Accel Leisure Pronounces Digital Investor Day on June 2

CHICAGO–() – May 24, 2021 – Accel Entertainment, Inc. (NYSE: ACEL) (“Accel”) announced today that an Investor Day will be held on June 2, 2021 from 10:00 AM CST / 11:00 AM EST until December 12, 2021 : 12:00 p.m. CST / 1:00 p.m. EST. During this two hour virtual event, Accel will cover its growth in Illinois and its continued expansion across the country through the upcoming acquisition of Century Gaming, Inc. (“Century Gaming”), a leading distributed gaming company in the western United States.

The virtual event will include an interactive presentation, followed by a Q&A with the Accel leadership team, attended by Andrew Rubenstein, Chief Executive Officer, Michael Marino, Chief Commercial Officer, Mark Phelan, Chief Revenue Officer, Ryan Hammer, President of Gaming Operations, includes Steve Arntzen, President and CEO of Century Gaming.

Virtual event details

Interested parties can attend the live event by registering at https://event.on24.com/wcc/r/3188927/B19D5E3CD81D9BD3239B060302EB728A. In addition to a rerun of the event, this registration link will also be available on Accel’s Investor Relations website: https://ir.accelentertainment.com.

About Accel

Accel is a leading US distributed gaming provider on an adjusted EBITDA basis and a preferred partner for local business owners in the Illinois market. Accel’s business consists of installing, maintaining and operating VGTs, redemption devices that pay out winnings and include ATM functions, and other entertainment devices in authorized locations outside the casino such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops , and grocery stores.

Analyst Forecasts For Accel Leisure, Inc. (NYSE:ACEL) Are Surging Greater

Celebrations may be appropriate for Accel Entertainment, Inc. ((NYSE: THAT) Shareholders, with analysts vastly improving their legal estimates for the company. Consensus estimates suggest that investors can expect sharp increases in statutory sales and earnings per share, with analysts modeling a real improvement in business performance. Investors were pretty bullish on Accel Entertainment, too, with its stock rising 11% to $ 13.46 over the past week. It will be interesting to see if today’s upgrade is enough to propel the stock any higher.

After the upgrade, the six analysts at Accel Entertainment are now forecasting sales of $ 684 million in 2021. If that were achieved, it would mean a significant increase in sales of 92% compared to the previous 12 months. The losses are expected to go away in the next year, with earnings projected at $ 0.37 per share this year. Prior to this last update, analysts had forecast sales of $ 612 million and earnings per share (EPS) of $ 0.26 for 2021. So we can see that analyst sentiment has risen significantly lately in both sales and earnings per share according to the latest estimates.

Check out our latest analysis for Accel Entertainment

NYSE: ACEL earnings and revenue growth May 15, 2021

It won’t be surprising to learn that as a result of these upgrades, analysts increased their target price for Accel Entertainment by 8.7% to $ 15.58. However, setting a single price target can be unwise because the consensus target is effectively the average of the analyst price targets. As a result, some investors enjoy looking at the various estimates to see if there are different opinions about company valuation. There are a few different perceptions at Accel Entertainment, with the most bullish analyst rating it at $ 20.00 and the most bearish at $ 13.00 per share. Analysts definitely have different views on the business, but we don’t think the spread of estimates is wide enough to suggest extreme results could be awaiting Accel Entertainment shareholders.

One way to get more context about these predictions is to examine how they compare to past performance and how other companies in the same industry are doing. For example, we’ve determined that Accel Entertainment’s rate of growth is expected to accelerate significantly. Annual sales growth of 138% is forecast by the end of 2021. This is well above the historic decline of 18% per year last year. In contrast, our data suggests that other companies (with analyst coverage) in the industry are forecasting revenue growth of 22% per year. Not only are Accel Entertainment revenues expected to improve, but analysts expect faster growth than the industry as a whole.

The bottom line

Most importantly, with this upgrade, analysts have revised their earnings per share estimates for this year in anticipation of an improvement in business conditions. They have also updated their sales estimates for this year, and sales are expected to grow faster than the broader market. Given that the consensus seems almost broadly bullish with a significant increase in forecasts and a higher price target, Accel Entertainment may be worth investigating further.

Analysts are definitely bullish at Accel Entertainment, but no company is perfect. In fact, you should know that there are a few potential concerns to be aware of, including last year’s dilutive stock issue. For more information, you can click through to our platform Learn more about this and the other two flags we identified .

Another way to look for interesting companies that might be Reaching a turning point is to track whether the management buys or sells with ours free List of growing companies that insider buy.

Funded
To trade with Accel Entertainment, open an account with the lowest cost * platform trusted by professionals. Interactive broker. Your clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.

This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
* Interactive brokers have been rated as Lowest Cost Brokers by StockBrokers.com. Annual online review 2020

Do you have any feedback on this article? Concerned about the content? Get in touch directly with us. Alternatively, you can also send an email to the editorial team (at) simplywallst.com.

Accel Leisure, Inc. (NYSE:ACEL) Insiders Have Been Promoting

We often see insiders buying stocks in companies that are doing well over the long term. On the flip side, it wouldn’t be worth mentioning that insider selling is known to precede tough times for a company. So we’re going to look to see if insiders bought or sold stocks of Accel Entertainment, Inc. ((NYSE: THAT).

What is insider selling?

It is perfectly legal for company insiders, including board members, to buy and sell shares in a company. However, most countries require the company to disclose such transactions to the market.

We would never suggest that investors base their decisions solely on what a company’s directors have done. But we would also consider it foolish to ignore insider trading altogether. For example a Harvard University study found that “insider buying generates unusual returns in excess of 6% per year”.

Check out our latest analysis for Accel Entertainment

The last 12 months of insider trading at Accel Entertainment

Co-founder Andrew Rubenstein made the biggest insider sale in the past 12 months. That single transaction involved shares valued at $ 867,000 priced at $ 9.63 each. This means that an insider was selling shares at a price slightly below the current price ($ 10.96). If an insider sells below the current price, it indicates that they consider that lower price to be fair. That makes us wonder what you think of the (higher) recent rating. Please note, however, that sellers can sell for a variety of reasons, so we do not know exactly what they think of the stock price. It’s worth noting that this sale was only 1.0% of Andrew Rubenstein’s stake.

Accel Entertainment insiders haven’t bought any shares in the past year. The following graph shows insider transactions (by companies and individuals) over the past year. If you want to know exactly who sold how much and when, just click on the graphic below!

NYSE: ACEL Insider Trading Volume March 21, 2021

If you are like me you will Not want to miss that free List of growing companies that insider buy.

Inside ownership of Accel Entertainment

Many investors enjoy checking out how much of a company is owned by insiders. A high level of insider responsibility often leads to corporate management taking greater account of the interests of shareholders. Accel Entertainment insiders own 23% of the company, currently valued at approximately $ 248 million based on the current share price. I like this level of insider ownership because it increases the chances that management will ponder the best interests of shareholders.

What does this data suggest about Accel Entertainment Insider?

The fact that there hasn’t been any insider trading by Accel Entertainment recently certainly doesn’t bother us. It is encouraging that insiders are abundant in stocks, but we would like more insider buying since Accel Entertainment’s final year of insider trading has not left us with confidence. While it is helpful to know what insiders are doing to buy or sell, it is also helpful to know the risks a particular company is facing. In performing our analysis, we found that Accel Entertainment did this 1 warning sign and it would be unwise to ignore it.

But note: Accel Entertainment may not be the best stock to buy. So take a look at it free List of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are persons who report their transactions to the competent supervisory authority. We currently consider open market transactions and private sales, but not derivative transactions.

Funded
To trade with Accel Entertainment, open an account with the lowest cost * platform trusted by professionals. Interactive broker. Your clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.

This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
* Interactive brokers have been rated as Lowest Cost Brokers by StockBrokers.com. Annual online review 2020

Do you have any feedback on this article? Concerned about the content? Get in touch directly with us. Alternatively, you can also send an email to the editorial team (at) simplywallst.com.

Accel Leisure’s 4Q Revenues Plunge 39%, Miss Estimates

Bloomberg

Biden Eyes first big tax hike since 1993 in next economic plan

(Bloomberg) – President Joe Biden is planning the first major federal tax hike since 1993 to fund the long-term economic program designed as a follow-up to his Pandemic Control Act, according to people familiar with The Covid-19 Business Stimulus Act $ 1.9 trillion, the next initiative, which is likely to be even bigger, will not rely solely on government debt as a source of funding. While it became increasingly clear that tax hikes will be a component – Treasury Secretary Janet Yellen said at least part of the next bill will have to be paid and pointed to higher rates – key advisors are now preparing for a package of measures that will could include an increase in both corporate and individual tax rates for high earners. With every tax break and every loan that has its own lobby constituency, tinkering with tax rates is associated with political risks. This explains why the tax increases in the 1993 revision of Bill Clinton stand out from the modest changes that have been made since then. For the Biden government, the planned changes not only offer the opportunity to fund important initiatives such as infrastructure, climate and expanded aid for poorer Americans. But also to address what Democrats argue is inequalities in the tax system itself. The plan will test both Biden’s ability to woo Republicans and Democrats’ ability to remain unified. “His whole outlook has always been that Americans believe tax policies must be fair, and he has looked at all of his policy options through that lens,” said Sarah Bianchi, director of US policy at Evercore ISI and former Biden economic assistant. “That is why the focus is on combating inequalities between work and wealth.” While the White House has opposed a direct wealth tax as suggested by progressive Democratic Senator Elizabeth Warren, current government thinking is targeting the rich. The White House is expected to see four people familiar with the discussions propose a series of tax increases, largely in line with Biden’s 2020 campaign proposals. The tax hikes, included in a broader infrastructure and jobs package, are likely to repeal portions of President Donald Trump’s tax bill for 2017, benefiting businesses and high net worth individuals, and making further changes to make tax law more progressive, according to the one with the Plan trusted people. The following proposals are among those currently planned or under consideration, according to respondents who did not want to because the discussions are private: Increase the corporate tax rate from 21% to 28% pass-through companies such as limited liability companies or Partnerships Increase Income Tax Rate for Individuals With Income Greater Than US $ 400,000 Widening Estate Tax Scope Increased Capital Gains Tax Rate for Individuals With Annual Earnings Of US $ 1M or More. (Biden on the campaign suggested applying higher income tax rates) White House economist Heather Boushey stressed that Biden has no plans to increase taxes on those earning less than $ 400,000 a year. But for “people at the top who have benefited from this economy and have not been hit so hard, there is plenty of room to ponder what types of income we can generate,” she said in a Bloomberg television interview Monday. An independent analysis of the Biden campaign’s tax plan by the Tax Policy Center estimated it would raise $ 2.1 trillion over a decade, though the administration’s plan is likely to be smaller. Bianchi wrote earlier this month that Congress Democrats could approve $ 500 billion. The full program has yet to be presented, with analysts estimating $ 2 to 4 trillion. A date has not yet been set for an announcement, although the White House said the plan will follow after the Covid-19 relief bill is signed. An open question for Democrats is what parts of the package need to be funded while debating whether there is infrastructure in place and this ultimately pays off – especially given the ongoing low cost of borrowing that remains historically low. Efforts to make the expanded child tax credit in the Pandemic Aid bill permanent – something estimated to price more than $ 1 trillion over a decade – could be harder to sell if classified as fully debt-financed. What Bloomberg’s Economists Are Saying … “The next big legislative initiative, infrastructure investments, could bring lasting economic gains that not only support higher wages but also encourage the diffusion of those gains across demographics and political beliefs.” – Andrew Husby and Eliza Winger, US economists For the full report click here. Democrats need at least 10 Republicans to support the bill and move it under regular Senate rules. But GOP members are signaling they’re ready to fight: “We’re going to have a big, robust discussion on the appropriateness of a big tax hike,” Senate Minority Chairman Mitch McConnell said last month, predicting the Democrats Pursue a reconciliation bill that waives the GOP Kevin Brady, Republican chief on the House Ways & Means Committee, said, “There seems to be a real drive to tax investments in capital gains at marginal income rates.” and called it a “terrible economic mistake”. While about 18% of the George W. Bush administration’s tax cuts were allowed to expire in a 2013 agreement and other laws saw some tax hikes, 1993 marks the last major string of hikes, experts say. This bill was passed by two votes in the House of Representatives, calling on the Vice President to break a tie in the Senate. “I don’t think it’s an understatement to say that the current partisan environment is more severe than it was in 1993,” said Ken Kies, executive director of the Federal Policy Group, former chief of staff of the Joint Tax Committee of Congress. “So you can draw your own conclusions” about the prospect of a deal this year, he said. Still, there could be some tax initiatives Republicans could leave behind. One of them is the switch from a gasoline tax to a fee for kilometers driven to finance motorway projects. Read More: Steam Another Road Tax For Funding Infrastructure Gains Is More Money To Enforce The Internal Revenue Service – A Way To Grow Revenue Without Raising Interest Rates. It is estimated that the agency brings in an additional $ 3 to $ 5 for every additional $ 1 spent on IRS audits. Democrats are also trying to overhaul tax laws, which they believe are not doing enough to discourage US companies from moving jobs and profits offshore – another way to increase revenue, an aide said. Republicans could potentially support incentives, although it is unclear whether they would support penalties. White House officials, including National Economic Council Assistant Director David Kamin, who wrote a paper on “Taxing the Rich” in 2019, are in the process of drafting the Biden tax plans. If the date is passed, tax measures are likely to take effect in 2022 – although some lawmakers and Biden supporters outside the administration have advocated holding back while unemployment remains high due to the pandemic’s own ideas for tax reforms. Senate Finance Committee Chairman Ron Wyden wants to consolidate energy tax breaks and require investors to regularly pay taxes on their investments, including stocks and bonds that make unrealized gains. “A nurse pays taxes on every single paycheck. A billionaire in an affluent suburb, on the other hand, can postpone paying taxes month after month so that paying taxes is all but optional, ”Wyden told Bloomberg in an interview. “I don’t think that’s right.” Warren has levied a wealth tax while House Financial Services Committee chair Maxine Waters said she would like to consider a financial transactions tax. Democratic strategists see the next package as the last chance to reshape the US economy on a grand scale before lawmakers turn to the 2022 mid-term campaign: “Typically, the party in power gets a shot or two to pass major legislative packages,” said Chuck Marr, senior director for Federal Tax Policy at the Left Center for Budget and Policy Priorities. “This is the next shot.” (Updates with White House economists in the first paragraph after the bullet section.) For more articles like this, visit bloomberg.com. Sign up now to stay up to date with the most trusted business news source. © 2021 Bloomberg LP

Accel Leisure Publicizes 2020 Working Outcomes

Accel Entertainment, Inc. (NYSE: ACEL) today announced certain financial and operating results for the three-months and fiscal year ended December 31, 2020.

Highlights

  • Ended 2020 with 2,435 locations; an increase of 5% compared to 2019

  • Ended 2020 with 12,247 VGTs; an increase of 17% compared to 2019

  • Revenue of $74 million for Q4 2020 and $316 million for YE 2020

  • Net loss of $10 million for Q4 2020 and $13 million for YE 2020

  • Adjusted EBITDA of $5 million for Q4 2020 and $34 million for YE 2020

  • Completed acquisition of American Video Gaming on December 30, 2020, an Illinois operator with 49 locations

Recent Events

  • February 2021 was the highest revenue month in Accel’s history

  • Entered into a securities purchase agreement in March 2021 to acquire Century Gaming, Inc., one of the leading distributed gaming operators in Montana and Nevada

2021 Guidance

While it is difficult to predict the duration and impact of COVID-19, our 2021 guidance includes the impact of the January 2021 shutdown, assumes no M&A, and includes increased operating expenses for COVID-19.

  • End 2021 with an estimated 13,250 – 13,400 VGTs

  • End 2021 with an estimated 2,550 – 2,575 locations

  • 2021 Revenue estimated to be $580 – $600 million

  • 2021 Adjusted EBITDA[1] estimated to be $95 – $100 million

  • 2021 capital expenditures estimated to be $20-$25 million of cash spend

Accel Entertainment CEO Andy Rubenstein commented, “We are pleased to have achieved strong financial results for both the fourth quarter and full year 2020, despite industry-wide complexities resulting from the COVID-19 pandemic. Our asset-light business model was key to allowing us to end the year stronger than ever, and execute on our growth plans to secure additional scale, as illustrated by our recent acquisition of American Video Gaming. As a result of these efforts we have begun 2021 with a strong tailwind, achieving the highest revenue month in our history in February. We’re confident we are well-positioned to continue this success as the market recovers and we remain focused on delivering a safe, yet comfortable gaming experience for our players.”

Story continues

Consolidated Statements of Operations and Comprehensive (Loss) Income and Other Data

Three Months Ended
December 31,

Year Ended
December 31,

(in thousands)

2020

2019

2020

2019

(As Restated)

(As Restated)

Total net revenues

$

74,414

$

122,812

$

316,352

$

428,696

Operating loss

(11,966)

(5,657)

(24,679)

13,336

Loss before income taxes

(13,650)

(19,976)

(29,902)

(10,502)

Net loss

(10,411)

(22,425)

(12,984)

(15,701)

Other Financial Data:

Adjusted EBITDA(1)

4,708

20,795

33,901

79,594

Adjusted net (loss) income(2)

(4,134)

1,300

5,776

22,695

(1)

Adjusted EBITDA is defined as net (loss) income plus amortization of route and customer acquisition costs and location contracts acquired; stock-based compensation expense; (gain) loss on change in fair value of contingent earnout A-2 shares; other expenses, net; tax effect of adjustments; depreciation and amortization of property and equipment; interest expense; emerging markets; and provision for income taxes. For additional information on Adjusted EBITDA and a reconciliation of net (loss) income to Adjusted EBITDA, see “Non-GAAP Financial Measures—Adjusted EBITDA and Adjusted net (loss) income.”

(2)

Adjusted net (loss) income is defined as net (loss) income plus amortization of route and customer acquisition costs and location contracts acquired; stock-based compensation expense; (gain) loss on change in fair value of contingent earnout A-2 shares, other expenses, net; and tax effect of adjustments. For additional information on Adjusted net (loss) income and a reconciliation of net (loss) income to Adjusted net (loss) income, see “Non-GAAP Financial Measures— Adjusted EBITDA and Adjusted net (loss) income.”

Key Metrics

As of December 31,

2020

2019

Licensed establishments (1)

2,435

2,312

Video gaming terminals (2)

12,247

10,499

Average remaining contract term (years) (3)

6.8

6.9

December 31,

2020

2019

Location hold-per-day – for the three months ended(4) (in whole $)

$

583

$

554

Location hold-per-day – for the year ended(4) (in whole $)

$

585

$

590

(1)

Based on Scientific Games International third-party terminal operator portal data which is updated at the end of each gaming day and includes licensed establishments that may be temporarily closed but still connected to the central system. This metric is utilized by Accel to continually monitor growth from existing locations, organic openings, acquired locations, and competitor conversions.

(2)

Based on Scientific Games International third-party terminal operator portal data which is updated at the end of each gaming day and includes VGTs that may be temporarily shut off but still connected to the central system. This metric is utilized by Accel to continually monitor growth from existing locations, organic openings, acquired locations, and competitor conversions.

(3)

Calculated by determining the average expiration date of all outstanding contracts, and then subtracting the applicable measurement date. The IGB limited the length of contracts entered into after February 2, 2018 to a maximum of eight years with no automatic renewals.

(4)

Calculated by dividing the difference between cash deposited in all VGTs at each licensed establishment and tickets issued to players at each licensed establishment by the number of locations in operation each day during the period being measured. Then divide the calculated amount by the number of operating days in such period. Excluding the Grand River Jackpot acquisition, location hold-per-day was $649 and $637 for the three months and year ended December 31, 2020, respectively. Location hold-per-day for the year ended December 31, 2020 is computed based on 217-eligible days of gaming (excludes 148 non-gaming days due to the IGB mandated COVID-19 shutdown).

Consolidated Statements of Cash Flows Data

Year Ended December 31,

(in thousands)

2020

2019

(As Restated)

Net cash (used in) provided by operating activities

$

(3,705

)

$

45,565

Net cash used in investing activities

(61,435

)

(151,532

)

Net cash provided by financing activities

74,188

139,141

Non-GAAP Financial Measures

Three Months Ended
December 31,

Year Ended
December 31,

(in thousands)

2020

2019

2020

2019

(As Restated)

(As Restated)

Net loss

$

(10,411)

$

(22,425)

$

(12,984)

$

(15,701)

Adjustments:

Amortization of route and customer acquisition costs and location contracts acquired(1)

5,830

4,763

22,608

17,975

Stock-based compensation(2)

1,483

1,852

5,538

2,236

(Gain) loss on change in fair value of contingent earnout shares(3)

(1,850)

9,836

(8,484)

9,837

Other expenses, net(4)

3,228

12,103

8,948

19,649

Tax effect of adjustments(5)

(2,414)

(4,829)

(9,850)

(11,301)

Adjusted net (loss) income

(4,134)

1,300

$

5,776

$

22,695

Depreciation and amortization of property and equipment

5,670

7,734

20,969

26,398

Interest expense, net

3,534

3,342

13,707

12,860

Emerging markets(6)

463

517

Income tax (benefit) expense

(825)

7,278

(7,068)

16,500

Loss on debt extinguishment

1,141

1,141

Adjusted EBITDA

4,708

20,795

$

33,901

$

79,594

(1) Route and customer acquisition costs consist of upfront cash payments and future cash payments to third-party sales agents to acquire the licensed video gaming establishments that are not connected with a business combination. Accel amortizes the upfront cash payment over the life of the contract, including expected renewals, beginning on the date the location goes live, and recognizes non-cash amortization charges with respect to such items. Future or deferred cash payments, which may occur based on terms of the underlying contract, are generally lower in the aggregate as compared to established practice of providing higher upfront payments, and are also capitalized and amortized over the remaining life of the contract. Future cash payments do not include cash costs associated with renewing customer contracts as Accel does not generally incur significant costs as a result of extension or renewal of an existing contract. Location contracts acquired in a business combination are recorded at fair value as part of the business combination accounting and then amortized as an intangible asset on a straight-line basis over the expected useful life of the contract of 10 years. “Amortization of route and customer acquisition costs and location contracts acquired” aggregates the non-cash amortization charges relating to upfront route and customer acquisition cost payments and location contracts acquired.

(2) Stock-based compensation consists of options, restricted stock units and warrants.

(3) (Gain) loss on change in fair value of contingent earnout A-2 shares represents an unrealized fair value adjustment at each reporting period end related to the value of these contingent shares. Upon achieving such contingency, A-2 shares convert to A-1 common stock resulting in a non-cash settlement of the obligation.

(4) Other expenses, net consists of (i) non-cash expenses including the remeasurement of contingent consideration liabilities, (ii) non-recurring expenses relating to lobbying efforts and legal expenses in Pennsylvania and lobbying efforts in Missouri, (iii) non-recurring costs associated with COVID-19 and (iv) other non-recurring expenses.

(5) Calculated by excluding the impact of the non-GAAP adjustments from the current period tax provision calculations.

(6) Emerging markets consist of the results, on an adjusted EBITDA basis, for non-core jurisdictions where our operations are developing. Markets are no longer considered emerging when Accel has installed or acquired at least 500 gaming terminals in the jurisdiction, or when 24 months have elapsed from the date Accel first installs or acquires gaming terminals in the jurisdiction, whichever occurs first.

Restatement of prior period financial statements

The restatement reflects adjustments to correct an error related to the accounting treatment of certain earn out arrangements issued in connection with the 2019 business combination with TPG Pace Holdings Corp., a special purpose acquisition company, that were previously presented as equity. Because the number of Class A-1 common stock (the “contingent earnout shares”) the holder is entitled to under the agreement are dependent, in part, upon the occurrence of a change of control, which is not an input to the fair value of a fixed for fixed contract on equity shares, the Company determined that the contingent earnout share obligation should be presented as a liability and marked to fair value each period, not equity-classified as previously presented. The Company also concluded that Class A-2 common stock issued in the transaction does not represent an increase in equity due to the fact that such shares are not entitled to dividends, voting rights, or a stake in the Company in the case of liquidation. Accordingly, the contingent earnout is now reflected as a liability at fair value on the Company’s consolidated balance sheets at December 31, 2020 and 2019, and the change in the fair value of such liability in each period is recognized as a gain or loss in the Company’s consolidated statements of operations and comprehensive (loss) income. The contingent earnout liability does not constitute indebtedness of the Company and will only be satisfied, if earned, by settlement in the Company’s Class A-1 common stock in a non-cash transaction. The existence of contingent earnout shares occurred as a result of the Company’s merger and reverse recapitalization occurring on November 20, 2019 and did not impact any reporting periods prior to the merger and reverse recapitalization transaction.

The Company also corrected certain classification errors impacting amusement revenue, ATM fees and other revenue, and cost of revenue that were previously presented net instead of gross, and certain revenue share expenses that were previously presented in general and administrative instead of cost of revenue. There is no impact to net income (loss) as a result of these reclassifications.

Conference Call

Accel will host an investor conference call on March 15, 2021 at 11 a.m. Central (12 p.m. Eastern) to discuss these operating and financial results. Interested parties may join the live webcast by registering at https://www.directeventreg.com/registration/event/662712 or accessing the webcast via the company’s investor relations website: ir.accelentertainment.com. Following completion of the call, a replay of the webcast will be posted on Accel’s investor relations website.

About Accel

Accel believes it is the leading distributed gaming operator in the United States on an Adjusted EBITDA basis, and a preferred partner for local business owners in the Illinois market. Accel’s business consists of the installation, maintenance and operation of VGTs, redemption devices that disburse winnings and contain ATM functionality, and other amusement devices in authorized non-casino locations such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery stores.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, contained in this press release are forward-looking statements, including, but not limited to, any statements regarding our 2021 guidance, including with respect to the duration and impact of the COVID-19 crisis (including expected operating expenses related thereto), potential acquisitions or strategic alliances, and our estimates of number of VGTs, locations, revenues, [net (loss) income], Adjusted EBITDA and capital expenditures. The words “predict,” “estimated,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” “continue,” and similar expressions or the negatives thereof are intended to identify forward looking statements. These forward looking statements represent our current reasonable expectations and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward looking statements due to a number of factors including, but not limited to: the existing and potential future adverse impact of the COVID-19 pandemic on Accel’s business, operations and financial condition, including as a result the suspensions of all video gaming terminal operations by the Illinois Gaming Board between March 16, 2020 and June 30, 2020 and between November 1 9, 2020 and January 23, 2021, which suspensions could be reinstated; Accel’s ability to operate in existing markets or expand into new jurisdictions; Accel’s ability to manage its growth effectively; Accel’s ability to offer new and innovative products and services that fulfill the needs of licensed establishment partners and create strong and sustained player appeal; Accel’s dependence on relationships with key manufacturers, developers and third parties to obtain VGTs, amusement machines, and related supplies, programs, and technologies for its business on acceptable terms; the negative impact on Accel’s future results of operations by the slow growth in demand for VGTs and by the slow growth of new gaming jurisdictions; Accel’s heavy dependency on its ability to win, maintain and renew contracts with licensed establishment partners; unfavorable economic conditions or decreased discretionary spending due to other factors such as epidemics or other public health issues (including COVID-19), terrorist activity or threat thereof, civil unrest or other economic or political uncertainties, that could adversely affect Accel’s business, results of operations, cash flows and financial conditions and other risks and uncertainties indicated from time to time in documents filed or to be filed with the Securities and Exchange Commission (“SEC”). Accordingly, forward-looking statements, including any projections or analysis, should not be viewed as factual and should not be relied upon as an accurate prediction of future results. The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on the Accel. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the sections entitled “Risk Factors” in the Quarterly Reports on Form 10 Q and in the Annual Report on Form 10-K filed by Accel with the SEC, as well as Accel’s other filings with the SEC. Except as required by law, we do not undertake publicly to update or revise these statements, even if experience or future changes make it clear that any projected results expressed in this or other press releases or future quarterly reports, or company statements will not be realized. In addition, the inclusion of any statement in this press release does not constitute an admission by us that the events or circumstances described in such statement are material. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors including those described in the section entitled “Risk Factors” in the Quarterly Reports on Form 10-Q and in the Annual Report on Form 10-K filed by Accel with the SEC, as well as Accel’s other filings with the SEC. These and other factors could cause our results to differ materially from those expressed in this press release.

Non-GAAP Financial Information

This press release includes certain financial information not prepared in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”), including Adjusted EBITDA and Adjusted net (loss) income. Adjusted EBITDA and adjusted net (loss) income are non-GAAP financial measures and are key metrics used to monitor ongoing core operations. Management of Accel believes Adjusted EBITDA and adjusted net (loss) income enhance the understanding of Accel’s underlying drivers of profitability and trends in Accel’s business and facilitates company-to-company and period-to-period comparisons, because these non-GAAP financial measures exclude the effects of certain non-cash items, represents certain nonrecurring items that are unrelated to core performance, or excludes non-core operations. Management of Accel also believes that these non-GAAP financial measures are used by investors, analysts and other interested parties as measures of financial performance.

Although Accel excludes amortization of route and customer acquisition costs and location contracts acquired from Adjusted EBITDA and Adjusted net (loss) income, Accel believes that it is important for investors to understand that these route, customer and location contract acquisitions contribute to revenue generation. Any future acquisitions may result in amortization of route and customer acquisition costs and location contracts acquired.

Adjusted EBITDA and Adjusted net (loss) income are not recognized terms under GAAP. These non-GAAP financial measures excludes some, but not all, items that affect net (loss) income, and these measures may vary among companies. These non-GAAP financial measures are unaudited and have important limitations as an analytical tool, should not be viewed in isolation and do not purport to be alternatives to net loss as indicators of operating performance.

[1] Although we provide guidance for Adjusted EBITDA, we are not able to provide guidance for net income, the most directly comparable GAAP measure. Certain elements of the composition of GAAP net income, including stock-based compensation expenses, are not predictable, making it impractical for us to provide guidance on net income or to reconcile our Adjusted EBITDA guidance to net income without unreasonable efforts. For the same reason, we are unable to address the probable significance of the unavailable information.

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Contacts

Media Contact:
Eric Bonach
Abernathy MacGregor
212-371-5999
ejb@abmac.com