Inspired(US:INSE)2024-05-10 11:30Financial Performance - Total revenue for Q1 2024 was $63.1 million, a decrease of 2.8% compared to $64.9 million in Q1 2023[14] - Net loss for Q1 2024 was $5.7 million, compared to a net loss of $1.4 million in Q1 2023, representing a significant increase in losses[14] - The company reported a comprehensive loss of $4.4 million for Q1 2024, compared to a comprehensive loss of $3.9 million in Q1 2023[14] - The Company reported a net operating loss of $1.4 million for the three months ended March 31, 2024, compared to a net operating income of $4.6 million in the same period of 2023[56][57] - Net operating loss for the three months ended March 31, 2024, was $1.4 million, a decrease of $5.7 million compared to the prior year period[93] - The company recorded a net loss of $5.7 million for the three months ended March 31, 2024, compared to a net loss of $1.4 million in the prior year period[94] Cash Flow and Liquidity - Cash and cash equivalents decreased to $35.3 million as of March 31, 2024, down from $40.0 million at the end of 2023, a decline of 18.8%[13] - Cash flows from operating activities provided $3.6 million in Q1 2024, a decrease from $11.6 million in Q1 2023[21] - Net cash inflow from operating activities decreased to $3.6 million for the three months ended March 31, 2024, down from $11.6 million in the same period in 2023, a decline of $8.0 million[174] - The company had liquidity of $35.3 million in cash and an undrawn revolver facility of $6.3 million as of March 31, 2024, compared to $27.8 million in cash and $24.7 million in undrawn revolver facilities as of March 31, 2023[180] - The company reported a working capital outflow of $1.8 million for the three months ended March 31, 2024, compared to a $2.0 million inflow for the same period in 2023[180] Expenses and Costs - Selling, general and administrative expenses increased to $34.2 million in Q1 2024, up from $29.2 million in Q1 2023, an increase of 17.2%[14] - The company incurred $2.3 million in stock-based compensation expense in Q1 2024, down from $2.9 million in Q1 2023[21] - Selling, general and administrative expenses increased by $4.1 million, or 16%, primarily due to restatement costs of $5.0 million and increased non-staff costs[89] - The defined benefit pension scheme has a net periodic cost of $0.2 million for Q1 2024, up from $0.1 million in Q1 2023[53] Assets and Liabilities - Total assets decreased to $331.1 million as of March 31, 2024, down from $340.9 million at the end of 2023, a reduction of 2.3%[13] - Total liabilities decreased slightly to $412.3 million as of March 31, 2024, from $418.9 million at the end of 2023, a decrease of 1.6%[13] - Accounts payable and accrued expenses totaled $57.6 million as of March 31, 2024, a decrease from $60.8 million as of December 31, 2023[29] - The company had an ending balance for the allowance for credit losses of $1.1 million as of March 31, 2024, unchanged from December 31, 2023[27] Revenue Segmentation - Revenue from the Gaming segment was $24.0 million, while the Virtual Sports segment generated $12.4 million, Interactive segment $8.1 million, and Leisure segment $18.6 million for Q1 2024[56] - Approximately 75% of revenue for the three months ended March 31, 2024, was derived from the UK, 10% from Greece, and 15% from the rest of the world[69] - Geographic revenue breakdown for Q1 2024 shows UK revenue at $47.2 million, Greece at $6.1 million, and the Rest of the World at $9.8 million[58] Operational Metrics - The average installed base of Gaming terminals increased by 0.6% to 34,924 terminals as of March 31, 2024, compared to 34,711 terminals a year earlier[99] - Customer Net Win per unit per day rose by 1.0% to £72.2 from £71.5, indicating improved performance despite overall revenue decline[99] - The number of machine sales decreased by 14.4% to 589 units in Q1 2024 from 688 units in Q1 2023[99] - The average installed base of pub digital gaming machines rose by 4.6% to 6,308 terminals, compared to 6,028 terminals last year[154] Tax and Regulatory Matters - The effective income tax rate for the three months ended March 31, 2024, was 27.4%, resulting in an income tax benefit of $2.2 million[41] - The company recorded a valuation allowance against all deferred tax assets as of March 31, 2024, and 2023, indicating a cautious outlook on future profitability[42] - The company received a subpoena from the SEC on March 12, 2024, regarding its recently restated financial statements[205] - Management believes the outcome of the SEC investigation remains uncertain and is not estimable at this time[206] Shareholder Actions - The company has authorized up to $25.0 million for share repurchases, with no repurchases made in the three months ended March 31, 2024, and a total of 1,193,118 shares repurchased at a cost of $12.0 million as of March 31, 2024[188] - The company issued a total of 340,735 shares during the three months ended March 31, 2024, related to equity-based plans[35] Currency and Foreign Operations - The company’s Euro functional currency net assets total approximately $17.3 million, while USD functional currency net assets total approximately $6.7 million[196] - A hypothetical 10% adverse change in the value of the Euro and USD relative to GBP would result in translation adjustments of approximately $1.6 million favorable and $0.7 million unfavorable, respectively[196] - A 10% weakening of GBP against the USD would change trading operational results favorably by approximately $0.1 million and result in unfavorable translation adjustments of approximately $9.4 million[198]