PlayAGS posts ‘better than expected’ Q3 results
Gaming equipment maker says financial condition improved ‘dramatically’ from Q2
PlayAGS, Inc., a Las Vegas-based designer and developer of equipment and services solutions for the global gaming industry, on Thursday said its third quarter net loss of $11.1m was a “dramatic improvement” from the $42.6m net loss it reported in the second quarter.
The company noted it was impacted by “nearly all” of its customers having to shut down from March to May due to the coronavirus pandemic. By Sept. 30, nearly all its customers’ casinos in the United States and Canada had resumed limited operations, while in Mexico approximately 50% of its customers’ properties were reopened with capacity restrictions.
Total revenue for Q3 was $49.3m, up from $16.8m in Q2. The company said revenue decreased 37.9% year-over-year, “predominantly attributable to the pandemic’s negative impact on our customer’s operations and, subsequently, our gaming operations revenue and EGM unit sales,” AGS said in a statement.
AGS said gaming operations revenue, or recurring revenue, was $36.3m in Q3, up from $10.2m in Q2, and down 30.9% year-over-year – again due to COVID-related casino closures and capacity limitations. “A year-over-year increase in our Interactive segment revenue helped to partially offset the declines in our other reporting segments,” the company reported.
“Our third quarter financial performance improved dramatically compared to the 2020 second quarter, with revenue, net loss, and adjusted EBITDA improving sharply on a sequential basis,” said Kimo Akiona, AGS’ Chief Financial Officer. “Importantly, we were free cash flow positive in the quarter, allowing us to report a strong liquidity position of $113.2m at quarter end. Given our better-than-expected third quarter financial performance and growing comfort with our resulting liquidity position, we elected to fully repay the $30 million outstanding on our revolving credit facility, subsequent to quarter end.”
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