Great Canadian Gaming announces second quarter 2012 results
RICHMOND, BC, Aug. 9, 2012 /CNW/ - Great Canadian Gaming Corporation [TSX:GC] ("Great Canadian" or "the Company") today announced its financial results for the three month period ended June 30, 2012 ("second quarter of 2012").
SECOND QUARTER 2012 HIGHLIGHTS
(Amounts presented in millions of Canadian dollars, except for per share information)
- Revenues of $101.3 million, a 2% increase when compared to the prior year
- EBITDA(1) decreased by $2.5 million, or 7%
- Shareholders' net earnings of $2.7 million
| Second Quarter | First Half | |||||||||||||||||||
| 2012 | 2011 | % Chg | 2012 | 2011 | % Chg | |||||||||||||||
| Revenues | $ | 101.3 | $ | 99.5 | 2% | $ | 204.1 | $ | 191.5 | 7% | ||||||||||
| EBITDA (1) | $ | 35.3 | $ | 37.8 | (7%) | $ | 74.3 | $ | 69.3 | 7% | ||||||||||
| EBITDA as a % of Revenues | 34.8% | 38.0% | 36.4% | 36.2% | ||||||||||||||||
| Net earnings (loss) | $ | 2.7 | $ | 10.3 | (74%) | $ | (29.2) | $ | 16.0 | |||||||||||
| Net earnings (loss) per common share | ||||||||||||||||||||
| Basic | $ | 0.03 | $ | 0.12 | $ | (0.36) | $ | 0.19 | ||||||||||||
| Diluted | $ | 0.03 | $ | 0.12 | $ | (0.36) | $ | 0.19 | ||||||||||||
| Total assets | $ | 917.8 | $ | 965.7 | (5%) | |||||||||||||||
| Long-term debt & Derivative liabilities, excluding current portion | $ | 395.1 | $ | 392.5 | 1% | |||||||||||||||
| (1) | EBITDA is a non-IFRS measure as defined in the Disclaimer section of this press release. |
For the second quarter of 2012, Great Canadian Gaming Corporation recorded revenues of $101.3 million, a $1.8 million, or 2%, increase from the second quarter of 2011. EBITDA was $35.3 million, a $2.5 million, or 7%, decrease from the second quarter of 2011.
The increase in consolidated revenues was primarily due to increases at both the River Rock Casino Resort ("River Rock") and the Other BC Casinos, when compared to the prior year. Boulevard Casino's revenues continue to show signs of stabilization, despite the significant, prolonged disruption from proximate highway construction that is expected to continue until late 2013. These improvements were partially offset by small decreases in revenues at the remaining properties.
The $2.5 million decrease in EBITDA in the second quarter of 2012 was primarily due to decreased revenues at certain properties, combined with increases in both human resources costs and property, marketing and administration expenses.
Net earnings (loss) decreased by $7.6 million in the second quarter of 2012, when compared to the second quarter of 2011, primarily due to a non-recurring expense of $11.0 million ($8.3 million after tax) associated with the settlement of a long-standing legal dispute with a former Ontario-based consultant.
"Great Canadian's financial results for the second quarter of 2012 continue to reflect the positive performance of both River Rock and our Other BC Casinos," stated Rod N. Baker, Great Canadian's President and Chief Executive Officer. "River Rock benefited from incremental revenues contributed by 'The Hotel at River Rock', which continues to trend positively since its October 2011 opening. River Rock also continues to improve its gaming performance, producing an increase in table drop. This improvement can be attributed to our recent enhancements of the property's hospitality and gaming offerings.
"Revenues at the Boulevard Casino continue to provide evidence of stabilization. Boulevard has witnessed modest increases in both table drop and slot coin-in during the last two quarters, when compared to the prior year. While we are encouraged by these results, we recognize that the property continues to be negatively impacted by prolonged disruption from construction on provincial highway enhancements adjacent to the facility, a challenging local economy, and proximate competition. Commencing in the third quarter of 2012, we will refresh and rebrand both Boulevard and its amenities. This redevelopment will assist the property in not only attracting new patrons, but also bringing back those guests who have been inconvenienced by the highway construction.
"On July 24, 2012, Great Canadian completed its debt refinancing, issuing $450.0 million of 6.625% Senior Unsecured Notes due July 25, 2022. The use of proceeds include repayment of our Tranche B term loans that were due in 2014, repurchase or redemption of our senior subordinated notes that were due in 2015, settlement of the related derivative liabilities, and general corporate purposes. We also extended the term of our $350.0 million undrawn revolving credit facility by one year to July 21, 2017.
"At the close of the second quarter of 2012, Great Canadian had $140.0 million of cash and cash equivalents. On July 6, 2012, we initiated a substantial issuer bid to purchase up to 10.0 million of the Company's outstanding common shares at a price of $10.00 per share using our surplus cash on hand."
Mr. Baker concluded, "With our long-term financing completed and a strong balance sheet in place, Great Canadian possesses significant flexibility. This flexibility will allow us to take advantage of future growth opportunities for value creation."
Great Canadian will host a conference call for investors and analysts today, August 9, 2012, at 2:00 PM Pacific Time to review the financial results for the period ended June 30, 2012. To participate in the conference call, please dial 647-427-7450, or toll free at 888-231-8191 (Passcode: 12252487). 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; please allow 15 minutes to register and install any necessary software. A replay of the call will also be available at www.gcgaming.com.
ABOUT GREAT CANADIAN GAMING CORPORATION
Great Canadian Gaming Corporation is a multi-jurisdictional gaming, entertainment and hospitality operator with 17 gaming facilities, which include ten casinos, four horse racetrack casinos, three community gaming centres, and a Four Diamond hotel resort, located in British Columbia, Ontario, Nova Scotia and Washington State. As of June 30, 2012, the Company had approximately 4,100 employees in Canada and 600 in Washington State. Further information is available on the Company's website, www.gcgaming.com.
Please refer to the Condensed Consolidated Financial Statements and Management's Discussion and Analysis ("MD&A") at www.gcgaming.com (available on August 9, 2012) or www.sedar.com (available on August 10, 2012) 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 Results of Operations
(Unaudited - Expressed in millions of Canadian dollars, except for per share information)
| Second Quarter | First Half | |||||||
| 2012 | 2011 | % Chg | 2012 | 2011 | % Chg | |||
| Gaming revenues | $ 72.9 | $ 72.3 | 1% | $ 149.7 | $ 139.8 | 7% | ||
| Facility Development Commission | 7.9 | 7.9 | 0% | 16.8 | 15.5 | 8% | ||
| Hospitality and other revenues | 21.2 | 17.9 | 18% | 39.2 | 33.6 | 17% | ||
| Racetrack revenues | 4.3 | 5.3 | (19%) | 8.1 | 9.8 | (17%) | ||
| 106.3 | 103.4 | 3% | 213.8 | 198.7 | 8% | |||
| Less: Promotional allowances | (5.0) | (3.9) | 28% | (9.7) | (7.2) | 35% | ||
| Revenues | 101.3 | 99.5 | 2% | 204.1 | 191.5 | 7% | ||
| Human resources | 41.6 | 38.9 | 7% | 80.7 | 76.3 | 6% | ||
| Property, marketing and administration | 24.4 | 22.8 | 7% | 49.1 | 45.9 | 7% | ||
| 66.0 | 61.7 | 7% | 129.8 | 122.2 | 6% | |||
| EBITDA | 35.3 | 37.8 | (7%) | 74.3 | 69.3 | 7% | ||
| Human resources as a % of Revenues before Promotional allowances |
39.1% | 37.6% | 37.7% | 38.4% | ||||
| EBITDA as a % of Revenues | 34.8% | 38.0% | 36.4% | 36.2% | ||||
| Amortization | 13.1 | 14.6 | 25.9 | 29.0 | ||||
| Share-based compensation | 0.7 | 1.7 | 2.8 | 3.4 | ||||
| Business development and other | 0.6 | 0.1 | 0.6 | 0.4 | ||||
| Litigation settlement | 11.0 | - | 11.0 | - | ||||
| Impairment of long-lived assets | - | - | 54.2 | - | ||||
| Impairment of goodwill | - | - | 3.2 | - | ||||
| Interest and financing costs, net | 7.4 | 7.2 | 14.5 | 13.9 | ||||
| Foreign exchange gain and other | (0.8) | (0.2) | (1.1) | (0.2) | ||||
| Income taxes | 0.6 | 4.1 | (7.6) | 6.8 | ||||
| Net earnings (loss) | $ 2.7 | $ 10.3 | (74%) | $ (29.2) | $ 16.0 | |||
| Net earnings (loss) per common share | ||||||||
| Basic | $ 0.03 | $ 0.12 | $ (0.36) | $ 0.19 | ||||
| Diluted | $ 0.03 | $ 0.12 | $ (0.36) | $ 0.19 | ||||
| Weighted average number of common shares (in thousands) | ||||||||
| Basic | 79,075 | 83,093 | 80,720 | 83,004 | ||||
| Diluted | 80,488 | 84,691 | 80,720 | 84,649 | ||||
GREAT CANADIAN GAMING CORPORATION
Condensed Interim Consolidated Statements of Financial Position
(Unaudited - Expressed in millions of Canadian dollars)
| June 30, | December 31, | |||||||||||||
| 2012 | 2011 | |||||||||||||
| Assets | ||||||||||||||
| Current | ||||||||||||||
| Cash and cash equivalents | $ | 140.0 | $ | 134.7 | ||||||||||
| Restricted cash | 7.0 | 7.1 | ||||||||||||
| Accounts receivable | 8.7 | 8.9 | ||||||||||||
| Prepaids, deposits and other assets | 8.3 | 6.6 | ||||||||||||
| 164.2 | 157.3 | |||||||||||||
| Property, plant and equipment | 635.7 | 663.6 | ||||||||||||
| Intangible assets | 80.6 | 119.7 | ||||||||||||
| Goodwill | 20.3 | 23.5 | ||||||||||||
| Deferred tax assets | 10.1 | 9.1 | ||||||||||||
| Other assets | 6.9 | 2.9 | ||||||||||||
| $ | 917.8 | $ | 976.1 | |||||||||||
| Liabilities | ||||||||||||||
| Current | ||||||||||||||
| Accounts payable and accrued liabilities | $ | 71.4 | $ | 59.0 | ||||||||||
| Income taxes payable | - | 0.8 | ||||||||||||
| Other liabilities | 5.5 | 5.1 | ||||||||||||
| 76.9 | 64.9 | |||||||||||||
| Long-term debt | 332.7 | 332.6 | ||||||||||||
| Derivative liabilities | 62.4 | 66.3 | ||||||||||||
| Deferred credits, provisions and other liabilities | 24.5 | 23.7 | ||||||||||||
| Deferred tax liabilities | 53.2 | 66.2 | ||||||||||||
| 549.7 | 553.7 | |||||||||||||
| Equity | ||||||||||||||
| Share capital and contributed surplus | 345.1 | 356.5 | ||||||||||||
| Accumulated other comprehensive loss | (4.5) | (6.5) | ||||||||||||
| Retained earnings | 27.5 | 72.4 | ||||||||||||
| 368.1 | 422.4 | |||||||||||||
| $ | 917.8 | $ | 976.1 | |||||||||||
DISCLAIMER
This news 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 its 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 and their profitability, 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 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 service agreements with lottery corporations; changes to gaming laws that may impact our operational service agreements; pending, proposed or unanticipated regulatory or policy changes; unanticipated fines, sanctions and suspensions imposed on the Company by its regulators; impact of global liquidity and credit availability; 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 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 claims 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; and economic uncertainty and financial market volatility. 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 2011, and as identified in the Company's disclosure record on SEDAR at www.sedar.com. The forward-looking information in documents incorporated by reference speak only as of the date of those documents. 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 Company undertakes no obligation to publicly revise forward-looking information to reflect subsequent events or circumstances except as required by law. The forward-looking information contained herein is made as of the date hereof and is expressly qualified in its entirety by cautionary statements in this news release.
The Company has included non-International Financial Reporting Standards ("non-IFRS") measures in this news 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, business development and other, litigation settlement, impairment of long-lived assets and goodwill, and foreign exchange gain and other. EBITDA is derived from the condensed interim consolidated statements of earnings (loss), and can be computed as revenues less human resources expenses and property, marketing and administration expenses.
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]
Suite #350 - 13775 Commerce Parkway
Richmond, BC
V6V 2V4
(604) 303-1000
Website: www.gcgaming.com
SOURCE: Great Canadian Gaming Corporation
For investor enquiries:
[email protected]
or
Ms. Tanya Ruskowski
Executive Assistant to the President and Chief Executive Officer and the Chief Financial Officer
(604) 303-1000
For media enquiries:
Mr. Howard Blank
Vice-President, Communications, Entertainment & Responsible Gaming
(604) 512-6066
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