Accel Entertainment acted fast when the coronavirus-mitigation shutdowns came. The Illinois video gaming terminal provider’s leaders called securing field cash within 72 hours of Gov. J.B. Pritzker’s March 20 stay-at-home order “a monumental logistical achievement.”
Accel’s earnings statement also showed an achievement — revenue rose and topped Wall Street forecasts. And officials said the company’s liquidity will get it through the crisis.
But getting there was painful; the company furloughed most of its employees and executives, including CEO Andy Rubenstein, CFO Brian Carroll, and General Counsel Derek Harmer, forwent their base salaries until gambling resumes.
In a statement Tuesday, Burr Ridge, Illinois-based Accel reported a net loss of $1.6 million, reversing $4 million in year-earlier net income. Per-share earnings weren’t disclosed.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash flow measure that excludes one-time costs, fell 25.2% to $14.8 million from $19.8 million.
Revenue rose 8% to $105.2 million from $97.4 million and topped the $95.4 million average estimate of analysts polled by Seeking Alpha.
In a conference call with analysts and journalists Monday, Rubenstein said Accel operated normally for the first quarter’s first 76 days, with strong operational and financial performance. Gaming revenue, for instance, increased 29% from the same period a year earlier.
Rubenstein said about 75% of its 600 surveyed location partners applied for relief under the Coronavirus Aid, Relief and Economic Security Act, aka CARES Act, and more than 80% said they expect to be open and running immediately after the stay-at-home order lifts.
Last month, Pritzker extended his state’s stay-at-home order through May 28, but he’s had pushback. On April 28, NPR reported that Illinois state Rep. Darren Bailey, a Republican, has called for the Democratic Pritzker to lift the order.
“We are waiting for more information on how and when each region will progress through the phases and its effect on the relaunch of video gaming,” Rubenstein said. “We are ready to resume normal operations as soon as the government states that is safe to do so.”
Accel said it finished the first quarter with 2,353 locations, a 35% jump from a year earlier, buoyed partly by the September acquisition of Grand River Jackpot LLC. The company ended the quarter with 11,164 video gaming terminals, a 41% jump, also helped by the Grand River acquisition.
In a note to investors following earnings, Union Gaming Group analyst John DeCree said Accel could emerge from the shutdowns stronger than before in Illinois.
DeCree said Montana’s slot route reopened last week to gaming volumes and foot-traffic consistent to pre-COVID-19 levels.
“We expect distributed gaming to bounce back quicker than casino gaming given that it is a more convenience-based gaming option located in less trafficked areas relative to casinos,” DeCree said.
Rubenstein also offered a glimmer of optimism for the post-pandemic days, whenever they come.
“These are challenging times, but I’ve been extremely proud of how the Accel team has responded,” he said. “The combination of our strong balance sheet and our asset-light business model means that we are well-positioned to successfully maintain our leadership position in the industry.”
Accel shares dropped Tuesday. In regular trading on the New York Stock Exchange, the shares fell 16 cents, or 2.01% to close at $7.80. After hours, the stock dropped 70 cents, or 8.97% to reach $7.10 at 4 p.m. PDT. Based on the after-hours result, Accel shares have dropped 43.2 percent in 2020.
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