Horse racing and card casino operator Canterbury Park Holding Corporation has published its Q3 and nine-month financial update for the periods ended September 30, 2019, showing a marginal Q3 improvement against a slight fall on the year-to-date segment in net revenues. The firm said it was ‘disappointed’ by the operating results in the third quarter.
For the third quarter, the company reported net revenues of $18.6m, ahead by 1.3% from revenues of $18.4m year-on-year. Operating expenses during Q3r were $17.1m, an increase of $788,000, or 4.8%, due to increased salaries and benefits of $542,000 resulting from adding several new exempt level positions as well as increased labor costs in the Card Casino and food and beverage departments.
Net income for Q3 came in at $1.2m compared to $1.6m for the same period in 2018. Diluted net income per share for the three months ended September 30, 2019 was $0.25 compared to $0.36 year-on-year.
Looking at the company’s net revenues year-to-date, there was a decrease of 1% to $46.6m million from $47.1m, primarily due to a reduction in pari-mutuel revenues of $724,000 as well as a decrease in other revenues of $484,000.
The company’s operating expenses during the nine months were $43.9m, up by $1.2m, or 2.7%, from $42.7m year-on-year. Net income totaled $2.2m compared to $3.3m for the same period in 2018. Diluted net income per share for the nine months ended September 30, 2019 was $0.47 compared to $0.74 for the same period in 2018.
Adjusted EBITDA of $2.3m in Q3 was down $426,000, or 15.8%, year-on-year, while for the nine month period, it fell by $1.7 million, or 26.8%, from the same period a year ago.
Randy Sampson, President and CEO, commented: “We are disappointed in our operating results for the 2019 third quarter, as EBITDA and net income were unfavorable compared to last year and to our 2019 internal plan.”
“Card Casino revenues decreased by 1% compared to the same period in 2018. While total revenues of $18.6m for the 2019 third quarter represented a record for the company, the increase was not enough to offset the increase of 5% in operating expenses compared to the 2018 third quarter.
“The increase in operating expenses resulted primarily from increased salaries and benefits due mainly to two factors. First, we are operating in a very challenging labor market for hourly workers, particularly seasonal summer positions. Like most hospitality businesses, we have found it difficult to staff many front line positions due to a lack of qualified candidates. This labor shortage has led to higher wages, excessive overtime, and use of third-party temporary labor to fill the gaps.
PaSecond, our labor expense has increased, as we have added a number of salaried positions to support growth initiatives in our Card Casino, food and beverage, and real estate development operations. We have aggressive, long-term growth plans, and we are optimistic that the investments in our human capital infrastructure to support our expanded table games operations, enhanced player hosting program, upgraded food and beverage offerings, and development of our excess real estate will result in sustained long-term revenue growth.”