PlayAGS, Inc.

Good day and welcome to the AGS Q3 2020 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would like now to turn the conference over to Brad Boyer, VP of Investor Relations, Corporate Development, and Strategy. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Welcome to AGS's third quarter 2020 earnings conference call. With me today are David Lopez, CEO, and Kimo Akiyona, CFO. A slide presentation reviewing our key operational and financial highlights for the third quarter 2020 can be found on our Investor Relations website, investors.playags.com. On today's call, we will provide an overview of our Q3 2020 financial performance and offer perspective on our current financial outlook. This conference call includes forward-looking statements. Any statement that refers to expectations, projections, or other characterizations of future events, including financial projections or future market conditions, is a forward-looking statement based on assumptions today. Actual results may differ materially from those expressed in these forward-looking statements, and we make no obligation to update our disclosures. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the earnings release that we issued today, as well as risks described in our annual report on Form 10-K, particularly in the section of these documents titled Risk Factors. Our commentary today will also include non-GAAP financial measures. We believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our earnings release issued today. Please refer to our filings with the SEC for more information. With that, I'd like to turn the call over to our CEO, David Lopez.

Thanks, Brad, and good afternoon, everyone. As most of you on the call can relate, it's hard to believe that it's been nearly eight months since the World Health Organization declared the outbreak of COVID-19 a global pandemic. While a lot has changed in the past eight months, our focus at AGS remains the same. Create an environment for our employees that fosters a strong corporate culture Consistently and prudently allocate capital and other resources to support creativity and the delivery of high performing game content. And finally, carefully manage our debt obligations and liquidity to ensure we are positioned to endure in the face of macroeconomic uncertainty. With all that said, I'm proud of the way our team rallied together to deliver better than expected third quarter 2020 financial results. On our last call, I noted that I believe we had the best pipeline of product and new game themes in the company's history. These new offerings, combined with our resilient base of recurring revenue coming back stronger than expected and ahead of the rebuild in our operating costs, allowed us to deliver $27 million of adjusted EBITDA in the quarter. I'm particularly encouraged by our performance, considering the unique set of challenges and uncertainties that continue to face the North American gaming industry and consumer more broadly. Given the only certainty related to COVID is uncertainty, we are keenly focused on addressing matters and opportunities within our control to ensure we emerge from the pandemic a stronger and more nimble company. Along those lines, we are encouraged by the green shoots emerging across all three of our product segments. First, with our electronic gaming machine or EGM segment, Our long-standing commitment to investing in R&D, coupled with ongoing refinement of our personnel, has our for-sale and recurring businesses on an encouraging trajectory. We shipped a total of 387 units in the third quarter, including sales into 11 U.S. states and two Canadian provinces. Our recently launched Imperial 88 and Ultimate Choice jackpot families of games continue to perform nicely above house average, strengthening our new unit sales efforts. Additionally, giving the strong mix of our Orion family of cabinets in our sales base, our ASP or average sales price eclipsed $18,000. Looking ahead, though COVID has the potential to compromise operators' propensity to spend capital on new game purchases, We believe our introduction of several newly highly anticipated form factors, including the Orion curve and multiple new high performing game franchises position us to command our fair share of future unit sales opportunities. We are even more enthused about the prospects for our recurring revenue business supported by our recent launched premium offerings, Orion Starwall and Orion Rise. Through the end of the third quarter, we installed 57 seats of Starwall, including 45 seats in the third quarter alone, with installs in both tribal and commercial jurisdictions. Starwall's initial performance has exceeded our expectations, with the games performing well above house average. Looking ahead, though encouraged by Starwall's performance to date, it's important to note we will remain selective and only deploy new units for opportunities that deliver superior returns on our invested capital. Looking beyond Starwall, the introduction of Orion Rai should further strengthen our ability to take advantage of additional opportunities to grow our premium recurring revenue footprint. According to the Eilers market data report, premium recurring revenue units generated 1.3 billion of revenue in 2019, and AGS commanded less than 1% share of the revenue generated within the segment. To be fair, we have not had the product to compete in the premium recurse space as our legacy big red cabinet is the only AGS offering captured by Eilers in the segment. Looking ahead, we expect to leverage our world-class hardware offerings and deep pipeline of new game themes to strategically grow our presence in the premium recurse segment. Turning to Oklahoma, We are pleased with the way our Oklahoma install base has performed since casinos began reopening in May. Pent-up consumer demand, a resilient core gambler, and fewer offerings competing for a share of consumers' entertainment wallet continue to support GGR growth throughout the Oklahoma market in the third quarter, and our install base benefited from this encouraging trend. Looking ahead, we plan to leverage our new high-performing game content and recently launched premium offerings to further propel our Oklahoma business forward. Additionally, we intend to take advantage of opportunities that present themselves to further enhance the efficiency of our Oklahoma capital footprint. All told, we are encouraged by our early signs of stabilization in our Oklahoma base and believe the business has the right leadership team and strategic plan in place to continue to improve moving forward. Shifting to our table game segment, we continue to look for opportunities to leverage our growing product portfolio and take advantage of operators' heightened cost focus to expand our site license portfolio. Through the end of the third quarter, we have gone live with three site license agreements, which we expect to collectively generate over $1 million of annualized revenue. Operators' interest in the site license concept continues to grow, presenting a unique growth opportunity for our table game business as site licenses run our presence and operators table pits while simultaneously allowing us to establish a longer term commitment from those customers. In addition to site licenses, we continue to achieve measured success with our high performing suite of table game progressive products. We ended the third quarter with over 1400 progressive units installed and operator interest has held steady despite the challenges created by COVID. Lastly, we remain committed to growing and diversifying our shuffler business and believe our customers' post-COVID search for additional operating efficiencies makes now an opportune time to broaden our presence in the shuffler space. To that end, we expect to submit Pax S proprietary table game shuffler to GOI for regulatory approval by end of the year. Looking ahead, we continue to see a unique opportunity in the market for efficient and affordable shuffler products, an opportunity we intend to capitalize on in the years ahead. Lastly, our interactive segment continues to benefit from the rollout of real money online gaming in additional jurisdictions throughout the United States, with third quarter RMG revenues establishing a new quarterly record. Looking forward, we are strategically positioning our real money gaming business to be able to swiftly enter new markets as they come online. While we also look to broaden our operator partner relationships and regulated jurisdictions. In social, we remain focused on launching our content with new and existing B2B partners, as well as our B2C social apps with newly signed deals, helping to further stabilize our performance within segment. In the end, I believe we have the right people, processes, and product in place to not only endure the unique set of challenges born of the COVID pandemic, but to emerge a stronger and more nimble company as the world gradually returns to normal. To that end, I would like to thank all of our employees across the globe for their tireless dedication and support over the past eight months. I truly believe our recent experiences will only help to strengthen our resolve moving forward. With that, I will turn the call over to Kimo to walk you through the quarter in greater detail.