SHAKOPEE, Minn., May 14, 2019 /PRNewswire/ -- Canterbury Park
Holding Corporation (NASDAQ: CPHC) (the "Company") today announced
financial results for the first quarter ended March 31, 2019.
The Company's 2019 first quarter consolidated net revenues were
$11.6 million, a 5.1% decrease over
net revenues of $12.2 million in the
2018 first quarter. Card Casino revenues decreased $377,000, or 4.6%, due to a $248,000 and $159,000 decrease in poker and table games
revenues, respectively. Pari-mutuel revenues decreased $50,000, or 3.3%, primarily due to a decrease in
simulcast revenue. Food and beverage revenues increased
$49,000, or 3.8%, primarily due to
increased event revenues. Other revenues decreased $251,000, or 22.9%, due to a one-time short-term
customer rental agreement in the 2018 first quarter related to the
Super Bowl held in Minneapolis.
Total operating expenses in the 2019 first quarter were
$11.6 million, a 6.9% increase over
operating expenses of $10.9 million
in the 2018 first quarter. This increase primarily reflects
increased salaries and benefits expense of $315,000, or 5.9%, and purse related expenses of
$151,000, or 12.1%. The Company also
recorded a loss on disposal of assets of $113,000, primarily due to a write-off of assets
disposed of in remodeling the Card Casino.
The Company's 2019 first quarter net income was $57,000 compared to net income of $990,000 in the 2018 first quarter. Net Income
includes non-operating interest income of $63,000 from interest on various deposits and
loans the Company made related to development activities. The
Company's 2019 first quarter diluted earnings per share were
$0.01, compared to $0.22 in the 2018 first quarter.
The Company generated adjusted EBITDA of $716,000 in the 2019 first quarter, a 63.7%
decrease compared to 2018 first quarter adjusted EBITDA of
$2.0 million.
Additional information regarding the Company's first quarter
2019 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 or before May 15,
2019.
Management Comments
Randy Sampson, Canterbury Park's
President and Chief Executive Officer, commented: "We are
disappointed in the operating results for the first quarter, as
revenues and net income were unfavorable compared to last year and
to our 2019 forecast for the quarter. However, we remain confident
about the prospects for the remainder of the year as we believe the
factors that combined to result in reduced revenues and earnings
for the quarter, compared to the same period in 2018, are largely
behind us. First, there was unusually inclement weather in the 2019
first quarter that significantly impacted our attendance for both
card casino and simulcasting. Specifically, February 2019 was unusually cold and the fourth
snowiest month in Minnesota
history. Second, as a result of expanding and remodeling the Card
Casino, we incurred significant disruption during the construction
period in January and February 2019
which resulted in reduced revenues due to lower attendance from our
regular players in the Card Room as well as the temporary reduction
of 10 gaming tables. This construction project and re-opening of
the new room in March 2019 also
resulted in significant labor costs and inefficiencies as well as a
$108,000 fixed asset write-off.
Third, there was a change in the purse payment structure starting
in January 2019, which resulted in
$240,000 of additional purse expenses
compared to the 2018 first quarter. This change to our contractual
purse structure is largely a timing difference and will result in
lower purse expense in the Second and Third quarters of this year.
Finally, our simulcast revenues were down primarily due to the
temporary shutdown of Santa Anita,
one of the most popular horse tracks in the country in terms of
simulcast wagering."
Mr. Sampson added: "Although the 2019 first quarter did not meet
our expectations, we are encouraged with the reopening of the Card
Casino and believe the expanded room will drive new business,
particularly during live racing season. We have also seen positive
results from the upgraded Food and Beverage venues, including the
Trifecta Café, and are looking forward to the grand opening of our
Little Chicago Chophouse this week. We are also confident our
growing Catering and Events area will continue to have a positive
impact on our Food and Beverage revenues. In addition, we had a
successful start to the 25th live racing season conducted by
Canterbury Park on Kentucky Derby day with over 20,000 patrons in
attendance and a record table games revenue day."
"Finally, we continue to make progress on our Canterbury Commons
development. Construction of the 13-acre, 300-unit first phase of
the Triple Crown apartments is well underway and on schedule to
have the leasing office open in September
2019 with move-in of the first residents in February of
2020. Also, the Shenandoah Drive road project is progressing and
will be completed this fall. Completion of this road is significant
as it opens up the ability to develop approximately 50 acres of our
property. We are making good progress on this first phase of the
Canterbury Commons development, which we anticipate will feature a
mixed use of townhomes, senior apartments, office and hospitality.
We expect to announce specifics for this portion of the development
in the 2019 second quarter."
Use of Non-GAAP Financial Measures:
To supplement our financial statements, we also provide
investors with information about our EBITDA (Earnings Before
Depreciation and Amortization) 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. We have presented EBITDA as a
supplemental disclosure because 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 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 period or periods
presented. For the three months ended March 31, 2019, Adjusted EBITDA excluded the 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 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)
|
|
|
(Unaudited)
|
|
Three Months Ended
March 31,
|
|
2019
|
|
2018
|
Net Operating
Revenues
|
$11,590,798
|
|
$12,219,946
|
|
|
|
|
Operating
Expenses
|
($11,613,559)
|
|
($10,863,193)
|
|
|
|
|
(Loss) Income from
Operations
|
($22,761)
|
|
$1,356,753
|
|
|
|
|
Non-Operating
Revenues, net
|
$63,240
|
|
$12,407
|
|
|
|
|
Income Tax Benefit
(Expense)
|
$16,093
|
|
($379,470)
|
|
|
|
|
Net Income
|
$56,572
|
|
$989,690
|
|
|
|
|
Basic Net Income Per
Common Share
|
$0.01
|
|
$0.22
|
|
|
|
|
Diluted Net Income
Per Common Share
|
$0.01
|
|
$0.22
|
RECONCILIATION OF
NET INCOME TO EBITDA
|
|
|
|
(Unaudited)
|
|
|
Three months
ended
|
|
|
March 31,
|
|
|
2019
|
|
2018
|
NET INCOME
|
|
$
|
56,572
|
|
$
|
989,690
|
Interest
income, net
|
|
|
(63,240)
|
|
|
(12,407)
|
Income tax
expense (benefit)
|
|
(16,093)
|
|
|
379,470
|
Depreciation
|
|
|
625,520
|
|
|
635,145
|
EBITDA
|
|
|
602,759
|
|
|
1,991,898
|
Loss on
disposal of assets
|
|
113,437
|
|
|
-
|
Gain on
insurance recoveries
|
|
-
|
|
|
(21,064)
|
ADJUSTED
EBITDA
|
|
$
|
716,196
|
|
$
|
1,970,834
|
CONTACT:
|
RANDY
SAMPSON
|
|
(952)
445-7223
|
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SOURCE Canterbury Park Holding Corporation