Canterbury shares plummet as hope for slot machines fade

May 20, 2003 4:15 AM

A decline in horse race betting caused a drop in earnings for the three months period ended on March 31 for Canterbury Park Holding Corporation (ECP).

But, the nearly 20% drop in the company’s share price on Friday had more to do with the company’s faltering efforts to get state approval for the installation of video lottery at their racetrack in Shakopee, Minn. The shares were opened Friday on the American Stock Exchange at $15.53 a share but after 203,100 shares had changed hands by the end of the trading day, the share price had plummeted to $12.60 each.

Randy Sampson, company president, commented on the media reports indicating that a budget compromise had been reached without including revenues from track slots. "We are disappointed in these reports," Sampson said, adding, "however, with several days left to go in the regular legislative session, no final budget agreement has been reached. We continue to aggressively work with legislators to make our case for the benefits of our racino proposal."

On Monday, Canterbury Park Holding Corporation continued its Wall Street slide, falling to $11, down $1.60 for the day. The company’s 52-week high was $17.50.

Total ECP revenues for the quarter reached $9,229,250, a slight decline from last year’s $931,038. Net income was $839,087 or $0.21 a share. During the comparable period in 2002, net income was $931,038 or $0.24 a share.

For the coming quarters, Sampson said, the company was "looking forward to the planned enhancements to the live racing experience for 2003 including the remodeling of our track level facility; creating more room for our patrons to meet the growing demand for banquet services, and the addition of a new Mexican themed concessions area offering our patrons a greater variety of food and beverage choices."

Archon Corp.

Archon Corporation (ARHN), which operates the Pioneer Hotel and Gambling Hall in Laughlin, Nev., reported revenues of $13.1 million for the quarter that ended on March 31. This was $900,000 less than the comparable quarter of a year earlier.

The company said the decrease resulted from a decline in revenues of the Laughlin property with operating income falling to $2 million from last year’s $2.7 million.

For the first six months of the current fiscal year, net revenues were $24.4 million, down $2 million from 2002 while operating income fell to $3.2 million from last year’s $4.3 million.

Paul-Son Gaming

Paul-Son Gaming Corporation (PSON), the Las Vegas-based manufacturer and supplier of casino table game equipment that is now controlled by Etablissements Bourgogne et Grasset of France, reported a substantial increase in revenue but a net loss for the first quarter of 2003.

Revenues totaled $7.8 million, up 58.7% from the $4.9 million reported last year. But the company recorded a net loss of $601,000 equal to $0.08 a share compared to net income of $106,000 or $0.03 a share last year.

However, the company noted that "the two periods are not comparable because the company’s size and structure underwent dramatic changes when it was combined with both the French company and its subsidiary, the Bud Jones Company." The combination of the companies required that it be recorded as a purchase transaction.

Describing 2002 as the "turnaround" year, Inc. (UBET) reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $522,000 for the first quarter of 2003, a $2 million improvement over the comparable quarter of 2002.

This resulted from gross revenues of $11 million, a 323% increase over last year’s $2.6 million. Net revenues for the period were $3.8 million compared to the $1.7 million recorded in the comparable period.

Chuck Champion, president and chief operating officer noted, "our focus was on cutting costs as well as growing handle and revenues, and we successfully accomplished both. Our focus on the high margin segments of the business differentiates us from our competitors, and has fueled our relative improvement in year over year comparisons.

The company is the largest Internet provider of thoroughbred racing content in the U.S.

Wheeling Island Gaming

Wheeling Island Gaming Inc., the privately held company that operates Wheeling Island Racetrack & Gaming Center in Wheeling, West Virginia, reported operating revenues of $21.1 million for the first quarter that ended on March 31.

This represented a decrease of $1.5 million or 6.6% from the same quarter last year. The company said the decrease was due to a drop in gaming and pari-mutuel revenues caused by poor weather conditions including "several significant snow and ice storms."

Income from operations for the quarter was $8 million or $1 million lower than the same quarter last year.

The company is a wholly-owned subsidiary of Delaware North Companies Inc. of Buffalo, N.Y.