Canlan Reports Significant EBITDA Growth for 2014 and Continuation of Dividend Policy


BURNABY, British Columbia, March 24, 2015 (GLOBE NEWSWIRE) -- Canlan Ice Sports Corp. (the "Corporation") (TSX:ICE) today reported its financial results for the fourth quarter and year ended December 31, 2014. The Corporation also announced a continuation of its dividend policy for Q1 2015.

Highlights of 2014

  • Total revenue of $75.7 million increased by $2.9 million or 4.0% compared to 2013; same store revenue increased by $3.5 million or 4.8%;
  • EBITDA1 of $11.1 million increased by $1.3 million or 13.2% compared to 2013;
  • Net income before tax of $1.8 million increased by $0.1 million or 6.6% compared to 2013;
  • Q4 revenue of $21.9 million (a record high since Canlan began focusing on recreation in 1998) increased by $0.9 million or 4.4% compared to the prior year;
  • The Company completed a $1.8 million renovation of the indoor soccer field at Burnaby 8Rinks on time and on budget;
  • The Company exercised its option to purchase a three-pad recreation facility in Fort Wayne, Indiana for US$9.3 million. This facility was previously operated under a long-term lease; and
  • A significant portion of debt was refinanced at favourable terms.

Subsequent to year end the Company also completed the purchase of a multi-sport facility in Lake Barrington, Illinois on January 30, 2015. The acquisition of this Sportsplex that contains a FIFA-sized soccer field and two full gymnasiums capable of housing basketball and volleyball play, is consistent with Canlan's strategy to incorporate non-ice facilities into its portfolio.

Fourth Quarter and Annual Results

 
  For the 3 months ended
December 31
For the year ended
December 31
(in thousands) 2014 2013 2014 2013
Revenue $21,888 $20,959 $75,732 $72,791
Operating expense 15,623 14,562 60,089 58,769
  6,265 6,397 15,643 14,022
G&A expense 1,315 895 4,559 4,234
EBITDA1 $4,950 $5,502 $11,084 $9,788
EBITDA per share $0.37 $0.41 $0.83 $0.73
Net earnings $1,715 $2,437 $896 $1,096
Net earnings per share $0.13 $0.18 $0.07 $0.08
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: 2014  2013
Assets    
Cash and cash equivalents $13,534 $10,080
Property plant and equipment 97,682 89,401
Investment properties 570 570
Other assets 6,236 5,510
Total assets $118,022 $105,561
Liabilities and Equity    
Interest bearing debt $53,582 $41,233
Accounts payable and accrued liabilities 7,351 7,360
Deferred revenue 11,333 11,216
Other liabilities 971 796
Total liabilities 73,237 60,605
Share capital and contributed surplus 63,652 63,652
Deficit (18,867) (18,696)
Total shareholders' equity 44,785 44,956
Total liabilities and equity $118,022 $105,561

 Fourth Quarter Results

(three months ended December 31, 2014 compared with three months ended December 31, 2013)

  • Q4 revenue of $21.9 million increased by $0.9 million or 4.4% compared to prior year;
  • Main drivers of the increase in revenue are incremental registrations from ASHL and soccer leagues, and higher sponsorship revenue; and
  • Q4 operating expense of $15.6 million increased by $1.1 million or 7.2% mainly due to increased repair and maintenance activities during the quarter compared to prior year.

2014 Year End Results

(year ended December 31, 2014 compared with year ended December 31, 2013)

  • Revenue of $75.7 million increased by $2.9 million or 4.0% compared to 2013. Same store revenue increased by $3.5 million or 4.8%. A portion of this overall revenue growth resulted from ice inventory returning to full capacity in 2014 as three facilities were at partial capacity during the summer of 2013 due to major renovation projects;
  • Main drivers of the increase in revenue are adult and youth hockey leagues, instructional programs and ice/field rentals;
  • Increased volume in internal programs and third party contracts also resulted in increased traffic through food & beverage operations;
  • Operating costs of $60.1 million increased by $1.3 million or 2.2% compared to 2013;
  • Increase in operating costs are mainly due to an increase in labour costs, repair and maintenance expenses, and customer expenses to service the increased business volume;
  • G&A expenses of $4.6 million increased by $0.3 million or 7.7% compared to 2013 mainly due to a revaluation of the Company's Stock Appreciation Rights plan;
  • After G&A, EBITDA of $11.1 million, increased by $1.3 million or 13.2% compared to 2013; and
  • After recording interest, depreciation, loss on foreign exchange and income tax expense totaling $10.2 million, net earnings for the year was $0.9 million or $0.07 per share.

"In 2014, after completing several significant renovation projects the year prior, we stayed the course with our core business and carried out our operations and marketing plans to maximize utilization at our facilities," said Canlan's CEO, Joey St-Aubin. "I'm proud of our team at all levels for pulling together through these major projects and having retained our customers, resulting in the strongest financial performance in recent years. I thank our customers for their patience, loyalty, and confidence in Canlan."

"The ability to re-invest capital into our facilities is vital to Canlan's success and the last 24 months is a great demonstration of this," said Canlan's CFO, Mike Gellard. "In addition to achieving strong EBITDA growth in 2014, we were also able to continue our capital expenditure program and maintain our facilities at a high standard."

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, 2015 to shareholders of record at the close of business April 2, 2015. 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

"As previously announced, Canlan recently purchased a Sportsplex facility in Lake Barrington, Illinois that falls within our expansion strategy into non ice sports and recreation facilities. One of our priorities in 2015 will be to transition this new facility into the Canlan portfolio, improve its utilization and customer experience, while positioning the business to generate positive cash flow over the next four quarters," said Mr. St-Aubin. "In addition, we will continue to execute our business plans in an effort to gain market share in all areas of recreation in which we operate."

Canlan's financial statements and Management Discussion & Analysis for the year ended December 31, 2014 will be available via SEDAR on or before March 31, 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 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 20 facilities in Canada and the United States with 55 ice surfaces, as well as indoor soccer fields, ball diamonds, curling rinks, volleyball courts 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.


            

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