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RED DEER, AB / ACCESSWIRE / March 8, 2022 / Gamehost Inc. (TSX:GH) Management and Directors of Gamehost Inc. (the "Company") present results for the twelve and three month periods ended December 31, 2021 (the "Year" and "Quarter" respectively).
In year-over-year comparison for the Quarter, operating revenue was up 52.8% to $13.6 from $8.9 ($17.3 - 2019), EBITDA to Shareholders was up 9.3% to $4.7 from $4.3 ($6.5 - 2019). Earnings per share for the Quarter were $0.01 lower to $0.7 from $0.08 per share ($0.15 - 2019).
The Company's casinos operated under Alberta's Restrictions Exemption Program (REP) from the mid-point in September 2021 through the end of the Quarter. REP mandates entry only to patrons with proof of vaccination or those providing a recent negative COVID-19 test or medical exemption certificate. Additional limitations on food and beverage service were added later in the Quarter resulting in service being cut-off at 11:00PM and no service outside of seated areas with-in lounge or restaurants. Company hotels continued to operate with standard masking and physical distancing at check-in. Restrictions had a negative affect on patron visitation and length of patron visits. This was especially the case in Grande Prairie and to a lesser extent in Fort McMurray. Citizens in both of these regions have vaccination rates lower than the provincial average and pushed back hard on government mandated, COVID-19 related restrictions.
During the Quarter, work on two major expansion projects also depressed revenue generation. Both projects, a $4.4 million, 5,000 square foot expansion of gaming and non-gaming amenities at Deerfoot Casino and a $6.3 million, 6,687 square foot expansion of non-gaming amenities and complete exterior refurbishment at Rivers Casino were completed late in the Quarter. Both projects were impacted by COVID-19 related supply and inflationary pressures. The Company used surplus cash and revolving debt to finance the two projects. The Company received a $1.9 million payment for tenant allowances in Q1 2022. The Company is finalizing plans for a renovation at Great Northern Casino which should commence this coming spring. Plans include an exterior modernization and general interior refresh along with expanded food and beverage areas.
The Company repurchased 245,100 shares for an aggregate $2.0 million or average $7.95 per share before commissions during the Quarter. The Company's current normal course issuer bid is open to July 20, 2022 and management intends to continue purchasing shares as long as the trading price of the shares do not adequately reflect underlying value.
At the regular scheduled meeting of the board of directors held March 7, 2022 the board reinstated a dividend for shareholders which has been suspended since April 2020. The board declared a dividend for the month of March 2022, of $0.03/common share. The dividend will be paid on or about April 15, 2022. In it's decision, the board considered the waning impact of COVID-19 and the lifting of related provincial operating restrictions. Management presented the board with future cash flow projections with a view of putting funds aside for accelerated debt payments through 2022 and reserving additional cash for share repurchases if warranted. The board determined that restarting the dividend at a monthly rate of $0.03 per common share is a fiscally responsible starting point and will review the dividend policy on a quarterly basis.
To say the last two years in our industry has been a challenge would be an understatement. This is especially true for our dedicated front-line team who deliver the daily services that our success is built on. They have endured multiple openings and closings and adapted to ever-changing rules for operating safely. The resulting ebbs and surges in business activity created unpredictable work schedules. The Company directors and management extend our most sincere thank you, thank you, thank you.
Looking forward, a shift from pandemic phase to endemic phase, for Covid-19, appears to be taking shape. With each restriction lifted we observed an uptick in our business. More importantly, we see a lot of green shoots in the Alberta economy. Outside of the obvious benefits from higher oil and gas prices, heavy investment is being made in solar, wind and other green energy infrastructure throughout the province. Public and private investment in biofuels, film, information technology, construction and other industries, along with affordable housing, is driving higher immigration and lower unemployment. With optimism we are looking past these last two years to a bright Alberta future!
Gamehost Inc.
Financial Highlights
Unaudited - Canadian dollars (millions except per share figures)
| twelve months ended December 31 | three months ended December 31 | |||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||
Operating revenue | $ | 33.3 | $ | 34.6 | (3.8 | %) | $ | 13.6 | $ | 8.9 | 52.8 | % | ||||||||||||
Cost of sales | ||||||||||||||||||||||||
Other | (21.5 | ) | (22.5 | ) | (8.7 | ) | (5.8 | ) | ||||||||||||||||
Depreciation | (3.4 | ) | (3.0 | ) | (1.3 | ) | (0.8 | ) | ||||||||||||||||
| (24.9 | ) | (25.5 | ) | (10.0 | ) | (6.6 | ) | |||||||||||||||||
Gross profit (loss) | 8.4 | 9.1 | (7.7 | %) | 3.6 | 2.3 | 56.5 | % | ||||||||||||||||
Lease and other income | 4.6 | 4.1 | 0.8 | 2.1 | ||||||||||||||||||||
Administrative expenses | ||||||||||||||||||||||||
Other | (2.3 | ) | (2.3 | ) | (0.7 | ) | (0.6 | ) | ||||||||||||||||
Depreciation | (1.0 | ) | (1.1 | ) | (0.3 | ) | (0.3 | ) | ||||||||||||||||
| (3.3 | ) | (3.4 | ) | (1.0 | ) | (0.9 | ) | |||||||||||||||||
Profit (loss) from operating activities | 9.7 | 9.8 | (1.0 | %) | 3.4 | 3.5 | (2.9 | %) | ||||||||||||||||
Fair value adjustment | (0.5 | ) | (0.8 | ) | (0.5 | ) | (0.2 | ) | ||||||||||||||||
Net finance costs | (1.6 | ) | (1.5 | ) | (0.5 | ) | (0.4 | ) | ||||||||||||||||
Profit (loss) before income tax | 7.6 | 7.5 | 2.4 | 2.9 | ||||||||||||||||||||
Income tax (expense) recovery | (1.5 | ) | (1.8 | ) | (0.5 | ) | (1.0 | ) | ||||||||||||||||
Profit (loss) | 6.1 | 5.7 | 7.0 | % | 1.9 | 1.9 | 0.0 | % | ||||||||||||||||
Profit (loss) attributable to: | ||||||||||||||||||||||||
Shareholders | 5.6 | 5.3 | 5.7 | % | 1.7 | 1.8 | (5.6 | %) | ||||||||||||||||
Non-controlling interest | 0.5 | 0.4 | 0.2 | 0.1 | ||||||||||||||||||||
| 6.1 | 5.7 | 1.9 | 1.9 | |||||||||||||||||||||
Earnings (loss) per share | ||||||||||||||||||||||||
Basic and fully diluted | $ | 0.24 | $ | 0.22 | 9.1 | % | $ | 0.07 | $ | 0.08 | (12.5 | %) | ||||||||||||
Weighted average number of common shares outstanding | ||||||||||||||||||||||||
Basic and fully diluted | 23.0 | 23.8 | 22.7 | 23.4 | ||||||||||||||||||||
EBITDA to Shareholders | $ | 13.5 | $ | 13.4 | 0.7 | % | $ | 4.7 | $ | 4.3 | 9.3 | % | ||||||||||||
EBITDA to Shareholders % | 37.5 | % | 36.2 | % | 34.6 | % | 41.0 | % | ||||||||||||||||
| December 31, 2021 | December 31, 2020 | |||||||||||||||||||||||
Cash | 15.6 | 10.3 | 51.5 | % | ||||||||||||||||||||
Total assets | 188.4 | 175.0 | 7.7 | % | ||||||||||||||||||||
Total debt | 49.0 | 40.8 | 20.1 | % | ||||||||||||||||||||
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 Rivers 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 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 2021 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 annual financial report. The Company will file an annual financial report for the twelve and three months ended December 31, 2021. 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.