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Great Canadian Gaming Announces Third Quarter 2013 Results

6 November 2013

RICHMOND, BC -- (PRESS RELEASE) -- Great Canadian Gaming Corporation (GC.TO) ("Great Canadian" or "the Company") today announced its financial results for the three month period ended September 30, 2013 ("third quarter 2013").


(Amounts presented in millions of Canadian dollars, except for per share information)
Revenues of $103.1 million, a 1% increase when compared to the prior year

EBITDA(1) of $39.1 million, a 9% increase when compared to the prior year

Net earnings of $13.3 million, a $14.2 million increase when compared to the prior year

Adjusted net earnings(2) of $13.3 million, a 10% increase when compared to the prior year

Opened the permanent Chances Maple Ridge facility on October 23, 2013 (formerly the temporary 'Maple Ridge Community Gaming Centre')

Announced that Boulevard Casino will re-launch as the Hard Rock Casino Vancouver, opening on December 20, 2013

During the third quarter and early October of 2013, repurchased and cancelled 1.7 million common shares at an average price of $11.14

Great Canadian recorded revenues of $103.1 million during the third quarter of 2013, a $1.3 million , or 1%, increase from the third quarter of 2012. EBITDA was $39.1 million , a $3.3 million , or 9%, increase from the third quarter of 2012. Both these increases were primarily due to revenue growth at the River Rock Casino Resort ("River Rock"), in addition to improvements at both the Company's Other BC Casinos and Great American Casinos. These increases were offset by declines at both the Boulevard Casino ("Boulevard") and the Company`s Ontario Racetracks. EBITDA as a percentage of revenues for the third quarter of 2013 was 37.9%, a 2.7 percentage point increase from the third quarter of 2012.

Net earnings increased by $14.2 million in the third quarter of 2013, when compared to the third quarter of 2012. This increase was primarily due to non-recurring expenses recorded during the third quarter of 2012, including both foreign exchange losses of $8.1 million and interest and financing costs of $6.3 million . Net earnings were also impacted by the increased EBITDA, which was partially offset by higher net interest and financing costs, an increase in income taxes arising from higher earnings, and an increase in British Columbia's provincial corporate income tax rate.

"Great Canadian's financial results for the third quarter of 2013 reflect positive contributions from River Rock , Chances Chilliwack, and the Great American Casinos," stated Rod Baker , Great Canadian's President and Chief Executive Officer. "These encouraging performances were partially offset by Boulevard, which again witnessed declines in slot coin-in, table drop, and food and beverage revenues. Boulevard remains challenged by both local economic conditions and ongoing disruption caused by proximate highway construction. To a lesser extent, Boulevard's guests were also affected by the property's repositioning and refresh.
"We continue to focus upon providing Boulevard's loyal guests with exceptional service as we work towards the re-launch of the property under the Hard Rock Casino Vancouver brand later this year. The introduction of this exciting brand will coincide with the substantial completion of the nearby highway construction, although guests may still be affected by some minor roadwork during the first quarter of 2014. We are optimistic about the property's future prospects for the Company. In the meantime, we will continue to carefully manage both Boulevard's staffing levels and discretionary spending.

"On October 23, 2013 , we were proud to officially open 'Chances Maple Ridge', a newly constructed, community gaming and entertainment facility in Maple Ridge, BC . This facility features 175 slot machines, 200 bingo seats, a casual fine dining restaurant, and improved parking capacity. Over the past year, Chances Chilliwack has become valuable component of our property portfolio. We are optimistic that Chances Maple Ridge will mirror that property's success.

"Since April 1, 2013 , Great Canadian's Ontario Racetracks have operated under interim lease arrangements with the Ontario Lottery and Gaming Corporation. Under the terms of these agreements, these two racetracks now receive both lease revenues from the OLG and horse racing transition funding from the Government of Ontario . However, they no longer receive a fixed percentage of the OLG's slot revenues, and do not directly share in horse racing pari-mutuel wagering revenues. As a result of these changes, these facilities witnessed declines in both overall revenues and EBITDA. We are pleased to continue our relationship with the OLG, and look forward to developing this relationship further as the gaming industry in Ontario continues its evolution.
"Great Canadian is financially prepared to take advantage of new value-added growth opportunities, including those in Ontario . The Company's financial flexibility is evident in both our strong cash balance and our undrawn revolving credit facility. While we await greater clarity surrounding these opportunities, we continue to pursue other avenues for the creation of shareholder value. In 2013, the Company has devoted $43.0 million of its cash resources towards repurchasing and cancelling 4.3 million common shares at an average price of $10.07 . As a result of these cancellations, we have increased the ownership percentage of our existing shareholders by 6.0% this year."

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 three community gaming centres, four racetracks, and ten casinos, including one with a Four Diamond hotel resort. As of September 30, 2013 , the Company had approximately 4,000 employees in Canada and 600 in Washington State

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