ACEL - Earnings call 4 2023 | Accel Entertainment, Inc.

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Operator

Hello, everyone. Thank you for attending today's Accel Entertainment Q4 and 2023 Earnings Call. My name is Sierra, and I will be your moderator today. [Operator Instructions]

I would now like to pass the conference over to our host, Derek Harmer.

Derek Harmer

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

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

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

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

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

I to Andy. call the will turn now over

Andrew Rubenstein

and everyone. EBITDA Fourth of for had $XXX million, Call. adjusted Thank respectively. good us increases for year, joining XX%, with XX% Accel's record-setting another Thanks, and pleased to Derek, $X.X of Quarter and billion afternoon, Earnings XXXX we and you I'm report total of revenue year-over-year

in the X% adding of throughout X%, locations growth the Century million, For respectively. revenue reported of by sales X% $XXX same-store new was adjusted quarter, we and acquisition driven growth and XXXX $XX and Illinois. of year-over-year increases million EBITDA Revenue

locations, continue players our where we attract improve equipment. offering growth developing our saw to in also better with new We and markets add

business demonstrates continued of strength model. our local Our growth the

recognize offering our partners businesses. on the incremental to and rely brings provide value high-quality the location we their Our revenues

on our continues inflationary expectations On remain expenses such as with parts. line structure in impacts despite labor the expense and side, the to our other cost

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

Looking than the country. more active at as multiple future growth, our we pipeline opportunities evaluate remains across ever

We right near forward opportunities line with the sharing look you finish future. and to are the them to working across in hard get the

optimistic also the currently are about the We where we in markets opportunities operate.

balance strong growth gaming. model focused sheet, one the locally Our best business offers in and of returns consistent

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

Mathew Ellis

afternoon, good Thanks, and everyone. Andy,

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

record, of we the set of and new $XXX For million, of billion a adjusted XX% year-over-year Accel year, $X.X increases respectively. with and XX%, total revenue EBITDA

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

for factors. the $XX million increase spend to year-over-year CapEx million year spend. the due was The for $XX cash was and CapEx fourth several cash was quarter

purchases to accelerated supply terminals we our disruptions. First, against of protect redemption chain

the terminals XX gaming introduced at one months. high-performing In released would in new cabinet we Second, to were see XX Illinois same high-performing X every time. past, the normally

we CapEx XX%. everything $XX in Based to to million $XX mentioned, Nebraska as Georgia. XXXX our XXXX's in decrease million, be more projecting portion markets than a I such a and developing of in are invest view between onetime continue we of as on we and CapEx Lastly, just and nature

CapEx further. to decrease expect the even term, longer we Over

terminals we As of December had XX, X,XXX year-over-year X%, increases locations, and of and respectively. XX,XXX X%

the million $XXX fourth credit low attrition facility. locations and to of liquidity, lowest on current of attributable closing quarter, doors. of the X% we our X%, remain and and continues Location Nebraska, performing At locations consisting and their to our end terminals by Excluding on balance mostly increased of net debt is year-over-year respectively. million and $XXX had availability sheet approximately $XXX $XXX of million cash million of our

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

make program. our We on $XXX million progress share to continue repurchase

we repurchased X.X shares quarter, purchase of average share. an price per the During million at $XX.XX

capital million We XX% uncertainty. and are not balance issuing almost with prior With more than guidance Similar through quarters, our can where repurchase program, in we are to the grow leverage, cost we million. macroeconomic our position repurchased to strong and we unique of near-term at a business a XX sheet the shares $XXX due are return shareholders. low to

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

Andrew Rubenstein

year executing gaming create to local solutions our Thanks, Mat. to platform strong another with to pleased a focused on strategy investors. for and that results. our We're full-service, provide turnkey, value continue and remain strong consistent produce We're our growth confident

Our so businesses. provide their grow location focus is customer unmatched to guidance and support, can expertise partners our

take We now will your questions.

Operator

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

Steven Pizzella

little growth a you up over new versus if these Are conversions? implying look? It market these could. Illinois, does location gaining Can are about first, for to share. looks wanted some current talk locations? is pipeline about on what the Are Just we that? Illinois bit X% up And you just X% how your focus like driving

Andrew Rubenstein

Thanks, Steve.

we've Accel partner. that as -- business So business seeing owners more see their we're at preferred and and what are competitors' of we effort. is lot And as had has look preferred new that sales a a a it, recognizing partner. more is offering locations a always We strong of the Accel choose our very

both grow our seeing our that help we're of The always we're base. current -- portfolio. at So looking

the locations continue of grow, more and you'll our Accel, think see down paring through constantly I to more choosing But aren't owners as last they establishment profitable. have are we as we bottom years. where portfolio So XX the

Steven Pizzella

get to year-over-year some to think see about guess Okay. And kind growth forward margins, what we line need of expansion? year? this guess, the margin sequentially. And into then, turning I should How we margin and modestly do top to moving down I

Mathew Ellis

Yes.

question. it's for Steve, Mat. the So Thanks

and it expense talked really easy What really and is labor. of and remain there's think that. I think to X.X all I comes of seems for the Again, sort is our we of But side versus inflation bit crazy you've it, down revenue those there, to and a of balance nearly be years labor of first the about hikes that business adjusted ago. part is, sort out line, And we're Century obviously, growth labor challenging. does still almost not seeing saw to in we've market the forecast.

of to it or forward-leaning have hit our to early like don't those that's of there's indicators, hard. side the forward And going us anything our business microeconomic we is beauty concentration revenue. other bookings thing The There's part The no no of is is that revenue. hard predict.

to hard now. you growth, It's like come again, So sticking I holds number. we've But pop. again, slightly it's get if coming that revenue back this mid-single some home routines, get we're to that we that up. their digit balancing seen on people depend think, give you'll we and exact But margin and to up, we'll year, revenue if we sticking weather to get the mid-, into and the but see really an close right act growth a cautious, below upper just

but comps. We I'd relatively like there. expect. out had some single-digit upper the February, growth we'd the old mid- days and great aren't had year January it's and say But Overall, we started tough of last weather --

relatively turns will how be it I flat, out. but So we'll it see think

Operator

comes question with from next Our Macquarie. Beynon today Chad

Chad Beynon

of kind I in at and potential rates M&A this down? to this you wanted We've environment. But are waiting for still about rate stubbornly cyclical point come sellers, period now to little waiting declines came to an in kind Obviously, you higher of for get the year. just been potential XX here to the as through levels for we when rates ask months about next they're the a catalyst? potential talk bit, is they the X down? still at talking And time. the this to a guys add be some opportunity are rates come to than that the Are down inorganically? Or thought could we

Andrew Rubenstein

[ Thanks, Greg ]. (sic) Yes. Chad

been always that we've, out of But at 'XX think, environment. and the and And with. has and opportunities. mean have see work we identified I seller and plays to still sell next the I a couple -- have is -- where As gap continued quarters. in that buyers And we'll saw a is that what few think expectation the of buy how 'XX look there's challenge different we we the over between adjusted economic the I closer a a kind to what to

companies from gap at, close need some you until I some of who think of or to going pressure closing? of rates kind of that little see take A to the it's the don't I that on some that these levels are see But over-levered the bit. have they're they you decline Do action.

we're believe positioned well a we as buyer. so And

low leverage. have We

is up appropriately in availability. We have will And seeing XX some to that end be great what we'll I execute the that think months priced. opportunities on XX next you'll

Chad Beynon

$XX-plus the on in CapEx million Mat, 'XX. of

is Because extra sounds additional bringing cash down those some Just Is the it type was higher So Are CapEx period CapEx a information like kind some with return the growth. that the quite it some was 'XX significantly. seeing doesn't assume absent can business, extraordinary purchases? mentioned of of in and it that's you it outflow terms customer? of kind returns it grow of on that, we sound how lead there terminal CapEx, in you coming a and was year to any in like deferred the to that the should it new weather? of new

Mathew Ellis

Thanks, Sure. Chad.

our to ramps, example players market now Nebraska. of the EBITDA demand the increased biggest think we're the primary there, turned Again, see at and has used are is product growth catalyst there but return Those starting we numbers. investments product. But and see developing decent that the it like they is market percentages again. great that as we that I outrageous, in expect markets. the positive, get to out market place as we A low the is see

revenue, into investments. you don't growth, you consistent in get that side, the in sort revenue. divide On is that of while X certainty revenue can you kind One Illinois get investment the and of it extending which

traffic offering. get other out able you do to half, with better it owner more they machine. And a drive to have The better are a you machine with you're taking less a where that because work desirable

seeing we those So returns. are

returns because is The more there. comes. expect change the the have obviously, a are than at the again, But longer, demand the location would because locations be you particularly that happy it in that, developing seeing. markets. Illinois, best product at cases, In the say I your biggest with those new would in we both players we're And demand return, it's rather little takes when it

Operator

Our comes with from Northland. Greg Gibas next question

Gregory Gibas

Great.

X% up the bottom Wondering if sales Just said full Was differences just wanted for that think clarify, QX. X%? to same-store any the with I you Illinois in there were year. the line

Mathew Ellis

in rough I don't to think good again, old the really our So compared we here, to weekend consistent, move local the well. And we 'XX, we which in coming than nice was Ironically, is saw expect. to than Again, a overall look press like other Again, of a we'd you And a biggest winter just this tad 'XX, way. to QX And been overall demand other in this, the in in play in the is had there's expect you lower, a I thing what in the holding growth the up we weather; still think is anything needle. there, look Greg, overall, very few but again I up can't And saw in and at local sort winter But Midwest is at we little. gaming of the as these we're good has January. the a it's look overall, more gaming, a had But modest see weather. mid-single an think more just revenues at digits, control. mild in can environment like space, It's right? that weekends it's things business release. mild. the

Gregory Gibas

in there? to wanted should Nebraska, -- prospects think just if And like guess, Okay. terms rate I in Nebraska like regarding or close the prospects how your rate the think Great. makes about year I of in specifically how within of accelerate the XXX a growth? Georgia. changed, anything curious presence we do -- But now Nebraska. kind of anything, versus seeing ask, think you Should sense to And XXX ago. you're you're I has about Or we thinking acquisition to Just that growth you're an locations market? your

Andrew Rubenstein

recently growth in I the a gap all acquisitions at large closed there's be lot It's like organically. we preferred a looking that especially vendor seen business gap. the We're to anytime time. and establishments, Greg. to Nebraska. is I Thanks, We've partner are pretty Yes. of don't think mean that, going clear premium And soon.

winning these an and And the acquisition new over as great. So I we're isn't again. think over need partners for

The a you the kind I surprised And are is my the couple my opportunities we're end is decides, other of tell if, time is this evaluating. hey, there them thing year, partner. one I will wouldn't of by and that Accel be of

Gregory Gibas

Great. a quick the be maybe or on be, were something just to able comment year? I market guess in end we of would you if are before follow-up we'd see markets the what that to

Andrew Rubenstein

or predict be to seller engaged. hard may it's think I the to talking be us because may

not, of Illinois. see Uncertain But I or we'll really we've now, focuses, whether -- think growth some discussed. see I of probably of execute think you'll Illinois. happens -- It's our Illinois a outside one as market? you'll do uncertain. but outside we'll think definitely things I Which in And something of you'll that. on right couple

Operator

currently are Instructions] registered. no There questions [Operator

waiting We time. have at no questions this

So remarks. conference to Rubenstein pass like to I'd for closing Andy the

Andrew Rubenstein

very it's today. is just trajectory. definitely joining are And XXXX; the see that that question the we growth very we're Like Illinois said provide off to opportunities the continue we execute performance 'XX 'XX. optimistic will themselves is in outside its the for day. all part or you start. had us said, of a Thank be recently latter and right And Accel on able of the I to as 'XX you'll that actually that whether we'll we strong what And presenting every on

forward you Thanks. reconvening again, thank So and to look about in months. X

Operator

call. you conference your today's participation. conclude for Thank will all That

disconnect You now your may lines.

Accel Entertainment (ACEL) 28 Feb 242023 Q4 Earnings call transcript