(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||||||||
, | ||||||||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||||
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
(d) | Exhibits | ||||||||||
The following is being furnished as an exhibit to the Current Report on Form 8-K. | |||||||||||
Exhibit Number | Description | ||||||||||
Press Release dated April 24, 2024 issued by Churchill Downs Incorporated | |||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
CHURCHILL DOWNS INCORPORATED | ||||||||
April 24, 2024 | /s/ Marcia A. Dall | |||||||
By: Marcia A. Dall | ||||||||
Title: Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
CONSOLIDATED RESULTS |
First Quarter | |||||||||||
(in millions, except per share data) | 2024 | 2023 | |||||||||
Net revenue | $ | 590.9 | $ | 559.5 | |||||||
Net income | $ | 80.4 | $ | 155.7 | |||||||
Diluted EPS | $ | 1.08 | $ | 2.05 | |||||||
Adjusted EBITDA(a) | $ | 242.5 | $ | 222.9 | |||||||
(a) This is a non-GAAP measure. See explanation of non-GAAP measures below. |
SEGMENT RESULTS |
First Quarter | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Revenue | $ | 248.9 | $ | 215.8 | |||||||
Adjusted EBITDA | 100.8 | 82.1 | |||||||||
First Quarter | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Revenue | $ | 114.1 | $ | 96.3 | |||||||
Adjusted EBITDA | 39.6 | 29.4 | |||||||||
First Quarter | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Revenue | $ | 243.2 | $ | 251.6 | |||||||
Adjusted EBITDA | 122.8 | 129.5 |
First Quarter | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Revenue | $ | — | $ | 0.3 | |||||||
Adjusted EBITDA | (20.7) | (18.1) |
ACQUISITION / DISPOSITION UPDATE |
CAPITAL MANAGEMENT |
NET INCOME |
Three Months Ended March 31, | ||||||||||||||
(in millions, except per common share data) | 2024 | 2023 | ||||||||||||
Net revenue: | ||||||||||||||
Live and Historical Racing | $ | 245.1 | $ | 214.4 | ||||||||||
TwinSpires | 106.6 | 94.8 | ||||||||||||
Gaming | 239.2 | 250.0 | ||||||||||||
All Other | — | 0.3 | ||||||||||||
Total net revenue | 590.9 | 559.5 | ||||||||||||
Operating expense: | ||||||||||||||
Live and Historical Racing | 157.2 | 143.3 | ||||||||||||
TwinSpires | 67.9 | 65.7 | ||||||||||||
Gaming | 178.5 | 173.5 | ||||||||||||
All Other | 2.1 | 5.0 | ||||||||||||
Selling, general and administrative expense | 54.8 | 52.3 | ||||||||||||
Transaction expense, net | 4.1 | (0.2) | ||||||||||||
Total operating expense | 464.6 | 439.6 | ||||||||||||
Operating income | 126.3 | 119.9 | ||||||||||||
Other (expense) income: | ||||||||||||||
Interest expense, net | (70.4) | (64.7) | ||||||||||||
Equity in income of unconsolidated affiliates | 37.8 | 38.3 | ||||||||||||
Gain on sale of Arlington | — | 114.0 | ||||||||||||
Miscellaneous, net | 8.1 | 1.4 | ||||||||||||
Total other (expense) income | (24.5) | 89.0 | ||||||||||||
Income from operations before provision for income taxes | 101.8 | 208.9 | ||||||||||||
Income tax provision | (21.4) | (53.2) | ||||||||||||
Net income | $ | 80.4 | $ | 155.7 | ||||||||||
Net income per common share data: | ||||||||||||||
Basic net income | $ | 1.09 | $ | 2.07 | ||||||||||
Diluted net income | $ | 1.08 | $ | 2.05 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | 74.1 | 75.3 | ||||||||||||
Diluted | 74.7 | 76.1 |
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 149.4 | $ | 144.5 | |||||||
Restricted cash | 72.6 | 77.3 | |||||||||
Accounts receivable, net | 115.0 | 106.9 | |||||||||
Income taxes receivable | — | 12.6 | |||||||||
Other current assets | 79.0 | 59.5 | |||||||||
Total current assets | 416.0 | 400.8 | |||||||||
Property and equipment, net | 2,668.5 | 2,561.2 | |||||||||
Investment in and advances to unconsolidated affiliates | 647.8 | 655.9 | |||||||||
Goodwill | 900.2 | 899.9 | |||||||||
Other intangible assets, net | 2,415.0 | 2,418.4 | |||||||||
Other assets | 19.3 | 19.3 | |||||||||
Total assets | $ | 7,066.8 | $ | 6,955.5 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 187.8 | $ | 158.5 | |||||||
Accrued expenses and other current liabilities | 423.3 | 426.8 | |||||||||
Income taxes payable | 4.1 | — | |||||||||
Current deferred revenue | 153.3 | 73.2 | |||||||||
Current maturities of long-term debt | 68.0 | 68.0 | |||||||||
Dividends payable | 0.7 | 29.3 | |||||||||
Total current liabilities | 837.2 | 755.8 | |||||||||
Long-term debt, net of current maturities and loan origination fees | 1,786.5 | 1,697.1 | |||||||||
Notes payable, net of debt issuance costs | 3,072.4 | 3,071.2 | |||||||||
Non-current deferred revenue | 11.8 | 11.8 | |||||||||
Deferred income taxes | 393.1 | 388.2 | |||||||||
Other liabilities | 138.9 | 137.8 | |||||||||
Total liabilities | 6,239.9 | 6,061.9 | |||||||||
Commitments and contingencies | |||||||||||
Shareholders' equity: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | — | — | |||||||||
Retained earnings | 827.8 | 894.5 | |||||||||
Accumulated other comprehensive loss | (0.9) | (0.9) | |||||||||
Total shareholders' equity | 826.9 | 893.6 | |||||||||
Total liabilities and shareholders' equity | $ | 7,066.8 | $ | 6,955.5 |
Three Months Ended March 31, | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 80.4 | $ | 155.7 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 46.9 | 37.9 | |||||||||
Distributions from unconsolidated affiliates | 45.0 | 45.8 | |||||||||
Equity in income of unconsolidated affiliates | (37.8) | (38.3) | |||||||||
Stock-based compensation | 7.2 | 8.6 | |||||||||
Deferred income taxes | 4.9 | 33.2 | |||||||||
Amortization of operating lease assets | 1.4 | 2.2 | |||||||||
Gain on sale of Arlington | — | (114.0) | |||||||||
Other | 1.7 | 0.8 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Income taxes | 17.0 | 19.9 | |||||||||
Deferred revenue | 80.1 | 81.8 | |||||||||
Other assets and liabilities | 7.9 | (17.7) | |||||||||
Net cash provided by operating activities | 254.7 | 215.9 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital maintenance expenditures | (12.4) | (11.8) | |||||||||
Capital project expenditures | (142.6) | (122.9) | |||||||||
Proceeds from sale of Arlington | — | 195.7 | |||||||||
Other | 1.6 | (6.5) | |||||||||
Net cash (used in) provided by investing activities | (153.4) | 54.5 | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowings under long-term debt obligations | 355.5 | 615.5 | |||||||||
Repayments of borrowings under long-term debt obligations | (266.7) | (797.5) | |||||||||
Payment of dividends | (28.6) | (26.7) | |||||||||
Repurchase of common stock | (141.7) | (0.5) | |||||||||
Taxes paid related to net share settlement of stock awards | (10.4) | (11.3) | |||||||||
Debt issuance costs | — | (2.5) | |||||||||
Change in bank overdraft | (8.6) | (14.2) | |||||||||
Other | (0.6) | (0.5) | |||||||||
Net cash used in financing activities | (101.1) | (237.7) | |||||||||
Net increase in cash, cash equivalents and restricted cash | 0.2 | 32.7 | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 221.8 | 204.7 | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 222.0 | $ | 237.4 |
Three Months Ended March 31, | ||||||||||||||
(in millions, except per common share data) | 2024 | 2023 | ||||||||||||
GAAP net income | $ | 80.4 | $ | 155.7 | ||||||||||
Adjustments, continuing operations: | ||||||||||||||
Other charges and recoveries, net | (6.7) | 0.3 | ||||||||||||
Transaction, pre-opening, and other expense | 12.6 | 6.7 | ||||||||||||
Gain on Dispositions | — | (114.0) | ||||||||||||
Income tax impact on net income adjustments (a) | (1.6) | 25.9 | ||||||||||||
Total adjustments | 4.3 | (81.1) | ||||||||||||
Adjusted net income attributable to Churchill Downs Incorporated | $ | 84.7 | $ | 74.6 | ||||||||||
Adjusted diluted EPS | $ | 1.13 | $ | 0.98 | ||||||||||
Weighted average shares outstanding - Diluted | 74.7 | 76.1 |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2024 | 2023 | ||||||||||||
Total Handle | ||||||||||||||
TwinSpires Horse Racing(a) | $ | 419.7 | $ | 410.5 |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2024 | 2023 | ||||||||||||
Net revenue from external customers: | ||||||||||||||
Live and Historical Racing: | ||||||||||||||
Churchill Downs Racetrack | $ | 3.1 | $ | 2.4 | ||||||||||
Louisville | 53.7 | 44.0 | ||||||||||||
Northern Kentucky | 28.5 | 26.3 | ||||||||||||
Southwestern Kentucky | 38.6 | 36.5 | ||||||||||||
Western Kentucky | 6.8 | 4.8 | ||||||||||||
Virginia | 111.2 | 97.7 | ||||||||||||
New Hampshire | 3.2 | 2.7 | ||||||||||||
Total Live and Historical Racing | $ | 245.1 | $ | 214.4 | ||||||||||
TwinSpires: | $ | 106.6 | $ | 94.8 | ||||||||||
Gaming: | ||||||||||||||
Florida | $ | 26.1 | $ | 26.1 | ||||||||||
Iowa | 23.4 | 24.5 | ||||||||||||
Louisiana | 44.3 | 44.1 | ||||||||||||
Maine | 26.8 | 27.7 | ||||||||||||
Maryland | 21.6 | 23.3 | ||||||||||||
Mississippi | 26.0 | 27.5 | ||||||||||||
New York | 45.0 | 44.5 | ||||||||||||
Pennsylvania | 26.0 | 32.3 | ||||||||||||
Total Gaming | $ | 239.2 | $ | 250.0 | ||||||||||
All Other | — | 0.3 | ||||||||||||
Net revenue from external customers | $ | 590.9 | $ | 559.5 | ||||||||||
Intercompany net revenues: | ||||||||||||||
Live and Historical Racing | $ | 3.8 | $ | 1.4 | ||||||||||
TwinSpires | 7.5 | 1.6 | ||||||||||||
Gaming | 4.0 | 1.5 | ||||||||||||
All Other | — | 0.2 | ||||||||||||
Eliminations | (15.3) | (4.7) | ||||||||||||
Intercompany net revenue | $ | — | $ | — |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | 11.0 | $ | 79.8 | $ | 10.6 | $ | 101.4 | $ | — | $ | 101.4 | |||||||||||||||||||||||
Historical racing(a) | 212.1 | — | 8.8 | 220.9 | — | 220.9 | |||||||||||||||||||||||||||||
Racing event-related services | 1.1 | — | 2.2 | 3.3 | — | 3.3 | |||||||||||||||||||||||||||||
Gaming(a) | 3.1 | 5.7 | 193.1 | 201.9 | — | 201.9 | |||||||||||||||||||||||||||||
Other(a) | 17.8 | 21.1 | 24.5 | 63.4 | — | 63.4 | |||||||||||||||||||||||||||||
Total | $ | 245.1 | $ | 106.6 | $ | 239.2 | $ | 590.9 | $ | — | $ | 590.9 |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | 11.0 | $ | 79.4 | $ | 11.6 | $ | 102.0 | $ | — | $ | 102.0 | |||||||||||||||||||||||
Historical racing(a) | 185.3 | — | 6.0 | 191.3 | — | 191.3 | |||||||||||||||||||||||||||||
Racing event-related services | 1.0 | — | 1.9 | 2.9 | — | 2.9 | |||||||||||||||||||||||||||||
Gaming(a) | 2.6 | 4.4 | 205.5 | 212.5 | — | 212.5 | |||||||||||||||||||||||||||||
Other(a) | 14.5 | 11.0 | 25.0 | 50.5 | 0.3 | 50.8 | |||||||||||||||||||||||||||||
Total | $ | 214.4 | $ | 94.8 | $ | 250.0 | $ | 559.2 | $ | 0.3 | $ | 559.5 |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Revenues | $ | 248.9 | $ | 114.1 | $ | 243.2 | $ | 606.2 | $ | — | $ | (15.3) | $ | 590.9 | |||||||||||||||||||||||||||
Gaming taxes and purses | (65.0) | (4.9) | (80.5) | (150.4) | — | — | (150.4) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (9.3) | (1.2) | (7.8) | (18.3) | — | — | (18.3) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (26.8) | (7.9) | (38.0) | (72.7) | — | — | (72.7) | ||||||||||||||||||||||||||||||||||
Content expense | (1.3) | (44.0) | (1.8) | (47.1) | — | 8.9 | (38.2) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (8.8) | (4.5) | (10.2) | (23.5) | (20.5) | 0.3 | (43.7) | ||||||||||||||||||||||||||||||||||
Maintenance, insurance and utilities | (10.3) | (1.0) | (9.6) | (20.9) | — | — | (20.9) | ||||||||||||||||||||||||||||||||||
Property and other taxes | (2.7) | (0.1) | (3.4) | (6.2) | (0.2) | — | (6.4) | ||||||||||||||||||||||||||||||||||
Other operating expense | (23.9) | (10.9) | (18.3) | (53.1) | — | 6.1 | (47.0) | ||||||||||||||||||||||||||||||||||
Other income | — | — | 49.2 | 49.2 | — | — | 49.2 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 100.8 | $ | 39.6 | $ | 122.8 | $ | 263.2 | $ | (20.7) | $ | — | $ | 242.5 | |||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Revenues | $ | 215.8 | $ | 96.3 | $ | 251.6 | $ | 563.7 | $ | 0.3 | $ | (4.5) | $ | 559.5 | |||||||||||||||||||||||||||
Gaming taxes and purses | (56.5) | (5.0) | (83.6) | (145.1) | — | — | (145.1) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (8.2) | (1.4) | (8.6) | (18.2) | — | 0.2 | (18.0) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (21.8) | (6.2) | (34.5) | (62.5) | — | — | (62.5) | ||||||||||||||||||||||||||||||||||
Content expense | (1.5) | (43.0) | (1.8) | (46.3) | — | 3.9 | (42.4) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (8.7) | (2.3) | (12.2) | (23.2) | (18.3) | 0.1 | (41.4) | ||||||||||||||||||||||||||||||||||
Maintenance, insurance and utilities | (9.3) | (0.9) | (9.8) | (20.0) | — | — | (20.0) | ||||||||||||||||||||||||||||||||||
Property and other taxes | (1.2) | — | (3.3) | (4.5) | — | — | (4.5) | ||||||||||||||||||||||||||||||||||
Other operating expense | (26.5) | (9.1) | (16.9) | (52.5) | (0.1) | 0.3 | (52.3) | ||||||||||||||||||||||||||||||||||
Other income | — | 1.0 | 48.6 | 49.6 | — | — | 49.6 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 82.1 | $ | 29.4 | $ | 129.5 | $ | 241.0 | $ | (18.1) | $ | — | $ | 222.9 |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2024 | 2023 | ||||||||||||
Reconciliation of Comprehensive Income to Adjusted EBITDA: | ||||||||||||||
Net income and comprehensive income | $ | 80.4 | $ | 155.7 | ||||||||||
Additions: | ||||||||||||||
Depreciation and amortization | 46.9 | 37.9 | ||||||||||||
Interest expense | 70.4 | 64.7 | ||||||||||||
Income tax provision | 21.4 | 53.2 | ||||||||||||
EBITDA | $ | 219.1 | $ | 311.5 | ||||||||||
Adjustments to EBITDA: | ||||||||||||||
Stock-based compensation expense | $ | 7.2 | $ | 8.6 | ||||||||||
Pre-opening expense | 8.3 | 3.2 | ||||||||||||
Other expenses, net | 0.2 | 3.7 | ||||||||||||
Transaction expense, net | 4.1 | (0.2) | ||||||||||||
Other income, expense: | ||||||||||||||
Interest, depreciation and amortization expense related to equity investments | 10.3 | 9.8 | ||||||||||||
Other charges and recoveries, net | (6.7) | 0.3 | ||||||||||||
Gain on Arlington sale | — | (114.0) | ||||||||||||
Total adjustments to EBITDA | 23.4 | (88.6) | ||||||||||||
Adjusted EBITDA | $ | 242.5 | $ | 222.9 | ||||||||||
Adjusted EBITDA by segment: | ||||||||||||||
Live and Historical Racing | $ | 100.8 | $ | 82.1 | ||||||||||
TwinSpires | 39.6 | 29.4 | ||||||||||||
Gaming | 122.8 | 129.5 | ||||||||||||
Total segment Adjusted EBITDA | 263.2 | 241.0 | ||||||||||||
All Other | (20.7) | (18.1) | ||||||||||||
Total Adjusted EBITDA | $ | 242.5 | $ | 222.9 |
Summarized Income Statement | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2024 | 2023 | ||||||||||||
Net revenue | $ | 216.9 | $ | 220.6 | ||||||||||
Operating and SG&A expense | 134.9 | 137.2 | ||||||||||||
Depreciation and amortization | 6.3 | 5.7 | ||||||||||||
Total operating expense | 141.2 | 142.9 | ||||||||||||
Operating income | 75.7 | 77.7 | ||||||||||||
Interest and other expense, net | (11.0) | (10.9) | ||||||||||||
Net income | $ | 64.7 | $ | 66.8 |
Summarized Balance Sheet | |||||||||||
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
Assets | |||||||||||
Current assets | $ | 99.2 | $ | 104.8 | |||||||
Property and equipment, net | 336.4 | 339.4 | |||||||||
Other assets, net | 270.1 | 266.1 | |||||||||
Total assets | $ | 705.7 | $ | 710.3 | |||||||
Liabilities and Members' Deficit | |||||||||||
Current liabilities | $ | 116.4 | $ | 106.2 | |||||||
Long-term debt | 845.6 | 847.2 | |||||||||
Other liabilities | 0.8 | 0.7 | |||||||||
Members' deficit | (257.1) | (243.8) | |||||||||
Total liabilities and members' deficit | $ | 705.7 | $ | 710.3 |
(in millions) | Project | Target Completion | Planned Spend | ||||||||
Live and Historical Racing Segment | |||||||||||
Churchill Downs Racetrack (Louisville, Kentucky) | Paddock Project | May 2024 | $185-$200 | ||||||||
Jockey Club Suites | May 2024 | $14 | |||||||||
The Rose (Northern Virginia) | New Property | Late September 2024 | $460 | ||||||||
Owensboro Racing & Gaming (Western Kentucky) | New Property | First Quarter 2025 | $100 | ||||||||
New Hampshire HRM Facility | New Property | TBD | TBD | ||||||||
Gaming Segment | |||||||||||
Terre Haute Casino Resort | New Casino | Opened April 5, 2024 | Up to $290 | ||||||||
New Hotel | May 2024 |
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