SHAKOPEE, Minn., May 14, 2018 /PRNewswire/ -- Canterbury Park
Holding Corporation (NASDAQ: CPHC) (the "Company") today announced
financial results for the first quarter ended March 31, 2018.
The Company's 2018 first quarter consolidated net revenues were
$12.2 million, a 6.8% increase over
net revenues of $11.4 million in the
2017 first quarter. Card Casino revenues increased
$573,000, or 7.4%, primarily due to a
$714,000 increase in table games
revenues, partially offset by a decrease in poker revenues of
$142,000. Pari-mutuel revenues
increased $35,000, or 2.3%, primarily
due to an increase in simulcast revenue. Food and beverage revenues
decreased $42,000, or 3.1%, primarily
due to a decline in attendance at several special events compared
to attendance in 2017.
Total operating expenses in the 2018 first quarter were
$10.9 million, a 2.7% increase over
operating expenses of $10.6 million
in the 2017 first quarter. This increase primarily reflects
increased purse expense related to the increase in Card Casino and
Pari-mutuel revenues. Additionally, salaries and benefits expense
increased as two executive positions were open the majority of the
2017 first quarter. These increases were partially offset by a
decrease in real estate tax expense as the Company has elected to
capitalize the real estate taxes payable by its subsidiary
Canterbury Development LLC for land it is actively engaged in
developing.
The Company's 2018 first quarter net income was $990,000, a 92.9% increase compared to 2017 first
quarter net income of $513,000.
This increase is due to the increase in revenues, and the
reduction in the corporate tax rate from 34% to 21% as a result of
the U.S. Tax Cuts and Jobs Act signed on December 22, 2017. The Company's 2018 first
quarter diluted earnings per share were $0.22, compared to $0.12 in the 2017 first quarter.
The Company generated adjusted EBITDA of $2.0 million in the 2018 first quarter, a 30.7%
increase compared to 2017 first quarter adjusted EBITDA of
$1.5 million.
Additional information regarding the Company's first quarter
2018 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 14, 2018.
Management Comments
Randy Sampson, Canterbury Park's
President and Chief Executive Officer, commented: "We are
very pleased with the increase in the Company's 2018 first quarter
revenues compared to the 2017 first quarter as it reflects the
continued progress in our strategic plan to grow our core
businesses. Our first quarter Card Casino revenues showed
solid growth on the strength of 14% revenue growth in Table Games.
This increase is primarily due to both expanded promotional efforts
and a strong economy. Our Pari-mutuel revenue increased
quarter-over-quarter for the fifth consecutive quarter, which is
attributed to an increase in ADW source market fees and simulcast
revenues. While Food and Beverage revenues decreased slightly
compared to the prior year, that revenue decline was more than
offset in our Catering and Events area by a 24% increase in other
revenues due primarily to a short-term rental contract of our
parking lot and expo center during the quarter related to the Super
Bowl held in Minneapolis in
February 2018. We are currently optimistic that revenues for
the remainder of 2018, particularly in table games, will continue
to show increases over 2017. We also believe our growing catering
and events businesses as well as three additional live racing dates
will have a positive impact on our Food and Beverage revenues."
Mr. Sampson added: "Looking ahead, we are enthused as we begin
the busiest time of our year, with the centerpiece being our 2018
live racing meet that began on May 4
and will conclude on September 15. Our conducting live racing
on Kentucky Derby Day was a great success with attendance of more
than 19,000, with Food and Beverage and Card Casino revenues at or
near all-time records for a Canterbury Park live racing day.
Thanks to support from our Cooperative Marketing Agreement
with the Shakopee Mdewakanton Sioux Community, we will pay out
record purses during the 2018 race season. As a result, we
expect our barns to be at or near capacity again, enabling us to
continue to offer high quality and competitive live horse racing at
Canterbury Park. We are also adding more events to the
calendar; both during the live racing season and the offseason, to
more fully use our catering areas, our expo center, and infield
concert/festival site.
"Finally, we continue to make progress on our development plans
as we work with the City of
Shakopee and various potential development partners. As
previously reported, on March 6,
2018, the Shakopee City Council approved a tax increment
financing plan that will enable us to use a portion of future
property tax revenues generated by redevelopment of our land to
reimburse us for costs we incur to construct public streets,
utilities, sidewalks, and other public infrastructure needed to
support new businesses and other amenities. On April 2, 2018, we entered into an operating
agreement with Doran Companies, a leading apartment developer in
the Twin Cities market, to form a
joint venture to construct approximately 300 units in the first
phase of a luxury apartment project on land adjacent to the
racetrack. Construction of the apartments is expected to commence
in the fall of 2018. Additionally, we are working with the Shakopee
City Council to finalize and approve our final plat and a tax
increment financing and development agreement for redevelopment of
our underutilized land."
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. For the three months ended March 31, 2018, Adjusted EBITDA excluded the 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
70-day 2018 live race meet began on May
4 and ends September 15. 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
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.
NOTE: Financial summary on following page.
CANTERBURY PARK
HOLDING CORPORATION'S
SUMMARY OF
OPERATING RESULTS
(UNAUDITED)
|
|
|
Three Months Ended
March 31,
|
|
2018
|
|
2017
|
Operating Revenues,
(net)
|
$
|
12,219,946
|
|
$
|
11,443,071
|
Operating
Expenses
|
$
|
10,863,193
|
|
$
|
10,581,262
|
Non-Operating
Income
|
$
|
12,407
|
|
$
|
12,188
|
Income Before Income
Taxes
|
$
|
1,369,160
|
|
$
|
873,997
|
Income Tax
Expense
|
$
|
(379,470)
|
|
$
|
(361,000)
|
Net Income
|
$
|
989,690
|
|
$
|
512,997
|
Basic Net Income Per
Common Share
|
$
|
0.22
|
|
$
|
0.12
|
Diluted Net Income
Per Common Share
|
$
|
0.22
|
|
$
|
0.12
|
RECONCILIATION OF
NET INCOME TO EBITDA
|
|
|
Three Months Ended
March 31,
|
|
2018
|
|
2017
|
NET INCOME
|
$
|
989,690
|
|
$
|
512,997
|
Interest
income
|
|
(12,407)
|
|
|
(12,188)
|
Income tax
expense
|
|
379,470
|
|
|
361,000
|
Depreciation
|
|
635,145
|
|
|
645,723
|
EBITDA
|
|
1,991,898
|
|
|
1,507,532
|
Gain on
insurance recoveries
|
|
(21,064)
|
|
|
-
|
ADJUSTED
EBITDA
|
$
|
1,970,834
|
|
$
|
1,507,532
|
CONTACT:
|
RANDY
SAMPSON
|
|
(952)
445-7223
|
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SOURCE Canterbury Park Holding Corporation