Accel Entertainment(US:ACEL)2024-10-30 20:19Financial Performance - Total net revenues for Q3 2024 were $302.2 million, an increase of $14.7 million, or 5.1%, compared to Q3 2023[137]. - Net gaming revenue increased by $15.8 million, reflecting growth in gaming locations and terminals, totaling $289.9 million in Q3 2024[137]. - Operating income for Q3 2024 was $21.8 million, a decrease of $3.3 million, or 13.0%, from $25.1 million in Q3 2023[137]. - Net income for Q3 2024 was $4.9 million, a decrease of $5.6 million, or 53.2%, from $10.5 million in Q3 2023[137]. - Total net revenues for the nine months ended September 30, 2024, were $913.5 million, an increase of $40.1 million, or 4.6%, compared to the prior-year period[153]. - Adjusted EBITDA for the three months ended September 30, 2024, was $45.9 million, an increase of $1.7 million or 3.9% compared to the prior-year period[171]. Expenses and Costs - Total operating expenses increased by $18.0 million, or 6.9%, to $280.4 million in Q3 2024[137]. - Cost of revenue for the three months ended September 30, 2024, was $210.8 million, an increase of $12.1 million, or 6.1%, driven by higher net gaming revenue[141]. - General and administrative expenses for the three months ended September 30, 2024, were $47.9 million, an increase of $2.7 million, or 6.1%, due to higher payroll-related costs[143]. - Cost of revenue for the nine months ended September 30, 2024, was $633.3 million, an increase of $28.7 million, or 4.8%, driven by higher net gaming revenue[154]. - Other expenses, net for the nine months ended September 30, 2024, were $13.6 million, an increase of $8.6 million, or 172.1%, primarily due to higher fair value adjustments related to acquisitions[156]. Tax and Interest - The effective tax rate for Q3 2024 was impacted by a decrease in income tax expense to $3.6 million, down 22.9% from the prior year[137]. - The effective tax rate for the nine months ended September 30, 2024, was 31.3%, compared to 36.1% in the prior-year period[160]. - Interest expense, net rose to $9.2 million, an increase of $749,000, or 8.9%, compared to the previous year[137]. - A 1.0% increase in interest rates would lead to an annual increase in interest expense of approximately $2.6 million, assuming the balance remains at $556.3 million[188]. Gaming Operations - The number of gaming locations increased to 4,014 in 2024, a growth of 108 locations or 2.8% compared to 3,906 in 2023[162]. - As of September 30, 2024, the total number of gaming terminals increased to 25,729, up by 1,025 terminals or 4.1% from 24,704 in the previous year[164]. - Location hold-per-day in Illinois increased to $839 for the three months ended September 30, 2024, up by $14 or 1.7% from $825 in the prior-year period[166]. Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2024, was $107.7 million, reflecting an increase of $15.7 million or 17.0% compared to the prior-year period[181]. - Net cash used in investing activities for the nine months ended September 30, 2024, was $90.2 million, a decrease of $54.8 million or 154.8% compared to the prior-year period[182]. - The company had $265.1 million in cash and cash equivalents as of September 30, 2024[172]. - The company borrowed an additional $119.0 million on the delayed draw term loan facility in October 2024, with $35.0 million anticipated for a pending business acquisition[176]. - As of September 30, 2024, borrowings under the senior secured credit facility amounted to $556.3 million[188]. Corporate Actions and Outlook - The company is monitoring macroeconomic conditions closely, with potential financial or operational actions planned if adverse impacts are observed[124]. - The company is pursuing a pending acquisition of the FanDuel Sportsbook & Horse Racing in Collinsville, Illinois, to expand its market presence[117]. - The company anticipates capital expenditures to be approximately $60–65 million in 2024[182]. - The CEO and CFO evaluated the effectiveness of disclosure controls and procedures, concluding they were effective at the reasonable assurance level as of September 30, 2024[191]. - There were no changes in internal control over financial reporting that materially affected the company's reporting during the quarter ended September 30, 2024[192].