SHAKOPEE, Minn., March 28, 2017 /PRNewswire/ -- Canterbury
Park Holding Corporation (NASDAQ:CPHC) today announced financial
results for its fourth quarter and year ended December 31, 2016.
Results for the Year Ended December
31, 2016
The Company's 2016 net revenues were $52.5 million, a 0.4% increase compared to 2015
net revenues of $52.3 million.
The $200,000 increase over 2015
reflects increases of $236,000 in
Card Casino revenues and $580,000 in
Other Revenues, largely offset by a $536,000 decline in pari-mutuel revenues and a
$101,000 decline in Food and Beverage
revenues.
Operating expenses in 2016 were $45.3
million compared to $47.6
million in 2015. This 4.9% decrease is primarily
attributable to the recognition as a reduction in operating expense
of a $3.9 million gain on sale of
land and other assets and a $1.5
million insurance recovery gain. By way of comparison,
2015 operating expenses were reduced by a $500,000 insurance recovery gain and a
$1.0 million gain on sale of land and
other assets. Excluding the gains on asset sales and
insurance recoveries in both 2016 and 2015, our operating expenses
increased $1.5 million or 3.1% due
primarily to a $1.1 million increase
in salaries and benefits largely attributable to mandated increases
in Minnesota's minimum wage and
$279,000 in severance compensation
payments related to a restructuring of senior management
positions.
The Company's net income increased 53.9% to $4.2 million, or $0.97 per diluted share, in 2016 compared to net
income of $2.7 million, or
$0.64 per diluted share, in
2015.
For the twelve months ended December 31,
2016 compared to the same period in 2015, earnings before
interest, taxes, depreciation and amortization ("EBITDA") increased
to $9.7 million from $6.9 million. Adjusted EBITDA, which
excludes gain on disposal of assets, gain on sale of land and gains
from insurance recoveries, was $4.4
million in 2016 compared to $5.3
million in 2015.
Results for the Quarter Ended December
31, 2016
The Company's 2016 fourth quarter net revenues were $11.6 million, a 6.9% increase from net revenues
of $10.8 million during the 2015
fourth quarter. Card Casino 2016 fourth quarter revenue increased
5.7% to $7.8 million compared to
$7.4 million during the same period
in 2015. Pari-mutuel 2016 fourth quarter revenues increased
5.3% to $1.5 million compared to 2015
fourth quarter of $1.4 million.
The increase in pari-mutuel revenues reflected source market fees
resulting from Advanced Deposit Wagering ("ADW") legislation, which
became effective November 1, that
enabled Canterbury to collect
source market fees of $144,000 in the
last two months of 2016. These revenue increases were
partially offset by a decrease in Food and Beverage revenues of
2.9% to $1.5 million in 2016 compared
to $1.6 million during the same
period in 2015, due to the loss of a major fall concert. 2016
fourth quarter net income was $684,000 or $0.16
per share, a decrease of 28.2% compared to 2015 fourth quarter net
income of $954,000, or $0.22 per share. The decrease in
fourth quarter net income was due to severance payments of
$279,000 and the recognition of gains
on assets sales and insurance recoveries totaling $779,000 in the 2016 fourth quarter compared to
$1,035,000 in the 2015 fourth
quarter.
Additional Financial Information
Further financial information for the fourth quarter and year
ended December 31, 2016 is presented
in the accompanying table, and additional information will be
provided in the Company's Form 10-K Report that will be filed on
March 30, 2016 with the Securities
and Exchange Commission.
Management Comments
Mr. Randy Sampson, Canterbury
Park's President and Chief Executive Officer, commented: "We
are pleased that our 2016 results represent the eighth consecutive
year of revenue growth as well as a record level of net income due
to the gain on the sale of land. While operating profit excluding
gains on sales of assets and insurance recoveries declined in 2016
compared to 2015, we believe we are making progress in growing our
core businesses as well as in our real estate development
efforts."
Commenting on results in the Company's core businesses, Mr.
Sampson added: "We continue to grow Card Casino revenues,
driven by strong increases in table games revenue, particularly in
the second half of 2016. Food and Beverage revenues related
to live racing and catering increased in 2016, but those increases
were offset by the loss of two major concerts that were hosted in
2015 due to the sale of our festival field land.
Pari-mutuel revenues decreased by 5.4% in 2016 compared to 2015.
Our decision to reduce the takeout rate on our live racing to the
lowest level in the country to promote our racing product
nationally did not generate the increase in wagering volume we
anticipated and resulted in an 8.7% decrease in total revenues from
on-track and out-of-state wagering on our live races. Also,
pari-mutuel revenue from simulcast racing, consistent with national
trends, continued to erode due to a shift in consumer preference to
internet wagering platforms. At the same time, we are
encouraged by early results from Advanced Deposit Wagering ("ADW")
legislation as source market fees that we collected in the final
two months of the year resulted in an increase in pari-mutuel
revenue for the quarter.
Mr. Sampson added: "Looking ahead, we remain confident about
prospects for the Company's core businesses in 2017 and beyond. We
believe there is room for continued revenue growth in our Card
Casino, and we are optimistic about increased Food and Beverage and
event revenues in 2017 fueled in part by revenues from our
successful Expo Center, as well as our Triple Crown banquet
center. We also made major improvements to our infield during
2016 to create a large concert and event area that will allow us to
again host major concerts and expect this will drive increased
events revenue in 2017 and beyond. While our pari-mutuel simulcast
operations face significant challenges from internet wagering
platforms, we believe the stability and improved quality of racing
provided by our Cooperative Marketing Agreement with the Shakopee
Mdewakanton Sioux Community will enable us to continue to not only
grow our revenues from wagering on live races, but also increase
our revenues from admissions, food and beverage, premium seating
and other non-gaming revenue sources. In addition, we plan to
return to our traditional takeout rates in 2017, which we
anticipate will generate an increase in on-track pari-mutuel
revenues.
Mr. Sampson concluded: "During 2016 we completed real
estate transactions that recognized the value of our underutilized
land, strengthened our balance sheet and realigned our real estate
portfolio to enhance our opportunities for future development. By
structuring the transactions as a 1031 exchange we were able to
defer taxes on the gains on the land sales. In addition, in
2016 we reorganized our corporate structure and completed the
platting of our property, both important steps to facilitate our
development efforts. Entering 2017 we believe we are
well positioned to capitalize on this foundation. Building on the
efforts started in 2016 we are actively engaged in pursuing several
compatible real estate development concepts. We expect to report
further progress on these efforts to enhance shareholder value
during the second quarter of 2017."
Annual Shareholders Meeting
The Company also announced that its 2017 Annual Meeting of
Shareholders will be held on Wednesday, June
7, 2017 at 10 a.m., at the
Racetrack in Shakopee, Minnesota.
The date of record for shareholders entitled to vote at the Annual
Meeting is April 12, 2017.
Use of Non-GAAP Financial Measures
To supplement our financial statements, we also provide
investors with information about our EBITDA and Adjusted EBITDA,
both of which are a non-GAAP measures. 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. Adjusted EBITDA represents our earnings before interest
income, income tax expense, depreciation and amortization and gain
from disposal of assets, gain on sale of land, and gain from
insurance recoveries. We have presented Adjusted EBITDA as a
supplemental disclosure because it enables investor to understand
our results excluding the effect of these three items.
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
67-day 2017 live race meet begins on May
5 and ends September 16. In addition, Canterbury
Park's Card Casino hosts 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 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 Form 10-K Report to the SEC. They include, but
are not limited to: material fluctuations in attendance at the
Racetrack; material changes in the level of wagering by patrons;
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 ability to successfully develop our real estate; and other
factors that are beyond our ability to control or predict.
CONTACT: Randy Sampson
(952) 445-7223
NOTE: Financial summary on following page.
CANTERBURY PARK
HOLDING CORPORATION'S
|
SUMMARY OF
OPERATING RESULTS
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Three
Months
Ended
December 31,
2016
|
Three
Months
Ended
December 31,
2015
|
Twelve
Months
Ended
December 31,
2016
|
Twelve
Months
Ended
December 31,
2015
|
|
|
|
|
|
Net Operating
Revenues
|
$11,550,492
|
$10,802,370
|
$52,460,203
|
$52,263,003
|
|
|
|
|
|
Operating
Expenses
|
($10,388,683)
|
($9,207,288)
|
($45,318,971)
|
($47,649,186)
|
|
|
|
|
|
Income from
Operations
|
$1,161,809
|
$1,595,082
|
$7,141,232
|
$4,613,867
|
Non-Operating
Revenues(expense), net
|
$27,235
|
$1,151
|
($21,252)
|
$2,804
|
|
|
|
|
|
Income Tax
Expense
|
($504,552)
|
($642,601)
|
($2,924,000)
|
($1,889,649)
|
|
|
|
|
|
Net Income
|
$684,491
|
$953,673
|
$4,195,980
|
$2,727,022
|
|
|
|
|
|
Basic Net Income Per
Common Share
|
$0.16
|
$0.22
|
$0.98
|
$0.65
|
|
|
|
|
|
Diluted Net Income
Per Common Share
|
$0.16
|
$0.22
|
$0.97
|
$0.64
|
RECONCILIATION OF
NET INCOME TO EBITDA AND ADJUSTED EBITDA
|
|
|
|
(Unaudited)
|
|
Year
Ended
|
Year
Ended
|
|
Dec.
31,
|
Dec.
31,
|
|
2016
|
2015
|
|
|
|
Net income
|
$
4,195,980
|
$
2,727,022
|
|
|
|
Interest
income(expense), net
|
21,252
|
(2,804)
|
|
|
|
Income tax
expense
|
2,924,000
|
1,889,649
|
|
|
|
Depreciation
|
2,547,772
|
2,297,613
|
|
|
|
EBITDA
|
$
9,689,004
|
$
6,911,480
|
|
|
|
|
Gain on disposal of
assets
|
(22,500)
|
(347,348)
|
|
Gain on sale of
land
|
(3,846,131)
|
(659,562)
|
|
Gain on Insurance
Recoveries
|
(1,464,923)
|
(495,465)
|
|
|
|
Adjusted
EBITDA
|
$
4,355,450
|
$
5,280,106
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/canterbury-park-holding-corporation-reports-2016-financial-results-300430662.html
SOURCE Canterbury Park Holding Corporation