AGS has expressed support for future growth prospects, as the organisation sees a major expansion of its digital division as additional US states are contemplating the implementation of online gaming legislation for real money.
Asserting that “AGS has the strongest pipeline of new products and game themes in the company’s history,” the Las Vegas-based company is lauded for delivering stronger results than anticipated in the third quarter.
AGS president and CEO David Lopez explained: “I am extremely proud of how our team came together to offset the challenges brought upon by the COVID-19 pandemic to deliver better than expected third quarter 2020 financial results.
“Our employees’ experiences throughout the pandemic will only help to strengthen their collective resolve, in turn propelling AGS to emerge a stronger and more nimble company as the world gradually returns to normal.”
Revenue fell 37.5 percent from $79.3 m to $49.3 m during the third quarter of the year, but increased from 16.8 m in Q2, with the decrease primarily due to the negative effect of the pandemic on consumer operations and, subsequently, revenue from gaming operations and sales of EGM units.
AGS adds that virtually all of the casinos of its customers in the United States and Canada had resumed limited operations by September 30. Approximately 50 per cent of customer properties in Mexico were reopened at the same date with capacity restrictions.
During the time, net loss “dramatically improved” from $42.6 m in the second quarter to end at $11.1 m (2019: $5.5 m), due to steps taken to minimise expenses in the middle of COVID-19, including staff furloughs, job cuts, and wage decreases, combined with a strategic focus on streamlining spending, mainly in professional fees, sales and marketing operations.
Net adjusted EBITDA rose from a $1.2 m loss in the second quarter of 2020 to $27 m. Due to year-over-year declines in EGM and table products segments, which were partially offset by interactive progress, a decrease from the $36.8 m delivered in the previous year period is recorded.
AGS Chief Financial Officer Kimo Akiona said: “Our third quarter financial performance improved dramatically compared to the 2020 second quarter, with revenues, net loss, and adjusted EBITDA improving sharply on a sequential basis.
“Importantly, we were free cash flow positive in the quarter, allowing us to report a strong liquidity position of $113.2m at quarter end. Given our better-than-expected third quarter financial performance and growing comfort with our resulting liquidity position, we elected to fully repay the $30m outstanding on our revolving credit facility, subsequent to quarter end.”