PlayAGS recovery a “few years” away

It’s going to take a “few years” before slot machine manufacturer PlayAGS Inc. is back operating at pre-pandemic levels, but CEO David Lopez is confident that a recovery is in the works.

The Las Vegas-based company’s slot machine unit sales fell sharply after casinos were ordered to close in early 2020, and have yet to bounce back. AGS sold 289 electronic gaming machine units in the first quarter, compared with 464 the same period the year prior.

But Lopez said the endurance of the broader gaming industry has been promising.

“We are encouraged by the tone and tenor of recent conversation with our customers,” he said. “As a more favorable operating environment continues to support a broad-based recovery and gaming revenue, we are slowly starting to see the improved revenue performance trigger a willingness by operators … for new purchases.”

Total revenue increased 1.9 percent year-over-year and 18.7 percent sequentially to $55.4 million. Net loss was $7.8 million in the quarter, compared with $14.4 million the year prior.

The company reallocated spending over the course of the pandemic, and Lopez said that will likely continue. The company is set to cut back spending on the gaming convention G2E, for example, and put those dollars toward other areas such as marketing.

“I think that COVID taught us a few things, and this might be one of the areas where it may not be a true clawback but a reallocation of dollars to become more efficient and more effective with our spend to get a better (return on investment),” Lopez said.

PlayAGS closed up 0.12 percent Thursday to $8.70 on the New York Stock Exchange. s

Contact Bailey Schulz at bschulz@reviewjournal.com. Follow @bailey_schulz on Twitter.