BURNABY, BC, Nov. 12 /CNW/ -- Canlan Ice Sports Corp., providers of the on-ice experience to youth and adults across North America, today announced its financial results for the three and nine-month periods ended September 30, 2009.
Key Financial Metrics
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Q3 2009 Q3 2008 Change
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Total assets $110.7M $109.5M -
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Interest bearing debt $49.6M $53.3M -6.9%
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Total Revenue $13.6M $12.9M +5.4%
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Same store revenue $13.4M $12.9M +3.9%
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Net loss $1.4M $1.3M -7.7%
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Net loss per share $0.10 $0.09 -11.1%
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"Our results for the third quarter, which traditionally is our weakest given the seasonal nature of our operations, showed a number of positive trends," said Joey St-Aubin, President and CEO of Canlan Ice Sports. "Against a backdrop of negative economic conditions, we grew our revenue by more than five percent, increased our tournament and sponsorship sales by more than $200,000 and paid down more than $1.4 million of long-term debt. In fact, excluding results from our start-up Ice Sports Vineland facility, our Q3 performance was generally consistent with our recent track record."
Third Quarter Operational and Financial Highlights
- $1.4 million worth of preference shares issued in connection with
financing secured to complete the acquisition of Ice Sports York in
August, 2006 were redeemed for cash.
- Consolidated revenue was $13.6 million, up 5.4% from $12.9 million
for the third quarter of 2008.
- Sales from Canlan's Adult Safe Hockey League totaled $2.6 million for
the summer season compared to $2.4 million in 2008.
- Same store revenue grew by $500,000 or 3.9%.
- Earnings before interest, taxes and amortization (EBITA)(1) was
$39,000 or $Nil per share compared to $608,000 or $0.05 per share for
Q3 2008, on a post-consolidated basis.
- Net loss before taxes was $1.9 million compared to a net loss before
taxes of $1.5 million for Q3 of 2008.
- Net loss after taxes was $1.4 million, or $0.10 per share (basic and
diluted), compared to a net loss after taxes of $1.3 million, or
$0.09 per share for Q3 of 2008.
Financial Results
Canlan reported consolidated revenue of $13.6 million for the three-month period ended September 30, 2009, up 5.4% from $12.9 million for Q3 of 2008. Same store revenue grew by 3.9% or $500,000 over Q3 of 2008. The revenue growth was principally due to higher ice sales and increased registrations for the Company's summer programs, including youth camps, the Adult Safe Hockey League and youth tournaments, as well as higher advertising and sponsorship sales.
Revenue for the nine-month period of 2009 was $47.6 million, up 4.2% from $45.7 million for the same period of 2008. Revenue growth included increased sales of $685,000, or 26%, by the Company's tournament division and incremental sales of $520,000 from Ice Sports Vineland, a New Jersey-based facility that Canlan began to lease and operate in October, 2008. Canlan's year-to-date revenue growth was negatively impacted, however, by a decline of food and beverage sales of $238,000, or 2.7%, from the same period of 2008. The decline is due to unfavorable economic conditions in a number of Canlan's major markets. On a year-to-date basis, same store revenue grew $1.4 million or 3.1% over 2008.
Canlan derives its revenue from the rental of its playing surfaces, registrations for internal programming, food and beverage sales, sports stores sales, tournament registrations, management and consulting fees and other related fees.
Operating expenses were $12.4 million and $38.9 million for third quarter and the nine-month period of 2009 respectively, compared to $11.4 million and $36.4 million for the same periods respectively for 2008.
The year-over-year increase in operating expenses for the third quarter of 2009 was due to a number of factors, including higher maintenance and ice production costs, higher electricity costs, particularly in Ontario where increased rates were levied by local hydro companies, higher wages and upgrades to buildings and parking facilities. A year-over-year growth in operation expenses of $321,000 was also incurred in Q3 of 2009 as a result of the addition of lce Sports Vineland to the Company's roster of facilities owned, leased or operated.
EBITA for the third quarter of 2009 was $39,000, down from $569,000 for Q3 of 2008. The decline was principally due to higher operating expenses and increased general and administrative expenses, including compensation charges stemming from the Company's Stock Appreciation Rights Plan and its related appreciation of Canlan's share price. The decline in EBITA was also attributable to increased labour costs due to new hires in strategic business areas, such as sales and marketing.
EBITA for the nine-month period of 2009 was $5.5 million compared to $6.7 million for the same period of 2008. The decline was primarily attributable to higher operating costs of $1.0 million related to Ice Sports Vineland.
Canlan recorded a net loss before taxes of $1.9 million for the third quarter of 2009 down 23% from a net loss of $1.5 million for Q3 of 2008. On a year-to-date basis, Canlan's net loss before taxes for 2009 was $196,000 compared to a net gain before taxes of $538,000 for the nine-month period of 2008.
Net loss for Q3 of 2009 was $1.4 million, or $0.10 per share (basic and diluted), once a future tax recovery of $529,000 was recorded. Net loss for Q3 of 2008 was $1.3 million or $0.09 per share. Net loss for the nine-month period of 2009 was $313,000 or $0.02 per share. This compares to a net earnings of $369,000, or $0.03 per share, for 2008. All per share totals have been adjusted to reflect Canlan's share consolidation effected December 2, 2008.
Cash and cash equivalents held at September 30, 2009 were $4.1 million compared to $3.6 million for September 30, 2008.
Outlook
"Our on-ice experience and the quality of our programming have allowed us to weather some very unfavorable economic conditions over the past nine months, which is reflected in an increase in same store sales," said Michael Gellard, Chief Financial Officer of Canlan Ice Sports. "Through a stronger balance sheet, strategic investments in a number of key areas, including new programming and online sales activities, and cost reduction efforts aimed primarily at energy conservation, we are very well positioned as we enter into the fall and winter seasons, which operationally are our busiest periods."
Canlan will file its consolidated financial statements and Management Discussion & Analysis for the period ending September 30, 2009 with SEDAR on or before November 16, 2009.
About Canlan
Canlan Ice Sports Corp. is the largest private sector operator of recreational ice facilities in North America with 63 playing surfaces at 21 facilities in Canada and the United States. Through the ASHL, Canlan operates the largest adult recreational hockey league in North America with more than 63,000 registered players in the winter and summer seasons, and offers a variety of other programs including youth leagues, hockey and figure skating schools and tournaments.
Canlan Ice Sports Corp. is listed on the Toronto Stock Exchange under the symbol "ICE."
Caution concerning forward-looking statements
This document contains forward-looking statements, which may be identified by words like "expects", "anticipates", "plans", "intends", "indicates" or similar expressions. These statements are not a guarantee of future performance and are inherently subject to risks and uncertainties. The Company's actual results could differ materially from those currently anticipated due to a number of factors set forth in reports and other documents filed by the Company with Canadian securities regulatory authorities from time to time.
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(1) Earnings before interest, taxes and amortization (EBITA) is often
used as a measure of financial performance. However, EBITA is not a
term that has specific meaning in accordance with generally accepted
accounting principles, and may be calculated differently by other
companies. Canlan reconciles EBITA to its net earnings.
CANLAN ICE SPORTS CORP.
Consolidated Balance Sheets
(In thousands of dollars)
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September December September
30 2009 31 2008 30 2008
(unaudited) (audited) (unaudited)
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Assets
Current assets:
Cash and cash equivalents $4,053 $7,588 $3,622
Accounts receivable 2,458 1,826 3,049
Inventory 1,044 1,071 1,169
Prepaid expenses 953 331 908
Future income taxes 3,092 3,209 1,077
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11,600 14,025 9,825
Properties:
Ice rinks 96,582 98,137 98,192
Held for ice rink development 856 856 856
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97,438 98,993 99,048
Future income taxes 1,357 1,357 303
Other assets 325 339 329
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$110,720 $114,714 $109,505
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued
liabilities $ 4,680 $ 5,721 $ 5,366
Deferred revenue and customer deposits 11,124 10,970 10,872
Financial liability held for trading 645 933 -
Current portion of:
Obligations under capital leases 546 551 439
Debt on ice rinks 2,687 2,663 943
Preferred shares - 1,400 1,250
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19,682 22,238 18,870
Long-term liabilities:
Obligations under capital leases 1,106 1,088 818
Debt on ice rinks 45,299 46,442 48,436
Preferred shares - - 1,400
Future income taxes 1,507 1,507 -
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47,912 49,037 50,654
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67,594 71,257 69,524
Shareholders' equity:
Share capital 63,109 63,109 63,109
Contributed surplus 543 543 543
Deficit (20,526) (20,213) (23,671)
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43,126 43,439 39,981
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$110,720 $114,714 $109,505
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CANLAN ICE SPORTS CORP.
Consolidated Statements of Earnings, Comprehensive Income and Deficit
(unaudited)
(In thousands of dollars, except for per share amounts)
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Three months ended Nine months ended
September 30 September 30
2009 2008 2009 2008
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Revenue:
Ice rinks $ 13,582 $ 12,921 $ 47,633 $ 45,686
Expenses:
Ice rinks 12,358 11,411 38,857 36,408
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Earnings from operations 1,224 1,510 8,776 9,278
General and
administration expenses 1,185 902 3,284 2,600
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Earnings before the
under-noted 39 608 5,492 6,678
Other expenses:
Amortization 1,117 1,084 3,324 3,119
Interest 908 1,069 2,716 3,069
Gain on held-for
-trading financial
liabilities (note 14) (70) - (288) -
Other (26) (7) (64) (48)
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1,929 2,146 5,688 6,140
Earnings (loss)
before taxes (1,890) (1,538) (196) 538
Future income tax
recovery (expense) 529 278 (117) (169)
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Net earnings (loss) (1,361) (1,260) (313) 369
Deficit, beginning
of period (19,165) (22,411) (20,213) (24,040)
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Deficit, end of period $ (20,526) $ (23,671) $ (20,526) $ (23,671)
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Basic and fully
diluted earnings per
common share $ (0.10) $ (0.09) $ (0.02) $ 0.03
Weighted average
common shares issued
for basic and diluted
earnings per share
calculations 13,337,448 13,337,448 13,337,448 13,337,448
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