|
|
|
|
|
(Mark One)
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
Delaware
|
|
46-3698600
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
5475 S. Decatur Blvd., Ste #100 Las Vegas, NV 89118
|
(Address of principal executive offices) (Zip Code)
|
(702) 722-6700
|
(Registrant’s telephone number, including area code)
|
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
Non-accelerated filer
x
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
o
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
|
(unaudited)
|
|
|
||||
Assets
|
|||||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
48,816
|
|
|
$
|
10,680
|
|
Restricted cash
|
100
|
|
|
100
|
|
||
Accounts receivable, net of allowance of $56 and $29, respectively
|
21,869
|
|
|
9,140
|
|
||
Inventories, net
|
6,690
|
|
|
3,175
|
|
||
Prepaid expenses
|
3,680
|
|
|
2,091
|
|
||
Deferred tax asset
|
4,075
|
|
|
—
|
|
||
Deposits and other
|
14,411
|
|
|
2,007
|
|
||
Total current assets
|
99,641
|
|
|
27,193
|
|
||
Property and equipment, net
|
71,845
|
|
|
40,769
|
|
||
Deferred loan costs, net
|
8,793
|
|
|
5,343
|
|
||
Goodwill
|
261,202
|
|
|
77,617
|
|
||
Intangible assets, net
|
295,395
|
|
|
101,885
|
|
||
Other assets
|
43,316
|
|
|
3,345
|
|
||
Total assets
|
$
|
780,192
|
|
|
$
|
256,152
|
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity
|
|||||||
Current liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
23,427
|
|
|
$
|
23,316
|
|
Current maturities of long-term debt
|
5,526
|
|
|
2,495
|
|
||
Deferred tax liability
|
—
|
|
|
528
|
|
||
Total current liabilities
|
28,953
|
|
|
26,339
|
|
||
Other long-term liabilities
|
62,671
|
|
|
—
|
|
||
Long-term debt
|
531,892
|
|
|
164,194
|
|
||
Deferred tax liability - noncurrent
|
22,064
|
|
|
1,863
|
|
||
Total liabilities
|
645,580
|
|
|
192,396
|
|
||
Commitments and contingencies (Note 14)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock at $0.01 par value; 100,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock at $0.01 par value; 30,000,100 shares authorized; 100 Class A Shares issued and outstanding at June 30, 2015 and December 31, 2014, and 14,931,529 and 10,000,000 Class B Shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively.
|
149
|
|
|
100
|
|
||
Additional paid-in capital
|
177,276
|
|
|
99,900
|
|
||
Accumulated deficit
|
(42,918
|
)
|
|
(36,532
|
)
|
||
Accumulated other comprehensive income
|
105
|
|
|
288
|
|
||
Total stockholders’ equity
|
134,612
|
|
|
63,756
|
|
||
Total liabilities and stockholders’ equity
|
$
|
780,192
|
|
|
$
|
256,152
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Gaming operations
|
$
|
24,785
|
|
|
$
|
16,692
|
|
|
$
|
43,352
|
|
|
$
|
33,420
|
|
Equipment sales
|
1,511
|
|
|
736
|
|
|
1,739
|
|
|
1,166
|
|
||||
Total revenues
|
26,296
|
|
|
17,428
|
|
|
45,091
|
|
|
34,586
|
|
||||
Operating expenses
|
|
|
|
|
|
|
|
||||||||
Cost of gaming operations
|
5,613
|
|
|
3,169
|
|
|
8,807
|
|
|
6,053
|
|
||||
Cost of equipment sales
|
254
|
|
|
454
|
|
|
339
|
|
|
629
|
|
||||
Selling, general and administrative
|
8,798
|
|
|
3,778
|
|
|
14,948
|
|
|
8,250
|
|
||||
Research and development
|
3,033
|
|
|
1,731
|
|
|
4,308
|
|
|
2,635
|
|
||||
Write downs and other charges
|
7,728
|
|
|
1,644
|
|
|
11,209
|
|
|
1,943
|
|
||||
Depreciation and amortization
|
12,209
|
|
|
8,120
|
|
|
20,555
|
|
|
16,128
|
|
||||
Total operating expenses
|
37,635
|
|
|
18,896
|
|
|
60,166
|
|
|
35,638
|
|
||||
Loss from operations
|
(11,339
|
)
|
|
(1,468
|
)
|
|
(15,075
|
)
|
|
(1,052
|
)
|
||||
Other expense (income)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
8,006
|
|
|
4,312
|
|
|
12,278
|
|
|
8,348
|
|
||||
Interest income
|
(17
|
)
|
|
(17
|
)
|
|
(26
|
)
|
|
(17
|
)
|
||||
Other expense (income)
|
523
|
|
|
(234
|
)
|
|
999
|
|
|
3
|
|
||||
Loss before income taxes
|
(19,851
|
)
|
|
(5,529
|
)
|
|
(28,326
|
)
|
|
(9,386
|
)
|
||||
Income tax benefit (expense)
|
22,700
|
|
|
(674
|
)
|
|
21,940
|
|
|
(1,347
|
)
|
||||
Net income (loss)
|
2,849
|
|
|
(6,203
|
)
|
|
(6,386
|
)
|
|
(10,733
|
)
|
||||
Foreign currency translation adjustment
|
(426
|
)
|
|
(180
|
)
|
|
(183
|
)
|
|
3
|
|
||||
Total comprehensive income (loss)
|
$
|
2,423
|
|
|
$
|
(6,383
|
)
|
|
$
|
(6,569
|
)
|
|
$
|
(10,730
|
)
|
|
|
|
|
|
|
|
|
||||||||
Basic and diluted income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.24
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.59
|
)
|
|
$
|
(1.07
|
)
|
Diluted
|
$
|
0.24
|
|
|
$
|
(0.62
|
)
|
|
$
|
(0.59
|
)
|
|
$
|
(1.07
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
11,734
|
|
|
10,000
|
|
|
10,872
|
|
|
10,000
|
|
||||
Diluted
|
12,118
|
|
|
10,000
|
|
|
10,872
|
|
|
10,000
|
|
|
Six months ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(6,386
|
)
|
|
$
|
(10,733
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
20,555
|
|
|
16,128
|
|
||
Accretion of contract rights under development agreements and placement fees
|
137
|
|
|
9
|
|
||
Amortization of deferred loan costs and discount
|
813
|
|
|
600
|
|
||
Provision (benefit) for bad debts
|
21
|
|
|
(216
|
)
|
||
Imputed interest income
|
(15
|
)
|
|
(14
|
)
|
||
Loss on disposition of assets
|
781
|
|
|
1,174
|
|
||
Impairment of prepaid royalties
|
637
|
|
|
257
|
|
||
Impairment of long lived assets
|
173
|
|
|
127
|
|
||
Impairment of intangible assets
|
2,237
|
|
|
—
|
|
||
(Benefit) provision for deferred income tax
|
(22,039
|
)
|
|
1,347
|
|
||
Changes in assets and liabilities that relate to operations:
|
|
|
|
||||
Accounts receivable and notes receivable
|
(182
|
)
|
|
630
|
|
||
Inventories
|
1,332
|
|
|
227
|
|
||
Prepaid expenses
|
(555
|
)
|
|
(856
|
)
|
||
Deposits and other
|
(308
|
)
|
|
1,553
|
|
||
Other assets, non-current
|
(726
|
)
|
|
(1,000
|
)
|
||
Accounts payable and accrued liabilities
|
2,542
|
|
|
56
|
|
||
Net cash (used in) provided by operating activities
|
(983
|
)
|
|
9,289
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Business acquisitions, net of cash acquired
|
(370,280
|
)
|
|
(11,000
|
)
|
||
Collection of notes receivable
|
235
|
|
|
29
|
|
||
Change in Canadian tax receivable
|
—
|
|
|
(418
|
)
|
||
Purchase of intangible assets
|
(2,448
|
)
|
|
(616
|
)
|
||
Software development and other expenditures
|
(1,831
|
)
|
|
(2,953
|
)
|
||
Proceeds from disposition of assets
|
11
|
|
|
365
|
|
||
Purchases of property and equipment
|
(7,843
|
)
|
|
(4,701
|
)
|
||
Net cash used in investing activities
|
(382,156
|
)
|
|
(19,294
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Repurchase of shares issued to management
|
(1,277
|
)
|
|
—
|
|
||
Borrowings under the revolving facility
|
11,500
|
|
|
10,000
|
|
||
Repayments under the revolving facility
|
(21,500
|
)
|
|
—
|
|
||
Proceeds from issuance of debt
|
369,400
|
|
|
—
|
|
||
Payment of previous acquisition obligation
|
(9,000
|
)
|
|
—
|
|
||
Payments on debt
|
(1,910
|
)
|
|
(814
|
)
|
||
Proceeds from issuance of common stock
|
77,425
|
|
|
—
|
|
||
Proceeds from employees in advance of common stock issuance
|
504
|
|
|
1,369
|
|
||
Proceeds from employees on early exercise of options
|
—
|
|
|
200
|
|
||
Payment of deferred loan costs
|
(3,837
|
)
|
|
(73
|
)
|
||
Net cash provided by financing activities
|
421,305
|
|
|
10,682
|
|
||
Effect of exchange rates on cash and cash equivalents
|
(30
|
)
|
|
(11
|
)
|
||
Increase in cash and cash equivalents
|
38,136
|
|
|
666
|
|
||
Cash and cash equivalents, beginning of period
|
10,680
|
|
|
21,742
|
|
||
Cash and cash equivalents, end of period
|
$
|
48,816
|
|
|
$
|
22,408
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid during the period for interest
|
$
|
11,306
|
|
|
$
|
7,351
|
|
Non-cash investing and financing activities:
|
|
|
|
||||
Financed purchase of property, plant and equipment
|
$
|
2,535
|
|
|
$
|
2,717
|
|
•
|
Pervasive evidence of an arrangement exists;
|
•
|
The sales price is fixed and determinable;
|
•
|
Delivery has occurred and services have been rendered; and
|
•
|
Collectability is reasonably assured.
|
Gaming equipment
|
3 to 6 years
|
Other property and equipment
|
3 to 6 years
|
•
|
Level 1 - quoted prices in an active market for identical assets or liabilities;
|
•
|
Level 2 - quoted prices in an active market for similar assets or liabilities, inputs other than quoted prices that are observable for similar assets or liabilities, inputs derived principally from or corroborated by observable market data by correlation or other means; and
|
•
|
Level 3 - valuation methodology with unobservable inputs that are significant to the fair value measurement.
|
Contractual cash purchase price adjusted for working capital
|
|
$
|
370,960
|
|
Seller note
|
|
12,000
|
|
|
Contingent receivable
|
|
(1,300
|
)
|
|
Total consideration
|
|
$
|
381,660
|
|
|
|
At May 29, 2015
|
||
Currents assets
(1)
|
|
$
|
38,162
|
|
Property and equipment
|
|
29,817
|
|
|
Goodwill
|
|
179,436
|
|
|
Intangible assets
|
|
199,752
|
|
|
Other long-term assets
|
|
38,690
|
|
|
Total assets
|
|
485,857
|
|
|
Current liabilities
|
|
8,636
|
|
|
Deferred tax liability non-current
|
|
41,001
|
|
|
Other long-term liabilities
|
|
54,560
|
|
|
Total equity purchase price
|
|
$
|
381,660
|
|
|
|
Fair values at May 29, 2015
|
|
Average remaining useful life (in years)
|
||
Gaming equipment
|
|
$
|
23,138
|
|
|
1 - 5
|
Other property and equipment
|
|
6,679
|
|
|
2 - 3
|
|
Total property and equipment
|
|
$
|
29,817
|
|
|
|
|
|
Fair values at May 29, 2015
|
|
Average remaining useful life (in years)
|
||
Trade names
|
|
$
|
3,000
|
|
|
5
|
Brand names
|
|
10,600
|
|
|
3 - 5
|
|
Customer relationships
|
|
107,000
|
|
|
5 - 12
|
|
Gaming software and technology platforms
|
|
79,152
|
|
|
2 - 7
|
|
Total intangible assets
|
|
$
|
199,752
|
|
|
|
|
|
From May 29, 2015 to June 30, 2015
|
||
Revenue
|
|
$
|
7,370
|
|
Net loss
|
|
$
|
572
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenue
|
$
|
39,102
|
|
|
$
|
46,060
|
|
|
$
|
77,909
|
|
|
$
|
84,788
|
|
Net loss
|
$
|
7,807
|
|
|
$
|
11,895
|
|
|
$
|
20,945
|
|
|
$
|
25,962
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Gaming equipment
|
$
|
80,349
|
|
|
$
|
53,295
|
|
Other property and equipment
(1)
|
15,003
|
|
|
3,902
|
|
||
Less: Accumulated depreciation
|
(23,507
|
)
|
|
(16,428
|
)
|
||
Total property and equipment, net
|
$
|
71,845
|
|
|
$
|
40,769
|
|
|
Gross Carrying Amount
|
||
Balance at December 31, 2014
|
$
|
77,617
|
|
Acquisition - Cadillac Jack
|
179,436
|
|
|
Acquisition - Gamingo
|
4,951
|
|
|
Foreign currency adjustments
|
(366
|
)
|
|
Other
|
(436
|
)
|
|
Balance at June 30, 2015
|
$
|
261,202
|
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Useful Life (years)
|
|
Gross
Value
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
|
Gross
Value
|
|
Accumulated
Amortization
|
|
Net Carrying
Value
|
||||||||||||
Indefinite lived trade names
|
Indefinite
|
|
$
|
12,126
|
|
|
$
|
—
|
|
|
$
|
12,126
|
|
|
$
|
12,126
|
|
|
$
|
—
|
|
|
$
|
12,126
|
|
Trade and brand names
|
7
|
|
14,409
|
|
|
(423
|
)
|
|
13,986
|
|
|
809
|
|
|
(119
|
)
|
|
690
|
|
||||||
Customer relationships
|
7
|
|
171,740
|
|
|
(15,061
|
)
|
|
156,679
|
|
|
65,159
|
|
|
(9,313
|
)
|
|
55,846
|
|
||||||
Contract rights under development and placement fees
|
1 - 7
|
|
2,368
|
|
|
(197
|
)
|
|
2,171
|
|
|
678
|
|
|
(58
|
)
|
|
620
|
|
||||||
Gaming software and technology platforms
|
1 - 5
|
|
115,414
|
|
|
(11,869
|
)
|
|
103,545
|
|
|
32,564
|
|
|
(7,108
|
)
|
|
25,456
|
|
||||||
Intellectual property
|
10 - 20
|
|
7,318
|
|
|
(430
|
)
|
|
6,888
|
|
|
7,279
|
|
|
(132
|
)
|
|
7,147
|
|
||||||
|
|
|
$
|
323,375
|
|
|
$
|
(27,980
|
)
|
|
$
|
295,395
|
|
|
$
|
118,615
|
|
|
$
|
(16,730
|
)
|
|
$
|
101,885
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Trade accounts payable
|
$
|
3,288
|
|
|
$
|
1,517
|
|
Salary and payroll tax accrual
|
6,860
|
|
|
3,002
|
|
||
Taxes payable
|
4,822
|
|
|
566
|
|
||
Accrued interest
|
1,659
|
|
|
499
|
|
||
Accrued commissions
|
308
|
|
|
351
|
|
||
C2 Gaming one-year payout (see Note 2)
|
—
|
|
|
9,000
|
|
||
C2 Gaming contingent consideration (see Note 2)
|
2,125
|
|
|
2,500
|
|
||
Proceeds from employees in advance of common stock issuance
|
—
|
|
|
1,969
|
|
||
Accrued other
|
4,365
|
|
|
3,912
|
|
||
Total accounts payable and accrued liabilities
|
$
|
23,427
|
|
|
$
|
23,316
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Senior secured credit facilities:
|
|
|
|
||||
Term loans, interest at LIBOR or base rate plus 8.25% (9.25% at June 30, 2015), net of unamortized discount of $11.7 million and $5.0 million at June 30, 2015 and December 31, 2014, respectively.
|
$
|
405,259
|
|
|
$
|
148,447
|
|
$40 million revolving credit facility, interest at LIBOR or base rate plus 8.25% (8.4% at June 30, 2015)
|
—
|
|
|
10,000
|
|
||
Senior secured PIK notes, net of unamortized discount of $3.4 million at June 30, 2015
|
111,568
|
|
|
—
|
|
||
Seller notes
|
18,322
|
|
|
6,012
|
|
||
Equipment long-term note payable and capital leases
|
2,269
|
|
|
2,230
|
|
||
Total debt
|
537,418
|
|
|
166,689
|
|
||
Less: Current portion
|
(5,526
|
)
|
|
(2,495
|
)
|
||
Long-term debt
|
$
|
531,892
|
|
|
$
|
164,194
|
|
|
Three months ended June 30, 2015
|
||
Numerator:
|
|
||
Net income
|
$
|
2,849
|
|
|
|
||
Denominator:
|
|
||
Weighted average common shares outstanding
|
11,734
|
|
|
Potential dilutive effect of stock options and restricted stock
|
384
|
|
|
Weighted average common and common equivalent shares outstanding
|
12,118
|
|
|
|
|
||
Basic earnings per share
|
$
|
0.24
|
|
Diluted earnings per share
|
$
|
0.24
|
|
|
Three Months Ended
June 30, 2015 |
|
Six Months Ended
June 30, 2015 |
Option valuation assumptions:
|
|
|
|
Expected dividend yield
|
None
|
|
None
|
Expected volatility
|
50%
|
|
53%
|
Risk-free interest rate
|
1.43%
|
|
1.44%
|
Expected term (in years)
|
4.5
|
|
4.5
|
|
Number of Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contract Term (years)
|
|
Aggregate Intrinsic Value
|
||
Options outstanding as of December 31, 2014
|
576,250
|
|
$10.00
|
|
|
|
|
|
|
Granted
|
109,125
|
|
$14.77
|
|
|
|
|
||
Canceled
|
(153,750)
|
|
$10.00
|
|
|
|
|
||
Options outstanding as of June 30, 2015
|
531,625
|
|
$10.98
|
|
3.9
|
|
$
|
2,509,613
|
|
|
December 31,
2014 |
|
Charge to expense
|
|
Cash paid
|
|
June 30,
2015 |
||||||||
Accrued severance
|
$
|
127
|
|
|
$
|
493
|
|
|
$
|
251
|
|
|
$
|
369
|
|
Accrued retention bonuses
|
216
|
|
|
437
|
|
|
238
|
|
|
415
|
|
||||
Property costs
|
—
|
|
|
25
|
|
|
$
|
—
|
|
|
25
|
|
|||
Total
|
$
|
343
|
|
|
$
|
955
|
|
|
$
|
489
|
|
|
$
|
809
|
|
•
|
Continue to expand our library of proprietary content
. We will continue our focused efforts to develop games, both internally and through partnerships with third parties, tailored to our target markets. After the acquisition of Cadillac Jack, our combined company had over 250 titles in our content library as of June 30, 2015, and we expect our current pool of development talent to create an additional 30-40 titles each year.
|
•
|
Improve yield on existing customer installed base by managing title mix.
We believe that more effective management of the title mix across our domestic installed base of participation gaming machines represents an opportunity to generate incremental earnings growth without requiring growth in our installed base of participation gaming machines. In addition, we expect improved game performance will likely drive incremental gaming machine placements within our customers’ facilities.
|
•
|
Expansion through strategic acquisitions.
We are actively seeking acquisition opportunities that will have a positive effect on earnings, have strong recurring revenue and have a developed library of proprietary content. We believe that strategic acquisitions will provide for expansion into new gaming jurisdictions and increased title mix and game content will assist in increased gaming machine placements. Our acquisitions of Cadillac Jack is a result of this strategy.
|
•
|
Develop niche products for expansion into traditional gaming markets.
With approximately 1,220 casino facilities in 41 U.S. states as of June 30, 2015, and the replacement cycle on equipment at a cyclical low, we believe the market
|
•
|
Continue expansion into Class III markets and increase penetration in Class II markets
. We have a foothold of approximately 3,600 Class III recurring revenue placements, approximately 550 units were attributable to the inclusion of Cadillac Jack, and we plan to continue expanding in this market. Utilizing new, recently-issued gaming licenses, we expect to begin placing and selling Class III products in five new jurisdictions (Nevada, Mississippi, Louisiana, New Jersey and Connecticut). We also anticipate growing our presence in Class III markets where we currently operate, such as Oklahoma, Florida and California, by placing additional content from our expanding library of games in these states. In addition, we believe that our existing core Class II product offering is among the strongest in the industry today. We expect to continue gaining market share in existing Class II jurisdictions and are focused on penetrating newly licensed jurisdictions.
|
•
|
Expansion into table games and social gaming.
In the third quarter 2014, we began developing table games products through the acquisitions of War Blackjack and other intellectual property related to table games products. As of June 30, 2015, the Company had approximately 450 table game units under monthly fixed fee arrangements. We plan to continue expanding our table games products through acquisitions and internal development. In the second quarter of 2015, we acquired Gamingo and entered online social gaming, where we plan to place our proven content in online and mobile formats for social gaming.
|
|
Three months ended June 30,
|
|
$
|
|
%
|
||||||||
|
2015
|
|
2014
|
|
Change
|
|
Change
|
||||||
Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
||||||
Gaming operations
|
$
|
24,785
|
|
|
$
|
16,692
|
|
|
8,093
|
|
|
48.5
|
%
|
Equipment sales
|
1,511
|
|
|
736
|
|
|
775
|
|
|
105.3
|
%
|
||
Total revenues
|
26,296
|
|
|
17,428
|
|
|
8,868
|
|
|
50.9
|
%
|
||
Operating expenses
|
|
|
|
|
|
|
|
||||||
Cost of gaming operations
|
5,613
|
|
|
3,169
|
|
|
2,444
|
|
|
77.1
|
%
|
||
Cost of equipment sales
|
254
|
|
|
454
|
|
|
(200
|
)
|
|
(44.1
|
)%
|
||
Selling, general and administrative
|
8,798
|
|
|
3,778
|
|
|
5,020
|
|
|
132.9
|
%
|
||
Research and development
|
3,033
|
|
|
1,731
|
|
|
1,302
|
|
|
75.2
|
%
|
||
Write downs and other charges
|
7,728
|
|
|
1,644
|
|
|
6,084
|
|
|
370.1
|
%
|
||
Depreciation and amortization
|
12,209
|
|
|
8,120
|
|
|
4,089
|
|
|
50.4
|
%
|
||
Total operating expenses
|
37,635
|
|
|
18,896
|
|
|
18,739
|
|
|
99.2
|
%
|
||
Loss from operations
|
(11,339
|
)
|
|
(1,468
|
)
|
|
(9,871
|
)
|
|
672.4
|
%
|
||
Interest expense
|
8,006
|
|
|
4,312
|
|
|
3,694
|
|
|
85.7
|
%
|
||
Interest income
|
(17
|
)
|
|
(17
|
)
|
|
—
|
|
|
—
|
%
|
||
Other expense (income)
|
523
|
|
|
(234
|
)
|
|
757
|
|
|
(323.5
|
)%
|
||
Loss before income taxes
|
(19,851
|
)
|
|
(5,529
|
)
|
|
(14,322
|
)
|
|
259.0
|
%
|
||
Income tax benefit (expense)
|
22,700
|
|
|
(674
|
)
|
|
23,374
|
|
|
(3,468.0
|
)%
|
||
Net income (loss)
|
$
|
2,849
|
|
|
$
|
(6,203
|
)
|
|
9,052
|
|
|
(145.9
|
)%
|
|
Six months ended June 30,
|
|
$
|
|
%
|
||||||||
|
2015
|
|
2014
|
|
Change
|
|
Change
|
||||||
Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
||||||
Gaming operations
|
$
|
43,352
|
|
|
$
|
33,420
|
|
|
9,932
|
|
|
29.7
|
%
|
Equipment sales
|
1,739
|
|
|
1,166
|
|
|
573
|
|
|
49.1
|
%
|
||
Total revenues
|
45,091
|
|
|
34,586
|
|
|
10,505
|
|
|
30.4
|
%
|
||
Operating expenses
|
|
|
|
|
|
|
|
||||||
Cost of gaming operations
|
8,807
|
|
|
6,053
|
|
|
2,754
|
|
|
45.5
|
%
|
||
Cost of equipment sales
|
339
|
|
|
629
|
|
|
(290
|
)
|
|
(46.1
|
)%
|
||
Selling, general and administrative
|
14,948
|
|
|
8,250
|
|
|
6,698
|
|
|
81.2
|
%
|
||
Research and development
|
4,308
|
|
|
2,635
|
|
|
1,673
|
|
|
63.5
|
%
|
||
Write downs and other charges
|
11,209
|
|
|
1,943
|
|
|
9,266
|
|
|
476.9
|
%
|
||
Depreciation and amortization
|
20,555
|
|
|
16,128
|
|
|
4,427
|
|
|
27.4
|
%
|
||
Total operating expenses
|
60,166
|
|
|
35,638
|
|
|
24,528
|
|
|
68.8
|
%
|
||
Loss from operations
|
(15,075
|
)
|
|
(1,052
|
)
|
|
(14,023
|
)
|
|
1,333.0
|
%
|
||
Interest expense
|
12,278
|
|
|
8,348
|
|
|
3,930
|
|
|
47.1
|
%
|
||
Interest income
|
(26
|
)
|
|
(17
|
)
|
|
(9
|
)
|
|
52.9
|
%
|
||
Other expense
|
999
|
|
|
3
|
|
|
996
|
|
|
33,200.0
|
%
|
||
Loss before income taxes
|
(28,326
|
)
|
|
(9,386
|
)
|
|
(18,940
|
)
|
|
201.8
|
%
|
||
Income tax benefit (expense)
|
21,940
|
|
|
(1,347
|
)
|
|
23,287
|
|
|
(1,728.8
|
)%
|
||
Net income (loss)
|
$
|
(6,386
|
)
|
|
$
|
(10,733
|
)
|
|
4,347
|
|
|
(40.5
|
)%
|
|
Six months ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Cash Flow Information:
|
|
|
|
||||
Net cash (used in) provided by operating activities
|
$
|
(983
|
)
|
|
$
|
9,289
|
|
Net cash used in investing activities
|
(382,156
|
)
|
|
(19,294
|
)
|
||
Net cash provided by financing activities
|
421,305
|
|
|
10,682
|
|
||
Effect of exchange rates on cash and cash equivalents
|
(30
|
)
|
|
(11
|
)
|
||
Net increase in cash and cash equivalents
|
$
|
38,136
|
|
|
$
|
666
|
|
•
|
any delay in the integration of strategies, operations, products and services;
|
•
|
diversion of the attention of management of the Company as a result of the Acquisition;
|
•
|
differences in business backgrounds, corporate cultures and management philosophies that may delay successful integration;
|
•
|
the ability to retain key employees;
|
•
|
the challenge of integrating complex systems, technology, networks and other assets of Cadillac Jack into those of the Company in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other constituencies of Cadillac Jack;
|
•
|
potential unknown liabilities and unforeseen increased expenses or delays associated with the Acquisition, including costs to integrate Cadillac Jack beyond current estimates; and
|
•
|
the disruption of, or the loss of momentum in, either the Company’s ongoing operations or inconsistencies in standards, controls, procedures and policies.
|
|
|
|
|
Incorporated by Reference
|
|||
Exhibit Number
|
|
Exhibit Description
|
Filed Herewith
|
Form
|
Period Ending
|
Exhibit
|
Filing Date
|
|
|
|
|
|
|
|
|
3.1
|
|
Third Amended and Restated Certificate of Incorporation of AP Gaming Holdco, Inc.
|
—
|
10/A
|
—
|
3.1
|
2/10/2014
|
|
|
|
|
|
|
|
|
3.2
|
|
Bylaws of AP Gaming Holdco, Inc.
|
—
|
10
|
—
|
3.2
|
12/16/2013
|
|
|
|
|
|
|
|
|
10.1
|
|
Subscription Agreement Between Apollo Gaming Holdings, L.P. and AP Gaming Holdco, Inc.
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
31.1
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
31.2
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
32
|
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
101.IN
|
|
XBRL Instance Document
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
X
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
X
|
—
|
—
|
—
|
—
|
|
|
|
AP GAMING HOLDCO, INC.
|
||
|
|
|
|
|
|
Date:
|
August 14, 2015
|
|
By:
|
|
/s/ KIMO AKIONA
|
|
|
|
Name:
|
|
Kimo Akiona
|
|
|
|
Title:
|
|
Treasurer
(Principal Financial and Accounting Officer) |
APOLLO GAMING HOLDINGS, L.P.
|
|
|
|
By:
|
Apollo Gaming Holdings GP, LLC its General Partner
|
|
|
|
|
By:
|
/s/ David B. Sambur
|
|
Name: David B. Sambur
|
|
Title: Chief Executive Officer, President, Treasurer and Secretary
|
AP GAMING HOLDCO, INC.
|
|
|
|
By:
|
/s/ David Lopez
|
|
Name: David Lopez
|
|
Title: Chief Executive Officer, President and Secretary
|
/s/ DAVID LOPEZ
|
David Lopez
President and Chief Executive Officer
(Principal Executive Officer)
|
/s/ KIMO AKIONA
|
Kimo Akiona
Treasurer
(Principal Financial Officer and Principal Accounting Officer) |
/s/ DAVID LOPEZ
|
David Lopez
President and Chief Executive Officer
(Principal Executive Officer)
|
/s/ KIMO AKIONA
|
Kimo Akiona
Treasurer
(Principal Financial Officer and Principal Accounting Officer) |