Canterbury Park (CPHC) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited) 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 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 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] Condensed Consolidated Statements of Stockholders' Equity 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 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 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] - The company has four reportable operating segments: horse racing, Casino, food and beverage, and development[40] - 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][54][56] Management's Discussion and Analysis of Financial Condition and Results of Operations 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][84][86] - The decrease in Casino revenue was attributed to increased competition and a lower average collection rate in table games[84] - 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][95] 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 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] Controls and Procedures 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] - No significant changes in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025[121] PART II. OTHER INFORMATION Legal Proceedings This section is not applicable, indicating no material legal proceedings to report for the period - The company reports no material legal proceedings[123] Risk Factors 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] Unregistered Sales of Equity Securities and Use of Proceeds 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 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] Exhibits 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]