Updated August 5, 2020 - 3:59 pm
PlayAGS is focusing on becoming a stronger, more nimble company during the pandemic.
That could mean attending fewer conventions and trade shows, in addition to other moves that cut costs.
“We have taken a very close look at (trade shows), and I think that they’ll be examined closely, more closely, in the future, as to what trade shows vendors should be participating in, ” said David Lopez, president and CEO of the Las Vegas-based slot machine and gaming equipment manufacturer.
With the cancellation of major trade shows such as G2E due to the pandemic, Lopez said the company’s sales team has found creative solutions to keep in touch with customers, including local visits — “with masks, of course,” Lopez said — or virtual meetings.
Lopez said the company may end up utilizing digital events and presentations within the company’s own showroom more in the future.
“As far as the lack of a physical trade show, we’ll be OK,” Lopez said during a Wednesday afternoon earnings call. “I think this industry knows how to operate without it. … I don’t think that the lack of a G2E or any particular trade show is going to hurt us any more than this pandemic has. I think the key is just to get those capital dollars flowing again in general.”
It’s disappointing news for the Las Vegas convention industry, which has already faced cancellations in 2020 and early 2021 — including major events like CES and SEMA, which have an economic impact worth millions.
Growing disinterest in trade shows could also deal a heavy blow for many local casino companies, which operate convention space and rely on group business to fill rooms midweek.
PlayAGS executives said told investors the company would be adjusting its cost structure, and only ramping up departments that are “essential to run (the) business,” such as field service, research and development and manufacturing.
The operational changes came after casinos across the world were forced to shut down.
During March and April, nearly all of its customers had closed their operations. By June 30, about 525 of its North American customers’ 970 properties had reopened, at least partially. Most of those that have yet to reopen are in Mexico, which Lopez estimated was one to two months behind the U.S.’s reopening schedule.
In the second quarter, revenue was $16.8 million, down 78 percent compared with the same period last year, while net loss was $42.6 million.
Lopez said the company has seen strong initial performance from its new products, as well as continued momentum from new titles.
Chief Financial Officer Kimo Akiona said PlayAGS has been able to strengthen its liquidity by managing expenses and cutting capital expenditures, but warned investors that COVID-19-related challenges aren’t over.
“In terms of what we’re seeing over the next 6 months, we believe customer budgets will continue to be impact for not only the remainder of the year, but also for 2021,” Akiona said. “The impact of the pandemic may delay any new reopenings and could possibly result in new closures if COVID-19 cases continue to rise.”
PlayAGS shares closed up 2.5 percent Wednesday to $3.67 on the New York Stock Exchange.
Second-quarter revenue and earnings for Las Vegas-based PlayAGS Inc., a gaming equipment and slot machine manufacturer. (NYSE: AGS).
2020: $16.8 million
2019: $74.5 million
2020: ($42.6 million)
2019: ($7.6 million)
Earnings/(Loss) per share