TORONTO, April 30, 2018 (GLOBE NEWSWIRE) -- Tangelo Games Corp. ("Tangelo" or the
"Company") (TSX-VENTURE:GEL) reports its financial results for the fourth quarter and year-end of 2017 (the three
and twelve-month periods ended December 31, 2017).
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| Fourth Quarter Financial Summary |
| in $000,000 Canadian Dollars except for shares
and per share amounts |
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Quarter ended |
Year ended |
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December 31, |
December 31, |
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2017 |
2016 |
2017 |
2016 |
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|
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| REVENUE |
|
$ |
8.81 |
|
$ |
9.35 |
|
$ |
35.51 |
|
$ |
39.57 |
|
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| Adjusted EBITDA* |
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2.86 |
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|
3.14 |
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9.80 |
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11.86 |
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Transaction costs, Severance and restructure
costs, Depreciation of
equipment, Amortization of intangibles, Stock-based compensation
and Impairment of goodwill |
|
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34.55 |
|
|
6.24 |
|
|
43.75 |
|
|
16.41 |
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| OPERATING (LOSS) |
|
|
(31.69 |
) |
|
(3.10 |
) |
|
(33.95 |
) |
|
(4.55 |
) |
| OTHER CHARGES |
|
|
|
|
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| Interest and accretion, Changes in value of long-term
debt, Foreign exchange |
|
|
3.53 |
|
|
7.23 |
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|
11.32 |
|
|
14.70 |
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| LOSS, CONTINUING OPERATIONS, BEFORE INCOME
TAX |
|
|
(35.23 |
) |
|
(10.33 |
) |
|
(45.27 |
) |
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(19.24 |
) |
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|
|
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| NET LOSS, CONTINUING OPERATIONS |
|
|
(34.27 |
) |
|
(9.59 |
) |
|
(43.63 |
) |
|
(17.96 |
) |
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|
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|
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|
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| NET INCOME/(LOSS), DISCONTINUED
OPERATIONS |
|
|
0.01 |
|
|
0.01 |
|
|
(0.04 |
) |
|
0.04 |
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| TOTAL NET LOSS FOR THE PERIOD |
|
|
(34.26 |
) |
|
(9.58 |
) |
|
(43.67 |
) |
|
(17.92 |
) |
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|
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| Basic and diluted loss per share, continuing operations |
|
$ |
(0.19 |
) |
$ |
(0.05 |
) |
$ |
(0.24 |
) |
$ |
(0.10 |
) |
| Basic and diluted income/(loss) per share, discontinued operations |
|
$ |
0.00 |
|
$ |
0.00 |
|
$ |
(0.00 |
) |
$ |
0.00 |
|
| Weighted average number of shares: basic and diluted |
|
|
181,613,228 |
|
|
180,668,880 |
|
|
180,906,907 |
|
|
176,896,032 |
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| * See Non-IFRS Measures |
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Tangelo Q4 results can be found on its website (www.tangelo.com) or SEDAR (www.sedar.com).
James Lanthier, Chief Executive Officer of Tangelo, commented:
“As previously disclosed, in the fourth quarter of 2017, Tangelo’s revenue grew from the immediately prior
quarter by 4% to $8.81 M. In the first quarter of 2018, Tangelo recorded $8.61 M in revenue – slightly down but actually up
on a daily average revenue basis.
"We attribute this to our continuous efforts to improve the cadence and quality of our customer relationship
management as well as our mix of promotions and content. Monthly average paying users were approximately 56,000 for the fourth
quarter, and 52,000 for the first quarter. Promisingly, paying users for Tangelo Israel are now growing year over year
and were up by 18% in the first quarter of 2018 from the year before, with the majority of this growth coming through reactivating
former customers from the Company’s large database of historical customers.
"New product development is essential to the longer-term growth of revenue. With the migration at Tangelo
Spain coming to an end in 2018, we will be able to accelerate new product delivery. Games representing the majority of our revenue
will be fully migrated to Unity by July, with the majority of our remaining games migrated through the rest of the year. Best
Jackpot, our new English language app, is in final beta testing and we expect it to be widely released in the coming
weeks. A revitalized Spanish-language Bingo Rider app will be released in May. The Mundijuegos app release has been
pushed to July in order to ensure that we maximize the range of content available to users.
"In the fourth quarter, the Company registered an impairment charge, incurring a net loss of $34.27 M, up from
$9.59 M in the fourth quarter of 2016. Tangelo delivered Adjusted EBITDA of $2.86 M in the fourth quarter, up 41% from the third
quarter and down 9% year over year."
As previously discussed, management has pursued a number of potential strategic alternatives with a view to
improving its capital structure and unlocking value for all stakeholders. While the Company cannot offer any assurances
that these discussions will result in a successful transaction, they are ongoing. The Company will, obviously, update the
market when or if a material development arises.
Financial Results and Non-IFRS Measures
The Company has included certain Non-IFRS performance measures, namely EBITDA and adjusted EBITDA and working
capital, within this press release. The Company believes that, in addition to conventional measures prepared in accordance with
IFRS, we and certain investors and securities analysts use this information to evaluate the Company’s performance and ability to
generate cash, profits and meet financial commitments. These Non-IFRS measures do not have any standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by other issuers. These Non-IFRS measures are intended to provide
additional information and should not be considered in isolation or as a substitute for measures of performance prepared in
accordance with IFRS.
EBITDA is defined as “Earnings Before Interest, Tax, Depreciation and Amortization”. Adjusted EBITDA adjusts
EBTIDA for due diligence and transaction costs and restructure and severance expenses as these are generally non-recurring. The
Company removes stock-based compensation in calculating Adjusted EBITDA as it is a non-cash expense that can vary significantly
depending on the timing of option grants. EBITDA does not include the discontinued operations of Vast and Tech Channel. The
following table provides a reconciliation to Operating Loss/Income on the Statements of Consolidated Income and Comprehensive Loss
for the quarters and years ended December 31, 2017 and 2016 as reported in the Company’s audited annual consolidated financial
statements.
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For the
Quarters Ended |
|
For the Years
Ended |
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|
December
31, |
|
December
31, |
| |
|
2017 |
2016 |
|
2017 |
2016 |
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| Operating loss, in 000,000's |
|
$ |
(31.69 |
) |
$ |
(3.10 |
) |
|
$ |
(33.95 |
) |
$ |
(4.55 |
) |
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| Add back: |
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| Transaction costs |
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|
0.08 |
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|
0.17 |
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|
0.45 |
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|
0.53 |
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| Severance and restructure costs |
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|
0.03 |
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|
0.03 |
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|
0.20 |
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|
0.83 |
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| Depreciation of equipment |
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|
0.03 |
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|
0.03 |
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|
0.11 |
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|
0.11 |
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| Amortization of intangibles |
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2.81 |
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|
2.87 |
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|
11.31 |
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|
11.45 |
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| Stock-based compensation |
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|
0.01 |
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0.05 |
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|
0.09 |
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|
0.40 |
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| Impairment of goodwill |
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|
31.59 |
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|
3.09 |
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|
31.59 |
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|
3.09 |
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| Adjusted EBITDA |
|
$ |
2.86 |
|
$ |
3.14 |
|
|
$ |
9.80 |
|
$ |
11.86 |
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About Tangelo
Tangelo Gaming Corp., the parent company of Tangelo Israel and Tangelo Spain, is a developer of social and
mobile gaming for desktop, iOS and Android platforms. Tangelo Israel and Tangelo Spain design, develop and distribute their top
ranked social casino-themed games within online social networks (such as Facebook) and mobile platforms (such as Android and
iPhone). All of the Tangelo Israel and Tangelo Spain games are free to play and generate revenue primarily through the in-game sale
of virtual coins.
Further Information
Spyros P. Karellas
President & CEO
Pinnacle Capital Markets LTD.
Mobile/Office: 416-433-5696
www.pinnaclecapitalmarkets.ca
spyros@pinnaclecapitalmarkets.ca
Skype: spyros.karellas
Caution Regarding Forward-Looking Information:
Certain statements in this press release may constitute “forward looking statements” which involve known and
unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements expressed or implied by such forward looking statements.
When used in this press release, such statements may use such words as “may”, “will”, expect”, “believe”, “plan” and
other similar terminology. These statements include, but are not limited to, statements with respect to the future business and
operations of the Company, the ability of the Company to release new and successful games, the financial results of the Company and
its subsidiaries, negotiations with the Company’s lenders to extend or amend terms of the credit facility, the potential to enter
into a strategic or financing transaction with a third party or receive approval from the Company’s lenders to enter into such
transaction and the future prospects of the Company. These statements reflect management’s current expectations regarding
future events and operating performance and speak only as of the date of this press release. The forward looking statements involve
a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, general economic, market or
business conditions and future developments in the sectors of the economy in which the businesses of Tangelo operate. The foregoing
list of factors is not exhaustive. Please see the Company’s public disclosure documents available under the Company’s profile on
www.sedar.com, for a more detailed description of the risk factors. The Company undertakes no obligation to update publicly or
revise any forward looking statements, whether a result of new information, future results or otherwise, except as required by
law.
NEITHER 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.
