Accel Entertainment, Inc.

Good day and thank you for standing by. Welcome to the Axel Entertainment Quarter 1 2021 Earnings Call Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Mr. Matthew Ellis. Please go ahead.

Welcome to Excel Entertainment's first quarter 2021 earnings call. Participating on the call today are Andy Rubenstein, Excel's Chief Executive Officer, and Brian Carroll, Excel's Chief Financial Officer. 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. 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 and the current health concerns. Actual 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. 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 Mr. Andy Rubenstein.

Thanks, Matt. Good morning, everyone. Thank you for joining us for Excel's first quarter earnings call. We were thrilled with the play to start the year. We set a new revenue and adjusted EBITDA record, despite being closed for more than half of January. Q1 gaming revenue was $140 million, a year-over-year increase of $38 million. The $38 million increase is broken out as follows. Existing locations contributed $35 million to the increase, meaning same-store sales growth of 34%. Acquisitions and new locations net of closures contributed $8 million to the increase. The reduction in operating gaming days due to COVID shutdown from 76 days in Q1 2020 to 72 days in Q1 2021 had a negative impact of $5 million. The primary drivers of the increase at existing locations were the higher VAT limit software, the 6 BGT, and improvements we made to optimize machines at our locations during the most recent shutdown. March is typically the best month for our industry, and this year was no different. The strong performance continued into April, where we actually earned more revenue per day than March. We've been cautious with our guidance as we evaluate the short-term impact of the recent stimulus. We also understand we are currently one of the few forms of available entertainment for our players. However, with strong play continuing each passing week, we have more confidence that the elevated revenue we are realizing is a new normal. We are also encouraged by the vaccine progress and recent comments about a full reopening this summer in Illinois, as we believe we are still missing many of our historical players, either due to caution or reduced indoor bar and restaurant capacity. We believe that the pandemic introduced our product to many new players as a more convenient option than casinos. and we believe that many of those new players will stay with us post-pandemic. At the same time, we also expect to gain back the aforementioned players we have not seen. Based on the sustained strong performance and other factors just mentioned, we've increased our guidance, which Brian will walk you through shortly. Turning to growth. We see opportunities in new markets, both organic and inorganic. last year we entered georgia in a small way but we still see upside then earlier this year we announced a large expansion into nevada and montana through our acquisition of century our m&a pipeline remains active and we expect to announce more opportunities in the future speaking of century we are working through the regulatory applications and we expect to close in late 2021. Century is also performing better than our original estimates. As we get closer to closing, we will provide more updates on Century's latest performance in our integration plans. On the organic front, we are cautiously optimistic that several states will consider distributed gaming. While the recent Senate vote in Missouri did not go the way we wanted, there is still significant momentum for gaming to be legalized in the future. We will continue to monitor the various opportunities across the country and provide updates when appropriate. We believe our growth playbook established in Illinois will enable us to be successful in any future market. With that, I turn it over to Brian to walk you through the numbers in more detail.