LAS VEGAS, March 14, 2018 /PRNewswire/ -- PlayAGS, Inc.
(NYSE: AGS) ("AGS", "us", "we" or the "Company") today reported
operating results for its fourth quarter 2017 and fiscal year ended
December 31, 2017.
![AGS Logo AGS Logo](https://mma.prnewswire.com/media/654341/AGS_logo_R_Logo.jpg)
"Record revenue of $57.7 million
in the fourth quarter punctuated a transformative year for AGS.
With 27% growth on the top line, 10% recurring revenue growth, and
25% growth in Adjusted EBITDA in fiscal 2017, our results reflected
AGS's continued dedication to best-in-class execution against its
growth initiatives to penetrate new jurisdictions and launch
high-performing, in-demand products into the market," said
David Lopez, President and CEO of
AGS. "Entering the new fiscal year, we believe we are well
positioned for meaningful growth as we benefit from continued
momentum of our Orion Portrait and Icon cabinets,
entry into new domestic and international jurisdictions, and
promising new product launches like the Orion Slant,
STAX table progressive system, and the Dex S card
shuffler."
Summary of the
quarter and year ended December 31, 2017 and 2016
(In thousands, except
per-share and unit data)
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
%
Change
|
|
2017
|
|
2016
|
|
%
Change
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
EGM
|
54,184
|
|
|
40,254
|
|
|
34.6
|
%
|
|
199,931
|
|
|
156,407
|
|
|
27.8
|
%
|
Table
Products
|
1,623
|
|
|
669
|
|
|
142.6
|
%
|
|
4,065
|
|
|
2,674
|
|
|
52.0
|
%
|
Interactive
|
1,854
|
|
|
1,822
|
|
|
1.8
|
%
|
|
7,959
|
|
|
7,725
|
|
|
3.0
|
%
|
Total
revenue
|
57,661
|
|
|
42,745
|
|
|
34.9
|
%
|
|
211,955
|
|
|
166,806
|
|
|
27.1
|
%
|
Operating income /
(loss)
|
861
|
|
|
(1,403)
|
|
|
161.4
|
%
|
|
14,502
|
|
|
(17,064)
|
|
|
185.0
|
%
|
Net loss
|
(8,520)
|
|
|
(20,234)
|
|
|
57.9
|
%
|
|
(45,106)
|
|
|
(81,374)
|
|
|
44.6
|
%
|
Loss per
share
|
(0.37)
|
|
|
(0.87)
|
|
|
57.5
|
%
|
|
(1.94)
|
|
|
(3.51)
|
|
|
44.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
EGM
|
26,335
|
|
|
23,025
|
|
|
14.4
|
%
|
|
107,785
|
|
|
91,729
|
|
|
17.5
|
%
|
Table
Products
|
193
|
|
|
(268)
|
|
|
172.0
|
%
|
|
(528)
|
|
|
(1,663)
|
|
|
68.3
|
%
|
Interactive
|
(79)
|
|
|
(656)
|
|
|
88.0
|
%
|
|
(416)
|
|
|
(4,727)
|
|
|
91.2
|
%
|
Total adjusted
EBITDA(1)
|
26,449
|
|
|
22,101
|
|
|
19.7
|
%
|
|
106,841
|
|
|
85,339
|
|
|
25.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
EGM Units
Sold
|
697
|
|
|
260
|
|
|
168.1
|
%
|
|
2,565
|
|
|
465
|
|
|
451.6
|
%
|
EGM total installed
base, end of period
|
23,805
|
|
|
20,851
|
|
|
14.2
|
%
|
|
23,805
|
|
|
20,851
|
|
|
14.2
|
%
|
|
(1)
Adjusted EBITDA is a non-GAAP measure, see non-GAAP reconciliation
below.
|
Fourth Quarter Financial Highlights
- Total revenue increased 35% to $57.7
million driven by continued growth of our EGMs in the Class
III marketplace.
- At $45.2 million, total recurring
revenue grew approximately 20% quarter-over-quarter, primarily
attributable to yield optimization efforts and the popularity of
our new premium cabinet, Orion Portrait.
- EGM equipment sales increased 151% to $12.4 million due to the sale of 697 units.
- Total adjusted EBITDA margin decreased to 46% in the fourth
quarter 2017 compared to 52% due to sales mix and the timing of
G2E, which took place in the fourth quarter 2017 and in the third
quarter for 2016.
- SG&A increased $4.2 million
in the fourth quarter of 2017 due to the timing of the annual
Global Gaming Expo ("G2E") trade show as well as well as increased
costs due to higher headcount.
- R&D increased $3.0 million in
the fourth quarter of 2017 driven by increased headcount costs and
the development of our new Orion Portrait and Orion
Slant cabinets as well as our newly established game
development studio in Sydney,
Australia.
- At $26.4 million, adjusted EBITDA
increased 20% driven by increases in revenue, and offset by
increased adjusted operating expenses of $4.8 million primarily due to increased
headcount.
- Net loss significantly improved to $8.5
million from $20.2
million.
Full Year Financial Highlights
- Total revenue increased 27% to $212.0
million due to the continued growth of our EGM segment
driven by the introduction of new products and our continued
expansion into the Class III marketplace.
- At $170.3 million, total
recurring revenue grew approximately 10%, primarily attributable to
yield optimization efforts and the popularity of our new premium
cabinet, Orion Portrait.
- EGM equipment sales increased 250% to $41.6 million driven by an increase of 2,100 sold
EGMs for a total of 2,565.
- Total adjusted EBITDA margin was 50% for 2017 compared to 51%,
which is attributable primarily to the large increase in EGM
equipment sales revenue.
- SG&A decreased $2.1 million
in 2017 primarily due to decreased user acquisition fees from our
Interactive segment in efforts to optimize marketing spend.
- R&D increased $4.4 million in
2017 driven by increased headcount costs and the development of our
new Orion Portrait and Orion Slant cabinets as well
as our newly established game development studio in Sydney, Australia.
- At $106.8 million, adjusted
EBITDA increased 25% driven by the increases in revenue described
above, and offset by increased adjusted operating expenses of
$4.1 million primarily due to
increased headcount.
- Net loss significantly improved to $45.1
million from $81.4
million.
Full Year Business Highlights
- EGM average selling price increased nearly 10% to $16,329.
- Domestic EGM revenue per day increased $1.03 to $25.77
driven by our yield optimization efforts as well as the
introduction of our new, high performing products.
- Nearly $4.4 million of 2017's
recurring revenue came from our yield optimization efforts. As of
year end, we have optimized nearly 2,300 units, of which 70% were
optimized in 2017.
- Table Products increased 900 units, or 60%, to 2,400 units
driven by both organic growth and the purchase of In Bet
assets.
- Our ICON cabinet footprint grew nearly 300% to over
4,700 total units in the field.
- Introduced to the market in Q1 of 2017, our Orion
Portrait cabinet ended the year with over 1,900 total units in
the field.
Balance Sheet Review
Capital expenditures increased $16.8
million to $57.5 million in
2017, compared to $40.7
million. The increase was driven primarily by the
purchase of property and equipment of $15.7
million and software development costs of $1.1 million to fuel growth initiatives. As of
December 31, 2017, AGS had
$19.2 million in cash and cash
equivalents compared to $18.0 million
at December 31, 2016. Total net
debt as of December 31, 2017, was
approximately $649 million. As
a result of the IPO, the exercise in full of the underwriters'
overallotment option and the settlement of our HoldCo PIK notes
subsequent to year end, our pro forma total net debt decreased by
$171 million to $478 million.
Recent Developments
Initial Public Offering
On January 26, 2018, we completed
the initial public offering of our common stock, in which it issued
and sold 10,250,000 shares of common stock at a public offering
price of $16.00 per share. We
received net proceeds of $149.1
million from the initial public offering, after deducting
underwriting discounts and commissions and offering expenses
payable.
On February 27, 2018 we sold an
additional 1,537,500 shares of common stock at a public offering
price of $16.00 per share pursuant to
the underwriters' exercise in full of the over-allotment option and
we received net proceeds of $23.0
million from the exercise of the over-allotment option,
after deducting underwriting discounts and commissions.
Repayment of Senior Secured PIK
Notes
On January 30, 2018, we used the
net proceeds of the initial public offering and cash on hand to
redeem in full the 11.25% senior secured PIK notes due 2024
(the "Notes"). On the redemption date, the aggregate principal
amount of the Notes outstanding was $152.6
million and the amount of accrued and unpaid interest was
$1.4 million. In connection with the
redemption, we repaid all of the outstanding obligations in respect
of principal, interest and fees under the Notes.
Term Loan Repricing
On February 7, 2018 we completed
the repricing of our existing $513
million term loans under our First Lien Credit Agreement
(the "Term Loans"). The Term Loans were repriced from 550 basis
points to 425 basis points over LIBOR. The LIBOR floor remains at
100 basis points. As a result of the repricing, we expect to
realize annual cash interest savings of approximately $6.4 million.
2018 Outlook
We expect to generate total adjusted EBITDA of $124 - $130 million
in 2018, representing growth of approximately 16%-22% compared to
the prior year period.
AGS expects 2018 capital expenditures to be in the range of
$55 - $60
million, compared to $57.5
million in 2017, reflecting an expectation for a continued
increase in our installed base in both existing and new markets as
well as our ongoing yield optimization initiative.
Comparison of Fiscal 2018 Guidance to Fiscal
2017 and Fiscal 2016 Results
|
Year ended
December 31,
|
(in $mm)
|
2018
Guidance
|
|
2017
|
|
2016
|
Adjusted EBITDA
(1)
|
$124 -
$130
|
|
$
|
107
|
|
|
$
|
85
|
|
Capex
|
$55 - $60
|
|
$
|
57
|
|
|
$
|
41
|
|
|
|
|
|
|
|
|
|
|
|
(1) A
reconciliation of this measure to net income, which is its most
comparable GAAP measure, can be found on page 8 of this press
release.
|
Conference Call and Webcast
Today, at 4:00 p.m. EST,
management will host a conference call to present the fourth
quarter 2017 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 US/Canada toll-free dial-in number is +1 (866)
777-2509 and the dial-in number for participants outside the
US/Canada is +1 (412) 317-5413.
The conference ID/confirmation code is AGS Q4 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 Native American 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 solutions for players and operators, and
best-in-class service, we offer an unmatched value proposition for
our casino partners. Learn more about us at
www.playags.com.
Forward-looking Statements
This release contains "forward-looking statements."
Forward-looking statements include any statements that address
future results or occurrences. In some cases you can identify
forward-looking statements by terminology such as "may," "might,"
"will," "would," "should," "could" or the negatives thereof.
Generally, the words "anticipate," "believe," "continue," "expect,"
"intend," "estimate," "project," "plan" and similar expressions
identify forward-looking statements. In particular, statements
about our expectations, beliefs, plans, objectives, assumptions or
future events or performance contained in this Annual Report on
Form 10-K in Item 1. "Business," Item 1A. "Risk Factors" and Item
7. "Management's Discussion and Analysis of Financial Condition and
Results of Operations" are forward-looking statements. These
forward-looking statements include statements that are not
historical facts, including statements concerning our possible or
assumed future actions and business strategies.
PLAYAGS,
INC.
CONSOLIDATED
BALANCE SHEETS
(amounts in
thousands, except share and per share data)
|
|
|
|
December 31,
2017
|
|
2017
|
|
2016
|
Assets
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
19,242
|
|
|
$
|
17,977
|
|
Restricted
cash
|
100
|
|
|
100
|
|
Accounts receivable,
net of allowance of $1,462 and $1,972 respectively
|
32,776
|
|
|
24,035
|
|
Inventories
|
24,455
|
|
|
10,729
|
|
Prepaid
expenses
|
2,675
|
|
|
2,609
|
|
Deposits and
other
|
3,460
|
|
|
3,052
|
|
Total current
assets
|
82,708
|
|
|
58,502
|
|
Property and
equipment, net
|
77,982
|
|
|
67,926
|
|
Goodwill
|
278,337
|
|
|
251,024
|
|
Deferred tax
asset
|
1,115
|
|
|
9
|
|
Intangible
assets
|
232,287
|
|
|
232,877
|
|
Other
assets
|
24,813
|
|
|
23,754
|
|
Total
assets
|
$
|
697,242
|
|
|
$
|
634,092
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
11,407
|
|
|
$
|
8,790
|
|
Accrued
liabilities
|
24,954
|
|
|
17,702
|
|
Current maturities of
long-term debt
|
7,359
|
|
|
6,537
|
|
Total current
liabilities
|
43,720
|
|
|
33,029
|
|
Long-term
debt
|
644,158
|
|
|
547,238
|
|
Deferred tax
liability - noncurrent
|
1,016
|
|
|
6,957
|
|
Other long-term
liabilities
|
36,283
|
|
|
30,440
|
|
Total
liabilities
|
725,177
|
|
|
617,664
|
|
Commitments and
contingencies (Note 14)
|
|
|
|
Stockholders'
equity
|
|
|
|
Preferred stock at
$0.01 par value; 100,000 shares authorized, no shares issued and
outstanding
|
—
|
|
|
—
|
|
Common stock at $0.01
par value; 46,629,155 shares authorized; 23,208,076 Shares issued
and outstanding at December 31, 2017 and 2016.
|
149
|
|
|
149
|
|
Additional paid-in
capital
|
177,276
|
|
|
177,276
|
|
Accumulated
deficit
|
(201,557)
|
|
|
(156,451)
|
|
Accumulated other
comprehensive (loss) income
|
(3,803)
|
|
|
(4,546)
|
|
Total
stockholders' equity
|
(27,935)
|
|
|
16,428
|
|
Total liabilities
and stockholders' equity
|
$
|
697,242
|
|
|
$
|
634,092
|
|
PLAYAGS,
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(amounts in
thousands, except per share data)
|
|
|
|
|
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
|
|
|
|
|
|
Gaming operations
(1)
|
$
|
45,212
|
|
|
$
|
37,764
|
|
|
$
|
170,252
|
|
|
$
|
154,857
|
|
Equipment
sales
|
12,449
|
|
|
4,981
|
|
|
41,703
|
|
|
11,949
|
|
Total
revenues
|
57,661
|
|
|
42,745
|
|
|
211,955
|
|
|
166,806
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Cost of gaming
operations(2)
|
9,948
|
|
|
7,109
|
|
|
31,742
|
|
|
26,736
|
|
Cost of equipment
sales(2)
|
5,521
|
|
|
1,993
|
|
|
19,847
|
|
|
6,237
|
|
Selling, general and
administrative
|
13,647
|
|
|
9,454
|
|
|
44,015
|
|
|
46,108
|
|
Research and
development
|
7,803
|
|
|
4,829
|
|
|
25,715
|
|
|
21,346
|
|
Write downs and other
charges
|
1,830
|
|
|
1,109
|
|
|
4,485
|
|
|
3,262
|
|
Depreciation and
amortization
|
18,051
|
|
|
19,654
|
|
|
71,649
|
|
|
80,181
|
|
Total operating
expenses
|
56,800
|
|
|
44,148
|
|
|
197,453
|
|
|
183,870
|
|
Loss from
operations
|
861
|
|
|
(1,403)
|
|
|
14,502
|
|
|
(17,064)
|
|
Other expense
(income)
|
|
|
|
|
|
|
|
Interest
expense
|
13,131
|
|
|
15,812
|
|
|
55,511
|
|
|
59,963
|
|
Interest
income
|
(28)
|
|
|
(6)
|
|
|
(108)
|
|
|
(57)
|
|
Loss on
extinguishment and modification of debt
|
903
|
|
|
—
|
|
|
9,032
|
|
|
—
|
|
Other expense
(income)
|
1,867
|
|
|
1,090
|
|
|
(2,938)
|
|
|
7,404
|
|
Loss before income
taxes
|
(15,012)
|
|
|
(18,299)
|
|
|
(46,995)
|
|
|
(84,374)
|
|
Income tax benefit
(expense)
|
6,492
|
|
|
(1,935)
|
|
|
1,889
|
|
|
3,000
|
|
Net
loss
|
(8,520)
|
|
|
(20,234)
|
|
|
(45,106)
|
|
|
(81,374)
|
|
Foreign currency
translation adjustment
|
36
|
|
|
(598)
|
|
|
743
|
|
|
(2,735)
|
|
Total
comprehensive loss
|
$
|
(8,484)
|
|
|
$
|
(20,832)
|
|
|
$
|
(44,363)
|
|
|
$
|
(84,109)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per common share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.37)
|
|
|
$
|
(0.87)
|
|
|
$
|
(1.94)
|
|
|
$
|
(3.51)
|
|
Diluted
|
$
|
(0.37)
|
|
|
$
|
(0.87)
|
|
|
$
|
(1.94)
|
|
|
$
|
(3.51)
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
23,208
|
|
|
23,208
|
|
|
23,208
|
|
|
23,208
|
|
Diluted
|
23,208
|
|
|
23,208
|
|
|
23,208
|
|
|
23,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
includes revenues from our EGM, Table Products and Interactive
segments
|
(2)
exclusive of depreciation and amortization
|
PLAYAGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
|
|
|
|
Year ended
December 31,
|
|
2017
|
|
2016
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
|
(45,106)
|
|
|
$
|
(81,374)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
71,649
|
|
|
80,181
|
|
Accretion of contract
rights under development agreements and placement fees
|
4,680
|
|
|
4,702
|
|
Amortization of
deferred loan costs and discount
|
2,976
|
|
|
3,542
|
|
Payment-in-kind
interest capitalized
|
15,935
|
|
|
15,396
|
|
Payment-in-kind
interest payments
|
(2,698)
|
|
|
—
|
|
Write off of deferred
loan cost and discount
|
3,294
|
|
|
—
|
|
Provision (benefit)
for bad debts
|
651
|
|
|
2,290
|
|
Imputed interest
income
|
—
|
|
|
—
|
|
Loss on disposition
of assets
|
3,901
|
|
|
1,149
|
|
Impairment of
assets
|
584
|
|
|
4,749
|
|
(Benefit) provision
of deferred income tax
|
(7,062)
|
|
|
(7,998)
|
|
Changes in assets and
liabilities that relate to operations:
|
|
|
|
Accounts
receivable
|
(8,348)
|
|
|
(3,191)
|
|
Inventories
|
(1,636)
|
|
|
307
|
|
Prepaid
expenses
|
(599)
|
|
|
2,021
|
|
Deposits and
other
|
(374)
|
|
|
(315)
|
|
Other assets,
non-current
|
(2,290)
|
|
|
467
|
|
Accounts payable and
accrued liabilities
|
8,451
|
|
|
12,567
|
|
Net cash provided
by (used in) operating activities
|
44,008
|
|
|
34,493
|
|
Cash flows from
investing activities
|
|
|
|
Business
acquisitions, net of cash acquired
|
(63,850)
|
|
|
—
|
|
Collection of notes
receivable
|
—
|
|
|
—
|
|
Purchase of
intangible assets
|
(1,226)
|
|
|
(1,311)
|
|
Software development
and other expenditures
|
(7,664)
|
|
|
(6,526)
|
|
Proceeds from
disposition of assets
|
514
|
|
|
87
|
|
Purchases of property
and equipment
|
(48,585)
|
|
|
(32,879)
|
|
Net cash used in
investing activities
|
(120,811)
|
|
|
(40,629)
|
|
Cash flows from
financing activities
|
|
|
|
Borrowings under the
revolving facility
|
—
|
|
|
—
|
|
Repayments under the
revolving facility
|
—
|
|
|
—
|
|
Proceeds from
issuance of first lien credit facilities
|
448,725
|
|
|
—
|
|
Proceeds from
incremental term loans
|
65,000
|
|
|
—
|
|
Repayment of senior
secured credit facilities
|
(410,655)
|
|
|
—
|
|
Payments on first
lien credit facilities
|
(2,413)
|
|
|
(6,987)
|
|
Deferred offering
costs paid
|
(653)
|
|
|
—
|
|
Payment of previous
acquisition obligation
|
—
|
|
|
(1,125)
|
|
Payment of financed
obligations
|
(128)
|
|
|
|
Payment of financed
placement fee obligations
|
(3,807)
|
|
|
(3,516)
|
|
Repayment of seller
notes
|
(12,401)
|
|
|
—
|
|
Payments on equipment
long term note payable and capital leases
|
(2,372)
|
|
|
—
|
|
Repurchase of shares
issued to management
|
—
|
|
|
(50)
|
|
Proceeds from
issuance of common stock
|
—
|
|
|
—
|
|
Proceeds from
employees in advance of common stock issuance
|
25
|
|
|
75
|
|
Payment of deferred
loan costs
|
(3,267)
|
|
|
—
|
|
Net cash provided
by financing activities
|
78,054
|
|
|
(11,603)
|
|
Effect of exchange
rates on cash and cash equivalents
|
14
|
|
|
(6)
|
|
Increase (decrease)
in cash and cash equivalents
|
1,265
|
|
|
(17,745)
|
|
Cash and cash
equivalents, beginning of period
|
17,977
|
|
|
35,722
|
|
Cash and cash
equivalents, end of period
|
$
|
19,242
|
|
|
$
|
17,977
|
|
Supplemental cash
flow information:
|
|
|
|
Cash paid during the
period for interest
|
$
|
35,890
|
|
|
$
|
40,060
|
|
Cash paid during the
period for taxes
|
$
|
1,157
|
|
|
$
|
1,247
|
|
Non-cash investing
and financing activities:
|
|
|
|
Non-cash
consideration given in business acquisitions
|
$
|
2,600
|
|
|
$
|
—
|
|
Financed placement
fees
|
$
|
—
|
|
|
$
|
—
|
|
Financed purchase
property and equipment
|
$
|
368
|
|
|
$
|
2,662
|
|
Financed purchase of
intangible asset
|
$
|
4,866
|
|
|
$
|
—
|
|
Non-GAAP Financial Measures
This press release and accompanying schedules provide certain
information regarding adjusted EBITDA which is considered a
non-GAAP financial measures 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 following table presents a reconciliation of total adjusted
EBITDA to net loss, which is the most comparable GAAP measure:
Total Adjusted EBITDA
Reconciliation
|
Three months ended
December 31,
|
|
Year ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net loss
|
(8,520)
|
|
|
(20,234)
|
|
|
(45,106)
|
|
|
(81,374)
|
|
Income tax (benefit)
expense
|
(6,492)
|
|
|
1,935
|
|
|
(1,889)
|
|
|
(3,000)
|
|
Depreciation and
amortization
|
18,051
|
|
|
19,654
|
|
|
71,649
|
|
|
80,181
|
|
Other expense
(income)
|
1,867
|
|
|
1,090
|
|
|
(2,938)
|
|
|
7,404
|
|
Interest
income
|
(28)
|
|
|
(6)
|
|
|
(108)
|
|
|
(57)
|
|
Interest
expense
|
13,131
|
|
|
15,812
|
|
|
55,511
|
|
|
59,963
|
|
Write downs and
other(1)
|
1,830
|
|
|
1,109
|
|
|
4,485
|
|
|
3,262
|
|
Loss on
extinguishment and modification of debt(2)
|
903
|
|
|
—
|
|
|
9,032
|
|
|
—
|
|
Other
adjustments(3)
|
823
|
|
|
159
|
|
|
2,890
|
|
|
1,809
|
|
Other non-cash
charges(4)
|
2,332
|
|
|
1,777
|
|
|
7,794
|
|
|
8,860
|
|
New jurisdiction and
regulatory licensing costs(5)
|
758
|
|
|
358
|
|
|
2,062
|
|
|
1,315
|
|
Legal &
litigation expenses including settlement
payments(6)
|
(243)
|
|
|
70
|
|
|
523
|
|
|
1,565
|
|
Acquisition &
integration related costs(7)
|
2,037
|
|
|
377
|
|
|
2,936
|
|
|
5,411
|
|
Adjusted
EBITDA
|
26,449
|
|
|
22,101
|
|
|
106,841
|
|
|
85,339
|
|
|
(1)
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
|
(2)
Loss on extinguishment and modification of debt primarily
relates to the refinancing of long-term debt, in which deferred
loan costs and discounts related to old senior secured credit
facilities were written off
|
(3)
Other adjustments are primarily composed of professional
fees incurred for projects, corporate and public filing compliance,
contract cancellation fees and other transaction costs deemed to be
non-operating in nature
|
(4)
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
|
(5) New
jurisdiction and regulatory license costs relates primarily to
one-time non-operating costs incurred to obtain new licenses and
develop products for new jurisdictions
|
(6)
Legal & litigation expenses include of payments to law
firms and settlements for matters that are outside the normal
course of business
|
(7)
Acquisition and integration costs include restructuring and
severance and are related to costs incurred after the purchase
of businesses, such as the acquisitions of Rocket, In Bet, Cadillac
Jack and RocketPlay, to integrate operations
|
For information contact:
Julia Boguslawski, Chief Marketing Officer &
EVP of Investor Relations
PlayAGS,
Inc.
702-724-1125
jboguslawski@playags.com
Or
Steven Kopjo, Director of SEC
Reporting & Investor Relations
PlayAGS,
Inc.
702-724-1155
skopjo@playags.com
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SOURCE AGS