Gaming supplier AGS reported a net loss of $42.6 million, or $1.20 per diluted share, for the second quarter of 2020, compared to a net loss of $7.2 million the same quarter a year ago. Pre-tax adjusted earnings showed a loss of $1.6 million, compared to earnings of $35.7 million in Q2 2019.
The losses were due to the coronavirus, but CEO David Lopez said the results were better than expected due to cost-cutting measures, and looked to the future in a statement released with the earnings report.
“Although casinos started to reopen in the later part of the quarter, we remained disciplined in how we reintroduced cost back into the business, ramping departments that are essential to run our business, such as field service, R&D and manufacturing,” Lopez said. “Initial game performance on EGM units that are in service has been strong and better than expected, which allows us to lean n our strong recurring revenue footprint in this challenging environment.”
Lopez also said new products are showing strong results. “Prior to and even during Covid-19, we were seeing strong initial performance from our new products, such as the Starwall and Orion Rise, as well as continued momentum from our new titles on Orion Portrait and our suite of table game progressives.
“Given the breadth and depth of our current content portfolio, we believe that the long-term opportunities for AGS remain intact, and that we have ample liquidity and the best-in-class team to navigate through near-term uncertainties.”
AGS Chief Financial Officer Kimo Akiona added, “Our careful management of expenses and capital expenditures during the casino shutdowns in the quarter—in addition to drawing $30 million under the existing revolving credit facility and entering into incremental term loans of $95 million—have resulted in a strengthened liquidity position.
“Although it is hard to predict exactly how the pandemic will continue to impact the macro operating environment, given all the measures we’ve taken, we believe we are positioned with sufficient liquidity and flexibility to emerge from this a more competitive and more nimble organization.”