LAS VEGAS, NV, May, 26 2016 – 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, 2016
Mar 31, 2015
Gross Margin %
Basic Loss Per Share
Diluted Loss Per Share
(1) Three months Adjusted EBITDA excludes share-based compensation, derivative value adjustment, gains and losses, net interest, foreign currency, acquisition and restructuring cost, and Ongame losses.
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 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 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.
For further information:
Matt Davey, Chief Executive Officer, NYX Gaming Group Limited Joann Head, Investor Relations