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Intertain Announces Second Quarter 2016 Financial Results
("Intertain" or the "Company") (TSX:IT; OTCQX:ITTNF) today announced its financial results for the three months ended June 30, 2016 . All amounts are stated in Canadian dollars unless otherwise noted.
(1) 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 June 30, 2016 " on page 3 of this release.
(2) Per share figures are calculated on a diluted weighted average basis using the IFRS treasury method.
"Intertain had a strong second quarter, with all business segments improving on their results from the same period last year," said Andrew McIver , CEO of Intertain. "The Company continues to realize significant gains from organic growth, with revenues up 22% from Q2 2015. We've also made a substantial investment in marketing in order to drive growth over future quarters. Increasing shareholder value remains my key objective, and all efforts going forward will be focused on positioning the Company for long-term growth and success."
(3) On April 13, 2016 , the InterCasino brand migrated to Intertain's proprietary Plain Gaming Platform. In conjunction with this operational change, the Company reassessed management and reporting for the combined segment and concluded that the InterCasino segment should be aggregated with the Vera&John segment.
(4) 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.
(5) Fair value adjustments on contingent consideration relate to the Jackpotjoy acquisition.
(6) Transaction related costs consist of legal, professional, underwriting, due diligence, special committee fees, bonuses paid to management and other direct costs/fees associated with transactions and acquisitions contemplated or completed, the strategic review undertaken by the Company's board of directors and the UK Strategic Initiatives. The decrease in transaction related costs in comparison with the same three months in 2015 relates to the fact that the Company had not completed any acquisitions in the second quarter of 2016, and significant acquisition related costs were included in the three months ended June 30, 2015 for the Jackpotjoy transaction that closed in Q2 2015. Transaction related costs included in the three months ended June 30, 2016 related mostly to the ongoing strategic review.
(7) Adjusted EBITDA, as defined by the Company, is income before interest expense (net of interest income), income taxes, amortization, share-based compensation, severance costs, 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 and share-based compensation eliminates the non-cash impact and the exclusion of severance costs, gain on cross currency swap, debt settlement expense, fair value adjustments on contingent consideration, transaction related costs and foreign exchange eliminates items which management believes are non-operational.
(8) 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 accretion, amortization of acquisition related purchase price intangibles, share-based compensation, severance costs, gain on cross currency swap, debt settlement expense, fair value adjustments on contingent consideration, transaction related costs, and foreign exchange. The exclusion of interest accretion and share-based compensation eliminates the non-cash impact and the exclusion of severance costs, gain on cross currency swap, debt settlement expense, amortization of acquisition related purchase price intangibles, fair value adjustments on contingent consideration, transaction related costs 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.
Intertain confirms its previously announced full year financial guidance on revenue, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income Per Share provided in its earnings release on March 9, 2016 (together, the "Guidance") for the quarter ended June 30, 2016 , with no changes to the ranges provided nor any material changes to the business performance assumptions used to determine the Guidance. Intertain notes that the Guidance was prepared based on USD/CAD exchange rate of 1.33, GBP/CAD exchange rate of 1.90, and EUR/CAD exchange rate of 1.46 on March 7, 2016 . As at close on August 9, 2016 , USD/CAD exchange rate was 1.31, GBP/CAD exchange rate was 1.71, and EUR/CAD exchange rate was 1.46. If this level of GBP/CAD is maintained throughout the balance of the year, Intertain's annual results will trend towards the lower range of the Guidance.
The financial statements, notes to the financial statements and Management's Discussion and Analysis for the three months ended June 30, 2016 will be available on SEDAR at http://www.sedar.com as well as Intertain's website at http://www.intertain.com.
A conference call to discuss Intertain's second quarter 2016 results will be held on August 11, 2016 at 8am ET . Andrew McIver , CEO of Intertain, and Keith Laslop , CFO of Intertain, will host the call.
To participate, interested parties are asked to dial (647)427-7450, 1(888)231-8191, or 0-800-051-7107, 10 minutes prior to the scheduled start of the call. A replay of the conference call will be available until August 25, 2016 by dialing 1(855)859-2056 or (416)849-0833 and using reference number 58475056. A transcript will also be made available on Intertain's website.
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 http://www.intercasino.com, Costa http://www.costabingo.com, Vera&John http://www.verajohn.com, Jackpotjoy http://www.jackpotjoy.com and jackpotjoy.se, and Botemania http://www.botemania.es brands. For more information about Intertain, please visit http://www.intertain.com.
Amanda Brewer , Vice President, Corporate Communications, The Intertain Group Limited, Tel: +1-416-720-8150, abrewer@intertain.com