Canlan Reports Record High Q2 Revenue and Continues Quarterly Dividend

Rhea-AI Summary

Canlan Ice Sports Corp. (TSX: ICE) reported record-high Q2 revenue of $21.8 million, a 10.3% increase from last year. Despite this, operating earnings decreased to $1.6 million from $2.3 million in 2023 due to increased expenses related to roof remediation and maintenance projects. Food and beverage revenue rose by 12.3% driven by increased tournament business. For the six months ended June 30, 2024, total operating revenue was $48.0 million, up 8.5% year-over-year. The company reported net earnings of $3.1 million or $0.23 per share for this period. Canlan's Board of Directors approved the continuation of its quarterly dividend of $0.03 per common share, payable on October 16, 2024.

Positive

• Record-high Q2 revenue of $21.8 million, up 10.3% year-over-year
• Food and beverage revenue increased by 12.3%
• Six-month operating revenue up 8.5% to $48.0 million
• Net earnings of $3.1 million for the six-month period
• Continuation of quarterly dividend of $0.03 per share

Negative

• Q2 operating earnings decreased to $1.6 million from $2.3 million in 2023
• Increased expenses due to roof remediation and maintenance projects
• G&A expenses increased by 30.6% in Q2
• Net loss of $1.2 million for Q2 compared to net earnings of $0.8 million in prior year
• Six-month net earnings per share decreased to $0.23 from $0.32 in 2023

Burnaby, British Columbia--(Newsfile Corp. - August 14, 2024) - Canlan Ice Sports Corp. (TSX: ICE) (the "Corporation") today reported its financial results for the second quarter ended June 30, 2024.

Overview of Q2 2024

• Total operating revenue of $21.8 million increased by $2.0 million or 10.3% compared to a year ago and represents a record high for the second quarter;

• Total operating earnings was $1.6 million compared to $2.3 million in 2023 as the Company incurred increased expenses related to its roof remediation program and other major maintenance projects to improve dressing rooms, rink floors and parking lots compared to 2023; and

• Food and beverage revenue was up 12.3% due to increased tournament business and additional promotional programs that drove increased traffic into the Company's restaurants.

Three Months and Six Months Ended June 30, 2024 Results

		For the 3 months ended June 30				For the 6 months ended June 30
(in thousands)		2024			2023	2024				2023
Ice rink & recreational facilities revenue	$	21,848		$	19,811			$	48,034			$	44,288
Operating expense		17,556			15,505				33,892				30,523
		4,292			4,306				14,142				13,765
G&A expense		2,684			2,055				4,904				4,086
Operating earnings[1]	$	1,608		$	2,251			$	9,238			$	9,679
Operating earnings per share	$	0.12		$	0.17			$	0.69			$	0.73
Depreciation		1,878			1,912				3,736				3,842
Interest		607			469				1,242				918
Interest rate swap (gain) loss		212			(1,107		)		(302		)		(527	)
Foreign exchange (gain) loss		(2	)		1				(4		)		1
Gain on sale of assets		-			-				-				(10	)
Income tax expense		91			174				1,506				1,208
Net earnings (loss)		($1,178	)	$	802			$	3,060			$	4,247
Net earnings (loss) per share		($0.09	)	$	0.06			$	0.23			$	0.32
Key Balance Sheet Figures (in thousands):
									June 30, 2024				December 31, 2023
Assets
Cash and cash equivalents								$	16,446			$	19,029
Property plant and equipment									92,780				93,328
Other assets									9,563				9,642
Total assets								$	118,789			$	121,999
Liabilities and Equity
Debt								$	42,001			$	42,948
Lease liabilities									5,866				6,327
Accounts payable and accrued liabilities									11,958				11,742
Deferred revenue									8,345				14,425
Other liabilities									2,530				1,901
Total liabilities									70,700				77,343
Share capital and contributed surplus									63,652				63,652
Foreign currency translation reserve									4,005				2,832
Deficit									(19,568		)		(21,828	)
Total shareholders' equity									48,089				44,656
Total liabilities and equity								$	118,789			$	121,999

 

Second Quarter Results
(three months ended June 30, 2024 compared with three months ended June 30, 2023)

• Total operating revenue of $21.8 million increased by $2.0 million or 10.3% compared to 2023. Higher tournament registrations, third-party contract rentals, youth hockey league registrations and food and beverage sales were key drivers of the increase;

• Total operating expenses of $17.6 million increased by $2.1 million or 13.2% mainly due to costs incurred related to its roof remediation program and maintenance projects to improve dressing rooms, rink floors and parking lots compared to 2023;

• Earnings before G&A expenses, excluding roof remediation costs, were $4.9 million compared to $4.5 million in 2023;

• Total G&A expenses of $2.7 million increased by $0.6 million or 30.6% mainly due to increased wages and accounting accruals related to a long-term incentive compensation plan that began mid-2023;

• After G&A, operating earnings were $1.6 million compared to $2.3 million in 2023; and

• After recording depreciation expense of $1.9 million, net finance costs of $0.8 million, and income tax expense of $0.1 million, net loss for the quarter was $1.2 million or $0.09 per share compared to net earnings of $0.8 million or $0.06 per share in the prior year.

Six Months Ended June 30, 2024 Results
(six months ended June 30, 2024 compared with six months ended June 30, 2023)

• Total operating revenue of $48.0 million increased by $3.7 million or 8.5% principally due to higher third-party contract ice rentals, tournament registrations and food and beverage revenue. Demand for Canlan-operated youth hockey tournaments remained strong in the BC and Ontario regions;

• Total operating expenses of $33.9 million increased by $3.4 million or 11.0% mainly due to increased labour and other expenses to service higher customer volumes, increased maintenance expense as we were able to commence major maintenance projects earlier than we did in the prior year, including roof remediation projects;

• Earnings before G&A expenses, excluding roof remediation costs, were $15.1 million compared to $14.0 million in 2023;

• Total G&A expenses of $4.9 million increased by $0.8 million or 20.0%. Incremental costs relate to labour and software implemented at the central office to strengthen operations support to sports complexes, provide enhanced KPI reporting, develop new products/programs to diversify the Company's revenue streams, and the Company recorded compensation expense of $0.3 million during the first six months of 2024 (no expense required during the same period of 2023) related to a new long-term incentive compensation plan that commenced in fiscal 2023;

• Operating earnings before interest, depreciation and taxes was $9.2 million compared to $9.7 million in 2023; and

• After recording depreciation expense of $3.7 million, net finance costs of $0.9 million, and income tax expense of $1.5 million, net earnings were $3.1 million or $0.23 per share compared to $4.2 million or $0.32 per share in the prior year.

"During the first half of 2024, we saw remarkable growth in surface utilization rates across nearly all regions, driven by a surge in contract surface rentals and a booming interest in youth hockey leagues and tournaments," said Canlan's President & CEO, Joey St-Aubin. "It's incredibly rewarding to witness the continued, year-on-year growth of Canlan's tournament division post-pandemic, significantly boosting our food and beverage revenues. Our teams are now energized and committed to delivering top-tier programs for our summer campers and completing our new sports simulator projects at Scotia Barn and Canlan Sports York. These innovative projects are set to further amplify our offerings by seamlessly blending virtual and physical sports activities, elevating the Canlan experience to new heights."

Dividend Policy

Canlan's Board of Directors has approved the continuation of the Corporation's quarterly dividend policy. As such, the Board declares eligible dividends totaling $0.03 per common share that will next be paid on October 16, 2024 to shareholders of record at the close of business September 30, 2024. Canlan's Board of Directors reviews the Corporation's dividend policy on a quarterly basis. Canlan's dividend is designated as an "eligible" dividend under the Income Tax Act (Canada) and any corresponding provincial legislation. Under this legislation, individuals resident in Canada may be entitled to enhanced dividend tax credits, which reduce income tax otherwise payable.

Filings

Canlan's financial statements and Management's Discussion & Analysis for the quarter ended June 30, 2024 will be available via SEDAR+ on or before August 14, 2024 and through the Company's website, www.canlansports.com.

About Canlan

Canlan Ice Sports Corp. (operating as Canlan Sports) is the North American leader in the ownership, operations and programming of multi-purpose recreation and entertainment facilities. We currently own, lease and/or manage 16 facilities in Canada and the United States with 48 ice surfaces, as well as five indoor soccer fields, and 20 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

This News Release may contain information that constitutes "forward-looking" information within the meaning of applicable securities laws. Often, but not always, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "is expected", "budgets", "scheduled", "estimates", "forecasts", "predicts", "projects", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative variations) of such words and phrases or may be identified by statements to the effect that certain actions "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking information in this press release includes, but is not limited to, anticipated benefits of capital expenditures (including energy efficiencies and enhanced customer experiences) and expectations of business growth. Forward-looking information is based on the reasonable assumptions, estimates, analyses, beliefs and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable at the date that such information is disclosed. Forward-looking information is subject to various known and unknown risks and uncertainties, many of which are beyond the ability of Canlan to control or predict, that may cause Canlan's actual results, performance or achievements to be materially different from those expressed or implied thereby. Material risk factors that could cause actual results to differ materially from the forward-looking information provided herein include those factors identified in Canlan's public disclosure file available at www.sedarplus.ca and, in particular, the risk factors set out under the heading "Risk Factors" in the Company's MD&A available for review on the Company's profile at www.sedarplus.ca. Such forward-looking information represents management's best judgment based on information currently available. Accordingly, readers are advised not to place undue reliance on forward-looking information. The forward-looking information herein is made as of the date of this press release only, and the Company does not assume any obligation to update or revise them to reflect new information, estimates or opinions, future events or results or otherwise, except as required by applicable securities law.

For more information:
Canlan Ice Sports Corp.
Ivan Wu
CFO
604 736 9240

________________________
¹ Operating earnings is defined as earnings after general and administrative expenses and before interest, depreciation, foreign currency exchange, gain 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.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/219832

FAQ

What was Canlan Ice Sports Corp's (TSX: ICE) Q2 2024 revenue?

Canlan Ice Sports Corp reported record-high Q2 2024 revenue of $21.8 million, a 10.3% increase from the previous year.

How did Canlan's (TSX: ICE) operating earnings change in Q2 2024?

Canlan's Q2 2024 operating earnings decreased to $1.6 million from $2.3 million in Q2 2023, primarily due to increased expenses related to roof remediation and maintenance projects.

What is Canlan Ice Sports Corp's (TSX: ICE) dividend for Q2 2024?

Canlan's Board of Directors approved a quarterly dividend of $0.03 per common share, payable on October 16, 2024, to shareholders of record as of September 30, 2024.

How did Canlan's (TSX: ICE) food and beverage revenue perform in Q2 2024?

Canlan's food and beverage revenue increased by 12.3% in Q2 2024, driven by increased tournament business and additional promotional programs.