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Churchill resolves dispute
over cost of simulcast signals

Nov 25, 2003 5:00 AM

A dispute over the cost of simulcast signals that began earlier this month was settled last week, thus averting a major loss of income for Churchill Downs Inc. (CHDN). The company controls the simulcast wagering signals at three major American tracks.

Earlier, the company had released its earnings for the third fiscal quarter that reflected lower revenues for the period. Net revenues totaled $117.5 million, down more than 6% from last year’s $125.6 million. However, operational changes kept the net earnings at $7.9 million, essentially the same as last year. Earnings per share of $0.59 also equaled last year’s amount.

Beyond the third quarter experience, improvement was not expected to be happening soon.

Tom Meeker, president and CEO, said that "because of the appreciable forward shift in 2003 race days at Arlington Park, our fourth quarter will feature far fewer race dates overall making comparisons to the same quarter in 2002 dissimilar. In addition, we will be challenged to improve our on-track performance this quarter, especially at Churchill Downs, where the clubhouse facility is closed during renovations until 2005." He added that he was hopeful the company would meet its full-year estimate of approximately $1.80 per diluted share.

The company’s directors have declared an annual dividend of $0.50 per share payable on Jan. 23, 204 to shareholders of record on Dec. 31.

No details to the settlement of negotiations over the cost of its signals to the Southern Racing Cooperative, a conglomerate of a dozen tracks who balked at proposed increases suggested by Churchill Downs. Both sides said they were happy to have resolved the dispute.

Mikohn Gaming

Adjustments to their operation resulted in a reduction in the loss reported by Mikohn Gaming Corporation (MIKN) for the third fiscal quarter that ended on Sept. 30.

The company said the net loss for the period was $4.2 million or $0.32 per share compared to a net loss of $30.2 million or $2.35 per share in the comparable quarter of a year earlier.

Revenues for the quarter were $20.6 million, down from last year’s $29.6 million. Revenues from gaming operations amounted to $8.2 million compared to $211.2 million in 2002.

"Although our progress has been slower than expected," commented Russ McMeekin, president and CEO, "we are encouraged by the response of casino operators to our new slot model. During the quarter we received strategic approvals in Mississippi and the province of Ontario." He added that the company also has received its first ever approval from the State of Arizona.

He also announced the appointment of Michael Dreitzer as executive vice president and general counsel.

Century Casinos

Both revenue and earnings were higher in the third quarter for Century Casinos Inc. (CNTY).

Net operating revenue was $8.2 million, topping the $7.88 million reported in the third quarter of the 2002 fiscal year.

Net earnings in the 2003 quarter were $914,000 or $0.07 per share compared to $453,000 or $0.03 per share last year.

The company operates casinos in Colorado and in South Africa and on a pair of luxury cruise ships. It also manages a casino in the Marriott Hotel in Prague, Czech Republic.