Nasdaq:CPHC
Canterbury Park Holding Corporation Reports Record 2021 Fourth Quarter Results
SHAKOPEE, Minn., March 21, 2022 (GLOBE NEWSWIRE) — Canterbury Park Holding Corporation (“Canterbury” or the “Company”) (NASDAQ: CPHC), today reported record financial results for the fourth quarter and full year ended December 31, 2021.
($ in thousands, except per share data and percentages)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
| 2021 | 2020 | Increase(3) | 2021 | 2020 | Increase | |||||||||||||
| Net revenues | $ | 13,955 | $ | 6,123 | 128 | % | $ | 60,400 | $ | 33,140 | 82 | % | ||||||
| Net income (1) | $ | 6,620 | $ | 139 | NM | $ | 11,798 | $ | 1,062 | 1,011 | % | |||||||
| Adjusted EBITDA(2) | $ | 3,360 | $ | (27 | ) | NM | $ | 13,471 | $ | 806 | 1,572 | % | ||||||
| Basic EPS | $ | 1.38 | $ | 0.03 | NM | $ | 2.47 | $ | 0.23 | 974 | % | |||||||
| Diluted EPS | $ | 1.37 | $ | 0.03 | NM | $ | 2.44 | $ | 0.23 | 961 | % | |||||||
| (1) | Net income for the twelve month period ended December 31, 2021 includes a $6.3 million credit to salaries and benefits expense related to the Employee Retention Credit (“ERC”), a refundable tax credit recorded in accounts receivable. The ERC assisted business owners and their employees by providing an incentive to keep workers on the payroll and eligible businesses received a tax credit for a percentage of each eligible employee’s wage. Net income for the twelve month period ended December 31, 2020 includes a benefit of a $2.4 million gain related to transfers of land to the Doran Canterbury II and Canterbury DBSV joint ventures. |
| (2) | Adjusted EBITDA, a non-GAAP measure, excludes certain items from net income, a GAAP measure. Non-GAAP financial measures are not intended to be considered in isolation from, a substitute for, or superior to GAAP results. Definitions, disclosures, and reconciliations of non-GAAP financial information are included later in the release. |
| (3) | Amounts referred to as “NM” are defined as not meaningful. |
Financial results for the twelve months ended December 31, 2021 include the impact of the state-mandated closure of Canterbury Park which ended January 10, 2021 as well as the impact of capacity restrictions from January 11, 2021 to May 28, 2021. Financial results for the three and twelve months ended December 31, 2020 reflect the impact of the onset of the COVID-19 pandemic and closure of the Card Casino, simulcast, and special events operations at Canterbury Park from March 16, 2020 to June 9, 2020, after which the Company reopened in a limited capacity, as well as the state-mandated closure of Canterbury Park from November 21, 2020 through the end of 2020.
Management Commentary
“Canterbury Park finished 2021 with strong fourth quarter financial results that further demonstrate our ongoing recovery since we fully reopened our business late in the second quarter. Revenue grew 128% year over year to $14.0 million, while adjusted EBITDA reached $3.4 million compared to a slight loss a year ago,” said Randy Sampson, President and Chief Executive Officer of Canterbury. “In particular, our fourth quarter performance benefited from strong Card Casino results as visitation and spend per customer continue to improve across our customer base. In this regard, our targeted marketing efforts and expanded special events and tournaments calendar are attracting new customers and driving additional visits and spend from existing customers. In addition, the return of some of our traditional in-person events, including our annual craft show in November and a large poker tournament in December, contributed to the strong results and overall performance in the fourth quarter 2021.
“As our top-line performance has rebounded, we’ve taken a measured approach to managing operating expenses, allowing us to maintain profitability and strong margins. To that end, Adjusted EBITDA as a percentage of total revenue was a record 24% for the second consecutive quarter. The steady recovery in our business has increased our forward free cash flow visibility, which allowed us to reinstate our quarterly cash dividend in January 2022. Further, during the quarter we recognized a one-time $6.3 million benefit from the ERC program created during the pandemic to help businesses retain employees on their payroll. We are grateful that we were able to qualify for the ERC and believe this is a direct result of our efforts to care for all of our employees throughout the pandemic. Upon receipt of the ERC refund, expected later in 2022, we expect to allocate these funds towards a combination of further investment in our team members, growth investments, capital expenditures, and deferred maintenance capital spending. Going forward, while the availability and the cost of labor remain headwinds, our team is actively managing expenses across the business and we believe we will be able to continue to drive continued strong margin performance.
“Progress on the development of Canterbury Commons™ continued in the 2021 fourth quarter and in the first months of 2022. Late last month, we announced the proposed sale of approximately 40 acres of land to Swervo Development Corporation (“Swervo”) for use in the development of a state-of-the-art, 19,000-seat amphitheater. This is a significant step in our long-term vision of creating a leading regional destination that offers a combination of residential, hospitality, commercial, retail and entertainment attractions and experiences. Swervo is an accomplished developer that we believe will create a world-class entertainment venue which complements Canterbury Park and highlights Shakopee and Canterbury Commons as the best place to live, work, stay and play in the greater Minneapolis region.
“As we enter 2022, we are pleased to be able to again return capital to our shareholders through our quarterly dividend while simultaneously evaluating strategic transactions where we can leverage our financial discipline and operating expertise. We are excited by the opportunities we have to continue transforming our business and believe we remain well positioned to deliver strong long-term growth for our shareholders. At the same time, momentum for Canterbury Commons continues to build, and we believe the announcement of flagship projects like the planned amphitheater will serve to attract additional high-profile tenants and exciting land uses. Canterbury Park remains a strong company, our future has never been brighter, and we look forward to the year ahead and the promise of continued growth across our business.”
Canterbury Commons Development Update
Occupancy of Phase I of the upscale Triple Crown Residences at Canterbury Park is now approximately 80% leased. Doran Companies expects to begin construction of the 305 apartments in Phase II of the project this Spring.
Greystone Construction and Canterbury Park, via their joint venture, continue to make progress on securing additional partners for the balance of their collective 13-acre site, with ongoing interest from potential hospitality and dining uses. The Greystone headquarters office building was completed in July 2021 and a certificate of occupancy was obtained in December 2021 for the majority of the buildings first floor. The office building is currently 84% leased. In March 2022, the joint venture contributed approximately 3.5 acres of land to a development partnership to build 156 units of senior market rate apartments. Construction of the apartments is expected to commence this Spring.
Pulte Homes of Minnesota is in the process of completing the first phase of its 63 new row homes and townhome residences and the first model units were completed in March 2022. In addition, Lifestyle Communities expects to begin construction of its development of a new cooperative community featuring a 56-unit, four-story building with over 5,000 square feet of amenity spaces in the second half of 2022.
Subsequent to the end of the quarter, the Company announced plans to sell approximately 40 acres in the northeast corner of the property – along Canterbury Road and Unbridled Avenue – to Minneapolis-based Swervo for use in the development of a state-of-the-art, 19,000-seat amphitheater, subject to state and local regulatory approvals. Further, should this planned development move forward, the Company plans to invest in a redevelopment of its horse stabling area, including the renovation of existing facilities, the addition of new barns, stables and dorms, and a reconfiguration of the existing training track. The Company and Swervo expect the regulatory approval process for the amphitheater project to be complete this Summer.
Developer and partner selection for the remaining 40 acres of Canterbury Commons continues. The primary focus for future projects will be on entertainment, office, retail, hotel, and restaurant uses. Canterbury expects to make additional new partner announcements in the future.
Summary of 2021 Fourth Quarter Operating Results
The 2020 fourth quarter results and year over year comparisons detailed below reflect the impact of the COVID-19 pandemic, which included a state-mandated limit on capacity of no more than 250 guests per designated area at any one time for the period between October 1, 2020 and November 20, 2020 and the temporary closure of all operations (except for development work on Canterbury Commons) from November 21, 2020 through the end of 2020.
Net revenues for the three months ended December 31, 2021 increased 127.9% to $14.0 million, compared to $6.1 million for the same period in 2020. This year-over-year increase reflects improved performance across the Company’s operations, the success of targeted marketing efforts, and expanded events and tournaments in the 2021 fourth quarter.
Operating expenses for the three months ended December 31, 2021 were $4.9 million, a decrease of $1.8 million, or 27.0%, compared to operating expenses of $6.7 million for the same period in 2020. Operating expenses in the 2021 fourth quarter included a $6.3 million credit to salaries and benefits expense related to the ERC. Excluding the ERC, operating expenses for the 2021 period increased $4.5 million, or 66.7%, compared to the 2020 period. The year-over-year increase in operating expenses reflects a full quarter of normal operations compared to the prior year period which was impacted by the temporary shutdown of operations starting November 21, 2020 as well as active efforts to reduce expenses in order to preserve cash in 2020.
The Company recorded a loss from equity investment of $739,000 and $817,000 for the three months ended December 31, 2021 and 2020, respectively, primarily related to its share of depreciation, amortization, and interest expense from the Doran Canterbury joint ventures that are developing the Triple Crown Residences.
The Company recorded income tax expense of $1.9 million for the three months ended December 31, 2021. The Company recorded an income tax benefit of $1.3 million for the three months ended December 31, 2020, driven by the provisions in the CARES Act which allowed the Company to carry back its net operating loss to a year with a higher corporate tax rate.
The Company recorded net income and diluted earnings per share of $6.6 million and $1.37, respectively, for the three months ended December 31, 2021. The Company recorded net income and diluted earnings per share of $139,000 and $0.03, respectively, for the three months ended December 31, 2020.
Adjusted EBITDA, a non-GAAP measure, was $3.4 million in the 2021 fourth quarter compared to a loss of $27,000 in the same period in 2020.
Summary of 2021 Full Year Operating Results
Net revenues for the twelve months ended December 31, 2021 increased 82.3% to $60.4 million, compared to $33.1 million for 2020. This year-over-year increase reflects improved performance across the Company’s operations, the success of targeted marketing efforts, and expanded events and tournaments after a return to normalized operations and full capacity in the third and fourth quarters of 2021.
Operating expenses for the twelve months ended December 31, 2021 were $43.0 million, an increase of $8.0 million, or 22.9%, compared to operating expenses of $35.0 million for the same period in 2020. Operating expenses in 2021 included a $6.3 million credit to salaries and benefits expense related to the ERC. Excluding the ERC, operating expenses for the 2021 period increased $14.3 million, or 41.0%, compared to 2020. This year-over-year increase in operating expenses is a result of a return to normalized operations and full capacity in the 2021 third and fourth quarters as compared to COVID-related operating impacts described above.
During 2021, the Company recorded a $264,000 gain related to the sale of approximately 9.7 acres of land to Pulte Homes of Minnesota and Lifestyle Communities for $2.5 million. In 2020, the Company recorded a $2.4 million gain related to the transfers of land to the Doran Canterbury II and Canterbury DBSV joint ventures.
The Company recorded a loss from equity investment of $2.7 million and $1.5 million for the twelve months ended December 31, 2021 and 2020, respectively. These losses from equity investments were primarily related to the Company’s share of depreciation, amortization, and interest expense from the Doran Canterbury joint ventures.
The Company recorded income tax expense of $4.0 million for the twelve months ended December 31, 2021. The Company recorded an income tax benefit of $1.3 million for the twelve months ended December 31, 2020.
The Company recorded net income and diluted earnings per share of $11.8 million and $2.44, respectively, for the twelve months ended December 31, 2021. The Company recorded net income and diluted earnings per share of $1.1 million and $0.23, respectively, for the twelve months ended December 30, 2020. The increase in net income and diluted earnings per share for 2021 was the result of revenue increases that significantly exceeded increases in operating expense, particularly taking into account the reduction in fourth quarter 2021 operating expenses from the ERC.
Adjusted EBITDA was $13.5 million for the twelve months ended December 31, 2021 compared to adjusted EBITDA of $806,000 in the same period of 2020.
Additional Financial Information
Further financial information for the fourth quarter and full year ended December 31, 2021 is presented in the accompanying tables at the end of this press release. Additional information will be provided in the Company’s Annual Report on Form 10-K that will be filed with the Securities and Exchange Commission.
Use of Non-GAAP Financial Measures
To supplement our financial statements, we also provide investors with information about our EBITDA and Adjusted EBITDA, each of which is a non-GAAP measure, which excludes certain items from net income a GAAP measure. We define EBITDA as earnings before interest, taxes, depreciation and amortization. We define Adjusted EBITDA as earnings before interest income, income tax expense (benefit), depreciation and amortization, as well as excluding gains on sale/transfer of land, loss on disposal of assets, depreciation and amortization related to equity investments, grant money received from the Minnesota COVID-19 relief package, Employee Retention Credit, and interest expense related to equity investments. Neither EBITDA nor adjusted EBITDA is a measure of performance calculated in accordance with generally accepted accounting principles (“GAAP”), and should not be considered an alternative to, or more meaningful than, net income as an indicator of our operating performance. We have presented EBITDA as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry. Other companies that provide EBITDA information may calculate EBITDA differently than we do. We have presented Adjusted EBITDA as a supplemental disclosure because it enables investors to understand our results excluding the effect of these items.
About Canterbury Park
Canterbury Park Holding Corporation (Nasdaq: CPHC) owns and operates Canterbury Park Racetrack and Card Casino in Shakopee, Minnesota, the only thoroughbred and quarter horse racing facility in the State. The Company generally offers live racing from May to December. The Card Casino hosts card games 24 hours a day, seven days a week, dealing both poker and table games. The Company also conducts year-round wagering on simulcast horse racing and hosts a variety of other entertainment and special events at its Shakopee facility. The Company is also pursuing a strategy to enhance shareholder value by the ongoing development of approximately 140 acres of underutilized land surrounding the Racetrack that was originally designated for a project known as Canterbury Commons™. The Company is pursuing several mixed-use development opportunities for the remaining underutilized land, directly and through joint ventures. For more information about the Company, please visit www.canterburypark.com.
Cautionary Statement
From time to time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, we may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans. These statements are typically preceded by the words “believes,” “expects,” “anticipates,” “intends” or similar expressions. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in federal securities laws. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties which could affect our actual results and cause actual results to differ materially from those indicated in the forward-looking statements. We report these risks and uncertainties in our Annual Report on Form 10-K filed with the SEC and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. They include, but are not limited to: the effect that the COVID-19 coronavirus pandemic and resulting precautionary measures may have on us as an entertainment venue or on the economy generally, including the fact that we temporarily suspended all card casino, simulcast, and special events operations during portions of 2020 and 2021 and may be required to do so again in 2022, that we were required to limit visitors and engage in new cleaning protocols, social distancing measures and other changes to our racetrack and card casino operations to comply with state law and health protocols and reductions in the number of visitors due to their COVID-19 concerns; material fluctuations in attendance at the Racetrack; material changes in the level of wagering by patrons; any decline in interest in the unbanked card games offered in the Card Casino; competition from other venues offering unbanked card games or other forms of wagering; competition from other sports and entertainment options; increases in compensation and employee benefit costs; increases in the percentage of revenues allocated for purse fund payments; higher than expected expense related to new marketing initiatives; the impact of wagering products and technologies introduced by competitors; the general health of the gaming sector; legislative and regulatory decisions and changes; our dependence on the Cooperative Marketing Agreement with the Shakopee Mdewakanton Sioux Community for purse enhancement payments and marketing payments, which may not continue after 2022; our ability to successfully develop our real estate, including the effect of competition on our real estate development operations and our reliance on our current and future development partners; temporary disruptions or changes in access to our facilities caused by ongoing infrastructure improvements; and other factors that are beyond our ability to control or predict.
Investor Contacts:
| Randy Dehmer Senior Vice President and Chief Financial Officer Canterbury Park Holding Corporation 952-233-4828 or [email protected] |
Richard Land, Jim Leahy JCIR 212-835-8500 or [email protected] |
– Financial tables follow –
| CANTERBURY PARK HOLDING CORPORATION’S | |||||||||||||||
| SUMMARY OF OPERATING RESULTS | |||||||||||||||
| Three months ended | Twelve months ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net Operating Revenues | $ | 13,955,004 | $ | 6,123,444 | $ | 60,399,698 | $ | 33,140,272 | |||||||
| Operating Expenses | 4,924,088 | 6,742,892 | 42,881,792 | 34,881,989 | |||||||||||
| Gain on Sale/Transfer of Land | – | 92,056 | 263,581 | 2,367,514 | |||||||||||
| Income (Loss) from Operations | 9,030,916 | (527,392 | ) | 17,781,487 | 625,797 | ||||||||||
| Other Loss, net | (544,370 | ) | (654,973 | ) | (1,983,934 | ) | (814,628 | ) | |||||||
| Income Tax (Expense) Benefit | (1,866,368 | ) | 1,321,343 | (3,999,400 | ) | 1,250,845 | |||||||||
| Net Income | $ | 6,620,178 | $ | 138,978 | $ | 11,798,153 | $ | 1,062,014 | |||||||
| Basic Net Income Per Common Share | $ | 1.38 | $ | 0.03 | $ | 2.47 | $ | 0.23 | |||||||
| Diluted Net Income Per Common Share | $ | 1.37 | $ | 0.03 | $ | 2.44 | $ | 0.23 | |||||||
| RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA | |||||||||||||||||
| Three months ended | Twelve months ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||
| NET INCOME | $ | 6,620,178 | $ | 138,978 | $ | 11,798,153 | $ | 1,062,014 | |||||||||
| Interest income, net | (194,608 | ) | (161,971 | ) | (719,365 | ) | (663,571 | ) | |||||||||
| Income tax benefit (expense) | 1,866,368 | (1,321,343 | ) | 3,999,400 | (1,250,845 | ) | |||||||||||
| Depreciation | 730,730 | 683,018 | 2,844,647 | 2,748,514 | |||||||||||||
| EBITDA | 9,022,668 | (661,318 | ) | 17,922,835 | 1,896,112 | ||||||||||||
| Loss on disposal of assets | — | — | — | 13,407 | |||||||||||||
| Gain on sale/transfer of land | — | (92,056 | ) | (263,581 | ) | (2,367,514 | ) | ||||||||||
| Employee Retention Credit | (6,314,468 | ) | — | (6,314,468 | ) | — | |||||||||||
| Depreciation and amortization related to equity investments | 452,025 | 464,979 | 1,735,883 | 918,571 | |||||||||||||
| Interest expense related to equity investments | 199,936 | 261,827 | 905,729 | 345,379 | |||||||||||||
| Other revenue, COVID-19 relief grants | — | — | (515,000 | ) | — | ||||||||||||
| ADJUSTED EBITDA | $ | 3,360,161 | $ | (26,568 | ) | $ | 13,471,398 | $ | 805,955 | ||||||||
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SHAKOPEE, Minn., March 13, 2025 (GLOBE NEWSWIRE) — Canterbury Park Holding Corporation (“Canterbury” or the “Company”) (NASDAQ: CPHC), today announced that the Company’s Board of Directors, pursuant to its dividend policy, approved a quarterly cash dividend of $0.07 per share that will be paid on April 14, 2025 to stockholders of record on March 31, 2025. At this quarterly rate, the annual dividend is equivalent to $0.28 per common share.
About Canterbury Park
Canterbury Park Holding Corporation (Nasdaq: CPHC) owns and operates Canterbury Park Racetrack and Casino in Shakopee, Minnesota, the only thoroughbred and quarter horse racing facility in the State. The Company generally offers live racing from May to September. The Casino hosts card games 24 hours a day, seven days a week, dealing both poker and table games. The Company also conducts year-round wagering on simulcast horse racing and hosts a variety of other entertainment and special events at its Shakopee facility. The Company is also pursuing a strategy to enhance shareholder value by the ongoing development of approximately 140 acres of underutilized land surrounding the Racetrack that was originally designated for a project known as Canterbury Commons™. The Company is pursuing several mixed-use development opportunities for the remaining underutilized land, directly and through joint ventures. For more information about the Company, please visit www.canterburypark.com.
Cautionary Statement
From time to time, in press releases and in other communications to shareholders or the investing public, Canterbury Park Holding Corporation may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans based on management’s beliefs and assumptions. These forward looking statements are typically preceded by the words such as “believes,” “expects,” “anticipates,” “intends” or similar expressions. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties, including those disclosed in our periodic filings with the Securities and Exchange Commission, which could cause actual performance, activities, future dividends or plans after the date the statements are made to differ significantly from those indicated in the forward-looking statements when made.
| Investor Contacts: | |
| Randy Dehmer | Richard Land, Jim Leahy |
| Senior Vice President and Chief Financial Officer | JCIR |
| Canterbury Park Holding Corporation | 212-835-8500 or [email protected] |
| 952-233-4828 or [email protected] |
SHAKOPEE, Minn., March 10, 2025 (GLOBE NEWSWIRE) — Canterbury Park Holding Corporation (“Canterbury” or the “Company”) (Nasdaq: CPHC) today reported financial results for the fourth quarter and full year ended December 31, 2024.
| ($ in thousands, except per share data and percentages) | |||||||||||||||||
| Three Months Ended December 31, | Twelve months ended December 31, | ||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||
| Net revenues | $11,978 | $12,527 | -4.4 | % | $61,562 | $61,437 | 0.2 | % | |||||||||
| Net income(1) | -$1,245 | $1,364 | -191.3 | % | $2,113 | $10,563 | -80.0 | % | |||||||||
| Adjusted EBITDA(2) | $1,335 | $2,051 | -34.9 | % | $10,234 | $10,446 | -2.0 | % | |||||||||
| Basic EPS(1) | -$0.25 | $0.28 | -189.3 | % | $0.42 | $2.15 | -80.5 | % | |||||||||
| Diluted EPS(1) | -$0.25 | $0.27 | -192.6 | % | $0.42 | $2.13 | -80.3 | % | |||||||||
(1) Net income and basic and diluted EPS for the twelve months ended December 31, 2024 include a $1.7 million gain to the transfer of land to a new joint venture. Net income and basic and diluted EPS for the twelve months ended December 31, 2023 include a $6.5 million gain on sale of land.
(2) Adjusted EBITDA, a non-GAAP measure, excludes certain items from net income, a GAAP measure. Non-GAAP financial measures are not intended to be considered in isolation from, a substitute for, or superior to GAAP results. Definitions, disclosures, and reconciliations of non-GAAP financial information are included later in the release.
Management Commentary
“Throughout 2024, we focused on managing our operations to address the evolution of our business and market. In our seasonally slowest quarter, fourth quarter revenues of $12.0 million and adjusted EBITDA of $1.3 million, which together resulted in an adjusted EBITDA margin of 11.1%, reflect the efficacy of these efforts during a period when our Casino operations faced a recent increase in competition,” said Randy Sampson, President and Chief Executive Officer of Canterbury Park.
“To address the increased Casino operations competition, we are implementing several initiatives to further elevate guest service and are expanding our marketing programs beyond our traditional focus on existing customers to attract and retain new customers. We also continue to introduce new table game offerings to the market. Collectively, our goal is for these efforts is to better position Canterbury as the gaming entertainment venue with the best service and table game variety in the region. We are also focused on further expanding the non-gaming entertainment side of our business as we had more mid- and large-scale events in 2024 than ever before, which drove higher cash flow from Food & Beverage and Other operations. We expect to accelerate this momentum in 2025 with more exciting events planned than in prior years. As our business and market continue to evolve, we are bringing additional attention to our expense control strategies that are focused on creating more operating efficiencies. We expect our collective revenue optimization and expense control initiatives will help maintain our ability to again deliver solid annual cash flow this year and beyond.
“Canterbury Commons is firmly positioned as a premiere destination for living, playing and working that brings consistently high levels of traffic and energy to the property. With nearly 1,000 residential units, five restaurants and breweries, two music and entertainment venues, 57,000 square-feet of office space, and other distinct amenities already open or under development, and another 50 acres available for future development, we expect Canterbury Commons will create new long-term revenue sources and positive economics for the Company.
“We remain focused on a range of strategies to create long-term value for our shareholders, including significant efforts to ensure Canterbury will benefit economically if online sports betting is approved in Minnesota. We are well positioned for the future as we generate consistent annual cash flow and have a strong balance sheet with over $15 million in unrestricted cash and short-term investments and nearly $19 million related to our tax increment financing receivable. As we near the completion of both our tax increment financing infrastructure and our barn relocation and redevelopment plan, our capital expenditures will decline in 2025 compared to 2024 and further decline in 2026 to our historical levels of between $2 to $3 million per year. Finally, we continue to successfully unlock the significant value of our real estate through the development of Canterbury Commons. Accordingly, we believe that when considered collectively, these factors, along with our return of capital initiative through our quarterly cash dividend, are not reflected in our current valuation.”
Canterbury Commons Development Update
Swervo continues to make progress on the construction of its state-of-the-art amphitheater. The Company’s barn relocation and redevelopment plan is nearing completion with over 300 new stalls completed and in operation, with the balance of the planned backside improvements on schedule for completion prior to the 2025 live racing season. Canterbury is also nearing completion of the road adjacent to the amphitheater which will unlock the development potential of roughly 25 acres of land in that portion of the site.
Residential and commercial construction updates related to joint ventures include:
- Phase II of The Doran Group’s upscale Triple Crown Residences at Canterbury Park has leased 87% of its available units.
- Repairs on Phase I of the Triple Crown Residences were fully completed in late 2024 and a certificate of occupancy was granted in February 2025.
- 80% of the 147 units of senior market rate apartments at The Omry at Canterbury are leased.
- The pizza restaurant, fitness center and BBQ restaurant in the 10,000 square-foot commercial building within the Winners Circle development are all open.
- Construction of an additional 28,000 square-foot commercial office building within the Winners Circle development is ongoing. The primary user has 50% of the space under lease and discussions are ongoing with other potential tenants.
- The Company’s joint venture partner, Trackside Holdings, LLC, continues to make progress with construction of an approximately 16,000 square foot project on 3.5 acres of trackside land that will house a new music venue, restaurant and bar in the spring of 2025.
Residential and commercial construction updates related to prior land sales include:
- Pulte Homes of Minnesota continues development on the 45-unit second phase of its row home and townhome residences.
Developer and partner selection for the remaining 50 acres of Canterbury Commons, including 25 acres that will become available for development following the completion of the new road noted above, continues. Additional uses could include office, retail, hotel and restaurants.
Summary of 2024 Fourth Quarter Operating Results
Net revenues for the three months ended December 31, 2024 were $12.0 million, compared to $12.5 million for the same period in 2023. Compared to the prior-year period, Casino revenue declined 4.9% primarily due to increased competition in the market for certain games offered at Canterbury. Pari-mutuel revenue declined 9.5%, primarily due to lower simulcasting handle. Food & Beverage and Other revenue increased 1.7% and 2.0%, respectively, year-over-year.
Operating expenses for the three months ended December 31, 2024 increased slightly to $12.1 from $11.9 million for the same period in 2023. The year-over-year increase primarily reflects increased salaries and benefits, due primarily to annual wage increases, and increased depreciation expenses, due to placing assets into service related to the first and second phases of the Company’s barn relocation and redevelopment plan, partially offset by lower advertising and marketing expenses, reflecting proactive efforts to lower overall costs.
The Company recorded a loss from equity investment of $2.1 million for the three months ended December 31, 2024 primarily related to the Company’s share of depreciation, amortization and interest expense from the Doran Canterbury joint ventures. For the three months ended December 31, 2023, the Company recorded income from equity investment of $939,000 related to a gain recognized on insurance proceeds received by Doran Canterbury I.
The Company recorded an income tax benefit of $440,000 for the three months ended December 31, 2024 compared to income tax expense of $708,000 for the three months ended December 31, 2023. The Company recorded a net loss of $1.2 million, or $0.25 per diluted share for the three months ended December 31, 2024, compared to net income and diluted earnings per share for the three months ended December 31, 2023 of $1.4 million and $0.27 per share, respectively.
Adjusted EBITDA, a non-GAAP measure, for the three months ended December 31, 2024 and December 31, 2023 was $1.3 million and $2.1 million, respectively.
Summary of 2024 Full-Year Operating Results
Net revenues for the twelve months ended December 31, 2024 were $61.6 million, compared to $61.4 million for the same period in 2023. Casino revenues were $38.8 million for the 2024 full year period compared to $39.8 million for the same period in 2023 partially reflecting the increased competition in the market noted above. Pari-mutuel revenues were $8.2 million for the 2024 full year period and $8.3 million in for the same period in 2023. Full year Food & Beverage and Other revenues both increased in 2024 to $8.0 million and $6.6 million, respectively, from $7.8 million and $5.6 million, respectively in 2023. The increase in Food & Beverage and Other revenues reflects increased catering operations and admissions revenues, respectively, related to Canterbury’s hosting of new large scale special events in 2024.
Operating expenses for the twelve months ended December 31, 2024 were $56.9 million, a slight increase from operating expenses of $56.4 million for 2023. The year-over-year increase reflects higher depreciation and amortization, due to service upgrades for the Company’s barns and backside, and higher salaries and benefits expenses, primarily due to annual wage increases, which more than offset lower advertising and marketing and professional and contracted services expenses as compared to 2023.
The Company recorded a $1.7 million gain on the transfer of approximately 3.5 acres of land to a new joint venture during the twelve months ended December 31, 2024. The Company recorded a gain on sale of land of $6.5 million related to the sale of 37 acres to Swervo during the twelve months ended December 31, 2023.
The Company recorded a loss from equity investment of $5.5 million for the twelve months ended December 31, 2024 compared to a gain from equity investment of $1.5 million for the twelve months ended December 31, 2023. The net loss for the twelve month period ended December 31, 2024 is related to the Company’s share of depreciation, amortization and interest expense from the Doran Canterbury joint ventures, while the net gain for the same period a year ago is related to a gain recognized on insurance proceeds received by Doran Canterbury I related to an outstanding claim.
The Company recorded income tax expense of $0.9 million for the twelve months ended December 31, 2024 compared to income tax expense of $4.4 million for the twelve months ended December 31, 2023.
The Company recorded net income of $2.1 million and diluted earnings per share of $0.42 for the twelve months ended December 31, 2024, compared to net income and diluted earnings per share for the twelve months ended December 31, 2023 of $10.6 million and $2.13 per share, respectively.
Adjusted EBITDA was $10.2 million for the twelve months ended December 31, 2024 compared with $10.4 million for the same period in 2023.
Additional Financial Information
Further financial information for the fourth quarter and full-year ended December 31, 2024, is presented in the accompanying tables at the end of this press release. Additional information will be provided in the Company’s Annual Report on Form 10-K that will be filed with the Securities and Exchange Commission on or about March 11, 2025.
Use of Non-GAAP Financial Measures
To supplement our financial statements, we also provide investors with information about our EBITDA and Adjusted EBITDA, each of which is a non-GAAP measure, and which exclude certain items from net income, a GAAP measure. We define EBITDA as earnings before interest, taxes, depreciation and amortization. We define Adjusted EBITDA as earnings before interest income (net of interest expense), income tax expense, depreciation and amortization, as well as excluding stock-based compensation (which includes our 401(k) match expense as this match occurs in Company stock), gain on insurance proceeds relating to equity investments, gain on disposal of assets, gain on the transfer or sale of land, depreciation and amortization related to equity investments, and interest expense related to equity investments. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net revenues. Neither EBITDA, Adjusted EBITDA, or Adjusted EBITDA margin are measures of performance calculated in accordance with generally accepted accounting principles (“GAAP”), and should not be considered an alternative to, or more meaningful than, net income as an indicator of our operating performance. See the table below, which presents reconciliations of these measures to the GAAP equivalent financial measure, which is net income. We have presented EBITDA as a supplemental disclosure because we believe that, when considered with measures calculated in accordance with GAAP, EBITDA gives investors a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes, and it is a widely used measure of performance and basis for valuation of companies in our industry. Other companies that provide EBITDA information may calculate EBITDA or Adjusted EBITDA differently than we do. We have presented Adjusted EBITDA as a supplemental disclosure because we believe it enables investors to understand and assess our core operating results excluding the effect of these items and is useful to investors in allowing greater transparency related to a significant measure used by management in its financial and operational decision-making. Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business and provides a perspective on the current effects of operating decisions.
About Canterbury Park
Canterbury Park Holding Corporation (Nasdaq: CPHC) owns and operates Canterbury Park Racetrack and Casino in Shakopee, Minnesota, the only thoroughbred and quarter horse racing facility in the State. The Company generally offers live racing from May to September. The Casino hosts card games 24 hours a day, seven days a week, dealing both poker and table games. The Company also conducts year-round wagering on simulcast horse racing and hosts a variety of other entertainment and special events at its Shakopee facility. The Company is also pursuing a strategy to enhance shareholder value by the ongoing development of approximately 140 acres of underutilized land surrounding the Racetrack that was originally designated for a project known as Canterbury Commons™. The Company is pursuing several mixed-use development opportunities for the remaining underutilized land, directly and through joint ventures. For more information about the Company, please visit www.canterburypark.com.
Cautionary Statement
From time to time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, we may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans. These statements are typically preceded by the words “believes,” “expects,” “anticipates,” “intends” or similar expressions. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in federal securities laws. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties which could affect our actual results and cause actual results to differ materially from those indicated in the forward-looking statements. We report these risks and uncertainties in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. They include, but are not limited to: we may not be successful in implementing our growth strategy; sensitivity to reductions in discretionary spending as a result of downturns in the economy and other factors; we have experienced a decrease in revenue and profitability from live racing; challenges in attracting a sufficient number of horses and trainers; a lack of confidence in core operations resulting in decreasing customer retention and engagement; personal injury litigation due to the inherently dangerous nature of horse racing; material fluctuations in attendance at the Racetrack; material changes in the level of wagering by patrons; any decline in interest in horse racing or the unbanked card games offered in the Casino; competition from other venues offering racing, unbanked card games or other forms of wagering; competition from other sports and entertainment options; increases in compensation and employee benefit costs; the impact of wagering products and technologies introduced by competitors; the general health of the gaming sector; legislative and regulatory decisions and changes; our ability to successfully develop our real estate, including the effect of competition on our real estate development operations and our reliance on our current and future development partners; our obligation to make improvements in the TIF district that will only be reimbursed to the extent of future tax revenue; temporary disruptions or changes in access to our facilities caused by ongoing infrastructure improvements; inclement weather and other conditions affecting the ability to conduct live racing; technology and/or key system failures; cybersecurity incidents; the general effects of inflation; our ability to attract and retain qualified personnel; dividends that may or may not be issued at the discretion of our Board of Directors; and other factors that are beyond our ability to control or predict.
The forward-looking statements in this press release speak only as of the date of this press release. Except as required by law, Canterbury assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
| Investor Contacts: | |
| Randy Dehmer | Richard Land, Jim Leahy |
| Senior Vice President and Chief Financial Officer | JCIR |
| Canterbury Park Holding Corporation | 212-835-8500 or [email protected] |
| 952-233-4828 or [email protected] | |
– Financial tables follow –
| CANTERBURY PARK HOLDING CORPORATION’S | |||||||||||
| SUMMARY OF OPERATING RESULTS | |||||||||||
| Three months ended | Twelve months ended | ||||||||||
| December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| Operating Revenues: | |||||||||||
| Casino | $8,994,643 | $9,459,017 | $38,774,702 | $39,781,166 | |||||||
| Pari-mutuel | 1,125,731 | 1,243,905 | 8,226,047 | 8,253,615 | |||||||
| Food and Beverage | 1,038,071 | 1,020,738 | 7,968,157 | 7,828,980 | |||||||
| Other | 819,092 | 803,403 | 6,593,382 | 5,573,097 | |||||||
| Total Net Revenues | 11,977,537 | 12,527,063 | 61,562,288 | 61,436,858 | |||||||
| Operating Expenses | (12,075,269 | ) | (11,939,193 | ) | (56,861,654 | ) | (56,425,975 | ) | |||
| Gain on Transfer/Sale of Land | – | – | 1,732,353 | 6,489,976 | |||||||
| (Loss) Income from Operations | (97,732 | ) | 587,870 | 6,432,987 | 11,500,859 | ||||||
| Other (Loss) Income, net | (1,587,787 | ) | 1,484,047 | (3,396,260 | ) | 3,479,390 | |||||
| Income Tax Benefit (Expense) | 440,116 | (708,000 | ) | (923,885 | ) | (4,417,000 | ) | ||||
| Net Income | $(1,245,403 | ) | $1,363,917 | $2,112,842 | $10,563,249 | ||||||
| Basic Net Income Per Common Share | ($0.25 | ) | $0.28 | $0.42 | $2.15 | ||||||
| Diluted Net Income Per Common Share | ($0.25 | ) | $0.27 | $0.42 | $2.13 | ||||||
| RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA | |||||||||||
| Three months ended | Twelve months ended | ||||||||||
| December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||
| NET INCOME | ($1,245,403 | ) | $1,363,917 | $2,112,842 | $10,563,249 | ||||||
| Interest income, net | (478,835 | ) | (544,769 | ) | (2,071,511 | ) | (1,978,122 | ) | |||
| Income tax (benefit) expense | (440,116 | ) | 708,000 | 923,885 | 4,417,000 | ||||||
| Depreciation and amortization | 944,807 | 837,100 | 3,620,899 | 3,145,372 | |||||||
| EBITDA | (1,219,547 | ) | 2,364,248 | 4,586,115 | 16,147,499 | ||||||
| Stock-based compensation | 372,932 | 335,817 | 1,447,009 | 1,378,373 | |||||||
| Gain on insurance proceeds related to equity investments | – | (1,698,800 | ) | – | (4,227,701 | ) | |||||
| Loss on disposal of assets | 55,714 | 176,425 | 49,214 | 157,160 | |||||||
| Gain on transfer/sale of land | – | – | (1,732,353 | ) | (6,489,976 | ) | |||||
| Depreciation and amortization related to equity investments | 1,415,230 | 439,270 | 3,086,695 | 1,753,256 | |||||||
| Interest expense related to equity investments | 711,109 | 434,186 | 2,796,932 | 1,727,192 | |||||||
| ADJUSTED EBITDA | $1,335,438 | $2,051,146 | $10,233,612 | $10,445,803 | |||||||
SHAKOPEE, Minn., Dec. 16, 2024 (GLOBE NEWSWIRE) — Canterbury Park Holding Corporation (“Canterbury” or the “Company”) (NASDAQ: CPHC), today announced that the Company’s Board of Directors, pursuant to its dividend policy, approved a quarterly cash dividend of $0.07 per share that will be paid on January 14, 2025 to stockholders of record on December 31, 2024. At this quarterly rate, the annual dividend is equivalent to $0.28 per common share.
About Canterbury Park
Canterbury Park Holding Corporation (Nasdaq: CPHC) owns and operates Canterbury Park Racetrack and Casino in Shakopee, Minnesota, the only thoroughbred and quarter horse racing facility in the State. The Company generally offers live racing from May to September. The Casino hosts card games 24 hours a day, seven days a week, dealing both poker and table games. The Company also conducts year-round wagering on simulcast horse racing and hosts a variety of other entertainment and special events at its Shakopee facility. The Company is also pursuing a strategy to enhance shareholder value by the ongoing development of approximately 140 acres of underutilized land surrounding the Racetrack that was originally designated for a project known as Canterbury Commons™. The Company is pursuing several mixed-use development opportunities for the remaining underutilized land, directly and through joint ventures. For more information about the Company, please visit www.canterburypark.com.
Cautionary Statement
From time to time, in press releases and in other communications to shareholders or the investing public, Canterbury Park Holding Corporation may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans based on management’s beliefs and assumptions. These forward looking statements are typically preceded by the words such as “believes,” “expects,” “anticipates,” “intends” or similar expressions. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties, including those disclosed in our periodic filings with the Securities and Exchange Commission, which could cause actual performance, activities, future dividends or plans after the date the statements are made to differ significantly from those indicated in the forward-looking statements when made.
CONTACT: Investor Contacts: Randy Dehmer Senior Vice President and Chief Financial Officer Canterbury Park Holding Corporation 952-233-4828 or [email protected] Richard Land, Jim Leahy JCIR 212-835-8500 or [email protected]
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