Gamehost Announces Fourth Quarter 2020 Financial Results
RED DEER, AB / ACCESSWIRE / March 11, 2021 / Gamehost Inc. (TSX:GH) Management and Directors of Gamehost Inc. (the "Company") present results for the twelve and three month periods ended December 31, 2020 (the "Year" and "Quarter" respectively).
In year-over-year comparison for the Quarter, operating revenue was down 48.3% from $17.2 to $8.9, EBITDA to shareholders was down 33.8% from $6.5 to $4.3, and net earnings to shareholders was down 51.4% from $3.7 to $1.8 with future income tax adjustments compounding the lower results. Earnings per share for the Quarter is down $0.07 per common share to $0.08 per common share.
The Company's casinos were open and operating with restricted capacities through the Quarter until November 27, 2020 when the Government of Alberta (GOA) ordered table games in the province closed. With rising COVID-19 case numbers and hospitalizations the GOA ordered a full shut down of all provincial land-based gaming venues effective December 13, 2020. The Company's Deerfoot Inn in Calgary closed along with the casino on December 13, 2020 while the Company's two remaining hotels operated continuously throughout the Quarter serving reduced demand. Early in the new year, Deerfoot Inn reopened primarily to service our regular clientele. All Gamehost hotels continue to operate under enhanced Company COVID-19 protocols and GOA restrictions that limit service to appointment only check-in.
The GOA announced a four-step plan for lifting economic and physical gathering restrictions that is tied to hospitalization numbers. The plan stipulates a minimum three weeks between moving forward from one step to another and a clear trend to declining hospitalizations. Other factors such as case counts and test positivity rates may also factor in any GOA decision to move between steps. The province is currently in Step 1 of the plan which requires hospitalizations to be less than 600. The Company could benefit moderately at Step 2, 450 hospitalizations, which includes easing current restrictions for hotels and banquet halls. Casinos are assigned to Step 3 of the GOA plan at 300 hospitalizations. Potential easing of restrictions on live entertainment is included in the final Step 4 of the GOA plan at 150 hospitalizations. Provincial hospitalizations have descended into Step 3 territory creating opportunity for additional restrictions to be lifted at the GOA's discretion. Ultimately though, effective vaccines with wide reaching distribution and acceptance will be required before economies everywhere and the Company can begin a more certain and stable recovery.
The Company continues to repurchase shares at what management perceives to be opportunistic prices. During the Quarter the Company purchased 228,300 common shares at prices averaging $5.25 per common share. The Company's current issuer bid expires in July 2021.
The Company's dividend remains temporarily suspended. A decision to reinstate the dividend in whole or in part is reviewed at regular intervals by the board of directors. Experience to date has demonstrated that the Company can operate cash flow positive under partial restrictions coupled with current available COVID-19 relief subsidies. During periods of full casino closure cash burn rates can be reduced to between $0.3 million and $0.5 million per month. The Company has ample liquidity to support full or partial restrictions for the foreseeable future.
The Company is taking full advantage of the current casino closures to accelerate construction on two expansion projects. A $3.5 million, 7,500 square foot expansion to gaming and non-gaming amenities at the Deerfoot Casino is expected to be completed spring of 2021. A net $2.5 million, 6,350 square foot expansion to gaming and non-gaming amenities at Boomtown Casino is expected to be completed summer of 2021.
It has been a year of challenges. The Company's casino operations were fully closed or operated at restricted capacity for 289 days during the Year. Despite this, the Company has performed remarkably well all things considered. During periods of casino closures and with COVID-19 relief subsidies, for which we are grateful, the Company is able to reduce cash burn to sustainable levels. Management is optimistic the worst of this pandemic may soon be in the rear-view mirror and confident the Company is well positioned to weather the impact in days ahead. We look forward to welcoming back all of our valued staff and patrons soon. Stay safe and please continue to do your part in limiting the spread of COVID-19.
Gamehost Inc.
Financial Highlights
Unaudited - Canadian dollars (millions except per share figures)
twelve months ended December 31 | three months ended December 31 | ||||||||||||||||||||||||||
2020 | 2019, (Restated) | % Change | 2020 | 2019 | % Change | ||||||||||||||||||||||
Operating revenue | $ | 34.6 | $ | 68.0 | (49.1 | %) | $ | 8.9 | $ | 17.2 | (48.3 | %) | |||||||||||||||
Cost of sales | |||||||||||||||||||||||||||
Other | (22.5 | ) | (38.6 | ) | (5.8 | ) | (9.9 | ) | |||||||||||||||||||
Depreciation | (3.0 | ) | (3.2 | ) | (0.8 | ) | (0.8 | ) | |||||||||||||||||||
(25.5 | ) | (41.8 | ) | (6.6 | ) | (10.7 | ) | ||||||||||||||||||||
Gross profit (loss) | 9.1 | 26.2 | (65.3 | %) | 2.3 | 6.5 | (64.6 | %) | |||||||||||||||||||
Administrative expenses | |||||||||||||||||||||||||||
Other | (2.3 | ) | (2.9 | ) | (0.6 | ) | (0.7 | ) | |||||||||||||||||||
Depreciation | (1.1 | ) | (1.2 | ) | (0.3 | ) | (0.3 | ) | |||||||||||||||||||
(3.4 | ) | (4.1 | ) | (0.9 | ) | (1.0 | ) | ||||||||||||||||||||
Profit (loss) from operating activities | 9.8 | 22.4 | (56.3 | %) | 3.5 | 5.6 | (37.5 | %) | |||||||||||||||||||
Fair value adjustment | (0.8 | ) | - | (0.2 | ) | - | |||||||||||||||||||||
Net finance costs | (1.5 | ) | (2.1 | ) | (0.4 | ) | (0.5 | ) | |||||||||||||||||||
Profit (loss) before income tax | 7.5 | 20.3 | 2.9 | 5.1 | |||||||||||||||||||||||
Income tax (expense) recovery | (1.8 | ) | (4.0 | ) | (1.0 | ) | (1.1 | ) | |||||||||||||||||||
Profit (loss) | 5.7 | 16.3 | (65.6 | %) | 1.9 | 4.0 | (55.0 | %) | |||||||||||||||||||
Profit (loss) attributable to: | |||||||||||||||||||||||||||
Shareholders | 5.3 | 15.3 | (66.0 | %) | 1.8 | 3.7 | (54.1 | %) | |||||||||||||||||||
Non-controlling interest | 0.4 | 1.0 | 0.1 | 0.3 | |||||||||||||||||||||||
5.7 | 16.3 | 1.9 | 4.0 | ||||||||||||||||||||||||
Earnings (loss) per share | |||||||||||||||||||||||||||
Basic and fully diluted | $ | 0.22 | $ | 0.63 | (65.1 | %) | $ | 0.08 | $ | 0.15 | (53.3 | %) | |||||||||||||||
Weighted average number of common shares outstanding | |||||||||||||||||||||||||||
Basic and Fully diluted | 23.8 | 24.3 | 23.4 | 24.3 | |||||||||||||||||||||||
EBITDA to Shareholders | $ | 13.4 | $ | 25.7 | (47.9 | %) | $ | 4.3 | $ | 6.5 | (33.8 | %) | |||||||||||||||
EBITDA to Shareholders % | 36.4 | % | 39.5 | % | 41.7 | % | 39.2 | % | |||||||||||||||||||
| December 31, 2020 | December 31, 2019 | % Change | ||||||||||
Cash | 10.3 | 15.4 | (33.1 | %) | ||||||||
Total assets | 175.0 | 176.2 | (0.7 | %) | ||||||||
Total debt | 40.8 | 40.7 | 0.2 | % | ||||||||
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 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 2020 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 annual financial report. The Company will file an annual financial report for the twelve and three months ended December 31, 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.
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