Canterbury Park (CPHC) - 2021 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents unaudited financial statements, management's discussion, market risk, and internal control disclosures Item 1. Financial Statements (unaudited) Presents unaudited condensed consolidated financial statements, including balance sheets, operations, equity, and cash flows, with detailed notes Condensed Consolidated Balance Sheets Provides a snapshot of the Company's assets, liabilities, and stockholders' equity at specific dates | ASSETS | March 31, 2021 ($) | December 31, 2020 ($) | | :-------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $2,271,227 | $— | | Restricted cash | $3,855,368 | $4,471,712 | | Total current assets | $10,937,487 | $9,452,021 | | Total assets | $69,312,034 | $68,804,787 | | LIABILITIES | | | | Total current liabilities | $9,841,782 | $10,095,081 | | Total long-term liabilities | $7,409,881 | $7,416,521 | | Total liabilities | $17,251,663 | $17,511,602 | | STOCKHOLDERS' EQUITY | | | | Total stockholders' equity | $52,060,371 | $51,293,185 | - Total assets increased from $68,804,787 at December 31, 2020, to $69,312,034 at March 31, 2021[10] - Cash and cash equivalents significantly increased from $0 at December 31, 2020, to $2,271,227 at March 31, 2021[10] Condensed Consolidated Statements of Operations Details the Company's revenues, expenses, and net income over specific reporting periods | Metric | Three Months Ended March 31, 2021 ($) | Three Months Ended March 31, 2020 ($) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Total Net Revenues | $9,225,542 | $10,948,959 | | Total Operating Expenses | $7,953,431 | $10,807,264 | | Income From Operations | $1,272,111 | $141,695 | | Net Income | $551,493 | $255,221 | | Basic earnings per share | $0.12 | $0.05 | | Diluted earnings per share | $0.12 | $0.05 | - Net revenues decreased by 15.7% from $10,948,959 in Q1 2020 to $9,225,542 in Q1 2021[12] - Income from operations significantly increased from $141,695 in Q1 2020 to $1,272,111 in Q1 2021[12] - Net income more than doubled, rising from $255,221 in Q1 2020 to $551,493 in Q1 2021, resulting in basic and diluted EPS increasing from $0.05 to $0.12[12] Condensed Consolidated Statements of Stockholders' Equity Outlines changes in stockholders' equity, including net income, stock options, and compensation | Item | Three Months Ended March 31, 2021 ($) | Three Months Ended March 31, 2020 ($) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Balance at December 31 | $51,293,185 | $49,416,110 | | Net income | $551,493 | $255,221 | | Exercise of stock options | $48,598 | $200,790 | | Stock-based compensation | $103,130 | $57,606 | | 401(K) stock match | $90,407 | $160,967 | | Balance at March 31 | $52,060,371 | $49,894,117 | - Total stockholders' equity increased from $51,293,185 at December 31, 2020, to $52,060,371 at March 31, 2021, primarily driven by net income and stock-based compensation[14] - Dividend distribution was significantly reduced to $494 in Q1 2021 compared to no distribution in Q1 2020, reflecting the suspension of quarterly cash dividends[14] Condensed Consolidated Statements of Cash Flows Summarizes cash inflows and outflows from operating, investing, and financing activities | Activity | Three Months Ended March 31, 2021 ($) | Three Months Ended March 31, 2020 ($) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net cash from operating | $1,843,556 | $350,820 | | Net cash used in investing | $(204,511) | $(870,608) | | Net cash from (used in) financing | $15,838 | $(326,237) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $1,654,883 | $(846,025) | | Cash, cash equivalents, and restricted cash at end of period | $6,126,595 | $3,081,073 | - Net cash provided by operating activities increased significantly from $350,820 in Q1 2020 to $1,843,556 in Q1 2021[16] - Net cash used in investing activities decreased from $870,608 in Q1 2020 to $204,511 in Q1 2021, primarily due to lower additions to property, plant, and equipment[16] - The Company experienced a net increase in cash, cash equivalents, and restricted cash of $1,654,883 in Q1 2021, a reversal from a net decrease of $846,025 in Q1 2020[16] Notes to Condensed Consolidated Financial Statements Provides detailed explanations of the Company's business, accounting policies, and financial disclosures 1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Outlines core business, COVID-19 impact, and key accounting policies like revenue recognition - The Company's primary revenue sources are Card Casino operations, pari-mutuel operations (live racing and simulcast), and food and beverage sales, with additional revenue from land development[18] - COVID-19 Pandemic led to temporary suspensions of operations (March 16, 2020, and November 21, 2020 - January 10, 2021) and ongoing capacity limitations, materially impacting financial results[20][21][22] - Mitigation actions include workforce reductions, executive pay cuts, dividend suspension, postponed capital expenditures, and reduced operating costs[23] - Revenue recognition for Card Casino is a percentage of wagers, pari-mutuel is commission on wagers, and food and beverage is net collected amount, with loyalty programs accounted for as separate performance obligations[33][34] 2. STOCK-BASED COMPENSATION Details stock-based compensation plans, including deferred stock awards and stock option activity - The Company temporarily suspended granting performance awards under its LTI Plan due to COVID-19 uncertainty, instead granting deferred stock awards for retention[42] Deferred Stock Activity (3 months ended March 31, 2021) | Deferred Stock Activity (3 months ended March 31, 2021) | Number of Shares | Average Fair Value Per Share ($) | | :-------------------------------------- | :--------------- | :--------------------------- | | Non-Vested Balance, December 31, 2020 | 18,800 | $11.07 | | Granted | 27,900 | $13.33 | | Forfeited | (1,050) | $11.43 | | Non-Vested Balance, March 31, 2021 | 45,650 | $12.43 | Stock Option Activity (3 months ended March 31, 2021) | Stock Option Activity (3 months ended March 31, 2021) | Number of Options | Weighted Average Exercise Price ($) | | :------------------------------------ | :---------------- | :------------------------------ | | Outstanding at January 1, 2021 | 9,000 | $13.30 | | Exercised | (3,654) | $13.30 | | Expired/Forfeited | (5,346) | $13.30 | | Outstanding at March 31, 2021 | - | - | - Stock-based compensation expense was $103,000 for the three months ended March 31, 2021, up from $58,000 in the prior year period[46] 3. NET INCOME PER SHARE COMPUTATIONS Reconciles numerator and denominator for basic and diluted net income per common share | Metric | Three Months Ended March 31, 2021 ($) | Three Months Ended March 31, 2020 ($) | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (numerator) | $551,493 | $255,221 | | Weighted average basic shares outstanding | 4,754,496 | 4,659,579 | | Weighted average diluted shares | 4,754,504 | 4,662,675 | | Basic net income per common share | $0.12 | $0.05 | | Diluted net income per common share | $0.12 | $0.05 | - Dilutive effect of stock options was 8 shares in Q1 2021, significantly lower than 3,096 shares in Q1 2020, with no out-of-the-money options at March 31, 2021[50] 4. GENERAL CREDIT AGREEMENT Details the Company's revolving credit line, available balance, collateral, and covenant compliance - The Company has a $10,000,000 revolving credit line, with $8,750,000 available as of March 31, 2021, after accounting for a $1,250,000 letter of credit[51] - The line of credit is collateralized by all receivables, inventory, equipment, and general intangibles, and had an outstanding balance of $0 as of March 31, 2021[51] 5. OPERATING SEGMENTS Disaggregates financial performance into horse racing, Card Casino, food and beverage, and development segments - The Company operates four reportable segments: horse racing, Card Casino, food and beverage, and development, each managed separately due to differing products and services[55] Segment Performance (Three Months Ended March 31, 2021) | Segment Performance (Three Months Ended March 31, 2021) | Horse Racing ($ in thousands) | Card Casino ($ in thousands) | Food and Beverage ($ in thousands) | Development ($ in thousands) | Total ($ in thousands) | | :-------------------------------------- | :----------- | :---------- | :---------------- | :---------- | :---- | | Net revenues from external customers | $1,972 | $6,864 | $390 | $0 | $9,226 | | Segment (loss) income before income taxes | $(430) | $1,135 | $(203) | $(527) | $(25) | Segment Assets (March 31, 2021) | Segment Assets (March 31, 2021) | Horse Racing ($ in thousands) | Card Casino ($ in thousands) | Food and Beverage ($ in thousands) | Development ($ in thousands) | Total ($ in thousands) | | :------------------------------ | :----------- | :---------- | :---------------- | :---------- | :---- | | Segment Assets | $36,455 | $2,951 | $24,824 | $28,433 | $92,663 | | Elimination of intercompany balances | | | | | $(23,351) | | Total consolidated assets | | | | | $69,312 | 6. COMMITMENTS AND CONTINGENCIES Outlines potential future obligations, including earn-out payments and TIF District infrastructure - A potential earn-out payment of $700,000 per operating year or 20% of Net Pretax Profit for five years could be triggered if off-track betting becomes legal and the Company conducts it, though management believes this likelihood is remote[60] - The Cooperative Marketing Agreement (CMA) with SMSC contains covenants that, if breached, would trigger repayment obligations, but management believes a breach is unlikely[61] - The Company is obligated to construct infrastructure improvements within a TIF District, with reimbursement from future tax increment revenue, which is not guaranteed[63] 7. COOPERATIVE MARKETING AGREEMENT Details the CMA with SMSC, focusing on purse enhancement, marketing payments, and gambling expansion commitments - The CMA, effective March 4, 2012, and amended in June 2020, aims to increase purses for live horse racing and expires on December 31, 2022[65][66] - SMSC agreed to provide up to $5,620,000 for the annual purse enhancement in 2020, with $7,380,000 per year for 2021 and 2022[66][67] Marketing Payments (Three Months Ended March 31) | Marketing Payments (Three Months Ended March 31) | 2021 ($) | 2020 ($) | | :----------------------------------------------- | :-------- | :-------- | | Other revenue from marketing payments | $47,000 | $68,000 | | Advertising and marketing expense | $23,000 | $30,000 | | Depreciation related to marketing funds | $24,000 | $38,000 | - Under the CMA, the Company agreed not to promote or lobby for expanded gambling authority in Minnesota and to support SMSC's lobbying efforts against it[69] 8. REAL ESTATE DEVELOPMENT Describes equity investments in joint ventures, TIF arrangements, and recent land sales - The Company has equity investments in joint ventures (Doran Canterbury I, Doran Canterbury II, Canterbury DBSV) for multi-unit apartment and multi-use developments on land adjacent to its Racetrack[71][73][74] - As of March 31, 2021, the Company recorded a TIF receivable of approximately $12,041,000 for infrastructure improvements, with management believing future tax revenues will cover development costs[77] - The total estimated cost of TIF eligible improvements to be borne by the Company is expected to be reduced by $7,670,000 due to authorized changes in the Redevelopment Agreement[79] - In April 2021, the Company closed on two land sales totaling approximately 10 acres for $2,500,000[80][81][93] 9. LEASES Describes the Company's finance and operating leases, including costs, right-of-use assets, and maturity schedules Lease Costs (Three Months Ended March 31) | Lease Costs (Three Months Ended March 31) | 2021 ($) | 2020 ($) | | :---------------------------------------- | :-------- | :-------- | | Operating leases | $0 | $2,031 | | Short-term leases | $61,671 | $80,680 | | Finance leases (depreciation) | $6,319 | $6,319 | Leased Assets (March 31, 2021) | Leased Assets (March 31, 2021) | Amount ($) | | :----------------------------- | :---------- | | Finance lease assets | $65,466 | | Operating lease right-of-use assets | $45,057 | | Total Leased Assets | $110,523 | Lease Terms and Discount Rates (March 31, 2021) | Lease Terms and Discount Rates (March 31, 2021) | Finance (years) | Operating (years) | | :---------------------------------------------- | :------ | :-------- | | Weighted average remaining lease term (years) | 2.4 | 0.8 | | Weighted average discount rate (%) | 5.0% | 5.5% | 10. RELATED PARTY RECEIVABLES Provides information on member loans to joint ventures and other related party receivables - The Company loaned approximately $1,367,000 to the Doran Canterbury I and II joint ventures, with $58,000 in interest as of March 31, 2021, expecting full reimbursement upon positive cash flow[91] - Other related party receivables totaled approximately $40,000 as of March 31, 2021, expected to be reimbursed in 2021[92] 11. SUBSEQUENT EVENTS Discloses significant events occurring after the reporting period, specifically land sales - In April 2021, the Company closed on two land sales totaling approximately 10 acres on the west side of the Racetrack, receiving total consideration of approximately $2,500,000[93] ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management discusses financial condition and operations, focusing on COVID-19 impact, revenue/expense analysis, liquidity, and outlook Overview Describes Canterbury Park's core operations, including pari-mutuel wagering, card casino, and other entertainment events - Canterbury Park is the sole facility in Minnesota offering live pari-mutuel thoroughbred and quarter horse racing[96] - Core operations include year-round simulcasting, seasonal live racing, and 24/7 Card Casino operations with poker and table games at up to 80 tables[97] - Revenues are also derived from concessions, parking, advertising, publication sales, and other entertainment events[97] COVID-19 Pandemic Details the pandemic's significant impact on operations, temporary closures, capacity restrictions, and mitigation strategies - The Company temporarily suspended all card casino, simulcast, and special events operations from March 16, 2020, and again from November 21, 2020, through January 10, 2021, due to state executive orders[99][100] - Reopened operations are subject to social distancing requirements, including reduced seating and capacity limitations, impacting attendance and revenue[101] - Mitigation actions include workforce reductions, furloughs, salary reductions for management, suspension of quarterly cash dividends, postponement of non-essential capital expenditures, and reduction in operating and discretionary spending[105][106] - The Company has no long-term debt and a $10.0 million credit line, providing liquidity to manage the challenging operating environment[107] Operations Review for the Three Months Ended March 31, 2021 Reviews Q1 2021 operational performance, highlighting revenue and expense changes due to COVID-19 - Total net revenues for Q1 2021 decreased by $1,723,000, or 15.7%, to $9,226,000 compared to Q1 2020, primarily due to the COVID-19 Pandemic[108] - Total operating expenses for Q1 2021 decreased by $2,854,000, or 26.4%, to $7,953,000, reflecting reductions across all expense categories due to limited operations and cost management efforts[115] - Net income for Q1 2021 was $551,000, an increase from $255,000 in Q1 2020, despite revenue declines, driven by significant expense reductions[122] Revenues Revenue streams declined across the board due to COVID-19 closures and capacity limits, partially offset by relief grants | Revenue Source | Three Months Ended March 31, 2021 ($) | Three Months Ended March 31, 2020 ($) | Change ($) | Change (%) | | :---------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Pari-mutuel | $1,153,844 | $1,296,026 | $(142,182) | -11.0% | | Card Casino | $6,864,294 | $7,561,172 | $(696,878) | -9.2% | | Food and beverage | $374,471 | $1,118,995 | $(744,524) | -66.5% | | Other | $832,933 | $972,766 | $(139,833) | -14.4% | | Total Net Revenues | $9,225,542 | $10,948,959 | $(1,723,417) | -15.7% | Pari-mutuel Revenue Pari-mutuel revenue decreased due to simulcast limitations, partially offset by higher Advanced Deposit Wagering revenue - Total pari-mutuel revenue decreased by 11% to $1,154,000 in Q1 2021, primarily due to a 17.3% decrease in simulcast revenue caused by COVID-19 limitations[109] - Other pari-mutuel revenue increased by 12.1% due to higher Advanced Deposit Wagering (ADW) revenue[109] Card Casino Revenue Card Casino revenue decreased due to COVID-19 related reduced seating and capacity limitations upon reopening Card Casino Revenue (Three Months Ended March 31) | Card Casino Revenue (Three Months Ended March 31) | 2021 ($) | 2020 ($) | | :------------------------------------------------ | :---------- | :---------- | | Poker Games | $1,326,000 | $1,658,000 | | Table Games | $4,903,000 | $5,076,000 | | Total Collection Revenue | $6,229,000 | $6,734,000 | | Other Poker Revenue | $314,000 | $484,000 | | Other Table Games Revenue | $321,000 | $343,000 | | Total Card Casino Revenue | $6,864,000 | $7,561,000 | - Card Casino revenue decreased by 9.2% to $6,864,000 in Q1 2021, attributed to COVID-19 related reduced seating and capacity limitations upon reopening[112] Food and Beverage Revenue Food and beverage revenue significantly decreased due to reduced attendance and special events from COVID-19 limits - Food and beverage revenue saw a significant 66.5% decrease to $374,000 in Q1 2021, primarily due to reduced attendance and special events caused by COVID-19 capacity limitations[113] Other Revenue Other revenue decreased due to limited special events, partially offset by COVID-19 relief grants - Other revenue decreased by 14.4% to $833,000 in Q1 2021, mainly due to limited special event operations, but was partially offset by $515,000 in COVID-19 relief grants[114] Operating Expenses Operating expenses significantly reduced across all categories in Q1 2021 due to COVID-19 and cost management - Total operating expenses decreased by $2,854,000, or 26.4%, to $7,953,000 in Q1 2021 compared to Q1 2020[115] - The reduction in expenses was a direct result of limited operations and proactive management efforts to mitigate the financial impact of the COVID-19 Pandemic[115] Purse expense Purse expense decreased, driven by reductions in pari-mutuel and Card Casino revenues - Purse expense decreased by 11.5% to $976,000 in Q1 2021, driven by a reduction in pari-mutuel and Card Casino revenues[117] Salaries and benefits Salaries and benefits decreased significantly due to unpaid furloughs and reduced personnel during limited operations - Salaries and benefits decreased significantly by 28.9% to $3,967,000 in Q1 2021, primarily due to unpaid furloughs and reduced personnel requirements during limited operations[118] Cost of food and beverage sales Cost of food and beverage sales decreased, correlating with lower revenues due to COVID-19 capacity limits - Cost of food and beverage sales decreased by 63.5% to $206,000 in Q1 2021, directly correlating with lower food and beverage revenues due to COVID-19 capacity limitations[119] Advertising and marketing Advertising and marketing expenses decreased, reflecting reduced spending due to COVID-19 capacity limitations - Advertising and marketing expenses decreased by 69.3% to $56,000 in Q1 2021, reflecting reduced spending due to capacity limitations imposed by the COVID-19 Pandemic[120] Income Tax Expense Income tax expense increased due to higher income before taxes, with an increased effective tax rate - Income tax expense increased to $252,000 in Q1 2021 from $50,000 in Q1 2020, primarily due to an increase in income before taxes from operations[121] - The effective tax rate increased to 31.4% in Q1 2021 from 16.4% in Q1 2020, partly due to a discrete benefit from an estimated NOL carryback in the prior year[121] Net Income Net income for Q1 2021 increased compared to Q1 2020, despite revenue declines, due to expense reductions - Net income for the three months ended March 31, 2021, was $551,000, compared to $255,000 for the same period in 2020[122] EBITDA Reconciles net income to EBITDA and Adjusted EBITDA, showing increased Adjusted EBITDA from labor efficiencies and expense reductions | Metric | Three Months Ended March 31, 2021 ($) | Three Months Ended March 31, 2020 ($) | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | | NET INCOME | $551,493 | $255,221 | | Interest income, net | $(169,310) | $(163,690) | | Income tax expense | $252,224 | $50,164 | | Depreciation | $689,585 | $716,853 | | EBITDA | $1,323,992 | $858,548 | | Depreciation and amortization related to equity investments | $393,673 | $0 | | Interest expense related to equity investments | $219,195 | $0 | | Other revenue, COVID-19 relief grants | $(515,000) | $0 | | ADJUSTED EBITDA | $1,421,860 | $858,548 | - Adjusted EBITDA increased by $563,000, or 65.6%, in Q1 2021 compared to Q1 2020, driven by increased labor efficiencies and overall operating expense reductions[125] - Adjusted EBITDA as a percentage of net revenue (excluding COVID-19 relief grants) was 16.3% in Q1 2021, up from 7.8% in Q1 2020[125] Contingencies Reaffirms the Company's contingencies regarding the Cooperative Marketing Agreement and real estate development feasibility - Management believes the likelihood of breaching covenants in the Cooperative Marketing Agreement and incurring related repayment obligations is remote[126] - The Company continues to analyze real estate development options and expects available funds to cover near-term predevelopment costs[127] Liquidity and Capital Resources Assesses the Company's liquidity, credit line, cash flows, and future funding needs - The Company has a $10,000,000 revolving credit line with $8,750,000 available as of March 31, 2021, and was in compliance with all financial covenants[128] - Cash, cash equivalents, and restricted cash increased to $6,127,000 at March 31, 2021, from $4,472,000 at December 31, 2020[129] - Existing cash, credit line availability, and funds from operations/future land sales are expected to be sufficient for regular operations and planned development, though significant additional real estate development may require further financing[129] Operating Activities Net cash provided by operating activities increased, driven by net income, depreciation, and accrued wages - Net cash provided by operating activities was $1,844,000 in Q1 2021, driven by net income, depreciation, equity investment loss, and an increase in accrued wages and payroll taxes, partially offset by a decrease in payables to horsemen[131] - In Q1 2020, net cash from operating activities was $351,000, primarily from net income, depreciation, and an increase in accounts payable, offset by decreases in accrued wages and Card Casino accruals[132] Investing Activities Net cash used in investing activities decreased due to lower additions to property, plant, and equipment - Net cash used in investing activities decreased to $205,000 in Q1 2021 from $871,000 in Q1 2020, mainly due to lower additions to property, plant, and equipment and TIF eligible improvements[133] - This was partially offset by a decrease in related party receivables in Q1 2021 and proceeds from the sale of investments in Q1 2020[133] Financing Activities Net cash provided by financing activities resulted from common stock issuance, offsetting tax payments for equity awards - Net cash provided by financing activities was $16,000 in Q1 2021, primarily from common stock issuance, partially offset by tax payments for equity awards[134] - Net cash used in financing activities was $326,000 in Q1 2020, mainly due to cash dividends paid to shareholders, which were suspended in March 2020[134][135] Critical Accounting Policies and Estimates Highlights critical accounting policies requiring significant management judgment, like property valuation and stock-based compensation - The preparation of financial statements requires management to make estimates and assumptions that could materially differ from actual results[136] Property and Equipment Property and equipment represent a significant asset, requiring judgment in capitalization, useful lives, and impairment - Property and equipment represent 47.6% of total assets at March 31, 2021, requiring judgment in capitalization, useful lives, and impairment assessments[138] - Management periodically reviews carrying values for impairment by comparing to expected undiscounted future net cash flows, with no impairment identified at March 31, 2021[138] Stock-Based Compensation Stock-based compensation is measured at grant date fair value, involving management judgment in assumptions - Stock-based compensation is measured at grant date fair market value, using a Black-Scholes model, which involves management judgment in determining assumptions[140] - The Long Term Incentive Plan (LTI Plan) was temporarily suspended due to COVID-19 uncertainty, with awards currently outstanding only for the period ending December 31, 2021[140] Commitments and Contractual Obligations Details key contractual obligations, including the Cooperative Marketing Agreement and Redevelopment Agreement Cooperative Marketing Agreement Details the CMA with SMSC, focusing on purse enhancement, marketing payments, and gambling expansion commitments - The CMA with SMSC, effective June 4, 2012, and expiring December 31, 2022, aims to increase horse racing purses and supports joint marketing efforts[142][144] - SMSC's annual purse enhancement for 2021 and 2022 remains $7,380,000, and annual marketing payment is $1,620,000[143][144] - The Company is committed not to promote or lobby for expanded gambling authority in Minnesota under the CMA[147] Redevelopment Agreement Involves the Company undertaking public infrastructure improvements, with reimbursement from future tax revenues - The Redevelopment Agreement with the City of Shakopee involves the Company undertaking specific public infrastructure improvements within a TIF District[148] - The City will reimburse the Company for these expenses from future tax revenues generated from the developed property, though reimbursement is not guaranteed[148] - Authorized changes to the agreement are expected to reduce the Company's total estimated cost of TIF eligible improvements by $7,670,000[149] Forward-Looking Statements Cautions on risks and uncertainties that could cause actual results to differ from forward-looking statements - Key risks include the short-term and long-term impact of the COVID-19 Pandemic on attendance and operations, competition from other entertainment venues, and fluctuations in interest in wagering[150][151][152] - Risks also encompass legislative and regulatory changes (e.g., sports betting), the success of real estate development projects and reliance on joint venture partners, and the ability to extend the Cooperative Marketing Agreement[152] - Other factors include potential disruptions from infrastructure improvements, discretion over future dividend payments, and general economic health of the gaming sector[152] Item 3. Quantitative and Qualitative Disclosures About Market Risk Confirms no applicable quantitative or qualitative disclosures regarding market risk for the Company - This item is not applicable[153] Item 4. Controls and Procedures Reports on the effectiveness of disclosure controls and confirms no significant changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures Concludes that the Company's disclosure controls and procedures were effective as of March 31, 2021 - The Company's President and CEO, Randall D. Sampson, and CFO, Randy J. Dehmer, concluded that the disclosure controls and procedures were effective as of March 31, 2021[154] Changes in Internal Control over Financial Reporting Confirms no significant changes in internal control over financial reporting during the fiscal quarter - There were no significant changes in internal control over financial reporting during the fiscal quarter ended March 31, 2021, that materially affected or are reasonably likely to materially affect it[156] PART II. OTHER INFORMATION Covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings Confirms no applicable legal proceedings for the Company - This item is not applicable[158] Item 1A. Risk Factors Reports no changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K - No changes to the Risk Factors listed in the Annual Report on Form 10-K for the year ended December 31, 2020[159] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Details the Company's share repurchase activities, primarily for tax payments related to deferred stock awards Total Shares Purchased | Period | Total Shares Purchased | Average Price Per Share ($) | | :-------------- | :--------------------- | :---------------------- | | March 1-31, 2021 | 1,894 | $13.70 | - The Company repurchased 1,894 shares in Q1 2021 in connection with tax payments upon issuance of deferred stock awards to employees[161] - As of March 31, 2021, 128,781 shares remained available under the 350,000 repurchase authorization approved in August 2012[160] Item 3. Defaults Upon Senior Securities Confirms no applicable defaults upon senior securities for the Company - This item is not applicable[162] Item 4. Mine Safety Disclosures Confirms no applicable mine safety disclosures for the Company - This item is not applicable[163] Item 5. Other Information Confirms no other applicable information for the Company - This item is not applicable[164] Item 6. Exhibits Lists exhibits filed with the Form 10-Q, including certifications, a press release, and XBRL financial data - Certifications of CEO and CFO pursuant to Sarbanes-Oxley Act of 2002 (Sections 302 and 906)[166][167] - Press Release dated May 10, 2021, announcing 2021 First Quarter Results[168] - XBRL financial information for Condensed Consolidated Balance Sheets, Statements of Operations, Stockholders' Equity, Cash Flows, and Notes to Financial Statements[169] Signatures Contains the official signatures of the Company's CEO and CFO, certifying the report's filing - The report was duly signed on May 11, 2021, by Randall D. Sampson, President and Chief Executive Officer, and Randy J. Dehmer, Chief Financial Officer[171][172]