MONTREAL, March 22, 2017 /PRNewswire/ - Amaya Inc.
(NASDAQ: AYA; TSX: AYA) today reported its financial results for
the fourth quarter and year ended December
31, 2016 and provided a 2017 update and full year financial
guidance ranges, as well as certain additional highlights and
updates. Unless otherwise noted, all dollar ($) amounts are in U.S.
dollars.
"2016 was a record year of revenues for Amaya," said Rafi
Ashkenazi, Chief Executive Officer. "Our proactive changes to the
poker ecosystem and customer acquisition initiatives continue to
reverse certain negative trends and we are starting to see organic
growth in that business, our casino offering exceeded expectations
as we introduced limited marketing campaigns and focused on our
cross-sell efforts, and we continued to build and develop our
sportsbook.
"The strong performance of our business has helped us to reduce
our currency risk, lower our interest expense, and accelerate the
payment of the remaining amounts owed on our deferred payment
obligation, all of which will allow us to continue pursuing our
four strategic priorities. We expect to continue our 2016 momentum
and execute on our strategy in 2017," noted Ashkenazi.
Fourth Quarter and Full Year 2016 Financial
Summary(1)
|
Three Months Ended
December 31,
|
Year-
over-Year
Change
|
Year Ended
December 31,
|
Year-
over-Year
Change
|
$000's, except
percentages and per share amounts
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Total
Revenue
|
310,434
|
|
293,201
|
5.9%
|
1,155,892
|
|
1,072,320
|
7.8%
|
Adjusted
EBITDA
|
147,604
|
|
125,305
|
17.8%
|
524,093
|
|
459,290
|
14.1%
|
Net earnings
(loss) from continuing operations
|
45,039
|
|
(15,226)
|
395.8%
|
135,550
|
|
(20,019)
|
777.1%
|
Adjusted Net
Earnings
|
107,013
|
|
82,287
|
30.0%
|
366,699
|
|
290,802
|
26.1%
|
Diluted earnings
(loss) from continuing operations
per common share
|
$ 0.23
|
|
$(0.11)
|
304.6%
|
$ 0.70
|
|
$(0.15)
|
573.0%
|
Adjusted Net Earnings
per Diluted Share
|
$ 0.53
|
|
$ 0.42
|
27.6%
|
$ 1.88
|
|
$ 1.47
|
27.8%
|
|
__________________________________________________
|
(1) For
important information on Amaya's non-IFRS measures, see below under
"Non-IFRS and Non-U.S. GAAP Measures" and the tables under
"Reconciliation of Non-IFRS Measures to Nearest IFRS Measures". As
a result of Amaya's change in presentation currency from Canadian
dollars to U.S. dollars during the first quarter of 2016, the
comparative and historical figures disclosed herein and in Amaya's
financial statements and management's discussion and analysis for
the three months and year ended December 31, 2015 have been
retrospectively adjusted to reflect such change as if the U.S.
dollar had been used as the presentation currency for all prior
periods presented.
|
Fourth Quarter and Full Year 2016 and Subsequent Financial
Highlights
- Revenues – Total revenues for the quarter and
year increased approximately 5.9% and 7.8% year-over-year,
respectively. Excluding the impact of year-over-year changes in
foreign exchange rates, total revenues for the quarter and year
would have increased by approximately 10.4% and 12.5%,
respectively. Real-money online poker revenues and real-money
online casino and sportsbook combined revenues represented
approximately 70.0% and 25.8% of total revenues for the quarter,
respectively, and 73.2% and 22.8% for the year, respectively, as
compared to approximately 78.0% and 17.2% and 82.7% and 12.7% for
the applicable prior year periods.
- Poker Revenues – Real-money online poker revenues for
the quarter were $217.2 million, or a
decrease of approximately 5.1% year-over-year, and $846.1 million for the year, or a decrease of
approximately 4.6% year-over-year. Excluding the impact of
year-over-year changes in foreign exchange rates, real-money online
poker revenues would have decreased by approximately 1% for the
quarter and remained flat for the year. In the fourth quarter of
2015 there were also $6.8 million of
one-time poker revenues resulting from accounting adjustments
related to offsets to gross gaming revenue. Amaya continues to see
a positive impact from its previously announced strategy of
focusing on recreational players, including through changes to its
online poker loyalty program and rake structure, and certain
adjustments to the poker ecosystem despite the year-over-year
declines.
- Debt – Total long term debt outstanding at the end of
the year was $2.53 billion with a
weighted average interest rate of 4.9%. Following the end of the
year, Amaya announced the successful repricing and retranching of
its U.S. dollar and Euro denominated first lien term loans
resulting in the reduction of the applicable interest rate margins
by 50 basis points, removing the Euribor floor on the Euro
denominated first lien term loans, and raising €100 million of
incremental Euro denominated first lien debt and using the same to
reduce its U.S. denominated first lien debt. As a result, the
weighted average interest rate on the long term debt will decrease
to 4.5% and Amaya currently expects to save approximately 13%, or
$15.4 million, of interest expense
annually. Amaya and the lenders also amended the credit agreement
for its first lien term loans to, among other things, reflect the
repricing, retranching, and waive the required 2016 and 2017 excess
cash flow repayments (as defined and described in the credit
agreement) previously due on March 31,
2017 and March 31, 2018,
respectively.
- Rational Group Deferred Payment - Amaya anticipates that
it will pay the remaining outstanding balance of the deferred
purchase price for its acquisition of the Rational Group of
approximately $122.5 million using
cash on its balance sheet and cash flow from operations by the end
of June 2017. As previously
announced, Amaya paid $200 million in
November 2016, an additional
$75 million in January 2017 and will also pay an additional
approximately $48 million by
May 15, 2017 which was previously
allocated to Amaya's 2016 excess cash flow repayments. In
February 2017, Amaya also paid
approximately $6 million representing
three-months of non-refundable late payment fees on the
then-outstanding balance (as required by its previously announced
agreement with the former owners of the Rational Group). Beginning
on May 1, 2017, any additional fees
will be calculated at the rates outlined in the original merger
agreement.
Fourth Quarter 2016 and Subsequent Operational
Highlights
- Quarterly Real-Money Active Uniques (QAUs) – Total
combined QAUs were approximately 2.6 million, an increase of
approximately 8% year-over-year primarily led by customer
acquisition initiatives. Approximately 2.5 million of such QAUs
played online poker during the quarter, an increase of
approximately 5% year-over-year, while Amaya's online casino
offerings had approximately 648,000 QAUs, an increase of
approximately 47% year-over-year, which Amaya continues to estimate
as one of the largest casino player bases among its competitors.
Amaya's emerging online sportsbook offerings had approximately
247,000 QAUs, an 88% increase year-over-year.
- Quarterly Net Yield (QNY) – Total QNY was $114, an increase of 0.5% year-over-year.
Excluding the impact of year-over-year changes in foreign exchange
rates, total QNY was $117, an
increase of 3.3% year-over-year. Notwithstanding the increase, QNY
in the fourth quarter of 2016 was negatively impacted by (i) an
increasing proportion of newly registered QAUs, who tend to have
lower yields in their first few quarters of activity, as a total
percentage of QAUs, primarily as a result of an evolving marketing
strategy and certain customer acquisition initiatives, and (ii)
Amaya only offering online poker in Portugal for approximately one month following
its relaunch in that jurisdiction late in the quarter. QNY in the
fourth quarter of 2015 also benefited from the one-time poker
revenues noted above. QNY is a non-IFRS measure.
- Customer Registrations – Customer Registrations
increased by 2.6 million during the quarter to approximately 108
million at the end of the year.
- Operational Excellence Initiatives – As part of Amaya's
strategy and as previously reported, it continues to review its
expense structure and identify areas for improvement that it
believes will enhance shareholder value. In 2016, this included
certain office and departmental restructurings, including in
London, Sydney and Dublin. Where possible, Amaya has and
continues to reassign and replace staff throughout the organization
as part of these efforts. Amaya continues to assess and monitor the
overall impact of these and potential future initiatives on its
operations and performance.
- Retirement of Chief Financial Officer – In January 2017, Amaya announced that its CFO,
Daniel Sebag, had advised it that he
will retire as CFO later this year once his successor is identified
and appointed, and will assist Amaya in ensuring an orderly
transition of his duties. The Board and leading executive
recruiting firm Spencer Stuart have commenced a global CFO search
and are in the process of interviewing certain potential
candidates.
2017 Performance Update and Full Year Guidance
- Revenues – For the first two months of 2017, Amaya
estimates that unaudited consolidated revenues were approximately
$215.3 million, representing an
increase of approximately 13.3% over the same period of 2016. Of
such revenues, 68.9% was attributable to real-money online poker
estimated revenues and 27.4% was attributable to real-money online
casino and sportsbook combined estimated revenues. Excluding the
impact of year-over-year changes in foreign exchange rates, Amaya
estimates that such revenues were approximately $214.6 million, representing an increase of
approximately 12.9% over the same period of 2016.
- Full Year Guidance – Amaya currently expects the
following 2017 full year financial guidance ranges:
- Revenues of $1,200 to
$1,260 million;
- Adjusted EBITDA of $560 to $580
million;
- Adjusted Net Earnings of $400 to $430
million; and
- Adjusted Net Earnings per Diluted Share of $1.94 to $2.13.
These estimates reflect
management's view of current and future market and business
conditions, including assumptions of (i) the cessation of
real-money online poker offering in Australia by the end of April 2017, (ii) the introduction of Amaya's
previously disclosed cross-vertical customer loyalty program, (iii)
no other material adverse regulatory events and (iv) no material
foreign currency exchange rate fluctuations, particularly against
the Euro which is the primary depositing currency of Amaya's
customers, that could negatively impact customer purchasing power
as it relates to Amaya's U.S. dollar denominated product offerings.
Such guidance is also based on a Euro to U.S. dollar exchange rate
of 1.06 to 1.00, unaudited expected results and certain accounting
assumptions.
Annual Information Form, Financial Statements, Management's
Discussion and Analysis and Additional Information; Internal
Control Over Financial Reporting
Management has identified internal control deficiencies that
constitute individually, or in the aggregate, material weaknesses
in Amaya's internal control over financial reporting as of
December 31, 2016. These
deficiencies relate to the operating effectiveness of controls over
derivative valuations and hedge accounting, and the design of
controls over foreign exchange rate information. Amaya has
identified and implemented, and continues to implement, steps to
remediate these deficiencies. There were no restatements or
adjusting entries required in Amaya's audited consolidated
financial statements for the three month period and year ended
December 31, 2016 (the "2016
Financial Statements") or otherwise as a result of the
foregoing. For additional information, see "Disclosure
Controls and Procedures and Internal Control Over Financial
Reporting" in Amaya's management's discussion and analysis for the
three month period and year ended December
31, 2016 (the "2016 MD&A").
Amaya's 2016 annual information form, the 2016 Financial
Statements and the 2016 MD&A, as well as additional information
relating to Amaya and its business, can be found on SEDAR at
www.sedar.com, Edgar at www.sec.gov and Amaya's website at
www.amaya.com.
In addition to press releases, securities filings and public
conference calls and webcasts, Amaya intends to use its investor
relations page on its website as a means of disclosing material
information to its investors and others and for complying with its
disclosure obligations under applicable securities laws.
Accordingly, investors and others should monitor the website in
addition to following Amaya's press releases, securities filings
and public conference calls and webcasts. This list may be updated
from time to time.
Conference Call and Webcast
Amaya will host a conference call today, March 22, 2017 at 8:30
a.m. ET to discuss its financial results for the fourth
quarter and year ended 2017 and related matters. Rafi Ashkenazi,
Chief Executive Officer of Amaya, will chair the call. To access
via tele-conference, please dial +1 877-407-0789 or +1 201-689-8562
ten minutes prior to the scheduled start of the call. The playback
will be made available two hours after the event at +1 844-512-2921
or +1 412-317-6671. The Conference ID number is 13657320. To access
the webcast please use the following link:
http://public.viavid.com/index.php?id=123320
Reconciliation of Non-IFRS Measures to Nearest IFRS
Measures
The table below presents reconciliations of Adjusted EBITDA,
Adjusted Net Earnings and Adjusted Net Earnings per Diluted Share
to the nearest IFRS measures:
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
$000's, except per
share amounts
|
2016
|
|
|
2015
(as
adjusted)
|
|
2016
|
|
2015
(as
adjusted)
|
Net earnings (loss)
from continuing operations
|
|
45,039
|
|
|
|
(15,226)
|
|
|
135,550
|
|
|
(20,019)
|
Financial
expenses
|
|
36,630
|
|
|
|
51,214
|
|
|
137,972
|
|
|
197,226
|
Income
taxes
|
|
(78)
|
|
|
|
970
|
|
|
4,000
|
|
|
14,441
|
Depreciation of
property and equipment
|
|
2,072
|
|
|
|
2,009
|
|
|
8,181
|
|
|
7,584
|
Amortization of
intangible and deferred development costs
|
|
34,783
|
|
|
|
31,262
|
|
|
131,702
|
|
|
120,470
|
EBITDA
|
|
118,446
|
|
|
|
70,229
|
|
|
417,405
|
|
|
319,702
|
Stock-based
compensation
|
|
1,893
|
|
|
|
2,901
|
|
|
10,289
|
|
|
14,224
|
Termination of
employment agreements
|
|
3,643
|
|
|
|
9,607
|
|
|
15,008
|
|
|
12,745
|
Termination of
affiliate agreements
|
|
1,099
|
|
|
|
2,362
|
|
|
4,485
|
|
|
7,652
|
Loss on disposal of
assets
|
|
361
|
|
|
|
194
|
|
|
923
|
|
|
357
|
Loss (gain) from
investments and associates
|
|
4,832
|
|
|
|
(774)
|
|
|
19,627
|
|
|
11,353
|
Gain on settlement of
deferred consideration
|
|
(2,466)
|
|
|
|
—
|
|
|
(2,466)
|
|
|
—
|
Loss (gain) on sale
of subsidiary
|
|
—
|
|
|
|
1,000
|
|
|
—
|
|
|
(4,352)
|
Acquisition-related
costs
|
|
—
|
|
|
|
275
|
|
|
199
|
|
|
495
|
Impairment
|
|
9,646
|
|
|
|
8,940
|
|
|
16,931
|
|
|
24,459
|
Other
costs
|
|
10,150
|
|
|
|
30,571
|
|
|
41,692
|
|
|
72,655
|
Adjusted
EBITDA
|
|
147,604
|
|
|
|
125,305
|
|
|
524,093
|
|
|
459,290
|
Current income tax
expense
|
|
(2,570)
|
|
|
|
(3,023)
|
|
|
(8,384)
|
|
|
(7,342)
|
Depreciation and
amortization (excluding amortization of purchase price allocation
intangibles)
|
|
(5,779)
|
|
|
|
(3,903)
|
|
|
(18,138)
|
|
|
(10,573)
|
Interest (excluding
interest accretion)
|
|
(32,242)
|
|
|
|
(36,092)
|
|
|
(130,872)
|
|
|
(150,573)
|
Adjusted Net
Earnings
|
|
107,013
|
|
|
|
82,287
|
|
|
366,699
|
|
|
290,802
|
Diluted
Shares
|
|
200,132,710
|
|
|
|
196,401,455
|
|
|
195,432,920
|
|
|
197,993,500
|
Adjusted Net
Earnings per Diluted Share
|
$
|
0.53
|
|
|
$
|
0.42
|
|
$
|
1.88
|
|
$
|
1.47
|
The table below presents certain items comprising "Other costs"
in the reconciliation table above:
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
$000's
|
|
2015
$000's
(as
adjusted)
|
|
2016
$000's
|
|
2015
$000's
(as
adjusted)
|
|
|
|
|
Non-U.S. lobbying
expenses
|
765
|
|
2,773
|
|
3,065
|
|
8,081
|
U.S. lobbying and
legal expenses
|
3,630
|
|
101
|
|
12,792
|
|
6,658
|
Strategic review
professional fees
|
2,965
|
|
—
|
|
10,338
|
|
—
|
Retention
bonuses
|
615
|
|
1,653
|
|
3,272
|
|
8,263
|
Non recurring
professional fees
|
1,188
|
|
104
|
|
6,021
|
|
4,031
|
Romania back
taxes
|
—
|
|
—
|
|
—
|
|
6,988
|
Austria gaming
duty
|
—
|
|
24,853
|
|
—
|
|
24,853
|
New Jersey license
fees
|
—
|
|
111
|
|
—
|
|
1,551
|
AMF investigation
professional fees
|
1,018
|
|
(348)
|
|
5,509
|
|
4,510
|
Office restructuring
and legacy business unit
shutdown costs
|
(31)
|
|
1,324
|
|
695
|
|
7,720
|
Other
costs
|
10,150
|
|
30,571
|
|
41,692
|
|
72,655
|
The table below presents a reconciliation of the numerator of
QNY (i.e., real-money online poker revenue and real-money online
casino and sportsbook combined revenue) to the nearest IFRS measure
(i.e., total revenue) as reported for the applicable period. Unless
otherwise noted, any deviation in the reconciliation below to
measures presented herein may be the result of immaterial
adjustments made in later periods due to certain accounting
reallocations.
|
Three Months Ended
December 31,
|
|
2016
|
|
2015
|
|
$000's
|
|
$000's
|
Total
revenue
|
|
310,434
|
|
|
293,201
|
Corporate
revenue
|
|
(151)
|
|
|
(471)
|
Other
business-to-consumer revenue
|
|
(12,884)
|
|
|
(13,419)
|
Real-money online
poker revenue and real-money online casino
|
|
|
|
|
|
|
and sportsbook
combined
revenue
|
|
297,399
|
|
|
279,311
|
Amaya has not provided a reconciliation of the non-IFRS measures
to the nearest IFRS measures included in its full year 2017
financial guidance provided in this release, including Adjusted
EBITDA, Adjusted Net Earnings and Adjusted Net Earnings per Diluted
Share, because certain reconciling items necessary to accurately
project such IFRS measures, particularly net earnings (loss) from
continuing operations, cannot be reasonably projected due to a
number of factors, including variability from potential foreign
exchange fluctuations impacting financial expenses, and the nature
of other non-recurring or one-time costs (which are excluded from
non-IFRS measures but included in net earnings (loss) from
continuing operations), as well as the typical variability arising
from the audit of annual financial statements, including, without
limitation, certain income tax provision accounting, and related
accounting matters.
For additional information on Amaya's non-IFRS measures, see
below and the 2016 MD&A, including under the headings
"Management's Discussion and Analysis" and "Selected Financial
Information—Other Financial Information".
About Amaya
Amaya is a leading provider of technology-based products and
services in the global gaming and interactive entertainment
industries. Amaya ultimately owns gaming and related consumer
businesses and brands including PokerStars, PokerStars Casino,
BetStars, Full Tilt, StarsDraft, and the PokerStars Championship
and PokerStars Festival live poker tour brands (incorporating
aspects of the European Poker Tour, PokerStars Caribbean Adventure,
Latin American Poker Tour and the Asia Pacific Poker Tour). These
brands have more than 108 million cumulative registered
customers globally and collectively form the largest poker business
in the world, comprising online poker games and tournaments,
sponsored live poker competitions, marketing arrangements for
branded poker rooms in popular casinos in major cities around the
world, and poker programming and content 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. Amaya, through certain of its subsidiaries,
is licensed or approved to offer, or offers under third party
licenses or approvals, its products and services in various
jurisdictions throughout the world, including in Europe, both within and outside of the
European Union, the Americas and elsewhere. In particular,
PokerStars is the world's most licensed online gaming brand,
holding licenses or related operating approvals in 17
jurisdictions.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements and
information within the meaning of the Private Securities Litigation
Reform Act of 1995 and applicable securities laws, including,
without limitation, certain financial and operational expectations
and projections, such as full year 2017 financial guidance, certain
future operational and growth plans and strategies, including,
without limitation, the repayment of the deferred purchase price
for the acquisition of the Rational Group and the operational
excellence program, CFO succession plans, and the timing
of Mr. Sebag's planned retirement and his assistance with
the transition to his successor. Forward-looking statements and
information 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 and information, 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 Amaya and management believe the expectations
reflected in such forward-looking statements and information 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 and information are inherently subject
to significant business, regulatory, 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 Amaya 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 Amaya'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; ability to mitigate tax risks and adverse tax
consequences, including, without limitation, the imposition of new
or additional taxes, such as value-added and point of consumption
taxes, and gaming duties; risks of foreign operations generally;
protection of proprietary technology and intellectual property
rights; ability to recruit and retain management and other
qualified personnel, including key technical, sales and marketing
personnel; defects in Amaya'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 Amaya 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; 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, but are not
limited to, those identified in Amaya's Annual Information Form for
the year ended December 31, 2016,
including under the heading "Risk Factors and Uncertainties", and
in the 2016 MD&A, including under the headings "Risk Factors
and Uncertainties", "Limitations of Key Metrics and Other Data" and
"Key Metrics", 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 or information. Any
forward-looking statement or information speaks only as of the date
hereof, and Amaya 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-IFRS and Non-U.S. GAAP Measures
This news release references non-IFRS and non-U.S. GAAP
financial measures, including QNY, Adjusted EBITDA, Adjusted Net
Earnings, Adjusted Net Earnings per Diluted Share, and the foreign
exchange impact on revenues (i.e., constant currency). Amaya
believes these non-IFRS and non-U.S. GAAP financial measures will
provide investors with useful supplemental information about the
financial performance of its business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key metrics used by management in
operating its business. Although management believes these
financial measures are important in evaluating Amaya, they are not
intended to be considered in isolation or as a substitute for, or
superior to, financial information prepared and presented in
accordance with IFRS or U.S. GAAP. They are not recognized measures
under IFRS or U.S. GAAP and do not have standardized meanings
prescribed by IFRS or U.S. GAAP. These measures may be different
from non-IFRS and non-U.S. GAAP financial measures used by other
companies, limiting its usefulness for comparison purposes.
Moreover, presentation of certain of these measures is provided for
year-over-year comparison purposes, and investors should be
cautioned that the effect of the adjustments thereto provided
herein have an actual effect on Amaya's operating results. In
addition to QNY, which is defined below under "Key Metrics and
Other Data", Amaya uses the following non-IFRS and non-U.S. GAAP
measures in this release:
Adjusted EBITDA 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 certain other items.
Adjusted Net Earnings means net earnings (loss) from continuing
operations before interest accretion, amortization of intangible
assets resulting from purchase price allocation following
acquisitions, deferred income taxes, stock-based compensation,
restructuring, foreign exchange, and certain other items. Adjusted
Net Earnings per Diluted Share means Adjusted Net Earnings divided
by Diluted Shares. Diluted Shares means the weighted average number
of common shares on a fully diluted basis, including options,
warrants and Amaya's convertible preferred shares. The effects
of anti-dilutive potential common shares are ignored in calculating
Diluted Shares. See note 10 to the 2016 Financial Statements.
For the year ended December 31, 2016,
Diluted Shares equaled 195,432,920. For the purposes of the full
year 2017 financial guidance provided in this release, Diluted
Shares equals between 202,000,000 and 206,000,000 for the high and
low ends of the Adjusted Net Earnings per Diluted Share range,
respectively.
To calculate revenue on a constant currency basis, Amaya
translated revenue for the three months and year ended December 31, 2016 (and for January and
February 2017 with respect to the
revenue for such months provided herein) using the prior year's
monthly exchange rates for its local currencies other than the U.S.
dollar and adjusting the prior year period to the extent any
accounting reallocations were made in later periods, which Amaya
believes is a useful metric that facilitates comparison to its
historical performance.
For additional information on Amaya's non-IFRS measures, see the
2016 MD&A, including under the headings "Management's
Discussion and Analysis" and "Selected Financial Information—Other
Financial Information".
Key Metrics and Other Data
Amaya defines QAUs as active unique customers (online,
mobile and desktop client) who generated rake, placed a bet or
otherwise wagered (excluding free play, bonuses or other
promotions) on or through an Amaya poker, casino or sportsbook
offering during the applicable quarterly period. Amaya defines
unique as a customer who played at least once on one of Amaya's
real-money offerings during the period, and excludes duplicate
counting, even if that customer is active across multiple verticals
(e.g., both poker and casino). For further clarity, the
exclusions from QAUs noted as "free play, bonuses or other
promotions" include, without limitation, low-stakes and/or
non-raked poker games, but do not include non-cash promotions or
poker tournament fees covered by Amaya as incentives for customers
who ultimately make or place real-money wagers or bets on or
through an Amaya poker, casino or sportsbook offering. Beginning
with its second quarter 2016 results, Amaya no longer provides
PokerStars-only QAUs as a result of the migration of the Full Tilt
brand and customers to the PokerStars platform.
Amaya defines QNY as combined real-money online gaming and
related revenue (excluding certain other revenues, such as revenues
from play-money offerings, live events and branded poker rooms) for
its two business lines (i.e., real-money online poker and
real-money online casino and sportsbook) as reported during the
applicable quarterly period (or as adjusted to the extent any
accounting reallocations are made in later periods) divided by the
total QAUs during the same period. Amaya provides QNY on a U.S.
dollar and constant currency basis. QNY is a non-IFRS measure.
Amaya defines Customer Registrations as the cumulative number of
online real-money and play-money customer registrations on
PokerStars, Full Tilt and related brands.
For additional information on Amaya's key metrics and other
data, see the 2016 MD&A, including under the headings
"Limitations on Key Metrics and Other Data" and "Key Metrics".
SOURCE Amaya Inc.