Not intended for distribution to U.S. newswire services or for dissemination in the U.S.
RED DEER, AB / ACCESSWIRE / August 11, 2020 / Gamehost Inc. (TSX:GH) Management and Directors of Gamehost Inc. (the "Company") present results for the six and three month periods ended June 30, 2020 (the "Period" and "Quarter" respectively).
Operating revenue for the Quarter was down 89.3% from the prior year or down $15.0 million to $1.8 million. Shareholder loss for the Quarter was $1.5 million versus a profit of $4.5 million for the same quarter in 2019 or a loss per common share of $0.06 versus earnings per common share of $0.19. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") that is attributable to shareholders of the Company ("EBITDA to Shareholders") was down $6.9 million to a loss of $0.7 million versus $6.2 million in the year ago quarter.
Following a closure of three months, the Company reopened all casinos June 19, 2020 with reduced slot machines in operation and fifty percent of food and beverage seating capacities. The casinos had been under a Government of Alberta (GOA) mandatory closure order due a public health emergency declared for Covid-19. The GOA has implemented a staged reopening of Alberta's economy. The current stage of relaunch, does not allow table games and limits large gathering sizes which continues to curb any live entertainment at our casinos. Our Deerfoot hotel was also closed voluntarily when casinos closed due to negligible business volume caused by the pandemic. All Gamehost properties are now operating with enhanced health and safety protocols to limit the risk of transmission of the Covid-19 virus. A significant portion of our workforce remains on temporary lay off while table game operations remain closed and food and beverage operations operate at reduced seating capacity. The GOA has not provided any timing for when these remaining restrictions will be lifted.
With less than two months of resumed operations behind us and a rising Covid-19 case count as Alberta's economy is reopened, forecasting the months ahead is not reasonably possible. What we do know from our experience over these last few months and weeks is that we are able to sustain the business at a very low cash burn rate, that federal and provincial government relief programs are essential to individuals and families and to maintain employment. We know that demand continues to exist for the entertainment and services we provide. Immediately following reopening, pent up demand and a reduced number of available slot machines pushed Cash Play per machine up by 44% compared to pre-Covid averages, but on 22% fewer slot machines.
Suspension of board of director and executive management compensation remains in effect. The Company's dividend is temporarily suspended due to Covid-19, but will be reviewed at regular intervals by the board of directors. In the meantime, since the restarting of closed operations, the Company is profitable and cash flow positive. The Company has and will remain active on its normal course issuer bids 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.
The Company has received all necessary approvals for a $3.0 million, 7,500 square foot expansion to gaming and non-gaming amenities at the Deerfoot Casino. Construction will commence this summer. The Company is also advancing plans with the AGLC and municipal authorities for an expansion to non-gaming amenities and a full exterior/interior facelift at Boomtown Casino in Fort McMurray.
Wash your hands frequently. When it is not possible to practice physical distancing, wear a mask. Self isolate if you are not feeling well and get tested for Covid-19. If we all do our part, we will make the best of this this unwanted situation.
| Gamehost Inc. | |||||||||||||||||||||||||||
| Financial Highlights | |||||||||||||||||||||||||||
| Unaudited - Canadian dollars (millions except per share figures) | |||||||||||||||||||||||||||
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six months ended June 30 |
three months ended June 30 |
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2020 | 2019 | % Change | 2020 | 2019 | % Change | |||||||||||||||||||||
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Operating revenue
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$ | 15.7 | $ | 33.8 | (53.6 | %) | $ | 1.8 | $ | 16.8 | (89.3 | %) | |||||||||||||||
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Cost of sales
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Other
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(10.8 | ) | (19.4 | ) | (2.5 | ) | (9.7 | ) | |||||||||||||||||||
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Depreciation
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(1.5 | ) | (1.6 | ) | (0.8 | ) | (0.8 | ) | |||||||||||||||||||
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(12.3 | ) | (21.0 | ) | (3.3 | ) | (10.5 | ) | |||||||||||||||||||
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Gross profit (loss)
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3.4 | 12.8 | (73.4 | %) | (1.5 | ) | 6.3 | (123.8 | %) | ||||||||||||||||||
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Administrative expenses
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Other
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(1.1 | ) | (1.6 | ) | (0.4 | ) | (0.7 | ) | |||||||||||||||||||
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Depreciation
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(0.6 | ) | (0.6 | ) | (0.3 | ) | (0.3 | ) | |||||||||||||||||||
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(1.7 | ) | (2.2 | ) | (0.7 | ) | (1.0 | ) | |||||||||||||||||||
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Profit (loss) from operating activities
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2.2 | 10.7 | (79.4 | %) | (1.8 | ) | 5.3 | (134.0 | %) | ||||||||||||||||||
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Fair value adjustment
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(0.6 | ) | - | - | - | ||||||||||||||||||||||
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Net finance costs
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(0.8 | ) | (1.0 | ) | (0.3 | ) | (0.5 | ) | |||||||||||||||||||
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Profit (loss) before income tax
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0.8 | 9.7 | (2.2 | ) | 4.8 | ||||||||||||||||||||||
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Income tax (expense) recovery
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(0.1 | ) | (1.3 | ) | 0.6 | - | |||||||||||||||||||||
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Profit (loss)
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0.7 | 8.4 | (91.7 | %) | (1.6 | ) | 4.8 | (133.3 | %) | ||||||||||||||||||
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Profit (loss) attributable to:
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Shareholders
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0.6 | 7.9 | (92.4 | %) | (1.5 | ) | 4.5 | (133.3 | %) | ||||||||||||||||||
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Non-controlling interest
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0.1 | 0.5 | (0.1 | ) | 0.3 | ||||||||||||||||||||||
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0.7 | 8.4 | (1.6 | ) | 4.8 | ||||||||||||||||||||||
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Earnings (loss) per share
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Basic and fully diluted
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$ | 0.02 | $ | 0.33 | (93.9 | %) | $ | (0.06 | ) | $ | 0.19 | (131.6 | %) | ||||||||||||||
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Weighted average number of common shares outstanding
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Basic
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24.1 | 24.3 | 24.0 | 24.3 | |||||||||||||||||||||||
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Fully diluted
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24.1 | 24.3 | 24.0 | 24.3 | |||||||||||||||||||||||
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EBITDA to Shareholders
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$ | 4.2 | $ | 12.5 | (66.4 | %) | $ | (0.7 | ) | $ | 6.2 | (111.3 | %) | ||||||||||||||
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EBITDA to Shareholders %
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27.1 | % | 38.7 | % | (33.3 | %) | 38.5 | % | |||||||||||||||||||
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| June 30, 2020 | |||||||||||||||||||||||||||
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Cash
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12.3 | 15.4 | (20.1 | %) | |||||||||||||||||||||||
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Total assets
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169.9 | 176.2 | (3.6 | %) | |||||||||||||||||||||||
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Total debt
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47.2 | 45.6 | 3.5 | % | |||||||||||||||||||||||
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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 six and three months ended June 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.