- Revenue increased 72% to $71.3
million from $41.5 million in
prior year
- Virtual Sports Revenue increased 71% year-over-year to a
record quarterly level - $14.0
million
- Net Income increased to $7.5
million, or $0.26 per diluted
share, from a Net Loss of $43.8
million in prior year
- Adjusted EBITDA1 increased 227% to
$26.1 million from $8.0 million in prior year
- Secured long-term strategic partnership with William Hill for UK gaming estate
- Since announcing its share repurchase program, Inspired
has repurchased 734,349 shares of common stock for $7.1 million (average price of $9.73 per share) as of August 9, 2022
NEW
YORK, Aug. 9, 2022 /PRNewswire/ -- Inspired
Entertainment, Inc. ("Inspired" or the "Company") (NASDAQ: INSE), a
leading B2B provider of gaming content, technology, hardware and
services, today reported unaudited financial results for the
three-month period ended June 30,
2022.
- Total Revenue increased 72% year-over-year for the three
months ended June 30, 2022 on a
reported basis2 and 91% in functional currency. The
results reflect a continuation of the trends seen in the last
quarter, including growth in the Company's aggregate online
business, which includes the Virtual Sports and Interactive
segments, and ongoing strength in the Gaming and Leisure
segments.
- Virtual Sports Revenue increased 71% year-over-year to a
record $14.0 million on a reported
basis (90% in functional currency), with Online Virtual Sports
Revenue increasing 99% year-over-year in functional currency.
Subsequent to the end of the quarter, DC Lottery became the second
North American lottery to launch Inspired's Virtual Sports, both in
retail and online.
- Interactive Revenue was flat year-over-year on a
reported basis (increased 12% in functional currency), with growth
in business volumes primarily driven by North America and Greece. Results in the UK were impacted by
many of our UK operator customers enhancing protections for players
in advance of the proposed UK Gambling Act review. During the
quarter, we went live with seven operators in Ontario and Rush
Street in Pennsylvania with
several additional customer launches in these new jurisdictions
expected throughout the remainder of 2022. Early indications from
these new markets (Adjusted EBITDA grew 15% in June versus prior
year in functional currency) suggest future growth opportunities
driven by geographic expansion of iGaming into new North American
markets as well as enhancements to our technology, content and
product offerings.
- Gaming Revenue increased 57% on a reported basis (75% in
functional currency) and Leisure Revenue increased 130%
year-over-year on a reported basis (157% in functional currency),
as recurring revenues returned to pre-COVID-19 performance levels
and Leisure benefited from a strong local holiday business.
Strength in the Gaming and Leisure businesses continues as major UK
contracts/extensions were signed with William Hill, Greene King and Mitchells & Butlers.
- Net Income improved to $7.5
million, or $0.28 per basic
share and $0.26 per diluted share,
from a net loss of $43.8 million, or
$(1.94) per basic and diluted share,
in the prior-year period.
- Adjusted EBITDA increased 227% year-over-year on a
reported basis (262% in functional currency). Adjusted EBITDA
Margin1 improved to 37% in second quarter
2022 compared to 19% in second quarter 2021.
________________________________
1
|
"Adjusted EBITDA" and
"Adjusted EBITDA Margin" are non-GAAP financial measures defined
below under "Non-GAAP Financial Measures" and reconciled to the
most directly comparable GAAP measures in the accompanying
supplemental table. Adjusted EBITDA Margin is calculated as a
percent of Revenue.
|
2
|
Reported income
statement results assume GBP:USD exchange rate was GBP 1.26: USD
1.00 for the three months ended June 30, 2022 and GBP 1.40: USD
1.00 for the three months ended June 30, 2021.
|
"This quarter's underlying performance is a testament to the
resiliency of our diversified business model as well as what we
perceive to be the continued strength in consumer spending across
our segments – notwithstanding ongoing macro trends," said
Lorne Weil, Executive Chairman of
Inspired. "Virtual Sports was, once again, the standout in the
quarter, producing its fourth record-setting Revenue and Adjusted
EBITDA quarter in a row, with online Virtual Sports doubling
year-over-year versus strong comparatives, speaking to our strong
product development and increased market penetration. Interactive
revenue increased year-over-year on a functional currency basis as
we increased our footprint through numerous integrations. In
our land-based business, we're delighted to see that customer gross
win per unit in betting shops and holiday parks was ahead of
pre-COVID levels as consumers continue to frequent betting shops
and pubs and are staying local for holidays."
Weil continued, "We are very excited about the current trends in
our business and what's to come, including our recent Interactive
launches in Ontario and
particularly in Pennsylvania,
where we are witnessing strong results with only one customer live
and we have several additional customer launches to follow in the
year, and the launch of Virtual Sports with the DC Lottery, our
second North American lottery. We have also successfully negotiated
a long-term strategic partnership/extension with William Hill on the Gaming front and signed key
contract extensions with customers in the UK pub industry,
including Greene King and
Mitchells & Butlers. In addition, we have an exciting pipeline
of new products and further enhancements to our existing Virtuals
products. We are making Virtuals history with the first ever
women-led virtual soccer product and we have signed baseball legend
Mickey Mantle, in addition to our
previously announced signing of Babe Ruth, for our Home Run
ShootOut™ game, which is expected to launch in early
2023."
"The long-term fundamentals and health of the business are the
strongest they have been in my tenure. The growth dynamics of our
markets remain compelling as a wider audience engages with online
betting and gaming and new jurisdictions open up, creating further
opportunities. With the return of our retail customer base, we
remain confident that our diversification and proven ability to
grow our business will enable us to deliver further progress
against our strategy," Weil concluded.
Summary of Second
Quarter 2022 Segment Financial Results (unaudited)
|
|
|
Three Months
Ended
June
30,
|
|
Reported
Variance
|
|
Currency
Movement
20222
|
|
Functional
Currency
Variance2
|
(In $
millions)
|
|
2022
|
|
2021
|
|
%
|
|
$
|
|
%
|
Total
Revenue
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
$25.5
|
|
$
16.2
|
|
57 %
|
|
$(2.9)
|
|
75 %
|
Virtual Sports
|
|
14.0
|
|
8.2
|
|
71 %
|
|
(1.5)
|
|
90 %
|
Interactive
|
|
5.8
|
|
5.8
|
|
--
|
|
(0.7)
|
|
12 %
|
Leisure
|
|
26.0
|
|
11.3
|
|
130 %
|
|
(3.0)
|
|
157 %
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
Revenue
|
|
$71.3
|
|
$
41.5
|
|
72 %
|
|
$(8.1)
|
|
91 %
|
Net operating income
(loss)
|
|
13.4
|
|
(9.7)
|
|
NM3
|
|
(1.6)
|
|
NM3
|
Net income
(loss)
|
|
7.5
|
|
(43.8)
|
|
NM3
|
|
(0.9)
|
|
NM3
|
Net income (loss)
per basic share
|
|
$0.28
|
|
$(1.94)
|
|
NM3
|
|
NM3
|
|
NM3
|
Net income (loss)
per diluted share
|
|
$0.26
|
|
$(1.94)
|
|
NM3
|
|
NM3
|
|
NM3
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA1
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
$ 9.5
|
|
$3.5
|
|
168 %
|
|
$(1.1)
|
|
195 %
|
Virtual Sports
|
|
12.0
|
|
6.4
|
|
88 %
|
|
(1.3)
|
|
109 %
|
Interactive
|
|
3.1
|
|
3.6
|
|
(12 %)
|
|
(0.3)
|
|
--
|
Leisure
|
|
7.7
|
|
(0.2)
|
|
NM3
|
|
(0.9)
|
|
NM3
|
Corporate
|
|
(6.2)
|
|
(5.3)
|
|
(17 %)
|
|
0.7
|
|
(32 %)
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
Adjusted EBITDA1
|
|
$26.1
|
|
$8.0
|
|
227 %
|
|
$(2.9)
|
|
262 %
|
Adjusted EBITDA
Margin1
|
|
37 %
|
|
19 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
Reconciliation to US GAAP shown below
|
2 Currency
movement calculated by translating 2022 and 2021 performances at
2021 exchange rates
|
3 Percentage
change is not meaningful
|
Stewart Baker, Executive Vice
President and Chief Financial Officer, stated, "We are particularly
pleased with our second quarter results, given the prevailing
perception of headwinds from the macro-economic environment as well
as the impact from foreign exchange rates. Given our ongoing strong
performance in the face of these headwinds, the long-term outlook
of the Company and the strength of our balance sheet, we have
utilized our board-approved share buyback program to repurchase
nearly 750,000 shares of Inspired common stock, as of August 9th, at an average price of
$9.73 per share (before trading
expenses). Moving forward, we see continued pressure from FX rates,
however our underlying business has maintained the same trend. We
will continue to be disciplined in our approach to capital
deployment, while also focused on executing on our strategic plan
to deliver profitable growth, increase cash flows and maximize
shareholder value."
Recent Highlights (as of August 9,
2022)
Corporate
- Share Repurchase Program – Inspired purchased
485,848 shares of its common stock for $5.1
million in the second quarter and 248,501 shares for
$2.0 million in third quarter 2022
(through August 9, 2022). The timing
and amount of future repurchases will be subject to the discretion
of Inspired based on market conditions and other opportunities that
Inspired may have for the use or investment of its cash
balances.
- Moody's Upgrade – Subsequent to the end of the
quarter, Moody's Investors Services upgraded Inspired's corporate
rating to B2 with a positive outlook from a previous rating of B3
with a stable outlook.
Interactive
- New Jurisdictions – In second quarter 2022,
Inspired went live with seven operators in Ontario and Rush
Street in Pennsylvania.
Inspired expects to launch with additional customers in
Pennsylvania throughout the
remainder of 2022.
- New Customers – During the quarter, Interactive
content was launched with fifteen operator brands, including six
new customers, one of which was the Netherlands Lottery. Subsequent
to the end of the quarter, Interactive content was launched with
FanDuel in Ontario.
- New Content – Twelve new games were launched
during second quarter 2022 across the estate, including Big Wheel
Bonus™ and Catch of the Day™, as well as a number of operator and
brand specific titles. This was an increase from eight games
launched in first quarter 2022.
- iLottery – Loto Quebec launched Inspired's first iLottery
title, Pharaon Reaction™, in June
2022. The game was among the Top 5 Loto Quebec iLottery
games in the second quarter 2022.
Virtual Sports
- North American Deployments – In the second
quarter, we launched a new and improved Race2Riches®, a tailored
lottery variant of Inspired's V-Play Horses 2.0™ product, with DC
Lottery in approximately 120 retailers throughout DC and on DC
Lottery's website and mobile app, via Intralot's multi-streaming
platform as part of its current contract with the DC Lottery.
- Retail and Online Virtual Sports Agreements –
During second quarter 2022, we extended our contract with Goldbet
covering the provision of Virtual Sports into both their retail and
online channels in Italy. We also
signed long-term extensions to our contracts with BetFred, covering
the provision of Virtual Sports into retail betting shops in the
UK, as well as Bet Victor and Niké (Slovakia) and additional territories were
added to our contract with Kaizen Gaming Betano.
- New Products – Inspired is making Virtual Sports
history with the first-ever, female-led virtual soccer product,
V-Play Women's Soccer, which was launched ahead of England winning the 2022 European Women's
Football Championship. Women's Virtual Soccer is exclusively
available from Inspired as the first and sole supplier of a women's
virtual sports event. Inspired also continues to add more
history-making players to its Home Run Shootout™ Virtual Sports
experience, signing Mickey Mantle in
the second quarter, in addition to the previously announced Babe
Ruth.
Gaming
- Long-term Strategic Partnership with William Hill – Inspired has successfully
negotiated a 12-month extension with William Hill in line with its existing managed
services agreement. In conjunction with this extension,
Inspired has signed a five-year exclusive contract, to commence
following the extension period and subject to a successful trial of
the Vantage® cabinet, to supply hardware, content and operational
services to William Hill's retail
gaming platform.
- 52 Valor® Sales in Illinois – The sale of 52 units in
Illinois brings total Valor
terminal sales in Illinois since
launch to 816. The Company has commitments for a higher number of
units in Illinois in third quarter
2022 than reported in second quarter 2022.
- New Content in UK LBO Estate – Inspired rolled
out new content across the UK LBO estate in second quarter 2022,
which has resulted in sequential growth in our customers' gross win
per unit per day from first quarter 2022 to second quarter
2022.
Leisure
- New Pubs Contracts – We successfully renewed our
contract with Greene King for a
further three years and increased our share of the estate.
Greene King is the country's
leading pub retailer and brewer, running over 2,700 pubs,
restaurants and hotels across England, Wales and Scotland. This new contract will utilize
Inspired's innovative server-based solution for the pub sector and
incorporate the new Vantage® cabinet, which is launching in early
2023. This intelligent operating system and digital cabinet
provides added functionality and remote access capabilities not
previously available to pub operators. We also signed a three-year
extension with Mitchells & Butlers, one of the largest
operators of restaurants, pubs and bars in the UK.
- Holiday Parks – During second quarter 2022, we
added five new parks to our holiday parks portfolio and benefited
from some parks opening early for the Easter and summer half-term
holidays.
- New Pubs Content – Space Invaders®, Cops 'N'
Robbers Bank Buster™ and Scorpion King™ were deployed across the
pub estate during second quarter 2022, demonstrating the commitment
to leverage Inspired's leading game portfolio for the pub
sector.
Overview of Second Quarter 2022 Results Versus Second Quarter
2021 on a Reported Basis
Total Revenue increased 72% year-over-year to
$71.3 million in the three months
ended June 30, 2022, compared to
$41.5 million in the prior-year
period, reflecting strength in the Gaming and Leisure segments
following customers' retail venues reopening after COVID-19
lockdowns and continued growth in the online business.
Gaming Service Revenue increased $6.8 million year-over-year due to Inspired's
retail recurring revenues exceeding pre-COVID-19 performance levels
in second quarter 2022 and the addition of the Company's newly
acquired lottery systems contract in the Dominican Republic ($1.3 million). The strong results are driven by
the removal of final COVID-19 restrictions across our geographies
in May 2022 and the introduction of
new content, which has resulted in growth. Gaming Product
Revenue increased by $2.5 million
driven by higher sales in the UK from the sale of Flex™ and Sabre
Hydra™. Gaming Segment Operating Income increased to
$4.8 million from a loss of
$2.7 million in the prior-year period
due to the increased revenue and decreased depreciation and
amortization from software being fully amortized, partly offset by
increased costs as all staff returned from furlough. Gaming
Adjusted EBITDA increased to $9.5
million from $3.5 million in
second quarter 2021.
Virtual Sports Revenue increased to a record
$14.0 million from $8.2 million in the prior-year period, primarily
due to Online Virtuals revenue doubling year-over-year, driven by
growth from existing customers, and an increase in Retail Virtuals
of $1.0 million, due to retail venues
being open for the whole of the period compared to the prior-year
period. Virtual Sports Segment Operating Income was
$11.1 million, which compares
favorably to $4.2 million in second
quarter 2021 primarily due to the increase in revenue.
Virtual Sports Adjusted EBITDA increased to
$12.0 million from $6.4 million in second quarter 2021.
Interactive Revenue of $5.8
million was flat year-over-year and grew 12% in functional
currency, driven by growth in North
America and Greece. Results
in the UK grew year-over-year but were impacted by many of our UK
operator customers enhancing protections for players in advance of
the proposed UK Gambling Act review. During the quarter, we
went live with seven operators in Ontario and Rush
Street in Pennsylvania with
several additional customer launches expected throughout the
remainder of 2022. Interactive Segment Operating Income was
$2.2 million, a 13% decrease
year-over-year primarily due to the increase in cost of sales and
third-party platform provider costs as well as an increase in
SG&A expenses driven by the investment in the segment to help
drive revenues and staff returning from furlough.
Interactive Adjusted EBITDA was $3.1
million, a 12% year-over-year decrease on a reported basis
but flat in functional currency, from a record $3.6 million in the prior-year period.
Leisure Revenue increased to $26.0 million from
$11.3 million in the prior-year
period when our customers' retail venues were closed for part of
the quarter and then ramping back up. Revenue from pubs,
holiday parks and motorway services was higher as a result of
increased travel within the UK, which we believe resulted in (i) a
significant number of holiday park locations opening early for the
Easter and summer half-term holiday and (ii) increasing volume of
road transport, which lead to a strong second quarter for our MSA
segments. Revenue generated in second quarter 2022 from holiday
park customers was $11.3 million, MSA
customers was $3.8 million and pub
customers was $8.5 million.
Digitization of the pub estate has continued with further digital
machines placed in the quarter taking digital penetration to 81%.
Leisure Segment Operating Income improved to
$4.1 million, from a loss of
$4.4 million, due to the increased
revenue as venues reopened and restrictions were removed.
Leisure Adjusted EBITDA improved to $7.7 million from a loss of $0.2 million in second quarter 2021.
Total Company Selling, General and Administrative
expenses increased to $29.3
million from $25.1 million in
the prior-year period. This $4.2
million increase was driven by all staff returning from
furlough and return to full pay for the whole period ($6.4 million) and favorable currency movements
($3.5 million), partly offset by a
$1.2 million cost in the prior period
from the provision of additional taxes due, relating to historic
periods, which is excluded from Adjusted EBITDA.
Net Income during the quarter increased to
$7.5 million, compared to a net loss
of $43.8 million in the prior-year
period, primarily due to the increase in net operating income
($23.1 million), driven by higher
revenue and a decrease in depreciation ($2.1
million), the change in fair value of warrant liability in
the prior-year period ($10.5 million)
and a decrease in net interest expense ($16.1 million), driven by the refinancing and
write off of debt fees in the prior-year period.
Foreign Currency Exchange Rates impacted our results in
the quarter. Foreign currency exchange negatively impacted Total
Revenue by $8.1 million ($2.9 million in Gaming, $1.5 million in Virtual Sports, $0.7 million in Interactive and $3.0 million in Leisure). Net Operating
Income was negatively impacted by $1.6
million ($0.5 million in
Gaming, $1.2 million in Virtual
Sports, $0.4 million in Interactive
and $0.5 million in Leisure, offset
by $1.0 million in Corporate).
Adjusted EBITDA was negatively impacted by $2.9 million ($1.1
million in Gaming, $1.3
million in Virtual Sports, $0.3
million in Interactive and $0.9
million in Leisure, offset by $0.7
million in Corporate).
Total Company Net Cash Provided by Operating Activities Less
Capital Expenditures during the quarter was an outflow of
$0.3 million due to a six-monthly
interest payment of $11.5 million and
$5.1 million of share repurchases in
the second quarter. This was an improvement from an outflow of
$18.2 million in the prior-year
period driven by events surrounding COVID-19-related closures and
interest expense timing associated with refinancing.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, including EBITDA and
Adjusted EBITDA, to analyze our operating performance. We use these
financial measures to manage our business on a day-to-day basis. We
believe that these measures are also commonly used in our industry
to measure performance. For these reasons, we believe that these
non-GAAP financial measures provide expanded insight into our
business, in addition to standard U.S. GAAP financial measures.
There are no specific rules or regulations for defining and using
non-GAAP financial measures, and as a result the measures we use
may not be comparable to measures used by other companies, even if
they have similar labels. The presentation of non-GAAP financial
information should not be considered in isolation from, or as a
substitute for, or superior to, financial information prepared and
presented in accordance with U.S. GAAP. You should consider our
non-GAAP financial measures in conjunction with our U.S. GAAP
financial measures.
We define our non-GAAP financial measures as follows:
EBITDA is defined as net loss excluding
depreciation and amortization, interest expense, interest income
and income tax expense.
Adjusted EBITDA is defined as net loss
excluding depreciation and amortization, interest expense, interest
income and income tax expense, and other additional exclusions and
adjustments. Such additional excluded amounts include
stock-based compensation U.S. GAAP charges where the associated
liability is expected to be settled in stock, and changes in the
value of earnout liabilities and income and expenditure in relation
to legacy portions of the business (being those portions where
trading no longer occurs) including closed defined benefit pension
schemes. Additional adjustments are made for items considered
outside the normal course of business, including (1) restructuring
costs, which include charges attributable to employee severance,
management changes, restructuring, dual running costs, costs
related to facility closures and integration costs, (2) merger and
acquisition costs and (3) gains or losses not in the ordinary
course of business. This does not include any adjustments related
to COVID-19.
We believe Adjusted EBITDA, when considered along with other
performance measures, is a particularly useful performance measure,
because it focuses on certain operating drivers of the business,
including sales growth, operating costs, selling and administrative
expense and other operating income and expense. We believe Adjusted
EBITDA can provide a more complete understanding of our operating
results and the trends to which we are subject, and an enhanced
overall understanding of our financial performance and prospects
for the future. Adjusted EBITDA is not intended to be a measure of
liquidity or cash flows from operations or a measure comparable to
net income or loss, because it does not take into account certain
aspects of our operating performance (for example, it excludes
non-recurring gains and losses which are not deemed to be a normal
part of underlying business activities). Our use of Adjusted
EBITDA may not be comparable to the use by other companies of
similarly termed measures. Management compensates for these
limitations by using Adjusted EBITDA as only one of several
measures for evaluating our operating performance. In addition,
capital expenditures, which affect depreciation and amortization,
interest expense, and income tax benefit (expense), are evaluated
separately by management.
Functional Currency at Constant rate. Currency
impacts shown have been calculated as the current-period average
GBP:USD rate less the equivalent average rate in the prior period,
multiplied by the current period amount in our functional currency
(GBP). The remaining difference, referred to as functional currency
at constant rate, is calculated as the difference in our functional
currency, multiplied by the prior-period average GBP:USD rate, as a
proxy for functional currency at constant rate movement.
Currency Movement represents the difference
between the results in our reporting currency (USD) and the results
on a functional currency at constant rate basis.
Reconciliations from net loss, as shown in our Consolidated
Statements of Operations and Comprehensive Loss, to Adjusted EBITDA
are shown below.
Conference Call and Webcast
Inspired management will host a conference call and simultaneous
webcast at 9:30 a.m. ET /2:30 p.m. UK on Wednesday,
August 10, 2022 to discuss the Company's financial results
and general business trends.
Telephone: The dial-in number to access
the call live is 1-888-550-5864 (US) or
1-646-960-0275 (International). Participants should ask to be
joined into the Inspired Entertainment call.
Webcast: A live audio-only webcast of the
call can be accessed through the "Events and Presentations" page of
the Company's website at www.inseinc.com under the Investors
link. Please follow the registration prompts.
Replay: A replay of the webcast will be
available on the Company's website at www.inseinc.com.
About Inspired Entertainment, Inc.
Inspired offers an expanding portfolio of content, technology,
hardware and services for regulated gaming, betting, lottery,
social and leisure operators across retail and mobile
channels around the world. The Company's gaming, virtual
sports, interactive and leisure products appeal to a wide variety
of players, creating new opportunities for operators to grow their
revenue. The Company operates in approximately 35
jurisdictions worldwide, supplying gaming systems with
associated terminals and content for approximately 50,000 gaming
machines located in betting shops, pubs, gaming halls and other
route operations; virtual sports products through more than 32,000
retail venues and various online websites; interactive games for
170+ websites; and a variety of amusement entertainment solutions
with a total installed base of more than 16,000
terminals. Additional information can be found
at www.inseinc.com.
Forward-Looking Statements
This news release contains "forward-looking statements" within
the meaning of the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995, including, but not
limited to, statements regarding our ability to bring certain of
our products to customers in the various markets in which we
operate and execute on our strategic plan, statements regarding
expectations with respect to potential new customers and statements
regarding our anticipated financial performance. Forward-looking
statements may be identified by the use of words such as
"anticipate," "believe," "continue," "expect," "estimate," "plan,"
"will," "would" and "project" and other similar expressions that
indicate future events or trends or are not statements of
historical matters. These statements are based on Inspired
management's current expectations and beliefs, as well as a number
of assumptions concerning future events.
Forward-looking statements are subject to known and unknown
risks, uncertainties, assumptions and other important factors, many
of which are outside of Inspired's control and all of which could
cause actual results to differ materially from the results
discussed in the forward-looking statements. Accordingly,
forward-looking statements should not be relied upon as
representing Inspired's views as of any subsequent date. You are
advised to review carefully the "Risk Factors" section of
Inspired's annual report on Form 10-K for the fiscal year ended
December 31, 2021, and subsequent
quarterly reports on Form 10-Q, which are available, free of
charge, on the U.S. Securities and Exchange Commission's website at
www.sec.gov. Inspired does not undertake any obligation to
update forward-looking statements to reflect events or
circumstances after the date they were made, whether as a result of
new information, future events or otherwise, except as required by
law.
Contact:
For Investors
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+1 646 565-6938
For Press and Sales
inspiredsales@inseinc.com
INSPIRED
ENTERTAINMENT, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) (in millions, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
|
Six Months
Ended
June
30,
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
|
$
|
64.8
|
|
|
$
|
37.5
|
|
|
$
|
121.8
|
|
|
$
|
54.6
|
Product
sales
|
|
|
6.5
|
|
|
|
4.0
|
|
|
|
10.1
|
|
|
|
9.7
|
Total
revenue
|
|
|
71.3
|
|
|
|
41.5
|
|
|
|
131.9
|
|
|
|
64.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales,
excluding depreciation and
amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
service
|
|
|
(11.7)
|
|
|
|
(8.0)
|
|
|
|
(23.5)
|
|
|
|
(10.1)
|
Cost of product
sales
|
|
|
(4.4)
|
|
|
|
(2.7)
|
|
|
|
(6.5)
|
|
|
|
(5.9)
|
Selling, general and
administrative expenses
|
|
|
(31.9)
|
|
|
|
(28.5)
|
|
|
|
(61.5)
|
|
|
|
(43.7)
|
Acquisition and
integration related transaction
expenses
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
(0.2)
|
|
|
|
(1.5)
|
Depreciation and
amortization
|
|
|
(9.8)
|
|
|
|
(11.9)
|
|
|
|
(19.9)
|
|
|
|
(25.0)
|
Net operating income
(loss)
|
|
|
13.4
|
|
|
|
(9.7)
|
|
|
|
20.3
|
|
|
|
(21.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(6.0)
|
|
|
|
(22.1)
|
|
|
|
(12.5)
|
|
|
|
(30.7)
|
Change in fair value of
warrant liability
|
|
|
—
|
|
|
|
(10.5)
|
|
|
|
—
|
|
|
|
(13.5)
|
Gain on disposal of
business
|
|
|
—
|
|
|
|
—
|
|
|
|
0.9
|
|
|
|
—
|
Other finance income
(expense)
|
|
|
0.3
|
|
|
|
(1.2)
|
|
|
|
0.6
|
|
|
|
5.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense,
net
|
|
|
(5.7)
|
|
|
|
(33.8)
|
|
|
|
(11.0)
|
|
|
|
(39.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
before income taxes
|
|
|
7.7
|
|
|
|
(43.5)
|
|
|
|
9.3
|
|
|
|
(60.9)
|
Income tax (expense)
benefit
|
|
|
(0.2)
|
|
|
|
(0.3)
|
|
|
|
(0.3)
|
|
|
|
0.4
|
Net income
(loss)
|
|
|
7.5
|
|
|
|
(43.8)
|
|
|
|
9.0
|
|
|
|
(60.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation gain (loss)
|
|
|
5.8
|
|
|
|
0.1
|
|
|
|
8.2
|
|
|
|
(1.0)
|
Change in fair value of
hedging instrument
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
0.3
|
Reclassification of
loss on hedging instrument to
comprehensive income
|
|
|
0.2
|
|
|
|
0.5
|
|
|
|
0.4
|
|
|
|
1.0
|
Actuarial gains on
pension plan
|
|
|
2.6
|
|
|
|
0.9
|
|
|
|
3.3
|
|
|
|
5.5
|
Other comprehensive
income
|
|
|
8.6
|
|
|
|
1.2
|
|
|
|
11.9
|
|
|
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss)
|
|
$
|
16.1
|
|
|
$
|
(42.6)
|
|
|
$
|
20.9
|
|
|
$
|
(54.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share – basic
|
|
$
|
0.28
|
|
|
$
|
(1.94)
|
|
|
$
|
0.34
|
|
|
$
|
(2.68)
|
Net income (loss)
per common share - diluted
|
|
$
|
0.26
|
|
|
$
|
(1.94)
|
|
|
$
|
0.31
|
|
|
$
|
(2.68)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
during the period – basic
|
|
|
26,826,014
|
|
|
|
22,594,207
|
|
|
|
26,838,339
|
|
|
|
22,589,461
|
Weighted average
number of shares outstanding
during the period – diluted
|
|
|
29,262,690
|
|
|
|
22,594,207
|
|
|
|
29,375,570
|
|
|
|
22,589,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of stock-based
compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation included in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
$
|
(2.6)
|
|
|
$
|
(3.4)
|
|
|
$
|
(5.4)
|
|
|
$
|
(4.8)
|
INSPIRED
ENTERTAINMENT, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS (in millions, except share
data)
|
|
|
|
June
30,
2022
|
|
|
December
31,
2021
|
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Cash
|
|
$
|
31.8
|
|
|
$
|
47.8
|
Accounts receivable,
net
|
|
|
28.6
|
|
|
|
31.7
|
Inventory,
net
|
|
|
25.4
|
|
|
|
16.9
|
Prepaid expenses and
other current assets
|
|
|
25.6
|
|
|
|
29.7
|
Corporate tax and other
current taxes receivable
|
|
|
0.8
|
|
|
|
0.3
|
Total current
assets
|
|
|
112.2
|
|
|
|
126.4
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
45.2
|
|
|
|
50.9
|
Software development
costs, net
|
|
|
34.5
|
|
|
|
35.6
|
Other acquired
intangible assets subject to amortization, net
|
|
|
15.5
|
|
|
|
18.9
|
Goodwill
|
|
|
74.5
|
|
|
|
82.7
|
Operating lease right
of use asset
|
|
|
8.0
|
|
|
|
10.1
|
Other assets
|
|
|
10.4
|
|
|
|
7.1
|
Total
assets
|
|
$
|
300.3
|
|
|
$
|
331.7
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Deficit
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
18.8
|
|
|
$
|
20.8
|
Accrued
expenses
|
|
|
25.8
|
|
|
|
32.6
|
Corporate tax and other
current taxes payable
|
|
|
5.8
|
|
|
|
12.3
|
Deferred revenue,
current
|
|
|
6.6
|
|
|
|
7.7
|
Operating lease
liabilities
|
|
|
2.6
|
|
|
|
3.3
|
Other current
liabilities
|
|
|
2.8
|
|
|
|
3.9
|
Current portion of
finance lease liabilities
|
|
|
1.0
|
|
|
|
0.9
|
Total current
liabilities
|
|
|
63.4
|
|
|
|
81.5
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
279.2
|
|
|
|
309.0
|
Finance lease
liabilities, net of current portion
|
|
|
1.5
|
|
|
|
1.9
|
Deferred revenue, net
of current portion
|
|
|
4.9
|
|
|
|
6.8
|
Operating lease
liabilities
|
|
|
6.1
|
|
|
|
7.4
|
Other long-term
liabilities
|
|
|
2.3
|
|
|
|
3.1
|
Total
liabilities
|
|
|
357.4
|
|
|
|
409.7
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit
|
|
|
|
|
|
|
|
Preferred stock;
$0.0001 par value; 1,000,000 shares authorized
|
|
|
—
|
|
|
|
—
|
Common stock; $0.0001
par value; 49,000,000 shares authorized; 26,448,573 shares
and 26,433,562 shares issued and outstanding at June 30, 2022 and
December 31,
2021, respectively
|
|
|
—
|
|
|
|
—
|
Additional paid in
capital
|
|
|
377.4
|
|
|
|
372.3
|
Accumulated other
comprehensive income
|
|
|
55.7
|
|
|
|
43.8
|
Accumulated
deficit
|
|
|
(490.2)
|
|
|
|
(494.1)
|
Total stockholders'
deficit
|
|
|
(57.1)
|
|
|
|
(78.0)
|
Total liabilities
and stockholders' deficit
|
|
$
|
300.3
|
|
|
$
|
331.7
|
INSPIRED
ENTERTAINMENT, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)
(Unaudited)
|
|
|
|
Six Months
Ended
June
30,
|
|
|
2022
|
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
9.0
|
|
|
$
|
(60.5)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
19.9
|
|
|
|
25.0
|
Amortization of right
of use asset
|
|
|
1.4
|
|
|
|
1.2
|
Stock-based
compensation expense
|
|
|
5.4
|
|
|
|
4.8
|
Change in fair value of
warrant liability
|
|
|
—
|
|
|
|
13.5
|
Unrealized
transactional currency gain/loss on senior bank debt
|
|
|
—
|
|
|
|
(4.6)
|
Reclassification of
loss on hedging instrument to comprehensive income
|
|
|
0.4
|
|
|
|
1.0
|
Non-cash interest
expense relating to senior debt
|
|
|
0.8
|
|
|
|
16.3
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(0.1)
|
|
|
|
5.5
|
Inventory
|
|
|
(10.4)
|
|
|
|
3.5
|
Prepaid expenses and
other assets
|
|
|
2.3
|
|
|
|
(4.1)
|
Corporate tax and other
current taxes payable
|
|
|
(6.5)
|
|
|
|
(6.7)
|
Accounts
payable
|
|
|
0.7
|
|
|
|
3.9
|
Deferred revenues and
customer prepayment
|
|
|
(2.2)
|
|
|
|
(5.7)
|
Accrued
expenses
|
|
|
(2.2)
|
|
|
|
(4.0)
|
Operating lease
liabilities
|
|
|
(1.2)
|
|
|
|
(1.2)
|
Other long-term
liabilities
|
|
|
(1.4)
|
|
|
|
(0.7)
|
Net cash provided by
(used in) operating activities
|
|
|
15.9
|
|
|
|
(12.8)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
(11.5)
|
|
|
|
(5.4)
|
Acquisition of
subsidiary company assets
|
|
|
(0.6)
|
|
|
|
—
|
Purchases of capital
software
|
|
|
(9.9)
|
|
|
|
(6.8)
|
Net cash used in
investing activities
|
|
|
(22.0)
|
|
|
|
(12.2)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from issuance
of long-term debt
|
|
|
—
|
|
|
|
333.1
|
Repurchase of common
stock
|
|
|
(5.1)
|
|
|
|
—
|
Repayments of long-term
debt
|
|
|
—
|
|
|
|
(320.7)
|
Cash paid in connection
with terminated interest rate swaps
|
|
|
—
|
|
|
|
(2.1)
|
Debt fees
incurred
|
|
|
—
|
|
|
|
(9.1)
|
Repayments of finance
leases
|
|
|
(0.3)
|
|
|
|
(0.2)
|
Net cash provided by
financing activities
|
|
|
(5.4)
|
|
|
|
1.0
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
|
|
(4.5)
|
|
|
|
1.4
|
Net decrease in
cash
|
|
|
(16.0)
|
|
|
|
(22.6)
|
Cash, beginning of
period
|
|
|
47.8
|
|
|
|
47.1
|
Cash, end of
period
|
|
$
|
31.8
|
|
|
$
|
24.5
|
|
|
|
|
|
|
|
|
Supplemental cash
flow disclosures
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
|
$
|
11.7
|
|
|
$
|
17.5
|
Cash paid during the
period for income taxes
|
|
$
|
0.1
|
|
|
$
|
0.1
|
Cash paid during the
period for operating leases
|
|
$
|
1.9
|
|
|
$
|
1.7
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash investing and financing
activities
|
|
|
|
|
|
|
|
Additional paid in
capital from settlement of RSUs
|
|
$
|
(0.2)
|
|
|
$
|
—
|
Property and equipment
acquired through finance lease
|
|
$
|
—
|
|
|
$
|
1.3
|
Property and equipment
transferred to inventory
|
|
$
|
0.8
|
|
|
$
|
—
|
INSPIRED
ENTERTAINMENT, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
(Unaudited)
|
|
|
|
|
For the
Three-Month
Period ended
|
|
For the
Six-Month
Period ended
|
|
|
|
Unaudited
|
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
Unaudited
|
|
|
|
June
30,
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
June
30,
|
(In
millions)
|
|
|
2022
|
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
Net income
(loss)
|
|
|
$
|
7.5
|
|
|
|
$
|
(43.8)
|
|
|
$
|
9.0
|
|
|
$
|
(60.5)
|
Items Relating to
Discontinued Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
charges
|
|
|
|
0.3
|
|
|
|
|
0.2
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items outside the
normal course of business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration related transaction expenses
|
|
|
|
0.1
|
|
|
|
|
0.1
|
|
|
|
0.2
|
|
|
|
1.5
|
Refinancing of Company
Debt
|
|
|
|
—
|
|
|
|
|
0.8
|
|
|
|
—
|
|
|
|
0.8
|
Italian tax related
costs relating to prior year
|
|
|
|
—
|
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
1.4
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
Stock-based
compensation expense
|
|
|
|
2.6
|
|
|
|
|
3.4
|
|
|
|
5.4
|
|
|
|
4.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
9.8
|
|
|
|
|
11.9
|
|
|
|
19.9
|
|
|
|
25.0
|
Interest expense,
net
|
|
|
|
6.0
|
|
|
|
|
22.1
|
|
|
|
12.5
|
|
|
|
30.7
|
Change in fair value of
warrant liability
Interest
|
|
|
|
—
|
|
|
|
|
10.5
|
|
|
|
—
|
|
|
|
13.5
|
Gain on disposal of
business
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
(0.9)
|
|
|
|
—
|
Other finance expenses
(income)
|
|
|
|
(0.3)
|
|
|
|
|
1.2
|
|
|
|
(0.6)
|
|
|
|
(5.2)
|
Income tax
|
|
|
|
0.2
|
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
(0.4)
|
Adjusted
EBITDA
|
|
|
$
|
26.1
|
|
|
|
$
|
8.0
|
|
|
$
|
46.2
|
|
|
$
|
11.9
|
Adjusted
EBITDA
|
|
|
£
|
20.7
|
|
|
|
£
|
5.7
|
|
|
£
|
35.7
|
|
|
£
|
8.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Rate - $ to
£
|
|
|
|
1.26
|
|
|
|
|
1.40
|
|
|
|
1.29
|
|
|
|
1.40
|
ADJUSTED EBITDA
RECONCILIATION BY SEGMENT
(Unaudited)
|
|
Three Months Ended June 30,
2022
|
|
|
|
Gaming
|
|
|
Virtual
Sports
|
|
|
Interactive
|
|
|
Leisure
|
|
|
Corporate
|
|
|
Total
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain
(loss)
|
|
$
|
4.8
|
|
|
$
|
11.1
|
|
|
$
|
2.2
|
|
|
$
|
4.1
|
|
|
$
|
(14.7)
|
|
|
$
|
7.5
|
|
Items Relating to Discontinued
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items outside the normal course of
business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and integration related transaction
expenses
|
|
|
0.1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
|
0.3
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
1.8
|
|
|
|
2.6
|
|
Depreciation and
amortization
|
|
|
4.3
|
|
|
|
0.7
|
|
|
|
0.7
|
|
|
|
3.5
|
|
|
|
0.6
|
|
|
|
9.8
|
|
Interest expense,
net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
6.0
|
|
|
|
6.0
|
|
Other finance expenses
(income)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
(0.3)
|
|
Income tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
Adjusted EBITDA
|
|
$
|
9.5
|
|
|
$
|
12.0
|
|
|
$
|
3.1
|
|
|
$
|
7.7
|
|
|
$
|
(6.2)
|
|
|
$
|
26.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
£
|
7.5
|
|
|
£
|
9.5
|
|
|
£
|
2.5
|
|
|
£
|
6.2
|
|
|
£
|
(5.0)
|
|
|
£
|
20.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate - $ to £
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.26
|
|
Three Months Ended June 30,
2021
|
|
|
|
Gaming
|
|
|
Virtual
Sports
|
|
|
Interactive
|
|
|
Leisure
|
|
|
Corporate
|
|
|
Total
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain
(loss)
|
|
$
|
(2.7)
|
|
|
$
|
4.2
|
|
|
$
|
2.6
|
|
|
$
|
(4.4)
|
|
|
$
|
(43.5)
|
|
|
$
|
(43.8)
|
|
Items Relating to Discontinued
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items outside the normal course of
business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and integration related transaction
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.1
|
|
Refinancing of Company
Debt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.8
|
|
|
|
0.8
|
|
Italian tax related costs
relating to prior years
|
|
|
—
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
|
0.4
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
2.7
|
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
5.8
|
|
|
|
0.7
|
|
|
|
0.9
|
|
|
|
4.1
|
|
|
|
0.4
|
|
|
|
11.9
|
|
Interest expense,
net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
22.1
|
|
|
|
22.1
|
|
Change in fair value of
warrant liability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10.5
|
|
|
|
10.5
|
|
Other finance expenses
(income)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.2
|
|
|
|
1.2
|
|
Income tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
0.3
|
|
Adjusted EBITDA
|
|
$
|
3.5
|
|
|
$
|
6.4
|
|
|
$
|
3.6
|
|
|
$
|
(0.2)
|
|
|
$
|
(5.3)
|
|
|
$
|
8.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
£
|
2.5
|
|
|
£
|
4.5
|
|
|
£
|
2.5
|
|
|
£
|
(0.1)
|
|
|
£
|
(3.8)
|
|
|
£
|
5.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate - $ to £
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.40
|
|
Six Months Ended
June 30, 2022
|
|
|
|
Gaming
|
|
|
Virtual
Sports
|
|
|
Interactive
|
|
|
Leisure
|
|
|
|
Corporate
|
|
|
Total
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
11.5
|
|
|
$
|
19.8
|
|
|
$
|
4.3
|
|
|
$
|
2.7
|
|
|
$
|
(29.3)
|
|
|
$
|
9.0
|
|
Items Relating to Discontinued
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items outside the normal course of
business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and integration related transaction
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
|
0.6
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
0.3
|
|
|
|
3.9
|
|
|
|
5.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
8.9
|
|
|
|
1.3
|
|
|
|
1.4
|
|
|
|
7.2
|
|
|
|
1.1
|
|
|
|
19.9
|
|
Interest expense,
net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12.5
|
|
|
|
12.5
|
|
Profit on disposal of
trade & assets
|
|
|
(0.9)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.9)
|
|
Other finance expenses
(income)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.6)
|
|
|
|
(0.6)
|
|
Income tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.3
|
|
|
|
0.3
|
|
Adjusted EBITDA
|
|
$
|
20.1
|
|
|
$
|
21.4
|
|
|
$
|
6.0
|
|
|
$
|
10.2
|
|
|
$
|
(11.5)
|
|
|
$
|
46.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
£
|
15.6
|
|
|
£
|
16.6
|
|
|
£
|
4.6
|
|
|
£
|
8.0
|
|
|
£
|
(9.0)
|
|
|
£
|
35.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate - $ to £
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.29
|
|
Six Months Ended
June 30, 2021
|
|
|
|
Gaming
|
|
|
Virtual
Sports
|
|
|
Interactive
|
|
|
Leisure
|
|
|
|
Corporate
|
|
|
Total
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(6.3)
|
|
|
$
|
7.9
|
|
|
$
|
5.2
|
|
|
$
|
(12.1)
|
|
|
$
|
(55.2)
|
|
|
$
|
(60.5)
|
|
Items Relating to Discontinued
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension charges
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.4
|
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items outside the normal course of
business:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and integration related transaction
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.5
|
|
|
|
1.5
|
|
Refinance of Company Debt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.8
|
|
|
|
0.8
|
|
Italian tax related costs relating to prior years
|
|
|
—
|
|
|
|
1.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
|
0.6
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
0.2
|
|
|
|
3.6
|
|
|
|
4.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
12.4
|
|
|
|
1.8
|
|
|
|
1.6
|
|
|
|
8.3
|
|
|
|
0.9
|
|
|
|
25.0
|
|
Interest expense,
net
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
30.7
|
|
|
|
30.7
|
|
Changes in fair value
of warrant liability
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13.5
|
|
|
|
13.5
|
|
Other finance expenses
(income)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5.2)
|
|
|
|
(5.2)
|
|
Income tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.4)
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
6.7
|
|
|
$
|
11.3
|
|
|
$
|
7.0
|
|
|
$
|
(3.6)
|
|
|
$
|
(9.5)
|
|
|
$
|
11.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
£
|
4.8
|
|
|
£
|
8.1
|
|
|
£
|
5.0
|
|
|
£
|
(2.6)
|
|
|
£
|
(6.9)
|
|
|
£
|
8.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange rate - $ to £
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.40
|
|
INSPIRED
ENTERTAINMENT, INC. SEGMENT PERFORMANCE
(Unaudited)
|
|
Three Months Ended
June 30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
Virtual
Sports
|
|
|
Interactive
|
|
|
Leisure
|
|
|
Corporate
Functions
|
|
|
Total
|
|
|
(in
millions)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
|
$
|
19.6
|
|
|
$
|
14.0
|
|
|
$
|
5.8
|
|
|
$
|
25.4
|
|
|
$
|
—
|
|
|
$
|
64.8
|
Product
sales
|
|
|
5.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
—
|
|
|
|
6.5
|
Total
revenue
|
|
|
25.5
|
|
|
|
14.0
|
|
|
|
5.8
|
|
|
|
26.0
|
|
|
|
—
|
|
|
|
71.3
|
Cost of sales,
excluding depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
service
|
|
|
(4.4)
|
|
|
|
(0.6)
|
|
|
|
(0.8)
|
|
|
|
(5.9)
|
|
|
|
—
|
|
|
|
(11.7)
|
Cost of product
sales
|
|
|
(4.0)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.4)
|
|
|
|
—
|
|
|
|
(4.4)
|
Selling, general and
administrative expenses
|
|
|
(7.7)
|
|
|
|
(1.4)
|
|
|
|
(1.9)
|
|
|
|
(12.0)
|
|
|
|
(6.3)
|
|
|
|
(29.3)
|
Stock-based
compensation expense
|
|
|
(0.3)
|
|
|
|
(0.2)
|
|
|
|
(0.2)
|
|
|
|
(0.1)
|
|
|
|
(1.8)
|
|
|
|
(2.6)
|
Acquisition and
integration related transaction expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
Depreciation and
amortization
|
|
|
(4.3)
|
|
|
|
(0.7)
|
|
|
|
(0.7)
|
|
|
|
(3.5)
|
|
|
|
(0.6)
|
|
|
|
(9.8)
|
Segment operating
income (loss)
|
|
|
4.8
|
|
|
|
11.1
|
|
|
|
2.2
|
|
|
|
4.1
|
|
|
|
(8.8)
|
|
|
|
13.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
13.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital
expenditures for the three months
ended June 30, 2022
|
|
$
|
5.8
|
|
|
$
|
1.3
|
|
|
$
|
1.3
|
|
|
$
|
2.0
|
|
|
$
|
0.7
|
|
|
$
|
11.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
|
|
|
Virtual
Sports
|
|
|
Interactive
|
|
|
Leisure
|
|
|
Corporate
Functions
|
|
|
Total
|
|
|
(in
millions)
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service
|
|
$
|
12.8
|
|
|
$
|
8.2
|
|
|
$
|
5.8
|
|
|
$
|
10.7
|
|
|
$
|
—
|
|
|
$
|
37.5
|
Product
sales
|
|
|
3.4
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.6
|
|
|
|
—
|
|
|
|
4.0
|
Total
revenue
|
|
|
16.2
|
|
|
|
8.2
|
|
|
|
5.8
|
|
|
|
11.3
|
|
|
|
—
|
|
|
|
41.5
|
Cost of sales,
excluding depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
service
|
|
|
(3.6)
|
|
|
|
(0.5)
|
|
|
|
(0.9)
|
|
|
|
(3.0)
|
|
|
|
—
|
|
|
|
(8.0)
|
Cost of product
sales
|
|
|
(2.4)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.3)
|
|
|
|
—
|
|
|
|
(2.7)
|
Selling, general and
administrative expenses
|
|
|
(6.7)
|
|
|
|
(2.7)
|
|
|
|
(1.3)
|
|
|
|
(8.2)
|
|
|
|
(6.2)
|
|
|
|
(25.1)
|
Stock-based
compensation expense
|
|
|
(0.4)
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
|
|
|
(2.7)
|
|
|
|
(3.4)
|
Acquisition and
integration related transaction expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.1)
|
|
|
|
(0.1)
|
Depreciation and
amortization
|
|
|
(5.8)
|
|
|
|
(0.7)
|
|
|
|
(0.9)
|
|
|
|
(4.1)
|
|
|
|
(0.4)
|
|
|
|
(11.9)
|
Segment operating
income (loss)
|
|
|
(2.7)
|
|
|
|
4.2
|
|
|
|
2.6
|
|
|
|
(4.4)
|
|
|
|
(9.4)
|
|
|
|
(9.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating
loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(9.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital
expenditures for the three months
ended June 30, 2021
|
|
$
|
3.0
|
|
|
$
|
1.1
|
|
|
$
|
0.9
|
|
|
$
|
1.7
|
|
|
$
|
0.6
|
|
|
$
|
7.3
|
Scheduled Online
Virtual Sports and Interactive Total Revenue
|
|
|
|
Three Months
Ended
|
|
|
|
Six Months
Ended
|
|
|
|
|
June
30
|
|
Change
|
|
June
30
|
|
Change
|
(in millions of
GBP)
|
|
|
2022
|
|
|
2021
|
|
%
|
|
|
2022
|
|
|
2021
|
|
%
|
Online
Revenue
|
|
|
|
|
|
|
Total Revenue £'m -
Online Virtuals
|
|
£
|
8.7
|
|
£
|
4.3
|
|
99 %
|
|
£
|
15.0
|
|
£
|
8.3
|
|
84 %
|
Total Revenue £'m –
Interactive
|
|
|
4.6
|
|
|
4.2
|
|
12 %
|
|
|
8.6
|
|
|
7.9
|
|
8 %
|
Total Revenue £'m –
Online Virtuals
and Interactive
|
|
£
|
13.3
|
|
£
|
8.5
|
|
57 %
|
|
£
|
23.5
|
|
£
|
16.2
|
|
47 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in millions of
USD
|
|
$
|
16.7
|
|
$
|
11.9
|
|
41 %
|
|
$
|
30.4
|
|
$
|
22.6
|
|
35 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange Rate - $ to
£
|
|
|
1.25
|
|
|
1.40
|
|
|
|
|
1.29
|
|
|
1.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/inspired-reports-second-quarter-2022-results-301602929.html
SOURCE Inspired Entertainment, Inc.