News Press Releases

Poydras Gaming Finance Corp. Announces Preliminary Financial Results for Fourth Quarter and Full-Year 2016

March 30, 2017

Canada NewsWire

VANCOUVER, March 30, 2017

— Achieves record full-year Revenue and Adjusted EBITDA —
— Announces additional machine placements in Texas —
— Company focused on continued growth with a strong business development pipeline —
— Announces hiring of Dan Zurcher as Director of New Market Development —

VANCOUVER, March 30, 2017 /CNW/ - POYDRAS GAMING FINANCE CORP. (TSX‐V: PYD; OTCQX: PYDGF) ("Poydras" or the "Company") today announces preliminary, unaudited financial results for the fourth quarter and year ended December 31, 2016 (all amounts stated in U.S. dollars unless otherwise indicated). The figures provided herein have not yet been approved by the Company's Audit Committee and Board of Directors.

Fourth Quarter and Fiscal Year 2016 Highlights & Financial Results Preview

Q4 16 revenue declined 5% over Q3 16, from $3.9 million to $3.7 million due to ceasing to recognize revenue from one customer effective November 1, 2016, which is related to a recent placement of 200 machines in a new Native-American owned casino in Oklahoma.
Q4 16 revenue grew 6% from $3.5 million in Q4 15.
FY 16 revenue grew more than 78% over FY 15, from $8.2 million to $14.6 million.
~$2.3 million in leasing payments in FY 16 (classified under IFRS on the statement of financial position as a reduction in finance lease receivable).
Q4 16 adjusted EBITDA is expected to be similar to Q3 16 adjusted EBITDA at $2.2 million. Q4 16 adjusted EBITDA is impacted negatively by approximately $0.9 million due to poor performance of the new casino customer which resulted in recognition of bad debts expense and ceasing to recognize revenue.
FY 16 adjusted EBITDA grew 150% over FY 15, from $3.6 million to $9.0 million.
Q4 and FY 16 estimated $0.6 million bad debt expense and $1.7 million impairment charge of placement fees related to the recent placement of 220 machines.

"While the back half of FY16 was somewhat softer than anticipated due to a challenging opening with a new customer as well as the lingering effects of the oil and gas industry downturn, we are expecting a return to strong growth in 2017," said Peter Macy, CEO of Poydras. "We are redeploying machines to more profitable and proven locations and continuing to expand our business in Oklahoma and Texas. In addition, we are increasing our focus on new market opportunities across the southwestern US."

The Company expects to file its audited FY 16 financial results on or before April 29, 2017. An investor conference call will follow. Details of the conference call will be released approximately one week prior to the call.

Additional Machine Placements in Texas

On January 3, 2017 the Company announced the deployment of an additional 108 Class II gaming machines at the Kickapoo Lucky Eagle Casino in Texas as well as plans to place up to 100 additional machines at this facility in 2017. The Company acquired an additional 71 revenue generating machines at this facility during Q1 2017.

With these machines in place, the Company now has over 280 revenue-generating machines in Texas.

Business Development in Complementary New Markets

Poydras also announces that Dan Zurcher has joined Poydras as Director of New Market Development. In his most recent position as Regional Sales Director, Mountain Region, for Scientific Games, Mr. Zurcher grew sales in Wyoming, Colorado, New Mexico, Kansas, Oklahoma and Texas and handled their world-wide U.S. Army and Air Force business. Previous roles include Account Executive at WMS, where he serviced accounts in California, Colorado and Oregon, and Account Executive for Aristocrat, where he was responsible for customers in Nevada, California, New Mexico, Colorado and Wyoming.

"With over fifteen years in gaming sales, and seven years before that in casino operations, Dan has outstanding relationships across the Western U.S., a deep understanding of what challenges customers face and knowledge of just the right solutions to offer them" said Peter Macy. "We are delighted to have Dan join the team at Poydras, and look forward to working with him in driving our business forward as we look to expand into complementary and growing markets across the West."

"I am very excited to join the Poydras teams, and leverage the relationships I've built across the Western U.S. to bring Poydras' unique set of solutions to a new group of customers for the Company," said Dan Zurcher.

About Poydras Gaming Finance Corp.:
Poydras Gaming is a regional slot route operator with over 2,600 revenue-generating gaming machines across 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. In addition, it distributes casino and bingo equipment, and offers direct and online sales of gaming supplies for poker and bingo. 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.

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 – Poydras Gaming Finance Corp.

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 debt, gain/loss on disposal of assets, finance lease receivable reduction, revaluation adjustment of earn-out liability, revaluation loss on investment in A&W JV, impairment of placement fees 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.

During the current quarter, the Company modified its definition of Adjusted EBITDA by adjusting its earnings by impairment of placement fees. The Company believes that to measure the Company's core business performance and liquidity, and to measure its ability to purchase additional machines, it is important to include this adjustment in determination of Adjusted EBITDA.

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 Poydras Gaming Finance Corp.