Great Canadian Gaming Announces Fourth Quarter and Annual 2015 Results

COQUITLAM, BC, March 9, 2016 /CNW/ - Great Canadian Gaming Corporation [TSX:GC] ("Great Canadian," or "the Company") today announced its financial results for both the three month period (the "fourth quarter") and twelve month period ("2015," or "the full year") ended December 31, 2015.

FOURTH QUARTER AND 2015 HIGHLIGHTS

• Revenues of $121.1 million for the fourth quarter and $453.8 million for the full year, increases of 5% and 2%, respectively, when compared to the same periods in the prior year.
• Adjusted EBITDA⁽¹⁾ of $45.1 million in the fourth quarter and $180.6 million for the full year.  
• Shareholders' net earnings of $17.6 million in the fourth quarter and $74.6 million for the full year.
• Adjusted shareholders' net earnings⁽¹⁾ of $18.1 million in the fourth quarter and $77.8 million for the full year.
• On October 1, 2015, acquired Casino New Brunswick for a cash purchase price of $97.3 million.
• On December 17, 2015, the redevelopment of Fraser Downs Racetrack and Casino in Surrey, B.C. was completed and the property was re-launched as Elements Casino.
• Repurchased and cancelled 1.9 million common shares of the Company at an average price of $15.97 during the fourth quarter.
• Subsequent to the conclusion of the fourth quarter, on January 11, 2016, a partnership in which the Company now owns a 90.5% share completed the acquisition of the first bundle in the Ontario Gaming Modernization Process.
• During the fourth quarter of 2015, partnerships in which the Company holds an interest were notified by Ontario Lottery and Gaming Corporation ("OLG") that they were pre-qualified to submit a Request for Proposal ("RFP") for two more of the OLG's Request for Pre-Qualifications ("RFPQ") submissions: Gaming Bundle 4 (Southwest) (the "Southwest Gaming Bundle") and Gaming Bundle 5 (GTA) (the "Greater Toronto Area Gaming Bundle").

(Amounts presented in millions of Canadian dollars, except for per share information)
		Fourth Quarter						Twelve Months of
		2015		2014		% Chg		2015		2014		% Chg
Revenues		$	121.1	$	115.7	5%		$	453.8	$	446.5	2%
Adjusted EBITDA ^(1)		$	45.1	$	47.0	(4%)		$	180.6	$	180.1	0%
Adjusted EBITDA as a % of Revenues		37.2%		40.6%				39.8%		40.3%
Shareholders' net earnings		$	17.6	$	21.6	(19%)		$	74.6	$	78.4	(5%)
Shareholders' net earnings per common share
	Basic	$	0.27	$	0.32	(16%)		$	1.10	$	1.16	(5%)
	Diluted	$	0.26	$	0.31	(16%)		$	1.08	$	1.12	(4%)
Adjusted shareholders' net earnings ^(1)		$	18.1	$	22.0	(18%)		$	77.8	$	75.2	3%
								December 31, 2015		December 31, 2014		% Chg
Total assets								$	998.1	$	1,020.3	(2%)
Long-term debt								$	443.0	$	442.0	0%
^(1)Adjusted EBITDA and adjusted shareholders' net earnings are non-IFRS measures as described in the disclaimer section of    this press release.  A reconciliation between shareholders' net earnings and adjusted shareholders' net earnings is included on    page 6 of this press release.

Great Canadian generated revenues of $121.1 million during the fourth quarter, a 5% increase from the fourth quarter of 2014.  This increase was primarily due to the Company's October 2015 acquisition of Casino New Brunswick, which contributed $10.8 million of revenues to the fourth quarter. Revenues also grew at most of the Company's properties, notably Hard Rock Casino Vancouver, which increased revenues by 18%.  These increases were offset by a decline in table gaming revenues at River Rock Casino Resort ("River Rock"). 

Adjusted EBITDA during the fourth quarter was $45.1 million, a 4% decrease from the fourth quarter of 2014.   The Adjusted EBITDA decrease was primarily due to River Rock's decline in table gaming revenues. This decrease was offset by a $3.4 million Adjusted EBITDA contribution from Casino New Brunswick, a $2.0 million Adjusted EBITDA improvement at Hard Rock Casino Vancouver, and a $1.9 million reduction in Corporate costs Adjusted EBITDA

Great Canadian generated net earnings of $17.6 million during the fourth quarter and $74.6 million during 2015.  After adjusting for items of note in the current and prior periods' shareholders' net earnings (listed on Page 6 of this press release), the Company's adjusted shareholders' net earnings for the fourth quarter were $18.1 million, an 18% decrease when compared with the same period in 2014.   This decrease was primarily due to the above-mentioned decrease in Adjusted EBITDA, a lower gain from foreign exchange and increases in amortization expense and restructuring and other costs. These factors were partially offset by a decrease in share-based compensation.

"In the final quarter of 2015, Great Canadian delivered revenues and Adjusted EBITDA improvements across the majority of our portfolio," stated Rod Baker, Great Canadian's President and Chief Executive Officer. "These improvements were partially offset by a revenue decline at River Rock Casino Resort. While River Rock did improve its slot machine revenues, the property experienced a 5.3 percentage point decrease in table hold percentage when compared to the prior year fourth quarter's record 25.0%. River Rock also witnessed a 12% decline in table drop, mainly as a result of decreased high limit table play volume."

"Great Canadian's financial results for the fourth quarter of 2015 reflect the contribution from Casino New Brunswick, which the Company acquired on October 1, 2015.  We were excited to welcome more than 400 new colleagues and believe this quarter's strong contribution is the first of many that property will make over the years to come."

"On December 17, 2015, we successfully renovated and rebranded Fraser Downs Racetrack and Casino in Surrey, British Columbia. The new facility, known as "Elements Casino," features gaming, facility, and hospitality enhancements throughout the property, including a buffet and entertainment lounge.  We are excited to have improved this property's entertainment offerings and position within Surrey, one of Canada's fastest growing cities."

"During the fourth quarter, the Company repurchased and cancelled 1.9 million common shares at an average price of $15.97. Throughout the year, the Company repurchased and cancelled a total of 5.5 million common shares. As a result, we increased the ownership percentage of our existing shareholders by 7.9% over the course of 2015."  

"On January 11, 2016, a partnership in which the Company now owns a 90.5% share completed its previously announced acquisition of OLG's Gaming Bundle 2 (East) and signed an associated 20-year casino operating and services agreement with OLG.  The existing gaming properties acquired within the East Gaming Bundle consist of Shorelines Casino Thousand Islands (formerly OLG Casino Thousand Islands) and Shorelines Slots at Kawartha Downs (formerly OLG Slots at Kawartha Downs), as well as a new build opportunity to service both the City of Belleville and the municipality of Quinte West. We have already begun construction of this facility in Belleville."

"We are excited to be the first owners of a gaming bundle arising from the modernization of gaming in Ontario.  We were also recently notified by OLG that two partnerships in which the Company holds interests have been pre-qualified to submit RFPs for the Southwest Gaming Bundle and the Greater Toronto Area Gaming Bundle. We look forward to these opportunities to continue to participate in the future of gaming in Ontario."

"Great Canadian concluded 2015 with 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 other potential opportunities in Ontario and elsewhere, we will also continue to efficiently manage our operations and explore additional options to grow our business."

Great Canadian will host a conference call for investors and analysts today, March 9, 2016, at 2:00 PM Pacific Time in order to review the financial results for the period ended December 31, 2015. To participate in the conference call, please dial 416-764-8688, 778-383-7413, or toll free at 1-888-390-0546 (Passcode: 50216403).  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, Nova Scotia, New Brunswick, and Washington State. The Company's 19 gaming properties, which consist of twelve casinos, including two with a Four Diamond resort hotel, four horse racetrack casinos and three community gaming centres. 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 million in our communities, and in 2014, over 1,200 charitable organizations were supported by Great Canadian. In each Canadian gaming jurisdiction, a significant portion of gross gaming revenue from gaming facilities goes back directly to provincial governments for the purpose of supporting programs like healthcare, education and social services. Further information is available on the Company's website, www.gcgaming.com.

Please refer to the Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") at www.gcgaming.com (available on March 9, 2016) or www.sedar.com (available on March 10, 2016) 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.

GREAT CANADIAN GAMING CORPORATION
Consolidated Statements of Earnings
(Unaudited - Expressed in millions of Canadian dollars, except for per share information)

		Fourth Quarter					Twelve Months
		2015		2014	% Chg		2015		2014		% Chg
Gaming revenues		$	82.0	$  79.9	3%		$	310.2	$	308.4	1%
Facility Development Commission		8.9		9.7	(8%)		36.9		37.7		(2%)
Hospitality, lease and other revenues		35.2		28.6	23%		119.9		108.4		11%
Racetrack revenues		3.5		3.6	(3%)		14.5		14.6		(1%)
		129.6		121.8	6%		481.5		469.1		3%
Less: Promotional allowances		(8.5)		(6.1)	39%		(27.7)		(22.6)		23%
Revenues		121.1		115.7	5%		453.8		446.5		2%
Human resources		43.3		42.3	2%		165.0		164.8		0%
Property, marketing and administration		32.7		26.4	24%		108.2		101.6		6%
		76.0		68.7	11%		273.2		266.4		3%
Adjusted EBITDA		45.1		47.0	(4%)		180.6		180.1		0%
Human resources as a % of Revenues before  Promotional allowances		33.4%		34.7%			34.3%		35.1%
Adjusted EBITDA as a % of Revenues		37.2%		40.6%			39.8%		40.3%
Amortization		11.2		10.3			40.1		45.3
Share-based compensation		0.6		1.4			4.3		4.8
Impairment (reversal) of long-lived assets		-		0.5			-		(4.7)
Interest and financing costs, net		7.8		7.7			31.6		31.6
Restructuring and other		2.1		0.2			6.9		0.8
Other expenses		(0.8)		(1.5)			(4.7)		(2.4)
Income taxes		6.6		6.8			27.8		26.3
Shareholders' net earnings		$	17.6	$  21.6	(19%)		$	74.6	$	78.4	(5%)
Shareholders' net earnings per common share
	Basic	$	0.27	$  0.32			$	1.10	$    1.16
	Diluted	$	0.26	$  0.31			$	1.08	$    1.12
Weighted average number of common shares (in thousands)
	Basic	65,553		68,421			67,664		67,864
	Diluted	66,553		70,598			69,151		69,789

GREAT CANADIAN GAMING CORPORATION
Consolidated Statements of Financial Position
(Unaudited - Expressed in millions of Canadian dollars)

			December 31,			December 31,
			2015			2014
Assets
Current
	Cash and cash equivalents		$	207.5		$	330.6
	Accounts receivable		7.3			6.3
	Income taxes receivable		0.4			-
	Prepaids, deposits and other assets		8.1			7.4
			223.3			344.3
Property, plant and equipment			638.2			574.0
Intangible assets			81.4			69.8
Goodwill			22.6			21.1
Deferred tax assets			9.6			8.9
Cash on deposit with Canada Revenue Agency			20.2			-
Other assets			2.8			2.2
			$	998.1		$	1,020.3
Liabilities
Current
	Accounts payable and accrued liabilities		$	66.6		$	66.5
	Income taxes payable		-			7.2
	Other liabilities		2.9			2.6
			69.5			76.3
Long-term debt			443.0			442.0
Deferred credits, provisions and other liabilities			25.9			27.4
Deferred tax liabilities			80.1			74.3
			618.5			620.0
Shareholders' equity
Share capital and reserves			310.2			318.8
Accumulated other comprehensive income			3.3			1.1
Retained earnings			65.7			80.4
Equity attributable to shareholders of the company			379.2			400.3
Non-controlling interests			0.4			-
Total equity			379.6			400.3
			$	998.1		$	1,020.3

GREAT CANADIAN GAMING CORPORATION
Adjusted Shareholders' Net Earnings
(Unaudited - Expressed in millions of Canadian dollars)

The current and prior periods' shareholders' net earnings included some items of note, which are summarized in the following adjusted shareholders' net earnings table:

				Fourth Quarter				Twelve Months
				2015	2014	% Chg		2015	2014	% Chg
Shareholders' net earnings				$17.6	$21.6	(19%)		$74.6	$78.4	(5%)
	Items of note
		Impairment (reversal) of long-lived assets		-	0.5			-	(4.7)
		Rebranding and pre-opening costs for Elements Casino		0.5	-			0.7	-
		FDC revenues previously deferred at Fraser Downs		-	-			-	(0.2)
		Restructuring severance costs		-				3.1	0.4
		Uneconomic lease provision due to Kent casino closure		-	-			0.8	-
		Jackpot and marketing fund liabilities reversed due to Kent casino closure		-	-			(0.3)	-
		Non-recurring payment received for right of way access		-	-			(0.5)	-
		Other		0.2	-			0.6	-
		Income taxes on the above items of note		(0.2)	(0.1)			(1.2)	1.3
Adjusted shareholders' net earnings ^(1)				$18.1	$22.0	(18%)		$77.8	$75.2	3%
^(1)Adjusted shareholders' net earnings is a non-IFRS measure as described in the disclaimer section of this press release.
Adjusted shareholders' net earnings per common share
	Basic			$0.28	$0.32			$1.15	$1.11
	Diluted			$0.27	$0.31			$1.13	$1.08
Weighted average shares outstanding
	Basic			65,553	68,421			67,664	67,864
	Diluted			66,553	70,598			69,151	69,789

After adjusting for the above items of note, the Company's adjusted shareholders' net earnings decreased by $3.9 million in the fourth quarter and increased by $2.6 million in 2015, when compared to the same periods 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 (including participation in Ontario's gaming modernization program), 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 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.  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 (including those that impact VIP play); 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; actual and possible reassessments of the Company's prior tax filings by tax authorities; the results of the Company's notices of objection challenging reassessments received by the Canada Revenue Agency; the Company's tax position on its facility development commission prevailing; 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; 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 2015, 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.  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, restructuring and other, and foreign exchange gain and other.  Adjusted EBITDA is derived from the consolidated statements of earnings, and can be computed as revenues 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 the 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 impairment (reversal) of long-lived assets, rebranding and pre-opening costs for Elements Casino, 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, non-recurring payment received for right of way access, 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
[phone]
Website: www.gcgaming.com  

SOURCE Great Canadian Gaming Corporation

For enquiries: [email protected] or Ms. Tanya Ruskowski, Executive Assistant to the President and Chief Executive Officer and the Chief Financial Officer, [phone]; For media enquiries: Mr. Chuck Keeling, Vice-President, Stakeholder Relations and Responsible Gaming, [phone]