Burnaby, British Columbia--(Newsfile Corp. - March 22, 2019) - Canlan Ice Sports Corp. (TSX: ICE) (the "Corporation") today reported its financial results for the fourth quarter and year ended December 31, 2018. The Corporation also announced the continuation of its dividend for Q1 2019.
Highlights of 2018
- Revenue of $87.6 million increased $2.2 million or 2.6% compared to 2017;
- Operating margin increased to 23.3% from 21.9% a year ago;
- EBITDA of $14.7 million rose $1.9 million or 14.7% compared to 2017; and
- Cash flow from operations increased by $1.6 million or 14.9% compared to 2017.
Fourth Quarter and Annual Results
|For the 3 months ended||For the year ended|
|December 31||December 31|
|Salaries, wages and benefits||8,317||8,457||32,769||32,874|
|Selling and customer service||2,796||2,432||11,303||11,320|
|Cost of goods sold||1,637||1,597||5,697||5,735|
|Repairs and maintenance||2,089||1,210||5,730||4,576|
|Total operating expenses||17,689||16,702||67,201||66,701|
|EBITDA per share||$||0.41||$||0.41||$||1.10||$||0.96|
|Loss (gain) on interest rate swap||570||(85||)||209||(1,027||)|
|Loss (gain) on foreign exchange||(64||)||(3||)||(91||)||24|
|Net earnings per share||$||0.17||$||0.18||$||0.34||$||0.27|
|Key Balance Sheet Figures (in thousands):|
|As at December 31:||2018||2017|
|Cash and cash equivalents||$||19,845||$||18,629|
|Property plant and equipment||99,582||98,596|
|Liabilities and Equity|
|Interest bearing debt||$||52,525||$||56,020|
|Accounts payable and accrued liabilities||12,567||10,105|
|Share capital and contributed surplus||63,652||63,652|
|Foreign currency translation reserve||3,775||2,365|
|Total shareholders’ equity||49,824||45,198|
|Total liabilities and equity||$||128,935||$||125,720|
Fourth Quarter Results
(three months ended December 31, 2018 compared with three months ended December 31, 2017)
Q4 revenue of $24.8 million increased by $0.5 million or 2.1% due to higher contract-rental revenue, growth in youth and adult soccer leagues, pricing of adult hockey leagues and incremental food & beverage revenue;
Operating costs of $17.7 million, increased by $1.0 million or 5.9% mainly due to higher repairs and maintenance expenses incurred during Q4 2018 compared to prior year; and
EBITDA was $5.5 million consistent with 2017.
2018 Year End Results
(year ended December 31, 2018 compared with year ended December 31, 2017)
Revenue of $87.6 million increased by $2.2 million or 2.6% compared to 2017;
Main drivers of increase were pricing and growth in youth soccer leagues, hockey tournament registrations, and contract ice/field rentals;
Total facility operating costs of $67.2 million in 2018 increased moderately by $0.5 million or 0.7% compared to 2017;
Increases in repairs and maintenance expenses were partially offset by reduced utility expenses. In addition, staffing levels were optimized to gain efficiencies that resulted in flat labour costs on a year-over-year basis;
The relatively low increase in operating costs yielded a higher operating margin of 23% compared to 22% a year ago;
Corporate G&A expenses of $5.8 million decreased by $0.2 million or 2.6% compared to 2017 mainly due to decreased labour costs and professional fees;
After G&A, EBITDA of $14.7 million, increased by $1.9 million or 14.7% compared to 2017; and
After recording a total of $10.2 million related to finance costs, depreciation, foreign exchange, and income tax expense, net earnings for the year was $4.5 million or $0.34 per share compared to $3.6 million or $0.27 per share a year ago.
"Our success in 2018 resulted from a tremendous amount of hard work in all areas of our business," said Canlan's CEO, Joey St-Aubin. "The team executed a labour optimization plan, continued our energy reduction program, continued to rollout new menu offerings in our restaurants, and achieved improvements in our tournament operations with a newly formed Sport Tourism division. We asked a lot from our team; the results demonstrate that the team delivered, and I want to thank and congratulate the Canlan crew for a great 2018 year."
"Increased operating earnings also contributed to stronger cash flow from operations," added Canlan's CFO, Ivan Wu. "This enables us to continue making improvements to our infrastructure, maintain our building envelopes, and target strategic opportunities for investment to expand our portfolio."
Canlan's Board of Directors has approved the continuation of the Corporation's quarterly dividend policy and declared eligible dividends totaling $0.025 per common share that will next be paid on April 16, 2019 to shareholders of record at the close of business March 29, 2019. Canlan's Board of Directors reviews the Corporation'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.
"For 2019, we are very excited about the Leafs Ice Centre acquisition that was just recently announced. In addition, we want to continue moving the needle on cost efficiencies to improve margins and cash flow company-wide. This enables us to put emphasis on R&D and innovation, and to create new revenue streams that help position us to take advantage of investment opportunities," said Mr. St-Aubin.
Canlan's financial statements and Management's Discussion & Analysis for the year ended December 31, 2018 will be available via SEDAR on or before March 29, 2019.
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 recreation facilities in North America and currently own, lease and/or manage 21 facilities in Canada and the United States with 60 ice surfaces, as well as five indoor soccer fields, and 15 sport, 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 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 Corporation 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 Corporation'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.
Chief Financial Officer
604 736 9152
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