|Churchill Downs, the company which owns and operates a number of the United States’ racetracks, have released revised figures for their forecast for the rest of their financial year. The figures have been downsized as a result of the investments the company is making on developing alternative revenue sources. Additionally a disappointing performance by one of their tracks, Ellis Park, has resulted in impairment charges for the company, again now affecting their predicted earnings for the rest of the year.|
The reevaluation of their finances has seen the company adjust the overall earning for the financial year to be at US$1-1.05 per share, compared to the US$1.44-1.53 per share originally forecasted. Third quarter results are expected to now be a loss of US$0.29 per share, compared to an earlier anticipation of earnings in the range of US$0.33-0.38 per share. The company’s president and chief executive Thomas H Meeker, explained the adjustments: 'As we advised in July, strategic initiatives such as our alternative gaming efforts might require additional, non-deductible legislative expenses, the extent of which continues to be contingent upon the efforts' prospects and need.'
Meeker went on to further explain the reasons for the downturn in projected revenues, and the future of the company: “The ballot initiatives in California and Florida, which are key growth opportunities for the Company, required higher than projected spending levels, some of which were moved forward into the third quarter versus the fourth. Our decision to increase our investment, a possibility we discussed publicly in July, is one of two key factors that triggered our third quarter loss. The second factor, the impairment charges that total $6.2 million for Ellis Park, reflects our reassessment of that operation following the completion of its disappointing meet in September. After careful review, we determined that we needed to adjust the carrying value of the asset. We will continue to evaluate viable options that offer the racetrack the greatest opportunity for long-term success.