Accel Entertainment, Inc.

Thank you for standing by. Welcome to the Excel Entertainment Q2 2021 earnings call. At this time, all participants are in a listening-only mode. After the speaker's 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 0. I would now like to hand the conference over to your speaker today, Mr. Matthew Ellis, Senior Vice President of Corporate Strategy.

Welcome to Accel Entertainment's second quarter 2021 earnings call. Participating on the call today are Andy Rubenstein, Accel's Chief Executive Officer, and Brian Carroll, Accel'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, including those related to COVID-19 and its variant strains. 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 statements 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 second quarter earnings call. I'm pleased to report the second quarter of 2021 was the best quarter in Excel's history. We set new revenue and adjusted EBITDA records. As discussed during our June Investor Day, the primary drivers of the higher revenue were the completion of higher bet limit software upgrades and the six VGT installations. The combination of these initiatives contributed to the increased location revenue, on average between 30% and 35%. versus 2019 levels. We also benefited from the third round of stimulus checks and higher demand due to the lack of other entertainment options as the economy was not fully open. But the improvements in our product offering were the critical drivers for this strong performance. As we entered the summer months and Illinois fully reopened, we watched revenue closely to see where it would settle. February, March, and April are traditionally the three best months of the year, while June and July are lower performing months. I'm pleased to share that our July gaming revenue was seasonally better than normal and above our previous expectations. This reinforces our belief that the elevated revenue we are seeing was driven by the initiatives and may be sustainable. Due to Q2's strong results and the strong start to Q3, we are raising our guidance. I'll leave it to Brian to walk you through the new numbers later in the call. Turning to growth, our sales teams continue to sign additional competitor and organic locations. Including the most recent IGB meeting on July 14th, year-to-date, Excel was awarded 168, or 38%, of all new licenses. Our ability to win more licenses than our current market share is a strong testament to our sales capabilities and it's just one of many competitive advantages that differentiates us from other operators. There have been some questions about the relatively low number of licenses issued at the last Gaming Board meeting in July. However, when looking at the calendar, there was a short amount of time between meetings in addition to the July 4th holiday weekend. We will always push ourselves to win more than our share, and help our local business partners generate incremental profits, which will lead to further location growth. It's too soon to determine what the new total number of annual licenses will be going forward, but we will see a significant amount of runway in Illinois, as illustrated in our June Investor Day presentation. Looking at other states, we remain cautiously optimistic that several states will consider distributed gaming in the future. For example, Virginia recently banned unregulated devices, which could be a first step towards regulated gaming. We will continue to work with the various stakeholders in these states to educate them about the benefits of distributed gaming and the incremental revenues it generates for state and local governments, as well as small businesses. Should a new state legalize gaming, we believe our growth playbook in Illinois will enable us to be successful in any future market. On the M&A front, our pipeline remains active, and we expect to announce more opportunities in the future in both existing and incremental states. In Georgia, we completed another acquisition in May when we acquired Island Games, a southern Georgia operator with 30 locations. Today, we have approximately 60 live locations in Georgia, and a backlog of over 100 locations. We expect both numbers to continue growing, and we remain excited about the long-term prospects for us in that market. Switching to Century, which operates in Montana, Nevada, South Dakota, West Virginia, and Louisiana, we have now submitted all our applications to the various regulators. Due to the large backlog of applications in various states, we will likely not be approved until the first half of 2022, which will impact the timing of the closing versus our initial expectations. We are happy to report that Century continues to perform better than our original estimates, and both sides are excited to combine the best practices of both companies. Overall, Excel is in a strong position to capitalize on the future. we believe we will offer one of the best returns in gaming, combined with highly visible growth. To put our growth into context, Illinois distributed gaming industry's revenue grew 60% from Q2 2019 to Q2 2021, as compared to Illinois casino's revenue, which decreased 7% over the same period. Over that same period, Excel's growth was 92% overall or 67% when normalized to the Grand River acquisition. With that, I'd like to turn it over to Brian to walk you through the numbers in more detail.