On Wednesday, March 5, the Great Canadian Gaming Corporation announced its financial results for the three-month period and 12-month period which ended December 31, 2013.
A release from GCGC states that Great Canadian recorded revenues of $101.6 million during the fourth quarter of 2013, a $1.2 million, or one per cent, decrease from the fourth quarter of 2012. The release states that the decrease is primarily attributed to both the decreased performance of the Ontario Racetracks and Boulevard Casino and Chances Chilliwack's receipt of $1.7 million in retroactive accelerated Facility Development Commission revenues during the fourth quarter of 2012. These declines were partially offset by revenues increases at River Rock Casino Resort and Great American Casinos.
Great Canadian's net earnings increased by $4.7 million during the fourth quarter of 2013 when compared to the prior year, primarily due to both a $6.9 million non-cash impairment charge on long-lived assets and $1.8 million higher restructuring and other costs that were recognized during the fourth quarter of 2012, as well as a $1.3 million reduction in amortization in 2013. These items were partially offset by the reductions in both EBITDA and income taxes as well as a $5.9 million increase in share based compensation expense.
For 2013, Great Canadian generated net earnings of $63.1 million, compared to a net loss of $27.6 million in 2012. This increase was primarily due to the $28.5 million reversal of the prior year's $64.3 million of non-cash impairment charges associated with Georgian Downs and Flamboro Downs.
"On November 29, 2013, Great Canadian signed definitive lease agreements with the Ontario Lottery and Gaming Corporation (‘OLG’) for the lease of the slot machine area at the Company's Ontario Racetracks,” Great Canadian's President and Chief Executive Officer Rod Baker was quoted as saying in the release. “The Company and OLG were previously operating under interim lease arrangements since April 1, 2013. The Company has also been receiving horse racing transition funding from the Government of Ontario since April 1, 2013. However, the Ontario Racetracks no longer receive a fixed percentage of the OLG's slot revenues, and do not directly share in horse racing pari-mutuel wagering revenues. When compared to the prior year, these changes led to decreases in both revenues and EBITDA at the Ontario Racetracks. Despite these declines, Great Canadian is pleased to continue our relationship with the OLG, and looks forward to developing this relationship further as the gaming industry in Ontario continues its evolution.
"In Ontario and elsewhere, Great Canadian is financially prepared to take advantage of opportunities to both enhance our property portfolio and grow shareholder value. Our financial flexibility is evident in both our strong cash balance and our undrawn revolving credit facility. Until the point that greater clarity around these opportunities emerges, we continue to pursue other avenues for creating shareholder value. Last year, the Company devoted $46.6 million towards the repurchase and cancellation of 4.5 million common shares at an average price of $10.32. As a result of these cancellations, we increased the ownership percentage of our existing shareholders by 6.4% over the course of 2013."
(With files from GCGC)
To view the release in its entirety, click here.
