Great Canadian Gaming Announces First Quarter 2017 Results

REVENUES INCREASED 9% TO $143 MILLION.  71% INCREASE IN SHAREHOLDERS' NET EARNINGS

COQUITLAM, BC, May 8, 2017 /CNW/ - Great Canadian Gaming Corporation [TSX:GC] ("Great Canadian," or "the Company") today announced its financial results for the three month period ended March 31, 2017 (the "first quarter").

FIRST QUARTER 2017 HIGHLIGHTS

• Revenues of $142.7 million, increased by 9% when compared to the same period in the prior year.
  
  
• Adjusted EBITDA⁽¹⁾ of $48.2 million, increased by 11% when compared to the same period in the prior year.
  
  
• Shareholder's net earnings of $17.8 million, increased by 71% when compared to the same period in the prior year. Shareholders' net earnings per common share of $0.29 cents, increased by 81% when compared to the same period in the prior year.
  
  
• Adjusted shareholders' net earnings⁽¹⁾ of $17.6 million, increased by 45% when compared to the same period in the prior year. Adjusted shareholders' net earnings⁽¹⁾ per common share of $0.29 cents, increased by 53% when compared to the same period in the prior year.
  
  
• Shorelines Casino in Belleville, Ontario opened on January 11, 2017, one year after Great Canadian acquired the Ontario Lottery and Gaming Corporation's ("OLG") East Gaming Bundle. Shorelines Casino Belleville is the first new casino opened in Ontario since 2006.
   
  
• The Company submitted bids on the Request for Proposals ("RFP") for OLG Gaming Bundle 1 (Ottawa) and Gaming Bundle 5 (GTA).
  
  
• The Company is currently assessing OLG's RFP for Gaming Bundle 6 (West GTA), which is due July 13, 2017.
  
  
• The Company has recently been pre-qualified to submit RFPs for OLG's Gaming Bundle 7 (Central) and Gaming Bundle 8 (Niagara).

Great Canadian generated revenues of $142.7 million during the first quarter, an increase of 9% when compared to the same period in the prior year. This increase was primarily due to the additional revenues from Shorelines Casino Belleville, and 9 additional days of revenues from Shorelines Casino Thousand Islands and Shorelines Slots at Kawartha Downs, which were acquired on January 11, 2016.  Additionally, Great Canadian has seen increases in revenue at all British Columbia and Atlantic properties, with the exception of River Rock Casino Resort ("River Rock") and Great American Casinos.

Adjusted EBITDA during the first quarter was $48.2 million, an increase of 11% when compared to the same period in the prior year. This improvement was primarily due to the previously mentioned additional revenues from Ontario, British Columbia and Atlantic properties, modestly offset by the decreases in River Rock and Great American Casinos.

Shareholders' net earnings for the first quarter were $17.8 million, an increase of 71% when compared with the same period in the prior year. The increase was primarily due to the improvement in Adjusted EBITDA and a decline in business acquisition, restructuring and other costs. The increase was partially offset by increased amortization of Shorelines Casino Belleville's assets and higher income taxes. Adjusted shareholders' net earnings per common share of $0.29 cents, increased by 53% when compared to the same period in the prior year due to 45% increase in adjusted shareholders' net earnings and 5% reduction in weighted average number of shares outstanding following the repurchase of common shares during 2016.

"Great Canadian generated improvements to both revenues and Adjusted EBITDA at the majority of its properties during the first quarter of 2017, when compared to the same period in the prior year," stated Rod Baker, the Company's President and Chief Executive Officer. "Great Canadian's revenues during the first quarter of 2017 also benefited from additional revenues attributable to Shorelines Casino Belleville that was opened in January 2017."

"OLG's gaming modernization is progressing. In February 2017, we submitted a bid for the Ottawa Gaming Bundle and in April 2017, we submitted a bid on the GTA Gaming Bundle. The Company is currently assessing OLG's Request for Proposal for the West GTA Gaming Bundle. We anticipate OLG to announce the successful proponents for these three bundles in the Spring, late Summer and Fall 2017, respectively. If successful, the Company intends to be the sole owner and operator for Ottawa and to be an equity partner for GTA and majority partner for West GTA. In addition, we were recently notified that Great Canadian is pre-qualified to submit bids on OLG's Request for Proposals for Central Gaming Bundle and Niagara Gaming Bundle."

"We have made good progress at several of our properties that are undergoing renovations, expansions or rebranding.  We look forward to having these projects completed over the course of 2017 to enhance guest experiences throughout our properties."

"Our business continues to perform well, notably boosted by our newest property, Shorelines Casino Belleville, which was opened this quarter ahead of schedule, in addition to the successful integration of the other two properties from OLG's East Gaming Bundle." concluded Mr. Baker.  "Given our strong financial position, the Company is well-positioned to pursue other potential growth opportunities in Ontario and elsewhere."

Great Canadian will host a conference call for investors and analysts tomorrow, May 9, 2017, at 5:30 AM Pacific Time in order to review the financial results for the period ended March 31, 2017.  To participate in the conference call, please dial 416-764-8688, 778-383-7413, or toll free at 1-888-390-0546.  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 is a Canadian based company that operates gaming, entertainment and hospitality facilities in British Columbia, Ontario, New Brunswick, Nova Scotia, and Washington State.  The Company has 21 gaming properties, which consist of thirteen casinos, including a four Diamond resort hotel in Richmond, British Columbia and a four star hotel in Moncton, New Brunswick, four horse racetrack casinos, three community gaming centres and one commercial bingo hall.  A key element of Great Canadian's business model is its commitment to social responsibility.  "PROUD of our people, our business, our community" is Great Canadian's brand that unifies the company's community, volunteering and social responsibility efforts.  Under the PROUD program, Great Canadian annually invests over $2.5 million in our communities, and in 2016, over 1,500 charitable organizations were supported by Great Canadian.  In each Canadian gaming jurisdiction, a significant portion of gross gaming revenue from gaming facilities is retained by our crown partners on behalf of their provincial government for the purpose of supporting programs like healthcare, education and social services.

Please refer to the Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") at www.gcgaming.com (available on May 8, 2017) or www.sedar.com (available on May 9, 2017) 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.

The following table reconciles shareholders' net earnings to adjusted shareholders' net earnings.

After adjusting for the above items of note, the Company's adjusted shareholders' net earnings increased by $5.5 million in the first quarter of 2017, when compared to the same period in the prior year.

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 historical trends and other factors.  Forward-looking statements are frequently but not always identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "targeted", "planned", "possible" or similar expressions or statements that events, conditions or results "will", "may", "could" or "should" occur or be achieved.  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 (including participation in Ontario's gaming modernization program and possible expansion of gaming in British Columbia), 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 impact of conditions imposed on certain VIP players in British Columbia, the impact of unionization activities, the Company's position on its claim against the British Columbia Lottery Corporation ("BCLC") with respect to the collection of marketing contributions, the Company's beliefs about the outcome of its notices of objection challenging the Canada Revenue Agency's reassessments and its tax position on its facility development commission prevailing, the terms and expected benefits of the normal course issuer bid, and expectations and implications of changes in legislation and government policies.  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 (including those that impact VIP play); the outcome of modernization of gaming in Ontario; the Company's ability to obtain and renew required business licenses, leases, and operational services agreements; unanticipated fines, sanctions and suspensions imposed on the Company by its regulators; impact of global liquidity and credit availability; actual and possible reassessments of the Company's prior tax filings by tax authorities; the results of the Company's notices of objection and subsequent appeals challenging reassessments received by the Canada Revenue Agency; the Company's tax position on its facility development commission prevailing; the results of the Company's litigation with BCLC; 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 timing and results of collective bargaining negotiations; adverse changes in the Company's labour relations; 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; 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 2016, and as identified in the Company's disclosure record on SEDAR at www.sedar.com.

The Company believes that the expectations reflected in forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct.  Readers are cautioned not to place undue reliance on the forward-looking information.  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.  Adjusted 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, business acquisition, restructuring and other, and foreign exchange loss and other.  Adjusted EBITDA is derived from the condensed interim consolidated statements of earnings and other comprehensive loss, and can be computed as revenues plus share of profit of equity investment less human resources expenses, and property, marketing and administration expenses.  The Company believes Adjusted 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.  Adjusted EBITDA is also used by investors and analysts for the purpose of valuing the Company.  Adjusted shareholders' net earnings, as defined by the Company, means shareholders' 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 pre-opening costs for the Ontario East Gaming Bundle, restructuring severance costs, impairment reversal of long-lived assets, other 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

GREAT CANADIAN GAMING CORPORATION [TSX:GC]
95 Schooner Street
Coquitlam, BC
V3K 7A8
(604) 303-1000
Website: www.gcgaming.com  

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SOURCE Great Canadian Gaming Corporation

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