Canlan Reports Q3 Results

BURNABY, British Columbia, Nov. 08, 2016 (GLOBE NEWSWIRE) -- Canlan Ice Sports Corp. (the "Corporation") (TSX:ICE), home of the world's largest adult recreation hockey league, today reported its financial results for the third quarter ended September 30, 2016.

Overview of Q3 2016:
  • Q3 revenue of $16.8 million increased by $0.3 million or 1.9% compared to Q3 2015;
  • Q3 loss before interest, tax, depreciation and amortization was $0.2 million compared to break even in Q3 2015;
  • The Company entered into a long-term agreement on July 7, 2016 to operate a twin-pad ice rink facility in Calgary, Alberta; and
  • Major projects related to energy management and renewal of refrigeration equipment are in progress and financial benefits are being realized.

Three and Nine Months Ended September 30, 2016 Results
  For the 3 months ended September 30     For the 9 months ended September 30  
(in thousands)   2016     2015       2016     2015  
Revenue $ 16,821   $ 16,509     $ 59,234   $ 56,560  
Operating expense   15,941     15,530       48,505     47,782  
    880     979       10,729     8,778  
G&A expense   1,109     918       3,858     3,286  
EBITDA 1 ($ 229 ) $ 61     $ 6,871   $ 5,492  
EBITDA per share ($ 0.02 ) $ -     $ 0.52   $ 0.41  
Depreciation   1,752     1,767       5,217     5,179  
Finance costs   526     746       4,354     2,187  
Loss (gain) on held for trading financial liabilities   (66 )   -       797     -  
Loss (gain) on foreign exchange   (3 )   447       (466 )   986  
Loss (gain) on sale of assets   (16 )   22       (21 )   19  
Income tax recovery   (1,307 )   (380 )     (2,067 )   (134 )
Net loss ($ 1,115 ) ($ 2,541 )   ($ 943 ) ($ 2,745 )
Net loss per share ($ 0.08 ) ($ 0.19 )   ($ 0.07 ) ($ 0.21 )
                           

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) :    
  September 30, 2016     December 31, 2015  
Assets              
Property plant and equipment $ 101,774     $ 103,631  
Cash and cash equivalents   10,211       10,065  
Restricted cash   1,300       -  
Investment properties   560       574  
Other assets   7,665       6,334  
Total assets $ 121,510     $ 120,604  
Liabilities and Equity              
Interest bearing debt $ 59,381     $ 55,762  
Deferred revenue   11,541       12,519  
Accounts payable and accrued liabilities   7,742       7,938  
Financial liability held for trading   797       -  
Other liabilities   735       657  
Total liabilities   80,196       76,876  
               
Share capital and contributed surplus   63,652       63,652  
Foreign currency translation reserve   2,941       3,612  
Deficit   (25,279 )     (23,536 )
Total shareholders' equity   41,314       43,728  
Total liabilities and equity $ 121,510     $ 120,604  
               

Third Quarter Results (three months ended September 30, 2016 compared with three months ended September 30, 2015)
  • Total revenue of $16.8 million increased by $0.3 million or 1.9% compared to the prior year;
  • Growth in sales from ASHL, contract ice rentals, in-house tournaments and food & beverage were the primary sources of the year-over-year revenue increase;
  • Loss before interest, tax, depreciation and amortization for the quarter was $0.2 million compared to a break-even level in 2015;
  • After recording depreciation, finance costs, an unrealized gain on an interest rate swap contract, and income tax recovery, net loss for the period was $1.1 million compared to $2.5 million a year ago;
  • Minimal foreign exchange gain/loss was recognized during the period compared to a foreign exchange loss of $0.4 million in 2015 related to period end translation of U.S. dollar denominated loans and monetary items; and
  • On July 7, 2016, Canlan entered into an operating agreement with a municipality to operate a two-pad ice rink facility in Calgary, Alberta for a term of 25 years.   Ownership of the facility will not transfer to Canlan; however, an income sharing arrangement with the municipality forms part of the agreement. The facility commenced operations in September 2016.

Nine Months Ended September 30, 2016 Results (nine months ended September 30, 2016 compared with nine months ended September 30, 2015)
  • Total revenue of $59.2 million increased by $2.7 million or 4.7% compared to the prior year;
  • Growth in sales from hockey and soccer leagues, contract ice rentals, in-house tournaments, instructional programs and food & beverage were the primary sources of the year-over-year revenue increase; in particular, newer operations of US facilities experienced strong growth in league and programs registrations; 
  • EBITDA of $6.9 million increased by $1.4 million or 25.1% from 2015;
  • After recording depreciation, finance costs, an unrealized valuation expense on an interest rate swap contract, income tax recovery and a foreign exchange gain, net loss for the period was $0.9 million compared to $2.7 million a year ago; and
  • A foreign exchange gain of $0.5 million was recognized during the period compared to a foreign exchange loss of $1.0 million in 2015 related to period end translation of U.S. dollar denominated loans and monetary items.

"It's nice to see the strong improvement of our operating results on a year-over-year basis," said Canlan's CEO, Joey St-Aubin.  "Our facility teams on both sides of the border have worked hard to provide excellent customer service and increase utilization of sport surfaces while carefully managing costs."

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