Colonial Holdings, Inc. Announces 2nd Quarter Results
NEW KENT, Va.--(BUSINESS WIRE)--Aug. 14, 2000--Colonial Holdings,
Inc. (Nasdaq:CDWN) (formerly Colonial Downs Holdings, Inc.) which,
through its subsidiaries, holds the only licenses to own and operate a
pari-mutuel horseracing course and satellite racing centers in
Virginia, today reported results of operations for the second quarter
ended June 30, 2000.
For the six months ended June 30, 2000, the Company reported a net
loss of $515,000 or $0.07 per share compared with a net loss of loss
of $516,000, or $0.07 per share for the same period in 1999. Revenues
for the first six months of 2000 were $13,873,000 compared with
$14,256,000 for the same period in 1999. The Company reported a net
loss for the second quarter of 2000 of $328,000 or $0.05 per share
compared to a loss of $1,031,000 or $0.14 per share for the same
period in 1999, a decrease of 68%. Total revenue in the second quarter
of 2000 was $6,975,000 compared to $7,233,000 in the second quarter of
1999, a decrease of 4%.
Results for the three month period ended June 30, 2000 reflect a
reduction in revenues because the Company conducted live standardbred
racing during one month of the corresponding period in 1999 and did
not conduct live racing in the three and six month periods ended June
30, 2000. The increase in operating expenses is primarily due to an
increase in purse expense resulting from the new agreement with the
Virginia Horsemen's Benevolent and Protective Association, Inc. Purse
expenses were approximately $200,000 and $1,000,000 higher for the
three and six months ended June 30, 2000, respectively, than for the
corresponding period of the prior year. Other direct expenses were
$306,000 and $276,000 lower during these periods because no live
racing was conducted in 2000 versus one month of live standardbred
racing in 1999. Selling, general and administrative expenses declined
due primarily to reductions in professional fees and live racing
related expenses. Interest expense declined primarily due to the
provision for interest of $285,000 recorded in June 1999 related to
the Norglass arbitration award.
In August 2000 the Company entered into an agreement with CD
Entertainment Ltd., an affiliate of the Chairman and CEO of the
Company, to refinance the $15 million in loans from PNC Bank that came
due on June 30, 2000. The refinanced former PNC debt and the Company's
existing debt to related parties have been consolidated into a
$25.7 million credit facility with a term of five years and an
interest rate of LIBOR plus 3%. The Company plans to draw on the
credit facility's available balance to payoff the $1.85 million
Norglass debt and provide supplemental short-term working capital.
Under the terms of the credit facility, principal payments of
$1 million each are due on June 30, 2002, 2003 and 2004 with the
balance due on June 30, 2005. In addition, the Company has agreed to
make an additional annual principal payment contingent upon the
Company's annual cash flow, commencing in 2002.
The Company also recently announced an agreement in principle with
JALOU II Inc. ("JALOU"), an affiliate of the Chairman and CEO of the
Company, to manage video poker truckstop assets in Louisiana on its
behalf. JALOU has entered into option agreements to acquire two
existing truckstops in Louisiana as well as several that are under
development. Each truckstop provides fuel, food and beverage services
and has 50 video poker machines. Under the proposed management
contract, the Company will manage the truckstops for a fee based on
total revenue and earnings before interest, taxes and amortization
(EBITDA). It is anticipated that JALOU will close the truckstop
acquisitions late in the third quarter of 2000, subject to licensing
in Louisiana and financing. The truckstops will be managed by Colonial
Holdings Management, Inc., a newly formed wholly owned subsidiary of
the Company, which will seek to develop management fee income in a
variety of industries.
Ian M. Stewart, President of the Company said, "The second quarter
financial performance of the Company is in accordance with our
expectations. The refinancing of the majority of our debt on a long
term basis is a very important step in positioning the Company for
future growth. The management agreement with JALOU which we recently
announced will diversify the Company's operations as we seek to expand
the Company in the future beyond pari-mutuel wagering in Virginia."
Colonial Holdings fourth thoroughbred meet to be held at Colonial
Downs in New Kent, VA will commence on September 4, Labor Day, and
conclude on October 17, 2000. The Company will host races on Friday
through Tuesday afternoons at 3:00 pm. The highlight of the meet will
be the third annual Virginia Derby on October 7th. The purse for the
Derby alone will be $200,000. |
