Canlan Reports Year-End 2012 Financial Results and Continuation of Dividend Policy

- Same store revenue and EBITDA growth of 3%, increased quarterly dividends, and new Sportsplex in Mississauga, Ontario highlight FY2012 -

BURNABY, BC, March 22, 2013 /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 12-month period ended December 31, 2012.

FY 2012 Key Financial Metrics

In thousands except share data	FY2012	FY2011	Change
Total revenue	$72,823	$71,966	+1%
Same store revenue	$70,340	$68,306	+3%
EBITDA^1	$9,757	$9,848	-1%
Same store EBITDA	$10,216	$9,883	+3%
Net earnings before taxes	$2,287	$4,113	-44%
Net earnings after taxes	$1,295	$2,844	-54%
Net earnings per share	$0.10	$0.21	-52%
	Dec. 31, 2012	Dec. 31, 2011
Total Assets	$102,824	$104,740	-2%
Cash and Cash equivalents	$12,900	$13,886	-7%
Total Interest bearing debt	$39,018	$41,972	-7%

"In 2012, we achieved an important operational milestone with the opening of Canlan Sportsplex, located in Mississauga, Ontario, our first non-ice related facility," said Joey St-Aubin, President and CEO of Canlan Ice Sports.  "The opening of Canlan Sportsplex, a facility that capitalizes on the recent growth in turf and court sports across the country, is an excellent example of our ability to identify exciting opportunities to grow our portfolio of facilities in markets where the demand for our expertise in the kind of sports and entertainment products and services we offer is strong."

FY2012 Operational and Financial Highlights

			-				Revenue of $72.8 million for FY2012, an increase of 1% over FY2011
			-				EBITDA of $9.8 million for FY2012 consistent with FY2011Net earnings of $1.3 million for FY2012 compared to $2.8 million for FY2011
			-				Same store revenue of $70.3 million for FY2012 , up 3% over FY2011
			-				Same store EBITDA of $10.2 million for FY2012, up 3% over FY2011
			-				Expanded its portfolio of facilities by opening Canlan's first non-ice facility called Canlan Sportsplex located in Mississauga, Ontario.  The facility houses two indoor soccer fields, volleyball courts, a boarded sport court and a fully-licensed food and beverage areaIntroduced Club Hockey Canada to its Adult Safe Hockey League (ASHL); a loyalty program in partnership with Hockey CanadaIncreased its quarterly dividend from $0.015 to $0.02 per common shareReduced interest bearing debt by $3.0 million

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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. Canlan reconciles EBITDA to its net earnings.

Dividend Policy
Canlan's Board of Directors has approved the continuation of the Company's quarterly dividend policy and declared eligible dividends totaling $0.02 per common share that will next be paid on April 17, 2013 to shareholders of record at the close of business March 29, 2013.  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 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 $72.8 million for the 12-month period ended December 31, 2012 up 1.2% from $72.0 million for the corresponding period of 2011.  The revenue growth was primarily due to an increase in ice related revenue such as contract ice/field rentals, adult hockey leagues, instructional programs and youth hockey leagues.

Revenue from the Adult Safe Hockey League (ASHL), the Company's largest component of ice revenue, was $24.4 million for the year, down slightly from $24.5 million in the same period last year.   The relatively small decrease in ASHL revenue was mainly due to the sale of Ice Sports Regina in September 2011 which decreased revenue by $0.6 million for year, the loss of one of the satellite leagues which decreased revenue by approximately $0.4 million and the closure of Ice Sports Vineland after the first quarter which decreased revenue by approximately $0.1 million. These decreases were offset by an increase in ASHL revenue from Ice Sports Romeoville, purchased in June 2011, and by pricing.  On a same store basis, ASHL revenue increased by $0.6 million or 2.6% for the fiscal 2012 year. 

Food and beverage revenue for FY2012 was $11.3 million, relatively the same as in FY2011 when it was $11.6 million.  While F&B sales grew by a combined 6.8% in the Winnipeg and Saskatoon markets, revenue in the Montreal facility decreased by 13.4% due to reduced traffic in this facility as a result of new ice rink competition in the area.  F&B sales in the B.C. and Ontario markets, as well as Fort Wayne, Indiana remained steady compared to FY2011.

Direct operating expenses were $57.9 million, in-line with FY2011's expenses of $57.8 million. The slight increase was attributable to an increase in labour costs which were offset by a reduction in direct customer service expenses and utilities.

Corporate general and administrative expenses totaled $5.2 million, up 20.7% from $4.3 million in FY2011, due mainly to the accrual of $0.5 million in compensation costs to account for the changes in fair values of stock appreciation rights.

EBITDA was $9.8 million for the fiscal year, consistent with EBITDA for FY2011.

Canlan generated net income before taxes of $2.3 million compared to $4.1 million in FY2011.  In FY2011, net earnings were increased by the recognition of a $2.6 million one time gain on sale of two facilities. Pre-tax earnings before the gain on sale of assets were $1.5 million or $0.12 per share in 2011 compared to $2.3 million or $0.17 per share in FY2012.

Net earnings for the fiscal year were $1.3 million or $0.10 per share fully diluted compared to $2.8 million or $0.21 per share fully diluted. 

Q4 2012 Key Financial Metrics

In thousands except share data	2012	2011	Change
Total revenue	$20,335	$20,555	-1%
EBITDA	$4,480	$4,441	+1%
Net earnings before taxes	$2,645	$2,256	+17%
Net earnings after taxes	$1,805	$1,881	-4%
Net earnings per share	$0.14	$0.14	-

Review of Q4 2012 Financial Results
On a three-month basis, Canlan generated consolidated revenue of $20.3 million for FY2012, down 1.1% from $20.6 million in FY2011. Revenue from the ASHL decreased $0.2 million or 3.0% from FY2011.  That decrease was partially offset by an increase in contract revenue of $0.1 million or 2.4% from FY2011.

For the fourth quarter of FY2012 operating expenses were $14.3 million, down 5.4% from $15.1 million for FY2011.  The year-over-year decrease was mainly due to an approximate $0.5 million roof maintenance cost incurred during the FY2011 fourth quarter.

In the fourth quarter of FY2011, general and administrative expenses totaled $1.6 million, an increase of $0.6 million or 54.9% compared to FY2011 as a result of a non-cash compensation expense relating to the Company's stock appreciation rights program.

EBITDA for the fourth quarter FY2012 was $4.5 million, up slightly from $4.4 million for the prior period.

Canlan generated earnings before taxes of $2.6 million for Q4 FY2012 compared to $2.3 million for Q4 FY2011.

For the quarter ended December 31, 2012, Canlan generated net earnings of $1.8 million or $0.14 per fully diluted share.  This compares to net earnings of $1.9 million or $0.14 per share for same period of FY2011.

Outlook
"We further reduced our mortgage debt, invested $1.8 million on improvements in our new Sportsplex facility in Mississauaga, and spent $2.5 million on capital expenditures in our existing buildings.  In addition, we provided to our shareholders a return on their investment in the form of an increasing quarterly dividend this past year," said Mr. Michael Gellard, Canlan's CFO. "We continue to have a strong cash balance and available credit facilities, providing us with the financial flexibility to take advantage of opportunities that present themselves."

"As we move forward we will continue to pursue attractive opportunities to support our growth. This includes ice-based recreational facilities as well as continuing to broaden our scope to include facilities that support soccer, other turf and court sports.  We believe our core competencies in facility operations and programming are ideal as we look to meet the growing demand for the types of services we can offer to an ethnically diverse North American audience," said Mr. St-Aubin.

Canlan's financial statements and Management Discussion & Analysis for the period ended December 31, 2012 will be available via SEDAR on or before March 31, 2013 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 20 facilities in Canada and the United States with 58 ice surfaces, as well as indoor soccer fields, ball diamonds, curling rinks and volleyball courts.  To learn more about Canlan 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]