11/03/2010 4:09PM

Churchill Downs Inc. posts $689K loss for third quarter

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Churchill Downs Inc. lost $689,000 in the third quarter of 2010, or four cents a share, according to financial statements released by the company on Wednesday afternoon, an improvement over last year's loss in the third quarter of $2.3 million.

The company posted the loss despite a 35 percent increase in revenue tied to results at a casino the company opened at Calder Race Course in Florida earlier this year and the recent acquisition of the account-wagering company Youbet.com. Revenue in the quarter was $135.7 million, compared with $100.9 million in the third quarter of last year, with $13.2 million in third-quarter revenue coming from the casino and $25 million from Youbet and a bet-processing company Churchill also acquired with the account-wagering company, the company said.

Churchill also took a charge of $4.4 million in the quarter related to its dissolution of a business unit, Churchill Downs Entertainment. Churchill scrapped the division after disappointing results for its inaugural concert festival, HullabaLOU, held this summer. Total attendance for the three-day festival was 78,000, and Bob Evans, the company's chief executive, had said earlier that Churchill had lost approximately $5 million on the event.

Operating expenses during the quarter increased 37 percent, from $85.3 million to $117.2 million, according to the financial statements.
 
Revenue from racing operations at the tracks four tracks -- Calder in South Florida, Churchill in Louisville, Arlington Park near Chicago, and Fair Grounds in New Orleans -- declined by 9 percent in the quarter, from $68.4 million in the third quarter last year to $62.4 million this year, according to the documents.

For the first nine months of 2010, Churchill has net income of $18.3 million, down 23 percent compared to net income for the first nine months of 2009 of $23.7 million. In general, racetracks in 2010 have derived less revenue from betting as handle has dropped throughout the year, following similar declines in 2009.