GlobeNewswire Inc | Mar 22, 2021 04:30PM EDT

March 22, 2021

Q4 revenue of $42.5 million up 34% vs Q3Q4 direct sales grew 230% to $3.3 million vs Q3Q4 revenue per viewer grew 100% to $0.52 vs Q3

TORONTO, March 22, 2021 (GLOBE NEWSWIRE) -- Enthusiast Gaming Holdings Inc. (TSX: EGLX)(OTCQB: ENGMF)(FSE: 2AV), (Enthusiast Gaming or the Company) the largest gaming media platform in North America, reaching over 300 million monthly video game and esports fans worldwide, today announced financial results for the fourth quarter and year ended December 31, 2020.

Today we announced record Q4 and 2020 revenue. These robust results show the tremendous progress made in 2020 and provide insight into the overall growth potential of the Company in 2021,commented Adrian Montgomery, CEO of Enthusiast Gaming.We exceeded our internal expectations, while delivering on our strategy of increasing direct sales revenue, which grew 230% in Q4 compared to Q3. We will continue to aggressively invest in our direct sales efforts to drive higher revenue per viewer and margin growth.

Fourth Quarter 2020 Highlights:

-- Revenue was $42.5 million, a 34% increase compared to pro forma revenue of $31.7 million in Q3 2020; -- Gross profit was $8.1 million, an increase of 52% compared to pro forma gross profit of $5.3 million in Q3 2020; -- Net and comprehensive loss was $6.9 million, resulting in a net and comprehensive loss per share, basic and diluted, of $0.06, compared to a pro forma net and comprehensive loss of $8.0 million and $0.10, respectively in Q3 2020; -- Direct advertising sales were $3.3 million, an increase of 230% compared to $1.0 million in Q3 2020; -- Paid subscribers grew 60% in the past 12 months to end the year at 122,000; -- Total views across written and video content were 9.9 billion for Q4; and, -- RPV (revenue per viewer) was $0.52, an increase of 100% from $0.26 in Q3 2020 driven by the inclusion of Omnia Media results for a full quarter, as well as strong results from Media and Content.

Looking back at the full year, I am so proud of our team and the considerable achievements we made despite the COVID-19 backdrop that presented a number of financial and operational challenges. We took significant steps forward towards building out our proprietary fan flywheel, by (1) completing and integrating the transformative acquisition of Omnia Media; (2) building out a direct sales team and closing nearly $5 million in integrated deals with clients like the Biden Harris presidential campaign, Gillette, Activision, Disney, Amazon, among many others; (3) growing our subscriber base by more than 60%; and (4) syndicating content to platforms Samsung TV Plus and Snapchat. Our Luminosity Gaming esports roster added some superstar talent, including xQc, Muselk, Chica, and Nick Eh 30 among many others. Finally, we successfully pivoted over half a dozen live events to virtual,added Montgomery.For 2021, we will continue to invest to accelerate growth and expect revenue growth of at least 20%, as we move more aggressively into Phase 2 of our strategic plan to grow and monetize our premium media, talent, esports and entertainment assets. Finally, the Company continues to advance its NASDAQ listing application, which we understand is in its final stages, and accordingly plans on filing a Form 40-F Registration Statement with the United States Securities and Exchange Commission in the coming weeks.

Significant events subsequent to December 31, 2020:

-- The Company joined the Comscore 100 ranking of Top 100 Internet Properties in the United States - one of only two gaming properties to make the list alongside Amazons TWITCH.TV, ranked #1 Gaming Information property for unique visitor traffic from mobile devices; -- Strengthened balance sheet by approximately $50 million with the combination of a bought deal financing for gross proceeds of $42.5 million and the reduction of the Companys indebtedness through the conversion of its outstanding debentures of approximately $9 million; -- Announced key partnership deals with Samsung and TikTok; -- Signed exclusive monetization agreements with nine new video game fan communities; -- Announced the launch of Upcomer, a new premium online publication dedicated to the growing needs of todays esports fan; and -- Entered into a binding term sheet to acquire Vedatis SAS, owners of Icy Veins, the Companys largest affiliate fan community, for 7 million in cash and stock, plus an earnout subject to certain milestones being achieved.

The Company completed the acquisition of Omnia Media Inc. (Omnia) on August 30, 2020 (see press release dated August 31, 2020). The audited consolidated financial statements of the Company for the years ended December 31, 2020 and 2019, (the Financial Statements) include the financial results of Omnia from August 31 through December 31, 2020. References to pro forma figures herein will assume the acquisition of Omnia took place on the first day of the respective period. The Company is providing pro forma quarterly information for 2020 as a number of mergers and acquisitions closed in the second half of 2019 reduce the comparability of year-over-year figures. The Financial Statements contain comparative figures for the year ended December 31, 2019. Results are presented in Canadian dollars.

Select Pro Forma Financial Metrics: Quarterly 2020Pro Forma for Omnia Acquisition(in $M except for EPS) Q120 Q220 Q320 Q420 YE20Total Revenue $26.2 $27.2 $31.7 $42.5 $127.6 Media and Content $22.5 $24.4 $29.0 $39.6 $115.5 Subscription $1.2 $1.7 $1.6 $1.7 $6.2 Esports and Entertainment $2.5 $1.1 $1.1 $1.2 $5.9 Gross Profit $4.7 $4.5 $5.3 $8.1 $22.6 Gross Margin % 18.0 % 16.7 % 16.8 % 19.1 % 17.7 %Operating Income (loss) ($4.6 ) ($4.3 ) ($4.0 ) ($4.4 ) ($17.3 )Operating Margin -17.6 % -15.8 % -12.6 % -10.4 % -13.6 %Net & Comprehensive Income ($5.9 ) ($6.6 ) ($7.9 ) ($6.9 ) ($27.3 )(loss)Earnings (loss) Per Share ($0.08 ) ($0.09 ) ($0.10 ) ($0.06 ) ($0.33 )(basic & diluted)

Select Pro Forma Operating Metrics: Quarterly 2020Pro Forma for Omnia Acquisition Q120 Q220 Q320 Q420 YE20Total Views (millions) 9,201 12,485 10,554 9,852 42,092Web pageviews 2,296 3,119 2,427 2,522 10,364Video views 6,905 9,366 8,127 7,330 31,728Paid Subscribers (thousands - as at end of period) 92 111 112 122 122

Certain information provided in this news release is extracted from Financial Statements and Managements Discussion & Analysis (MD&A) of the Company for the year ended December 31, 2020 and should be read in conjunction with them. It is only in the context of the fulsome information and disclosures contained in the Financial Statements and MD&A that an investor can properly analyze this information. The Financial Statements and MD&A can be found under the Companys profile on www.sedar.com.

Earnings Announcement and Supplemental Information

Management will host a conference call and webcast on March 22, 2021, at 5 p.m. Eastern Time to review and discuss results for the fourth quarter and year end December 31, 2020.

Please call the following numbers (at least 10 minutes before the scheduled time) to participate:

North America (toll-free): +1 877-407-9039

International: +1 201-689-8470

Conference ID: 13717348

A live webcast can be heard at https://www.enthusiastgaming.com/shareholder-information/.

If you are unable to join live, a replay of the call will be accessible until April 5, 2021, as follows: North America: +1 844-512-2921; International: +1 412-317-6671. The conference ID is 13717348. A recorded version of the webcast will also be available via the Enthusiast Gaming investor relations website.

About Enthusiast Gaming

Enthusiast Gaming is building the worlds largest media platform of communities for gamers and esports fans that reaches over 300 million gaming enthusiasts on a monthly basis. Already the largest gaming platform in North America and the United Kingdom, the Companys business is comprised of four main pillars: Esports, Content, Talent and Entertainment. Enthusiast Gamings esports division, Luminosity Gaming, is a leading global esports franchise that consists of 7 professional esports teams under ownership and management, including the Vancouver Titans Overwatch team and the Seattle Surge Call of Duty team. Enthusiasts Gaming content division includes 2 of the top 20 gaming media and entertainment video brands with BCC Gaming and Arcade Cloud, reaching more than 50MM unique viewers a month across 9 YouTube pages, 8 Snapchat shows and related Facebook, Instagram and TikTok accounts. Its 100 gaming-related websites including The Sims Resource, Destructoid, and The Escapist collectively generate approximately 1 billion page views monthly. Enthusiast Gamings talent division works with nearly 1,000 YouTube creators generating nearly 3 billion views a month working with leading gamer talent such as Pokimane, Flamingo, Anomaly, and The Sidemen. Enthusiast Gamings entertainment business includes Canadas largest gaming expo, EGLX (eglx.com), and the largest mobile gaming event in Europe, Pocket Gamer Connects (pgconnects.com). For more information on the Company visit enthusiastgaming.com. For more information on Luminosity Gaming visit luminosity.gg.

Investor Relations Contact: Eric Bernofsky, Chief Corporate Officer416-623-9360investor@enthusiastgaming.com

Media Relations:Carmela Antolino, Provident Communications647-287-2286 carmela@providentcomms.com

Forward Looking Statements 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 Enthusiast anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations and future actions of the Company. 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 information is based on currently available competitive, financial and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Enthusiast to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors may be based on information currently available to Enthusiast, including information obtained from third-party industry analysts and other third-party sources, and are based on management's current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement. Trading in the securities of the Company should be considered highly speculative.

There are measures included in this news release that do not have a standardized meaning under generally accepted accounting principles (GAAP) and therefore may not be comparable to similarly-titled measures and metrics presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. In particular, revenue per view or RPV are non-GAAP measures. Enthusiast Gaming includes these measures because it believes certain investors use these measures and metrics as a means of assessing financial performance and that such measures highlight trends in the Company's financial performance that may not otherwise be apparent when one relies solely on GAAP measures.

The non-GAAP measures presented in the news release are as follows:

i. Revenue per viewer or (RPV) which is measured as the Companys content and media revenue plus subscription revenue plus certain categories of esports and entertainment revenue including sponsorship and streaming revenue, the sum of which is then divided by the average monthly viewers over the indicated period. In the case of an interim three-month period, the quotient is multiplied by four to produce an annualized figure.

Non-GAAP measures should not be considered in isolation or as a substitute for revenue, net income, cash flows generated by operating, investing or financing activities, or other financial statement data presented in accordance with GAAP, and may not be comparable to similarly titled measures used by other companies. Further discussion on non-GAAP measures is provided for in the MD&A.

Neither the TSX Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Exchange) accepts responsibility for the adequacy or accuracy of this release.

Enthusiast Gaming Holdings Inc. Consolidated Statements of Financial PositionAs at December 31, 2020 and 2019 December 31, December 31, 2020 2019 ASSETS Current Cash $ 4,323,823 $ 13,211,722 Investments 124,998 804,865 Trade and other receivables 22,424,596 6,701,087 Loans receivable 194,389 205,936 Income tax receivable 290,077 - Prepaid expenses 576,802 612,386 Total current assets 27,934,685 21,535,996 Non-current Property and equipment 354,850 298,312 Right-of-use asset - lease contract 2,848,400 733,413 Long-term investment 2,606,100 2,480,405 Investment in associates 1,026,910 914,295 Long-term portion of prepaid 263,196 104,630 expenses Intangible assets 81,106,007 60,017,320 Goodwill 106,181,086 83,259,416 Total Assets $ 222,321,234 $ 169,343,787 LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued $ 23,602,547 $ 7,423,396 liabilities Contract liabilities 1,625,594 1,647,594 Income tax payable - 2,415 Current portion of long-term debt 1,250,000 - Current portion of deferred payment 636,600 1,208,413 liability Current portion of convertible 7,546,453 - debentures Current portion of lease contract 578,330 193,366 liability Total current liabilities 35,239,524 10,475,184 Non-current Long-term debt 21,651,956 19,691,220 Long-term lease contract liability 2,308,336 548,846 Long-term portion of convertible - 7,015,820 debentures Vendor-take-back loan 5,559,250 - Long-term portion of deferred payment 529,124 473,413 liability Deferred tax liability 15,161,987 12,482,605 Total liabilities $ 80,450,177 $ 50,687,088 Shareholders' Equity Share capital 232,616,997 176,511,857 Shares to be returned to treasury - (3,858,756 ) Warrants reserve - 15,404,728 Contributed surplus 7,494,164 9,439,324 Accumulated other comprehensive 45,428 90,078 income Deficit (98,285,532 ) (78,930,532 ) Total shareholders' equity 141,871,057 118,656,699 Total liabilities and shareholders' $ 222,321,234 $ 169,343,787 equity

Enthusiast Gaming Holdings Inc. Consolidated Statements of Loss and Comprehensive LossFor the years ended December 31, 2020 and 2019 December 31, December 31, 2020 2019 Revenue Revenue $ 72,758,717 $ 11,760,927 Gain on player buyout 204,764 448,399 Total revenue 72,963,481 12,209,326 Cost of sales 54,294,967 7,245,000 Gross margin 18,668,514 4,964,326 Operating expenses Professional fees 2,273,088 1,174,890 Consulting fees 5,805,134 6,793,925 Advertising and 1,409,084 2,104,622 promotion Office and general 2,878,813 1,371,821 Salaries and wages 9,131,447 1,794,054 Technology support, web 4,734,548 1,144,534 development and content Esports player, team 3,446,652 1,728,525 and game expenses Foreign exchange (gain) (13,832 ) 239,828 loss Share-based 818,383 6,113,644 compensation Amortization and 5,036,787 2,933,874 depreciation Total operating expenses 35,520,104 25,399,717 Other expenses (income) Listing expense - 6,829,371 Transaction cost 1,882,081 3,154,313 Share of loss from investment in 2,057,135 746,424 associates Interest and accretion 5,236,482 2,825,793 Goodwill impairment on acquisition of - 46,170,418 businesses Change in fair value of (183,951 ) 57,708 investment Loss on modification of 1,140,320 - long-term debt Loss on conversion of 49,002 - convertible debentures Interest income (102,158 ) (677,276 ) Net loss before income (26,930,501 ) (79,542,142 ) taxes Income taxes Current tax expense 5,617 - Deferred tax (recovery) (83,786 ) (995,715 ) Net loss for the year (26,852,332 ) (78,546,427 ) Other comprehensive income Items that may be reclassified to profit or loss Foreign currency (44,650 ) 90,078 translation adjustment Net loss and comprehensive loss for $ (26,896,982 ) $ (78,456,349 ) the year Net loss and comprehensive loss per share, basic and diluted $ (0.32 ) $ (2.07 ) Weighted average number of common shares outstanding, basic and 83,401,398 37,872,549 diluted

Enthusiast Gaming Holdings Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2020 and 2019 December 31, December 31, 2020 2019 Cash flows from operating activities Net loss for the year $ (26,852,332 ) $ (78,546,427 ) Items not affecting cash: Amortization and depreciation 5,036,787 2,933,874 Share-based compensation 818,383 6,113,644 Interest and accretion 1,868,063 1,444,017 Goodwill impairment on acquisition of - 46,170,418 businesses Deferred income tax recovery (83,786 ) (995,715 ) Gain on player buyout (204,764 ) (448,399 ) Foreign exchange loss 16,409 100,540 Listing expense - 6,829,371 Capitalized interest and success fee 1,494,910 1,102,691 Shares issued for services 441,613 1,770,090 Loss on modification of long-term 1,140,320 - debt Loss on conversion of convertible 49,002 - debentures Provisions 47,716 - Change in fair value of investment (183,951 ) 57,708 Share of loss from investment in 2,057,135 746,424 associates Lease payments (404,958 ) (87,159 ) Changes in working capital Changes in trade and other (7,114,118 ) (3,593,513 ) receivables Changes in prepaid expenses (1,777 ) 75,827 Changes in accounts payable and 6,896,882 (689,483 ) accrued liabilities Changes in contract liabilities (22,000 ) 1,031,352 Changes in income tax receivable (292,492 ) (85,983 ) Net cash used in operating activities (15,292,958 ) (16,070,723 ) Cash flows from investing activities Cash paid for acquisitions (10,500,000 ) (6,116,972 ) Business acquisitions, net of cash 281,125 (9,051,864 ) acquired Proceeds from disposal of investment 680,000 - Deferred payment liability (659,832 ) (11,965,500 ) Proceeds from disposal of intangible 204,764 1,113,799 assets Investment in associate (2,169,750 ) - Acquisition of property and equipment (7,259 ) (139,294 ) Acquisition of intangibles - (64,940 ) Net cash used in investing activities (12,170,952 ) (26,224,771 ) Cash flows from financing activities Proceeds from the issuance of shares 15,609,256 - for the Offering, net of transaction costs Proceeds from the issuance of shares - 23,201,002 for subscription receipts, net of transaction costs Proceeds from convertible debenture, - 9,345,004 net of transaction costs Proceeds from long-term debt, net of 26,000 18,354,050 transaction costs Proceeds from exercise of warrants 2,728,015 382,418 Proceeds from exercise of options 228,536 21,837 Net cash provided by financing 18,591,807 51,304,311 activities Foreign exchange effect on cash (15,796 ) 47,851 Net change in cash (8,887,899 ) 9,056,668 Cash, beginning of year 13,211,722 4,155,054 Cash, end of year $ 4,323,823 $ 13,211,722