Record Derby Week Keys Strong CDI Performance
Description:
Record adjusted earnings for Kentucky Derby week—up more than $6 million compared with last year—helped Churchill Downs Inc. register record adjusted second quarter earnings of $157.2 million, the company said July 29.
As for its racing operations, CDI reported second-quarter adjusted earnings before interest, tax, depreciation, and amortization improved $1.7 million thanks to the successful Derby week, during which earnings improved by $6 million compared with 2014. Last year, Derby week generated between $7.5 million and $9 million.
Paced by its strong Derby week this year, Churchill Downs racetrack enjoyed an $8.4 million spike in second-quarter adjusted EBITDA.
Second-quarter racing revenue fell $4 million because the cessation of pari-mutuel operations at CDI's former Calder Casino & Race Course July 1, 2014, accounted for a loss of 40 race days. In its second-quarter business results reported July 29, CDI also noted that Arlington International Racecourse saw declines the company blamed on a reduction of state purse subsidies that led to a loss of live race days and decreased field size.
CDI's advance deposit wagering platform, TwinSpires.com, also enjoyed a strong quarter as total pari-mutuel handle improved 9% to $289.4 million to pace a 6% improvement in net revenue to $60.7 million compared with the same quarter last year. Adjusted EBITDA improved 19% to $16.7 million.
With a big assist from its new social gaming division, Big Fish Games, CDI registered record second- quarter adjusted EBITDA of $157.2 million, up 34% compared with the same quarter last year. Net earnings declined 4% to $55 million for the quarter, while net earnings for the year are down 6% to $53.49 million for the first six months of the year.
"Our second quarter delivered record revenues and adjusted EBITDA, driven primarily by a fantastic 2015 Kentucky Oaks and Derby, and by the contributions of our Big Fish Games division," CDI chief executive officer Bill Carstanjen said in a release. "While all of our segments showed improvements, Big Fish Games was our largest growth catalyst for the quarter, and further validates our strategy to enter the online and mobile games segment."