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Stocks On The Run: Amaya Inc. (NASDAQ: AYA)

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On Friday, Shares of Amaya Inc. (NASDAQ:AYA), added 3.20 percent and closed at $19.35 in the last trading session. The last trading range of the stock ranges between $19.00 and $20.35.

Amaya Inc. (NASDAQ: AYA) recently stated its financial results for the 1st- quarter finished March 31, 2017, declared that it will ask investors to approve, among other things, certain matters regarding the projected corporate name change and related matters, reconfirmed complete year 2017 financial guidance ranges and offered certain extra highlights and updates. Unless otherwise noted, all dollar ($) amounts are in U.S. dollars.

“We continued our momentum in the 1st- quarter as we perform on our policy and reinforce the foundation for sustainable and diversified revenue development, numbering through the strengthening of our core administration team and operations,” said Rafi Ashkenazi, CEO. “Our company also continues to evolve through corporate programs to deliver the greatest value for our investors.”

1st- Quarter 2017 and Subsequent Financial Highlights:

Revenues – Total revenues for the quarter increased approximately 10.00 percent yoy. Apart From the impact of yoy changes in foreign exchange rates, total revenues for the quarter would have raised by approximately 9.90 percent. Real-money online poker revenues and real-money online casino and sportsbook combined revenues represented approximately 68.90 percent and 27.30 percent of total revenues for the quarter, respectively, as contrast to approximately 75.00 percent and 20.80 percent for the previous year period.

Poker Revenues – Real-money online poker revenues for the quarter were $218.70M, or a increase of approximately 1.10 percent yoy. Apart From the impact of yoy changes in foreign exchange rates, real-money online poker revenues would have increased by approximately 0.30 percent for the quarter.

Debt – Total long term debt outstanding at the end of the quarter was $2.530B with a weighted average interest rate of 4.50 percent. In March 2017, Amaya declared the successful repricing and retranching of its U.S. dollar and Euro denominated 1st- lien term loans resulting in the reduction of the applicable interest rate margins by 50.00 basis points, removing the Euribor floor on the Euro denominated 1st- lien term loans, and increasing €100.00M of incremental Euro denominated 1st- lien debt and using the same to decrease its U.S. denominated 1st- lien debt. As a result, the weighted average interest rate on the long term debt decreased approximately 0.40 percent and Amaya presently anticipates to save approximately 13.00 percent, or $15.40M, of interest cost yearly. Amaya and the lenders also amended the credit agreement for its 1st- lien term loans to, among other things, reflect the repricing, retranching, and waive the needed 2016 and 2017 excess cash flow repayments (as defined and described in the credit agreement) previously due on March 31, 2017 and March 31, 2018, respectively.

Rational Group Deferred Payment :Amaya paid $75.00M in January 2017 and an extra $75.00M in April 2017 on the outstanding balance of the deferred purchase price for its acquisition of the Rational Group and continues to anticipate paying the remaining $47.50M by the end of June 2017 using cash on its balance sheet and cash flow from operations.

1st- Quarter 2017 and Subsequent Operational Highlights:

  • Quarterly Real-Money Active Uniques (QAUs) – Total combined QAUs were approximately 2.70M, a increase of approximately 5.00 percent yoy mainly led by client acquisition, engagement and reactivation programs. Approximately 2.50M of such QAUs played online poker throughout the quarter, a increase of approximately 2.00 percent yoy, while Amaya’s online casino offerings had approximately 664,000.00 QAUs, a boost of approximately 42.00 percent yoy, which Amaya continues to estimate is one of the leading casino player bases among its competitors. Amaya’s emerging online sportsbook offerings had approximately 277,000.00 QAUs, a 64.00 percent increase yoy.
  • Quarterly Net Yield (QNY) – Total QNY and QNY apart from the impact of yoy changes in foreign exchanges rates were both $115.00, a increase of 5.40 percent yoy in each case. QNY is a non-IFRS measure.
  • Client Registrations – Client Registrations increased by 3.00M throughout the quarter to approximately 111.00M.
  • CFO Update – In January 2017, Amaya declared that its CFO, Daniel Sebag, advised it that he will retire as CFO later this year once his successor is identified and designated, and will assist Amaya in ensuring an orderly transition of his responsibilities. The Board and leading executive recruiting firm Spencer Stuart begind a global CFO search and Amaya is in the final stages of the hiring process with respect to a potential candidate.
  • Appointment of Chief Corporate Development Officer – On May 11, 2017, Amaya declared the appointment of Robin Chhabra to the newly created position of Chief Corporate Development Officer. Mr. Chhabra is an practiced online gaming executive who most recently served as Group Director of Strategy and Corporate Development for William Hill plc (LSE: WMH). Amaya anticipates Mr. Chhabra will join the company in September 2017 following a brief garden leave from William Hill.
  • Corporate Name Change and Continuance:
  • Amaya currently intends to include in its administration information circular for its approaching 2017 yearly and special conference of investors, among other things, the following special matters:
  • Corporate Name Change –Amaya intends to change its corporate name to “The Stars Group Inc.”
  • Continuance – To more effectively manage its business and affairs, Amaya also intends to effect a continuance under the Business Corporations Act (Ontario) such that it will become an Ontario corporation and subject to such act. Following the continuance and appointment of its new CFO, Amaya intends to move its corporate head office to Toronto, Ontario.
  • Extra information regarding the business of the conference and the matters to be considered and voted on by the investors at the meeting will be offered in the administration information circular.

Full Year Guidance:

Complete Year Guidance – Amaya reconfirms its previously declared 2017 complete year financial guidance ranges and continues to expect the following:

  • Revenues of $1,200.00 to $1,260.00M;
  • Adjusted EBITDA of $560.00 to $580.00M;
  • Adjusted Net Earnings of $400.00 to $430.00M; and
  • Adjusted Net Earnings per Diluted Share of $1.940 to $2.130.

These estimates reflect administration’s view of current and future market and business conditions, counting assumptions of  (i) the cessation of real-money online poker offering in Australia by the end of June 2017 (previously believed to be April 2017), (ii) the introduction of Amaya’s previously revealed cross-vertical customer loyalty program, (iii) no other material adverse regulatory events and (iv) no material foreign currency exchange rate fluctuations, mostly against the Euro which is the primary depositing currency of Amaya’s clients, that could negatively impact customer purchasing power as it relates to Amaya’s United State dollar denominated product offerings. Such guidance is also based on a Euro to U.S. dollar exchange rate of 1.060 to 1.0, unaudited expected results and certain accounting assumptions.

Conference Call and Webcast:

Amaya will host a conference call recently, May 12, 2017 at 8:30 a.m. ET to talk approximately its financial results for the 1st- quarter 2017 and related matters. Rafi Ashkenazi, CFO of Amaya, will chair the call. To access via tele-conference, please dial +1 877-407-0789 or +1 201-689-8562 ten minutes before the planned start of the call. The playback will be made accessible two hours after the occasion at +1 844-512-2921 or +1 412-317-6671. The Conference ID number is 13661536.

Analyst recommendation for this stock stands at 2.00.