Poydras Gaming Finance Corp. Announces 2016 Second Quarter Results

— Company focused on growth and on target to meet or exceed 2016 Adjusted EBITDA of US $10MM —
— 1H 2016 Adjusted EBITDA of US $4.56 million versus Adjusted EBITDA loss in the Y-o-Y period —

VANCOUVER, Aug. 25, 2016 /CNW/ - POYDRAS GAMING FINANCE CORP. (TSX‐V: PYD) ("Poydras," "PGFC," or the "Company") today announces financial results for the second quarter ended June 30, 2016 (all amounts stated in U.S. dollars unless otherwise indicated).

"Our results in the second quarter continued to demonstrate our strong year over year growth, but were somewhat muted by seasonality in our core markets when compared to our first quarter results," said Peter Macy, CEO of Poydras. "Additionally, results were impacted by 145 machines being offline for a majority of the quarter as they were being prepared to be moved to other facilities. Many of these machines have since been redeployed in Q3 2016 under a new long-term contract. With these machines back online as well as the addition of more new machines to fully satisfy our recently announced 234 machine contract, and the purchase of the remaining 50% of our joint venture with A&W, we remain on target to meet or beat our 2016 Adjusted EBITDA target of $10 million."

"Of significant importance is our recently announced financing arrangement with MGG Investment Group, LP, which not only funds our next stage of growth but also frees up operating cash flow to reinvest in growth. I would like to take this opportunity to thank our debenture holders for their support for Poydras' early days through their investment. We are all committed to delivering strong results over the next stage of growth for our shareholders."

Second Quarter 2016 Highlights

  • Revenue of $3,390,891, representing an increase of 272% compared to $910,465 in Q2 2015.
  • Adjusted EBITDA of $1,988,157 compared to negative $142,830 in Q2 2015.
  • Net loss of $946,103 compared with a net loss of $1,530,182 in Q2 2015.
  • The Company signed a new long-term contract to place 234 gaming machines in a new Native-American owned casino in Oklahoma, bringing the Poydras' total machine count to approximately 2,600 once fully deployed. The majority of machines are now placed and generating revenue in early Q3 2016. The contract is expected to contribute approximately $2.0 million in annual run-rate revenue (see Company press release dated May 24, 2016.

Highlights Subsequent to Quarter End

  • On August 2, 2016, the Company announced that it secured a five-year term loan facility in the aggregate principal amount of $30.525 million with MGG Investment Group LP and its related parties. To date, the Company has used the financing to: pay approximately $1.5 million of financing costs; repay $7.7 million in convertible debentures (the debenture holder's trustee has been paid sufficient funds to redeem the debentures in full, and redemption is scheduled for September 5, 2016); repay $12.9 million of loans payable; purchase equipment and finance placement fees of a combined $3.0 million dollars for a new revenue contract for 234 machines; and to purchase joint venture partner's interest in its Aurora A&W joint venture (see below).
  • On August 12, 2016, the Company announced that it had entered into an agreement to purchase A&W Enterprises, LLC's ("A&W") remaining 50% interest in Aurora A&W Enterprises, LLC ("A&W JV"). Upon closing, the Company made a cash payment of $1.8 million to A&W, and assumed $1.5 million in A&W JV debt, which has since been repaid. Acquiring A&W's ownership in the A&W JV is expected to contribute $1.25 million in annualized Adjusted EBITDA to Poydras.

Quarterly Adjusted EBITDA

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


Q2 2016

Q1 2016

Q4 2015

Q3 2015

Q2 2015


($)

($)

($)

($)

($)







Net Income (loss)

(946,103)

341,262

(981,101)

1,103,411

(1,530,182)

Adjustments:







Depreciation of equipment

954,638

888,132

805,699

646,155

217,264


Amortization of placement fees

443,148

443,148

489,094

335,878

190,661


Amortization of intangible assets

217,395

216,061

166,509

227,384

73,533


Income tax expense (recovery)

(498,427)

131,960

287,400

(2,302,033)

-


Finance lease receivable reduction

501,599

448,599

338,603

170,572

185,350


Financing costs

898,576

748,145

399,945

771,334

444,342


Foreign exchange (gain) loss

(47,175)

(411,798)

276,851

504,594

(84,444)


Impairment of loan receivable

28,505

-

120,714

-

250,000


Gain on settlement of debt

-

-

-

(261,407)

-


Loss (gain) on disposal of assets

65,858

38,947

(214,338)

-

-


Revaluation of earn-out liability

-

(599,000)

-

-

-


Stock based compensation

206,177

104,720

121,816

169,711

110,646


A&W JV EBITDA adjustments at 50% interest:








Depreciation of equipment

172,113

184,124

234,576

180,317

-



Amortization of placement fees

10,416

10,416

10,416

8,417

-



Interest expense

18,178

26,531

25,437

16,292

-



Loss (gain) on disposal of assets

(36,741)

4,626

(1,101)

-

-







Adjusted EBITDA

1,988,157

2,575,873

2,080,520

1,570,625

(142,830)







Adjusted EBITDA includes:







Integrity acquisition costs

-

-

-

96,000

30,000


Total normalization adjustments

-

-

-

96,000

30,000


1,988,157

2,575,873

2,080,520

1,666,625

(112,830)

 

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.

Conference Call

The Company will hold a conference call to discuss the results for its second quarter ended June 30, 2016. The call will be hosted by Peter Macy, CEO, and Adam Kniec, CFO on Tuesday, August 30, 2016 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, August 30, 2016

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:                    

70963125




Taped Replay:                      

1 (855) 859-2056, available until 12:00 midnight (EDT)
Tuesday, September 6, 2016

Reference number:            

70963125

 

About Poydras Gaming Finance Corp.:
Poydras Gaming is a regional slot route operator with approximately 2,500 revenue-generating gaming machines across 25 casinos in Oklahoma and Texas.  The Company provides slot machines and related capital expenditures under short- and long-term contracts for existing casinos, new casino developments and gaming machine suppliers in the United States. 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, gain/loss on settlement of loans payable, gain/loss on disposal of assets, finance lease receivable reduction 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.

SOURCE Poydras Gaming Finance Corp.

For further information: Keith Richards, Investor Relations | NATIONAL Equicom, T: (416) 848-1599, E: krichards@national.ca; James Kim, VP of Corporate Development, Poydras Gaming Finance Corp., T: (604) 683-8393, E: info@poydrasgaming.com


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