Annual revenue grows 204%; fourth quarter revenue grows 353%
MONTREAL, March 19, 2012 /CNW/ - Amaya Gaming Group Inc. (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, 2011. All amounts are stated in Canadian dollars unless otherwise noted.
Financial Highlights
| FOR THE THREE AND TWELVE-MONTH PERIODS ENDED DECEMBER 31, 2011 | Q4 2011 $ |
Q4 2010 $ |
FY 2011 $ |
FY 2010 $ |
||||||||
| Revenues | 9,490,081 | 2,096,610 | 18,375,249 | 6,049,236 | ||||||||
| Net earnings (loss) | 2,887,313 | (591,401) | (1,926,025) | 82,995 | ||||||||
| Basic earnings (loss) per share | 0.06 | (0.02) | (0.04) | 0.00 |
FISCAL 2011 Highlights
- The Corporation announced a number of significant customer wins in 2011, including:
- an agreement to provide virtual horse racing systems to Société des Casinos du Québec;
- an exclusive 20-year contract with the National Lottery of Moldova to provide a full range of gaming solutions including lottery systems, video lottery terminals, sports betting, and digital gaming;
- an exclusive 10-year contract with the Government of the Republic of Armenia to implement a national lottery program and to provide its central reporting and integrity software solutions;
- the selection by Loto-Québec subsidiary Société du Jeu Virtuel du Québec (SJVQ) to provide content for its gaming website, Espace-jeux.
- The Corporation has successfully deployed several recurring-revenue gaming initiatives, including:
- Kwachu 6/48, a Short Message Service ("SMS")-based lottery in the Republic of Kenya, in September, 2011;
- Betkenya.com, the official online gaming website of the Republic of Kenya, in October, 2011;
- Yoola Obukadde, or "Win Millions," an SMS game in Uganda, in October, 2011;
- 1,200 additional Mosino hospitality entertainment systems were deployed during the year for total deployments nearing 3,500 units.
- On July 14, 2011, the Corporation completed the acquisition of Chartwell Technology Inc. ("Chartwell") for consideration totalling $22.7 million. The Chartwell business was a significant contributor to revenue growth in the third and fourth quarters.
- The Corporation announced that it secured a license to operate online gaming in the Dominican Republic. The Dominican Republic is the second largest Caribbean nation with an estimated population of 10 million people. Amaya's online gaming offering includes slot games as well as table games like Blackjack, Roulette, Sicbo, Craps and Baccarat in addition to peer-to-peer games such as online poker.
- The Corporation secured new gaming licenses in Uganda and Kenya. In addition, through the acquisition of Chartwell, the Corporation added licenses in Malta, Alderney, Curacao, Gibraltar, Isle of Man and United Kingdom.
- In December, 2011, the Corporation announced that it had agreed in principle on the terms of an all-cash offer to acquire CryptoLogic Limited. Subsequent to year-end, the boards of Amaya and CryptoLogic agreed on the terms of an offer, and the Corporation made a formal bid to the shareholders of CryptoLogic. The offer remains open for acceptance until March 28, 2012.
"Amaya capped a breakthrough year with an outstanding fourth quarter," said Mr. David Baazov, President and Chief Executive Officer of Amaya Gaming Group. "We tripled revenues in 2011 as contract wins turned into active deployments. This was the first year in which we gained real traction in the government solutions vertical. And in the hospitality vertical, we deployed a significant number of Mosino units which will strengthen the recurring revenue stream."
Mr. Baazov continued: "Looking ahead, we see additional opportunities in the public sector, as more governments - including several in North America - are considering the expansion of regulated gaming activities in their jurisdictions. Even on the strength of the existing contracts we have already deployed or are in the process of implementing, we are very well positioned for continued rapid growth in 2012."
Financial Results
Amaya generated total revenue of $18.38 million in fiscal 2011, an increase of $12.33 million or 204% compared to $6.05 million of revenues in 2010. The revenue growth was primarily attributable to the Corporation's sales of its proprietary Mosino hospitality entertainment system, the inclusion of Chartwell's software licensing revenue in the second half of 2011, and SMS sales in the Republic of Kenya.
Amaya's revenue in the fourth quarter of 2011 was $9.49 million. This represented year-over-year growth of 353% from revenue of $2.10 million in the fourth quarter of 2010, and sequential growth of 139% from revenue of $3.97 million in the third quarter of 2011. The sequential increase was driven by the ongoing deployment of Mosino systems in the Caribbean and the launch of online and SMS gaming initiatives in Africa.
Gross profit was $17.02 million in fiscal 2011, representing 93% of revenues, compared to $4.73 million or 78% of revenues in 2010. The increase in gross profit percentage was due primarily to a reduction in hardware costs of the Mosino system, and the inclusion of Chartwell's high-margin software licensing revenue. Gross margin in the fourth quarter of 2011 was 90%, compared to 72% in Q4 2010.
Selling expenses were $6.48 million in 2011, compared to $0.87 million in 2010. The $5.61 million increase was attributable to several factors, including: advertising, marketing, and prize pool funding for lottery operations in Kenya and Uganda; royalties paid for rights to branded content; compliance with certain license requirements; selling expenses incurred by subsidiary Chartwell; and sales activities targeting potential government customers. Selling expense was $0.96 million in the fourth quarter of 2011, compared to $0.32 million in Q4 2010.
General and administrative expenses were $13.74 million in 2011, compared to $3.62 million in Q3 2010. The increase was the result of a growing employee base, fees associated with the Chartwell and CryptoLogic transactions, the costs of establishing fully staffed operations in the Republics of Kenya and Uganda, and amortization of property, equipment and intangible assets. General and administrative expense was $5.53 million in the fourth quarter of 2011, compared to $1.33 million in Q4 2010.
2011 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 ending December 31, 2011, are available on the SEDAR website at www.sedar.com
About Amaya Gaming Group Inc.
Amaya is engaged in the design, development, manufacturing, distribution and sale of technology based gaming solutions for the regulated gaming industry worldwide. 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."
Mr. David Baazov
President and Chief Executive Officer
Amaya Gaming Group Inc.
North America: 1-866-744-3122
Worldwide:1-514-744-3122
http://www.amayagaming.com
Jeff Codispodi
The Equicom Group
416-815-0700 ext. 261
[email protected]
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