Strong product sales boost PlayAGS fourth-quarter earnings

A boost in product sales in the fourth quarter lifted gaming equipment manufacturer PlayAGS Inc. with earnings that surpassed analysts’ expectations, the company reported Wednesday.

Las Vegas-based PlayAGS reported earnings of $1.4 million, 4 cents a share, on revenue of $77.8 million in the quarter that ended Dec. 31. That compared with a loss of $10.3 million, 29 cents a share, on revenue of $72.1 million in the fourth quarter of 2018.

A survey of analysts on average anticipated earnings of 2 cents a share and revenue of $76.5 million for the quarter.

President and CEO David Lopez attributed the company’s 18 percent increase in cash flow to strong slot machine sales and table-game product performance as well as high demand for games on the company’s Orion Portrait upright cabinet.

The company more than doubled the number of Orion Portrait sales in 2019, from around 4,000 to 9,000.

“We sold 4,879 EGMs (electronic gaming machines), which was up 11 percent from 2018,” Lopez said during a Wednesday conference call with investors. “EGM domestic market share grew to 3 percent up from 2.5 percent at year-end 2018 within a market that has approximately 1 million machines. We ended the year with nearly 2,200 placements of Rakin’ Bacon! our highest performing game on Orion Portrait.”

Lopez expects the trend to continue this year.

“2020 is one of if not the most significant product launch years in AGS’ history, with the Orion Rise, the Orion Curve, the Starwall, and the Pax S card shuffler all debuting on casino floors this year,” he said. “We feel confident that this lineup of new products, along with brand extensions and innovative offerings on our current portfolio, will provide meaningful long-term growth opportunities for AGS.”

Lopez said the company has been working to install its first Orion Curve cabinet game by the end of March.

“Our first two titles, Royal Phoenix and Sacred Dragon, which we unveiled at (October’s Global Gaming Expo in Las Vegas) look to lead our launch with more games coming during the balance of the year,” he said. “Similarly, we haven’t taken our foot off the gas with Orion Portrait and believe that some of the new content will help drive greater placements throughout the year.”

Investors took profits Thursday with shares plunging $1.53, 18.7 percent, to $6.65 on volume more than four times the daily average. After hours, shares rebounded slightly, inching up 29 cents, 4.4 percent, and finishing at $6.94 a share.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.