Enough activity followed Churchill Downs this week that it was easy to almost forget that the horse track and casino company had first-quarter results to report.
The Louisville, Kentucky-based company on Tuesday showed off its new $45 million Homestretch Club and on Thursday, executives said they were investing up to $150 million to buy a New Hampshire casino. Churchill Downs also posted Wall Street forecast-topping first-quarter earnings and revenue.
In a statement, Churchill Downs said it earned $42.1 million, or $1.08 per diluted share, for the three months ended March 31, up from net income of $36.1 million, or 91 cents per diluted share, a year earlier.
The latest net income result topped the average $1.07 cents-per-share forecast of analysts surveyed by Seeking Alpha.
Churchill Downs shares rose on the news, climbing $13,19, or 6.71%, to close at $209.88 on the Nasdaq. The shares slipped after hours, falling 88 cents, or 0.42%, to settle at $209.
First-quarter adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 16.3% to $128.5 million from $110.6 million. In a conference call with analysts and journalists, CEO Bill Carstanjen said adjusted EBITDA grew at almost all of Churchill Downs’ regional gaming properties, contributing significantly to overall adjusted EBITDA growth.
Revenue rose 12.3% to $364.1 million from $324.3 million and topped the $327.2 million forecast of Seeking Alpha-polled analysts.
In its earnings statement, Churchill Downs said it would acquire Chasers Poker Room in Salem, New Hampshire, and spend the aforementioned $150 million to develop an expanded charitable gaming facility to accommodate historical racing machines.
During the call, the company said it opened two phases of a $90 million expansion of Rivers Casino Des Plaines in Illinois. The expansion’s first phase opened Jan. 4, the company said, with the addition of 200 new slot machines, 24 table games, and a new restaurant. The second phase opened April 8, with 300 new slots, a new 22-table poker room, and a large new casino bar. Carstanjen said his company expects the casino expansion’s third and final phase, which includes a new ballroom and event space, to open in early May.
Meanwhile, in Louisville, Churchill Downs led a tour of the Homestretch Club, which will be ready for the May 7 Kentucky Derby. The Louisville Courier-Journal newspaper reported the company converted 5,200 outdoor bleacher seats into 3,250 premium reserved seats – 2,610 stadium club seats, 66 covered terrace dining tables, 30 trackside lounges, and five private VIP hospitality lounges.
Churchill Downs on Thursday said it would improve its namesake track further, upgrading its paddock as part of a $185 million to $200 million project. The Paddock Project will debut in May 2024 for the Kentucky Derby’s 150th running.
As CDC Gaming Reports reported, the redesigned paddock will increase guest spaces to 12,000 from 5,000 and club spaces will be added for horse-focused experiences. The project is expected to add premium seating to create 3,612 new reserved seats and room for 3,250 standing-room-only tickets.
“We can … create spectacular new seating and viewing areas where none even exists today,” Carstenjen said on Thursday’s conference call. “And most importantly, we can reintroduce to our historic facility the best of 21st century hospitalityand the pageantry of America’s longest continuously held sporting and entertainment event.”
Carstanjen said his company remains on track to sell the 326-acre Arlington Park property to the Chicago Bears for $197 million in 2023’s first half, pending remaining approvals. “We will seek to utilize a 1031 exchange to defer the tax from the gain on this sale of the land,” he added.
Follow Matthew Crowley on Twitter @copyjockey.
