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Enter Symbol
or Name
USA
CA



Great Canadian Gaming Corp
Symbol GC
Shares Issued 66,368,020
Close 2015-11-04 C$ 17.20
Market Cap C$ 1,141,529,944
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Great Canadian Gaming earns $21.8-million in Q3 2015

2015-11-04 16:36 ET - News Release

Mr. Rod Baker reports

GREAT CANADIAN GAMING ANNOUNCES THIRD QUARTER 2015 RESULTS

Great Canadian Gaming Corp. has released its financial results for the three-month period ended Sept. 30, 2015.

Third quarter 2015 highlights

  • Revenues of $113.8-million, a $1.5-million increase when compared with the same period in the prior year;
  • EBITDA (earnings before interest, taxes, depreciation and amortization) of $47.5-million, a 4-per-cent increase when compared with the same period in the prior year and the second-highest quarter in the company's history;
  • First nine months of 2015 EBITDA of $135.5-million, an increase of $2.4-million when compared with the same period in the prior year;
  • Adjusted net earnings of $22.6-million, a 12-per-cent increase when compared with the same period in the prior year;
  • On Sept. 8, 2015, awarded first bundle in Ontario gaming modernization process;
  • On Oct. 1, 2015, completed the acquisition of Casino New Brunswick.

 
                             FINANCIAL HIGHLIGHTS
          (in millions of dollars, except for per-share information)   

                                               Third quarter      First nine months
                                           2015         2014        2015       2014

Revenues                               $  113.8     $  112.3    $  332.7   $  330.8
EBITDA (1)                             $   47.5     $   45.5    $  135.5   $  133.1
EBITDA as a percentage of revenues        41.7%        40.5%       40.7%      40.2%
Net earnings                           $   21.8     $   19.9    $   57.0   $   56.8
Net earnings per common share
Basic                                  $   0.33     $   0.29    $   0.83   $   0.84
Diluted                                $   0.32     $   0.28    $   0.81   $   0.82
Adjusted net earnings (1)              $   22.6     $   20.1    $   59.9   $   53.2

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

Great Canadian generated revenues of $113.8-million during the third quarter, a 1-per-cent increase from the third quarter of 2014. EBITDA during the third quarter was $47.5-million, a 4-per-cent increase from the third quarter of 2014. EBITDA as a percentage of revenues for the third quarter was 41.7 per cent, a 1.2-percentage-point increase from the third quarter of 2014. The improved EBITDA in the third quarter of 2015 was primarily due to increased revenues from the majority of the company's properties, most notably Hard Rock Casino Vancouver, Great American Casinos, Nova Scotia Casinos, Vancouver Island Casinos and other British Columbia casinos. EBITDA similarly increased at nearly all of the company's properties in the most recent third quarter, with the exception of River Rock Casino Resort, which experienced a decline, primarily attributed to a 3-per-cent decrease in revenues. Corporate and other costs also contributed to the improved EBITDA as these decreased 22 per cent in the third quarter of 2015 when compared with the prior-year period. On a year-to-date basis, Great Canadian's EBITDA was $2.4-million higher than the first nine months of 2014.

Great Canadian's adjusted net earnings for the third quarter of 2015 were $22.6-million. After adjusting for items of note in the current and prior periods' net earnings, the company's adjusted net earnings for the third quarter were 12 per cent higher when compared with the same period in 2014, primarily due to the increase in EBITDA and decreases in amortization expense and share-based compensation.

"Great Canadian was very active during the third quarter of 2015," stated Rod Baker, Great Canadian's president and chief executive officer. "We continued our efforts to enhance guest experience and improve results at each of our properties while also pursuing value-creating business development opportunities.

  • "Following the recent launch of Hard Rock Casino Vancouver's VIP table games area earlier this year and as part of our continuing efforts to enhance guest experience at the property, we added a new value-price Buffet at Unlisted on Sept. 16, 2015.
  • "We continued our plans to rebrand and reposition our Fraser Downs Racetrack and Casino in Surrey, B.C., into the Elements Casino, which is scheduled to open on Dec. 17, 2015.
  • "We commenced an expansion of the premium slots gaming area at River Rock to provide guests a more private gaming experience.
  • "We announced in September that we were the successful bidder for the Ontario East gaming bundle, the first awarded under that province's gaming modernization plans. We are in the midst of transition planning with the OLG [Ontario Lottery and Gaming Corp.] and are targeting to complete the acquisition on Jan. 11, 2016.
  • "We received the required regulatory approvals and completed the acquisition of Casino New Brunswick on Oct. 1, 2015.

"River Rock's revenues in the third quarter of 2015 decreased by 3 per cent when compared to the strong level achieved during the same period last year. While the third quarter's table drop decreased 5 per cent compared to the prior-year period, it was still the second-highest table drop in the property's history. In addition, while we often focus on the property's table games performance, its slot coin-in and slot win was the highest in the property's history and continued the trend of year-over-year quarterly growth that began in the second quarter of 2014. We believe this is continuing evidence of the property's long-term potential.

"At the end of the third quarter, Great Canadian maintained both a strong cash balance and an undrawn revolving credit facility," concluded Mr. Baker. "The company remains well positioned to take advantage of new opportunities for value creation. While we continue to pursue potential opportunities in Ontario and elsewhere, we will also continue to efficiently manage our operations and explore other options to grow our business."

The company also wishes to announce that certain of its executives have indicated that they may wish to undertake an early exercise (before the expiry date) of certain long-held stock options. The election platform of the recently elected Liberal party proposed certain changes to the tax treatment of stock options. The early exercise of options is intended to be undertaken to have such exercise treated under the current tax rules. These executives have indicated that, while they would, in the normal course, sell certain of the shares acquired to finance the payment of the exercise price and all related taxes, they would also be prepared to hold the balance of the shares for an extended period of time. For the president and chief executive officer, the chief operating officer, and the chief financial officer, that commitment period would be a minimum of three years. For the remaining executives that period would be a minimum of the otherwise remaining duration of the options exercised, which is generally between one to two years. The exercise of these options is expected to be completed through an automatic share distribution plan. A definitive decision by the executives will be made in compliance with the company's trading policies and in compliance with the terms of the automatic share distribution plan.

Great Canadian will host a conference call for investors and analysts on Nov. 4, 2015, at 2 p.m. Pacific Time, in order to review the financial results for the period ended Sept. 30, 2015. To participate in the conference call, please dial 416-764-8688, 778-383-7413 or toll-free at 1-888-390-0546 (passcode 17689595). 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 STATEMENTS OF EARNINGS
                     (in millions of dollars, except for per-share information)

                                                         Third quarter ended       First nine months ended 
                                                     Sept. 30,      Sept. 30,      Sept. 30,      Sept. 30,  
                                                         2015           2014           2015           2014

Gaming revenues                                    $     78.4     $     77.5      $   228.2      $   228.4
Facility development commission                           9.4            9.5           28.0           28.1
Hospitality, lease and other revenues                    29.4           27.1           84.7           79.8
Racetrack revenues                                        3.8            3.9           11.0           11.1
                                                        121.0          118.0          351.9          347.4
Less 
Promotional allowances                                   (7.2)          (5.7)         (19.2)         (16.6)
Revenues                                                113.8          112.3          332.7          330.8
Human resources                                          40.4           41.3          121.7          122.5
Property, marketing and administration                   25.9           25.5           75.5           75.2
                                                         66.3           66.8          197.2          197.7
EBITDA                                                   47.5           45.5          135.5          133.1
Human resources as a percentage of 
revenues before promotional allowances                  33.4%          35.0%          34.6%          35.3%
EBITDA as a percentage of revenues                      41.7%          40.5%          40.7%          40.2%
Amortization                                              9.8           10.7           28.9           35.0
Share-based compensation                                 (0.1)           1.2            3.7            3.4
Impairment reversal of long-lived assets                    -              -              -           (5.2)
Interest and financing costs, net                         8.1            7.9           23.8           23.9
Restructuring and other                                   2.0            0.4            4.8            0.6
Foreign exchange gain and other                          (2.1)          (0.7)          (3.9)          (0.9)
Income taxes                                              8.0            6.1           21.2           19.5
Net earnings                                       $     21.8     $     19.9     $     57.0      $    56.8
Net earnings per common share
Basic                                              $     0.33     $     0.29     $     0.83      $     0.8
Diluted                                            $     0.32     $     0.28     $     0.81      $     0.8

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