Q1 Revenue of $58.9
million, up 200%, and Adjusted EBITDA of $16.8 million, up 250%
LAS VEGAS, May 30, 2017 /CNW/ - NYX Gaming Group Limited
(TSXV:NYX) ("NYX Gaming Group" or the "Company") today announced
financial and operating results for the first quarter ended
March 31, 2017. All amounts expressed
are in Canadian dollars unless otherwise noted.
"With our new operating model in place, we're pleased to report
growth in revenue and Adjusted EBITDA from the prior quarter and
the prior year period," said Matt
Davey, CEO of NYX Gaming Group. "Our customer development
pipeline remains strong, and we are focused on profitable growth
through our product led strategy with targeted R&D investment
in sportsbook, gaming, and content technologies."
First Quarter 2017 Highlights
- Revenue of $58.9 million, or
growth of 199.8% year-over-year;
- Organic revenue growth of 17.3% year-over-year, excluding the
impact of OpenBet and Betdigital acquisitions during May 2016;
- Royalty and license revenue of $30.9
million, or growth of 77.9% year-over-year;
- Gross profit of $52.1 million, or
88.4% of revenue compared to 82.7% of revenue in Q1 2016;
- Adjusted EBITDA of $16.8 million,
an increase of 250.1% over the prior year period;
- Signed 11 new agreements for the Open Platform System ("OPS")
and Open Gaming System ("OGS");
- Launched OGS content across six new client sites; and
- As of March 31, 2017, held
development commitments with 28 customers that have not yet
launched.
First Quarter 2017 Operating Results and Highlights
During the first quarter of 2017, NYX Gaming Group signed 11 new
agreements for OGS and OPS and successfully launched OGS content
across six new client sites including Pokerstars Denmark,
Rush Street, Nederlandse Loterij,
MarathonBet, Luckia, and GVC Holdings.
As of March 31, 2017, the
development pipeline remains strong as commitments were held with
28 customers that had not yet launched. As of May 23, 2017, NYX Gaming Group has signed three
new deals and launched two new clients since March 31, 2017.
In addition, the number of unique game installations across the
Company's distribution network grew to 34,933 at the end of the
first quarter of 2017, an increase of 94.2% and 16.5% from the
first quarter of 2016 and the fourth quarter of 2016,
respectively.
In April 2017, NYX was named
Casino Platform Supplier and Best Platform Supplier at the 2017 EGR
North America Awards and iGaming North America Awards,
respectively. The awards acknowledge the Company's position as the
industry's market-leading gaming offering, through the Company's
OGS and OPS platforms, which allow licensees to leverage the
best-of-breed multi-vendor casino content from around the
world.
Summary of Results
The increase in revenue and gross profit for the three months
ended March 31, 2017, compared to the
three months ended March 31, 2016,
was attributable to a number of factors including the results of
operations from OpenBet and Betdigital (both acquired in
May 2016), increased gaming revenues
from our existing customers, and new customer launches.
Summary of Financial Information
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
CAD$ (in 000s,
except per share)
|
|
|
2017
|
2016
|
Total
revenue
|
|
|
58,923
|
19,652
|
Gross
profit
|
|
|
52,073
|
16,243
|
Gross profit
margin
|
|
|
88.4%
|
82.7%
|
Adjusted
EBITDA
|
|
|
16,802
|
4,799
|
Adjusted EBITDA
margin
|
|
|
28.5%
|
24.4%
|
Net income
(loss)
|
|
|
2,523
|
(9,136)
|
Basic and diluted net
income (loss) per share
|
|
|
0.02
|
(0.18)
|
|
|
|
|
|
|
|
|
March
31,
|
December
31,
|
|
|
|
2017
|
2016
|
Total
assets
|
|
|
754,612
|
752,376
|
Total non-current
liabilities
|
|
|
467,661
|
472,017
|
|
|
|
|
|
Revenue
Revenue for the three months ended March
31, 2017 increased to $58.9
million, or 199.8%, from $19.7
million for the three months ended March 31, 2016. All revenue categories grew
significantly as a result of a full quarter contribution in the
amount of $34.7 million from the
Company's acquisition of OpenBet in May
2016, and 11 new agreements for OGS and OPS during the first
quarter of 2017.
Royalty and license revenue for the current quarter increased
$13.5 million, or 77.9%, to
$30.9 million from $17.4 million in the prior year period.
Professional services revenue for the quarter increased
$26.3 million to $27.7 million from $1.4
million for the same period in the prior year due primarily
to the acquisition of OpenBet.
Gross Profit
Gross profit increased by $35.8
million, or 220.6%, for the three months ended March 31, 2017 to $52.1
million from $16.2 million for
the three months ended March 31,
2016. Gross profit margin was 88.4% for the three months
ended March 31, 2017, compared to
82.7% for the three months ended March 31,
2016. The increase in gross profit was a result of a revenue
increase from the underlying core casino business and the revenue
impact from acquisitions.
General and Administrative Expenses
General and administrative expenses ("G&A") includes
marketing, administrative, and personnel expenses. G&A
increased by $21.9 million to
$36.1 million for the three months
ended March 31, 2017, compared to
$14.2 million for the three months
ended March 31, 2016. The increase
was due primarily to the higher operating and personnel expenses
associated with the Company's acquisitions of OpenBet and
Betdigital. In addition, increases in personnel and administration
costs associated with support functions for legal, finance, and
human resources contributed to the increase in expenses.
Net Income (Loss)
The Company reported net income for the three months ended
March 31, 2017 of $2.5 million, compared to a net loss of
$9.1 million for the three months
ended March 31, 2016. The increase in
net income was primarily the result of the contribution from
OpenBet and gain on fair value adjustment of derivatives of
$9.9 million during the period,
partially offset by higher personnel costs, interest expense, and
loss on foreign exchange for the three months ended March 31, 2017 compared to the prior year
period.
Adjusted EBITDA
To supplement the Company's consolidated financial statements
presented in accordance with International Financial Reporting
Standards ("IFRS"), the Company uses Adjusted EBITDA, a measure
they believe is appropriate to provide meaningful comparison with,
and to enhance an overall understanding of, their past financial
performance and prospects for the future. The Company believes
Adjusted EBITDA provides useful information to both management and
investors by excluding specific expenses and gains that they
believe are not indicative of their core operating results.
Further, Adjusted EBITDA is a measure of operating performance used
by management, as well as industry analysts, to evaluate operations
and operating performance and is widely used in the technology and
gaming industry. The presentation of this additional information is
not meant to be considered in isolation or as a substitute for
measures of financial performance prepared in accordance with IFRS.
In addition, other companies in NYX Gaming Group's industry may
calculate Adjusted EBITDA differently than the Company does. A
reconciliation of net loss to Adjusted EBITDA is provided in the
table below.
The Company defines "Adjusted EBITDA" as earnings before
interest and other non-operating income (expense), income taxes,
depreciation and amortization, impairment charges, share-based
payments, gains and losses on the revaluing of contingent
consideration, foreign currency gains and losses, acquisition and
restructuring costs and other gains and losses.
|
|
Three
Months Ended
March
|
CAD$ (in
000s)
|
|
2017
|
|
2016
|
|
|
|
|
|
Net income
(loss)
|
|
2,523
|
|
(9,136)
|
|
Net tax expense
(benefit)
|
|
670
|
|
(1,765)
|
Income (loss)
before tax
|
|
3,193
|
|
(10,901)
|
|
Depreciation and
amortization
|
|
8,646
|
|
4,463
|
|
Interest expense,
net
|
|
11,122
|
|
2,365
|
EBITDA
|
|
22,961
|
|
(4,073)
|
|
Impairment of
intangibles
|
|
—
|
|
6,485
|
|
Acquisition and
restructuring costs
|
|
—
|
|
2,700
|
|
Foreign
exchange
|
|
1,341
|
|
(75)
|
|
Fair value adjustment
to derivatives
|
|
(9,850)
|
|
3,046
|
|
Revaluing contingent
consideration
|
|
—
|
|
(6,077)
|
|
Share-based
payments
|
|
822
|
|
127
|
|
Other
expense
|
|
1,528
|
|
2,666
|
Adjusted
EBITDA
|
|
16,802
|
|
4,799
|
Adjusted EBITDA was $16.8 million
for the three months ended March 31,
2017, compared to $4.8 million
for the same period in the prior year. During the first quarter of
2017, EBITDA was positively impacted by the contribution from
OpenBet operations.
Financial Position as of March 31,
2017
- Cash and cash equivalents (including restricted cash) of
$39.7 million;
- Total assets of $754.6
million;
- Total liabilities of $561.0
million;
- Total equity of $193.6 million;
and
- Total borrowings of $332.2
million.
First Quarter 2017 Conference Call & Webcast
A conference call and webcast to discuss NYX Gaming Group's
first quarter 2017 results will be held on May 30, 2017, at 8:30 a.m. E.T. Matt Davey, CEO of NYX Gaming Group, and
Eric Matejevich, CFO of NYX Gaming
Group, will host the call. A question and answer session will
follow the presentation. To participate, interested parties are
asked to dial (647) 427-7450 or (888) 231-8191 prior to the
scheduled start of the call. A replay of the conference call will
be available by dialing (855) 859-2056 and using the reference
number 22376094. The replay of this call will be available
until June 6, 2017.
The Conference Call will also be webcast live at
https://event.on24.com/wcc/r/1426889/27158C4508ECF7076E7E2934E38BB84E
Financial Statements and Management's Discussion and
Analysis
NYX Gaming Group's unaudited consolidated financial statements,
notes thereto and Management's Discussion and Analysis for the
three months ended March 31, 2017
will be available on SEDAR at www.sedar.com. Additional
information relating to NYX Gaming Group and its business may also
be found on SEDAR at www.sedar.com and the Company's website at
www.nyxgaminggroup.com.
Disclaimer
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.
Caution Regarding Forward-Looking Statements and Non-IFRS
Financial Measures
Certain statements included herein, including those that express
management's expectations or estimates of the Company's future
performance, constitute "forward-looking statements" within the
meaning of applicable securities laws. Any statements that
are contained in this news release that are not statements of
historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified
by terms such as "may", "will", "should", "expect", "plan",
"anticipate", "believe", "intend", "estimate", "potential" or the
negative of these terms or other similar expressions.
Forward-looking statements are based on certain assumptions
regarding the Company's expected growth, results of operations,
performance, industry trends and growth opportunities.
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 risks, uncertainties and
contingencies that could cause actual results to differ materially
from those expressed or implied in such statements. Investors
are cautioned not to put undue reliance on forward-looking
statements. Applicable risks and uncertainties include, but
are not limited to: credit, market, currency, operational,
liquidity and funding risks, including changes in economic
conditions, interest rates or tax rates, the impact of government
regulation on the online gaming industry and the risk that such
regulation is subject to change, competition from other providers
of online gaming services, the possibility that the Company may be
unable to successfully integrate the acquired businesses, the risks
associated with international and foreign operations, the impact of
consolidations in the online gaming industry and the other risks
identified under the heading "Risk Factors" in the Company's final
long form prospectus dated December 18,
2014 and final short form prospectuses dated July 9, 2015 and July 14,
2016, each as filed on SEDAR at www.sedar.com, and in other
filings that NYX Gaming Group may make with applicable securities
authorities in the future. The forward-looking statements
contained herein reflect NYX Gaming Group's current views with
respect to future events, and except as required by law, NYX Gaming
Group does not intend, and undertakes no obligation, to update any
forward-looking statements to reflect, in particular, new
information or future events, or otherwise.
This release contains Non-IFRS financial measures and are noted
where used. These financial measures are used by many
investors to compare companies and management believes they are
important measures in evaluating NYX Gaming Group. However,
they are not recognized measures under IFRS and do not have a
standardized meaning prescribed by IFRS. Therefore, they may
not be comparable to similar measures presented by other
issuers. Investors are cautioned that such measures should
not be construed as alternatives to comparable IFRS measures
determined in accordance with IFRS.
About NYX Gaming Group
NYX Gaming Group Limited is a leading digital gaming provider,
headquartered in Las Vegas,
USA, with a staff of more than
1,000 employees globally. NYX delivers value by adhering to the
highest standards of customer service, probity, and
responsibility.
It has one of the broadest distribution bases in the industry,
with over 200 unique customers.
The award-winning NYX OGS™ (Open Gaming System), which allows
licensees to leverage the best-of-breed, multi-vendor casino
content from around the world, is acknowledged to be the industry's
market-leading gaming offering. From its own studios and a broad
partner network of the most innovative third party suppliers, NYX
offers customers the widest portfolio of content available, with
access to over 2,000 game titles, via OGS™.
In addition, NYX's award winning sports betting division OpenBet
is utilized and trusted by leading sports book operators, with its
scale and performance world-renowned. In 2016, the OpenBet
sportsbook processed more than two billion bets and broke new
records at the 2017 Grand National, where it processed 68,000
bets-per-minute.
NYX Gaming Group Limited is listed on the TSX Venture Exchange
under the symbol TSXV:NYX. For more information about the group
visit: www.nyxgaminggroup.com.
SOURCE NYX Gaming Group Limited