Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | May 06, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38136 | |
Entity Registrant Name | Accel Entertainment, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-1350261 | |
Entity Address, Address Line One | 140 Tower Drive | |
Entity Address, City or Town | Burr Ridge | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60527 | |
City Area Code | 630 | |
Local Phone Number | 972-2235 | |
Title of 12(b) Security | Class A-1 Common Stock, par value $.0001 per share | |
Trading Symbol | ACEL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 83,746,192 | |
Amendment Flag | false | |
Document Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001698991 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total net revenues | $ 301,817 | $ 293,208 |
Operating expenses: | ||
Cost of revenue (exclusive of depreciation and amortization expense shown below) | 209,167 | 203,554 |
Cost of manufacturing goods sold (exclusive of depreciation and amortization expense shown below) | 1,159 | 1,408 |
General and administrative | 47,634 | 43,018 |
Depreciation and amortization of property and equipment | 10,434 | 9,063 |
Amortization of intangible assets and route and customer acquisition costs | 5,438 | 5,242 |
Other expenses, net | 2,426 | 3,251 |
Total operating expenses | 276,258 | 265,536 |
Operating income | 25,559 | 27,672 |
Interest expense, net | 8,660 | 7,888 |
Loss on change in fair value of contingent earnout shares | 4,716 | 4,602 |
Income before income tax expense | 12,183 | 15,182 |
Income tax expense | 4,767 | 6,000 |
Net income | $ 7,416 | $ 9,182 |
Earnings per common share: | ||
Basic (in usd per share) | $ 0.09 | $ 0.11 |
Diluted (in usd per share) | $ 0.09 | $ 0.11 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 84,298 | 86,885 |
Diluted (in shares) | 85,300 | 87,132 |
Comprehensive income | ||
Net income | $ 7,416 | $ 9,182 |
Unrealized gain (loss) on interest rate caplets (net of income taxes of $405 and $(829), respectively) | 1,081 | (2,166) |
Comprehensive income | 8,497 | 7,016 |
Net gaming | ||
Total net revenues | 288,137 | 279,380 |
Amusement | ||
Total net revenues | 6,129 | 6,798 |
Manufacturing | ||
Total net revenues | 2,209 | 2,122 |
ATM fees and other | ||
Total net revenues | $ 5,342 | $ 4,908 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Income taxes for unrealized gain on interest rate caplets | $ 405 | $ (829) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 253,919 | $ 261,611 |
Accounts receivable, net | 13,737 | 13,467 |
Prepaid expenses | 8,092 | 6,287 |
Inventories | 7,841 | 7,681 |
Interest rate caplets | 8,912 | 8,140 |
Other current assets | 16,763 | 15,408 |
Total current assets | 309,264 | 312,594 |
Property and equipment, net | 271,414 | 260,813 |
Noncurrent assets: | ||
Route and customer acquisition costs, net | 20,458 | 19,188 |
Location contracts acquired, net | 173,206 | 176,311 |
Goodwill | 101,554 | 101,554 |
Other intangible assets, net | 19,933 | 20,542 |
Interest rate caplets, net of current | 5,342 | 4,871 |
Other assets | 17,956 | 17,020 |
Total noncurrent assets | 338,449 | 339,486 |
Total assets | 919,127 | 912,893 |
Current liabilities: | ||
Current maturities of debt | 28,485 | 28,483 |
Current portion of route and customer acquisition costs payable | 1,480 | 1,505 |
Accrued location gaming expense | 9,352 | 9,350 |
Accrued state gaming expense | 19,076 | 18,364 |
Accounts payable and other accrued expenses | 39,046 | 36,012 |
Accrued compensation and related expenses | 8,900 | 12,648 |
Current portion of consideration payable | 2,791 | 3,288 |
Total current liabilities | 109,130 | 109,650 |
Long-term liabilities: | ||
Debt, net of current maturities | 511,425 | 514,091 |
Route and customer acquisition costs payable, less current portion | 4,702 | 4,955 |
Consideration payable, less current portion | 4,252 | 4,201 |
Contingent earnout share liability | 36,544 | 31,827 |
Other long-term liabilities | 7,144 | 7,015 |
Deferred income tax liability, net | 43,801 | 42,750 |
Total long-term liabilities | 607,868 | 604,839 |
Stockholders’ equity: | ||
Preferred Stock, par value of $0.0001; 1,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 0 | 0 |
Class A-1 Common Stock, par value $0.0001; 250,000,000 shares authorized; 95,266,660 shares issued and 83,778,268 shares outstanding at March 31, 2024; 95,016,960 shares issued and 84,123,385 shares outstanding at December 31, 2023 | 8 | 8 |
Additional paid-in capital | 204,456 | 203,046 |
Treasury stock, at cost | (118,252) | (112,070) |
Accumulated other comprehensive income | 9,017 | 7,936 |
Accumulated earnings | 106,900 | 99,484 |
Total stockholders' equity | 202,129 | 198,404 |
Total liabilities and stockholders' equity | $ 919,127 | $ 912,893 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Class A-1 Common Stock | ||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 95,266,660 | 95,016,960 |
Common stock, shares outstanding (in shares) | 83,778,268 | 84,123,385 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2022 | 86,674,390 | |||||
Beginning balance at Dec. 31, 2022 | $ 178,590 | $ 9 | $ 194,157 | $ (81,697) | $ 12,240 | $ 53,881 |
Beginning balance (in shares) at Dec. 31, 2022 | (7,829,661) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock (in shares) | (476,718) | (476,718) | ||||
Repurchase of common stock | (4,206) | $ (4,206) | ||||
Stock-based compensation | 1,688 | 1,688 | ||||
Exercise of stock-based awards, net of shares withheld (in shares) | 247,153 | |||||
Exercise of stock-based awards, net of shares withheld | (602) | (602) | ||||
Unrealized gain (loss) on interest rate caplets, net of taxes | (2,166) | (2,166) | ||||
Net income | 9,182 | 9,182 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 86,444,825 | |||||
Ending balance at Mar. 31, 2023 | 182,486 | $ 9 | 195,243 | $ (85,903) | 10,074 | 63,063 |
Ending balance (in shares) at Mar. 31, 2023 | (8,306,379) | |||||
Beginning balance (in shares) at Dec. 31, 2023 | 84,123,385 | |||||
Beginning balance at Dec. 31, 2023 | 198,404 | $ 8 | 203,046 | $ (112,070) | 7,936 | 99,484 |
Beginning balance (in shares) at Dec. 31, 2023 | (10,893,575) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Repurchase of common stock (in shares) | (594,817) | (594,817) | ||||
Repurchase of common stock | (6,182) | $ (6,182) | ||||
Stock-based compensation | 2,350 | 2,350 | ||||
Exercise of stock-based awards, net of shares withheld (in shares) | 249,700 | |||||
Exercise of stock-based awards, net of shares withheld | (940) | (940) | ||||
Unrealized gain (loss) on interest rate caplets, net of taxes | 1,081 | 1,081 | ||||
Net income | 7,416 | 7,416 | ||||
Ending balance (in shares) at Mar. 31, 2024 | 83,778,268 | |||||
Ending balance at Mar. 31, 2024 | $ 202,129 | $ 8 | $ 204,456 | $ (118,252) | $ 9,017 | $ 106,900 |
Ending balance (in shares) at Mar. 31, 2024 | (11,488,392) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 7,416 | $ 9,182 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 10,434 | 9,063 |
Amortization of intangible assets and route and customer acquisition costs | 5,438 | 5,242 |
Amortization of debt issuance costs | 455 | 449 |
Loss on change in fair value of contingent earnout shares | 4,716 | 4,602 |
Stock-based compensation | 2,350 | 1,688 |
Loss (gain) on disposal of property and equipment | 42 | (9) |
Net loss on write-off of route and customer acquisition costs and route and customer acquisition costs payable | 118 | 321 |
Remeasurement of contingent consideration | 288 | 162 |
Payments on consideration payable | (823) | (551) |
Accretion of interest on route and customer acquisition costs payable, contingent consideration, and contingent stock consideration | 296 | 383 |
Deferred income taxes | 646 | 2,315 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (1,634) | 589 |
Accounts receivable, net | (270) | 3,426 |
Inventories | (160) | (529) |
Route and customer acquisition costs | (1,883) | (730) |
Route and customer acquisition costs payable | (353) | (424) |
Accounts payable and accrued expenses | 4,951 | 5,588 |
Accrued compensation and related expenses | (3,748) | (3,903) |
Other assets | 471 | 1,119 |
Net cash provided by operating activities | 28,750 | 37,983 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (20,635) | (21,461) |
Proceeds from the sale of property and equipment | 180 | 476 |
Advances against a portion of the purchase price on a pending business acquisition | (1,800) | 0 |
Business and asset acquisitions, net of cash acquired | (3,641) | (2,600) |
Net cash used in investing activities | (25,896) | (23,585) |
Cash flows from financing activities: | ||
Proceeds from debt | 15,000 | 8,000 |
Payments on debt | (17,875) | (12,625) |
Payments for repurchase of common stock | (6,121) | (4,206) |
Payments on interest rate caplets | (244) | (240) |
Proceeds from exercise of stock-based awards | 68 | 0 |
Payments on finance leases | (54) | 0 |
Payments on consideration payable | (132) | (168) |
Tax withholding on stock-based payments | (1,188) | (743) |
Net cash used in financing activities | (10,546) | (9,982) |
Net (decrease) increase in cash and cash equivalents | (7,692) | 4,416 |
Cash and cash equivalents: | ||
Beginning of period | 261,611 | 224,113 |
End of period | 253,919 | 228,529 |
Cash payments for: | ||
Interest, net | 7,685 | 9,275 |
Income taxes | 0 | 0 |
Supplemental schedules of noncash investing and financing activities: | ||
Purchases of property and equipment in accounts payable and accrued liabilities | 14,022 | 10,885 |
Deferred premium on interest rate caplets | 1,815 | 2,784 |
Acquisition of businesses and assets: | ||
Total identifiable net assets acquired | 3,641 | 2,600 |
Cash purchase price | $ 3,641 | $ 2,600 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Accel Entertainment, Inc. (and together with its subsidiaries, the “ Company ” or “Accel”) is a leading distributed gaming operator in the United States (“U.S.”). The Company has operations in Illinois, Montana, Nevada, Nebraska, Georgia, Iowa, and Pennsylvania. The Company is subject to the various gaming regulations in the states in which it operates, as well as various other federal, state and local laws and regulations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation and preparation : The condensed consolidated financial statements and accompanying notes were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of the Company and of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”) . In preparing our condensed consolidated financial statements, we applied the same significant accounting policies as described in Note 2 to the consolidated financial statements in the Form 10-K. Any significant changes to those accounting policies are discussed below. Interim results are not necessarily indicative of results for a full year. Use of estimates : The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates used by the Company include, among other things, the useful lives for depreciable and amortizable assets, income tax provisions, the evaluation of the future realization of deferred tax assets, projected cash flows in assessing the initial valuation of intangible assets in conjunction with business acquisitions, the selection of useful lives for depreciable and amortizable assets in conjunction with business acquisitions, the valuation of level 3 investments, the valuation of contingent earnout shares and warrants, the valuation of interest rate caplets, contingencies, and the expected term of share-based compensation awards and stock price volatility when computing stock-based compensation expense. Actual results may differ from those estimates. Segment information : The Company operates as a single reportable segment. The Company’s chief operating decision maker (“CODM”) is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of its resources. The CODM assesses the Company’s performance and allocates resources based on consolidated results, and this is the only discrete financial information that is regularly reviewed by the CODM. Revenue recognition : The Company generates revenues from the following types of services: gaming terminals, amusements, and ATMs. The Company also generates manufacturing revenue from the sales of gaming terminals and associated software. Revenue is disaggregated by type of revenue and is presented on the face of the condensed consolidated statements of operations and comprehensive income. Total net revenues for the three months ended March 31, 2024 and 2023 are further disaggregated by the primary states in which the Company operates. (in thousands) Three Months Ended March 31, 2024 2023 Net revenues by state: Illinois $ 224,863 $ 219,843 Montana 38,141 36,451 Nevada 29,209 29,961 Nebraska 5,834 3,924 Other 3,770 3,029 Total net revenues $ 301,817 $ 293,208 Recent accounting pronouncements : On November 27, 2023, the Financial Accounting Standards Board (“FASB”) is sued Accounting Standards Update ( “ASU”) 2023-07, Segment Reporting (Topic 280) : Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses regularly provided to the CODM. The amendments in this ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis. The Company is currently evaluating the potential effect that this ASU will have on its financial statement disclosures. On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid disaggregated by jurisdiction. The new requirements will be effective for annual periods beginning after December 15, 2024, and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the potential effect that this ASU will have on its financial statement disclosures. Other recently issued accounting standards or pronouncements have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on its condensed consolidated financial statements. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Raw materials and manufacturing supplies $ 5,906 $ 5,693 Finished products 1,935 1,988 Total inventories $ 7,841 $ 7,681 As of March 31, 2024 and December 31, 2023 , no inventory valuation allowance was determined to be necessary. |
Investment in Convertible Notes
Investment in Convertible Notes | 3 Months Ended |
Mar. 31, 2024 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Convertible Notes | Investment in Convertible Notes On May 31, 2023, the Company and Gold Rush Amusements, Inc. (“Gold Rush”), another terminal operator in Illinois, entered into a settlement agreement which resolved any and all lawsuits and all outstanding obligations under the Company’s investment in Gold Rush’s convertible notes. As part of the settlement, the Company received $32.5 million from Gold Rush in June 2023, which included the repayment of the face value of the convertible notes plus accrued interest as well as a $0.4 million prepayment on future amounts due. In addition, the Company has a receivable from Gold Rush of $1.4 million as of March 31, 2024, |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following as of March 31, 2024, and December 31, 2023 (in thousands): March 31, December 31, Gaming terminals, software and equipment $ 380,641 $ 361,662 Amusement, ATM and other equipment 28,536 27,182 Office equipment and furniture 3,618 3,385 Computer equipment and software 21,064 20,592 Leasehold improvements 9,349 8,281 Vehicles 20,387 19,862 Buildings and improvements 15,367 14,047 Land 2,998 2,469 Construction in progress 1,320 5,480 Total property and equipment 483,280 462,960 Less accumulated depreciation and amortization (211,866) (202,147) Total property and equipment, net $ 271,414 $ 260,813 Depreciation and amortization of property and equipment was $10.4 million and $9.1 million for the three months ended March 31, 2024 and 2023 , respectively. |
Route and Customer Acquisition
Route and Customer Acquisition Costs | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Route and Customer Acquisition Costs | Route and Customer Acquisition Costs The Company enters into contracts with third parties and its gaming locations to install and operate gaming terminals. Payments are due when gaming operations commence and then on a periodic basis for a specified period of time thereafter. Gross payments due, based on the number of live locations, were approximately $7.1 million and $7.4 million as of March 31, 2024 and December 31, 2023, respectively. Payments are due over varying terms of the individual agreements and are discounted at the Company’s incremental borrowing rate associated with its long-term debt at the time the contract is acquired. The net present value of payments due was $6.2 million and $6.5 million as of March 31, 2024 and December 31, 2023, respectively, of which approximately $1.5 million was included in current liabilities in the accompanying condensed consolidated balance sheets as of both March 31, 2024 and December 31, 2023. The route and customer acquisition cost asset was comprised of payments made on the contracts of $21.7 million and $20.0 million as of March 31, 2024 and December 31, 2023, respectively. The Company has upfront payments of commissions paid to the third parties for the acquisition of the customer contracts that are subject to a clawback provision if the customer cancels the contract prior to completion. The payments subject to a clawback were $1.0 million as of both March 31, 2024 and December 31, 2023. Route and customer acquisition costs consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, December 31, Cost $ 35,390 $ 33,855 Accumulated amortization (14,932) (14,667) Route and customer acquisition costs, net $ 20,458 $ 19,188 Amortization expense of route and customer acquisition costs was $0.5 million and $0.4 million for the three months ended March 31, 2024 and 2023 |
Location Contracts Acquired
Location Contracts Acquired | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Location Contracts Acquired | Location Contracts Acquired Location contract assets acquired in business acquisitions are recorded at acquisition at fair value based on an income approach. Location contracts acquired consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, December 31, Cost $ 287,958 $ 286,728 Accumulated amortization (114,752) (110,417) Location contracts acquired, net $ 173,206 $ 176,311 Amortization expense of location contracts acquired was $4.3 million for both the three |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company acquired various companies which were accounted for as a business combination using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations ( “ Topic 805 ” ) . The total excess of the purchase price over the tangible and intangible assets acquired and liabilities assumed was recorded as goodwill of $101.6 million as of both March 31, 2024 and December 31, 2023, of which $38.0 million was deductible for tax purposes as of March 31, 2024. Other intangible assets Other intangible assets consist of definite-lived trade names, customer relationships, and software applications. The Company determines the fair value of trade name assets acquired in acquisitions using a relief from royalty valuation method which requires assumptions such as projected revenue and a royalty rate. Other intangible assets are amortized over their estimated 7 to 20-year useful lives. Other intangible assets consist of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer Relationships 7 years $ 6,800 $ (1,781) $ 5,019 $ 6,800 $ (1,538) $ 5,262 Software Applications 8 years 7,800 (1,788) 6,012 7,800 (1,544) 6,256 Trade Names 20 years 9,800 (898) 8,902 9,800 (776) 9,024 $ 24,400 $ (4,467) $ 19,933 $ 24,400 $ (3,858) $ 20,542 Amortization expense of other intangible assets was $0.6 million for both the three months ended March 31, 2024 and 2023. Indefinite-lived intangible assets The Company also has indefinite-lived intangible assets related to operating licenses totaling $3.7 million and $2.8 million as of March 31, 2024 and December 31, 2023, respectively, which are recorded within other assets on the condensed consolidated balance sheets. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s debt as of March 31, 2024 and December 31, 2023, consisted of the following (in thousands): March 31, December 31, Senior Secured Credit Facility: Revolving credit facility $ 50,000 $ 46,000 Term Loan 306,250 310,625 Delayed Draw Term Loan 186,250 188,750 Total borrowings 542,500 545,375 Add: Remaining premium on interest rate caplets financed as debt 1,815 2,059 Less: Debt issuance costs (4,405) (4,860) Total debt, net of debt issuance costs 539,910 542,574 Less: Current maturities (28,485) (28,483) Total debt, net of current maturities $ 511,425 $ 514,091 As of March 31, 2024, the weighted-average interest rate on the Company’s borrowings was approximately 7.7%. Interest rate caplets The Company manages its exposure to some of its interest rate risk through the use of interest rate caplets, which are derivative financial instruments. On January 12, 2022, the Company hedged the variability of the cash flows attributable to changes in the 1-month LIBOR/SOFR interest rates on the first $300 million of the term loan under the Company’s existing credit agreement, as amended, by entering into a 4-year series of 48 deferred premium caplets (“caplets ”) The Company recognized an unrealized gain, net of taxes, o n the change in fair value of the caplets of $1.1 million for the three months ended March 31, 2024, a nd an unrealized loss of $2.2 million , net of taxes, for the three months ended 2023. For more information on how the Company determines the fair value of the caplets, see Note 12. T he Company also recognized interest income on the caplets of $2.6 million and $1.9 million for the three m onths ended March 31, 2024 and 2023, respectively, which is reflected in interest expense, net |
Business Acquisitions
Business Acquisitions | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Acquisitions | Business Acquisitions 2024 Business Acquisitions Great Lakes Vending On February 22, 2024, the Company acquired certain assets of Great Lakes Vending Corporation (“GLV”), an Illinois-based terminal operator. The Company acquired one operational location, as well as gaming and redemption terminal equipment. The acquisition was accounted for as an asset acquisition in accordance with Topic 805. The total purchase price was approximately $1.3 million, which the Company paid in cash at closing. The total purchase price of $1.3 million was allocated to the following assets: i) location contracts totaling $1.2 million and ii) gaming and redemption equipment totaling $0.1 million. The results of operations for GLV are included in the condensed consolidated financial statements of the Company from the date of acquisition and were not material. Doc & Eddy’s On January 10, 2024, the Company acquired Doc & Eddy’s West (“D&E”), a hospitality operation in Montana. The hospitality operation is set to be a Century-vended operation. The acquisition was accounted for as an asset purchase acquisition in accordance with Topic 805. The total purchase price was approximately $2.3 million, which the Company paid in cash at closing, and was allocated to the following assets: i) buildings totaling $1.0 million, ii) indefinite long lived assets totaling $0.9 million and iii) land totaling $0.4 million. The results of operations for D&E are included in the condensed consolidated financial statements of the Company from the date of acquisition and were not material. Subsequent event - Illinois Gaming Entertainment On May 1, 2024, the Company acquired certain assets of Illinois Gaming Entertainment LLC (“IGE”), an Illinois-based terminal operator. The Company acquired 16 operational locations, as well as gaming equipment. The total purchase price was approximately $13.7 million, of which the Company paid $11.2 million in cash at closing. The remaining $2.5 million of consideration is payable in three installments of $0.6 million which are due on the first, second and third anniversary of the acquisition with the remaining $0.7 million due on the fourth anniversary. All payments are subject to the acquired locations still being in operation on the respective anniversary date. Pending Business Acquisition On April 11, 2023, the Company entered into an agreement to acquire a distributed gaming operator in the state of Louisiana with an option to acquire a second distributed gaming operator in the state of Louisiana. In connection therewith, the Company has paid $8.2 million through the three months ended March 31, 2024, as an advance against a portion of the purchase price and is recorded within other assets on the condensed consolidated balance sheets. Furthermore, on August 10, 2023, the Company loaned the distributed gaming operator $0.3 million. The Company agreed to pay an additional $0.7 million in April 2024, against the final purchase price. 2023 Business Acquisitions Illinois Video Slot Management On December 27, 2023, the Company acquired certain assets of Illinois Video Slot Management Corp. (“IVSM”), an Illinois-based terminal operator. The Company acquired a gaming location, as well as gaming equipment. The acquisition was accounted for as an asset acquisition in accordance with Topic 805. The total purchase price was approximately $1.0 million, of which the Company paid $0.7 million in cash at closing. The remaining $0.3 million of consideration is payable in three installments of $0.1 million which are due on the first, second and third anniversary of the acquisition assuming the location is still in operation. The total purchase price of $1.0 million was allocated to the following assets: i) a location contract totaling $0.9 million and ii) gaming equipment totaling $0.1 million. The results of operations for the IVSM acquisition is included in the condensed consolidated financial statements of the Company from the date of acquisition and were not material. Illinois Gaming Entertainment On May 23, 2023, the Company acquired four operational locations from IGE, as well as gaming equipment. The acquisition was accounted for as an asset acquisition in accordance with Topic 805. The total purchase price was approximately $1.5 million, which the Company paid in cash at closing. The total purchase price of $1.5 million was allocated to the following assets: i) location contracts totaling $1.1 million and ii) gaming equipment totaling $0.4 million. On October 3, 2023, the Company acquired three additional operational locations from IGE, as well as gaming equipment. The acquisition was accounted for as an asset acquisition in accordance with Topic 805. The total purchase price was approximately $2.3 million, which the Company paid in cash at closing. The total purchase price of $2.3 million was allocated to the following assets: i) location contracts totaling $2.0 million and ii) gaming equipment totaling $0.3 million. The results of operations for both IGE acquisitions are included in the condensed consolidated financial statements of the Company from the date of acquisition and were not material. Rendezvous On February 13, 2023, the Company acquired Rendezvous, a hospitality operation in Billings, Montana. The hospitality operation is set to be a Century vended location. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with Topic 805. The total purchase price of $2.6 million was paid in cash at closing and was allocated to the following assets: i) indefinite-lived intangible assets totaling $0.8 million; ii) land totaling $0.5 million; iii) buildings totaling $0.4 million; iv) gaming equipment totaling $0.1 million, and v) goodwill totaling $0.8 million. The results of operations for Rendezvous are included in the condensed consolidated financial statements of the Company from the date of acquisition and were not material. Consideration Payable The Company has a contingent consideration payable related to certain locations, as defined in each respective acquisition agreement, which are placed into operation during a specified period after the acquisition date. The fair value of contingent consideration is included in consideration payable on the condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023. The contingent consideration accrued is measured at fair value on a recurring basis. The Company presents on its statement of cash flows, payments for consideration payable within 90-days in investing activities, payments after 90-days and up to the acquisition date fair value in financing activities, and payments in excess of the acquisition date fair value in operating activities. Current and long-term portions of consideration payable consist of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Current Long-Term Current Long-Term TAV * $ 1,512 $ — $ 2,005 — Fair Share Gaming * 474 87 504 92 Skyhigh * 553 3,994 528 3,941 IVSM 95 171 94 168 Tom's Amusements * 57 — 57 — Island * 100 — 100 — Total $ 2,791 $ 4,252 $ 3,288 $ 4,201 * Acquisitions that occurred prior to 2023. |
Contingent Earnout Share Liabil
Contingent Earnout Share Liability | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Contingent Earnout Share Liability | Contingent Earnout Share Liability P ursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation, the Company authorized and has available for issuance 10,000,000 shares of Class A-2 common stock. The holders of the Class A-2 common stock do not have voting rights and are not entitled to receive or participate in any dividends or distributions when and if declared from time to time. The Company concluded that the Class A-2 common stock should be reflected as a contingent earnout share liability due to the fact that such shares are not entitled to dividends, voting rights, or a stake in the Company in the case of liquidation. The contingent earnout share liability is recorded at fair value. For more information on how the fair value is determined, see Note 12. In 2019, 5,000,000 shares of Class A-2 common stock were issued, subject to the conditions set forth in a restricted stock agreement (the “Restricted Stock Agreement”), which sets forth the terms upon which the Class A-2 common stock will be exchanged for an equal number of validly issued, fully paid and non-assessable Class A-1 common stock. The exchange of Class A-2 common stock for Class A-1 common stock will be subject to the terms and conditions set forth in the Restricted Stock Agreement, with such exchanges occurring in three separate tranches upon the satisfaction of the specified triggers, based either on the Company achieving certain last twelve month EBITDA (“LTM EBITDA”) thresholds in certain periods or the closing sale price of Class A-1 common stock exceeding certain prices over certain trading periods. In 2020, the market condition for the settlement of Tranche I was satisfied. As a result, 1,666,636 shares of the 1,666,666 shares of Class A-2 common stock were converted into Class A-1 common stock. The current thresholds, as approved by a disinterested committee of the Company's board of directors made up of independent directors who do not hold any Class A-2 common stock, for the remaining two Tranches are as follows: • Tranche II, equal to 1,666,667 shares of Class A-2 common stock, will be exchanged for Class A-1 common stock if the closing sale price of Class A-1 common stock on the New York Stock Exchange (“NYSE”) equals or exceeds $14.00 for at least twenty trading days in any consecutive thirty trading day period; and • Tranche III, equal to 1,666,667 shares of Class A-2 common stock, will be exchanged for Class A-1 common stock if either (i) the LTM EBITDA threshold as of March 31, 2024 or June 30, 2024 is $198.6 million or (ii) the closing sale price of Class A-1 common stock on the NYSE equals or exceeds $16.00 for at least twenty trading days in any consecutive thirty trading day period. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and the corresponding disclosure requirements around fair value measurements. This topic applies to all financial instruments that are being measured and reported on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, various methods, including market, income and cost approaches, are used. Based on these approaches, certain assumptions are utilized that the market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. Valuation techniques are utilized that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, it is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1 : Valuations for assets and liabilities traded in active exchange markets, such as the NYSE. Level 1 also includes U.S. Treasury and federal agency securities and federal agency mortgage-backed securities, which are traded by dealers or brokers in active markets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 : Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3 : Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. Assets measured at fair value The following tables summarize the Company’s assets that are measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using March 31, 2024 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Interest rate caplets 14,254 — 14,254 — Fair Value Measurement at Reporting Date Using December 31, 2023 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Interest rate caplets 13,011 — 13,011 — Interest rate caplets The Company determines the fair value of the interest rate caplets using quotes that are based on models whose inputs are observable LIBOR/SOFR forward interest rate curves. The valuation of the interest rate caplets is considered to be a Level 2 fair value measurement as the significant inputs are observable. Unrealized changes in the fair value of the interest rate caplets are classified within other comprehensive income on the accompanying condensed consolidated statements of operations and comprehensive income. Realized gains on the interest rate caplets are recorded to interest expense, net on the accompanying condensed consolidated statements of operations and comprehensive income and included within cash payments for interest, net on the condensed consolidated statements of cash flow. Liabilities measured at fair value The following tables summarizes the Company’s liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using March 31, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Contingent consideration $ 5,265 $ — $ — $ 5,265 Contingent earnout shares 36,544 — 36,544 — Warrants 13 — 13 — Total $ 41,822 $ — $ 36,557 $ 5,265 Fair Value Measurement at Reporting Date Using December 31, 2023 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Contingent consideration $ 5,484 $ — $ — $ 5,484 Contingent earnout shares 31,827 — 31,827 — Warrants 13 — 13 — Total $ 37,324 $ — $ 31,840 $ 5,484 Contingent Consideration The Company uses a discounted cash flow analysis to determine the value of contingent consideration upon acquisition and updates this estimate on a recurring basis. The significant assumptions used in the Company's cash flow analysis includes the probability adjusted projected revenues after state taxes, a discount rate as applicable to each acquisition, and the estimated number of locations that “go live” with the Company during the contingent consideration period. The valuation of the Company's contingent consideration is considered to be a Level 3 fair value measurement as the significant inputs are unobservable and require significant judgment or estimation. Changes in the fair value of contingent consideration liabilities are classified within other expenses, net on the accompanying condensed consolidated statements of operations and comprehensive income. Contingent earnout shares The Company determined the fair value of the contingent earnout shares based on the market price of the Company's Class A-1 common stock. The liability, by tranche, is then stated at present value based on i) an interest rate derived from the Company's borrowing rate and the applicable risk-free rate and ii) an estimate on when it expects the contingent earnout shares to convert to Class A-1 common stock. The valuation of the Company's contingent consideration is considered to be a Level 2 fair value measurement. Changes in the fair value of contingent earnout shares are included within loss (gain) on change in fair value of contingent earnout shares on the accompanying condensed consolidated statements of operations and comprehensive income. Warrants The Company has 5,144 warrants outstanding as of March 31, 2024, which will expire in November 2024. The liability for the Company’s warrants is included in other long-term liabilities on the condensed consolidated balance sheets. The Company determined the fair value of its warrants by using a Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the fair value of the Company's Class A-1 common stock, the risk-free interest rate, expected term, expected dividend yield and expected volatility. The Company's valuation of its warrants is considered to be a Level 2 fair value measurement. Changes in the fair value of the warrants are included within gain on change in fair value of warrants on the accompanying condensed consolidated statements of operations and comprehensive income, if applicable. There was no change in the fair value of the warrants for the three months ended March 31, 2024 and 2023. There were no transfers in or out of Level 3 for the periods presented. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity P ursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation, the Company authorized and has available for issuance the following shares: Class A-1 Common Stock The holders of the Class A-1 common stock are entitled to one vote for each share. The holders of Class A-1 common stock are entitled to receive dividends or other distributions when and if declared from time to time and share equally on a per share basis in such dividends and distributions, subject to such rights of the holders of preferred stock. Treasury Stock On November 22, 2021, the Company’s Board of Directors approved a share repurchase program of up to $200 million shares of Class A-1 common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. Under the repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases or privately negotiated transactions, in compliance with the rules of the SEC and other applicable legal requirements. The repurchase program does not obligate the Company to acquire any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. As of March 31, 2024, the Company acquired a total of 12,004,014 shares under the plan at a total purchase price of $124.2 million, of which 594,817 shares at a total purchase price of $6.1 million were acquired during the three months ended March 31, 2024 |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation The Company grants various types of stock-based compensation awards. The Company measures its stock-based compensation expense based on the grant date fair value of the award and recognizes the expense over the requisite service period for the respective award. Under the Accel Entertainment, Inc. Long Term Incentive Plan, the Company issued 319,731 restricted stock units (“RSUs”) to the Board of Directors and certain eligible employees during the first quarter of 2024, which will vest over a period of 3 to 4 years for employees and by the end of 2024 for the Board of Directors. The Company also issued 149,381 performance-based restricted stock units (“PSUs”) to certain eligible employees during the first quarter of 2024, which will vest after 3 years. The numbers of shares earned upon vesting of the PSUs, if any, is based on the attainment of performance goals over the performance period, subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. The estimated grant date fair value of these RSUs and PSUs totaled $5.3 million. Stock-based compensation expense, which pertains to the Company’s stock options, RSUs and PSUs, was $2.4 million and $1.7 million for the three months ended March 31, 2024 and 2023, respectively. Stock-based compensation expense is included within general and administrative expenses in the condensed consolidated statements of operations and other comprehensive income. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recognized income tax expense of $4.8 million and $6.0 million for the three months ended March 31, 2024 and 2023, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lawsuits and claims are filed against the Company from time to time in the ordinary course of business, including related to employee matters, employment of professionals and non-compete clauses and agreements. Other than settled matters explained as follows, these actions are in various stages, and no judgments or decisions have been rendered. Management, after reviewing matters with legal counsel, believes that the outcome of such matters will not have a material adverse effect on the Company’s financial position or results of operations. The Company has been involved in a series of related litigated matters stemming from claims that it wrongly contracted with 10 different licensed establishments (the “Defendant Establishments”) in 2012 in violation of the contractual rights held by J&J Ventures Gaming, LLC (“J&J”), as further described below. On August 21, 2012, one of the Company’s operating subsidiaries entered into certain agreements with Jason Rowell (“Rowell”), a member of Action Gaming LLC (“Action Gaming”), which was an unlicensed terminal operator that had exclusive rights to place and operate gaming terminals within a number of establishments, including the Defendant Establishments. Under agreements with Rowell, the Company agreed to pay him for each licensed establishment which decided to enter into an exclusive location agreement with Accel. In late August and early September 2012, each of the Defendant Establishments signed a separate location agreement with the Company, purporting to grant the Company the exclusive right to operate gaming terminals in those establishments. Separately, on August 24, 2012, Action Gaming sold and assigned its rights to all its location agreements to J&J, including its exclusive rights with the Defendant Establishments (the “J&J Assigned Agreements”). At the time of the assignment of such rights to J&J, the Defendant Establishments were not yet licensed by the Illinois Gaming Board (the “IGB”). Action Gaming, J&J, and other parties, collectively, the Plaintiffs, filed a complaint against the Company, Rowell, and other parties in the Circuit Court of Cook County, Illinois (the “Circuit Court”), on August 31, 2012, as amended on November 1, 2012, December 19, 2012, and October 3, 2013, alleging, among other things, that Accel aided and abetted Rowell in breaches of his fiduciary duties and contractual obligations with Action Gaming and tortiously interfered with Action Gaming’s contracts with Rowell and agreements assigned to J&J. The complaint seeks damages and injunctive and equitable relief. On January 24, 2018, the Company filed a motion to dismiss for lack of subject matter jurisdiction, as further described below. On May 14, 2018, the Circuit Court denied the Company’s motion to dismiss and granted a stay to the case, pending a ruling from the IGB on the validity of the J&J Assigned Agreements. From 2013 to 2015, the Plaintiffs filed additional claims, including J&J Ventures Gaming, LLC et al. v. Wild, Inc. (“Wild”), in various circuit courts seeking declaratory judgments with a number of establishments, including each of the Defendant Establishments, requesting declarations that, among other things, J&J held the exclusive right to operate gaming terminals at each of the Defendant Establishments as a result of the J&J Assigned Agreements. The Company was granted leave to intervene in all of the declaratory judgments. The circuit courts found that the J&J Assigned Agreements were valid because each of the underlying location agreements were between an unlicensed establishment and an unlicensed terminal operator, and therefore did not constitute use agreements that were otherwise precluded from assignment under the IGB’s regulations. Upon the Company’s appeal, the Illinois Appellate Court, Fifth District (the “District Court”), vacated the circuit courts’ judgments and dismissed the appeals, holding that the IGB had exclusive jurisdiction over the matter that formed the basis of the parties’ claims, and declined to consider the merits of the parties’ disputes. On September 22, 2016, and after the IGB intervened, the Supreme Court of Illinois issued a judgment in Wild, affirming the District Court’s decision vacating the circuit courts’ judgments for lack of subject matter jurisdiction and dismissing the appeals, determining that the IGB has exclusive jurisdiction to decide the validity and enforceability of gaming terminal use agreements. Between May 2017 and September 2017, both the Company and J&J filed petitions with the IGB seeking adjudication of the rights of the parties and the validity of the use agreements. Those petitions were recently adjudicated by the IGB, largely in the Company’s favor, and J&J has filed a new lawsuit to challenge the IGB’s rulings. The Company does not have a present estimate regarding the potential damages, if any, that could potentially be awarded in this litigation and, accordingly, has established no reserves relating to such matters. There are also petitions pending with the IGB which could lead to the Company obtaining new locations. On October 7, 2019, the Company filed a lawsuit in the Circuit Court of Cook County, Illinois against Jason Rowell and other parties related to Mr. Rowell’s breaches of his non-compete agreement with Accel. The Company alleged that Mr. Rowell and a competitor were working together to interfere with the Company’s customer relationships. On November 7, 2019, Mr. Rowell filed a lawsuit in the Circuit Court of Cook County, Illinois against the Company alleging that he had not received certain equity interests in the Company to which he was allegedly entitled under his agreement. The Company has answered the complaint and asserted a counterclaim and intends to defend itself against the allegations. Pre-trial discovery is ongoing as of the date of this report. Mr. Rowell's claims and the Company's claims are both being litigated in this lawsuit, while the original lawsuit remains pending against the other defendants. On July 2, 2019, Illinois Gaming Investors, LLC filed a lawsuit against the Company. The lawsuit alleges that a current employee violated his non-competition agreement with Illinois Gaming Investors, LLC, and together with the Company, wrongfully solicited prohibited licensed video gaming locations. The parties settled this dispute in April 2022. On December 18, 2020, the Company received a disciplinary complaint from the IGB alleging violations of the Video Gaming Act and the IGB’s Adopted Rules for Video Gaming. The disciplinary complaint sought to fine the Company in the amount of $5 million. On July 6, 2023, the IGB and the Company entered into a settlement agreement for $1.1 million of which $1.0 million is the fine for the alleged conduct and $0.1 million is for reimbursement of administrative and investigative costs. The amount was paid in the third quarter of 2023. As a result of the settlement agreement, the Company has agreed to review similar initiatives with the IGB before implementing a new program or making any public announcements, require additional annual training of its employees, and provide additional compliance disclosures to the IGB. On March 9, 2022, the Company filed a lawsuit in the Circuit Court of Cook County, Illinois against Gold Rush relating to the Gold Rush convertible notes. The complaint sought damages for breach of contract and the implied covenant of good faith and fair dealing as well as unjust enrichment. On June 22, 2022, Gold Rush filed a lawsuit in the Circuit Court of Cook County, Illinois against the Company. The lawsuit alleged that the Company tortiously interfered with Gold Rush’s business activities and engaged in misconduct with respect to the Gold Rush convertible notes. On April 22, 2022, the Company filed a petition in the Circuit Court of Cook County, Illinois to judicially review the IGB's decision to deny the requested transfer of Gold Rush common stock in respect of the Company’s conversion of the convertible notes. Discovery ensued on these lawsuits but both suits were dismissed with prejudice as a result of the previously mentioned settlement between the Company and Gold Rush on the convertible notes. The Company also withdrew its petition to judicially review the IGB's decision. For more information, see Note 4. On March 25, 2022, Midwest Electronics Gaming LLC (“Midwest”) filed an administrative review action against the Illinois Gaming Board, the Company and J&J in the Circuit Court of Cook County, Illinois seeking administrative review of decisions of the IGB ruling in favor of the Company and J&J and against Midwest regarding the validity of certain use agreements covering locations currently serviced by Midwest. No monetary damages are sought against the Company. The Company filed a motion to dismiss Midwest’s amended complaint, which was granted in part and denied in part. In July 2022, an enforcement action was brought against the Company by an Illinois municipality related to an alleged violation of an ordinance requiring the collection of an additional tax, the enforceability of which is currently being contested by the Illinois Gaming Machine Operators Association. Rather than litigate the alleged violation, the Company pled no contest and paid an initial penalty to the municipality in October 2022 and for the remaining months of 2022. The Company continued to negotiate with and voluntarily make the appropriate payments to the municipality during 2023 and 2024. In February 2023, an Illinois municipality issued an order against the Company for the alleged failure to pay a terminal operator tax (“TO Tax”) for the privilege of operating gaming terminals within the municipality. The TO Tax was adopted by the municipality on June 8, 2021, but there was no enforcement of this tax until the Company was issued a notice of hearing in February 2023. In April 2023, the Company, along with numerous other terminal operators, filed a complaint in the Circuit Court of Cook County, Illinois contesting the validity and enforceability of the TO Tax and won a temporary restraining order to stay the order. Currently, the matter remains pending as a result of a motion to consolidate and to finalize the assignment of the judge. The results for both the three months ended March 31, 2024 and 2023 included a loss totaling $0.1 million related to these matters, which is included within general and administrative expenses in the condensed consolidated statements of operations and other comprehensive incom e. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The components of basic and diluted earnings per share (“EPS”) were as follows for the three months ended March 31 (in thousands, except per share amounts): Three Months Ended 2024 2023 Net income $ 7,416 $ 9,182 Basic weighted average outstanding shares of common stock 84,298 86,885 Dilutive effect of stock-based awards for common stock 1,002 247 Diluted weighted average outstanding shares of common stock 85,300 87,132 Earnings per common share: Basic $ 0.09 $ 0.11 Diluted $ 0.09 $ 0.11 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net income | $ 7,416 | $ 9,182 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Andrew Rubenstein [Member] | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 15, 2024, Andrew Rubenstein, our President and Chief Executive Officer, entered into a pre-arranged written stock sale plan in accordance with Rule 10b5-1 (the “Rubenstein Rule 10b5-1 Plan”) under the Exchange Act, for the sale of shares of our Class A-1 common stock. The Rubenstein Rule 10b5-1 Plan was entered into during an open trading window in accordance with our insider trading policy and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Rubenstein Rule 10b5-1 Plan provides for the potential sale of up to 580,000 shares of our Class A-1 common stock, so long as the market price of our Class A-1 common stock is higher than certain minimum threshold prices specified in the Rubenstein Rule 10b5-1 Plan between June 14, 2024 and December 31, 2024. |
Name | Andrew Rubenstein |
Title | President and Chief Executive Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | March 15, 2024 |
Arrangement Duration | 200 days |
Aggregate Available | 580,000 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of presentation and preparation | Basis of presentation and preparation : The condensed consolidated financial statements and accompanying notes were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of the Company and of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”) |
Use of estimates | Use of estimates : The preparation of the condensed consolidated financial statements requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates used by the Company include, among other things, the useful lives for depreciable and amortizable assets, income tax provisions, the evaluation of the future realization of deferred tax assets, projected cash flows in assessing the initial valuation of intangible assets in conjunction with business acquisitions, the selection of useful lives for depreciable and amortizable assets in conjunction with business acquisitions, the valuation of level 3 investments, the valuation of contingent earnout shares and warrants, the valuation of interest rate caplets, contingencies, and the expected term of share-based compensation awards and stock price volatility when computing stock-based compensation expense. Actual results may differ from those estimates. |
Segment information | Segment information : The Company operates as a single reportable segment. The Company’s chief operating decision maker (“CODM”) is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of its resources. The CODM assesses the Company’s performance and allocates resources based on consolidated results, and this is the only discrete financial information that is regularly reviewed by the CODM. |
Revenue recognition | Revenue recognition : |
Recent accounting pronouncements | Recent accounting pronouncements : On November 27, 2023, the Financial Accounting Standards Board (“FASB”) is sued Accounting Standards Update ( “ASU”) 2023-07, Segment Reporting (Topic 280) : Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses regularly provided to the CODM. The amendments in this ASU enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis. The Company is currently evaluating the potential effect that this ASU will have on its financial statement disclosures. On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid disaggregated by jurisdiction. The new requirements will be effective for annual periods beginning after December 15, 2024, and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the potential effect that this ASU will have on its financial statement disclosures. Other recently issued accounting standards or pronouncements have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on its condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue | Total net revenues for the three months ended March 31, 2024 and 2023 are further disaggregated by the primary states in which the Company operates. (in thousands) Three Months Ended March 31, 2024 2023 Net revenues by state: Illinois $ 224,863 $ 219,843 Montana 38,141 36,451 Nevada 29,209 29,961 Nebraska 5,834 3,924 Other 3,770 3,029 Total net revenues $ 301,817 $ 293,208 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Raw materials and manufacturing supplies $ 5,906 $ 5,693 Finished products 1,935 1,988 Total inventories $ 7,841 $ 7,681 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following as of March 31, 2024, and December 31, 2023 (in thousands): March 31, December 31, Gaming terminals, software and equipment $ 380,641 $ 361,662 Amusement, ATM and other equipment 28,536 27,182 Office equipment and furniture 3,618 3,385 Computer equipment and software 21,064 20,592 Leasehold improvements 9,349 8,281 Vehicles 20,387 19,862 Buildings and improvements 15,367 14,047 Land 2,998 2,469 Construction in progress 1,320 5,480 Total property and equipment 483,280 462,960 Less accumulated depreciation and amortization (211,866) (202,147) Total property and equipment, net $ 271,414 $ 260,813 |
Route and Customer Acquisitio_2
Route and Customer Acquisition Costs (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Route and Customer Acquisition Costs | Route and customer acquisition costs consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, December 31, Cost $ 35,390 $ 33,855 Accumulated amortization (14,932) (14,667) Route and customer acquisition costs, net $ 20,458 $ 19,188 |
Location Contracts Acquired (Ta
Location Contracts Acquired (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Location Contracts Acquired | Location contracts acquired consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, December 31, Cost $ 287,958 $ 286,728 Accumulated amortization (114,752) (110,417) Location contracts acquired, net $ 173,206 $ 176,311 Other intangible assets consist of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer Relationships 7 years $ 6,800 $ (1,781) $ 5,019 $ 6,800 $ (1,538) $ 5,262 Software Applications 8 years 7,800 (1,788) 6,012 7,800 (1,544) 6,256 Trade Names 20 years 9,800 (898) 8,902 9,800 (776) 9,024 $ 24,400 $ (4,467) $ 19,933 $ 24,400 $ (3,858) $ 20,542 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Location Contracts Acquired | Location contracts acquired consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, December 31, Cost $ 287,958 $ 286,728 Accumulated amortization (114,752) (110,417) Location contracts acquired, net $ 173,206 $ 176,311 Other intangible assets consist of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Amortization Period Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Customer Relationships 7 years $ 6,800 $ (1,781) $ 5,019 $ 6,800 $ (1,538) $ 5,262 Software Applications 8 years 7,800 (1,788) 6,012 7,800 (1,544) 6,256 Trade Names 20 years 9,800 (898) 8,902 9,800 (776) 9,024 $ 24,400 $ (4,467) $ 19,933 $ 24,400 $ (3,858) $ 20,542 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company’s debt as of March 31, 2024 and December 31, 2023, consisted of the following (in thousands): March 31, December 31, Senior Secured Credit Facility: Revolving credit facility $ 50,000 $ 46,000 Term Loan 306,250 310,625 Delayed Draw Term Loan 186,250 188,750 Total borrowings 542,500 545,375 Add: Remaining premium on interest rate caplets financed as debt 1,815 2,059 Less: Debt issuance costs (4,405) (4,860) Total debt, net of debt issuance costs 539,910 542,574 Less: Current maturities (28,485) (28,483) Total debt, net of current maturities $ 511,425 $ 514,091 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Consideration Payable | Current and long-term portions of consideration payable consist of the following as of March 31, 2024 and December 31, 2023 (in thousands): March 31, 2024 December 31, 2023 Current Long-Term Current Long-Term TAV * $ 1,512 $ — $ 2,005 — Fair Share Gaming * 474 87 504 92 Skyhigh * 553 3,994 528 3,941 IVSM 95 171 94 168 Tom's Amusements * 57 — 57 — Island * 100 — 100 — Total $ 2,791 $ 4,252 $ 3,288 $ 4,201 * Acquisitions that occurred prior to 2023. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets Measured on Recurring Basis | The following tables summarize the Company’s assets that are measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using March 31, 2024 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Interest rate caplets 14,254 — 14,254 — Fair Value Measurement at Reporting Date Using December 31, 2023 Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Interest rate caplets 13,011 — 13,011 — |
Schedule of Liabilities Measured on a Recurring Basis | The following tables summarizes the Company’s liabilities that are measured at fair value on a recurring basis (in thousands): Fair Value Measurement at Reporting Date Using March 31, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Contingent consideration $ 5,265 $ — $ — $ 5,265 Contingent earnout shares 36,544 — 36,544 — Warrants 13 — 13 — Total $ 41,822 $ — $ 36,557 $ 5,265 Fair Value Measurement at Reporting Date Using December 31, 2023 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Contingent consideration $ 5,484 $ — $ — $ 5,484 Contingent earnout shares 31,827 — 31,827 — Warrants 13 — 13 — Total $ 37,324 $ — $ 31,840 $ 5,484 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Components of Basic and Diluted EPS | The components of basic and diluted earnings per share (“EPS”) were as follows for the three months ended March 31 (in thousands, except per share amounts): Three Months Ended 2024 2023 Net income $ 7,416 $ 9,182 Basic weighted average outstanding shares of common stock 84,298 86,885 Dilutive effect of stock-based awards for common stock 1,002 247 Diluted weighted average outstanding shares of common stock 85,300 87,132 Earnings per common share: Basic $ 0.09 $ 0.11 Diluted $ 0.09 $ 0.11 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total net revenues | $ 301,817 | $ 293,208 |
Illinois | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | 224,863 | 219,843 |
Montana | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | 38,141 | 36,451 |
Nevada | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | 29,209 | 29,961 |
Nebraska | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | 5,834 | 3,924 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total net revenues | $ 3,770 | $ 3,029 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw materials and manufacturing supplies | $ 5,906,000 | $ 5,693,000 |
Finished products | 1,935,000 | 1,988,000 |
Total inventories | 7,841,000 | 7,681,000 |
Inventory valuation reserves | $ 0 | $ 0 |
Investment in Convertible Not_2
Investment in Convertible Notes (Details) - Convertible Promissory Notes - USD ($) $ in Millions | 1 Months Ended | |
Jun. 30, 2023 | Mar. 31, 2024 | |
Debt Securities, Available-for-sale [Line Items] | ||
Settlements received on investments owned | $ 32.5 | |
Investments, prepayment on future amounts due | $ 0.4 | |
Accrued investment income receivable | $ 1.4 | |
Investments, amount due from other parties | $ 1.5 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 483,280 | $ 462,960 | |
Less accumulated depreciation and amortization | (211,866) | (202,147) | |
Total property and equipment, net | 271,414 | 260,813 | |
Depreciation and amortization of property and equipment | 10,434 | $ 9,063 | |
Gaming terminals, software and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 380,641 | 361,662 | |
Amusement, ATM and other equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 28,536 | 27,182 | |
Office equipment and furniture | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 3,618 | 3,385 | |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 21,064 | 20,592 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 9,349 | 8,281 | |
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 20,387 | 19,862 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 15,367 | 14,047 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | 2,998 | 2,469 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 1,320 | $ 5,480 |
Route and Customer Acquisitio_3
Route and Customer Acquisition Costs - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |||
Gross payments due | $ 7,100 | $ 7,400 | |
Net present value of payments due | 6,200 | 6,500 | |
Current portion of payments due | 1,480 | 1,505 | |
Customer acquisition cost asset | 21,700 | 20,000 | |
Capitalized contract cost, subject to claw back | 1,000 | $ 1,000 | |
Amortization expense on route and customer acquisition costs | $ 500 | $ 400 |
Route and Customer Acquisitio_4
Route and Customer Acquisition Costs - Route and Customer Acquisition Costs (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Cost | $ 35,390 | $ 33,855 |
Accumulated amortization | (14,932) | (14,667) |
Route and customer acquisition costs, net | $ 20,458 | $ 19,188 |
Location Contracts Acquired - L
Location Contracts Acquired - Location Contracts Acquired (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Cost | $ 287,958 | $ 286,728 |
Accumulated amortization | (114,752) | (110,417) |
Location contracts acquired, net | $ 173,206 | $ 176,311 |
Location Contracts Acquired - N
Location Contracts Acquired - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 0.6 | $ 0.6 |
Location Contract | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 4.3 | $ 4.3 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Acquired Indefinite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 101,554 | $ 101,554 | |
Tax exempt portion of goodwill | 38,000 | ||
Amortization of intangible assets | 600 | $ 600 | |
Operating Licenses | |||
Acquired Indefinite-Lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets (excluding goodwill) | $ 3,700 | $ 2,800 | |
Minimum | |||
Acquired Indefinite-Lived Intangible Assets [Line Items] | |||
Expected useful life of intangibles (in years) | 7 years | ||
Maximum | |||
Acquired Indefinite-Lived Intangible Assets [Line Items] | |||
Expected useful life of intangibles (in years) | 20 years |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 287,958 | $ 286,728 |
Accumulated Amortization | (114,752) | (110,417) |
Location contracts acquired, net | 173,206 | 176,311 |
Century | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 24,400 | 24,400 |
Accumulated Amortization | (4,467) | (3,858) |
Location contracts acquired, net | $ 19,933 | 20,542 |
Customer Relationships | Century | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 7 years | |
Gross Carrying Amount | $ 6,800 | 6,800 |
Accumulated Amortization | (1,781) | (1,538) |
Location contracts acquired, net | $ 5,019 | 5,262 |
Software Applications | Century | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 8 years | |
Gross Carrying Amount | $ 7,800 | 7,800 |
Accumulated Amortization | (1,788) | (1,544) |
Location contracts acquired, net | $ 6,012 | 6,256 |
Trade Names | Century | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization Period | 20 years | |
Gross Carrying Amount | $ 9,800 | 9,800 |
Accumulated Amortization | (898) | (776) |
Location contracts acquired, net | $ 8,902 | $ 9,024 |
Debt - Long-term Debt Instrumen
Debt - Long-term Debt Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Total borrowings | $ 542,500 | $ 545,375 |
Add: Remaining premium on interest rate caplets financed as debt | 1,815 | 2,059 |
Less: Debt issuance costs | (4,405) | (4,860) |
Total debt, net of debt issuance costs | 539,910 | 542,574 |
Less: Current maturities | (28,485) | (28,483) |
Total debt, net of current maturities | 511,425 | 514,091 |
Credit Agreement, Amendment | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Total borrowings | 50,000 | 46,000 |
Credit Agreement, Amendment | Term Loan | ||
Debt Instrument [Line Items] | ||
Total borrowings | 306,250 | 310,625 |
Credit Agreement, Amendment | Delayed Draw Term Loan | ||
Debt Instrument [Line Items] | ||
Total borrowings | $ 186,250 | $ 188,750 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | ||
Jan. 12, 2022 USD ($) caplet | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | |
Debt Instrument [Line Items] | |||
Unrealized gain (loss) on interest rate caplets, net of taxes | $ 1,081,000 | $ (2,166,000) | |
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, after tax | $ 2,600,000 | $ 1,900,000 | |
Credit Agreement, Amendment | Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Weighted-average interest rate (as a percent) | 7.70% | ||
Credit Agreement, Amendment | Term Loan | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 300,000,000 | ||
Debt instrument, term | 4 years | ||
Number of deferred premium caplets | caplet | 48 |
Business Acquisitions - Narrati
Business Acquisitions - Narrative- 2024 Business Acquisitions (Details) | 1 Months Ended | 3 Months Ended | ||||||
May 01, 2024 USD ($) location installment_payment | Feb. 22, 2024 USD ($) location | Jan. 10, 2024 USD ($) | Oct. 03, 2023 USD ($) location | May 23, 2023 USD ($) location | Apr. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) | Aug. 10, 2023 USD ($) | |
Pending Acquisition | ||||||||
Asset Acquisition [Line Items] | ||||||||
Purchase price advance | $ 8,200,000 | |||||||
Face amount | $ 300,000 | |||||||
Subsequent Event | Pending Acquisition | ||||||||
Asset Acquisition [Line Items] | ||||||||
Purchase price advance | $ 700,000 | |||||||
Great Lakes Vending | ||||||||
Asset Acquisition [Line Items] | ||||||||
Number of locations acquired | location | 1 | |||||||
Asset acquisition, consideration transferred | $ 1,300,000 | |||||||
Asset acquisition, location contracts | 1,200,000 | |||||||
Asset acquisition, gaming and redemption equipment | $ 100,000 | |||||||
Doc & Eddy’s | ||||||||
Asset Acquisition [Line Items] | ||||||||
Asset acquisition, consideration transferred | $ 2,300,000 | |||||||
Asset acquisition, recognized identifiable assets acquired and liabilities assumed, buildings | 1,000,000 | |||||||
Asset acquisition recognized identifiable assets acquired and liabilities assumed intangibles | 900,000 | |||||||
Asset acquisition, recognized identifiable assets acquired and liabilities assumed, land | $ 400,000 | |||||||
Illinois Gaming Entertainment | ||||||||
Asset Acquisition [Line Items] | ||||||||
Number of locations acquired | location | 3 | 4 | ||||||
Asset acquisition, consideration transferred | $ 2,300,000 | $ 1,500,000 | ||||||
Asset acquisition, location contracts | $ 2,000,000 | $ 1,100,000 | ||||||
Illinois Gaming Entertainment | Subsequent Event | ||||||||
Asset Acquisition [Line Items] | ||||||||
Number of locations acquired | location | 16 | |||||||
Asset acquisition, consideration transferred | $ 13,700,000 | |||||||
Payments to acquire productive assets | 11,200,000 | |||||||
Asset acquisition, consideration transferred, contingent consideration | $ 2,500,000 | |||||||
Number of installments | installment_payment | 3 | |||||||
Illinois Gaming Entertainment | Subsequent Event | First Anniversary | ||||||||
Asset Acquisition [Line Items] | ||||||||
Asset acquisition, consideration transferred, contingent consideration | $ 600,000 | |||||||
Illinois Gaming Entertainment | Subsequent Event | Second Anniversary | ||||||||
Asset Acquisition [Line Items] | ||||||||
Asset acquisition, consideration transferred, contingent consideration | 600,000 | |||||||
Illinois Gaming Entertainment | Subsequent Event | Third Anniversary | ||||||||
Asset Acquisition [Line Items] | ||||||||
Asset acquisition, consideration transferred, contingent consideration | 600,000 | |||||||
Illinois Gaming Entertainment | Subsequent Event | Fourth Anniversary | ||||||||
Asset Acquisition [Line Items] | ||||||||
Asset acquisition, consideration transferred, contingent consideration | $ 700,000 |
Business Acquisitions - Narra_2
Business Acquisitions - Narrative- 2023 Business Acquisitions (Details) $ in Thousands | Dec. 27, 2023 USD ($) | Oct. 03, 2023 USD ($) location | May 23, 2023 USD ($) location | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Feb. 13, 2023 USD ($) |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 101,554 | $ 101,554 | ||||
Rendezvous Casino and Burger Bar | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase price | $ 2,600 | |||||
Business combination, recognized identifiable assets acquired and liabilities assumed, finite-lived intangibles | 800 | |||||
Business combination, recognized identifiable assets acquired and liabilities assumed, land | 500 | |||||
Buildings totaling | 400 | |||||
Gaming equipment totaling | 100 | |||||
Goodwill | $ 800 | |||||
Illinois Video Slot Management | ||||||
Business Acquisition [Line Items] | ||||||
Asset acquisition, consideration transferred | $ 1,000 | |||||
Payments to acquire productive assets | 700 | |||||
Asset acquisition, consideration transferred, contingent consideration | 300 | |||||
Asset acquisition, location contracts | 900 | |||||
Illinois Video Slot Management | Gaming Equipment | ||||||
Business Acquisition [Line Items] | ||||||
Asset acquisition, gaming equipment | 100 | |||||
Illinois Video Slot Management | First Anniversary | ||||||
Business Acquisition [Line Items] | ||||||
Asset acquisition, consideration transferred, contingent consideration, annual payment | 100 | |||||
Illinois Video Slot Management | Second Anniversary | ||||||
Business Acquisition [Line Items] | ||||||
Asset acquisition, consideration transferred, contingent consideration, annual payment | 100 | |||||
Illinois Video Slot Management | Third Anniversary | ||||||
Business Acquisition [Line Items] | ||||||
Asset acquisition, consideration transferred, contingent consideration, annual payment | $ 100 | |||||
Illinois Gaming Entertainment | ||||||
Business Acquisition [Line Items] | ||||||
Asset acquisition, consideration transferred | $ 2,300 | $ 1,500 | ||||
Asset acquisition, location contracts | 2,000 | 1,100 | ||||
Asset acquisition, gaming equipment | $ 300 | $ 400 | ||||
Number of locations acquired | location | 3 | 4 |
Business Acquisitions - Conside
Business Acquisitions - Consideration Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Business Acquisition [Line Items] | ||
Current | $ 2,791 | $ 3,288 |
Long-Term | 4,252 | 4,201 |
TAV | ||
Business Acquisition [Line Items] | ||
Current | 1,512 | 2,005 |
Long-Term | 0 | 0 |
Fair Share Gaming | ||
Business Acquisition [Line Items] | ||
Current | 474 | 504 |
Long-Term | 87 | 92 |
Skyhigh | ||
Business Acquisition [Line Items] | ||
Current | 553 | 528 |
Long-Term | 3,994 | 3,941 |
IVSM | ||
Business Acquisition [Line Items] | ||
Current | 95 | 94 |
Long-Term | 171 | 168 |
Tom's Amusements | ||
Business Acquisition [Line Items] | ||
Current | 57 | 57 |
Long-Term | 0 | 0 |
Island | ||
Business Acquisition [Line Items] | ||
Current | 100 | 100 |
Long-Term | $ 0 | $ 0 |
Contingent Earnout Share Liab_2
Contingent Earnout Share Liability (Details) $ / shares in Units, $ in Millions | 3 Months Ended | |||||
Jun. 30, 2024 USD ($) | Mar. 31, 2024 USD ($) $ / shares shares | Mar. 31, 2024 day $ / shares shares | Dec. 31, 2020 shares | Dec. 31, 2019 tranche shares | Nov. 20, 2019 shares | |
Tranche III - LTM EBITDA or 20 trading days in consecutive 30 day trading period | ||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||
Maximum stock price of common stock before conversion (in usd per share) | $ / shares | $ 16 | $ 16 | ||||
Business combinations and dispositions, consideration transferred and received, threshold | $ | $ 198.6 | |||||
Tranche III - LTM EBITDA or 20 trading days in consecutive 30 day trading period | Forecast | ||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||
Business combinations and dispositions, consideration transferred and received, threshold | $ | $ 198.6 | |||||
Tranche II - LTM EBITDA or 20 trading days in consecutive 30 day trading period | ||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||
Maximum stock price of common stock before conversion (in usd per share) | $ / shares | $ 14 | $ 14 | ||||
Class A-2 Common Stock | ||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||
Class A-1 common stock reserved for issuance (in shares) | 10,000,000 | |||||
Class A-2 Common Stock | Tranche III - LTM EBITDA or 20 trading days in consecutive 30 day trading period | ||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||
Number of shares converted (in shares) | 1,666,667 | 1,666,667 | 1,666,636 | |||
Threshold trading days | day | 20 | |||||
Threshold consecutive trading days | day | 30 | |||||
Class A-2 Common Stock | Tranche I - EBITDA for last 12 months or 20 trading days in consecutive 30 day trading period | ||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||
Number of shares converted (in shares) | 1,666,666 | |||||
Class A-2 Common Stock | Tranche II - LTM EBITDA or 20 trading days in consecutive 30 day trading period | ||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||
Number of shares converted (in shares) | 1,666,667 | 1,666,667 | ||||
Threshold trading days | day | 20 | |||||
Threshold consecutive trading days | day | 30 | |||||
Class A-2 Common Stock | Common Stock | ||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||
Shares issued (in shares) | 5,000,000 | |||||
Number of tranches upon satisfaction | tranche | 3 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value, Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caplets | $ 8,912 | $ 8,140 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caplets | 14,254 | 13,011 |
Fair Value, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caplets | 0 | 0 |
Fair Value, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caplets | 14,254 | 13,011 |
Fair Value, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate caplets | $ 0 | $ 0 |
Fair Value Measurements - Liabi
Fair Value Measurements - Liabilities Measured on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $ 5,265 | $ 5,484 |
Contingent earnout shares | 36,544 | 31,827 |
Warrants | 13 | 13 |
Total | 41,822 | 37,324 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Contingent earnout shares | 0 | 0 |
Warrants | 0 | 0 |
Total | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 0 | 0 |
Contingent earnout shares | 36,544 | 31,827 |
Warrants | 13 | 13 |
Total | 36,557 | 31,840 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 5,265 | 5,484 |
Contingent earnout shares | 0 | 0 |
Warrants | 0 | 0 |
Total | $ 5,265 | $ 5,484 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) | Mar. 31, 2024 shares |
Fair Value Disclosures [Abstract] | |
Warrants outstanding (in shares) | 5,144 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ in Thousands | 3 Months Ended | 28 Months Ended | |||
Sep. 28, 2020 vote | Mar. 31, 2024 USD ($) shares | Mar. 31, 2023 USD ($) | Mar. 31, 2024 USD ($) shares | Nov. 22, 2021 USD ($) | |
Class of Warrant or Right [Line Items] | |||||
Repurchase of common stock | $ 6,182 | $ 4,206 | |||
Class A-1 Common Stock | |||||
Class of Warrant or Right [Line Items] | |||||
Common stock , voting rights, votes per share | vote | 1 | ||||
Stock repurchase program, authorized amount (up to) | $ 200,000 | ||||
Repurchase of common stock (in shares) | shares | 594,817 | 12,004,014 | |||
Repurchase of common stock | $ 6,100 | $ 124,200 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option compensation expense | $ 2.4 | $ 1.7 |
PSUs & RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Estimated grant date fair value of options and RSUs granted | $ 5.3 | |
RSU | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted (in shares) | 319,731 | |
RSU | Employee | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years | |
RSU | Employee | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years | |
PSU | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted (in shares) | 149,381 | |
PSU | Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 3 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 4,767 | $ 6,000 |
Effective tax rate | 39.10% | 39.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jul. 06, 2023 USD ($) | Dec. 18, 2020 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2012 defendant | |
Loss Contingencies [Line Items] | |||||
Number of defendant establishments | defendant | 10 | ||||
Loss contingency, loss in period | $ 0.1 | $ 0.1 | |||
IGB Complaint | |||||
Loss Contingencies [Line Items] | |||||
Damages sought | $ 5 | ||||
Litigation settlement, amount | $ 1.1 | ||||
IGB Complaint | Alleged Conduct | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement, amount | 1 | ||||
IGB Complaint | Administrative and Investigative Costs | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement, amount | $ 0.1 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net income | $ 7,416 | $ 9,182 |
Basic weighted average outstanding shares of common stock (in shares) | 84,298,000 | 86,885,000 |
Dilutive effect of stock-based awards for common stock (in shares) | 1,002,000 | 247,000 |
Diluted weighted average outstanding shares of common stock (in shares) | 85,300,000 | 87,132,000 |
Earnings Per Share, Basic and Diluted EPS [Abstract] | ||
Basic (in usd per share) | $ 0.09 | $ 0.11 |
Diluted (in usd per share) | $ 0.09 | $ 0.11 |
Anti-dilutive options excluded from calculation of diluted EPS (in shares) | 4,339,250 | 4,907,216 |