Canterbury Park Holding Corporation Reports Third Quarter Results

Randy Sampson, President and Chief Executive Officer of Canterbury Park

“Our third-quarter results demonstrate the operating leverage in our business, with revenue growth driving higher profitability and cash flow. Net income nearly doubled and Adjusted EBITDA increased 27.8% on revenue growth of 4.2%. Casino revenues rose 13.8% year over year, supported by a 17% increase in table games drop and a higher hold percentage. Food and beverage revenues increased 2.9%. Together, these gains more than offset declines in Pari-mutuel and Other revenues. Disciplined cost management has kept total operating expenses consistent with recent years despite inflation, including higher labor costs. As a result, our third-quarter Adjusted EBITDA margin increased to 20.1% from 16.3% a year earlier. Year-to-date, our Adjusted EBITDA margin improved to 19.0% from 15.1% in the prior-year period. The higher level of cash flow from operations we are generating is noteworthy as we are also in the final stages of a multi-year period of elevated capital expenditures that were primarily associated with strategic investments to enhance Canterbury’s long-term real estate opportunities rather than being undertaken for short-term return-focused projects. In addition, we expect the current quarter will be the last quarter of other significant development infrastructure expenditures, including for our final payment related to the tax increment financing (“TIF”) note receivable. Also, we expect to make our final equity contribution to the Doran Canterbury I joint venture prior to year-end related to its expected refinancing. As a result, we will enter 2027 with significantly lower capital requirements, while we expect positive cash flow from our joint ventures as well as opportunities to actively invest to grow interest income. This will allow the Company to transition into ‘cash-harvesting mode’ next year as we expect to generate a meaningful improvement in cash flow. This will provide us with additional and meaningful optionality for returning capital to shareholders. In addition, we continue to believe there is significant unrecognized value on our balance sheet including the more than $11 per share in cash, TIF receivables, and real estate joint ventures. With our strong balance sheet and expectations for growing cash flow, we remain committed to delivering long-term value to shareholders.”