Intertain Announces First Quarter 2016 Financial Results, Update on Process to Enhance Shareholder Value
(Thomson Reuters ONE) -
Record Profits and Cash Flow Generated: 70 Cents of Operating Cash Flow Per
Share in Q1 2016
TORONTO, ONTARIO--(Marketwired - May 10, 2016) - The Intertain Group Limited
("Intertain" or the "Company") (TSX:IT)(OTCQX:ITTNF) today announced its
financial results for the three months ended March 31, 2016. All amounts are
stated in Canadian dollars unless otherwise noted.
Financial Highlights:
--------------------------------
3 months ended 3 months ended
March 31, 2016 March 31, 2015
($000's) ($000's)
--------------------------------
Revenue 128,526 32,792
Operating cash flow 52,221 7,085
Operating cash flow per share((1)) $0.70 $0.19
Net income/(loss) 9,964 (26,161)
Adjusted EBITDA((2)) 55,109 9,989
Adjusted Net Income((2)) 46,041 8,623
Net income/(loss) per share((1)) $0.14 $(0.80)
Adjusted Net Income per share((1)(2)) $0.62 $0.25
Q1 Financial and Subsequent Corporate Highlights
* Significantly Increased Q1 Revenue Year Over Year
Jackpotjoy generated revenues of $87.4 million in Q1 2016, representing 20%
growth year over year on a constant currency basis.
Vera&John generated revenues of $25.3 million in Q1 2016, representing 53%
growth year over year on a constant currency basis.
Mandalay generated revenues of $11.4 million in Q1 2016, representing 9% growth
year over year on a constant currency basis.
* Generated Record Profits and Cash Flow
$10 million net income, and Adjusted Net Income((2)) of $46 million after non-
cash and one-time items are excluded.
70 cents of operating cash flow per share((1)) and 43 cents of net cash flow per
share((1)) generated in Q1 2016.
95% conversion rate from Adjusted EBITDA((2)) to operating cash flow.
((1)) Per share figures are calculated on a diluted weighted average basis
using the IFRS treasury method.
((2)) This release contains non-IFRS financial measures, which are noted where
used. For additional details, including with respect to the
reconciliations from these non-IFRS financial measures, please refer to
the information under the heading "Adjusted EBITDA and Adjusted Net
Income for the Three Months Ended March 31, 2016" on pages 3 - 4 of this
release.
* Successfully Migrated and Re-Launched InterCasino
The InterCasino brand was successfully migrated and re-launched in April and is
now based on Intertain's proprietary Plain Gaming platform.
The Plain Gaming platform is currently integrated with more than 30 game
providers, offering over 1,000 web games and 400 mobile games.
More than 50% of Plain Gaming's current revenue is generated by mobile, a key
growth target for Intertain.
In addition to leveraging a proprietary platform and increasing both the content
offering and mobile access for customers, Intertain will be able to reduce costs
as it will lessen the amount it pays in licensing fees to third-party suppliers.
"Intertain continues to outperform our expectations," said John Kennedy
FitzGerald, President and CEO of Intertain. "We remain focused on the execution
of our plans in order to continue to deliver great results and value to our
shareholders."
Update on Intertain's Special Committee Process to Enhance Shareholder Value
The Special Committee is continuing to work with Canaccord Genuity, its
financial advisor, and Osler, Hoskin & Harcourt, its independent legal advisor
in the consideration of third party proposals to acquire all of the shares or
material business units of Intertain. In recent weeks, some parties have made
preliminary offers in that regard. Other parties have been conducting due
diligence following the execution of nondisclosure agreements and have received
management presentations. The Special Committee is evaluating all proposals on
an ongoing basis and expects to provide a further update no later than the end
of June.
In parallel with these ongoing discussions and in order to ensure that the
Special Committee has explored the broadest range of potential value enhancing
alternatives, the Special Committee has retained Credit Suisse to advise on
potential advantageous scenarios including a possible migration of Intertain to
a European jurisdiction and greater exposure to European capital markets. The
Special Committee is receiving advice from appropriate experts and professionals
on the issues relating to such scenarios, and expects to provide further updates
as this analysis progresses.
The Special Committee is also progressing in its search for a new Chief
Executive Officer and Chairman of the Board of Directors of the Company (the
"Board"), as well as additional independent directors and has met several
Europe-based candidates in connection with these positions. The credentials
along with the industry experience of these candidates is impressive and the
Special Committee is well advanced with the recruitment of both the Chief
Executive Officer and Chairman of the Board and has also identified several
prospective Europe-based independent board members with whom further discussions
will be held.
David Danziger, Chairman of the Board commented, "the Board considers the
Company to be significantly undervalued and is actively exploring all options to
correct this. We are pleased by the considerable interest shown by third parties
in pursuing a value enhancing strategic transaction with Intertain. Similarly,
if we conclude that a sale is not the most advantageous option for the business,
we are confident that we will have a talented management team to drive the
strategy of Intertain going forward, particularly with the prospect of a
potential migration of Intertain and increased exposure of Intertain to European
capital markets. We continue to progress all strategic options with the
objective of timely identification of the best alternative. Of course, the
excellent financial results we have announced further confirm the strength and
continued growth of Intertain's main businesses and the value we believe can be
unlocked for the benefit of our shareholders."
Adjusted EBITDA and Adjusted Net Income for the Three Months Ended March
31, 2016((3))
------------------------------------------
3 months ended 3 months ended
March 31, 2016 March 31, 2015
($000's) ($000's)
------------------------------------------
Net income/(loss) for the period 9,964 (26,161)
------------------------------------------
Interest expense, net 16,403 2,466
Taxes 390 (20)
Amortization 25,498 8,438
------------------------------------------
EBITDA 52,255 (15,277)
------------------------------------------
Share-based compensation 586 1,950
Fair value adjustments for
contingent consideration((4)) 3,286 -
Independent Committee related
expenses 3,326 -
Gain on cross currency swap (7,918) -
Transaction related costs((5)) 2,549 24,291
Foreign exchange 1,025 (975)
------------------------------------------
Adjusted EBITDA((6)) 55,109 9,989
------------------------------------------
Net income/(loss) for the period 9,964 (26,161)
------------------------------------------
Share-based compensation 586 1,950
Fair value adjustments for
contingent consideration((4)) 3,286 -
Independent Committee related
expenses 3,326 -
Gain on cross currency swap (7,918) -
Transaction related costs((5)) 2,549 24,291
Foreign exchange 1,025 (975)
Amortization of acquisition related
purchase price intangibles 25,293 8,399
Accretion 7,930 1,119
------------------------------------------
Adjusted Net Income((7)) 46,041 8,623
------------------------------------------
------------------------------------------
Net income/(loss) per share((1)) $0.14 $(0.80)
------------------------------------------
Adjusted Net Income per share((1)) $0.62 $0.25
------------------------------------------
((3)) This release contains non-IFRS financial measures, which are noted where
used. These non-IFRS financial measures are used because management
believes that they provide additional useful information regarding
ongoing operating and financial performance. Readers are cautioned that
the non-IFRS financial measures are not recognized measures under IFRS,
do not have standardized meanings prescribed by IFRS, and should not be
considered in isolation or construed to be alternatives to revenues and
net income (loss) and comprehensive income (loss) for the period
determined in accordance with IFRS or as indicators of performance,
liquidity or cash flows. Our method of calculating these measures may
differ from the method used by other entities. Accordingly, our measures
may not be comparable to similarly titled measures used by other
entities or in other jurisdictions.
((4)) Fair value adjustments for contingent consideration relates to the
Jackpotjoy business segment.
((5)) Transaction related costs consist of legal, professional, underwriting,
due diligence, and other direct costs/fees associated with transactions
contemplated or completed by Intertain, as well as acquisition related
bonuses paid to management. The decrease in transaction related costs in
comparison with the same three-month period in 2015 relates to the fact
that the Company has not completed any acquisitions in the first quarter
of 2016.
((6)) Adjusted EBITDA, as defined by the Company, is income before interest
expense (net of interest income), income taxes, amortization, share-
based compensation, independent committee related expenses, impairment
charges, gain on cross currency swap, debt settlement expense, fair
value adjustments on contingent consideration, transaction related costs
and foreign exchange. Management believes that Adjusted EBITDA is
another important indicator of the issuer's ability to generate
liquidity through operating cash flow to service outstanding debt and
fund acquisition earn-out payments and uses this metric for such
purpose. The exclusion of amortization, share-based compensation, and
impairment charges eliminates the non-cash impact and the exclusion of
debt settlement expense, gain on cross currency swap, fair value
adjustments on contingent consideration, transaction related costs,
independent committee related expenses and foreign exchange eliminates
items which management believes are non-operational.
((7)) Adjusted Net Income, as defined by the Company, means net income plus or
minus items of note that management may reasonably quantify and believes
will provide the reader with a better understanding of the Company's
underlying business performance. Adjusted Net Income is calculated by
adjusting Net Income for share-based compensation, independent committee
related expenses, amortization on acquisition related purchase price
intangibles, transaction related costs, foreign exchange, accretion,
gain on cross currency swap, debt settlement expense, and fair value
adjustments on contingent consideration. The exclusion of amortization,
share-based compensation, accretion and impairment charges eliminates
the non-cash impact and the exclusion of debt settlement expense, fair
value adjustments on contingent consideration, transaction related
costs, gain on cross currency swap, independent committee related
expenses and foreign exchange eliminates items which management believes
are non-operational. Management believes that Adjusted Net Income is an
important indicator of the issuer's ability to generate liquidity
through operating cash flow to service outstanding debt and fund
acquisition earn-out payments and uses this metric for such purpose.
Adjusted Net Income is also considered by some investors and analysts
for the purpose of assisting in valuing a company.
2016 Full Year Financial Guidance
Intertain is confirming its previously announced 2016 full year financial
guidance provided in its earnings release on March 9, 2016, for the quarter
ended March 31, 2016, with no changes to the ranges provided nor any material
changes to the assumptions used to determine the guidance.
2016 First Quarter Financial Statements and Management's Discussion and Analysis
The financial statements, notes to the financial statements and Management's
Discussion and Analysis for the three months ended March 31, 2016 will be
available on SEDAR at www.sedar.com as well as Intertain's website at
www.intertain.com.
2016 First Quarter Conference Call
A conference call to discuss Intertain's first quarter 2016 results will be held
on May 10, 2016 at 5:30pm ET. John Kennedy FitzGerald, President and CEO of
Intertain, and Keith Laslop, CFO of Intertain, will host the call. David
Danziger, Chairman of Intertain, will join Mr. FitzGerald and Mr. Laslop for a
question-and-answer session that will follow the presentation.
To participate, interested parties are asked to dial (647) 788-4919 or (877)
291-4570 10 minutes prior to the scheduled start of the call. A replay of the
conference call will be available until May 24, 2016 by dialing (800) 585-8367
or (416) 621-4642 and using reference number 99841855. A transcript will also be
made available on Intertain's website.
About The Intertain Group Limited
Intertain is an online gaming holding company that, through its operating
subsidiaries, provides entertainment to global consumer base in which such
subsidiaries operate. Intertain currently offers bingo-led gaming and casino to
its customers using the InterCasino www.intercasino.com, Costa
www.costabingo.com, Vera&John www.verajohn.com, Jackpotjoy www.jackpotjoy.com
and jackpotjoy.se, and Botemania www.botemania.es brands. For more information
about Intertain, please visit www.intertain.com.
Cautionary Note Regarding Forward-Looking Information
This release contains certain information and statements that may constitute
"forward-looking information" within the meaning of Canadian securities laws.
Often, but not always, forward-looking information can be identified by the use
of words such as "plans", "expects", "estimates", "projects", "predicts",
"targets", "seeks", "intends", "anticipates", or "believes" or the negative of
such words or other variations of or synonyms for such words, or state that
certain actions, events or results "may", "could", "would", "should", "might" or
"will" be taken, occur or be achieved. Forward-looking information involves
known and unknown risks, uncertainties and other factors which may cause actual
results, performance, achievements or developments to be materially different
from those anticipated by the Company and expressed or implied by the forward-
looking statements. Forward-looking information contained in this release
includes, but is not limited to, statements with respect to the Company's future
financial performance, the future prospects of the Company's business and
operations, the expected cost savings relating to the migration and re-launch of
the InterCasino brand, the strategic review process, the Company's growth
opportunities and the execution of its growth strategies.
These statements reflect the Company's current expectations related to future
events or its future results, performance, achievements or developments, and
future trends affecting the Company. All such statements, other than statements
of historical fact, are forward-looking information. Such forward-looking
information is based on a number of assumptions which may prove to be incorrect,
including, but not limited to, the ability of the Company to secure, maintain
and comply with all required licenses, permits and certifications to carry out
business in the jurisdictions in which it currently operates or intends to
operate; governmental and regulatory actions, including the introduction of new
laws or changes in laws (or the interpretation thereof) related to online
gaming; general business, economic and market conditions; the competitive
environment; the expected growth of the online gaming market and potential new
market opportunities; anticipated and unanticipated costs; the protection of the
Company's intellectual property rights; the Company's ability to successfully
integrate and realize the benefits of its completed acquisitions; and the
ability of the Company to obtain additional financing, if, as and when required.
Such statements could also be materially affected by risks relating to the lack
of available and qualified personnel or management; stock market volatility;
taxation policies; competition; foreign operations; the Company's limited
operating history; and the Company's ability to access sufficient capital from
internal or external sources. The foregoing risk factors are not intended to
represent a complete list of factors that could affect the Company. Additional
risk factors are discussed in the Company's annual information form dated March
30, 2016 under the heading "Risk Factors". Although the Company has attempted to
identify important factors that could cause actual results, performance,
achievements or developments to differ materially from those described in
forward-looking statements, there may be other factors that cause actual
results, performance, achievements or developments not to be as anticipated,
estimated or intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results, performance, achievement or
developments are likely to differ, and may differ materially, from those
expressed in or implied by the forward-looking information contained in this
release.
Accordingly, readers should not place undue reliance on forward-looking
information. While subsequent events and developments may cause the Company's
expectations, estimates and views to change, the Company does not undertake or
assume any obligation to update or revise any forward-looking information,
except as required by applicable securities laws. The forward-looking
information contained in this release should not be relied upon as representing
the Company's expectations, estimates and views as of any date subsequent to the
date of this release. The forward-looking information contained in this release
is expressly qualified by this cautionary statement.
Contact Information
The Intertain Group Limited
Amanda Brewer
Vice President, Corporate Communications
+1 416 720-8150
abrewer(at)intertain.com
www.intertain.com
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: The Intertain Group Limited via GlobeNewswire
[HUG#2011507]
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Datum: 10.05.2016 - 23:23 Uhr
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