NEWS! VANCOUVER, Aug. 12, 2016 - POYDRAS GAMING FINANCE CORP. (TSXV: PYD) ("Poydras" or the "Company"), a leading provider of gaming machines to casino operators in its core markets of Oklahoma and Texas, today announced that it has entered into a Membership Interest Purchase Agreement to purchase A&W Enterprises, LLC's ("A&W") remaining 50% interest in Aurora A&W Enterprises, LLC ("A&W JV"). Overall consideration for the transaction consists of a cash payment to A&W of $1.75 million and the assumption of approximately $1.6 million of debt formerly held by the A&W JV. Poydras intends to retire the assumed debt with a portion of the proceeds of its recently announced term loan.
Post-acquisition, Poydras will consolidate 100% of the results of operations of the A&W JV in its financial statements, rather than reporting 50% of Income from Equity Accounted Investees using the equity basis of accounting, as is its current practice. Acquiring A&W's ownership in the A&W JV is expected to add an incremental approximately $1.25 million in annualized Adjusted EBITDA to Poydras. The financial impact of the acquisition will be seen starting in Q3 2016, with the fourth quarter of 2016 being the first full quarter to realize the benefit of the consolidation.
"We are pleased to be moving forward quickly in funding our next phase of growth made possible by our recently announced debt refinancing," said Peter Macy, CEO of Poydras. "The non-dilutive purchase of A&W's interest in the A&W JV will contribute immediately to our financial performance and allows us to manage the JV's assets and contracts more efficiently, supporting enhanced growth and profitability."
NonIFRS 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, gain/loss on settlement of loans payable, gain/loss on disposal of assets, finance lease receivable reduction, revaluation adjustment of earn-out liability and non-recurring costs. In addition, to arrive at the Adjusted EBITDA, the Company is adjusting its earnings for its 50% share of the above mentioned income/expense and gain/loss categories that are included in the Company's income from equity accounted investees.
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.