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
MeasuresTo 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
ParkCanterbury 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 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 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.
CANTERBURY PARK
HOLDING CORPORATION’S
SUMMARY OF
OPERATING RESULTS
(Unaudited)
Three Months Three Months
Twelve Months Twelve Months Ended Ended Ended Ended December 31,
December 31, December 31, December 31, 2014 2013
2014 2013 Net Operating Revenues $10,263,711
$10,036,460 $48,469,837 $46,736,437 Operating Expenses
($8,673,352 ) ($9,415,308 ) ($44,369,912 ) ($45,002,628 )
Income from Operations $1,590,359 $621,152 $4,099,925 $1,733,809
Non-Operating Revenues, net
$414
$459
$2,407
$2,684
Income Tax Expense ($651,865 ) ($259,731 ) ($1,691,177 )
($719,781 ) Net Income $938,908 $361,880 $2,411,155
$1,016,712 Basic Net Income Per Common Share
$0.22
$0.09
$0.58
$0.24
Diluted Net Income Per Common Share
$0.22
$0.09
$0.57
$0.24
RECONCILIATION OF NET INCOME TO
Adjusted EBITDA
(Unaudited)
Year Ended
Year Ended
Dec. 31,
Dec. 31,
2014
2013
Net income $ 2,411,155 $ 1,016,712 Interest income,
net of interest expense (2,407 ) (2,684 ) Income tax expense
1,691,177 719,781 Depreciation 2,137,778
1,861,702 EBITDA $ 6,237,703 $ 3,595,511
Gain on Insurance Recoveries (957,597 ) 0
Adjusted EBITDA $ 5,280,106 $ 3,595,511
Canterbury Park Holding CorporationRandy Sampson,
952-445-7223
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