Churchill Downs reports Q3 results

8 Nov 2007

LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (NASDAQ: CHDN) today reported results for the third quarter and nine months ended Sept. 30, 2007.

Net revenues from continuing operations for the third quarter of 2007 grew 7.1 percent to $103.9 million, compared to the $97.0 million reported during the same period of 2006. The growth in net revenues from continuing operations was driven primarily by the Company's June 2007 acquisition of the AmericaTAB and Bloodstock Research Information Systems advance-deposit wagering ("ADW") and data-services companies; the May 2007 launch of the Company's first owned and operated ADW platform, TwinSpires.com; and the improved performance of Arlington Park. The Chicago-area racetrack experienced larger field sizes and higher pari-mutuel wagering on its races during the third quarter after installing a synthetic racing surface in April 2007.

The Company's higher net revenues from continuing operations were offset partially by lower net revenues at Churchill Downs Racetrack, which hosted six fewer days of live racing during the third quarter of 2007 compared to the same period one year ago. Despite hosting four additional race days during the quarter, Calder Race Course also experienced lower net revenues due to heavy rains throughout the summer months that forced 55 turf races, more than one-third of all turf races scheduled during the third quarter, to be moved to the dirt surface. Calder also faced additional in-market competition for simulcast customers from South Florida pari-mutuel operations that already offer alternative gaming.

EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations for the third quarter of 2007 totaled $10.0 million and was relatively unchanged year over year. During the third quarter of 2006, the Company recognized $1.8 million of pre-tax insurance recoveries, net of impairment losses, related to Hurricane Wilma.

Net earnings from continuing operations during the third quarter of 2007 were $1.1 million, or $0.08 per diluted common share, compared to $2.9 million, or $0.21 per diluted common share, during the third quarter of 2006.

President and Chief Executive Officer Robert L. Evans said the Company made steady progress during the quarter on the path for growth outlined earlier this year. "We continued to see solid results from our core business as we grew overall net revenues from continuing operations by 7 percent; grew net pari-mutuel revenues from our racing operations by 6 percent; and grew total handle for the period by 1 percent," Evans stated. "We grew top-line revenues even though two major ADW sites and a large rebate operator were not taking wagers on Churchill Downs races last summer – and our own ADW platforms were not able to offer races from Saratoga, Del Mar, Belmont and other popular tracks.

"We are pleased with the performance of our acquired ADW platforms and data service businesses in terms of handle, data product sales and new customer sign-ups, and we look forward to additional growth in the fourth quarter as we continue to integrate our platforms and their offerings. Additionally in October, we secured the right for these ADW platforms to accept wagers from California residents, the largest account-wagering market in the nation. Our ADW sites will offer the premier horse racing content available during the fall, winter and spring months, with races from Churchill Downs, Fair Grounds, Hollywood Park, Santa Anita Park, Gulfstream Park and Oaklawn Park all part of our wagering line up.

"In September, we opened our temporary slot machine gaming facility at Fair Grounds in New Orleans with 245 machines. The fourth quarter will give us a better measure of our Louisiana gaming operations overall impact on earnings, as the temporary facility was only open 12 days during the third quarter. Construction is now underway on our permanent building, and our 2007-08 racing season begins Thanksgiving Day.

"We were pleased to see improved results from Arlington Park during the third quarter, due in part to higher wagering levels. Arlington experienced a very difficult 2006 racing season, marked by negative publicity related to a number of on-track horse injuries. Considering the challenges they faced one year ago, we are encouraged by Arlington's 2007 performance.

"In closing, I'd like to welcome our new chief financial officer, Bill Mudd to Churchill Downs Incorporated. Bill joins us from General Electric and brings to our Company key experience in domestic and international finance as well as an extensive business background that will help us continue to strengthen our management team."

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	Churchill Downs reports Q3 results 8 Nov 2007 LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (NASDAQ: CHDN) today reported results for the third quarter and nine months ended Sept. 30, 2007. Net revenues from continuing operations for the third quarter of 2007 grew 7.1 percent to $103.9 million, compared to the $97.0 million reported during the same period of 2006. The growth in net revenues from continuing operations was driven primarily by the Company's June 2007 acquisition of the AmericaTAB and Bloodstock Research Information Systems advance-deposit wagering ("ADW") and data-services companies; the May 2007 launch of the Company's first owned and operated ADW platform, TwinSpires.com; and the improved performance of Arlington Park. The Chicago-area racetrack experienced larger field sizes and higher pari-mutuel wagering on its races during the third quarter after installing a synthetic racing surface in April 2007. The Company's higher net revenues from continuing operations were offset partially by lower net revenues at Churchill Downs Racetrack, which hosted six fewer days of live racing during the third quarter of 2007 compared to the same period one year ago. Despite hosting four additional race days during the quarter, Calder Race Course also experienced lower net revenues due to heavy rains throughout the summer months that forced 55 turf races, more than one-third of all turf races scheduled during the third quarter, to be moved to the dirt surface. Calder also faced additional in-market competition for simulcast customers from South Florida pari-mutuel operations that already offer alternative gaming. EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations for the third quarter of 2007 totaled $10.0 million and was relatively unchanged year over year. During the third quarter of 2006, the Company recognized $1.8 million of pre-tax insurance recoveries, net of impairment losses, related to Hurricane Wilma. Net earnings from continuing operations during the third quarter of 2007 were $1.1 million, or $0.08 per diluted common share, compared to $2.9 million, or $0.21 per diluted common share, during the third quarter of 2006. President and Chief Executive Officer Robert L. Evans said the Company made steady progress during the quarter on the path for growth outlined earlier this year. "We continued to see solid results from our core business as we grew overall net revenues from continuing operations by 7 percent; grew net pari-mutuel revenues from our racing operations by 6 percent; and grew total handle for the period by 1 percent," Evans stated. "We grew top-line revenues even though two major ADW sites and a large rebate operator were not taking wagers on Churchill Downs races last summer – and our own ADW platforms were not able to offer races from Saratoga, Del Mar, Belmont and other popular tracks. "We are pleased with the performance of our acquired ADW platforms and data service businesses in terms of handle, data product sales and new customer sign-ups, and we look forward to additional growth in the fourth quarter as we continue to integrate our platforms and their offerings. Additionally in October, we secured the right for these ADW platforms to accept wagers from California residents, the largest account-wagering market in the nation. Our ADW sites will offer the premier horse racing content available during the fall, winter and spring months, with races from Churchill Downs, Fair Grounds, Hollywood Park, Santa Anita Park, Gulfstream Park and Oaklawn Park all part of our wagering line up. "In September, we opened our temporary slot machine gaming facility at Fair Grounds in New Orleans with 245 machines. The fourth quarter will give us a better measure of our Louisiana gaming operations overall impact on earnings, as the temporary facility was only open 12 days during the third quarter. Construction is now underway on our permanent building, and our 2007-08 racing season begins Thanksgiving Day. "We were pleased to see improved results from Arlington Park during the third quarter, due in part to higher wagering levels. Arlington experienced a very difficult 2006 racing season, marked by negative publicity related to a number of on-track horse injuries. Considering the challenges they faced one year ago, we are encouraged by Arlington's 2007 performance. "In closing, I'd like to welcome our new chief financial officer, Bill Mudd to Churchill Downs Incorporated. Bill joins us from General Electric and brings to our Company key experience in domestic and international finance as well as an extensive business background that will help us continue to strengthen our management team."