Churchill Downs Incorporated /CDI/ has recently released its first quarter financial report posting net revenue of $252.9 million, down 5% compared to Q1 in 2019.
The company posted net loss for the quarter to the extent of $23.4 million, in total contrast with the $11.6 million profit generated the year before. Adjusted earnings before interest, tax, depreciation, and amortization /EBITDA/went down 26% compared to the same quarter the prior year, to $55.3 million.
Revenue Affected by Health Crisis
CDI believes the drop in revenue is due to the closure of its properties, as part of the infection containment mitigation measures. The race track operator started closing down venues March 14 and although it had taken steps to address the impact, including placing employees on furlough, the adverse effect of the ongoing health crisis was unavoidable.
CDI’s CEO Bill Carstanjen reiterated the company’s stance that the health and safety of team members, customers and community remained the top priority during these unprecedented times. Despite the negative financial result, the strength in the balance sheet paired with the resilience of its staff will help CDI emerge as a stronger company, ready to execute on the growth opportunities approved by its investors, CEO Carstanjen continued.
“We appreciate the support we are receiving from our state and local government and regulatory officials as well as our community leaders who are reviewing our proposed safety protocols and working with us to determine the appropriate timing for re-opening our properties.”
Bill Carstanjen, CEO, Churchill Downs Incorporated
Plans for Re-Opening Approved
The praise heaped by the company’s CEO on state officials was due to Gov. Andy Beshear announcement Wednesday regarding the famous Churchill Downs Racetrack, home of the Kentucky Derby, an event that also got affected by the ongoing health concerns by shifting its dates from May to September.
The governor approved the racetrack to re-open its stable areas effective May 11, albeit under strict guidelines regarding the implementation of measures to mitigate health risks. Churchill’s stable areas were closed for annual winter renovations December 31, originally scheduled to reopen March 17, but then rescheduled, first for April 28 and then May 5. It is still uncertain whether CDI will be able to start racings by May 14, the first open race day on the calendar, but one thing that is for certain is that fans will not be allowed.
“This is one of the most detailed plans we have seen about specific security checks that everybody has to go through and be temperature checked, to masking, to having a very limited group that is there.”
Kentucky Governor Andy Beshear
Only racetrack employees that are authorized for work, as well as Kentucky Horse Racing Commission license holders responsible for providing support for a horse stabled at the facility will be permitted on property. There is no clear indication about the timing state officials will allow spectators back in.