MONTREAL, Aug. 13, 2015 /PRNewswire/ - Amaya
Inc. ("Amaya" or the "Corporation") (TSX: AYA; NASDAQ: AYA)
today reported its financial results for the three and six-month
periods ended June 30, 2015. Unless
otherwise noted, all references to"$" and "CAD" are to the Canadian
dollar, "US$" and "USD" are to the U.S. dollar and "€" and "EUR"
are to the Euro.
"This was another exciting quarter for Amaya," said David Baazov, Amaya's Chairman and CEO. "Our
core poker business remains strong and our customers have embraced
our expansion into non-poker offerings.
"We've completed our transition to a pure B2C technology company
having finalized the divestiture of our B2B businesses," added
Baazov. "We substantially reduced our leverage and improved our
financial condition. Since the acquisition of our B2C business,
we've repaid approximately US$529
million of our long-term debt, thereby eliminating an
estimated US$62 million of related
interest expense."
Key Q2 2015 Financial Highlights
- Revenues grew 10% to approximately $320
million as compared to pro-forma1 revenues for Q2
20142 of approximately $289
million.
- Revenues grew approximately 24% on a constant currency
basis3 and normalizing4 the impact of
approximately $6 million in value
added taxes ("VAT") charged in 2015 (but not in 2014) in certain
European Union jurisdictions, including Germany and France. On the same basis, poker grew
approximately 11%, partially attributable to an increase in
real-money unique players and depositors on PokerStars.
- Online casino comprised approximately 11% of revenues, with the
remainder almost entirely from poker.
- Adjusted EBITDA5 grew 24% to $138 million, or 43.5% of revenues, as compared
to pro-forma Adjusted EBITDA for Q2 2014 of approximately
$112 million, or 38.5% of revenues.
- Adjusted EBITDA year-over-year margin expansion was driven
primarily by the increase in high margin revenue streams, including
online casino, despite a material decline in the value of global
currencies as against the USD and the introduction of new gaming
duties and VAT (totaling approximately $10
million) not in effect during Q2 2014.
- Adjusted Net Earnings grew 43% to $86
million as compared to pro-forma Adjusted Net Earnings for
Q2 2014 of approximately $60
million.
- Adjusted Net Earnings per Diluted Share6 grew 43% to
$0.43 as compared to pro-forma
Adjusted Earnings per Diluted Share7 for Q2 2014 of
approximately $0.30.
Financial Summary for Q2 and YTD 2015 and
20148
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
$000's except
percentages and per share figures
|
2015
|
2014
|
2015
|
2014
|
Revenues
|
319,646
|
289,302
|
656,871
|
624,669
|
Adjusted
EBITDA
|
138,174
|
111,755
|
279,474
|
247,982
|
Adjusted Net
Earnings
|
86,074
|
59,655
|
170,371
|
138,879
|
Adjusted Net Earnings
per Diluted Share
|
$0.43
|
$0.30
|
$0.85
|
$0.69
|
Key Q2 2015 Operational Highlights
- The Corporation's B2C business added an aggregate of 1.9
million customer registrations during the quarter, with registered
customers totalling more than 95 million as of June 30, 2015. Approximately 5.7 million of such
total registered customers were active9 during the
quarter.
- The aggregate number of unique10 customers who
played a real money online offering during the quarter was
approximately 2.3 million, of which approximately 95% played on
PokerStars, in line with Q2 2014.
- Gross deposits increased approximately 4% on a constant
currency basis, including approximately 7% on
PokerStars.
Key Q2 2015 and Subsequent Corporate and Other Financial
Highlights
- Since the acquisition of its B2C business on August 1, 2014, Amaya repaid approximately
US$529 million of long-term debt,
reducing total long-term debt from approximately US$3.134 billion to approximately US$2.605 billion.
- All previously announced B2B business divestitures were
completed as of July 31, 2015 and the
majority of the net proceeds were used to help repay debt and
repurchase common shares.
- Approximately US$344 million of
such proceeds were used to repay outstanding long-term debt during
the quarter.
- Approximately $35.6 million of
such proceeds were used to repurchase and cancel 1.1 million common
shares pursuant to the Corporation's TSX-approved normal course
issuer bid.
- The previously announced refinancing was completed on
August 12, 2015 (the "Refinancing"),
including the repayment of approximately US$590 million of the Corporation's USD second
lien term loan. The Corporation funded this repayment, as well as
fees and related costs, through a combination of an approximately
US$315 million increase of its
existing USD first lien term loan, approximately €92 million
increase of its existing EUR first lien term loan and approximately
US$195 million in cash.
- As a result of the Refinancing and the repayment of debt since
the acquisition of its B2C business, Amaya expects that its annual
interest expense will reduce by approximately US$62 million, of which approximately
US$26.2 million is related to the
Refinancing, thereby strengthening its cash flow generation,
liquidity and leverage profile.
2015 Full Year Financial Guidance
Amaya is reaffirming its previously announced 2015 full-year
financial guidance provided in its earnings release on May 14, 2015 for the quarter ended March 31, 2015, with no changes to the ranges
provided nor any material changes to the assumptions used to
determine such guidance, except for the expected impact of
approximately four and a half months' interest savings as a result
of the Refinancing.
Financial Statements, Management's Discussion and Analysis
and Additional Information
Amaya's unaudited interim condensed consolidated financial
statements, notes thereto and Management's Discussion and Analysis
for the three and six-month periods, as applicable, ended
June 30, 2015, will be available on
SEDAR at www.sedar.com, Edgar at www.sec.gov and Amaya's website at
www.amaya.com. Additional information relating to Amaya and
its business may also be found on SEDAR at www.sedar.com, Edgar at
www.sec.gov and Amaya's website at www.amaya.com.
________________________________
1
Assumes that the acquisition of Amaya's B2C business occurred as of
the first day of such financial period. All figures in this release
are unaudited.
2 Amaya acquired its B2C business on August 1, 2014, therefore its results for the
three and six-month periods ended June 30,
2014 are not included in Amaya's unaudited interim condensed
consolidated financial statements for the period ended June 30, 2015 (the "Q2 Financials"), which were
prepared in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board
("IFRS").
3 For each jurisdiction in which the Corporation's B2C
business operates, 2015 dollar
figures are adjusted to their 2014 constant currency equivalent by
using a factor that is derived from the percentage change in the
exchange rate of the applicable jurisdiction's currency relative to
USD during the comparative period. The sum of each such equivalent
is then compared to IFRS figures for the applicable comparative
financial period in 2014. During the quarter, the Corporation
estimates the decline in purchasing power of our consumer base was
a result of an average 19% decline in the value of its customers'
local currencies relative to USD, which was partially offset by the
translation into its CAD reporting currency.
4 Normalizing as defined by the Corporation means adding
back the particular dollar amount at issue to the referenced
financial measure.
5 Adjusted EBITDA as defined by the Corporation means
net earnings (loss) from continuing operations before interest and
financing costs (net of interest income), income taxes,
depreciation and amortization, stock-based compensation,
restructuring and other non-recurring costs. Adjusted EBITDA is a
non-IFRS and non-U.S. GAAP measure. Reconciliation to net income
from continuing operations is included in this release.
6 Adjusted Net Earnings (Loss) as defined by the
Corporation means net earnings (loss) from continuing operations
before interest accretion, amortization of intangible assets
resulting from purchase price allocation following acquisitions,
stock-based compensation, foreign exchange, and other non-recurring
costs. Adjusted Net Earnings (Loss) per Diluted Share as defined by
the Corporation means Adjusted Net Earnings (Loss) divided by
Diluted Shares. Diluted Shares as defined by the Corporation means
the Corporation's common shares on a fully diluted basis including
options, warrants and convertible preferred shares using the
treasury method of accounting (assumes proceeds from in-the-money
options and warrants are used to repurchase common shares).
Adjusted Net Earnings (Loss) and Adjusted Net Earnings (Loss) per
Diluted Share are non-IFRS and non-U.S. GAAP measures.
Reconciliation to net income from continuing operations is included
in this release.
7 Assumes that each of current income taxes,
depreciation and amortization (net of amortization of purchase
price allocation intangibles), and interest (net of interest
accretion) in Q2 2015 was the same as in Q2 2014.
8 Continuing operations do not include Amaya's divested
B2B businesses, which were classified as discontinued operations
during the relevant financial periods. See the Q2 Financials and
the related management's discussion and analysis for the period
ended June 30, 2015. All 2014 figures
are presented on a pro forma basis, which assumes that the
acquisition of Amaya's B2C business occurred as of the first day of
such financial period. The USD to CAD exchange rates used in the
financial summary are as follows: Q2 2015 – 1.2294; YTD 2015 –
1.2352; Q2 2014 – 1.0902; and YTD 2014 – 1.0968.
9 Active as defined by the Corporation means a customer
who played on one or both of the PokerStars and Full Tilt
platforms (real- and play-money) during the quarter.
10 Unique as defined by the Corporation means a customer
who played on only one of the platforms and excludes any duplicate
counting.
Conference Call and Webcast
Amaya will host a conference call and webcast presentation
today, Thursday, August 13, 2015, at
8:30 a.m. ET to discuss its financial
results and business highlights for the second quarter of 2015.
David Baazov, Chairman and CEO of
Amaya, will chair the call.
To access via tele-conference, please dial +1.888.231.8191 or
+1.647.427.7450 ten minutes prior to the scheduled start of the
call. The playback will be made available two hours after the event
at +1.855.859.2056 or +1.416.849.0833. The Conference ID number is
92173455. To access the webcast presentation please use the
following link:
http://event.on24.com/r.htm?e=1027922&s=1&k=11D49E586699A8F4F1ED6CA3C1A5BB4D
Reconciliation of Non-IFRS Measures
to Nearest IFRS Measures
$000's except per
share figures
|
Q2
2015
|
Q2
2014
|
YTD Q2
2015
|
YTD Q2
2014
|
Net Income from
continuing operations
|
14,114
|
(8,042)
|
42,587
|
37,303
|
Financial
expenses
|
47,940
|
27
|
113,382
|
(776)
|
Current income
taxes
|
1,278
|
1
|
4,172
|
1
|
Deferred income
taxes
|
10,579
|
(2,952)
|
8,112
|
(3,699)
|
Depreciation of
property and equipment
|
2,471
|
286
|
4,422
|
615
|
Amortization of
intangible assets
|
36,237
|
579
|
72,912
|
1,142
|
Amortization of
deferred development costs
|
141
|
67
|
290
|
131
|
Stock-based
compensation
|
6,171
|
781
|
9,597
|
1,535
|
Pro-forma B2C
EBITDA
|
-
|
111,359
|
-
|
245,519
|
EBITDA
|
118,931
|
102,106
|
255,474
|
281,771
|
Termination of
agreements
|
7,775
|
53
|
7,831
|
151
|
Non-recurring
professional fees
|
1,604
|
-
|
4,401
|
-
|
Loss on disposal of
assets
|
175
|
-
|
224
|
-
|
Gain (loss) on sale
of subsidiary
|
-
|
1,720
|
-
|
(47,655)
|
Gain (loss) from
investments
|
670
|
(1,107)
|
(3,682)
|
(1,008)
|
Acquisition-related
costs
|
159
|
5,731
|
159
|
8,316
|
Impairment
|
1,587
|
-
|
1,587
|
-
|
Other one-time
costs
|
7,273
|
718
|
13,480
|
1,567
|
Pro-forma B2C
one-time costs
|
-
|
2,534
|
-
|
4,840
|
Adjusted
EBITDA
|
138,174
|
111,755
|
279,474
|
247,982
|
Current income
taxes
|
(1,278)
|
(1)
|
(4,171)
|
(1)
|
Depreciation and
amortization (net of amortization of purchase price allocation
intangibles)
|
(2,749)
|
(933)
|
(5,067)
|
(1,888)
|
Interest (net of
interest accretion)
|
(48,073)
|
(446)
|
(99,865)
|
(1,147)
|
Pro-forma B2C current
income taxes, depreciation, amortization, and interest
|
-
|
(50,720)
|
-
|
(106,067)
|
Adjusted net
income
|
86,074
|
59,655
|
170,371
|
138,879
|
Diluted Shares as at
June 30, 2015
|
200,394,577
|
200,394,577
|
200,394,577
|
200,394,577
|
Adjusted Net
Earnings per Diluted Share
|
0.43
|
0.30
|
0.85
|
0.69
|
About Amaya
Amaya is a leading provider of technology-based solutions,
products and services in the global gaming and interactive
entertainment industries. Amaya owns gaming and related consumer
businesses and brands including PokerStars, Full
Tilt, the European Poker Tour, PokerStars Caribbean
Adventure, Latin American Poker Tour and the Asia
Pacific Poker Tour. These brands collectively form the largest
poker business in the world, comprising online poker games and
tournaments, live poker competitions, branded poker rooms in
popular casinos in major cities around the world, and poker
programming created for television and online audiences. Amaya,
through certain of these brands, also offers non-poker gaming
products, including casino, sportsbook and daily fantasy
sports.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and
applicable securities laws, including, without limitation, certain
financial expectations and projections. Forward-looking statements
can, but may not always, be identified by the use of words such as
"anticipate", "plan", "continue", "estimate", "expect", "may",
"will", "project", "predict", "potential", "targeting", "intend",
"could", "might", "would", "should", "believe", "objective",
"ongoing" and similar references to future periods or the negatives
of these words and expressions. These statements, other than
statements of historical fact, are based on management's current
expectations and are subject to a number of risks, uncertainties,
and assumptions, including market and economic conditions, business
prospects or opportunities, future plans and strategies,
projections, technological developments, anticipated events and
trends and regulatory changes that affect us, our customers and our
industries. Although the Corporation and management believe the
expectations reflected in such forward-looking statements are
reasonable and are based on reasonable assumptions and estimates,
there can be no assurance that these assumptions or estimates are
accurate or that any of these expectations will prove accurate.
Forward-looking statements are inherently subject to significant
business, economic and competitive risks, uncertainties and
contingencies that could cause actual events to differ materially
from those expressed or implied in such statements. Specific risks
and uncertainties include, but are not limited to: the heavily
regulated industry in which the Corporation carries on business;
interactive entertainment and online and mobile gaming generally;
current and future laws or regulations and new interpretations of
existing laws or regulations with respect to online and mobile
gaming; potential changes to the gaming regulatory scheme; legal
and regulatory requirements; ability to obtain, maintain and comply
with all applicable and required licenses, permits and
certifications to distribute and market its products and services,
including difficulties or delays in the same; significant barriers
to entry; competition and the competitive environment within the
Corporation's addressable markets and industries; impact of
inability to complete future acquisitions or to integrate
businesses successfully; ability to develop and enhance existing
products and services and new commercially viable products and
services; ability to mitigate foreign exchange and currency risks;
risks of foreign operations generally; protection of proprietary
technology and intellectual property rights; lengthy and variable
sales cycle; ability to recruit and retain management and other
qualified personnel, including key technical, sales and marketing
personnel; defects in the Corporation's products or services;
losses due to fraudulent activities; management of growth; contract
awards; potential financial opportunities in addressable markets
and with respect to individual contracts; ability of technology
infrastructure to meet applicable demand; systems, networks,
telecommunications or service disruptions or failures or
cyber-attacks; regulations and laws that may be adopted with
respect to the Internet and electronic commerce and that may
otherwise impact the Corporation in the jurisdictions where it is
currently doing business or intends to do business; ability to
obtain additional financing on reasonable terms or at all;
refinancing risks; customer and operator preferences and changes in
the economy; dependency on customers' acceptance of its products
and services; changes in ownership of customers or consolidation
within the gaming industry; litigation costs and outcomes;
expansion within existing and into new markets; relationships with
vendors and distributors; and natural events. Other applicable
risks and uncertainties include those identified under the heading
"Risk Factors and Uncertainties" in Amaya's Annual Information Form
for the year ended December 31, 2014
and in its Management's Discussion and Analysis for the period
ended June 30, 2015, each available
on SEDAR at www.sedar.com, Edgar at www.sec.gov and Amaya's website
at www.amaya.com, and in other filings that Amaya has made and may
make with applicable securities authorities in the future.
Investors are cautioned not to put undue reliance on
forward-looking statements. Any forward-looking statement speaks
only as of the date hereof, and the Corporation undertakes no
obligation to correct or update any forward-looking statement,
whether as a result of new information, future events or otherwise,
except as required by applicable law.
Non-US GAAP and Non-IFRS Measures
This news release contains non-U.S. GAAP and non-IFRS financial
measures, specifically Adjusted Net Earnings, Adjusted Net Earnings
per Diluted Share, Adjusted EBITDA, Adjusted EBITDA, and the
pro-forma equivalents of such measures for comparative periods.
These financial measures are commonly used to compare companies and
management believes they are important measures in evaluating
Amaya. However, they are not recognized measures under U.S. GAAP or
IFRS and do not have standardized meanings prescribed by U.S. GAAP
or IFRS. Therefore, it may not be comparable to similar measures
presented by other companies. Investors are cautioned that this
measure should not be construed as an alternative to comparable
U.S. GAAP or IFRS measures determined in accordance with U.S. GAAP
or IFRS.
B2C Business Historical Measures
All historical information and financial measures relating to
Amaya's B2C business prior to Amaya's acquisition of Amaya Group
Holdings (IOM) Limited (formerly known as Oldford Group Limited)
and its subsidiaries (collectively, "Rational Group") on
August 1, 2014 presented in, or due
to lack of information omitted from, the Corporation's documents
filed on SEDAR at www.sedar.com and Edgar at www.sec.gov, including
the Corporation's Management Information Circular, dated
June 30, 2014, for the annual and special meeting of
shareholders of the Corporation held on July 30, 2014, the
Corporation's Business Acquisition Report, as amended and restated
on July 27, 2015, and this release,
including all financial information of the B2C business, has been
provided in exclusive reliance on the information made available by
Rational Group and their respective representatives. Although the
Corporation has no reason to doubt the accuracy or completeness of
Rational Group's information provided therein and herein, any
inaccuracy or omission in such information could result in
unanticipated liabilities or expenses, increase the cost of
integrating Amaya and Rational Group or adversely affect the
operational plans of the combined entities and its results of
operations and financial condition.
SOURCE Amaya Inc.