Increases in video gambling terminal counts and placements buoyed third-quarter earnings, cash flow, and revenue for Accel Entertainment. Although revenue topped Wall Street forecasts, earnings per share narrowly missed.
In a Wednesday 10-Q statement filed with the Securities and Exchange Commission, Burr Ridge, Illinois-based Accel said net income was $10.8 million, or 11 cents per diluted share, for the three months ended Sept. 30, up from net income of $6.8 million, or 8 cents per diluted share, a year earlier.
The latest earnings per share missed the 12-cent consensus forecast of analysts surveyed by Seeking Alpha.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes one-time costs, rose 62.8% to $37.6 million from $23.1 million.
Revenue rose 43.2% to $193.4 million from $135.1 million and topped the $188.5 million consensus forecast of Seeking Alpha-polled analysts.
Accel’s SEC filing showed a 43.5% increase in net gaming revenue to $186 million from $129.6 million that boosted overall third-quarter revenue.
Accel, which went public in 2019, ended the quarter with 2,549 locations, up 8% from a year earlier, and with 13,384 video gaming terminals, up 15% from a year earlier. Also, Accel’s third-quarter revenue per location per day increased 34% year over year.
The company cut its year-to-year debt 13% to $148 million.
In the statement, Accel CEO Andy Rubenstein said video gambling machine installations and completion of higher-bet-limit software upgrades buoyed his company’s third-quarter results. Also, he said, Accel amended its credit facility to $900 million from $438 million, thereby boosting its fiscal flexibility to grow beyond Illinois.
“Our M&A pipeline is active and we expect to announce more opportunities in the future in both existing and incremental new states,” Rubenstein said in a conference call with analysts and journalists.
In the question-and-answer period, Rubenstein acknowledged that Virginia and Missouri could be Accel expansion targets if the state legislatures approve video gambling terminals.
In March, Accel agreed to buy Century Gaming, a slot-route company operating 8,500 slot machine terminals in more than 900 locations in Nevada and Montana. The deal is set to close in 2022’s first half.
Accel pegged 2022 revenue at $820 million to $870 million. Assuming the full-year benefit from the Century acquisition, Accel put 2022 revenue at $1.07 billion to $1.18 billion.
Century is headquartered in Montana and entered Nevada in 2004 after buying United Coin Machine. The company is the largest slot-route operator in Montana with some 6,000 games.
“This is a significant deal for Accel, as it marks meaningful geographic expansion and diversification,” Union Gaming Group analyst John DeCree told CDC Gaming, reflecting on the Accel-Century Gaming deal in March. “Not only does the transaction provide geographic diversity, but it also proves the company’s
ability and desire to expand outside of Illinois in a meaningful way.”
Accel Entertainment shares were unchanged Thursday, closing at $12.97. The share price has risen 33.4% in 2021.
Follow Matthew Crowley on Twitter @copyjockey.
