Form 8-K PlayAGS, Inc. For: Mar 14

March 14, 2018 2:55 PM

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

December 31, 2017

Date of Report (Date of earliest event reported)

PLAYAGS, INC.

(Exact name of registrant as specified in its charter)



Nevada	001-38357	46-3698600
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

5475 S. Decatur Blvd., Ste #100

Las Vegas, Nevada 89118

(Address of principal executive offices) (Zip Code)

(702) 722-6700

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Item 2.02. Results of Operations and Financial Condition.

On March 14, 2018, the Company issued a press release and an earnings presentation announcing its results of operations for the three months ended December 31, 2017. A copy of the press release and earnings presentation are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively and incorporated herein by reference.

The results of operations information in this Item 2.02, Exhibit 99.1 and Exhibit 99.2 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of such section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits



Exhibit No.			Document
99.1			Press Release dated March 14, 2018, issued by the Company.
99.2			Earnings presentation of the Company, dated March 14, 2018

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	PLAYAGS, INC.

March 14, 2018	By:	/s/ Kimo Akiona
		Kimo Akiona
		Chief Financial Officer, Chief Accounting Officer and Treasurer, (Principal Financial and Accounting Officer)

Exhibit 99.1

- AGS ANNOUNCES FOURTH QUARTER AND FULL YEAR RESULTS


•	Fourth Quarter Revenue of $57.7 Million Grew 35% Year-Over-Year


•	Record Annual Revenue of $212.0 Million Grew 27% Year-Over-Year


•	Record Annual Adjusted EBITDA of $106.8 Million Grew 25% Year-Over-Year


•	Annual Net Loss of $45.1 Million Improved 45% Year-Over-Year

LAS VEGAS, Nevada, March 14, 2018 - PlayAGS, Inc. (NYSE: AGS) (“AGS”, "us", "we" or the “Company”) today reported operating results for its fourth quarter 2017 and fiscal year ended December 31, 2017.

"Record revenue of $57.7 million in the fourth quarter punctuated a transformative year for AGS. With 27% growth on the top line, 10% recurring revenue growth, and 25% growth in Adjusted EBITDA in fiscal 2017, our results reflected AGS’s continued dedication to best-in-class execution against its growth initiatives to penetrate new jurisdictions and launch high-performing, in-demand products into the market,” said David Lopez, President and CEO of AGS. “Entering the new fiscal year, we believe we are well positioned for meaningful growth as we benefit from continued momentum of our Orion Portrait and Icon cabinets, entry into new domestic and international jurisdictions, and promising new product launches like the Orion Slant, STAX table progressive system, and the Dex S card shuffler.”

Summary of the quarter and year ended December 31, 2017 and 2016

(In thousands, except per-share and unit data)



	Three Months Ended December 31,						Year Ended December 31,
	2017		2016		% Change		2017		2016		% Change
Revenues
EGM	54,184		40,254		34.6	%	199,931		156,407		27.8	%
Table Products	1,623		669		142.6	%	4,065		2,674		52.0	%
Interactive	1,854		1,822		1.8	%	7,959		7,725		3.0	%
Total revenue	57,661		42,745		34.9	%	211,955		166,806		27.1	%
Operating income / (loss)	861		(1,403	)	161.4	%	14,502		(17,064	)	185.0	%
Net loss	(8,520	)	(20,234	)	57.9	%	(45,106	)	(81,374	)	44.6	%
Loss per share	(0.37	)	(0.87	)	57.5	%	(1.94	)	(3.51	)	44.7	%

Adjusted EBITDA
EGM	26,335		23,025		14.4	%	107,785		91,729		17.5	%
Table Products	193		(268	)	172.0	%	(528	)	(1,663	)	68.3	%
Interactive	(79	)	(656	)	88.0	%	(416	)	(4,727	)	91.2	%
Total adjusted EBITDA⁽¹⁾	26,449		22,101		19.7	%	106,841		85,339		25.2	%

EGM Units Sold	697		260		168.1	%	2,565		465		451.6	%
EGM total installed base, end of period	23,805		20,851		14.2	%	23,805		20,851		14.2	%

⁽¹⁾Adjusted EBITDA is a non-GAAP measure, see non-GAAP reconciliation below.

Fourth Quarter Financial Highlights


•	Total revenue increased 35% to $57.7 million driven by continued growth of our EGMs in the Class III marketplace.


•	At $45.2 million, total recurring revenue grew approximately 20% quarter-over-quarter, primarily attributable to yield optimization efforts and the popularity of our new premium cabinet, Orion Portrait.


•	EGM equipment sales increased 151% to $12.4 million due to the sale of 697 units.


•	Total adjusted EBITDA margin decreased to 46% in the fourth quarter 2017 compared to 52% due to sales mix and the timing of G2E, which took place in the fourth quarter 2017 and in the third quarter for 2016.


•	SG&A increased $4.2 million in the fourth quarter of 2017 due to the timing of the annual Global Gaming Expo ("G2E") trade show as well as well as increased costs due to higher headcount.


•	R&D increased $3.0 million in the fourth quarter of 2017 driven by increased headcount costs and the development of our new Orion Portrait and Orion Slant cabinets as well as our newly established game development studio in Sydney, Australia.


•	At $26.4 million, adjusted EBITDA increased 20% driven by increases in revenue, and offset by increased adjusted operating expenses of $4.8 million primarily due to increased headcount.


•	Net loss significantly improved to $8.5 million from $20.2 million.

Full Year Financial Highlights


•	Total revenue increased 27% to $212.0 million due to the continued growth of our EGM segment driven by the introduction of new products and our continued expansion into the Class III marketplace.


•	At $170.3 million, total recurring revenue grew approximately 10%, primarily attributable to yield optimization efforts and the popularity of our new premium cabinet, Orion Portrait.


•	EGM equipment sales increased 250% to $41.6 million driven by an increase of 2,100 sold EGMs for a total of 2,565.


•	Total adjusted EBITDA margin was 50% for 2017 compared to 51%, which is attributable primarily to the large increase in EGM equipment sales revenue.


•	SG&A decreased $2.1 million in 2017 primarily due to decreased user acquisition fees from our Interactive segment in efforts to optimize marketing spend.


•	R&D increased $4.4 million in 2017 driven by increased headcount costs and the development of our new Orion Portrait and Orion Slant cabinets as well as our newly established game development studio in Sydney, Australia.


•	At $106.8 million, adjusted EBITDA increased 25% driven by the increases in revenue described above, and offset by increased adjusted operating expenses of $4.1 million primarily due to increased headcount.


•	Net loss significantly improved to $45.1 million from $81.4 million.

Full Year Business Highlights


•	EGM average selling price increased nearly 10% to $16,329.


•	Domestic EGM revenue per day increased $1.03 to $25.77 driven by our yield optimization efforts as well as the introduction of our new, high performing products.


•	Nearly $4.4 million of 2017’s recurring revenue came from our yield optimization efforts. As of year end, we have optimized nearly 2,300 units, of which 70% were optimized in 2017.


•	Table Products increased 900 units, or 60%, to 2,400 units driven by both organic growth and the purchase of In Bet assets.


•	Our ICON cabinet footprint grew nearly 300% to over 4,700 total units in the field.


•	Introduced to the market in Q1 of 2017, our Orion Portrait cabinet ended the year with over 1,900 total units in the field.

Balance Sheet Review

Capital expenditures increased $16.8 million to $57.5 million in 2017, compared to $40.7 million. The increase was driven primarily by the purchase of property and equipment of $15.7 million and software development costs of $1.1 million to fuel growth initiatives. As of December 31, 2017, AGS had $19.2 million in cash and cash equivalents compared to $18.0 million at December 31, 2016. Total net debt as of December 31, 2017, was approximately $649 million. As a result of the IPO, the exercise in full of the underwriters’ overallotment option and the settlement of our HoldCo PIK notes subsequent to year end, our pro forma total net debt decreased by $171 million to $478 million.

Recent Developments

Initial Public Offering

On January 26, 2018, we completed the initial public offering of our common stock, in which it issued and sold 10,250,000 shares of common stock at a public offering price of $16.00 per share. We received net proceeds of $149.1 million from the initial public offering, after deducting underwriting discounts and commissions and offering expenses payable.

On February 27, 2018 we sold an additional 1,537,500 shares of common stock at a public offering price of $16.00 per share pursuant to the underwriters’ exercise in full of the over-allotment option and we received net proceeds of $23.0 million from the exercise of the over-allotment option, after deducting underwriting discounts and commissions.

Repayment of Senior Secured PIK Notes

On January 30, 2018, we used the net proceeds of the initial public offering and cash on hand to redeem in full the 11.25% senior secured PIK notes due 2024 (the “Notes”). On the redemption date, the aggregate principal amount of the Notes outstanding was $152.6 million and the amount of accrued and unpaid interest was $1.4 million. In connection with the redemption, we repaid all of the outstanding obligations in respect of principal, interest and fees under the Notes.

Term Loan Repricing

On February 7, 2018 we completed the repricing of our existing $513 million term loans under our First Lien Credit Agreement (the "Term Loans"). The Term Loans were repriced from 550 basis points to 425 basis points over LIBOR. The LIBOR floor remains at 100 basis points. As a result of the repricing, we expect to realize annual cash interest savings of approximately $6.4 million.

2018 Outlook

We expect to generate total adjusted EBITDA of $124 - $130 million in 2018, representing growth of approximately 16%-22% compared to the prior year period.

AGS expects 2018 capital expenditures to be in the range of $55 - $60 million, compared to $57.5 million in 2017, reflecting an expectation for a continued increase in our installed base in both existing and new markets as well as our ongoing yield optimization initiative.

Comparison of Fiscal 2018 Guidance to Fiscal 2017 and Fiscal 2016 Results



	Year ended December 31,
(in $mm)	2018 Guidance	2017		2016
Adjusted EBITDA ⁽¹⁾	$124 - $130	$	107	$	85
Capex	$55 - $60	$	57	$	41

⁽¹⁾ A reconciliation of this measure to net income, which is its most comparable GAAP measure, can be found on page 8 of this press release.

Conference Call and Webcast

Today, at 4:00 p.m. EST, management will host a conference call to present the fourth quarter 2017 results. Listeners may access a live webcast of the conference call along with accompanying slides at AGS' Investor Relations website at http://investors.playags.com/. A replay of the webcast will be available on the website following the live event. To listen by telephone, the US/Canada toll-free dial-in number is +1 (866) 777-2509 and the dial-in number for participants outside the US/Canada is +1 (412) 317-5413. The conference ID/confirmation code is AGS Q4 Earnings Call.

Company Overview

AGS is a global company focused on creating a diverse mix of entertaining gaming experiences for every kind of player. Our roots are firmly planted in the Class II Native American gaming market, but our customer-centric culture and remarkable growth have helped us branch out to become one of the most all-inclusive commercial gaming suppliers in the world. Powered by high-performing Class II and Class III slot products, an expansive table products portfolio, highly-rated social casino solutions for players and operators, and best-in-class service, we offer an unmatched value proposition for our casino partners. Learn more about us at www.playags.com.

Forward-looking Statements

This release contains “forward-looking statements.” Forward-looking statements include any statements that address future results or occurrences. In some cases you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “would,” “should,” “could” or the negatives thereof. Generally, the words “anticipate,” “believe,” “continue,” “expect,”

“intend,” “estimate,” “project,” “plan” and similar expressions identify forward-looking statements. In particular, statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance contained in this Annual Report on Form 10-K in Item 1. “Business,” Item 1A. “Risk Factors” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are forward-looking statements. These forward-looking statements include statements that are not historical facts, including statements concerning our possible or assumed future actions and business strategies.

PLAYAGS, INC.

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share and per share data)



	December 31,
	2017			2016
Assets
Current assets
Cash and cash equivalents	$	19,242		$	17,977
Restricted cash	100			100
Accounts receivable, net of allowance of $1,462 and $1,972 respectively	32,776			24,035
Inventories	24,455			10,729
Prepaid expenses	2,675			2,609
Deposits and other	3,460			3,052
Total current assets	82,708			58,502
Property and equipment, net	77,982			67,926
Goodwill	278,337			251,024
Deferred tax asset	1,115			9
Intangible assets	232,287			232,877
Other assets	24,813			23,754
Total assets	$	697,242		$	634,092

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	11,407		$	8,790
Accrued liabilities	24,954			17,702
Current maturities of long-term debt	7,359			6,537
Total current liabilities	43,720			33,029
Long-term debt	644,158			547,238
Deferred tax liability - noncurrent	1,016			6,957
Other long-term liabilities	36,283			30,440
Total liabilities	725,177			617,664
Commitments and contingencies (Note 14)
Stockholders' equity
Preferred stock at $0.01 par value; 100,000 shares authorized, no shares issued and outstanding	—			—
Common stock at $0.01 par value; 46,629,155 shares authorized; 23,208,076 Shares issued and outstanding at December 31, 2017 and 2016.	149			149
Additional paid-in capital	177,276			177,276
Accumulated deficit	(201,557		)	(156,451		)
Accumulated other comprehensive (loss) income	(3,803		)	(4,546		)
Total stockholders’ equity	(27,935		)	16,428
Total liabilities and stockholders’ equity	$	697,242		$	634,092

PLAYAGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(amounts in thousands, except per share data)



	Three months ended December 31,						Year ended December 31,
	2017			2016			2017			2016
Revenues
Gaming operations ⁽¹⁾	$	45,212		$	37,764		$	170,252		$	154,857
Equipment sales	12,449			4,981			41,703			11,949
Total revenues	57,661			42,745			211,955			166,806
Operating expenses
Cost of gaming operations⁽²⁾	9,948			7,109			31,742			26,736
Cost of equipment sales⁽²⁾	5,521			1,993			19,847			6,237
Selling, general and administrative	13,647			9,454			44,015			46,108
Research and development	7,803			4,829			25,715			21,346
Write downs and other charges	1,830			1,109			4,485			3,262
Depreciation and amortization	18,051			19,654			71,649			80,181
Total operating expenses	56,800			44,148			197,453			183,870
Loss from operations	861			(1,403		)	14,502			(17,064		)
Other expense (income)
Interest expense	13,131			15,812			55,511			59,963
Interest income	(28		)	(6		)	(108		)	(57		)
Loss on extinguishment and modification of debt	903			—			9,032			—
Other expense (income)	1,867			1,090			(2,938		)	7,404
Loss before income taxes	(15,012		)	(18,299		)	(46,995		)	(84,374		)
Income tax benefit (expense)	6,492			(1,935		)	1,889			3,000
Net loss	(8,520		)	(20,234		)	(45,106		)	(81,374		)
Foreign currency translation adjustment	36			(598		)	743			(2,735		)
Total comprehensive loss	$	(8,484	)	$	(20,832	)	$	(44,363	)	$	(84,109	)

Basic and diluted loss per common share:
Basic	$	(0.37	)	$	(0.87	)	$	(1.94	)	$	(3.51	)
Diluted	$	(0.37	)	$	(0.87	)	$	(1.94	)	$	(3.51	)
Weighted average common shares outstanding:
Basic	23,208			23,208			23,208			23,208
Diluted	23,208			23,208			23,208			23,208

(1) includes revenues from our EGM, Table Products and Interactive segments

(2) exclusive of depreciation and amortization

PLAYAGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)



	Year ended December 31,
	2017			2016
Cash flows from operating activities
Net loss	$	(45,106	)	$	(81,374	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	71,649			80,181
Accretion of contract rights under development agreements and placement fees	4,680			4,702
Amortization of deferred loan costs and discount	2,976			3,542
Payment-in-kind interest capitalized	15,935			15,396
Payment-in-kind interest payments	(2,698		)	—
Write off of deferred loan cost and discount	3,294			—
Provision (benefit) for bad debts	651			2,290
Imputed interest income	—			—
Loss on disposition of assets	3,901			1,149
Impairment of assets	584			4,749
(Benefit) provision of deferred income tax	(7,062		)	(7,998		)
Changes in assets and liabilities that relate to operations:
Accounts receivable	(8,348		)	(3,191		)
Inventories	(1,636		)	307
Prepaid expenses	(599		)	2,021
Deposits and other	(374		)	(315		)
Other assets, non-current	(2,290		)	467
Accounts payable and accrued liabilities	8,451			12,567
Net cash provided by (used in) operating activities	44,008			34,493
Cash flows from investing activities
Business acquisitions, net of cash acquired	(63,850		)	—
Collection of notes receivable	—			—
Purchase of intangible assets	(1,226		)	(1,311		)
Software development and other expenditures	(7,664		)	(6,526		)
Proceeds from disposition of assets	514			87
Purchases of property and equipment	(48,585		)	(32,879		)
Net cash used in investing activities	(120,811		)	(40,629		)
Cash flows from financing activities
Borrowings under the revolving facility	—			—
Repayments under the revolving facility	—			—
Proceeds from issuance of first lien credit facilities	448,725			—
Proceeds from incremental term loans	65,000			—
Repayment of senior secured credit facilities	(410,655		)	—
Payments on first lien credit facilities	(2,413		)	(6,987		)
Deferred offering costs paid	(653		)	—
Payment of previous acquisition obligation	—			(1,125		)
Payment of financed obligations	(128		)
Payment of financed placement fee obligations	(3,807		)	(3,516		)
Repayment of seller notes	(12,401		)	—
Payments on equipment long term note payable and capital leases	(2,372		)	—
Repurchase of shares issued to management	—			(50		)
Proceeds from issuance of common stock	—			—
Proceeds from employees in advance of common stock issuance	25			75
Payment of deferred loan costs	(3,267		)	—
Net cash provided by financing activities	78,054			(11,603		)
Effect of exchange rates on cash and cash equivalents	14			(6		)
Increase (decrease) in cash and cash equivalents	1,265			(17,745		)
Cash and cash equivalents, beginning of period	17,977			35,722
Cash and cash equivalents, end of period	$	19,242		$	17,977
Supplemental cash flow information:
Cash paid during the period for interest	$	35,890		$	40,060
Cash paid during the period for taxes	$	1,157		$	1,247
Non-cash investing and financing activities:
Non-cash consideration given in business acquisitions	$	2,600		$	—
Financed placement fees	$	—		$	—
Financed purchase property and equipment	$	368		$	2,662
Financed purchase of intangible asset	$	4,866		$	—

Non-GAAP Financial Measures

This press release and accompanying schedules provide certain information regarding adjusted EBITDA which is considered a non-GAAP financial measures under the rules of the Securities and Exchange Commission.

We believe that the presentation of total adjusted EBITDA is appropriate to provide additional information to investors about certain material non-cash items that we do not expect to continue at the same level in the future, as well as other items we do not consider indicative of our ongoing operating performance. Further, we believe total adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures. It also provides management and investors with additional information to estimate our value.

Total adjusted EBITDA is not a presentation made in accordance with GAAP. Our use of the term total adjusted EBITDA may vary from others in our industry. Total adjusted EBITDA should not be considered as an alternative to operating income or net income. Total adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation or as a substitute for the analysis of our results as reported under GAAP.

Our definition of total 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. Due to these limitations, we rely primarily on our GAAP results, such as net loss, (loss) income from operations, EGM Adjusted EBITDA, Table Products Adjusted EBITDA or Interactive Adjusted EBITDA and use Total adjusted EBITDA only supplementally.

The following table presents a reconciliation of total adjusted EBITDA to net loss, which is the most comparable GAAP measure:

Total Adjusted EBITDA Reconciliation



	Three months ended December 31,				Year ended December 31,
	2017		2016		2017		2016
Net loss	(8,520	)	(20,234	)	(45,106	)	(81,374	)
Income tax (benefit) expense	(6,492	)	1,935		(1,889	)	(3,000	)
Depreciation and amortization	18,051		19,654		71,649		80,181
Other expense (income)	1,867		1,090		(2,938	)	7,404
Interest income	(28	)	(6	)	(108	)	(57	)
Interest expense	13,131		15,812		55,511		59,963
Write downs and other⁽¹⁾	1,830		1,109		4,485		3,262
Loss on extinguishment and modification of debt⁽²⁾	903		—		9,032		—
Other adjustments⁽³⁾	823		159		2,890		1,809
Other non-cash charges⁽⁴⁾	2,332		1,777		7,794		8,860
New jurisdiction and regulatory licensing costs⁽⁵⁾	758		358		2,062		1,315
Legal & litigation expenses including settlement payments⁽⁶⁾	(243	)	70		523		1,565
Acquisition & integration related costs⁽⁷⁾	2,037		377		2,936		5,411
Adjusted EBITDA	26,449		22,101		106,841		85,339

(1) Write downs and other includes items related to loss on disposal or impairment of long lived assets, fair value adjustments to contingent consideration and acquisition costs

(2) 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

(3) 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

(4) 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

(5) New jurisdiction and regulatory license costs relates primarily to one-time non-operating costs incurred to obtain new licenses and develop products for new jurisdictions

(6) Legal & litigation expenses include of payments to law firms and settlements for matters that are outside the normal course of business

(7) Acquisition and integration costs include restructuring and severance and are related to costs incurred after the purchase of businesses, such as the acquisitions of Rocket, In Bet, Cadillac Jack and RocketPlay, to integrate operations

For information contact:

Julia Boguslawski, Chief Marketing Officer & EVP of Investor Relations

PlayAGS, Inc.

702-724-1125

[email protected]

Steven Kopjo, Director of SEC Reporting & Investor Relations

PlayAGS, Inc.

702-724-1155

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March 2018 Social Casino Table Games Premium EGMs Orion Core EGMs ICON Specialty EGMs Big Red Table Equipment Q4 2017 Results Presentation Exhibit 99.2

1 This presentation and information contained herein constitutes confidential information and is provided to you on the condition that you will hold it in strict confidence and not reproduce, disclose, forward or distribute it in whole or in part, other than to your directors, officers and employees who have a need to know such information, without the prior written consent of AGS. This presentation contains statements that constitute forward-looking statements which involve risks and uncertainties, including such risks and uncertainties described in the Annual Report on Form 10-K of PlayAGS, Inc. (“AGS”) for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission. These statements include descriptions regarding the intent, belief or current expectations of AGS or its officers with respect to the consolidated results of operations and financial condition, 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 and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. These statements are subject to risks, uncertainties, changes in circumstances, assumptions and other important factors, many of which are outside management’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 the management of AGS on future events. We undertake no obligation to publicly update or revise any forward-looking statement contained in this presentation, whether as a result of new information, future events or otherwise, except as required by law. In light of the risks, uncertainties and assumptions, the forward-looking events discussed in this presentation might not occur, and our actual results 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”), Adjusted EBITDA and other measures that are non-GAAP financial measures. Management believes that EBITDA and Adjusted EBITDA and related measures are commonly reported by companies and widely used by investors as indicators of a company’s operating performance. There are other non-GAAP financial measures which should be considered only as a supplement to, and not as a superior measure to, financial measures prepared in accordance with GAAP. Please refer to the last slide of this presentation for a reconciliation of certain non-GAAP financial 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 the information contained herein may change at any time without notice. Except as required by applicable law, we do not have any responsibility 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’s views as of this date, all of which are subject to change. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by third parties. The information contained herein is subject to change, completion or amendment and we are not under any obligation to 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 from third parties. The information contained herein is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

2 SUMMARY OF Q4 AND FY 2017 FINANCIAL PERFORMANCE $40.3 $54.2 $0.7 $1.6 $1.8 $1.9$42.7 $57.7 Q4 '16 Q4 '17 EGM Table Products Interactive Revenue Adjusted EBITDA $156.4 $199.9 $2.7 $4.1 $7.7 $8.0 $166.8 $212.0 FY 2016 FY 2017 EGM Table Products Interactive ($ in mm) ($ in mm) $23.0 $26.3 $22.1 $26.4 Q4 '16 Q4 '17 Tables: ($0.3) Interactive: ($0.7) Tables: $0.2 Interactive: ($0.1) Table: ($0.3 Interactive: ($0.6) Table: $0.2 Interactive: ($0.1) $91.7 $107.8 $85.3 $106.8 FY 2016 FY 2017 Tables: 1 7) 4 7 Tables: ($0.5) 4 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. Recurring Revenue $45.2 Recurring Revenue $170.3

3 2017 BUSINESS HIGHLIGHTS  Launch of Orion Portrait in Q1 2017; ended year with ~1,900(1) units  Achieved over 5% ship share(2) in 2H 2017  2,565 EGMs sold in 2017 vs 465 in 2016 (452% increase)  Optimized ~1,600 legacy EGM units in 2017  Grew the recurring EGM base by more than 2,900 units in 2017  Continued success of ICON core cabinet; ended year with over 4,700(1) units  Acquisition of ~1,500 Class II units from Rocket Gaming in Q4 2017  Table Products segment EBITDA positive in Q4 2017  Launched 7 new table products in 2017  Acquisition of nearly 500 table game units from In Bet Gaming in Q4 2017  Interactive segment EBITDA positive in December 2017  Successful launch of our new B2B Social White Label Casino platform  AGS selected as one of Nation’s Best & Brightest Companies to Work For® (1) Includes sales, leases and trials (2) Q4 Eilers Survey

4 203 465 2,565 2015 2016 2017 EGM PERFORMANCE OVERVIEW Class II 11,952 Intl 7,727 Class III 2,909 VLT 1,217 EGM Installed Base(1) 23,805 leased EGMs EGM Revenue and Adj. EBITDA 50% Huge Growth in Sold EGMs Achieved +5% ship share in Q4 17 vs. <1% two years ago ~50% gross profit margin(3) 33% 12% Brazil & Philippines upside Steady Ramp in Number of Leased EGMs ~100% recurring business; ~80% gross profit margin(2) +15% +23% +12% Y-o-Y Growth  High recurring revenue  Strong relationships  Stable business 5% Note: All financial figures include contribution of Cadillac Jack following acquisition in May 2015. (1) Inclusive of ~1,500 units acquired from Rocket in December 2017 (2) Gross Profit Margin for leased units = EGM gaming operations revenue less EGM cost of gaming operations, divided by EGM gaming operations revenue for FY2017 (3) Gross Profit Margin for sold units defined as EGM equipment sales revenue less Cost of equipment sales, divided by EGM equipment sales revenue for FY2017 $119.6 $156.4 $199.9 $66.3 $91.7 $107.8 2015 2016 2017 EGM Revenue EGM Adjusted EBITDA ($ in mm) 13,139 13,953 16,078 6,112 6,898 7,727 19,251 20,851 23,805 2015 2016 2017 Domestic International Recurring Revenue $113.5 $144.5 $158.3 18.1% CAGR ($ in mm) ~700 Units Sold in Q4 17

5 Table Products Installed Base and ALP TABLE PRODUCTS PERFORMANCE OVERVIEW 815 1,500 2,400 2015 2016 2017 ~70% Side Bets ~25% Progressives ~5% Premium Table Revenue Adj. EBITDA $1.7 $2.7 $4.1 2015 2016 2017 ($1.4) ($1.7) ($0.5) 2015 2016 2017 ($ in mm) ($ in mm) ALP ($ in mm) $171 $194 $171  Over 30 different products, including premium table games (poker and blackjack derivatives), side bets, progressive systems, card shufflers and table signage  Full quarter contribution of In Bet assets  125+ Bonus Spin units in the field  Quadrupled Buster Blackjack installed base since acquisition in September 2015  Adjusted EBITDA positive in Q4 ‘17      ~100% Recurring Q4 17 $0.2

6 INTERACTIVE PERFORMANCE OVERVIEW $2.0 $7.7 $8.0 2015 2016 2017 ($2.5) ($4.7) ($0.4) 2015 2016 2017 Interactive Revenue Adj. EBITDA ($ in mm) ($ in mm)  B2C - continued focus on optimizing marketing spend by decreasing user acquisition fees  ARPDAU increased by ~10% to $0.54 in Q4 due to marketing optimization and increased attention on player  Adjusted EBITDA positive in December  Significant EBITDA improvement in 2017 compared in 2016  Ended the year with six signed agreements for Social WLC, our B2B offering     

7 Pro Forma Capitalization ($ in mm) CAPITAL STRUCTURE UPDATE  AGS priced its IPO on January 25th (NYSE: AGS) • 10,250,000 shares offered at $16.00 per share • Day 1 trading performance ( 15.6%), 31%+ since IPO(1) • Greenshoe option was exercised on February 27, 2018  Repricing overview: • On February 6, 2018, AGS repriced its existing $512.6 million B term loan due February 2024 • Reprice from L + 550 bps to L + 425 bps, saving over $6 million in annual interest expense 12/31/17 Adj. Pro Forma Rate Maturity Capitalization Cash $19 $18 $37 $30 million existing revolver – – – L + 4.25% 6/6/2022 First li term loan 513 – 513 L + 4.25% 2/15/2024 Other 3 – 3 Various – Total first lien debt $515 $515 HoldCo PIK notes $153 (153) – 11.25% 5/28/2024 Total debt $668 $515 Total net debt 649 478 (1) As of 3/13/18.

8 STRATEGIC INITIATIVES TO DRIVE GROWTH 1. Continued Penetration of the Orion Portrait Cabinet and Securing Additional Banks of ICON  Opportunity to grow footprint in NV, CA, MS, LA, MD, etc.  +15 new titles for Orion Portrait to launch in 2018 2. New Market Entry for EGMs and Table Products  AGS obtained its gaming license in Ohio in Q1 2018  Prospective: MA, Canada, PA, CO 3. New Products to Drive Growth  New Orion Slant set to launch in Q2 2018; “Core Plus” cabinet • +20 new titles for Orion Slant to launch in 2018  STAX multi-level progressive jackpot system • Received GLI approval • Received Casino Journal’s Top 20 Most Innovative Gaming Technology Products Award  B2B Social WLC and RMG opportunities 4. International Expansion Opportunities  Alora video bingo cabinet touched ground in Philippines in Q1 2018  If legalization of regulated gaming is passed, Brazil presents additional upside

9 Market Stage Jurisdiction Estimated Total Units in State(1) AGS Estimated Current Market Share Established / Class II Texas 4,097 41.7% Alabama 6,602 40.6% Oklahoma 74,737 9.2% Ramping Florida 22,081 8.2% Montana 17,681 3.3% California 72,704 1.8% Early Entry Mississippi 30,377 0.8% New York 34,498 0.9% Iowa 19,254 0.5% New Mexico 20,524 0.5% Indiana 19,047 0.5% Louisiana 41,910 0.4% Michigan 31,557 0.5% Nevada 161,701 0.4% Ontario 22,794 0.1% Ohio 18,526 0.0% Alberta 20,492 0.0% Manitoba 10,099 0.0% Saskatchewan 7,172 0.0% Other(2) 215,400 1.9% Prospective Other(3) 130,667 0.0% Total 981,920 2.1% SIGNIFICANT WHITESPACE OPPORTUNITY 27% 12% 12% AGS Q4 ship share demonstrates path to further market share growth (1) Per Eilers & Krejcik Slot & Table Count 3Q17 (2) Other Early Entry jurisdictions include AZ, CT, DE, ID, IL, KS, MD, MN, ND, NE, NJ, NC, OR, SD, WA, WI and WY (3) AGS is not currently licensed in U.S. states of AK, AR, CO, KY, ME, MA, MO, PA, RI, WV and Canadian provinces of British Columbia, New Brunswick, Newfoundland & Labrador, Nova Scotia, Prince Edward Island and Quebec  Solid recurring revenue base and market leadership in core markets of TX, AL and OK  AGS has aggressively secured licenses in, and begun to penetrate, key Class III markets (e.g., NV, Canada, MS)  Orion Portrait is driving the growth in early-entry markets  Recent ship share gains far in excess of current market share  AGS is not dependent on the replacement cycle to grow  1% market share when excluding established markets      

10 FY 2018 OUTLOOK  The Company expects to generate adjusted EBITDA, a non-GAAP financial measure defined below, of $124 - $130 million in 2018, representing growth of approximately 16%-22% compared to the prior year period.  AGS expects 2018 capital expenditures to be in the range of $55 - $60 million, compared to the prior year period, reflecting an expectation for a continued increase in its installed base in both existing and new markets. ($ in mm) 2016 2017 2018 guidance Adj. EBITDA $85.3 $106.8 $124 - $130 Capex $40.7 $57.5 $55 - $60

APPENDIX

12 COMPREHENSIVE OPERATIONAL SUMMARY ($ in mm, except RPD, ASP, ALP and ARPDAU) Operational and other data Q1 Q2 Q3 Q4 2016 Q1 Q2 Q3 Q4 2017 Revenues by segment EGM $37.9 $39.9 $38.4 $40.3 $156.4 $45.0 $47.4 $53.3 $54.2 $199.9 Table products 0.7 0.6 0.7 0.7 2.7 0.6 0.7 1.1 1.6 4.1 Interactive 1.7 2.1 2.2 1.8 7.7 2.1 2.0 2.0 1.9 8.0 Total revenue $40.2 $42.6 $41.2 $42.7 $166.8 $47.8 $50.1 $56.4 $57.7 $212.0 Adjusted EBITDA by segment EGM $23.8 $24.0 $20.9 $23.0 $91.7 $25.2 $26.5 $29.8 $26.3 $107.8 % margin 62.8% 60.1% 54.6% 57.2% 58.6% 56.0% 55.9% 55.8% 48.6% 53.9% Table products (0.5) (0.6) (0.4) (0.3) (1.7) (0.2) (0.3) (0.2) 0.2 (0.5) Interactive (2.0) (1.4) (0.6) (0.7) (4.7) (0.1) (0.1) (0.1) (0.1) (0.4) Total Adjusted EBITDA $21.3 $22.0 $20.0 $22.1 $85.3 $24.9 $26.1 $29.4 $26.4 $106.8 % margin 52.8% 51.7% 48.4% 51.7% 51.2% 52.1% 52.1% 52.1% 45.9% 50.4% EGM segment Total installed base units 19,747 20,014 20,108 20,851 20,851 21,204 21,479 22,015 23,805 23,805 Total revenue per day $20.52 $20.33 $19.78 $18.55 $19.78 $19.93 $19.99 $19.65 $19.95 $19.88 EGM units sold 24 115 66 260 465 453 574 842 696 2,565 Average sales price $16,868 $14,317 $14,361 $15,108 $14,897 $15,695 $15,840 $15,890 $17,676 $16,329 Table products segment Table products install base 923 1,091 1,205 1,500 1,500 1,691 1,754 2,350 2,400 2,400 Average monthly lease price $259 $187 $186 $149 $194 $125 $124 $151 $228 $171 Interactive segment Average MAU 203,183 222,016 207,151 207,009 209,840 192,560 183,912 194,239 200,628 192,835 Average DAU 38,381 44,092 42,953 40,488 41,478 38,534 37,191 36,906 37,536 37,542 ARPDAU $0.49 $0.48 $0.47 $0.49 $0.48 $0.57 $0.58 $0.59 $0.54 $0.57

13 2  Write downs and other includes 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 relates primarily to one-time non-operating costs incurred to obtain new licenses and develop products for new jurisdictions  Legal & litigation expenses include of payments to law firms and settlements for matters that are outside the normal course of business  Acquisition and integration costs include restructuring and severance and are related to costs incurred after the purchase of businesses, such as the acquisitions of Cadillac Jack and RocketPlay, to integrate operations 1 2 3 4 5 6 7 3 4 5 6 7 1 TOTAL ADJUSTED EBITDA RECONCILIATION ($ in mm) Adj. EBITDA reconciliation Q1 Q2 Q3 Q4 2017 Net income ($12.4) ($20.1) ($4.1) ($8.5) ($45.1) Income tax (benefit) expense 2.2 1.3 1.1 (6.5) (1.9) Depreciation and amortization 18.5 18.2 16.9 18.1 71.6 Other expense (income) (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 oth r 0.2 1.9 0.5 1.8 4.5 Loss on extinguish t 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 charg 2.1 1.8 1.6 2.3 7.8 New jurisdiction and gulatory licensing costs 0.2 0.5 0.6 0.8 2.1 Legal & litigation exp nses including settlement payments 0.4 0.2 0.2 (0.2) 0.5 Acquisition & integr ion related costs 0.6 0.2 0.1 2.0 2.9 Adjusted EBITDA $24.9 $26.1 $29.4 $26.4 $106.8 ($ in mm) Adj. EBITDA reconciliation Q1 Q2 Q3 Q4 2016 Net income ($21.1) ($18.8) ($21.2) ($20.2) ($81.4) Income tax (benefit) expense (2.2) (1.6) (1.2) 1.9 (3.0) Depreciation and amortization 20.5 20.6 19.4 19.7 80.2 Other expense (income) 4.4 1.5 0.4 1.1 7.4 Interest income (0.0) (0.0) (0.0) (0.0) (0.1) Interest expense 4 6 14 6 1 9 15 8 60 0 Write downs a d o h r 0 1 0 2 9 1 1 3 3 Loss on exti guish en and modification of debt – – – – – adjustments 1 1 0 1 0 2 1 8 O her no -cash charges 1 7 3 6 1 8 1 8 8 9 New jurisdiction and r gulatory licensing costs 0 0 0 1 0 8 0 4 1 3 Legal & litigation expe ses including settlement payments 7 0 5 4 0 1 1 6 Acquisition & integrati n relate costs 1.3 1 0 2.7 4 5 4 Adjusted EBITDA $21 3 $22 0 $2 0 $22 1 $85 3 2 3 4 5 6 7 1

14 Unless otherwise indicated or the context otherwise requires, the following terms in this presentation have the meanings set forth below:  Adjusted EBITDA: Total adjusted EBITDA is not a presentation made in accordance with GAAP. Our use of the term total adjusted EBITDA may vary from others in our industry. Total adjusted EBITDA should not be considered as an alternative to operating income or net income  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  Monthly Active Users (MAU): MAU is a count of monthly unique visitors to a site  Recurring Revenue: Equal to the Gaming Operations Revenue line of our audited financial statements  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 recurring revenue table products installed on a specified date TERMS USED IN THIS PRESENTATION

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Form 8-K PlayAGS, Inc. For: Mar 14

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