Canlan Reports Second Quarter 2012 Financial Results

- Same store revenue continues to grow -

BURNABY, BC, Aug. 10, 2012 /CNW/ - Canlan Ice Sports Corp. (TSX: ICE), industry-leading providers of recreational and multi sport facilities across North America, today announced its financial results for the three - and six-month period ended June 30, 2012.

Q2 2012 Key Financial Metrics

In thousands except share data	Q2 2012	Q2 2011	Change
Total revenue	$16,109	$16,277	-1%
EBITDA^1	$332	$724	-54%
Loss before taxes	$1,600	$1,215	+32%
Loss after taxes	$1,213	$985	+23%
Loss per share	$0.09	$0.07	+29%
	June 30, 2012	June 30, 2011
Total Assets	$100,499	$101,638	-1%
Cash and Cash equivalents	$9,672	$2,654	+264%
Total Interest bearing debt	$41,228	$44,821	-8%

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¹ Earnings before interest, taxes, depreciation and amortization (EBITDA) is often used as a measure of financial performance. However, EBITDA is a not a term that has specific meaning in accordance with IFRS, and may be calculated differently by other companies.

"Same store revenue for the quarter was solid and the ramp up in revenue from Ice Sports Romeoville was ahead of schedule," said Joey St-Aubin, President and CEO of Canlan Ice Sports.  "We continue to reduce our debt while identifying exciting opportunities to grow our portfolio of facilities in markets where demand for the kind of sports and entertainment products and services we offer is strong."

Q2 2012 Operational and Financial Highlights

• Same store revenue increased 1.5%
• Total revenue was $16.1 million for Q2 2012, 1% less than Q2 2011
• EBITDA was $0.3 million for Q2 2012
• Announced the addition of Canlan Sportsplex, a 55,000 sq. ft. multi-sports complex set to open in the fall in Mississauga, Ontario focusing on field and court sports
• Increased its quarterly dividend to $0.02 per share from $0.015 per share
• Cash balance at quarter end was $9.7 million compared to $2.7 million a year ago
• Reduced interest bearing debt by $3.6 million year-over-year

Dividend Policy
Canlan's Board of Directors has approved the continuation of the Company's quarterly dividend and declared eligible dividends totaling $0.02 per common share that will next be paid on October 17, 2012 to shareholders of record at the close of business September 30, 2012.  Canlan's Board of Directors reviews the Company's dividend policy on a quarterly basis.  Canlan's dividend is designated as an "eligible" dividend under the Income Tax Act (Canada) and any corresponding provincial legislation. Under this legislation, individuals resident in Canada may be entitled to enhanced dividend tax credits, which reduce income tax otherwise payable.

Review of Q2 2012 Financial Results
Canlan derives its revenue from the rental of its playing surfaces, registrations for internal programming, food and beverage sales, sports stores sales, tournament registrations, management and consulting fees and other related fees.

Canlan reported consolidated revenue of $16.1 million for the three month period ended June 30, 2012, down 1.0% from $16.4 million for the corresponding period of 2011.  The decline in total revenue was primarily due to the sale of two facilities during the latter half of 2011.

Same store revenue of $15.7 million increased by $0.2 million or 1.5% compared to 2011.  The increase was principally due to augmented revenue from the summer adult recreational hockey league (ASHL) and increased sponsorship and advertising revenue.

The increase in summer ASHL and sponsorship was partially offset by a decrease in same store food & beverage revenue.  F&B sales of $3.0 million declined by $0.1 million or 3.4% compared to the prior year mainly due to reduced third-party tournament traffic.

In June of 2011, Canlan purchased a three-pad arena in Romeoville, Illinois.  Ice Sports Romeoville added approximately $0.4 million to total sales for the quarter, which was slightly ahead of expectations.

On a six-month basis, Canlan generated consolidated revenue of $37.3 million for FY2012, up 1.8% from $36.6 million for FY2011. Same store revenue of $36.0 million increased by $1.1 million or 3.3% compared to 2011.  The improvement in same store revenue was mainly due to increased ASHL revenue (Winter and Summer seasons combined) and third party contract ice rentals.

Direct operating expenses for the quarter were $14.5 million, consistent with Q2 2011. On a same store basis, operating costs of $14 million increased by $0.3 million or 2.4% mainly due to increased labour, and repairs and maintenance costs.  Ice Sports Romeoville added $0.4 million to direct operating costs, in line with management's expectations.

For the six-month period of FY2012 operating expenses were $29.6 million, up 2.1% from $29.0 million for FY2011.  The year-over-year increase was due to higher wages, benefits and repair and maintenance expense.

Corporate general and administrative expenses totaled $1.3 million, up 18% from $1.1 million for Q2 2011 due mainly to annual wage increases and professional fees.  On a six-month basis, general and administrative expenses totaled $2.5 million for FY2012 and $2.3 million for FY2011, respectively.

EBITDA was $0.3 million for the second quarter of the year versus $0.7 million for Q2 2011. The decrease in EBITDA was a result of the decrease in revenue and an increase in expenses.  EBITDA for the six-month period of FY2012 was $5.1 million, down 5.8% from $5.4 million for FY2011.

Canlan generated a net loss before taxes of $1.6 million, an increase from a net loss before taxes of $1.2 million in Q2 2011.  On a year-to-date basis, Canlan generated earnings before taxes of $1.3 million for FY2012 compared to earnings before taxes of $1.5 million for FY2011.

Net loss for the second quarter of 2012 was $1.2 million or $0.09 per share. In the second quarter of 2011, Canlan generated a net loss of $1.0 million, or $0.07 per share.  For the six-month period of FY2012, Canlan generated net earnings of $654,000 or $0.05 per fully diluted share.  This compares to net earnings of $847,000 or $0.06 per fully diluted share for same period of FY2011. 

At June 30, 2012, the Company held cash and cash equivalents of $9.7 million and interest bearing debt totaling $41.2 million. This compares to $2.7 million and $44.8 million, respectively, at June 30, 2011.

"We continue to maintain a strong balance sheet while rewarding investors with an increase to our quarterly dividend to $0.02 per quarter," said Mr. Michael Gellard, Canlan's CFO. "The Company's strong and flexible financial position enabling us to act on opportunities such as the new Mississauga facility that meet our criteria and add significant value."

"We began the lease of our newest facility, Canlan Sportsplex - Mississauga, in the second quarter of 2012," said Mr. St-Aubin.  "We are excited to turn what is currently a vacant warehouse, into a premier 55,000 sq. ft. full service indoor recreation facility located in an ideal high profile growing market."

Canlan's financial statements and Management Discussion & Analysis for the period ended June 30, 2012 will be available via SEDAR on or before August 15, 2012 and through the Company's website, www.icesports.com.

About Canlan
Canlan Ice Sports Corp. is the North American leader in the development, operations and ownership of multi-purpose recreation and entertainment facilities. We are the largest private sector owner and operator of recreational ice sports facilities in North America and currently own and/or manage 21 facilities in Canada and the United States with 60 ice surfaces, as well as indoor soccer fields, ball diamonds, curling rinks and volleyball courts.  To learn more please visit www.icesports.com.

Canlan Ice Sports Corp. is listed on the Toronto Stock Exchange under the symbol "ICE."

Caution concerning forward-looking statements
Certain statements in this MD&A may constitute ''forward looking'' statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this MD&A, such statements may use such words as ''may'', ''will'', ''expect'', ''believe'', ''plan'' and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this MD&A. These forward looking statements involve a number of risks and uncertainties. Some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward looking statements are the effects of, as well as changes in: international, national and local business and economic conditions; political or economic instability in the Company's markets; competition; legislation and governmental regulation; and accounting policies and practices. The foregoing list of factors is not exhaustive.

 

SOURCE: Canlan Ice Sports Corp.

Canlan Ice Sports Corp.
Michael F. Gellard
Senior Vice President & CFO
604 736 9152  

TMX Equicom
Philip Dale 
416 815 0700 ext. 253 
[email protected]