Canterbury Park’s revenues for the three months ended September 30, 2023, decreased $3m, or 13.6 per cent, to $19.3m, compared to $22.3m for the same period in 2022.
Casino revenue was up 1.8 per cent, or $185,000. This slight increase was more than offset by decreases in pari-mutuel, food & beverage, and other revenue of 28 per cent, 15.4 per cent, and 35.5 per cent, respectively. The decrease in pari-mutuel revenue was driven by a continued decrease in out-of-state handle due to smaller field sizes and less races. Food & beverage revenues declined primarily due to Twin Cities Summer Jam not taking place in the third quarter of 2023 as it did during the third quarter of 2022. Other revenues decreased primarily due to revenues earned during the three months ended September 30, 2022, as part of the cooperative marketing agreement that expired by its terms on December 31, 2022.
Management stated: “Canterbury Park’s third quarter results represent a continuation of solid Casino segment performance offset by higher operating costs and our previously disclosed reduced racing calendar compared to the year-ago period. Third quarter net revenue of $19.3m and adjusted EBITDA of $2.9m resulted in adjusted EBITDA as a percentage of revenue of 14.8 per cent. Adjusted EBITDA as a percentage of revenue rebounded nicely from a recent low in the 2023 second quarter, and we expect our improved cost structure and operating efficiencies will stabilize this metric at an approximate mid- to high-teens percentage. Adjusted EBITDA and adjusted EBITDA as a percentage of revenue were also impacted by professional fees related to long-term strategic growth initiatives.
“Casino revenue rose 1.8 per cent over the prior year as we saw relatively stable customer visitation and spend, particularly at the upper end of our database. Pari-mutuel revenue declined 28.0% year-over-year primarily due to a significant decline in out-of-state handle on Canterbury Park races as a result of decreased field sizes as well as weather impacts and cancelations that reduced the number of races during the period by 12 per cent compared to the same period last year. In addition, food & beverage revenues were negatively impacted by the live racing cancelations as well as having fewer events this year compared to last year’s third quarter, particularly with Twin Cities Summer Jam not taking place in the third quarter of 2023 as it did during the third quarter of 2022.
“Development activity at Canterbury Commons continued to expand with a broad array of partners bringing exciting amenities to our vibrant lifestyle community and exploring new opportunities. Swervo Development Corporation has begun full-scale development of its state-of-the-art amphitheater with significant activity underway on the 37-acre site. Further, the initial success of the Badger Hill Brewery and Bravis Modern Street Food restaurant are drivers of traffic to Canterbury Commons and helping us make good on our promise of ‘Live, Work, Stay, and Play’ across the broader Canterbury Commons development.
“Our Casino business continues to deliver steady financial results and the operating practices and infrastructure we’ve put in place have allowed us to adapt to the changing environment in our operations. At the same time, we continue to leverage our strong balance sheet and stable cash flow generation as we return capital to shareholders through our quarterly cash dividend. Going forward, we are actively evaluating opportunities to further optimize our return of capital while simultaneously exploring additional ways to create new value for our shareholders. As we continue to execute on our five-year strategic plan focused on growing Casino revenue, we are also actively pursuing new opportunities that would diversify and grow our business, including through potential strategic transactions and initiatives. We are committed to continue to build a bright future for Canterbury Park.”