Accel Entertainment, Inc.

Hello everyone and welcome to the Excel Entertainment second quarter 2022 earnings call. My name is Seb and I will be the operator for your call today. There will be an opportunity for Q&A on today's call and you can register your question by pressing star 1 on your telephone keypad or press star 2 to withdraw your question. If you require operator assistance at any time, please press star 0. I will now hand the floor over to Derek Harmer, General Counsel and Chief Compliance Officer.

Welcome to Accel Entertainment's second quarter 2022 earnings call. Participating on the call today are Andy Rubenstein, Accel's chief executive officer, and Matt Ellis, 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 various 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 followings 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 Andy.

Thanks, Derek. And good morning, everyone. Thank you for joining us for Excel's second quarter earnings call. I'm pleased to report we had another strong quarter. We reported revenue of $228 million and adjusted EBITDA of $43 million. In Illinois, same-store sales were essentially flat to the prior year, despite the current inflationary environment and the fact that stimulus checks went out near the beginning of Q2 last year. Our performance continues to demonstrate the strength and resilience of our business model. We believe local businesses will continue to invest in their gaming due to the incremental profits they receive, and players will continue to choose our local, high-quality offerings. due to its convenience and appeal. On the expense side, just like most other businesses, we experience higher-than-expected costs for macroeconomic-related impacts, such as increased expenses for labor and fuel. We're continually monitoring our spend and looking for ways to mitigate increased costs without sacrificing our best-in-class service. Our asset-light business model and highly variable cost structure will allow us to quickly adjust if there are any further changes in the market. On the M&A front, I'm pleased to report that we successfully closed our acquisition of Century on June 1st. The integration is going well, and the companies are working hard as we share our best practices. I'm also pleased to welcome the entire Century team, led by Steve Arnson, Heidi Schmaltz, and Merle Frank, to the Accel family. Century is experiencing similar inflationary pressures as we are seeing across the country, but continues to outperform our original estimates. Looking at new states, I'm excited to share that we entered Nebraska in June with a handful of organic locations. Nebraska's play today is significantly lower than our more established markets, but we see potential for both organic and inorganic growth. We aim to develop Nebraska using the growth playbook we developed in Illinois. This will be a new market for us, but one that will eventually lead to an attractive earning stream. And to that point, we recently acquired DBS, an amusement operator, for $9.5 million. Overall, our M&A pipeline remains active, and we are evaluating multiple opportunities in Illinois and across the country. Our long-term goal is to continue to increase the percentage of our revenue generated outside of Illinois. Switching over to Georgia, in May, the Georgia Lottery announced it would be extending its gift card pilot program and making it available to all locations. This program allows players to load their winnings onto a prepaid gift card, which substantially reduces one of the biggest barriers players face in the Georgia market. As you would expect, our locations in the pilot program experience significant increases in play. We're currently working with the lottery and our locations to roll out the pilot program across our network. We see this as an opportunity to expand our presence in the market and the profitability of each location. In Illinois, our sales team continues to sign additional competitor and organic locations. As of the end of the second quarter, our backlog had grown more than 14% year-to-date. We're working closely with our locations to ensure that they are licensed and live as soon as possible. Whether we look at the number of eligible businesses without gaming or the number of VGTs per capita, we believe Illinois still has highly visible growth. Overall, Excel achieved several milestones this quarter with the Century acquisition and expansion in Nebraska. More importantly, we continue to build a platform further expand into existing and new markets. Our local business model, low capital requirements, and highly visible growth offers one of the best returns in gaming. With that, I'd like to turn it over to Matt to walk you through the numbers in more detail.