Accel Entertainment, Inc. (NYSE:ACEL) Q1 2024 Earnings Call Transcript

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Steve Pizzella: Okay. Thanks. And then always nice to see revenue growth in Illinois, even when location hold per day is down year-over-year, driven by the actual location growth. Can you give us any color on the pipeline you have for location growth moving forward, whether in Illinois or some of your other states? And how we should think about that for the remainder of the year?

Andrew Rubenstein: Yes, I mean, we continue to have the opportunities. We — the establishment owners select us consistently over our competition and we tend to win on the sales front over and over again. And that’s — whether that’s Illinois, whether it’s Montana, whether it’s Nevada, Georgia, and I think that theme will continue to carry us as we move forward. We obviously always experience business owners that are not successful and their establishments closed, but we continue to upgrade our portfolio as the bottom kind of self-cleanses and the locations that we signed on a whole are definitely a big improvement for what we lose. So, you’re seeing a constant improvement in the portfolio. I think as we’ve seen some softness with some of our locations that we’ll be a little more cautious in bringing on new locations because going forward, there’s — it’s — you need a certain amount of revenue on the location side more than we do to support your establishments cost structure.

And the — as labor costs rise, while material costs, cost of goods sold, they impact those businesses greater than ours. And so we’re very aware that their business model changes to be a little more cautious as we sign up new locations.

Steve Pizzella: Okay. Thanks. And then just one more for me, if I may. The Nevada location hold per day, it was just slightly negative year-over-year in the quarter. Is there anything you’re seeing in that market to highlight? And how should we think about that moving forward?

Mathew Ellis: Thanks Steve, this is Mat. I think similar to what Andy said earlier, players push to our local close to home offering, and there’s a very local regional offering there as well. But we don’t see anything systemic. I think demand is still there. You look at that overall locals market. I think we’re on the better end of that spectrum. And it’s just, again, our offering improves, especially we’re able to make smart investments in that market with our locations. So, obviously, I would love to see it up. But I think with what you’re seeing, again, it highlights that close-to-home convenient offering the whole concept of 10 minutes door-to-door versus a much further journey to something else.

Steve Pizzella: Okay, appreciate it. Thanks guys.

Andrew Rubenstein: Thank you.

Operator: Thank you all for your questions. There are currently no questions waiting. [Operator Instructions] It seems we have no further questions. So, I will pass the conference back over to Andy Rubenstein for closing remarks.

Andrew Rubenstein: Thank you, everyone for joining us today. As a reminder, the Accel Entertainment Annual Meeting is tomorrow. I’m hoping everyone will be able to join us. We had a very good first quarter despite a rough start. We’re excited one month into the second quarter. And we look forward to sharing more and more news about the growth of Accel on next quarter’s call. So, thank you and I hope all of you enjoy the Mother Day — Mother’s Day weekend.

Operator: That will conclude today’s conference call. Thank you all for your participation. You may now disconnect your line.

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