Accel Entertainment(US:ACEL)2025-05-05 20:18Financial Performance - Net revenues for Q1 2025 increased by 7.3% to $323.912 million, compared to $301.817 million in Q1 2024[143] - Net gaming revenue rose by 4.8% to $301.951 million, while amusement revenue decreased by 3.6% to $5.908 million[143] - Manufacturing revenue surged by 74.6% to $3.858 million, and ATM fees and other revenues increased by 128.3% to $12.195 million[143] - Total operating expenses grew by 7.9% to $297.960 million, with cost of revenue increasing by 5.9% to $221.472 million[143] - Net income for Q1 2025 was $14.613 million, a significant increase of 97.0% from $7.416 million in Q1 2024[143] - Adjusted EBITDA for Q1 2025 was $49.5 million, up 7.1% from $46.2 million in Q1 2024, attributed to an increase in locations and gaming terminals[165] - Net income for Q1 2025 was $14.6 million, a 97.0% increase from $7.4 million in Q1 2024[165] Taxation - The effective tax rate for income tax expense was approximately 25.4%, with income tax expense rising to $4.993 million[143] - The effective tax rate for Q1 2025 was 25.5%, down from 39.1% in Q1 2024[153] - The tax on net gaming revenue in Illinois increased from 34% to 35% effective July 1, 2024[134] Operational Expansion - The company opened Fairmount Park - Casino & Racing in April 2025, enhancing its market presence in Illinois[125] - The number of gaming terminals increased by 4.4% to 27,180 in Q1 2025, compared to 26,029 in Q1 2024[158] - The number of locations grew by 2.9% to 4,391 in Q1 2025, up from 4,267 in Q1 2024[155] - Location hold-per-day in Illinois increased by 2.9% to $885 in Q1 2025, compared to $860 in Q1 2024[160] Cash Flow and Investments - For the three months ended March 31, 2025, net cash provided by operating activities was $44.8 million, an increase of $16.0 million or 55.7% compared to the prior-year period[173] - Net cash used in investing activities for the same period was $26.2 million, reflecting a slight increase of $0.3 million or 1.1% compared to the prior-year period[175] - Net cash used in financing activities was $27.9 million, an increase of $17.4 million or 164.9% compared to the prior-year period, primarily due to higher net repayments on debt and stock repurchases[176] Debt and Interest - Interest expense for Q1 2025 was $8.685 million, reflecting a slight increase of 0.3% compared to the previous year[143] - The company recognized an unrealized loss of $1.1 million on the change in fair value of interest rate caplets for the three months ended March 31, 2025, compared to an unrealized gain of $1.1 million for the same period in 2024[172] - Interest income on the caplets was $1.8 million for the three months ended March 31, 2025, down from $2.6 million in the prior-year period[172] - As of March 31, 2025, borrowings under the senior secured credit facility amounted to $582.5 million, with a potential annual impact of $2.8 million on future earnings if interest rates increase by 1.0%[181] Capital Expenditures - Capital expenditures are anticipated to be approximately $75–80 million in 2025, with specific allocations of $31–32 million for Fairmount, $5–7 million for Louisiana, and $39–41 million for other expenditures[175] Seasonal Trends - Seasonal trends affect the company's operations, with gross revenue per machine typically lower in summer and higher between February and April[179] Compliance and Accounting Policies - The company remained in compliance with all debt covenants under the Credit Agreement as of March 31, 2025[170] - The company applies the same critical accounting policies as described in its Annual Report on Form 10-K for the year ended December 31, 2024[178]