If 2020 was a year of resiliency, 2021 was a year of transition for Las Vegas electronic-slot and bingo-machine maker AGS, Chief Executive Officer David Lopez said Thursday, citing growth in the company’s main businesses.
In the fourth quarter, the company narrowed its loss and missed Wall Street estimates, though revenue rose and beat estimates.
In a statement, Las Vegas-based AGS said its net loss was $9.1 million, or 25 cents per share, for the three months ended Dec. 31, compared with a net loss of $17.2 million, or 49 cents per share, a year earlier. Analysts surveyed by Seeking Alpha had expected a loss of 8 cents per share.
AGS said its narrower loss reflects improved financial performance and lower depreciation and amortization expense.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 51.6% to $32.3 million from $21.3 million.
Fourth-quarter revenue rose 50.6% to $70.2 million from $46.6 million and topped the $69.1 million forecast of Seeking Alpha-polled analysts.
It was AGS’ fourth consecutive quarter of revenue growth. The company said a 20%-plus increase in electronic-gambling-machine sales and record table-product revenue buoyed overall fourth-quarter revenue.
“It is important to note (electronic-gambling-machine) equipment sales increased sequentially in all four quarters of 2021,” the company said, “while international EGM gaming operations revenue has improved sequentially in all six quarters since reaching COVID-19-impacted lows in (second quarter) 2020.”
Fourth-quarter gaming operations revenue rose 32.3% to $52.9 million from $40 million. Fourth-quarter electronic gaming-machine revenue rose 52.5% to $64.5 million, up from $42.3 million.
“With our improved 2021 financial results behind us, our attention has shifted to ensuring we are best positioned to achieve even greater success in 2022,” Lopez said. “I would characterize 2022 as a year of acceleration for AGS, one in which we will look to further leverage the continuous improvement in our people, products, and processes to strengthen our financial performance.”
On Jan. 18, AGS said it would explore remaking its revolving credit and term-loan facilities and consider increasing its revolving-credit facility, reducing borrowing costs and extending debt maturities.
AGS set a target for its net leverage ratio (net debt divided by trailing-12 month adjusted earnings before interest, taxes, depreciation, and amortization) of less than 4.0x by year-end 2022. Truist Securities noted this mark was lower than AGS’ preannounced levels of 4.2x to 4.3x at the end of 2021’s fourth quarter and 7.5x at the end of 2020.
On Feb. 15, AGS said it refinanced its total debt by issuing a $575 million senior secured first lien term loan due 2029 and a $40 million senior secured first lien revolving facility due 2027.
For the 12 months ended Dec. 31, AGS had a net loss of $22.6 million, or 62 cents per share, compared with a net loss of $85.4 million, or $2.30 per share, a year-earlier. Twelve-month revenue rose 55.7% to $260 million from $167 million.
AGS shares rose 15 cents, or 1.94%, Thursday to close at $7.87 on the New York Stock Exchange.
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