Canlan Reports Record Q4 EBITDA, 2013 Year End Results, and Continuation of Dividend Policy

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| Source: Canlan Ice Sports Corp.

BURNABY, British Columbia, March 21, 2014 (GLOBE NEWSWIRE) -- Canlan Ice Sports Corp. (the "Corporation") (TSX:ICE) today reported its financial results for the fourth quarter and year ended December 31, 2013. The Corporation also announced a continuation of its dividend policy for Q1 2014.

Highlights of 2013

  • Revenue of $72.8 million and EBITDA1 of $9.8 million for the year remained consistent with 2012 despite shutting down six ice surfaces for major renovations at three facilities during the summer;
  • $7.0 million of major facility renovations to improve ice quality and amenities were completed at three facilities on time and on budget;
  • Q4 EBITDA of $5.5 million (a record high since Canlan began focusing on recreation in 1998) increased by $1.0 million or 23% compared to prior year;
  • Canlan Sportsplex, which houses two indoor soccer fields, three volleyball courts and a sport court, is our first non-ice multi-sport complex located in Mississauga, Ontario. Its first full year of operations in 2014 contributed $0.7 million of incremental revenue on a year over year basis. In addition, the new facility operated at close to break-even before facility lease cost in its first full year.
Fourth Quarter and Annual Results
 
  For the 3 months ended
December 31
For the year ended
December 31
(in thousands) 2013 2012 2013 2012
Revenue $20,959 $20,335 $72,791 $72,823
Operating expense 14,562 14,284 58,769 57,912
  6,397 6,051 14,022 14,911
G&A expense 895 1,571 4,234 5,154
EBITDA1 $5,502 $4,480 $9,788 $9,757
EBITDA per share $0.41 $0.34 $0.73 $0.73
Net earnings $2,437 $1,805 $1,096 $1,295
Net earnings per share $0.18 $0.14 $0.08 $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. Canlan reconciles EBITDA to its net earnings.
 
Key Balance Sheet Figures (in thousands):
As at December 31: 2013 2012
Assets    
Cash and cash equivalents $10,080 $12,900
Property plant and equipment 89,401 84,384
Investment properties 570 570
Other assets 5,510 4,970
Total assets $105,561 $102,824
Liabilities and Equity    
Interest bearing debt $41,233 $39,018
Accounts payable and accrued liabilities 7,360 6,914
Deferred revenue 11,216 11,348
Other liabilities 796 617
Total liabilities 60,605 57,897
Share capital and contributed surplus 63,652 63,652
Deficit (18,696) (18,725)
Total shareholders' equity 44,956 44,927
Total Liabilities and Equity $105,561 $102,824

Fourth Quarter Results

(three months ended December 31, 2013 compared with three months ended December 31, 2012)

  • Revenue of $21.0 million earned during the quarter is the highest Q4 revenue figure achieved since Canlan became an ice rink recreation company in 1998;
  • This represents an increase of $0.6 million or 3.1% compared to 2012;
  • Incremental sales from Canlan's instructional programs, restaurant operations, and soccer rentals at the new Sportsplex were the main drivers of the growth;
  • The period's quarterly EBITDA of $5.5 million was also a new high for Canlan as increased sales coupled with G&A cost reductions helped boost earnings by 23%.

"After completing some major renovations in the summer, it was good for us to hit the ground running in the busy fall/winter season," said Canlan's CEO, Joey St-Aubin. "Registrations for our winter adult hockey leagues were strong in most regions and we continue to be encouraged by increased utilization at our multi-sports complex where we began operations in Q4 of 2012."

2013 Year End Results

(year ended December 31, 2013 compared with year ended December 31, 2012)

  • Revenue of $72.8 million was consistent with that of 2012;
  • Sales from instructional programs and ice/field rentals increased but were offset by rink renovation projects that resulted in reduced hockey league and F&B revenue;
  • Operating costs of $58.8 million increased by $0.9 million or 1.5% while G&A costs of $4.2 million decreased by $0.9 million or 17.9%;
  • Repairs and maintenance and customer incentive costs were the main drivers of increased facility expenses while reduced compensation and consulting costs were the principal factors of decreased G&A expenses;
  • As a result of the above, EBITDA remained steady at $9.8 million for the year.
  • After recording interest, depreciation, and income tax expense totaling $8.7 million, net earnings for the year was $1.1 million or $0.08 per share.

"Despite reduced capacity in BC, Manitoba and Quebec during the year, our ability to increase revenue in other regions, combined with cost controls enabled us to maintain revenue and EBITDA at levels comparable to prior year," said Canlan's CFO, Mike Gellard. "In addition, our ability to bank finance $5.0 million of the renovations enabled us to sustain an optimal capital structure and demonstrates a degree of confidence that creditors have in Canlan's balance sheet and earnings ability."

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 April 17, 2014 to shareholders of record at the close of business April 2, 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

"In 2014, management's focus will be to achieve our annual operating plan while continuing to seek expansion opportunities to profitably grow the business," said Mr. St-Aubin. "In addition, appropriate investment will continue to be made in our properties to maintain high standards that our customers have come to expect. In 2013 we took 6 surfaces off line during the Spring/Summer period for remediation and in 2014 we only have plans to take one surface off line for remediation and we expect to regain full utilization of those surfaces."

"Cash flow will also be a key focus in 2014 as management must ensure our capital structure meets the needs of operations, investments, and dividend payments," said Mr. Gellard.

Canlan's financial statements and Management Discussion & Analysis for the period ended December 31, 2013 will be available via SEDAR on or before March 31, 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 multi-purpose recreation and entertainment 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 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