TANGELO GAMES REPORTS 2017 YEAR END FINANCIAL RESULTS
Toronto, Ontario – April 30, 2018 – 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).
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 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.
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.