As it moved closer to closing its deal for Century Gaming Technologies, video-gaming-terminal provider Accel Entertainment posted net income that reversed a year-earlier loss and had a jump in revenue, both of which topped Wall Street forecasts.
In an 8-K filing Thursday with the Securities and Exchange Commission, Burr Ridge, Illinois-based Accel said its net income was $6.8 million, for the three months ended Dec. 31, reversing a year-earlier $8.5 million loss. The company didn’t report fourth-quarter earnings per share.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash=-flow measure that excludes one-time costs, surged to $33.2 million from $4.7 million.
Revenue more than doubled to $192.3 million from $74.4 million and topped the $191.6 million average estimate of analysts surveyed by Seeking Alpha.
Accel shares rose 29 cents, or 2.2%, Thursday to close at $13.49 on the New York Stock Exchange. The company’s most recent 52-week high was $14.10.
In a conference call with analysts and journalists, Accel Chief Executive Officer Andy Rubenstein said although Accel had a small dip in expected revenue toward the end of 2021 related to omicron, COVID cases have since waned and gambling machine play is returning to pre-pandemic norms.
Accounting for the $140 million acquisition of Billings, Montana-based Century Gaming Technologies, Accel Entertainment forecast it would have 23,000 to 25,000 video gambling terminals by the end of 2022, up from 13,639 for 2021 (which was an 11% increase from 2020). The combined company would end 2022 with an estimated 3,700 to 3,800 locations, up from 2,584 locations in 2021 (a 6% jump from 2020). Accel said it expects the Century deal to close by May 31.
Accel projected post-acquisition revenue of $1.07 billion to $1.18 billion for 2022.
Accel has been widening its market. The Dec. 30 acquisition of amusement-device and automated-teller-machine operator Rich and Junnie’s for an undisclosed price put Accel in Iowa. (A June 2020 deal for Tom’s Amusement Co., also for an undisclosed price, put Accel in Georgia.)
Rubenstein said Accel is monitoring House and Senate bills to legalize prepaid debit-card redemption and added that North Carolina is expected to introduce video-gaming legislation in the upcoming legislative session.
“We remain cautiously optimistic that several states will consider distributed gaming in the future,” he said.
In November, Accel Entertainment said it would buy back up to $200 million of its shares. Rubenstein said the company bought back $9 million worth of Accel stock at an average $12.79-per-share purchase price in December and bought back $11 million in January and February at an average $12.73 purchase price.
On Thursday, as MarketWatch reported, Deutsche Bank analyst Steven Pizzella kept his “buy” rating on Accel and a $17 price target. (The consensus rating for Accel “moderate buy” with a $16 price target.)
For the 12 months ended Dec. 31, Accel had $31.6 million in net income, reversing a $410,000 net loss. Twelve-month revenue rose to $734. 7 million from $316.4 million.
Follow Matthew Crowley on Twitter @copyjockey.
