Gamehost Announces Fourth Quarter 2021 Financial Results and Resumes Dividends from March 2022

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RED DEER, AB /ACCESSWIRE/March 8, 2022/ Gamehost Inc. (TSX:GH) The management and directors of Gamehost Inc. (the “Company”) present the results for the twelve and three-month periods ended December 31, 2021 (the “Year” and “Quarter”) respectively).

Compared year over year for the quarter, revenue increased 52.8% to $13.6 from $8.9 ($17.3 – 2019), EBITDA to shareholders increased rose 9.3% to $4.7 from $4.3 ($6.5 – 2019). Earnings per share for the quarter were $0.01 to $0.7 lower compared to $0.08 per share ($0.15 – 2019).

The Company’s casinos operated under Alberta’s Restrictions Exemption Program (REP) from mid-September 2021 through the end of the quarter. The REP only requires entry to guests with proof of vaccination or those providing a recent negative COVID-19 test or medical exemption certificate. Additional restrictions on dine-in service were added later in the quarter, resulting in service shutting down at 11:00 p.m. and no service outside of seated areas with a lounge or restaurants. The company’s hotels continued to operate with standard masking and physical distancing when checking in. The restrictions had a negative effect on customer visits and the length of customer visits. This was particularly the case in Grande Prairie and, to a lesser extent, in Fort McMurray. Citizens in these two regions have lower vaccination rates than the provincial average and have strongly pushed back against government restrictions related to COVID-19.

During the quarter, work on two major expansion projects also reduced revenue generation. The two projects, a $4.4 million 5,000 square foot expansion of gaming and other facilities at Deerfoot Casino and a $6.3 million 6,687 square foot expansion of non-gaming facilities and an exterior renovation of the Rivers Casino were completed at the end of the quarter. Both projects have been impacted by COVID-19 related supply and inflationary pressures. The Company used excess cash and revolving debt to finance both projects. The company received a $1.9 million payment for tenant compensation in the first quarter of 2022. The company is finalizing plans for the renovation of the Great Northern Casino which is expected to begin next spring. Plans include an exterior modernization and general interior refresh as well as expanded food and beverage areas.

The Company repurchased 245,100 shares for a total of $2.0 million or an average of $7.95 per share before commissions during the quarter. The Company’s current tender offer is open until July 20, 2022 and management intends to continue buying shares as long as the share price does not adequately reflect the underlying value.

At the regular meeting of the board of directors held on March 7, 2022, the board reinstated a dividend for shareholders which had been suspended since April 2020. The board declared a dividend for the month of March 2022, of $0.03 /ordinary share. The dividend will be paid on or about April 15, 2022. In making its decision, the board considered the waning impact of COVID-19 and the lifting of related provincial operating restrictions. Management presented future cash flow projections to the board with a view to setting aside funds to accelerate debt payments through 2022 and to reserve additional cash for share buybacks if necessary. justified. The board has determined that restarting the dividend at a monthly rate of $0.03 per common share is a tax-responsible starting point and will review the dividend policy on a quarterly basis.

To say the past two years in our industry have been challenging would be an understatement. This is especially true for our dedicated front-line team who provide the day-to-day services on which our success is based. They have undergone multiple openings and closings and have adapted to ever-changing rules to operate safely. The resulting ups and downs in business activity created unpredictable work schedules. The directors and management of the Company send you our most sincere thanks, thank you, thank you.

For the future, a transition from the pandemic phase to the endemic phase, for Covid-19, seems to be taking shape. With each lifting of the restriction, we observed an increase in our activity. More importantly, we are seeing a lot of green shoots in Alberta’s economy. Along with the obvious benefits of rising oil and gas prices, there are significant investments being made in solar, wind and other green energy infrastructure across the province. Public and private investment in biofuels, film, information technology, construction and other industries, as well as affordable housing, leads to increased immigration and lower unemployment. With optimism, we look forward to a bright future for Alberta over the past two years!

Gamehost Inc.
Financial Highlights
Unaudited – Canadian dollars (in millions except per share figures)

twelve months ended December 31

three months ended December 31

2021

2020

% Change

2021

2020

% Change

Operating revenue

$

33.3

$

34.6

(3.8

%)

$

13.6

$

8.9

52.8

%

Cost of sales

Other

(21.5

)

(22.5

)

(8.7

)

(5.8

)

Depreciation

(3.4

)

(3.0

)

(1.3

)

(0.8

)

(24.9

)

(25.5

)

(10.0

)

(6.6

)

Gross profit (loss)

8.4

9.1

(7.7

%)

3.6

2.3

56.5

%

Rental and other income

4.6

4.1

0.8

2.1

Administrative expenses

Other

(2.3

)

(2.3

)

(0.7

)

(0.6

)

Depreciation

(1.0

)

(1.1

)

(0.3

)

(0.3

)

(3.3

)

(3.4

)

(1.0

)

(0.9

)

Profit (loss) from operating activities

9.7

9.8

(1.0

%)

3.4

3.5

(2.9

%)

Fair value adjustment

(0.5

)

(0.8

)

(0.5

)

(0.2

)

Net financial charges

(1.6

)

(1.5

)

(0.5

)

(0.4

)

Profit (loss) before income tax

7.6

7.5

2.4

2.9

Income tax recovery (expenses)

(1.5

)

(1.8

)

(0.5

)

(1.0

)

loss of profit)

6.1

5.7

7.0

%

1.9

1.9

0.0

%

Profit (loss) attributable to:

Shareholders

5.6

5.3

5.7

%

1.7

1.8

(5.6

%)

Non-controlling interest

0.5

0.4

0.2

0.1

6.1

5.7

1.9

1.9

Earnings (loss) per share

Basic and fully diluted

$

0.24

$

0.22

9.1

%

$

0.07

$

0.08

(12.5

%)

Weighted average number of common shares outstanding

Basic and fully diluted

23.0

23.8

22.7

23.4

EBITDA to shareholders

$

13.5

$

13.4

0.7

%

$

4.7

$

4.3

9.3

%

EBITDA to shareholders %

37.5

%

36.2

%

34.6

%

41.0

%

December 31, 2021

Cash

15.6

10.3

51.5

%

Total assets

188.4

175.0

7.7

%

Total debt

49.0

40.8

20.1

%

This press release may contain certain “forward-looking information” or statements within the meaning of applicable securities laws and may contain words such as “anticipates”, “believes”, “could”, “expects”, “indicates ‘, ‘expects’, ‘resist’, ‘further’ or other similar expressions that suggest future results or events. Forward-looking information is based on the Company’s current expectations, estimates, projections and assumptions that have been 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 all statements that address expectations relating to future economic results or the Company’s dividend. Forward-looking statements reflect reasonable assumptions made based on management’s current beliefs with information known to management at the time of writing. Many factors could cause actual results to differ from the results discussed in the forward-looking statements. Actual results may not be consistent with these forward-looking statements.

The Company has included measures that do not comply with International Financial Reporting Standards (“non-IFRS”) in this press release. EBITDA to shareholders, as defined by the Company, means earnings before interest and financing costs, income taxes, depreciation and amortization and foreign exchange gain. The Company believes that 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 requirements, servicing debts, financing future capital expenditures and supporting the dividend policy. Readers are cautioned that non-IFRS measures do not have standardized meanings prescribed by IFRS and should not be considered substitutes for net income 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. Dividend payout ratio means EBITDA minus all expected principal payments on debt, interest expense and income tax expense. The Company believes this metric is helpful to management and investors as it provides insight into the sustainability of the Company’s dividend.

Gamehost is a corporation incorporated under the laws of the Province of Alberta. The Company’s operations are all located in the province of Alberta, Canada. The Company’s operations include the Rivers Casino in Ft. McMurray, the Great Northern Casino, the Service Plus Inns & Suites hotel, the Encore Suites hotel and a shopping mall, all located in Grande Prairie. The Company also holds a 91% interest in Deerfoot Inn & Casino Inc. in Calgary.

These consolidated financial results include the accounts of Gamehost Inc. and its subsidiaries; however, they do not include all of the information normally provided in annual consolidated financial statements and should be read in conjunction with the 2021 annual consolidated financial statements. In addition, while the financial figures included in this announcement have been calculated in accordance with applicable IFRS at annual periods, this announcement does not contain sufficient information to constitute an annual financial report. The Company will file an annual financial report for the twelve and three months ended December 31, 2021. This report will be filed in full, together with historical financial reports on the Company’s website at www.gamehost.ca and on SEDAR at www.sedar.com as well as the Company’s other continuous disclosure documents, when available.

Gamehost’s common stock trades on the Toronto Stock Exchange (TSX) under the symbol GH. For more information contact:

Craig M. Thomas or Darcy J. Will
(877) 703-4545
F (403) 340-0683
E [email protected]

THE SOURCE: Gamehost Inc.

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