TANGELO REPORTS 2017 Q2 FINANCIAL RESULTS
FOR IMMEDIATE RELEASE
Toronto, Ontario – August 29, 2017 – Tangelo Games Corp. (“Tangelo” or the “Company“) (TSX-VENTURE: GEL) reports its financial results for the second quarter of 2017 (the three and six-month period ended June 30, 2017).
All figures CAD
- Tangelo generated revenue of $9.27 million and $18.25 million for the three and six months ended June 30, 2017 compared to revenue of $10.05 million and $20.91 million for the three and six months ended June 30, 2016. The Operating Loss was $0.60 million and $1.18 million for the three and six months ended June 30, 2017 compared to $0.85 million and $1.33 million for the three and six months ended June 30, 2016. Adjusted EBITDA of $2.48 million and $4.91 million was realized for the three and six months ended June 30, 2017 compared to $2.76 million and $5.76 million for the three and six months ended June 30, 2016 (see Non-IFRS measures).
- The Company has continued its operational initiative to migrate to Unity, along with development of new mobile applications. Tangelo is working to release a web version (based in Unity) of Bingo Rider, one of Tangelo Spain’s most popular titles, representing 35% of Tangelo Spain’s revenue. By the end of 2017, Tangelo plans to release a new Mundijuegos Mobile App with the most popular web titles. Collectively, more than 75% of Tangelo Spain’s revenue will be migrated to Unity by the end of 2017.
James Lanthier, Chief Executive Officer of Tangelo, commented:
“Tangelo’s Q2 results reflect sequential quarter improvement as we optimize our current business in parallel with our focus on the migration to Unity and new product pipeline.
Our revenue grew by 3% quarter-over-quarter. Overall paying users declined from approximately 56,000 in Q1 to approximately 53,000 in Q2, but overall revenue grew on the back of a growth in the player base of Tangelo Israel and growth in spending from the player base of Tangelo Spain.
Tangelo’s improved performance is attributable to the continual refinement of its predictive analytics models, and their usage in its Tangelo Israel business unit. Thanks to these and similar measures, Tangelo continues to maximize its efficiency at revenue generation. Adjusted EBITDA grew by 2% quarter over quarter. Adjusted EBITDA margin remained steady at 27% of revenue.”
Vicenc Marti, President of Tangelo, commented:
“Tangelo continues to make strong progress on its development pipeline. We had previously announced that we would convert the four top performing slot machines to Unity – this is now complete. Bingo Rider conversion is nearly completed. We are on track to deliver on schedule in 2017 our remaining goals of a new Mundijuegos Mobile App along with two entirely new mobile- first slot applications, tailored specifically for English speaking markets with innovative social functionality.”
The Company reiterates that it is in discussions with a number of parties regarding potential transactions that could result in an acquisition, merger with, or sale to a third party. The Company can offer no assurances that these discussions will yield a successful transaction, and the Company can offer no further details or commentary regarding the likelihood or nature of the potential transactions.
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 tables provide a reconciliation to Operating Loss/Income on the Statements of Consolidated Income and Comprehensive Loss for the three and six months ended June 30, 2017 and 2016 as reported in the Company’s interim financial statements.
Adjusted EBITDA – Consolidated
Tangelo Games 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.
Spyros P. Karellas
Pinnacle Capital Markets LTD.
President & CEO
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 short form prospectus dated March 27, 2015, the Company’s Annual Information Form dated November 11, 2015 and other 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.