MILL VALLEY, CA - POYDRAS GAMING FINANCE CORP. (TSX-V: PYD) ("Poydras," "PGFC," or the "Company") has released financial results for the fourth quarter and full year ended December 31, 2014 (all amounts expressed in US Dollars unless otherwise stated.)
During the fourth quarter ended December 31, 2014, the Company focused on the development of a future growth pipeline including, most notably, negotiation of the recently announced long-term gaming machine placement agreement with the Tonkawa Tribe of Indians of Oklahoma to provide 600 Class III gaming machines under a 6-year and 11-month contract. Once fully deployed, the placement agreement is expected to generate approximately $6 million in annual revenue for Poydras.
Since the completion of its reverse takeover ("RTO") transaction on May 9, 2014, Poydras has increased the number of its revenue-generating gaming machines from 217 to 543, and has purchased and will place an additional 264 machines by the end of the second quarter of 2015. The Company's existing contracts allow it the opportunity to place an additional 242 gaming machines for a total number of 1,049 deployed and deployable machines.
"2014 was a year of tremendous corporate growth for Poydras, starting with the completion of our RTO, continuing through the deployment of additional machines, and wrapping up with the announcement of the Integrity acquisition," said Peter Macy, CEO of Poydras Gaming. "The recently announced placement agreement with the Tonkawa Tribe of Indians of Oklahoma solidifies our leadership position in our core market and enhances our base of long-term, sustainable revenue-generating contracts. We look forward to reporting outstanding growth in 2015 as the impacts of the Tonkawa and Integrity transactions, with the potential to add $15 million in estimated annual revenue and USD$10 to $11 million in estimated adjusted annual EBITDA, are reflected in our financial results. Our presence in over two dozen casinos will provide a strong platform for organic growth going forward."
The fourth quarter results include the consolidated accounts of PGFC, Platform 9 Corporation and Poydras Gaming LLC as well as the accounts of Windy Hill Capital LLC and Poydras Street Finance II LLC for the full quarter.
Fiscal 2014 Highlights & Financial Results:
(Comparisons made between fiscal 2014 and fiscal 2013 results, unless otherwise noted)
- Total revenue in 2014 was $1,654,476, up 470% from $289,968 in 2013. The increase in revenue was primarily due to higher gaming machine deployment in 2014.
- Net loss for 2014 was $12,058,686 or $0.12 per share compared to $1,692,194 net loss or $0.08 loss per share in 2013. This increase in net loss is mainly due to non-recurring RTO acquisition costs, loss on valuation of convertible debentures, incurring professional fees relating to the RTO and concurrent acquisitions and financing transactions, and increased general and administrative costs. Included in the 2014 net loss figure are $4,511,255 of non-cash reverse takeover public listing costs, $3,572,926 of non-cash unrealized loss on valuation of September 2013debentures, $691,856 of non-cash stock based compensation, $618,000 of non-recurring professional fees incurred during the RTO process, and $261,000 of legal and consulting fees related to the proposed acquisition of the Integrity Companies.
- Cash at the end of 2014 was $3,559,273, compared to $427,390 of cash on December 31, 2013. This increase in cash is due to recent financings, offset by the cost of RTO related expenditures and an increase in operating, general and administrative expenses.
- Working capital as of December 30, 2014 was $2,938,376 compared with a working capital deficit of $906,195 at the end of the prior year. This increase is due to equity and debt offerings with gross proceeds of $3,068,807 and$7,732,000 respectively. These financings were offset by significant RTO expenses, as well as concurrent business acquisitions and current period operating expenses.
- As of December 31, 2014, Poydras had total assets of $11,783,725 consisting of cash of $3,559,273, receivables of$680,992, prepaid expenses of $99,711, prepaid placement fees of $2,380,164, gaming equipment of $2,935,152, loans receivable of $430,813 and intangible assets of $1,697,620.
- As of December 31, 2014, Poydras had total liabilities of $8,967,253 consisting of $1,398,353 of current liabilities and$7,568,900 of non-current liabilities.
Fourth Quarter 2014 Highlights & Financial Results
(Comparisons made between fiscal Q4 2014 and fiscal Q4 2013 results, unless otherwise noted)
- Revenue increased 448% to $551,640 from $100,573 in Q4 2013. The increase in revenue was due a higher number of deployed gaming machines in Q4 as compared to the prior year period.
- Adjusted EBITDA loss was $164,739. Q4 2014 EBITDA was negatively impacted by approximately $24,000 of professional costs incurred as part of the RTO and approximately $154,000 of legal and consulting costs incurred in connection with the proposed acquisition of the Integrity Companies. Excluding the impact of these RTO and acquisition related professional, and legal and consulting costs, Q4 2014 Adjusted EBITDA would have been $13,261.
- Net loss increased to $1,394,003 or $0.01 per share compared to $1,113,228 net loss or $0.02 loss per share. The increase in net loss is mainly due to an unrealized foreign exchange loss on convertible debentures, stock based compensation and increased general and administrative and regulatory compliance costs after completion of the RTO on May 9, 2014, which was offset by the increase in revenue.
Proposed Acquisition of Integrity Companies
Poydras management expects to close its previously announced acquisition of the Integrity Companies (see News Release dated September 29, 2014) within the next 30 days subject to certain conditions including completion of an audit of the Integrity Companies, the approval of the TSX Venture Exchange, and the consent of applicable gaming regulatory authorities. The acquisition of the Integrity Companies is projected to contribute $5.0 to $6.0 million of adjusted EBITDA on an annualized basis. Upon closing of the acquisition of the Integrity Companies and the placement of machines with the Tonkawa Tribe of Indians of Oklahoma, Poydras will have over 2,500 machines under participation leases with 26 casinos.
Tonkawa Placement Agreement
Subsequent to December 31, 2014, the Company, in partnership with the Integrity Companies, entered into a long-term gaming machine placement agreement with the Tonkawa Tribe of Indians of Oklahoma. Under the terms of the agreement, Poydras and Integrity will provide 600 Class III gaming machines under a 6-year and 11-month contract, and up to $5.5 million in funding for the renovation of the Native Lights Casino and additional development at the Tonkawa West Casino. As of April 30, 2015, Poydras has acquired 496 machines under the Tonkawa placement agreement, including 264 machines which are already installed and revenue-producing, with the balance to be delivered in the next 30 to 60 days.
Subsequent to December 31, 2014, the Company initiated equity financings whereby Poydras will raise in aggregate up to C$11.5 million. As announced on April 14, 2015, the initial tranche of C$4.5 million was expected to be completed by way of private placement (the "Private Placement"), with the balance completed by way of prospectus offering (the "Prospectus Offering"). As announced on April 30, 2015, Poydras has completed the Private Placement effective April 29, 2015, raising C$4.6 million through the issuance of 66,073,284 shares at C$0.07 per share. The Company has also engaged an agent for the Prospectus Offering. The Prospectus Offering comprises subscription receipts priced at C$0.07 which will be convertible into common shares upon the satisfaction of certain conditions including satisfaction of the conditions precedent to the acquisition of the Integrity Companies. The net proceeds from the financings will be used to fund the Company's 600 machine placement with the Tonkawa Tribe of Indians ofOklahoma, acquisition of the Integrity Companies, as well as for general working capital purposes. The Prospectus Offering is subject to TSX-V approval.
The company will host hold a conference call to discuss the results of its fourth quarter and full-year endedDecember 31, 2014. The call will be hosted by Peter Macy, CEO, and Adam Kniec, CFO, on Monday, May 4, 2015at 8:00am PST (11:00 a.m. EST) followed by a question and answer period. All interested parties are invited to participate.
Conference Call Details:
DATE: Monday, May 4, 2015
TIME: 8:00 a.m. Pacific Time / 11:00a.m. Eastern Time
DIAL IN NUMBER:
North America Toll-Free Dial-In Number: 1 (888) 231-8191
For Toronto: (647) 427-7450
For Vancouver: (778) 371-9827
CONFERENCE ID: 38304631
TAPED REPLAY: 1 (855) 859-2056
Available until 12:00 midnight (EST) Monday, May 11, 2015
Reference number: 38304631
About Poydras Gaming Finance Corp.:
Poydras Gaming is focused on leasing and financing gaming machines (such as slot machines) and related capital expenditures for existing casinos, new casino developments and gaming machine suppliers in the United States. It owns and finances slot machines including long-term lease contracts across six casinos in Oklahoma and a financing agreement with a gaming machine supplier based out of California. Additional information about the Company can be found 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.
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 forwardlooking 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 forwardlooking information. The forward-looking information in this news release 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 FORWARDLOOKING 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.
Adjusted EBITDA and reconciliation to net income (loss) is as follows:
For additional information please see the SEDAR website at www.sedar.com.
SOURCE Poydras Gaming Finance Corp.
For further information: Robert Kelly, Investor Relations, TMX Equicom, T: 416.815.0700 ext. 253, E: firstname.lastname@example.org; or, Peter Macy, CEO, Poydras Gaming Finance Corp., T: (604) 683-8393, E: email@example.com
Visit POYDRAS GAMING FINANCE CORP. Website: www.poydrasgaming.com