Poydras Gaming Finance Corp. Announces 2016 Third Quarter Results

— Revenue up 27% Y-o-Y and 15% Q-o-Q; Adjusted EBITDA up 51% Y-o-Y and 19% Q-o-Q —
— Company focused on continued growth with a strong business development pipeline —  

VANCOUVER, Nov. 21, 2016 /CNW/ - POYDRAS GAMING FINANCE CORP. (TSX‐V: PYD; OTCQX: PYDGF) ("Poydras" or the "Company") today announces financial results for the third quarter ended September 30, 2016 (all amounts stated in U.S. dollars unless otherwise indicated).

"Our results in the third quarter continued to demonstrate our strong year-over-year and quarter-over-quarter growth in both revenue and Adjusted EBITDA as we continue to expand our footprint with both new and existing customers," said Peter Macy, CEO of Poydras.

"Of particular note, we grew leasing revenue for the quarter by 19% over Q2 2016 on an increase of average number of machines installed of 3.5%, demonstrating that our ongoing efforts to maximize the value of our portfolio through analytics are producing results. We will continue to utilize and further enhance our proprietary database to further optimize our asset deployment."

"Looking forward, Adjusted EBITDA for the full year 2016 should come close to our stated goal of $10 million and we expect to continue our consistent growth into 2017.  Our business development pipeline is strong, with several deals under active consideration across multiple markets.  We remain committed to continuing to build our business through organic growth, strategic partnerships, and accretive acquisitions."

Third Quarter 2016 Highlights

  • Revenue of $3,893,546, representing an increase of 26.9% compared to $3,067,616 in Q3 2015 and an increase of 14.8% compared to $3,390,891 in Q2 2016.
  • Adjusted EBITDA of $2,363,549, representing an increase of 50.5% compared to $1,570,625 in Q3 2015 and an increase of 18.9% compared to $1,988,157 in Q2 2016.
  • Net loss of $2,918,891 compared with net income of $1,103,411 in Q3 2015 and a net loss of $946,103 in Q2 2016.
  • On July 29th, the Company entered into 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. Further details about the facility can be found in the Company's Q3 2016 Financial Statements.
  • On August 11th, the Company completed its acquisition of the remaining 50% interest in J&W AV for $1.8 million, and repaid $1.5 million of A&W JV's debt. On the date of acquisition, A&W JV had 382 revenue generating machines.
  • On September 14th, 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.

Quarterly Adjusted EBITDA

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


Q3 2016

Q2 2016

Q1 2016

Q4 2015

Q3 2015


($)

($)

($)

($)

($)







Net Income (loss)

(2,918,891)

(946,103)

341,262

(981,101)

1,103,411

Adjustments:







Depreciation of equipment

1,024,513

954,638

888,132

805,699

646,155


Amortization of placement fees

524,449

443,148

443,148

489,094

335,878


Amortization of intangible assets

223,772

217,395

216,061

166,509

227,384


Income tax expense (recovery)

(357,883)

(498,427)

131,960

287,400

(2,302,033)


Finance lease receivable reduction

664,490

501,599

448,599

338,603

170,572


Financing costs

2,170,864

898,576

748,145

399,945

771,334


Foreign exchange (gain) loss

(97,863)

(47,175)

(411,798)

276,851

504,594


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

-

65,858

38,947

(214,338)

-


Revaluation of earn-out liability

450,000

-

(599,000)

-

-


Revaluation loss on investment in A&W JV

588,317

-

-

-

-


Stock based compensation

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

2,363,549

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


2,395,417

1,988,157

2,575,873

2,080,520

1,666,625

 

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 third quarter ended September 30, 2016. The call will be hosted by Peter Macy, CEO, and Adam Kniec, CFO on Wednesday, November 30, 2016 at 8:00 a.m. PST (11:00 a.m. EST), and followed by a question and answer period.  All interested parties are invited to participate. 

Conference Call Details:

Date:                                 

Wednesday, November 23, 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:                 

17560612




Taped Replay:                   

1 (855) 859-2056, available until 12:00 midnight (EST) Wednesday, November 30, 2016

Reference number:          

17560612

 

About Poydras Gaming Finance Corp.:
Poydras Gaming is a regional slot route operator with over 2,500 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, 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.

During the current quarter, the Company modified its definition of Adjusted EBITDA by adjusting its earnings by revaluation loss on investment in A&W JV.  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.

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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