Gamehost Inc. (TSX:GH)
Management and Directors of Gamehost Inc. ("Gamehost", the
"Company", the "Corporation", "Our") are pleased to present annual
results for the twelve months ended December 31, 2011 (the
"Period") and three months ended December 31, 2011 (the
"Quarter").
It's been a while since we've been able to say "another record
Quarter", but we can say it again for Q4 2011, our biggest quarter
ever! Total operating revenues for the Quarter grew by 6.4% to
$19.0 million from $17.8 in the same quarter of 2010. Earnings
before interest, taxes, depreciation and amortization ("EBITDA")
that is attributable to owners of the Company ("EBITDA to Owners")
grew $0.6 million or 8.4% to $8.1 million for the Quarter compared
to $7.4 million for the same quarter in 2010. EBITDA to Owners
margin climbed by 0.8 percentage points to 42.6% from 41.8% in the
Quarter compared to one year earlier. For the Period, in year over
year comparisons, revenue is up 15.3% to $72.0 million from $62.5
million, EBITDA to Owners is up 13.0% to $30.6 million from $27.1
million while EBITDA to Owners margins are down 1.1 percentage
points to 42.3% from 43.4%. The year over year reduction in Period
EBITDA to Owners margin percentage can be attributed to the May
2010 acquisition of an additional 51% interest in the Deerfoot Inn
& Casino which has higher operating costs than do the Company's
other properties. We're hoping this is the sound of the starting
gun for a quick out of the blocks sprint through 2012.
There's still a lot of ill health affecting the world's
economies. Clear treatment plans for the European Union sovereign
and financial credit markets have not yet emerged. A drug resistant
bacterium continues to malay the United States economy, and unrest
from the 'Arab spring' is affecting good circulation in middle
eastern economies. Just a few of the names on the 'critical' list.
Here in Alberta, there is significant optimism that things may be
on the mend. So, forget about your winter holiday trip south. A
trip west to Alberta might just be your best medicine.
During the year $5.2 million of the Company's debentures were
presented for conversion to 490,879 common shares. Offsetting this
increase to dividend paying shares, the Company repurchased for
cancellation 495,140 shares at an average price of $11.00 per share
resulting in zero dilution of the Company's per share earnings. We
will endeavor to continue a program of share repurchase equal to
the rate of debenture conversions in the coming year.
The Corporation, will make its first ever tax installments
beginning January 2013. On June 26, 2011, a federal government Ways
and Means Motion to limit tax deferral opportunities for
corporations with interests in partnerships received royal assent.
Consequently, a perpetual one year deferral of current year taxes
will be closed at the end of 2012. The accretive cash flow from the
2010 acquisition of a further 51% interest in Deerfoot Inn &
Casino will ensure tax obligations can be met while maintaining the
Company's $0.733 per share regular monthly dividend rate.
Management continued a program of facility refurbishment over
the year, completing a number of projects in Grande Prairie and
Calgary in order to maintain the high level of appearance and
quality we know our customers appreciate.
Scheduled principal reductions on the Company's traditional debt
together with debenture conversions continue to improve on already
envious debt levels. The Company's total debt to EBITDA ratio sits
at 2.4:1 at December 31, 2011.
During the year, and indeed since the onset of the 'Great
Recession', management has worked diligently to keep costs in
check. Repeatedly, over the course of this troubled period we made
mention of the benefits of having to examine areas of cost that we
had assumed were as efficient as they could be. Learning otherwise,
we have made some permanent changes to our cost structure.
Elimination of some administrative positions and offering and
promoting fewer but higher quality live entertainment events to
name a few examples.
At the date of writing, Gamehost shares are trading in a flat to
moderately higher trend, at or near 52 week highs, which represents
a 13.8% increase from the start of the 2011. We are optimistic that
2012 will continue to witness increased per capita spending by our
customers and higher foot traffic through our doors. As it does,
the home fires should burn brighter than ever before. We look
forward again to days when we can report that we are truly 'on
fire'!
Consolidated statement of profit (loss) and comprehensive income
(loss)
In Canadian dollars (audited) (unaudited)
--------------------------------------------------------
twelve months ended December three months ended
31 December 31
--------------------------------------------------------
2011 2010 2011 2010
--------------------------------------------------------
Operating revenue $ 71,989,151 $ 62,449,609 $ 18,957,496 $ 17,820,644
Cost of sales
Other (37,432,038) (31,524,933) (9,863,356) (9,405,924)
Depreciation (2,355,818) (2,228,479) (591,336) (633,236)
--------------------------------------------------------
(39,787,856) (33,753,412) (10,454,692) (10,039,160)
--------------------------------------------------------
Gross profit 32,201,295 28,696,197 8,502,804 7,781,484
Other income 240,386 240,383 68,257 58,985
Administrative
expenses
Other (2,959,443) (3,435,257) (750,388) (793,768)
Depreciation (2,663,731) (1,446,991) (682,823) (700,927)
--------------------------------------------------------
(5,623,174) (4,882,248) (1,433,211) (1,494,695)
--------------------------------------------------------
Profit from
operating
activities 26,818,507 24,054,332 7,137,850 6,345,774
--------------------------------------------------------
Other gains 1,677 27,083,015 1,677 -
Finance income 82,542 56,540 21,893 20,477
Finance costs (5,586,935) (12,581,717) (1,238,534) (3,526,685)
Fair value changes
to Class B
limited partnership
units - (23,336,000) - (9,241,056)
--------------------------------------------------------
Profit (loss) before
income taxes 21,315,791 15,276,170 5,922,886 (6,401,490)
Income tax expense (5,301,001) (564,272) (2,984,706) (851,091)
Profit (loss) and
comprehensive
income (loss) for
the period $ 16,014,790 $ 14,711,898 $ 2,938,180 $ (7,252,581)
Profit (loss) and
comprehensive
income (loss)
attributable to:
Owners of the
Company $ 14,860,454 $ 13,942,116 $ 2,618,808 $ (7,533,019)
Non-controlling
interest 1,154,336 769,782 319,372 280,438
Profit (loss) and
comprehensive
income (loss) for
the period $ 16,014,790 $ 14,711,898 $ 2,938,180 $ (7,252,581)
Earnings per share
Basic and diluted
earnings (loss) per
share $ 0.702 $ 0.661 $ 0.123 $ (0.357)
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 and a strip mall all located
in Grande Prairie. The Company also holds a 91% ownership position
in Deerfoot Inn & Casino Inc. in Calgary.
This press release may contain forward-looking statements.
Forward-looking statements may contain words such as "anticipates",
"believes", "could", "expects", "indicates", "plans" or other
similar expressions that suggest future outcomes or events. Use of
these 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.
This press release is not a suitable source of information for
readers who are unfamiliar with the Gamehost. Readers more familiar
with the Company should not consider this press release a
substitute for reading the financial statements and MD&A.
Consolidated financial statements and MD&A, both current and
historical, are available on the Company's website at
www.gamehost.ca and will be filed in their entirety along with the
Company's other continuous disclosure documents, when they are
available, on SEDAR at www.sedar.com.
Gamehost common shares and convertible debentures trade on the
Toronto Stock Exchange (TSX) under the symbols GH and GH.DB
respectively.
Contacts: Gamehost Inc. Craig M. Thomas (877) 703-4545 (403)
340-0683 (FAX) Gamehost Inc. Darcy J. Will (877) 703-4545 (403)
340-0683 (FAX)info@gamehost.ca www.gamehost.ca
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