Gamehost Inc. (TSX:GH)
Gamehost's press release issued March 29, 2012 incorrectly stated that the
Company would maintain a "$0.733 per share regular monthly dividend rate". The
statement should read a $0.0733 per share regular monthly dividend rate. The
full corrected press release is re-printed below:
GAMEHOST ANNOUNCES Q4 and ANNUAL FINANCIAL RESULTS FOR 2011
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 malady 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 $0.0733 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 December
31 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.
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