A change in fair value of contingent earn-out shares dampened profits for video-gaming-terminal provider Accel Entertainment. Earnings per share dropped, but a key cash-flow measure and revenue both rose.
In a 10-Q report filed Thursday with the Securities and Exchange Commission, Burr Ridge, Illinois-based Accel said its net income was $10 million, or 11 cents per diluted share, for the three months ended June 30, down from $22.5 million, or 24 cents per diluted share, a year earlier.
Accel said a $4.8 million loss on the change in fair value of the contingent earn-out shares hurt the latest earnings result; the company had a $5.7 million fair-value gain on contingent earn-out shares a year earlier.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 9.1% to $46.6 million from $42.7 million.
Revenue rose 28.4% to $292.6 million from $227.9 million.
Accel finished the quarter with 3,655 locations, up 4.8% from 3,489 a year earlier. The company had 23,759 gambling terminals in use at quarter’s end, up 7.7% from 22,128 the previous year.
During the quarter, Accel bought back $8 million in common stock and settled a disciplinary complaint with the Illinois Gaming Board for $1.1 million, which is included in the latest net-income and adjusted-EBITDA results.
In an earnings statement, Accel CEO Andy Rubenstein said chances for future growth excited him.
“Despite uncertain economic times, our revenues continue to grow organically outside of acquisitions,” he said. “As we look beyond Illinois, we have greater visibility on new ways to further extend our position as a national leader in distributed gaming.”
Accel Entertainment shares rose 4 cents, or 0.36%, Thursday to close at $11.15 on the Nasdaq Stock Market. The shares spiked after hours, climbing 74 cents, or 6.6%, to settle at $11.89.
