SHAKOPEE, Minn., Nov. 13, 2017 /PRNewswire/ -- Canterbury
Park Holding Corporation (the "Company") (NASDAQ: CPHC) today
announced financial results for its third quarter and nine month
periods ended September 30,
2017.
The Company reported net revenues of $17.7 million for the three months ended
September 30, 2017, an increase of
6.2% from revenues of $16.6 million
in the same 2016 period. Card Casino revenues increased
$655,000, or 8.9%, primarily due to a
$646,000 increase in table games
revenues. Pari-mutuel revenues increased $311,000, or 8.8%, due to a $92,000 increase in simulcast revenues and
receipt of $155,000 in source market
fees under Advanced Deposit Wagering (ADW) legislation that took
effect on November 1, 2016.
Food and beverage revenues decreased $262,000, or 7.6%, which is primarily due to
hosting six less live racing days in the 2017 third quarter
compared to the 2016 third quarter.
For the nine months ended September 30,
2017, the Company's net revenues were $45.0 million, an increase of 10.0% from revenues
of $40.9 million for the same period
in 2016. Card Casino revenues increased $2.4
million, or 11.0%, which reflected a $2.6 million increase in table games revenues,
partially offset by a modest decline in poker revenues. Pari-mutuel
revenues increased $931,000, or
11.7%, primarily due to $655,000
received in ADW source market fees. Food and beverage revenues
increased $143,000, or
2.1%.
The Company's operating expenses during the 2017 third quarter
were $16.1 million, an increase of
$1.0 million, or 7.0%, compared to
2016 third quarter expenses of $15.1
million, and the Company's operating expenses during the
nine months ended September 30, 2017
were $41.4 million, an increase of
$6.5 million, or 18.6%, from
$34.9 million in the nine months
ended September 30, 2016. Operating
expenses in the 2016 third quarter included an insurance recovery
of $592,276 related to storm damage
in 2014 that was accounted for as a reduction in operating expense.
The 2016 year-to-date operating expenses reflect the previously
reported $3,990,519 pretax gain on
sale of land in the 2016 second quarter that was also accounted for
as a reduction in operating expense. Excluding insurance recoveries
in 2016, operating expenses for the 2017 third quarter increased
$466,000 or 3.0% compared to the 2016
third quarter. Excluding insurance recoveries and gains on sales in
2016, operating expenses for the nine month period ended
September 30, 2017 increased
$1.9 million or 4.8% compared to the
2016 nine month period. Expense increases in the three and nine
month periods ended September 30,
2017 primarily reflected increases in purse and Breeders'
Fund expense, salaries and benefits, and other expenses related to
the revenue increases.
Net income for the three and nine months ended September 30, 2017 totaled $953,000 and
$2.2 million, respectively, compared
to $926,000 and $3.5 million for the same periods in 2016.
Diluted income per share for the three and nine months ended
September 30, 2017 was $0.22 and $0.50,
respectively, compared to $0.21 and
$0.82 for the same periods in
2016.
The Company generated adjusted EBITDA of $2.2 million for
the three months ended September 30,
2017, an increase of $544,000, or 33.2% from the same
period a year ago. Adjusted EBITDA as a percentage of net
revenues for the three months ended September 30, 2017 increased to 12.4% from 9.9%
for the same period in 2016. The Company generated adjusted
EBITDA of $5.5 million in the first nine months of 2017, an
increase of $2.2 million, or 67.3% from the same period a year
ago. Adjusted EBITDA as a percentage of net revenues for the
nine months ended September 30, 2017
increased to 12.2% from 8.0% for same period in 2016. EBITDA
represents earnings before interest, income tax expense, and
depreciation and amortization. Adjusted EBITDA reflects
additional adjustments to net income to eliminate unusual items,
which for the 2016 third quarter excluded insurance recoveries and,
for the first nine months of 2016, excluded the gain on sale of
land and insurance recoveries.
Additional information regarding the results of the Company's
third quarter and first nine months of 2017 is presented in the
accompanying table and in our Form 10-Q Report that will be filed
with the Securities and Exchange Commission on November 14, 2017.
Management Comments:
"We are very pleased with our results for the three months and
nine months ended September 30, 2017," stated Randy
Sampson, Canterbury Park's President and CEO. "After excluding the
impact of insurance recoveries and gain on sale of land in 2016,
the operating results in our core operations in the third quarter
and nine months ended September 30,
2017 showed continuing growth compared to last year's
results for the same periods, with all three of our operating
segments reporting increased revenues for the nine month period.
Improved results in our Card Casino reflect both success in
our marketing efforts and a strong economy. For the third
consecutive quarter we reported increased revenue in our
pari-mutuel wagering segment in spite of running six less live
racing days in the third quarter of 2017. This increase
primarily reflects new ADW source market fee revenues, but we also
saw growth in our live on-track and out-of-state pari-mutuel
revenues as well as an increase in revenue from simulcast wagering.
Finally, although Food and Beverage revenues for the quarter were
down slightly due to the reduction of racing dates, our Food and
Beverage operating results continue to reflect success in growing
our catering and events businesses. Perhaps the best measure
of our performance through the first nine months of 2017 is our
adjusted EBITDA. This non-GAAP measure, which is adjusted to
eliminate the impact of gains from land sale and insurance
recoveries in 2016, increased 67.3% to $5.5 million from $2.2 million in the same 2016 period, an amount
which represented 12.2% of our net revenues in the 2017 nine month
period."
Mr. Sampson concluded: "We are pleased with the performance of
all of our operating segments and are optimistic about the
Company's prospects for the remainder of 2017 and beyond. We
believe we will continue to see revenue and cash flow growth in our
core business, primarily from our table games as well as food and
beverage and other non-gaming revenues. However, as the upward
revenue trend in all our core businesses began in the fourth
quarter of 2016, we expect the future revenue growth percentage to
moderate as we face more difficult year over year comparisons.
We believe the strength of our core operating segments
provides a solid foundation as we continue to pursue our real
estate development efforts. While we have experienced delays
in the approval process for the initial phase of the development of
our underutilized land, we are continuing to make progress on
currently unresolved issues."
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 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 reflects additional adjustments to our net income
to eliminate unusual items. We have presented Adjusted EBITDA as a
supplemental disclosure because it enables investors to understand
our results excluding the effect of unusual or infrequent items.
For the three months ended September 30,
2016, Adjusted EBITDA excluded the gain on insurance
recoveries. For the nine months ended September 30, 2016, Adjusted EBITDA excluded the
gain on sale of land and gain on insurance recoveries.
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 began on May
5th and ended September
16th. 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 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.
CANTERBURY PARK
HOLDING CORPORATION'S
|
SUMMARY OF
OPERATING RESULTS
|
(UNAUDITED)
|
|
|
Three
Months
Ended
September 30,
2017
|
Three
Months
Ended
September 30,
2016
|
Nine
Months
Ended
September 30,
2017
|
Nine
Months
Ended
September
30,
2016
|
|
|
|
|
|
Operating Revenues,
net
|
$17,666,841
|
$16,630,408
|
$44,956,390
|
$40,862,702
|
|
|
|
|
|
Operating Expenses
(1)
|
$16,130,028
|
$15,071,503
|
$41,366,597
$
|
$34,883,277
|
|
|
|
|
|
Interest Income
(Expense), net
|
$13,575
|
$538
|
$37,178
|
($48,488)
|
|
|
|
|
|
Income before Income
Taxes
|
$1,550,388
|
$1,559,443
|
$3,626,971
|
$5,930,937
|
|
|
|
|
|
Income Tax
Expense
|
($597,753)
|
(633,606)
|
($1,444,753)
|
($2,419,447)
|
|
|
|
|
|
Net Income
|
$952,635
|
$925,837
|
$2,182,218
|
$3,511,490
|
|
|
|
|
|
Basic Net Income Per
Common Share
|
$0.22
|
$0.22
|
$0.50
|
$0.82
|
|
|
|
|
|
Diluted Net Income
Per Common Share
|
$0.22
|
$0.21
|
$0.50
|
$0.82
|
|
|
|
|
|
(1) Operating
expenses for the three months ended September 30, 2016 include a
$592,000 gain on insurance recoveries. Operating expenses for the
nine months ended September 30, 2016 also include a $4.0 million
gain on sale of land. Both the gain on insurance recoveries and the
gain on sale of land were accounted for as a reduction of
expenses.
|
RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
NET INCOME
|
$
|
952,635
|
|
$
|
925,837
|
|
$
|
2,182,218
|
|
$
|
3,511,490
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
(income) expense, net
|
|
(13,575)
|
|
|
(538)
|
|
|
(37,178)
|
|
|
48,488
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
597,753
|
|
|
633,606
|
|
|
1,444,753
|
|
|
2,419,447
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
646,050
|
|
|
672,465
|
|
|
1,869,048
|
|
|
1,866,975
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
2,182,863
|
|
|
2,231,370
|
|
|
5,458,841
|
|
|
7,846,400
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
insurance recoveries
|
|
0
|
|
|
(592,276)
|
|
|
0
|
|
|
(592,276)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale
of land
|
|
0
|
|
|
0
|
|
|
0
|
|
|
(3,990,519)
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED
EBITDA
|
$
|
2,182,863
|
|
$
|
1,639,094
|
|
$
|
5,458,841
|
|
$
|
3,263,605
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT:
|
Randy
Sampson
|
|
(952)
445-7223
|
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SOURCE Canterbury Park Holding Corporation