Accel Entertainment, Inc.

Good afternoon. Thank you for attending the Xcel Entertainment second quarter 2023 earnings call. My name is Matt and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I would now like to pass the conference over to our host, Derek Harmer. Derek, please go ahead.

Welcome to Xcel Entertainment's second quarter 2023 earnings call. Participating on the call today are Andy Rubenstein, Excel's Chief Executive Officer, and Matt Ellis, 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. 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 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 Andy.

Thanks, Derek, and good afternoon, everyone. Thank you for joining us for Excel's second quarter earnings call. I'm pleased to report we had another record-breaking quarter. We reported revenue of $293 million, a year-over-year increase of 28%, and adjusted EBITDA of $47 million, a year-over-year increase of 9%. Q2's revenue growth was primarily driven by the successful acquisition of Century, which is now fully integrated and 0.4% same-store sales growth in Illinois. The modest growth in Illinois was mainly due to unfavorable weather. Warmer temperatures came earlier than expected, and we've seen higher thunderstorm activity during the summer. Our continued growth in the face of economic uncertainty clearly demonstrates the strength of our hyper-local business model. Our establishment partners recognize and rely on the incremental profits our high-quality offerings bring to their businesses. On the expense side, our technology investments have started to bear fruit. Over the winter, we reimagined how to provide service to our locations by investing in technology to help us more efficiently dispatch our technicians while continuing our industry-leading level of service. Our cost structure continues to remain stable despite the inflationary impacts on labor and costs. While the labor market remains challenging, we've seen some signs of stabilization, allowing us to better retain and attract talent. Our asset-light business model and highly variable cost structure will allow us to continue to quickly calibrate our business to any additional changes in the economy. On the regulatory front, we reached a settlement with the Illinois Gaming Board to resolve our disciplinary complaint for $1,125,000. With this matter behind us, we look forward to working together more productively. Turning to Century, I'm pleased to share that we've completed our back office integrations and our operations teams continue to align on best practices. With Century's capital constraints removed, we're now focused on unlocking Century's growth by investing in new equipment and strategic acquisitions. On the greenfield front, we're closely watching North Carolina. As a part of North Carolina's efforts to reduce corporate income taxes, we're hopeful the state will turn to distributed gaming as an alternative source of tax revenue. The House and Senate are currently reconciling their respective budget bills, both of which currently include distributed gaming. We should know more by the end of August. Looking at M&A, our pipeline remains active. and we're evaluating multiple opportunities across the country. Our long-term goal continues to be the increase of percentage of our revenue generated outside of Illinois. Overall, Excel continues to execute its growth playbook. We remain excited about the opportunities in the markets where we are currently operating, as well as new markets we're looking to enter. Our strong balance sheet, local business model, 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 our financials in more detail.