Q2 Same-Facility Surface Revenue Returned to Pre-Pandemic Level
Burnaby, British Columbia--(Newsfile Corp. - August 12, 2022) - Canlan Ice Sports Corp. (TSX: ICE) (the "Corporation") today reported its financial results for the second quarter ended June 30, 2022.
Overview - Quarter Ended June 30, 2022
Total operating revenue was $17.1 million compared to $3.6 million a year ago;
Q2 same-facility surface revenue returned to pre-pandemic (Q2 2019) levels;
Total operating earnings was $1.9 million compared to an operating loss of $1.4 million in 2021;
Canlan Sports Libertyville, the latest sports complex added to the Company's portfolio in July 2021, reached its one-year anniversary and operating earnings are on target for the first half of 2022; and
In terms of capital projects, the Company resumed its investments in green-initiatives as it completed a multi-year project to re-lamp all sports complexes with LED lighting and continued the electrification of the Company's fleet of ice re-surfacers. In addition, Canlan Sports Lake Barrington's field turf was completely replaced.
Three Months and Six Months Ended June 30, 2022 Results
| For the 3 months ended June 30 | For the 6 months ended June 30 | | |||||||||||
| (in thousands) | 2022 | 2021 | 2022 | 2021 | | ||||||||
| Ice rink & recreational facilities revenue | $ | 17,073 | $ | 3,610 | $ | 36,021 | $ | 8,660 | |||||
| Other income - government subsidy | - | 2,262 | - | 4,701 | |||||||||
| Operating expense | (13,362 | ) | (5,891 | ) | (25,847 | ) | (12,378 | ) | |||||
| 3,711 | (19 | ) | 10,174 | 983 | |||||||||
| G&A expense | (1,762 | ) | (1,333 | ) | (3,371 | ) | (2,713 | ) | |||||
| Operating earnings (loss)[1] | $ | 1,949 | ($1,352 | ) | $ | 6,803 | ($1,730 | ) | |||||
| Operating earnings (loss) per share | $ | 0.15 | ($0.10 | ) | $ | 0.51 | ($0.13 | ) | |||||
| Depreciation | (1,978 | ) | (1,913 | ) | (3,953 | ) | (3,858 | ) | |||||
| Interest | (647 | ) | (643 | ) | (1,174 | ) | (1,254 | ) | |||||
| Mark-to-market gain on held for trading financial liabilities | 192 | 112 | 507 | 243 | |||||||||
| Gain (loss) on foreign exchange | 4 | (7 | ) | 1 | 18 | ||||||||
| Gain on sale of assets | 106 | 22 | 106 | 45 | |||||||||
| Income tax recovery (expense) | 131 | 1,174 | (416 | ) | 1,799 | | |||||||
| Net earnings (loss) | ($243 | ) | ($2,607 | ) | $ | 1,874 | ($4,737 | ) | |||||
| Net earnings (loss) per share | ($0.02 | ) | ($0.20 | ) | $ | 0.14 | ($0.36 | ) | |||||
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1 Operating earnings (loss) is defined as earnings (loss) after general and administrative expenses and before interest, depreciation, foreign currency exchange, gain (loss) on assets sold and income tax. However, operating earnings is not a term that has specific meaning in accordance with IFRS, and may be calculated differently by other companies. Canlan reconciles operating earnings to its net earnings.
| Key Balance Sheet Figures (in thousands): | ||||||
| June 30, 2022 | December 31, 2021 | |||||
| Assets | ||||||
| Cash | $ | 9,643 | $ | 12,530 | ||
| Property plant and equipment | 96,076 | 97,432 | ||||
| Investment | 350 | 350 | ||||
| Other assets | 6,289 | 6,300 | ||||
| Total assets | $ | 112,358 | $ | 116,612 | ||
| Liabilities and Equity | ||||||
| Debt | $ | 41,771 | $ | 43,796 | ||
| Lease liabilities | 10,806 | 11,221 | ||||
| Accounts payable and accrued liabilities | 8,059 | 8,152 | ||||
| Deferred revenue | 7,885 | 12,029 | ||||
| Other liabilities | 1,083 | 998 | ||||
| Total liabilities | 69,604 | 76,196 | ||||
| Share capital and contributed surplus | 63,652 | 63,652 | ||||
| Foreign currency translation reserve | 2,221 | 1,757 | ||||
| Deficit | (23,119 | ) | (24,993 | ) | ||
| Total shareholders’ equity | 42,754 | 40,416 | ||||
| Total liabilities and equity | $ | 112,358 | $ | 116,612 |
Second Quarter Results
(three months ended June 30, 2022 compared with three months ended June 30, 2021)
Total Q2 revenue was $17.1 million compared to $3.6 million as operations were opened in all locations in 2022 whereas in 2021, operations were only starting to resume in certain regions;
Revenue from contract surface rentals and the ASHL represented approximately two-thirds of total surface revenue as demand in these two product areas remains strong;
Business activity in restaurants and concessions increased compared to Q1; however, they still were not at 100% capacity in all regions due to labour supply issues being faced in the hospitality industry;
Total operating expenses of $13.4 million increased by $7.5 million due to resumption of operations in 2022;
Significant maintenance projects, some of which were deferred from the previous two years were completed during the quarter;
Total G&A expenses of $1.8 million increased by $0.4 million or 32.2% mainly due to the centralization of our sales and customer service team members;
Operating earnings from operations was $1.9 million for the quarter compared to a loss of $1.4 million a year ago; and
After recording $2.2 million related to depreciation, finance costs, income tax recoveries and other miscellaneous items, net loss for the period was $0.2 million or $0.02 a share compared to a loss of $2.6 million or $0.20 a share in 2021.
Six Months Ended June 30, 2022 Results
(six months ended June 30, 2022 compared with six months ended June 30, 2021)
Total revenue was $36.0 million compared to $8.7 million as operations were at full capacity starting February 2022 compared to 2021, when facility closures were still in effect until the latter weeks of Q2;
ASHL revenue for the first half of 2022 reached approximately 91% of 2019 levels (pre-pandemic year) on a same-facility basis, demonstrating the strength of the Company's adult hockey league offering;
Total operating expenses of $25.8 million increased by $13.5 million due to the full resumption of operations in 2022;
G&A expenses of $3.4 million increased by $0.7 million or 24.3% mainly due to the centralization of our sales and customer service team members;
Operating earnings before interest, depreciation and taxes was $6.8 million compared to a loss of $1.7 million in 2021; and
After recording $4.9 million related to depreciation, finance costs, income tax expense, and miscellaneous items, net earnings for the period was $1.9 million or $0.14 a share, compared to a net loss of $4.7 million or $0.36 a share a year ago.
"The three months ended June 30, 2022 marked the first quarter since the end of 2019 in which all of our sports complexes were able to operate with no interruptions related to COVID-19 public health orders or entry restrictions due to vaccination requirements. This was a huge burden lifted from our business operations and it showed right away in our results as same-facility surface revenue returned to levels comparable to Q2 2019, the last pre-pandemic year," said Joey St-Aubin, Canlan's CEO. He also stressed, "Our team has done an outstanding job, especially in light of the labour shortfalls the service sector continues to face. We are now focused on wrapping up the summer league, tournament, and camp season while starting up the fall/winter league registration season. Though very early in this process, registrations look strong so far and we'll continue to push towards pre-pandemic levels of business activity in all areas, including food & beverage and sports store operations."
Dividend Policy
When the COVID-19 pandemic began, measures were implemented by management to preserve cash balances. Given this, combined with the austerity that was asked of our employees, directors, our customers, our suppliers and our financial partners, Canlan's Board of Directors suspended the payment of dividends on March 24, 2020 and will continue to do so until further notice. Canlan's Board of Directors reviews the Corporation's dividend policy on a quarterly basis and will continue to monitor this situation and respond accordingly as we work towards the resumption of full business operations.
Filings
Canlan's financial statements and Management's Discussion & Analysis for the period ended June 30, 2022 will be available via SEDAR on or before August 12, 2022 and through the Company's website, www.canlansports.com.
About Canlan
Canlan Ice Sports Corp. is the North American leader in the development, operations and ownership of multi-purpose recreation and entertainment facilities. We are amongst the largest private sector owners and operators of recreation facilities in North America and currently own, lease and/or manage 18 facilities in Canada and the United States with 49 ice surfaces, as well as seven indoor soccer fields, and 24 sport, volleyball, and basketball courts. To learn more about Canlan please visit www.canlansports.com.
Canlan Ice Sports Corp. is listed on the Toronto Stock Exchange under the symbol "ICE."
Caution concerning forward-looking statements
Certain statements in this News Release may constitute ''forward looking'' statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this News Release, such statements may use such words as ''may'', ''will'', ''expect'', ''believe'', ''plan'' and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this News Release. These forward looking statements involve a number of risks and uncertainties. Some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward looking statements are the effects of, as well as changes in: international, national and local business and economic conditions; political or economic instability in the Corporation's markets; competition; legislation and governmental regulation; and accounting policies and practices. The foregoing list of factors is not exhaustive.
For more information:
Canlan Ice Sports Corp.
Ivan Wu
CFO
604 736 9152
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/133569
