PlayAGS, Inc. (NYSE:AGS) Q4 2022 Earnings Call Transcript

Brad Boyer: We got you. Let him clear.

Barry Jonas: Great. Look, you’ve obviously had a big change since last quarter around board and shareholder composition. Curious if there’s any related changes we should expect to see from a strategic or really any other perspective. Thanks.

David Lopez: Thanks, Barry. Not steady any, I mean, I think our objectives many of which Kimo just stated are the same now as they were before. Obviously there’s different personalities in the room, but the game plan, the playbook, the long-term planning is all very similar, if not the same. Those priorities that Kimo stated de-levering and de-levering and de-levering and generating more cash flow and, responsible EBITDA growth and really taking care of our install base in an analytical and responsible way is, how we view our future. And that’s the way it was before and after that shareholder in sort of board level change.

Barry Jonas: Got it. And then just follow-up, David, what’s the M&A environment out there right now? Any interesting things available or for sale? Any tuck-ins or anything else that you’re chalking?

David Lopez: We’re always poking around as you know we’re hoping, some food falls off the table here and there and we’ll pick it up. We’re not too proud, tuck-ins are sort of the name of the game for us in particular, I would say in the table space and in obviously in the real money gaming space. So, we’re always poking around there. We continue to look obviously with our stated goal of de-leveraging if something were to be bigger and larger and it would have to be a real banger Barry for us to, I want to dive in deep there. So, we continue to sort of poke around the tuck-ins and even with tuck-ins, we want them to be good if we’re going to move forward with them.

Barry Jonas: Great. Alright. Thank you and congrats on an impressive quarter.

David Lopez: Thanks, Barry. Appreciate it.

Operator: Thank you. The next question comes from an Edward Engel with Roth MKM. You may proceed.

Edward Engel: Hi, thanks for taking my question and congrats on the nice quarter. Just on the topic of de-leveraging, I mean certainly your cash has been building and net debt-to-EBITDA has been declined pretty rapidly. Just kind of curious at what point do you kind of start accelerating the actual pay down of debt and maybe kind of offset some of that higher interest rates?

Kimo Akiona: I mean, without obviously giving you a specific number. I mean, one thing is optionality great, right? Like, I think we will obviously continue to accumulate cash on the balance sheet, but, looking forward, right? I think with people still discussing, the idea of any form of recession or something in the very back half of the year or possibly even as far as 2024. I think optionality is nice to have. So, I’m not going to, give you a specific number when we’ll start to actually pay down debt, but in the short term, I think we’ll just accumulate cash on the balance sheet.

Edward Engel: Great, that’s helpful. And then I guess quickly on the interactive side, you kind of talked about a step up in the 2Q of this year. Is there anything, one thing specific that’s kind of driving that or is that just a couple integrations we have in the pipeline, just get turned on?

Brad Boyer: Yes, this is Brad. I would just say, it’s kind of all of the above. The way I like to think about it, if you look at some of the recent announcements we’ve had on the customer win side, on the jurisdictional win side, we’re really at a point where we have all of the, let’s call it the meaningful pipes are open, right? And now supported by some of the new hires we’ve made on both the commercial and technical sides, we’re really in a position to not only accelerate the flow of our traditional brick-and-mortar casino content into the online channel, but we also have the means now to start bringing some online first we’ll call it content into the market. And also potentially, get some of our table content into the market.