Press release from CNW Group
Amaya Gaming Group announces its 2012 fourth quarter and year-end financial results
Monday, April 29, 2013
Amaya Gaming Group announces its 2012 fourth quarter and year-end financial results18:33 EDT Monday, April 29, 2013
Annual revenue grows 292%; fourth quarter revenue grows 316%
MONTREAL, April 29, 2013 /CNW/ - Amaya Gaming Group Inc. ("Amaya" or the "Corporation) (TSX.V: AYA), an entertainment solutions provider for the regulated gaming industry, today announced its financial results for the three and twelve month periods ended December 31, 2012. All amounts are stated in Canadian dollars unless otherwise noted.
|FOR THE THREE and TWELVE-MONTH PERIODS ENDED DECEMBER 31||
|Net earnings (loss)||(711,309)||2,887,313||(7,112,352)||(1,926,025)|
|Basic earnings (loss) per share||(0.01)||0.06||(0.11)||(0.04)|
Q4 2012 AND SUBSEQUENT HIGHLIGHTS
- Amaya made a number of significant product-related announcements, including:
- the signing of a memorandum of understanding with Bally Technologies, Inc. to integrate Amaya's Ongame poker platform into Bally's award-winning iGaming Platform as its preferred poker provider in the emerging U.S. online gaming market
- the launch of some of its most popular online casino slot games by Microgame S.p.A., the leading service provider for the remote gaming market in Italy
- the launch of its full suite of proprietary and branded games on Circus Group's Casino777.be, one of Belgium's first regulated online gaming sites and the country's premier online gaming destination, pursuant to a three-year licensing agreement announced in July, 2012
- an agreement with ACEP Interactive, LLC, the interactive gaming arm of American Casino & Entertainment Properties LLC ("ACEP") for Amaya's Ongame poker network to power ACEP's online poker offering at acePLAYpoker.com
- an extension of its agreement with Warner Bros. Consumer Products, on behalf of DC Entertainment, to be the exclusive provider of DC Comics comic book-inspired pay-to-play online casino games
- the selection of Amaya's Ongame poker platform by Redbet Gaming Ltd to power Redbet's company-wide poker business
- the appoinment of SHFL Entertainment Inc as Amaya's exclusive distributor for its online poker platform in the United States for a period of 10 years commencing as of the signing of the definitive agreement
- the selection of Amaya's Ongame poker platform by Belgian casino operator Golden Palace to power its mobile poker offering for its online casino goldenpalace.be
- a global licensing agreement with Playboy Enterprises through which Amaya and Playboy will collaborate and develop online gaming initiatives in poker and lottery featuring the iconic Playboy brand in selected territories where permitted around the world
- the official launch by the Société des Casinos du Québec of Amaya's virtual horse racing system at the Casino de Montréal and the Casino du Lac-Leamy in Gatineau
- the selection of Amaya's Ongame poker platform by the Mohegan Sun Casino to power its online poker offering at www.mohegansun.com for PCs, Macs, smart phones and tablets
- Amaya also made a number of Corporation-related announcements, including:
- the closing of a private placement of Units for aggregate gross proceeds of $30 million, with the Units consisting of: (i) $1,000 principal amount of unsecured non-convertible subordinated debentures bearing interest at a rate of 7.50% per annum payable semi-annually in arrears on January 31 and July 31 in each year commencing July 31, 2013; and (ii) 48 non-transferable common share purchase warrants (each a "Warrant"). Amaya also announced the issuance of a redemption notice to all the holders of its 10.5% convertible unsecured subordinated debentures due April 30, 2014 (the "Convertible Debentures"), all the holders of which converted their Convertible Debentures into common shares of Amaya and the Convertible Debentures were delisted from the TSX Venture Exchange
- Amaya was honoured as the TSX Venture Tech Stock of the Year and Amaya's CEO David Baazov was awarded with the TSX Venture Tech Executive of the Year in the third annual Cantech Letter Awards
- the appointment of a gaming industry specialist Dr. Aubrey Zidenberg and Ben Soave, a retired Chief Superintendent of the RCMP and internationally recognized innovator in the field of law enforcement, as advisors to its board of directors
- the completion of the purchase of Cadillac Jack Inc. ("Cadillac Jack"), a leading supplier of products and technologies for the global gaming market with gaming machine placements in more than 200 venues in the United States and Mexico, an acquisition previously announced on September 25, 2012. Amaya announced it would pay approximately $177.0 million to acquire 100 per-cent of the equity of Cadillac Jack, to retire its debt, pay for transaction costs and fund working capital, and that it would finance the transaction through a combination of cash on hand and a US$110.0 million non-convertible senior secured term loan secured by Cadillac Jack's assets
- the completion of the purchase of Ongame Network Ltd. ("Ongame"), a leading business-to-business (B2B) online poker network, from bwin.party digital entertainment plc for a cash consideration of €15.0 million on a cash-free and debt-free basis, to be funded through existing cash reserves. Additional contingent consideration of up to €10.0 million will become payable by Amaya if there is regulated online gaming in the United States within five years of completion of the acquisition. The exact amount of the contingent consideration will depend upon the extent of the regulation based upon the number of states that regulate and the total population covered.
"The past year has been transformational for Amaya," said Mr. David Baazov, President and Chief Executive Officer of Amaya Gaming Group. "We expanded dramatically in Europe by increasing the licensee base of our subsidiaries Chartwell and CryptoLogic, which we had acquired in 2011 and April, 2012 respectively. Cryptologic went from a net loss in the first half of 2012 to a significant contributor of income for Amaya by the end of 2012.
"In the fourth quarter, we rounded out our offering of gaming solutions with the acquisitions of gaming machine supplier Cadillac Jack, which gives us an important presence in the United States, and B2B poker network provider Ongame," Mr. Baazov. "We now have the technology to address the growing trend toward convergence in our industry, with operators increasingly looking to offer physical, virtual, and mobile gaming products and experiences to their customers.
"Looking ahead, we are focused on extending our footprint, including through strategic partnerships in the United States, where the regulation of online gaming continues to evolve. Three states including New Jersey and Nevada have recently legalized online gaming and other states have tabled legislation that would do the same," Mr. Baazov concluded. "Additionally, we expect to realize on synergies from our acquisitions of Ongame and Cadillac Jack, as we did with Cryptologic, including growing their respective customer bases in various jurisdictions."
Amaya reported revenues of $37.19 million for the fourth quarter of 2012, an increase of $27.70 million or 292% compared to $9.49 million in the fourth quarter of 2011. This revenue increase is primarily attributable to the Corporation's licensing of its proprietary online and mobile technology, consolidating CryptoLogic's software licensing and hosted casino revenue, consolidating Ongame's software licensing revenue, and consolidating Cadillac Jack's participation agreement revenue. For the year ended December 31, 2012, revenues were $76.44 million, an increase of $58.06 million or 316% compared to $18.38 million in fiscal 2011. This revenue increase is primarily attributable to the Corporation's placements of its gaming stations, licensing of its proprietary online and mobile technology, consolidating Chartwell's software licensing revenue and consolidating CryptoLogic's software licensing and hosted casino revenue, consolidating Ongame's software licensing revenue, and consolidating Cadillac Jack's participation agreement revenue. On a regional basis, revenue in Q4 and the full year of 2012 was concentrated in Europe, the Caribbean and North America.
Gross profit percentage was 99% of revenues for the three months ended December 31, 2012 and 90% for the three month period ended December 31, 2011. Gross profit was $75.21 million in 2012, representing 98% of revenues, compared to $17.02 million, or 93% of revenues, in 2011.
Selling and marketing expenses increased from $0.96 million for the three month period ended December 31, 2011 to $3.71 million for the three month period ended December 31, 2012, representing an increase of 286%, in line with the percentage increase in revenues. Selling and marketing expenses increased from $6.48 million in 2011 to $11.68 million in 2012, representing an increase of 80%.
General and administrative expenses increased from $5.6 million for the three month period ended December 31, 2011, to $29.77 million for the three month period ended December 31, 2012, representing an increase of 431%. General and administrative expenses increased from $13.74 million for the twelve month period ended December 31, 2011, to $61.98 million for the twelve month period ended December 31, 2012, representing an increase of 349%.The increase in 2012 was driven by a growing employee base due to the CryptoLogic, Cadillac Jack, and Ongame acquisitions, fully staffed operations in Moldova, Armenia, and the Dominican Republic, consulting fees, amortization costs, fees incurred in connection with the termination of agency agreements, and costs incurred in connection with the termination of employment agreements.
Financial expenses were $0.14 million for the three month period ended December 31, 2011 and $3.64 million for the three month period ended December 31, 2012. Financial expenses were $0.68 million for the full year 2011 and $6.82 million in 2012. The increase in 2012 is primarily attributable to interest on both the convertible debentures related to the acquisition of Cryptologic, and the facility in connection with the agreement and plan of merger to acquire Cadillac Jack.
Adjusted EBITDA was $16.75 million in the fourth quarter of 2012, a $13.34 million improvement compared to an adjusted EBITDA of $3.41 million in Q4 2011, and a $10.57 million improvement from $6.36 million in the third quarter of 2012. Q4 2012 adjusted EBITDA excludes $11.30 million in one-time costs, comprised of $3.20 million in acquisition-related costs, $5.37 million in non-recurring bonuses, $1.80 million of costs to terminate certain employee agreements, $0.44 million to terminate a lease agreement, and $0.49 in other one-time costs. Adjusted EBITDA was $23.11 million in 2012, an improvement of $23.17 million from a $(0.06) million adjusted EBITDA loss in 2011. 2012 adjusted EBITDA excludes $16.45 million in one-time costs, comprised of $6.03 million of acquisition-related costs, $5.37 million in non-recurring bonuses, $3.37 million of costs to terminate certain employment agreements, $1.19 million to terminate certain agency and lease agreements, and $0.49 in other one-time costs.
AMENDMENT TO STOCK OPTION PLAN
On April 29, 2013, the Board of Directors of Amaya approved certain modifications to the employee stock option plan of Amaya (the "Stock Option Plan") to increase the number of common shares of Amaya reserved for issuance under the Stock Option Plan from 7,752,005 to 8,600,000 (the "Amendment to the Stock Option Plan"). The Amendment to the Stock Option Plan was conditionally approved by the TSX Venture Exchange on April 19, 2013.
2012 FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS
The complete financial statements, notes to financial statements and Management's Discussion and Analysis for the three and twelve-month periods ended December 31, 2012, will be available on the SEDAR website at www.sedar.com.
Amaya will host a conference call on Tuesday, April 30, 2013 at 9:00 a.m. ET to discuss its 2012 fourth quarter and year end financial results. David Baazov, CEO of Amaya Gaming Group Inc., will chair the call. To participate in the call, please dial 647-427-7450 or 1-888-231-8191 ten minutes prior to the scheduled start of the call. A replay of the conference call will be available until Tuesday, May 7, 2013 by calling 416-849-0833 or 1-855-859-2056, reference number 47454140. The conference call will be webcast live at http://bit.ly/Z66gXQ.
ABOUT AMAYA GAMING GROUP INC.
Amaya provides a full suite of gaming products and services including casino, poker, sportsbook, platform, lotteries and slot machines. Some of the world's largest gaming operators and casinos are powered by Amaya's online, mobile, and land-based products. Amaya is present in all major gaming markets in the world with offices in North America, Latin America and Europe. Amaya recently acquired Cryptologic, a pioneer within online casino, Ongame, a leader within online poker, and Cadillac Jack, a successful slot machine manufacturer. For more information please visit www.amayagaming.com.
DISCLAIMER IN REGARDS TO FORWARD-LOOKING STATEMENTS
Certain statements included herein, including those that express management's expectations or estimates of our future performance constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Investors are cautioned not to put undue reliance on forward looking statements. Except as required by law, the Corporation does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.
"Neither 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."
1 Adjusted EBITDA as defined by the Corporation means earnings before interest and financing costs (net of interest income), income taxes, depreciation and amortization, stock-based compensation, restructuring and other non-recurring costs, and non-controlling interests. Adjusted EBITDA is a non-IFRS measure.
SOURCE: AMAYA GAMING GROUP INC.
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