Churchill Downs Incorporated reported its third-quarter earnings, posting revenues of $173.7 million, a 6% decline compared to prior year. The drop in revenue was attributed to the loss of online gambling in Texas and the close of its racing operations in Calder, South Florida.
The company reported adjusted EBITDA of $32.2 million in the quarter, 1% above 2013’s third quarter, driven by a $4.4 million increase in CDI’s Gaming Adjusted EBITDA, which benefited from the addition of CDI’s two newest gaming properties, MVG and Oxford, as well as improved profitability from our two Mississippi properties – Harlow’s Casino and Riverwalk Casino.
The revenue report prompted CDI CEO Bill Carstanjen to give the quarter’s results a soft thumbs-up. “We were pleased with our third-quarter results which were in line with our internal expectations,” Carstanjen said in a statement. “We produced record Adjusted EBITDA of $32.2 million, despite generally soft regional gaming trends and changes to the legal and tax environment affecting our online operations.”
On the other hand, CDI posted a 15% decline in online business adjusted EBITDA to $1.9 million, largely because of the loss of online gambling in Texas and new online gambling taxes having far bigger weight than the division’s organic growth. Earnings from containing operations also dropped to $5.7 million, 62% worse than its Q3 2013 numbers. The company attributed this steep drop to effects of leasing the pari-mutuel operations at Calder to go with not getting anything from the Illinois Horse Racing Equity Trust Fund compared to the $4.2 million it received in the same time last year.
Meanwhile, Scientific Games Corporation reported a third-quarter net loss of $69.8 million, or $0.82 per share compared to last year’s numbers of $0.5 million in net losses, or $0.01 share. The US gaming and lottery supplier attributed to total to a handful of factors, including $19.7 million in impairment charges to write down an equity investment; $5.9 million in transaction and financing related costs tied into the company’s acquisition of Bally Technologies; and $1.9 million in restructuring and employee termination expenses.
The company said that its third-quarter revenue increased to $415.6 million from $234.4 million in the prior year quarter, an increase of 77.3%, primarily reflecting the contribution of WMS operations and a 9% increase in total lottery revenue. For the time period, the company posted $202.9 million in gaming revenue, $162.5 million of which came from WMS.
The revenue number was also a little higher than the $404.63 million analysts estimated.