Churchill suffers poor 1st quarter

May 17, 2005 5:48 AM

While basking in the glory of its most successful Kentucky Derby ever, Churchill Downs Inc. (CHDN) reported problems in its first fiscal quarter that ended on March 31, with a substantial increase in revenues but also a substantial increase in its loss.

Historically, the company operates at a loss for the first quarter because of the way its racing schedules fall but this year the net loss for the first quarter reached $13.9 million or $1.08 per share compared with last year’s net loss of $11.7 million or $0.89 per share.

Revenues increased to $56.3 million from last year’s $27.7 million because of the company’s acquisition of Fair Grounds racetrack in New Orleans whose racing schedule fell within the reporting period. However, cutting into the Fair Grounds benefit was an expense of $2.8 million that the company spent in Florida in an attempt to get the voters to approve slot machines at its Calder racetrack. The voters rejected slots.

Tom Meeker, president and CEO, said through the company’s investments in strategic investments, "we expect to deliver growth over the course of several years and have already begun to see some of our investments manifest themselves onto our top line."

Pinnacle Entertainment

Just a few days away from opening its most ambitious project yet, Pinnacle Entertainment Inc. (PNK) reported improved financial experiences for its first quarter of the current fiscal year.

Revenues rose 4.1$ to $139.8 million from last year’s $134.4 million and net income was $3.4 million or $0.08 per share, compared to last year’s adjusted net loss of $377,000 or $0.01 per share.

On May 26, the company will open its new riverboat facility in Lake Charles, Louisiana, called L’Auberge du Lac, a multi-million project that company chairman and CEO Dan Lee called "our world-class resort hotel."

Ready for development is a hotel-casino project in downtown St. Louis. Construction is set to begin during the second quarter.

Progressive Gaming

Progressive Gaming International Corporation (PGIC), formerly known as Mikohn Gaming Corp., continued on its path of returning to profitability during the three months that ended on March 31.

Revenues during the period rose to $22.9 million from the $21.1 million in the previous year and net earnings reached $1 million or $0.04 per share compared to a net loss of $2.4 million or $0.11 per share in the corresponding period.

The company said it had seen an 82% increase in its EBITDA (earnings before interest, taxes, depreciation and amortization) from $2.6 million to the quarter’s $4.8 million and expects to receive net cash proceeds of approximately $11 million from the sale of the interior signage business.

Russell McMeekin, president and CEO noted that this was the company’s "third consecutive quarter our team has delivered net income, and the fifth consecutive quarter of either meeting or exceeding expectations on the bottom line." He said he expected the company to "continue as we lance growth between revenues generated form this channel and contracts obtained organically."

Scientific Games

Scientific Games Corp. (SGMS) reported a modest increase in profits for the quarter that ended on March. Declines in racing related business offset increases in its lottery ticket sales, the company said.

Quarterly income was $21 million, or $0.23 per share, up from $18.4 million or $0.22 per share in 2004. However, per share earnings were a penny below the consensus of estimates from analysts.

Revenue for the period totaled $184.6 million, reflecting a small decrease from last year’s $185.5 million. Yet, service revenue jumped 10% to $155.6 million while sales plunged to $28.8 million from the $43.8 million recorded in the previous year.

Affecting its racing business, the company said, was the 6% decline in North American thoroughbred racing handle that occurred during the months of January and February.