- Total revenue for the quarter was $4.8 million, an increase of 12% over the prior year.
- Gross margin for the quarter increased to 59%, compared to 50% in the prior year.
Vancouver, British Columbia--(Newsfile Corp. - November 14, 2023) - FansUnite Entertainment Inc. (TSX: FANS) (OTCQB: FUNFF) ("FansUnite" or the "Company") announced that it has filed its condensed consolidated interim financial statements and associated management's discussion and analysis ("MD&A") for the three and nine month periods ended September 30, 2023. All amounts are stated in Canadian dollars unless otherwise indicated.
Q3 Fiscal 2023 Earnings Call Details
Day: Wednesday, November 15, 2023
Time: 10:00 AM (EST) / 7:00 AM (PST)
Topic: FansUnite's Q3 Fiscal 2023 Financial Results
Registration: https://us02web.zoom.us/webinar/register/WN_o8e4zdIVRoa0gY2rkLrBEg
Third Quarter Fiscal 2023 Financial Highlights:
Total revenue for the three months ended September 30, 2023 was $4.8 million, an increase of 12% as compared to $4.3 million over the same period in the prior year.
Gross margin for the three months ended September 30, 2023 was 59%, an increase of 9% as compared to 50% over the same period in the prior year.
Gross profit for the three months ended September 30, 2023 was $2.8 million, an increase of 27% as compared to $2.2 million over the same period in the prior year.
Total Adjusted EBITDA for the three months ended September 30, 2023 was $0.2 million, an increase of $1.5 million as compared to ($1.3) million over the same period in the prior year.
The Company had net working capital of $1.5 million as of September 30, 2023, as compared to ($4.2) million as of December 31, 2022.
Nine Months Ended Fiscal 2023 Financial Highlights:
Total revenue for the nine months ended September 30, 2023 was $17.2 million, a decrease of approximately 2% as compared to $17.5 million over the same period in the prior year.
Gross margin for the nine months ended September 30, 2023 was 64%, an increase of approximately 10% as compared to 54% over the same period in the prior year.
Gross profit for the nine months ended September 30, 2023 was $10.9 million, an increase of approximately 16% as compared to $9.4 million over the same period in the prior year.
Total Adjusted EBITDA for the nine months ended September 30, 2023 was $1.1 million, an increase of $2.3 million as compared to ($1.2) million over the same period in the prior year.
Third Quarter Fiscal 2023 Operational Highlights:
On August 24, 2023, the Company announced that it reached an agreement with DragonBet, a Welsh-based UK sportsbook, to migrate off the Chameleon Gaming platform on September 3, 2023, as part of the Company's strategy to streamline its business operations. The migration of DragonBet, combined with the sale of the Company's Chameleon source code to Betr Holdings, Inc. on May 8, 2023, completed FansUnite's transition away from business-to-business ("B2B") platform licensing. As a result of this transition, the Company expects to achieve annualized cost savings of approximately $7.8 million, which includes reductions in salary and selling, general and administrative costs.
"We are pleased to achieve continued growth as highlighted by our financial performance in the third quarter of 2023," said Scott Burton, CEO of FansUnite. "With a focus on expanding our affiliate business, FansUnite reported substantial increases in our revenues and gross margins during Q3 of this year. These results reflect our strategy to focus on profitability while maximizing our cost efficiencies in all areas of our business."
Growth Outlook
The Company intends to continue expanding its affiliate operations across North America via Betting Hero by entering new betting jurisdictions as well as growing its additional revenue streams, which include Hero Research and Hero Hotline. Furthermore, FansUnite will continue evaluating new opportunities to achieve cost efficiencies across all business units without disrupting its revenue growth.
About FansUnite Entertainment Inc.
FansUnite is a global sports entertainment and gaming company, focused on the regulated and lawful sports betting affiliate market which includes customer acquisition, retention, support and reactivation. FansUnite has established itself as a leader in the North American affiliate market through its subsidiary American Affiliate Co LLC ("AmAff'' or "American Affiliate"). AmAff is a North American omni-channel customer acquisition company, covering both retail and digital customer activation for sportsbooks, casinos, poker and fantasy sports platforms.
For further information, please contact:
Prit Singh, Investor Relations at FansUnite
ir@fansunite.com
(905) 510-7636
DISCLAIMER REGARDING FINANCIAL INFORMATION:
This news release contains unaudited financial information for the three and nine months ended September 30, 2023, which has been prepared by management based on information currently available to the Company. Accordingly, such financial information may be subject to change based on the results of the Company's year-end audit. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws.
FORWARD-LOOKING INFORMATION:
This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that FansUnite anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results "may", "could", "would", "might" or "will" (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward-looking statements in this news release include, but are not limited to, the Company's strategic objectives, goals, growth outlook, strategy and focus including scaling Betting Hero's operations across new markets, growing additional revenue streams and identifying opportunities for financial efficiencies.
Forward-looking statements are based on assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, including, but not limited to, expectations and assumptions concerning: interest and foreign exchange rates; capital efficiencies, cost saving and synergies; growth and growth rates; the success in the online gambling and sports betting industry; the regulatory environment applicable to online gambling and sports betting; the technological infrastructure and support needed to host the Company's online gambling and sports betting platforms and applications; any cryptocurrency applications to the Company's business; and the Company's growth plan. While FansUnite considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. Readers are cautioned not to place undue reliance on forward-looking statements. In addition, forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with general economic conditions; audit-risks; risks associated with the regulatory environments in the jurisdictions the Company operates in; technology-related risks that could adversely affect the Company's ability to operate its online gambling and sports betting platforms and applications, risks related to the novel coronavirus (COVID-19) global pandemic and any effects it might have on the Company's business thereto. Readers are cautioned that the foregoing list is not exhaustive. For more information on the risk, uncertainties and assumptions that could cause anticipated opportunities and actual results to differ materially, please refer to the public filings of FansUnite which are available on SEDAR+ at www.sedarplus.ca. Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. FansUnite disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
FansUnite Entertainment Inc.
Condensed Consolidated Interim Statement of Financial Position
| Unaudited (CAD - thousands) | Notes | September 30, 2023 $ | December 31, 2022 $ | ||||
| Assets | |||||||
| Current | |||||||
| Cash and cash equivalents | 2,291 | 2,914 | |||||
| Restricted cash | 74 | 646 | |||||
| Receivables | 3 | 5,954 | 4,711 | ||||
| Due from related parties | 9 | 316 | 376 | ||||
| Prepaid expenses | 106 | 230 | |||||
| Total current assets | 8,741 | 8,877 | |||||
| Non-current | |||||||
| Equipment | - | 67 | |||||
| Goodwill | 5 | 20,125 | 20,664 | ||||
| Intangible assets | 4 | 28,174 | 47,391 | ||||
| Digital currencies | 45 | 32 | |||||
| Right of use assets | 211 | 359 | |||||
| Deferred tax asset | 1,980 | - | |||||
| Long-term investments | 2,048 | 63 | |||||
| Long-term receivables | 139 | - | |||||
| Total assets | 61,463 | 77,453 | |||||
| Liabilities | |||||||
| Current | |||||||
| Accounts payable and accrued liabilities | 6 | 4,372 | 4,539 | ||||
| Due to related parties | 9 | 34 | 74 | ||||
| Bank indebtedness | 7 | 2,720 | 8,233 | ||||
| Deferred and contingent consideration | 8 | 16,347 | 12,138 | ||||
| Lease liability | 145 | 186 | |||||
| Total current liabilities | 23,618 | 25,170 | |||||
| Non-current | |||||||
| Deferred and contingent consideration | 8 | 3,003 | 8,688 | ||||
| Deferred tax liability | - | 459 | |||||
| Lease liability | 62 | 153 | |||||
| Total liabilities | 26,683 | 34,470 | |||||
| Shareholders' equity | |||||||
| Share capital | 11 | 122,228 | 121,208 | ||||
| Reserves | 20,037 | 16,567 | |||||
| Accumulated other comprehensive income | 3,710 | 3,750 | |||||
| Deficit | (111,195 | ) | (98,542 | ) | |||
| Total shareholders' equity | 34,780 | 42,983 | |||||
| Total liabilities and shareholders' equity | 61,463 | 77,453 |
FansUnite Entertainment Inc.
Condensed Consolidated Interim Statements of Loss and Comprehensive Loss
| For the three months ended September 30 | For the nine months ended September 30 | ||||||||||||
| Unaudited (CAD - thousands) | Notes | 2023 $ | Restated Note 2(c) 2022 $ | 2023 $ | Restated Note 2(c) 2022 $ | ||||||||
| | |||||||||||||
| Revenue | 13 | 4,822 | 4,322 | 17,176 | 17,469 | ||||||||
| Cost of revenue | (1,985 | ) | (2,155 | ) | (6,250 | ) | (8,069 | ) | |||||
| Gross margin | 2,837 | 2,167 | 10,926 | 9,400 | |||||||||
| Expenses | |||||||||||||
| Selling, general and administrative | 14 | (7,969 | ) | (12,431 | ) | (26,109 | ) | (32,211 | ) | ||||
| Loss before other items | (5,132 | ) | (10,264 | ) | (15,183 | ) | (22,811 | ) | |||||
| | | ||||||||||||
| Other items | |||||||||||||
| Interest and other expenses, net | 14 | (405 | ) | (3,145 | ) | (1,950 | ) | (9,577 | ) | ||||
| Revaluation of contingent consideration | 331 | 51,755 | 562 | 51,755 | |||||||||
| | |||||||||||||
| Income tax recovery (expense): | |||||||||||||
| Current | (152 | ) | 212 | (153 | ) | - | |||||||
| Deferred, net | 1,081 | 3,844 | 2,423 | 4,478 | |||||||||
| Net income (loss) from continuing operations | (4,277 | ) | 42,402 | (14,301 | ) | 23,845 | |||||||
| Loss from discontinued operations, net of income taxes | 19 | (1,753 | ) | (13,751 | ) | (5,833 | ) | (18,874 | ) | ||||
| Gain on disposal of discontinued operations, net of income taxes | 19 | - | - | 7,482 | - | ||||||||
| Net income (loss) from discontinued operations | (1,753 | ) | (13,751 | ) | 1,649 | (18,874 | ) | ||||||
| | |||||||||||||
| Net income (loss) | (6,030 | ) | 28,651 | (12,652 | ) | 4,971 | |||||||
| | |||||||||||||
| Other comprehensive income | |||||||||||||
| Revaluation gain (loss) on digital currencies | 12 | 10 | 13 | (61 | ) | ||||||||
| Currency translation adjustment | 871 | 3,490 | (53 | ) | 4,502 | ||||||||
| Total comprehensive income (loss) | (5,147 | ) | 32,151 | (12,692 | ) | 9,412 | |||||||
| | |||||||||||||
| Income (loss) per share - basic and diluted | |||||||||||||
| Continuing operations | (0.01 | ) | 0.13 | (0.04 | ) | 0.08 | |||||||
| Discontinued operations | (0.01 | ) | (0.04 | ) | 0.00 | (0.06 | ) | ||||||
| Net income (loss) | (0.02 | ) | 0.09 | (0.04 | ) | 0.02 | |||||||
| Weighted average number of common | |||||||||||||
| shares outstanding - basic and | 357,577,800 | 324,295,194 | 347,129,849 | 304,726,288 | |||||||||
| diluted | | ||||||||||||
FansUnite Entertainment Inc.
Condensed Consolidated Interim Statements of Cash Flows
| For the nine months ended Unaudited (CAD - thousands) | Notes | September 30, 2023 $ | Restated Note 2(c) September 30, 2022 $ | ||||
| Operating activities: | |||||||
| Net income (loss) | (12,652 | ) | 4,971 | ||||
| Restricted cash | 309 | (55 | ) | ||||
| Adjustments for non-cash items: | |||||||
| Depreciation of equipment | 172 | 134 | |||||
| Amortization of intangible assets | 4 | 14,954 | 15,686 | ||||
| Impairment loss | 113 | 11,279 | |||||
| Accretion on liabilities | 8 | 1,399 | 9,358 | ||||
| Revaluation gain on contingent consideration | 8 | (562 | ) | (51,755 | ) | ||
| Gain on sale of asset | (3,064 | ) | - | ||||
| Gain on sale of business | (4,382 | ) | - | ||||
| General & administrative expenses paid with common shares | - | 462 | |||||
| Marketing expenses paid with digital currencies | - | 10 | |||||
| Unrealized fair value loss on investments | - | 153 | |||||
| Share-based payments | 12 | 1,551 | 5,731 | ||||
| Interest and other income, net | 566 | 17 | |||||
| Deferred income tax recovery | (2,423 | ) | (4,497 | ) | |||
| | |||||||
| Changes in non-cash working capital | 17 | 706 | 2,608 | ||||
| | | ||||||
| Net cash flows used in operating activities | (3,313 | ) | (5,898 | ) | |||
| | |||||||
| Investing activities | |||||||
| Payment of contingent consideration | 8 | (2,288 | ) | (8,639 | ) | ||
| Proceeds on sale of business | 19 | 5,268 | - | ||||
| Payment of net working capital adjustment | - | (3,802 | ) | ||||
| Purchase of intangibles | 4 | - | (13 | ) | |||
| Proceeds on sale of intangibles | 18 | 3,029 | - | ||||
| Proceeds on sale of investments | - | 843 | |||||
| Purchase of equipment | (4 | ) | (42 | ) | |||
| Net cash flows provided by (used in) investing activities | 6,005 | (11,653 | ) | ||||
| | |||||||
| Financing activities | |||||||
| Repayment of lease liability | (133 | ) | (149 | ) | |||
| Repayment of bank indebtedness | (5,513 | ) | 8,233 | ||||
| Proceeds from brokered financing, net | 11(i) | 2,965 | - | ||||
| Proceeds from warrant/option exercise | - | 73 | |||||
| Repurchase of shares | 11(ii) | (25 | ) | (58 | ) | ||
| Interest paid, net | (662 | ) | - | ||||
| Repayments from (payments to) related parties | 20 | (427 | ) | ||||
| Net cash flows provided by (used) in financing activities | (3,348 | ) | 7,672 | ||||
| | |||||||
| Effect of foreign exchange | 33 | 481 | |||||
| | |||||||
| Change in cash | (623 | ) | (9,398 | ) | |||
| Cash, beginning of the period | 2,914 | 13,974 | |||||
| Cash, end of period | 2,291 | 4,576 |
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/187419
