Magna Entertainment Corp Results for 2005 - PariMax announced

Posted on Tuesday, February 28th, 2006

Magna Entertainment Corp suffered a net loss of $105 million for year ended Dec. 31, 2005.

In announcing these results, Tom Hodgson, President and Chief Executive Officer of MEC, remarked: "2005 has been a financially challenging, yet exciting year for MEC. Developments over the past year included the sale of Flamboro Downs and our investment in Maryland-Virginia Racing Circuit, Inc., agreements to sell a tract of residential land at Palm Meadows in Florida and The Meadows in Pennsylvania, the opening of a casino facility at Remington Park, the passing of slot legislation in Florida and in early January 2006 the opening of the new Gulfstream Park clubhouse, which has been under development for the past 18 months. We have recently announced the participation in a joint venture involved in the development of an international subscription television channel into the United Kingdom and Ireland. We have made significant progress in 2005 in the pursuit of alternative gaming, regulatory reform and strategic initiatives, which will deliver future returns, but achieving these milestones has not been without cost and financing challenges. We are encouraged by the fact that the third and fourth quarters of 2005, which are typically our least profitable quarters, given the seasonality of our business, have delivered two consecutive quarters of EBITDA and net loss improvements from continuing operations over the comparative periods in 2004. These profit improvements in our continuing operations are positive steps in the achievement of cost reduction initiatives, the growth of our alternative gaming operations and the stabilization of our core racing business."

"I am also pleased to announce that our Board of Directors today approved the formation of PariMax, Inc., a new company to oversee the development of our various electronic distribution platforms including XpressBet(R), HRTV(TM), MagnaBet(TM), RaceONTV(TM) and our 30% stake in AmTote International, Inc. Joe DeFrancis, Chief Executive Officer of The Maryland Jockey Club, has been appointed Chief Executive Officer of PariMax. PariMax will focus on the development of complete wagering solutions and will concentrate on serving the global wagering market by developing product lines which meet the needs of both distribution partners and end consumers worldwide. For distribution partners, RaceONTV(TM) will provide simulcasting and wagering solutions for betting shops internationally. AmTote will continue to provide a variety of wagering interfaces and connectivity products for racetracks, OTBs, and account wagering providers, both domestically and abroad. For consumers, XpressBet(R) and MagnaBet(TM) will be PariMax’s account wagering platforms, which provide video streaming and wagering opportunities to an increasingly international customer base. Consumers will be further served by PariMax supported television channels, including HRTV(TM) in the United States, Racing World in the United Kingdom and Ireland (a planned joint venture between MEC, Churchill Downs Inc., and Racing UK) and PremiereWin (a MEC television partner) in central Europe. This will be the first time a company with such breadth of services will have such a focus, and we are optimistic that PariMax will create significant value for the North American racing industry as a whole, including MEC’s portfolio of tracks."

Our racetracks operate for prescribed periods each year. As a result, our racing revenues and operating results for any quarter will not be indicative of our racing revenues and operating results for the year.

Our financial results for the fourth quarter of 2005 reflect the full quarter’s operations for all of MEC’s racetracks and pari-mutuel wagering operations but do not include the operations of Bay Meadows and Multnomah Greyhound Park, which were included in the comparative results for the fourth quarter of 2004 as the facility leases expired on December 31, 2004. Our financial results for the three months and year ended December 31, 2004 have also been restated to reflect only continuing operations. Discontinued operations for the three months and year ended December 31, 2005 and 2004 reflect the results of Flamboro Downs, the sale of which was completed on October 19, 2005, and Maryland-Virgina Racing Circuit, Inc., the sale of which was completed on September 30, 2005.

Revenues for the three months ended December 31, 2005 decreased $4.6 million to $127.0 million, compared to $131.6 million for the three months ended December 31, 2004. In the fourth quarter of 2004, $4.7 million of additional revenues were recognized under the golf course access fee agreements as the agreements were entered into in November 2004 and revenue was recognized at that time from the date of expiration of the previous agreements. Also in the fourth quarter of 2004, Bay Meadows and Multnomah Greyhound Park accounted for $13.6 million of revenue as the facility leases expired on December 31, 2004. These revenue decreases were partially offset by revenue increases attributable to gaming revenues generated at our Remington Park casino facility, which opened on November 28, 2005, a shift in the racing calendar at Golden Gate Fields, which resulted in ten additional live race days in the fourth quarter of 2005 compared to the fourth quarter of 2004 and improvements at our Maryland operations with the opening of the new turf course at Laurel Park. Revenues were $624.7 million in 2005, compared to $702.5 million in 2004, a decrease of $77.8 million or 11.1%. The decrease is primarily due to the expiry of the leases at Bay Meadows and Multnomah Greyhound Park, which combined accounted for $64.0 million of revenue in 2004, as well as reduced revenues of $16.4 million from the sale of non-core real estate in the prior year.

EBITDA from continuing operations for the three months ended December 31, 2005 was a loss of $19.1 million, compared to a loss of $26.8 million in the three months ended December 31, 2004, an improvement of $7.7 million from the prior year period. The improvement is primarily attributable to a reduction of predevelopment, pre-opening and other costs, the opening of the Remington Park casino facility, a strong start to the Santa Anita Park 2006 race meet, which began on December 26, 2005 and cost reductions at our European, Northern U.S. and Corporate operations.

EBITDA from continuing operations was a loss of $29.4 million for 2005, compared to a loss of $44.3 million in 2004, an improvement of $15.0 million from the prior year. It should be noted that the EBITDA loss in 2004 was negatively impacted by $26.7 million of non-cash write-downs of long-lived assets and positively impacted by $9.6 million of earnings on the sale of non-core real estate.

During the fourth quarter of 2005, cash used for operations was $16.0 million, which has improved from cash used for operations of $23.8 million in the fourth quarter of 2004. Cash used in investing activities during the three months ended December 31, 2005 was $67.7 million, which included real estate property and fixed asset additions of $66.6 million and other asset additions of $1.1 million. Cash provided by financing activities during the three months ended December 31, 2005 of $78.2 million represents advances and long-term debt from our parent company of $80.4 million, $0.2 million of long-term debt incurred on a capital lease and $2.0 million from net increases of bank indebtedness, partially offset by long-term debt repayments of $4.4 million.

Cash used for operations in 2005 was $64.9 million, decreasing from a use of cash in operations in 2004 of $40.9 million. Cash used in investing activities in 2005 of $145.5 million included $151.3 million of real estate property, fixed asset and other asset additions, partially offset by $5.8 million of proceeds on disposal of real estate properties and fixed assets. Financing activities in 2005 provided cash of $171.4 million, including advances and long-term debt from our parent company of $156.5 million, $27.7 million of proceeds of long-term debt and $2.8 million from net increases of bank indebtedness, partially offset by long-term debt repayments of $15.6 million.

MEC, North America’s number one owner and operator of horse racetracks, based on revenue, acquires, develops and operates horse racetracks and related pari-mutuel wagering operations, including off-track betting facilities. Additionally, MEC owns and operates XpressBet(R), a national Internet and telephone account wagering system, and HorseRacing TV(TM), a 24-hour horse racing television network.

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Santa Catalina Stakes To Be Renamed Next Year

Posted on Monday, February 27th, 2006

ARCADIA, Calif. (AP) — The Santa Catalina Stakes, a steppingstone to the Santa Anita Derby, will be renamed in honor of Bob Lewis next year.

The 81-year-old Lewis, who narrowly missed winning the Triple Crown with Silver Charm and Charismatic, died earlier this month.

The race will be called The Robert B. Lewis Memorial, joining the Charles H. Strub Stakes and Frank E. Kilroe Mile as the only races named for individuals in Santa Anita’s 71-year history.

Lewis and his wife Beverly won the Kentucky Derby and Preakness with Silver Charm in 1997 and Charismatic in 1999. Both horses failed to win the Belmont Stakes, which would have earned them the Triple Crown.

"It is indeed fitting and appropriate that Bob Lewis be included in this select company," track president Ron Charles said. "Through this race for generations to come, horsemen and the public alike will be able to associate Bob Lewis with aspiring young 3-year-olds on their way to the Santa Anita Derby."

This year’s Santa Catalina, to be run at 1 1-16 miles on Saturday, will feature California’s leading Kentucky Derby contender, Brother Derek.

Santa Catalina Stakes Free Tips and Picks 

Kentucky Derby Odds 2006  

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Lawyer Ron Wins Southwest Stakes

Posted on Sunday, February 26th, 2006

HOT SPRINGS, Ark. — Lawyer Ron moved a step closer to the Kentucky Derby with his fourth straight win, leading gate-to-wire for a three-quarter length victory over Steppenwolfer in Saturday’s $250,000 Southwest Stakes at Oaklawn Park.

The 3-year-old colt, ridden by John McKee, has now won all five career starts on dirt and is 0-for-7 on the grass.

Lawyer Ron wins Southwest Stakes - Strengthens Kentucky Derby Favorite Status

Read full story: "Lawyer Ron Wins Southwest Stakes"...

Filed under Horse Racing Industry, Horses, Kentucky Derby, Triple Crown, USA Horse Racing | 1 Comment »

Late Lasix Shot Triggers Investigation in Del Mar Race

Posted on Sunday, February 26th, 2006

The California Horse Racing Board will investigate the controversial circumstances surrounding a Sept. 3 race at Del Mar, board member Richard B. Shapiro said yesterday.

The move comes in response to questions suddenly being raised by owners who had horses in the race, a Grade II stake that awarded a first-place prize of $120,000 to Intercontinental, the odds-on favorite.

A drug rules violation occurred when veterinarian Amy Lee Nevens gave Intercontinental a shot of Lasix 20 minutes after deadline – a violation that normally requires the horse be scratched from the race. Lasix is used to treat horses that bleed from the lungs and is to be given no later than 3 hours, 45 minutes before a race.

Instead of being scratched, Intercontinental won easily. Six weeks later, Nevens was fined $750 for the late shot and for falsifying records to make it appear that the shot was given on time. She hung up on a reporter who asked her why she falsified the records.

Yesterday, owner Marsha Naify, whose horse Amorama finished second to Intercontinental, said she would file a letter of protest with the CHRB and ask that the purse be redistributed. On Wednesday, Jim Ford, whose horse Katdogawn finished fourth, sent a similar letter to the CHRB and raised concerns that the situation has the appearance of a cover-up in favor of the betting windows and a high-profile horse and trainer, Bobby Frankel.

“We will probably form a committee or have our medication committee look into this because we clearly want to do, in all instances, the right thing,” Shapiro said. “There is no thought whatsoever by us that this was a cover-up.”

Ingrid Fermin, executive director of the CHRB, said the violation wasn’t discovered by racing officials until after the race.

However, an associate steward, Gina Powell, disputes that. Shapiro, Naify and Ford only recently discovered the situation after it came to light through legal research by another owner unconnected to the race, Jerry Jamgotchian.

CHRB chief investigator Frank Moore learned of it the day after the race and proceeded with the investigation of Nevens.

“We want the matter looked into, in terms of why were just finding out about this now and why was it only a $750 fine,” Naify said.

Related: Del Mar Thorughbred Club free picks and tips 

 

Filed under Horses, Owners & Breeders, Trainers, USA Horse Racing | No Comments »

Calder Announces Record 2006 Stakes Schedule

Posted on Friday, February 24th, 2006

Calder Race Course will offer 45 stakes worth a record $6.7 million during the track’s 35th season. A total of 112 racing days have been scheduled for 2006, including the Tropical at Calder meet, which will feature 25 of those stakes worth a record $3.06 million.

Highlighting Calder’s meet will once again be the Summit of Speed, which enters it seventh season. Set for July 15, Summit of Speed boasts racing’s richest day of sprints, including the Princess Rooney H. (G1) and Smile Sprint H. (G2), each worth $500,000. Two other graded events — $300,000 Carry Back S. (G2) and $300,000 Azalea Breeders’ Cup S. (G3) — will join four other sprints on the day’s card.

"The plans are in place, now we look forward to carrying them out," said Mike Anifantis, who was appointed Calder’s racing secretary after the passing of Bob Umphrey. "The foundation that Bobby set here over the years is solid and we’ll build further upon it. Events like the Summit of Speed have already proven successful and now it’s my job to see that the momentum continues."

Changes from last year include the Dr. Fager and Desert Vixen divisions of the Florida Stallion S. getting purse increases from $75,000 to $100,000. Another way officials are marking the 25th anniversary of the Florida Stallion S. is by increasing the purses of the Affirmed and Susan’s Girl divisions, the second legs in the series, from $125,000 to $150,000 each. The last races of the series, the In Reality and My Dear Girl divisions, will remain at $400,000 and take place on Festival of the Sun Day, October 14.

One of those special race days is scheduled for July 22. The "Extreme Day at the Races" will feature stakes with an extreme theme, such as the two-furlong Rocket Man S. for two-year-olds and up as well as the new two-mile Bob Umphrey Turf Marathon. The latter event is the longest stakes in the country and will be worth $250,000. Another "extreme" event on the day is the seven-furlong Methuselah H. for six-year-olds and up.

Nine graded events will take place during the Tropical at Calder meet. Some of the major events scheduled for that fall meet include the November 11 Florida Million program as well as the Grand Slam I, II and III (on December 2, 16, 30).

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Brother Derek Aims for Santa Catalina

Posted on Friday, February 24th, 2006

San Rafael Stakes winner Brother Derek sizzled six furlongs in a bullet 1:12 1/5 over Santa Anita’s fast track on Thursday. The California-bred Grade 1 victor is targeting the March 4 Santa Catalina Stakes as his next stop on route to the Kentucky Derby on May 6 at Churchill Downs.

Read full story: "Brother Derek Aims for Santa Catalina"...

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Autotote Enterprises & Mohegan Sun Complete 5-Year Racebook Support Extension

Posted on Friday, February 24th, 2006

NEW YORK, Feb. 23 /PRNewswire-FirstCall/ — SCIENTIFIC GAMES CORPORATION (Nasdaq: SGMS - News) announced that its subsidiary Autotote Enterprises, Inc. and the Mohegan Tribal Gaming Authority completed a five-year contract extension for Autotote to supply racebook services at the Mohegan Sun in Uncasville, Connecticut. Autotote has been the racebook supplier to the extremely successful Mohegan Sun Racebook since it was developed more than seven years ago. This contract extension is valued at between $7 million - $10 million.

Lorne Weil, Chairman of Scientific Games, stated, "We have a strong relationship with the Mohegan Sun team and we are gratified that this deal reinforces our mutual commitment and success. We have been planning to reappoint the technology components in the racebook and we look forward to that upgrade in the near future."

Autotote Enterprises operates the Connecticut OTB system with 11 locations throughout the state including Sports Haven in New Haven and the Bradley Teletheater. Autotote and Scientific Games Worldwide Sports LTD also provide venue management services to the Isle of Capri Casino at Our Lucaya in Freeport, Grand Bahamas, the Divi Carina Bay Resort Casino in St. Croix, the Randall James Racetrack and Simulcast Center in St. Croix, the Tote Investments Racing Service Simulcast Center in Bridgetown, Barbados, and the Ho-Chunk Casino in Baraboo, Wisconsin.

 

 

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