Debt-refinancing costs weighed heavily on Las Vegas electronic slot- and bingo-machine maker AGS, widening the company’s loss even as revenue rose.
In a statement Thursday, AGS said its net loss was $12.6 million, or 34 cents per diluted share, for the three months ended March 31, compared with a net loss of $7.8 million, or 21 cents per diluted share, a year earlier.
Analysts surveyed by Seeking Alpha had forecast an 8-cents-per-share loss.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash-flow measure that excludes one-time costs, rose 24.7% to $32.8 million from $26.3 million.
Revenue rose 17.5% to $72.9 million from $55.4 million and topped the $70 million forecast of Seeking Alpha-polled analysts. Electronic-game-machine revenue rose 32.4% to $66.9 million from $50.5 million to fuel the overall revenue growth, the company’s fifth consecutive quarter of growth.
AGS also said it sold 955 electronic-game-machine units globally, the highest level since the 2019 fourth quarter, and table-product revenue reached a record $3.5 million.
The company said the debt-refinancing transaction it closed in February caused the wider loss and that the loss would have narrowed otherwise. To finance the debt, AGS issued a $575 million first-lien term loan due 2029 and a $40 million senior secured first-lien revolving facility due 2027.
AGS said the larger loan lowers the company’s total principal debt outstanding by about $40 million and cuts the annualized cash-interest expense by about $10 million.
“We have heavily invested in strengthening the foundation of our company over the past couple of years and are beginning to realize accelerating returns on these investments,” AGS President and Chief Executive Officer David Lopez said in the statement. “To that end, I believe our solid first-quarter performance simply foreshadows what our laser-focused organization can accomplish in the quarters and years ahead.”
Chief Financial Officer Kimo Akiona said the interest expense savings and operational momentum will boost the company’s fortunes. “(With) our organizational commitment to maximizing free cash flow, we remain confident in our ability to deliver on our year-end 2022 net-leverage target of less than 4.0x.”
AGS shares fell 15 cents, or 2.3%, Thursday to close at $6.36. The shares shed 12 cents, or 1.89%, after hours to settle at $6.24.
Follow Matthew Crowley on Twitter @copyjockey.
