Churchill Downs Inc (CHDN) 10-Q Quarterly Report April 2021

- Churchill Downs Incorporated (Nasdaq: CHDN) (the "Company", "we", "us", "our") today reported business results for the first quarter ended March 31, 2021.

First Quarter 2021 Highlights

•Net revenue of $324.3 million, up 28% over the prior year quarter

•Net income(a) of $36.1 million compared to net loss of $23.4 million in the prior year quarter

◦Adjusted net income(a) of $34.6 million, compared to $2.0 million in the prior year quarter

•Adjusted EBITDA of $110.6 million, up 100% compared to $55.3 million in the prior year quarter

•Derby City Gaming delivered record net revenue of $32.9 million, up 52% over the prior year quarter

•Our TwinSpires Horse Racing business delivered record first quarter net revenue of $93.1 million, up 39% over the prior year quarter

•Our TwinSpires Sports and Casino business launched sports betting and iGaming operations in Michigan on January 22, 2021 and sports betting operations in Tennessee on March 18, 2021

•Our Gaming Segment delivered record Adjusted EBITDA of $82.4 million, up 72% over the prior year quarter

•In February 2021, Kentucky passed legislation that clarifies the legality of historical racing machines

•On February 1, 2021, we purchased one million shares of CHDN stock from The Duchossois Group for $193.94 per share ($193.9 million total) in a privately negotiated transaction

(a) Reflects amounts attributable to Churchill Downs Incorporated.


CONSOLIDATED RESULTS	First Quarter
(in millions, except per share data)	2021		2020

Net revenue	$	324.3	$	252.9
Net income (loss)(a)	$	36.1	$	(23.4)
Diluted EPS(a)	$	0.91	$	(0.59)
Adjusted net income(a)(b)	$	34.6	$	2.0
Adjusted diluted EPS(a)(b)	$	0.87	$	0.05
Adjusted EBITDA(b)	$	110.6	$	55.3

(a) Reflects amounts attributable to Churchill Downs Incorporated.
(b) These are non-GAAP measures. See explanation of non-GAAP measures below.

The following information was filed by Churchill Downs Inc (CHDN) on Wednesday, April 21, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Churchill Downs Inc's 10-Q Quarterly Report:

Financial - Earnings Highlight
Excluding these items, net income (loss) from continuing operations increased $32.6 million primarily due to a $33.4 million after-tax increase driven by the results of our operations and equity income from our unconsolidated affiliates, partially offset by a $0.8 million after-tax increase in interest expense associated with higher outstanding debt balances.

Financial - Income Highlight
Reconciliation of Comprehensive Income (Loss) to Adjusted EBITDA Consolidated Balance Sheet The following table is a summary of our overall financial position: Significant items affecting the comparability of our condensed consolidated balance sheets include: Total assets increased $100.7 million driven by a $80.3 million increase in cash and cash equivalents primarily due to the net proceeds from the new Term Loan B-1 and Additional 2028 Notes; a $20.0 million increase in income taxes receivable primarily due to the payment of the Kater and Thimmegowda litigation settlements; an $8.8 million increase in accounts receivable, net primarily due to sponsorships related to the 2021 Kentucky Derby and Oaks; and an $8.2 million increase in other current assets driven by an increase in prepaid insurance related to our annual renewals.
Financial - Earnings Highlight
The following items impacted comparability of the Company's first quarter of 2021 net income from continuing operations compared to the prior year quarter: a $14.0 million after-tax expense decrease related to our equity portion of the non-cash change in the fair value of Rivers Des Plaines' interest rate swaps; a $12.0 million non-cash after-tax impact related to our intangible asset impairment from the first quarter of 2020 that did not recur in the first quarter of 2021; and a $1.0 million after-tax decrease in expenses related to lower transaction, pre-opening and other expenses.
Financial - Cash Flow Highlight
Three Months Ended March 31, 2021, Compared to the Three Months Ended March 31, 2020 Cash flows from operating activities decreased $63.3 million driven by a $124.0 million decrease from the payment of the Kater and Thimmegowda litigation settlements and a $32.4 million decrease in deferred revenue related to advance ticket and sponsorship for the 2021 Kentucky Derby and Oaks.
Other - Other Highlight
Adjusted EBITDA We believe that the use of Adjusted EBITDA as a key performance measure of the results of operations enables management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner.
Financial - Earnings
Net income (loss) attributable to...Read more
Financial - Income
Operating income (loss) increased $58.3...Read more
Legal - Other
Partially offsetting these decreases was...Read more
Other - Other
We believe that the use...Read more
Financial - Shares
Gaming Adjusted EBITDA increased $34.5...Read more
Revenue - Product
Consolidated Financial Results The following...Read more
Other - Other
Capital project expenditures represent fixed...Read more
Revenue - Product
Financial Results by Segment Net...Read more
Revenue - Product
Horse Racing net revenue increased...Read more
Other - Other
TwinSpires Adjusted EBITDA increased $6.5...Read more
Revenue - Product
Three Months Ended March 31,...Read more
Financial - Shares
Adjusted EBITDA increased $55.3 million...Read more
Financial - Expense
Partially offsetting these increases was...Read more
Revenue - Product
Sports and Casino net revenues...Read more
Other - Other
Adjusted EBITDA is a supplemental...Read more
Other - Other
Adjusted EBITDA is a supplemental...Read more
Other - Other
Cash used in investing activities...Read more
Financial - Expense
Adjusted EBITDA excludes: Transaction expense,...Read more
Other - Other
The Credit Agreement also contains...Read more
Financial - Shares
On February 1, 2021, the...Read more
Revenue - Product
These indicators include changes in...Read more
Revenue - Product
TwinSpires revenue increased $30.7 million...Read more
Financial - Expense
Content expense increased $12.2 million...Read more
Other - Other
All Other Adjusted EBITDA decreased...Read more
Financial - Earnings
Partially offsetting these decreases were...Read more
Financial - Shares
In addition, at any time...Read more
Financial - Shares
In addition, at any time...Read more
Financial - Expense
Consolidated Operating Expense The following...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Churchill Downs Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.A: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.B: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32: Section 1350 Certification

Ticker: CHDN
CIK: 20212
Form Type: 10-Q Quarterly Report
Accession Number: 0000020212-21-000039
Submitted to the SEC: Wed Apr 21 2021 4:19:55 PM EST
Accepted by the SEC: Wed Apr 21 2021
Period: Wednesday, March 31, 2021
Industry: Racing Including Track Operation

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Churchill Downs Inc (CHDN) SEC Filing 10-Q Quarterly Report for the period ending Wednesday, March 31, 2021

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