Mr. Peter Macy reports
INTEGRITY GAMING CORP. ANNOUNCES 2018 FIRST QUARTER FINANCIAL RESULTS
Integrity Gaming Corp. has released its financial results for the first quarter ended March 31, 2018 (all amounts stated in U.S. dollars unless otherwise indicated).
First quarter 2018 highlights and financial results:
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6.9-per-cent increase in revenue to $4.4-million, over $4.2-million in Q1 2017;
-
Adjusted EBITDA (defined at the end of this news release) relatively flat year over year at $2.4-million, compared with $2.4-million in Q1 2017;
- Operating cash flow before changes in current non-cash working capital of $976,000, compared with $944,000 in Q1 2017;
- Net loss of $900,000 for Q1 2018, compared with a net loss of $1.2-million in Q1 2017;
- At quarter-end, Integrity held participating interests in approximately 2,707 revenue-generating machines, compared with 2,650 at March 31, 2017.
"We achieved solid growth in revenue in the first quarter of 2018, reflecting our success at increasing our machine base, both through exclusive and non-exclusive products offerings, and optimizing machines placements to achieve better unit economics," said Peter Macy, chief executive officer of Integrity. "We're off to a good start for the year, and we will continue to drive growth by actively managing our current machines, increasing our penetration with new and exclusive product offerings, adding new casinos to our roster, and introducing innovative games and technologies, including iGaming, that will enhance our profile as a leader in the tribal gaming industry."
SELECTED OPERATING AND FINANCIAL INFORMATION AND RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
Q1 2018 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016
Weighted average number of machines $ 2,701 $ 2,622 $ 2,529 $ 2,583 $ 2,650 $ 2,548
Leasing payments* 4,276,700 3,781,240 3,833,128 3,922,972 4,058,507 4,001,201
Reported revenue 4,443,280 4,062,627 3,898,110 4,250,547 4,157,374 4,027,458
COGS (cost of goods sold) --
casino supplies and equipment (633,979) (320,786) (428,829) (428,595) (354,373) (337,437)
Operating expenses (2,252,720) (2,317,861) (2,474,213) (2,335,795) (2,268,483) (2,797,730)
General and administrative expenses (1,439,193) (1,372,907) (1,554,085) (1,546,981) (1,490,607) (800,093)
Amortization of intangible assets (198,775) (200,375) (200,642) (199,576) (198,775) (218,337)
Gain (loss) on disposal of assets - - 990 23,200 108,212 (12,750)
Impairment of placement fees - - - - - (1,732,152)
(Loss) from operations (81,387) (149,302) (758,669) (237,200) (46,652) (1,871,041)
Financing costs (932,950) (3,882,101) (1,163,893) (1,145,358) (1,140,346) (1,153,146)
Foreign exchange gain (loss) 1,897 (299) (1,948) 196 (8,466) (745)
Gain on sale of Bingo - 139,032 - - - -
Gain on settlement of debt - 194 580 (224) 28,380 -
Revaluation of exit fee liability 105,464 - - - - -
Revaluation of earnout liability - - - - - (30,000)
Income tax recovery (expense) (10,000) (3,307) (98,199) - - 119,904
Net income (loss) (916,976) (3,895,783) (2,022,129) (1,382,586) (1,167,084) (2,935,028)
Adjustments
Depreciation of equipment 1,277,063 1,321,685 1,599,168 1,525,644 1,390,548 1,074,475
Amortization of placement fees 441,393 441,393 424,863 449,658 449,658 533,904
Amortization of intangible assets 198,775 200,375 200,642 199,576 198,775 218,337
Income tax expense (recovery) 10,000 3,307 98,199 - - (119,904)
Finance lease receivable reduction 525,263 204,521 538,231 308,392 467,486 513,064
Financing costs 932,950 3,882,101 1,163,893 1,145,358 1,140,346 1,153,146
Foreign exchange (gain) loss (1,897) 299 1,948 (196) 8,466 745
Impairment of placement fees - - - - - 1,732,152
Gain on settlement of debt - (194) (580) 224 (28,380) -
Loss (gain) on disposal of assets - (139,032) (990) (23,200) (108,212) 12,750
Revaluation of earnout liability - - - - - 30,000
Revaluation of exit fee liability (105,464) - - - - -
Stock-based compensation 56,627 89,024 92,691 116,416 92,919 102,272
Employee separation fees - - 290,000 - - -
Adjusted EBITDA 2,417,734 2,107,696 2,385,936 2,339,286 2,444,522 2,315,913
* Leasing payments consist of leasing revenue reported under IFRS (international financial reporting
standards) plus finance lease receivable reduction.
Conference call
The company will hold a conference call to discuss the results for its first quarter ended March 31, 2018. The call will be hosted by Mr. Macy and Adam Kniec, chief financial officer, on Thursday, May 24, 2018, at 8:30 a.m. PST (11:30 a.m. EST), followed by a question-and-answer period. All interested parties are invited to participate.
Conference call details
Date: Thursday, May 24, 2018
Time: 8:30 a.m. PST (11:30 a.m. EST)
Dial-in numbers
North America toll-free dial-in number: 1-888-231-8191
For Toronto: 647-427-7450
For Vancouver: 778-371-9827
Conference ID: 8596356
Taped replay: 1-855-859-2056
Replay: available until 12 a.m. EST on Thursday, May 31, 2018,
reference No. 8596356
About Integrity Gaming Corp.
Formerly Poydras Gaming Finance Corp., Integrity Gaming is a regional slot route operator with over 2,700 gaming machines in operation across over 30 casinos in Oklahoma and Texas. The company primarily derives its revenue from short-term and long-term revenue share contracts with Native American casinos.
Non-IFRS measures
Adjusted EBITDA is a financial measure that does not have a standardized meaning under IFRS. Adjusted EBITDA is defined as earnings before financing costs, income taxes, depreciation, amortization, stock-based compensation, unrealized foreign exchange, impairment of loans receivable, impairment of placement fees, gain or loss on settlement of debt, gain or loss on disposal of assets, gain or loss on disposal of BitBoss, finance lease receivable reduction, revaluation adjustment of earnout liability, revaluation of exit fee liability, employee separation fees, and non-recurring costs.
We seek Safe Harbor.
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