NYX Announces First Quarter 2016 Financial Results - Q1 Revenue of $18.8 million, up 88.7% (31.8% Organic Growth)
LAS VEGAS, NV, May 26, 2016 /CNW/ - NYX Gaming Group Limited (TSXV:NYX) ("NYX Gaming Group" or "Company") today announced its financial and operating results for the first quarter ended March 31, 2016. All amounts expressed are in Canadian dollars unless otherwise noted.
"We are very proud that Q1 not only marks another strong quarter but is also a confirmation of our long-term strategy to be the leading provider of digital gaming content and technology worldwide. Through our highly successful M&A activity, we have set in place the building blocks for our global business, and are now focused on realizing our full potential for the benefit of our customers and shareholders," says CEO Matt Davey.
First Quarter 2016 Highlights
- Revenue of $18.8 million or 88.7% growth year-over-year;
- Organic Revenue excluding acquisitions of $13.1 million or 31.8% growth year-over-year;
- Royalty and License Revenue of $16.5 million;
- Gross Profit of $16.2 million;
- Adjusted EBITDA of $4.8 million;
- Signed 12 new OGS contracts, 1 letter of intent for OPS;
- Launched our OGS content across 4 new client sites;
- Released 8 new games
First Quarter Operating and Financial Results
On April 4, 2016, NYX announced that it had entered into a binding share purchase agreement (the "Agreement") pursuant to which it would acquire 100% of the issued and outstanding shares of OB Topco Limited ("OpenBet"), the leading regulated digital gaming supplier. Following this, on May 20, 2016, NYX was pleased to announce that it has closed the share purchase agreement. The total consideration of £270.0 ($491.0) million, was paid in cash and financed through a combination of (i) new senior secured credit facilities; (ii) convertible preference shares in a new wholly-owned subsidiary called NYX Digital Gaming (OB Holdings) Limited ("Holdco") incorporated for the purpose of the acquisition ("Convertible Preference Shares"); (iii) a placement of new unsecured convertible debentures; and (iv) a "bought deal" private placement offering of subscription receipts.
The acquisition of OpenBet is highly transformative as it now completes NYX's portfolio of industry leading products and services, and solidifies NYX as the leading provider of B2B betting and gaming solutions in the global regulated gaming industry. The transaction joins together two of the world's most established and proven suppliers to create an organization that will deliver the leading end-to-end solution for regulated gaming markets. Further details on the financing can be found on the Company's website or at www.sedar.com.
In the first quarter of 2016, NYX continued to see a strong demand in both our Open Gaming System ("OGS") and Open Platform System ("OPS"). The Company signed 12 new agreements for OGS, including deals with PaddyPower, Marathonbet, and Telecinco. In addition, NYX signed a letter of intent with Netherlandse Staatsloterij/De Lotto to execute an agreement for the integration of digital gaming content and player account management via NYX's OPS.
NYX also successfully launched its OGS across four new client sites, in the regulated markets of Latvia, Belgium, and Denmark. In addition, Game360 launched Sportsbook (IT) with Stanleybet and its bespoke product across two leading sites – Sisal and SNAI. On the content side, NYX continued to prove its commitment to developing industry leading products and services. In Q1 2016, we released a total of eight new games. Furthermore, with the launch of our four new clients during the period, we saw the number of game instances (i.e., unique game installations) increase by 14.0% quarter-over-quarter.
In addition to the OpenBet acquisition announced on April 4, 2016, NYX reached an agreement to sell substantially all of its European Poker Business, operated within its Ongame division. As part of the agreement, a partner with experience in the industry will take on all costs, customer contracts and development for the poker product. The agreement was effective as of March 31, 2016.
Summary of Results
| Three Months Ended |
||||||
| In 000's except share data |
Mar 31, |
Mar 31, |
% |
|||
| Total Revenue |
$18,757 |
$9,939 |
88.7% |
|||
| Gross Profit |
$16,243 |
$8,767 |
85.3% |
|||
| Gross Margin % |
86.6% |
88.2% |
||||
| Adjusted EBITDA(1) |
$4,798 |
$2,372 |
102.3% |
|||
| Net Loss |
$(9,136) |
$(5,034) |
(81.5)% |
|||
| Basic Loss Per Share |
$(0.18) |
$(0.15) |
(20.0)% |
|||
| Diluted Loss Per Share |
$(0.18) |
$(0.15) |
(20.0)% |
|||
| (1) Three months Adjusted EBITDA excludes share-based compensation, derivative |
||||||
Revenue
Revenue for the three months ended March 31, 2016 grew to $18.8 million, or 88.7%, from $9.9 million for the three months ended March 31, 2015. Royalty and License revenue was the main driver of growth as we benefited from a full contribution of the acquisitions and four new customers launched during the period, which contributed to an increase in revenue by $8.5 million for the three months ended March 31, 2016 to $16.5 million as compared to the three months ended March 31, 2015.
Excluding acquisitions, organic revenue for the three months ended March 31, 2016 grew to $13.1 million, or 31.8%, from $9.9 million for the three months ended March 31, 2015.
Gross Profit
Gross profit increased by $7.5 million for the three months ended March 31, 2016 to $16.2 million as compared to the three months ended March 31, 2015. Gross profit margins were 86.6% for the three months ended March 31, 2016 compared to 88.2% for the same period ending March 31, 2015. The growth in gross profit was a result of the increases in revenue from the underlying core casino business and the impact from acquisitions. The decrease in gross margins was the result of increases in revenue from third-party content, which we earn a lower royalty rate than our own content.
Net Loss and Loss per Share
Basic and diluted loss per share was $0.18 and $0.18, respectively, for the three months ended March 31, 2016. Basic and diluted loss per share was $0.15 and $0.15, respectively, for the three months ended March 31, 2015.
Our net loss for the three-month period ended March 31, 2016 was $9.1 million compared to $5.0 million for the three months ended March 31, 2015.
The loss for the period was primarily the result of the impairment charge of $6.5 million, acquisition and restructuring charges of $2.7 million, and the fair value adjustment of the derivatives, which totaled $3.0 million.
Adjusted EBITDA
Adjusted EBITDA was $4.8 million for the three months ended March 31, 2016 compared to $2.4 million for the same period ended March 31, 2015. During the first quarter of 2016, EBITDA was positively impacted by strong growth in revenues and reduced losses from the Cryptologic and Chartwell acquisition as we realized the benefits from our restructuring efforts. The increase in EBITDA was attributable to strong organic growth in our real money casino business from our core content, OGS and OPS products.
Financial Position as of March 31, 2016
- Cash of $5.5 million
- Total assets of $279.9 million
- Total liabilities of $152.6 million
- Total borrowings of $71.8 million
- Total stockholders' equity of $127.3 million
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-month period ended March 31, 2016 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.
First Quarter 2016 Conference Call Details
NYX Gaming Group Ltd. (TSXV: NYX) ("NYX Gaming Group") is pleased to announce that it will hold a conference call to discuss its financial results for the first quarter of fiscal 2016 on Thursday, May 26 at 8:30am ET.
To participate, interested parties are asked to dial (647) 427-7450 or 1-888-231-8191 prior to the scheduled start of the call. A replay of the conference call will be available by dialing (855) 859-2056 and using reference number 13230352. This call will be available until June 02, 2016.
About NYX Gaming Group Limited
NYX Gaming Group Limited is a premier digital gaming supplier headquartered in Las Vegas, USA with a staff of 416 employees based in 11 countries across Europe, North America and Australia. The Company provides one of the world's largest portfolios of leading content and technology to some of the foremost gaming operators, lotteries and casinos across the globe. NYX also has one of the broadest distribution bases in the industry with over 170 unique customers and a collective game catalogue of over 700 games. The market leading game catalogue includes slots, table games, scratch cards, lottery, bingo and poker available across web and mobile formats.
Disclaimer
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is definite 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 our 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 on-line 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 be unable to successfully integrate the B2B Business as described herein, 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, 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.
Neither the 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.
NYX Gaming Group Limited is listed on the TSX Venture Exchange under the symbol (NYX.V).
SOURCE NYX Gaming Group Limited
Matt Davey, Chief Executive Officer, NYX Gaming Group Limited, 1-702-586-8428; Joann Head, Investor Relations, 647 - 962 - 9600
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