PlayAGS Inc., a Las Vegas-based electronic slot and bingo machine maker, held its first conference call since going public in January and posted a narrower loss and higher revenue for the fourth quarter.
In a statement, the company said its net loss was $8.5 million, or 37 cents per share, for the three months ended Dec. 31, compared with a net loss of $20.2 million, or 87 cents per share, a year earlier.
The results missed the 32-cents-per-share loss forecast by four analysts polled by Zacks Investment Research.
Adjusted earnings before interest, taxes, depreciation and amortization rose 19.4 percent to $26.4 million from $22.1 million. Also, electronic gaming machine sales rose 151 percent to $12.4 million, helped by the sale of 697 units.
Notably, PlayAGS CEO David Lopez said during a conference call accompanying the earnings, the sales weren’t concentrated in any one or two orders or in any one place. The company put games in California, Nevada, Louisiana, Mississippi, Arizona, Indiana and Iowa.
“That’s why when people ask me, ‘Where are you placing EGMs?’ my answer is, ‘Just about everywhere,’” Lopez said.
Fourth-quarter revenue rose 34.8 percent to a record $54.2 million from $40.2 million. Analysts polled by Zacks forecast revenue of $55.1 million.
During the call, Lopez said, “We’re very proud of our performance in 2017 and in the fourth quarter, ending an eventful year where we achieved many major milestones … which include the launch of our most successful product to date — the Orion Portrait cabinet.”
In a statement accompanying the earnings, Lopez said, “Entering the new fiscal year, we believe we are well positioned for meaningful growth as we benefit from continued momentum of our Orion Portrait and Icon cabinets, entry into new domestic and international jurisdictions, and promising new product launches like the Orion Slant, STAX table progressive system, and the Dex S card shuffler.”
PlayAGS, founded in 2005, filed to go public in December. The company sold 10.2 million shares during its Jan. 20 initial public offering at $16 per share, raising $149.1 million in net proceeds.
Analysts have been generally bullish on the company. On Feb. 20, after the quiet period following the initial public offering ended, Deutsche Bank rated the stock “buy” and set a $23 per share price target.
“In AGS, we see an upstart equipment supplier, with a steady cash flow generating install base, several growth avenues, both domestic and international, and multiple fundamental tailwinds,” analyst Carlos Santarelli wrote.
Santarelli listed strong game performance relative to house averages, driving incremental ship share, a strong hardware pipeline with a solid order backlog and international growth as PlayAGS’ upsides.
Stifel Nicolaus, Bank of America, Merrill Lynch and Macquarie Securities, meanwhile, rated PlayAGS “buy.” Jefferies & Co. rated the stock “hold.”
PlayAGS’ electronic gaming machine business includes a 300-game library and accounts for 94 percent the company’s total sales. The company’s installed base includes 23,805 machines, up 14 percent year over year.
In December, PlayAGS acquired Rocket Gaming Systems for $57 million, boosting its installed game base by 1,500 machines.
Lopez added that the company is open to more acquisitions, but weighs each carefully for financial viability and cultural fit.
“We’re kissing all the frogs,” he said during the conference call. “We’re always looking for the prince.”
This month, PlayAGS received the Ohio Casino Control Commission’s approval to sell gambling machines and table games in the state. During the conference call, Lopez said he feels comfortable about his company’s prospects in the Buckeye State and other new jurisdictions, including Massachusetts and Colorado.
For the full year, PlayAGS narrowed its loss to $45.1 million, or $1.94 per share, from $81.4 million, or $3.51 per share, in 2016.
Twelve-month revenue rose 29.7 percent to $199.9 million from $156.4 million.
PlayAGS shares rose 62 cents, or 2.97 percent, Wednesday to close at $21.51 on the New York Stock Exchange.
