Not intended for distribution to U.S. newswire services or for dissemination in the U.S.
RED DEER, AB / ACCESSWIRE / November 10, 2020 / Gamehost Inc. (TSX:GH)
Management and Directors of Gamehost Inc. (the "Company") present results for the nine and three month periods ended September 30, 2020 (the "Period" and "Quarter" respectively).
Operating revenue for the Quarter was down 40.2% from the prior year or down $6.8 million to $10.1 million. Shareholder profit for the Quarter was down 23.7% from the prior year or down $0.9 million to $2.9 million for earnings per common share of $0.12 versus earnings per common share of $0.16. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") that is attributable to shareholders of the Company ("EBITDA to Shareholders") was down 26.9% to $4.9 million versus $6.7 million in the year ago quarter.
All three of the Company's casinos reopened for table play within a week of the AGLC lifting restrictions September 4, 2020. Results include a full Quarter of slot operations and a partial month of table operations. All Gamehost properties are operating with enhanced health and safety protocols to limit the risk of transmission of the COVID-19 virus. The Company is taking extra precaution and requiring mandatory face coverings at all of our casinos though some of the municipalities in which we operate do not require it. Guests have expressed appreciation for the Company's higher health and safety measures.
Alberta has taken a more rapid approach to relaunching economic activity than some of its provincial peers. The province moved into Stage 2 of an economic relaunch plan on June 12, 2020. For a period of time following entering Stage 2, COVID-19 transmission remained reasonably stable. Like many other jurisdictions, Alberta is now seeing an upward trend in COVID-19 cases which is exacerbated as we enter the seasonal flu season. Alberta's relaunch strategy monitors all regions for COVID-19 trends and includes targeted provisions for enhanced restrictions where deemed necessary. None of the jurisdictions in which we operate are currently subject to any enhanced restrictions imposed by the province.
The Company's dividend remains temporarily suspended. A decision to reinstate the dividend in whole or in part will be reviewed at regular intervals by the board of directors. The Company is profitable and cash flow positive. Surplus cash is being used to stay active on our normal course issuer bid while valuations are attractive. Since the end of the last Quarter, the Company has repurchased 437,286 shares at prices averaging $5.31 per share.
Construction has begun on a $3.0 million, 7,500 square foot expansion to gaming and non-gaming amenities at the Deerfoot Casino with an expected completion in spring of 2021. The Company has also received development permit approval from the AGLC and the Regional Municipality of Wood Buffalo for a $3.5 million, 6,400 square foot expansion of Boomtown Casino. The Boomtown project will include a full exterior facelift as well as an expansion and interior refresh for all non-gaming amenities.
Gamehost is being proactive to minimize the continued risk from COVID-19 to our operations but realistic to the possibilities with contingency plans in place. Knowing with certainty the GOA's actions regarding COVID-19 restrictions further than a few days ahead is not reasonably assured. The Company and its employees are grateful for the federal and provincial relief programs which have been significant. We are pleased with the confidence exhibited by our customer base since reopening. Along with the rest of humanity, we look forward to an effective vaccine and/or treatment for COVID-19. Until then, stay safe by continuing to follow all health authority guidelines.
Gamehost Inc.
Financial Highlights
Unaudited - Canadian dollars (millions except per share figures)
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nine months ended September 30
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three months ended September 30
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2020
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2019
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% Change
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2020
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2019
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% Change
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Operating revenue
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$ 25.7
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$ 50.7
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(49.3%)
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$ 10.1
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$ 16.9
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(40.2%)
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Cost of sales
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Other
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(16.5)
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(28.6)
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(5.8)
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(9.2)
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Depreciation
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(2.3)
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(2.4)
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(0.8)
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(0.8)
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(18.8)
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(31.0)
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(6.6)
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(10.0)
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Gross profit (loss)
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6.9
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19.7
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(65.0%)
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3.5
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6.9
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(49.3%)
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Administrative expenses
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Other
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(1.7)
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(2.2)
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(0.6)
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(0.7)
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Depreciation
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(0.9)
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(0.9)
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(0.3)
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(0.3)
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(2.6)
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(3.1)
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(0.9)
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(1.0)
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Profit (loss) from operating activities
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6.3
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16.7
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(62.3%)
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4.1
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5.9
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(30.5%)
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Fair value adjustment
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(0.6)
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-
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-
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-
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Net finance costs
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(1.1)
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(1.6)
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(0.4)
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(0.5)
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Profit (loss) before income tax
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4.6
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15.1
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3.7
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5.4
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Income tax (expense) recovery
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(0.8)
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(2.5)
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(0.6)
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(1.3)
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Profit (loss)
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3.8
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12.6
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(69.8%)
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3.1
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4.1
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(24.4%)
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Profit (loss) attributable to:
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Shareholders
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3.5
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11.8
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(70.3%)
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2.9
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3.8
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(23.7%)
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Non-controlling interest
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0.3
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0.8
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0.2
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0.3
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3.8
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12.6
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3.1
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4.1
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Earnings (loss) per share
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Basic and fully diluted
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$ 0.15
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$ 0.49
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(69.4%)
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$ 0.12
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$ 0.16
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(25.0%)
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Weighted average number of common shares outstanding
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Basic
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24.0
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24.3
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23.7
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24.3
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Fully diluted
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24.0
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24.3
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23.7
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24.3
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EBITDA to Shareholders
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$ 9.1
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$ 19.2
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(52.6%)
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$ 4.9
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$ 6.7
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(26.9%)
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EBITDA to Shareholders %
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34.3%
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39.6%
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44.5%
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41.6%
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September 30, 2020
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December 31, 2019
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Cash
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15.7
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15.4
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1.9%
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Total assets
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172.8
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176.2
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(1.9%)
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Total debt
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48.7
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45.6
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6.8%
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This press release may contain certain "forward-looking information" or statements within the meaning of applicable securities legislation and may contain words such as "anticipates", "believes", "could", "expects", "indicates", "plans", "withstand", "further" or other similar expressions that suggest future outcomes or events. 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 any statements that address expectations related to future economic outcomes or the Company's dividend. Forward-looking statements reflect reasonable assumptions made on the basis of management's current beliefs with information known by management at the time of writing. Many factors could cause actual results to differ from the results discussed in forward-looking statements. Actual results may not be consistent with these forward-looking statements.
The Company has included non-International Financial Reporting Standards ("non-IFRS") measures in this press release. EBITDA to Shareholders, as defined by the Company, means earnings before interest and financing costs, income taxes, depreciation and amortization, and foreign exchange gain. The Company believes EBITDA is a useful measure because it provides information to management and investors about the Company's performance in generating operating cash flow to fund working capital needs, service debt obligations, fund future capital expenditures and support dividend policy. Readers are cautioned that non-IFRS measures do not have any standardized meaning prescribed by IFRS and should not be taken as alternatives to net earnings measured in accordance with IFRS. The Company's method of calculating non-IFRS measures may not be comparable to similarly titled measures used by other reporting entities. Dividend pay-out ratio, means EBITDA less all scheduled principal payments on debt, interest expense, and income tax expense. The Company believes this measure to be useful to management and investors because it provides insight into the sustainability of the Company's dividend.
Gamehost is a corporation established under the laws of the Province of Alberta. The Company's operations are all located in the Province of Alberta, Canada. Operations of the Company include the Boomtown Casino in Ft. McMurray, the Great Northern Casino, Service Plus Inns & Suites hotel, Encore Suites hotel and a strip mall all located in Grande Prairie. The Company also holds a 91% ownership position in Deerfoot Inn & Casino Inc. in Calgary.
These condensed interim consolidated financial results include the accounts of Gamehost Inc. and its subsidiaries; however, they do not include all disclosures normally provided in annual consolidated financial statements and should be read in conjunction with the 2019 annual consolidated financial statements. Further, while the financial figures included in this announcement have been computed in accordance with IFRS applicable to annual periods, this announcement does not contain sufficient information to constitute an interim or annual financial report. The company will file an interim financial report for the nine and three months ended September 30, 2020. This report will be filed in its entirety, along with historical financial reports on the Company's website at www.gamehost.ca and on SEDAR at www.sedar.com along with the Company's other continuous disclosure documents, when they are available.
Gamehost common shares trade on the Toronto Stock Exchange (TSX) under the symbol GH. For more information, contact:
Craig M. Thomas or Darcy J. Will
P (877) 703-4545
F (403) 340-0683
E [email protected]
SOURCE: Gamehost Inc.