Supplier News
US – PlayAGS back up to 90 per cent of pre-pandemic revenue
By Phil - 11 March 2022
PlayAGS delivered fourth quarter revenues of $70.2m, marking the fourth consecutive quarter in which the slot manufacturer was able to achieve quarterly sequential revenue growth, taking the quarter back up to 90 per cet of pre-pandemic levels.
Fourth quarter revenue exceeded the level reached in Q3 2021 by approximately four per cent, supported by an over 20 per cent increase in EGM equipment sales, sustained strength within the company’s domestic EGM recurring revenue business, record Table Products performance, and further recovery in our international EGM gaming operations revenue.
Q4 2021 consolidated revenue reached approximately 90 per cent of the level achieved in Q4 2019, as higher revenue contributions from our domestic EGM recurring revenue, Table Products and Interactive businesses were more than offset by the more gradual post-COVID-19 recoveries experienced within the company’s EGM equipment sales and international EGM gaming operations verticals. Although slower to fully recover, it is important to note EGM equipment sales increased sequentially in all four quarters of 2021, while international EGM gaming operations revenue has improved sequentially in all six quarters since reaching COVID-19-impacted lows in Q2 2020.
AGS President and Chief Executive Officer David Lopez said: “If 2020 was the year of resiliency within our business, 2021 was the year of transition. Supported by the foundational changes put into place over the preceding 18 months and an accommodative macroeconomic backdrop, we were able to establish operating momentum within all three business verticals as we progressed throughout the year, a trend that continued into the fourth quarter.”
Mr. Lopez continued: “With our improved 2021 financial results behind us, our attention has shifted to ensuring we are best positioned to achieve even greater success in 2022. To that end, I would characterize 2022 as a year of acceleration for AGS; one in which we will look to further leverage the continuous improvement in our people, products and processes to strengthen our financial performance.”
Kimo Akiona, AGS’ Chief Financial Officer, added: “I am pleased with the degree to which we were able to improve the quality and flexibility of our balance sheet throughout 2021. Looking ahead to 2022, I believe the operational momentum we continue to see within the business, the approximately $10 million of annualized cash interest expense savings we expect to realize as a result of our recent refinancing transaction, and our organizational commitment to maximizing free cash flow position us to deliver upon our year end net leverage target of less than 4.0x.”
AGS’ domestic EGM installed base grew by more than 170 units versus the 15,767 units installed at September 30, 2021, marking the second consecutive quarterly sequential increase in its domestic EGM installed base. Growing operator demand for the company’s expanded suite of premium recurring revenue products and, to a lesser degree, new casino opening and expansion activity paced the quarterly sequential unit growth. AGS’ domestic installed base decreased by 329 units and 2,429 units versus Q4 2020 and Q4 2019, respectively, with the overwhelming majority of the declines directly attributable to our decision to strategically prune lower-yielding units.
