Q2 2024 Accel Entertainment Inc Earnings Call

Ladies and gentlemen, please remain holding. The conference will begin shortly. Again, please remain holding. The conference will begin momentarily.

Tamiya: Please remain holding. The conference will begin momentarily. My name is Tamiya, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to your host, Derek Harmer, General Counsel and Chief Compliance Officer.

Unnamed Moderator: Thank you for attending today's Excel Entertainment Q2 2024 earnings call.

Speaker Change: Good afternoon. Thank you for attending today's Accel Entertainment Q2 2024 Earnings Call.

Tamia: My name is Tamia, and I will be your moderator for today's call. All lines will be needed during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad.

Tamiya: My name is Tamiya and I will be your moderator for today's call.

Derek Harmer: All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to your host, Derek Harmer, General Counsel and Chief Compliance Officer.

Derek Harmer: I would now to pass the conference over to your host, Derek Harmer, General Counsel and Chief Compliance Officer. Welcome to Excel Entertainment's second quarter 2024 earnings call. Participating in the call today are Andy Rubenstein, Accel's Chief Executive Officer, Matt Ellis, Accel's Chief and Ansel Officer, and Mark Phelan, Accel's President of US Canada. Please refer to our website for the press release and supplemental information that will be discussed on this call. Today's call is being recorded and will be available on our website under Events and Presentations within the Investor Relations section of our website.

Derek Harmer: Welcome to Accel Entertainment's second quarter 2024 earnings call. Participating on the call today are Andy Rubenstein, Accel's Chief Executive Officer, Matt Ellis, Accel's Chief Financial Officer, and Mark Phelan, Accel's President of U.S. Data. Please refer to our website for the press release and supplemental information that will be discussed on this call. Today's call is being recorded and will be available on our website under Events and Presentations within the Investor Relations section of our website.

Speaker Change: Welcome to Accel Entertainment's second quarter 2024 earnings call. Participating on the call today are Andy Rubenstein, Accel's Chief Executive Officer, Matt Ellis, Accel's Chief Financial Officer, and Mark Phelan, Accel's President of U.S. Gambling.

Speaker Change: Please refer to our website for the press release and supplemental information that will be discussed on this call.

Speaker Change: Today's call is being recorded and will be available on our website under events and presentations within the investor relations section of our website. Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995.

Derek Harmer: Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. Actual results made different materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law. For more detailed discussion on these and other risk factors, investors should review the forward-looking statement section of the earnings press release available on our website, as well as other risk factor disclosures in our filing to the essence. to see.

Derek Harmer: Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties. Accel's results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law. For a more detailed discussion of these and other risk factors, investors should review the forward-looking statement section of the earnings press release available on our website, as well as other risk factor disclosures in our filings with the SEC.

Speaker Change: These forward-looking statements are subject to risks and uncertainties.

Speaker Change: Actual results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law.

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

Derek Harmer: Any projected financial information presented in this call is for measuring purposes only and should not be relied upon as being predictive of future results. The inclusion of any financial forecast information in this call should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved.

Derek Harmer: Any projected financial information presented in this call is for administrative purposes only and should not be relied upon as being predictive of future results. The inclusion of any financial forecast information in this call should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved. During the call, we may discuss certain non-GAAP financial measures. For reconciliations of the non-GAAP measures, as well as other information regarding these measures, please refer to our earnings release and other materials in the Investor Relations section of our website. I will now turn the call over to Andy.

Speaker Change: Any projected financial information presented in this call is for administrative purposes only and should not be relied upon as being predictive of future results.

Speaker Change: The inclusion of any financial forecast information in this call should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved.

Derek Harmer: During the call, we may discuss certain non-GAAP financial measures. For reconciliation of the non-GAAP measures as well as other information regarding these measures, please refer to our earnings release and other materials in the Investor Relations section of our website.

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

Speaker Change: For reconciliations of the non-GAAP measures, as well as other information regarding these measures, please refer to our earnings release and other materials in the investor relations section of our website. I will now turn the call over to Andy. Thank you, Derek. And good afternoon, everyone.

Andy Rubenstein: I will now turn the call over to Andy. Thank you, Derek, and good afternoon, everyone. Thank you for joining us for Accel's second quarter earnings call. This is a very exciting time here at Accel. First off, we have another record-breaking quarter. We reported revenue of $309 million and adjusted EBITDA of $50 million. Positive proof of the strength of our convenient local gaming offer.

Andrew Harry Rubenstein: Thank you, Derek, and good afternoon, everyone. Thank you for joining us for Accel's second quarter earnings call. This is a very exciting time here at Accel. First off, we have another record-breaking quarter.

Andrew Harry Rubenstein: We reported revenue of $309 million and adjusted EBITDA of $50 million, positive proof of the strength of our convenient local gaming office. Secondly, we announced a pending acquisition of Fairmont Park, which Mark will discuss in more detail shortly. In terms of financial performance, our home market in Illinois posted market-wide GGR growth of 5% year-over-year, and Accel outperformed that, growing revenues by 6%. This is in stark contrast to Illinois casinos, which were flat year-over-year.

Andy: Thank you for joining us for Accel's second quarter earnings call. This is a very exciting time here at Accel. First off, we have another record-breaking quarter.

Andy: We reported revenue of $309 million and adjusted EBITDA of $50 million. Positive proof of the strength of our convenient local gaming offering.

Andy Rubenstein: Secondly, we announced a pending acquisition of Fairmont Park, which Mark will discuss in more detailed short-flighting. In terms of financial performance, our whole market nail-on-white posted market-wide GGR growth of 5% year-over-year, and Accel outlawed that, growing revenues by 6%. This is in stark contrast to Illinois casinos, which were flat year-over-year. We're proud of the strong foundation we've built in our home state, leading in a model that's a win-win-win for our state, our customers, and gaming providers like us. We added almost 50 locations nationwide this quarter, highlighted by 30 in Illinois and 11 in Montana. This is another way we differentiate ourselves from transitional casinos: unit growth.

Andy: Secondly, we announced our pending acquisition of Fairmont Park, which Mark will discuss in more detail shortly.

Mark: In terms of financial performance, our home market in Illinois posted market-wide GGR growth of 5% year-over-year.

Mark: and Accel outperformed that, growing revenues by 6%. This is in stark contrast to Illinois casinos, which were flat year over year.

Andrew Harry Rubenstein: We're proud of the strong foundation we've built in our home state, leading in a model that's a win-win-win for our state, our customers, and gaming providers like us. We added almost 50 locations nationwide this quarter, highlighted by 30 in Illinois and 11 in Montana. This is another way we differentiate ourselves from traditional casinos, unit growth. This unit growth was in addition to positive same-store sales growth in Illinois, Montana, and Nebraska, which was primarily driven by increased demand for our offering, new machines, and favorable weather.

Mark: We're proud of the strong foundation we've built in our home state, leading in a model that's a win-win-win for our state, our customers, and gaming providers like us.

Mark: We added almost 50 locations nationwide this quarter, highlighted by 30 in Illinois and 11 in Montana.

Mark: This is another way we differentiate ourselves from traditional casinos.

Andy Rubenstein: This unit growth was in addition to positive same-store sales growth in Illinois, Montana, and Nebraska, which was primarily driven by increased demand in our offering, new machines, and favorable weather.

Mark: unit growth. This unit growth was in addition to positive same-store sales growth in Illinois, Montana, and Nebraska, which was primarily driven by increased demand in our offerings, new machines, and favorable weather.

Andy Rubenstein: In Nevada, we saw a modest decline in same-store sales due to an overall increase in supply in the greater Las Vegas local market.

Andrew Harry Rubenstein: In Nevada, we saw a modest decline in same-store sales due to an overall increase in supply in the greater Las Vegas locals market, which is turning to expand. Earlier this year, Illinois raised the state gaining tax from 34% to 35% effective July 1st.

Mark: In Nevada, we saw a modest decline in same-store sales due to an overall increase in supply in the greater Las Vegas locals market.

Andy Rubenstein: Turning to expenses. Earlier this year, Illinois raised the state gaming tax from 34% to 35%, affected July 1st. The increases split evenly between us and our location partners. Based on our highly variable cost structure, we will hopefully offset most of the increased expense. On a regulatory side, we're seeing signs Illinois will implement ticket-in, ticket-out, known as Tito, which should make cash processing more efficient and, more importantly, create a more convenient experience for our players, allowing them to switch between games in our venues without cashing out and cashing in each time. We expect Tito to be rolled out in the next 18 months.

Mark: Turning to expenses. Earlier this year, Illinois raised the state gaining tax from 34% to 35% effective July 1st.

Andrew Harry Rubenstein: The increase is split evenly between us and our location partners. Based on our highly variable cost structure, we will hopefully offset most of the increased expense. On the regulatory front, we're seeing signs Illinois will implement Ticket In, Ticket Out, known as TITO, which should make cash processing more efficient and, more importantly, create a more convenient experience for our players, allowing them to switch between games in our venues without cashing out and cashing in each time. We expect Cheeto to be rolled out in the next 18 months.

Speaker Change: The increase is split evenly between us and our location partners. Based on our highly variable cost structure, we will hopefully offset most of the increased expense.

Speaker Change: On a regulatory front, we're seeing signs Illinois will implement Ticket In, Ticket Out, known as TITO.

Speaker Change: We should make cash processing more efficient, and more importantly, create a more convenient experience for our players, allowing them to switch between games in our venues without cashing out and cashing in each time.

Speaker Change: We expect Cheeto to be rolled out in the next 18 months.

Andy Rubenstein: Before I turn it over to Mark, I want to take a few minutes to talk about Excel's value proposition and where we see our greatest opportunities. We provide a high-quality slot-gathering experience at a low price point that could be accessed by our players at a local convenient retail location of their choosing. Oftentimes, 15 minutes or less. We support our retail gaming partners by providing them with high margin revenue per square plug gaming products and self-service technology. We instill player loyalty to our awards programs and create memorable player experiences with our diverse game selection. And finally, we maintain collaborative and reliable partnerships with regulators across 11 different regulatory structures, all while generating attractive returns on capital in the low teens.

Andrew Harry Rubenstein: Before I turn it over to Mark, I want to take a few minutes to talk about Accel's value proposition and where we see our greatest opportunities. We provide a high-quality slot gaming experience at a low price point that can be accessed by our players at a local, convenient retail location of their choosing, oftentimes within 15 minutes or less. We support our retail gaming partners by providing them with high-margin revenue per square foot gaming products and self-service technology.

Speaker Change: Before I turn it over to Mark, I want to take a few minutes to talk about Accel's value proposition and where we see our greatest opportunities.

Mark: We provide a high-quality slot gaming experience at a low price point that can be accessed by our players at a local, convenient retail location of their choosing, oftentimes 15 minutes or less.

Mark: We support our retail gaming partners by providing them with high-margin revenue per square foot gaming products and self-service technology.

Andrew Harry Rubenstein: We instill player loyalty through our rewards programs and create memorable player experiences with our diverse game selection. And finally, we maintain collaborative and reliable partnerships with regulators across 11 different regulatory structures, all while generating attractive returns on capital in the low T. At our core route-based business model, our steady state growth algorithm is both simple and compelling. We target low single-digit revenue growth, mid single-digit EBITDA growth, and high single-digit free cash flow growth, with core business CapEx quickly compressing down towards our annual depreciation of $40 million.

Mark: We instill player loyalty through our rewards programs and create memorable player experiences with our diverse game selection.

Mark: And finally, we maintain collaborative and reliable partnerships with regulators across 11 different regulatory structures, all while generating attractive returns on capital in the low T's.

Andy Rubenstein: In our core rock-based business model, our steady-state growth algorithm is both simple and compelling. We target low single-digit revenue growth, mid single-digit EBITDA growth, and high single-digit cash flow growth, and core business cat-backs quickly compressing down towards our annual depreciation of $40 million. Looking ahead, the primary levers for growth in our core rock business are one, growing organically in Illinois, Nebraska, and Georgia. We both do relations establishments and converting competitor locations to collecting the greater share of location economics through selectively owning establishments in markets where this is permitted and is otherwise profitable. Really, driving profitability in Nebraska and Georgia through operational execution and strategically positioning ourselves in the face of favorable legislation and, for, preparing ourselves for future opportunities in new states likely to legalize local gaming in the future.

Mark: In our core route-based business model, our steady-state growth algorithm is both simple and compelling.

Mark: We target low single-digit revenue growth, mid-single-digit EBITDA growth, and high single-digit free cash flow growth, and core business CapEx quickly compressing down towards our annual depreciation of $40 million.

Andrew Harry Rubenstein: Looking ahead, the primary levers for growth in our core route business are, one, growing organically in Illinois, Nebraska, and Georgia through both newly licensed establishments and converting competitor locations. Two, Collecting a Greater Share of Location Economics through Selectively Owning Establishments, in markets where this is permitted, and his otherwise partner. 3.

Mark: Looking ahead, the primary levers for growth in our core route business are, one, growing organically in Illinois, Nebraska, and Georgia through both newly licensed establishments and converting competitor locations.

Mark: 2. Collecting a greater share of location economics through selectively owning establishments in markets where this is permitted and is otherwise profitable.

Andrew Harry Rubenstein: Driving profitability in Nebraska and Georgia through operational execution and strategically positioning ourselves in the face of favorable legislation, and four, preparing ourselves for future opportunities in new states likely to legalize local gaming in the future. Outside of our core business, our M&A pipeline remains active, as demonstrated by Thurmont and Elk. We are confident that we can leverage our proven capabilities as a local gaming operator to seize opportunities in the attractive and sizable $15 billion GGR local gaming market.

Mark: 3. Driving profitability in Nebraska and Georgia through operational execution and strategically positioning ourselves in the face of favorable legislation.

Mark: and four, preparing ourselves for future opportunities in new states likely to legalize local gaming in the future.

Andy Rubenstein: Outside of our core business, our M&A pipeline remains active, as demonstrated by the Thermon announcement. We are confident that we can leverage our proven capabilities as a local gaming operator to convert opportunities in attractive and sizable $15 billion GGR local gaming market. Most assets in this market are unconsolidated instead of EBITDA levels that are below the radar of larger gaming companies; conditions that play to our strengths.

Mark: Outside of our core business, our M&A pipeline remains active, as demonstrated by the Thurmon announcement.

Mark: We are confident that we can leverage our proven capabilities as a local gaming operator to convert opportunities into an attractive and sizable $15 billion GGR local gaming market.

Andrew Harry Rubenstein: Most assets in this market are unconsolidated and sit at EBITDA levels that are below the radar of larger gaming companies, conditions that play to our strengths. As a prime example of these opportunities, I'm going to turn it over to Mark.

Mark: Most assets in this market are unconsolidated and sit at EBITDA levels that are below the radar of larger gaming companies, conditions that play to our strengths. As a prime example of these opportunities, I'm going to turn it over to Mark.

Mark Phelan: As a prime example of these opportunities, I'm going to turn it over to Mark. Thanks, Sandy. As we all know, we announced the acquisition of Thermon for approximately $35 million in Excel stuff. The acquisition includes a master sports betting license with a long-term partnership with Fandall, a racetrack, track betting opportunities, and the ability to develop a best in class, locally focused casino. We also welcome Bill Starritz and Rob Battelli, both world-class value creators as long-term investors in Excel. Much of this transaction builds on the core capabilities in local gaming and we've honed over the last 15 years, with attractive returns on capital and free cash flow.

Mark T. Phelan: Thanks, Andy. As we all know, we announced the acquisition of Paramount for approximately $35 million in Accel shares. The acquisition includes a Master's Sports Betting License, a long-term partnership with FANDL, a racetrack, off-track betting opportunities, and the ability to develop a best-in-class locally focused casino. We also welcome Bill Starix and Rob Vitale, both world-class value creators and long-term investors.

Mark: Thanks, Andy. As we all know, we announced the acquisition of Paramount for approximately $35 million in Accel stock. The acquisition includes a Master's Sports Betting License with a long-term partnership with FanDuel.

Mark: a racetrack, off-track betting opportunities, and the ability to develop a best-in-class locally focused casino.

Speaker Change: We also welcome Bill Sterricks and Rob Vitale, both world-class value creators and long-term investors in Accel.

Mark T. Phelan: Much of this transaction builds on the core capabilities in local gaming that we've honed over the last 15 years with attractive returns on capital and free cash. We are currently going through the licensing process with the Illinois Gaming Board and the Illinois Racing Commission and anticipate that the transaction will close in the fourth quarter of this year. As a reminder, we expect to develop this project in two phases, with a total development spend of approximately $85 to $95 million.

Speaker Change: Much of this transaction builds on the core capabilities in local gaming that we've honed over the last 15 years with attractive returns on capital and free cash flow.

Mark Phelan: We are currently going through the licensing process with the Illinois Gaming Board and the Illinois Racing Commission and anticipate that the transaction will close in the fourth quarter of this year.

Speaker Change: We are currently going through the licensing process with the Illinois Gaming Board and the Illinois Racing Commission and anticipate that the transaction will close in the fourth quarter of this year.

Mark Phelan: As a reminder, we expect to develop this project in toothpaste. with total development spend of approximately $85 to $95 million in addition to the $3.5 million Excel shares exchanged for the Fairmont Park assets. Phase one will be built in the existing grandstand, adding 200 slot machines, 4 to 6 table games, and continuing to utilize the existing sandal sportsbook and food and beverage outlets. This will be done with relatively low capital intensity and is expected to open in the second quarter of 2025. Phase two will direct a permanent casino onsite, with detailed plans for 500 slot machines, 24 table games, and a new larger FanDuel sportsbook.

Speaker Change: As a reminder, we expect to develop this project in two phases, with total development spend of approximately $85 to $95 million, in addition to the $3.5 million Accel shares exchanged for the Fairmont Park assets.

Mark T. Phelan: In addition to the 3.5 million Excel shares exchanged for the Fairmont Park, Phase one will be built in the existing grandstand, adding 200 slot machines and 4-6 Table Games, and continuing to utilize the existing FanDuel Sportsbook and Food & Beverage Outlets. This will be done with relatively low capital intensity and is expected to open in the second quarter of 2021.

Speaker Change: Phase 1 will be built in the existing grandstand, adding 200 slot machines, 4-6 table games, and continuing to utilize the existing FanDuel sportsbook and food and beverage outlet.

Speaker Change: This will be done with relatively low capital intensity and is expected to open in second quarter 2025.

Mark T. Phelan: For Phase 2, we'll erect a permanent casino on-site with detailed plans for 500 slot machines, 24 table games, and a new larger fan-dual sports. We are combining our local gaming expertise with key partnerships in areas outside our core to create an exceptional offering. For the horse track, we will build on Fairmount's long-term horse racing management team, as well as consultation from industry experts. For the casino, we're engaged with RRC Gaming Management, including Tony Rodeo, former CEO of Caesars Entertainment, and Howie Gagnon, CEO of HTC Gaming Hospitality, and former CEO of several casino companies, including Seneca Games. We're discussing food and beverage amenities with several experienced F&B operators, and sports betting. We're assuming the existing long-term relationship with fans.

Speaker Change: For Phase 2, we'll erect a permanent casino on-site, with detailed plans for 500 slot machines, 24 table games, and a new larger fan-dual sportsbook.

Mark Phelan: We are combining our local gaming expertise with key partnerships and areas outside our core to create an exceptional office. For the horse track, we will build on Fairmont's long-term horse racing management team, as well as consultation from industry experts. For the casino, we're engaged with RRC gaming management, including Tony Rodeo, former CEO of Caesar's Entertainment, and Halliganion, CEO of HTC Gaming Hospitality, and former CEO of several casino companies, including Seneca Gaming. With food and beverage, we're discussing food and beverage amenities with several experienced F&B operators. In sports betting, we're assuming the existing long-term relationship with the fans will be the number one sportsbook in Illinois.

Speaker Change: We are combining our local gaming expertise with key partnerships in areas outside our core to create an exceptional offering. For the horse track, we will build on Fairmount's long-term horse racing management team as well as consultation from industry experts.

Speaker Change: For the casino, we're engaged with RRC Gaming Management, including Tony Rodeo, former CEO of Caesars Entertainment, and Hallie Ganyan, CEO of HTC Gaming Hospitality, and former CEO of several casino companies, including Seneca Gaming.

Speaker Change: We're discussing food and beverage amenities with several experienced F&B operators.

Mathew Ellis: Well, the number one sports book and, Broadly, these partners will complement Accel's expertise in local gaming, regulatory partnerships, and efficient capital allocation. Within five years, our conservative underwriting implies a $20 to $25 million adjusted EBITDA opportunity. We're excited that the acquisition is expected to be accretive to adjusted EBITDA and free cash flow at an implied multiple of approximately five and a half. This opportunity takes advantage of our core expertise and builds on Accel's strong, distributed, route-based platform. It is an exciting milestone in our national expansion in the local gaming market. With that, I'll pass it over to Matt to go over the fundamentals of the quarter.

Speaker Change: In sports betting, we're assuming an existing long-term relationship with FanDuel, the number one sports book in Illinois.

Mark Phelan: Broadly, these partners will complement Excel's expertise in local gaming, regulatory partnerships, and efficient capital allocation. Within five years, our concern of underwriting implies a $20 to $25 million adjusted EBITDA opportunity. We're excited that the acquisition is expected to be creative to adjust EBITDA and free cash flow at an applied multiple of approximately five and a half times. This opportunity takes advantage of our core expertise and builds on Excel's strong distributed route-based platform and is an exciting milestone in our national expansion in the local gaming market.

Speaker Change: Broadly, these partners will complement Accel's expertise in local gaming, regulatory partnerships, and efficient capital allocation.

Speaker Change: Within five years, our conservative underwriting implies a $20 to $25 million adjusted EBITDA opportunity. We're excited that the acquisition is expected to be accretive to adjusted EBITDA and free cash flow at an implied multiple of approximately five and a half times.

Speaker Change: This opportunity takes advantage of our core expertise and builds on Accel's strong distributed route-based platform and is an exciting milestone in our national expansion in the local gaming market.

Mathew Ellis: Thanks, Mark, and good afternoon, everyone. For the second quarter, we had record revenue of $309 million, a year-over-year increase of 5.7 percent, and adjusted EBITDA of $50 million, a year-over-year increase of 6.5 percent. As of June 30th, we had 25,757 terminals in 4,034 locations, with year-over-year increases of 5.7% and 4.7%, respectively. Location attrition continues to remain low and is mostly attributable to our lowest performing locations closing their doors.

Matt Ellis: With that, I'll pass it over to Matt to go to the fundamentals of the quarter. Thanks, Mark, and good afternoon, everyone. For the second quarter, we had record revenue of $309 million, a year-over-year increase of 5.7%, and adjusted EBITDA of $50 million, a year-over-year increase of 6.5%. As in June 30th, we had 25,757 terminals and 4,034 locations, year-over-year increases of 5.7% and 4.7% respectively. Location attrition continues to remain low, as mostly attributable to our lowest performing locations closing their doors.

Mathew Ellis: Revenue per location for the quarter in our core states was as follows. Illinois was $862 per day, an increase of $0.5. Montana was $612, an increase of 7.6%. Nevada was $843 per day, a decrease of 2%, and Nebraska was $255, an increase of 7.6. The increase in Illinois, Montana, and Nebraska was due to a combination of increased player demand, new equipment driving more play, and favorable weather.

Speaker Change: With that, I'll pass it over to Matt to go over the fundamentals of the quarter.

Matt: Thanks, Mark, and good afternoon, everyone.

Matt: For the second quarter, we had record revenue of $309 million, a year-over-year increase of 5.7%, and adjusted EBIT of $50 million, a year-over-year increase of 6.5%.

Matt: As of June 30th, we had 25,757 terminals in 4,034 locations. Year-over-year increases of 5.7% and 4.7% respectively.

Matt: Location attrition continues to remain low as mostly attributable to our lowest performing locations closing their doors.

Matt Ellis: Revenue per location for the quarter and our core states was as follows. Illinois was $862 per day and increased of 0.5%. Montana was $612 per day and increased of 7.6%. Nevada was $843 per day, a decrease of 2%, and Nebraska was $255 per day and increased of 7.6%. The increase in Illinois, Montana, and Nebraska was due to a combination of increased player demand, new equipment driving more play, and favorable weather. The decline in Nevada was due to an overall increase in supply in the greater Las Vegas local market.

Matt: Revenue per location for the quarter in our core states was as follows, Illinois was $862 per day, an increase of 0.5%.

Montana was $612 per day, an increase of 7.6%.

Matt: Nevada was $843 per day, a decrease of 2%, and Nebraska was $255 per day, an increase of 7.6%.

Matt: The increase in Illinois, Montana, and Nebraska was due to a combination of increased player demand, new equipment driving more play, and favorable weather.

Mathew Ellis: The decline in Nevada was due to an overall increase in supply in the greater Las Vegas local area. Capital Expenditures for the second quarter were $18 million. The increase over the last year was attributable to payments of outstanding invoices from last year. As a reminder, the primary driver of our elevated CapEx was the introduction of four new high-performing gaming terminals at the same time in Illinois. We view last year and this quarter's elevated CapEx as one time only.

Matt: The decline in Nevada was due to an overall increase in supply in the greater Las Vegas local market.

Matt Ellis: Capital expenditures for the second quarter were $18 million cash spent. The increase over the last year was attributable to payments of outstanding invoices from last year. As a reminder, the primary driver of our elevated CAPEX was the introduction of four new high-performing gaming terminals at the same time in Illinois. We reviewed last year and this quarter's elevated CAPEX is one time in nature. For 2024, we are still projecting CAPEX to be between $55 million and $65 million, a decrease of more than 20% from last year. Over the longer term, we expect CAPEX to decrease even further towards our $40 million of annual depreciation, and Andy highlighted earlier.

Speaker Change: Capital expenditures for the second quarter were $18 million cash spent. The increase over the last year was attributable to payments of outstanding invoices from last year.

Speaker Change: As a reminder, the primary driver of our elevated CapEx was the introduction of four new high-performing gaming terminals at the same time in Illinois.

Speaker Change: We view last year and this quarter's elevated capex as one-time in nature.

Mathew Ellis: For 2024, we are still projecting CapEx to be between $55 and $65 million, a decrease of more than 20% from last year. Over the longer term, we expect CAPEX to decrease even further towards our $40 million of annual depreciation, as Andy highlighted earlier.

Speaker Change: For 2024, we are still projecting CapEx to be between $55 and $65 million, a decrease of more than 20% from last year.

Speaker Change: Over the longer term, we expect CAPEX to decrease even further towards our $40 million of annual depreciation that Andy highlighted earlier.

Matt Ellis: At the end of the second quarter, we had approximately $300 million of net debt and $522 million of liquidity, consisting of $255 million of cash on our balance sheet and $267 million of availability on our credit facility. On our capital allocation strategy, we continue to make progress in our $200 million share repurchase program. During the quarter, we repurchase $906,000 shares at an average purchase price of $10 and 16 cents for a total of $9 million. We are two-thirds of the way through the repurchase program with $12.9 million shares repurchased at a cost of $133 million.

Mathew Ellis: At the end of the second quarter, we had approximately $300 million of net debt and $522 million of liquidity, consisting of $255 million of cash on our balance sheet and $267 million of availability on our credit. As part of our capital allocation strategy, we continue to make progress on our $200 million share repurchase. During the quarter, we repurchased 906,000 shares at an average purchase price of $10.16 for a total of $9 million. We are two-thirds of the way through the repurchase program with 12.9 million shares repurchased at a cost of $133 million.

Speaker Change: At the end of the second quarter, we had approximately $300 million of net debt and $522 million of liquidity, consisting of $255 million of cash on our balance sheet and $267 million of availability on our credit facility.

Speaker Change: On our capital allocation strategy, we continue to make progress in our $200 million share repurchase program.

Speaker Change: During the quarter, we repurchased 906,000 shares at an average purchase price of $10.16 for a total of $9 million.

Speaker Change: We are two-thirds of the way through the repurchase program with 12.9 million shares repurchased at a cost of $133 million.

Matt Ellis: With our strong balance sheet and low leverage, we are in a unique position where we can grow our business and return capital to shareholders.

Mathew Ellis: With our strong balance sheet and low leverage, we are in a unique position where we can grow our business and return capital to shareholders. With that, I'd like to turn it back over to Andrew. Thanks, Matt.

Speaker Change: With our strong balance sheet and low leverage, we are in a unique position where we can grow our business and return capital to shareholders.

Andy Rubenstein: With that, I'd like to turn it back over to Andy. Thanks, Matt. As I mentioned earlier, we are very pleased with our record performance this quarter and excited for what the future holds with Fairmont Park. For the immediate term, we remain focused on executing our growth algorithm, closing the acquisition, and getting the casino live. Looking further ahead, we have a strong financial position, demonstrated growth trajectory, improving cash flow profile, and strong returns on invested capital. Despite this, we trade at a low double-digit three cash flow yield and amid single-digit enterprise value to even a multiple.

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

Andrew Harry Rubenstein: As I mentioned earlier, we are very pleased with our record performance this quarter and excited about what the future holds with Fairmont Park. For the immediate term, we remain focused on executing our growth algorithm, closing the acquisition, and getting the casino live. Looking further ahead, we have a strong financial position with a demonstrated growth trajectory, an improving cash flow profile, and strong returns on invested capital. Despite this, we trade at a low double-digit free cash flow yield and a mid-single-digit enterprise value to EBITDA multiple.

Andy: Thanks, Matt. As I mentioned earlier, we are very pleased with our record performance this quarter and excited for what the future holds with Fairmont Park.

Andy: For the immediate term, we remain focused on executing our growth algorithm, closing the acquisition, and getting the casino live. Looking further ahead, we have a strong financial position.

Andy: Demonstrated Growth Trajectory, Improving Cash Flow Profile, and Strong Returns on Invested Capital.

Andy: Despite this, we trade at a low double-digit recash flow yield and a mid-single-digit enterprise value to EBITDA multiple.

Andy Rubenstein: We look forward to capitalizing on a significant growth opportunities ahead of us as an aligned and incentivized Excel team will move this needle. Excel remains strong as evidenced by a record-second quarter results and our healthy balance sheet. This enables us to pursue a multi-planned approach to capital return, making us a compelling investment.

Andrew Harry Rubenstein: We look forward to capitalizing on the significant growth opportunities ahead of us as an aligned and incentivized Accel team will move this needle. Accel remains strong, as evidenced by our record second-quarter results and our healthy balance sheet. This enables us to pursue a multi-pronged approach to capital return, making us a compelling investment. Local gaming is an attractive growing segment within the broader gaming market with multiple opportunities to generate strong and consistent revenue and EBITDA growth, as well as strong free cash flow. We will now take your questions.

Andy: We look forward to capitalizing on the significant growth opportunities ahead of us as an aligned and incentivized Accel team will move this needle.

Andy: Accel remains strong, as evidenced by our record second quarter results and our healthy balance sheet.

Andy: This enables us to pursue a multi-pronged approach to capital return, making us a compelling investment.

Andy Rubenstein: Local gaming is an attractive growing segment within the broader gaming market, with multiple opportunities to generate strong and consistent revenue and even a growth, as well as strong return.

Andy: Local gaming is an attractive, growing segment within the broader gaming market, with multiple opportunities to generate strong and consistent revenue and EBITDA growth, as well as strong free cash flow.

Unnamed Moderator: We will now take your questions. We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If any reason at all, you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one.

Speaker Change: We will now take your questions.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If, for any reason at all, you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. You may proceed.

Speaker Change: We will now begin the question and answer session.

Speaker Change: If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason at all you would like to remove that question, please press star followed by two.

Unnamed Moderator: As a reminder, if you are using a speaker phone, please remember to pick up your handset before asking your question.

Speaker Change: Again, to ask a question, please press star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. The first comes from Steve Pizzella with Deutsche Bank. You may proceed.

Steven Pizzella: The first comes from Steve Pazella with Deutsche Bank. You may proceed. Andy, on the M&A front, you noted the pipeline continues to remain active. Are these similar opportunities to pheromone in terms of type of assets, size, and return profile? And you have the bandwidth to take on additional projects while working on the pheromone development?

Andrew Harry Rubenstein: Andy, on the M&A front, you noted the pipeline continues to remain active. Are these similar opportunities to Fairmont in terms of type of assets, size, and return profile? And do you have the bandwidth to take on additional projects while working on the Fairmont development?

Andy: Andy, on the M&A front, you noted the pipeline continues to remain active.

Steven Donald Pizzella: Are these similar opportunities to Fairmont in terms of type of assets, size, and return profile, and do you have the bandwidth to take on additional projects while working on the Fairmont development?

Andy Rubenstein: Thanks for the questions, Steve. A lot of the other opportunities that we're looking at are, they have some resemblance of pheromot, and I say resemblance. They're local gaming, entertainment-type opportunities. Each of them is a little different from each other. Their scale ranges from a few million dollars in an EBITDA, upwards into the 20s and 30s million dollars in EBITDA. So I can't say that any two are alike, but there's a lot of similarities. And they are able to accentuate our competitive advantages in operating slot machines, working with the local customer, and providing value in the entertainment.

Andrew Harry Rubenstein: Thanks for the questions, Steve. A lot of the other opportunities that we're looking at are, they have some resemblance to Fairmont, and when I say resemblance, I mean local gaming. Entertainment-type opportunities. Each of them is a little different from each other. Their scale ranges from a few million dollars in an EBITDA upwards into the 20s and 30s, million dollars to leave it up. I can't say that any two are alike, but there are a lot of similarities.

Speaker Change: Thanks for the questions, Steve.

Andy: A lot of the other opportunities that we're looking at are, they have some resemblance of Fairmont, and when I say resemblance, they're

Andy: local gaming.

Andy: Entertainment type opportunities. Each of them is a little different from each other. Their scale ranges from

Andy: I can't say that any two are alike, but there's a lot of similarities, and they, they...

Andrew Harry Rubenstein: They are able to accentuate our competitive advantages in operating slot machines, working with the local customer, and providing value in the entertainment. As far as the ability to take on more of these opportunities goes, absolutely. We have a great team, we have great partners all over the country, and you'll see that the opportunities when they present themselves aren't going to be in one geography because we're pursuing opportunities across the United States and in many of the markets that we already are operating in, um, and some that are, adjacent or in the region. So there's a lot to look forward to. We're super excited. We're building that skill set to be able to take on more and more, and we've got a great team.

Andy: are able to accentuate our competitive advantages in operating slot machines, working with the local customer, and providing value in the entertainment.

Andy Rubenstein: As far as the ability to take on more of these opportunities, absolutely. We have a great team; we have great partners all over the country. And you'll see that the opportunities, when they present themselves, it's not going to be in one geography because we're pursuing opportunities across the United States and in many of the markets that we already are operating, and some that are adjacent or in the region. So there's a lot to look forward to. We're super excited. We're building that skill set to be able to take on more and more. And we've got a great team.

Andrew Harry Rubenstein: Okay, great. Thank you. And then, regarding the Illinois gaming tax increase, can you talk about anything you can do to offset that? I believe you started talking about Tito. What is the opportunity there?

Andy: As far as the ability to take on more of these opportunities, absolutely. We have a great team, we have great partners all over the country, and

Andy: You'll see that the opportunities, when they present themselves, it's not going to be in one geography because we're pursuing opportunities across the United States and in many of the markets that we already are operating and some that are

Andy: adjacent or in the the region. So there's a lot to look forward to. We're super excited. We're building that skill set to be able to take on more and more and we've got a great team.

Steven Pizzella: Okay, great. Thank you.

Steven Pizzella: And then regarding the Illinois gaming tax increase, can you talk about anything you can do to offset that? I believe you started talking about Tito. What is the opportunity there? So, as far as the Tito's concern, we believe that Tito will really help facilitate our players in getting a more value for their time. It won't be cashed out all the time. We'll be able to continue their play. And historically, the markets where this is introduced, it provides a lift to the market of about five to ten percent. So we feel that will help mitigate the half a percent tax that we increased that we received.

Speaker Change: Okay, great. Thank you. And then regarding the Illinois gaming tax increase, can you talk about anything you can do to offset that? I believe you started talking about Cheeto. What is the opportunity there?

Andrew Harry Rubenstein: So as far as Tito's concerned, we believe that Tito will really help our players in getting more value for their time. We'll be catching out all the time.

Speaker Change: So as far as the Tito's concerned, we believe that Tito will really help facilitate our players in getting more value for their time.

Andrew Harry Rubenstein: They'll be able to continue their play, and historically, markets where this is introduced provide a lift to the market of about five to ten percent. So we feel that will help mitigate the half a percent tax that we increased that we received, and in addition, we really focused on some of the bottom part of our portfolio that's maybe not core to our operations. This tax really allowed us to identify opportunities to operate in what we call revenue centers. Make the overall route more profitable and cut back on some of the expenses for those outlying accounts that, at the margin, are no longer profitable.

Speaker Change: It won't be cashing out all the time. They'll be able to continue their play and Historically markets where this is introduced

Speaker Change: It provides a lift to the market of about 5-10%.

Speaker Change: So we feel that will help mitigate the half a percent tax that we increased that we received. In addition, we really focused on some of the bottom part of our portfolio that's maybe now core to our operations.

Andy Rubenstein: And in addition, we've really focused on some of the bottom part of our portfolio that's maybe now core to our operations. and this tax kind of has really allowed us to identify opportunities just to operate in what we call revenue centers, and make the overall route more profitable and cut back on some of the expenses for those outlying accounts that at the margin, the longer are profitable.

Speaker Change: And this tax kind of has really allowed us

Speaker Change: to identify opportunities to operate in what we call revenue centers.

Speaker Change: and make the overall route more profitable and cut back on some of the expenses for those outlying accounts that, at the margin, no longer are profitable.

Steven Pizzella: Okay, thanks.

Mathew Ellis: Okay, thanks. And just lastly, you noticed a modest same store decline in Nevada due to some of the increased local supply. Have you seen any changes in demand there at all as we go through July or any green shifts?

Steven Pizzella: And just lastly, you noticed the modesty in store declines in Nevada due to some of the increased local supply. Have you seen any changes in demand there at all as you go through July, or any green shirts?

Speaker Change: Okay, thanks. And just lastly, you noticed a modest same-store decline in Nevada due to some of the increased local supply. Have you seen any changes in demand there at all as we go through July or any green shoots?

Matt Ellis: Hey, Steve, it's Matt. Thanks for the question. I would say overall, no, nothing noticeable. It's really just this supply and flux that we're seeing, but I think overall across the business everywhere, including Nevada. You're seeing a real healthy customer for our offering.

Mathew Ellis: Hey, Steve, it's Matt. Thanks for the question. I would say overall, no, nothing noticeable. It's really just the supply influx that we're seeing. But I think overall, across the business everywhere, including Nevada, you're seeing a really healthy customer for our business.

Speaker Change: Hey Steve, it's Matt. Thanks for the question. I would say overall, no, nothing noticeable. It's really just the supply influx that we're seeing, but I think overall, across the business everywhere, including Nevada, you're seeing a real healthy customer for our offering.

Steven Pizzella: Okay, thank you. Appreciate it.

Operator: Okay, thank you. I appreciate it.

Matt: Okay, thank you. I appreciate it.

Unnamed Moderator: Thank you.

Operator: Thank you. The next question comes from Chad Beynon with McCorry. You may proceed. Good afternoon.

Chad Beynon: The next question comes from Chad Beynon with McCory. You may proceed. Afternoon, thanks for taking my question. With respect to the new locations in Montana, from percentage standpoint, certainly some nice growth there. Could you just talk about how you see that portfolio evolving post the acquisition that you made over a year ago, if there's still new opportunities. And if you see that as a big growth market for you guys over the next 12, 18 months, thanks.

Speaker Change: Thank you. The next question comes from Chad Beynon with McCorry. You may proceed.

Andrew Harry Rubenstein: Afternoon. Thanks for taking my question. With respect to the new locations in Montana, from a percentage standpoint, certainly some nice growth there. Could you just talk about how you see that portfolio evolving post the acquisition that you made over a year ago, if there's still new opportunities, and if you see that as a big growth market for you guys over the next 12 to 18 months? Thanks.

Chad C. Beynon: Afternoon, thanks for taking my question. With respect to the new locations in Montana, you know, from a percentage standpoint, certainly some nice growth there. Could you just talk about how that, how you see that portfolio evolving?

Speaker Change: post the acquisition that you made over a year ago, if there's still new opportunities, and if you see that as a big growth market for you guys over the next 12 to 18 months. Thanks.

Andy Rubenstein: Yeah, thanks, Chad. Cindy, we are excited about Montana. We found many opportunities in the market to grow our offerings to the establishments. You've seen some new software that we've offered to our existing partners. We've provided some new models on the games. We look, which is a lot of that has allowed us to win more contracts, where the premier assistant provider in the market, our awards program, continues to be the most preferred by players. And as we've identified opportunities for us to test some of our own operations strategy, we've had a few locations that we've opened up ourselves to identify ways to help our existing partners to improve their businesses.

Andrew Harry Rubenstein: and Vinny. We are excited about Montana. We've found many opportunities in the market to grow our offerings to the establishments. You've seen some new software that we've offered to our existing partners. We've come out with some new models for the games. A lot of that has allowed us to win more contracts. We're the premier systems provider in the market, and our iRewards program continues to be the one most preferred by players. And as we've identified opportunities for us to test some of our own operations strategy, we've had a few locations that we've opened up to, to find ways to help our existing partners to improve their business.

Chad C. Beynon: Yeah. Thanks, Chad.

Zandy: We are excited about Montana. We've found many opportunities.

Zandy: in the market to

Zandy: to grow our offerings to the establishments.

Zandy: You've seen some new software that we've offered to our existing partners.

Speaker Change: We've come out to put some new models on the...

Speaker Change: The games, a lot of that has allowed us to win more contracts. We're the premier systems provider in the market. Our iRewards program continues to be the one most preferred by players.

Speaker Change: As we've identified opportunities for us to test some of our own operation strategy, we've had a few locations that we've opened up ourselves to

Speaker Change: identify ways to help our existing partners to improve their businesses.

Chad Beynon: Thank you.

Mathew Ellis: And then, you know, post the acquisition, which is coming with, you know, the issuance of new stock, you still have a significant amount of cash on the balance sheet. So how should we think about, again, in terms of what you need to keep in the company just in terms of working capital, and what should be used, you know, on an annual basis in terms of share repurchases? Matt, you mentioned that CapEx does come down. So just trying to figure out, you know, opportunities in terms of deploying some of this other cash, mainly in 25. Thank you.

Chad Beynon: And then, post the acquisition, which is coming with the assurance of new stock, you still have a significant amount of cash on the balance sheet.

Speaker Change: Thank you. And then, you know, post the acquisition, which is coming with, you know, the issuance of new stock, you still have a significant amount of cash on the balance sheet. So how should we think about...

Matt Ellis: So how should we think about again, in terms of what you need to keep in the company, just in terms of working capital, which should be used on an annual basis, in terms of share repurchases. Matt, you mentioned that that catbacks does come down. So just trying to figure out opportunities in terms of deploying some of this other cash, mainly in 25. Thank you.

Speaker Change: Matt, you mentioned that that CapEx does come down. So just trying to figure out, you know, opportunities in terms of deploying some of this other cash, mainly in 25. Thank you.

Matt Ellis: Hey, Chad, it's Matt. Thanks for the question. So I think you hit the nail on the head. Free cash flow generation is going to go up. I mean, the first deployment for us is always growth. As these M&A opportunities come up, we won't pursue them. And like Andy said, we have the team for it. We also have the financial capacity for it. So that comes first. Next would be returning capital to shareholders. We generally want to use our free cash flow to do that because we think that's far more attractive than repaying any debt. So don't want to quite get to an exact number.

Mathew Ellis: Hey, Chad, it's Matt. Thanks for the question. So I think you hit the nail on the head; free cash flow generation is going to go up. I mean, the first deployment for us is always growth. As these M&A opportunities come up, we will pursue them, and like Andy said, we have the team for it. We also have the financial capacity for it, so that comes first. Next would be returning capital to shareholders.

Speaker Change: Hey Chad, it's Matt. Thanks for the question. So, I think you hit the nail on the head. Free cash flow generation is going to go up. I mean, the first deployment for us is always growth.

Speaker Change: As the M&A opportunities come up, we will pursue them, and like Andy said, we have the team for it. We also have the financial capacity for it. So that comes first. Next would be returning capital to shareholders.

Mathew Ellis: We generally want to use our free cash flow to do that because we think that's far more attractive than repaying any debt. So I don't want to quite get to an exact number. But if we continue to perform and generate this cash, I would expect our return on capital to shareholders to kind of creep up a bit from where we've been today.

Andy: We generally want to use our free cash flow to do that because we think that's far more attractive than

Chad Beynon: But if we continue to perform and generate this cash, I would expect our return to capital to shareholders to kind of creep up a bit from where we've been today. That's great to hear. Thank you very much, guys. Appreciate it. Nice quarter. Thanks.

Andy: repaying any debt. So don't want to quite get to an exact number, but if we continue to perform and generate this cash, I would expect our return to capital to shareholders to kind of creep up a bit from where we've been today.

Operator: That's great to hear. Thank you very much, guys. I appreciate it. Nice quarter. Thanks, Jeff.

Speaker Change: That's great to hear. Thank you very much, guys. Appreciate it. Nice quarter.

Unnamed Moderator: Thank you. As a quick reminder, if you would like to ask a question, please press star one on your telephone keypad.

Operator: Thank you. As a quick reminder, if you would like to ask a question, please press star one on your telephone keypad. The next question comes from Greg Gibas with Northland. You may proceed.

Jeff: Thanks, Jeff.

Speaker Change: Thank you. Thank you.

Speaker Change: As a quick reminder, if you would like to ask a question, please press star 1 on your telephone keypad. The next question comes from Greg Gibas with Northland. You may proceed.

Gregory Gibas: The next question comes from Greg Gibbis with Northland. You may proceed. Hey, Andy, Mark, and Matt, thanks for taking the questions. You know, if I could just follow up on some of the dynamics in the quarter, you know, you spoke to the slight Nevada declines being related to increase supply.

Andrew Harry Rubenstein: Hey Andy, Mark, and Matt, thanks for taking the questions. You know, if I could just follow up on some of the dynamics in the quarter. You spoke to the slight Nevada declines being related to increased supply, and you want this kind of, you know, do you expect more supply growth to kind of continue in that market? And then secondly, you know, with the new equipment driving more play, you know, I'm guessing more overall, particularly in Illinois. How long should we expect that to be a tailwind?

Gregory Thomas Gibas: Hey Andy, Mark, Matt, thanks for taking the questions. If I could just follow up on some of the dynamics in the quarter. You spoke to the slight Nevada declines being related to increased supply.

Gregory Gibas: And you don't want this kind of see, you know, do you expect more supply growth kind of to continue in that market?

Gregory Thomas Gibas: Do you expect more supply growth to continue in that market? And then secondly, with the new equipment driving more play?

Gregory Gibas: And then secondly, you know, with the new equipment driving more play, you know, I'm guessing more overall, particularly in Illinois, how long do we expect that to be a tailwind? Thanks, Greg.

Speaker Change: I'm guessing more overall, particularly in Illinois. How long should we expect that to be a tailwind?

Andrew Harry Rubenstein: Thanks, Greg. It's Andy.

Andy Rubenstein: Andy. First is the Nevada market. These local markets continue to have new supply come on. As you saw, Durango happened in late 2023. And there's a lot more new construction coming on. There's, but at the same time, the Nevada market, especially the Las Vegas markets, are growing population. So we think demand will continue. Now, other macro factors, I don't know how that will impact the local market, but we see a continuance of demand in the near future.

Andrew Harry Rubenstein: For the Nevada market, the local market continues to have New Supply come on, as you saw Durango happened in late 2023, and there's a lot more new construction coming on. But at the same time, the Nevada market, especially the Las Vegas market, is a growing population. So we think demand will continue. Now, other macro factors. I don't know how that will impact the local market, but we see a continuation of demand in the near future.

Andy: Thanks, Greg. It's Andy.

Speaker Change: For the Nevada market, the local market continues to have new supply come on, as you saw Durango happened in...

Speaker Change: late 2023, and there's a lot more new construction coming on.

Speaker Change: But at the same time, the Nevada market, especially the Las Vegas market, is a growing population. So we think demand will continue. Now, other

Speaker Change: macro factors. I don't know how that will impact the local market, but we see a continuance of demand in the near future.

Andy Rubenstein: As far as Illinois, if you look at their ratio of small machines to people or population, we're still underserved in the market on a relative basis. The quality of the equipment that we could be delivering to our customer improves, which basically increases the demand. So we believe that our local defeated operating will always be the most attractive. And we see continued growth. The cost of our entertainment is not affected by inflation. So it is a value proposition for dollars that they have for their time.

Andrew Harry Rubenstein: As far as Illinois is concerned, if you look at the ratio of slot machines to people or population, we're still underserved in the market on a relative basis. The quality of the equipment that we continue to bring to our customers improves, which basically increases the demand. So we believe that our local, Matthew Ellis, Matt Beynon, Andrew Rubenstein, Derek Harmer, Matthew Ellis, Accel Ent, Matt Beynon, So it is a value proposition for the dollars that they have for their time.

Speaker Change: People, or population, were still underserved in the market on a relevant basis.

Speaker Change: The quality of the equipment that we continue to bring to our customers improves, which basically increases the demand. So we believe that our local

Speaker Change: convenient offering will always be the most attractive, and we see continued growth. The cost of our entertainment is not affected by inflation.

Speaker Change: So it is a value proposition for dollars that they have for their time.

Gregory Gibas: that's helpful. And if I could follow up on your M&A commentary, is it fair to say that nothing's really changed from a priority perspective following the recent Jeremiah purchase? I guess we shouldn't assume that you're going to be less aggressive in the near term. I just kind of wanted to confirm that your stance on M&A isn't really changing because that's there. Yeah, I would not say it was going to be less aggressive. That's probably not a fair comment.

Andrew Harry Rubenstein: Got it. That's helpful. And if I could, you know, follow up on your M&A commentary, you know, is it fair to say that, you know, nothing's really changed from a priority perspective following the recent Fairmont purchase? I guess, we shouldn't assume that you're going to be less aggressive in the near term. I just kind of wanted to confirm that your stance on M&A isn't really changing. Is that fair?

Speaker Change: Got it. That's helpful. And if I could, you know, follow up on your M&A commentary, you know, is it fair to say that, you know, nothing's really changed from a priority perspective, you know, following the recent Fairmont purchase? I guess...

Speaker Change: You know, we shouldn't assume that you're going to be less aggressive in the near term. I just kind of wanted to confirm that your stance on M&A isn't really changing. Is that fair?

Andrew Harry Rubenstein: Yeah, I would not say we're going to be less aggressive. I doubt that's probably... Not a fair comment.

Speaker Change: Yeah, I would not say we're going to be less aggressive. That's probably...

Andy Rubenstein: The timing of Fairmont is such that allows us to continue pursuing a lot of these opportunities that we've been working on for the last 12 to 18 months. I think you'll see that we'll continue with finding local gaming opportunities that are within our economics that we have to begin to look what it needs to execute on these. And we have the team to be successful in the local gaming entertainment market. And we're looking forward to showing the investor's beauty that Accel and the deliverers over and over again. Got it, that's helpful.

Andrew Harry Rubenstein: The timing of Fairmont is such that it allows us to continue pursuing a lot of these opportunities that we've been working on for the last 12 to 18 months. I think you'll see that we will continue to do so. Finding local gaming opportunities that are within our economics, and we have significant liquidity to execute on these, and we have the team to be successful in the local gaming entertainment market, and we're looking forward to showing the investor community that Accel and it delivers over and over again.

Speaker Change: Not a fair comment. We, the timing of Fairmont is such that allows us to continue pursuing a lot of these opportunities that we've been working on for the last

Speaker Change: 12 to 18 months. I think you'll see that we'll continue

Speaker Change: [inaudible]

Speaker Change: finding local gaming opportunities that

Speaker Change: are within our...

Speaker Change: economics that we have significant liquidity to execute on these, and we have the team to be successful in the local gaming entertainment market, and we're looking forward.

Speaker Change: to showing the investor community that Accel delivers over and over again.

Andrew Harry Rubenstein: Got it. That's helpful. Thanks and congrats. Thank you.

Gregory Gibas: Thanks, and congrats.

Unnamed Moderator: Thank you. You there currently know other questions in Q.

Speaker Change: Got it. That's helpful. Thanks and congrats.

Speaker Change: Thank you.

Operator: There are currently no other questions in queue, so as a final reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Now, with no questions remaining at this time, I will pass the microphone back over to Andy Rubenstein for closing remarks. Thank you.

Unnamed Moderator: So, as a final reminder, if you would like to ask a question, please press star one on your telephone keypad.

Speaker Change: There are currently no other questions in queue, so as a final reminder, if you would like to ask a question, please press star 1 on your telephone keypad.

Andy Rubenstein: With no questions remaining at this time, I'll pass it back over to Andy Rubinstein for closing remarks. Thank you. I just wanted to thank everyone for joining us today. A few weeks ago, when we announced the Fairmont transaction, we're looking forward to sharing an update on that on the next learning call. I think you'll see that the direction that Accel is going is exciting. And Fairmont is the beginning of a new trajectory where Accel will continue growing in markets across the United States.

Speaker Change: With no questions remaining at this time, I will pass it back over to Andy Rubenstein for closing remarks.

Andrew Harry Rubenstein: Thank you. I just wanted to thank everyone for joining us today. A few weeks ago when we announced The Fairmont Transaction, we're looking forward to sharing an update on that on the next learning call. I think you'll see that the direction Accel is going in is exciting, and Fairmont is the beginning of a new trajectory where Accel will continue growing in markets across the United States. So enjoy the summer, and we'll see you again in the fall.

Andrew Harry Rubenstein: Thank you. I just wanted to thank everyone for joining us today. A few weeks ago, when we announced

Andrew Harry Rubenstein: The Fairmont transaction, we're looking forward to sharing.

Andrew Harry Rubenstein: An update on that on the next learning call. I think you'll see that the direction that Accel is going is exciting and Fairmont is the beginning of a new trajectory where Accel will continue growing in markets across the United States.

Andy Rubenstein: So enjoy the summer, and we'll see you again in the fall. Thanks.

Andrew Harry Rubenstein: So, enjoy the summer, and we'll see you again in the fall. Thanks.

Unnamed Moderator: This concludes the conference call. Thank you for your participation. You may now disconnect your line.

Operator: This concludes the conference call. Thank you for your participation. You may now disconnect your line.

Speaker Change: This concludes the conference call. Thank you for your participation. You may now disconnect your line.