ACEL - Earnings call transcript Q1 2021 | Accel Entertainment, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Accel Entertainment Quarter 1 2021 Earnings Call Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Mathew Ellis, Please go ahead.

Mathew Ellis

Welcome to Accel Entertainment's first quarter 2021 earnings call. today Carroll, Rubenstein, Accel's call Officer; Chief the Brian and Chief on are Accel's Andy Executive Participating Financial Officer. our will this to supplemental refer website press the Please release information that be call. on discussed for and Today's section our Presentations under on be website website. our being call Investor Events Relations recorded is the will available and within of and

forward-looking to Securities constitute no statements unless the these meaning within and of comments required Reform of the concerns. Some Act statements current the subject company those update in differ Actual forward-looking today's today, statements XXXX. and law. uncertainties results undertakes by These the and to the risks materially call Private are discussed may health obligation of from may

other forward-looking available other review investors For a filings risk well website in more factors, our statements press the release of with detailed the the on earnings our factor disclosures as as SEC. and should risk discussion section these of

financial we call, the During may certain non-GAAP measures. discuss

the non-GAAP Investor Relations as our I other to the in reconciliations Mr. please call other materials the earnings of release Andy For our to turn measures, these measures will section website. refer of over regarding and information well now Rubenstein. as

Andy Rubenstein

increase, negative reduction new the $X of sales of gaming to increase half COVID March shutdown. joining Good EBITDA contributed increase broken guidance to locations increase record due April, and earnings despite to for impact $XX year had out operating morning, at higher same-store limit improvements Matt. our the January. XX new more during the and we is $XX primary These as a different. the bet locations adjusted revenue actually you of the in gaming million a and in as of revenue than drivers in software, evaluate QX growth The this $XX XX the continued increase for no QX was Existing $XXX The month VGT of everyone. best performance stimulus. industry, and contributed typically million, We closures $X machines locations year. Thank days of for being strong we the million the a first recent Acquisitions XXXX start year-over-year cautious Thanks, where for QX follows: X days to March. in quarter were been were to than recent days optimize the million our the Accel's per us XX%. and net million. to the our the with from is into revenue call. play with thrilled short-term impact earned shutdown We We've was XXXX locations of more set most made million. we closed day existing meaning

We the also each of are we have continuing available of play forms strong players; entertainment more few normal. understand passing currently that a revenue we the we our confidence elevated new realizing is are with for one however, week,

which us the time, through Brian you strong Based many the Illinois, as same historical have aforementioned our capacity. the on At walk of new those our casinos, post stay the we factors and more of as We are and are a players to due gain than believe will seen. this bar option a many and in to that reduced we or with about players not reopening vaccine also We restaurant comments sustained progress believe increased our full the back by players summer expect many convenient to we either shortly. pandemic. and we've new pandemic also other just caution performance missing still introduced that indoor we will we recent mentioned, believe guidance, encouraged players product

both markets, earlier new a in entered opportunities see year, expansion still this We upside. in we large inorganic. we small organic Last Nevada Century. acquisition and see but Georgia into Then way, we year, Montana our growth. through of announced a to Turning and

remains in and more the we pipeline announce expect opportunities Our to future. active, M&A

Speaking regulatory late applications, is close We're our and than the performing in Century. through we of to original working also Century expect estimates. better XXXX.

get closing, and we As closer updates we integration will latest more provide Century's our plans. to performance on

optimistic will front, states organic that the On we distributed are gaming. several consider cautiously

significant did recent be gaming in to go we the Missouri the in vote still wanted, there legalized not the Senate way momentum future. While is for

to us in various believe established our across opportunities be country We that, to to numbers will Brian updates appropriate. in detail. continue future walk the market. you will monitor over successful in I through We With enable to Illinois when playbook turn growth the the more and any provide it

Brian Carroll

Thanks, Andy.

of historical $XXX, XX,XXX a of pre-COVID the increase As XX% VGTs in was year-over-year locations, first of location increases attrition Revenue had XX%. X,XXX averages. continues we year-over-year March Also, the X%. per day and for quarter to mirror XX, per

at primary drivers the were of higher initiatives bet residual X approximately end the software, made machines the X.X we earlier, discussed of during locations to March, our average recent Andy most As was the increase our At improvements optimize limit VGT the the years. contract and length shutdown.

June. VGTs this by to VGTs, of only still As total and handful April should XX, installed X,XXX their so they municipality than of increase install we've expect could more A of change X ordinances. X number allow X,XXX a

of player of discussed debt revolver now our on provide of revised At revenue we year $X XXXX. of had XX%, million for million, sheet earlier, EBITDA of the $XX consisting and of the $XX the For Andy first million and million first increases total quarter the first XX% adjusted like cash quarter, spend was to favorable of end had of CapEx would million and guidance net year-over-year of quarter, million cash in balance compared liquidity, to respectively. Based I and $XXX $XXX million $XXX the availability. a on and ago. we $XXX the approximately trends, million $X behaviors

XX,XXX includes X,XXX To EBITDA locations. to million million $XXX X,XXX We are XXXX VGTs, to Revenue XX,XXX now is the and XX refresh, fully the $XXX year is be $XXX first until were the for to week million gaming, without million $XXX be expected $XX forecasting not million. million February. of year still and to with first fact forecasted to reopened the to cash end now CapEx with $XX to the this days Illinois to of that adjusted was spend. of of

assume no and the impact from All M&A COVID-XX. of revised amounts minimal

and with discuss a in our we the I warrants value Finally, not statement. change from the issued the primarily with the Also, auditors, were we on specific directed recent towards exchanged to Accel. Based The the consultation companies income nearly and resulted our briefly staff recorded in became on EBITDA to by of for our warrants was SEC XX-K filed yesterday. change QX in the and the amended pronouncement SEC our reclassified and in to that mergers adjusted impact liability AX warrants XXXX. equity all acquisition was shares companies to no or special-purpose statement through want cash public

continue As are the always, Back we standards. accounting hold the Andy. we'll you, latest highest to committed guidance to to to ourselves following and

Andy Rubenstein

Thanks, Brian.

with pleased the by this are We strong our excited performance. continuing extremely quarter and performance

our the reopens. creates model as would possible a and Our local be our success thrive know hyper dedication employees Please times business platform establishment without not weather country partners. asset-light of and difficult to the

take your questions. now will We

Operator

comes of first Jordan question Your [Operator Macquarie. the from line Bender of Instructions]

Jordan Bender

to large you a space it to acquisition Does make was ago. get change a There maybe it a some these the over was your I sell Could on. pretty now? for anything harder just of weeks in locations standpoint? from few to thoughts looking this competitive convert

Andy Rubenstein

discussing. you're acquisition which clarify Please

Jordan Bender

J The J Ventures. &

Andy Rubenstein

With IGS?

Jordan Bender

Yes.

Andy Rubenstein

We market. don't will have any to -- think continue progress continuing to own the real impact, to our and plans through within on organically grow it we're

Jordan Bender

on then comments. growth the the follow-up And Okay.

legalization in underway Downtown Cook think in a for some With of RFP in that for, start Chicago start hear talked need to for that any we change that an guess, the your to could anything you're you've Downtown, for to casino, movement is look the past, or there area? I hearing distributed Chicago I in that thought gaming market, in politicians casino County. in the order about at

Andy Rubenstein

Yes. I think addressed a permanent some issue It's the don't of a while until of The to a time time would take long. take say while. is to be that significant line casino. the permanent I going operation build to the will RFP is still going casino.

So, we're at looking few years. a quite

budget in the future. not it's in our near So

Operator

Your next Sander question line comes of from Omer the from JP Morgan.

Omer Sander

Congrats on results. the strong

the the first obviously, a sustainability, think reduced on the strong and Just do first guess? capacity, question January. or then about then shutdown throughout I how capacity And early limited impact -- trends? in the you And quarter the of demand

Andy Rubenstein

were because will are because And those would experience reluctant comfortable inside lot impact you it, population obviously part out people going to the wasn't The -- going say, of still same I is have player elements is I on with X to is, a -- to reduced say, relatively to it bigger older I'd But establishments some there's out minimal in as there's that people they are go X not does base. it had the So we capacity. less because the remember, it a effect socialize public. before. more are That have machines. of of facility. allowed only think got One, there's that

the the of I players pent-up And be some that I for think seen some come a of that those back. March numbers. think kind haven't some of of will fueled demand we replacement

So sales path it out. same-store we'll will will I with get our think balance customers growth. And which those itself continue back,

Omer Sander

maybe that's operators more present in And XX% comment is other there, that and there you're are XX%, share on -- at opportunity helpful. market not I in XQ, Illinois I that much there you space? Can guess, how the distressed, maybe may question think be but runway M&A. some in then one

Andy Rubenstein

that merge doing. to experience that work unique with have the a operators We're to we're ability see we establishment value other proposition some as their that in of contribute hopeful the to that as there'll for well what to offers be a opportunities

So still and that those and there's opportunities, we're how see to goes. opportunities, explore we'll continuing

Operator

the John from comes DeCree. of line question next Your

John DeCree

from me. Two questions

it backlog up. picked give more has kind a the presentation, backlog your the if little be live. helpful. we And still you've advance as think is, new And there's strong would reopening, can could Is give openings detail. it mentioned there Andy, first conversions? you I to they The business contracted color go on more more or that us locations of little Any of up Are in picked that how us as waiting backlog? thoughts a -- you is built? through

Andy Rubenstein

successful Yes. the our license a share. in market than been I that periods mean, larger licenses we've got -- receiving the in proportion I of think we've demonstrated first X

businesses over we are -- with up forward, closed either in year had success as I businesses go that, or they've that on reflecting taken we open think people some to ownership. So that as we've new -- do looking last -- and new

reopenings think reflect into in you'll strong more the that as of back the 'XX growth our reopening becomes and see a I path will of So and there confidence the 'XX economy from backlog. half

John DeCree

Got a complete. of early, the higher is Wondering, higher that Probably nearly those the how believe if new changes structural Illinois Understood. the how max guess, we're bet kind max per that noise, regs and machines much in have the upgraded. are pivot had revenue versus as demand but. those performing all much we yet stimulus across trying the you payout, you mentioned this to And the relative a demand checks of strong is are your tough not sense and pent-up I to it. I to have at that given decipher day afforded been you? bet question some all machines, how upgrades to and look of

Andy Rubenstein

I clarity. little there can lot give is you a -- a of but noise Yes, and

So the all any have of upgraded that most max establishments bets higher the been jackpots. considerable to revenue and kind have all

everybody So see upgraded. that more most much left we're not because going lift to been has

like pent-up the versus or it. bit out. and the it norm, weeks early seeing the we're has through March and the surge demand greater occurred. we're new continued of checks But And the as this ability week seeing a on hit, when and as the of have normalized and maybe of that April, kind it seasonality don't X, to still kind you you seasonality the then That we being -- saw real far little normalized As in normalization stimulus is reopening in couple economy see a said, first -- guys May. of into saw

trips reopened casinos. they a a to again players we last created our opened some they does we've appear play, going we up were very the and probably making up the then enhancements it to base of new convenience with a So convenient. that pandemic the but have customer and back in good those more the equipment July, and go through that will lot as similar casinos, to to new that of a of and normalization January, used end recognize payouts experience, When more casinos. on They the still establishments reduced that built the because for very it's a good good level replacement much have saw

Operator

Your of Northland. line Greg of Gibas next question comes the from

Greg Gibas

the Congrats on strong results.

wondering was I First, a of if still new guess, location in market penetrated you're level I on do general the kind opportunities just state? think maybe, penetration for currently the could how the of you you update provide is. And Illinois seeing

Andy Rubenstein

always in people that kind still that market or As in see within in that that establishment market. growing. that businesses mean, their reopen, you'll the where and growth always business fail replacement And place, far either as same I there's their in have of new the is overall I market,

continue occur and we forward. outperformed because we see factor maybe forward, we've grow market we'll pipeline, at But to going more solid So continue our that obtain cycle to a historically, reduced share. able a as to going been

Greg Gibas

M&A if I Okay. guess, And ask pipeline. could, about the Great. I

You of remains mostly Is pipeline that new kind or active. operators? on Illinois said additional adding it market-oriented focused

Andy Rubenstein

in We to we're identified markets the we Yes, allow to that we've the us Century some but that become I'd will on gaming that capitalized fronts. new introduced opportunities don't mean, working We've in other I opportunities obviously Georgia yet, identified say -- past. markets. both in think also have of

always Illinois. going while an of the opportunities and there, growth have I -- be Illinois think probably the So we'll on more focused be we'll that states eye forward, outside on

Greg Gibas

from I If on could me. guess, up one Okay, just the great. I last follow backlog.

it healthy about talking here. pretty You're remaining

it recently interested that you establishments? maybe early are trying second XXXX guess of guess, since just just expecting that their on saw to adding the look locations reopened? But the directional kind VGTs you in demand half of -- that you're better. to everything frame? levels dynamics Or talked seeing time kind a in I QX, a I seeing now about similar level, are of XXXX, you more lot For you the could comment to reopened of of

Andy Rubenstein

Yes.

I new most have in establishments VGT open think that up revenue their budgets.

the -- that Why I to looking has a end and small is expectation day greater have gaming is has very opening business up up is owner confidence And as a second 'XX business that 'XX us. toward so new going appears the the clearly they're in is into was becoming every prevalent. of COVID as of half of that picked behind the it worst economy the

a business up And so small that reduced. a takes business new risk owner has business that they open when been

during local willing business, bar their at reopen empty build in And and and so what, it. make can those it. closed will built a COVID. attitude of local low-risk more establishments say, were can they're XX that because in I relatively to months. And our look businesses small out you the it's that opportunities it, already the a next, There know that that to that to and the new #X town more XX call I'm do We're starting I it's was goal seeing -- pipeline us allow of to for proposition

Operator

of Bank. line Pizzella Steve comes the Your Instructions] next question [Operator from from Deutsche

Steve Pizzella

some revenues -- compared at kind their we've are betting, how of come through the seen wanted some Kind some when those guys' of is about to for you thinking various expanding tax VGTs. of way Just the of which generate kind get slow are to up that? what opinion that that to your They [indiscernible], kind states. on bills that VGTs sports of of guys for interesting look of the you work

Andy Rubenstein

is States, it VGTs in challenging. they think participate. something And except new when last states And And for -- market definitely that historically, I looking wasn't of you a most United they're of is few that sports that kind more is states legislation is in see a always pass few looking the very betting, throughout gaming as for their to the a years. The and wave look can prior legislators often. the to the they're in doesn't available occurring at form it

look sweepstakes of a skill-based there running gaming or think one whatever VGTs; greater that not oftentimes, people -- on are are And There's favor market. who a existing as for in headwinds the would I -- or you gaming that obviously, regulated of call are revenue we so states the But in far like that state. operators it VGT bring to at gaming. is the see are we casino the from that

oppositions the And been always given anti-gaming sentiment those to have state. addition challenging a so in in

a you there in legislation legislation And recognize revenue great that next years, states can And as line. can goal that And across always can think opportunity, So value VGTs the the where will next we that to appreciate close. is help that and the be see that move got we it we businesses is it session the or I lot And value see of as the opportunity a few survive. challenge. will saw hope Georgia and the very X, budgets. be some It in of and of that that small ever. can the as those their Missouri, very, our both bring provide, legislators

Steve Pizzella

And on legalized potential there do in we that impacted how somewhat iGaming online at helpful. business related think if then by that Has Illinois all? And opportunities up all? betting. following That's your Okay. you just any at -- sports the of

Andy Rubenstein

other allows in but non-eventful more So brings to talking the terms and environment just and -- establishment. get more to I think, are another think, with on bets maybe introduces people games watch them it games. who opportunity while been point our our sale of they're by the sports bringing have the or to out importantly, gives of has point, that bars, I people those people social at gaming, gets placing interested It them VGTs, for basically, people business. more helpful to That betting, to game general, to about in

So And just think have market. And very going has on have We We my a it's our be could effect to know iGaming the legislated. implementing it's, helpful. going how regulators positive opinion, in in that be I it. know similar I overall, don't way good been we to a don't think job done the implemented. think it's

hope gaming to a will who able Our is in gaming. And license. way it's bringing therefore, available experience owns that was get anyone to participate able be or license who that we're another optimistic our players that to to we

Operator

[Operator Instructions] continue. the Mr. have questions over phone. And any don't we Rubenstein, please

Andy Rubenstein

Yes.

So I joining wanted for today. thank to just us everyone

the rest optimistic and very the in of are We next Thank of the end you look we -- on quarter. reconnecting to with XXXX, at forward you.

Operator

concludes And today's Thank this conference participation. your you for call.

disconnect. You may now

Accel Entertainment (ACEL) 11 May 212021 Q1 Earnings call transcript