Executive Summary

Net revenues rose 14.1% year over year to $15.85M, driven by broad-based strength across Card Casino (+15.9%), pari-mutuel (+16.0%), and food & beverage (+6.3%) in Q2 2017 .
Diluted EPS was $0.16 vs $0.53 in Q2 2016, largely due to a non-recurring $3.99M land sale gain that reduced operating expenses in the prior year; excluding that, operating expenses rose a modest 4.8% yoy .
Adjusted EBITDA improved sharply year to date, reaching $3.28M (+101.7% yoy), with adjusted EBITDA margin increasing to 12.0% from 6.7% for the first six months; Q2 EBITDA was $1.77M .
Management cited sustained table games momentum (+26.8% yoy), ADW source market fees ($284k in Q2), and strong live racing dynamics (more racing days, return to statutory takeout) as key operational tailwinds; development planning continues for a luxury apartment project led by Doran Companies .

What Went Well and What Went Wrong

What Went Well

All three segments posted revenue increases for the second consecutive quarter; table games led with +26.8% yoy, while pari-mutuel increased double-digits aided by ADW fees and a strong start to live racing .
“We are very pleased with the operating results... all three of our business segments posted revenue increases,” with catering seeing “a solid increase” during live racing, reflecting growth initiatives .
ADW source market fees contributed $284k in Q2 and $500k in 1H17, offsetting erosion from internet wagering platforms and supporting live racing economics .

What Went Wrong

Net income declined to $0.717M from $2.275M in Q2 2016 due to the prior-year $3.99M gain on land sale booked as a reduction in operating expenses; excluding that, operating expenses rose 4.8% yoy .
Higher purse and Minnesota Breeders’ Fund expense, plus salaries/benefits (minimum wage step-up) and RiverSouth marketing spend pressured opex .
Professional and contracted services increased tied to more live racing days and development consulting, lifting run-rate costs vs 2016 .

Financial Results

Consolidated performance vs prior periods

Metric	Q4 2016	Q1 2017	Q2 2017
Revenue ($USD Millions)	$11.55	$11.44	$15.85
Net Income ($USD Millions)	$0.68	$0.51	$0.72
Diluted EPS ($USD)	$0.16	$0.12	$0.16

Segment revenue breakdown (quarterly)

Segment ($USD Millions)	Q2 2016	Q1 2017	Q2 2017
Card Casino	$7.00	$7.70	$8.11
Pari-mutuel	$3.02	$1.50	$3.50
Food & Beverage	$2.22	$1.40	$2.36

KPIs and operational drivers (Q2 detail)

KPI	Q2 2016	Q2 2017
Card Casino – Table games revenue ($USD Millions)	$4.10	$5.20
Card Casino – Poker revenue ($USD Millions)	$2.25	$2.21
Card Casino – Other ($USD Millions)	$0.66	$0.71
Pari-mutuel – Simulcast ($USD Millions)	$1.78	$1.73
Pari-mutuel – Live racing ($USD Millions)	$0.74	$0.94
Pari-mutuel – Guest fees ($USD Millions)	$0.44	$0.50
Pari-mutuel – Other ($USD Millions)	$0.06	$0.33
ADW source market fees included in Pari-mutuel ($USD Thousands)	—	$284
Racing days – Simulcast-only	159	154
Racing days – Live + Simulcast	23	27
Racing days – Total	182	181

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance (revenue/margins/OpEx/tax)	Q2 2017 and FY17	Not provided	Not provided	Maintained: no quantitative guidance
Dividend per share (declared)	Q2 2017	—	$0.06 declared	—

Note: No quantitative revenue, margin, OpEx, OI&E or tax guidance was communicated in Q2 2017 materials; management commentary focused on operational momentum and development plans .

Earnings Call Themes & Trends

No Q2 2017 earnings call transcript was found in the document corpus; themes below reflect management commentary across filings and press releases.

Topic	Previous Mentions (Q4 2016)	Previous Mentions (Q1 2017)	Current Period (Q2 2017)	Trend
ADW legislation / source market fees	ADW fees began Nov 2016; partial offset to simulcast erosion	$216k ADW fees aided pari-mutuel	$284k ADW fees in Q2; $500k for 1H17	Strengthening contribution to pari-mutuel
Live racing takeout policy	2016 promo cut takeout hurt rev; return to traditional rates planned	Earlier start; strong Derby day boost	Return to statutory takeout; stronger on-track and out-of-state revenue	Positive swing with normalized takeout
Table games performance	Second-half 2016 strength	Best quarter since 2006 for Card Casino, table games +18%	Table games +26.8% yoy; segment led growth	Accelerating
Events/catering	Loss of major fall concert in 2016; infield improvements	Expo center momentum; catering growth	Solid increase in group catering; new infield concert and Lantern Light Festival planned	Expanding events
Real estate development	1031 exchange and portfolio realignment; development concepts in 2017	Filed Planned Development application; 305 apartments with Doran	Slower-than-anticipated approvals; continuing with Doran on first phase	Progressing, timeline extended
Labor cost / minimum wage	Minimum wage increases pressured costs	—	Continued wage pressure in salaries/benefits	Persistent cost headwind

Management Commentary

“For the second consecutive quarter, all three of our business segments posted revenue increases… The increased revenue was again led by the table games portion of the card casino, which increased by 26.8% compared to last year… [and] reflects a strong start to our live racing season… return to the statutory take-out rates” – Randy Sampson, President, CFO, and CEO .
“We are looking forward to… a number of new events… a concert in our infield in September and a Lantern Light Festival… Although progress on our development plans has been slower than we had anticipated, we are continuing to work through the City approval process for the first phase of a luxury apartment project led by Doran Companies” .
Q1 set the tone: “Fueled by an 18% increase in table games revenues, our first quarter Card Casino revenues were our best since 2006… Food and Beverage… best ever first quarter… ADW source market fees [supported pari-mutuel]” .

Q&A Highlights

No Q2 2017 earnings call transcript was available; no Q&A disclosures beyond the press release and 10-Q.

Estimates Context

S&P Global Wall Street consensus estimates for Q2 2017 (Revenue, EPS) were not available for CPHC at the time of analysis; as a result, we cannot provide vs-estimate comparisons for this micro-cap company in Q2 2017.
Actual results: Revenue $15.85M and diluted EPS $0.16; consensus comparison unavailable .

Key Takeaways for Investors

Core operations inflected positively: double-digit revenue growth across Card Casino, pari-mutuel, and food & beverage, with table games the standout (+26.8% yoy), indicating healthy consumer spend and effective promotions .
YoY EPS decline is optical: prior-year land sale gain lowered 2016 operating expenses; excluding that non-recurring item, opex growth was controlled (+4.8% yoy), and adjusted EBITDA improved markedly for 1H17 (+101.7%) .
Structural tailwinds: ADW source market fees ($284k in Q2; $500k YTD) and normalization of live racing takeout support pari-mutuel revenue resilience and mix quality .
Events and catering expansion should augment seasonality: new infield events and Lantern Light Festival plus group catering momentum can lift Q3/Q4 non-gaming revenue, providing additional levers .
Watch cost inflation and marketing spend: minimum wage increases and RiverSouth marketing costs are persistent headwinds; monitor operating leverage as revenue scales .
Real estate development remains a medium-term optionality: apartment project phase approvals ongoing with Doran Companies; timing has extended but could unlock incremental value on approval milestones .
Dividend continuity: $0.06 per share declared in Q2 suggests ongoing capital return within a disciplined balance sheet (no revolver borrowings; $8.8M cash) .

Canterbury Park Holding Corp (CPHC)·Q2 2017 Earnings Summary