nov 14th
NEW KENT, Va.--(ENTERTAINMENT WIRE)--Nov. 14, 1997--Colonial Downs
Holdings Inc. (NASDAQ NMS: CDWN) which holds the only unlimited
licenses to own and operate a pari-mutuel horse racing course and
satellite wagering facilities in Virginia, Friday reported results
of operations for the third quarter of 1997.
Net earnings for the third quarter ended Sept. 30, 1997 were
$80,000, or $0.01 per share, compared with a net loss of $279,000,
or $0.09 per share for the third quarter of 1996. Revenues for the
third quarter were $7,153,000 compared with $ 3,367,000 in the third
quarter of 1996. Net earnings for the nine months ended Sept. 30,
1997 improved by $1,390,000 to $982,000, or $0.16 per share, compared
with a loss of $408,000, or a loss of $0.14 per share in 1996.
Revenues for the first nine months of 1997 were $17,614,000, up
from $5,704,000 in 1996. Per share calculations are based upon the
weighted average of common shares outstanding as of the end of each
quarter. Prior to its initial public offering, the Company had an
equivalent of 3,000,000 shares. At the end of the third quarter of
1997, the Company had 7,250,000 common shares outstanding as a result
of its initial public offering of 4,250,000 shares effective March
17, 1997.
The increase in revenue and earnings during these periods as
compared with the same periods a year ago results from the operation
of two racing centers for the entire first nine months of 1997 and
one month of operation of live thoroughbred horse racing at the
Colonial Downs Race Track compared to only operating the Chesapeake
Racing Center, which opened on Feb. 17, 1996, during the corresponding
period in 1996.
Commenting on the results, Chairman and Chief Executive Officer
Jeff Jacobs said: "We had several positive occurrences in the third
quarter. First of all, we successfully operated our first live
thoroughbred meet; secondly, we made a profit after substantial
initial startup and operating race meet expenses; and lastly, our
attendance and fan base grew steadily throughout the meet. Our fans
are becoming more sophisticated in regards to this new sport.
"The last week of the meet our daily attendance averaged 4,300
with a per capita handle of approximately $70. We look forward to
a productive fourth quarter as we open two more satellite wagering
centers and begin to prepare for our first live harness meet in April
1998."
In 1998, the harness season will begin on April 24 and run
through the July 4th weekend.
Other significant matters affecting the Company are:
Colonial Downs, in conjunction with The Virginia Tourism Council,
will host the prestigious harness racing event, The Breeders Crown,
in November 1998. This series of races is the standardbred horse
industry's equivalent to thoroughbred racing's Breeders' Cup.
President Jim Peterson said: "This is quite significant given
that we have not run a single harness race or hosted a harness meet
at this facility. This is a great vote of confidence for our
organization and our race track."
Construction of the Hampton and Brunswick satellite facilities
is well underway and scheduled for completion in the 4th quarter of
1997. The Hampton facility will open first and is in the inspection
and acceptance phase with local officials. The Brunswick opening
will follow and will be in operation in December.
Colonial Downs plans to file on Nov. 14, 1997 a demand for
arbitration with Norglass Inc., the general contractor that managed
the construction of the track and grandstand, in response to
mechanic's liens filed by Norglass. The contract between Colonial
Downs and Norglass is a fixed price contract for $29.5 million, and
Norglass' claim exceeds the amount remaining to be paid under the
contract. Colonial Downs disputes the amounts claimed under the
liens. The contract with Norglass provides for disputes to be
resolved by arbitration by the American Arbitration Association
(AAA).
Efforts to expand the satellite wagering network suffered a
setback as a result of the November referendums in Roanoke,
Fredericksburg, and Martinsville. Voters in these cities rejected
the Company's request to build facilities in these localities.
Peterson said: "This is a setback in locating our remaining
facilities. We will evaluate our efforts in these localities,
regroup, and explore the options in 1998. We have a great company
and several cities and counties throughout the state have contacted
us and expressed strong interest in having a satellite wagering
center in their locality."
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