GAMEHOST INC. (:GH) Gamehost Announces First Quarter Financial Results and Dividend for May

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09/05/2023 23:00

Not intended for distribution to U.S. newswire services or for dissemination in the U.S.

RED DEER, AB / ACCESSWIRE / May 9, 2023 / Gamehost Inc. (TSX:GH)

Management and Directors of Gamehost Inc. (the "Company") present results for the three months ended March 31, 2023 (the "Quarter").

The Quarter is the fourth consecutive quarter of operations without COVID-19 restrictions of any kind. Results in the Quarter are compared with both the comparable prior year quarter and (pre-COVID-19 quarter in 2019). Operating revenue was $19,838.6 thousand versus $14,942.4 thousand ($17,022.5 thousand - 2019), EBITDA to Owners was $8,022.6 thousand versus $4,528.8 thousand ($6,258.6 thousand - 2019), and Earnings per share for the Quarter was $0.21 versus $0.09 ($0.14 - 2019). The Company performed well above expectation for the Quarter on both top and bottom lines.

Capital investments made during and following the pandemic are delivering solid returns. The extensive expansions and renovations to all of our properties should result in minimal capital maintenance requirements for the Company in the medium term.

After funding the Company's regular monthly dividend, the Company continued prioritizing the use of capital resources for repurchasing shares while market prices remain below management's assessment of their underlying value. Under the current normal course issuer bid ("NCIB"), the Company has repurchased 666,356 common shares, 60% of the allowable maximum, at prices averaging $8.12 per common share excluding broker commissions for an aggregate $5,413.8 thousand. The NCIB expires in July 2023. Surplus cash, beyond dividend, NCIB and working capital requirements, was applied to revolving variable rate debt. Management believes these priorities for capital to be low risk, high return uses for excess cash.

The Company previously announced that the province's gaming regulator, AGLC, will increase the operator's share of slot commissions from 15% to 17% effective April 1, 2023. AGLC has stated the commission increase will be temporary for a period of two years. Slot operators are expected to reinvest in their facilities and/or in promotional activities that measurably support slot play. AGLC and provincial operators are collectively working out qualifying criterial and reporting requirements for the added commission. The Company is hopeful the increase will become permanent following evaluation of the temporary increase period.

During the Quarter, Deerfoot Inn & Casino hosted a third successful World Series of Poker Circuit ("WSOP-C") event. Deerfoot first hosted a WSOP-C event in January 2022 and built the biggest main event poker prize pool in Alberta history. Prize pools for these events have grown with each successive event held. Deerfoot will host a fourth WSOP-C event in May 2023. The Company hopes to build on our Deerfoot's early success and ideal suitability for such events in Calgary.

Inflation and the lagging impact of higher interest rates remain front burner risks to the Company's business. Management has taken steps to mitigate these risks. Capital allocation priorities allow for accelerated reduction in the Company's variable rate debt. Greater monitoring and forward contracting of major operational costs are already producing benefits.

Despite the overhang of inflation and interest rates, we like the look and feel of Alberta right now. Roadways are busy and the province is attracting a growing population. The Alberta Activity Index ("AAX"), data developed by the Alberta Treasury Board and Finance, tracks nine key indicators of economic activity (employment, average weekly earnings, retail trade, wholesale trade, manufacturing, new truck sales, housing starts, rigs drilling and oil production). The latest AAX data for January 2023 indicates Alberta economic activity at a historical high. So, this feeling we have, its not imagined. Its real!

Gamehost Inc.
Financial Highlights
Unaudited - Canadian dollars (thousands except per share figures)

three months ended March 31
2023 2022
Operating revenue
$19,838.6 $14,942.4
Cost of sales
(10,897.8) (8,903.6)
(829.5) (934.0)
(11,727.3) (9,837.6)
Gross profit
8,111.3 5,104.8
Lease and other income
42.8 (462.1)
Administrative expenses
(1,042.5) (827.4)
(231.6) (244.9)
(1,274.1) (1,072.3)
Profit from operating activities
6,880.0 3,570.4
Net finance costs
(768.5) (440.8)
Profit (loss) before income tax
6,111.5 3,129.6
Income tax (expense) recovery
(1,564.5) (979.4)
4,547.0 2,150.2
Profit attributable to:
4,547.0 1,973.2
Non-controlling interest
- 177.0
4,547.0 2,150.2
Earnings per share
Basic and fully diluted
$0.21 $0.09
Weighted average number of common shares outstanding
Basic and fully diluted (x 000)
22,161.1 22,651.8
$8,022.6 $4,759.7
40.2% 32.8%
March 31, 2023 December 31, 2022
16,597.0 15,614.5
Total assets
182,748.8 183,409.5
Total debt
53,935.0 54,502.2

Gamehost has declared a cash dividend for the month of May 2023 of $0.03 (CDN) per common share, which equates to $0.36 (CDN) per common share on an annualized basis. The dividend will be paid on June 15, 2023 to shareholders of record on May 31, 2023. This dividend is considered an "Eligible Dividend" and therefore, eligible for the enhanced gross-up and dividend tax credit available to Canadian shareholders.

This press release may contain certain "forward-looking information" or statements within the meaning of applicable securities legislation and may contain words such as "anticipates", "believes", "could", "expects", "indicates", "plans", "withstand", "further" or other similar expressions that suggest future outcomes or events. Forward-looking information is based on the Company's current expectations, estimates, projections and assumptions that were made by the Company in light of its historical trends and other factors. All information or statements, other than statements of historical fact, are forward-looking information including any statements that address expectations related to future economic outcomes or the Company's dividend. Forward-looking statements reflect reasonable assumptions made on the basis of management's current beliefs with information known by management at the time of writing. Many factors could cause actual results to differ from the results discussed in forward-looking statements. Actual results may not be consistent with these forward-looking statements.

The Company has included non-International Financial Reporting Standards ("non-IFRS") measures in this press release. EBITDA, as defined by the Company, means earnings before interest and financing costs, income taxes, depreciation and amortization, and foreign exchange gains or losses. The Company believes EBITDA is a useful measure because it provides information to management and investors about the Company's performance in generating operating cash flow to fund working capital needs, service debt obligations, fund future capital expenditures and support dividend policy. Readers are cautioned that non-IFRS measures do not have any standardized meaning prescribed by IFRS and should not be taken as alternatives to net earnings measured in accordance with IFRS. The Company's method of calculating non-IFRS measures may not be comparable to similarly titled measures used by other reporting entities.

Gamehost is a corporation established under the laws of the Province of Alberta. The Company's operations are all located in the Province of Alberta, Canada. Operations of the Company include the Rivers Casino & Entertainment Centre in Ft. McMurray, the Great Northern Casino, Service Plus Inns & Suites and Encore Suites hotels as well as a strip mall all located in Grande Prairie and the Deerfoot Inn & Casino in S.E. Calgary.

These consolidated interim financial results include the accounts of Gamehost Inc. and its subsidiaries; however, they do not include all disclosures normally provided in consolidated interim financial statements and should be read in conjunction with the 2023 Q1 consolidated interim financial statements. Further, while the financial figures included in this announcement have been computed in accordance with IFRS applicable to annual periods, this announcement does not contain sufficient information to constitute an annual financial report and should be read in conjunction with the 2022 annual financial report for the twelve and three months ended December 31, 2022. This interim report will be filed in its entirety, along with historical financial reports on the Company's website at www.gamehost.ca and on SEDAR at www.sedar.com along with the Company's other continuous disclosure documents, when they are available.

Gamehost common shares trade on the Toronto Stock Exchange (TSX) under the symbol GH. For more information, contact:

Craig M. Thomas or Darcy J. Will
P (877) 703-4545
F (403) 340-0683
E ir@gamehost.ca

SOURCE: Gamehost Inc.

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