AGS released the financial statements for the fourth quarter and year ended December 31, 2020 on Thursday.
Consolidated sales was $46.6 million in the fourth quarter of 2019, down from $77.8 million the previous year, a 40.1 percent decline. The year-over-year drop represents the COVID-19 pandemic’s negative effect on the supplier’s customers’ activities and, as a result, income and EGM unit revenues from gaming operations.
As of December 31, 2020, Orion Starwall had over 300 games built. In Q4, the installed base of progressive table game items grew by 127 units sequentially. As of December 31, 2020, AGS reports that approximately 90 percent of its 16,268-unit domestic installed base was operational. On a global scale, it reports that 36 percent of its 7,985-unit installed base was operational as of December 31, 2020.
Gaming operations income, or recurring revenue, was $40.0 million in the fourth quarter of 2019, down from $51.6 million in the previous quarter. The decline in gaming operations revenue year over year is due to the effect of COVID-19 on its EGM and Table Product recurring sales sources, which was partly offset by higher Interactive segment income.
Table Products and Interactive divisions
AGS’ net loss in the fourth quarter of 2020 was $17.2 million, down from $1.4 million in the fourth quarter of 2019. Total Adjusted EBITDA fell to $21.3 million from $37.3 million in the fourth quarter of 2019. A drop in EGM adjusted EBITDA year over year, primarily due to COVID’s effect, was partly offset by higher adjusted EBITDA in our Table Products and Interactive divisions as compared to the prior year’s period.
Total Adjusted EBITDA margin fell to 45.7 percent in the fourth quarter of 2020 from 47.9 percent the previous year, reflecting the effect of normalisation of its operational expense base to help the expected sales turnaround from post-COVID lows.
Year full of unprecedented challenges
David Lopez, President and Chief Executive Officer of AGS, stated: “2020 was a year full of unprecedented challenges, the likes of which required the unwavering commitment of a passionate, loyal, and hardworking team to successfully overcome. To that end, I am extremely honoured by and thankful for the tireless efforts put forth by so many of our AGS team members to ensure we not only survived the COVID-19 pandemic, but put ourselves in a position to emerge a stronger, more resilient company.”
He continued: “Looking beyond the many challenges faced throughout the year, one of the bright spots, to the extent there was one, is that the COVID-19 pandemic slowed down the pace of life. As a company, we used this time to refine our strategy and improve our operating efficiency, with a keen focus on three key areas; people, product, and processes. As a result, I believe we are better positioned today to achieve success across all three of our business segments than at any other point in our company’s history.”
Kimo Akiona, AGS’s Chief Financial Officer, stated: “I am incredibly proud of the way our team came together throughout 2020 to face the unprecedented operational and financial hurdles introduced by the spread of COVID-19. Not only were we able to nimbly streamline our business to preserve liquidity at the onset of COVID-19, but we opportunistically shored up our balance sheet in May and successfully ramped operations as our casino operator partners gradually brought their businesses back online. As I look ahead to 2021, I believe our strong liquidity position, improving product portfolio, and organizational alignment position us to achieve improved financial performance.”