VANCOUVER, Aug. 22, 2018 /CNW/ - INTEGRITY GAMING
CORP. (TSX-V: IGAM) (OTCQX: IGAMF) ("Integrity" or the
"Company") today announces financial results for the second quarter
ended June 30, 2018 (all amounts
stated in U.S. dollars unless otherwise indicated).
Second Quarter 2018 Highlights & Financial
Results
- 2.1% increase in revenue to $4.34
million in Q2 2018 from $4.25
million in Q2 2017.
- 4.4% increase in revenue to $8.78
million for the first 6 months of 2018 from $8.41 million for the first 6 months of
2017.
- 3.7% decrease in Adjusted EBITDA to $2.25 million in Q2 2018, compared to
$2.34 million in Q2 2017.
- Net loss of $1.61 million for Q2
2018, compared to a net loss of $1.38
million in Q2 2017.
- Operating cash flow before changes in current non-cash working
capital of 1.33 million for the first 6 months of 2018, compared to
$1.94 million for the first 6 months
of 2017.
- At quarter end, Integrity held participating interests in
approximately 2,770 revenue generating machines, compared to 2,562
at June 30, 2017.
- Signed an exclusive distribution agreement with Free Slot
Games of Las Vegas
("FSGoLV") for the sale, marketing and distribution
of FSGoLV social gaming products in Oklahoma.
"Despite the seasonal downturn that we typically experience in
the second quarter, we continue to carry out our strategy of
increasing placements of machines in tribal casinos and we continue
to look for opportunities to expand our presence into new
markets. In 2018, we increased our machine base by 136
machines, or 5%," said Robert
Miodunski, Interim CEO of Integrity.
About Integrity Gaming Corp.
Formerly Poydras Gaming Finance Corp., Integrity Gaming Corp. is
a regional slot route operator with over 2,700 gaming machines in
operation across over 30 casinos in Oklahoma and Texas. The Company
primarily derives its revenue from short- and long-term revenue
share contracts with Native American casinos. It provides
gaming equipment such as slot machines and electronic table games,
and project financing to owners, operators, and managers of casinos
and other regulated gaming venues. The Company works with
casinos, new casino developments, and gaming machine
suppliers. Additional information about the Company can be
found on the Company's website at www.integritygaming.com and on
the SEDAR website at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Selected operating and financial information and reconciliation
of net income (loss) to Adjusted EBITDA is as follows:
|
Q2 2018
|
Q1 2018
|
Q4 2017
|
Q3 2017
|
Q2 2017
|
Q1 2017
|
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
Average number of
machines
|
2,729
|
2,701
|
2,622
|
2,529
|
2,583
|
2,650
|
Leasing Payments
*
|
3,964,593
|
4,276,700
|
3,781,240
|
3,833,128
|
3,922,972
|
4,058,507
|
Reported
Revenue
|
4,338,416
|
4,443,280
|
4,062,627
|
3,898,110
|
4,250,547
|
4,157,374
|
COGS: Casino supplies
and equipment
|
(924,106)
|
(633,979)
|
(320,786)
|
(428,829)
|
(428,595)
|
(354,373)
|
Operating
expenses
|
(2,236,190)
|
(2,252,720)
|
(2,317,861)
|
(2,474,213)
|
(2,335,795)
|
(2,268,483)
|
General and
administrative expenses
|
(1,667,662)
|
(1,439,193)
|
(1,372,907)
|
(1,554,085)
|
(1,546,981)
|
(1,490,607)
|
Amortization of
intangible assets
|
(199,576)
|
(198,775)
|
(200,375)
|
(200,642)
|
(199,576)
|
(198,775)
|
Gain (loss) on
disposal of assets
|
17,056
|
-
|
-
|
990
|
23,200
|
64,500
|
Loss from
operations
|
(672,062)
|
(81,387)
|
(149,302)
|
(758,669)
|
(237,200)
|
(90,364)
|
Financing
costs
|
(976,244)
|
(932,950)
|
(3,882,101)
|
(1,163,893)
|
(1,145,358)
|
(1,140,346)
|
Foreign exchange gain
(loss)
|
1,047
|
1,897
|
(299)
|
(1,948)
|
196
|
(8,466)
|
Gain on disposal of
BitBoss IP license
|
-
|
-
|
-
|
-
|
-
|
43,712
|
Gain on sale of
Bingo
|
-
|
-
|
139,032
|
-
|
-
|
-
|
Gain on settlement of
debt
|
-
|
-
|
194
|
580
|
(224)
|
28,380
|
Revaluation of exit
fee liability
|
43,248
|
105,464
|
-
|
-
|
-
|
-
|
Income tax recovery
(expense)
|
(10,000)
|
(10,000)
|
(3,307)
|
(98,199)
|
-
|
-
|
Net Income
(loss)
|
(1,614,011)
|
(916,976)
|
(3,895,783)
|
(2,022,129)
|
(1,382,586)
|
(1,167,084)
|
Adjustments:
|
|
|
|
|
|
|
|
Depreciation of
equipment
|
1,254,083
|
1,277,063
|
1,321,685
|
1,599,168
|
1,525,644
|
1,390,548
|
|
Amortization of
placement fees
|
435,372
|
441,393
|
441,393
|
424,863
|
449,658
|
449,658
|
|
Amortization of
intangible assets
|
199,576
|
198,775
|
200,375
|
200,642
|
199,576
|
198,775
|
|
Income tax expense
(recovery)
|
10,000
|
10,000
|
3,307
|
98,199
|
-
|
-
|
|
Finance lease
receivable reduction
|
653,287
|
525,263
|
204,521
|
538,231
|
308,392
|
467,486
|
|
Financing
costs
|
976,244
|
932,950
|
3,882,101
|
1,163,893
|
1,145,358
|
1,140,346
|
|
Foreign exchange
(gain) loss
|
(1,047)
|
(1,897)
|
299
|
1,948
|
(196)
|
8,466
|
|
Gain on settlement of
debt
|
-
|
-
|
(194)
|
(580)
|
224
|
(28,380)
|
|
Loss (gain) on
disposal of assets
|
(17,056)
|
-
|
-
|
(990)
|
(23,200)
|
(64,500)
|
|
Gain on disposal of
BitBoss IP license
|
-
|
-
|
-
|
-
|
-
|
(43,712)
|
|
Gain on disposal of
Bingo
|
-
|
-
|
(139,032)
|
-
|
-
|
-
|
|
Revaluation of exit
fee liability
|
(43,248)
|
(105,464)
|
-
|
-
|
-
|
-
|
|
Stock based
compensation
|
116,686
|
56,627
|
89,024
|
92,691
|
116,416
|
92,919
|
|
Employee separation
fees
|
284,000
|
-
|
-
|
290,000
|
-
|
-
|
Adjusted
EBITDA
|
2,253,886
|
2,417,734
|
2,107,696
|
2,385,936
|
2,339,286
|
2,444,522
|
|
* Leasing Payments
consist of leasing revenue reported under IFRS plus finance lease
receivable reduction reported in the statement of financial
position.
|
Cautionary Note Regarding Forward‐Looking
Statements
Certain information in this news release is considered
forward‐looking within the meaning of certain securities laws and
is subject to important risks, uncertainties and assumptions. This
forward‐looking information includes, among other things,
information with respect to the Company's beliefs, plans,
expectations, anticipations, estimates and intentions. The words
"may", "could", "should", "would", "suspect", "outlook", "believe",
"anticipate", "estimate", "expect", "intend", "plan", "target" and
similar words and expressions are used to identify forward‐looking
information. The forward‐looking information in this news release,
including those statements relating to expected EBITDA, and the
placement of additional machines by the Company, describes the
Company's expectations as of the date of this news release.
The results or events anticipated or predicted in such
forward‐looking information may differ materially from actual
results or events. Material factors which could cause actual
results or events to differ materially from such forward‐ looking
information include, among others, risks arising from general
economic conditions and adverse industry events.
The Company cautions that the foregoing list of material factors
is not exhaustive. When relying on the Company's forward‐looking
information to make decisions, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events. The Company has assumed a certain
progression, which may not be realized. It has also assumed that
the material factors referred to in the previous paragraph will not
cause such forward‐looking information to differ materially from
actual results or events. However, the list of these factors is not
exhaustive and is subject to change and there can be no assurance
that such assumptions will reflect the actual outcome of such items
or factors.
THE FORWARD‐LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE
REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS
NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH
DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD‐LOOKING
INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY
OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE
TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME.
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/loss on settlement of debt, gain/loss on disposal of
assets, gain on sale of Bingo, gain/loss on disposal of BitBoss,
finance lease receivable reduction, revaluation adjustment of
earn-out liability, revaluation of exit fee liability, employee
separation fees and non-recurring costs.
As there is no standardized method of calculating Adjusted
EBITDA, it may not be directly comparable with similarly titled
measures used by other companies. The Company considers
Adjusted EBITDA to be a relevant indicator for measuring trends in
performance and its ability to generate funds to service its debt
and to meet its future working capital and capital expenditure
requirements. Adjusted EBITDA is not a generally accepted earnings
measure and should not be considered in isolation or as an
alternative to net income (loss), cash flows or other measures of
performance prepared in accordance with IFRS.
SOURCE Integrity Gaming Corp.