Derby fans weathered a steady late-afternoon rain as Country House
captured the 145th Kentucky Derby Presented by Woodford Reserve
over a sloppy track. Wagering from all-sources was the
highest all-time on both the Kentucky Derby Day program and on the
Kentucky Derby race.
Wagering from all-sources on the Kentucky Derby Day program
totaled $250.9 million, an 11% increase over the 2018 total and
previous record of $225.7 million. Wagering from all-sources
on the Kentucky Derby race increased 10% to $165.5 million from the
previous record of $149.9 million set last year. This year’s
wagering record includes $4.1 million of handle wagered in Japan
with this being the first year the Kentucky Derby has ever been
offered for wagering in the country.
Attendance of 150,729 decreased 4% compared to last year, as the
threat of an all-day rain forecast kept many fans away.
This year’s Derby purse was elevated $1 million to a guaranteed
$3 million making it the richest in history for America’s greatest
race and first leg of horse racing’s Triple Crown.
BUSINESS COMMENTARY “We are deeply grateful to
all of the fans of the Kentucky Derby around the world who once
again made this an amazing and memorable experience,” said Bill
Carstanjen, CEO of Churchill Downs Incorporated (“CDI”). “We
expect the Kentucky Derby Week Adjusted EBITDA to reflect another
record with $4.5-to-$6.0 million of growth over last year.”
TWINSPIRES TwinSpires, the country’s leading
online and mobile betting platform and the official betting partner
of the Kentucky Derby, recorded $48.4 million in handle on
Churchill Downs races for the Kentucky Derby Day program, an
increase of 20% over the prior year. TwinSpires’ handle on
the Kentucky Derby race alone was $30.2 million, up 23% over
2018.
DERBY WEEK All-sources handle for Opening
Night, Saturday, April 27, through Derby Day, Saturday, May 4, rose
to a new record of $343.0 million, up 10% from the previous record
of $311.2 million set last year. Attendance for those five days was
360,237, down 4% over 2018.
Use of Non-GAAP Measures
In addition to the results provided in
accordance with GAAP, the Company also uses non-GAAP measures,
including adjusted net income, adjusted diluted EPS, EBITDA
(earnings before interest, taxes, depreciation and amortization)
and Adjusted EBITDA.
The Company uses non-GAAP measures as a key
performance measure of the results of operations for purposes of
evaluating performance internally. These measures facilitate
comparison of operating performance between periods and helps
investors to better understand the operating results of CDI by
excluding certain items that may not be indicative of the Company's
core business or operating results. The Company believes the use of
these measures enable management and investors to evaluate and
compare, from period to period, the Company’s operating performance
in a meaningful and consistent manner. The non-GAAP measures are a
supplemental measure of our performance that is not required by, or
presented in accordance with GAAP, and should not be considered as
an alternative to, or more meaningful than, net income or diluted
EPS (as determined in accordance with GAAP) as a measure of our
operating results.
We use Adjusted EBITDA to evaluate segment
performance, develop strategy and allocate resources. We utilize
the Adjusted EBITDA metric to provide a more accurate measure of
our core operating results and enable management and investors to
evaluate and compare from period to period our operating
performance in a meaningful and consistent manner. Adjusted EBITDA
should not be considered as an alternative to operating income as
an indicator of performance, as an alternative to cash flows from
operating activities as a measure of liquidity, or as an
alternative to any other measure provided in accordance with GAAP.
Our calculation of Adjusted EBITDA may be different from the
calculation used by other companies and, therefore, comparability
may be limited.
Adjusted net income and adjusted diluted EPS
exclude discontinued operations net income or loss;
recapitalization costs related to the Midwest Gaming transaction;
transaction expense, which includes acquisition and disposition
related charges, Calder exit costs, as well as legal, accounting,
and other deal-related expense; pre-opening expense; and certain
other gains, charges, recoveries, and expenses.
Adjusted EBITDA includes CDI's portion of the
EBITDA from our equity investments.
Adjusted EBITDA excludes:
- Transaction expense, net which includes:
- Acquisition and disposition related charges, including fair
value adjustments related to earnouts and deferred payments;
- Calder Racing exit costs; and
- Other transaction expense, including legal, accounting, and
other deal-related expense;
- Stock-based compensation expense;
- Recapitalization costs related to the Midwest Gaming
transaction;
- Asset impairments;
- Gain on Ocean Downs/Saratoga Transaction;
- Loss on extinguishment of debt;
- Pre-opening expense; and
- Other charges, recoveries and expenses
For purposes of segment reporting, Adjusted
EBITDA includes intercompany revenue and expense totals that are
eliminated in the condensed consolidated statements of
comprehensive income. Refer to the reconciliation of
comprehensive income to Adjusted EBITDA included herewith for
additional information.
About Churchill Downs
Racetrack
Churchill Downs, the world’s most legendary racetrack, has
conducted Thoroughbred racing and presented America’s greatest
race, The Kentucky Derby, continuously since 1875. Located in
Louisville, the flagship racetrack of Churchill Downs Incorporated
(Nasdaq: CHDN) offers year-round simulcast wagering at the historic
track. Churchill Downs will conduct the 145th running of the
Kentucky Derby Presented by Woodford Reserve on May 4, 2019. The
track’s 2019 Spring Meet is scheduled for April 27 – June 29.
Churchill Downs has hosted the Breeders’ Cup World Championships
nine times. Information about Churchill Downs can be found online
at www.churchilldowns.com.
About Churchill Downs
Incorporated
Churchill Downs Incorporated ("CDI") (Nasdaq:
CHDN), headquartered in Louisville, Ky., is an industry-leading
racing, gaming and online entertainment company anchored by our
iconic flagship event - The Kentucky Derby. We own and
operate the largest legal online horseracing wagering platform in
the U.S., through our TwinSpires business. We are also a
leader in brick-and-mortar casino gaming with approximately 11,000
slot machines and VLTs and approximately 200 table games in eight
states. In August 2018, we launched our BetAmerica Sportsbook
at our two Mississippi casino properties and have announced plans
to enter additional U.S. sports betting and iGaming markets.
Derby City Gaming, the first historical racing machine ("HRM")
facility in Louisville, Kentucky, was opened in September 2018 with
900 HRM machines. Additional information about CDI can be
found online at www.churchilldownsincorporated.com.
Information set forth in this presentation
contains various “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995 (the “Act”),
which provides certain “safe harbor” provisions. All
forward-looking statements made in this presentation are made
pursuant to the Act. Forward-looking statements are typically
identified by the use of terms such as “anticipate,” “believe,”
“could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“predict,” “project,” “seek,” “should,” “will,” and similar words,
although some forward-looking statements are expressed
differently.
Although we believe that the expectations
reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct.
Important factors that could cause actual results to differ
materially from expectations include the following: the effect of
economic conditions on our consumers' confidence and discretionary
spending or our access to credit; additional or increased taxes and
fees; public perceptions or lack of confidence in the integrity of
our business; loss of key or highly skilled personnel; restrictions
in our debt facilities limiting our flexibility to operate our
business; general risks related to real estate ownership, including
fluctuations in market values and environmental regulations;
catastrophic events and system failures disrupting our operations;
online security risk, including cyber-security breaches; inability
to recover under our insurance policies for damages sustained at
our properties in the event of inclement weather and casualty
events; increases in insurance costs and inability to obtain
similar insurance coverage in the future; inability to identify and
complete acquisition, expansion or divestiture projects, on time,
on budget or as planned; difficulty in integrating recent or future
acquisitions into our operations; number of people attending and
wagering on live horse races; inability to respond to rapid
technological changes in a timely manner; inadvertent infringement
of the intellectual property of others; inability to protect our
own intellectual property rights; payment-related risks, such as
risk associated with fraudulent credit card and debit card use;
compliance with the Foreign Corrupt Practices Act or applicable
money-laundering regulations; work stoppages and labor issues;
difficulty in attracting a sufficient number of horses and trainers
for full field horseraces; inability to negotiate agreements with
industry constituents, including horsemen and other racetracks;
personal injury litigation related to injuries occurring at our
racetracks; our inability to utilize and provide totalisator
services; weather conditions affecting our ability to conduct live
racing; increased competition in the horseracing business; changes
in the regulatory environment of our racing operations; changes in
regulatory environment of our online horseracing business; increase
in competition in our online horseracing; uncertainty and changes
in the legal landscape relating to our online wagering business;
legalization of online sports betting and iGaming in the United
States and our ability to predict and capitalize on any such
legalization; inability to expand our sports betting operations and
effectively compete; failure to comply with laws requiring us to
block access to certain individuals could result in penalties or
impairment with respect to our mobile and online wagering products;
increased competition in our casino business; changes in regulatory
environment of our casino business; development and expansion of
casinos is costly and susceptible to delays, cost overruns and
other uncertainties; and concentration and evolution of slot
machine manufacturing and other technology conditions that could
impose additional costs.
Contact: Nick Zangari(502)
394-1157Nick.Zangari@kyderby.com
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