Shares of Canterbury Park Holding Corporation (CPHC) have risen 3.1% since reporting third-quarter 2025 results, outpacing the S&P 500 index’s 0.8% growth over the same period. However, the stock has fallen 2.9% over the past month, lagging the S&P 500’s 3.6% rally.Canterbury Park generated net revenues of $18.3 million in the latest quarter, down 5% from the year-ago period. Net income plummeted 75.9% to $487,000 from $2 million, as last year’s results benefited from a $1.7-million gain tied to a land tran ...

Revenue Performance - Total net revenues for Q3 2025 were $18,315,000, a decrease of $969,000, or 5.0%, compared to $19,284,000 in Q3 2024[80] - Total Casino revenue decreased by $954,000, or 9.7%, for Q3 2025, and by $2,174,000, or 7.3%, for the nine months ended September 30, 2025, compared to the same periods in 2024[82] - Total pari-mutuel revenue decreased by $91,000, or 2.7%, for Q3 2025, and by $522,000, or 7.4%, for the nine months ended September 30, 2025, compared to the same periods in 2024[84] - Food and beverage revenue increased by $405,000, or 13.1%, for Q3 2025, and by $269,000, or 3.9%, for the nine months ended September 30, 2025, compared to the same periods in 2024[85] Income and Expenses - Net income for Q3 2025 was $487,000, or $0.10 per share, compared to net income of $2,022,000, or $0.40 per share, for Q3 2024[95][96] - Adjusted EBITDA decreased by $467,000, or 14.2%, for Q3 2025, and by $2,275,000, or 25.6%, for the nine months ended September 30, 2025, compared to the same periods in 2024[98] - Purse expense decreased by $444,000, or 15.9%, for Q3 2025, primarily due to decreased Casino and pari-mutuel revenues[88] - Advertising and marketing costs increased by $124,000, or 18.6%, for Q3 2025, due to new Casino promotions[91] - Other loss, net, for Q3 2025 was $408,000, an increase of $445,000 compared to a loss of $853,000 for Q3 2024[93] Tax and Cash Flow - The effective tax rate for Q3 2025 was 24.3%, compared to 27.6% for Q3 2024[94] - Net cash provided by operating activities for the nine months ended September 30, 2025 was $9,004,000, despite a net loss of $139,000[102] - The company declared a cash dividend of $0.07 per share payable during the three months ended September 30, 2025[106] Assets and Financing - As of September 30, 2025, the company's cash, cash equivalents, and restricted cash balance was $16,990,000, an increase of 24.4% from $13,687,000 as of December 31, 2024[101] - The company recorded a TIF receivable of approximately $20,161,000 as of September 30, 2025, which includes $16,141,000 of principal and $4,020,000 of interest[112] - Net cash used in investing activities for the nine months ended September 30, 2025 was $4,655,000, primarily due to additions to land, buildings, and equipment of $3,675,000[104] - The company has a revolving credit line of up to $10,000,000, which was reduced to $5,000,000 as of January 31, 2024[100] - The company anticipates that unrestricted funds, along with amounts available under its revolving line of credit, will be sufficient for ongoing liquidity and capital resource requirements for at least the next twelve months[101] - The company may require additional financing for significant real estate development or strategic growth, potentially through joint ventures, debt, or equity financing[101] Other Financial Considerations - The company experienced an increase in payable to horsepersons of $1,158,000 for the nine months ended September 30, 2025, primarily due to the timing of the live racing season[102] - The company expects to spend the remaining $1,452,000 in tax increment financing over the next six months for the completion of the private redevelopment plan[101]

Core Insights - Canterbury Park Holding Corporation reported a decline in net revenues and net income for the third quarter and nine months ended September 30, 2025, compared to the same periods in 2024, primarily due to reduced casino revenues and increased competition [2][3][16]. Financial Performance - For the three months ended September 30, 2025, net revenues were $18.3 million, a decrease of 5.0% from $19.3 million in 2024. For the nine months, net revenues were $47.1 million, also down 5.0% from $49.6 million in 2024 [2][16]. - Net income for the third quarter was $487,000, a significant drop of 75.9% from $2.0 million in 2024. For the nine months, the company recorded a net loss of $139,000 compared to a net income of $3.4 million in 2024 [2][21]. - Adjusted EBITDA for the third quarter was $2.8 million, down 14.2% from $3.3 million in 2024, and for the nine months, it was $6.6 million, a decrease of 25.6% from $8.9 million in 2024 [2][21]. Revenue Breakdown - Casino revenues for the third quarter were $8.9 million, down 9.7% year-over-year. Pari-mutuel revenues decreased by 2.7%, while food and beverage revenues increased by 13.1% [8][29]. - For the nine months, casino revenues decreased by 7.3%, pari-mutuel revenues by 7.4%, and other revenues by 0.6%, with food and beverage revenues increasing by 3.9% [16]. Operating Expenses - Operating expenses for the third quarter were $17.3 million, a slight decrease of 0.6% from $17.4 million in 2024. For the nine months, operating expenses increased by 0.5% to $45.0 million from $44.8 million in 2024 [11][17]. Strategic Developments - The company opened the Boardwalk Kitchen & Bar, which has received positive customer feedback, and is exploring additional entertainment and hospitality opportunities [4][6]. - Canterbury Park is progressing on its Canterbury Commons development, which includes a new amphitheater scheduled to open in summer 2026, and is conducting a market analysis for potential uses of 25 acres of prime land [7][4]. Joint Ventures and Real Estate - The company has made significant contributions to real estate joint ventures, with an estimated value of over $10 per share from cash, TIF receivables, and joint ventures [6]. - The Triple Crown Residences at Canterbury Park have seen strong leasing activity, with Phase II at 93% leased and Phase I at 52% leased [9].

Core Insights - Canterbury Park Holding Corporation (CPHC) experienced a 2.8% decline in shares following the second quarter 2025 results, contrasting with a 0.8% growth in the S&P 500 index during the same period [1] - The company reported a net revenue of $15.7 million for Q2 2025, down 3.3% from $16.2 million in the previous year, with a net loss of $327,000 compared to a net income of $338,000 in the prior year [2] - Adjusted EBITDA fell 22.2% to $1.87 million, with the margin decreasing to 12% from 14.9% year-over-year, primarily due to lower revenues and increased marketing costs [2][7] Revenue Breakdown - Casino revenues decreased by 3.6% year-over-year to $9.49 million, with declines in table games and poker collections attributed to heightened competition [3] - Pari-mutuel revenues dropped 12.9% to $2.26 million, impacted by fewer live race days (14 in 2025 versus 17 last year) and reduced simulcast wagering [3] - Food and beverage sales slightly decreased by 1.6% to $2.07 million, reflecting reduced casino activity and fewer race days, while other revenues increased by 11.4% to $1.85 million due to strong admission receipts for special events [3] Operating Expenses and Losses - Operating expenses rose by 1% year-over-year to $15.23 million, driven by higher salaries, advertising, and marketing costs related to new casino promotions [4] - Loss from equity investments widened to $1.39 million from $1.17 million, reflecting depreciation, amortization, and interest costs from joint ventures [4] Management Initiatives - CEO Randy Sampson highlighted ongoing efforts to enhance casino marketing programs and renovate horse racing facilities to improve the racing experience [5] - Management is focused on unlocking value from the Canterbury Commons real estate development, viewing it as essential for transforming the property into a premier regional destination [6] Financial Position - The company maintains a debt-free balance sheet with nearly $17 million in cash and short-term investments, alongside approximately $20 million in TIF receivables expected to generate payments in Q4 2025 [6] Factors Affecting Performance - Revenue declines were primarily due to competitive pressures in the casino segment and weather-related cancellations affecting live racing and pari-mutuel revenues [7] - The adjusted EBITDA margin drop was influenced by revenue declines and increased marketing expenditures aimed at reversing traffic and wagering declines [7] Future Outlook - The company expressed confidence that marketing investments and facility improvements will yield benefits in the second half of the year, supported by additional special events and ongoing real estate development [8] Development Progress - Significant progress was made in the Canterbury Commons development, including a nearly completed 19,000-seat amphitheater and high occupancy rates in residential projects [9] - Construction is underway for a 28,000-square-foot commercial office building, which is 66% pre-leased, with occupancy targeted for Q3 2025 [10]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited consolidated financial statements for Q2 2025 and 2024, detailing balance sheets, operations, equity, cash flows, and notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary | ASSETS (June 30, 2025) | Amount ($) | | :--------------------- | :--------- | | Cash and cash equivalents | 12,442,407 | | Restricted cash | 5,940,759 | | Short-term investments | 4,500,000 | | Total Current Assets | 27,908,761 | | Total Long-term Assets | 87,021,445 | | **TOTAL ASSETS** | **114,930,206** | | LIABILITIES AND STOCKHOLDERS' EQUITY (June 30, 2025) | Amount ($) | | Total Current Liabilities | 14,350,398 | | Total Long-term Liabilities | 16,979,197 | | **TOTAL LIABILITIES** | **31,329,595** | | Total Stockholders' Equity | 83,600,611 | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **114,930,206** | - Total assets **increased** from **$109,922,782** as of December 31, 2024, to **$114,930,206** as of June 30, 2025, representing a **4.55%** **increase**. Total liabilities **increased** from **$25,834,108** to **$31,329,595**, a **21.27%** **increase**, primarily driven by current liabilities[7](index=7&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations Summary | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :-------------------------- | :----------------------------------- | :----------------------------------- | :--------------------------------- | :--------------------------------- | | Total Net Revenues | 15,665,734 | 16,202,395 | 28,807,366 | 30,300,384 | | Total Operating Expenses | 15,233,916 | 15,080,180 | 27,725,877 | 27,416,295 | | INCOME FROM OPERATIONS | 431,818 | 1,122,215 | 1,081,489 | 2,884,089 | | Net Other Loss | (910,224) | (641,929) | (2,040,105) | (955,649) | | (LOSS) INCOME BEFORE TAXES | (478,406) | 480,286 | (958,616) | 1,928,440 | | INCOME TAX BENEFIT (EXPENSE) | 151,000 | (142,000) | 332,000 | (592,000) | | NET (LOSS) INCOME | (327,406) | 338,286 | (626,616) | 1,336,440 | | Basic (loss) earnings per share | (0.06) | 0.07 | (0.12) | 0.27 | | Diluted (loss) earnings per share | (0.06) | 0.07 | (0.12) | 0.27 | | Cash dividends declared per share | 0.07 | 0.07 | 0.14 | 0.14 | - The company reported a **net loss** of **$327,406** for the three months ended June 30, 2025, compared to **net income** of **$338,286** in the prior year, and a **net loss** of **$626,616** for the six months ended June 30, 2025, compared to **net income** of **$1,336,440** in the prior year. This **decline** is primarily due to **decreased** total net revenues and **increased** net other loss[9](index=9&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' Equity Summary | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :-------------------------- | :------------------ | :-------------------- | | Common Stock | 50,860 | 50,367 | | Additional Paid-in Capital | 29,797,790 | 28,940,887 | | Retained Earnings | 53,751,961 | 55,097,420 | | Total Stockholders' Equity | 83,600,611 | 84,088,674 | - Total stockholders' equity **decreased** from **$84,088,674** at December 31, 2024, to **$83,600,611** at June 30, 2025, primarily due to a **net loss** of **$626,616** and dividends declared of **$718,843** for the six months ended June 30, 2025, partially offset by stock-based compensation and 401(k) stock match[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flows Summary | Cash Flow Activity | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :----------------------------------- | :--------------------------------- | :--------------------------------- | | Net cash provided by operating activities | 7,755,896 | 7,010,463 | | Net cash used in investing activities | (2,377,059) | (6,688,846) | | Net cash used in financing activities | (683,089) | (696,899) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | 4,695,748 | (375,282) | | Cash, cash equivalents, and restricted cash at end of period | 18,383,166 | 25,466,472 | - Net cash provided by operating activities **increased** to **$7,755,896** for the six months ended June 30, 2025, from **$7,010,463** in the prior year. Net cash used in investing activities significantly **decreased** from **$6,688,846** in 2024 to **$2,377,059** in 2025, primarily due to lower additions to land, buildings, and equipment[12](index=12&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=1.%20OVERVIEW%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - Canterbury Park Holding Corporation operates a Racetrack and Casino in Shakopee, Minnesota, offering seasonal live horse racing, year-round simulcast operations, and 24/7 card games (poker and table games) on up to 80 tables. Key revenue sources include Casino operations, pari-mutuel operations, and food and beverage sales, with additional revenue from land development (Canterbury Commons™) through mixed-use opportunities and joint ventures[14](index=14&type=chunk) - The company's revenue recognition policy for Casino and pari-mutuel wagering involves identifying performance obligations, determining transaction price, allocating it, and recognizing revenue when obligations are satisfied. For loyalty programs, a liability is allocated based on the stand-alone redemption value of points[23](index=23&type=chunk)[24](index=24&type=chunk) [2. STOCK-BASED COMPENSATION](index=12&type=section&id=2.%20STOCK-BASED%20COMPENSATION) - The company suspended performance awards under its Long Term Incentive Plan (LTI Plan) from 2020-2025, instead granting deferred stock awards to retain executives. Non-employee directors receive restricted and deferred stock grants, generally vesting **100%** one year after grant[30](index=30&type=chunk)[32](index=32&type=chunk) Employee Deferred Stock Awards | Employee Deferred Stock Awards (Six Months Ended June 30, 2025) | Shares | | :------------------------------------------------ | :----- | | Non-Vested Balance, December 31, 2024 | 43,790 | | Granted | 27,400 | | Vested | (12,505) | | Forfeited | (4,950) | | Non-Vested Balance, June 30, 2025 | 53,735 | - Stock-based compensation expense for the six months ended June 30, 2025, was approximately **$331,000**, up from **$271,000** in the prior year. Unrecognized stock-based compensation expense totaled **$1,185,000** as of June 30, 2025, expected to be recognized over approximately **3.8** years[36](index=36&type=chunk) [3. NET INCOME PER SHARE COMPUTATIONS](index=13&type=section&id=3.%20NET%20INCOME%20PER%20SHARE%20COMPUTATIONS) Net Income Per Share Computations | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net (loss) income (numerator) | $(327,406) | $338,286 | $(626,616) | $1,336,440 | | Weighted average basic shares outstanding | 5,060,543 | 4,984,953 | 5,050,003 | 4,975,889 | | Basic (loss) earnings per share | $(0.06) | $0.07 | $(0.12) | $0.27 | | Diluted (loss) earnings per share | $(0.06) | $0.07 | $(0.12) | $0.27 | - Basic and diluted EPS for the three and six months ended June 30, 2025, were **$(0.06)** and **$(0.12)** respectively, a **decrease** from **$0.07** and **$0.27** in the comparable periods of 2024, reflecting the **net loss** incurred[38](index=38&type=chunk) [4. GENERAL CREDIT AGREEMENT](index=15&type=section&id=4.%20GENERAL%20CREDIT%20AGREEMENT) - The company's general credit and security agreement was amended on January 31, 2024, extending the maturity date to January 31, 2027, and reducing the maximum borrowing under the revolving credit line from **$10,000,000** to **$5,000,000**. The line of credit is collateralized by receivables, inventory, equipment, and general intangibles, with a negative pledge agreement on certain real property[39](index=39&type=chunk) - There were no borrowings under the credit line during the three and six months ended June 30, 2025, and the outstanding balance was **$0** at both June 30, 2025, and December 31, 2024[39](index=39&type=chunk) [5. OPERATING SEGMENTS](index=15&type=section&id=5.%20OPERATING%20SEGMENTS) - The company operates four reportable segments: horse racing, Casino, food and beverage, and development. These segments are managed separately due to differing products, services, and production processes, with horse racing and Casino segments regulated by the Minnesota Racing Commission[40](index=40&type=chunk) Segment Net Revenues from External Customers | Segment Net Revenues from External Customers (Six Months Ended June 30, 2025) | Amount ($000s) | | :------------------------------------------------ | :------------- | | Horse Racing | 6,129 | | Casino | 18,681 | | Food and Beverage | 3,997 | | Development | — | | **Total** | **28,807** | Segment Income (Loss) Before Income Taxes | Segment Income (Loss) Before Income Taxes (Six Months Ended June 30, 2025) | Amount ($000s) | | :------------------------------------------------ | :------------- | | Horse Racing | (1,174) | | Casino | 1,971 | | Food and Beverage | 720 | | Development | (2,476) | | **Total** | **(959)** | [6. COMMITMENTS AND CONTINGENCIES](index=16&type=section&id=6.%20COMMITMENTS%20AND%20CONTINGENCIES) - The company has **increased** its maximum indemnification obligation under a Contribution and Indemnity Agreement with Doran affiliates for Doran Canterbury I, LLC debt financing to **$7,500,000** as of December 18, 2024. A new indemnity agreement for Doran Canterbury II, LLC debt financing was also entered into, with a maximum indemnification of **$1,000,000**[43](index=43&type=chunk)[44](index=44&type=chunk) - For the 2025 live race meet, the company guaranteed an additional **$500,000** of purse monies, with potential for up to **$1,500,000** more if additional purse revenues are secured. The company recorded a receivable of **$140,000** for the anticipated 2025 overpayment, believing reimbursement is likely from future purse supplements, especially with proposed sports wagering legislation[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - The company is obligated to construct infrastructure improvements within a Tax Increment Financing (TIF) District and will be reimbursed by the City of Shakopee from future tax increment revenue, up to specified maximum amounts. As of June 30, 2025, a TIF receivable of approximately **$19,819,000** was recorded, with management believing it is fully collectible[50](index=50&type=chunk)[65](index=65&type=chunk) [7. REAL ESTATE DEVELOPMENT](index=17&type=section&id=7.%20REAL%20ESTATE%20DEVELOPMENT) - The company is involved in several equity method joint ventures for real estate development, including Doran Canterbury I, LLC (321-unit apartment complex, **27.4%** equity), Doran Canterbury II, LLC (300 additional apartment units, **27.4%** equity), Canterbury DBSV Development, LLC (multi-use development, **61.87%** equity), and Trackside Investments, LLC (restaurant and entertainment venue, **50%** equity)[51](index=51&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) Equity Investment Loss (Six Months Ended June 30, 2025) | Equity Investment Loss (Six Months Ended June 30, 2025) | Amount ($) | | :------------------------------------------ | :--------- | | Doran Canterbury I, LLC | (1,836,000) | | Doran Canterbury II, LLC | (975,000) | | Canterbury DBSV Development, LLC | (134,000) | | Trackside Investments, LLC | (18,000) | | **Total Loss from Equity Investment** | **(2,963,000)** | - The total estimated cost of TIF eligible improvements to be borne by the Company was reduced to an amount not to exceed **$17,592,881** under the First Amendment to the Redevelopment Agreement. The Company expects to substantially complete these improvements by July 17, 2027, and will be reimbursed by future tax increment revenue[63](index=63&type=chunk)[64](index=64&type=chunk) [8. LEASES](index=20&type=section&id=8.%20LEASES) - The company leases office equipment under finance leases and horse racing equipment under operating leases. Lease costs for operating leases were **$11,276** for the six months ended June 30, 2025, and total lease expenses for short-term leases were **$250,613** for the same period[67](index=67&type=chunk)[69](index=69&type=chunk) Lease Terms and Discount Rates | Lease Type | Weighted Average Remaining Lease Term (Years) - June 30, 2025 | Weighted Average Discount Rate (%) - June 30, 2025 | | :--------- | :------------------------------------------------ | :--------------------------------------- | | Finance | 3.5 | 8.5 | | Operating | 0.3 | 8.0 | Lease Maturities | Lease Maturities (June 30, 2025) | Operating Leases ($) | Finance Leases ($) | | :----------------------- | :------------------- | :----------------- | | 2025 remaining | 16,952 | 22,223 | | 2026 | — | 44,447 | | 2027 | — | 44,447 | | 2028 | — | 44,251 | | Total minimum lease obligations | 16,952 | 155,368 | | Present value of minimum lease payments | 16,731 | 134,005 | [9. RELATED PARTY RECEIVABLES](index=22&type=section&id=9.%20RELATED%20PARTY%20RECEIVABLES) - The company has made member loans to Doran Canterbury I and Doran Canterbury II joint ventures, totaling approximately **$4,039,000** as of June 30, 2025, with accrued interest of **$1,082,000**. Interest income from these loans was **$184,000** for the six months ended June 30, 2025[75](index=75&type=chunk) - The company expects full reimbursement for these member loans and other related party receivables (**$19,000** as of June 30, 2025) as the joint ventures achieve positive cash flow and in the following year, respectively[75](index=75&type=chunk)[76](index=76&type=chunk) [10. SUBSEQUENT EVENTS](index=22&type=section&id=10.%20SUBSEQUENT%20EVENTS) - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, introducing changes to U.S. corporate income tax law, including permanent **100%** bonus depreciation, immediate expensing of domestic R&E, and modifications to business interest expense limitations. The company is currently evaluating the impact of this legislation on its consolidated financial statements[77](index=77&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of Q2 2025 and 2024 financial condition, results, revenue, expenses, EBITDA, liquidity, and risks [Overview](index=23&type=section&id=Overview) - Canterbury Park Holding Corporation operates the only facility in Minnesota offering live pari-mutuel thoroughbred and quarter horse racing, alongside year-round simulcasting and unbanked card games (poker and table games) at its Casino, which operates 24/7[80](index=80&type=chunk)[81](index=81&type=chunk) [Operations Review for the Three and Six Months Ended June 30, 2025](index=23&type=section&id=Operations%20Review%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025) [Revenues](index=23&type=section&id=Revenues) Total Net Revenues | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :---------------- | :----------------------------------- | :----------------------------------- | :--------- | :--------- | | Total Net Revenues | 15,666,000 | 16,202,000 | (537,000) | (3.3%) | | Metric | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :---------------- | :--------------------------------- | :--------------------------------- | :--------- | :--------- | | Total Net Revenues | 28,807,000 | 30,300,000 | (1,493,000) | (4.9%) | [Casino Revenue](index=23&type=section&id=Casino%20Revenue) Casino Revenue | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :------------------- | :----------------------------------- | :----------------------------------- | :--------- | :--------- | | Total Casino Revenue | 9,489,000 | 9,845,000 | (356,000) | (3.6%) | | Metric | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :------------------- | :--------------------------------- | :--------------------------------- | :--------- | :--------- | | Total Casino Revenue | 18,681,000 | 19,901,000 | (1,220,000) | (6.1%) | - The **decrease** in Casino revenue is primarily attributed to a **decrease** in 'drop' due to **increased** competition and a lower average collection revenue rate in table games, partially offset by an **increase** in other table games revenue from progressive jackpot revenue[84](index=84&type=chunk) [Pari-Mutuel Revenue](index=23&type=section&id=Pari-Mutuel%20Revenue) Pari-Mutuel Revenue | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :--------------------- | :----------------------------------- | :----------------------------------- | :--------- | :--------- | | Total Pari-Mutuel Revenue | 2,263,000 | 2,599,000 | (336,000) | (12.9%) | | Metric | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | Change ($) | Change (%) | | :--------------------- | :--------------------------------- | :--------------------------------- | :--------- | :--------- | | Total Pari-Mutuel Revenue | 3,342,000 | 3,773,000 | (431,000) | (11.4%) | - The **decline** in pari-mutuel revenue is mainly due to fewer live race days (14 in 2025 vs. 17 in 2024) and lower simulcast revenues, which are linked to fewer overall race days at other tracks nationwide[86](index=86&type=chunk) [Food and Beverage Revenue](index=25&type=section&id=Food%20and%20Beverage%20Revenue) - Food and beverage revenue **decreased** by **1.6%** (**$33,000**) for the three months and **3.5%** (**$136,000**) for the six months ended June 30, 2025, compared to the same periods in 2024, primarily due to lower Casino revenues and fewer live race days[88](index=88&type=chunk) [Other Revenue](index=25&type=section&id=Other%20Revenue) - Other revenues **increased** by **11.4%** (**$189,000**) for the three months and **10.5%** (**$295,000**) for the six months ended June 30, 2025, driven by higher admission revenue from large-scale special events in the first half of 2025[89](index=89&type=chunk) [Operating Expenses](index=25&type=section&id=Operating%20Expenses) - Total operating expenses **increased** by **1.0%** (**$154,000**) for the three months and **1.1%** (**$310,000**) for the six months ended June 30, 2025, compared to the same periods in 2024[90](index=90&type=chunk) - **Purse expense:** **Decreased** by **14.8%** (**$341,000**) for three months and **12.8%** (**$472,000**) for six months, due to **decreased** Casino and pari-mutuel revenues[91](index=91&type=chunk) - **Salaries and benefits:** **Increased** by **1.6%** (**$111,000**) for three months and **2.1%** (**$270,000**) for six months, due to annual wage and minimum wage **increases**[92](index=92&type=chunk) - **Depreciation and amortization:** **Increased** by **10.9%** (**$97,000**) for three months and **10.2%** (**$178,000**) for six months, due to placing larger fixed assets into service for barn relocation and redevelopment[93](index=93&type=chunk) - **Advertising and marketing:** **Increased** by **40.8%** (**$165,000**) for three months and **36.5%** (**$200,000**) for six months, due to new Casino promotions[94](index=94&type=chunk) - **Professional and contracted services:** **Increased** by **10.5%** (**$151,000**) for three months and **4.1%** (**$110,000**) for six months, due to **increased** live racing regulation costs from the Horseracing Integrity and Safety Authority[95](index=95&type=chunk) [Other Income (Loss), Net](index=25&type=section&id=Other%20Income%20(Loss)%2C%20Net) - Net other **loss** **increased** by **$268,000** to **$910,000** for the three months and by **$1,084,000** to **$2,040,000** for the six months ended June 30, 2025, primarily due to depreciation expense and debt service costs from the Doran Canterbury II joint venture becoming fully operational in Q2 2024[96](index=96&type=chunk) [Income Taxes](index=25&type=section&id=Income%20Taxes) - The company recorded an income tax benefit of **$151,000** for the three months and **$332,000** for the six months ended June 30, 2025, compared to an expense of **$142,000** and **$592,000** respectively in 2024. This shift is mainly due to a **decrease** in income before taxes from operations and a federal interest income tax refund in Q1 2025[97](index=97&type=chunk) Effective Tax Rates | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective Tax Rate | 31.6% | 29.6% | 34.6% | 30.7% | [Net (Loss) Income](index=25&type=section&id=Net%20(Loss)%20Income) Net (Loss) Income and EPS | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :-------------------------- | :----------------------------------- | :----------------------------------- | :--------------------------------- | :--------------------------------- | | Net (Loss) Income | (327,000) | 338,000 | (627,000) | 1,336,000 | | Basic and Diluted EPS | (0.06) | 0.07 | (0.12) | 0.27 | [EBITDA](index=27&type=section&id=EBITDA) EBITDA Reconciliation | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Six Months Ended June 30, 2025 ($) | Six Months Ended June 30, 2024 ($) | | :-------------------------- | :----------------------------------- | :----------------------------------- | :--------------------------------- | :--------------------------------- | | NET (LOSS) INCOME | (327,406) | 338,286 | (626,616) | 1,336,440 | | EBITDA | 28,632 | 836,789 | 36,629 | 2,597,402 | | ADJUSTED EBITDA | 1,873,203 | 2,407,353 | 3,812,485 | 5,620,371 | - Adjusted EBITDA **decreased** by **22.2%** (**$534,000**) for the three months and **32.2%** (**$1,808,000**) for the six months ended June 30, 2025, primarily due to an overall **decrease** in income from operations. Adjusted EBITDA as a percentage of net revenue was **12.0%** and **13.2%** for the three and six months ended June 30, 2025, respectively, down from **14.9%** and **18.5%** in 2024[100](index=100&type=chunk) [Contingencies](index=27&type=section&id=Contingencies) - The company is analyzing various options for developing its underutilized land and expects available funds to cover near-term feasibility and predevelopment costs. Substantial costs may be incurred during this process[101](index=101&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) - The company's primary liquidity sources are cash flow from operations and a revolving line of credit, which was amended to **$5,000,000** with a maturity date of January 31, 2027. No borrowings were outstanding as of June 30, 2025, and the company was in compliance with financial covenants[102](index=102&type=chunk) - Cash, cash equivalents, and restricted cash **increased** to **$18,383,000** at June 30, 2025, from **$13,687,000** at December 31, 2024. The company expects current funds, credit line, and future land sales to cover operations and planned development expenses for at least the next twelve months, including remaining costs for barn relocation (**$1,000,000**) and TIF financing (**$1,555,000**)[103](index=103&type=chunk) [Operating Activities](index=28&type=section&id=Operating%20Activities) - Net cash provided by operating activities for the six months ended June 30, 2025, was **$7,756,000**, driven by a **net loss** of **$627,000**, depreciation and amortization of **$1,918,000**, a **loss** from equity investment of **$2,963,000**, and **increases** in payable to horsepersons and deferred revenue, partially offset by **increases** in accounts receivable and TIF receivable[104](index=104&type=chunk) [Investing Activities](index=28&type=section&id=Investing%20Activities) - Net cash used in investing activities for the six months ended June 30, 2025, was **$2,377,000**, primarily due to additions to land, buildings, and equipment (**$2,032,000**), TIF eligible improvements (**$486,000**), and an **increase** in related party receivables (**$396,000**), partially offset by proceeds from short-term investments (**$5,000,000**)[106](index=106&type=chunk) [Financing Activities](index=28&type=section&id=Financing%20Activities) - Net cash used in financing activities for the six months ended June 30, 2025, was **$683,000**, mainly due to cash dividends paid to shareholders (**$0.07** per share declared) and payments for taxes related to equity awards[108](index=108&type=chunk) [Critical Accounting Estimates](index=29&type=section&id=Critical%20Accounting%20Estimates) - Management made no changes to the company's critical accounting estimates during the quarter ended June 30, 2025. The primary critical estimate discussed is the allowance for doubtful accounts for the Property Tax Increment Financing (TIF) Receivable[111](index=111&type=chunk) - As of June 30, 2025, the TIF receivable was approximately **$19,819,000**. Management believes this receivable is fully collectible, based on an annual collectability analysis that projects future tax increment revenue from completed development projects to exceed the company's infrastructure improvement costs[114](index=114&type=chunk)[115](index=115&type=chunk) [Forward-Looking Statements](index=30&type=section&id=Forward-Looking%20Statements) - Risks include challenges in implementing growth strategy, sensitivity to consumer spending, **decreased** live racing profitability, difficulty attracting horses/trainers, significant competition, **declining** popularity of horse racing, and potential impact of integrity issues[118](index=118&type=chunk) - Operational risks involve inclement weather affecting live racing, changes in governing laws (e.g., gaming taxes), extensive regulation, reliance on joint venture partners (Doran, Greystone), and challenges in executing real estate development strategy[118](index=118&type=chunk)[122](index=122&type=chunk) - Financial and other risks include obligations for TIF district improvements (reimbursement dependent on future tax revenue), competition from other real estate developers, inflation effects, ability to attract/retain qualified personnel, discretion over future dividends, and cybersecurity risks to information technology and customer data[118](index=118&type=chunk)[122](index=122&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No applicable quantitative and qualitative disclosures about market risk are reported - The company has no applicable quantitative and qualitative disclosures about market risk[120](index=120&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms effective disclosure controls and procedures, with no significant changes in internal control over financial reporting in Q2 2025 - The President and CEO, Randall D. Sampson, and CFO, Randy J. Dehmer, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[121](index=121&type=chunk) - There have been no significant changes in internal control over financial reporting during the fiscal quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[123](index=123&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) No applicable legal proceedings are reported for the period - No legal proceedings are applicable for the reporting period[125](index=125&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) Refers to risk factors from the 2024 Form 10-K, with no material changes reported - There have been no material changes from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[126](index=126&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds are reported - No unregistered sales of equity securities and use of proceeds are applicable[127](index=127&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities are reported - No defaults upon senior securities are applicable[128](index=128&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[129](index=129&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated trading arrangements during Q2 2025 - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended June 30, 2025[130](index=130&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including certifications, press releases, and XBRL financial information - Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002 (Exhibits 31.1, 31.2, 32)[136](index=136&type=chunk) - Press Release dated August 7, 2025, announcing 2025 First Quarter Results (Exhibit 99.1)[136](index=136&type=chunk) - Financial information formatted in Inline eXtensible Business Reporting Language (XBRL) for the condensed consolidated financial statements and notes (Exhibits 101, 104)[136](index=136&type=chunk) [Signatures](index=34&type=section&id=Signatures) - The report was duly signed on August 8, 2025, by Randall D. Sampson, President and Chief Executive Officer, and Randy J. Dehmer, Chief Financial Officer[134](index=134&type=chunk)

Core Viewpoint - Canterbury Park Holding Corporation (CPHC) experienced a decline in financial performance for Q1 2025, with total net revenues falling by 6.8% year-over-year, primarily due to decreased Casino revenues and increased competition in the market [2][4][7]. Financial Performance - Total net revenues for Q1 2025 were $13.1 million, down from $14.1 million in Q1 2024, reflecting broad-based softness across key business segments [2]. - Casino revenues, the main income driver, decreased by 8.6% to $9.2 million [2]. - Pari-mutuel revenues fell by 8.2% to $1.08 million, while food and beverage revenues decreased by 5.9% to $1.62 million [3]. - Other revenues increased by 9.3% to $1.25 million, driven by higher admission revenues from large-scale special events [3]. Profitability Metrics - Net income turned to a loss of $299,000, or 6 cents per diluted share, compared to a profit of $998,000, or 20 cents per diluted share, in the prior-year period [4]. - Adjusted EBITDA fell by 39.6% to $1.94 million from $3.21 million a year earlier [4]. - EBITDA, excluding interest, tax, depreciation, and amortization, dropped sharply to $8,000 from over $1.76 million in the prior-year quarter, indicating significant margin pressure [5]. Operating Expenses - Operating expenses increased by 1.3% year-over-year to $12.5 million, driven by higher payroll expenses and increased property taxes and marketing expenses [6]. - Cost pressures were exacerbated by annual wage increases and state-mandated minimum wage hikes [6]. Management Insights - CEO Randy Sampson noted increased competition in the Casino segment as a primary factor for revenue decline and emphasized the need for a stronger marketing strategy [7]. - The company is investing in long-term projects, including the Canterbury Commons development, which is expected to drive future economic value [8]. Revenue Influences - The decline in Casino revenues was attributed to reduced wagering activity and a lower average collection rate due to competitive pressures [9]. - Pari-mutuel revenues were impacted by fewer race days at other tracks, affecting simulcast betting volume [10]. Future Outlook - Management expressed confidence in future performance driven by event-driven revenue expansion, operational efficiencies, and ongoing real estate development [12]. - The company anticipates benefits from tax increment financing receivables and the completion of its barn relocation initiative by mid-2025 [12]. Development Initiatives - The Canterbury Commons real estate development is progressing, with Phase II of the Triple Crown Residences 95% leased and new commercial spaces opening [13][14]. - A new 16,000-square-foot entertainment venue is set to open in June 2025, and additional development land has been unlocked for future projects [15].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) The unaudited condensed consolidated financial statements for Canterbury Park Holding Corporation as of March 31, 2025, and for the three months then ended, include balance sheets, statements of operations, statements of stockholders' equity, statements of cash flows, and accompanying notes providing detailed explanations of accounting policies and financial items [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to $112.4 million from $109.9 million at year-end 2024, driven by increases in restricted cash and TIF receivable, while total liabilities also rose to $28.6 million from $25.8 million, primarily due to higher current liabilities, and stockholders' equity slightly decreased to $83.7 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $26,564 | $24,413 | | **Total Long-term Assets** | $85,795 | $85,510 | | **Total Assets** | **$112,358** | **$109,923** | | **Total Current Liabilities** | $12,462 | $10,674 | | **Total Long-term Liabilities** | $16,148 | $15,160 | | **Total Liabilities** | **$28,610** | **$25,834** | | **Total Stockholders' Equity** | **$83,748** | **$84,089** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the first quarter of 2025, the company reported a net loss of $299,210, a significant downturn from a net income of $998,154 in the same period of 2024, driven by a 6.8% decrease in total net revenues to $13.1 million and a substantial increase in net other loss, primarily from equity investment losses, resulting in a diluted loss per share of ($0.06) compared to earnings of $0.20 in Q1 2024 Q1 2025 vs Q1 2024 Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Casino Revenue | $9,192 | $10,056 | | Pari-mutuel Revenue | $1,078 | $1,174 | | **Total Net Revenues** | **$13,142** | **$14,098** | | Total Operating Expenses | $12,492 | $12,336 | | **Income from Operations** | **$650** | **$1,762** | | Loss from equity investment | ($1,573) | ($852) | | **Net (Loss) Income** | **($299)** | **$998** | | **Diluted (Loss) Earnings Per Share** | **($0.06)** | **$0.20** | - The company declared a cash dividend of **$0.07** per share in both Q1 2025 and Q1 2024[9](index=9&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity decreased from $84.1 million at the end of 2024 to $83.7 million at March 31, 2025, primarily due to a net loss of $299,210 and dividends declared of $359,851, partially offset by stock-based compensation and 401(k) stock match contributions Changes in Stockholders' Equity (Q1 2025) | Item | Amount | | :--- | :--- | | Balance at Dec 31, 2024 | $84,088,674 | | Net loss | ($299,210) | | Dividend declared | ($359,851) | | Stock-based compensation & other | $318,727 | | **Balance at Mar 31, 2025** | **$83,748,340** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, net cash provided by operating activities was $3.4 million, a significant improvement from $1.6 million in Q1 2024, mainly due to non-cash adjustments like loss from equity investment, while net cash used in investing activities was $0.9 million, primarily for additions to property and equipment, and net cash used in financing activities was $0.4 million, largely for dividend payments, resulting in the company's total cash, cash equivalents, and restricted cash increasing by $2.1 million during the quarter Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $3,374 | $1,616 | | Net cash used in investing activities | ($891) | ($2,707) | | Net cash used in financing activities | ($430) | ($470) | | **Net increase (decrease) in cash** | **$2,054** | **($1,561)** | | **Cash at end of period** | **$15,741** | **$24,281** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures supporting the financial statements, covering the company's business overview and revenue sources (Note 1), stock-based compensation plans (Note 2), credit agreements (Note 4), segment performance (Note 5), significant commitments including indemnity agreements and purse guarantees (Note 6), and extensive details on real estate development joint ventures and the associated TIF receivable (Note 7) - The company's three largest revenue sources are Casino operations, pari-mutuel operations, and food and beverage sales, and it is also developing underutilized land through a project known as Canterbury Commons™[14](index=14&type=chunk) - The company has four reportable operating segments: horse racing, Casino, food and beverage, and development[40](index=40&type=chunk) - The company has entered into multiple joint ventures for real estate development, including Doran Canterbury I & II, Canterbury DBSV, and Trackside Investments, which are accounted for using the equity method[50](index=50&type=chunk)[54](index=54&type=chunk)[56](index=56&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 6.8% decrease in Q1 2025 revenue to lower Casino and pari-mutuel revenues, with Casino revenue falling 8.6% due to increased competition and a lower collection rate in table games, while operating expenses saw a slight increase of 1.3%, and a significant net loss was recorded, driven by a $1.13 million other loss primarily from equity investment losses in the Doran Canterbury II joint venture, though the company maintains sufficient liquidity through cash flow and its credit facility to fund operations and planned capital projects - Total net revenues for Q1 2025 decreased by **6.8%** to **$13.1 million** compared to Q1 2024, primarily due to an **8.6%** drop in Casino revenue and an **8.2%** decrease in pari-mutuel revenue[82](index=82&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk) - The decrease in Casino revenue was attributed to increased competition and a lower average collection rate in table games[84](index=84&type=chunk) - The company recorded a net loss of **$299,000** in Q1 2025, compared to a net income of **$998,000** in Q1 2024, largely due to increased losses from its Doran Canterbury II joint venture equity investment[93](index=93&type=chunk)[95](index=95&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **NET (LOSS) INCOME** | **($299)** | **$998** | | EBITDA | $8 | $1,761 | | **ADJUSTED EBITDA** | **$1,939** | **$3,213** | [Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable for the reporting period - The company has indicated that there are no quantitative and qualitative disclosures about market risk to report for this period[118](index=118&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, with no significant changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls - The Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures are effective as of the end of the period[119](index=119&type=chunk) - No significant changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025[121](index=121&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) This section is not applicable, indicating no material legal proceedings to report for the period - The company reports no material legal proceedings[123](index=123&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors were reported since the last Annual Report on Form 10-K[124](index=124&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2025, the company repurchased a total of 3,234 shares of its stock at an average price of $19.71 per share, with these repurchases made in connection with the payment of taxes upon the issuance of deferred stock awards to employees Share Repurchases in Q1 2025 | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | January 1-31, 2025 | - | $ - | | February 1-28, 2025 | 1,212 | $ 20.80 | | March 1-31, 2025 | 2,022 | $ 19.05 | | **Total** | **3,234** | **$ 19.71** | [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) No director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the first quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[128](index=128&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications (31.1, 31.2, 32), the press release for Q1 2025 results (99.1), and financial statements formatted in Inline XBRL (101) - Exhibits filed include Sarbanes-Oxley certifications, the Q1 2025 earnings press release, and XBRL data files[132](index=132&type=chunk)

Financial Performance - Canterbury Park Holding Corporation reported net revenues of $13.1 million for Q1 2025, a decrease of 6.8% from $14.1 million in Q1 2024 [3][12] - The company recorded a net loss of $299,000 in Q1 2025, compared to a net income of $998,000 in Q1 2024, reflecting a 130.0% decline [3][17] - Adjusted EBITDA for the first quarter was $1.9 million, down 39.6% from $3.2 million in the same period last year, resulting in an adjusted EBITDA margin of 14.8% [3][4][17] Revenue Breakdown - Casino revenues decreased by 8.6% to $9.2 million, Pari-mutuel revenues fell by 8.2% to $1.1 million, and Food and Beverage revenues declined by 5.9% to $1.6 million [12][24] - Other revenues increased by 9.3% to $1.2 million, primarily driven by strong event admission revenues [12] Operating Expenses - Operating expenses rose by 1.3% to $12.5 million in Q1 2025, compared to $12.3 million in Q1 2024, mainly due to increased salaries, property taxes, and marketing costs [13] Strategic Initiatives - The company is refocusing and expanding its marketing programs to attract new customers and retain existing high-value guests, with a new Vice President of Marketing and Entertainment joining the team [5] - Canterbury Park is enhancing its event strategy, with several record attendance events already held in 2025 and more planned for the year [5][9] Real Estate Development - Canterbury Commons is being developed as a long-term economic driver, with nearly 1,000 residential units and various amenities already in place or under construction [6] - The company is exploring additional trackside development opportunities, including office, retail, hotel, and restaurant spaces [11] Financial Position - The company has no debt and holds cash and short-term investments valued at approximately $15 million, or $3.04 per share, along with over $19 million in tax increment financing receivable [8] - The total value of cash, tax increment financing receivable, and real estate joint ventures is estimated at $10 per share [8]

Core Insights - Canterbury Park Holding Corporation (CPHC) experienced a 6.9% decline in share price following the release of its fourth-quarter 2024 results, compared to a 2.3% decline in the S&P 500 index during the same period [1] Financial Performance - In Q4 2024, CPHC reported a diluted loss per share of $0.25, down from earnings of $0.27 in the same quarter of the previous year [2] - Net revenues for Q4 2024 were $11.98 million, a decrease of 4.4% from $12.53 million in Q4 2023 [2] - Adjusted EBITDA fell 34.9% year over year to $1.34 million from $2.05 million [2] - For the full year 2024, net revenues were nearly flat at $61.56 million compared to $61.44 million in 2023, but net income plummeted 80% to $2.11 million from $10.56 million [3] - Diluted EPS for the year declined to $0.42 from $2.13, while adjusted EBITDA decreased by 2% to $10.23 million from $10.45 million [3] Business Segments - Casino revenues, the largest segment, declined 4.9% year over year to $8.99 million in Q4 2024, attributed to increased market competition [4] - Pari-mutuel revenues fell 9.5% year over year to $1.13 million due to a lower simulcasting handle [4] - Food & Beverage and Other revenue categories saw modest increases of 1.7% and 2%, respectively [4] Operating Expenses - Operating expenses rose slightly to $12.08 million from $11.94 million in the prior-year period, driven by higher salaries and benefits and increased depreciation expenses [5] - These increases were partially offset by lower advertising and marketing expenses [5] Equity Investments - CPHC recorded a loss from equity investment of $2.1 million in Q4 2024, compared to a gain of $0.939 million in the prior-year quarter [6] Management Strategy - Management acknowledged the seasonally slow nature of Q4 and highlighted efforts to mitigate competitive pressures in casino operations [7] - CEO Randy Sampson outlined initiatives to enhance guest service and expand marketing efforts to attract new patrons [7] - The company introduced table game offerings and emphasized growth in its non-gaming entertainment business, which had a record number of events in 2024 [7] - Cost-control strategies were stressed to drive operating efficiencies while maintaining cash flow generation [8] Capital Expenditure Outlook - CPHC expects capital expenditure to decline year over year in 2025 and 2026, following the completion of its tax increment financing infrastructure and barn redevelopment projects [8] Real Estate Developments - The Canterbury Commons mixed-use real estate project continues to expand, featuring nearly 1,000 residential units, multiple restaurants, breweries, entertainment venues, and 57,000 square feet of office space [9] - Recent updates include an 87% leasing rate for Phase II of The Doran Group's Triple Crown Residences and the completion of repairs for Phase I [10] - 80% of the 147-unit senior housing complex, The Omry at Canterbury, has been leased [10] Additional Developments - CPHC continues to advocate for potential economic benefits if online sports betting is approved in Minnesota, supported by a strong balance sheet with over $15 million in unrestricted cash and short-term investments [12] - The company is unlocking value from its real estate holdings through new partnerships and ongoing discussions with potential developers for the remaining 50 acres of Canterbury Commons [13]

Financial Performance - Total net revenues for 2024 were $61,562,000, an increase of $125,000, or 0.2%, compared to 2023[162]. - Adjusted EBITDA for 2024 was $10,233,612, a decrease of $212,000, or 2.0%, compared to 2023, with Adjusted EBITDA as a percentage of net revenue at 16.6%[160]. - The Company recorded a net income of $2,113,000 for 2024, a decrease of 80% compared to $10,563,000 in 2023[180]. - Other net loss for 2024 was $3,396,000, a decrease of $6,875,000 from other income of $3,479,000 in 2023[178]. - Cash provided by operating activities for 2024 was $6,488,000, down from $11,537,000 in 2023[192][193]. - The Company recorded a provision for income taxes of $924,000 for 2024, down from $4,417,000 in 2023[179]. Revenue Breakdown - Total Casino revenue decreased by $1,006,000, or 2.5%, in 2024, primarily due to a decrease in drop and a lower average collection revenue rate in table games[164]. - Total pari-mutuel revenue for 2024 decreased by $28,000, or 0.3%, compared to 2023, mainly due to a decrease in simulcast handle[166]. - Food and beverage revenues increased by $139,000, or 1.8%, to $7,968,000 in 2024, driven by increased catering operations[167]. - Other revenues increased by $1,020,000, or 18.3%, to $6,593,000 in 2024, attributed to admission revenue increases from new events[169]. Operating Expenses - Total operating expenses increased by $436,000, or 0.8%, to $56,862,000 in 2024, with operating expenses as a percentage of net revenues rising to 92.4%[170]. - Total purse expense increased by $308,000, or 4.1%, in 2024, primarily due to expenses related to recruiting and participation incentives[171]. - Depreciation and amortization increased by $476,000, or 15.1%, in 2024, due to larger fixed assets being placed into service[174]. Cash Flow and Investments - Net cash used in investing activities for 2024 was $17,349,000, primarily for additions to land, buildings, and equipment[194]. - As of December 31, 2024, the Company had cash, cash equivalents, and restricted cash of $13,687,000, a decrease of $12,155,000 from $25,842,000 in 2023[197]. Assets and Liabilities - The TIF receivable as of December 31, 2024, was approximately $18,898,000, consisting of $15,551,000 principal and $3,347,000 interest[182]. - The player pool liability was $542,000 and $1,055,000 at December 31, 2024 and 2023, respectively, indicating a decrease of approximately 48.7% year-over-year[203]. - The outstanding chip liability was $447,000 and $558,000 at December 31, 2024 and 2023, respectively, indicating a decrease of approximately 19.9%[207]. - Accrued jackpot funds decreased from $172,000 in 2023 to $88,000 in 2024, showing a decline of about 48.8%[206]. - The poker promotional pool liability rose from $339,000 in 2023 to $364,000 in 2024, reflecting an increase of approximately 7.4%[204]. - Purse funds related to thoroughbred races increased from $7,133,000 in 2023 to $8,288,000 in 2024, marking a rise of about 16.2%[208]. Future Obligations and Concerns - The Company expects to spend approximately $2,500,000 for the remaining costs of the barn relocation and redevelopment plan[198]. - The Company has guaranteed purses for the 2025 live racing season totaling $2,000,000, which may be repaid through reimbursement in subsequent racing years[188][199]. - Future minimum purchase obligations under a totalizator agreement are set at $166,400 per year[209]. - The Company is obligated to construct public infrastructure improvements within the TIF District, with reimbursement from the City of Shakopee based on future tax increment revenue[210]. - The Company has experienced a decrease in revenue and profitability from live racing, which is a significant concern for future performance[212]. - The Company faces competition from other racing and gaming operations, which could materially affect its operations[212]. Other Notable Events - The company recorded a gain on transfer of land of $1,732,000 in 2024, resulting from transferring approximately 3.5 acres of land[176]. - The Company had a net loss on disposal of assets of $49,000 for 2024, compared to a net loss of $157,000 in 2023[177].