Gamehost Income Fund - Reports 2009 first quarter financial results



    RED DEER, AB, May 14 /CNW/ - Gamehost Income Fund (the "Fund") (TSX:
GH.UN) Management and Trustees of Gamehost Income Fund present results of the
Fund for the three months ended March 31, 2009 (the "Quarter").
    The last six months, have been clouded with an economic storm of epic
proportions. Global economies have been sinking and the race for life
preservers has been fast and furious. The Fund has been navigating the storm
surge remarkably well. Revenues for the Quarter totaled $13.8 million up 3.9%
from $13.3 million in Q1 2008. We entered the Quarter with our eyes wide open,
prepared for the typical post Christmas slowdown that would be further
hampered by looming layoffs and consumer pessimism. Accordingly, we began
targeted marketing campaigns and value added promotions for our customers. As
a result, Quarterly revenues posted only a slight decrease from the Christmas
season of Q4 2008, down 3.2% from $14.3 million.
    Growing revenues is a real challenge in these times, so our growth
strategy is now a cost efficiency strategy. Earnings before interest, taxes,
depreciation and amortization ("EBITDA") for the Quarter were flat when
compared to Q1 2008, totaling $6.3 million, and were up from $6.1 million in
Q4 2008, an improvement of 3.3%. Year over year EBITDA margins were down
marginally by 1.4% to 45.8%. On a monthly basis EBITDA margins have been
steadily improving from a low point in Q4 2008 of 42.6% increasing 3.2% during
the Quarter. As the Stampede Joint Venture matures, greater efficiencies are
achieved every month and management remains diligent in monitoring
discretionary spending at all operations.
    Until this economic storm passes, the Fund is concentrating on
maintaining revenue strongholds. Management has a proven track record in
producing growth, and we haven't forgotten this. It is now a game of inches,
and we are patiently making gains on a very muddy field. Competition brings
out the best and we are confident that our facilities are just that. The
Quarter has posted encouraging increases in table drop in both of our Calgary
operations as well as in Ft. McMurray, and we don't intend to give up any
ground.
    Our Ft. McMurray property, Boomtown Casino, has faced some challenges
with announced deferrals of some major oil sands projects in the area.
However, recent sharp declines in steel, gas and labour prices should improve
investment returns for large scale projects. Stabilizing commodity prices are
encouraging as well.
    Difficulties in the Grande Prairie region continue. The forestry sector
continues to suffer the effects of a fall out in construction activity. The
provincial royalty review hit the natural gas industry when they were already
suffering from low commodity prices, but with the provincial government's
announcement in March of $1.5 billion in drilling incentives, we may see some
recovery. On a positive note, 2009 has shown a moderate improvement from a
bottom reached in 2008. The management of Great Northern Casino has also made
significant progress in trimming operating costs. Our Service Plus hotel in
Grande Prairie has shown remarkable resilience. However, we expect to
experience additional pressure this year as the rooming market suffers further
reductions in demand.
    Calgary faces similar economic issues as our other properties, perhaps on
a broader scale. Competition is fierce, as there are fewer gaming dollars to
spread around. We have been pleased to see gains in table drop figures,
illustrating that our renewed focus on VIP players is succeeding. The Stampede
Joint Venture is showing improvements, albeit these battles are hard won. New
joint marketing programs have benefited both properties. Upcoming periods
should bring additional cost savings on the operating side.
    We are likely in for a period of prolonged economic stagnation. The long
term benefits of our cost efficiency strategy are significant. The Fund
historically produced some of the best profit margins in the gaming sector,
and when we rise up from this recession, we will be lean and mean. Strap in
and join us for the ride, it may be a little bumpy on the way, but it will be
worth it.

    
    Interim Consolidated Statements of Earnings and Comprehensive Income
    (unaudited)
    -------------------------------------------------------------------------
                                                 three months ended March 31
                                                 ----------------------------
                                                       2009          2008
                                                 ----------------------------

    Revenue
      Hotel - rooming                             $  2,013,076  $  2,070,375
      Table games                                    2,593,210     1,910,284
      Slot machines                                  5,020,009     5,183,454
      Food and beverage services                     3,060,750     2,895,744
      Lease and rental                                  89,120        84,160
      Other                                          1,069,682     1,188,988
                                                 ----------------------------
                                                    13,845,847    13,333,005
                                                 ----------------------------
    Expenses
     Cost of goods sold                                940,439       912,770
     Human resources                                 3,685,283     3,470,949
     Marketing and promotions                          640,980       552,055
     Operating                                       1,730,678     1,523,371
     Corporate and general administration              508,047       574,077
                                                 ----------------------------
                                                     7,505,427     7,033,222
                                                 ----------------------------

    Earnings before the following:                   6,340,420     6,299,783

    Interest charges                                   305,061       303,496

    Future income taxes (recoveries)                   (30,754)       23,867

    Unrealized loss on fair valuation of
     financial assets and liabilities                    1,107             -

    Amortization of property, plant and equipment      639,559       501,458

    Earnings allocation to minority interest         2,656,336     2,678,620
                                                 ----------------------------

    Net earnings and comprehensive income         $  2,769,111  $  2,792,342
                                                 ----------------------------

    Earnings per unit, basic and fully diluted    $      0.257  $      0.259
                                                 ----------------------------
                                                 ----------------------------
    


    This press release may contain forward-looking statements.
Forward-looking statements may contain words such as "anticipates",
"believes", "could", "expects", "indicates", "plans" or other similar
expressions that suggest future outcomes or events. Use of these 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 Fund is an unincorporated open-ended limited purpose trust
established under the laws of the Province of Alberta. The Fund's activities
are currently confined to the Province of Alberta, Canada. Operations include
the Boomtown Casino in Ft. McMurray, the Great Northern Casino, Service Plus
Inns & Suites and a strip mall all located in Grande Prairie. The Fund is also
a 40% joint venture partner in the Deerfoot Inn & Casino in Calgary and a 20%
joint venture partner in the new Stampede Casino in Calgary.
    Complete consolidated interim financial statements and MD&A for the three
months ended March 31, 2009 will be available following the close of trading
on May 14, 2009 on the company's website at www.gamehost.ca and thereafter on
SEDAR at www.sedar.com.

    %SEDAR: 00019487E




For further information:

For further information: Craig M. Thomas or, Darcy J. Will, P (403)
346-4545, F (403) 340-0683, E info@gamehost.ca

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GAMEHOST INCOME FUND

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