SHAKOPEE, Minn., Nov. 14, 2018 /PRNewswire/ -- Canterbury Park
Holding Corporation (the "Company") (NASDAQ: CPHC) today announced
financial results for its third quarter and nine month periods
ended September 30, 2018.
The Company reported net revenues of $18.4 million for the three months ended
September 30, 2018, an increase of
4.0% from revenues of $17.7 million
in the same 2017 period. Card Casino revenues increased
$660,000, or 8.3%, due to a
$869,000 increase in table games
revenues. This increase was partially offset by a
$217,000 decrease in poker
revenues. Pari-mutuel revenues increased $135,000, or 3.5%, primarily due to an increase
in guest fee revenue. Food and beverage revenues increased
$72,000, or 2.3%.
For the nine months ended September 30,
2018, the Company's net revenues were $47.1 million, an increase of 4.8% from revenues
of $45.0 million for the same period
in 2017. Card Casino revenues increased $1.6
million, or 6.7%, which reflected a $2.0 million increase in table games revenues,
partially offset by a decline in poker revenues of $532,000. Pari-mutuel revenues increased
$220,000, or 2.5%, primarily due to
an increase in simulcast and guest fee revenue. Food and beverage
revenues increased $66,000, or 1.0%.
The Company's operating expenses during the 2018 third quarter
were $16.3 million, an increase of
$209,000, or 1.3%, compared to the
2017 third quarter expenses of $16.1
million, and the Company's operating expenses during the
nine months ended September 30, 2018
were $42.7 million, an increase of
$1.3 million, or 3.3%, from
$41.4 million in the nine months
ended September 30, 2017. The
increases in both the three and nine month periods as compared to
the same periods in 2017 are due to increased purse related
expense, utilities, and professional and contracted services
resulting from the higher level of Company development activities
in the 2018 periods.
Net income for the three and nine months ended September 30, 2018 totaled $1.6 million and
$3.3 million, respectively, compared
to $953,000 and $2.2 million for the same periods in 2017.
Diluted net income per share for the three and nine months ended
September 30, 2018 was $0.36 and $0.74,
respectively, compared to $0.22 and
$0.50 for the same periods in
2017.
The Company generated Adjusted EBITDA of $2.7 million for
the three months ended September 30,
2018, an increase of $508,000, or 23.3% from the same
period a year ago. Adjusted EBITDA as a percentage of net
revenues for the three months ended September 30, 2018 increased to 14.6% from 12.4%
for the same period in 2017. The Company generated Adjusted
EBITDA of $6.4 million in the first nine months of 2018, an
increase of $904,000, or 16.6%, from the same period a year
ago. Adjusted EBITDA as a percentage of net revenues for the
nine months ended September 30, 2018
increased to 13.5% from 12.1% for same period in 2017. 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 first nine months of 2018, excluded the loss on
disposal of assets and gain on insurance recoveries.
Additional information regarding the results of the Company's
third quarter and first nine months of 2018 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, 2018.
Management Comments:
Randy Sampson, Canterbury Park's
President and Chief Executive Officer, commented:
"We are pleased with the results for the three and nine months
ended September 30, 2018. The
operating results in our core operations in the third quarter and
nine months ended September 30, 2018
showed continuing growth compared to last year's results for the
same period as all three of our operating segments reported
increased revenues. Our increase in Card Casino revenue during the
third quarter and nine months ended September 30, 2018 was partially due to an
unusually high hold percentage on our table games during the
period, as well as an increase in volume due to enhanced
promotional efforts. For the seventh consecutive quarter we
reported year over year increases in revenue in our Pari-Mutuel
wagering segment, which is encouraging as it reverses what had been
a general downward trend in revenues for this segment of our
business. Food and Beverage revenue increased slightly during
the third quarter of 2018, benefitting from the extra live racing
day as well as price increases compared to the prior year. Net
income was positively impacted by recent reductions in corporate
tax rates resulting in our effective tax rate for the first nine of
months of 2018 decreasing to 24.2% compared to 39.8% for the same
period in 2017."
Mr. Sampson added: "In addition to solid operating results for
the quarter, we also made great progress on the development front.
We have broken ground on the first phase of the Canterbury Commons
project with the construction start of the Doran Canterbury I, LLC
joint venture as well as the extension of Shenandoah Drive. The
Doran Canterbury I project involves the construction of an upscale
300-unit apartment complex, heated parking ramp and a clubhouse on
land adjacent to Canterbury's racetrack. On September 27, 2018, Canterbury Development, LLC
transferred approximately 13 acres of land as its equity
contribution in the joint venture for a 27.4% interest in Doran
Canterbury I, LLC. As stated in the Operating Agreement, Doran is
responsible for securing financing for Doran Canterbury I. We anticipate the
construction financing will close in the fourth quarter, at which
time the Company will recognize a gain on the transfer of land.
Additionally, in October, Canterbury entered into three purchase
agreements, two for the sale of Canterbury Development LLC parcels
and one for the purchase of land and buildings adjacent to
Canterbury Park. We entered into an agreement with Primrose Schools
to sell approximately 1.7 acres of land for total consideration of
approximately $564,000, which would
allow for construction of a preschool. We also signed an agreement
with United Properties to sell approximately 20 acres of land for
total consideration of approximately $3.9
million for a project to bring a significant employer and
its corporate headquarters to Canterbury Commons. Finally, we
entered into an agreement with Hansen & Hansen to purchase
approximately 2.6 acres of land for total consideration of
approximately $1.0 million, to enable
us to meet the obligations to undertake specific infrastructure
improvements per the redevelopment agreement between Canterbury and
the city of Shakopee. We expect
all three of these transactions to close in 2019."
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 nine months ended September 30,
2018, Adjusted EBITDA excluded the gain on insurance
recoveries and loss on disposal of assets.
About Canterbury Park:
Canterbury Park Holding Corporation owns and operates Canterbury
Park Racetrack and Card Casino in Shakopee, Minnesota, the only thoroughbred and
quarter horse racing facility in the State. The Company offers live
racing from May to September. The Card 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 redeveloping 140 acres of
underutilized land surrounding the Racetrack in a project know as
Canterbury Commons. The Company is pursuing several mixed-use
development opportunities for this land, directly and through joint
ventures. 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 Annual Form 10-K Report to the SEC and
subsequent Form 10-Q. 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)
|
|
|
(Unaudited)
|
|
|
|
Three
Months
|
Three
Months
|
Nine
Months
|
Nine
Months
|
|
Ended
|
Ended
|
Ended
|
Ended
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
|
2018
|
2017
|
2018
|
2017
|
Operating Revenues,
(net)
|
$18,370,511
|
$17,666,841
|
$47,103,153
|
$44,956,390
|
|
|
|
|
|
Operating
Expenses
|
$16,338,866
|
$16,130,028
|
$42,715,316
|
$41,366,597
|
|
|
|
|
|
Non-Operating Income,
(net)
|
$8,567
|
$13,575
|
$26,023
|
$37,178
|
|
|
|
|
|
Income Before Income
Taxes
|
$2,040,212
|
$1,550,388
|
$4,413,890
|
$3,626,971
|
|
|
|
|
|
Income Tax
Expense
|
($407,367)
|
($597,753)
|
($1,066,000)
|
($1,444,753)
|
|
|
|
|
|
Net Income
|
$1,632,845
|
$952,635
|
$3,347,890
|
$2,182,218
|
|
|
|
|
|
Basic Net Income Per
Common Share
|
$0.36
|
$0.22
|
$0.75
|
$0.50
|
|
|
|
|
|
Diluted Net Income
Per Common Share
|
$0.36
|
$0.22
|
$0.74
|
$0.50
|
RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA
|
|
|
|
|
(Unaudited)
|
|
|
|
Three months
ended
|
|
|
Nine months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
NET INCOME
|
|
$
|
1,632,845
|
|
$
|
952,635
|
|
$
|
3,347,890
|
|
$
|
2,182,218
|
Interest
income, net
|
|
|
(8,567)
|
|
|
(13,575)
|
|
|
(26,023)
|
|
|
(37,178)
|
Income tax
expense
|
|
|
407,367
|
|
|
597,753
|
|
|
1,066,000
|
|
|
1,444,753
|
Depreciation
|
|
|
659,498
|
|
|
646,050
|
|
|
1,895,723
|
|
|
1,869,048
|
EBITDA
|
|
|
2,691,143
|
|
|
2,182,863
|
|
|
6,283,590
|
|
|
5,458,841
|
Gain on
insurance recoveries
|
|
-
|
|
|
-
|
|
|
(21,064)
|
|
|
-
|
Loss on
disposal of assets
|
|
-
|
|
|
-
|
|
|
99,934
|
|
|
-
|
ADJUSTED
EBITDA
|
|
$
|
2,691,143
|
|
$
|
2,182,863
|
|
$
|
6,362,460
|
|
$
|
5,458,841
|
CONTACT:
|
Randy
Sampson
|
|
(952)
445-7223
|
|
|
CANTERBURY
PARK
|
1100 Canterbury
Road
|
Shakopee, MN
55379
|
|
|
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SOURCE Canterbury Park Holding Corporation