Executive Summary

Q4 2016 net revenues were $11,550,492, up 6.9% year over year, driven by Card Casino (+5.7%) and pari-mutuel (+5.3%) growth; net income fell 28.2% to $684,491 due to severance costs ($279,000) and lower gains on asset sales/insurance recoveries versus Q4 2015 .
Management highlighted record full-year net income ($4,195,980; $0.97 diluted EPS) largely due to land sale gains, while core operating profit (ex-gains) declined; they remain confident in Card Casino growth, event-driven Food & Beverage, and real estate development initiatives .
No formal quantitative guidance was issued; management plans to return to traditional takeout rates in 2017 to support on-track pari-mutuel revenue, and expects increased events revenue as new concert infrastructure comes online .
Potential stock reaction catalysts: ADW legislation enabling source market fees ($144,000 in last two months of 2016), progress updates on Canterbury Commons real estate, and resumption of major concerts/events .

What Went Well and What Went Wrong

What Went Well

Card Casino revenue increased 5.7% to $7.8M in Q4 2016, with strong table games momentum, particularly in the second half of 2016 (“We continue to grow Card Casino revenues, driven by strong increases in table games revenue”) .
Pari-mutuel revenue increased 5.3% to $1.5M in Q4, aided by ADW legislation’s source market fees of $144,000 collected in the last two months of 2016 .
Full-year record net income ($4.2M) and real estate transactions (structured as a 1031 exchange) strengthened the balance sheet and positioned the company for development (“we completed real estate transactions… and realigned our real estate portfolio”) .

What Went Wrong

Q4 net income declined 28.2% YoY to $684,491, pressured by $279,000 severance payments and lower gains ($779,000 in Q4 2016 vs $1,035,000 in Q4 2015) .
Food & Beverage revenue fell 2.9% to $1.5M in Q4 due to the loss of a major fall concert following the sale of the festival field land .
Full-year core operating profit excluding gains declined; management cited higher labor costs from minimum wage increases and challenges in simulcast pari-mutuel due to consumer shifts to internet wagering platforms .

Financial Results

Quarterly progression

Metric	Q2 2016	Q3 2016	Q4 2016
Net Operating Revenues ($)	$13,885,992	$16,630,408	$11,550,492
Operating Expenses ($)	$9,988,467	$15,071,503	$10,388,683
Income from Operations ($)	$3,897,525	$1,558,905	$1,161,809
Net Income ($)	$2,274,900	$925,837	$684,491
Diluted EPS ($)	$0.53	$0.21	$0.16
Operating Margin (%)	28.1% (calc from cited values)	9.4% (calc from cited values)	10.1% (calc from cited values)

Note: Operating Margin (%) calculated as Income from Operations / Net Operating Revenues using cited figures in each column.

Q4 year-over-year comparison

Metric	Q4 2015	Q4 2016	YoY Change
Net Operating Revenues ($)	$10,802,370	$11,550,492	+6.9% (calc from cited values)
Net Income ($)	$953,673	$684,491	-28.2% (calc from cited values)
Diluted EPS ($)	$0.22	$0.16	-27.3% (calc from cited values)

Segment revenue breakdown (Q4)

Segment	Q4 2015 ($)	Q4 2016 ($)	YoY Change
Card Casino	$7.4M	$7.8M	+5.7%
Pari-mutuel	$1.4M	$1.5M	+5.3%
Food & Beverage	$1.6M	$1.5M	-2.9%

Full-year highlights

Metric	FY 2015	FY 2016
Net Revenues ($)	$52,263,003	$52,460,203
Net Income ($)	$2,727,022	$4,195,980
Diluted EPS ($)	$0.64	$0.97
EBITDA ($)	$6,911,480	$9,689,004
Adjusted EBITDA ($)	$5,280,106	$4,355,450

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Dividend per Share	Ongoing (initiated Sep 2016)	None	$0.05 per share quarterly dividend (first paid Oct 14, 2016)	Raised (initiated policy)
Live Racing Takeout Rate	2016 vs 2017	Reduced to lowest in country in 2016	Plan to return to traditional takeout rates in 2017	Raised (return to traditional)
Events/Concert Capacity	2016 → 2017	Festival field sold; inability to host major concert	New infield concert/event area to host major concerts in 2017+	Raised (capacity restored)
Pari-mutuel Source Market Fees (ADW)	Effective Nov 1, 2016	Not applicable	$144,000 collected in Nov–Dec 2016	New revenue stream

No formal quantitative guidance ranges (revenue, margins, OpEx, OI&E, tax rate) were provided in the Q4 release .

Earnings Call Themes & Trends

No Q4 2016 earnings call transcript was available in the document set; themes below reflect management commentary across Q2–Q4 press releases.

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
Card Casino performance	Q2: softness vs record prior year; market weakness . Q3: improvement over previous two quarters; momentum into Q4 .	Continued growth; strong table games increases in H2 2016 .	Improving
Pari-mutuel (live/simulcast)	Q2/Q3: simulcast eroding due to shift to internet; reduced takeout did not drive expected volume .	Q4 lift from ADW source market fees ($144k) and plan to return to traditional takeout rates in 2017 .	Stabilizing with ADW; strategic reset on takeout
Food & Beverage/events	Q2: fewer racing days and inability to host major concert hurt results . Q3: catering/events growth and strong live racing attendance .	Q4 down due to loss of major fall concert; new infield event area to drive 2017+ revenue .	Near-term down; medium-term positive with new venue
Labor costs/minimum wage	Rising labor costs pressured operating expenses YTD .	2016 OpEx up ex-gains due to $1.1M higher salaries/benefits from minimum wage and $279k severance .	Cost headwind persists
Real estate development (Canterbury Commons)	Q2: land sale gain structured via 1031; acquisition of 32 acres; reorganization to holding company . Q3: actively pursuing mixed-use development; confidence in progress .	Portfolio realignment complete; foundation for development; progress updates expected in Q2 2017 .	Advancing; near-term catalysts
Dividend policy	Board adopted regular quarterly dividends (first $0.05 paid Oct 14, 2016) .	No change indicated .	Maintained

Management Commentary

“We are pleased that our 2016 results represent the eighth consecutive year of revenue growth as well as a record level of net income due to the gain on the sale of land.”
“We continue to grow Card Casino revenues, driven by strong increases in table games revenue, particularly in the second half of 2016.”
“Pari-mutuel revenues decreased by 5.4% in 2016… our decision to reduce the takeout rate… did not generate the increase in wagering volume we anticipated… At the same time, we are encouraged by early results from ADW legislation…”
“We made major improvements to our infield… to again host major concerts and expect this will drive increased events revenue in 2017 and beyond.”
“We completed real estate transactions… and realigned our real estate portfolio to enhance our opportunities for future development… we are actively engaged in pursuing several compatible real estate development concepts.”

Q&A Highlights

No Q4 earnings call transcript was available; therefore, no Q&A highlights, clarifications, or tone changes can be assessed from a call transcript [Functions search returned none].

Estimates Context

Wall Street consensus (S&P Global) for Q4 2016 EPS and revenue could not be retrieved due to data access limits; therefore, comparisons vs consensus are unavailable. Values retrieved from S&P Global were unavailable due to rate limits.
Given the lack of formal guidance and unavailable consensus, near-term estimate adjustments may focus on: improved Card Casino trajectory, incremental pari-mutuel fees from ADW, and 2017 event revenue potential offset by labor cost headwinds .

Key Takeaways for Investors

Q4 revenue grew 6.9% YoY to $11.55M, but EPS fell to $0.16 on severance costs and lower non-operating gains; underlying operating margin improved sequentially vs Q3 despite seasonality .
Card Casino momentum appears durable into 2017, with second-half table games strength highlighted by management; this is the primary profit driver near-term .
Pari-mutuel dynamics remain mixed: simulcast declines persist, but ADW source market fees provide a new revenue stream; management will revert to traditional takeout rates to stabilize on-track economics .
Event-driven Food & Beverage should rebound with the new infield concert venue; the 2016 loss of festival field concerts depressed Q4 comps .
Real estate remains a medium-term value lever: 1031-exchange land transactions boosted FY results and position the company for Canterbury Commons development updates in Q2 2017 .
Dividend policy ($0.05 per quarter) adds shareholder return while development progresses; monitor sustainability alongside labor cost pressures .
Near-term trading setup: watch for ADW fee traction and event calendar updates; medium-term thesis hinges on Card Casino growth plus tangible real estate milestones .

Canterbury Park Holding Corp (CPHC)·Q4 2016 Earnings Summary