PLAYAGS, INC. Investor Presentation
March 2024
Cautionary Note Regarding Forward-Looking Statements
This presentation contains statements that constitute forward-looking statements which involve risks and uncertainties, including such risks and uncertainties set forth in the Annual Report on Form 10-K of PlayAGS, Inc. ("AGS" or the "Company") filed with the U.S. Securities and Exchange Commission (the "SEC") by the Company. These statements include descriptions regarding the intent, belief or current expectations of AGS or its officers with respect to the consolidated results of operations and financial condition, future events and plans of AGS. These statements can be recognized by the use of words such as "expects," "plans," "will," "estimates," "projects," or words of similar meaning. Such forward-looking statements are not guarantees of future performance and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. These statements are subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of which are outside management's control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of the management of AGS on future events. We undertake no obligation to publicly update or revise any forward-looking statement contained in this presentation, whether as a result of new information, future events or otherwise, except as required by law. In light of the risks, uncertainties and assumptions, the forward-looking events discussed in this presentation might not occur, and our actual results could differ materially from those anticipated in these forward-looking statements.
This presentation also contains references to Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), Total Adjusted EBITDA, Total Adjusted EBITDA Margin, Free Cash Flow, and Total Net Debt Leverage Ratio which are non-GAAP financial measures. Management believes that these non-GAAP measures and their related GAAP measures are commonly reported by companies and widely used by investors as indicators of a company's operating performance. Non-GAAP financial measures should be considered only as a supplement to, and not as a superior measure to, financial measures prepared in accordance with GAAP. Please refer to the reconciliations of certain non-GAAP financial measures included in this presentation to the most directly comparable financial measure prepared in accordance with GAAP.
Unless otherwise noted, information included herein is presented as of the dates indicated. This presentation is not complete and the information contained herein may change at any time without notice. Except as required by applicable law, we do not have any responsibility to update the presentation to account for such changes.
Certain information in this presentation is based upon management forecasts and reflects prevailing conditions and management's views as of this date, all of which are subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by third parties. The information contained herein is subject to change, completion or amendment and we are not under any obligation to keep you advised of such changes. We make no representation or warranty, express or implied, with respect to the accuracy, reasonableness or completeness of any of the information contained herein, including, but not limited to, information obtained from third parties.
The information contained herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations.
Investment Highlights
1
Resilient recurring revenuebusiness underpinned by deeply-rootedrelationshipswith stable tribal gaming customers
2
EGM transformationproducing consistent operating momentum and prolific growth
3
Industry consolidation creates opportunity; uniquely positioned to potentially capitalize
4
An established B2B online content provider; considerable momentumwith high-growth North American RMG customers
5
A leading supplierand innovator of choicein recurring revenue dominantand cash generativeTable Products
6
Focused deleveraging strategyto drive structural value transferfrom the balance sheet to AGS equity
3
Corporate Overview
Corporate Overview
Uniquely Diversified Product Portfolio Serving Land-Based and Online Gaming Customers
Electronic Gaming Machines "EGM"
- ~16,400-unitdomestic recurring revenue footprint and over 6,000 units in MX(1)
- Over 5,000 units sold in the last 12 months (1); ~6% ship share(2)
- Serving Tribal and Non-Tribal customers
Table Products
- End-to-endproduct suite includes progressives, premium games, side bets, and card shufflers
- Over 5,400 table products installed on lease(1)
- One of the largest table product providers to the North American casino market
Interactive
- Partner with over 80 real- money gaming ("RMG") operators globally, including the top-5 North American operators(1), to provide AGS game content for play online
- Operate a small B2C social casino platform
- Positioned to participate in the growth of the regulated North American i-gaming market
Revenue Composition(1) | Historical Revenue & Total Adjusted EBITDA(3) | |||||||||||||
Interactive, | ($ in millions) | $357 | $356 | |||||||||||
3% | $305 | $309 | ||||||||||||
Tables, 5% | $285 | $260 | ||||||||||||
Non-Tribal | $136 | $146 | $167 | $123 | $139 | $159 | $158 | |||||||
<40% | $72 | |||||||||||||
Tribal >60% | EGM, 92% | |||||||||||||
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2023E | ||||||||
Revenue | Total Adjusted EBITDA | |||||||||||||
1) | As of 2023A | |
2) | Per Eilers & Krejcik Gaming Supplier KPIs - 3Q23 | |
3) | Total Adjusted EBITDA is a non-GAAP financial measure; a reconciliation to the most directly comparable GAAP measure can be found in the appendix to this presentation | 5 |
Historical Performance
Total Company Revenue 17% Ahead of 2019
($ in millions)
$357 | ||||
$305 | $309 | |||
$260 | ||||
$167 | ||||
2019 | 2020 | 2021 | 2022 | 2023 |
Free Cash Flow Conversion Steadily Improving(2)
($ in millions) | $34 | ||
$28 | $27 | ||
$10 | |||
2021 | 2022 | 2023 | 2024T |
Total Adjusted EBITDA at Record Levels (1)
($ in millions)
$146 | $159 | |||
$139 | ||||
$123 | ||||
$72 | ||||
2019 | 2020 | 2021 | 2022 | 2023 |
Total Net Debt Leverage Ratio on a Path to Inside of 3.0x(3)
4.2x
3.8x
3.2x
2.9x
2021 | 2022 | 2023 | 2024T |
1) | Total Adjusted EBITDA is a non-GAAP financial measure; a reconciliation to the most directly comparable GAAP measure can be found in the appendix to this presentation | |
2) | Free Cash Flow is a non-GAAP financial measure; a reconciliation to the most directly comparable GAAP measure can be found in the appendix to this presentation; 2024T reflects targeted growth of 25% or more | 6 |
3) | Total Net Debt Leverage Ratio is calculated as Total Net Debt divided by LTM AEBITDA; see Appendix for a full reconciliation; 2024T reflects the midpoint of the targeted year-end 2024 range of 2.75x to 3.00x |
Consistent Operating Momentum
Quarterly Revenue
($ in millions)
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||
$90 | $89 | $82 | $94 | ||||||||
$83 | $77 | $78 | |||||||||
$70 | |||||||||||
$73 | $67 | $67 | |||||||||
$55 | |||||||||||
2021 | 2022 | 2023 | 2021 | 2022 | 2023 | 2021 | 2022 | 2023 | 2021 | 2022 | 2023 |
Q4 2023 Highlights
Consolidated
- Record-settingquarter with total revenue of $94 million and Total Adjusted EBITDA(1) of $43 million; both metrics increased ~15% year-over-year
- Represented 11th consecutive quarter of double-digit revenue growth and fifth consecutive quarter of double-digit Total Adjusted EBITDA growth
- Over 60% of total revenue derived from recurring sources
- Total Adjusted EBITDA margin of 45% reached the highest level since Q4 2022; reflects strong operating leverage, superior gross margins on the new Spectra family of cabinets and improving margin profile of the Interactive segment
- Free Cash Flow (1) surpassed $10 million for the third consecutive quarter
Segment-Level
- All three operating segments delivered double-digit growth rates vs. the prior year
- EGM revenues up 14% year-over-year
- Table revenues up 24% year-over-year
- Interactive revenues up 34% year-over-year
- Global EGM unit sales eclipsed 1,500 units for the first time; up by over 30% year- over-year for the third consecutive quarter
- Table Products experienced continued placements of industry-leading progressives and PAX S card shufflers
- Achieved strong flow through on outsized Interactive revenue growth; segment Adjusted EBITDA more than doubled year-over-year
1) Total Adjusted EBITDA, Total Adjusted EBITDA Margin and Free Cash Flow are non-GAAP financial measures a reconciliation to the most directly comparable GAAP measures can be found in the appendix to this presentation | 7 |
Electronic Gaming Machines
("EGM")
EGM Segment Overview
Overview | Key Products |
-
The EGM segment is PlayAGS's largest business unit, accounting for over 90% of
2023 total revenue - Origins rooted in Class II Native American gaming with subsequent expansion into Class III; current portfolio addresses all key slot product categories (Class II / Class III, Core / Premium, HHR)
- Enhanced game development capabilities featuring a library of 550+ proprietary titles and ability to produce over 60 games per year
- EGM revenue is generated on a recurring lease and for-sale basis
- Lease: Generally based on a fixed fee ($45-55 per day on average) or revenue share (typically 15-20% of gross gaming revenue ("GGR"))
- For-Sale: One-time sales; average sales price ("ASP") of ~$20,000 per unit
Historical Revenue & Adjusted EBITDA
($ in millions)
$290 | $284 | $327 | ||||||
$238 | ||||||||
$145 | $152 | $128 | $146 | |||||
$113 | ||||||||
$66 | ||||||||
2019 | 2020 | 2021 | 2022 | 2023 | ||||
Revenue | Adjusted EBITDA | |||||||
Lease and For-Sale | Lease and For-Sale | Premium Lease-Only | Lease and For-Sale | Lease and For-Sale |
Lease and For-Sale | Premium Lease-Only | Lease and For-Sale | Premium Lease-Only | Premium Lease-Only |
9
A Dramatic EGM Transformation
Game Dev Studios
Unique Game Titles
Produced
- of Customers Sold To
Premium Game Mix
(% of Domestic EGM base)
Account
Executives
20192023
37
~30>60
~100~180
1%>17%
13>20
10
Attachments
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Disclaimer
PlayAGS Inc. published this content on 20 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 March 2024 12:16:23 UTC.
