Better operating performance and interest-expense savings from debt refinancing helped Las Vegas electronic slot and bingo machine maker PlayAGS post second-quarter income, reversing a year-earlier loss.
Earnings per share and revenue both topped Wall Street forecasts.
In a statement, PlayAGS said its net income was $1.5 million, or 4 cents per share, for the three months ended June 30, reversing a year-earlier net loss of $3.9 million, or 11 cents per share.
The latest result topped the 3-cents-per-share loss analysts surveyed by Seeking Alpha had expected on average. It was the first positive quarterly net income for the company since 2019’s fourth quarter.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 6% to $34.1 million from $32.1 million.
Revenue rose 15.2% to $70.5 million from $61.2 million.
Electronic-gaming-machine revenue growth, buoyed by recovery in North American replacement unit demand, drove overall revenue higher, the company said.
In the statement, PlayAGS Chief Executive Officer David Lopez said that investments in the company’s research-and-development, sales and product management teams helped boost the quarterly results.
“These investments have accelerated the operating momentum we are seeing within the business,” he said. “Despite swirling uncertainty over the health of the consumer and the direction of the global economy, we have been encouraged by the incredible consistency demonstrated within our business through July.”
Electronic-game-machine revenue rose 15.2% to $70.5 million from $61.2 million, led by 69.4% rise in equipment sales (to $19.9 million from $11.8 million).
In June, the U.S. Supreme Court ruled that Texas regulators couldn’t prevent the Ysleta del Sur and Alabama and Coushatta Indian tribes from offering bingo gaming on their tribal lands in the state. Roth Capital analyst Edward Engel told Seeking Alpha he expects PlayAGS to benefit from the ruling.
“(Before) the ruling, investors were discounting (about) $10 million to $12 million of high-margin revenues for AGS, where an unfavorable ruling would have wiped these out,” Engel said. “Rather, the favorable ruling now presents a growth opportunity for AGS, as two tribal casinos in (Texas) are more likely to expand casino floors.”
On July 12, PlayAGS named David Jacques Farahi to its board of directors. Farahi, who previously served as Monarch Casino & Resort’s chief operating officer, will serve on PlayAGS’ nominating and governance, compensation, and audit committees.
PlayAGS shares rose 18 cents, or 3.57%, Monday, to close at $5.40 on the Nasdaq Stock Market, then gained another 18 cents, or 3.45%, to settle at $5.40 after hours. The share price has declined 29.3% in 2022.
Follow Matthew Crowley on Twitter @copyjockey
