Canterbury Park Holding Corporation (NASDAQ:CPHC) today announced
financial results for its fourth quarter and year ended December 31,
2014, and also reviewed strategic initiatives launched during 2014.
Results for the Year Ended December 31, 2014
The Company’s net revenues in 2014 were $48,470,000, a 3.7% increase
compared to 2013 net revenues of $46,736,000. This overall increase
reflects increases over 2013 of $1.5 million in Card Casino revenues,
$501,000 in concession revenues, and $653,000 in Other Revenues.
Offsetting these increases, was a $986,000 decline in pari-mutuel
revenues over 2013, $412,000 of which reflects an accounting estimate
change that increased 2013 revenue.
Operating expenses in 2014 were $44.4 million compared to $45.0 million
in 2013. This 1.4% decrease is primarily attributable to a $958,000 gain
from insurance recoveries received due to 2014 storm damage, but also
reflects a $195,000 reduction in salary and benefit expense offset by
increases over 2013 of $173,000 in advertising expense and $276,000 in
depreciation due to additional investments in our buildings and
equipment.
The Company’s 2014 net income was $2,411,000 or $.57 per diluted share
compared to net income of $1,017,000 or $.24 per diluted share in 2013.
The Company’s operations continue to generate positive cash flow. For
the twelve months ended December 31, 2014 compared to the same period in
2013, adjusted Earnings before Interest, Taxes, Depreciation and
Amortization (“EBITDA”), which excludes the gain on insurance
recoveries, was $5.3 million compared to $3.6 million in 2013, which as
a percentage of revenues was 10.9% in 2014 compared in 7.7% in 2013.
Results for the Quarter Ended December 31, 2014
The Company’s net revenues in the fourth quarter were $10,264,000, a
2.3% increase from net revenues of $10,036,000 during the same period in
2013, reflecting an increase in card casino revenues of 6.5% offset by a
decrease in pari-mutuel revenue of 16.7%. 2014 fourth quarter net income
was $939,000, or $.22 per share, an increase of 259% over fourth quarter
net income of $362,000, or $.09 per share in 2013. The increase is due
to the $958,000 pre-tax gain from insurance recoveries that was
recognized in the fourth quarter as a reduction in operating expenses.
Additional Financial Information
Further financial information for the fourth quarter and year ended
December 31, 2014 is presented in the accompanying table, and additional
information will be provided in the Company’s Form 10-K Report that will
be filed on March 30, 2015 with the Securities and Exchange Commission.
Management Comments
Mr. Randy Sampson, Canterbury Park’s President and Chief Executive
Officer, commented: “We are pleased with our financial results for the
year ended December 31, 2014 as we reported our best revenue and net
income figures since 2007 due primarily to solid growth in our card
casino operations as well as the insurance recoveries. We are also
pleased with the progress we made in our strategic plans to build a
foundation for future revenue and profit growth. In September we opened
our new 30,000 square foot Expo Center. This facility will allow us to
expand our trade show and event business by providing the ability to do
events year-round. With this venue, Canterbury Park now offers over
100,000 square feet of space for events, the fourth largest available
space of its kind in the Twin Cities. Also, in December we began a
project to remodel our club level to improve our capability to host
banquets and other catered events. In addition to upgrading the finishes
of the space, the project, which will be completed in time for our live
racing meet, will give us more capacity and flexibility to host a wide
variety of banquets and events.”
Commenting further, Mr. Sampson said: “In terms of our business
opportunities, we are most excited about our progress in pursuing the
development of a mixed-use destination lifestyle center on unused and
underutilized land adjacent to our Racetrack. Under a letter of intent
with Kraus-Anderson Incorporated, announced in November, extensive due
diligence regarding the feasibility of this project has now been
successfully completed, and we have begun negotiating the terms of a
formal Development Agreement that would guide financing and construction
of the proposed project. While there is still much work ahead of us to
make this development a reality, we are pleased to be working with
Kraus-Anderson, a proven development company that has considerable
experience with similar mixed-use projects.”
Mr. Sampson concluded: “We remain committed to providing our guests a
premier gaming, entertainment and event experience as evidenced by our
recent investments and plans for future development. With our healthy
cash position, positive cash flow and a stable future provided by the
Cooperative Marketing Agreement we signed in 2012 with the Shakopee
Mdewakanton Sioux Community, we believe we are well positioned to
continue to profitably grow revenues in our core operations, while at
the same time generating new revenue opportunities through strategic
investments that expand and broaden our business.”
Annual Shareholders Meeting
The Company also announced that its 2015 Annual Meeting of Shareholders
will be held on Thursday, June 4, 2015 at 4:00 pm, at the Racetrack in
Shakopee, Minnesota. The date of record for shareholders entitled to
vote at the Annual Meeting is April 10, 2015.
Use of Non-GAAP Financial Measures
To
supplement our financial statements, we also provide investors with
EBITDA (defined below), which is a non-GAAP measure. Adjusted EBITDA
represents earnings before interest income, income tax expense,
depreciation and amortization and gain from insurance recoveries. 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.
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 2015 live race meet begins on May 15 and ends September
12. 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 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 which are typically preceded
by the words “believes,” “expects,” “anticipates,” “intends” or similar
expressions. For such 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 such 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. Such risks and uncertainties 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;
legislative and regulatory decisions and changes; the general health of
the gaming sector; and other factors that are beyond our ability to
control or predict.
NOTE: Financial summary on following page.
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CANTERBURY PARK HOLDING CORPORATION’S
SUMMARY OF OPERATING RESULTS
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(Unaudited)
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Three Months
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Three Months
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Twelve Months
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Twelve Months
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Ended
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Ended
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Ended
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Ended
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December 31,
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December 31,
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December 31,
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December 31,
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2014
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2013
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2014
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2013
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Net Operating Revenues
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$10,263,711
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$10,036,460
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$48,469,837
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$46,736,437
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Operating Expenses
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($8,673,352
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($9,415,308
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($44,369,912
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($45,002,628
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Income from Operations
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$1,590,359
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$621,152
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$4,099,925
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$1,733,809
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Non-Operating Revenues, net
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$414
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$459
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$2,407
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$2,684
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Income Tax Expense
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($651,865
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($259,731
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($1,691,177
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($719,781
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Net Income
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$938,908
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$361,880
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$2,411,155
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$1,016,712
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Basic Net Income Per Common Share
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$0.22
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$0.09
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$0.58
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$0.24
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Diluted Net Income Per Common Share
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$0.22
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$0.09
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$0.57
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$0.24
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RECONCILIATION OF NET INCOME TO Adjusted EBITDA
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(Unaudited)
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Year Ended
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Year Ended
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Dec. 31,
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Dec. 31,
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2014
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2013
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Net income
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$
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2,411,155
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$
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1,016,712
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Interest income, net of interest expense
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(2,407
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(2,684
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Income tax expense
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1,691,177
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719,781
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Depreciation
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2,137,778
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1,861,702
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EBITDA
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$
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6,237,703
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$
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3,595,511
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Gain on Insurance Recoveries
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(957,597
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0
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Adjusted EBITDA
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$
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5,280,106
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$
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3,595,511
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Copyright Business Wire 2015