MONTREAL, May 16, 2016 /CNW/ - Amaya Inc. (NASDAQ: AYA;
TSX: AYA) today reported financial results for the first quarter
ended March 31, 2016 and provided a
performance update for the month of April
2016. As previously reported, during the first quarter 2016,
Amaya changed its presentation currency from the Canadian dollar to
the U.S. dollar. As such, unless otherwise noted, all dollar ($)
amounts are in U.S. dollars.
"Amaya remains focused," said Rafi Ashkenazi, Interim Chief
Executive Officer of Amaya. "During the first quarter, we continued
to execute on our growth plans despite unexpected challenges,
including management changes and the ongoing strategic alternatives
process. We attracted new customers to PokerStars, continued to
introduce changes to improve the overall poker experience, expanded
our online casino offering and continued to invest in our emerging
online sportsbook."
First Quarter 2016 Financial Summary(1)
|
|
Three Months Ended
March 31,
|
|
Year-over- Year Change
|
$000's, except
percentages and per share amounts
|
|
2016
|
|
2015
|
|
|
Revenues
|
|
288,673
|
|
272,292
|
|
6.0%
|
Adjusted
EBITDA
|
|
123,434
|
|
113,546
|
|
8.7%
|
Net earnings from
continuing operations
|
|
55,491
|
|
23,263
|
|
138.5%
|
Adjusted Net
Earnings
|
|
84,967
|
|
67,428
|
|
26.0%
|
Diluted earnings from
continuing operations per common share
|
|
$ 0.28
|
|
$ 0.12
|
|
141.8%
|
Adjusted Net Earnings
per Diluted Share
|
|
$ 0.43
|
|
$ 0.34
|
|
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". The comparative and
historical figures disclosed herein and in Amaya's financial
statements and management's discussion and analysis for the three
months ended March 31, 2016 have been retrospectively adjusted to
reflect the change in presentation currency to the U.S. dollar as
if the U.S. dollar had been used as the presentation currency for
all prior periods presented.
|
First Quarter 2016 Financial Highlights
- Revenues - Total revenues and real-money online revenues
for the quarter increased 6.0% and 6.7%, respectively. Excluding
the impact of year-over-year changes in foreign exchange rates,
total revenues and real-money online revenues for the quarter would
have increased by 13.9% and 14.0%, respectively. Real-money online
poker revenues and real-money online casino and sportsbook combined
revenues represented approximately 75% and 21% of total revenues
for the quarter, respectively, as compared to 89% and 6%,
respectively, for the first quarter of 2015.
- Debt – Total long term debt outstanding at the end of
the quarter was $2.57 billion with a
weighted average interest rate of 5.1%. The reduction in long term
debt during the quarter was primarily the result of a CDN
$30 million debenture repayment.
First Quarter 2016 Operational Highlights
- Customer Registrations – Customer Registrations
increased by 2.5 million to approximately 102 million at the end of
the quarter.
- Quarterly Real-Money Active Uniques (QAUs) – Total
combined QAUs were 2.5 million, an increase of approximately 1.7%
year-over-year, and PokerStars-only QAUs were 2.4 million, an
increase of approximately 4.2% year-over-year. Approximately 97.5%
of QAUs played online poker during the quarter, while Amaya's
online casino offerings had approximately 469,000 QAUs, which Amaya
estimates is one of the largest casino player bases among its
competitors, and its emerging online sportsbook offerings had
approximately 169,000 QAUs.
- Quarterly Net Yield (QNY) – Total QNY was $109, an increase of 4.1% year-over-year.
Excluding the impact of year-over-year changes in foreign exchange
rates, total QNY was $118, an
increase of 12.1% year-over-year.
- New Jersey – Amaya
currently estimates that since its launch, PokerStars NJ has
contributed to the growth of the New
Jersey real-money online poker market, which according to
the New Jersey Department of Gaming Enforcement, grew approximately
30% in the month of April year-over-year. In April 2016, its first full month of operation,
PokerStars NJ accounted for approximately 46% of the total
New Jersey real-money online poker
revenue.
Second Quarter 2016 Update
- Revenues – For the month of April
2016, Amaya estimates that unaudited consolidated revenues
were approximately $96 million,
representing an increase of approximately 11% over April 2015. Of such revenues, 77% was
attributable to real-money online poker estimated revenues and 21%
was attributable to real-money online casino and sportsbook
combined estimated revenues. Amaya estimates that such online poker
revenues remained relatively flat over April
2015 while PokerStars-only real-money online poker estimated
revenues increased 3%. Excluding the impact of year-over-year
changes in foreign exchange rates, Amaya estimates that revenues
were approximately $99 million,
representing an increase of approximately 14% over April 2015. On the same basis, real-money online
poker estimated revenues increased approximately 4% while
PokerStars-only real-money online poker estimated revenues
increased 7%.
- Special Committee Update - The Special Committee's
review of strategic alternatives is active and ongoing, with the
goal of determining the best outcome for Amaya and its
shareholders. Specifically, the Special Committee's financial
advisor, Barclays Capital Canada Inc., has contacted a range of
strategic and financial parties who might be interested in a
transaction involving Amaya. To date, several parties, including
David Baazov, who is on a leave of
absence as Chairman and Chief Executive Officer of Amaya, have
entered into confidentiality agreements with Amaya. A number of
these parties have received management presentations and are
conducting due diligence.
While there can be no assurance that this process will result in a
transaction of any kind, the Special Committee is focused on
completing its review of strategic alternatives in a timely
manner. The Special Committee believes the interests of Amaya
and its shareholders are best served by maintaining confidentiality
around the details of this process, but it will provide further
updates to shareholders as circumstances warrant.
While the Special Committee's review of strategic alternatives is
proceeding, the Board is also focused on ensuring that it is
comprised of directors with an optimal range of expertise and
experience. Mr. Baazov and Daniel
Sebag, Amaya's Chief Financial Officer, have advised the
Board that they will not be standing for re-election as directors
at Amaya's upcoming annual shareholders meeting. The Board is
actively engaged in identifying suitable director candidates with
competencies that complement those of Amaya's existing
directors.
As previously announced, the Special Committee's mandate also
includes responsibility for investigating allegations that have
been made by the Autorité des marchés financiers (AMF) with respect
to Mr. Baazov. That investigation by the Special Committee
and its counsel is ongoing.
- 2016 Guidance – The Special Committee of the Board of
Directors has determined, in consultation with the Audit Committee
of the Board, that while the Special Committee's review of
strategic alternatives is ongoing it remains inappropriate for
Amaya to provide guidance with respect to its 2016 financial
performance at this time.
Financial Statements, Management's Discussion and Analysis
and Additional Information
Amaya's unaudited condensed consolidated financial statements
and management's discussion and analysis for the three months ended
March 31, 2016, 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, May 16, 2016 at 5:30 p.m.
ET to discuss its financial results for the first quarter
2016. Rafi Ashkenazi, Interim 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 +1 877-870-5176 or +1 858-384-5517. The
Conference ID number is 13637776. To access the webcast please use
the following link:
http://public.viavid.com/index.php?id=119696
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
March 31,
|
|
$000's, except per
share amounts
|
|
2016
|
|
|
2015
|
|
Net earnings from
continuing operations
|
|
|
55,491
|
|
|
|
23,263
|
|
Financial
expenses
|
|
|
24,884
|
|
|
|
52,803
|
|
Income taxes
(recovery)
|
|
|
1,962
|
|
|
|
(302)
|
|
Depreciation of
property and equipment
|
|
|
1,957
|
|
|
|
1,576
|
|
Amortization of
intangible and deferred assets
|
|
|
31,326
|
|
|
|
29,666
|
|
Stock-based
compensation
|
|
|
3,066
|
|
|
|
2,760
|
|
EBITDA
|
|
|
118,686
|
|
|
|
109,766
|
|
Termination of
affiliate and employment agreements
|
|
|
2,245
|
|
|
|
45
|
|
Non-recurring
professional fees
|
|
|
6,164
|
|
|
|
—
|
|
Loss on disposal of
assets
|
|
|
222
|
|
|
|
39
|
|
Gain from
investments
|
|
|
(9,441)
|
|
|
|
(3,506)
|
|
Acquisition-related
costs
|
|
|
184
|
|
|
|
—
|
|
Other non-recurring
costs
|
|
|
5,374
|
|
|
|
7,202
|
|
Adjusted
EBITDA
|
|
|
123,434
|
|
|
|
113,546
|
|
Current income tax
expense
|
|
|
(1,872)
|
|
|
|
(1,565)
|
|
Depreciation and
amortization (excluding amortization of purchase price allocation
intangibles)
|
|
|
(3,913)
|
|
|
|
(1,871)
|
|
Interest (excluding
interest accretion)
|
|
|
(32,682)
|
|
|
|
(42,682)
|
|
Adjusted Net
Earnings
|
|
|
84,967
|
|
|
|
67,428
|
|
Diluted
Shares
|
|
|
197,041,822
|
|
|
|
199,764,496
|
|
Adjusted Net
Earnings per Diluted Share
|
|
$
|
0.43
|
|
|
$
|
0.34
|
|
The table below presents certain items comprising "Other
non-recurring costs" in the reconciliation table above:
|
|
Three Months Ended
March 31,
|
|
|
2016
|
|
2015
|
|
|
$000's
|
|
$000's
|
Non-U.S. lobbying
expenses
|
|
808
|
|
—
|
U.S. lobbying and
legal expenses
|
|
3,353
|
|
4,089
|
Retention
bonuses
|
|
1,110
|
|
—
|
Other
|
|
103
|
|
3,113
|
Other
non-recurring costs
|
|
5,374
|
|
7,202
|
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, Full Tilt, BetStars,
StarsDraft, the European Poker Tour, PokerStars Caribbean
Adventure, Latin American Poker Tour and the Asia Pacific Poker
Tour. These brands have more than 100 million cumulative registered
customers globally and 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. Amaya and its group companies
have various gaming and gaming-related licenses or approvals
throughout the world, including from the United Kingdom, Italy, France, Spain, Estonia, Belgium, Denmark, Bulgaria, Greece, Ireland, Romania, the Isle of
Man, Malta, the State of
Schleswig-Holstein in Germany, the Provinces of Quebec and Ontario in Canada, and the State of New Jersey in the United States.
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 and operational 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 Amaya
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, 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 those identified
under the heading "Risk Factors and Uncertainties" in Amaya's
Annual Information Form for the year ended December 31, 2015 and "Risk Factors and
Uncertainties" and "Limitations of Key Metrics and Other Data" in
its Management's Discussion and Analysis for the period ended
March 31, 2016 (the "Q1 2016
MD&A"), 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 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 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. 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 other non-recurring costs.
Adjusted Net Earnings means net earnings (loss) from continuing
operations before interest accretion, amortization of intangible
assets resulting from purchase price allocation following
acquisitions, stock-based compensation, restructuring, foreign
exchange, and other non-recurring costs. 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
the Amaya's convertible preferred shares. The effects of
anti-dilutive potential common shares are ignored in calculating
Diluted Shares. See note 7 to Amaya's unaudited interim condensed
consolidated financial statements for the three months ended
March 31, 2016.
To calculate revenue on a constant currency basis, Amaya
translated revenue for the three months ended March 31, 2016
using the prior year's monthly exchange rates for its local
currencies other than the U.S. dollar, which Amaya believes is a
useful metric that facilitates comparison to its historical
performance.
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).
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 operating segments (i.e., real-money online poker and
real-money online casino and sportsbook) as reported during the
applicable quarterly period divided (or as adjusted to the extent
any accounting reallocations are made in later periods) by the
total QAUs during the same period. Amaya provides QNY on a U.S.
dollar and constant currency basis.
Amaya defines Customer Registrations as the cumulative number of
real-money and play-money customer registrations on PokerStars and
Full Tilt.
For additional information on Amaya's key metrics and other
data, see the Q1 2016 MD&A under the headings "Limitations on
Key Metrics and Other Data" and "Key Metrics".
SOURCE Amaya Inc.