LAS VEGAS, Aug. 2, 2018 /PRNewswire/ -- PlayAGS, Inc. (NYSE:
AGS) ("AGS", "us", "we" or the "Company") today reported operating
results for its second quarter 2018.
"AGS grew both the top and bottom line by more than 40% in the
second quarter, marking the most successful quarter in our
company's history. Our strong results reflect record highs in
our EGM and Tables Products revenue, average selling prices,
revenue per day, and recurring revenue. We continue to reap
the benefits of our Orion and Bonus Spin product launches, our
steady ramp into key markets like Nevada, California and New
Jersey, and strong performance from both our optimized and
new product footprint.
In addition to a strong pipeline of new product launches and our
initial entry into markets such as Canada to accelerate our growth, our recent
acquisition of content-aggregator Gameiom creates a new channel to
exploit our industry-leading game content in online real-money
gaming markets. Because of the potential upside from these
exciting opportunities in our EGM business and our strong first
half of the year, we are raising our Adjusted EBITDA guidance to
reflect a new range of $132 million
to $136 million."
|
Summary of the
quarter ended June 30, 2018 and 2017
|
(In thousands, except
per-share and unit data)
|
|
|
Three Months Ended
June 30,
|
|
2018
|
|
2017
|
|
%
Change
|
Revenues
|
|
|
|
|
|
EGM
|
$
|
69,319
|
|
|
$
|
47,404
|
|
|
46.2
|
%
|
Table
Products
|
1,792
|
|
|
711
|
|
|
152.0
|
%
|
Interactive
|
1,711
|
|
|
1,965
|
|
|
(12.9)
|
%
|
Total
revenue
|
$
|
72,822
|
|
|
$
|
50,080
|
|
|
45.4
|
%
|
Operating
income
|
$
|
11,024
|
|
|
$
|
2,322
|
|
|
374.8
|
%
|
Net loss
|
$
|
(5,310)
|
|
|
$
|
(20,110)
|
|
|
73.6
|
%
|
Loss per
share
|
$
|
(0.15)
|
|
|
$
|
(0.87)
|
|
|
82.8
|
%
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
EGM
|
$
|
36,867
|
|
|
$
|
26,495
|
|
|
39.1
|
%
|
Table
Products
|
70
|
|
|
(312)
|
|
|
122.4
|
%
|
Interactive
|
(355)
|
|
|
(97)
|
|
|
(266.0)
|
%
|
Total Adjusted
EBITDA(1)
|
$
|
36,582
|
|
|
$
|
26,086
|
|
|
40.2
|
%
|
|
|
|
|
|
|
EGM units
sold
|
1,058
|
|
|
574
|
|
|
84.3
|
%
|
EGM total installed
base, end of period
|
24,523
|
|
|
21,479
|
|
|
14.2
|
%
|
|
|
(1)
|
Total Adjusted EBITDA
is a non-GAAP measure, see non-GAAP reconciliation
below.
|
Second Quarter Financial Highlights
- Total revenue increased 45% to $72.8
million, a company record, driven by continued growth of our
EGMs in the Class III marketplace, led by demand for our premium
Orion Portrait cabinet.
- Recurring revenue grew to $52.6
million or 26% year-over-year. In addition to the
contribution from the EGMs purchased from Rocket Gaming and Table
Products purchased from In Bet in the Fall of 2017, the increase
was driven by our strong Domestic revenue per day ("RPD") of
$27.79, up $1.90 year-over-year.
- EGM equipment sales increased 144% to $20.2 million, another Company record, due to the
sale of 1,058 units, of which approximately 60% and 12% were Orion
Portrait and Orion Slant cabinets, respectively.
- Net loss improved to $5.3 million
from $20.1 million in the prior year,
primarily due to increased revenue described above.
- Total Adjusted EBITDA (non-GAAP) increased to $36.6 million, or 40%, driven by the significant
increase in revenue, partially offset by increased adjusted
operating expenses of $3.9 million
primarily due to increased headcount in SG&A and
R&D.(1)
- Total Adjusted EBITDA margin decreased to 50% in the second
quarter 2018 compared to 52% in the prior year driven by several
different factors, most notably due to the increased proportion of
equipment sales to total revenues.
- SG&A expenses increased $5.0
million in the second quarter of 2018 primarily
due to $2.3 million in increased
professional fees driven by costs associated with the acquisition
of online content-aggregator Gameiom as well as costs associated
with our previous offerings. Salary and benefit costs increased
$1.8 million due to higher headcount
and non-cash stock based compensation expense increased
$0.3 million.
- R&D expenses increased $0.7
million in the second quarter of 2018 driven by higher
salary and benefit costs related to additional headcount.
(1) Total Adjusted
EBITDA is a non-GAAP measure, see non-GAAP reconciliation
below.
Second Quarter Business Highlights
- Domestic EGM installed base increased by more than 2,400 units
year-over-year driven by the purchase of approximately 1,500 EGMs
from Rocket Gaming in December 2017
and the popularity of our Orion Portrait and ICON cabinets.
- Domestic EGM RPD increased 7% to $27.79 driven by our new product offerings and
the optimization of our installed base by installing our newer
higher performing EGMs.
- EGM units sold increased to 1,058 in the current quarter
compared to 574 in the prior year led by sales of the Orion
Portrait cabinet in early entry markets such as California, Nevada and New
Jersey.
- EGM average selling price (ASP) increased 18% to $18,728, a quarterly company record, driven by
record sales of the premium-priced Orion Portrait cabinet and our
newly introduced core-plus cabinet, Orion Slant.
- On a trailing twelve months basis, approximately $8.3 million of our recurring revenue came from
our yield optimization efforts.
- Table Products increased 983 units, or 56%, to 2,737 units
driven by both organic growth, most notably in Buster Blackjack and
Bonus Spin progressive units, and the purchase of approximately 500
In Bet units in the third quarter of 2017.
- Our ICON cabinet footprint grew 108% to over 6,417 total units
in the field including our first placements of nearly 200 cabinets
into Mexico.
- Introduced to the market in Q1 of 2017, our Orion Portrait
cabinet ended Q2 2018 with a footprint of over 3,600 total units as
compared to 463 units in second quarter of 2017, up 90% from
year-end and 680% year-over-year.
Balance Sheet Review
Capital expenditures decreased $4.8
million to $13.1 million in
the second quarter, compared to $17.9
million in the prior year period. As of
June 30, 2018, we had $28.2 million in cash and cash equivalents
compared to $19.2 million at
December 31, 2017. Total net debt,
which is the principal amount of debt outstanding less cash and
cash equivalents, as of June 30,
2018, was approximately $483.7
million compared to $648.7
million at December 31, 2017.
This substantial reduction was driven by the IPO and related
redemption of our HoldCo PIK notes during the first quarter.
In the second quarter, net debt decreased by over $3.0 million due to mandatory principal payments
on our term loans and a higher balance of cash and cash
equivalents. As a result of the above transactions and our
strong operational performance, our total net debt leverage ratio,
which is total net debt divided by Adjusted EBITDA for the trailing
twelve-month period, decreased from 6.1 times at December 31, 2017, to 4.2 times at March 31, 2018, and now 3.8 times at June 30, 2018.
2018 Outlook
Based on our year-to-date progress and due to our current
momentum, we now expect our total Adjusted EBITDA in 2018 to be
between $132.0 and $136.0 million. This is an upward revision to the
guidance we previously released and is based on greater visibility
that we now have for the installation and performance of Orion
Portrait, Orion Slant, STAX, and other products for the remainder
of the year, in addition to accelerated efforts to increase our
footprint in sizable new markets, such as Canada. We maintain our capital expenditures
range of $55.0 to $60.0 million.
We have not provided a reconciliation of forward looking total
Adjusted EBITDA to the most directly comparable GAAP financial
measure, Net income (loss), due primarily to the variability and
difficulty in making accurate forecasts and projections of the
variable and individual adjustments for a reconciliation to Net
income (loss), as not all of the information necessary for a
quantitative reconciliation is available to us without unreasonable
effort. We expect that the main components of Net income (loss) for
fiscal year 2018 shall consist of operating expenses, interest
expenses as well as other expenses (income) and income tax
expenses, which are inherently difficult to forecast and quantify
with reasonable accuracy without unreasonable efforts. The amounts
associated with these items have historically and may continue to
vary significantly from quarter to quarter and material changes to
these items could have a significant effect on our future GAAP
results.
Conference Call and Webcast
Today, at 5:00 p.m. ET, management
will host a conference call to present the second quarter 2018
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) 270-1533 and the dial-in number for
participants outside the US/Canada
is +1 (412) 317-0797. The conference ID/confirmation code is AGS Q2
2018 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, 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 and other factors set forth
under Item 1. "Business," Item 1A. "Risk Factors" in AGS's Annual
Report on Form 10-K/A, filed with the Securities and Exchange
Commission on March 30, 2018. 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.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands, except share and per share data)
|
(unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2018
|
|
2017
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
28,151
|
|
|
$
|
19,242
|
Restricted
cash
|
78
|
|
|
100
|
Accounts receivable,
net of allowance of $1,247 and $1,462, respectively
|
44,518
|
|
|
32,776
|
Inventories
|
29,706
|
|
|
24,455
|
Prepaid
expenses
|
4,368
|
|
|
2,675
|
Deposits and
other
|
4,233
|
|
|
3,460
|
Total current
assets
|
111,054
|
|
|
82,708
|
Property and
equipment, net
|
81,202
|
|
|
77,982
|
Goodwill
|
281,553
|
|
|
278,337
|
Intangible
assets
|
214,202
|
|
|
232,287
|
Deferred tax
asset
|
919
|
|
|
1,115
|
Other
assets
|
13,661
|
|
|
24,813
|
Total
assets
|
$
|
702,591
|
|
|
$
|
697,242
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
12,395
|
|
|
$
|
11,407
|
Accrued
liabilities
|
21,441
|
|
|
24,954
|
Current maturities of
long-term debt
|
6,649
|
|
|
7,359
|
Total current
liabilities
|
40,485
|
|
|
43,720
|
Long-term
debt
|
493,112
|
|
|
644,158
|
Deferred tax
liability - noncurrent
|
3,892
|
|
|
1,016
|
Other long-term
liabilities
|
26,074
|
|
|
36,283
|
Total
liabilities
|
563,563
|
|
|
725,177
|
Commitments and
contingencies
|
|
|
|
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; 450,000,000 shares authorized at June 30, 2018 and
46,629,155 at December 31, 2017; and 35,261,519 and 23,208,076
shares issued and outstanding at June 30, 2018 and December 31,
2017, respectively.
|
353
|
|
|
149
|
Additional paid-in
capital
|
358,829
|
|
|
177,276
|
Accumulated
deficit
|
(216,405)
|
|
|
(201,557)
|
Accumulated other
comprehensive loss
|
(3,749)
|
|
|
(3,803)
|
Total
stockholders' equity
|
139,028
|
|
|
(27,935)
|
Total liabilities
and stockholders' equity
|
$
|
702,591
|
|
|
$
|
697,242
|
|
|
|
PLAYAGS,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(amounts in
thousands, except per share data)
|
(unaudited)
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
2017
|
Revenues
|
|
|
|
|
|
|
Gaming
operations
|
$
|
52,554
|
|
|
$
|
41,758
|
|
|
$
|
102,186
|
|
$
|
82,191
|
Equipment
sales
|
20,268
|
|
|
8,322
|
|
|
35,492
|
|
15,663
|
Total
revenues
|
72,822
|
|
|
50,080
|
|
|
137,678
|
|
97,854
|
Operating
expenses
|
|
|
|
|
|
|
Cost of gaming
operations(1)
|
9,710
|
|
|
6,979
|
|
|
18,568
|
|
14,450
|
Cost of equipment
sales(1)
|
9,411
|
|
|
4,144
|
|
|
16,810
|
|
7,996
|
Selling, general and
administrative
|
15,350
|
|
|
10,345
|
|
|
32,127
|
|
20,626
|
Research and
development
|
6,855
|
|
|
6,141
|
|
|
15,480
|
|
11,445
|
Write downs and other
charges
|
1,005
|
|
|
1,933
|
|
|
2,615
|
|
2,165
|
Depreciation and
amortization
|
19,467
|
|
|
18,216
|
|
|
38,816
|
|
36,667
|
Total operating
expenses
|
61,798
|
|
|
47,758
|
|
|
124,416
|
|
93,349
|
Income from
operations
|
11,024
|
|
|
2,322
|
|
|
13,262
|
|
4,505
|
Other expense
(income)
|
|
|
|
|
|
|
Interest
expense
|
8,873
|
|
|
14,554
|
|
|
19,297
|
|
29,714
|
Interest
income
|
(21)
|
|
|
(40)
|
|
|
(73)
|
|
(55)
|
Loss on
extinguishment and modification of debt
|
—
|
|
|
8,129
|
|
|
4,608
|
|
8,129
|
Other (income)
expense
|
455
|
|
|
(1,529)
|
|
|
9,687
|
|
(4,338)
|
Income (loss)
before income taxes
|
1,717
|
|
|
(18,792)
|
|
|
(20,257)
|
|
(28,945)
|
Income tax benefit
(expense)
|
(7,027)
|
|
|
(1,318)
|
|
|
5,409
|
|
(3,551)
|
Net income
(loss)
|
(5,310)
|
|
|
(20,110)
|
|
|
(14,848)
|
|
(32,496)
|
Foreign currency
translation adjustment
|
(2,883)
|
|
|
330
|
|
|
54
|
|
1,205
|
Total
comprehensive loss
|
$
|
(8,193)
|
|
|
$
|
(19,780)
|
|
|
$
|
(14,794)
|
|
$
|
(31,291)
|
|
|
|
|
|
|
|
Basic and diluted
loss per common share:
|
|
|
|
|
|
|
Basic
|
$
|
(0.15)
|
|
|
$
|
(0.87)
|
|
|
$
|
(0.44)
|
|
$
|
(1.40)
|
Diluted
|
$
|
(0.15)
|
|
|
$
|
(0.87)
|
|
|
$
|
(0.44)
|
|
$
|
(1.40)
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
Basic
|
35,233
|
|
|
23,208
|
|
|
33,494
|
|
23,208
|
Diluted
|
35,233
|
|
|
23,208
|
|
|
33,494
|
|
23,208
|
|
|
(1)
|
exclusive of
depreciation and amortization
|
|
|
|
PLAYAGS,
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
|
(unaudited)
|
|
|
Six months ended
June 30,
|
|
2018
|
|
2017
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
|
(14,848)
|
|
|
$
|
(32,496)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
38,816
|
|
|
36,667
|
Accretion of contract
rights under development agreements and placement fees
|
2,206
|
|
|
2,365
|
Amortization of
deferred loan costs and discount
|
914
|
|
|
1,709
|
Payment-in-kind
interest capitalized
|
—
|
|
|
7,807
|
Payment-in-kind
interest payments
|
(37,624)
|
|
|
(2,698)
|
Write off of deferred
loan cost and discount
|
3,410
|
|
|
3,294
|
Stock based
compensation expense
|
8,629
|
|
|
—
|
(Benefit) provision
for bad debts
|
(148)
|
|
|
396
|
Loss on disposition
of assets
|
1,020
|
|
|
2,510
|
Impairment of
assets
|
995
|
|
|
285
|
Fair value adjustment
of contingent consideration
|
600
|
|
|
—
|
Provision for
deferred income tax
|
3,090
|
|
|
2,021
|
Changes in assets and
liabilities that relate to operations:
|
|
|
|
Accounts
receivable
|
(11,552)
|
|
|
192
|
Inventories
|
(2,440)
|
|
|
3,035
|
Prepaid
expenses
|
(1,685)
|
|
|
(699)
|
Deposits and
other
|
(758)
|
|
|
(466)
|
Other assets,
non-current
|
11,138
|
|
|
(2,221)
|
Accounts payable and
accrued liabilities
|
(12,082)
|
|
|
(3,803)
|
Net cash (used in)
provided by operating activities
|
(10,319)
|
|
|
17,898
|
Cash flows from
investing activities
|
|
|
|
Business
acquisitions, net of cash acquired
|
(4,452)
|
|
|
—
|
Purchase of
intangible assets
|
(594)
|
|
|
(420)
|
Software
development
|
(5,168)
|
|
|
(4,208)
|
Proceeds from
disposition of assets
|
21
|
|
|
93
|
Purchases of property
and equipment
|
(22,314)
|
|
|
(27,729)
|
Net cash used in
investing activities
|
(32,507)
|
|
|
(32,264)
|
Cash flows from
financing activities
|
|
|
|
Proceeds from
issuance of first lien credit facilities
|
—
|
|
|
448,725
|
Proceeds from stock
option exercise
|
279
|
|
|
—
|
Repayment of senior
secured credit facilities
|
(115,000)
|
|
|
(410,655)
|
Payments on first
lien credit facilities
|
(2,576)
|
|
|
—
|
Payment of financed
placement fee obligations
|
(1,772)
|
|
|
(2,135)
|
Payments on deferred
loan costs
|
—
|
|
|
(3,127)
|
Repayment of seller
notes
|
—
|
|
|
(12,401)
|
Payments on equipment
long term note payable and capital leases
|
(1,405)
|
|
|
(1,295)
|
Initial public
offering cost
|
(4,160)
|
|
|
—
|
Proceeds from
issuance of common stock
|
176,341
|
|
|
—
|
Proceeds from
employees in advance of common stock issuance
|
—
|
|
|
25
|
Net cash provided
by financing activities
|
51,707
|
|
|
19,137
|
Effect of exchange
rates on cash and cash equivalents and restricted cash
|
6
|
|
|
4
|
Increase in cash and
cash equivalents and restricted cash
|
8,887
|
|
|
4,775
|
Cash, cash
equivalents and restricted cash, beginning of period
|
19,342
|
|
|
18,077
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
28,229
|
|
|
$
|
22,852
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
Cash paid during the
period for interest
|
$
|
16,767
|
|
|
$
|
16,869
|
Cash paid during the
period for taxes
|
$
|
494
|
|
|
$
|
574
|
Non-cash investing
and financing activities:
|
|
|
|
Financed purchase of
property and equipment
|
$
|
256
|
|
|
$
|
116
|
Non-GAAP Financial Measures
This press release and accompanying schedules provide certain
information regarding total 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 or expenses that are deducted in
calculating net income and to deduct certain gains that are
included in calculating net income. However, these charges and
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 June 30, 2018 compared to the Three Months Ended June 30,
2017
|
|
|
Three months ended
June 30,
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
Net loss
|
$
|
(5,310)
|
|
|
$
|
(20,110)
|
|
|
$
|
14,800
|
|
|
73.6
|
%
|
Income tax
expense
|
7,027
|
|
|
1,318
|
|
|
5,709
|
|
|
433.2
|
%
|
Depreciation and
amortization
|
19,467
|
|
|
18,216
|
|
|
1,251
|
|
|
6.9
|
%
|
Other (income)
expense
|
455
|
|
|
(1,529)
|
|
|
1,984
|
|
|
129.8
|
%
|
Interest
income
|
(21)
|
|
|
(40)
|
|
|
19
|
|
|
47.5
|
%
|
Interest
expense
|
8,873
|
|
|
14,554
|
|
|
(5,681)
|
|
|
(39.0)
|
%
|
Write downs and
other(1)
|
1,005
|
|
|
1,933
|
|
|
(928)
|
|
|
(48.0)
|
%
|
Loss on
extinguishment and modification of debt(2)
|
—
|
|
|
8,129
|
|
|
(8,129)
|
|
|
(100.0)
|
%
|
Other
adjustments(3)
|
929
|
|
|
946
|
|
|
(17)
|
|
|
(1.8)
|
%
|
Other non-cash
charges(4)
|
1,616
|
|
|
1,800
|
|
|
(184)
|
|
|
(10.2)
|
%
|
New jurisdictions and
regulatory licensing costs(5)
|
—
|
|
|
502
|
|
|
(502)
|
|
|
(100.0)
|
%
|
Legal &
litigation expenses including settlement
payments(6)
|
834
|
|
|
186
|
|
|
648
|
|
|
348.4
|
%
|
Acquisitions &
integration related costs including restructuring &
severance(7)
|
1,231
|
|
|
181
|
|
|
1,050
|
|
|
580.1
|
%
|
Non-cash stock based
compensation(8)
|
476
|
|
|
—
|
|
|
476
|
|
|
100.0
|
%
|
Total Adjusted
EBITDA
|
$
|
36,582
|
|
|
$
|
26,086
|
|
|
$
|
10,496
|
|
|
40.2
|
%
|
|
(1) Write downs and
other include 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 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 and Gameiom, to
integrate operations
|
|
(8) Non-cash stock
based compensation includes non-cash compensation expense
related to grants of options, restricted stock, and other equity
awards
|
|
|
|
Six Months
Ended June 30, 2018 compared to the Six Months Ended June 30,
2017
|
|
|
Six months ended
June 30,
|
|
$
|
|
%
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
Net loss
|
$
|
(14,848)
|
|
|
$
|
(32,496)
|
|
|
$
|
17,648
|
|
|
54.3
|
%
|
Income tax expense
(benefit)
|
(5,409)
|
|
|
(3,551)
|
|
|
(1,858)
|
|
|
(52.3)
|
%
|
Depreciation and
amortization
|
38,816
|
|
|
36,667
|
|
|
2,149
|
|
|
5.9
|
%
|
Other (income)
expense
|
9,687
|
|
|
(4,338)
|
|
|
14,025
|
|
|
323.3
|
%
|
Interest
income
|
(73)
|
|
|
(55)
|
|
|
(18)
|
|
|
(32.7)
|
%
|
Interest
expense
|
19,297
|
|
|
29,714
|
|
|
(10,417)
|
|
|
(35.1)
|
%
|
Write downs and
other(1)
|
2,615
|
|
|
2,165
|
|
|
450
|
|
|
20.8
|
%
|
Loss on
extinguishment and modification of debt(2)
|
4,608
|
|
|
8,129
|
|
|
(3,521)
|
|
|
(43.3)
|
%
|
Other
adjustments(3)
|
1,325
|
|
|
1,593
|
|
|
(268)
|
|
|
(16.8)
|
%
|
Other non-cash
charges(4)
|
3,190
|
|
|
3,912
|
|
|
(722)
|
|
|
(18.5)
|
%
|
New jurisdictions and
regulatory licensing costs(5)
|
—
|
|
|
737
|
|
|
(737)
|
|
|
(100.0)
|
%
|
Legal &
litigation expenses including settlement
payments(6)
|
834
|
|
|
585
|
|
|
249
|
|
|
42.6
|
%
|
Acquisitions &
integration related costs including restructuring &
severance(7)
|
2,410
|
|
|
828
|
|
|
1,582
|
|
|
191.1
|
%
|
Non-cash stock based
compensation(8)
|
8,629
|
|
|
—
|
|
|
8,629
|
|
|
100.0
|
%
|
Total Adjusted
EBITDA
|
$
|
71,081
|
|
|
$
|
50,992
|
|
|
$
|
20,089
|
|
|
39.4
|
%
|
|
(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 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 and Gameiom, to
integrate operations
|
|
(8) Non-cash stock
based compensation includes non-cash compensation expense
related to grants of options, restricted stock, and other equity
awards
|
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