Canlan Reports Strong Q3 Results and Continuation of Dividend Policy
November 13, 2014 6:02 AM EST | Source: Canlan Ice Sports Corp.
Burnaby, British Columbia--(Newsfile Corp. - November 13, 2014) - Canlan Ice Sports Corp. (TSX: ICE) (the "Corporation") today reported its financial results for the third quarter ended September 30, 2014.
Highlights of Q3 2014
- Total revenue of $16.2 million increased by 7.1% over 2013; same store revenue increased by 8.0%;
- Q3 EBITDA was $0.5 million compared to break even in 2013;
- The Company has completed a $1.8 million renovation of the indoor soccer field at Burnaby 8Rinks on time and on budget. The soccer field has returned to full operation for the 2014/2015 fall/winter season;
- On September 2, 2014, the Company exercised its option to purchase a three-pad recreation facility in Fort Wayne, Indiana for US$9.3 million with the assistance of a US$6.0 million vendor-take-back mortgage. This facility was previously operated under a long-term lease; and
- Long term debt of $2.6 million was refinanced into a $5.4 million debt package with a US-based lender to assist with the purchase of the facility in Fort Wayne, Indiana.
Q3 and Nine Months Ended September 30, 2014 Results
For the 3 months ended | For the 9 months ended | |||||||||||
September 30, 2014 | September 30, 2014 | |||||||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||||||
Revenue | $ | 16,166 | $ | 15,093 | $ | 53,844 | $ | 51,832 | ||||
Operating expense | 14,718 | 14,220 | 44,466 | 44,207 | ||||||||
1,448 | 873 | 9,378 | 7,625 | |||||||||
G&A expense | 979 | 890 | 3,244 | 3,339 | ||||||||
EBITDA1 | $ | 469 | $ | (17 | ) | $ | 6,134 | $ | 4,286 | |||
EBITDA per share | $ | 0.04 | - | $ | 0.46 | $ | 0.32 | |||||
Net loss | $ | (1,843 | ) | $ | (1,606 | ) | $ | (819 | ) | $ | (1,341 | ) |
Net loss per share | $ | (0.14 | ) | $ | (0.12 | ) | $ | (0.06 | ) | $ | (0.10 | ) |
____________________
1 Earnings before interest, taxes, depreciation and
amortization (EBITDA) is often used as a measure of financial performance.
However, EBITDA is not a term that has specific meaning in accordance with IFRS,
and may be calculated differently by other companies.
Key Balance Sheet Figures (in thousands):
September 30, 2014 | December 31, 2013 | |||||
Assets | ||||||
Cash and cash equivalents | $ | 11,198 | $ | 10,080 | ||
Property plant and equipment | 98,333 | 89,401 | ||||
Investment properties | 570 | 570 | ||||
Other assets | 6,057 | 5,510 | ||||
Total assets | $ | 116,158 | $ | 105,561 | ||
Liabilities and Equity | ||||||
Interest bearing debt | $ | 54,641 | $ | 41,233 | ||
Accounts payable and accrued liabilities | 6,643 | 7,360 | ||||
Deferred revenue | 10,874 | 11,216 | ||||
Other liabilities | 663 | 796 | ||||
Total liabilities | 72,821 | 60,605 | ||||
Share capital and contributed surplus | 63,652 | 63,652 | ||||
Deficit | (20,315 | ) | (18,696 | ) | ||
Total shareholders' equity | 43,337 | 44,956 | ||||
Total liabilities and equity | $ | 116,158 | $ | 105,561 |
Third Quarter Results
(three months ended
September 30, 2014 compared with three months ended September 30, 2013)
- Revenue of $16.2 million increased by $1.1 million or 7.1% compared to the prior year. Same store revenue increased by $1.2 million or 8.0%;
- Incremental sales from Canlan's ice and field revenue, and food and beverage revenue were the main drivers of the growth;
- Total ice and field revenue of $12.2 million increased by $0.8 million or 6.9%;
- Total operating costs increased by 3.5% compared to prior year, mainly due to cost to service increased customer volume and increased labour cost;
- Corporate G&A costs increased by 10.0% from prior year, mainly due to increase of stock based compensation expense compared to prior year; and
- Quarterly EBITDA was $0.5 million compared to break even in 2013.
"EBITDA for the quarter met expectations and our revenue growth demonstrated that our summer leagues and programs got back on track after last year's successful renovation projects," said Canlan's CEO, Joey St-Aubin.
"Besides achieving our EBITDA targets during Q3, we also completed the purchase transaction of the SportOne/Parkview Ice House in Fort Wayne, Indiana. Despite having to add debt to our balance sheet to complete the purchase, exercising our purchase option on this facility makes economic sense in the long term," said Canlan's CFO, Mike Gellard.
Nine Months Ended September 30, 2014 Results
(nine
months ended September 30, 2014 compared with nine months ended September 30,
2013)
- Revenue of $53.8 million increased by $2.0 million or 3.9% compared to the prior year. Same store revenue increased by $2.4 million or 4.6%;
- Total ice and field sales of $39.8 million increased by $1.5 million or 3.8% compared to prior year. Same store revenue increased by $1.8 million or 4.7%;
- ASHL, contract rentals, and instructional ice programs were the main sources of revenue growth;
- Food and beverage revenue of $8.4 million increased by $0.5 million or 6.6% compared to prior year;
- Total operating costs of $44.5 million remained steady with 2013 while corporate G&A costs decreased due to reduced labour and travel costs;
- EBITDA of $6.1 million increased by $1.8 million or 43.1% from the prior year. EBITDA as a percentage of revenue was 11.4% compared to 8.3% in 2013; and
- After recording depreciation of $4.5 million and income tax expense of $0.3 million, net loss for the nine months period ended was $0.8 million compared to a net loss of $1.3 million a year ago.
Dividend Policy
Canlan's Board of Directors has
approved the continuation of the Company's quarterly dividend policy and
declared eligible dividends totaling $0.02 per common share that will next be
paid on January 15, 2015 to shareholders of record at the close of business
December 30, 2014. Canlan's Board of Directors reviews the Company's dividend
policy on a quarterly basis. Canlan's dividend is designated as an "eligible"
dividend under the Income Tax Act (Canada) and any corresponding provincial
legislation. Under this legislation, individuals resident in Canada may be
entitled to enhanced dividend tax credits, which reduce income tax otherwise
payable.
Outlook
"It was very positive to see us quickly
return to profitability during the spring/summer season, which was impacted last
year by a significant capital remediation program. Q2 and Q3 EBITDA combined for
an increase of almost $1.1 million compared to 2013. Revenue growth along with
energy efficiencies has helped to improve operating margins; however, added
attention to cost management will be important during the final quarter of the
year," said Mr. Gellard.
"Our fall/winter adult hockey and soccer league registrations were strong and our facilities are now focused on filling holiday season programs and completing the remainder of our scheduled maintenance projects during the rest of 2014," said Mr. St-Aubin.
Canlan's financial statements and Management's Discussion & Analysis for the period ended September 30, 2014 will be available via SEDAR on or before November 14, 2014 and through the Company's website, www.icesports.com.
About Canlan
Canlan Ice Sports Corp. is the North American leader in the development, operations and ownership of ice rink and multi-purpose recreation facilities. We are the largest private sector owner and operator of recreational ice sports facilities in North America and currently own and/or manage 18 facilities in Canada and the United States with 55 ice surfaces, as well as indoor soccer fields, ball diamonds, curling rinks and volleyball courts. To learn more about Canlan please visit www.icesports.com.
Canlan Ice Sports Corp. is listed on the Toronto Stock Exchange under the symbol "ICE."
Caution concerning forward-looking statements
Certain statements in this news release may constitute "forward
looking" statements which involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the Company to be materially different from any future results, performance or
achievements expressed or implied by such forward looking statements. When used
in this news release, such statements may use such words as "may", "will",
"expect", "believe", "plan" and other similar terminology. These
statements reflect management's current expectations regarding future events and
operating performance and speak only as of the date of this news release. These
forward looking statements involve a number of risks and uncertainties. Some of
the factors that could cause actual results to differ materially from those
expressed in or underlying such forward looking statements are the effects of,
as well as changes in: international, national and local business and economic
conditions; political or economic instability in the Company's markets;
competition; legislation and governmental regulation; and accounting policies
and practices. The foregoing list of factors is not exhaustive.
For more information:
Canlan Ice Sports Corp.
Michael F. Gellard
Senior Vice President & CFO
604 736 9152