14:20:51 EDT Thu 28 Mar 2024
Enter Symbol
or Name
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CA



Great Canadian Gaming Corp
Symbol GC
Shares Issued 68,003,401
Close 2014-11-04 C$ 20.37
Market Cap C$ 1,385,229,278
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Great Canadian Gaming earns $19.9-million in Q3

2014-11-05 16:24 ET - News Release

Mr. Rod Baker reports

GREAT CANADIAN GAMING ANNOUNCES THIRD QUARTER 2014 RESULTS

Great Canadian Gaming Corp. has released its financial results for the three-month period ended Sept. 30, 2014.

Third quarter 2014 highlights

  • Revenues and EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 9 per cent and 16 per cent, respectively, to $112.3-million and $45.5-million;
  • Net earnings of $19.9-million, a 50-per-cent increase when compared with the third quarter of 2013;
  • Adjusted net earnings of $20.1-million, a 51-per-cent increase when compared with the third quarter of 2013;
  • Revenues and EBITDA at River Rock Casino Resort increased by 16 per cent and 24 per cent, respectively, to $50.9-million and $29.4-million;
  • Revenues and EBITDA at Hard Rock Casino Vancouver increased by 10 per cent and 27 per cent, respectively, to $12.8-million and $3.8-million.

 
                       THIRD QUARTER 2014 HIGHLIGHTS
                    (in millions of dollars, except for 
                   per-share and percentage information)

                                        Third quarter       First nine months                       
                                     2014        2013        2014        2013
         
Revenues                         $  112.3    $  103.1   $   330.8    $  305.7
EBITDA (1)                       $   45.5    $   39.1   $   133.1    $  115.4
EBITDA as a percentage 
of revenues                         40.5%       37.9%       40.2%       37.7%
Net earnings                     $   19.9    $   13.3   $    56.8    $   55.9
Net earnings per common share
Basic                            $   0.29    $   0.20   $    0.84    $   0.81
Diluted                          $   0.28    $   0.19   $    0.82    $   0.80
Adjusted net earnings (1)        $   20.1    $   13.3   $    53.2    $   34.9  

(1) EBITDA and adjusted net earnings are non-IFRS (international financial 
    reporting standards) measures.

Great Canadian recorded revenues of $112.3-million during the third quarter of 2014, a $9.2-million, or 9-per-cent, increase from the third quarter of 2013. EBITDA during the third quarter of 2014 was $45.5-million, a $6.4-million, or 16-per-cent, increase from the third quarter of 2013. EBITDA as a percentage of revenues for the third quarter of 2014 was 40.5 per cent, a 2.6-percentage-point increase from the third quarter of 2013. Both the revenues and EBITDA increases were primarily due to the continuation of strong performance at River Rock Casino Resort. Hard Rock Casino Vancouver also generated a meaningful quarterly improvement. These increases were partially offset by declines at both the company's Nova Scotia casinos and Vancouver Island casinos.

River Rock's 2014 third quarter revenues of $50.9-million and EBITDA of $29.4-million increased by 16 per cent and 24 per cent, respectively, when compared with the third quarter of 2013. Hard Rock Casino Vancouver's 2014 third quarter revenues and EBITDA increased by 10 per cent and 27 per cent, respectively, to $12.8-million and $3.8-million.

Great Canadian recorded net earnings of $19.9-million during the third quarter of 2014, a $6.6-million increase when compared with the third quarter of 2013. This increase was primarily due to the growth in the company's EBITDA.

"Great Canadian's financial results for the third quarter were again led by a strong performance at River Rock Casino Resort," stated Rod Baker, Great Canadian's president and chief executive officer. "River Rock recorded significant growth in both gaming revenues and EBITDA. These improvements continue a lengthy trend of positive momentum at the property. Since the fourth quarter of 2011, River Rock's quarterly table drop has increased at a compound annual rate of 27 per cent, while its table hold has increased at a compound annual rate of 28.6 per cent. We are pleased with these results and the fashion in which River Rock continues to achieve its considerable potential.

"We are also encouraged by the performance of Hard Rock Casino Vancouver. This property has steadily built its business since its relaunch last December, and its quarterly results are the greatest evidence to date that Hard Rock Casino Vancouver is establishing itself as one of Vancouver's premier entertainment destinations. While we are very encouraged by these results, we continue to believe that there is potential for further improvement at this property and will maintain our efforts to increase its traffic.

"With our strong cash balance and our undrawn revolving credit facility, Great Canadian remains financially prepared to take advantage of new opportunities for value creation," concluded Mr. Baker. "This includes any opportunities that may arise from Ontario's plans to modernize gaming. While we pursue these potential opportunities, we will continue to efficiently manage our operations and look for other ways to continue to grow our business."

Great Canadian will host a conference call for investors and analysts on Nov. 5, 2014, at 2 p.m. Pacific Time, in order to review the financial results for the period ended Sept. 30, 2014. To participate in the conference call, please dial 416-764-8688, 778-383-7413 or toll-free at 888-390-0546 (passcode 53039901). Questions will be reserved for institutional investors and analysts. Interested parties may also access the call via the investor relations section of the company's website. Investors using the website should allow 15 minutes for the registration and installation of any necessary software. A replay of the call will also be available at the company's website.

                     CONDENSED INTERIM CONSOLIDATED STATEMENT OF EARNINGS
                (in millions of dollars, except for per-share and percentage information)

                                                               Third quarter                 First nine months
                                                       2014             2013             2014             2013

Gaming revenues                                  $     77.5       $     69.5        $   228.4        $   206.4
Facility development commission                         9.5              8.3             28.1             25.9
Hospitality, lease and other revenues(1)               27.1             26.3             79.8             76.2
Racetrack revenues                                      3.9              3.8             11.1             10.9
                                                      118.0            107.9            347.4            319.4
Less promotional allowances                            (5.7)            (4.8)           (16.6)           (13.7)
Revenues                                              112.3            103.1            330.8            305.7
Human resources                                        41.3             40.2            122.5            119.7
Property, marketing and administration                 25.5             23.8             75.2             70.6
                                                       66.8             64.0            197.7            190.3
EBITDA                                                 45.5             39.1            133.1            115.4
Human resources as a percentage of 
revenues before promotional allowances                35.0%            37.3%            35.3%            37.5%
EBITDA as a percentage of revenues                    40.5%            37.9%            40.2%            37.7%
Amortization                                           10.7             12.2             35.0             36.9
Share-based compensation                                1.2              0.9              3.4              3.6
Reversal of impairment of long-lived assets               -                -             (5.2)           (28.5)
Interest and financing costs, net                       7.9              8.4             23.9             24.8
Restructuring and other                                 0.4              0.1              0.6              1.4
Foreign exchange gain and other                        (0.7)            (0.2)            (0.9)            (0.6)
Income taxes                                            6.1              4.4             19.5             21.9
Net earnings                                     $     19.9       $     13.3       $     56.8       $     55.9
Net earnings per common share
Basic                                            $     0.29       $     0.20       $     0.84       $     0.81
Diluted                                          $     0.28       $     0.19       $     0.82       $     0.80

(1) For the first nine months of 2013, the company has reclassified its Ontario gaming revenues of 
    $6.4-million that related to its prior Ontario racetrack siteholder agreements as hospitality, 
    lease and other revenues. Management believes this presentation improves the comparability with 
    the current year's revenues from Ontario Lottery and Gaming Corp. (OLG) for its lease of the 
    slot machine areas at the Ontario racetracks. The prior siteholder agreements were terminated 
    by OLG effective March 31, 2013, and replaced by five-year lease agreements effective 
    April 1, 2013, as described in the major developments section of the management discussion 
    and analysis for the third quarter of 2014.

We seek Safe Harbor.

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