ACEL - Earnings call 3 2023 | Accel Entertainment, Inc.

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Operator

Ladies and gentlemen, please remain holding. The call will begin momentarily. Once again, please remain holding. The call will begin momentarily.

you today's thank Quarter Entertainment and Call. Earnings afternoon, for Accel attending Third Good Jason, be and today. is name My I'll the for moderator [Operator to our like Instructions] I conference would to over pass host, the Harmer. Derek now

Derek Harmer

Entertainment Accel today and website section call Mathew will for to call Ellis, that Rubenstein, on Andrew information Chief Financial be to Earnings on Officer. is Call. will website being Third Today's Events Welcome are Officer; the Executive our recorded Participating Chief the website. Accel's Accel's available press release Presentations and the XXXX supplemental under be and this refer discussed our of Quarter on within call. and Investor . Please our Relations

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

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

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

materials For regarding in other well our the reconciliations of these Relations website. as release of information earnings Investor the as measures, and other non-GAAP measures to please refer our section

to turn Andy. over the now call I will

Andrew Rubenstein

X% EBITDA a revenue Thanks, you year-over-year report million, X%. million. am pleased another to increase We strong $XX $XXX year-over-year had Accel's increase adjusted Derek, joining I of and call. afternoon, of earnings third good everyone. Thank a reported quarter for for of and we of us quarter.

was locations primarily by QX's X% with Illinois, in same-store revenue sales growth. new along adding growth driven

players. developing growth our and add to locations where some attract saw also We continue we new markets in

in our model. of the hyper environment demonstrates current Our continued business local growth economic the strength

our that to businesses. incremental recognize on their partners rely and high-quality Our offering the profits establishment brings

On labor stable. continues cost side, parts. to impacts inflationary on other the and such our as remain expense structure expenses Despite the

While some retain and have seen the of us labor talent. market remains stabilization, tight, to allowing we better attract signs

worked provide now a consistent have on nearly the timely and to basis. able vendors through supply all are parts disruptions and chain Our of

model variable any structure quickly Our asset-light business cost to economy. us calibrate to highly in and allow business the changes our

hard pipeline at remains excited active, finish across I'm across share future those the opportunities with them forward opportunities to in sharing and multiple our line working the growth, future. we're to to and Looking the you country. evaluating get We're look

goal the outside revenue Our continue to increase long-term remains to percentage generated Illinois. our that of of is

We enter. Overall, about excited to execute to opportunities where markets playbook. in are where currently new its we're the continues looking operating Accel as remain markets as well growth the we

of model business local one offers sheet balance highly strong best Our visible returns and the in gaming. growth

over With that, to detail. Matt in through I'd like to you turn walk to financials it more our

Mathew Ellis

Thanks, and good afternoon, Andy, everyone.

X% of revenue the quarter, A year-over-year adjusted X%. of $XX total For we increase million. of and a had million, year-over-year of increase EBITDA $XXX third

in the included but attractive, margins X, Century markets lower our between in results operates revenue our far been XXXX, As has other than where The are since the a and reminder, Century negotiated. is Century markets. June location split and

Nebraska in quarter such third in purchases the for accelerating and as cash due Illinois CapEx markets increase and some our was to developing Georgia. million spend. investment The $XX is additional

upside and both by We these continue we're recent in see excited growth. to the markets,

years realized investments for That said, not to several may important fully to it's be realize come. today's

to performing and continues mostly their to remain had is and September terminals Location locations attributable XX, lowest our of doors. As increases we and X,XXX X%, respectively. locations, X% XX,XXX year-over-year of low attrition closing

$XXX of cash and debt third of balance our the sheet $XXX liquidity, approximately end facility. $XXX quarter, million net had consisting on of of on million credit and $XXX of availability the million million our we At of

capital on to I'd update strategy. allocation like an provide now our

balance aware, in program. business unique can As low in strong repurchase all leverage, return and $XXX and XXXX, November you're we sheet a to of million position we where announced we're shareholders. grow our With a our capital share

the average just over we XXX,XXX per During share. quarter, price shares repurchased $XX.XX of an at purchase

We shares a of approximately the are through million. just cost program approximately over with repurchase $XXX million halfway XX at repurchased

to are guidance due near-term uncertainty. to not we issuing quarters, Similar prior the macroeconomic

strong that should to demand expect current emphasize the I continue, the results. would However, continues finish year remain we trends and like record-breaking to to with

turn back to it With over that, to like Andy. I'd

Andrew Rubenstein

strong another to with executing platform growth in normal thrive on a pleased business creates our to model as outperform confident We're our focused conditions for challenging We're focused our Matt. and quarter under these investors. and strategy such in remain circumstances. Thanks, value create locally

We your will now take questions.

Operator

from [Operator Instructions] question Our Pizzella first is Deutsche Bank. Steve with

Steven Pizzella

your you anything outside a the color about maybe any And throughout seasonality talk saw give on if customer X us you you regions. main how in Can trended? quarter of can demand perspective October then normal from

Andrew Rubenstein

in it's of calling, terms some Thanks Steve. basic on the year-over-year of the minimal seeing what play. we're in for Yes. growth, it's The but same-store still stability play, is -- kind not --

We've But -- As we're Nevada that. market. -- there's to -- where starting say we new I'd the we're market of been at overall, see markets, continue seen we see strength some that we in stable. we've look invested Illinois, has seeing the equipment. in the

final kind in have is that we getting are quality. strong, . October convenience provide even has I stable results, seen. starting our business think we our the few followed what in The and of the the numbers incredibly of we spending. discretionary performance. their customer see the value. kind state And that and as you'll days from better. Again, from of reporting We sees have it's is I in quality provide equipment a the better next fact very keeps people mean the and trend. of resilient paused don't to the as representative although

may or at than casino a location. experience destination they as is a So the locally just experience that or in have good better they

good feel it. we So about

We I where of year, think end in of we're a forecasting kind distributed is business position of gaming sits strength. stability have and off this beyond on in of kind And of the confidence the vertical quarter. although holding gaming the the our

Steven Pizzella

Okay. margin and it moving about need forward? think the we cost That's think were we helpful. kind then maybe moving like margins -- level couple what forward? what to points growth basis structure, And of cadence a think do of margins expansion looks How to that to And you as down should revenue get flat about you of that maybe year-over-year.

Mathew Ellis

first. in the past, question. we our talked this for Thanks July. Matt. with Again, raised it's about think Steve, the I'll I is in but cycle cost start

So about very as annual rather the being than a overall And living sequential. best of have we like part has talked mean, the thing stable. increases year cost biggest ago we that. the of to wages I has our and and But as expenses of stuff been cost that stable. look at been pretty sort structure

that easy, option very forecasting the sort close as job. the of down seeing come good of revenue. the of What lot Andy we're trends, the that's to an Again, on discussed convenient part our how to revenue for local. of, will we're We're is the easy players. about We strong base. a feel expansion Frankly, part, at. flows the or cost home margin sort And earlier, while

came again, forecasted. see October better as he numbers internally the you'll through soon. said, than But So we

certainly feel overall, margin get So a we lot demand through good, that try but the of to but on expansion, we'll come some will side.

Steven Pizzella

about level $XX if to kind And of million The think to $XX XXXX we a kind XXXX is that build rate million out more, our then models? into could. in good forward just moving I this of year, and one CapEx as run

Mathew Ellis

be to But we you shortages. certain to we didn't of have keep a to walked with talked purchases And out Like into forward and up lower of this setting can't I but want of equipment, little you lot year We'll those of opportunistic, to than new to we new see I everything next have be don't expect think year. in. backlog a run you products we some safe, lot and would about, XX% comes want drop go can away. any XX% gone a then abundance how little to a in, a said, Like caution that. we it locations. end just come

So I XX%. XX% expect to . it would down

Operator

is next question with from Our Chad Beynon Macquarie.

Chad Beynon

This is Sam on for Chad.

the not integration? tuck-ins, new question gaming in revenues remind First Could the various broader slowing same-store industry. such portfolio guys gaming of that growth, same-store that opportunities have in vertical you with as dependent on locations, us you regional growth your are

what the portfolio the are same-store fee avenues in 'XX? And assuming would growth and trends from flat across 'XX these aggregate

Andrew Rubenstein

-- or I'd pursuing tuck-in, other have Thanks, Sam. quite a expect few to continue opportunities us is those in -- The 'XX. opportunities, here in we And markets. Illinois Andy. those whether it's This

Montana. locations We that a retail we to the have operations, business got of will able be will in operate our expand couple retail

of opportunities 'XX. You'll in kind see manifest the themselves

And real a to its I then for there, -- like indicated to as we're there's has lot to looking of new that the opportunities expanded us is at -- business Nebraska, mean grow. success Accel as we places there markets. other us

the We are as into we a involved we Louisiana Dakota, the half South get manufacturer in anticipate second market 'XX. states getting of more like in Louisiana,

are opportunities the there. So

the will some second by we real the quarter, time progress. first start think the the made you'll at toward see we've call, half of of be the I 'XX realized 'XX. end -- to end this results in the do that into And

Chad Beynon

like actually VGT as last And has it that market like been a it then impacted in new looks have follow-up, of growth looking casinos by launched Illinois data, months. has doesn't And the accelerated. the Great. few the at look any

anything, you've what at all? wondering Just your in seen, if portfolio

Andrew Rubenstein

individual had how in in We similar of it. mean that as is has entertainment. decrease. entertainment felt Nevada, There's as value in in it casino of more haven't are really acceptable people I form proximity general, Illinois been that, a gaming to locations an that becomes to that in more see -- real the couple believe a marginal it we

of We're spent of is the the same. the value in in entertainment people or offer appreciating is. our an our inflationary where proposition time what alternatives other environment are And money many

is is will is So people gaming slot and the that strong view over we've years market. of operating a playing entertainment prefer. that more seen machines Illinois as an become last It more of culture, our a XX

Operator

There are more questions. no

question we Sorry, Northland. have from Greg Gibas another with

Gregory Gibas

those. at been you it's look continuing I mentioned tuck-ins little just Illinois First, I guess, to while. a think I -- in just

So still of opportunities I'm tuck-ins within attractive if seeing in terms Illinois. you're curious

Andrew Rubenstein

opportunities this indicates exit they'll looking always And people we're company think market, opportunity lot kind are spot And that and that partner Yes. of And of again, years that. will a transitioning and them. presence a good -- companies partner -- XX and execute think, is we're a continue are through is -- those to for there right I the to find that continue. market we've the of The we when I will evaluating into demonstrated this both appropriate. to the or on go with. And is diligence kind

Gregory Gibas

kind of And I the Great. follow-up then, there. guess,

You mentioned markets. of stack With being Carolina expand the goal where outside opportunities being, growth most the of just still Illinois. of curious terms I'm for are excited up like time kind table those about? where in you'd North up revenues you to

Andrew Rubenstein

that continue I Montana started we've business able in to a grow mean few be successful really be we we been have and I capitalize retail think able like significantly. these that to To some of situations. to on, the And path. the in opportunities of down we'll we've

a we from pattern same-store growth at growing other but that growth there. a out number, strong low You're there, states looking in very is see sales are very Nebraska

looking like make think, may other. we be said, one move what other year, a identified we stronger that at direction into next the we're as or pivot really doing pursue hard to there'll effort. we I in we've Whether Georgia. I We're that So states in

South opportunities. a has presented few Dakota

is So but from X most away. present. but the a tell may And months It -- be would that is they different I conversation actionable Montana's right now, Montana are you, to there. X most one the

Operator

team pass back management for remarks. to the are call over more There the questions. no closing I'll

Andrew Rubenstein

And everyone, thank us joining for today. you,

. spill second and will 'XX. to a half sharing you want about into wish I are forward 'XX everyone news year. coming Thank look good guys which We of into you. excited the and a pretty very and in to happy appreciate to We as we the year season, listening new talk safe today. holiday what's strong 'XX, again some in you and we'll

Operator

That you concludes Thank participation. conference your the for call.

You may now your disconnect lines.

Accel Entertainment (ACEL) 7 Nov 232023 Q3 Earnings call transcript