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
UpdateSwervo 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
ResultsNet 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
ResultsNet 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
InformationFurther 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
MeasuresTo 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 ParkCanterbury
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 StatementFrom 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 cphc@jcir.com |
|
952-233-4828 or investorrelations@canterburypark.com |
|
- Financial tables follow –
| |
|
CANTERBURY PARK HOLDING CORPORATION'SSUMMARY 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 |
|
Canterbury Park (NASDAQ:CPHC)
Historical Stock Chart
From Oct 2024 to Nov 2024
Canterbury Park (NASDAQ:CPHC)
Historical Stock Chart
From Nov 2023 to Nov 2024
