Inspired Entertainment, Inc. (NASDAQ:INSE) Q3 2018 Earnings Conference Call - Final Transcript
Aug 14, 2018 • 08:00 am ET
So further down the income statement. Net operating result improved from a net loss to a profit due to the increased revenue and a decreased cost of sales. SG&A increased year-over-year, but once the items outside the normal course of business are taken into account, namely the restructuring costs, these reduced 1% in US dollar or 7% in constant currency. So we have a strong focus on costs.
From a cash flow perspective, for the nine months, net cash provided by operating activity increased to $17.8 million and up from $4.2 million in the prior year. And net cash used in investing activities decreased slightly from $29 million last year to $28 million this year. And that's, as we closed the quarter, at just over $10 million in cash.
So carrying on with the balance sheet and thinking about the recent refinance, which we mentioned in the earnings release. We successfully completed a refinancing of approximately $150 million facility, which includes a $140 million loan, which brought LIBOR plus 900. And then we also have a GBP7.5 million revolving credit facility. The majority of these proceeds are being used to pay off the existing debt and revolver and any accrued and unpaid interest and related premiums and fees and costs.
If we think about this and potentially oversimplify we're taking the loan out in US dollars, but as our earnings at the moment are predominantly in pounds and euros, we're locking into a cross-currency swap, which will have the effect of swapping the floating interest rate to a fixed interest rate and also fixing the exchange rates into pounds and euros during the three year term of the swap.
So to think about this, the all-in implied rate for the term of the swap, excluding fees and repayments for the three year period is 10.9%. This will effectively strengthen our balance sheet by adding approximately $9 million of cash as well as leave an unfunded revolver position of GBP7.5 million. It will lower our cost of capital significantly and provide the flexibility to grow our business, which we've been after.
So with that, I'll hand back to Lorne for any additional comments before we open up to Q&A.
Thank you, Stewart. I think that was a great description of the operational aspects in the quarter as well as the details surrounding and benefits of the refi that we're obviously all quite happy about. Other than that, I really don't have any additional comments. So operator, at this time, we're happy to open the program up to Q&A.