TORONTO, April 17, 2020 /PRNewswire/ -- The Stars
Group Inc. (NASDAQ: TSG) (TSX: TSGI) today provided a general
business update, including expectations for its financial
results for the first quarter of 2020.
"We saw record revenues in the first quarter with 27%
year-over-year growth and are continuing to see strong momentum
into April, with strong growth in poker and gaming revenues helping
to mitigate the cancellation of sporting events. With these
encouraging trends, a well-diversified and cash-generative
business, and our strong balance sheet, we believe that we remain
well-positioned to navigate further headwinds related to the
COVID-19 pandemic in 2020, and remain fully committed to our
combination with Flutter, which we now expect to close in the
second quarter and are confident will enhance and accelerate our
growth strategy," said Rafi Ashkenazi, Chief Executive Officer of
The Stars Group. "During these exceptional times, our top priority,
however, is the health and safety of our employees and customers,
which includes enhancing our responsible and safer gambling
measures as well as ensuring that we provide our customers with all
the help and support they may need."
First Quarter 2020
Financial Performance; Current Business
Update1
|
|
Consolidated1
|
|
|
|
Q1 2020
Expected
|
|
Q1 2020
Expected
|
|
Q1 2019
Actual
|
|
Variance (to
midpoint)
|
In millions of U.S.
Dollars (except per share amounts)
|
|
Low
|
|
High
|
|
|
|
|
Revenue
|
|
735
|
|
735
|
|
580
|
|
27
|
%
|
Operating
income
|
|
140
|
|
149
|
|
62
|
|
133
|
%
|
Net (loss)
earnings
|
|
(79)
|
|
(69)
|
|
28
|
|
(364)
|
%
|
Adjusted Net
Earnings2
|
|
185
|
|
192
|
|
106
|
|
78
|
%
|
Adjusted
EBITDA2
|
|
291
|
|
297
|
|
195
|
|
51
|
%
|
Diluted net (loss)
earnings per common share ($/Share)3
|
|
(0.27)
|
|
(0.23)
|
|
0.10
|
|
(350)
|
%
|
Adjusted Diluted
Net Earnings per Share ($/Share)2 3
|
|
0.63
|
|
0.65
|
|
0.38
|
|
68
|
%
|
Revenue - The Stars Group saw strong momentum across its
segments since the start of 2020, and now expects record revenues
for the first quarter of 2020 of approximately $735 million, an increase of approximately 27% as
compared to $580 million in the first
quarter of 2019. This performance was supported by continued strong
underlying momentum in customer activity in the United Kingdom and Australia segments, a sequential improvement
in the International segment, and a year-over-year increase in
Betting Net Win Margin at approximately 12.1% compared to 6.1% in
the first quarter of 2019. Additional segment specific factors
impacting revenue are described below.
COVID-19 Impact - The Stars Group saw increased
customer activity across its online poker and casino product
offerings largely beginning in March, with year-over-year
International revenue growth of approximately 44% for the month,
which more than mitigated the disruption from the cancellation or
postponement of sporting events during that time. The Stars Group
has continued to see increased activity in online poker and casino
into the second quarter of 2020, with consolidated average daily
revenues in the first two weeks of the quarter approximately 33%
higher as compared to the first quarter of 2020. On the same basis,
International revenues were approximately 75%
higher, benefiting from increased activity in online poker and
casino, and United Kingdom
revenues were approximately 30% lower, with growth in gaming partly
mitigating a reduction of approximately 65% in Stakes. In the
Australian segment, as racing has continued with minimal
disruption, the growth in racing revenues fully mitigated the loss
of sports revenues in this short period.
If the COVID-19 pandemic continues for a prolonged period
causing continued global macro-economic uncertainty, it is possible
that consumer spending across The Stars Group's product offerings
may also become adversely impacted. Similarly, the return of
sporting events earlier than currently anticipated could benefit
The Stars Group's sports betting revenues, but could negatively
impact the current increased activity across its online poker and
casino products.
However, the operating environment is evolving rapidly, and it
remains difficult for The Stars Group to predict the scope, timing
and length of the current COVID-19 pandemic and related
restrictions and sports postponements and cancellations, and the
impact that this will have on The Stars Group's business for the
remainder of 2020. The Stars Group currently estimates that each
month that horse and dog racing and major sporting events are
cancelled would reduce operating income by approximately £10 to £15
million in the United Kingdom
segment and by up to A$10 million in
the Australian segment, with no material negative impact on the
International segment.
Commitment to Safer Gambling - A key area of focus
for The Stars Group, particularly during this unprecedented time,
has been to enable customers to enjoy its games in a safe and fair
manner. To this end, The Stars Group has further increased its
investment and focus into its safer and responsible gambling
measures by, among other initiatives, encouraging customers to take
advantage of its various safer gambling tools, such as setting
deposit limits, using cool-off periods and using "reality checks"
where available. In addition to encouraging customers to monitor
and control their own activity, The Stars Group strives to
intervene where customer data suggests a heightened risk of harm,
setting mandatory deposit limits or otherwise restricting gameplay.
The Stars Group is also supporting its range of free-to-play games
for customers to enjoy during these challenging times.
Debt and Cash - The Stars Group continues to maintain a
strong liquidity position and healthy balance sheet. As previously
disclosed, The Stars Group prepaid an additional $100 million of its USD first lien term loan in
February 2020. As of March 31, 2020, The Stars Group had cash and cash
equivalents of $285 million. In addition, The Stars Group has
access to its revolving credit facility, among other potential
sources of liquidity, that together with its current cash and cash
equivalents continues to provide approximately $1 billion of liquidity.
U.S. Update - The Stars Group currently operates its
FOX Bet real-money wagering products and PokerStars-branded
real-money poker and casino products in New Jersey and Pennsylvania, and since the launch of FOX Bet
in New Jersey and Pennsylvania in 2019, the performance has been
in-line with The Stars Group's expectations, with an expected loss
of approximately $15 million in the
first quarter of 2020, as it continues to build its active
customers and revenues. With limited sporting events during March
and consistent with the trends seen in the International segment
during this time, The Stars Group saw increased customer activity
across its online poker and casino products, which has so far
similarly continued into April, and as such, has also shifted most
of its marketing efforts to support PokerStars, including the first
Spring Championship of Online Poker (SCOOP) taking place in April
in New Jersey and Pennsylvania, with a guaranteed prize pool of
$2 million in Pennsylvania. As it relates to new markets,
The Stars Group recently received applicable operating approvals in
both Colorado and West Virginia and expects to launch sports
betting in those states in due course.
Combination with Flutter Entertainment plc - Last week,
two independent proxy advisory firms, Institutional Shareholder
Services Inc. (ISS) and Glass Lewis & Co., each recommended
that shareholders vote FOR the proposed all-share combination with
Flutter at the upcoming special meeting of The Stars Group
shareholders, which will now be held virtually on April 24, 2020 at 10:00
a.m. EDT. At the end of March, the UK Competition &
Markets Authority also announced that it had unconditionally
cleared the combination with Flutter Entertainment plc following
its Phase 1 review under the Enterprise Act 2002. The Stars Group
currently expects closing of the combination to occur during the
second quarter of 2020 subject to, among other things, shareholder
and remaining regulatory approvals.
International1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020
Expected
|
|
Q1 2020
Expected
|
|
Q1 2019
Actual
|
|
Variance (to
midpoint)
|
In millions of U.S.
Dollars
|
|
Low
|
|
High
|
|
|
|
|
Stakes
|
|
254
|
|
254
|
|
275
|
|
(8)
|
%
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
378
|
|
378
|
|
341
|
|
11
|
%
|
Constant
Currency Revenue
|
|
390
|
|
390
|
|
341
|
|
14
|
%
|
Operating
income
|
|
116
|
|
123
|
|
115
|
|
4
|
%
|
Adjusted
EBITDA2
|
|
171
|
|
175
|
|
159
|
|
9
|
%
|
International Segment Revenue - The Stars Group saw a
sequential improvement in its International segment during the
quarter, and currently expects first quarter revenues of
approximately $378 million,
representing year-over-year growth of approximately 11% compared to
$341 million in the first quarter of
2019. During 2019, revenue was negatively impacted by disruptions
and regulatory headwinds in certain markets due to local
restrictions on some methods of payment processing and on certain
methods of downloading The Stars Group's products, particularly
related to casino and poker. During the first quarter of 2020, The
Stars Group began to see a reduction in the impact of such
disruption, with revenue growth driven by underlying growth in
customer activity, as well as its continued expansion into new
jurisdictions, including the United
States. During March and largely following the "stay at
home" and similar restrictions implemented by various local and
national authorities as a result of COVID-19, The Stars Group saw
increased customer activity in its online poker and casino games,
particularly through the reactivation of former customers, driving
revenue growth of approximately 44% year-over-year for the
month.
United
Kingdom1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020
Expected
|
|
Q1 2020
Expected
|
|
Q1 2019
Actual
|
|
Variance (to
midpoint)
|
In millions of U.S.
Dollars
|
|
Low
|
|
High
|
|
|
|
|
Stakes
|
|
1,230
|
|
1,230
|
|
1,505
|
|
(18)
|
%
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
297
|
|
297
|
|
179
|
|
66
|
%
|
Constant
Currency Revenue
|
|
301
|
|
301
|
|
179
|
|
68
|
%
|
Operating income
(loss)
|
|
58
|
|
63
|
|
(26)
|
|
333
|
%
|
Adjusted
EBITDA2
|
|
121
|
|
125
|
|
42
|
|
193
|
%
|
United Kingdom Segment Revenue - The Stars Group saw
strong underlying momentum in its United
Kingdom segment in the first quarter, and currently expects
first quarter revenues of approximately $297
million, representing year-over-year growth of approximately
66% compared to $179 million in the
first quarter of 2019. Revenue increased significantly for the
quarter primarily due to strong operational momentum across the
United Kingdom segment's betting
and gaming products and a significantly higher Betting Net Win
Margin of approximately 14.9% compared to 5.0% in the prior year
period, which was negatively impacted by operator unfavorable
sports results and the previously disclosed planned investment in
promotional activity for the Cheltenham Festival. Stakes for the
quarter were approximately 18% lower than seen in the first quarter
of 2019, with a significant reduction in the last two weeks of
March due to the impact of sporting event cancellations.
Australia1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020
Expected
|
|
Q1 2020
Expected
|
|
Q1 2019
Actual
|
|
Variance (to
midpoint)
|
In millions of U.S.
Dollars
|
|
Low
|
|
High
|
|
|
|
|
Stakes
|
|
731
|
|
731
|
|
754
|
|
(3)
|
%
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
61
|
|
61
|
|
62
|
|
(2)
|
%
|
Constant
Currency Revenue
|
|
66
|
|
66
|
|
62
|
|
6
|
%
|
Operating
loss
|
|
(7)
|
|
(5)
|
|
(1)
|
|
500
|
%
|
Adjusted
EBITDA2
|
|
6
|
|
8
|
|
9
|
|
(22)
|
%
|
Australia Segment Revenue - The Stars Group saw continued
underlying momentum in its Australia segment in the first quarter, and
currently expects first quarter revenues of approximately
$61 million, representing a
year-over-year decline of approximately 2% compared to $62 million in the first quarter of 2019.
Constant Currency Revenue increased by approximately 6%, with
underlying growth more than offset by negative foreign exchange
fluctuations. Year-over-year growth in Stakes of approximately 5%
on a local currency basis was primarily due to the continued
success of BetEasy's promotional strategies in engaging customers,
while the Betting Net Win Margin of approximately 8.1% was broadly
stable relative to the prior year period, with targeted,
personalized promotions directed at growing Stakes per
customer.
_____________________________
1 The financial and operational information
presented in this news release represents The Stars Group's current
estimates as it relates to the anticipated performance of its
reporting segments and on a consolidated basis for the first
quarter of 2020 and the first two weeks of the second quarter of
2020, as applicable. These estimated anticipated results are based
solely on information available to The Stars Group as of the date
of this news release, do not include certain accounting
determinations that remain on-going, have not been reviewed by The
Stars Group's independent auditor, and are subject to change.
2 Non-IFRS measure. For important information
on The Stars Group's non-IFRS measures, please see below under
"Non-IFRS Measures" and the tables under "Reconciliation of
Non-IFRS Measures to Nearest IFRS Measures".
3 Weighted average common shares outstanding
used for the calculation of diluted net (loss) earnings per common
share and Adjusted Diluted Net Earnings per Share for the first
quarter of 2020 was approximately 289 million and 292 million,
respectively, compared to approximately 274 million for both
calculations for the prior year period. Diluted net loss per common
share for the first quarter of 2020 was impacted as all potentially
dilutive securities of The Stars Group (i.e., securities
exercisable or convertible into common shares or equity-based
awards that can be settled into common shares) were not included in
the weighted average common share amount because the exercise,
conversion or settlement of such securities would be
anti-dilutive.
Reconciliation of Non-IFRS Measures to Nearest IFRS
Measures
The tables below present reconciliations of Adjusted EBITDA,
Adjusted Net Earnings and Adjusted Diluted Net Earnings per Share
to operating income (loss), which is the nearest IFRS measure.
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020
Expected
|
|
Q1 2020
Expected
|
|
Q1 2019
Actual
|
In millions of U.S.
Dollars (except per share amounts)
|
|
Low
|
|
High
|
|
|
Operating
Income
|
|
140
|
|
149
|
|
62
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
110
|
|
109
|
|
109
|
Add (deduct) the
impact of the following:
|
|
|
|
|
|
|
Adjusting
items1
|
|
22
|
|
21
|
|
3
|
Other
costs2
|
|
19
|
|
18
|
|
21
|
Total
adjustments
|
|
41
|
|
39
|
|
24
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
291
|
|
297
|
|
195
|
|
|
|
|
|
|
|
Depreciation and
amortization3
|
|
26
|
|
25
|
|
19
|
Interest4
|
|
59
|
|
58
|
|
67
|
Taxes5
|
|
21
|
|
22
|
|
3
|
Adjusted Net
Earnings
|
|
185
|
|
192
|
|
106
|
|
|
|
|
|
|
|
Adjusted Net Earnings
attributable to
|
|
|
|
|
|
|
Shareholders of The
Stars Group Inc.
|
|
185
|
|
191
|
|
105
|
Non-controlling
Interest
|
|
—
|
|
1
|
|
1
|
|
|
|
|
|
|
|
Diluted
Shares6
|
|
292
|
|
292
|
|
274
|
Adjusted Diluted
Net Earnings per Share ($/Share)
|
|
0.63
|
|
0.65
|
|
0.38
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020
Expected
|
|
Q1 2020
Expected
|
|
Q1 2019
Actual
|
In millions of U.S.
Dollars
|
|
Low
|
|
High
|
|
|
Operating
Income
|
|
116
|
|
123
|
|
115
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
40
|
|
39
|
|
38
|
Add (deduct) the
impact of the following:
|
|
|
|
|
|
|
Adjusting
items1
|
|
5
|
|
4
|
|
—
|
Other
costs2
|
|
10
|
|
9
|
|
6
|
Total
adjustments
|
|
15
|
|
13
|
|
6
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
171
|
|
175
|
|
159
|
United
Kingdom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020
Expected
|
|
Q1 2020
Expected
|
|
Q1 2019
Actual
|
In millions of U.S.
Dollars
|
|
Low
|
|
High
|
|
|
Operating Income
(Loss)
|
|
58
|
|
63
|
|
(26)
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
61
|
|
61
|
|
62
|
Add (deduct) the
impact of the following:
|
|
|
|
|
|
|
Adjusting
items1
|
|
—
|
|
—
|
|
—
|
Other
costs2
|
|
2
|
|
1
|
|
6
|
Total
adjustments
|
|
2
|
|
1
|
|
6
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
121
|
|
125
|
|
42
|
Australia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2020
Expected
|
|
Q1 2020
Expected
|
|
Q1 2019
Actual
|
In millions of U.S.
Dollars
|
|
Low
|
|
High
|
|
|
Operating Income
(Loss)
|
|
(7)
|
|
(5)
|
|
(1)
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
9
|
|
9
|
|
9
|
Add (deduct) the
impact of the following:
|
|
|
|
|
|
|
Adjusting
items1
|
|
3
|
|
3
|
|
—
|
Other
costs2
|
|
1
|
|
1
|
|
1
|
Total
adjustments
|
|
4
|
|
4
|
|
1
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
6
|
|
8
|
|
9
|
___________________________
1 With respect to the relevant adjusting items
for the first quarter of 2019 (excluding "Other costs"), see the
Adjusted EBITDA reconciliation in the news release issued by The
Stars Group on May 15, 2019, under
the heading "Reconciliation of Non-IFRS Measures to Nearest IFRS
Measures". With respect to 2020, The Stars Group currently expects
to incur and adjust for substantially similar items as it did in
the 2019 period as well as acquisition related costs associated the
proposed combination with Flutter.
2 With respect to the first quarter of 2019,
see the table in the news release issued by The Stars Group on
May 15, 2019, under the heading
"Reconciliation of Non-IFRS Measures to Nearest IFRS Measures"
which presents certain items comprising "Other costs". With respect
to 2020, The Stars Group currently expects to incur and adjust for
substantially similar costs as it did in the 2019 period.
3 "Depreciation and amortization" means total
depreciation and amortization, excluding amortization of
acquisition intangibles, which is not adjusted for in this
measure.
4 "Interest" means total net financing charges,
including interest on long term debt and other interest (income)
expense but excluding interest accretion, ineffectiveness on cash
flow hedges, re-measurement of deferred contingent consideration,
and re-measurement of embedded derivatives, each of which is not
adjusted for in this measure.
5 "Taxes" means total income tax expense,
excluding the impact of tax on "Adjusting items" and "Other costs"
included in the calculation of Adjusted EBITDA for each period and
for the first quarter of 2020 current estimates are based on an
expected effective tax rate of approximately 10%.
6 Weighted average common shares outstanding
used for the calculation of Adjusted Diluted Net Earnings per Share
for the first quarter of 2020 was approximately 292 million,
compared to approximately 274 million for the prior year
period.
About The Stars Group
The Stars Group is a provider of technology-based product
offerings in the global gaming and interactive entertainment
industries. Its brands have millions of registered customers
globally and collectively are leaders in online and mobile betting,
poker, casino and other gaming-related offerings. The Stars Group
owns or licenses gaming and related consumer businesses and brands,
including PokerStars, PokerStars Casino, BetStars, Full Tilt, FOX
Bet, BetEasy, Sky Bet, Sky Vegas,
Sky Casino, Sky Bingo, Sky Poker,
and Oddschecker, as well as live poker tour and events brands,
including the PokerStars Players No Limit Hold'em Championship,
European Poker Tour and Asia Pacific Poker Tour. The Stars Group is
one of the world's most licensed online gaming operators with its
subsidiaries collectively holding licenses or approvals in 24
jurisdictions throughout the world, including in Europe, Australia, and the Americas. The Stars Group's
vision is to become the world's favorite iGaming destination and
its mission is to provide its customers with winning moments.
Cautionary Note Regarding Forward Looking Statements
This news release contains forward-looking statements and
information within the meaning of the Private Securities Litigation
Reform Act of 1995 and applicable securities laws, including,
without limitation, certain financial and operational expectations
and projections, including those relating to the first and second
quarters of 2020, potential launches in new jurisdictions, as well
as the impact of the COVID-19 pandemic and related matters.
Forward-looking statements and information can, but may not always,
be identified by the use of words such as "seek", "anticipate",
"plan", "continue", "estimate", "expect", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"would", "should", "believe", "objective", "ongoing", "imply",
"assumes", "goal", "likely" and similar references to future
periods or the negatives of these words or variations or synonyms
of these words or comparable terminology and similar expressions.
These statements and information, other than statements of
historical fact, are based on management's current expectations and
are subject to a number of risks, uncertainties, and assumptions,
including market and economic conditions, business prospects or
opportunities, future plans and strategies, projections,
technological developments, anticipated events and trends and
regulatory changes that affect The Stars Group and its customers,
partners, suppliers and industries in which it operates or may
operate in the future. Although The Stars Group and management
believe the expectations reflected in such forward-looking
statements and information are reasonable and are based on
reasonable assumptions and estimates as of the date hereof, there
can be no assurance that these assumptions or estimates are
accurate or that any of these expectations will prove accurate.
Forward-looking statements are inherently subject to significant
business, regulatory, economic and competitive risks, uncertainties
and contingencies that could cause actual events to differ
materially from those expressed or implied in such statements.
Specific risks and uncertainties include, but are not limited to:
customer and operator preferences and changes in the economy;
reputation and brand growth; competition and the competitive
environment within addressable markets and industries;
macroeconomic conditions and trends in the gaming and betting
industry; social responsibility concerns and public opinion; legal
and regulatory requirements; potential changes to the gaming
regulatory framework, including without limitation, those that may
impact The Stars Group's ability to access and operate in certain
jurisdictions, whether directly or through arrangements with
locally based operators; ability to predict fluctuations in
financial results from quarter to quarter; ability to mitigate tax
risks and adverse tax consequences, including, without limitation,
changes in tax laws or administrative policies relating to tax and
the imposition of new or additional taxes, such as value-added and
point of consumption taxes, and gaming duties; The Stars Group's
substantial indebtedness requires that it use a significant portion
of its cash flow to make debt service payments; impact of inability
to complete future or announced acquisitions or to integrate
businesses successfully, including, without limitation, Sky Betting
& Gaming and BetEasy; contractual relationships of The Stars
Group with FOX Corporation and Sky plc and/or their respective
subsidiaries; an ability to realize all or any of The Stars Group's
estimated synergies and cost savings in connection with
acquisitions, including, without limitation, the acquisition of Sky
Betting & Gaming and the Australian acquisitions; ability to
mitigate foreign exchange and currency risks; the heavily regulated
industry in which The Stars Group carries on its business; ability
to obtain, maintain and comply with all applicable and required
licenses, permits and certifications to offer, operate and market
its product offerings, including difficulties or delays in the
same; protection of proprietary technology and intellectual
property rights; intellectual property infringement or invalidity
claims; and systems, networks, telecommunications or service
disruptions or failures or cyber-attacks and failure to protect
customer data, including personal and financial information.
These factors are not intended to represent a complete list of the
factors that could affect The Stars Group; however, these factors
as well as other applicable risks and uncertainties include, but
are not limited to, those identified in its most recently filed
annual information form, including under the heading "Risk Factors
and Uncertainties", and in its most recently filed management's
discussion and analysis, including under the headings "Caution
Regarding Forward-Looking Statements", "Risk Factors and
Uncertainties" and "Non-IFRS Measures, Key Metrics and Other Data",
each available on SEDAR at www.sedar.com, EDGAR at www.sec.gov and
The Stars Group's website at www.starsgroup.com, and in other
filings that The Stars Group has made and may make in the future
with applicable securities authorities in the future, should be
considered carefully. Investors are cautioned not to put undue
reliance on forward-looking statements or information. Any
forward-looking statement or information in this news release are
expressly qualified by this cautionary statement. Any
forward-looking statement or information speaks only as of the date
hereof, and The Stars Group undertakes no obligation to correct or
update any forward-looking statement, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
Non-IFRS Measures
This news release references non-IFRS financial measures. The
Stars Group believes these non-IFRS financial measures will provide
investors with useful supplemental information about the financial
and operational performance of its business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key metrics used by management in
operating its business, identifying and evaluating trends, and
making decisions. The Stars Group believes that such non-IFRS
financial measures provide useful information about its underlying,
core operating results and trends, enhance the overall
understanding of its past performance and future prospects and
allow for greater transparency with respect to metrics and measures
used by management in its financial and operational
decision-making.
Although management believes these non-IFRS financial measures
are important in evaluating The Stars Group, they are not intended
to be considered in isolation or as a substitute for, or superior
to, financial information prepared and presented in accordance with
IFRS. They are not recognized measures under IFRS and do not have
standardized meanings prescribed by IFRS. These measures may be
different from non-IFRS financial measures used by other companies
any may not be comparable to similar meanings prescribed by other
companies, limiting its usefulness for comparison purposes.
Moreover, presentation of certain of these measures is provided for
period over-period comparison purposes, and investors should be
cautioned that the effect of the adjustments thereto provided
herein have an actual effect on The Stars Group's operating
results. The Stars Group provides the following non-IFRS measures
in this news release:
Adjusted EBITDA means net earnings before financial expenses,
income tax expense (recovery), depreciation and amortization,
stock-based compensation, restructuring, net earnings (loss) on
associate and certain other items as set out in the reconciliation
tables under "Reconciliation of Non-IFRS Measures to Nearest IFRS
Measures" above.
Adjusted EBITDA Margin means Adjusted EBITDA as a proportion of
total revenue.
Adjusted Net Earnings means net earnings before interest
accretion, amortization of intangible assets resulting from
purchase price allocations following acquisitions, stock-based
compensation, restructuring, net earnings (loss) on associate, and
certain other items. In addition, The Stars Group makes adjustments
for (i) the re-measurement of contingent consideration, (ii) the
re-measurement of embedded derivatives and ineffectiveness on cash
flow hedges, and (iii) certain non-recurring tax adjustments and
settlements. Each adjustment to net earnings is then adjusted for
the tax impact, where applicable, in the respective jurisdiction to
which the adjustment relates.
Adjusted Diluted Net Earnings per Share means Adjusted Net
Earnings attributable to the Shareholders of The Stars Group Inc.
divided by Diluted Shares. Diluted Shares means the weighted
average number of Common Shares on a fully diluted basis, including
options, other equity-based awards such as warrants and any
convertible preferred shares of The Stars Group then
outstanding. The effects of anti-dilutive potential common
shares are ignored in calculating Diluted Shares. Diluted Shares
used in the calculation of diluted earnings (loss) per share may
differ from diluted shares used in the calculation of Adjusted
Diluted Net Earnings per Share where the dilutive effects of the
potential common shares differ. For the quarter ended March 31, 2020, Diluted Shares used for the
calculation of Adjusted Diluted Net Earnings per Share equaled
approximately 292 million compared to approximately 274 million for
the same period in 2019.
Constant Currency Revenue means IFRS reported revenue for the
relevant period calculated using the applicable prior year period's
monthly average exchange rates for its local currencies other than
the U.S. dollar.
Key Metrics and Other Data
The Stars Group provides the following key metrics in this news
release:
Stakes means betting amounts wagered on The Stars Group's
applicable online betting product offerings, and is also an
industry term that represents the aggregate amount of funds wagered
by customers within the betting line of operation for the period
specified.
Betting Net Win Margin means Betting revenue as a proportion of
Stakes.
For additional information on The Stars Group's key metrics and
other data, see the 2019 Annual MD&A, including under the
headings "Non-IFRS Measures, Key Metrics and Other Data" and
"Segment Results of Operations".
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SOURCE The Stars Group Inc.