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US – AGS creeping back up to pre-pandemic sales levels

By - 8 November 2021

Slots supplier PlayAGS said its third quarter revenue totaled $67.3m compared to $49.3m and $79.4m in Q3 2020 and Q3 2019, respectively. 

Growth in domestic EGM gaming operations and Interactive revenue, combined with all-time record Table Products revenue, was more than offset by declines in EGM equipment sales and international EGM gaming operations revenue versus Q3 2019 levels.

Although Q3 2021 EGM equipment sales revenue came in below Q3 2019 levels, AGS said it was ‘encouraged by evidence of operators’ growing propensity to commit capital for new equipment purchases.’

Similarly, while efforts to curtail the spread of COVID-19, coupled with the lack of fiscal stimulus, has protracted the recovery in the company’s Mexico gaming operations business, with the company saying it remained ‘cautiously optimistic in the prospects for the Mexico gaming market to make a full recovery.’

AGS President and Chief Executive Officer David Lopez said: “Our third quarter financial performance once again reflects our growing product momentum and improved execution across all three of our operating segments. The investments we have made into our business over the past eighteen months have strengthened our company’s foundation, which should pave the way for meaningful shareholder value creation in the coming quarters.” 

Kimo Akiona, AGS’ Chief Financial Officer, added: “Supported by our solid third quarter financial results and the stability we are in seeing within our business fourth quarter to date, we now expect to be nicely free cash flow positive for the full year 2021 and to end the year with net leverage inside of 4.5x TTM Adjusted EBITDA.

“Looking ahead, we continue to carefully manage our leverage and liquidity position to ensure we can execute on opportunities to lower our borrowing costs as they present themselves, with an intermediate-term focus on restoring the balance sheet flexibility we had prior to the onset of COVID-19, when our balance sheet was levered well inside of 4.0x.”

AGS sold a total of 663 EGM units compared to 387 units and 1,391 units in Q3 2020 and Q3 2019, respectively. EGM unit sales increased modestly versus the 613 units sold in Q2 2021.

“We attribute the sequential growth in EGM unit sales to accelerating AGS core game content momentum and further recovery in core North American replacement unit demand, partially offset by a more modest opening and expansion opportunity set,” it added.

Customer demand for our Orion Curve Premium package continues to strengthen, with current installs performing well above house average. In addition to broadening our available product configurations to provide added versatility for future installs, we continue to develop a deep pipeline of new premium game content to further support our long-term growth initiatives within the higher-yielding premium segment. 

“Customer demand for our Orion Curve Premium package continues to strengthen, with current installs performing well above house average. In addition to broadening our available product configurations to provide added versatility for future installs, we continue to develop a deep pipeline of new premium game content to further support our long-term growth initiatives within the higher-yielding premium segment. 

“Our Ultimate Choice Jackpots and Coin Bonanza families of core games are delivering solid performance, helping us achieve the largest percentage point growth in the “Top New Core Games” category over the last six months in the October 2021 Eilers-Fantini Game Performance Report,” it added.

“Customer feedback on our array of new game themes and cabinet configurations recently showcased at the Global Gaming Expo has proven overwhelmingly positive. Notably, customers appear encouraged by our enhanced graphics, new game play mechanics and more diversified content offerings, helping to stimulate demand for our products.”

  

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