Canterbury Park (CPHC) - 2024 Q3 - Quarterly Report

Financial Performance - Total net revenues for Q3 2024 were $19,284,000, a slight increase of$16,000 or 0.1% compared to Q3 2023 revenues of $19,268,000[77] - Total net revenues for the nine months ended September 30, 2024 were$49,585,000, an increase of $675,000 or 1.4$48,910,000 for the same period in 2023[77] - Total Casino revenue decreased by $345,000 or 3.4$542,000 or 1.8% for the nine months ended September 30, 2024 compared to the same periods in 2023[79] - Total pari-mutuel revenue decreased by $78,000 or 2.3$90,000 or 1.3% for the nine months ended September 30, 2024 compared to the same periods in 2023[82] - Net income for Q3 2024 was $2,022,000 or$0.40 per share, compared to $1,136,000 or$0.23 per share for Q3 2023[95] - Net income for the nine months ended September 30, 2024 was $3,358,000 or$0.67 per share, compared to $9,199,000 or$1.87 per share for the same period in 2023[95] - Other revenue increased by $647,000 or 27.8$1,005,000 or 21.1% for the nine months ended September 30, 2024 compared to the same periods in 2023[85] - Adjusted EBITDA increased by $89,000 (2.8$506,000 (6.0%) for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, with Adjusted EBITDA as a percentage of net revenue at 17.0% and 18.0%[98] Operating Expenses and Cash Flow - Operating expenses decreased by $92,000 or 0.5$300,000 or 0.7% for the nine months ended September 30, 2024 compared to the same periods in 2023[86] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $9,281,000, compared to$10,201,000 for the same period in 2023[103][104] - The Company's cash, cash equivalents, and restricted cash balance at September 30, 2024, was $22,427,000, down from$25,842,000 as of December 31, 2023[102] - Net cash used in investing activities for the nine months ended September 30, 2024, was $11,637,000, primarily due to additions to land, buildings, and equipment of$8,080,000[105] Tax and Gains - The effective tax rate for Q3 2024 was 27.6%, down from 31.9% in Q3 2023, primarily due to favorable discrete items[94] - The company recorded a gain on transfer of land of $1,732,000 during Q3 2024[92] Dividends and Redevelopment - The Company declared a cash dividend of$0.07 per share payable during the three months ended September 30, 2024[107] - The Company has completed phases one and two of a $15 million barn relocation and redevelopment plan, with approximately$5,000,000 remaining for phase three[102] Credit and Financing - As of September 30, 2024, the outstanding balance on the line of credit was $0, and the Company did not borrow on the revolving line of credit during the quarter[101] - The Company recorded a TIF receivable of approximately$16,969,000 as of September 30, 2024, which includes $13,793,000 of principal and$3,176,000 of interest[113] - The Company expects to finance improvements under the Redevelopment Agreement with current operating resources and existing credit facilities, potentially supplemented by third-party financing[115] Partnerships and Development Challenges - The company relies on partner Doran for the development and profitable operation of the Triple Crown Residences at Canterbury Park joint venture[122] - The company is dependent on partner Greystone Construction for a new development project[122] - The company may face challenges in executing its real estate development strategy[122] - The company is obligated to make improvements in the TIF district and will be reimbursed only to the extent of future tax revenue[122] Risks and Regulations - The company may be adversely affected by inflation and increases in the minimum wage mandated under Federal or Minnesota law[123] - The company's success may be impacted if it cannot attract, develop, and retain qualified personnel[123] - Future dividends are subject to Board of Director discretion and various risks and uncertainties[123] - The company's information technology systems are subject to cyber security risks, including misappropriation of customer information[124] - The company processes and stores personal information, which subjects it to governmental regulation and legal obligations related to privacy[124] - There are no applicable quantitative and qualitative disclosures about market risk[125]