Financial report

AGS sees revenue up to $70.2M in Q4 2021 in "transitional" year of business recovery

AGS President and Chief Executive Officer David Lopez.
2022-03-11
Reading time 2:09 min

Manufacturer and supplier of gaming products PlayAGS has shared its financial results for Q4 and full-year 2021. The company posted consolidated revenue of $70.2 million in Q4 -the fourth consecutive quarter in which quarterly sequential growth was delivered-, up from $46.6 million in 2020. Revenue for the full year was $259.7 million, up from $167 million in 2020.

"If 2020 was the year of resiliency within our business, 2021 was the year of transition,” said AGS President and Chief Executive Officer David Lopez. “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."

Consolidated revenue for the fourth quarter also exceeded the level reached in Q3 by approximately 4%, driven by the over 20% increase in electronic gaming machines (EGM) equipment sales, the sustained strength within the domestic EGM recurring revenue business, a record table products performance, and further recovery in international EGM gaming operations revenue.

During the fourth quarter, domestic EGM revenue per day (RPD) exceeded $30 for the third consecutive quarter, while premium EGM footprint more than doubled year-over-year. Additionally, EGM replacement unit sales increased by over 35% sequentially.

Other highlights of the quarter include table products revenue surpassing $3 million for the second straight quarter, and the successful completion of a comprehensive debt refinancing, announced on February 15 this year.

"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,” added Lopez. “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."

Consolidated revenue for Q4 2021 reached “approximately 90%” of the level achieved in pre-pandemic Q4 2019, when the company delivered $77.8 million in revenue. The company is now experiencing gradual post-Covid recoveries within its EGM equipment sales and international EGM gaming operations verticals.

The business’ Q4 net loss of $9.1 million also saw a notorious improvement when compared to a $17.2 million net loss incurred in Q4 2020, reflecting “improved financial performance” and lower depreciation and amortization expense.

Meanwhile, total Adjusted EBITDA was $32.3 million, compared to $21.3 million in Q4 2020, while slightly down from $37.3 million in 2019. Total Adjusted EBITDA margin was 45.9%, relatively consistent with the 45.7% achieved the previous year.

"I am pleased with the degree to which we were able to improve the quality and flexibility of our balance sheet throughout 2021,” said Kimo Akiona, AGS' Chief Financial Officer.

“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," Akiona added.

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