PlayAGS, a provider of gaming equipment and services, is on course to achieve its target debt-to-EBITDA ratio between 3.25 and 3.75 by 2023 after posting a record $83.2m in Q1 (PS65.9m/EUR76.0m).
The company now has nine quarters in a row of record revenues.
AGSpresident, chief executive officer David Lopez, hailed this result as the fruit of previous investment in the business. In a press release, he highlighted the strengths of the company:
He said: “Our first-quarter revenue record and adjusted EBITDA results are yet another testament of how the strategic investments that we made in our people over the last several years has strengthened the underlying resilience and vibrancy in our business.”
“I am very excited about the future of AGS and its shareholders, as I believe that we have the best team and the most compelling product line in the history of the company.”
PlayAGS attempts to deleverage debt burden
AGS, whose revenue is largely derived from the electronic gaming machines (EGMs) it sells, took on significant debt when the Covid-19 pandemic hit.
The company has stated that reducing its debt, which amounted to $569.9m at the end of March, is their top priority.
AGS Chief Financial Officer Kimo Akiona stated that the organisation is “singularly focussed” on optimising their operating and capital deployment to de-leverage its balance sheet.
He said: “Supported with our strong first-quarter financial performance, growing demand for high-performing products for sale, and relative stability observed in our recurring revenue operations we remain confident that we will be able to exit 2023 within our targeted range of 3,25 to 3.75 times, with an interim-term focus to return net leverage within 3.0 times.”
AGS suffers a loss due to interest payments in Q1
The total revenue reached a record of $83.2m in the three months ending 31 March. This is a 14% increase from the $72.9m achieved by the previous year during the same period.
AGS’ EGM division was the main driver of this growth. Revenues increased 14.4% from $66.9m to $76.6m, a jump of $14.4%.
Table Products, a division of the company, also announced a notable increase in revenue. The business reported an increase in revenue of 17.6% to $4.1m.
The revenue from AGS Interactive products, however, experienced a relatively modest increase of 2.1%, to $2.5m.
Operating expenses for the business did not change much from the $67.1m announced in Q1 of 2022. They now total $71.4m.
The business reported a net profit of $11.7m. AGS’s interest expenses for the quarter were $13.7m due to its ongoing debt burden.
The company reported a net loss of $334,000 for the period ending March 31, after receiving a $1.2m benefit from the tax authorities on top of a pre-tax loss amounting to $1.5m.
