Canterbury Park Holding Corp - Quarterly Report (10-Q)

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 10-Q

 

(Mark One)

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008.

 

OR

 

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE TRANSITION PERIOD FROM          TO            .

 

Commission File Number:  001-31569

 

 

CANTERBURY PARK HOLDING CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

 

Minnesota		41-1775532
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

 

1100 Canterbury Road

Shakopee, MN 55379

(Address of principal executive offices and zip code)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

 

YES

o

NO

x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

 

YES

o

NO

x

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

YES

x

NO

o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Exchange Act Rule 12b-2).

		Large accelerated filer		o	Accelerated filer		o
		Non-accelerated filer		o	Smaller reporting company		x

 

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).

 

YES

o

NO

x

 

The Company had 3,979,025 shares of common stock, $.01 par value, outstanding as of August 14, 2008.

 

 

 

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Canterbury Park Holding Corporation

 

INDEX

 

			Page
PART I.	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets as of June 30, 2008 and December 31, 2007	3
		Consolidated Statements of Operations for the periods ended June 30, 2008 and 2007	4
		Consolidated Statements of Cash Flows for the periods ended June 30, 2008 and 2007	5
		Notes to Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19
	Item 4.	Controls and Procedures	19
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	20
	Item 1A.	Risk Factors	20
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
	Item 3.	Defaults Upon Senior Securities	20
	Item 4.	Submission of Matters to a Vote of Security Holders	20
	Item 5.	Other Information	20
	Item 6.	Exhibits	21
	Signatures		22
	Certifications		23

 

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PART 1 - FINANCIAL INFORMATION

 

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 2008 AND DECEMBER 31, 2007 (Unaudited)

 

		June 30,			December 31,
		2008			2007
ASSETS
CURRENT ASSETS
Cash		$	6,941,873		$	7,050,389
Restricted cash		4,540,559			2,032,632
Short-term investments		56,107			80,688
Accounts receivable, net of allowance of $3,325 and $46,400		1,021,058			749,782
Inventory		286,196			169,801
Prepaid expenses		593,823			453,350
Income taxes receivable		501,020			215,594
Deferred income taxes		398,500			295,900
Total current assets		14,339,136			11,048,136
LONG-TERM ASSETS
Deposits		20,000			20,000
Land, buildings and equipment, net of accumulated depreciation of $15,531,102 and $14,593,197, respectively		25,456,136			25,037,636
		$	39,815,272		$	36,105,772
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	6,196,204		$	2,209,639
Card club accruals		2,409,231			2,413,796
Accrued wages and payroll taxes		1,807,535			1,851,140
Cash dividend payable		1,007,173
Accrued interest payable		9,429			5,196
Due to MHBPA		95,678			56,951
Accrued property taxes		494,364			491,630
Payable to horsepersons		237,282			162,931
Total current liabilities		12,256,896			7,191,283
DEFERRED INCOME TAXES		265,300			336,400
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS’ EQUITY
Common stock, $.01 par value, 10,000,000 shares authorized, 4,016,746 and 4,084,087, respectively, shares issued and outstanding		40,167			40,841
Additional paid-in capital		15,262,843			15,395,778
Accumulated earnings		11,990,066			13,141,470
Total stockholders’ equity		27,293,076			28,578,089
		$	39,815,272		$	36,105,772

 

See notes to consolidated financial statements.

 

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CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

PERIODS ENDED JUNE 30, 2008 AND 2007 (Unaudited)

 

		Three Months Ended June 30,						Six Months Ended June 30,
		2008			2007			2008			2007
OPERATING REVENUES:
Pari-mutuel		$	4,291,946		$	4,723,673		$	6,769,868		$	7,437,553
Card Club		6,647,122			7,077,195			13,170,178			14,572,191
Concessions		2,059,254			1,942,296			2,935,057			2,827,065
Admissions and parking		281,387			324,635			304,109			354,331
Publications		128,810			141,840			213,868			238,669
Other		469,052			499,009			723,457			798,108
Total Revenues		13,877,571			14,708,648			24,116,537			26,227,917
Less: Promotional Allowances		(72,678		)	(82,625		)	(111,581		)	(133,305		)
Net Revenues		13,804,893			14,626,023			24,004,956			26,094,612
OPERATING EXPENSES:
Purse expense		2,370,658			2,546,900			3,644,708			3,912,190
Minnesota Breeders’ Fund		310,744			339,202			542,595			596,600
Host track fees		568,815			608,099			1,000,352			1,066,501
Pari-mutuel taxes		7,364			35,347			14,235			61,908
Salaries and benefits		5,809,601			5,844,205			10,381,624			10,864,914
Cost of concessions and publication sales		1,089,176			1,008,898			1,677,119			1,602,323
Depreciation		507,663			454,600			1,012,713			962,290
Utilities		389,186			371,027			696,253			702,473
Repairs, maintenance and supplies		422,838			348,476			636,703			550,462
License fees and property taxes		210,558			213,558			405,921			411,821
Advertising and marketing		631,109			556,105			812,814			661,769
Insurance		214,276			314,321			367,617			549,903
Other		1,348,346			1,182,868			2,077,550			1,898,040
		13,880,334			13,823,606			23,270,204			23,841,194
NONOPERATING (EXPENSES) REVENUES:
Interest expense		(3,331		)	(4,745		)	(2,364		)	(9,913		)
Other, net		38,855			86,037			84,675			163,665
		35,524			81,292			82,311			153,752
(LOSS) INCOME BEFORE INCOME TAX EXPENSE		(39,917		)	883,709			817,063			2,407,170
INCOME TAX BENEFIT (EXPENSE) (Note 1)		4,498			(380,716		)	(353,602		)	(1,011,800		)
NET (LOSS) INCOME		$	(35,419	)	$	502,993		$	463,461		$	1,395,370
BASIC NET (LOSS) INCOME PER COMMON SHARE (Note 1)		$	(.01	)	$	.12		$	.11		$	.34
DILUTED NET (LOSS) INCOME PER COMMON SHARE (Note 1)		$	(.01	)	$	.12		$	.11		$	.33

 

See notes to consolidated financial statements.

 

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CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

PERIODS ENDED JUNE 30, 2008 AND 2007 (Unaudited)

 

		Six Months Ended June 30,
		2008			2007
Operating Activities:
Net Income		$	463,461		$	1,395,370
Adjustments to reconcile net income to net cash provided by operations:
Depreciation		1,012,713			962,290
Stock-based compensation expense		74,696			133,863
Excess tax benefit from exercise of stock options		(17,530		)	(44,794		)
Loss on sale of property and equipment		1,968			5,949
Decrease in deferred income taxes		(135,974		)	(136,556		)
Increase in restricted cash		(2,507,927		)	(2,499,116		)
Increase in accounts receivable		(271,276		)	(12,355		)
Increase in other current assets		(256,868		)	(56,067		)
(Increase) decrease in income taxes receivable		(285,426		)	113,356
Increase in accounts payable and accrued wages and payroll taxes		3,819,295			3,650,849
Decrease in card club accruals		(4,565		)	(36,183		)
Increase in accrued interest		4,233			7,834
Increase in accrued property taxes		2,734			27,242
Increase (decrease) in payable to horsepersons		74,351			(95,738		)
Increase (decrease) in due to MHBPA		38,727			(50,460		)
Net cash provided by operations		2,012,612			3,365,484
Investing Activities:
Additions to buildings and equipment		(1,307,296		)	(1,184,310		)
Proceeds from sale of equipment		3,540			3,472
Decrease in short-term investments		24,581			25,248
Net cash used in investing activities		(1,279,175		)	(1,155,590		)
Financing Activities
Proceeds from issuance of common stock		120,125			208,305
Common stock repurchases		(979,608		)
Excess tax benefit from exercise of stock options		17,530			44,794
Net cash (used) provided by financing activities		(841,953		)	253,099
Net (decrease) increase in cash		(108,516		)	2,462,993
Cash at beginning of period		7,050,389			5,745,556
Cash at end of period		$	6,941,873		$	8,208,549
Supplemental disclosure of noncash investing activities:
Additions to buildings and equipment funded through accounts payable		$	223,622		$	47,328
Supplemental disclosure of noncash financing activities:
Common stock repurchases funded through accounts payable		$	104,240
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds		$	775,000		$	1,035,000
Dividend declared		$	1,007,173		$	1,027,695

 

See notes to consolidated financial statements.

 

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CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PERIODS ENDED JUNE 30, 2008 AND 2007

 

1.                SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Business – Canterbury Park Holding Corporation (the “Company”) was incorporated under the laws of Minnesota and acquired land and buildings to conduct pari-mutuel horse racing operations (the “Racetrack”) in March 1994.  The Racetrack is located in Shakopee, Minnesota, approximately 25 miles southwest of downtown Minneapolis.  In May 1994, we commenced year-round horse racing simulcast operations and hosted the first annual live race meet during the summer of 1995.  Our live racing operations are a seasonal business as we host live race meets each year from early May until Labor Day.  We earn additional pari-mutuel revenue by televising our live racing to out-of-state Racetracks around the country.  We also derive revenues from related services and activities, such as advertising, admissions, parking and publication sales and from other entertainment events and activities held at the Racetrack.  In April 2000, we opened Canterbury Park’s Card Club (the “Card Club”).  The Card Club operates 24 hours a day, seven days a week and is limited by Minnesota State law to a maximum of 50 tables.  The Card Club currently offers 34 tables of Poker Games and 16 tables of Casino Games.  Our three largest sources of revenues, Card Club operations, pari-mutuel operations and concessions sales, generate cash revenues.

 

Unaudited Financial Statements - The consolidated balance sheet as of June 30, 2008, the consolidated statements of operations for the three and six months ended June 30, 2008 and 2007, the consolidated statements of cash flows for the six months ended June 30, 2008 and 2007, and the related information contained in these notes have been prepared by management without audit.  In the opinion of management, all adjustments (consisting only of normal recurring adjustments) which are necessary for a fair presentation of financial position and results of operations for such periods have been made.  Results for an interim period should not be considered as indicative of results for a full year.

 

The summary of significant accounting policies is included in the notes to consolidated financial statements in the 2007 Annual Report on Form 10-K.

 

Revenue Recognition - Our revenues are derived primarily from the operations of a Card Club, pari-mutuel wagering on simulcast and live horse races, concession sales, and related activities.  Collection revenue from Card Club operations and pari-mutuel commission and fee revenues are recognized at the time that the wagering process is complete.  Revenues related to concession and publication sales and parking and admission fees are recognized as revenue when the service has been performed or the product has been delivered.

 

Estimates - The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.

 

Restricted Cash – Restricted cash represents refundable deposits and amounts due to horsemen for purses, stakes and awards, and amounts accumulated in the Player Pool and jackpot pools to be used to repay card club players in the form of promotions, giveaways, prizes, or by other means.

 

Income Taxes - Income tax expense is computed by applying the estimated annual effective tax rate to the year-to-date income.  Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to reverse.

 

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The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB No. 109, (“FIN 48”), on January 1, 2007.  FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB Statement 109, Accounting for Income Taxes, and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Interest and penalties associated with uncertain income tax positions are presented in income tax expense. The Company has not recorded any significant income tax related interest or penalties during any of the periods presented.  Upon implementation, we determined all recorded benefits and income tax positions were more-likely-than-not.  Therefore, no cumulative effect relating to the adoption of FIN 48 was recorded.

 

The Company and its consolidated subsidiaries file income tax returns in the United States (“U.S.”) federal jurisdiction.  The Company is no longer subject to U.S. federal examinations by tax authorities for years prior to 2007 or by State of Minnesota tax authorities for years prior to 2003.  We do not believe there will be any material changes in our unrecognized tax positions over the next twelve months.

 

Net (Loss) Income Per Share - Basic net (loss) income per common share is based on the weighted average number of common shares outstanding during each period.  The weighted average number of common shares outstanding for the three and six-month periods ended June 30, 2008 were 4,019,196 and 4,042,800, respectively.  The weighted average number of common shares outstanding for the three and six-month periods ended June 30, 2007 were 4,069,104 and 4,060,809, respectively.  Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding.  The Company’s potential common shares outstanding are stock options and shares of unvested (“restricted”) stock.  After considering the dilutive effect of stock options outstanding, the weighted average shares used to calculate diluted earnings per share for the three and six-month periods ended June 30, 2008 were 4,019,196 and 4,126,852, respectively.  66,689 weighted average shares were considered anti-dilutive and excluded from the computation of common equivalent shares for the three months ended June 30, 2008, as the Company reported a net loss for that period.  The weighted average shares used to calculate diluted earnings per share for the three and six-month periods ended June 30, 2007 were 4,215,833 and 4,228,088, respectively.

 

Fair Values of Financial Instruments – Due to the current classification of all financial instruments of the Company, and given the short-term nature of the related account balances, carrying amounts reported in the consolidated balance sheets approximate fair value.

 

New Accounting Pronouncements – In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157 (“SFAS 157”), Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  SFAS 157 for financial assets and liabilities is effective for fiscal years beginning after November 15, 2007, and the Company has adopted the standard for those assets and liabilities as of January 1, 2008 and the impact of adoption had no impact on our financial position or results of operation.  See Note 3 for further discussion.

 

In February 2007, the FASB issued SFAS No. 159 (“SFAS 159”), The Fair Value Option for Financial Assets and Financial Liabilities including an amendment of FASB Statement No. 115 .  SFAS 159 provides companies with an option to report selected financial assets and financial liabilities at fair value.  Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings at each subsequent reporting date. S FAS 159 became effective for fiscal years beginning after November 15, 2007. We have elected not to implement the fair value option with respect to any existing assets or liabilities; therefore, the adoption of SFAS 159 had no impact on our financial position or results of operations.

 

In December 2007, the FASB issued SFAS No. 141(revised) (“SFAS 141(R)”), Business Combinations .  SFAS 141(R) applies to all business combinations. Under SFAS 141(R), an entity is required to recognize the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration at their

 

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fair values on the acquisition date. We are required to adopt this statement starting in 2009 and it is to be applied to business combinations occurring in 2009 and after. Early adoption of this statement is prohibited.  The Company will evaluate the impact the adoption of SFAS No. 141 (R) will have on any future business combinations.

 

In December 2007, the FASB issued SFAS No. 160 (“SFAS 160”), Noncontrolling Interests in Consolidated Financial Statements .  SFAS 160 applies to the accounting for noncontrolling interests and transactions with noncontrolling interest holders in consolidated financial statements.  SFAS 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. We are required to adopt this statement beginning in 2009.  Early adoption of this statement is prohibited and we are currently in the process of evaluating the effect that this statement will have on our consolidated results of operations and financial condition.

 

In March of 2008, the FASB issued SFAS No. 161 (“SFAS 161”), Disclosures about Derivative Instruments and Hedging Activities , an amendment of SFAS 133.”  SFAS 161 requires entities to provide greater transparency about how and why the entity uses derivative instruments, how the instruments and related hedged items are accounted for under SFAS 133, and how the instruments and related hedged items affect the financial position, results of operations, and cash flows of the entity.  SFAS 161 is effective for fiscal years beginning after November 15, 2008.  The Company is evaluating the impact the adoption of SFAS 161 will have on its consolidated results of operations and financial condition.

 

2.                STOCK BASED COMPENSATION

 

Effective January 1, 2006, we adopted FASB Statement No.123(R), Share Based Payment (“SFAS 123R”), applying the modified prospective transition method.  We recognized $74,696 and $133,863 in stock-based compensation expense in salaries and benefits expense line item on the consolidated statements of operations during the six-months ended June 30, 2008 and 2007, respectively.

 

Our annual grant of stock-based compensation generally takes place during the first quarter of each fiscal year.  Each non-employee member of the Board of Directors receives an annual recurring grant of 3,000 non-qualified stock options on the first business day in February.  On February 1, 2008, 15,000 options were granted to the five non-employee board members with an exercise price equal to the market price on the date of grant of $11.35.  The stock options vest over a six-month period and expire in ten years.  The compensation cost associated with this grant of Board of Director options is $29,700 to be recognized as expense over the six-month vesting period.  On February 1, 2007, 15,000 options were granted to the five non-employee board members with an exercise price equal to the market price on the date of grant of $13.76.

 

The number of shares granted and the weighted average fair value per share during the periods presented were:

 

		Six Months Ended
		June 30, 2008					June 30, 2007
				Weighted					Weighted
				Average					Average
				Fair Value					Fair Value
		Grant		Per Share			Grant		Per Share
Stock options		15,000		$	1.98		15,000		$	3.89
Total shares		15,000					15,000

 

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The fair value of stock options granted under the Plan during first six months of 2008 were estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions and results:

 

		2008			2007
Dividend yield		2.20		%	1.82		%
Weighted-average volatility		15		%	22		%
Risk-free interest rate		3.62		%	4.86		%
Expected term of stock options in years		7.3			7.2
Fair value of stock options on grant date		$	29,700		$	58,400

 

A summary of stock option activity as of June 30, 2008 and changes during the six months then ended is presented below:

 

							Weighted
				Weighted			Average
				Average			Remaining		Aggregate
		Number of		Exercise			Contractual		Grant Date
Stock Options		Shares		Price			Term		Fair Value
Outstanding at January 1, 2008		605,900		$	11.00
Granted		15,000		$	11.35
Exercised		(45,000	)	$	3.11
Expired		(77,000	)	$	15.55
Outstanding at June 30, 2008		498,900		$	11.03		2.7 Years		$	5,501,493
Exercisable at June 30, 2008		476,400		$	10.96		2.4 Years		$	5,222,118

 

3.                FAIR VALUE

 

SFAS 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  SFAS 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The standard describes three levels of inputs that may be used to measure fair value:

 

Level 1 – Quoted prices in active markets for identical assets or liabilities.

 

Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

 

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

 

The Company utilizes the market approach to measure fair value for its financial assets and liabilities.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

 

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Assets and liabilities measured at fair value on a recurring basis are summarized below:

 

		Fair Value Measurements as of June 30, 2008
Description		Total			Level 1			Level 2			Level 3
Short-term investments		$	56,107		$	56,107		$	—		$	—
Total		$	56,107		$	56,107		$	—		$	—

 

4.                BORROWINGS UNDER CREDIT AGREEMENT

 

Borrowings under the Company’s credit agreement with Bremer Bank include a commercial revolving credit line, which provides for maximum advances of $2,250,000 with interest at the prime rate until April 20, 2009.  The Company had no borrowings under this credit line at June 30, 2008 and December 31, 2008.  The credit agreement contains certain covenants requiring the Company to maintain certain financial ratios.  The Company was in compliance with these requirements as of June 30, 2008.  Management believes that funds available under this line of credit, along with funds generated from card club and simulcast operations, will be sufficient to satisfy its liquidity and capital resource requirements during 2008.

 

5.                OPERATING SEGMENTS

 

During the first six months of 2008 and 2007, the Company had three reportable operating segments:  horse racing, card club, and concessions.  The horseracing segment primarily represents simulcast and live horse racing operations.  The card club segment primarily represents operations of Canterbury Park’s Card Club, and the concessions segment primarily represents concessions provided during simulcast and live racing, in the Card Club, and during special events.  The Company’s reportable operating segments are strategic business units that offer different products and services.  They are managed separately because the segments differ in the nature of the products and services provided as well as processes to produce those products and services.  The Minnesota Racing Commission regulates the horse racing and card club segments.

 

The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies in the 2007 Annual Report on Form 10-K.

 

Depreciation, interest expense and income taxes are allocated to the segments but no allocation is made to concessions for shared facilities.  However, the concessions segment pays approximately 25% of gross revenues earned on live racing and special event days to the horse racing segment for use of the facilities.

 

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The following tables provide information about the Company’s operating segments (in 000’s):

 

		Six Months Ended June 30, 2008
		Horse Racing			Card Club			Concessions			Total
Net revenues from external customers		$	7,887		$	13,170		$	2,948		$	24,005
Intersegment revenues		357						883			1,240
Net interest income		82									82
Depreciation		658			271			84			1,013
Segment income before income taxes		(857		)	1,629			487			1,259
Segment Assets		$	35,204		$	3,638		$	8,368		$	47,210

 

		Six Months Ended June 30, 2007
		Horse Racing			Card Club			Concessions			Total
Net revenues from external customers		$	8,673		$	14,572		$	2,850		$	26,095
Intersegment revenues		355						973			1,328
Net interest income		154									154
Depreciation		593			308			61			962
Segment income before income taxes		(69		)	2,437			626			2,994

 

		At December 31, 2007
Segment Assets		$	31,431		$	3,857		$	7,723		$	43,011

 

The following are reconciliations of reportable segment revenue, income before income taxes, and assets, to the Company’s consolidated totals (in 000’s):

 

		Six Months Ended June 30,
		2008			2007
Revenues
Total net revenue for reportable segments		$	25,245		$	27,423
Elimination of intersegment revenues		(1,240		)	(1,328		)
Total consolidated net revenues		$	24,005		$	26,095
Income before income taxes
Total segment income before income taxes		$	1,259		$	2,994
Elimination of intersegment income before income taxes		(442		)	(587		)
Total consolidated income before income taxes		$	817		$	2,407

 

		June 30,			December 31,
		2008			2007
Assets
Total assets for reportable segments		$	47,210		$	43,011
Elimination of intercompany receivables		(7,395		)	(6,905		)
Total consolidated assets		$	39,815		$	36,106

 

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6.                COMMITMENTS AND CONTINGENCIES

 

In accordance with an Earn Out Note, given to the prior owner of the Racetrack as part of the consideration paid by the Company to acquire the Racetrack in 1994, if (i) off-track betting becomes legally permissible in the State of Minnesota and (ii) the Company begins to conduct off-track betting with respect to or in connection with its operations, the Company will be required to pay to the IMR Fund, L.P. the greater of $700,000 per operating year, as defined, or 20% of the net pretax profit, as defined for each of five operating years.  At this time, management believes that the likelihood that these two conditions will be met, and that the Company will be required to pay these amounts is remote.  At the date (if any) that these two conditions are met, the five minimum payments will be discounted back to their present value and the sum of those discounted payments will be capitalized as part of the purchase price in accordance with generally accepted accounting principles.  The purchase price will be further increased if payments become due under the “20% of Net Pretax Profit” calculation.  The first payment is to be made 90 days after the end of the third operating year in which off-track betting is conducted by the Company.  Remaining payments would be made within 90 days of the end of each of the next four operating years.

 

The Company is periodically involved in various legal actions arising in the normal course of business.  At June 30, 2008, management believes that the resolution of any legal actions outstanding will not have a material impact on the consolidated financial statements.

 

On June 5, 2008, the Company’s Board of Directors declared a special cash dividend of $.25 per share of common stock payable on July 11, 2008 to shareholders of record on June 20, 2008.  The aggregate amount paid to shareholders on July 11, 2008 pursuant to this dividend declaration was $1,007,173.

 

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ITEM 2:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Canterbury Park Holding Corporation, our operations and our present business environment.  This MD&A is provided as a supplement to – and should be read in conjunction with – our consolidated financial statements and the accompanying notes to the financial statements (the “Notes”).

 

Overview:

 

Canterbury Park Holding Corporation (the “Company”) owns and operates the Canterbury Park Racetrack and Card Club in Shakopee, Minnesota (the “Racetrack”).  The primary businesses of the Company are simulcast and live pari-mutuel horse racing, hosting unbanked card games, and food and beverage operations.

 

The Racetrack is the only pari-mutuel thoroughbred and quarter horse racing facility in the State of Minnesota.  The Racetrack earns revenues from pari-mutuel take-out on races simulcast year-round to Canterbury Park from racetracks throughout the country and from live race meets featuring thoroughbred and quarter horse racing.  In 2008, the live race meet began in May and will conclude in September.  During the live meet, the Company televises its races to out-of-state racetracks around the country and earns additional pari-mutuel revenue on wagers placed on our races at the out-of-state racetracks.

 

Canterbury Park’s Card Club (the “Card Club”) hosts “unbanked” card games in which players compete against each other and not against the house.  The Card Club is open twenty-four hours a day, seven days a week.  Under Minnesota law, the Company is required to pay up to 14% of the gross Card Club revenues to the Racetrack’s purse fund and the State of Minnesota Breeders’ Fund.  However, the Company has agreed with the Minnesota Horsemen’s Benevolent and Protective Association (“MHBPA”) to pay 15% of Card Club revenues into the purse fund for the first half of 2008 and all of 2007.

 

The Company also generates revenues from other activities such as admission and parking fees and from the sale of food and beverage, programs and other racing publications, and corporate sponsorships.  Additional revenues are derived from an RV park and the use of the Racetrack facilities for special events such as concerts, craft shows and snowmobile racing.

 

Operations Review for the Three and Six Months Ended June 30, 2008 and June 30, 2007:

 

Total net revenues decreased $2,089,656, or 8.0%, during the six months ended June 30, 2008 compared to the six months ended June 30, 2007, and decreased $821,130, or 5.6%, for the three months ended June 30, 2008 compared to the three months ended June 30, 2007. The decrease was due primarily to reductions of 9.0% and 9.6% in pari-mutuel and Card Club revenues for the six months ended June 30, 2008.  These decreases were partially offset by an increase of 3.8% in concession revenue for the six months ended June 30, 2008.

 

Pari-mutuel revenues decreased $667,685, or 9.0%, in the six-month period ended June 30, 2008 compared to the same period in 2007, and decreased $431,727, or 9.1%, for the three-month period ended June 30, 2008 compared to the same period in 2007.  Total handle wagered on simulcast races for the first half of 2008 was down $2.3 million, or 5.5%, compared to the same period last year.  The decrease in pari-mutuel revenues is partially due to a smoking ban that became effective October 1, 2007.  The Company believes that those simulcast customers who smoke and no longer visit our facilities are unlawfully wagering on the Internet.  The smoking ban is discussed later in this filing under the Legislation heading.  In addition, economic downturn and higher fuel costs have adversely impacted discretionary spending on entertainment throughout the first half of 2008.  Inclement weather during the first quarter of 2008 at racetracks that simulcast their signal to our racetrack also resulted in decreased pari-mutuel revenues.  Finally, on April 11, 2008, Running Aces Harness Park, located in Columbus Township, Anoka County, Minnesota, began their race meet.  The Company

 

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believes that this added an alternative simulcast betting location for our simulcast customers, resulting in decreased simulcast wagering at the Racetrack.

 

For further information, see the “Summary of Pari-mutuel Data” below:

 

		Six Months Ended June 30,
Summary of Pari-mutuel Data:		2008			2007
Racing Days
Simulcast only		153			152
Live and Simulcast		29			29
Total Number of Racing Days		182			181
On-Track Handle
Simulcast racing handle on simulcast only days		$	18,356,000		$	20,444,000
Live and Simulcast days:
Live racing handle		5,863,000			6,490,000
Simulcast racing handle		7,230,000			7,597,000
Total On-Track Handle		31,449,000			34,531,000
Out-of-State Live Handle		7,883,000			7,134,000
Total Handle		$	39,332,000		$	41,665,000
On-Track Average Daily Handle
Simulcast only racing days		$	119,974		$	134,500
Live and simulcast racing days		$	451,483		$	485,759

 

Total Card Club revenue decreased $1,402,013, or 9.6%, for the first six months of 2008 and $430,073, or 6.1%, for the second quarter of 2008 compared to the same periods in 2007. The primary source of Card Club revenue, referred to as “collection revenue,” is a percentage of the wagers received from the players as compensation for providing the Card Club facility and services.  Other revenue includes fees collected for the administration of tournaments and amounts earned as reimbursement of the administrative costs of maintaining jackpot funds.  Poker collection revenue fell $188,169 or 2.1% compared to the first six months of 2007.  In addition, Casino Games collection revenue dropped $1,087,700 or 20.9% compared to the first half of 2007.  The decrease in revenue is primarily due to the smoking ban that became effective on October 1, 2007.  The Company believes that those Card Club customers who smoke and no longer visit the Card Club are now patronizing tribal casinos where smoking is permitted.  The smoking ban is discussed later in this filing under the Legislation heading.  Additionally, economic downturn has adversely impacted discretionary spending on entertainment throughout the first half of 2008.  Total Card Club revenues represented 54.8% and 48.1% of net revenues for the six-month and three-month periods ended June 30, 2008, respectively.  The three-month percentage is usually lower in the second quarter of any calendar year due to increased revenue from live racing.

 

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For further information, see the “Summary of Card Club Data” below:

 

		Six Months Ended June 30,
Summary of Card Club Data:		2008			2007
Poker Games		$	8,652,000		$	8,840,000
Casino Games		4,125,000			5,213,000
Total Collection Revenue		12,777,000			14,053,000
Other Revenue		393,000			519,000
Total Card Club Revenue		$	13,170,000		$	14,572,000
Number of Days Offered		182			181
Average Revenue per Day		$	72,363		$	80,508

 

Concessions revenues increased $107,992, or 3.8%, and $116,958, or 6.0%, for the six-month and three-month periods ended June 30, 2008, respectively, compared to the prior year.  The increase was primarily attributed to additional concession sales as a result of special events in the first half of 2008 that did not occur in 2007.  The increase can also be attributed to price increases in concession products to offset the rising price of food commodities.

 

Total operating expenses decreased $570,990, or 2.4%, during the six-month period ended June 30, 2008 compared to the six-month period ended June 30, 2007, but increased $56,728, or .4%, during the three months ended June 30, 2008 compared to the three-month period ended June 30, 2007.

 

Total expense for statutory purses and the Minnesota Breeders’ Fund decreased 7.1% to $4,187,303 for the first six months ended June 30, 2008 compared to the first six months ended June 30, 2007.  The decrease was due primarily to a reduction in Card Club purse and breeders’ fund expenses due to lower Card Club collection revenues in the first half of 2008 compared to the first half of 2007.

 

The following table provides additional information regarding purse and Breeders’ Fund Expense:

 

								Minnesota
		Purse Expense						Breeders’ Fund Expense
		Six Months Ended June 30,						Six Months Ended June 30,
		2008			2007			2008			2007
Card Club		$	1,778,000		$	1,967,000		$	198,000		$	219,000
Simulcast Horse Racing		1,271,000			1,322,000			284,000			313,000
Live Horse Racing		596,000			623,000			61,000			65,000
		$	3,645,000		$	3,912,000		$	543,000		$	597,000

 

Salaries and benefits decreased $483,290, or 4.4%, in the 2008 six-month period ended June 30 and $34,604, or .6%, in the three-month period ended June 30, 2008 compared to the same periods last year.  Salaries and benefits expense decreased in the first half of 2008 primarily as a result of the expense related to the voluntary retirement incentive program that occurred in the first quarter of 2007.  Advertising and marketing costs increased $151,045, or 22.8%, in the 2008 six-month period ended June 30 and $75,004, or 13.5%, in the three-month period ended June 30, 2008 compared to the same periods last year primarily as a result of the use of an advertising agency and related fees in the current year.  Insurance expense decreased $182,286, or 33.1%, in the 2008 six-month period ended June 30 and $100,045, or 31.8%, in the three-month period

 

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ended June 30, 2008 compared to the same periods last year.  The decrease was due to a change in insurance provider that has allowed for significant decreases in premiums paid.  Repairs, maintenance and supplies expense increased $86,241, or 15.7%, in the 2008 six-month period ended June 30 and $74,362, or 21.3%, in the three-month period ended June 30, 2008 compared to same periods last year.  The increase was primarily due to necessary upgrades to the Company’s escalator system in order to be in compliance with new Minnesota statutes.

 

Income before income taxes was $817,063 for the six months ended June 30, 2008 compared to $2,407,170 for the six months ended June 30, 2007.  After income tax expense of $353,602 for the six months ended June 30, 2008, net income was $463,461 in 2008 compared to $1,395,370 in 2007, a decrease of $931,909 or 66.8%.  For the quarter ended June 30, 2008, the Company recorded a $39,917 loss before income tax benefit compared to income before income tax expense of $883,709 for the quarter ended June 30, 2007, a decrease of $923,626 or 104.5%.  After an income tax benefit of $4,498 in the second quarter of 2008, net loss was $35,419 compared to net income of $502,993 for the second quarter of 2007, a decrease of $538,412 or 107.0%.

 

Contingencies:

 

There have been no material changes in our contingencies from the information provided in our Report on Form 10-K for our year ended December 31, 2007.

 

Liquidity and Capital Resources:

 

Cash provided by operating activities during the period January 1, 2008 through June 30, 2008 was $2,012,612, resulting primarily from net income of $463,461, non-cash depreciation expense of $1,012,713, and an increase in accounts payable and accrued wages and payroll taxes of $3,819,295, caused primarily by a seasonal increase of $2.5 million in horsemen payables, a $418,000 increase in trade accounts payable, a $232,000 increase in host fees payable, and a $238,000 increase in deferred revenues for corporate sponsorships.  These items are partially offset by an increase in restricted cash of $2,507,927, resulting primarily from the increase in horsemen payables of $2.5 million.  Cash provided by operating activities during the period January 1, 2007 through June 30, 2007 was $3,365,484, resulting primarily from net income of $1,395,370, non-cash depreciation expense of $962,290, and an increase in accounts payable and accrued wages and payroll taxes of $3,650,849, caused by a seasonal increase of $2.7 million in horsemen payables, a $630,000 increase in trade accounts payable and a $231,000 increase in deferred revenues for corporate sponsorships.  These items are partially offset by an increase in restricted cash of $2,499,116 resulting primarily from the increase in horsemen payables of $2.7 million.  Pursuant to an agreement with the MHBPA, during the six months ended June 30, 2008 and 2007, the Company transferred into a trust account or paid directly to the MHBPA approximately $3,175,000 and $3,575,000, respectively.

 

Net cash used in investing activities for the first six months of 2008 of $1,279,175 resulted primarily from the purchase of a building management system for approximately $378,000, upgrades to the grandstand building of approximately $306,000, and upgrades to the Card Club of approximately $109,000.  During the six-month period ended June 30, 2007, net cash used in investing activities for the first six months of 2007 of $1,155,590 resulted primarily from the acquisition of equipment for food and beverage operations of $221,000, a poker room management system of $295,000, upgrades to the grandstand building of $402,000, and improvements to backside barns of $149,000.

 

During the period January 1, 2008 through June 30, 2008, cash used in financing activities was $841,953, resulting from repurchases of company stock of $979,608 offset by proceeds and tax benefits regarding the exercise of stock options of $137,655.  For additional information on the stock repurchase plan, see Part II, Item 2 (c) on page 20.  During the period January 1, 2007 through June 30, 2007, cash provided by financing activities was $253,099 representing the exercise of stock options.

 

The Company has a general credit agreement with Bremer Bank, which provides a revolving credit line of up to $2,250,000 with interest at the prime rate until April 20, 2009.  The Company had no borrowings under the line of credit at June 30, 2008 or December 31, 2007.  The credit agreement contains certain covenants

 

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requiring the Company to maintain certain financial ratios.  The Company was in compliance with these requirements at all times throughout the quarter ended June 30, 2008.

 

Unrestricted cash balances at June 30, 2008 were $6,941,873 compared to $7,050,389 at December 31, 2007. The Company believes that the funds available in its cash accounts, amounts available under the general credit and security agreement, along with funds generated from operations, will be sufficient to satisfy its liquidity and capital resource requirements for the balance of 2008 for regular operations including the special cash dividend paid in July 2008.

 

Critical Accounting Policies and Estimates:

 

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates that effect the amounts reported and disclosed in the consolidated financial statements. By their nature, these estimates are subject to an inherent degree of uncertainty. These estimates are based on our experience and various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. On an ongoing basis, we evaluate our estimates. However, actual results could differ from those estimates.

 

Our significant accounting policies are included in Note 1 to our consolidated financial statements in our 2007 Annual Report on Form 10-K. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

 

Land, Buildings and Equipment - We have significant capital invested in our property and equipment, which represents approximately 63.9% of our total assets. We utilize our judgment in various ways including: determining whether an expenditure is considered a maintenance expense or a capital asset; determining the estimated useful lives of assets; and determining if or when an asset has been impaired. Our property and equipment is evaluated for impairment whenever circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, we recognize an impairment loss. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value and is charged to operations in the period in which such impairment is determined by management. We do not believe that any impairment has occurred or is likely to occur in the near future.

 

Regulation - Our business can be materially impacted both positively and negatively by legislative and regulatory changes, such as those described below.  Significant negative changes resulting from these activities could result in an impairment of our property and equipment in accordance with generally accepted accounting standards. Additional information regarding how our business can be impacted by legislative and regulatory changes are included in Item 1 (vi), and Item 1 (vii), respectively, in our 2007 Annual Report on Form 10-K.

 

Commitments and Contractual Obligations:

 

On June 5, 2008, the Company’s Board of Directors declared a special cash dividend of $.25 per share of common stock payable on July 11, 2008 to shareholders of record on June 20, 2008.  The aggregate amount paid to shareholders on July 11, 2008 pursuant to this dividend declaration was $1,007,173.  The Company has not adopted any policies regarding dividend payments and there can be no assurance that any dividend will be paid in the future.

 

There have been no additional material changes in our outstanding commitments and contractual obligations since those reported at December 31, 2007.

 

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Legislation:

 

The Company did not propose or support any legislation during the 2008 biannual session of the Minnesota Legislature to obtain authorization for our Racino proposal that has been discussed in our previous flings with the SEC, mainly because a majority of those serving in the Minnesota Legislature following the November 2006 elections are considered unlikely to favorably entertain our Racino proposal.  Based on the success of several Racinos in other states, we continue to believe that if a Racino was authorized at the Racetrack, it would enhance horseracing with increased purses, provide growth and development opportunities for the Company, and provide significant new tax revenues for state and local governments.

 

On October 1, 2007, legislation became effective that severely restricted smoking in all public places in Minnesota, including at the Racetrack.  Tribal casinos located in Minnesota are not covered by this legislation and will continue to offer various gaming alternatives, including card games, in an environment that allows smoking.  Since October 1, 2007, this legislation has had, and will likely continue to have, a significant adverse effect on the Company’s revenues and profits.  The Company believes that those simulcast customers who smoke and no longer visit our facilities are now wagering on the Internet.  The Company also believes those Card Club customers who smoke and no longer visit the Card Club are now patronizing tribal casinos where smoking is permitted.

 

In April 2008, the Minnesota Legislature passed a bill allowing pari-mutuel simulcast wagering on all breeds at Running Aces Harness Park (“Running Aces”), a harness track that opened in Anoka County in April 2008.  In anticipation of the passing of this legislation, the Company entered into a revenue sharing agreement with Running Aces.  This agreement will benefit the respective horsemen’s associations by requiring the Company and Running Aces to make purse set aside contributions and Breeders Fund contributions as required by law.  Additionally, under the terms of the agreement, the Company will pay Running Aces a portion of net revenues for simulcast wagers taken on harness racing, and Running Aces will pay the Company a portion of net revenues for simulcast wagers taken on thoroughbred racing.  The Company believes that this agreement will help offset any revenue decreases that would have occurred as a result of the passage of this bill.

 

Forward-Looking Statements:

 

From time to time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, the Company may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans which are typically preceded by the words “believes,” “expects,” “anticipates,” “intends” or similar expressions.  For such forward-looking statements, the Company claims the protection of the safe harbor for forward-looking statements contained in federal securities laws.  Shareholders and the investing public should understand that such forward-looking statements are subject to risks and uncertainties which could cause actual performance, activities or plans to differ significantly from those indicated in the forward-looking statements.  Such risks and uncertainties include, but are not limited to: fluctuations in attendance at the Racetrack, material changes in the level of wagering by patrons, decline in interest in the unbanked card games offered at the Card Club, legislative and regulatory changes, the impact of wagering products and technologies introduced by competitors; increases in the percentage of revenues allocated for purse fund payments; increase in compensation and employee benefit costs; the general health of the gaming sector; higher than expected expense related to new marketing initiatives; and other factors discussed under Item 1A in our Report on Form 10-K for the year ended December 31, 2007 and in the Company’s other filings with the Securities and Exchange Commission.

 

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ITEM 3:     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Canterbury Park is not required to provide the information requested by this Item as it qualifies as a smaller reporting company.

 

ITEM 4:     CONTROLS AND PROCEDURES

 

(a)            Evaluation of Disclosure Controls and Procedures:

 

The Company’s Chief Executive Officer, Randall D. Sampson, and Chief Financial Officer, David C. Hansen, have reviewed the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report.  Based upon this review, these officers have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that the disclosure controls are also effective to ensure that information required to be disclosed in the Company’s Exchange Act reports is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

 

(b)            Changes in Internal Control Over Financial Reporting:

 

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934) that occurred during our fiscal quarter ended June 30, 2008 that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II

OTHER INFORMATION

 

Item 1.		Legal Proceedings
		Not Applicable
Item 1A.		Risk Factors
		There have been no material changes to the Risk Factors since those reported in the Form 10-K for the year ended December 31, 2007.
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds
		(a)	Not Applicable.
		(b)	Not Applicable.
		(c)	On January 16, 2008, the Company announced that its Board of Directors had authorized a program to repurchase up to an additional 250,000 shares of the Company’s common stock. During the second quarter of 2008, the Company repurchased 112,057 shares of common stock at an average price of $9.06 for an aggregate purchase price of $1,014,838. A month-by-month breakdown of purchases is included in the following table:

 

Period		Total Number of Shares Purchased		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plan		Maximum Number of Shares that May Yet Be Purchased Under the Plan
April 1 to April 30, 2008		25,453		$	9.40		25,453		217,565
May 1 to May 31, 2008		66,026		8.68			66,026		151,539
June 1 to June 30, 2008		20,578		9.84			20,578		130,961
Total		112,057					112,057		130,961

 

Item 3.		Defaults Upon Senior Securities
		Not Applicable
Item 4.		Submission of Matters to a Vote of Security Holders
		The Company held its Annual Meeting of Shareholders on June 5, 2008. Shareholders reelected the following directors for a one year term: Patrick R. Cruzen, Burton F. Dahlberg, Carin J. Offerman, Curtis A. Sampson, Randall D. Sampson, and Dale H. Schenian. Not less than 3,544,380 shares were voted in favor of each of the reelected directors (approximately 92.6% of all shares present and voting).
Item 5.		Other Information
		Not Applicable

 

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Item 6.		Exhibits
		(a)	The following exhibits are included herein:
			11	Statement re computation of per share earnings – See Net Income Per Share under Note 1 of Notes to Consolidated Financial Statements under Part 1, Item 1, which is incorporated herein by reference.
			31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (rules 13a-14 and 15d-14 of the Exchange Act).
			31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (rules 13a-14 and 15d-14 of the Exchange Act).
			32	Certfications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	Canterbury Park Holding Corporation
Dated: August 14, 2008	/s/ Randall D. Sampson
	Randall D. Sampson,
	President, and Chief Executive Officer
Dated: August 14, 2008	/s/ David C. Hansen
	David C. Hansen,
	Vice President, and Chief Financial Officer

 

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