Churchill Downs Inc., the Louisville, Kentucky-based operator of casinos and the historic horse-racing track, said fourth-quarter earnings rose from a year ago and said it will buy hotel-casinos in Pennsylvania and Mississippi for $229.5 million.
CDC Gaming Reports on Wednesday reported Eldorado Resorts would sell Presque Isle Downs & Casinos for $178.9 million and Lady Luck Casino Vicksburg for $50.6 million. The transactions will be funded with cash on hand and through the company’s existing credit facility, the company said in a statement.
The holdings will add to Churchill Downs’ portfolio, which includes casinos in Miami Gardens, Florida, and Oxford, Maine; a racetrack and casino in New Orleans; a racetrack in Arlington Heights, Illinois; and hotel-casinos in Greenville, Mississippi, and Vicksburg, Mississippi.
Seller Eldorado Resorts said it expects the Lady Luck Vicksburg deal to close in the second quarter and expects the Presque Isle Downs & Casinos deal to close later this year.
“Presque Isle will give us a foothold in Pennsylvania which has recently passed legislation authorizing real money online gaming,” Churchill Downs CEO William Carstanjen said in a statement. “The Lady Luck Vicksburg is immediately adjacent to our Riverwalk facility and offers us operational efficiencies in a stable region. Both properties fit our investment criteria and will be immediately accretive to our shareholders.”
Presque Isle opened its casino in February 2007 and operates approximately 1,600 slots, 32 table games and a poker room; it began live thoroughbred racing in September 2007 and holds about 100 race dates annually. Lady Luck Vicksburg operates 620 slots, nine table games and includes an 89-room hotel.
Also Thursday, Churchill Downs said net income for the three months ended Dec. 31 rose 43 percent, to $38.2 million, or $2.46 per diluted share, from $26.8 million, or $1.60 per share, a year earlier.
Fourth-quarter revenue rose 11 percent to $178.9 million from $161.7 million.
For the full year, net income rose 30 percent to $140.5 million, or $8.77 a share, from $108.1 million, or $6.42 per share, a year earlier.
Full-year revenue rose 7.3 percent to $882.6 million from $822.4 million.
As it announced earnings, the company announced a reshuffling of its board of directors. Alex Rankin will become board chairman April 24, the day of the company’s annual meeting. The company added that Robert Evans, Watts Humphrey Jr. and Craig Duchossois won’t stand for re-election at the meeting.
In comments accompanying the earnings results, Carstanjen called the company’s Nov. 29 sale of Big Fish Games for $990 million to Aristocrat Technologies one the of the quarter’s major accomplishments. The deal closed Jan. 9.
“(We) accomplished three significant strategic objectives,” Carstanjen said. “We announced the sale of Big Fish in November, we refinanced all of our debt and in January we launched a $500 million share repurchase via a tender offer utilizing a portion of the proceeds from the sale of Big Fish.
“We accomplished all of these initiatives,” he added, “while returning approximately $212 million to shareholders through dividends and share repurchases in 2017 in addition to the $500 million share in early 2018.”
Churchill Downs shares fell $2, or 0.77 percent, Thursday to close at $256.20 on the Nasdaq.
