday.

Revenue in the quarter was $166.3 million, a third-quarter record for the company and up 13 percent compared with revenue during the third quarter of last year. Revenue was boosted by the operation of a Mississippi casino Churchill acquired in December of last year, along with revenue growth for Churchill's account-wagering operation, twinspires.com.

Churchill also recorded a one-time gain of $19.3 from a court-ordered distribution of money from a fund set aside for the racing industry from casinos in Illinois, where Churchill owns Arlington Park. Churchill recorded the gain in miscellaneous income, so that figure was not included in the record third-quarter revenue figure.

In a release, Churchill said that wagering through its twinpires.com operation was up 4.2 percent in the quarter, despite an overall 7.2 percent decline in U.S. handle during the quarter. Twinspires.com is currently the largest account-wagering company in the United States by handle.

Racing revenue in the quarter was down 1.3 percent, from $67.4 million to $66.5 million. Revenue from twinspires.com was up 7.1 percent, from $39.2 million to $42 million, and other gambling revenue was up 49.6 percent, from $34.7 million to $51.9 million. In addition to the Mississippi casino, Churchill operates casinos at its Calder Race Course in Florida and Fair Grounds racetrack in New Orleans.
During the quarter, Churchill paid down its long-term debt by $28.6 million, continuing a strategy of using cash flow from its casinos to reduce its debt load. So far this year, Churchill has paid down its debt by $108.8 million. As of the end of the third quarter, the company's long-term debt stood at $156.3 million.

For the first nine months of the year, Churchill has net income of $56.7 million on revenue of $547.6 million. Last year through the first nine months of the year, Churchill had net income of $23.8 million on revenue of $448.1 million.