PlayAGS, Inc.

Good day and welcome to the AGS fourth quarter earnings conference 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. Please note that this event is being recorded. I would now like to turn the conference over to Brad Boyer, Vice President of Investor Relations and Corporate Strategy. Please go ahead, sir.

Thank you, Operator, and good afternoon, everyone. Welcome to AGS's fourth quarter and full year 2020 earnings conference call. With me today are David Lopez, CEO, and Kimo Akiyama, CFO. A slide presentation reviewing our key operational and financial highlights for the fourth quarter and full year 2020 can be found on our investor relations website, investors.playags.com. On today's call, we will provide an overview of our Q4 and full-year 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 would like to turn the call over to our CEO, David Lopez.

Thank you, Brad, and good afternoon, everyone. To say 2020 was an unprecedented year might be the understatement of the century. That said, I'm a big believer in a famous quote, out of adversity comes opportunity. As you can imagine, we as an organization faced our fair share of adversity throughout 2020. In addition to quickly realigning our business to meet the challenges presented, by an extended shutdown of casinos across the globe, we successfully shored up our balance sheet and implemented measures to ensure we were positioned to support casino operators as their businesses began to come back online. Successful execution of the feats I just described required the commitment of a passionate, loyal, and hardworking team. To that end, I'm extremely honored by and thankful for the tireless efforts put forth by all of our AGS team members to ensure we not only manage through the COVID storm, but emerge as a stronger, more resilient company. Looking beyond the many challenges introduced by COVID, one of the bright spots, to the extent there was one, is that the pandemic slowed the pace of life. Business travel grounded to a halt, corporate offices turned dark for a while, and kitchen tables got to work out. As a company, we use this time to refocus our efforts on solidifying our foundation with a keen focus on three key areas, people, products, and processes. As a result, I believe we are better positioned today to achieve success across all three of our business segments than at any other point in our company's history. Within our electronic gaming machines or EGM segment, we continue to leverage our new high-performing product offering, the Orion StarWall, to strategically grow our presence within the industry's premier recurring revenue segment. At quarter end, our StarWall footprint eclipsed 300 games and operator demand remained healthy. I'm equally as excited about prospects for our Orion Curve Premium Package, scheduled to formally launch in the back half of 2021. Curve Premium will be offered in a socially distanced carousel format. We plan to lead with an extension of our player favorite, Rake and Vacant game theme, both of which should help stimulate demand for this new form factor. Within the for-sale business, we continue to refine our hardware offerings and deepen our content catalog to ensure we are well-positioned in advance of the anticipated improvements in operator slot capital spending, which many industry experts believe could occur in the back half of 2021. We currently have our high-performing Ultimate Choice jackpot family of games available on the Orion Curve cabinet and remain committed to improving our content creation execution both with respect to the quality and quantity of new games. In an effort to combat COVID's negative effect on new unit sales demand, we have looked for our opportunities to strategically create our own demand by expanding our businesses into new product adjacencies, including historical horse racing, or HHR as we call it. During the fourth quarter, we executed our first sale of units into the Virginia HHR market and believe our strong initial gain performance could stimulate future demand for our products throughout the state. Additionally, the recent favorable legislative ruling in Kentucky broadens the addressable market for our HHR content and has the potential to accelerate sales demand in the coming quarters. On the Class 2 front, We remain committed to nurturing our nearly 12,000-unit Class 2 install base, both inside and outside of Oklahoma. To that end, we recently made our Imperial 88 family of games available for play in the Class 2 format and plan to leverage our new technology platform to significantly increase the number of new Class 2 titles released to the market in 2021. In addition to new content, it is important to remember our premium game strategy extends to Class 2 as well. Over 15% of our StarWall games installed to date have been placed in Class 2 markets, and we see considerable opportunity for our Curve Premium and Orion Rise cabinets within the Class 2 space. Turning to our table products business, despite the COVID-related challenges facing our casino partners' table game operations, demand for our industry-leading progressive products continue to grow. In the fourth quarter alone, we achieved a 127-unit sequential increase in our progressive install base, supported by strong demand for our Super 4 stacks and Royal Mine progressive products. Additionally, as operators continue to look for ways to identify incremental margin enhancement opportunities on their floor, demand for our site license offerings continues to build. With six site licenses live at year end. Looking ahead, I believe we have the right products and teams to continue growing our share of Casino's overall table product spend, particularly as new products such as our Bonus Spin Extreme Progressive and Tax S hand forming shufflers are introduced to the market later in the year. Finally, I've become increasingly encouraged by the more consistent performance achieved within our interactive segment. For the fourth consecutive quarter, Interactive delivered strong year-over-year revenue growth and positive adjusted EBITDA. As most of you on the call can attest, the expansion of regulated gaming from the brick and mortar to mobile and online channels could potentially represent the industry's greatest growth opportunity of the 21st century. Having said that... we remain deeply committed to ensuring we have the right people and technology in place to emerge as a more affordable content provider within this growing market. Looking ahead, I believe we are well positioned to execute on all four areas of our real money gaming growth strategy, which includes broadening our partnerships to include additional B2C providers, expanding the amount of AGS content available for play online, participating in new regulated markets as they are approved, and deepening partnerships with existing third-party content providers. With respect to new markets, we continue to see growing legislative interest in iGaming and believe new jurisdictional launches in both the U.S. and Canada could strengthen our future interactive segment growth metrics. I will close by once again thanking all of our AGS team members for their tireless commitment during what was truly a challenging year. I believe we have used the last year as an opportunity to refine our strategy and improve our operational efficiencies. And it is now time for us to lean on the sturdier foundation we created to achieve greater levels of success and continue moving the organization forward. With that, I will turn the call over to Kimo to provide additional perspective on our financial results, liquidity position, and current outlook for the business.