Gamehost Inc. (TSX:GH)
Management and Directors of Gamehost Inc. (the "Company") are
pleased to present results for the twelve months ended December 31,
2012 (the "Period", or "Year") and three months ended December 31,
2012 (the "Quarter").
Put It In The Win Column
Total operating revenues for the Quarter grew by 4.4% to $19.8
million from $19.0 in the same quarter of 2011. For the Year,
revenues were up 6.3% to $76.6 million from $72.0 million in the
prior year. These results represent quarterly and annual revenue
records for the Company. Earnings before interest, taxes,
depreciation and amortization ("EBITDA") that is attributable to
owners of the Company ("EBITDA to Owners") grew by $0.5 million or
6.1% to $8.6 million for the Quarter compared to $8.1 million for
the same quarter in 2011. EBITDA to Owners for the Year grew by
$3.3 million or 10.7% to $33.6 million compared to $30.3 million in
2011. EBITDA to Owners margin percentage was higher by 77 basis
points to 45.3% from 44.6% in the Quarter compared to one year
earlier. True to form, the final quarter of the year is typically a
strong revenue quarter for the Company accompanied by some pressure
on margins caused by seasonally high food and beverage sales from
corporate banquets. Nevertheless, margins held up well producing an
annual EBITDA to Owners margin of 46.3%, a 185 basis point increase
from 44.5% a year earlier. All tallied, Q4 2012 was a winning
Quarter in a winning Year.
LOL
While other Canadian companies steal the business headlines and
euphoria and disappointment wax and wane in the market, we have run
the 2012 race like the proverbial turtle. While the S&P/TSX
Composite Index gained 4.0% on the Year, the Company shares rose
$1.45 or 12.9% and the Company debentures rose 11.3% over the same
time frame. Furthermore, over the course of the Year we have
quietly reduced loans and borrowings by $6.4 million or 23.7%,
increased our cash deposits by $2.0 million or 11.2%, repurchased
$2.0 million of Company shares for cancellation at an average price
of $11.97 per common share, and spent $1.1 million to maintain or
improve our facilities. Most importantly though, we have
distributed $22.0 million, an additional $0.6 million or 2.8%, over
2011 to the best people in the world, our investors. So go ahead,
laugh out loud!
To Have And To Hold
During the Quarter, $1.8 million face value of debentures were
presented for conversion to 0.2 million common shares leaving $31.7
million of the original $55.0 million debenture issue outstanding
at the end of the Year. There were no shares repurchased under
normal course issuer bid (NCIB) during the Quarter. Since the start
of the year an additional 1.5 million shares have been issued net
of those cancelled by repurchase under NCIB. The volume of the
Company shares traded on the Toronto Stock Exchange during the year
increased 10.0% over the volume of the preceding year improving the
liquidity of the Company's shares.
New Neighbours
We were excited to learn of Imperial Oil's plans to relocate its
Calgary headquarters to a campus-style office complex in the
southeast suburban office park known as Quarry Park. While suburban
office parks are not a new thing, this marks the first time an
industry oil giant has ventured away from Calgary's downtown core.
Imperial Oil's new offices will be located a skip and a jump from
our Deerfoot Inn & Casino and will eventually house some 3,000
employees. This announcement is bound to accelerate the residential
growth in nearby communities. Relocation for Imperial Oil employees
will begin in mid 2014 and we look forward to welcoming our new
neighbours and their out-of-town meeting guests to our hotel for
years to come.
Looking Glass
We live in an ever-changing world. It seems likely that this
will continue, perhaps dramatically, into 2013. For business,
economies and investing the uncertainty is difficult. Will there be
new pipelines to deliver Alberta bitumen or won't there? What
actions should we expect from the Alberta government to address
falling revenues from discounted Alberta crude oil prices? Has a
sustained rebound of the USA economy really begun? What of the
continued turmoil in Arab and African nations? Israeli jets in
Syria? There are more questions, and big ones, than answers.
What we do know is Alberta is growing. Migration to the
province, both international and interprovincial, is reaching
levels not seen since 2006 and we can benefit from that. A small
expansion completed at our Boomtown Casino added 30 slot machines
to the gaming floor in February 2013. A renovation/expansion in the
works for Great Northern Casino will improve the dining, lounge and
live entertainment experience for patrons. Hospital development in
close proximity to our Calgary and Grande Prairie facilities will
have beneficial spinoff effects.
Cash on hand was used to make our first ever income tax payment
of $5.2 million on February 28, 2013. Taxes paid include 15% of
deferred partnership income taxes and 100% of the Company's 2012
income taxes. The remaining 2011 deferred taxes will be paid in
monthly instalments over four years beginning January 2014. Tax
instalments for estimated 2013 income taxes will begin in March
2013. As we put the deferred tax hurdle behind us we can then begin
to entertain alternative uses for surplus cash.
In spite of all the headline news, we are optimistic for the
days ahead. We hope you will stay with us to see how 2013
unfolds.
Consolidated statements of profit and comprehensive income
In Canadian
dollars (audited) (unaudited)
------------------------------------------------------------
twelve months ended three months ended
December 31 December 31
------------------------------------------------------------
2012 2011 2012 2011
------------------------------------------------------------
Operating
revenue $ 76,557,136 $ 71,989,151 $ 19,795,024 $ 18,957,496
Cost of sales
Other (38,584,088) (37,432,038) (10,245,325) (9,863,356)
Depreciation (2,234,657) (2,355,818) (617,059) (591,336)
------------------------------------------------------------
(40,818,745) (39,787,856) (10,862,384) (10,454,692)
------------------------------------------------------------
Gross profit 35,738,391 32,201,295 8,932,640 8,502,804
Other income 247,621 240,386 67,475 68,257
Administrative
expenses
Other (2,927,729) (2,959,443) (681,321) (750,388)
Depreciation (2,270,928) (2,663,731) (567,732) (682,823)
------------------------------------------------------------
(5,198,657) (5,623,174) (1,249,053) (1,433,211)
------------------------------------------------------------
Profit from
operating
activities 30,787,355 26,818,507 7,751,062 7,137,850
------------------------------------------------------------
Other (losses)
gains (62,814) 1,677 (62,814) 1,677
Finance income 90,783 82,542 24,781 21,893
Finance costs (4,141,730) (5,586,935) (1,020,092) (1,238,534)
------------------------------------------------------------
Profit before
income taxes 26,673,594 21,315,791 6,692,937 5,922,886
-
Income tax
expense (5,184,063) (5,301,001) (762,242) (2,984,706)
------------------------------------------------------------
Profit and
comprehensive
income $ 21,489,531 $ 16,014,790 $ 5,930,695 $ 2,938,180
------------------------------------------------------------
------------------------------------------------------------
Profit and
comprehensive
income
attributable
to:
Owners of the
Company $ 20,123,155 $ 14,860,454 $ 5,578,043 $ 2,618,808
Non-
controlling
interest 1,366,376 1,154,336 352,652 319,372
------------------------------------------------------------
$ 21,489,531 $ 16,014,790 $ 5,930,695 $ 2,938,180
------------------------------------------------------------
------------------------------------------------------------
Earnings per
share
Basic and
diluted
earnings per
share $ 0.919 $ 0.702 $ 0.248 $ 0.123
EBITDA to Owners $ 33,854,182 $ 30,589,693 $ 8,565,236 $ 8,070,447
EBITDA to Owners
% 46.3% 44.5% 45.3% 44.6%
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.
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.
These annual 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 2012 annual
consolidated financial statements. Further, while the financial
figures included in this annual results 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 has published and filed an
annual financial report for the annual period ended December 31,
2012. This report, along with historical financial reports can be
found on the Company's website at www.gamehost.ca and will be filed
in its 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 Gamehost
Inc. Darcy J. Will (877) 703-4545 (403) 340-0683
(FAX)info@gamehost.ca www.gamehost.ca
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