INNOVA Announces Q4 and Full Year 2016 Financial Results
INNOVA Gaming Group Inc. (“INNOVA” or the “Company“) (TSX: IGG), announced today its financial results for the three and twelve-month periods ended December 31, 2016. All figures in this press release are in U.S. dollars, unless otherwise noted.
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2016 Operational Highlights
- Deployed 185 new LT-3 ticket dispensers (“LT-3s”) in the twelve months ending December 31st. 2,062 LT-3s were deployed at December 31, 2016 and 1,968 LT-3s were deployed at March 22, 2017. The reduction in LT-3’s from December 31, 2016 to March 22, 2017 is primarily related to removals from Missouri liquor-by-the-drink locations. We believe that accommodating the Missouri Lottery with the withdrawal of our machines from liquor-by-the-drink locations will facilitate the continuation of our pilot program in fraternal and veteran halls in the State of Missouri, and potentially allow us to redeploy some of the removed machines in fraternal and veteran halls in the state.
- INNOVA’S wholly-owned subsidiary Diamond Game Enterprises (“Diamond Game“), signed an agreement with Tonk Group to distribute LT-3s in New Hampshire under a charitable program regulated by the New Hampshire Lottery.
- Diamond Game was approved to join the World Lottery Association as an Associate Member, recognizing Diamond Game’s success as a provider of unique local, extended play gaming solutions to North American lotteries and the Company’s growing influence within the global lottery community.
- Diamond Game unveiled NexPlay™—a suite of innovative lottery products—at the North American State and Provincial Lottery Conference in October 2016. The Conference is the largest lottery show in North America.
2016 Financial Highlights
- Revenue of $22.7 million in 2016, compared to $21.2 million in 2015.
- LT-3 Revenue grew 19.1% in 2016, compared to 2015.
- Average LT-3 WPU3 (Win Per Unit per day) and ARPU4 (Average Revenue Per Unit per day) of $142 and $29, respectively.
- Adjusted EBITDA1 of $5.8 million in 2016, compared to $4.6 million in 2015.
- Adjusted EPS2 of $0.15 in 2016, compared to $0.09 in 2015.
- Instituted a normal course issuer bid (“NCIB“) on March 29, 2016 and as of December 31, 2016, the Company had purchased and cancelled an aggregate of 369,500 Common Shares under this program.
- Recognized $1,342,763 of EBITDA support compensation as part of other non-operating income, of which $638,839 was received in cash.
1 Adjusted EBITDA is a non-IFRS measure. See “Non-IFRS Measures and Financial Indicators”
2 Adjusted EPS is a non-IFRS measure. See “Non-IFRS Measures and Financial Indicators”
3 WPU is a non-IFRS measure. See “Non-IFRS Measures and Financial Indicators”
4 ARPU is a non-IFRS measure. See “Non-IFRS Measures and Financial Indicators”.
“We continued to drive solid revenue and earnings growth in 2016 despite some specific challenges from a new deployment perspective,” said Richard Weil, Chairman and CEO of INNOVA. “The reality of dealing with heavily regulated customers is that approval for new deployments can take longer than desired. However, once installed, the units generate strong recurring revenue that benefits INNOVA, lotteries and the charities they support. In the almost two years since going public, we have assembled the team and established the infrastructure required to maintain our business and drive growth. In 2017, with the bulk of near-term product and new feature spending behind us, we expect to continue to generate earnings growth on our current base while working with existing and potential customers to drive deployment upside.”