Gaming equipment provider AGS said Monday it will postpone its annual shareholder meeting until July 1, rather than switch its planned May 8 gathering to a virtual format.
Meanwhile, the Las Vegas-based AGS implemented short-term furloughs and company-wide salary reductions and reduced its workforce by 10% on April 6 to deal with the nationwide casino-industry closures caused by the coronavirus outbreak.
“We expect that our furloughed employees will continue to receive all their employee benefits during the furlough,” AGS said in a filing with the Securities and Exchange Commission.
As for the annual meeting switch, AGS Chief Marketing Officer Julia Boguslawski said the company looked into various virtual meeting formats but decided to stay with its preference for an in-person meeting. Printing concerns and mail delays that could have led to delays in delivering proxy materials to shareholders factored into the postponement. The company’s proxy materials are printed in New York, which has been hit severely by the pandemic.
Several gaming companies have already switched their meetings to virtual platforms because of social distancing protocols and public health policy due to COVID-19 guidelines.
On Thursday, Las Vegas-based regional casino operator Boyd Gaming was the first company to hold its discussion with shareholders via an audio webcast. Others scheduled for virtual annual meetings are VICI Properties, MGM Resorts International, MGM Growth Properties, and Twin River Worldwide.
AGS, which has more than 760 full-time employees, said in an SEC filing it was also “reviewing alternatives for additional financing and may pursue one or more of these alternatives depending on the length of the casino closures in markets and jurisdictions where we earn our revenues.”
Other gaming equipment providers have taken similar steps.
Scientific Games furloughed an undisclosed number of employees, reduced pay and work hours for others, and sliced the salaries of its executive leadership by 50%. CEO Barry Cottle gave up his entire salary.
International Game Technology reduced the base salary for “senior leaders” and implemented “short-term furlough programs for certain employee groups.” The Providence Business News reported on April 2 that IGT was furloughing 320 workers at its Rhode Island offices.
Everi Holdings implemented targeted furloughs and company-wide salary reductions in an effort to preserve its cash on hand. CEO Mike Rumbolz gave up his annual salary, and the company’s executive team elected to reduce their salaries by 70%.
AGS ended 2019 with $519 million in long term debt but without any near-term maturities. The company had $13 million on hand and drew down $30 million under a credit line last month, improving its total liquidity to $43 million.
According to an SEC filing, AGS said it borrowed the funds as “a precautionary measure” to increase the company’s cash position and “facilitate financial flexibility in light of the current uncertainty in the global markets.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
