Accel Entertainment, Inc. (NYSE: ACEL) today announced certain
financial and operating results for the second quarter ended June
30, 2024.
Highlights:
- Ended Q2 2024 with 4,034 locations; an increase of 4.7%
compared to Q2 2023
- Ended Q2 2024 with 25,757 gaming terminals; an increase of 5.7%
compared to Q2 2023
- Record revenues of $309.4 million for Q2 2024; an increase of
5.7% compared to Q2 2023
- Net income of $14.6 million for Q2 2024; an increase of 46.1%
compared to Q2 2023
- Record Adjusted EBITDA of $49.7 million for Q2 2024; an
increase of 6.5% compared to Q2 2023
- Q2 2024 ended with $311 million of net debt; an increase of 9%
compared to Q2 2023
- Repurchased approximately $9.2 million of Accel Class A-1
common stock in Q2 2024
- Announced acquisition of Fairmount Holdings, the owner of the
FanDuel Sportsbook & Horse Racing in Collinsville, Illinois,
which is expected to close in Q4 2024
Accel CEO Andy Rubenstein commented, “I am happy to report that
we delivered another record-setting quarter, continuing to
demonstrate the strength of our local, convenience-based gaming
model. We are excited to leverage our strengths in catering to
local markets with our announcement to acquire the FanDuel
Sportsbook & Horse Racing, a single-site, easily accessible,
local gaming venue and a natural extension of our route-based
gaming platform. As we continue to strengthen our core and expand
our offerings, we believe we can continue to generate attractive
low-teens returns on capital and improve our trading multiples,
making Accel a compelling investment opportunity.”
Condensed Consolidated Statements of
Operations and Other Data
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2024
2023
2024
2023
Total net revenues
$
309,413
$
292,647
$
611,230
$
585,855
Operating income
22,683
29,164
48,242
56,836
Income before income tax expense
18,519
16,085
30,702
31,267
Net income
14,586
9,983
22,002
19,165
Other Financial Data:
Adjusted EBITDA(1)
49,665
46,612
95,912
92,730
Adjusted net income (2)
21,383
20,435
40,888
41,499
(1)
Adjusted EBITDA is a non-GAAP
metric. See "Non-GAAP Financial Measures" for a reconciliation to
GAAP.
(2)
Adjusted net income is a non-GAAP
metric. See "Non-GAAP Financial Measures" for a reconciliation to
GAAP.
Net Revenues
(in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net revenues by state:
Illinois
$
227,093
$
215,947
$
451,956
$
435,790
Montana
42,583
39,275
80,724
75,726
Nevada
29,322
29,869
58,531
59,830
Nebraska
6,249
4,488
12,083
8,412
Other
4,166
3,068
7,936
6,097
Total net revenues
$
309,413
$
292,647
$
611,230
$
585,855
Key Business Metrics
Locations (1)
As of June 30,
Increase / (Decrease)
2024
2023
Change
Change (%)
Illinois
2,816
2,690
126
4.7
%
Montana
620
610
10
1.6
%
Nevada
359
355
4
1.1
%
Nebraska
239
197
42
21.3
%
Total locations
4,034
3,852
182
4.7
%
Gaming terminals (1)
As of June 30,
Increase / (Decrease)
2024
2023
Change
Change (%)
Illinois
15,743
14,767
976
6.6
%
Montana
6,435
6,210
225
3.6
%
Nevada
2,735
2,782
(47
)
(1.7
)%
Nebraska
844
609
235
38.6
%
Total gaming terminals
25,757
24,368
1,389
5.7
%
Location hold-per-day (2)
Three Months Ended June
30,
Increase / (Decrease)
2024
2023
Change ($)
Change (%)
Illinois
$
862
$
858
$
4
0.5
%
Montana
612
569
43
7.6
%
Nevada
843
860
(17
)
(2.0
)%
Nebraska
255
237
18
7.6
%
Six Months Ended June
30,
Increase / (Decrease)
2024
2023
Change ($)
Change (%)
Illinois
$
861
$
871
$
(10
)
(1.1
)%
Montana
601
573
28
4.9
%
Nevada
845
860
(15
)
(1.7
)%
Nebraska
243
229
14
6.1
%
(1)
Based on a combination of
third-party portal data and data from our internal systems. This
metric is utilized by Accel to continually monitor growth from
existing locations, organic openings, acquired locations, and
competitor conversions.
(2)
Location hold-per-day is
calculated by dividing net gaming revenue in the period by the
average number of locations. We then divide the calculated amount
by the number of operational days. We utilize this metric to
compare market and location performance on a normalized basis. The
percent change in location hold-per-day is the underlying metric
used to determine the change in same-store sales.
Condensed Consolidated Statements of
Cash Flows Data
Six Months Ended June
30,
Increase / (Decrease)
(in thousands)
2024
2023
Change ($)
Change (%)
Net cash provided by operating
activities
$
57,614
$
63,845
$
(6,231
)
(9.8
)%
Net cash used in investing activities
(69,324
)
(16,245
)
(53,079
)
326.7
%
Net cash provided by (used in) financing
activities
5,022
(38,279
)
43,301
113.1
%
Non-GAAP Financial
Measures
Adjusted net income is defined as net income plus:
- Amortization of intangible assets and route and customer
acquisition costs
- Stock-based compensation expense
- (Gain) loss on change in fair value of contingent earnout
shares
- Other expenses, net which consists of (i) non-cash expenses
including the remeasurement of contingent consideration
liabilities, (ii) non-recurring lobbying and legal expenses related
to distributed gaming expansion in current or prospective markets,
and (iii) other non-recurring expenses
- Tax effect of adjustments
Adjusted EBITDA is defined as net income plus:
- Amortization of intangible assets and route and customer
acquisition costs
- Stock-based compensation expense
- (Gain) loss on change in fair value of contingent earnout
shares
- Other expenses, net
- Tax effect of adjustments
- Depreciation and amortization of property and equipment
- Interest expense, net
- Emerging markets, which reflects the results, on an Adjusted
EBITDA basis, for non-core jurisdictions where our operations are
developing
- Markets are no longer considered emerging when we have
installed or acquired at least 500 gaming terminals in the
jurisdiction, or when 24 months have elapsed from the date we first
install or acquire gaming terminals in the jurisdiction, whichever
occurs first
- We currently view Pennsylvania as an emerging market
- Prior to January 2024, Iowa was considered an emerging
market
- Prior to April 2023, Nebraska was considered an emerging
market
- Income tax expense
Net debt is defined as debt, net of current maturities
plus:
- Current maturities of debt
- less Cash and cash equivalents
Adjusted net income and Adjusted EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2024
2023
2024
2023
Net income
$
14,586
$
9,983
$
22,002
$
19,165
Adjustments:
Amortization of intangible assets and
route and customer acquisition costs
5,589
5,284
11,027
10,526
Stock-based compensation expense
3,235
2,567
5,585
4,255
(Gain) loss on change in fair value of
contingent earnout shares
(4,742
)
4,836
(26
)
9,438
Other expenses, net
7,327
73
9,753
3,324
Tax effect of adjustments
(4,612
)
(2,308
)
(7,453
)
(5,209
)
Adjusted net income
21,383
20,435
40,888
41,499
Depreciation and amortization of property
and equipment
10,794
9,446
21,228
18,509
Interest expense, net
8,906
8,243
17,566
16,131
Emerging markets
38
78
78
(720
)
Income tax expense
8,544
8,410
16,152
17,311
Adjusted EBITDA
$
49,665
$
46,612
$
95,912
$
92,730
Net Debt
As of June 30,
(in thousands)
2024
2023
Debt, net of current maturities
$
537,252
$
489,721
Plus: Current maturities of debt
28,489
28,472
Less: Cash and cash equivalents
(254,923
)
(233,434
)
Net debt
$
310,818
$
284,759
Conference Call
Accel will host an investor conference call on July 30, 2024 at
4:00 p.m. Central time (5:00 p.m. Eastern time) to discuss these
financial and operating results. Interested parties may join the
live webcast by registering at
https://www.netroadshow.com/events/login?show=70f3f5e5&confId=66550
or accessing the webcast via the company’s investor relations
website: ir.accelentertainment.com. Following completion of the
call, a replay of the webcast will be posted on Accel’s investor
relations website.
About Accel
Accel is a leading distributed gaming operator in the United
States and a preferred partner for local business owners in the
markets it serves. Accel offers turnkey full-service gaming
solutions to authorized non-casino locations such as bars,
restaurants, convenience stores, truck stops, and fraternal and
veteran establishments across the country. Accel installs,
maintains, operates and services gaming terminals and related
equipment for its location partners as well as redemption devices,
stand-alone ATMs and amusement devices, including jukeboxes,
dartboards, pool tables, and other entertainment related equipment.
Accel also designs and manufactures gaming terminals and related
equipment.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical fact,
contained in this press release are forward-looking statements,
including, but not limited to, any statements regarding our
estimates of number of gaming terminals, locations, revenues,
Adjusted EBITDA and capital expenditures, our ability to continue
to generate returns on capital and improve our trading multiples,
and our proposed acquisition of Fairmount Holdings, Inc. The words
“predict,” “estimated,” “anticipates,” “believes,” “estimates,”
“expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,”
“continue,” and similar expressions or the negatives thereof are
intended to identify forward-looking statements. These
forward-looking statements represent our current reasonable
expectations and involve known and unknown risks, uncertainties and
other factors that may cause our actual results, performance and
achievements, or industry results, to be materially different from
any future results, performance or achievements expressed or
implied by such forward-looking statements. We cannot guarantee the
accuracy of the forward-looking statements, and you should be aware
that results and events could differ materially and adversely from
those contained in the forward-looking statements due to a number
of factors including, but not limited to: Accel’s ability to
operate in existing markets or expand into new jurisdictions;
Accel’s ability to offer new and innovative products and services
that fulfill the needs of location partners and create strong and
sustained player appeal; Accel’s dependence on relationships with
key manufacturers, developers and third parties to obtain gaming
terminals, amusement machines, and related supplies, programs, and
technologies for its business on acceptable terms; the negative
impact on Accel’s future results of operations by the slow growth
in demand for gaming terminals and by the slow growth of new gaming
jurisdictions; Accel’s heavy dependency on its ability to win,
maintain and renew contracts with location partners; the parties'
ability to satisfy the conditions to the consummation of the
proposed acquisition of Fairmount Holdings, Inc. and the risk that
the proposed acquisition may not be completed in a timely manner or
at all; unfavorable macroeconomic conditions or decreased
discretionary spending due to other factors such as interest rate
volatility, persistent inflation, actual or perceived instability
in the U.S. and global banking systems, high fuel rates,
recessions, epidemics or other public health issues, terrorist
activity or threat thereof, civil unrest or other macroeconomic or
political uncertainties, that could adversely affect Accel’s
business, results of operations, cash flows and financial
conditions and other risks and uncertainties indicated from time to
time in documents filed or to be filed with the Securities and
Exchange Commission (“SEC”).
Accordingly, forward-looking statements, including any
projections or analysis, should not be viewed as factual and should
not be relied upon as an accurate prediction of future results. The
forward-looking statements contained in this press release are
based on our current expectations and beliefs concerning future
developments and their potential effects on Accel. These
forward-looking statements involve a number of risks, uncertainties
(some of which are beyond our control), or other assumptions that
may cause actual results or performance to be materially different
from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not
limited to, those factors described in the section entitled “Risk
Factors” in the Annual Report on Form 10-K for the fiscal year
ended December 31,2023 filed by Accel with the SEC on February 28,
2024 (the "Form 10-K"), as well as Accel’s other filings with the
SEC. Except as required by law, we do not undertake publicly to
update or revise these statements, even if experience or future
changes make it clear that any projected results expressed in this
or other press releases or future quarterly reports, or company
statements will not be realized. In addition, the inclusion of any
statement in this press release does not constitute an admission by
us that the events or circumstances described in such statement are
material. We qualify all of our forward-looking statements by these
cautionary statements. In addition, the industry in which we
operate is subject to a high degree of uncertainty and risk due to
a variety of factors including those described in the section
entitled “Risk Factors” in the Form 10-K, as well as Accel’s other
filings with the SEC. These and other factors could cause our
results to differ materially from those expressed in this press
release.
Non-GAAP Financial Information
This press release includes certain financial information not
prepared in accordance with Generally Accepted Accounting
Principles in the United States (“GAAP”), including Adjusted
EBITDA, Adjusted net income, and Net Debt. Adjusted EBITDA,
Adjusted net income, and Net Debt are non-GAAP financial measures
and are key metrics used to monitor ongoing core operations.
Management of Accel believes Adjusted EBITDA, Adjusted net income,
and Net Debt enhance the understanding of Accel’s underlying
drivers of profitability and trends in Accel’s business and
facilitates company-to-company and period-to-period comparisons,
because these non-GAAP financial measures exclude the effects of
certain non-cash items, represents certain nonrecurring items that
are unrelated to core performance, or excludes non-core operations.
Management of Accel also believes that these non-GAAP financial
measures are used by investors, analysts and other interested
parties as measures of financial performance.
ACCEL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share
amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net revenues:
Net gaming
$
293,240
$
277,551
$
581,377
$
556,931
Amusement
5,539
5,630
11,668
12,428
Manufacturing
5,208
4,430
7,417
6,552
ATM fees and other
5,426
5,036
10,768
9,944
Total net revenues
309,413
292,647
611,230
585,855
Operating expenses:
Cost of revenue (exclusive of depreciation
and amortization expense shown below)
213,317
202,306
422,484
405,860
Cost of manufacturing goods sold
(exclusive of depreciation and amortization expense shown
below)
3,162
2,154
4,321
3,562
General and administrative
46,541
44,220
94,175
87,238
Depreciation and amortization of property
and equipment
10,794
9,446
21,228
18,509
Amortization of intangible assets and
route and customer acquisition costs
5,589
5,284
11,027
10,526
Other expenses, net
7,327
73
9,753
3,324
Total operating expenses
286,730
263,483
562,988
529,019
Operating income
22,683
29,164
48,242
56,836
Interest expense, net
8,906
8,243
17,566
16,131
(Gain) loss on change in fair value of
contingent earnout shares
(4,742
)
4,836
(26
)
9,438
Income before income tax
expense
18,519
16,085
30,702
31,267
Income tax expense
3,933
6,102
8,700
12,102
Net income
$
14,586
$
9,983
$
22,002
$
19,165
Earnings per common share:
Basic
$
0.17
$
0.12
$
0.26
$
0.22
Diluted
0.17
0.11
0.26
0.22
Weighted average number of common
shares outstanding:
Basic
83,911
86,184
84,105
86,529
Diluted
85,054
86,820
85,178
86,971
ACCEL ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value and share
amounts)
June 30,
December 31,
2024
2023
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
254,923
$
261,611
Accounts receivable, net
15,149
13,467
Prepaid expenses
8,765
6,287
Inventories
7,533
7,681
Interest rate caplets
8,801
8,140
Other current assets
11,111
8,853
Total current assets
322,201
312,594
Property and equipment, net
276,477
260,813
Noncurrent assets:
Route and customer acquisition costs,
net
23,705
19,188
Location contracts acquired, net
181,350
176,311
Goodwill
101,859
101,554
Other intangible assets, net
19,324
20,542
Interest rate caplets, net of current
3,730
4,871
Other assets
21,702
17,020
Total noncurrent assets
351,670
339,486
Total assets
$
950,348
$
912,893
Liabilities and Stockholders’
Equity
Current liabilities:
Current maturities of debt
$
28,489
$
28,483
Current portion of route and customer
acquisition costs payable
2,014
1,505
Accrued location gaming expense
9,129
9,350
Accrued state gaming expense
17,177
18,364
Accounts payable and other accrued
expenses
34,476
36,012
Accrued compensation and related
expenses
11,195
12,648
Current portion of consideration
payable
3,275
3,288
Total current liabilities
105,755
109,650
Long-term liabilities:
Debt, net of current maturities
537,252
514,091
Route and customer acquisition costs
payable, less current portion
7,482
4,955
Consideration payable, less current
portion
9,794
4,201
Contingent earnout share liability
31,801
31,827
Other long-term liabilities
6,713
7,015
Deferred income tax liability, net
42,463
42,750
Total long-term liabilities
635,505
604,839
Stockholders’ equity:
Preferred Stock, par value of $0.0001;
1,000,000 shares authorized; 0 shares issued and outstanding at
June 30, 2024 and December 31, 2023
—
—
Class A-1 Common Stock, par value $0.0001;
250,000,000 shares authorized; 95,352,477 shares issued and
82,958,153 shares outstanding at June 30, 2024; 95,016,960 shares
issued and 84,123,385 shares outstanding at December 31, 2023
8
8
Additional paid-in capital
207,199
203,046
Treasury stock, at cost
(127,545
)
(112,070
)
Accumulated other comprehensive income
7,940
7,936
Accumulated earnings
121,486
99,484
Total stockholders' equity
209,088
198,404
Total liabilities and stockholders'
equity
$
950,348
$
912,893
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240730900803/en/
Media: Eric Bonach H/Advisors Abernathy 212-371-5999
eric.bonach@h-advisors.global
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