COLONIAL DOWNS HOLDINGS INC. REPORTS FIRST QUARTER PROFIT
NEW KENT, Va.--(BUSINESS WIRE)--May 12, 1997--Colonial Downs Holdings Inc. (Nasdaq:NMS - news), which holds the only unlimited licenses to own and operate a pari- mutuel horse racing track and satellite wagering facilities in Virginia, today reported results of operations for the first quarter of 1997, its first quarter as a publicly-held company.
For the three months ended March 31, 1997, Colonial Downs Holdings Inc. reported net earnings of $429,000 or $0.12 per common share compared with a net loss of ($66,000) or ($0.02 per common share) in the first quarter of 1996 ended March 31, 1996. Operating earnings in the first quarter of 1997 were $478,000 compared with an operating loss of ($43,000) in the same period a year ago.
Weighted average common shares outstanding in the first quarter of 1997 were 3,614,000 compared with 3,000,000 last year. (Prior to a reorganization effective March 12, 1997, the private owners of the company held partnership interests which were converted to 3,000,000 shares of stock as part of the reorganization). At the end of the first quarter of 1997, the company had 7,250,000 common shares outstanding as a result of the completion of its initial public offering of 4,250,000 shares effective March 17, 1997.
Revenues for the first quarter of 1997 were $5,417,000, up 311% from $1,305,000 in the first quarter of 1996.
Commenting on the first quarter results, President and Chief Operating Officer O. James Peterson III said:
``We are pleased to have earned a profit in our first quarter as a publicly-held company, before live horse racing has begun at the new Colonial Downs racetrack currently under construction and before our third and fourth satellite wagering facilities have opened in Hampton and Brunswick County.
``Our earnings and revenue improvements in the first quarter of this year occurred as a result of two satellite wagering facilities, in Chesapeake and Richmond, being in operation during the entire first quarter of this year. Last year only the Chesapeake facility, which opened on February 17, 1996, was conducting satellite wagering operations,'' Peterson explained.
``We have a very challenging period ahead of us as we prepare to open on September 1 Virginia's first pari-mutuel racetrack since the 1800s. We also plan to open two additional satellite wagering facilities in Hampton and Brunswick County in the third quarter. We are continuing to investigate sites for two more satellite wagering facilities to be built, which would result in a total of six such facilities in operation, the current maximum allowed under Virginia law,'' Peterson said.
``Some significant events have occurred since the public offering that deserve mention. First is the movement of the start of the thoroughbred meet from July 1 to September 1, which was approved by the Virginia Racing Commission at its April 16 meeting. This change in schedule would have resulted in a November-December harness meet, a difficult period to conduct a harness meet because of weather and lack of availability of horses. After discussion with representatives of the harness horsemen, the company announced that it plans to hold its inaugural harness meet from April 23, 1998 to July 4, 1998 followed by a 10-day super meet in November of 1998. This change will adversely affect 1997 earnings due to the deferral of revenues from the meet until 1998,'' Peterson said.
``Colonial Downs' sales of box seats and dining room tables have proceeded v1/2ery well and we have sold out of those opportunities for this year. We recently signed a significant sponsorship deal with Pepsi, and sponsorship income is on a pace to exceed our original expectations. Additionally, we are pleased to announce that Colonial Downs will be the host track for four thoroughbred match series races in September and October: a Grade II and a Grade III stakes, each with a $100,000 purse, and two additional stakes races with purses of $75,000 and $100,000. Two of the races are scheduled to be televised by ESPN. These televised match series races should provide us with significant, unanticipated media exposure nationwide during our inaugural thoroughbred meet,'' Peterson said.
Colonial Downs' inaugural thoroughbred meet will run from September 1 to October 12, 1997 and will include 30 days of live thoroughbred racing. Under an agreement signed with harness horsemen on April 17, 1997, Colonial Downs will hold its inaugural harness meet beginning in April of 1998 and ending July 4, 1998, with a 10-day super meet in November, for a total of 51 days of live racing, subject to the Virginia Racing Commission's approval.
Statements regarding the anticipated opening of additional satellite wagering facilities, sponsorship income, scheduling of the thoroughbred and harness meets, and certain other statements contained in this news release are forward-looking statements and as such involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements, expressed or implied by such forward- looking statements. Such potential risks, uncertainties and factors include but are not limited to risks of construction delays, including unforeseen environmental, engineering or geological problems, governmental regulation, including licensing of additional satellite wagering facilities and certain sponsorship income, approval by the Virginia Racing Commission of harness race dates for 1998, competition with other sporting events and forms of entertainment, and the success of planned advertising, marketing and promotional efforts. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the company with the Securities and Exchange Commission.
Colonial Downs Holdings Inc. is a Virginia corporation organized in November of 1996 to pursue opportunities for wagering and horse racing in Virginia. The company, through its two wholly-owned subsidiaries Colonial Downs L.P. and Stansley Racing Corp., holds the only unlimited licenses to own and operate a pari-mutuel horse racing track and satellite wagering facilities in Virginia. Currently the company operates two satellite wagering facilities with two more expected to open in the third quarter of 1997. Colonial Downs Holdings Inc. became a publicly-held company in March of 1997 and trades on the Nasdaq National Market System under the symbol CDWN. |
