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PlayAGS slips to loss despite revenue increase in third quarter


Gaming technology supplier PlayAGS has posted a net loss of $5.5m for the third quarter, despite also reporting an increase in revenue for the period.

Total revenue for the three months to 30 September, 2019 amounted to $79.4m, up from $75.5m in the same period last year.

Electronic gaming machines (EGM), including slots, were by far the main source of revenue for PlayAGS in the third quarter, generating $75.3m, up 4.9% year-on-year.

PlayAGS said this was primarily the result of record EGM sales – up 4% to 1,391 – bringing in $26.4m in revenue in the process, a rise of 7.2% on last year. The gaming operations segment of the EGM business generated $48.9m in revenue, a year-on-year increase of 3.7%.

Elsewhere, table products revenue increased 39.4% from $2.1m to $2.9m, with PlayAGS noting a 28.9% rise in gaming operations revenue to a record $2.5m. The supplier also enjoyed record equipment sales, with revenue rocketing by 173.3% to $410,000.

It was not so good news for the interactive segment, where revenue slipped 28.0% from $1.7m to $1.2m, mainly due to a 50.8% dip in social gaming revenue to $712,000. In contrast, iGaming revenue hiked 107.0% to $505,000, boosted by the launch of a platform in New Jersey with Rush Street Interactive.

However, PlayAGS reported a 12.8% year-on-year rise in operating costs from $65.4m to $73.8m, with higher spending across the board. The main outgoing was depreciation and amortisation, with this climbing from $19.0m last year to $23.8m.

Selling, general and administrative costs climbed 10.6% from $15.3m to $16.9m, while the cost of equipment sales climbed 11.3% from $12.1m to $13.5m. There were also increases in the cost of gaming operations, research and development and write-downs and charges.

This higher spending hit PlayAGS in terms of earnings, with the supplier posting a net loss of $5.5m, compared to a net income of $4.3m in Q3 of last year. Loss before tax in the quarter also amounted to $3.6m, a sharp decline from a positive income of $809,000 in 2018.

However, adjusted earnings before interest, tax, depreciation and amortisation was up 9.6% year-on-year to $36.8m, as a result of growth within the EGM and table products segments.

“Our third quarter performance was underscored by the sale of nearly 1,400 EGMs – the most in our company’s history – as well as record performance in our table products segment,” PlayAGS president and chief executive, David Lopez, said.

“Some 92% of domestic EGM unit sales were from our Orion family of cabinets, including our latest addition, the Orion Upright, which accounted for approximately 300 sold units in the quarter. We’re looking forward to launching our premium lease-only Orion Rise cabinet and Starwall LED merchandising display, as well as our highly anticipated Orion 49C, Pax S card shuffler, and Bonus Spin Xtreme progressive system.

“We believe this robust suite of products will help drive growth in 2020 and beyond.”

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