Churchill Downs Inc. posts loss for first quarter

Churchill Downs Inc. had a net loss of $1.6 million in the first quarter of 2015 on record revenue of $250.9 million, according to financial statements released Monday. The loss compares with a $700,000 loss in the first quarter of last year.

During the quarter, revenue from Churchill racing’s operations and account-wagering companies both declined. Racing-operations revenue was down 20 percent, from $30.6 million during the first quarter last year to $24.4 million this year, largely because of the loss of simulcasting revenue from Calder Race Course in Florida. Churchill reached a deal to lease Calder to The Stronach Group last summer.

Despite the drop in revenue for its racetracks, Churchill said operations in the unit improved over last year, largely because of a jump in revenue from Fair Grounds, where handle was up 10.6 percent during the last meet, but also because the lease of Calder’s racing operations resulted in a net gain of $1.4 million in earnings for the property before interest, taxes, depreciation, and amortization.

Account-wagering revenue declined 2 percent, from $46.1 million during the first quarter last year to $45.3 million in this year’s first quarter. In a release accompanying the statement, Churchill said the loss was partly due to the “cancellation of a third-party administrative call center service agreement” late last year. The release noted that handle through Churchill’s twinspires.com account-wagering service increased 1.1 percent during the quarter, even though overall U.S. handle dropped 5.2 percent during the quarter.

Total revenue for the company during the quarter was up 50 percent due to the inclusion of revenue from a mobile-gaming company Churchill acquired last year, Big Fish. During the quarter, Big Fish had revenue of $91.9 million, according to the financial documents. Expenses for Big Fish’s operations were $82.2 million during the quarter. The acquisition cost of Big Fish is expected to reach $900 million when including payouts to the former owners based on future results.

Revenue from Churchill’s casino properties during the quarter was $85.4 million, down 1 percent from $86.4 million during the first quarter last year.

The balance sheet distributed Monday showed that Churchill used $72 million in cash generated during the quarter to reduce the company’s long-term debt to $687 million. Interest payments on debt during the quarter was $7.3 million, compared with $5.0 million during the first quarter of last year.