Accel Entertainment, Inc.

Ladies and gentlemen, thank you for your patience and thank you for attending today's Excel Entertainment Third Quarter 2022 Earnings Call. My name is Amber and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad at any time. It is now my pleasure to hand the conference over to our host, Derek Harnmer, with Accel. Derek, please proceed.

Welcome to Accel Entertainment's third 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. Actual results may differ materially from those discussed today and the company undertakes no obligation to update these statements unless required by law. For 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 Andy.

Thanks, Derek, and good afternoon, everyone. Thank you for joining us for Excel's third quarter earnings call. I'm pleased to report we had another strong quarter. We reported revenue of $267 million, a year-over-year increase of 38%, and adjusted EBITDA of $41 million, a year-over-year increase of 9%. Year three's revenue growth was primarily driven by the successful acquisition of Century and 3% same-store sales growth in Illinois. Adjusted EBITDA had a lower growth rate than revenue due to Century's negotiated splits. Despite the current inflationary environment, our performance continues to demonstrate the strength and resilience of our business model. We believe businesses will continue to see the upside of local gaming in their establishments, that they will continue to invest in their gaming due to the incremental profits they receive, and that players will continue to choose our local, high-quality offering due to its convenience and appeal. On the expense side, we continue to invest in new market opportunities and also face higher-than-expected costs for macroeconomic-related impacts such as increased labor, parts, and fuel expenses. Our partnership with local establishments is what drove our success for the last 10 years. It's what sets us apart from the competition today, and we will continue to refine how we win in an environment of increased cost pressures. Our asset-light business model and highly variable cost structure allows us to quickly adjust. With Century on board, we're starting to explore new growth opportunities and implementing some cost savings initiatives. Century continues to outperform our original expectations, and the integration remains on schedule. We believe that Century's technological capabilities will provide us with a competitive advantage in some of the developing markets where we currently operate or plan to operate in the near future. In Nebraska, I'm excited to share we closed two acquisitions. In August, we purchased VVS, an amusement operator based in Lincoln, and in September, we purchased River City Amusements based in Sioux City. While Nebraska's play is significantly lower than our more established markets, we remain optimistic about the potential of the market. We aim to continue growing Nebraska both organically and through acquisition. Overall, our M&A pipeline remains active and we are evaluating multiple opportunities 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 lottery announced it would be expanding its gift card pilot program by making it available to all locations. This program allows players to load their winnings onto a prepaid value card, which substantially reduces one of the biggest barriers players face in the Georgia market. We're working with the value card provider selected by the lottery and expect the rollout to begin this quarter. We see this as an opportunity to expand our presence in the market and the profitability of each location. Overall, Excel continues to execute its growth playbook. We remain excited about the opportunities in the markets where we currently operate, as well as the new markets we're looking to enter. 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. Thanks, Andy, and good afternoon, everyone.