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INVESTOR OVERVIEWMay 2019
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This presentation contains statements that constitute forward-looking statements which involve risks and uncertainties, including suchrisks and uncertainties detailed 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 on March 5, 2019. These statements include descriptions regardingthe intent, belief or current expectations of AGS or its officers with respect to the consolidated results of operations and financialcondition, 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 andactual results may differ from those in the forward-looking statements as a result of various factors and assumptions. These statementsare subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of which are outsidemanagement’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 themanagement of AGS on future events. We undertake no obligation to publicly update or revise any forward-looking statementcontained in this presentation, whether as a result of new information, future events or otherwise, except as required by law. In light ofthe risks, uncertainties and assumptions, the forward-looking events discussed in this presentation might not occur, and our actualresults 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”), and AdjustedEBITDA, which are non-GAAP financial measures. Management believes that EBITDA and Adjusted EBITDA and related measures arecommonly reported by companies and widely used by investors as indicators of a company’s operating performance. There are othernon-GAAP financial measures which should be considered only as a supplement to, and not as a superior measure to, financialmeasures prepared in accordance with GAAP. Please refer to the last slide of this presentation for a reconciliation of certain non-GAAPfinancial 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 theinformation contained herein may change at any time without notice. Except as required by applicable law, we do not have anyresponsibility 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’sviews as of this date, all of which are subject to change. In preparing this presentation, we have relied upon and assumed, withoutindependent verification, the accuracy and completeness of all information available from public sources or which was provided to usby third parties. The information contained herein is subject to change, completion or amendment and we are not under any obligationto 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 fromthird parties.
The information contained herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice orinvestment recommendations.
1
INVESTMENT HIGHLIGHTS
2
Attractive
Business
Model w/
High-
Performing
Products
Favorable
Market
Backdrop
▪ Consistent historical growth: U.S. gaming revenue has grown ~2% annually since 2014
▪ Strong future growth prospects: U.S. unemployment remains under 4% and continued expansion of the experience economy
▪ Potential acceleration of replacement cycle
• AGS not dependent on the replacement cycle, but acceleration could enhance Class III growth
▪ Leases drive 70% recurring revenue(1), which provides high revenue visibility
• Sales provide a tremendous opportunity to expand and diversify product and customer mix
▪ AGS generates one of the top EGM Adjusted EBITDA margins in the industry, which fund high-ROI growth opportunities
▪ Strong recurring cash flow with 8-12 month payback periods on new leased EGMs
▪ Market-leading and high-performing products
• Casino-owned and leased EGMs generated win per day of ~1.5x and ~1.4x, respectively
Multiple
Levers for
Growth
▪ Industry-leading game performance drives continued market share growth
▪ Recent ship share gains far in excess of current market share: ~5% U.S. ship(2) share vs ~3% market share
▪ Material whitespace opportunity due to substantial increases in TAM: Grew TAM and new licenses by 125% and117%, respectfully, since 2012
▪ Meaningful international expansion opportunities in Philippines, Canada and Brazil
Source: Eilers & Krejcik, The AGA Survey of the Casino Industry (2018)
U.S. Department of Commerce, Bureau of Economic Analysis
(1) For LTM 3/31/19
(2) Eilers – Fantini Quarterly Slot Surveys
$34.3 $36.7
$34.5$36.3
Q1 '18 Q1 '19
216.2
279.4
5.1
8.1
7.8
5.9
180
230
280
LTM 3/31/2018 LTM 3/31/2019
EGM Table Products Interactive
61.3
69.71.7
2.2
1.9
1.2
55
60
65
70
75
Q1 2018 Q1 2019
EGM Table Products Interactive
3
Q1 2019 FINANCIAL PERFORMANCE HIGHLIGHTS
Note: Adjusted EBITDA allows us to add back certain non-cash charges that are deducted in calculating net income and to deduct certain gains that are included in
calculating net income. However, these expenses and gains vary greatly, and are difficult to predict. They can represent the effect of long-term strategies as opposed to
short-term results. In addition, in the case of charges or expenses, these items can represent the reduction of cash that could be used for other corporate purposes.
Note: Please refer to appendix for Net Income to Adjusted EBITDA reconciliation
$116.9 $139.8
$116.4
$138.0
LTM 3/31/18 LTM 3/31/19
ADJUSTED EBITDA
($ in mm)($ in mm)
Tables: ($0.2)
Interactive: ($0.3)
Tables: $1.2
Interactive: ($3.1)
Recurring
Revenue
$205.0
REVENUE
Recurring
Revenue
$52.9
Tables: $0.5
Interactive: ($0.9)
Tables: $0.2
Interactive: $0.0
$64.9
$73.0
$293.5
$229.0
4
PERFORMANCE DRIVEN BY A CULTURE OF INNOVATION
EGM Installed Units 8,735 27,308 213%
EGM Sold Units 255 4,573 1,693%
Domestic RPD $21.23 $26.94 27%
Gaming Licenses 161 275 71%
Revenue ($ in mm) $72 $293 307%
Years Experience
Years at AGS
KPIs 2014 3/31/19 Δ
David Lopez
Kimo Akiona
Sigmund Lee
Matt Reback
Julia Boguslawski
John Hemberger
Andrew Burke
Title
▪ 725+ employees around the globe
▪ R&D employees represent ~30% of total AGS employees
▪ Unique culture sets us apart from other companies
▪ Expect employee-centric culture to continue attracting high-caliber talent
AGS Drives Innovation Through its Unique Culture
Note: EGM sold units, domestic RPD and revenue as of respective LTM periods; 2014 figures are as reported and are not pro forma to include the acquisitions of
Cadillac Jack or RocketPlay
5
AGS COMPANY OVERVIEW
Table Products: $8mm+59% Y-o-Y
CORPORATE EVOLUTION
SEGMENT BREAKDOWN
$293mm Revenue+28% Y-o-Y
47% Adj. EBITDA margin
$138mm Adj. EBITDA+18% Y-o-Y
LTM 3/31/19Revenue
70%
FINANCIAL SNAPSHOT SIGNIFICANT WHITESPACE
OPPORTUNITY
RECURRING REVENUE
EGM: $279mm+29% Y-o-Y
Interactive: $6mm-24% Y-o-Y
CanadaMexico Philippines Brazil
RampingEstablished Early Entry
LTM 3/31/19
(1)
Prospective No Gaming
Note: All figures as of LTM 3/31/19. Y-o-Y growth is from LTM 3/31/18 to LTM 3/31/19
(1) Denotes AGS acquired by funds managed by Apollo, not Apollo Global Management itself
~50% gross profit margin(2)
13,139 13,953 16,078 16,29618,798
6,1126,898
7,727 8,3518,510
2015 2016 2017 2018 3/31/2019
Domestic International
6
EGM SEGMENTSTRONG RECURRING REVENUE BASE WITH INDUSTRY-LEADING MARGINS
Note: All financial figures include contribution of Cadillac Jack following acquisition in May 2015(1) Gross Profit Margin for leased units = EGM gaming operations revenue less EGM cost of gaming operations, divided by EGM gaming operations revenue for LTM 3/31/19(2) Gross Profit Margin for sold units defined as EGM equipment sales revenue less costs of equipment sales, divided by EGM equipment sales revenue for LTM 3/31/19(3) Q1 2019 EILERS-FANTINI Quarterly Slot Survey
$120 $156
$200
$271 $279
$66 $92 $108
$137 $140
2015 2016 2017 2018 LTM
3/31/2019
EGM Revenue EGM Adjusted EBITDA
203 465
2,565
4,387 4,573
2015 2016 2017 2018 LTM
3/31/2019
Class II
12,191
Intl
8,510
Class III
5,940
VLT
667
EGM Installed Base
27,308 leased EGMs
EGM Revenue and EGM Adj. EBITDA
($ in mm)
45%
Huge Growth in Sold EGMs
Achieved +5% ship
share in TTM period
ending Q1 ’19 vs.
<1% two years
ago(3)
31%
22%
5%
Brazil &
Philippines
upside
Steady Ramp in Number of Leased EGMs
~100% recurring business; ~80% gross profit margin(1)
-1%
+93%
14%
Y-o-Y Growth
▪ Second largest Class II Installed Base
▪ High recurring revenue
▪ Strong relationships
▪ Stable business
2%
7
EGM SEGMENTCOMPREHENSIVE EGM PRODUCT LINE-UP
Cabinet
Type
Specialty Large Format
Core Premium Core Plus CoreLatin-Style
Bingo
Year
Introduced2014 2016 2017 2018 2019
Initial units in Q1 2019
Installed
Base (1) 230 4,711 2,120 1,042 N/A <20 (2)
RPD ~$85 ~$25 ~$50 ~$35 ~$30 $10-$30
Units Sold
LTMN/A 1,015 2,604 889 N/A N/A
Selling
PriceN/A ~$15,500 ~$20,500 ~$19,000 ~$18,000 N/A
Planning
~60 new
titles &
~1 cabinet
a year
Best value in the industry and smartest
price point. Core cabinet for mass
market
Big Red ICON Orion SlantOrion Portrait
Performance focused, premium portrait. One of the
top-performing cabinets in the U.S.
Fills the need for the fastest-growing
segment of the market
New
Ultra Jumbo Format with classic gameplay
Robust product pipeline fuels future growth
Alora
Utility cabinet designed specifically
for video-bingo players
Note: Based on our list price of EGMs
(1) Leased units
(2) Initial units placed into the Philippines in March 2019
Orion Upright
Broadens product portfolio and allows
for greater penetration
1.5X
1.2X 1.2X1.0X
1.0X 1.0X0.9X
0.8X 0.8X
Pe
rfo
rma
nc
e o
ve
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ou
se a
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8
EGM SEGMENTGAME PERFORMANCE OVERVIEW
▪ More than 99% of customer trials of Orion Portrait and Orion Slant cabinets resulted in conversion to a lease or sale
▪ Designed to address Class II and Class III EGM markets
▪ AGS casino-owned games generated win per day that was ~1.5x the house average, leading the industry by a significant margin (1)
▪ AGS leased games generated win per day that was ~1.4x the house average(2)
▪ Two large R&D studios in premier locations that continually produce top-performing game titles
▪ Achieved +5% ship share in the TTM period ending Q1 (3)
Leased Domestic Game Performance(2)Casino-Owned Domestic Game Performance(1)
(1) Eilers-Fantini Game Performance Report – April 2019 (suppliers with more than 100 games)(2) Eilers-Fantini Game Performance Report – April 2019 (suppliers with more than 50 games)(3) Eilers-Fantini Quarterly Slot Surveys
2.6X
1.8X 1.7X1.6X
1.5X 1.4X1.4X 1.4X 1.3X
Pe
rfo
rma
nc
e o
ve
r h
ou
se a
ve
rag
e
9
EGM SEGMENTSUSTAINABLE GROWTH THROUGH MARKET EXPANSION AND PRODUCT PERFORMANCE
AGS Licenses
AGS Total Addressable Market(3)
AGS Domestic Leased Units
AGS Domestic Leased + Sold Units
161
~650,000
8,735
9,403
127
~400,000
7,720
7,755
AGS’s Total Addressable Market has Doubled and is Growing Faster than the Industry
117%
125%
143%
267%
275
~900,000
18,798
28,484
(1) AGS installed base as a % of total domestic EGM market, which was ~960,000, ~970,000 and ~995,000 as of 2012, 2014 and 3/31/19, respectively
(2) AGS sold units as a % of total domestic EGM market, which was ~960,000, ~970,000 and ~995,000 as of 2012, 2014 and 3/31/19, respectively
(3) Total addressable markets in which AGS is licensed to place EGMs in U.S. & Canada
2012 2014 3/31/2019
Total Domestic Market
AGS Market Share Leased Units(1)
0.8%
0.9%
1.9%} 2.9%Lease + Sold
Growth
2012-3/31/19
AGS Market Share Sold Units(2)
1.0%
74%
6%
12%
8%
10
FOOTPRINTAGS HAS SIGNIFICANTLY EXPANDED ITS FOOTPRINT, BUT STILL HAS MANY NEW GAMING JURISDICTIONS WHERE IT IS NOT YET LICENSED
CA74,100
NV160,677
UT
AZ16,762
TX3,737
OR19,269
WA31,559
ID3,604
MT17,565
WY1,675
CO14,072
NM19,971
OK74,410
KS8,492
NE674
SD14,749
ND3,959
MN21,325
WI18,061
MI31,214IA
19,114
IL40,405
MO16,625
AR2,786
LA41,484
FL22,817
GAAL6,441
MS30,148
SC
NC4,419TN
KY2,734
IN20,029
OH18,686
WV13,183 VA
MD11,535
NJ17,947
PA25,443
NY37,410
ME1,665
VTNH MA
3,731
CT8,595
RI5,180
DE6,696
MB10,099
RampingEstablished Early Entry Prospective No Casino Gaming
AK90
% of total units
BC15,490
NB2,711
NL1,896
SK7,600
AB20,400
ON23,914
QC16,900
NS2,919
PE505
Note: Eilers: Slot & Table Count – 4Q18
11
MARKET SHAREAGS IS TAKING MARKET SHARE IN CURRENTLY LICENSED STATES
▪ Solid recurring revenue base and
market leadership in core markets of
OK, AL and TX
▪ AGS has successfully secured
licenses in, and begun to penetrate,
key Class III markets (e.g., NV,
Canada, LA)
▪ Recent ship share gains far in excess
of current market share of 2.9%
▪ AGS is not dependent on the
replacement cycle to grow
▪ <1% market share when excluding
established markets
▪ 2019 key markets include Canada,
Florida, California, Ohio, and
Pennsylvania
▪ Q1 2018 market share of 2.3%
Note: Market share is calculated based on the # of units on participation plus the cumulative amount of units sold to date and estimated to remain on casino floors(1) Per Eilers& Krejcik - Slot & Table Count - 4Q18(2) Other Early Entry jurisdictions include AZ, CT, DE, ID, IA, IL, KS, MD, MA, MN, ND, NE, NJ, NC, OR, SD, WA, WI, WY and the Canadian provinces of British Columbia, New Brunswick, Newfoundland &
Labrador, Nova Scotia, Manitoba, and Saskatchewan. (3) AGS is not currently licensed in U.S. states of AK, AR, CO, KY, ME, MO, RI, WV and the Canadian province of Prince Edward Island. (4) Ship share is average 3/31/2019 TTM ship share Per Eilers& Krejcik
Market Stage JurisdictionEstimated TotalUnits in State(1)
AGS Estimated Current Market Share
Established
/ Class II
Alabama 6,441 44.3%
Texas 3,737 37.9%
Oklahoma 74,410 13.9%
Ramping
Florida 22,817 11.0%
Montana 17,565 3.1%
California 74,100 2.8%
Early Entry
Indiana 20,029 1.8%
New Mexico 19,971 1.4%
Ontario - CAN 23,914 1.4%
Mississippi 30,148 1.3%
New York 37,410 0.9%
Louisiana 41,484 0.9%
Michigan 31,214 0.9%
Alberta - CAN 20,400 0.8%
Nevada 160,677 0.8%
Ohio 18,686 0.3%
Pennsylvania 25,443 0.1%
Quebec - CAN 16,900 0.0%
Other(2) 291,895 1.6%
Prospective Other(3) 58,231 0.0%
Total 995,472 2.9%
15%
9%
5%
13%
9%
Ship
Share(4)
4%
12
EMERGING SUPPLIERSWINNING SHIP SHARE FROM BIG-3
Non-Big-4 Ship Share Increasing as Customers Prefer More Diversification Given Industry Consolidation(1)
17%
20%
17% 16%
25%27%
28%
31%
35%
10%
20%
30%
40%
12/10 12/11 12/12 12/13 12/14 12/15 12/16 12/17 12/18 12/19
Industry consolidation triggered
shift towards Non-Big-3 suppliers
North American Expected FORWARD 12-Month Replacement Ship Share(2)
26% 25%
20%
8%6% 5% 4% 3% 2%
0% 0% 1%
Other
Big-3 Non-Big-3
(1) EILERS: Gaming Supplier KPIs - 4Q18. 3/19 is based on Eilers estimates.
(2) 1Q19 EILERS-FANTINI Quarterly Slot Survey; expected forward replacement ship share includes route ops
3/19
37%
13
INTERNATIONAL EXPANSION STRATEGY
Philippines
▪ Initial ALORA units currently installed and live
▪ Target 3,000-5,000 unit leased footprint over 3-5 year period, representing ~4-7% of market
▪ ~70,000 unit market size
Other
International
Opportunities
Brazil
▪ When legislation is approved, AGS is poised to capitalize on what is considered one of the most significant expansions in gaming
▪ Potential to be a 500,000 gaming machine market
▪ MOUs in place for ~8,700 leased units representing ~1.7% of market
Canada
▪ Canada is a large untapped market, currently represent <1% of the market
▪ Now approved in +90% of the Canadian market
▪ Recent BCLC approval
▪ First installations of ICON and Orion cabinets have been successful
▪ OLG privatization has brought a positive change in the market
Imm
ed
iate
Up
sid
ePe
nd
ing
Leg
isla
tio
n
▪ Latin America, Asia, Australia and Europe all represent future opportunities for growth
Fu
rth
er
Up
sid
e
14
TABLE PRODUCTS SEGMENTSIGNIFICANT UPSIDE IN A HIGH-DEMAND SPACE
1,500
2,400
2016 2017 2018 3/31/2019
$2.7
$4.1
2016 2017 2018 LTM 3/31/19
▪ Over 40 different products, including progressive
systems, premium table games (poker and
blackjack derivatives), side bets, a card shuffler,
and table signage
▪ Table Products segment has reported positive
Adjusted EBITDA for 6 consecutive quarters
▪ Progressives have grown 364 units year-over-year,
up 55%
• Currently have over 1,100 progressive units in
the field(1)
• Over 300 progressive conversions to date with
approximately $1 million in annual savings.
▪ 45 Dex S shufflers in the field(1)
▪ ~75% gross margin
Table Products Installed Base and ALP
~65% Side Bets
~30% Progressives
~5% Premium
$194 $167 $218
Table Products Revenue Table Products Adj. EBITDA
($ in mm) ($ in mm)Nearly 100%
Recurring
$7.7
($1.7)
($0.5)
$0.9
$1.2
2016 2017 2018 LTM 3/31/19
3,162
ALP:
(1) As of May 2019(2) LTM 3/31/2019
$8.1
3,285
$217(2)
15
INTERACTIVE SEGMENTINDUSTRY-LEADING CONTENT DRIVES B2B & B2C CUSTOMER ENGAGEMENT
▪ Signed Jamul Casino▪ Signed The Plaza Las Vegas▪ 5 new potential deals in the pipeline▪ Leverage land-based relationships
Social White Label Casino (ConnexSys) Real Money Gaming (AxSys)
▪ Launched AGS content in Europe▪ Golden Wins launched on GVC in March▪ Jade Wins launched on BetVictor in April▪ Fu Nan Fu Nu, Rakin’ Bacon!, and Olympus
Strikes to launch soon
$7.7 $8.0 $6.6
$5.9
2016 2017 2018 LTM 3/31/19
($4.7)
($0.4)($2.1) ($3.1)
2016 2017 2018 LTM 3/31/19
Interactive Revenue Interactive Adj. EBITDA
($ in mm) ($ in mm)
16
INTERACTIVE SEGMENTNEW RMG PLATFORM (AxSys)
▪ Acquired platform in June 2018▪ Robust, scalable Remote Gaming Server▪ Single integration can deliver content from
wide network of game providers▪ Opportunity to connect to numerous RMG
operators overseas
Real-Money iGaming
$107
$62
$85
$136 $138
51% 51% 50% 48% 47%
2015 2016 2017 2018 LTM 3/31/19Adj. EBITDA margin
$123$167
$212
$285
2015 2016 2017 2018 LTM 3/31/19
$293
17
AGS’S STRONG FINANCIAL TRACK RECORD OF SUCCESS
▪ 70% of the $293(1) million total revenue is recurring
• ~80% gross profit margin for leased units(2) and ~50% gross profit margin for sold units(3)
▪ 47% LTM Total Adjusted EBITDA Margin
▪ Payback period of only ~8-12 months on capital spent for new leased machines
Strong Revenue Growth with Robust Margins
($ in mm)
Total Adjusted EBITDA(4)Total Revenue(4)
LTMRevenues by Segment 2015 2016 2017 2018 3/31/2019
EGM $119.6 $156.4 $199.9 $271.0 $279.4
Table Products 1.7 2.7 4.1 7.7 8.1
Interactive 2.0 7.7 8.0 6.6 5.9
LTMAdjusted EBITDA by Segment 2015 2016 2017 2018 3/31/2019
EGM $66.3 $91.7 $107.8 $137.4 $139.8
Table Products (1.4) (1.7) (0.5) 0.9 1.2
Interactive (2.5) (4.7) (0.4) (2.1) (3.1)
($ in mm)
(1) Total Revenue for LTM 3/31/19
(2) Gross Profit Margin for leased units = EGM gaming operations revenue less EGM cost of gaming operations, divided by EGM gaming operations revenue for LTM 3/31/19
(3) Gross Profit Margin for sold units = EGM equipment sales revenue less EGM cost of equipment sales, divided by EGM equipment sales revenue for LTM 3/31/19
(4) As reported figures
LTM
3/31/19
Net cash provided by operating activities 89,982
Purchase of intangible assets (1,782)
SW development and other expenditures (10,639)
Purchases of property and equipment (57,776)
Free Cash Flow 19,785
18
FAVORABLE CASH FLOW DYNAMICS INVESTMENTSPRODUCE HIGH DISCRETIONARY CASH FLOW AND PERMIT ATTRACTIVE ROI
▪ Total Adj. EBITDA – One of the industries
leading Adj. EBITDA margin of 47% (1)
▪ Cash taxes – significant NOLs of over
$100 million and high D&A result in no
cash taxes
▪ Maintenance capex – refurbishment
obligations on existing installed base are
low and decreasing
Strong Cash Flow Conversion
Favorable Cash Flow Drivers
in 000’s
▪ Growth capex – builds recurring revenue
base by placing higher yielding leased
cabinets with highly compelling ROIs
• 12 month payback on core units and 8 months on premium units
▪ Intangibles – primarily capitalized R&D
that facilitates cutting edge hardware
and content development
Strong
cashflow for
high-ROI
investments,
growth and
deleveraging
>90% cash flow conversion(2)
▪ Reinvestment in
high ROI growth
▪ Significant
potential for future
deleveraging
92%
99%98%
97%
2016 2017 2018 LTM 3/31/19
(1) Adjusted EBITDA margin for LTM 3/31/19
(2) Percentages equal (LTM 3/31/19 EGM Adjusted EBITDA – LTM 3/31/19 maintenance capex) / LTM 3/31/19 EGM Adjusted EBITDA
19
CAPITAL STRUCTURE OVERVIEW
Capitalization
12/31/2018 3/31/2019 Rate Maturity
Capitalization
Cash $71 $10
$30 million existing revolver – – L+5.50% 06/06/22
First lien term loan 538 536 L+3.50% 02/15/24
Other 1 2
Total first lien debt $539 $538
Total debt $539 $538
Total net debt $468 $527
LTM Adjusted EBITDA $136 $138
Net leverage 3.4x 3.8x
Integrity LTM Adjusted EBITDA – $8
Post-Integrity LTM Adjusted EBITDA(1) $136 $146
Adjusted total net debt leverage ratio 3.4x 3.6x
(1) Represents Integrity's 2017 Adjusted EBITDA, which we believe is indicative of Integrity’s performance in subsequent periods, adjusted for the time period for which Integrity’s financial measures are included in AGS’s results.
20
SUMMARIZING THE AGS OPPORTUNITY
Attractive high-margin, recurring revenue model
Pure-play casino gaming supplier with outsized growth potential
Capitalizing on strong Class II position while continuing to penetrate Class III markets
Growth from international expansion in Philippines, Brazil and other markets
Strong free cash flow generation allows for reinvestment in business at attractive ROIs
Industry-leading R&D platform in both hardware and content
Diversified product suite
Proven ability to successfully integrate acquisitions and scale the platform
1
2
3
4
5
6
7
8
APPENDIX
21
22
TERMS USED IN THIS PRESENTATION
▪ Average Monthly Lease Price (ALP): Average monthly lease price is calculated by dividing (a) total revenues recognized
and directly attributable to Table Products by (b) the number of Table Products Installed Base and by (c) the number of
months in such period.
▪ Average Revenue per Daily Active User (ARPDAU): ARPDAU is calculated by dividing (a) daily revenue by (b) the number
of Daily Active Users.
▪ Average Sales Price (ASP): Average sales price is calculated by dividing (a) total revenues recognized and directly
attributable to EGM unit sales in a period by (b) the number of EGM units sold over that same period.
▪ Daily Active Users (DAU): DAU is a count of daily unique visitors to a site.
▪ EGM Installed Base: EGM Installed Base is the number of recurring revenue EGM units installed on a specified date.
▪ Electronic Gaming Machine (EGM): EGMs include but are not limited to slot machines, Class II machines, video poker and
video lottery machines.
▪ House Average (HA): House average is the average casino win from slot machines or table products.
▪ Monthly Active Users (MAU): MAU is a count of monthly unique visitors to a site.
▪ Revenue Per Day (RPD): RPD is calculated by dividing (a) total revenues over a specified period recognized and directly
attributable to units on lease (whether on a participation or daily fee arrangement) by (b) the number of units installed
over that period and by (c) the number of days in such period.
▪ Ship Share: Ship Share is the share of all slots sold in a specified period.
▪ Table Products Installed Base: Table Products Installed Base is the number of table products installed on a specified date.
▪ TAM: Total addressable markets are markets in which we are currently licensed, or could be licensed with minimal effort,
to place EGMs in the United States and Canada.
▪ Win Per Day (WPD): WPD is the total revenue generated by an EGM per day.
Unless otherwise indicated or the context otherwise requires, the following terms in this presentation have the meanings set forth below:
23
FY 2019 OUTLOOK
($ in mm) FY 2018 2019 Guidance
Adjusted EBITDA1 $136.2 $160 - $164
Capex $66.2 $65 - $69
▪ AGS continues to expect to generate Adjusted EBITDA, a non-GAAP financial measure (see footnote below), of $160 - $164 million in 2019, representing growth of approximately 17%-20% compared to the prior year period
▪ AGS continues to expect 2019 capital expenditures to be in the range of $65 -$69 million, reflecting an expectation for a continued increase in its installed base in both existing and new markets.
1) Please refer to appendix for Adjusted EBITDA reconciliation. We have not provided a reconciliation of forward looking total Adjusted EBITDA to the most directly comparable GAAP financial measure, Net income (loss), due primarily to the variability and difficulty in making accurate forecasts and projections of the variable and individual adjustments for a reconciliation to Net income (loss), as not all of the information necessary for a quantitative reconciliation is available to us without unreasonable effort. We expect that the main components of Net income (loss) for fiscal year 2019 shall consist of operating expenses, interest expenses as well as other expenses (income) and income tax expenses, which are inherently difficult to forecast and quantify with reasonable accuracy without unreasonable efforts. The amounts associated with these items have historically and may continue to vary significantly from quarter to quarter and material changes to these items could have a significant effect on our future GAAP results.
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ROAD TO $250M AEBITDA
$50-$80$10-$15
$15-$20
$15-$25 ~$230-$290
$45-$70
($ in mm)
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Road to $250M AEBITDA is an aspirational goal set by the Company to achieve $250M of Adjusted EBITDA within 3-5 years
CAGRs(1)
Target
AEBITDA 5 Years 4 Years 3 years
Low: $230 11% 14% 19%
Mid: $250 13% 16% 22%
High: $290 16% 21% 29%
(1) Calculated based on FY 2018 AEBITDA of $136M
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iGAMING ECOSYSTEM
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CONSOLIDATED OPERATIONAL SUMMARY
($ in mm, except RPD, ASP, ALP and ARPDAU)
Operational and other data Q1 Q2 Q3 Q4 2017 Q1 Q2 Q3 Q4 2018 Q1 LTM 3/31/19
Revenues by segmentEGM $45.0 $47.4 $53.3 $54.2 $199.9 $61.3 $69.3 $71.8 $68.7 $271.0 $69.7 $279.4Table products 0.6 0.7 1.1 1.6 4.1 1.7 1.8 2.1 2.1 7.7 2.2 8.1Interactive 2.1 2.0 2.0 1.9 8.0 1.9 1.7 1.7 1.3 6.6 1.2 5.9Total revenue $47.8 $50.1 $56.4 $57.7 $212.0 $64.9 $72.8 $75.5 $72.1 $285.3 $73.0 $293.5
Adjusted EBITDA by segmentEGM $25.2 $26.5 $29.8 $26.3 $107.8 $34.3 $36.9 $34.0 $32.2 $137.4 $36.7 $139.8
% margin 56.0% 55.9% 55.8% 48.6% 53.9% 56.0% 53.2% 47.4% 46.9% 50.7% 52.7% 50.0%Table products (0.2) (0.3) (0.2) 0.2 (0.5) 0.2 0.1 0.4 0.3 0.9 0.5 1.2Interactive (0.1) (0.1) (0.1) (0.1) (0.4) 0.0 (0.4) (0.9) (0.9) (2.1) (0.9) (3.1)Total Adjusted EBITDA $24.9 $26.1 $29.4 $26.4 $106.8 $34.5 $36.6 $33.6 $31.5 $136.2 $36.3 $138.0
% margin 52.1% 52.1% 52.1% 45.9% 50.4% 53.2% 50.2% 44.5% 43.8% 47.7% 49.6% 47.0%
EGM segmentDomestic installed base 14,025 14,246 14,544 16,078 16,078 16,553 16,647 16,068 16,296 16,296 18,798 18,798Domestic RPD $25.84 $25.89 $25.44 $25.88 $25.77 $26.72 $27.79 $27.14 $26.41 $27.02 $26.42 $26.94
International installed base 7,179 7,233 7,471 7,727 7,727 7,480 7,876 8,116 8,351 8,351 8,510 8,510International RPD $8.20 $8.58 $8.33 $8.14 $8.31 $8.27 $8.80 $8.52 $8.07 $8.41 $8.68 $8.52– – – –Total recurring units 21,204 21,479 22,015 23,805 23,805 24,033 24,523 24,184 24,647 24,647 27,308 27,308Total RPD $19.93 $19.99 $19.65 $19.95 $19.88 $20.94 $21.77 $20.95 $20.20 $20.96 $20.73 $20.91– –EGM units sold 452 574 842 697 2,565 838 1,058 1,332 1,159 4,387 1,024 4,573Average sales price $15,695 $15,840 $15,890 $17,676 $16,329 $17,758 $18,728 $18,051 $18,782 $18,360 $18,738 $18,575
Table products segmentTable products install base 1,691 1,754 2,350 2,400 2,400 2,631 2,737 3,065 3,162 3,162 3,285 3,285Average monthly lease price $128 $125 $167 $226 $167 $220 $213 $214 $224 $218 $217 $217
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TOTAL ADJUSTED EBITDA RECONCILIATION
▪ Write downs and other include items related to loss on disposal or impairment of long lived assets, fair value adjustments to contingent consideration and acquisition costs
▪ Loss on extinguishment and modification of debt primarily relates to the refinancing of long-term debt, in which deferred loan costs and discounts related to old senior secured credit facilities were written off
• Other adjustments are primarily composed of professional fees incurred for projects, corporate and public filing compliance, contract cancellation fees and other transaction costs deemed to be non-operating in nature
▪ Other non-cash charges are costs related to non-cash charges and losses on the disposition of assets, non-cash charges on capitalized installation and delivery, which primarily includes the
costs to acquire contracts that are expensed over the estimated life of each contract and non-cash charges related to accretion of contract rights under development agreements
▪ New jurisdiction and regulatory license costs relate primarily to one-time non-operating costs incurred to obtain new licenses and develop products for new jurisdictions
▪ Legal & litigation expenses include payments to law firms and settlements for matters that are outside the normal course of business
▪ Acquisition & integration costs include restructuring and severance and are related to costs incurred after the purchase of businesses, such as the acquisitions of Rocket and Gameiom, to integrate operations
▪ Non-cash stock compensation includes non-cash compensation expense related to grants of options, restricted stock, and other equity awards
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($ in mm)
Adj. EBITDA reconciliation Q1 Q2 Q3 Q4 2017
Net loss attributable to PlayAGS, Inc. ($12.4) ($20.1) ($4.1) ($8.5) ($45.1)
Income tax expense (benefit) 2.2 1.3 1.1 (6.5) (1.9)
Depreciation and amortization 18.5 18.2 16.9 18.1 71.6
Other (income) expense (2.8) (1.5) (0.5) 1.9 (2.9)
Interest income (0.0) (0.0) (0.0) (0.0) (0.1)
Interest expense 15.2 14.6 12.7 13.1 55.5
Write downs and other 0.2 1.9 0.5 1.8 4.5
Loss on extinguishment and modification of debt – 8.1 – 0.9 9.0
Other adjustments 0.6 0.9 0.5 0.8 2.9
Other non-cash charges 2.1 1.8 1.6 2.3 7.8
New jurisdiction and regulatory licensing costs 0.2 0.5 0.6 0.8 2.1
Legal & litigation expenses including settlement payments 0.4 0.2 0.2 (0.2) 0.5
Acquisition & integration related costs 0.6 0.2 0.1 2.0 2.9
Non-cash stock compensation – – – – –
Adjusted EBITDA $24.9 $26.1 $29.4 $26.4 $106.8
($ in mm)
Adj. EBITDA reconciliation Q1 Q2 Q3 Q4 2018
Net (loss) income attributable to PlayAGS, Inc. ($9.5) ($5.3) $4.3 ($10.3) ($20.8)
Income tax (benefit) expense (12.4) 7.0 (3.5) 0.6 (8.4)
Depreciation and amortization 19.3 19.5 19.0 19.8 77.5
Other expense (income) 9.2 0.5 0.4 0.4 10.5
Interest income (0.1) (0.0) (0.1) (0.0) (0.2)
Interest expense 10.4 8.9 9.0 9.4 37.6
Write downs and other 1.6 1.0 0.7 5.5 8.8
Loss on extinguishment and modification of debt 4.6 – – 2.0 6.6
Other adjustments 0.4 0.9 0.9 0.2 2.4
Other non-cash charges 1.6 1.6 1.7 1.7 6.6
New jurisdiction and regulatory licensing costs – – – – –
Legal & litigation expenses including settlement payments – 0.8 (0.0) 0.2 1.0
Acquisition & integration related costs 1.2 1.2 0.7 0.5 3.6
Non-cash stock compensation 8.2 0.5 0.5 1.8 10.9
Adjusted EBITDA $34.5 $36.6 $33.6 $31.5 $136.2
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TOTAL ADJUSTED EBITDA RECONCILIATION
▪ Write downs and other include items related to loss on disposal or impairment of long lived assets, fair value adjustments to contingent consideration and acquisition costs
▪ Loss on extinguishment and modification of debt primarily relates to the refinancing of long-term debt, in which deferred loan costs and discounts related to old senior secured credit facilities were written off
• Other adjustments are primarily composed of professional fees incurred for projects, corporate and public filing compliance, contract cancellation fees and other transaction costs deemed to be non-operating in nature
▪ Other non-cash charges are costs related to non-cash charges and losses on the disposition of assets, non-cash charges on capitalized installation and delivery, which primarily includes the
costs to acquire contracts that are expensed over the estimated life of each contract and non-cash charges related to accretion of contract rights under development agreements
▪ New jurisdiction and regulatory license costs relate primarily to one-time non-operating costs incurred to obtain new licenses and develop products for new jurisdictions
▪ Legal & litigation expenses include payments to law firms and settlements for matters that are outside the normal course of business
▪ Acquisition & integration costs include restructuring and severance and are related to costs incurred after the purchase of businesses, such as the acquisitions of Rocket and Gameiom, to integrate operations
▪ Non-cash stock compensation includes non-cash compensation expense related to grants of options, restricted stock, and other equity awards
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($ in mm) LTM
Adj. EBITDA reconciliation Q2 '17 Q3 '17 Q4 '17 Q1 '18 3/31/2018
Net loss attributable to PlayAGS, Inc. ($20.1) ($4.1) ($8.5) ($9.5) ($42.3)
Income tax expense (benefit) 1.3 1.1 (6.5) (12.4) (16.6)
Depreciation and amortization 18.2 16.9 18.1 19.3 72.5
Other (income) expense (1.5) (0.5) 1.9 9.2 9.1
Interest income (0.0) (0.0) (0.0) (0.1) (0.1)
Interest expense 14.6 12.7 13.1 10.4 50.8
Write downs and other 1.9 0.5 1.8 1.6 5.9
Loss on extinguishment and modification of debt 8.1 – 0.9 4.6 13.6
Other adjustments 0.9 0.5 0.8 0.4 2.6
Other non-cash charges 1.8 1.6 2.3 1.6 7.3
New jurisdiction and regulatory licensing costs 0.5 0.6 0.8 – 1.8
Legal & litigation expenses including settlement payments 0.2 0.2 (0.2) – 0.1
Acquisition & integration related costs 0.2 0.1 2.0 1.2 3.5
Non-cash stock compensation – – – 8.2 8.2
Adjusted EBITDA $26.1 $29.4 $26.4 $34.5 $116.4
($ in mm) LTM
Adj. EBITDA reconciliation Q2 '18 Q3 '18 Q4 '18 Q1 '19 3/31/19
Net (loss) income attributable to PlayAGS, Inc. ($5.3) $4.3 ($10.3) ($0.1) ($11.4)
Income tax (benefit) expense 7.0 (3.5) 0.6 (5.8) (1.7)
Depreciation and amortization 19.5 19.0 19.8 21.5 79.7
Other expense (income) 0.5 0.4 0.4 5.3 6.5
Interest income (0.0) (0.1) (0.0) (0.0) (0.2)
Interest expense 8.9 9.0 9.4 8.9 36.1
Write downs and other 1.0 0.7 5.5 1.0 8.2
Loss on extinguishment and modification of debt – – 2.0 – 2.0
Other adjustments 0.9 0.9 0.2 0.3 2.3
Other non-cash charges 1.6 1.7 1.7 2.0 7.1
New jurisdiction and regulatory licensing costs – – – – –
Legal & litigation expenses including settlement payments 0.8 (0.0) 0.2 – 1.0
Acquisition & integration related costs 1.2 0.7 0.5 2.0 4.4
Non-cash stock compensation 0.5 0.5 1.8 1.2 4.0
Adjusted EBITDA $36.6 $33.6 $31.5 $36.3 $138.0
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FREE CASH FLOW RECONCILIATION
($ in 000’s)
Q2 '18 Q3 '18 Q4 '18 Q1 '19 LTM 3/31/19
Free Cash Flow ReconciliationNet cash provided by operating activities 22,497$ 23,639$ 32,191$ 11,655$ 89,982$ Purchase of intangible assets (26) (337) (188) (1,231) (1,782) Software development and other expenditures (2,678) (3,626) (1,666) (2,669) (10,639) Purchases of property and equipment (10,383) (12,143) (20,145) (15,105) (57,776)
Free Cash Flow 9,410$ 7,533$ 10,192$ (7,350)$ 19,785$
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