Poydras Gaming Finance Corp. Announces 2016 Fourth Quarter and Full-Year Financial Results

-- Double and triple digit growth in annual revenue and Adjusted EBITDA
driven by expanded machine deployments – 

VANCOUVER, April 24, 2017 /CNW/ - POYDRAS GAMING FINANCE CORP. (TSX-V: PYD) (OTCQX: PYDGF) ("Poydras," "PGFC," or the "Company") today announces financial results for the fourth quarter and full-year ended December 31, 2016 (all amounts stated in U.S. dollars unless otherwise indicated).

Fourth Quarter 2016 Highlights & Financial Results 

  • 14% increase in revenue to $4.0 million, over $3.5 million in Q4 2015.
  • 11% increase in Adjusted EBITDA to $2.3 million over $2.1 million in Q4 2015.
  • Net loss of $2.9 million for Q4 2016, compared to $1.0 million in Q4 2015.
  • On October 15, 2016, the Company's common shares began trading on the OTCQX Best Market under the symbol PYDGF, in addition to its current listing on the TSX Venture Exchange.
  • Approximately 2,618 gaming machines in operation at the end of Q4 2016, compared to 2,581 at the end of Q3 2016.

2016 Full-year Highlights & Financial Results 

  • 84% growth in revenue, to $15.0 million in 2016 compared to $8.2 million in 2015.
  • 159% growth in Adjusted EBITDA, to $9.3 million in 2016, compared to $3.6 million in 2015.
  • Net loss of $6.5 million, or $0.19 per share, for 2016, compared to $2.9 million, or $0.12 per share, for 2015.
  • On May 2, 2016, the Company completed a 10-for-1 share capital consolidation.
  • On July 29, 2016, the Company completed a financing arrangement with MGG Investment Group LP, consisting of a 5-year term loan facility for $30.5 million at an initial rate of LIBOR plus 11.5%, which steps down as the Company deleverages.
  • On August 11, 2016, the Company completed its acquisition of the remaining 50% interest in A&W JV for $1.8 million, and repaid $1.5 million of A&W JV's debt.
  • On September 5, 2016, the Company completed the early redemption and cancellation of its 11.0% Convertible Debentures with a face value of $7,732,000.
  • On August 31, 2016, the Company entered into an exclusive agreement with Gamblit Gaming, a leading innovator of real money and skill‐based gaming, to distribute Gamblit's products in Oklahoma and Texas.
  • Approximately 2,618 gaming machines in operation as of December 31, 2016, compared to 2,428 as at December 31, 2015.

"The strong growth in revenue and Adjusted EBITDA we generated in 2016 is a reflection of the successful execution of our strategy to expand our deployed-machine base and optimize placements to support improved financial performance," said Peter Macy, CEO of Poydras Gaming. "In 2016 we took steps to strengthen our balance sheet and access to capital to support an array of growth initiatives including: increasing machine deployments with a focus on reducing customer concentration and expanding geographic reach; accessing new, in-demand gaming technologies to enhance the end-customer entertainment experience; and consolidating our interest in a high performing joint venture. Going forward, we are well positioned to drive further increases in deployments as well as placements in new Western U.S. markets."

Adjusted EBITDA and reconciliation to net income (loss) is as follows:


Q4 2016

Q3 2016

Q2 2016

Q1 2016

Q4 2015

Q3 2015


($)

($)

($)

($)

($)

($)








Net Income (loss)

(2,935,028)

(2,918,891)

(946,103)

341,262

(981,101)

1,103,411








Adjustments:








Depreciation of equipment

1,074,475

1,024,513

954,638

888,132

805,699

646,155


Amortization of placement fees

533,904

524,449

443,148

443,148

489,094

335,878


Amortization of intangible assets

218,337

223,772

217,395

216,061

166,509

227,384


Income tax expense (recovery)

(119,904)

(357,883)

(498,427)

131,960

287,400

(2,302,033)


Finance lease receivable reduction

513,064

664,490

501,599

448,599

338,603

170,572


Financing costs

1,153,146

2,170,864

898,576

748,145

399,945

771,334


Foreign exchange (gain) loss

745

(97,863)

(47,175)

(411,798)

276,851

504,594


Impairment of placement fees

1,732,152

-

-

-

-

-


Impairment (recovery) of loan receivable

-

(85,000)

28,505

-

120,714

-


Gain on settlement of debt

-

(110,487)

-

-

-

(261,407)


Loss (gain) on disposal of assets

12,750

-

65,858

38,947

(214,338)

-


Revaluation of earn-out liability

30,000

450,000

-

(599,000)

-

-


Revaluation loss on investment in A&W JV

-

588,317

-

-

-

-


Stock based compensation

102,272

207,210

206,177

104,720

121,816

169,711


A&W JV EBITDA adjustments at 50% interest:









Depreciation of equipment                        

-

69,254

172,113

184,124

234,576

180,317



Amortization of placement fees

-

4,728

10,416

10,416

10,416

8,417



Interest expense

-

6,076

18,178

26,531

25,437

16,292



Loss (gain) on disposal of assets

-

-

(36,741)

4,626

(1,101)

-

Adjusted EBITDA

2,315,913

2,363,549

1,988,157

2,575,873

2,080,520

1,570,625








Adjusted EBITDA includes:








Integrity acquisition costs

-

-

-

-

-

96,000


A&W JV acquisition costs

-

31,868

-

-

-

-


Total normalization adjustments

-

31,868

-

-

-

96,000


2,315,913

2,395,417

1,988,157

2,575,873

2,080,520

1,666,625

 

Conference Call

The Company will hold a conference call to discuss the results for its fourth quarter and year-end ended December 31, 2016. The call will be hosted by Peter Macy, CEO, and Adam Kniec, CFO on Tuesday, April 25, 2017 at 8:00 a.m. PDT (11:00 a.m. EDT), and followed by a question and answer period.  All interested parties are invited to participate. 

Conference Call Details:

Date:

Tuesday, April 25, 2017

Time:

8:00 a.m. Pacific Time / 11:00 a.m. Eastern Time



Dial-In Numbers: 

North America Toll-Free Dial-In Number:

1 (888) 231-8191                                                


For Toronto:  

(647) 427-7450


For Vancouver:

(778) 371-9827




Conference ID:        

7492431


Taped Replay:  

1 (855) 859-2056, Available until 12:00 midnight (EST) Tuesday, May 2, 2017

Reference number:

7492431


 

About Poydras Gaming Finance Corp.:
Poydras Gaming is a regional slot route operator with approximately 2,600 revenue-generating gaming machines across casinos in Oklahoma and Texas.  The Company primarily derives its revenue from short- and long-term revenue share contracts with Native American casinos.  It provides gaming equipment such as slot machines and electronic table games, and project financing to owners, operators, and managers of casinos and other regulated gaming venues.  The company works with casinos, new casino developments, and gaming machine suppliers.  In addition, it distributes casino and bingo equipment, and offers direct and online sales of gaming supplies for poker and bingo. Additional information about the Company can be found on the SEDAR website at www.sedar.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward‐Looking Statements
Certain information in this news release is considered forward‐looking within the meaning of certain securities laws and is subject to important risks, uncertainties and assumptions. This forward‐looking information includes, among other things, information with respect to the Company's beliefs, plans, expectations, anticipations, estimates and intentions. The words "may", "could", "should", "would", "suspect", "outlook", "believe", "anticipate", "estimate", "expect", "intend", "plan", "target" and similar words and expressions are used to identify forward‐looking information. The forward‐looking information in this news release, including those statements relating to expected EBITDA, and the placement of additional machines by the Company, describes the Company's expectations as of the date of this news release.

The results or events anticipated or predicted in such forward‐looking information may differ materially from actual results or events. Material factors which could cause actual results or events to differ materially from such forward‐ looking information include, among others, risks arising from general economic conditions and adverse industry events.

The Company cautions that the foregoing list of material factors is not exhaustive. When relying on the Company's forward‐looking information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has assumed a certain progression, which may not be realized. It has also assumed that the material factors referred to in the previous paragraph will not cause such forward‐looking information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.

THE FORWARD‐LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD‐LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.

Non‐IFRS Measures – Poydras Gaming Finance Corp.  
Adjusted EBITDA is a financial measure that does not have a standardized meaning under IFRS. Adjusted EBITDA is defined as earnings before financing costs, income taxes, depreciation, amortization, stock based compensation, unrealized foreign exchange, impairment of loans receivable, impairment of placement fees, gain/loss on settlement of debt, gain/loss on disposal of assets, finance lease receivable reduction, revaluation adjustment of earn-out liability, revaluation loss on investment in A&W JV and non-recurring costs.  In addition, to arrive at the Adjusted EBITDA, the Company is adjusting its earnings for its 50% share of the above mentioned income/expense and gain/loss categories that are included in the Company's income from equity accounted investees up to the date of the acquisition of the A&W JV.

During the current quarter, the Company modified its definition of Adjusted EBITDA by adjusting its earnings by impairment of placement fees.  The Company believes that to measure the Company's core business performance and liquidity, and to measure its ability to purchase additional machines, it is important to include this adjustment in determination of Adjusted EBITDA.

As there is no standardized method of calculating Adjusted EBITDA, it may not be directly comparable with similarly titled measures used by other companies.  The Company considers Adjusted EBITDA to be a relevant indicator for measuring trends in performance and its ability to generate funds to service its debt and to meet its future working capital and capital expenditure requirements. Adjusted EBITDA is not a generally accepted earnings measure and should not be considered in isolation or as an alternative to net income (loss), cash flows or other measures of performance prepared in accordance with IFRS.

SOURCE Poydras Gaming Finance Corp.

For further information: Craig MacPhail, Investor Relations | NATIONAL Equicom, T: 416.586.1938, E: cmacphail@national.ca; James Kim, VP of Corporate Development, Poydras Gaming Finance Corp., T: 604.683.8393, E: info@poydrasgaming.com


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