Annual Report 2011 - Canlan Ice Sports

Management Discussion & Analysis
Revenue by Quarter
The Company recorded the following revenue by quarter in 2011. The revenue stream is seasonal with 56% of the
Company’s revenue being generated in the fall and winter months (first and fourth quarters) and 44% in the spring
and summer season (second and third quarters).
2011 2010
in thousands Revenue % of total Revenue % of total
Q1 $20,427 28% $19,844 28%
Q2 16,351 23% 15,866 23%
Q3 14,843 21% 14,208 20%
Q4 20,345 28% 19,991 29%
$71,966 100% $69,909 100%
Direct Operating Costs
Total ice rink operating costs were $57.8 million in 2011 compared to $55.6 million in 2010, an increase of $2.2 million
or 4.0%. Labour costs increased by $0.7 million mainly due to annual wage increments in the normal course of
business. Labour is our largest expense and represents 46% of our direct operating costs, compared to 47% in 2010.
We continually monitor labour rates to stay competitive in all markets. Four of our facilities are subject to collective
agreements with two different unions.
Repairs and maintenance costs increased by $0.5 million mainly due to roof maintenance costs that were required
to ensure the roofs of our facilities remain safe and waterproof. Customer service expenses such as prizing, league
statistics, camp supplies, etc, and cost of goods sold increased by $0.4 million mainly due to increased marketing
efforts and start up costs required upon the purchase of Ice Sports Romeoville. Utility expenses include the cost of
electricity, gas and water. Total utility expense of $7.2 million increased by $0.3 million or 4.7%. After eliminating
the effects of differences caused by the sale of Ice Sports Regina and the addition of Ice Sports Romeoville, total
energy consumption decreased on a same-store basis; however, higher utility rates caused mainly by Provincial hydro
surcharges caused expenses to increase in some markets.
Also included in operating costs are building and land lease payments related to five of our facilities. In 2011, rent
payments totaled $1.7 million, compared to $1.4 million in 2010; the increase in lease costs of Ice Sports Fort Wayne
that opened in February 2010.
Ice rink operating costs are less seasonal than revenue, as our business does have a fixed cost component to it.
2011 2010
in thousands Costs % of total Costs % of total
Q1 $14,569 25 $14,042 25
Q2 14,551 25 14,335 26
Q3 13,837 24 13,184 24
Q4 14,890 26 14,066 25
$57,847 100 $55,627 100
18 Canlan Ice Sports Corp. 2011 Annual Report