LAS VEGAS,
Nov. 4, 2021 /PRNewswire/
--
Third Quarter 2021 Highlights:
- Domestic EGM RPD Exceeded $30
for the Second Consecutive Quarter
- Domestic EGM Installed Base Increased Sequentially for the
First Time Since Q3 2019
- Domestic EGM Gaming Operations Revenue Eclipsed Q3 2019
Levels
- Premium Game Footprint Nearly Doubled Year-to-Date
- Table Products Revenue Reached Another All-Time
Record
- Net Loss Improved to $1.8
Million Compared to $3.9
Million in Q2 2021
- Adjusted EBITDA Margin Surpassed the Upper End of our
Targeted 45% to 47% Range
- Approximately $118 Million of
Available Liquidity as of September 30,
2021
- Net Leverage Reduced to 4.7x as of September 30, 2021
PlayAGS, Incorporated (NYSE: AGS) ("AGS", "us", "we" or the
"Company") today reported operating results for its third quarter
ended September 30, 2021.
AGS President and Chief Executive Officer David Lopez said, "Our third quarter financial
performance once again reflects our growing product momentum
and improved execution across all three of our operating segments.
The investments we have made into our business over the past
eighteen months have strengthened our company's foundation, which
should pave the way for meaningful shareholder value creation in
the coming quarters."
Kimo Akiona, AGS' Chief
Financial Officer, added, "Supported by our solid third quarter
financial results and the stability we are in seeing within our
business fourth quarter to date, we now expect to be nicely free
cash flow positive for the full year 2021 and to end the year with
net leverage inside of 4.5x TTM Adjusted EBITDA. Looking ahead, we
continue to carefully manage our leverage and liquidity position to
ensure we can execute on opportunities to lower our borrowing costs
as they present themselves, with an intermediate-term focus on
restoring the balance sheet flexibility we had prior to the onset
of COVID-19, when our balance sheet was levered well inside of
4.0x."
Summary of the Three Months Ended September 30,
2021, 2020 and 2019
(In thousands, except per-share and Adjusted EBITDA
margin data)
|
|
|
|
Three Months Ended September
30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
2021 vs
2020
|
|
|
2021 vs
2019
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM
|
|
$
|
61,600
|
|
|
$
|
45,081
|
|
|
$
|
75,299
|
|
|
|
36.6
|
%
|
|
|
(18.2)
|
%
|
Table
Products
|
|
|
3,104
|
|
|
|
2,262
|
|
|
|
2,861
|
|
|
|
37.2
|
%
|
|
|
8.5
|
%
|
Interactive
|
|
|
2,573
|
|
|
|
1,941
|
|
|
|
1,217
|
|
|
|
32.6
|
%
|
|
|
111.4
|
%
|
Total revenues
|
|
$
|
67,277
|
|
|
$
|
49,284
|
|
|
$
|
79,377
|
|
|
|
36.5
|
%
|
|
|
(15.2)
|
%
|
Income (loss) from operations
|
|
$
|
7,011
|
|
|
$
|
(2,402)
|
|
|
$
|
5,579
|
|
|
|
(391.9)
|
%
|
|
|
25.7
|
%
|
Net (loss) income
|
|
$
|
(1,829)
|
|
|
$
|
(11,078)
|
|
|
$
|
(5,536)
|
|
|
|
(83.5)
|
%
|
|
|
(67.0)
|
%
|
(Loss) income per
share
|
|
$
|
(0.05)
|
|
|
$
|
(0.31)
|
|
|
$
|
(0.16)
|
|
|
|
(83.9)
|
%
|
|
|
(68.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM
|
|
$
|
29,474
|
|
|
$
|
25,000
|
|
|
$
|
35,825
|
|
|
|
17.9
|
%
|
|
|
(17.7)
|
%
|
Table
Products
|
|
|
1,628
|
|
|
|
1,272
|
|
|
|
1,409
|
|
|
|
28.0
|
%
|
|
|
15.5
|
%
|
Interactive
|
|
|
806
|
|
|
|
750
|
|
|
|
(447)
|
|
|
|
7.5
|
%
|
|
|
(280.3)
|
%
|
Total Adjusted EBITDA(1)
|
|
$
|
31,908
|
|
|
$
|
27,022
|
|
|
$
|
36,787
|
|
|
|
18.1
|
%
|
|
|
(13.3)
|
%
|
Total Adjusted EBITDA margin(2)
|
|
|
47.4
|
%
|
|
|
54.8
|
%
|
|
|
46.3
|
%
|
|
|
(740 bps)
|
|
|
|
108 bps
|
|
Third Quarter 2021 Financial
Results
- Given the degree to which the COVID-19 pandemic impacted the
global gaming industry throughout Q3 2020, we have included our Q3
2019 financial results in the tables presented throughout this
release, as we believe comparisons to Q3 2019 metrics provide more
meaningful insight into the recovery trajectory of our various
business segments.
- Consolidated revenue totaled $67.3
million compared to $49.3
million and $79.4 million in
Q3 2020 and Q3 2019, respectively. Growth in domestic EGM gaming
operations and Interactive revenue, combined with all-time record
Table Products revenue, was more than offset by declines in EGM
equipment sales and international EGM gaming operations revenue
versus Q3 2019 levels. Although Q3 2021 EGM equipment sales revenue
came in below Q3 2019 levels, we are encouraged by evidence of
operators' growing propensity to commit capital for new equipment
purchases. Similarly, while efforts to curtail the spread of
COVID-19, coupled with the lack of fiscal stimulus, has protracted
the recovery in our Mexico gaming
operations business, we remain cautiously optimistic in the
prospects for the Mexico gaming
market to make a full recovery.
- Gaming operations, or recurring revenue, increased to
$53.2 million versus $36.3 million and $52.5 million in Q3 2020 and
Q3 2019, respectively. Relative to Q3 2019, the growth
achieved within our domestic EGM, Table Products, and Interactive
recurring revenue businesses was partially offset
by a decline in our international EGM recurring revenue
business, as previously discussed. In aggregate, recurring
revenue accounted for 79.1% of our consolidated Q3 2021 revenue
compared to 73.7% in Q3 2020 and 66.2% in Q3 2019.
- Our 2021 third quarter net loss of $1.8
million improved as compared to net losses of $11.1 million and $5.5
million realized in Q3 2020 and Q3 2019, respectively. The
year-over-year decline in our reported net loss reflects our
improved operating performance and lower depreciation and
amortization ("D&A") expense. The improvement in our
reported net loss, as compared to the level reported in Q3 2019,
was driven by lower D&A and income tax expense, partially
offset by slightly higher interest expense.
- Total Adjusted EBITDA (non-GAAP)(1)was $31.9 million compared to $27.0 million in Q3 2020 and $36.8 million in Q3 2019. Interactive and
Table Products Adjusted EBITDA increased sharply relative to the
levels achieved in Q3 2019, supported by successful execution
of our strategic revenue growth initiatives within each of the
segments. EGM Adjusted EBITDA decreased 17.7% versus Q3 2019
levels, as the upside from our improved Q3 2021 domestic
EGM gaming operations performance was more than offset by the more
gradual recoveries we are experiencing within our EGM
product sales and international EGM gaming operations
businesses.
- Total Adjusted EBITDA margin (non-GAAP)(1) was 47.4% compared
to 54.8% in Q3 2020. Margins in the prior year period
benefitted from our domestic recurring revenue businesses
recovering from COVID-19-related shutdowns in advance of
normalization in our operating expenses as well as a sale of
previously leased units to a distributor in the prior year with a
favorable gross margin. Adjusted EBITDA margin expanded by
108bps versus Q3 2019, supported by a favorable mix of
higher-margin recurring revenues and the rate of our revenue
recovery from post-COVID-19 lows exceeding the rate of
normalization in our operating costs.
(1)
|
Adjusted EBITDA and
Adjusted EBITDA margin are non-GAAP measures, see non-GAAP
reconciliation below.
|
(2)
|
Basis points
("bps").
|
EGM
Three Months Ended September 30, 2021 compared
to Three Months Ended September 30, 2020 and
2019
|
|
(Amounts in thousands, except unit
data)
|
|
Three Months Ended September
30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
2021 vs
2020
|
|
|
2021 vs
2019
|
|
EGM segment revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
operations
|
|
$
|
47,705
|
|
|
$
|
32,188
|
|
|
$
|
48,854
|
|
|
|
48.2
|
%
|
|
|
(2.4)
|
%
|
Equipment
sales
|
|
|
13,895
|
|
|
|
12,893
|
|
|
|
26,445
|
|
|
|
7.8
|
%
|
|
|
(47.5)
|
%
|
Total EGM revenues
|
|
$
|
61,600
|
|
|
$
|
45,081
|
|
|
$
|
75,299
|
|
|
|
36.6
|
%
|
|
|
(18.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM Adjusted EBITDA
|
|
$
|
29,474
|
|
|
$
|
25,000
|
|
|
$
|
35,825
|
|
|
|
17.9
|
%
|
|
|
(17.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM unit information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VLT
|
|
|
-
|
|
|
|
512
|
|
|
|
517
|
|
|
|
(100.0)
|
%
|
|
|
(100.0)
|
%
|
Class II
|
|
|
11,272
|
|
|
|
11,887
|
|
|
|
12,355
|
|
|
|
(5.2)
|
%
|
|
|
(8.8)
|
%
|
Class III
|
|
|
4,495
|
|
|
|
4,426
|
|
|
|
5,852
|
|
|
|
1.6
|
%
|
|
|
(23.2)
|
%
|
Domestic installed
base, end of period
|
|
|
15,767
|
|
|
|
16,825
|
|
|
|
18,724
|
|
|
|
(6.3)
|
%
|
|
|
(15.8)
|
%
|
International
installed base, end of period
|
|
|
7,896
|
|
|
|
8,030
|
|
|
|
8,668
|
|
|
|
(1.7)
|
%
|
|
|
(8.9)
|
%
|
Total installed base,
end of period
|
|
|
23,663
|
|
|
|
24,855
|
|
|
|
27,392
|
|
|
|
(4.8)
|
%
|
|
|
(13.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Installed base -
Oklahoma
|
|
|
8,107
|
|
|
|
9,063
|
|
|
|
10,503
|
|
|
|
(10.5)
|
%
|
|
|
(22.8)
|
%
|
Installed base -
non-Oklahoma
|
|
|
7,660
|
|
|
|
7,762
|
|
|
|
8,221
|
|
|
|
(1.3)
|
%
|
|
|
(6.8)
|
%
|
Domestic installed
base, end of period
|
|
|
15,767
|
|
|
|
16,825
|
|
|
|
18,724
|
|
|
|
(6.3)
|
%
|
|
|
(15.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic revenue per
day
|
|
$
|
31.08
|
|
|
$
|
20.81
|
|
|
$
|
25.08
|
|
|
|
49.4
|
%
|
|
|
23.9
|
%
|
International revenue
per day
|
|
$
|
5.11
|
|
|
$
|
0.78
|
|
|
$
|
7.99
|
|
|
|
555.1
|
%
|
|
|
(36.0)
|
%
|
Total revenue per
day
|
|
$
|
22.40
|
|
|
$
|
14.50
|
|
|
$
|
19.68
|
|
|
|
54.5
|
%
|
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic EGM unit sales
components:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino opening and
expansion units
|
|
|
110
|
|
|
|
117
|
|
|
|
348
|
|
|
|
(6.0)
|
%
|
|
|
(68.4)
|
%
|
Other
|
|
|
553
|
|
|
|
270
|
|
|
|
1,002
|
|
|
|
104.8
|
%
|
|
|
(44.8)
|
%
|
Total Domestic EGM
units sold
|
|
|
663
|
|
|
|
387
|
|
|
|
1,350
|
|
|
|
71.3
|
%
|
|
|
(50.9)
|
%
|
International EGM
units sold
|
|
|
-
|
|
|
|
-
|
|
|
|
41
|
|
|
|
N/A
|
|
|
|
(100.0)
|
%
|
Total EGM units
sold
|
|
|
663
|
|
|
|
387
|
|
|
|
1,391
|
|
|
|
71.3
|
%
|
|
|
(52.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic average sales
price
|
|
$
|
18,970
|
|
|
$
|
18,190
|
|
|
$
|
18,476
|
|
|
|
4.3
|
%
|
|
|
2.7
|
%
|
EGM Quarterly Results
Domestic Gaming Operations (3)
- Domestic gaming operations, or recurring revenue, increased to
$44.0 million compared to
$31.6 million and $42.5 million in Q3 2020 and Q3 2019,
respectively. A greater mix of higher-yielding premium games, more
consistent core game content execution, and a generally
accommodative gaming macroeconomic backdrop drove our improved
revenue performance.
- Our domestic EGM installed base grew by more than 300 units
versus the 15,446 units installed at June
30, 2021, marking the first quarterly sequential increase
since Q3 2019. Growing operator demand for our expanded suite of
premium recurring revenue products and new casino opening and
expansion activity paced the quarterly sequential unit growth. Our
domestic installed base decreased by 1,058 units and 2,957 units
versus Q3 2020 and Q3 2019, respectively, with the majority of the
decline directly attributable to our decision to opportunistically
prune lower-yielding units.
- Domestic EGM revenue per day ("RPD") increased 23.9% to
$31.08 compared to $25.08 in Q3 2019. Continued growth of
our higher-yielding premium game footprint, accelerating
core game content momentum, the opportunistic pruning of
lower-yielding units, and a supportive gaming macroeconomic
environment drove our improved RPD performance.
- Our premium games accounted for more than 8% of our domestic
EGM installed base at September 30,
2021 compared to 6.4% at June 30,
2021 and 4.2% at December 31,
2020. We estimate our premium games generated nearly 13% of
our Q3 2021 domestic gaming operations revenue.
International Gaming Operations
- International gaming operations revenue totaled $3.7 million compared to $0.6 million in Q3 2020 and $6.3 million in Q3 2019. The decline versus Q3
2019 reflects the degree to which our Mexico business has been impacted by measures
implemented to slow the spread of COVID-19, including the
imposition of casino capacity restrictions. 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 65% of our 7,896-unit international
installed base was active and playable as of September 30, 2021 compared to 36% as of
December 31, 2020.
- International RPD was $5.11
compared to $0.78 in Q3 2020 and
$7.99 in Q3 2019. International RPD
improved approximately 10% on a quarterly sequential basis from the
$4.66 achieved in Q2 2021, supported
by an increase in the number of active playable games in casinos
throughout Q3 2021.
- Our international installed base totaled 7,896 units at
September 30, 2021, representing a
modest increase as compared to the 7,879 units installed as of
June 30, 2021.
- Given the protracted revenue recovery we are experiencing
within our Mexico business, our
team remains laser focused on managing costs to preserve
profitability. To that end, our international segment continued to
contribute positive Adjusted EBITDA in Q3 2021.
Equipment Sales
- We sold a total of 663 EGM units compared to 387 units and
1,391 units in Q3 2020 and Q3 2019, respectively. EGM unit sales
increased modestly versus the 613 units sold in Q2 2021. We
attribute the sequential growth in EGM unit sales to accelerating
AGS core game content momentum and further recovery in core North
American replacement unit demand, partially offset by a more modest
opening and expansion opportunity set.
- Domestic average sales price ("ASP") was $18,970 versus $18,190 in Q3 2020 and $18,476 in Q3 2019. Our improved ASP reflects a
greater mix of premium-priced Orion
Curve cabinets, which accounted for approximately
60% of Q3 2021 total units sold.
- We sold units into 23 U.S. states and two Canadian provinces
throughout Q3 2021, with Nevada,
Florida, and Michigan emerging as our top three sales
markets.
Product Highlights
- Customer demand for our Orion Curve Premium package
continues to strengthen, with current installs performing well
above house average. In addition to broadening our available
product configurations to provide added versatility for future
installs, we continue to develop a deep pipeline of new premium
game content to further support our long-term growth initiatives
within the higher-yielding premium segment.
- Our Ultimate Choice Jackpots and Coin
Bonanza families of core games are delivering solid
performance, helping us achieve the largest percentage point growth
in the "Top New Core Games" category over the last six months in
the October 2021 Eilers-Fantini Game Performance
Report.
- Customer feedback on our array of new game themes and cabinet
configurations recently showcased at the Global Gaming
Expo has proven overwhelmingly positive. Notably,
customers appear encouraged by our enhanced graphics, new game play
mechanics and more diversified content offerings, helping to
stimulate demand for our products.
(3)
|
"Domestic"
includes both the United States and Canada.
|
Table Products
Three Months Ended September 30, 2021 compared
to Three Months Ended September 30, 2020 and
2019
|
|
(Amounts in thousands, except unit
data)
|
|
Three Months Ended September
30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
2021 vs
2020
|
|
|
2021 vs
2019
|
|
Table Products segment
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming
operations
|
|
$
|
2,953
|
|
|
$
|
2,170
|
|
|
$
|
2,451
|
|
|
|
36.1
|
%
|
|
|
20.5
|
%
|
Equipment
sales
|
|
|
151
|
|
|
|
92
|
|
|
|
410
|
|
|
|
64.1
|
%
|
|
|
(63.2)
|
%
|
Total Table Products revenues
|
|
$
|
3,104
|
|
|
$
|
2,262
|
|
|
$
|
2,861
|
|
|
|
37.2
|
%
|
|
|
8.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table Products Adjusted EBITDA
|
|
$
|
1,628
|
|
|
$
|
1,272
|
|
|
$
|
1,409
|
|
|
|
28.0
|
%
|
|
|
15.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table Products unit
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table Products
installed base, end of period
|
|
|
4,648
|
|
|
|
4,012
|
|
|
|
3,601
|
|
|
|
15.9
|
%
|
|
|
29.1
|
%
|
Average monthly lease
price
|
|
$
|
212
|
|
|
$
|
169
|
|
|
$
|
232
|
|
|
|
25.4
|
%
|
|
|
(8.6)
|
%
|
Table Products Quarterly Results
- Gaming operations, or recurring revenue, grew to a record
$3.0 million, paced by continued
customer adoption of our industry-leading table game progressive
products and the growing appeal of our all-inclusive site license
offering, the AGS Arsenal. Recurring revenue increased
approximately 6% over the previous record of $2.8 million set in Q2 2021.
- Adjusted EBITDA increased 15.5% versus Q3 2019 and 12.4% on a
quarterly sequential basis to a record $1.6
million. Adjusted EBITDA margin was 52.4% compared to 51.2%
in Q2 2021 and 49.2% in Q3 2019.
- Our installed base grew by 190 units on a quarterly
sequential basis, with growth witnessed across all segments of our
diversified Table Products portfolio, including side bets,
progressives, premium games, and card shufflers.
- Operator interest in our industry-leading and expanding table
game progressive product suite continues to build, pushing our
progressive installed base to a record 1,696 units at September 30, 2021. Customer demand for our
Royal 9 Baccarat and Super 4
STAX progressive products remains strong, while the
installed base of our highly anticipated Bonus Spin Xtreme
("BSX") progressive eclipsed 35 units as of September 30, 2021. Based upon the strong initial
customer feedback we have received, we
expect BSX customer adoption to accelerate in the
quarters ahead.
- Our average monthly lease price ("AMLP") increased 2.4%
compared to the $207 achieved in Q2
2021. The nearly 9% decline in AMLP versus Q3 2019
levels reflects the impact of AGS Arsenal on
our reported metrics, as this offering is intended to drive down
per unit pricing in return for an increase in contracted
monthly revenue.
- We were live with 13 AGS Arsenal site licenses at
the end of Q3 2021 compared to ten at the end of Q2 2021. Interest
in our site license offering continues to grow as our
customers look for ways to further enhance the efficiency of their
table game operations.
- We continue to proceed with a field trial of our PAX
S specialty card shuffler as we prepare for a full-scale
product launch.
Interactive
Three Months Ended September 30, 2021
compared to Three Months
Ended September 30, 2020
and 2019
|
|
(Amounts in thousands)
|
|
Three Months Ended September
30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
2021 vs
2020
|
|
|
2021 vs
2019
|
|
Interactive segment revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Social gaming
revenue
|
|
$
|
558
|
|
|
$
|
829
|
|
|
$
|
712
|
|
|
|
(32.7)
|
%
|
|
|
(21.6)
|
%
|
Real-money gaming
revenue
|
|
|
2,015
|
|
|
|
1,112
|
|
|
|
505
|
|
|
|
81.2
|
%
|
|
|
299.0
|
%
|
Total Interactive revenue
|
|
$
|
2,573
|
|
|
$
|
1,941
|
|
|
$
|
1,217
|
|
|
|
32.6
|
%
|
|
|
111.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interactive Adjusted EBITDA
|
|
$
|
806
|
|
|
$
|
750
|
|
|
$
|
(447)
|
|
|
|
7.5
|
%
|
|
|
(280.3)
|
%
|
Interactive Quarterly Results
- Total Interactive revenue increased 32.6% year-over-year to
$2.6 million, supported by outsized
growth within our RMG business.
- Interactive Adjusted EBITDA grew to $806
thousand, marking the segment's seventh consecutive quarter
of positive Adjusted EBITDA performance.
- RMG revenue increased 81.2% year-over-year to $2.0 million. The successful launch of our
RMG platform with additional iGaming operators, the expansion of
regulated iGaming to additional North American jurisdictions,
including several Canadian provinces, and continued strong
performance of AGS game content benefitted the year-over-year RMG
revenue comparison.
- We currently have a full array of AGS titles available for play
online, with our Capital Gains, Tiger Lord, and
Aztec Chief game themes delivering solid
performance.
- Social gaming revenue of $558
thousand was relatively consistent with the prior sequential
quarter, as we continue to prioritize stability and profitability
within this segment of our business. The year-over-year revenue
comparison was impacted by the consumer's preference for at-home
activities during Q3 2020 in response to the global spread of
COVID-19.
Liquidity and Capital Expenditures
As of September 30, 2021, we had $117.8 million of total available liquidity,
comprised of an $87.8 million available cash balance and
$30.0 million of revolver
availability, compared to total available liquidity
of $111.7 million at December 31,
2020. The total principal amount of debt outstanding,
as of September 30, 2021, was $617.5 million, predominantly comprised of
$616.4 million in first lien
term loans, which mature in February 2024.
In May 2020, we issued an
additional $95.0 million secured term
loan to increase the Company's cash position and strengthen
our financial flexibility in response to the uncertain gaming
industry operating environment that emerged following the global
spread of the COVID-19 virus. In conjunction with the $95.0 million offering, 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 Adjusted EBITDA to measure the net first lien
leverage ratio for the first three quarters of 2021. As of
September 30, 2021, our net first lien leverage ratio,
measured in accordance with the revised calculation of Adjusted
EBITDA referenced above, was 4.3 times, putting us in
compliance with our 6.0 times financial covenant.
Total net debt, which is the principal amount of debt
outstanding less cash and cash equivalents, as of
September 30, 2021 was approximately $529.6 million compared to
approximately $540.8 million at December 31, 2020. Our Total Net Debt Leverage
Ratio decreased from 7.5 times at December 31, 2020 to 4.7 times at
September 30, 2021 (see Total Net Debt Leverage
Ratio Reconciliation below(4)).
Third quarter 2021 capital expenditures totaled
$14.9 million, primarily
comprised of $9.1 million in
growth capital expenditures, which reflect costs associated with
the placement of additional units into our leased installed
base, and $4.1 million in
intangible capital expenditures, inclusive of capitalized internal
software development costs. Capital expenditures for the nine
months ended September 30, 2021
totaled $36.3 million compared
to $53.6 million for the nine
months ended September 30,
2019.
(4)
|
Total Adjusted EBITDA
and total net debt leverage ratio are non-GAAP measures, see
non-GAAP reconciliation below.
|
Conference Call and Webcast
AGS leadership will host a conference call to
review the Company's third quarter 2021 results
on November 4, 2021, at 5 p.m. EDT. Participants may access a live
webcast of the conference call, along with a slide presentation
reviewing the quarterly results, at the
Company's Investor Relations website
http://investors.playags.com. A replay of the webcast will be
available on the website following the live event. U.S. and
Canadian participants may access the call live by telephone by
calling +1 (844) 200-6205, while international participants should
call +1 (646) 904-5544 . The conference ID/access code is
790955.
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, 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)
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
Assets
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
87,844
|
|
|
$
|
81,689
|
|
Restricted
cash
|
|
|
20
|
|
|
|
20
|
|
Accounts receivable,
net of allowance of $2,090 and $2,077, respectively
|
|
|
51,879
|
|
|
|
41,743
|
|
Inventories
|
|
|
27,805
|
|
|
|
26,902
|
|
Prepaid
expenses
|
|
|
8,069
|
|
|
|
4,210
|
|
Deposits and
other
|
|
|
8,283
|
|
|
|
4,704
|
|
Total current assets
|
|
|
183,900
|
|
|
|
159,268
|
|
Property and
equipment, net
|
|
|
75,263
|
|
|
|
81,040
|
|
Goodwill
|
|
|
285,464
|
|
|
|
286,042
|
|
Intangible
assets
|
|
|
166,047
|
|
|
|
187,644
|
|
Deferred tax
asset
|
|
|
6,358
|
|
|
|
6,762
|
|
Operating lease
assets
|
|
|
11,371
|
|
|
|
9,763
|
|
Other
assets
|
|
|
9,096
|
|
|
|
10,259
|
|
Total assets
|
|
$
|
737,499
|
|
|
$
|
740,778
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
11,596
|
|
|
$
|
9,547
|
|
Accrued
liabilities
|
|
|
36,208
|
|
|
|
26,325
|
|
Current maturities of
long-term debt
|
|
|
6,883
|
|
|
|
7,031
|
|
Total current liabilities
|
|
|
54,687
|
|
|
|
42,903
|
|
Long-term
debt
|
|
|
599,863
|
|
|
|
601,560
|
|
Deferred tax
liability, non-current
|
|
|
2,222
|
|
|
|
2,254
|
|
Operating lease
liabilities, long-term
|
|
|
10,949
|
|
|
|
9,497
|
|
Other long-term
liabilities
|
|
|
23,396
|
|
|
|
30,781
|
|
Total liabilities
|
|
|
691,117
|
|
|
|
686,995
|
|
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 September 30, 2021 and
at December 31, 2020; and 36,886,287 and 36,494,002 shares issued
and outstanding at September 30, 2021 and December 31, 2020,
respectively.
|
|
|
369
|
|
|
|
364
|
|
Additional paid-in
capital
|
|
|
388,486
|
|
|
|
379,917
|
|
Accumulated
deficit
|
|
|
(335,799)
|
|
|
|
(321,412)
|
|
Accumulated other
comprehensive loss
|
|
|
(6,674)
|
|
|
|
(5,086)
|
|
Total stockholders' equity
|
|
|
46,382
|
|
|
|
53,783
|
|
Total liabilities and stockholders'
equity
|
|
$
|
737,499
|
|
|
$
|
740,778
|
|
PLAYAGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(amounts in thousands, except per share
data)
|
|
|
|
Three Months Ended September
30,
|
|
|
|
2021
|
|
|
2020
|
|
Revenues
|
|
|
|
|
|
|
|
|
Gaming
operations
|
|
$
|
53,231
|
|
|
$
|
36,299
|
|
Equipment
sales
|
|
|
14,046
|
|
|
|
12,985
|
|
Total revenues
|
|
|
67,277
|
|
|
|
49,284
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Cost of gaming
operations(5)
|
|
|
9,641
|
|
|
|
8,268
|
|
Cost of equipment
sales(5)
|
|
|
6,805
|
|
|
|
3,981
|
|
Selling, general and
administrative
|
|
|
15,913
|
|
|
|
10,862
|
|
Research and
development
|
|
|
9,269
|
|
|
|
6,180
|
|
Write-downs and other
charges
|
|
|
197
|
|
|
|
1,932
|
|
Depreciation and
amortization
|
|
|
18,441
|
|
|
|
20,463
|
|
Total operating expenses
|
|
|
60,266
|
|
|
|
51,686
|
|
Income (loss) from operations
|
|
|
7,011
|
|
|
|
(2,402)
|
|
Other expense (income)
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
10,700
|
|
|
|
11,330
|
|
Interest
income
|
|
|
(263)
|
|
|
|
(671)
|
|
Loss on extinguishment
and modification of debt
|
|
|
-
|
|
|
|
-
|
|
Other expense
(income)
|
|
|
1,126
|
|
|
|
(311)
|
|
(Loss) income before income
taxes
|
|
|
(4,552)
|
|
|
|
(12,750)
|
|
Income tax benefit
(expense)
|
|
|
2,723
|
|
|
|
1,672
|
|
Net (loss) income
|
|
|
(1,829)
|
|
|
|
(11,078)
|
|
Foreign currency
translation adjustment
|
|
|
(1,612)
|
|
|
|
1,375
|
|
Total comprehensive (loss)
income
|
|
$
|
(3,441)
|
|
|
$
|
(9,703)
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.05)
|
|
|
$
|
(0.31)
|
|
Diluted
|
|
$
|
(0.05)
|
|
|
$
|
(0.31)
|
|
Weighted average common shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
36,725
|
|
|
$
|
35,647
|
|
Diluted
|
|
$
|
36,725
|
|
|
$
|
35,647
|
|
|
|
(5)
|
Exclusive of
depreciation and amortization.
|
PLAYAGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (in
thousands)
|
|
|
Nine Months Ended September 30,
|
|
|
|
2021
|
|
|
2020
|
|
Cash flows from operating
activities
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(13,482)
|
|
|
$
|
(68,136)
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
55,460
|
|
|
|
66,353
|
|
Accretion of contract
rights under development agreements and placement fees
|
|
|
4,916
|
|
|
|
5,643
|
|
Amortization of
deferred loan costs and discount
|
|
|
3,439
|
|
|
|
2,538
|
|
Stock-based
compensation expense
|
|
|
8,856
|
|
|
|
4,726
|
|
Provision (benefit)
for bad debts
|
|
|
313
|
|
|
|
1,133
|
|
Loss on disposition of
long-lived assets
|
|
|
388
|
|
|
|
2,004
|
|
Impairment of
assets
|
|
|
653
|
|
|
|
6
|
|
Fair value adjustment
of contingent consideration
|
|
|
(56)
|
|
|
|
796
|
|
Provision for deferred
income tax (benefit)
|
|
|
159
|
|
|
|
(518)
|
|
Changes in assets and
liabilities that relate to operations:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(10,646)
|
|
|
|
19,391
|
|
Inventories
|
|
|
945
|
|
|
|
5,840
|
|
Prepaid
expenses
|
|
|
(3,862)
|
|
|
|
(1,463)
|
|
Deposits and
other
|
|
|
(3,565)
|
|
|
|
667
|
|
Other assets,
non-current
|
|
|
3,054
|
|
|
|
1,955
|
|
Accounts payable and
accrued liabilities
|
|
|
7,625
|
|
|
|
(21,216)
|
|
Net cash provided by operating
activities
|
|
|
54,197
|
|
|
|
19,719
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
Customer notes
receivable
|
|
|
-
|
|
|
|
(4,690)
|
|
Proceeds from
payments on customer notes receivable
|
|
|
-
|
|
|
|
279
|
|
Purchase of intangible
assets
|
|
|
-
|
|
|
|
(1,414)
|
|
Software development
and other expenditures
|
|
|
(11,329)
|
|
|
|
(8,004)
|
|
Proceeds from
disposition of assets
|
|
|
35
|
|
|
|
32
|
|
Purchases of property
and equipment
|
|
|
(24,938)
|
|
|
|
(12,196)
|
|
Net cash used in investing
activities
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
-
|
|
|
|
-
|
|
Repayment of first
lien credit facilities
|
|
|
(4,040)
|
|
|
|
(4,040)
|
|
Repayment of
incremental term loans
|
|
|
(713)
|
|
|
|
(238)
|
|
Payment of financed
placement fee obligations
|
|
|
(3,690)
|
|
|
|
(4,179)
|
|
Proceeds from
incremental term loans
|
|
|
-
|
|
|
|
92,150
|
|
Borrowing on
revolver
|
|
|
-
|
|
|
|
30,000
|
|
Payment of deferred
loan costs
|
|
|
(848)
|
|
|
|
(5,744)
|
|
Payments of previous
acquisition obligation
|
|
|
(416)
|
|
|
|
(292)
|
|
Payments on finance
leases and other obligations
|
|
|
(1,195)
|
|
|
|
(1,012)
|
|
Repurchase of
stock
|
|
|
(905)
|
|
|
|
(483)
|
|
Proceeds from stock
option exercise
|
|
|
-
|
|
|
|
158
|
|
Net cash (used in) provided by financing
activities
|
|
|
(11,807)
|
|
|
|
106,320
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
|
(3)
|
|
|
|
(8)
|
|
Net increase in cash, cash equivalents and restricted
cash
|
|
|
6,155
|
|
|
|
100,038
|
|
Cash, cash equivalents and restricted cash, beginning
of period
|
|
|
81,709
|
|
|
|
13,182
|
|
Cash, cash equivalents and restricted cash, end of
period
|
|
$
|
87,864
|
|
|
$
|
113,220
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow
information:
|
|
|
|
|
|
|
|
|
Non-cash investing and financing
activities:
|
|
|
|
|
|
|
|
|
Leased assets obtained
in exchange for new operating lease liabilities
|
|
$
|
3,042
|
|
|
$
|
-
|
|
Leased assets obtained
in exchange for new finance lease liabilities
|
|
$
|
317
|
|
|
$
|
426
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change
|
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
2021 vs
2020
|
|
|
2021 vs
2019
|
|
Net (loss)
income
|
|
$
|
(1,829)
|
|
|
$
|
(11,078)
|
|
|
$
|
(5,536)
|
|
|
|
(83.5)
|
%
|
|
|
(67.0)
|
%
|
Income tax (benefit)
expense
|
|
|
(2,723)
|
|
|
|
(1,672)
|
|
|
|
1,926
|
|
|
|
62.9
|
%
|
|
|
(241.4)
|
%
|
Depreciation and
amortization
|
|
|
18,441
|
|
|
|
20,463
|
|
|
|
23,810
|
|
|
|
(9.9)
|
%
|
|
|
(22.5)
|
%
|
Other
expense
|
|
|
1,126
|
|
|
|
(311)
|
|
|
|
(106)
|
|
|
|
(462.1)
|
%
|
|
|
N/A
|
|
Interest
income
|
|
|
(263)
|
|
|
|
(671)
|
|
|
|
(42)
|
|
|
|
(60.8)
|
%
|
|
|
526.2
|
%
|
Interest
expense
|
|
|
10,700
|
|
|
|
11,330
|
|
|
|
9,320
|
|
|
|
(5.6)
|
%
|
|
|
14.8
|
%
|
Write-downs and
other(6)
|
|
|
197
|
|
|
|
1,932
|
|
|
|
807
|
|
|
|
(89.8)
|
%
|
|
|
(75.6)
|
%
|
Other
adjustments(7)
|
|
|
17
|
|
|
|
2,413
|
|
|
|
(3)
|
|
|
|
(99.3)
|
%
|
|
|
(666.7)
|
%
|
Other non-cash
charges(8)
|
|
|
2,030
|
|
|
|
2,415
|
|
|
|
2,426
|
|
|
|
(15.9)
|
%
|
|
|
(16.3)
|
%
|
Legal and litigation
expenses including settlement
payments(9)
|
|
|
193
|
|
|
|
389
|
|
|
|
1,745
|
|
|
|
(50.4)
|
%
|
|
|
(88.9)
|
%
|
Acquisitions and
integration-related costs including
restructuring and severance(10)
|
|
|
25
|
|
|
|
79
|
|
|
|
481
|
|
|
|
(68.4)
|
%
|
|
|
(94.8)
|
%
|
Non-cash stock-based
compensation
|
|
|
3,994
|
|
|
|
1,733
|
|
|
|
1,959
|
|
|
|
130.5
|
%
|
|
|
103.9
|
%
|
Total Adjusted EBITDA
|
|
$
|
31,908
|
|
|
$
|
27,022
|
|
|
$
|
36,787
|
|
|
|
18.1
|
%
|
|
|
(13.3)
|
%
|
|
|
|
|
|
|
|
|
(Amounts in thousands, except Adjusted EBITDA
margin)
|
|
|
|
|
|
% Change
|
|
|
|
2021
|
|
|
2020
|
|
|
2019
|
|
|
2021 vs
2020
|
|
|
2021 vs
2019
|
|
Total
revenues
|
|
$
|
67,277
|
|
|
$
|
49,284
|
|
|
$
|
79,377
|
|
|
|
36.5
|
%
|
|
|
(15.2)
|
%
|
Adjusted
EBITDA
|
|
$
|
31,908
|
|
|
$
|
27,022
|
|
|
$
|
36,787
|
|
|
|
18.1
|
%
|
|
|
(13.3)
|
%
|
Adjusted EBITDA
margin
|
|
|
47.4
|
%
|
|
|
54.8
|
%
|
|
|
46.3
|
%
|
|
|
(13.5)
|
%
|
|
|
2.3
|
%
|
|
|
(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 costs and inventory and receivable valuation charges associated
with the COVID-19 pandemic, professional fees incurred
for projects, corporate and public filing compliance, contract
cancellation fees, and other transaction costs deemed to be
non-operating in nature, as well as costs incurred related to
public offerings.
|
(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)
|
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.
|
(10)
|
Acquisition and
integration costs primarily relate to costs incurred related
to 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)
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
Total principal
amount of debt
|
|
$
|
617,452
|
|
|
$
|
622,509
|
|
Less: Cash and cash
equivalents
|
|
|
87,844
|
|
|
|
81,689
|
|
Total net debt
|
|
$
|
529,608
|
|
|
$
|
540,820
|
|
LTM Adjusted
EBITDA
|
|
$
|
111,632
|
|
|
$
|
71,669
|
|
Total net debt leverage ratio
|
|
|
4.7
|
|
|
|
7.5
|
|
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)
|
|
Nine Months
Ended
September 30,
2021
|
|
|
Six Months
Ended
September 30,
2021
|
|
|
Three Months
Ended
September 30,
2021
|
|
Net cash provided by
operating activities
|
|
$
|
54,197
|
|
|
$
|
35,893
|
|
|
$
|
18,304
|
|
Software development
and other expenditures
|
|
|
(11,329)
|
|
|
|
(7,210)
|
|
|
|
(4,119)
|
|
Purchases of property
and equipment
|
|
|
(24,938)
|
|
|
|
(14,191)
|
|
|
|
(10,747)
|
|
Free Cash Flow
|
|
$
|
17,930
|
|
|
$
|
14,492
|
|
|
$
|
3,438
|
|
|
(Amounts in thousands)
|
|
Nine Months
Ended
September 30,
2020
|
|
|
Six Months
Ended
September 30,
2020
|
|
|
Three Months
Ended
September 30,
2020
|
|
Net cash provided by
operating activities
|
|
$
|
19,719
|
|
|
$
|
7,867
|
|
|
$
|
11,852
|
|
Purchase of
intangible assets
|
|
|
(1,414)
|
|
|
|
(925)
|
|
|
|
(489)
|
|
Software development
and other expenditures
|
|
|
(8,004)
|
|
|
|
(5,530)
|
|
|
|
(2,474)
|
|
Purchases of property
and equipment
|
|
|
(12,196)
|
|
|
|
(8,057)
|
|
|
|
(4,139)
|
|
Free Cash Flow
|
|
$
|
(1,895)
|
|
|
$
|
(6,645)
|
|
|
$
|
4,750
|
|
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SOURCE AGS