Canlan Reports Q3 Results

Burnaby, British Columbia--(Newsfile Corp. - November 13, 2015) - Canlan Ice Sports Corp. (the "Corporation") (TSX: ICE) today reported its financial results for the third quarter ended September 30, 2015.

Overview of Q3 2015

• Total revenue of $16.5 million, increased by $0.3 million or 2.1% over 2014; same store revenue increased by $0.2 million or 1.1%;
• The Company completed a $1.1 million renovation on time in our Winnipeg facility. This renovation has greatly improved the facility's accessibility and ice conditions;
• Due to the strengthening of the U.S. dollar, a non-cash expense was recognized in the statement of earnings of $1.1 million (2014 - $0.3 million) related to the revaluation of the Company's US-denominated debt outstanding at September 30, 2015; and
• Utilities expense increased by $0.2 million for the quarter due to a sharp increase in the hydro-electricity surcharge (called "global adjustment") imposed by Ontario's hydro authority.

Third Quarter and Nine Months Ended September 30, 2015 Results

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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):

Third Quarter Results
(three months ended September 30, 2015 compared with three months ended September 30, 2014)

• Q3 revenue of $16.5 million increased by $0.3 million or 2.1% compared to the prior year. Same store revenue increased by $0.2 million or 1.1%;
• The modest increase in revenue for the quarter resulted from strong growth in youth hockey leagues, summer camp programs, and soccer leagues, but offset by a slight decline in ASHL compared to prior year;
• The decline of ASHL traffic also affected restaurants and sports stores revenue as the adult customer base is one of the largest market segments. Same store food & beverage revenue of $2.2 million decreased by $0.1 million or 3.2% compared to 2014. Sports store revenue of $0.4 million decreased by $0.1 million or 18.1% compared to the prior year;
• Tournament operations revenue of $0.5 million increased by 6.4% compared to the prior year mainly due to an increase in overall registrations;
• Quarterly EBITDA was $0.1 million in 2015 compared to $0.5 million in the prior year;
• After recording interest expense of $0.8 million, depreciation of $1.7 million, foreign exchange loss of $1.1 million, and income tax recovery of $0.4 million, net loss for the quarter was $3.1 million ($0.24 loss per share) compared to $1.8 million ($0.14 loss per share) a year ago; and
• The loss on foreign exchange of $1.1 million (2014 - $0.3 million) for the quarter was up sharply from 2014 as the U.S. dollar strengthened significantly during Q3. This foreign exchange charge mainly reflects the unrealized loss that results from the period-end revaluation of mortgage debt that is denominated in U.S. dollars.

"Revenue from our core hockey leagues was lower than expected for the summer, which also affected food and beverage and sports store sales. However, it was good to see strong growth in our summer programs and soccer league revenue on year over year basis. We continue to be innovative in the way we create value for our members in the ASHL and have seen attractive adoption rate increases in our "Players Bench" team administration platform and in our "Puck Buck" loyalty program. These indicators tell us that our ASHL members are engaged and see the value in what we offer on and off the ice," said Canlan's CEO, Joey St-Aubin.

"While we experienced modest revenue growth for the quarter, operating costs increased by more than expected as electricity surcharges imposed by Ontario's hydro authorities continues to increase at a rapid rate," said Canlan's CFO, Mike Gellard. "We will continue to prudently manage energy consumption in all our facilities and increase efficiencies where possible; however, the global adjustment surcharges, which have increased our operating costs by $0.5 million dollars for the year so far, have been punitive and beyond the control of businesses such as ourselves."

Nine Months Ended September 30, 2015 Results
(nine months ended September 30, 2015 compared with nine months ended September 30, 2014)

• Revenue of $56.6 million increased by $2.7 million or 5.0% compared to the prior year. Same store revenue increased by $1.7 million or 3.1%;
• The main sources of revenue growth came from soccer leagues, the tournament division, instructional programs and third-party contract rentals;
• Incremental revenue from turf and court rentals, and soccer leagues was also contributed by our new sportsplex in Lake Barrington, Illinois, which has performed relatively close to expectations since its acquisition on January 30, 2015;
• Same store direct operating costs of $46.6 million increased by $2.2 million or 4.9% compared to the same period in 2014;
• Labour, facility maintenance, customer service, and property tax expense all increased from the prior year but were on plan. However, utilities expense rose significantly which resulted from a sharp and unexpected increase in hydro-electricity surcharges imposed by the Ontario Power Authority. These surcharges increased by 77% compared to the prior year;
• EBITDA of $5.5 million decreased by $0.6 million or 10.5% from the prior year;
• After recording depreciation of $5.1 million, loss on foreign exchange of $1.7 million and income tax recovery of $0.1 million, net loss for the period was $3.4 million ($0.25 loss per share) compared to $0.8 million ($0.06 loss per share) a year ago; and
• The loss on foreign exchange of $1.7 million (2014 - $0.3 million) for the period was up sharply from 2014 as the U.S. dollar strengthened significantly. This foreign exchange charge mainly reflects the unrealized loss that results from the period-end revaluation of mortgage debt that is denominated in U.S. dollars.

"During the summer months, a lot of work was completed to maintain and renew our facilities' ice rinks, turfs, dressing rooms, and equipment," said Mr. Gellard. "The most significant project we completed this year was a $1.1 million renovation in Winnipeg that has enhanced ice conditions on one surface and added improved entrances and wheelchair accessibility."

"In the busy final quarter of 2015, we will be focused on delivering a high level of customer service in all areas of the business, especially in our Adult Safe Hockey League," said Mr. St-Aubin. "Overall, we were able to bring in more teams than the prior year for the current fall/winter ASHL season, and the current season marks a significant milestone for Canlan as it is the 20^th anniversary of the ASHL. On behalf of the Canlan team, I'd like to thank all of our ASHL players for enjoying recreation hockey with us and constantly helping us bring a better rec hockey experience to you."

Canlan's financial statements and Management Discussion & Analysis for the period ended September 30, 2015 will be available via SEDAR on or before November 14, 2015 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 21 facilities in Canada and the United States with 57 ice surfaces, as well as indoor soccer fields, sport courts, volleyball, and basketball 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 MD&A 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 MD&A, 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 MD&A. 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