Accel Entertainment Announces 2024 Operating Results and Replenishment of Share Repurchase Program

Accel Entertainment, Inc. (NYSE:ACEL) today announced certain financial and operating results for the three months and year ended December 31, 2024.

Highlights:

• Ended Q4 2024 with 4,117 locations; an increase of 3.9% compared to Q4 2023
• Ended Q4 2024 with 26,346 gaming terminals; an increase of 5.0% compared to Q4 2023
• Record revenues of $317.5 million for Q4 2024; an increase of 6.9% compared to Q4 2023
• Record revenues of $1.2 billion for YE 2024; an increase of 5.2% compared to YE 2023
• Net income of $8.4 million for Q4 2024; a decrease of 47.5% compared to Q4 2023
• Net income of $35.3 million for YE 2024; a decrease of 22.6% compared to YE 2023
• Adjusted EBITDA of $47.4 million for Q4 2024; an increase of 6.2% compared to Q4 2023
• Adjusted EBITDA of $189.1 million for YE 2024; an increase of 4.2% compared to YE 2023
• Q4 2024 ended with $314 million of net debt; an increase of 11.8% compared to Q4 2023
• Repurchased approximately $4.0 million of Accel Class A-1 common stock in Q4 2024
• Acquisition of Toucan Gaming, a distributed gaming operator in the state of Louisiana, closed on November 1, 2024
• Acquisition of the FanDuel Sportsbook & Horse Racing in Collinsville, Illinois, closed on December 2, 2024
• Board of Directors approved an amendment to the share repurchase program to replenish the dollar amount that may be repurchased under the program back to $200 million of shares of Class A-1 common stock

Accel CEO Andy Rubenstein commented, "I am very pleased to report that we ended 2024 on very strong footing, positioning us well as we enter 2025. We delivered another record quarter in terms of revenue, entered the Louisiana market with our acquisition of Toucan Gaming, and closed on our acquisition of FanDuel Sportsbook & Horse Racing, where we have already started construction on Phase I of our casino in anticipation of opening in the second quarter of 2025. We continue to strengthen our core and are expanding our offerings, which we believe will maintain attractive low-teens returns on capital, generate more free cash flow, and improve our trading multiples, making Accel a compelling investment opportunity."

Condensed Consolidated Statements of Operations and Other Data

Net Revenues

Key Business Metrics

Condensed Consolidated Statements of Cash Flows Data

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
• Loss from unconsolidated affiliates
• Loss on change in fair value of contingent earnout shares
• Gain on expiration of warrants
• 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
• Loss from unconsolidated affiliates
• Loss on change in fair value of contingent earnout shares
• Gain on expiration of warrants
• 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

Net Debt

Amendment to Share Repurchase Program

On November 22, 2021, Accel previously announced a share repurchase program of up to $200 million shares of Class A-1 common stock. As of December 31, 2024, Accel had purchased a total of 13,855,897 shares under the share repurchase program at a total purchase price of $143.6 million.

On February 27, 2025, the Board of Directors approved an amendment to the share repurchase program to replenish the dollar amount that may be repurchased under the program back to up to $200 million of shares of Class A-1 common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities.

Under the share repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases or privately negotiated transactions, in compliance with the rules of the Securities and Exchange Commission (the "SEC") and other applicable legal requirements. The share repurchase program does not obligate Accel to acquire any particular amount of shares, and the share repurchase program may be suspended or discontinued at any time at Accel's discretion.

Conference Call

Accel will host an investor conference call on February 27, 2025 at 4:30 p.m. Central time (5:30 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=a8e678a0&confId=71436 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, Adjusted net income, location hold-per-day and capital expenditures, our ability to continue to generate returns on capital and improve our trading multiples, our expansion into casino operations and horse racing, and our ability to consummate share repurchases in the amounts authorized pursuant to our share repurchase program or at all. 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; Accel's expansion into casino operations and horse racing; unfavorable macroeconomic conditions or decreased discretionary spending due to other factors such as interest rate volatility, persistent inflation, increased or retaliatory tariffs, 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 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, 2024. 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.

Industry and Market Data

Unless otherwise indicated, information contained in this press release concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity, and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources, and on our knowledge of the markets for our services. This information includes a number of assumptions and limitations, and you are cautioned not to give undue weight to such information. In addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the Form 10-K, as well as Accel's other filings with the SEC. These and other factors could cause results to differ materially from those expressed in the estimates made by third parties and by us.

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.

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Media Contact:

Eric Bonach

H/Advisors Abernathy

212-371-5999

[email protected]