LAS VEGAS, March 4, 2021 /PRNewswire/ -- PlayAGS, Inc.
(NYSE: AGS) ("AGS", "us", "we" or the "Company") a designer and
developer of equipment and services solutions for the global gaming
industry, today reported financial results for
the fourth quarter and full year ended December 31, 2020.
AGS President and Chief Executive Officer David Lopez said, "2020 was a year full of
unprecedented challenges, the likes of which required the
unwavering commitment of a passionate, loyal, and hardworking team
to successfully overcome. To that end, I am extremely honored by
and thankful for the tireless efforts put forth by so many of our
AGS team members to ensure we not only survived the COVID-19
pandemic, but put ourselves in a position to emerge a stronger,
more resilient company."
Lopez added, "Looking beyond the many challenges faced
throughout the year, one of the bright spots, to the extent there
was one, is that the COVID-19 pandemic slowed down the pace of
life. As a company, we used this time to refine our strategy and
improve our operating efficiency, with a keen focus on three key
areas; people, product, and processes. As a result, I believe we
are better positioned today to achieve success across all three of
our business segments than at any other point in our company's
history."
AGS Chief Financial Officer Kimo
Akiona added, "I am incredibly proud of the way our
team came together throughout 2020 to face the unprecedented
operational and financial hurdles introduced by the spread of
COVID-19. Not only were we able to nimbly streamline our business
to preserve liquidity at the onset of COVID-19, but we
opportunistically shored up our balance sheet in May and
successfully ramped operations as our casino operator partners
gradually brought their businesses back online. As I look ahead to
2021, I believe our strong liquidity position, improving product
portfolio, and organizational alignment position us to achieve
improved financial performance"
Summary of
the Three Months Ended December 31,
2020 and 2019
|
(In thousands,
except per-share and Adjusted EBITDA margin data)
|
|
|
Three Months Ended
December 31,
|
|
|
Twelve Months
Ended December 31,
|
|
|
2020
|
|
|
2019
|
|
|
$
Change
|
|
|
%
Change
|
|
|
2020
|
|
|
2019
|
|
|
$
Change
|
|
|
%
Change
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM
|
$
|
42,396
|
|
|
$
|
73,710
|
|
|
$
|
(31,314)
|
|
|
|
(42.5)
|
%
|
|
$
|
151,789
|
|
|
$
|
289,642
|
|
|
$
|
(137,853)
|
|
|
|
(47.6)
|
%
|
Table
Products
|
|
2,551
|
|
|
|
2,757
|
|
|
|
(206)
|
|
|
|
(7.5)
|
%
|
|
|
7,969
|
|
|
|
10,194
|
|
|
|
(2,225)
|
|
|
|
(21.8)
|
%
|
Interactive
|
|
1,675
|
|
|
|
1,319
|
|
|
|
356
|
|
|
|
27.0
|
%
|
|
|
7,249
|
|
|
|
4,878
|
|
|
|
2,371
|
|
|
|
48.6
|
%
|
Total
revenues
|
$
|
46,622
|
|
|
$
|
77,786
|
|
|
$
|
(31,164)
|
|
|
|
(40.1)
|
%
|
|
$
|
167,007
|
|
|
$
|
304,714
|
|
|
$
|
(137,707)
|
|
|
|
(45.2)
|
%
|
(Loss) income from
operations
|
$
|
(7,835)
|
|
|
$
|
7,815
|
|
|
$
|
(15,650)
|
|
|
|
(200.3)
|
%
|
|
$
|
(44,169)
|
|
|
$
|
23,737
|
|
|
$
|
(67,906)
|
|
|
|
(286.1)
|
%
|
Net (loss) income
attributable to PlayAGS, Inc.
|
$
|
(17,242)
|
|
|
$
|
1,423
|
|
|
$
|
(18,665)
|
|
|
|
(1311.7)
|
%
|
|
$
|
(85,378)
|
|
|
$
|
(11,752)
|
|
|
$
|
(73,626)
|
|
|
|
626.5
|
%
|
(Loss) income per
share
|
$
|
(0.49)
|
|
|
$
|
0.04
|
|
|
$
|
(0.53)
|
|
|
|
(1325.0)
|
%
|
|
$
|
(2.40)
|
|
|
$
|
(0.33)
|
|
|
$
|
(2.07)
|
|
|
|
627.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM
|
$
|
19,696
|
|
|
$
|
36,630
|
|
|
$
|
(16,934)
|
|
|
|
(46.2)
|
%
|
|
$
|
65,877
|
|
|
$
|
144,718
|
|
|
$
|
(78,841)
|
|
|
|
(54.5)
|
%
|
Table
Products
|
|
1,316
|
|
|
|
1,005
|
|
|
|
311
|
|
|
|
30.9
|
%
|
|
|
3,360
|
|
|
|
3,699
|
|
|
|
(339)
|
|
|
|
(9.2)
|
%
|
Interactive
|
|
287
|
|
|
|
(370)
|
|
|
|
657
|
|
|
|
(177.6)
|
%
|
|
|
2,432
|
|
|
|
(2,355)
|
|
|
|
4,787
|
|
|
|
(203.3)
|
%
|
Total Adjusted
EBITDA(1)
|
$
|
21,299
|
|
|
$
|
37,265
|
|
|
$
|
(15,966)
|
|
|
|
(42.8)
|
%
|
|
$
|
71,669
|
|
|
$
|
146,062
|
|
|
$
|
(74,393)
|
|
|
|
(50.9)
|
%
|
Total Adjusted
EBITDA margin(1)
|
|
45.7
|
%
|
|
|
47.9
|
%
|
|
|
(2.2)
|
%
|
|
(222)bps
|
|
|
|
42.9
|
%
|
|
|
47.9
|
%
|
|
|
(5.0)
|
%
|
|
(502)bps
|
|
Fourth Quarter 2020 Financial
Results
- During March and April and continuing through mid- to late-May,
nearly all of our customers closed their operations due to the
COVID-19 pandemic and the actions taken by governments and
businesses to contain the virus. COVID-19-related measures
continued to impact our customers' businesses throughout the fourth
quarter, pacing the majority of the year-over-year declines in the
metrics presented above, including revenues, (loss) income from
operations, net (loss) income, and Adjusted EBITDA.
- Consolidated revenue totaled $46.6
million compared to $77.8
million in the 2019 fourth quarter, representing a
year-over-year decrease of 40.1%. The year-over-year decline
reflects the COVID-19 pandemic's negative impact on our customers'
operations and, subsequently, our gaming operations revenue and EGM
unit sales.
- We estimate approximately 90% of our 16,268-unit domestic
installed base was active as of December 31,
2020. Internationally, we estimate approximately 36% of our
7,985-unit installed base was active as of December 31, 2020.
- Gaming operations revenue, or recurring revenue, totaled
$40.0 million compared to
$51.6 million in the 2019 fourth
quarter. The year-over-year gaming operations revenue decrease
reflects the impact of COVID-19 on our EGM and Table Product
recurring revenue streams, partially offset by higher Interactive
segment revenue, as compared to the prior year. Recurring revenue
comprised 85.7% of our total revenue compared to 66.3% in the prior
year, reflecting the relative resiliency inherent in our gaming
operations business.
- Our 2020 fourth quarter net loss of $17.2 million declined as compared to net income
of $1.4 million in the 2019 fourth
quarter. Lower net income year-over-year reflects the impact of the
COVID-19 pandemic on our operations, coupled with higher interest
expense related to our incremental debt financing, which we closed
upon in May 2020.
- Total Adjusted EBITDA (non-GAAP)(1) decreased
to $21.3 million compared to $37.3
million in the 2019 fourth quarter. A year-over-year
decrease in our EGM adjusted EBITDA, which we largely
attribute to the impact of COVID, was partially offset by higher
adjusted EBITDA in our Table Products and Interactive segments, as
compared to the prior year's quarter.
- Total Adjusted EBITDA margin (non-GAAP)(1) decreased to 45.7%
in the fourth quarter of 2020 compared to 47.9% in
the prior year, reflecting the impact of normalization in our
operating cost base to support the anticipated recovery in our
revenues from post-COVID lows.
(1) Adjusted
EBITDA and Adjusted EBITDA margin are non-GAAP measures, see
non-GAAP reconciliation below.
|
EGM
|
|
Three Months Ended
December 31, 2020 compared to Three Months Ended
December 31, 2019
|
|
(Amounts in
thousands, except unit data)
|
Three Months Ended
December 31,
|
|
|
Twelve Months
Ended December 31,
|
|
|
2020
|
|
|
2019
|
|
|
$
Change
|
|
|
%
Change
|
|
|
2020
|
|
|
2019
|
|
|
$
Change
|
|
|
%
Change
|
|
EGM segment
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
operations
|
$
|
35,940
|
|
|
$
|
47,586
|
|
|
$
|
(11,646)
|
|
|
|
(24.5)
|
%
|
|
$
|
114,548
|
|
|
$
|
196,101
|
|
|
$
|
(81,553)
|
|
|
|
(41.6)
|
%
|
Equipment
sales
|
|
6,456
|
|
|
|
26,124
|
|
|
|
(19,668)
|
|
|
|
(75.3)
|
%
|
|
|
37,241
|
|
|
|
93,541
|
|
|
|
(56,300)
|
|
|
|
(60.2)
|
%
|
Total EGM
revenues
|
$
|
42,396
|
|
|
$
|
73,710
|
|
|
$
|
(31,314)
|
|
|
|
(42.5)
|
%
|
|
$
|
151,789
|
|
|
$
|
289,642
|
|
|
$
|
(137,853)
|
|
|
|
(47.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM Adjusted
EBITDA
|
$
|
19,696
|
|
|
$
|
36,630
|
|
|
$
|
(16,934)
|
|
|
|
(46.2)
|
%
|
|
$
|
65,877
|
|
|
$
|
144,718
|
|
|
$
|
(78,841)
|
|
|
|
(54.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM unit
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VLT
|
|
-
|
|
|
|
512
|
|
|
|
(512)
|
|
|
|
(100.0)
|
%
|
|
|
-
|
|
|
|
512
|
|
|
|
(512)
|
|
|
|
(100.0)
|
%
|
Class II
|
|
11,794
|
|
|
|
12,415
|
|
|
|
(621)
|
|
|
|
(5.0)
|
%
|
|
|
11,794
|
|
|
|
12,415
|
|
|
|
(621)
|
|
|
|
(5.0)
|
%
|
Class III
|
|
4,474
|
|
|
|
5,441
|
|
|
|
(967)
|
|
|
|
(17.8)
|
%
|
|
|
4,474
|
|
|
|
5,441
|
|
|
|
(967)
|
|
|
|
(17.8)
|
%
|
Domestic installed
base, end of period
|
|
16,268
|
|
|
|
18,368
|
|
|
|
(2,100)
|
|
|
|
(11.4)
|
%
|
|
|
16,268
|
|
|
|
18,368
|
|
|
|
(2,100)
|
|
|
|
(11.4)
|
%
|
International
installed base, end of period
|
|
7,985
|
|
|
|
8,497
|
|
|
|
(512)
|
|
|
|
(6.0)
|
%
|
|
|
7,985
|
|
|
|
8,497
|
|
|
|
(512)
|
|
|
|
(6.0)
|
%
|
Total installed base,
end of period
|
|
24,253
|
|
|
|
26,865
|
|
|
|
(2,612)
|
|
|
|
(9.7)
|
%
|
|
|
24,253
|
|
|
|
26,865
|
|
|
|
(2,612)
|
|
|
|
(9.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Installed base -
Oklahoma
|
|
8,871
|
|
|
|
10,171
|
|
|
|
(1,300)
|
|
|
|
(12.8)
|
%
|
|
|
8,871
|
|
|
|
10,171
|
|
|
|
(1,300)
|
|
|
|
(12.8)
|
%
|
Installed base -
non-Oklahoma
|
|
7,397
|
|
|
|
8,197
|
|
|
|
(800)
|
|
|
|
(9.8)
|
%
|
|
|
7,397
|
|
|
|
8,197
|
|
|
|
(800)
|
|
|
|
(9.8)
|
%
|
Domestic installed
base, end of period
|
|
16,268
|
|
|
|
18,368
|
|
|
|
(2,100)
|
|
|
|
(11.4)
|
%
|
|
|
16,268
|
|
|
|
18,368
|
|
|
|
(2,100)
|
|
|
|
(11.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic revenue per
day
|
$
|
23.26
|
|
|
$
|
24.97
|
|
|
$
|
(1.71)
|
|
|
|
(6.8)
|
%
|
|
$
|
17.66
|
|
|
$
|
25.65
|
|
|
$
|
(7.99)
|
|
|
|
(31.2)
|
%
|
International revenue
per day
|
$
|
2.56
|
|
|
$
|
7.65
|
|
|
$
|
(5.09)
|
|
|
|
(66.5)
|
%
|
|
$
|
2.59
|
|
|
$
|
8.13
|
|
|
$
|
(5.54)
|
|
|
|
(68.1)
|
%
|
Total revenue per
day
|
$
|
16.42
|
|
|
$
|
19.52
|
|
|
$
|
(3.10)
|
|
|
|
(15.9)
|
%
|
|
$
|
12.84
|
|
|
$
|
20.10
|
|
|
$
|
(7.26)
|
|
|
|
(36.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic EGM unit
sales components:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino opening and
expansion units
|
|
-
|
|
|
|
52
|
|
|
|
(52)
|
|
|
|
(100.0)
|
%
|
|
|
200
|
|
|
|
559
|
|
|
|
(359)
|
|
|
|
(64.2)
|
%
|
Other
|
|
283
|
|
|
|
1,121
|
|
|
|
(838)
|
|
|
|
(74.8)
|
%
|
|
|
1,043
|
|
|
|
4,041
|
|
|
|
(2,998)
|
|
|
|
(74.2)
|
%
|
Total Domestic EGM
units sold
|
|
283
|
|
|
|
1,173
|
|
|
|
(890)
|
|
|
|
(75.9)
|
%
|
|
|
1,243
|
|
|
|
4,600
|
|
|
|
(3,357)
|
|
|
|
(73.0)
|
%
|
International EGM
units sold
|
|
-
|
|
|
|
110
|
|
|
|
(110)
|
|
|
|
(100.0)
|
%
|
|
|
100
|
|
|
|
279
|
|
|
|
(179)
|
|
|
|
(64.2)
|
%
|
Total EGM units
sold
|
|
283
|
|
|
|
1,283
|
|
|
|
(1,000)
|
|
|
|
(77.9)
|
%
|
|
|
1,343
|
|
|
|
4,879
|
|
|
|
(3,536)
|
|
|
|
(72.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic average sales
price
|
$
|
18,035
|
|
|
$
|
17,833
|
|
|
$
|
202
|
|
|
|
1.1
|
%
|
|
$
|
18,068
|
|
|
$
|
18,302
|
|
|
$
|
(234)
|
|
|
|
(1.3)
|
%
|
EGM Quarterly Results
Domestic Gaming Operations (2)
- Domestic gaming operations revenue totaled $34.1 million, compared to $41.6 million in the prior year's quarter. The
year-over-year revenue decline reflects the impact of
COVID-19-related capacity restrictions and casino closures and, to
a lesser extent, a decline in our installed base compared to the
prior year period.
- As of December 31, 2020, nearly
all our customers' properties in the
United States and Canada
were reopened, with most operating under some type of capacity
limitation. We estimate that more than 14,500, or approximately
90%, of our domestic EGMs were active at the end of the 2020 fourth
quarter.
- Our domestic EGM installed base decreased by 2,100 units
year-over-year, primarily due to the strategic pruning of
approximately 1,200 lower-yielding Integrity units. Additionally,
approximately 500 lower-yielding IL VLT units were removed from the
base in the fourth quarter of 2020 as part of a planned end of
lease term sale. Excluding the Integrity and IL VLT removals, our
installed base decreased by approximately 350 units year-over-year,
predominantly driven by COVID-19-related floor
reconfigurations.
- Domestic EGM revenue per day ("RPD") decreased to $23.26 compared to $24.97 in the prior year period, reflecting
the impact of EGMs that were not active in the quarter and
thus did not contribute to EGM revenue, but were included in the
calculation of RPD.
- Excluding EGMs that were not active during the
period, Domestic EGM RPD increased 8% year-over-year to
approximately $27, supported by
growth within our premium-leased unit installed base, the strategic
pruning of lower-yielding units, a resilient core gambling
customer, and reduced supply of active EGMs.
International Gaming Operations
- International gaming operations revenue decreased to
$1.8 million compared to $6.0 million in the prior year period. The
year-over-year decline reflects the impact of measures implemented
to slow the spread of COVID-19, such as temporary casino closures
and capacity restrictions, on our business. Additionally, in
contrast to the United States,
Mexico has not provided any type
of fiscal stimulus to support its post-COVID-19 economic
recovery.
- We estimate approximately 36% of our international EGMs were
active at the end of the quarter. Mexico continues to require operators to
follow strict protocols that include deactivating adjacent machines
and cleaning machines after each is played.
- Our international installed base decreased by 512 units
year-over-year as a result of permanent casino closures in
Mexico and COVID-19-related floor
reconfigurations.
Equipment Sales
- EGM units sold decreased to 283 units in the fourth quarter of
2020, primarily attributable to business disruptions related to
COVID-19 as noted above and reduced customer budgets for EGM
purchases. Additionally, we faced a softer new opening and
expansion calendar, as compared to the prior year.
- Domestic ASP remained stable at $18,035 compared to $17,833 in the
prior year period.
- We sold units into 17 U.S. states and one Canadian province,
with Virginia, Nevada and California emerging as our top three sales
markets.
- The Orion Curve accounted for 37% of units shipped in
the quarter.
Product Highlights
- Installed an additional 246 premium, lease-only Orion
Starwall games, increasing our installed base to over
300 games at quarter end. Starwall games continue to perform
well and operator interest remains steady.
- Installed over 175 Orion Curve cabinets in the
quarter, increasing our total footprint to over 370 units as of
December 31, 2020.
- Completed our first sale of Historical Horse Racing ("HHR")
units into the Virginia HHR market.
(2) "Domestic" includes both the United
States and Canada.
|
Table Products
Three Months Ended
December 31, 2020 compared to Three Months Ended December
31, 2019
|
|
(Amounts in
thousands, except unit data)
|
Three Months Ended
December 31,
|
|
|
Twelve Months
Ended December 31,
|
|
|
2020
|
|
|
2019
|
|
|
$
Change
|
|
|
%
Change
|
|
|
2020
|
|
|
2019
|
|
|
$
Change
|
|
|
%
Change
|
|
Table Products
segment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
operations
|
$
|
2,362
|
|
|
$
|
2,653
|
|
|
$
|
(291)
|
|
|
|
(11.0)
|
%
|
|
$
|
7,353
|
|
|
$
|
9,555
|
|
|
$
|
(2,202)
|
|
|
|
(23.0)
|
%
|
Equipment
sales
|
|
189
|
|
|
|
104
|
|
|
$
|
85
|
|
|
|
81.7
|
%
|
|
|
616
|
|
|
|
639
|
|
|
$
|
(23)
|
|
|
|
(3.6)
|
%
|
Total Table
Products revenues
|
$
|
2,551
|
|
|
$
|
2,757
|
|
|
$
|
(206)
|
|
|
|
(7.5)
|
%
|
|
$
|
7,969
|
|
|
$
|
10,194
|
|
|
$
|
(2,225)
|
|
|
|
(21.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table Products
Adjusted EBITDA
|
$
|
1,316
|
|
|
$
|
1,005
|
|
|
$
|
311
|
|
|
|
30.9
|
%
|
|
$
|
3,360
|
|
|
$
|
3,699
|
|
|
$
|
(339)
|
|
|
|
(9.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table Products
unit information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table Products
installed base, end of period
|
|
4,254
|
|
|
|
3,766
|
|
|
|
488
|
|
|
|
13.0
|
%
|
|
|
4,254
|
|
|
|
3,766
|
|
|
|
488
|
|
|
|
13.0
|
%
|
Average monthly lease
price
|
$
|
182
|
|
|
$
|
239
|
|
|
$
|
(57)
|
|
|
|
(23.8)
|
%
|
|
$
|
149
|
|
|
$
|
230
|
|
|
$
|
(81)
|
|
|
|
(35.2)
|
%
|
Table Products Quarterly Results
- Gaming operations, or recurring, revenue totaled $2.4 million compared to $2.7 million in the prior year's quarter.
Capacity limitations and other restrictions implemented at casinos
to help combat the spread of COVID-19 negatively impacted the
year-over-year comparison.
- Continued growth across all product categories, including side
bets, premium table games, table equipment and, most notably,
progressives, drove a 13.0% year-over-year increase in our
installed base. We estimate approximately 80% of our installed base
was active at quarter end.
- Equipment sales revenue increased 81.7% compared to the prior
year period. The year-over-year improvement reflects an increase
from sales of protective VisiDeal Shield
plexiglass player dividers and other parts to help our casino
customers operate safely in the current environment.
- Our installed base of table game progressives grew
to over 1,500 units, representing a year-over-year
increase of 235 units and quarterly sequential growth of 127
units.
- Interest in our all-inclusive site license offering, the AGS
Arsenal, continues to build as our customers look for additional
ways to improve operating efficiency. We were live with six
licenses as of December 31,
2020.
Interactive
Three Months Ended
December 31, 2020 compared to Three Months Ended
December 31, 2019
|
|
(Amounts in
thousands)
|
Three Months Ended
December 31,
|
|
|
Twelve Months
Ended December 31,
|
|
|
2020
|
|
|
2019
|
|
|
$
Change
|
|
|
%
Change
|
|
|
2020
|
|
|
2019
|
|
|
$
Change
|
|
|
%
Change
|
|
Interactive
segment revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Social gaming
revenue
|
$
|
767
|
|
|
$
|
713
|
|
|
$
|
54
|
|
|
|
7.6
|
%
|
|
$
|
3,513
|
|
|
$
|
3,319
|
|
|
$
|
194
|
|
|
|
5.8
|
%
|
Real-money gaming
revenue
|
|
908
|
|
|
|
606
|
|
|
|
302
|
|
|
|
49.8
|
%
|
|
|
3,736
|
|
|
|
1,559
|
|
|
|
2,177
|
|
|
|
139.6
|
%
|
Total Interactive
revenue
|
$
|
1,675
|
|
|
$
|
1,319
|
|
|
$
|
356
|
|
|
|
27.0
|
%
|
|
$
|
7,249
|
|
|
$
|
4,878
|
|
|
$
|
2,371
|
|
|
|
48.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interactive
Adjusted EBITDA
|
$
|
287
|
|
|
$
|
(370)
|
|
|
$
|
657
|
|
|
|
(177.6)
|
%
|
|
$
|
2,432
|
|
|
$
|
(2,355)
|
|
|
$
|
4,787
|
|
|
|
(203.3)
|
%
|
Interactive Quarterly Results
- Total revenue increased 27.0% year-over-year to $1.7 million, while Adjusted EBITDA totaled
$0.3 million, marking a $0.7 million improvement versus the prior
year.
- Interactive achieved positive Adjusted EBITDA for the fourth
consecutive quarter. Continued growth within our real-money gaming
("RMG") business and consistent social gaming performance, coupled
with cost savings from the restructuring of our social business in
prior periods, helped to drive improved profitability within the
segment.
- RMG revenue increased 49.8% year-over-year, supported by
the continued introduction of our EGM content into the
European RMG market, our fourth quarter 2019 launch into the
New Jersey market, and our
second quarter 2020 launch into Pennsylvania. We
also believe COVID-19 stay-at-home measures supported our quarterly
performance.
- In December 2020 we received our
provisional Michigan i-Gaming
supplier license and our content is currently live within the
state.
Liquidity and Capital Expenditures
As of December 31, 2020, we had
$111.7 million in total
liquidity compared to $43.2
million at December 31, 2019.
The total principal amount of debt outstanding, as of
December 31, 2020, was $622.5 million, predominantly comprised of
$621.1 million in first lien
term loans, which mature in 2024.
As a precautionary measure to increase the Company's cash
position and facilitate financial flexibility in light of
uncertainty in the gaming industry at the time resulting from the
COVID-19 pandemic, in March the Company borrowed $30.0 million under the revolving credit
facility and in May issued an additional $95.0 million in term loans. In connection with
the new term loans, the Company negotiated a financial covenant
relief period through December 31,
2020 related to its net first lien leverage ratio
financial covenant and implemented a revised calculation of EBITDA
to be used in the net first lien leverage ratio for the first
three quarters of 2021. In October, we elected to fully repay
the $30.0 million previously drawn
down on our revolving credit facility.
Total net debt, which is the principal amount of debt
outstanding less cash and cash equivalents, as of December 31, 2020 was $540.8 million compared to $520.6 million at December 31, 2019. Our Total Net Debt Leverage
Ratio increased from 3.6 times at December
31, 2019, to 7.5 times at December 31, 2020, see Total Net Debt Leverage
Ratio Reconciliation below(3).
Capital expenditures decreased by 19.1% year-over-year to
$14.1 million in the current period,
in line with our plans to conservatively manage the use of our cash
and only invest in those projects that will provide the highest
return on our investment. The current quarter capital
expenditures were primarily comprised of $3.4 million in intangible capital expenditures,
including capitalized internal software development costs, and
$8.7 million in growth
capital expenditures, which reflects costs associated with the
placement of additional units into our leased installed base.
(3) Total Adjusted
EBITDA and total net debt leverage ratio are non-GAAP measures, see
non-GAAP reconciliation below.
|
Conference Call and Webcast
On March 4, 2021, at 5 p.m. EST, AGS leadership will host a conference
call to present the company's fourth quarter and full
year 2020 financial results. Listeners may access a live
webcast of the conference call, along with accompanying slides, at
AGS' Investor Relations website at http://investors.playags.com/. A
replay of the webcast will be available on the website following
the live event. To listen by telephone, the U.S./Canada toll-free call-in number is
+1 (844) 746-0637 and the call-in number for participants
outside the U.S./Canada is
+1 (412) 317-5261. The conference ID/confirmation code is "AGS
Q4 2020 Earnings Call".
Company Overview
AGS is a global company focused on creating a diverse mix of
entertaining gaming experiences for every kind of player. Our roots
are firmly planted in the Class II tribal gaming market, but our
customer-centric culture and remarkable growth have helped us
branch out to become one of the most all-inclusive commercial
gaming suppliers in the world. Powered by high-performing Class II
and Class III slot products, an expansive table products portfolio,
highly rated social casino, real-money gaming solutions for players
and operators, and best-in-class service, we offer an unmatched
value proposition for our casino partners. Learn more at
playags.com.
AGS Investor & Media Contacts:
Brad Boyer, Vice President of
Investor Relations, Corporate Development
and Strategy
bboyer@playags.com
Julia Boguslawski, Chief
Marketing Officer
jboguslawski@playags.com
©2021 PlayAGS, Inc. Products referenced herein are sold by
AGS LLC or other subsidiaries of PlayAGS, Inc. Solely for
convenience, marks, trademarks and trade names referred to in this
press release appear without the ® and
TM and SM symbols, but such references are
not intended to indicate, in any way, that PlayAGS, Inc. will not
assert, to the fullest extent under applicable law, its rights or
the rights of the applicable licensor to these marks, trademarks
and trade names.
Forward-Looking Statement
This release contains, and oral statements made from time to
time by our representatives may contain, forward-looking statements
based on management's current expectations and projections, which
are intended to qualify for the safe harbor of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements include statements regarding the proposed public
offering and other statements identified by words such as
"believe," "will," "may," "might," "likely," "expect,"
"anticipates," "intends," "plans," "seeks," "estimates,"
"believes," "continues," "projects" and similar references to
future periods, or by the inclusion of forecasts or projections.
All forward-looking statements are based on current expectations
and projections of future events.
These forward-looking statements reflect the current views,
models, and assumptions of AGS, and are subject to various risks
and uncertainties that cannot be predicted or qualified and could
cause actual results in AGS's performance to differ materially from
those expressed or implied by such forward looking statements.
These risks and uncertainties include, but are not limited to, the
ability of AGS to maintain strategic alliances, unit placements or
installations, grow revenue, garner new market share, secure new
licenses in new jurisdictions, successfully develop or place
proprietary product, comply with regulations, have its games
approved by relevant jurisdictions, the effects of COVID-19 on the
Company's business and results of operations and other factors set
forth under Item 1. "Business," Item 1A. "Risk Factors" in AGS's
Annual Report on Form 10-K, filed with the Securities and Exchange
Commission. All forward-looking statements made herein are
expressly qualified in their entirety by these cautionary
statements and there can be no assurance that the actual results,
events or developments referenced herein will occur or be realized.
Readers are cautioned that all forward-looking statements speak
only to the facts and circumstances present as of the date of this
press release. AGS expressly disclaims any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
PLAYAGS,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(amounts in
thousands, except share and per share data)
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
|
Assets
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
81,689
|
|
|
$
|
13,162
|
|
Restricted
cash
|
|
20
|
|
|
|
20
|
|
Accounts receivable,
net of allowance of $2,077 and $723 respectively
|
|
41,743
|
|
|
|
61,224
|
|
Inventories
|
|
26,902
|
|
|
|
32,875
|
|
Prepaid
expenses
|
|
4,210
|
|
|
|
2,983
|
|
Deposits and
other
|
|
4,704
|
|
|
|
5,332
|
|
Total current
assets
|
|
159,268
|
|
|
|
115,596
|
|
Property and
equipment, net
|
|
81,040
|
|
|
|
103,598
|
|
Goodwill
|
|
286,042
|
|
|
|
287,049
|
|
Intangible
assets
|
|
187,644
|
|
|
|
230,451
|
|
Deferred tax
asset
|
|
6,762
|
|
|
|
4,965
|
|
Operating lease
assets
|
|
9,763
|
|
|
|
11,543
|
|
Other
assets
|
|
10,259
|
|
|
|
9,176
|
|
Total
assets
|
$
|
740,778
|
|
|
$
|
762,378
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
9,547
|
|
|
$
|
15,598
|
|
Accrued
liabilities
|
|
26,325
|
|
|
|
34,840
|
|
Current maturities of
long-term debt
|
|
7,031
|
|
|
|
6,038
|
|
Total current
liabilities
|
|
42,903
|
|
|
|
56,476
|
|
Long-term
debt
|
|
601,560
|
|
|
|
518,689
|
|
Deferred tax
liability - non-current
|
|
2,254
|
|
|
|
1,836
|
|
Operating lease
liabilities, long-term
|
|
9,497
|
|
|
|
11,284
|
|
Other long-term
liabilities
|
|
30,781
|
|
|
|
40,309
|
|
Total
liabilities
|
|
686,995
|
|
|
|
628,594
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
Preferred stock at
$0.01 par value; 50,000,000 shares authorized, no shares issued and
outstanding
|
|
-
|
|
|
|
-
|
|
Common stock at $0.01
par value; 450,000,000 shares authorized at December 31, 2020 and
December 31, 2019; 36,494,002 and 35,534,558 shares issued and
outstanding at December 31, 2020 and 2019, respectively.
|
|
364
|
|
|
|
355
|
|
Additional paid-in
capital
|
|
379,917
|
|
|
|
371,311
|
|
Accumulated
deficit
|
|
(321,412)
|
|
|
|
(235,474)
|
|
Accumulated other
comprehensive loss
|
|
(5,086)
|
|
|
|
(2,408)
|
|
Total stockholders'
equity
|
|
53,783
|
|
|
|
133,784
|
|
Total liabilities
and stockholders' equity
|
$
|
740,778
|
|
|
$
|
762,378
|
|
PLAYAGS,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(amounts in
thousands, except per share data)
|
|
|
Three Months
Ended
December
31,
|
|
|
Twelve Months
Ended
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
operations
|
$
|
39,977
|
|
|
$
|
51,558
|
|
|
$
|
129,150
|
|
|
$
|
210,534
|
|
Equipment
sales
|
|
6,645
|
|
|
|
26,228
|
|
|
|
37,857
|
|
|
|
94,180
|
|
Total
revenues
|
|
46,622
|
|
|
|
77,786
|
|
|
|
167,007
|
|
|
|
304,714
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of gaming
operations(4)
|
|
8,331
|
|
|
|
10,234
|
|
|
|
32,087
|
|
|
|
40,955
|
|
Cost of equipment
sales(4)
|
|
3,438
|
|
|
|
12,607
|
|
|
|
16,789
|
|
|
|
45,513
|
|
Selling, general and
administrative
|
|
15,352
|
|
|
|
15,442
|
|
|
|
46,463
|
|
|
|
61,785
|
|
Research and
development
|
|
7,444
|
|
|
|
9,163
|
|
|
|
26,786
|
|
|
|
34,338
|
|
Write-downs and other
charges
|
|
523
|
|
|
|
53
|
|
|
|
3,329
|
|
|
|
6,912
|
|
Depreciation and
amortization
|
|
19,369
|
|
|
|
22,472
|
|
|
|
85,722
|
|
|
|
91,474
|
|
Total operating
expenses
|
|
54,457
|
|
|
|
69,971
|
|
|
|
211,176
|
|
|
|
280,977
|
|
(Loss) Income from
operations
|
|
(7,835)
|
|
|
|
7,815
|
|
|
|
(44,169)
|
|
|
|
23,737
|
|
Other expense
(income)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
11,369
|
|
|
|
8,494
|
|
|
|
41,935
|
|
|
|
36,248
|
|
Interest
income
|
|
(336)
|
|
|
|
(51)
|
|
|
|
(1,179)
|
|
|
|
(163)
|
|
Loss on extinguishment
and modification of debt
|
|
-
|
|
|
|
-
|
|
|
|
3,102
|
|
|
|
-
|
|
Other expense
(income)
|
|
(767)
|
|
|
|
(486)
|
|
|
|
3,226
|
|
|
|
4,622
|
|
Loss before income
taxes
|
|
(18,101)
|
|
|
|
(142)
|
|
|
|
(91,253)
|
|
|
|
(16,970)
|
|
Income tax
benefit
|
|
859
|
|
|
|
1,565
|
|
|
|
5,875
|
|
|
|
5,449
|
|
Net
loss
|
|
(17,242)
|
|
|
|
1,423
|
|
|
|
(85,378)
|
|
|
|
(11,521)
|
|
Less: Net income
attributable to non-controlling interests
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(231)
|
|
Net loss
attributable to PlayAGS, Inc.
|
|
(17,242)
|
|
|
|
1,423
|
|
|
|
(85,378)
|
|
|
|
(11,752)
|
|
Foreign currency
translation adjustment
|
|
3,556
|
|
|
|
1,769
|
|
|
|
(2,678)
|
|
|
|
1,366
|
|
Total comprehensive
(loss) income
|
$
|
(13,686)
|
|
|
$
|
3,192
|
|
|
$
|
(88,056)
|
|
|
$
|
(10,386)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.49)
|
|
|
$
|
0.04
|
|
|
$
|
(2.40)
|
|
|
$
|
(0.33)
|
|
Diluted
|
$
|
(0.49)
|
|
|
$
|
0.04
|
|
|
$
|
(2.40)
|
|
|
$
|
(0.33)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,760
|
|
|
|
35,448
|
|
|
|
35,639
|
|
|
|
35,424
|
|
Diluted
|
|
35,760
|
|
|
|
35,766
|
|
|
|
35,639
|
|
|
|
35,424
|
|
|
(4) Exclusive of
depreciation and amortization.
|
PLAYAGS,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
|
|
|
Year Ended
December 31,
|
|
|
2020
|
|
|
2019
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
Net loss
|
$
|
(85,378)
|
|
|
$
|
(11,521)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
85,722
|
|
|
|
91,474
|
|
Accretion of contract
rights under development agreements and placement fees
|
|
7,421
|
|
|
|
6,378
|
|
Amortization of
deferred loan costs and discount
|
|
3,656
|
|
|
|
1,917
|
|
Stock-based
compensation expense
|
|
8,457
|
|
|
|
9,001
|
|
Provision (benefit)
for bad debts
|
|
2,694
|
|
|
|
294
|
|
Loss on disposition of
long-lived assets
|
|
2,399
|
|
|
|
1,068
|
|
Impairment of
assets
|
|
134
|
|
|
|
5,343
|
|
Fair value adjustment
of contingent consideration
|
|
796
|
|
|
|
501
|
|
Benefit from deferred
income tax
|
|
(1,671)
|
|
|
|
(1,927)
|
|
Changes in assets and
liabilities related to operations:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
16,469
|
|
|
|
(15,033)
|
|
Inventories
|
|
10,099
|
|
|
|
490
|
|
Prepaid
expenses
|
|
(1,264)
|
|
|
|
715
|
|
Deposits and
other
|
|
517
|
|
|
|
(449)
|
|
Other assets,
non-current
|
|
3,367
|
|
|
|
6,565
|
|
Accounts payable and
accrued liabilities
|
|
(17,248)
|
|
|
|
(6,827)
|
|
Net cash provided
by operating activities
|
|
36,170
|
|
|
|
87,989
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
Customer notes
receivable
|
|
(4,690)
|
|
|
|
(2,382)
|
|
Proceeds from payments
on customer notes receivable
|
|
1,087
|
|
|
|
—
|
|
Business acquisitions,
net of cash acquired
|
|
—
|
|
|
|
(54,935)
|
|
Purchase of intangible
assets
|
|
(1,756)
|
|
|
|
(6,295)
|
|
Software development
and other expenditures
|
|
(11,017)
|
|
|
|
(14,350)
|
|
Proceeds from
disposition of assets
|
|
32
|
|
|
|
450
|
|
Purchases of property
and equipment
|
|
(22,939)
|
|
|
|
(50,420)
|
|
Net cash used in
investing activities
|
|
(39,283)
|
|
|
|
(127,932)
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
Proceeds from
incremental term loans
|
|
92,150
|
|
|
|
—
|
|
Borrowing on
revolver
|
|
30,000
|
|
|
|
—
|
|
Repayment of first
lien credit facilities
|
|
(5,387)
|
|
|
|
(5,387)
|
|
Repayment of
incremental term loans
|
|
(475)
|
|
|
|
—
|
|
Repayment of
revolver
|
|
(30,000)
|
|
|
|
—
|
|
Payments on finance
leases and other obligations
|
|
(1,185)
|
|
|
|
(1,396)
|
|
Payment of deferred
loan costs
|
|
(5,744)
|
|
|
|
—
|
|
Payment of financed
placement fee obligations
|
|
(6,933)
|
|
|
|
(8,215)
|
|
Payment of previous
acquisition obligation
|
|
(381)
|
|
|
|
(1,748)
|
|
Proceeds from stock
option exercise
|
|
158
|
|
|
|
685
|
|
Repurchase of
stock
|
|
(560)
|
|
|
|
(1,320)
|
|
Distributions to
non-controlling interest owners
|
|
—
|
|
|
|
(302)
|
|
Net cash provided
by (used in) financing activities
|
|
71,643
|
|
|
|
(17,683)
|
|
Effect of exchange
rates on cash, cash equivalents and restricted cash
|
|
(3)
|
|
|
|
4
|
|
Increase (decrease) in
cash, cash equivalents and restricted cash
|
|
68,527
|
|
|
|
(57,622)
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
13,182
|
|
|
|
70,804
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
81,709
|
|
|
$
|
13,182
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
|
|
Cash paid during the
period for interest
|
$
|
37,749
|
|
|
$
|
33,567
|
|
Cash paid during the
period for taxes
|
$
|
423
|
|
|
$
|
1,548
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
Intangible assets
obtained under placement fee arrangements
|
$
|
-
|
|
|
$
|
40,338
|
|
Leased assets obtained
in exchange for new finance lease liabilities
|
$
|
425
|
|
|
$
|
1,326
|
|
Leased assets obtained
in exchange for new operating lease liabilities
|
$
|
84
|
|
|
$
|
13,048
|
|
Non-GAAP Financial Measures
To provide investors with additional information in connection
with our results as determined by generally accepted accounting
principles in the United States
("GAAP"), we disclose the following non-GAAP financial measures:
total Adjusted EBITDA, total Adjusted EBITDA margin, total net debt
leverage ratio, and Free Cash Flow. These measures are not
financial measures calculated in accordance with GAAP and should
not be considered as a substitute for net income, operating income,
cash flows, or any other measure calculated in accordance with
GAAP, and may not be comparable to similarly titled measures
reported by other companies.
Total Adjusted EBITDA
This press release and accompanying schedules provide certain
information regarding Adjusted EBITDA, which is considered a
non-GAAP financial measure under the rules of the Securities and
Exchange Commission.
We believe that the presentation of total Adjusted EBITDA is
appropriate to provide additional information to investors about
certain material non-cash items that we do not expect to continue
at the same level in the future, as well as other items we do not
consider indicative of our ongoing operating performance. Further,
we believe total Adjusted EBITDA provides a meaningful measure of
operating profitability because we use it for evaluating our
business performance, making budgeting decisions, and comparing our
performance against that of other peer companies using similar
measures. It also provides management and investors with additional
information to estimate our value.
Total Adjusted EBITDA is not a presentation made in accordance
with GAAP. Our use of the term total Adjusted EBITDA may vary from
others in our industry. Total Adjusted EBITDA should not be
considered as an alternative to operating income or net income.
Total Adjusted EBITDA has important limitations as an analytical
tool, and you should not consider it in isolation or as a
substitute for the analysis of our results as reported under
GAAP.
Our definition of total Adjusted EBITDA allows us to add back
certain non-cash charges that are deducted in calculating net
income and to deduct certain gains that are included in calculating
net income. However, these expenses and gains vary greatly, and are
difficult to predict. They can represent the effect of long-term
strategies as opposed to short-term results. In addition, in the
case of charges or expenses, these items can represent the
reduction of cash that could be used for other corporate purposes.
Due to these limitations, we rely primarily on our GAAP results,
such as net loss, (loss) income from operations, EGM Adjusted
EBITDA, Table Products Adjusted EBITDA or Interactive Adjusted
EBITDA and use Total Adjusted EBITDA only supplementally.
The total Adjusted EBITDA discussion above is also applicable to
its margin measure, which is calculated as total Adjusted EBITDA as
a percentage of Total Revenue.
The following table presents a reconciliation of total Adjusted
EBITDA to net loss, which is the most comparable GAAP measure:
Total Adjusted
EBITDA Reconciliation
|
|
(Amounts in
thousands)
|
Three Months
Ended
December
31,
|
|
|
Twelve Months
Ended
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Net loss attributable
to PlayAGS, Inc.
|
$
|
(17,242)
|
|
|
$
|
1,423
|
|
|
$
|
(85,378)
|
|
|
$
|
(11,752)
|
|
Income tax (benefit)
expense
|
|
(859)
|
|
|
|
(1,565)
|
|
|
|
(5,875)
|
|
|
|
(5,449)
|
|
Depreciation and
amortization
|
|
19,369
|
|
|
|
22,472
|
|
|
|
85,722
|
|
|
|
91,474
|
|
Other expense
(income)
|
|
(767)
|
|
|
|
(486)
|
|
|
|
3,226
|
|
|
|
4,622
|
|
Interest
income
|
|
(336)
|
|
|
|
(51)
|
|
|
|
(1,179)
|
|
|
|
(163)
|
|
Interest
expense
|
|
11,369
|
|
|
|
8,494
|
|
|
|
41,935
|
|
|
|
36,248
|
|
Write-downs and
other(5)
|
|
523
|
|
|
|
53
|
|
|
|
3,329
|
|
|
|
6,912
|
|
Loss on
extinguishment and modification of debt
|
|
-
|
|
|
|
-
|
|
|
|
3,102
|
|
|
|
-
|
|
Other
adjustments(6)
|
|
1,825
|
|
|
|
206
|
|
|
|
6,477
|
|
|
|
909
|
|
Other non-cash
charges(7)
|
|
2,245
|
|
|
|
2,537
|
|
|
|
9,712
|
|
|
|
9,078
|
|
Legal and litigation
expenses including settlement payments(8)
|
|
1,441
|
|
|
|
96
|
|
|
|
1,830
|
|
|
|
1,844
|
|
Acquisitions and
integration related costs including restructuring and
severance(9)
|
|
-
|
|
|
|
394
|
|
|
|
311
|
|
|
|
3,338
|
|
Non-cash stock-based
compensation
|
|
3,731
|
|
|
|
3,692
|
|
|
|
8,457
|
|
|
|
9,001
|
|
Total Adjusted
EBITDA
|
$
|
21,299
|
|
|
$
|
37,265
|
|
|
$
|
71,669
|
|
|
$
|
146,062
|
|
|
|
(Amounts in
thousands, except Adjusted EBITDA margin)
|
Three Months
Ended
December
31,
|
|
|
Twelve Months
Ended
December
31,
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
Total
revenues
|
$
|
46,622
|
|
|
$
|
77,786
|
|
|
$
|
167,007
|
|
|
$
|
304,714
|
|
Adjusted
EBITDA
|
$
|
21,299
|
|
|
$
|
37,265
|
|
|
$
|
71,669
|
|
|
$
|
146,062
|
|
Adjusted EBITDA
margin
|
|
45.7
|
%
|
|
|
47.9
|
%
|
|
|
42.9
|
%
|
|
|
47.9
|
%
|
|
(5) Write-downs
and other includes items related to loss on disposal or
impairment of long-lived assets, fair value adjustments to
contingent consideration, and acquisition costs.
|
(6) Other
adjustments primarily composed of costs and inventory and
receivable valuation charges associated with the COVID-19 pandemic,
professional fees incurred by the Company for projects, corporate
and public filing compliance, contract cancellation fees and other
transaction costs deemed to be non-recurring in nature.
|
(7) Other non-cash
charges are costs related to non-cash charges and losses on the
disposition of assets, non-cash charges on capitalized installation
and delivery, which primarily includes the costs to acquire
contracts that are expensed over the estimated life of each
contract, and non-cash charges related to accretion of contract
rights under development agreements.
|
(8) Legal and litigation expenses
including settlement payments consist of payments to law
firms and settlements for matters that are outside the normal
course of business. These costs related to litigation and matters
that were not significant individually.
|
(9) Acquisition
and integration costs primarily relate to costs incurred after
the purchase of businesses, such as the purchase of Integrity, to
integrate operations and obtain costs synergies. Restructuring and
severance costs primarily relate to costs incurred through the
restructuring of the Company's operations from time to time and
other employee severance costs recognized in the periods
presented.
|
Total Net Debt
Leverage Ratio Reconciliation
|
|
The following table
presents a reconciliation of total net debt and total net debt
leverage ratio:
|
|
(Amounts in
thousands, except net debt leverage ratio)
|
December
31,
|
|
|
December
31,
|
|
|
2020
|
|
|
2019
|
|
Total principal
amount of debt
|
$
|
622,509
|
|
|
$
|
533,727
|
|
Less: Cash and cash
equivalents
|
|
81,689
|
|
|
|
13,162
|
|
Total net
debt
|
$
|
540,820
|
|
|
$
|
520,565
|
|
LTM Adjusted
EBITDA
|
$
|
71,669
|
|
|
$
|
146,062
|
|
Total net debt
leverage ratio
|
|
7.5
|
|
|
|
3.6
|
|
Free Cash Flow
This schedule provides certain information regarding Free Cash
Flow, which is considered a non-GAAP financial measure under the
rules of the Securities and Exchange Commission.
We define Free Cash Flow as net cash provided by operating
activities less cash outlays related to capital expenditures. We
define capital expenditures to include purchase of intangible
assets, software development and other expenditures, and purchases
of property and equipment. In arriving at Free Cash Flow, we
subtract cash outlays related to capital expenditures from net cash
provided by operating activities because they represent long-term
investments that are required for normal business activities. As a
result, subject to the limitations described below, Free Cash Flow
is a useful measure of our cash available to repay debt and/or make
other investments.
Free Cash Flow adjusts for cash items that are ultimately within
management's discretion to direct, and therefore, may imply that
there is less or more cash that is available than the most
comparable GAAP measure. Free Cash Flow is not intended to
represent residual cash flow for discretionary expenditures since
debt repayment requirements and other non-discretionary
expenditures are not deducted. These limitations are best addressed
by using Free Cash Flow in combination with the GAAP cash flow
numbers.
The following table presents a reconciliation of Free Cash
Flow:
(Amounts in
thousands)
|
Year
Ended
December
31,
2020
|
|
|
Nine
Months
Ended
September
30,
2020
|
|
|
Three
Months
Ended
December
31,
2020
|
|
Net cash provided by
operating activities
|
$
|
36,170
|
|
|
$
|
19,719
|
|
|
$
|
16,451
|
|
Purchase of
intangible assets
|
|
(1,756)
|
|
|
|
(1,414)
|
|
|
|
(342)
|
|
Software development
and other expenditures
|
|
(11,017)
|
|
|
|
(8,004)
|
|
|
|
(3,013)
|
|
Purchases of property
and equipment
|
|
(22,939)
|
|
|
|
(12,196)
|
|
|
|
(10,743)
|
|
Free Cash
Flow
|
$
|
458
|
|
|
$
|
(1,895)
|
|
|
$
|
2,353
|
|
|
|
(Amounts in
thousands)
|
Year
Ended
December
31,
2019
|
|
|
Nine
Months
Ended
September
30,
2019
|
|
|
Three
Months
Ended
December
31,
2019
|
|
Net cash provided by
operating activities
|
$
|
87,989
|
|
|
$
|
62,481
|
|
|
$
|
25,508
|
|
Purchase of
intangible assets
|
|
(6,295)
|
|
|
|
(4,926)
|
|
|
|
(1,369)
|
|
Software development
and other expenditures
|
|
(14,350)
|
|
|
|
(9,957)
|
|
|
|
(4,393)
|
|
Purchases of property
and equipment
|
|
(50,420)
|
|
|
|
(38,760)
|
|
|
|
(11,660)
|
|
Free Cash
Flow
|
$
|
16,924
|
|
|
$
|
8,838
|
|
|
$
|
8,086
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/ags-reports-fourth-quarter-and-full-year-2020-results-301241004.html
SOURCE AGS