Great Canadian Gaming Announces First Quarter 2015 Results

RICHMOND, BC, May 6, 2015 /CNW/ - Great Canadian Gaming Corporation [TSX:GC] ("Great Canadian," or "the Company") today announced its financial results for the three month period (the "first quarter") ended March 31, 2015.

FIRST QUARTER 2015 HIGHLIGHTS

• Revenues of $108.0 million in the first quarter, a 4% increase when compared to same period in the prior year.
  
  
• EBITDA⁽¹⁾ of $41.1 million in the first quarter, an 8% increase when compared to the same period in the prior year.
  
  
• Adjusted net earnings⁽¹⁾ of $16.9 million in the first quarter, a 27% increase, when compared to the same period in the prior year.
  
  
• First quarter revenues at River Rock Casino Resort increased by 3% to $47.4 million.
  
  
• First quarter revenues and EBITDA at Hard Rock Casino Vancouver increased by 6% and 41%, respectively, to $13.4 million and $4.1 million.

Great Canadian generated revenues of $108.0 million during the first quarter, a 4% increase from the first quarter of 2014. EBITDA during the first quarter was $41.1 million, an 8% increase from the first quarter of 2014. EBITDA as a percentage of revenues for the first quarter was 38.1%, a 1.4 percentage point increase from the first quarter of 2014. The revenues increase was primarily due to River Rock Casino Resort ("River Rock"), as well as improvements at Hard Rock Casino Vancouver, Great American Casinos, and our BC Racinos. EBITDA improvements were most pronounced at Hard Rock Casino Vancouver and Great American Casinos, as well as from reduced Corporate costs, while the majority of our other properties also made positive contributions.

Great Canadian's net earnings for the first quarter of 2015 were $16.1 million. After adjusting for items of note in the current and prior periods' net earnings (listed on page 6 of this press release), the Company's adjusted net earnings increased by $3.6 million or 27% in the first quarter of 2015, when compared to the same period in 2014. This increase was primarily due to the growth in EBITDA and the decrease in amortization expense during the first quarter of 2015.

"River Rock Casino Resort's increase in gaming volumes during the first quarter of 2015 was offset by a decline in both table hold percentage and slot win percentage," stated Rod Baker, Great Canadian's President and Chief Executive Officer. "River Rock's improved gaming volumes can be partially attributed to the expansion of its high limit baccarat gaming area and the associated addition of 15 new tables, both of which took place on February 12, 2015.

"At Hard Rock Casino Vancouver, we continued our efforts to increase the property's visitation. On February 17, 2015 we opened a new high limit table area and created a more exclusive high limit slot area at the property. We expect both of these additions will improve Hard Rock Casino Vancouver's premium gaming experience.

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

Great Canadian will host a conference call for investors and analysts today, May 6, 2015, at 2:00 PM Pacific Time in order to review the financial results for the period ended March 31, 2015. To participate in the conference call, please dial 416-764-8688, 778-383-7413, or toll free at 888-390-0546 (Passcode: 01014893). 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, www.gcgaming.com/financials. 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 www.gcgaming.com/financials.

ABOUT GREAT CANADIAN GAMING CORPORATION
Great Canadian Gaming Corporation operates gaming, entertainment and hospitality facilities in British Columbia, Ontario, Nova Scotia, and Washington State. The Company's 16 gaming properties consist of three community gaming centres, four racetracks (two with casinos operated by the Company and two with casinos operated by the Ontario Lottery and Gaming Corporation), and nine casinos, including one with a Four Diamond resort hotel. As of March 31, 2015, the Company had approximately 3,900 employees in Canada and 500 in Washington State. Further information is available on the Company's website, www.gcgaming.com.

Please refer to the Condensed Interim Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") at www.gcgaming.com (available on May 6, 2015) or www.sedar.com (available on May 7, 2015) for detailed financial information and analysis.

The financial results on the following pages are unaudited and prepared by management. Expressed in millions of Canadian dollars, except for per share information.

After adjusting for the above items of note, the Company's adjusted net earnings increased by $3.6 million in the first quarter, when compared to the same period in 2014.

DISCLAIMER

This press release contains certain "forward-looking information" or statements within the meaning of applicable securities legislation.  Forward-looking information is based on the Company's current expectations, estimates, projections and assumptions that were made by the Company in light of its historical trends and other factors.  All information or statements, other than statements of historical fact, are forward-looking information including statements that address expectations, estimates or projections about the future, the Company's strategy for growth and objectives, expected future expenditures, costs, operating and financial results, expected impact of future commitments, the future ability of the Company to operate the Georgian Downs and Flamboro Downs facilities beyond the terms of the signed Ontario Lease Agreements and Ontario Racing Agreements, the terms and expected benefits of the normal course issuer bid, and expectations and implications of changes in legislation and government policies.  Forward-looking information may be identified by words such as "anticipate", "believe", "expect", or similar expressions.  Such forward-looking information is not a guarantee of future performance and may involve a number of risks and uncertainties. 

Although forward-looking information is based on information and assumptions that the Company believes are current, reasonable and complete, they are subject to unknown risks, uncertainties, and a number of factors that could cause actual results to vary materially from those expressed or implied by such forward-looking information.  Such factors may include, but are not limited to: terms of operational services agreements with lottery corporations; changes to gaming laws that may impact the operational services agreements, pending, proposed or unanticipated regulatory or policy changes; the outcome of restructuring of gaming in Ontario; the Company's ability to obtain and renew required business licenses, leases, and operational services agreements; the future of horse racing in Ontario, unanticipated fines, sanctions and suspensions imposed on the Company by its regulators; impact of global liquidity and credit availability; possible reassessments of the Company's prior tax filings by tax authorities; adverse tourism trends and further decreases in levels of travel, leisure and consumer spending; competition from established competitors and new entrants in the gaming business; dependence on key personnel; the Company's ability to manage its capital projects and its expanding operations; the risk that systems, procedures and controls may not be adequate to meet regulatory requirements or to support current and expanding operations; potential undisclosed liabilities and capital expenditures associated with acquisitions; negative connotations linked to the gaming industry; First Nations rights with respect to some land on which we conduct our operations; future or current legal proceedings; construction disruptions; financial covenants associated with credit facilities and long-term debt; credit, liquidity and market risks associated with our financial instruments; interest and exchange rate fluctuations; non-realization of cost reductions and synergies; demand for new products and services; fluctuations in operating results; economic uncertainty and financial market volatility; technology dependence; and privacy breaches or data theft.  The Company cautions that this list of factors is not exhaustive.  Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.  These factors and other risks and uncertainties are discussed in the Company's continuous disclosure documents filed with the Canadian securities regulatory authorities from time to time, including in the "Risk Factors" section of the Company's Annual Information Form for fiscal 2014, and as identified in the Company's disclosure record on SEDAR at www.sedar.com.

Readers are cautioned not to place undue reliance on the forward-looking information, as there can be no assurance that the plans, intentions, or expectations upon which they are based will occur.  The forward-looking information contained herein is made as of the date hereof, is subject to change after such date, and is expressly qualified in its entirety by cautionary statements in this press release.  Forward-looking information is provided for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of the Company's operating environment.  The Company undertakes no obligation to publicly revise forward-looking information to reflect subsequent events or circumstances except as required by law. 

The Company has included non-International Financial Reporting Standards ("non-IFRS") measures in this press release.  EBITDA, as defined by the Company, means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, share-based compensation, impairment reversal of long-lived assets, restructuring and other, and foreign exchange gain and other.  EBITDA is derived from the condensed interim consolidated statements of earnings, and can be computed as revenues less human resources expenses, and property, marketing and administration expenses.  The Company believes EBITDA is a useful measure because it provides information to management about the operating and financial performance of the Company and its ability to generate operating cash flow to fund future working capital needs, service outstanding debt, and fund future capital expenditures.  EBITDA is also used by the investors and analysts for the purpose of valuing the Company.  Adjusted net earnings, as defined by the Company, means net earnings plus or minus items of note that management may reasonably quantify and that it believes will provide the reader with a better understanding of the Company's underlying business performance.  Items of note may vary from time to time and in this press release include impairment reversal of long-lived assets, FDC revenues previously deferred at Fraser Downs, restructuring severance costs, uneconomic lease provision due to Kent casino closure, jackpot and marketing fund liabilities reversed due to Kent casino closure, and the related income taxes thereon.

Readers are cautioned that these non-IFRS definitions are not recognized measures under International Financial Reporting Standards ("IFRS"), do not have standardized meanings prescribed by IFRS, and should not be construed to be alternatives to net earnings determined in accordance with IFRS or as indicators of performance or liquidity or cash flows.  The Company's method of calculating these measures may differ from methods used by other entities and accordingly our measures may not be comparable to similarly titled measures used by other entities or in other jurisdictions.  The Company uses these measures because it believes they provide useful information to both management and investors with respect to the operating and financial performance of the Company.

ON BEHALF OF

GREAT CANADIAN GAMING CORPORATION

"Original Signed By Rod N. Baker"

_____________________
Rod N. Baker
President and Chief Executive Officer

SOURCE Great Canadian Gaming Corporation