Canterbury Park Holding Corporation (NASDAQ: CPHC) (the
“Company”) today announced financial results for the first quarter
ended March 31, 2016.
The Company’s 2016 first quarter consolidated net revenues
increased $512,273, or 5.2%, to $10,393,311, as compared to first
quarter 2015 revenues of $9,881,038. All three segments posted
gains. Card Casino revenues increased 4.1%, primarily due to growth
in table games revenues. Food and beverage revenues increased 7.7%,
and pari-mutuel revenues increased 1.8% increase.
Total operating expenses in the 2016 first quarter increased
$651,586, or 7.1%, to $9,870,318 compared to $9,218,730 in the 2015
first quarter. Most of this increase is attributable to a $462,000,
or 10%, increase in salary and benefit expense and a $154,000, or
17%, increase in purse expense. The increase in salary and benefit
expense is, to a substantial degree, due to the 12.5% increase in
Minnesota’s minimum wage from $8.00 to $9.00 per hour that took
effect on August 1, 2015. The increase in purse expense is largely
due to a change in calculating purse expense that is further
discussed below.
For the three months ended March 31, 2016 the Company’s net
income was $310,752 as compared to 2015 first quarter net income of
$388,680. The Company’s diluted earnings per share in the 2016
first quarter were $.07, compared to diluted earnings per share of
$.09 for the same period last year.
Additional information regarding the Company’s first quarter
2016 results is presented in the accompanying table and in our Form
10-Q report that will be filed with the Securities and Exchange
Commission on May 16, 2016.
Management Comments
Randy Sampson, Canterbury Park’s President and Chief Executive
Officer, commented: “We were pleased with the Company’s improved
revenues in the 2016 first quarter compared to the 2015 first
quarter. Along with solid increases in our Card Casino and Food and
Beverage segments, we were encouraged by the modest increase in our
simulcast revenues. Our goal to leverage this revenue growth into
quarter-over-quarter bottom line growth was, unfortunately,
undermined by two factors. The first was the $1.00 per hour
increase in Minnesota’s minimum wage on August 1, 2015 that, along
with staffing increases to support our catering and events growth
initiatives were the main factors in the $462,000 increase in our
salary and benefit expense in the first quarter. While this minimum
wage increase will continue to present challenges when a further
$.50 per hour increase takes effect August 1, 2016, we remain
committed to finding ways to mitigate the impact of these increases
without diminishing the quality of our services or the loyalty of
our customers. The second factor adversely affecting our first
quarter results was the $154,000 increase in our purse expense that
was due to a change in the statutory formula by which our purse
expense is determined. Pursuant to legislation that took effect
January 1, purse accruals are now determined based on a single
rate, rather than the variable rate depending on the time of the
year that was previously in effect. This change will cause our
purse expense to be higher in the first and fourth quarters and
lower in the second and third quarters when compared to payments
calculated under the previous statutory structure. However, the
change is not expected to have any material impact on our purse
expense on an annual basis.”
Mr. Sampson added: “We are excited about prospects for our live
meet that begins May 20. With support from our Cooperative
Marketing Agreement with the Shakopee Mdewakanton Sioux Community,
we anticipate offering the highest quality and most competitive
live race meet in the history of Canterbury Park. Adding to our
excitement is our decision to reduce the takeout on wagers made on
our live races to the lowest level at any racetrack in the U.S. in
order to increase the amount paid to winning horseplayers. Over the
years we have earned the reputation of being one of the most
horsemen-friendly racetracks in the country. By this move we seek
to also become known as one of the most horseplayer-friendly
racetracks. While the take-out reduction will decrease our revenue
as a percentage of on-track handle, we anticipate that this bold
move will draw the attention of serious horse-players both locally
and throughout the country to our improving racing product and will
result in a significant increase in wagering handle for our live
race meet.“
Use of Non-GAAP Financial
Measures:
To supplement our financial statements, we also provide
investors with EBITDA (defined below), which is a non-GAAP measure.
EBITDA represents earnings before interest income, income tax
expense, and depreciation and amortization. EBITDA is not a measure
of performance or liquidity 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, or cash flows from
operating activities as a measure of liquidity. EBITDA has been
presented as a supplemental disclosure because it is a widely used
measure of performance and basis for valuation of companies in our
industry. Moreover, other companies that provide EBITDA information
may calculate EBITDA differently than we do.
About Canterbury
Park:
Canterbury Park Holding Corporation owns and operates Canterbury
Park Racetrack, Minnesota’s only thoroughbred and quarter horse
racing facility. The Company’s 69-day 2016 live race meet begins on
May 20th and ends September 17th. In addition, Canterbury Park’s
Card Casino hosts “unbanked” card games 24 hours a day, seven days
a week, offering 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 facility
in Shakopee, Minnesota. For more information about the Company,
please visit us at www.canterburypark.com.
Cautionary
Statement:
From time to time, in press releases and in other communications
to shareholders or the investing public, the 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 or plans after the date the
statements are made to differ significantly from those indicated in
the forward-looking statements when made.
CANTERBURY PARK
HOLDING CORPORATION’S
SUMMARY OF
OPERATING RESULTS
(UNAUDITED)
Three Months Three Months Ended Ended
March 31, 2016 March 31, 2015 Operating Revenues, (net)
$10,393,311 $9,881,038 Operating Expenses $9,870,318
$9,218,730
Non-Operating Income, net
$945
$616
Income Before Income Taxes
$523,938
$662,924
Income Tax Expense $(213,186 ) $(274,242 ) Net Income
$310,752 $388,680
Basic Net Income Per Common Share
$.07
$0.09
Diluted Net Income Per Common Share
$.07
$0.09
RECONCILIATION OF
NET INCOME TO EBITDA
Three Months Three Months Ended Ended
March 31, 2016
March 31, 2015 Net income $ 310,752 $ 388,682
Interest income, net of interest expense (945 ) (616 )
Income tax expense 213,186 274,242 Depreciation
576,480
564,105
EBITDA $ 1,099,473 $ 1,236,413
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version on businesswire.com: http://www.businesswire.com/news/home/20160513005057/en/
Canterbury Park Holding CorporationRandy Sampson,
952-445-7223
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