AGS PlayAGS Inc

Exhibit 99.1

AGS REPORTs Third QUARTER 2023 RESULTS

Third Quarter 2023 Highlights:

LAS VEGAS, November 7, 2023 - 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 operating results for the third quarter ended September 30, 2023.

Commenting upon the Company's third quarter results, AGS President and Chief Executive Officer David Lopez said, "We delivered another solid quarter of execution in the third quarter, with our product momentum and focused team producing performance that far exceeded the trends observed across the broader domestic gaming landscape. Exiting our most exciting Global Gaming Expo to date, I believe our deeper and more diverse product portfolio, combined with our passionate team, position us to deliver on this theme of relative outperformance for many quarters to come." 

Kimo Akiona, AGS Chief Financial Officer added, "Our record-setting Q3 2023 Adjusted EBITDA and free cash flow performance enabled us to reduce our net leverage to 3.4 times at quarter end, placing us inside of our targeted year-end range of 3.25 times to 3.50 times a full quarter ahead of schedule. We remain intently focused on leveraging our commitment to capex discipline and working capital efficiency to consistently generate free cash flow, which combined with our operating momentum, should allow for further net leverage reduction in the quarters ahead." 

Summary of the Three Months Ended September 30, 2023 and 2022

(In thousands, except per-share and Adjusted EBITDA margin data)

Third Quarter 2023 Financial Results

⁽¹⁾ Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures; see non-GAAP reconciliation below.

⁽²⁾ Free cash flow is a non-GAAP measure; see non-GAAP reconciliation below.

EGM

Three Months Ended September 30, 2023 compared to Three Months Ended September 30, 2022 

EGM Quarterly Results

⁽³⁾ "Domestic" includes both the United States and Canada.

Table Products

Three Months Ended September 30, 2023 compared to Three Months Ended September 30, 2022 

Table Products Quarterly Results

Interactive

Three Months Ended September 30, 2023 compared to Three Months Ended September 30, 2022 

Interactive Quarterly Results

Liquidity and Capital Expenditures

As of September 30, 2023, the Company had an available cash balance of $43.7 million and $40.0 million of availability under its undrawn revolving credit facility, resulting in total available liquidity of approximately $84 million.

The total principal amount of debt outstanding, as of September 30, 2023, was $568.3 million compared to $571.4 million at December 31, 2022. Total net debt, which is the principal amount of debt outstanding less cash and cash equivalents, was $524.7 million as of September 30, 2023, conveying a total net debt leverage ratio of 3.4 times compared to 3.8 times as of December 31, 2022⁽⁴⁾.

Third quarter 2023 capital expenditures totaled $17.2 million, bringing year-to-date capital expenditures to $46.5 million. Gaming equipment-related investments into the Company's EGM and Table Product installed bases accounted for approximately 55% of the total capital expenditures incurred in Q3 2023 and approximately 60% in the year-to-date period. The Company continues to expect full year 2023 capital expenditures, inclusive of anticipated capitalized R&D expenditures, to land in the range of $65 million to $70 million.

2023 Net Leverage Target

Supported by the Company's record-setting year-to-date financial performance through September 30, 2023, the growing appeal and customer adoption of our expanded suite of for-sale EGM products, the relative resiliency observed across our recurring revenue businesses, and an unwavering organizational focus on capital deployment discipline and working capital efficiency, we remain confident in our ability to exit 2023 with net leverage in the range of 3.25 times to 3.50 times.

⁽⁴⁾ Total Adjusted EBITDA and Total Net Debt Leverage Ratio are non-GAAP measures, see non-GAAP reconciliation below.

Conference Call and Webcast

AGS executive leadership will host a conference call on Tuesday, November 7, 2023, at 5 p.m. EST to review the Company's third quarter 2023 financial results. Participants may visit the Company's website, investors.playags.com, to access a live webcast of the conference call and a slide presentation reviewing the Company's quarterly financial performance. A replay of the webcast will be available on the Company's website following the live event. United States residents may access the call live by dialing +1 (833) 470-1428, while international participants should visit www.netroadshow.com/events/global-numbers?confId=55552 for a dial by country directory. The conference call access code is 371718.

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 equipment 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, Senior Vice President Corporate Operations and Investor Relations

investors@playags.com 

Julia Boguslawski, Chief Marketing Officer

jboguslawski@playags.com

©2023 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)

PLAYAGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(amounts in thousands, except per share data)

⁽⁵⁾ Exclusive of depreciation and amortization.

PLAYAGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

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 (loss), income from operations, 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 income (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

⁽⁶⁾ Write-downs and other includes items related to loss on disposal or impairment of long-lived assets and fair value adjustments to contingent consideration.

⁽⁷⁾ Other adjustments are primarily composed of the following: 

⁽⁸⁾ 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.

⁽⁹⁾ Non-cash stock-based compensation includes non-cash compensation expense related to grants of options, restricted stock, and other equity awards.

Total Net Debt Leverage Ratio Reconciliation

The following table presents a reconciliation of total net debt and total net debt leverage ratio:

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 and proceeds from payments on customer notes receivable 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 and add proceeds from payments on customer notes receivable to 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:

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