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Gamehost Announces Third Quarter 2018 Financial Results, Hotel Purchase, and November Dividend

Not Intended for Distribution to U.S. Newswire Services or for Dissemination in the U.S.

RED DEER, ALBERTA / ACCESSWIRE / November 13, 2018 / Gamehost Inc. (TSX: GH) Management and Directors of Gamehost Inc. (the "Company") present results for the nine months and three months ended September 30, 2018 (the "Period" and "Quarter" respectively).

The Company posted a marginal gain in overall revenue but not significant enough to offset inflationary pressures on costs. An early and severe arrival of snow in September coupled with a general slowing of growth in Alberta cooled field activity in the energy sector resulting in fewer hotel stays and less foot traffic in our casinos.

Operating revenue for the Quarter was up $0.1 million on strength in slot activity while profit to shareholders was $0.3 million lower. Earnings per common share for the Quarter were $0.17 versus $0.18 in Q3 2017.

Earnings before interest, taxes, depreciation, and amortization ("EBITDA") that is attributable to shareholders of the Company ("EBITDA to Shareholders") was down $0.5 million or 6.9% to $6.7 million compared to $7.2 million in the same quarter of 2017. EBITDA to Shareholders margin for the Quarter was 1.0 percentage points lower than the same quarter in 2017 at 42.9% compared to 43.9%.

The Company purchased 114,845 shares on normal course issuer bid during the Quarter at prices averaging $11.95 per common share plus commissions. The Company will continue to purchase shares at opportunistic price levels.

During the Quarter, the Company renegotiated existing term credit facilities to extend terms an additional eight years to 2033. This will decelerate the repayment of debt by $1.2 million annually. At 0.9 to 1, and stable, the Company's debt to EBITDA ratio remains conservative with further prime rate increases expected in the new year. This action provides further cushion to the Company's dividend payout ratio which has also stabilized in the 90% range.

On November 13, 2018, a Special Committee of the Company's independent board members approved the purchase of the business and property known as Encore Suites by Service Plus Inns located in Grande Prairie, Alberta from Peace Country Hospitality Inc ("Peace Country") for a price of $12.5 million. Peace Country is a company controlled by David Will, Darcy Will and Elston Noren, each of whom are officers and significant shareholders of the Company. The purchase is subject to certain terms and conditions including execution of a mutually satisfactory purchase and sale agreement. Gamehost secured an additional $7.0 million on its revolving credit facility to complete the purchase. The Company's revolving credit facility carries interest of bank prime plus 1.0% or currently 4.95%. The purchase is expected to be immediately accretive to cash flow. Gamehost anticipates the sale to close prior to the end of the calendar year.

Gamehost Inc.







Financial Highlights







Unaudited - Canadian dollars (millions except per share figures)












nine months ended September 30

three months ended September 30




2018

2017

% Chg.

2018

2017

% Chg.









Operating revenue

$ 52.8

$ 50.5

4.6%

$ 17.3

$ 17.2

0.6%

Cost of sales








Other

(28.4)

(27.7)


(9.5)

(9.1)



Depreciation

(1.3)

(1.3)


(0.4)

(0.4)




(29.7)

(29.0)


(9.9)

(9.5)


Gross profit

23.1

21.5

7.4%

7.4

7.7

(3.9%)









Administrative expenses








Other

(2.5)

(2.2)


(0.8)

(0.7)



Depreciation

(0.9)

(1.0)


(0.3)

(0.3)




(3.4)

(3.2)


(1.1)

(1.0)


Profit from operating activities

19.8

18.4

7.6%

6.3

6.7

(6.0%)









Net finance costs

(0.7)

(0.7)


(0.3)

(0.2)










Income tax expense

(4.9)

(4.6)


(1.5)

(1.7)


Profit

14.2

13.1

8.4%

4.5

4.8

(6.3%)









Profit attributable to:








Shareholders

13.3

12.3

8.1%

4.2

4.5

(6.7%)


Non-controlling interest

0.9

0.8


0.3

0.3




14.2

13.1


4.5

4.8










Earnings per share







Basic and fully diluted

$ 0.54

$ 0.50

8.0%

$ 0.17

$ 0.18

(5.6%)









Weighted average number of common shares outstanding







Basic

24.5

24.7


24.4

24.7


Fully diluted

24.5

24.7


24.4

24.7










EBITDA to Shareholders

$ 21.1

$ 19.9

6.0%

$ 6.7

$ 7.2

(6.9%)

EBITDA to Shareholders %

41.9%

41.3%


42.9%

43.9%

















Cash

15.0

14.6

2.7%




Total assets

161.7

164.1

(1.5%)




Total debt

27.6

25.8

7.0%





Gamehost has also declared a cash dividend for the month of November 2018 of $0.0575 per common share. The dividend will be paid on December 14, 2018 to shareholders of record on November 30, 2018. The ex-dividend date is November 28, 2018.

This dividend is considered an "Eligible Dividend", qualifying for the enhanced gross-up and dividend tax credit available to 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 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 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. Dividend pay-out ratio, means EBITDA less all scheduled principal payments on debt, interest expense, and income tax expense. The Company believes this measure to be useful to management and investors because it provides insight into the sustainability of the Company's dividend.

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 Boomtown Casino in Ft. McMurray, the Great Northern Casino, Service Plus Inns & Suites hotel and a strip mall all located in Grande Prairie. The Company also holds a 91% ownership position in Deerfoot Inn & Casino Inc. in Calgary.

These condensed interim consolidated financial results include the accounts of Gamehost Inc. and its subsidiaries; however, they do not include all disclosures normally provided in annual consolidated financial statements and should be read in conjunction with the 2017 annual consolidated 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 interim or annual financial report. The company will file an interim financial report for the nine and three months ended September 30, 2018. This 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 info@gamehost.ca

SOURCE: Gamehost Inc.



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https://www.accesswire.com/527989/Gamehost-Announces-Third-Quarter-2018-Financial-Results-Hotel-Purchase-and-November-Dividend

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