Nasdaq:CPHC
Canterbury Park Holding Corporation Reports 2022 Fourth Quarter Results
SHAKOPEE, Minn., March 20, 2023 (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, 2022.
($ in thousands, except per share data and percentages)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||
| 2022 | 2021 | Change(3) | 2022 | 2021 | Change | |||||||
| Net revenues(2) | $13,119 | $13,955 | -6.0% | $66,824 | $60,400 | 10.6% | ||||||
| Net income(2) | $1,063 | $6,620 | -83.9% | $7,513 | $11,798 | -36.3% | ||||||
| Adjusted EBITDA(3) | $2,687 | $3,360 | -20.0% | $15,141 | $13,471 | 12.4% | ||||||
| Basic EPS | $0.22 | $1.38 | -84.1% | $1.55 | $2.47 | -37.2% | ||||||
| Diluted EPS | $0.22 | $1.37 | -83.9% | $1.54 | $2.44 | -36.9% | ||||||
| (1) | Financial results for the twelve-month period ended December 31, 2021 reflected the impact of the COVID-19 pandemic, including the state-mandated closure of Canterbury Park from January 1, 2021 through January 10, 2021 and the re-opening on January 11, 2021 with a capacity limitation of 150 guests per designated area; the capacity limitation was subsequently increased on February 13, 2021 to 250 guests per designated area; remaining restrictions were lifted in late May 2021. Results for the three month periods ended December 31, 2022 and December 31, 2021 and the twelve months ended December 31, 2022 reflected no closures or capacity limitations. |
| (2) | Net revenues and net income for the twelve-month period ended December 31, 2021 include $0.5 million in grant funds received as a result of the Minnesota COVID-19 relief package. Net income for the three and twelve-month period ended December 31, 2021 included the impact of a $6.3 million Employee Retention Credit as part of the CARES and American Rescue Plan Acts. |
| (3) | 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
“Canterbury Park finished 2022 with strong fourth quarter financial results that continue to demonstrate the revenue, Adjusted EBITDA and margin growth profile we have established compared to pre-pandemic periods. Revenue and Adjusted EBITDA of $13.1 million and $2.7 million, respectively, both reached the second highest ever level for a fourth quarter period following the record quarter last year, which we believe benefitted from stimulus payments to consumers and pent-up demand following a period of closures,” said Randy Sampson, President and Chief Executive Officer of Canterbury. “In particular, our fourth quarter performance reflected strong Casino results, with revenue up more than 8% compared to the same period in 2019 as we continue to benefit from solid visitation and spend per customer trends.
“The measures we have taken to improve our operating efficiency and focus on generating profitable revenue have delivered substantial margin improvements from our pre-covid operations. For the 2022 fiscal year, Adjusted EBITDA as a percentage of total revenue was a record 23%, resulting in record Adjusted EBITDA of $15.1 million. This compares to 2019 Adjusted EBITDA as a percentage of total revenue of 11% and Adjusted EBITDA of $6.4 million. We continue to actively manage our operating practices and cost structure. While the current inflationary and increased wage environment will mitigate some of the benefits of these initiatives, we are confident we have the right strategies in place to sustain strong margins going forward.
“As part of our efforts to position Canterbury to benefit from potential new growth opportunities, following good-faith discussions regarding options for a continued partnership with our tribal partner, at the end of 2022, the CMA expired by its terms, which included the racing purse enhancement and marketing agreement that had been in place for ten years. We believe that legislative discussions around sports betting and other gaming options must consider both racetracks and tribal casinos playing an important role as plans are developed for additional legalized gaming in the state. As such, we are actively advocating for Canterbury to be part of the dialogue around potential gaming expansion in Minnesota.
“Progress on the development of Canterbury Commons™ continued in the 2022 fourth quarter and in the first months of 2023. Upon the expected near-term completion of the 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, we will have completed transactions with development partners that account for approximately 75% of the 140 total developable acres across the Canterbury Commons site. We are very pleased with the significant progress we have made to date on transforming Shakopee and Canterbury Commons into the best place to live, stay, work and play in the greater Minneapolis region. This significant progress is aligned with our long-term vision to monetize the value of our excess land and drive visitation and spend to our property.
“We enter 2023 with a strong foundation in place to continue generating consistent revenue and Adjusted EBITDA growth. In addition, we have an excellent balance sheet with no long-term debt, approximately $13 million of unrestricted cash, and notable income tax and TIF receivables. Our balance sheet and strong cash flow enable us to return capital to shareholders through our quarterly cash dividend while also positioning Canterbury to concurrently review potential transactions that would diversify and grow our operations. As we begin 2023, we are confident that the best days for the Company are still ahead as Canterbury has never been better positioned to grow and drive long-term value for our shareholders.”
Canterbury Commons Development Update
The Company expects to complete the sale of approximately 40 acres in the northeast corner of the property to Swervo in connection with their development of a state-of-the-art, 19,000-seat amphitheater in the near future. The project has received requisite state and local approvals and Swervo is expected to begin construction upon closing of the sale, with an anticipated opening in 2024. Additionally, the Company has finalized its stable area improvement plan and has begun the first phase of the barn relocation and redevelopment process.
Progress on Greystone Construction’s (“Greystone”) construction of an 11,000 square-foot brewery, taproom (Badger Hill) and Mexican restaurant (Bravis Modern Street Food) which includes outdoor patio space, continues with the restaurants scheduled to open in early Summer 2023. In addition, Greystone expects to break ground on the development of the Next Steps Learning Center preschool in Spring 2023 with an expected construction time of approximately nine months.
Development of Phase II of Doran Companies’ upscale Triple Crown Residences at Canterbury Park continues with the parking garage now completed and a certificate of occupancy for some of the units anticipated in Fall 2023.
Pulte Homes of Minnesota has sold 35 units of the 63-unit first phase of its new row home and townhome residences, with a total of 46 of these 63 units already completed and pads for the remaining 17 homes in the first phase now available. Pulte expects to initiate the development of the 45-unit second phase this Spring. Adjacent to Pulte’s development, Lifestyle Communities continues pre-sales for its Artessa at Canterbury Park cooperative community, which will feature a 56-unit, four-story building with over 5,000 square feet of amenity spaces. Construction is expected to begin in Spring 2023. Construction on the 147 units of senior market rate apartments under the Omry brand is underway with first occupancy expected in Fall 2023.
Developer and partner selection for the remaining 40 acres of Canterbury Commons continues, with Canterbury management expecting approximately 20 acres to be devoted to an entertainment district. Additional uses for the remaining acres will include potential office, retail, hotel and restaurant development. Canterbury expects to make additional new partner announcements in the future.
Summary of 2022 Fourth Quarter Operating Results
Net revenues for the three months ended December 31, 2022 decreased 6% to $13.1 million, compared to $14.0 million for the same period in 2021. The year-over-year decrease is primarily related to a 10% decrease in Casino revenues due to lower spend per visit. Pari-mutuel, food and beverage, and other revenues all generated increases due to the continued return to more normalized operations and special events.
Operating expenses for the three months ended December 31, 2022 were $11.8 million, an increase of $6.8 million, or 139%, compared to $4.9 million for the same period in 2021. Included in the three months ended December 31, 2021 was a $6.3 million Employee Retention Credit which the Company recognized as a reduction to overall operating expenses. Excluding the Employee Retention Credit, operating expenses for the three months ended December 31, 2022 increased approximately $0.5 million, or 5%, compared to the same period in 2021. The year-over-year increase in operating expenses was primarily due to higher labor and advertising costs as well as increased costs reflecting the current inflationary environment.
The Company recorded a loss from equity investment of $0.3 million for the three months ended December 31, 2022 compared to a loss from equity investment of $0.7 million in the three months ended December 31, 2021. The loss from equity investments in both periods was 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 $0.3 million for the three months ended December 31, 2022 compared to income tax expense of $1.9 million for the three months ended December 31, 2021.
The Company recorded net income of $1.1 million, or diluted earnings per share of $0.22, for the three months ended December 31, 2022 compared to net income and diluted earnings per share for the three months ended December 31, 2021 of $6.6 million and $1.37, respectively.
Adjusted EBITDA, a non-GAAP measure, for the three months ended December 31, 2022 was $2.7 million compared to adjusted EBITDA of $3.4 million for the same period in 2021.
Summary of 2022 Year-to-Date Operating Results
Net revenues for the twelve months ended December 31, 2022 increased 11% to $66.8 million, compared to $60.4 million in 2021. The year-over-year increase reflects higher revenue across all of the Company’s operations driven by increased visitation and spend per visit as well as a return to normalized operations as compared to the various restrictions and constraints in place during the first half of 2021.
Operating expenses for the twelve months ended December 31, 2022 were $55.9 million, an increase of $13.1 million, or 30%, compared to $42.9 million for the same period in 2021. The year-over-year increase in operating expenses reflects the $6.3 million Employee Retention Credit as a reduction to 2021 operating expenses as well as an increase in nearly all the Company’s operating areas, primarily as a result of a return to normalized operations compared to the various restrictions and constraints in place during the first half of 2021, as well as increased costs reflecting the current inflationary environment.
The Company recorded a loss from equity investment of $1.6 million for the twelve months ended December 31, 2022 compared to a loss from equity investment of $2.7 million for the twelve months ended December 31, 2021. The loss from equity investments in both periods was 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 $2.7 million for the twelve months ended December 31, 2022 compared to income tax expense of $4.0 million for the twelve months ended December 31, 2021.
The Company recorded net income of $7.5 million, or diluted earnings per share of $1.54, for the twelve months ended December 31, 2022 compared to net income and diluted earnings per share for the twelve months ended December 31, 2021 of $11.8 million and $2.44, respectively.
Adjusted EBITDA was $15.1 million for the twelve months ended December 31, 2022. Adjusted EBITDA was $13.5 million for the same period in 2021.
Additional Financial Information
Further financial information for the fourth quarter and full year ended December 31, 2022 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 21, 2023.
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, depreciation and amortization, as well as excluding gain on sale of land, depreciation and amortization related to equity investments, interest expense related to equity investments, and grant money received from the Minnesota COVID-19 relief package. 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 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 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: our Cooperative Marketing Agreement with the Shakopee Mdewakanton Sioux Community contains both affirmative and negative covenants that restrict our business and limit our ability to pursue certain changes to gaming laws, even if such activities or changes would be in the best interests of our company; 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; 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 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 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 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 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.
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, except as required by law.
# # #
– Financial tables follow –
CANTERBURY PARK HOLDING CORPORATION’S
SUMMARY OF OPERATING RESULTS
| Three months ended | Twelve months ended | ||||||
| December 31, | December 31, | ||||||
| 2022 | 2021 | 2022 | 2021 | ||||
| Operating Revenues: | |||||||
| Casino | $9,824,566 | $10,883,747 | $40,218,953 | $38,090,835 | |||
| Pari-mutuel | 1,358,622 | 1,244,681 | 10,957,692 | 10,243,835 | |||
| Food and Beverage | 1,076,390 | 1,066,244 | 8,227,105 | 6,185,832 | |||
| Other | 859,654 | 760,332 | 7,420,131 | 5,879,196 | |||
| Total Net Revenues | $13,119,232 | $13,955,004 | $66,823,881 | $60,399,698 | |||
| Operating Expenses | 11,764,049 | 4,924,088 | 55,943,422 | 42,881,792 | |||
| Gain on Sale of Land | – | – | 12,151 | 263,581 | |||
| Income from Operations | 1,355,184 | 9,030,916 | 10,892,610 | 17,781,487 | |||
| Other Loss, net | (4,617) | (544,370) | (657,864) | (1,983,934) | |||
| Income Tax Expense | (287,722) | (1,866,368) | (2,721,800) | (3,999,400) | |||
| Net Income | 1,062,845 | 6,620,178 | 7,512,946 | 11,798,153 | |||
| Basic Net Income Per Common Share | $0.22 | $1.38 | $1.55 | $2.47 | |||
| Diluted Net Income Per Common Share | $0.22 | $1.37 | $1.54 | $2.44 | |||
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
| Three months ended | Twelve months ended | ||||||
| December 31, | December 31, | ||||||
| 2022 | 2021 | 2022 | 2021 | ||||
| NET INCOME | $1,062,845 | $6,620,178 | $7,512,946 | $11,798,153 | |||
| Interest income, net | (289,147) | (194,608) | (909,958) | (719,365) | |||
| Income tax expense | 287,723 | 1,866,368 | 2,721,800 | 3,999,400 | |||
| Depreciation | 746,378 | 730,730 | 2,981,168 | 2,844,647 | |||
| EBITDA | 1,807,799 | 9,022,668 | 12,305,956 | 17,922,835 | |||
| Loss on disposal of assets | 157,435 | — | 157,435 | — | |||
| Gain on sale of land | — | — | (12,151) | (263,581) | |||
| Employee Retention Credit | — | (6,314,468) | — | (6,314,468) | |||
| Depreciation and amortization related to equity investments | 442,002 | 452,025 | 1,782,870 | 1,735,883 | |||
| Interest expense related to equity investments | 279,856 | 199,936 | 907,099 | 905,729 | |||
| Other revenue, COVID-19 relief grants | — | — | — | (515,000) | |||
| ADJUSTED EBITDA | $2,687,090 | $3,360,161 | $15,141,209 | $13,471,398 | |||
CONTACT: Investor Contacts: Randy Dehmer Senior Vice President and Chief Financial Officer Canterbury Park Holding Corporation 952-233-4828 or [email protected] Richard Land, Jim Leahy JCIR 212-835-8500 or [email protected]
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SHAKOPEE, Minn., Nov. 07, 2024 (GLOBE NEWSWIRE) — Canterbury Park Holding Corporation (“Canterbury” or the “Company”) (Nasdaq: CPHC) today reported financial results for the three and nine months ended September 30, 2024.
($ in thousands, except per share data and percentages)
| Three Months Ended September 30, | Nine months ended September 30, | ||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||
| Net revenues | $19,284 | $19,269 | 0.1% | $49,585 | $48,910 | 1.4% | |||||||||||
| Net income (1) | $2,022 | $1,136 | 77.9% | $3,358 | $9,199 | -63.5% | |||||||||||
| Adjusted EBITDA (2) | $3,280 | $3,192 | 2.8% | $8,901 | $8,394 | 6.0% | |||||||||||
| Basic EPS (1) | $0.40 | $0.23 | 73.9% | $0.67 | $1.87 | -64.2% | |||||||||||
| Diluted EPS (1) | $0.40 | $0.23 | 73.9% | $0.67 | $1.86 | -64.0% | |||||||||||
(1) Net income and basic and diluted EPS for the three and nine months ended September 30, 2024 include a $1.7 million gain related to the transfer of land to a new joint venture. Net income and basic and diluted EPS for the nine months ended September 30, 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
“Canterbury’s 2024 third quarter results again demonstrated our ability to deliver consistent, solid financial performance. Net revenues and Adjusted EBITDA of $19.3 million and $3.3 million, respectively, were both up slightly compared to the prior year as we continue to execute on initiatives focused on delivering solid contributions from all segments of our operations,” said Randy Sampson, President and Chief Executive Officer of Canterbury Park. “This focus is reflected in the 28% year-over-year increase in Other revenues in the third quarter as we continue to position our venue as a leading regional destination for events of all sizes and focus on bringing new, exciting entertainment to the property, such as the debut of the Canterbury Park rodeo in July. The strong contributions from these activities offset modest year-over-year declines in Casino, Pari-mutuel and Food & Beverage revenue. Our focus on operating more efficiently and prioritizing cash flow generation is reflected in the adjusted EBITDA margin of 17.0% in the quarter which compares to 16.6% for the same period in 2023.
“We continue our work with top-tier partners to transform the excess land around the property into Canterbury Commons, a regional destination for living, playing and working experiences. There are now currently available or under development over 900 residential units, five restaurants and breweries, two music and entertainment venues, 57,000 square-feet of office space, and other distinct amenities that are the core of an entirely new community in the region. Canterbury Commons is already bringing new, 24-hour traffic and energy to the property, and we expect it will create new long-term revenue sources and economics for the Company.
“Canterbury is well-positioned to deliver solid financial results in the near and long-term. We believe the Company’s current valuation does not fully reflect our consistent annual cash flow generation, strong balance sheet with nearly $22 million in unrestricted cash and short-term investments and nearly $17 million related to our tax increment financing receivable, as well as our return of capital initiative through our quarterly cash dividend. This is heightened by the significant value in our real estate which we are unlocking through the development of Canterbury Commons. We remain on track to execute on strategies over the balance of this year and beyond that will further create long-term value for our shareholders.”
Canterbury Commons Development Update
Swervo continues to make progress on the construction of its state-of-the-art amphitheater which is expected to open in August 2025. The Company’s barn relocation and redevelopment plan is nearing completion with three new barns 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 80% of its available units.
- Repairs continue on Phase I of the Triple Crown Residences and are expected to be fully complete in late 2024 with a certificate of occupancy expected in early 2025.
- 74% of the 147 units of senior market rate apartments at The Omry at Canterbury are leased.
- The pizza restaurant and fitness center in the new, 10,000 square-foot commercial building within the Winners Circle development recently opened; the development’s BBQ restaurant is expected to open before year-end.
- A land use application for an additional 28,000 square-foot commercial office building within the Winners Circle development was approved by the City Planning Commission and the City Council, and construction has recently begun on the project. The primary user has 57% of the space under lease and discussions are ongoing with other potential tenants.
- In the third quarter of 2024, Canterbury transferred 3.5 acres of trackside land into a new joint venture. The Company’s joint venture partner, Trackside Hospitality, LLC, has begun construction of an approximately 16,000 square foot project 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 Third Quarter Operating Results
Net revenues for the three months ended September 30, 2024 and September 30, 2023 were $19.3 million. Compared to the prior-year period, Casino revenue declined 3.4% primarily due to a decrease in table games drop along with a lower average collection rate. Pari-mutuel and Food & Beverage revenue declined 2.3% and 6.3%, respectively, primarily due to one fewer live race day year-over-year (37 in 2024 compared to 38 in 2023). These declines were offset by a 27.8% increase in Other revenue primarily driven by higher admissions revenue related to hosting large scale special events, including Canterbury’s first ever rodeo in July, as well as a successful comedy series in September.
Operating expenses for the three months ended September 30, 2024 declined slightly to $17.4 from $17.5 million for the same period in 2023. The year-over-year decline primarily reflects lower advertising and marketing expenses and professional and contracted services, due to proactive efforts to lower overall costs, slightly offset by an increase in other operating expenses, primarily due to higher promoter expenses related to special events.
The Company recorded a $1.7 million gain on the transfer of 3.5 acres of land to a new joint venture during the three months ended September 30, 2024. There were no transfers or sales of land in the three months ended September 30, 2023.
The Company recorded a loss from equity investment of $1.4 million for the three months ended September 30, 2024. For the three months ended September 30, 2023, the Company recorded a loss from equity investment of $674,000. The losses from equity investments in both periods 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 $772,000 for the three months ended September 30, 2024 compared to income tax expense of $533,000 for the three months ended September 30, 2023. The Company recorded net income of $2.0 million and diluted earnings per share of $0.40 for the three months ended September 30, 2024, compared to net income and diluted earnings per share for the three months ended September 30, 2023 of $1.1 million and $0.23 per share, respectively.
Adjusted EBITDA, a non-GAAP measure, for the three months ended September 30, 2024 and September 30, 2023 was $3.3 million and $3.2 million, respectively.
Summary of 2024 Year-to-Date Operating Results
Net revenues for the nine months ended September 30, 2024 increased 1.4% to $49.6 million, compared to $48.9 million for the same period in 2023. The improvement relative to the nine months ended September 30, 2023 reflects increases in Pari-mutuel, Food & Beverage and Other revenues of 1.3%, 1.8% and 21.1%, respectively, partially offset by a 1.8% decline in Casino revenue. The increased Pari-mutuel revenues were primarily the result of the Company having one more live race day compared to the same period last year as well as higher out-of-state handle due to increased field sizes on a per race basis. The increase in Food & Beverage revenue was also partially due to the one additional live race day while also benefiting from increased catering operations related to hosting large scale special events. Other revenues increased primarily due to admission revenues related to the rodeo, comedy series and live racing events.
Operating expenses for the nine months ended September 30, 2024 were $44.8 million, an increase of $300,000, or less than 1.0%, compared to operating expenses of $44.5 million for the same period in 2023. The year-over-year increase reflects higher depreciation, due to putting into service upgrades to the Company’s barns and backside, and higher salaries and benefits expenses, due primarily to annual wage increases, which more than offset lower advertising and marketing and professional and contracted services expenses as compared to the nine months ended September 30, 2023.
The Company recorded a $1.7 million gain on the transfer of 3.5 acres of land to a new joint venture during the nine months ended September 30, 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 nine months ended September 30, 2023.
The Company recorded a loss from equity investment of $3.4 million for the nine months ended September 30, 2024 compared to a gain from equity investment of $0.6 million for the nine months ended September 30, 2023. The net loss for the nine month period ended September 30, 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 $1.4 million for the nine months ended September 30, 2024 compared to income tax expense of $3.7 million for the nine months ended September 30, 2023.
The Company recorded net income of $3.4 million and diluted earnings per share of $0.67 for the nine months ended September 30, 2024, compared to net income and diluted earnings per share for the nine months ended September 30, 2023 of $9.2 million and $1.86 per share, respectively.
Adjusted EBITDA was $8.9 million for the nine months ended September 30, 2024 compared with $8.4 million for the same period in 2023.
Additional Financial Information
Further financial information for the third quarter ended September 30, 2024, is presented in the accompanying tables at the end of this press release. Additional information will be provided in the Company’s Quarterly Report on Form 10-Q that will be filed with the Securities and Exchange Commission on or about November 8, 2024.
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, 2023 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; 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 |
| (UNAUDITED) |
| Three months ended | Nine months ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Operating Revenues: | |||||||||||||||
| Casino | $9,878,660 | $10,224,216 | $29,780,059 | $30,322,149 | |||||||||||
| Pari-mutuel | 3,327,332 | 3,405,010 | 7,100,316 | 7,009,710 | |||||||||||
| Food and Beverage | 3,102,706 | 3,310,759 | 6,930,086 | 6,808,242 | |||||||||||
| Other | 2,975,669 | 2,328,564 | 5,774,290 | 4,769,694 | |||||||||||
| Total Net Revenues | $19,284,367 | $19,268,549 | $49,584,751 | $48,909,795 | |||||||||||
| Operating Expenses | (17,370,092) | (17,461,813) | (44,786,387) | (44,486,784) | |||||||||||
| Gain on Transfer/Sale of Land | 1,732,353 | – | 1,732,353 | 6,489,976 | |||||||||||
| Income from Operations | 3,646,628 | 1,806,736 | 6,530,717 | 10,912,987 | |||||||||||
| Other (Loss) Income, net | (852,822) | (137,437) | (1,808,471) | 1,995,344 | |||||||||||
| Income Tax Expense | (772,000) | (533,000) | (1,364,000) | (3,709,000) | |||||||||||
| Net Income | 2,021,806 | 1,136,299 | 3,358,246 | 9,199,331 | |||||||||||
| Basic Net Income Per Common Share | $0.40 | $0.23 | $0.67 | $1.87 | |||||||||||
| Diluted Net Income Per Common Share | $0.40 | $0.23 | $0.67 | $1.86 | |||||||||||
| RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA | |||||||
| (UNAUDITED) | |||||||
| Three months ended | Nine months ended | ||||||
| September 30, | September 30, | ||||||
| 2024 | 2023 | 2024 | 2023 | ||||
| NET INCOME | $2,021,806 | $1,136,299 | $3,358,246 | $9,199,331 | |||
| Interest income, net | (521,579) | (536,904) | (1,592,676) | (1,433,353) | |||
| Income tax expense | 772,000 | 533,000 | 1,364,000 | 3,709,000 | |||
| Depreciation and amortization | 936,033 | 831,379 | 2,676,092 | 2,308,272 | |||
| EBITDA | 3,208,260 | 1,963,774 | 5,805,662 | 13,783,250 | |||
| Stock-based compensation | 358,922 | 341,809 | 1,074,077 | 1,042,556 | |||
| Gain on insurance proceeds related to | |||||||
| equity investments | – | – | – | (2,528,901) | |||
| Gain on disposal of assets | – | (19,265) | (19,265) | ||||
| Gain on transfer/sale of land | (1,732,353) | – | (1,732,353) | (6,489,976) | |||
| Depreciation and amortization related to equity investments |
605,138 |
438,011 |
1,667,927 |
1,313,986 |
|||
| Interest expense related to equity investments | 840,504 |
467,571 |
2,085,327 |
1,292,627 |
|||
| ADJUSTED EBITDA | $3,280,471 | $3,191,900 | $8,900,640 | $8,394,277 | |||
SHAKOPEE, Minn., Sept. 18, 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 October 14, 2024 to stockholders of record on September 30, 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]
SHAKOPEE, Minn., Aug. 08, 2024 (GLOBE NEWSWIRE) — Canterbury Park Holding Corporation (“Canterbury” or the “Company”) (Nasdaq: CPHC) today reported financial results for the three and six months ended June 30, 2024.
| ($ in thousands, except per share data and percentages) | |||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||
| Net revenues | $16,202 | $16,342 | -0.9 | % | $30,300 | $29,641 | 2.2 | % | |||||||||
| Net income (1) | $338 | $5,293 | -93.6 | % | $1,336 | $8,063 | -83.4 | % | |||||||||
| Adjusted EBITDA (2) | $2,407 | $2,384 | 1.0 | % | $5,620 | $5,202 | 8.0 | % | |||||||||
| Basic EPS (1) | $0.07 | $1.08 | -93.5 | % | $0.27 | $1.64 | -83.5 | % | |||||||||
| Diluted EPS (1) | $0.07 | $1.07 | -93.5 | % | $0.27 | $1.64 | -83.5 | % | |||||||||
| (1) | Net income and basic and diluted EPS for the three and six months ended June 30, 2023 include a $6.5 million gain on sale of land which did not recur in the three and six months ended June 30, 2024. |
| (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. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net revenues. |
Management Commentary
“Canterbury delivered solid second quarter 2024 financial results, with net revenues and Adjusted EBITDA of $16.2 million and $2.4 million, respectively, both in line with the prior-year performance. Casino revenue declined year-over-year primarily reflecting ongoing efforts to optimize our marketing re-investment program. We are focused on optimizing cash flow from our Casino operations by driving more consistent visitation from our high-end players and limiting short-term swings in volume,” said Randy Sampson, President and Chief Executive Officer of Canterbury Park. “The collective 6.7% year-over-year increase in Pari-mutuel, Food & Beverage and Other revenues in the 2024 second quarter offset the decline in Casino revenue as we had two additional live race days compared to last year and benefited from our ongoing efforts to position our event center as a leading destination for events of all sizes in the region. The adjusted EBITDA margin of 14.9% in the quarter increased from 14.6% for the same period in 2023, again highlighting our Company-wide focus on initiatives to operate efficiently and generate cash flow. Overall, our second quarter 2024 financial results continue to demonstrate the improvement in our operations that we are delivering compared to the pre-pandemic periods.
“Our long-term vision for Canterbury Commons to be transformed as both a regional destination for ‘Live, Work, Stay, and Play’ and as a driver of new revenue sources and economics for the Company continues to gain momentum with development progress being made every day. Swervo Development Corporation’s (“Swervo”) amphitheater remains on schedule for a Summer 2025 opening as does construction of the 10,000 square foot commercial building in our Winners Circle development that will be home to BBQ and pizza restaurants and a fitness center, all of which are expected to open within the next few months. Greystone, our partner in the Winners Circle development, is also working through the pre-development process for a second 28,000 square foot commercial office building that would complement their headquarters at Canterbury Commons. We expect these commercial developments will add daytime traffic, bringing energy to the Winners Circle and our overall Canterbury Commons development.
“Our solid balance sheet with unrestricted cash and short-term investments of nearly $24 million and consistent cash flow generation enables us to fund our growth-focused initiatives without incurring debt, while simultaneously returning capital to shareholders through our quarterly cash dividend. Looking ahead to the second half of the year and beyond, we are confident in our ability to execute on our strategies to deliver growth and drive long-term value for our shareholders.”
Canterbury Commons Development Update
Swervo continues to make progress on the construction of its state-of-the-art amphitheater which is expected to open Summer 2025. The Company’s barn relocation and redevelopment plan is also well underway with three new barns complete and in operation, with the balance of the planned backside improvements on schedule for completion in early 2025. Canterbury also recently began work on 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 80% of its available units.
- Repairs continue on Phase I of the Triple Crown Residences and are expected to be fully complete in late 2024.
- 63% of the 147 units of senior market rate apartments at The Omry at Canterbury are leased.
- Construction continues on a new 10,000 square-foot commercial building within the Winners Circle development; the building will feature three tenants, including a BBQ restaurant, a pizza restaurant and a fitness center, all of which are expected to open within the next few months.
- A land use application for an additional 28,000 square-foot commercial office building within the Winners Circle development was approved by the City Planning Commission and the City Council. Construction is expected to begin this Fall, contingent on commitments, with the primary user expected to occupy 50% of the building.
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 Second Quarter Operating Results
Net revenues for the three months ended June 30, 2024 decreased 0.9% to $16.2 million, compared to $16.3 million for the same period in 2023. The decrease reflects a decline in Casino revenue of 5.2%, or $538,000, as compared to the three month period ended June 30, 2023. The decline in Casino revenue was primarily due to a decrease in table games drop, partially offset by increases in Pari-mutuel, Food & Beverage and Other revenue of 5.2%, 3.6% and 13.6%, respectively, compared to the same period a year ago which were driven in part by having two additional live race days as well as higher out-of-state handle due to increased field sizes. Additionally, the Company generated increased catering operations and admissions revenue related to hosting large scale special events.
Operating expenses for the three months ended June 30, 2024 were $15.1 million, a decline of $199,000, or 1.3%, compared to operating expenses of $15.3 million for the same period in 2023. The year-over-year decline primarily reflects lower advertising and marketing expenses and other operating expenses compared to the same period in 2023 that were somewhat offset by increased purse expense and depreciation.
The Company recorded a gain on sale of land of $6.5 million related to the sale of 37 acres to Swervo during the three months ended June 30, 2023. There were no sales of land in the three and six months ended June 30, 2024.
The Company recorded a loss from equity investment of $1.2 million for the three months ended June 30, 2024. For the three months ended June 30, 2023, the Company recorded a loss from equity investment of $622,000. The losses from equity investments in both periods 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 $142,000 for the three months ended June 30, 2024 compared to income tax expense of $2.1 million for the three months ended June 30, 2023. The Company recorded net income of $338,000, or diluted earnings per share of $0.07, for the three months ended June 30, 2024, compared to net income and diluted earnings per share for the three months ended June 30, 2023 of $5.3 million and $1.07 per share, respectively.
Adjusted EBITDA, a non-GAAP measure, for the three months ended June 30, 2024 and June 30, 2023 was $2.4 million.
Summary of 2024 Year-to-Date Operating Results
Net revenues for the six months ended June 30, 2024 increased 2.2% to $30.3 million, compared to $29.6 million for the same period in 2023. The year-over-year improvement reflects increases as compared to the six months ended June 30, 2023 in Pari-mutuel, Food & Beverage and Other revenues of 4.7%, 9.4% and 14.6%, respectively, partially offset by a 1.0% decline in Casino revenue. The increases were primarily the result of the Company having two more live race days along with a continued return to more normalized operations and events in the six months ended June 30, 2024 than in the same period last year.
Operating expenses for the six months ended June 30, 2024 were $27.4 million, an increase of $391,000, or 1.4%, compared to operating expenses of $27.0 million for the same period in 2023. The year-over-year increase reflects higher depreciation, due to putting into service upgrades to the Company’s barns and backside, and higher salaries and benefits expenses, due primarily to annual wage increases, in the six months ended June 30, 2024, which more than offset lower advertising and marketing and other operating expenses as compared to the six months ended June 30, 2023.
The Company recorded a gain on sale of land of $6.5 million related to the sale of 37 acres to Swervo during the six months ended June 30, 2023. There were no sales of land in the three and six months ended June 30, 2024.
The Company recorded a loss from equity investment of $2.0 million for the six months ended June 30, 2024 compared to a gain from equity investment of $1.2 million for the six months ended June 30, 2023. The net loss for the six months ended June 30, 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 $592,000 for the six months ended June 30, 2024 compared to income tax expense of $3.2 million for the six months ended June 30, 2023.
The Company recorded net income of $1.3 million, or diluted earnings per share of $0.27, for the six months ended June 30, 2024 compared to net income and diluted earnings per share for the six months ended June 30, 2023 of $8.1 million and $1.64 per share, respectively.
Adjusted EBITDA was $5.6 million for the six months ended June 30, 2024 compared with $5.2 million for the same period in 2023.
Additional Financial Information
Further financial information for the second quarter ended June 30, 2024, is presented in the accompanying tables at the end of this press release. Additional information will be provided in the Company’s Quarterly Report on Form 10-Q that will be filed with the Securities and Exchange Commission on or about August 9, 2024.
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, depreciation and amortization related to equity investments 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. 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, 2023 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; 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 (UNAUDITED) |
|||||||||||||||
| Three months ended | Six months ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Operating Revenues: | |||||||||||||||
| Casino | $9,845,371 | $10,383,578 | $19,901,399 | $20,097,933 | |||||||||||
| Pari-mutuel | 2,598,716 | 2,471,366 | 3,772,984 | 3,604,700 | |||||||||||
| Food and Beverage | 2,100,231 | 2,027,652 | 3,827,380 | 3,497,483 | |||||||||||
| Other | 1,658,077 | 1,459,092 | 2,798,621 | 2,441,130 | |||||||||||
| Total Net Revenues | $16,202,395 | $16,341,688 | $30,300,384 | $29,641,246 | |||||||||||
| Operating Expenses | (15,080,180 | ) | (15,279,233 | ) | (27,416,295 | ) | (27,024,968 | ) | |||||||
| Gain on Sale of Land | – | 6,489,976 | – | 6,489,976 | |||||||||||
| Income from Operations | 1,122,215 | 7,552,431 | 2,884,089 | 9,106,254 | |||||||||||
| Other (Loss) Income, net | (641,929 | ) | (124,906 | ) | (955,649 | ) | 2,132,781 | ||||||||
| Income Tax Expense | (142,000 | ) | (2,135,000 | ) | (592,000 | ) | (3,176,000 | ) | |||||||
| Net Income | 338,286 | 5,292,525 | 1,336,440 | 8,063,035 | |||||||||||
| Basic Net Income Per Common Share | $0.07 | $1.08 | $0.27 | $1.64 | |||||||||||
| Diluted Net Income Per Common Share | $0.07 | $1.07 | $0.27 | $1.64 | |||||||||||
| RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA (UNAUDITED) |
|||||||||||||||
| Three months ended | Six months ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| NET INCOME | $338,286 | $5,292,525 | $1,336,440 | $8,063,035 | |||||||||||
| Interest income, net | (532,570 | ) | (497,274 | ) | (1,071,097 | ) | (896,449 | ) | |||||||
| Income tax expense | 142,000 | 2,135,000 | 592,000 | 3,176,000 | |||||||||||
| Depreciation | 889,073 | 741,632 | 1,740,059 | 1,476,893 | |||||||||||
| EBITDA | 836,789 | 7,671,883 | 2,597,402 | 11,819,479 | |||||||||||
| Stock-based compensation | 368,789 | 364,542 | 715,155 | 700,747 | |||||||||||
| Gain on insurance proceeds related to equity investments | – | – | – | (2,528,901 | ) | ||||||||||
| Gain on sale of land | – | (6,489,976 | ) | – | (6,489,976 | ) | |||||||||
| Depreciation and amortization related to equity investments | 535,164 | 435,211 | 1,062,789 | 875,975 | |||||||||||
| Interest expense related to equity investments | 666,507 | 402,795 | 1,244,822 | 825,056 | |||||||||||
| ADJUSTED EBITDA | $2,407,249 | $2,384,455 | $5,620,168 | $5,202,380 | |||||||||||
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