Great Canadian Gaming Reaches Agreements in Principle for OLG Slot Facility Leases at Georgian Downs and Flamboro Downs
RICHMOND, BC, March 9, 2013 /CNW/ - Great Canadian Gaming Corporation [TSX:GC] ("Great Canadian" or "the Company") today announced that it has entered into letters of intent with the Ontario Lottery and Gaming Corporation ("OLG") for the continuation of slot operations at each of the Company's Georgian Downs and Flamboro Downs racetrack facilities.
The letters of intent set out the general intentions and business arrangements for the respective properties' and proposed lease agreements with the OLG. The terms of definitive lease agreements are subject to approval by the Ontario Ministry of Finance. These lease arrangements will replace the current site holder agreements that will expire on March 31, 2013.
While the Company has had discussions with the Ontario Horse Racing Industry Transition Panel (the "Panel"), it has not formalized transitional funding for continued racing operations at either Georgian Downs or Flamboro Downs. We believe that securing lease agreements with the OLG will assist in further discussions with the Panel regarding transition funding for horseracing.
"We are extremely pleased to have reached this agreement in principle with Great Canadian for both their Flamboro and Georgian sites" said Rod Phillips, OLG's President and CEO. "We have a longstanding and positive relationship with Great Canadian and look forward to working with them in the future."
"We also are extremely pleased to have now concluded our negotiations with the OLG and look forward to continuing to work with them through these lease arrangements," stated Mr. Rod N. Baker, Great Canadian's President and Chief Executive Officer. "We also look forward to continuing our discussions with the Ontario government and the Panel with a view to finalizing arrangements and funding for horse racing to be able to continue at Flamboro Downs and Georgian Downs."
Until such time as the definitive lease agreements have been signed, further discussions with the Panel have occurred, and related horse racing transitional funding decisions have been made, the full effect of today's announcement on our properties' annual revenues and EBITDA will not be determinable. However, based on terms agreed to in the Letters of Intent with the OLG, we continue to expect the Company's Ontario properties' EBITDAs will decline as compared to the levels realized in 2012.
Once definitive lease agreements have been signed, the Company will need to re-evaluate its assumptions used in the recent long-lived asset impairment tests for these properties. Based on the terms of the letters of intent, the Company expects that it may need to record long-lived asset impairment reversals for Georgian Downs and Flamboro Downs.
ABOUT GREAT CANADIAN GAMING CORPORATION
Great Canadian Gaming Corporation operates gaming, entertainment and hospitality facilities in British Columbia, Ontario, Nova Scotia and Washington State. The Company's 17 gaming properties consist of ten casinos, including one with a Four Diamond hotel resort, four horse racetrack casinos, and three community gaming centres. As of December 31, 2012, the Company had approximately 4,000 employees in Canada and 600 in Washington State. Further information is available on the Company's website, www.gcgaming.com.
This press release contains certain "forward-looking information" or statements within the meaning of applicable securities legislation. 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 statements that address expectations, estimates or projections about the future, the Company's strategy for growth and its objectives, expected future expenditures, costs, operating and financial results, expected impact of future commitments, the future ability of the Company to operate the Georgian Downs and Flamboro Downs facilities and their profitability, expectations and implications of changes in legislation and government policies. Forward-looking information may be identified by words such as "anticipate", "believe", "expect", or similar expressions. Such forward-looking information is not a guarantee of future performance and may involve a number of risks and uncertainties.
Although forward-looking information is based on information and assumptions that the Company believes are current, reasonable and complete, they are subject to unknown risks, uncertainties, and a number of factors that could cause actual results to vary materially from those expressed or implied by such forward-looking information. Such factors may include, but are not limited to: terms of operational service agreements with lottery corporations; changes to gaming laws that may impact our operational service agreements; pending, proposed or unanticipated regulatory or policy changes; the Company's ability to obtain and renew required business licenses, leases, and operational services agreements; unanticipated fines, sanctions and suspensions imposed on the Company by its regulators; impact of global liquidity and credit availability; adverse tourism trends and further decreases in levels of travel, leisure and consumer spending; competition from established competitors and new entrants in the gaming business; dependence on key personnel; the Company's ability to manage its capital projects and its expanding operations; the risk that systems, procedures and controls may not be adequate to meet regulatory requirements or to support current and expanding operations; potential undisclosed liabilities and capital expenditures associated with acquisitions; negative connotations linked to the gaming industry; First Nations rights with respect to some land on which we conduct our operations; future or current legal proceedings; construction disruptions; financial covenants associated with credit facilities and long-term debt; credit, liquidity and market risks associated with our financial instruments; interest and exchange rate fluctuations; non-realization of cost reductions and synergies; demand for new products and services; fluctuations in operating results; and economic uncertainty and financial market volatility. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. These factors and other risks and uncertainties are discussed in the Company's continuous disclosure documents filed with the Canadian securities regulatory authorities from time to time, including in the "Risk Factors" section of the Company's Annual Information Form for fiscal 2012, and as identified in the Company's disclosure record on SEDAR at www.sedar.com.
Readers are cautioned not to place undue reliance on the forward-looking information, as there can be no assurance that the plans, intentions, or expectations upon which they are based will occur. The forward-looking information contained herein is made as of the date hereof and is subject to change after such date, and is expressly qualified in its entirety by cautionary statements in this press release. Forward-looking information is provided for the purpose of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of the Company's operating environment. The Company undertakes no obligation to publicly revise forward-looking information to reflect subsequent events or circumstances except as required by law.
The Company has included non-International Financial Reporting Standards ("non-IFRS") measures in this press release. EBITDA, as defined by the Company, means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, share-based compensation, equity investment loss and other, litigation settlement, impairment of long-lived assets and goodwill, and foreign exchange loss and other. EBITDA is derived from the consolidated statements of earnings (loss), and can be computed as revenues less human resources expenses and property, marketing and administration expenses.
Readers are cautioned that these non-IFRS definitions are not recognized measures under International Financial Reporting Standards ("IFRS"), do not have standardized meanings prescribed by IFRS, and should not be construed to be alternatives to net earnings determined in accordance with IFRS or as indicators of performance or liquidity or cash flows. The Company's method of calculating these measures may differ from methods used by other entities and accordingly our measures may not be comparable to similarly titled measures used by other entities or in other jurisdictions. The Company uses these measures because it believes they provide useful information to both management and investors with respect to the operating and financial performance of the Company.
ON BEHALF OF
GREAT CANADIAN GAMING CORPORATION
"Original Signed By Rod N. Baker"
Rod N. Baker
President and Chief Executive Officer
GREAT CANADIAN GAMING CORPORATION [TSX:GC]
Suite #350 - 13775 Commerce Parkway
SOURCE: Great Canadian Gaming CorporationFor further information:
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