Accel Entertainment Inc (ACEL) 2024 Q2 法說會逐字稿

Good afternoon. Thank you for attending today's Accel Entertainment Q2 2024 earnings call. My name is Tamiya and I will be your moderator for today's call. (Operator Instructions)

午安.感謝您參加今天的 Accel Entertainment 2024 年第二季財報電話會議。我叫田宮，我將擔任今天電話會議的主持人。（操作員說明）

I would now like to pass the conference over to your host, Derek Harmer, General Counsel and Chief Compliance Officer.

現在我想將會議轉交給東道主、總法律顧問兼首席合規官德里克·哈默 (Derek Harmer)。

Welcome to Accel Entertainment's Q2 2024 earnings call. Participating on the call today are Andy Rubenstein, Accel's Chief Executive Officer; Matt Ellis, Accel's Chief Financial Officer; and Mark Phelan, Accel's President of US Gaming.

歡迎參加 Accel Entertainment 的 2024 年第二季財報電話會議。Accel 執行長 Andy Rubenstein 參加了今天的電話會議； Matt Ellis，Accel 財務長；以及 Accel 美國遊戲業務總裁 Mark Phelan。

Please refer to our website for the press release and supplemental information that will be discussed on this call. Today's call is being recorded and will be available on our website under events and presentations within the investor relations section of our website.

請參閱我們的網站，以了解本次電話會議將討論的新聞稿和補充資訊。今天的電話會議正在錄音，並將在我們網站的投資者關係部分的活動和演示中提供。

Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law.

今天電話會議中的一些評論可能構成 1995 年《私人證券改革法案》含義內的前瞻性陳述。這些前瞻性陳述存在風險和不確定性。實際結果可能與今天討論的結果有重大差異，除非法律要求，否則公司不承擔更新這些聲明的義務。

For a more detailed discussion of these and other risk factors, investors should review the forward-looking statements section of the earnings press release available on our website, as well as other risk factor disclosures in our filings with the SEC. Any projected financial information presented in this call is for administrative purposes only and should not be relied upon as being predictive of future results. The inclusion of any financial forecast information in this call should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved.

若要更詳細地討論這些和其他風險因素，投資人應查看我們網站上的收益新聞稿的前瞻性陳述部分，以及我們向 SEC 提交的文件中揭露的其他風險因素。本次電話會議中提供的任何預期財務資訊僅用於管理目的，不應被視為對未來結果的預測。本次電話會議中包含的任何財務預測資訊不應被視為任何人表示將實現此類預測中反映的結果。

During the call, we may discuss certain non-GAAP financial measures. For reconciliations of the non-GAAP measures, as well as other information regarding these measures, please refer to our earnings release and other materials in the investor relations section of our website.

在電話會議期間，我們可能會討論某些非公認會計準則財務指標。有關非公認會計準則措施的調節以及有關這些措施的其他信息，請參閱我們網站投資者關係部分的收益發布和其他資料。

I will now turn the call over to Andy.

我現在會把電話轉給安迪。

Thank you, Derek, and good afternoon, everyone. Thank you for joining us for Accel's second quarter earnings call. This is a very exciting time here at Accel. First off, we had another record-breaking quarter. We reported revenue of $309 million and adjusted EBITDA of $50 million, positive proof of the strength of our convenient local gaming offering. Secondly, we announced our pending acquisition of Fairmount Park, which Mark will discuss in more detail shortly.

謝謝德里克，大家下午好。感謝您參加 Accel 第二季財報電話會議。這是 Accel 非常令人興奮的時刻。首先，我們又迎來了一個破紀錄的季度。我們公佈的收入為 3.09 億美元，調整後 EBITDA 為 5,000 萬美元，這有力地證明了我們便捷的本地遊戲產品的實力。其次，我們宣布即將收購 Fairmount Park，馬克很快就會對此進行更詳細的討論。

In terms of financial performance, our home market in Illinois posted market-wide GGR growth of 5% year-over-year. And Accel outperformed that, growing revenues by 6%. This is in stark contrast to Illinois casinos, which were flat year-over-year. We're proud of the strong foundation we've built in our home state, leading in a model that's a win-win-win for our state, our customers, and gaming providers like us.

就財務表現而言，我們伊利諾州的本土市場的整個市場 GGR 年比成長 5%。Accel 的表現更勝一籌，營收成長了 6%。這與伊利諾伊州賭場形成鮮明對比，後者同比持平。我們為我們在家鄉建立的堅實基礎感到自豪，引領了對我們的州、我們的客戶和像我們這樣的遊戲提供者來說是三贏的模式。

We added almost 50 locations nationwide this quarter, highlighted by 30 in Illinois and 11 in Montana. This is another way we differentiate ourselves from traditional casinos, unit growth. This unit growth was in addition to positive same-store sales growth in Illinois, Montana, and Nebraska, which was primarily driven by increased demand in our offering, new machines, and favorable weather. In Nevada, we saw a modest decline in same-store sales due to an overall increase in supply in the greater Las Vegas locals market.

本季我們在全國增加了近 50 個地點，其中伊利諾伊州 30 個，蒙大拿州 11 個。這是我們有別於傳統賭場的另一種方式，即單位成長。這一單位增長是伊利諾伊州、蒙大拿州和內布拉斯加州同店銷售積極增長的補充，這主要是由於我們的產品需求增加、新機器和有利的天氣所推動的。在內華達州，由於大拉斯維加斯當地人市場的供應量整體增加，我們看到同店銷售額略有下降。

Turning to expenses, earlier this year, Illinois raised the state gaming tax from 34% to 35% effective July 1. The increase is split evenly between us and our location partners, based on our highly variable cost structure, we will hopefully offset most of the increased expense.

說到支出，今年早些時候，伊利諾伊州從 7 月 1 日起將州博彩稅從 34% 提高到 35%。增加的費用由我們和我們的合作夥伴平均分配，基於我們高度變動的成本結構，我們希望能夠抵銷大部分增加的費用。

On a regulatory front, we're seeing signs Illinois will implement, Ticket-In, Ticket-Out, known as TITO, which should make cash processing more efficient and, more importantly, create a more convenient experience for our players, allowing them to switch between games in our venues without cashing out and cashing in each time. We expect TITO to be rolled out in the next 18 months.

在監管方面，我們看到伊利諾伊州將實施 Ticket-In、Ticket-Out 的跡象，即 TITO，這將使現金處理更加高效，更重要的是，為我們的玩家創造更便捷的體驗，使他們能夠在我們場館的遊戲之間切換，無需每次都兌現和兌現。我們預計 TITO 將在未來 18 個月內推出。

Before I turn it over to Mark, I want to take a few minutes to talk about Accel's value proposition and where we see our greatest opportunities. We provide a high-quality slot gaming experience at a low price point that can be accessed by our players at a local, convenient retail location of their choosing, oftentimes 15 minutes or less. We support our retail gaming partners by providing them with high-margin revenue per square foot gaming products and self-service technology.

在將其交給 Mark 之前，我想花幾分鐘時間談談 Accel 的價值主張以及我們在哪裡看到了最大的機會。我們以低廉的價格提供高品質的老虎機遊戲體驗，我們的玩家可以在他們選擇的當地便利的零售地點訪問，通常需要 15 分鐘或更短的時間。我們透過為零售遊戲合作夥伴提供每平方英尺高利潤收入的遊戲產品和自助服務技術來支持他們。

We instill player loyalty to our rewards programs and create memorable player experiences with our diverse game selection. And finally, we maintain collaborative and reliable partnerships with regulators across 11 different regulatory structures, all while generating attractive returns on capital in the low [teens].

我們培養玩家對我們的獎勵計劃的忠誠度，並透過我們多樣化的遊戲選擇創造難忘的玩家體驗。最後，我們與 11 個不同監管結構的監管機構保持協作和可靠的合作夥伴關係，同時在較低的資本回報率下創造有吸引力的資本回報。[青少年]。

In our core route-based business model, our steady-state growth algorithm is both simple and compelling. We target low single-digit revenue growth, mid-single-digit EBITDA growth, and high single-digit free cash flow growth, and core business CapEx quickly compressing down towards our annual depreciation of $40 million.

在我們基於路線的核心業務模型中，我們的穩態成長演算法既簡單又引人注目。我們的目標是實現低個位數收入成長、中個位數 EBITDA 成長和高個位數自由現金流成長，並將核心業務資本支出迅速壓縮至 4,000 萬美元的年度折舊。

Looking ahead, the primary levers for growth in our core route business are, one, growing organically in Illinois, Nebraska, and Georgia, through both newly licensed establishments and converting competitor locations. Two, collecting a greater share of location economics through selectively owning establishments in markets where this is permitted and is otherwise profitable.

展望未來，我們核心航線業務成長的主要槓桿是，第一，透過新許可的機構和轉換競爭對手的地點，在伊利諾伊州、內布拉斯加州和喬治亞州實現有機成長。第二，透過選擇性地在允許且有利可圖的市場中擁有企業，獲得更大的區位經濟份額。

Three, driving profitability in Nebraska and Georgia through operational execution and strategically positioning ourselves in the face of favorable legislation. And four, preparing ourselves for future opportunities in new states likely to legalize local gaming in the future.

第三，透過營運執行提高內布拉斯加州和喬治亞州的獲利能力，並在有利的立法面前進行策略定位。第四，為未來可能使本地博彩合法化的新州的未來機會做好準備。

Outside of our core business, our M&A pipeline remains active, as demonstrated by the Fairmount announcement. We are confident that we can leverage our proven capabilities as a local gaming operator to convert opportunities in an attractive and sizable $15 billion GGR local gaming market. Most assets in this market are unconsolidated and sit at EBITDA levels that are below the radar of larger gaming companies, conditions that play to our strengths. As a prime example of these opportunities.

在我們的核心業務之外，我們的併購管道仍然活躍，正如費爾蒙特公告所表明的那樣。我們相信，我們能夠利用我們作為本地博彩營運商的成熟能力，在極具吸引力且規模龐大、總收入高達 150 億美元的本地博彩市場中轉化機會。這個市場上的大多數資產都沒有合併，其 EBITDA 水平低於大型遊戲公司的水平，而這些條件正是我們發揮優勢的條件。作為這些機會的典型例子。

I'm going to turn it over to Mark.

我要把它交給馬克。

Thanks, Andy. As we all know, we announced the acquisition of Fairmount for approximately $35 million in Accel stock. The acquisition includes a master sports betting license with a long-term partnership with FanDuel, a racetrack, off-track betting opportunities, and the ability to develop a best-in-class, locally focused casino.

謝謝，安迪。眾所周知，我們宣布以約 3500 萬美元的 Accel 股票收購 Fairmount。此次收購包括與 FanDuel 建立長期合作夥伴關係的體育博彩主許可證、賽馬場、場外投注機會以及開發一流的本地賭場的能力。

We also welcome e Bill Stiritz and Rob Vitale, both world-class value creators and long-term investors in Accel. Much of this transaction builds on the core capabilities in local gaming that we've honed over the last 15 years with attractive returns on capital and free cash flow. We are currently going through the licensing process with the Illinois Gaming Board and the Illinois Racing Commission and anticipate that the transaction will close in the fourth quarter of this year.

我們也歡迎 e Bill Stiritz 和 Rob Vitale，他們都是世界級的價值創造者和 Accel 的長期投資者。這項交易的大部分建立在我們過去 15 年磨練的本地遊戲核心能力的基礎上，具有有吸引力的資本回報和自由現金流。我們目前正在與伊利諾伊州博彩委員會和伊利諾伊州賽馬委員會進行許可程序，預計交易將於今年第四季完成。

As a reminder, we expect to develop this project in two phases with total development spend of approximately $85 million to $95 million in addition to the $3.5 million Accel shares exchanged for the Fairmount Park assets. Phase 1 will be built in the existing grandstand, adding 200 slot machines, four to six table games, and continuing to utilize the existing FanDuel Sportsbook and food and beverage outlet. This will be done with relatively low capital intensity and is expected to open in second quarter 2025.

提醒一下，我們預計該專案將分兩個階段開發，除了用於交換 Fairmount Park 資產的 350 萬美元 Accel 股票之外，總開發支出約為 8,500 萬至 9,500 萬美元。第一期將在現有的看台上建造，增加 200 台老虎機、四到六張賭桌，並繼續利用現有的 FanDuel 體育博彩和餐飲店。該項目將以相對較低的資本密集度完成，預計將於 2025 年第二季開幕。

For Phase 2, we'll erect a permanent casino on-site with detailed plans for 500 slot machines, 24 table games, and a new larger FanDuel Sportsbook. We are combining our local gaming expertise with key partnerships in areas outside our core to create an exceptional offering. For the Horse Track, we will build on Fairmount's long-term horse racing management team as well as consultation from industry experts.

在第二階段，我們將在現場建立一個永久性賭場，並詳細規劃了 500 台老虎機、24 個賭桌和一個新的更大的 FanDuel 體育博彩。我們正在將我們的本地遊戲專業知識與我們核心以外領域的主要合作夥伴相結合，以創造出卓越的產品。對於賽馬場，我們將依託費爾蒙特長期的賽馬管理團隊以及行業專家的諮詢。

For the casino, we're engaged with RRC Gaming Management, including Tony Rodio, former CEO of Caesars Entertainment, and Holly Gagnon, CEO of HTC Gaming Hospitality, and former CEO of several casino companies, including Seneca Gaming. In food and beverage, we're discussing food and beverage amenities with several experienced F&B operators. In sports betting, we're assuming the existing long-term relationship with FanDuel, the number one sportsbook in Illinois.

對於賭場，我們與 RRC Gaming Management 合作，其中包括 Caesars Entertainment 前首席執行官 Tony Rodio、HTC Gaming Hospitality 首席執行官以及 Seneca Gaming 等多家賭場公司的前首席執行官 Holly Gagnon。在食品和飲料方面，我們正在與幾位經驗豐富的餐飲業者討論食品和飲料設施。在體育博彩方面，我們假設與伊利諾伊州排名第一的體育博彩公司 FanDuel 現有長期合作關係。

Broadly, these partners will complement Accel's expertise in local gaming, regulatory partnerships, and efficient capital allocation. Within five years, our conservative underwriting implies a $20 million to $25 million adjusted EBITDA opportunity. We're excited that the acquisition is expected to be accretive to adjusted EBITDA and free cash flow at an implied multiple of approximately 5.5 times. This opportunity takes advantage of our core expertise and builds on Accel strong, distributed, route-based platform and is an exciting milestone in our national expansion in the local gaming market.

總體而言，這些合作夥伴將補充 Accel 在當地博彩、監管合作夥伴關係和高效資本配置方面的專業知識。五年內，我們保守的承保意味著 2000 萬至 2500 萬美元的調整後 EBITDA 機會。我們很高興此次收購預計將以約 5.5 倍的隱含倍數增加調整後 EBITDA 和自由現金流。這個機會利用了我們的核心專業知識，並建立在 Accel 強大的、分散式的、基於路線的平台上，是我們在本地遊戲市場的全國擴張中的一個令人興奮的里程碑。

With that, I'll pass it over to Matt to go over the fundamentals of the quarter.

接下來，我將把它交給馬特，讓他回顧本季的基本面。

Thanks, Mark. And good afternoon, everyone. For the second quarter, we had record revenue of $309 million, a year-over-year increase of 5.7%, and adjusted EBITDA of $50 million, a year-over-year increase of 6.5%. As of June 30, we had 25,757 terminals in 4,034 locations, year-over-year increases of 5.7% and 4.7%, respectively.

謝謝，馬克。大家下午好。第二季度，我們的營收達到創紀錄的 3.09 億美元，年增 5.7%，調整後 EBITDA 為 5,000 萬美元，年增 6.5%。截至6月30日，我們在4,034個地點擁有25,757個終端，年比分別成長5.7%和4.7%。

Location attrition continues to remain low and is mostly attributable to our lowest-performing locations closing their doors. Revenue per location for the quarter in our core states was as follows. Illinois was $862 per day, an increase of 0.5%. Montana was $612 per day, an increase of 7.6%. Nevada was $843 per day, a decrease of 2%. And Nebraska was $255 per day, an increase of 7.6%.

門市流失率持續保持在較低水平，這主要是由於我們表現最差的門市關門歇業。本季我們核心州每個地點的收入如下。伊利諾州每天 862 美元，成長 0.5%。蒙大拿州為每天 612 美元，成長 7.6%。內華達州為每天 843 美元，下降了 2%。內布拉斯加州為每天255美元，成長了7.6%。

The increase in Illinois, Montana, and Nebraska was due to a combination of increased player demand, new equipment driving more play, and favorable weather. The decline in Nevada was due to an overall increase in supply in the greater Las Vegas local market.

伊利諾伊州、蒙大拿州和內布拉斯加州的增長歸因於玩家需求的增加、新設備推動更多的遊戲以及有利的天氣。內華達州的下降是由於大拉斯維加斯當地市場的供應總體增加。

Capital expenditures for the second quarter were $18 million cash spent. The increase over the last year was attributable to payments of outstanding invoices from last year. As a reminder, the primary driver of our elevated CapEx was the introduction of four new high-performing gaming terminals at the same time in Illinois.

第二季的資本支出為 1800 萬美元現金。較去年增加的原因是支付了去年未付的發票。提醒一下，我們資本支出增加的主要驅動力是在伊利諾伊州同時引入了四個新的高效能遊戲終端。

We view last year and this quarter's elevated CapEx as one time in nature. For 2024, we are still projecting CapEx to be between $55 million and $65 million, a decrease of more than 20% from last year. Over the longer term, we expect CapEx to decrease even further towards our $40 million of annual depreciation as Andy highlighted earlier.

我們認為去年和本季資本支出的上升是自然現象。2024 年，我們仍預期資本支出在 5,500 萬美元至 6,500 萬美元之間，比去年下降 20% 以上。從長遠來看，我們預計資本支出將進一步下降，年折舊將達到 4,000 萬美元，正如安迪之前所強調的。

At the end of the second quarter, we had approximately $300 million of net debt and $522 million of liquidity, consisting of $255 million of cash on our balance sheet and $267 million of availability on our credit facility. On our capital allocation strategy, we continue to make progress in our $200 million share repurchase program.

截至第二季末，我們擁有約 3 億美元的淨債務和 5.22 億美元的流動資金，其中包括資產負債表上的 2.55 億美元現金和 2.67 億美元的可用信貸額度。在我們的資本配置策略上，我們的 2 億美元股票回購計畫持續取得進展。

During the quarter, we repurchased 906,000 shares at an average purchase price of $10.16 for a total of $9 million. We are two-thirds of the way through the repurchase program with 12.9 million shares repurchased at a cost of $133 million. With our strong balance sheet and low leverage, we are in a unique position where we can grow our business and return capital to shareholders.

本季度，我們以平均購買價格 10.16 美元回購了 906,000 股股票，總金額為 900 萬美元。我們的回購計畫已完成三分之二，回購了 1,290 萬股股票，成本為 1.33 億美元。憑藉強大的資產負債表和低槓桿率，我們處於獨特的地位，可以發展業務並向股東返還資本。

With that, I'd like to turn it back over to Andy.

有了這個，我想把它轉回給安迪。

Thanks, Matt. As I mentioned earlier, we are very pleased with our record performance this quarter and excited for what the future holds with Fairmount Park. For the immediate term, we remain focused on executing our growth algorithm, closing the acquisition, and getting the casino live.

謝謝，馬特。正如我之前提到的，我們對本季創紀錄的業績感到非常滿意，並對費爾蒙特公園的未來感到興奮。就短期而言，我們仍然專注於執行我們的成長演算法、完成收購並讓賭場上線。

Looking further ahead, we have a strong financial position, demonstrated growth trajectory, improving cash flow profile, and strong returns on invested capital. Despite this, we trade at a low double-digit free cash flow yield and a mid-single-digit enterprise value to EBITDA multiple.

展望未來，我們擁有強勁的財務狀況、良好的成長軌跡、改善的現金流狀況以及強勁的投資回報。儘管如此，我們的自由現金流收益率較低，為兩位數，企業價值與 EBITDA 倍數為中個位數。

We look forward to capitalizing on the significant growth opportunities ahead of us as an aligned and incentivized Accel team will move this needle. Accel remains strong as evidenced by our record second quarter results and our healthy balance sheet.

我們期待著利用我們面前的重大成長機會，因為團結一致且積極激勵的 Accel 團隊將推動這一發展。Accel 依然強勁，我們創紀錄的第二季業績和健康的資產負債表證明了這一點。

This enables us to pursue a multi-pronged approach to capital return, making us a compelling investment. Local gaming is an attractive growing segment within the broader gaming market with multiple opportunities to generate strong and consistent revenue and EBITDA growth, as well as strong free cash flow.

這使我們能夠採取多管齊下的方法來獲得資本回報，使我們成為一項引人注目的投資。本地遊戲是更廣泛的遊戲市場中一個有吸引力的成長領域，有多種機會產生強勁且持續的收入和 EBITDA 成長以及強勁的自由現金流。

We will now take your questions.

我們現在將回答您的問題。

(Operator Instructions) Steve Pizzella, Deutsche Bank.

（操作員指令）Steve Pizzella，德意志銀行。

Andy, on the M&A front, you noted the pipeline continues to remain active. Are these similar opportunities to Fairmount in terms of type of assets, size, and return profile? And do you have the bandwidth to take on additional projects while working on the Fairmount development?

安迪，在併購方面，您注意到管道繼續保持活躍。這些機會在資產類型、規模和回報方面與費爾蒙特相似嗎？在從事費爾蒙特開發工作的同時，您是否有足夠的能力承擔其他專案？

Thanks for the question, Steve. A lot of the other opportunities that we're looking at are -- they have some resemblance of Fairmount. And when I say resemblance, they're local gaming entertainment type opportunities.

謝謝你的提問，史蒂夫。我們正在尋找的許多其他機會——它們與費爾蒙特有一些相似之處。當我說相似時，它們是本地遊戲娛樂類型的機會。

Each of them is a little different from each other. Their scale ranges from a few million dollars in EBITDA upwards into the $20 million and $30 million of EBITDA. So, I can't say that any two are alike, but there's a lot of similarities.

他們每個人都有點不同。他們的規模從幾百萬美元的 EBITDA 到 2000 萬美元到 3000 萬美元的 EBITDA 不等。所以，我不能說任何兩個都是相似的，但有很多相似之處。

And they are able to accentuate our competitive advantages in operating slot machines, working with the local customer, and providing value in the entertainment. As far as the ability to take on more of these opportunities, absolutely. We have a great team. We have great partners all over the country.

他們能夠凸顯我們在營運老虎機、與當地客戶合作以及提供娛樂價值方面的競爭優勢。就是否有能力接受更多這些機會而言，絕對是如此。我們有一支很棒的團隊。我們在全國各地都有優秀的合作夥伴。

And you'll see that the opportunities, when they present themselves, it's not going to be in one geography because we're pursuing opportunities across the United States and in many of the markets that we already are operating, and some that are adjacent or in the region. So, there's a lot to look forward to. We're super excited. We're building that skill set to be able to take on more and more. And we've got a great team.

你會發現，當機會出現時，它不會出現在一個地區，因為我們正在美國各地以及我們已經運營的許多市場中尋找機會，其中一些市場是鄰近的或在該地區。所以，有很多值得期待的事。我們非常興奮。我們正在建立一套技能，以便能夠承擔越來越多的任務。我們有一支優秀的團隊。

Okay, great. Thank you. And then, regarding the Illinois gaming tax increase, can you talk about anything you can do to offset that? I believe you started talking about TITO. What is the opportunity there?

好的，太好了。謝謝。然後，關於伊利諾伊州博彩稅的增加，您能談談可以採取哪些措施來抵消這一影響嗎？我相信你開始談論蒂托。那裡有什麼機會？

So, as far as the TITO is concerned, we believe that TITO will really help facilitate our players in getting more value for their time. They won't be cashing out all the time. They'll be able to continue their play. And historically, in markets where this is introduced, it provides a lift to the market of about 5% to 10%.

所以，就TITO而言，我們相信TITO將真正幫助我們的玩家獲得更多的時間價值。他們不會一直兌現。他們將能夠繼續他們的比賽。從歷史上看，在引入此功能的市場中，它為市場提供了約 5% 至 10% 的提升。

So, we feel that will help mitigate the 0.5% tax increase that we received. And in addition, we've really focused on some of the bottom part of our portfolio that's maybe not core to our operations. And this tax really allowed us to identify opportunities to operate in what we call revenue centers and make the overall route more profitable and cut back on some of the expenses for those outlying accounts that, at the margin, no longer are profitable.

因此，我們認為這將有助於減輕我們收到的 0.5% 的增稅。此外，我們確實專注於我們投資組合的一些底部部分，這可能不是我們營運的核心。這種稅收確實使我們能夠找到在我們所謂的收入中心開展業務的機會，並使整個路線的利潤更高，並減少那些邊際不再盈利的邊遠帳戶的一些費用。

Okay, thanks. And just lastly, you noticed a modest game store decline in Nevada due to some of the increased local supply. Have you seen any changes in demand there at all as we go through July or any green shoots?

好的，謝謝。最後，您注意到由於當地供應增加，內華達州的遊戲商店略有下降。隨著七月的到來，您是否看到需求發生任何變化或出現任何新芽？

Hey, Steve, it's Matt. Thanks for the question. I would say overall, no, nothing noticeable. It's really just the supply influx that we're seeing. But I think overall, across the business everywhere, including Nevada, you're seeing a real healthy customer for our offering.

嘿，史蒂夫，我是馬特。謝謝你的提問。總的來說，我想說，不，沒有什麼值得注意的。這實際上只是我們看到的供應湧入。但我認為總體而言，在包括內華達州在內的各地業務中，您會看到我們的產品真正健康的客戶。

Okay, thank you. Appreciate it.

好的，謝謝。欣賞它。

Chad Beynon, Macquarie.

查德貝農，麥格理。

Afternoon. Thanks for taking my question. With respect to the new locations in Montana, from a percentage standpoint, certainly some nice growth there. Could you just talk about how you see that portfolio evolving, post the acquisition that you made over a year ago, if there's still new opportunities, and if you see that as a big growth market for you guys over the next 12 to 18 months? Thanks.

下午。感謝您提出我的問題。就蒙大拿州的新地點而言，從百分比的角度來看，那裡肯定有一些不錯的增長。您能否談談您如何看待該投資組合的發展，發布您一年多前進行的收購，是否仍然有新的機會，以及您是否認為這對您來說是未來12 到18 個月的一個巨大的成長市場？謝謝。

Yeah, thanks, Chad. We are excited about Montana. We've found many opportunities in the market to grow our offerings to the establishments. We've seen some new software that we've offered to our existing partners. We've come out with some new models on the games, which is a lot of that has allowed us to win more contracts. We're the premier systems provider in the market.

是的，謝謝，查德。我們對蒙大拿州感到興奮。我們在市場上發現了許多機會來為企業提供更多的產品。我們已經看到了一些向現有合作夥伴提供的新軟體。我們在遊戲中推出了一些新模型，其中許多模型讓我們贏得了更多合約。我們是市場上首屈一指的系統供應商。

Our rewards program continues to be the one most preferred by players. And as we've identified opportunities for us to test some of our own operations strategy, we've had a few locations that we've opened up ourselves to identify ways to help our existing partners to improve their businesses.

我們的獎勵計劃仍然是玩家最喜歡的獎勵計劃。當我們發現了測試我們自己的一些營運策略的機會時，我們已經開放了一些地點，以確定幫助我們現有合作夥伴改善業務的方法。

Thank you. And then, post the acquisition, which is coming with the issuance of new stock, you still have a significant amount of cash on the balance sheet. So how should we think about, again, in terms of what you need to keep in the company, just in terms of working capital, what should be used, on an annual basis in terms of share repurchases? Matt, you mentioned that CapEx does come down. So just trying to figure out, opportunities in terms of deploying some of this other cash, mainly in '25. Thank you.

謝謝。然後，在發行新股的同時進行收購後，資產負債表上仍然有大量現金。那麼，我們應該如何考慮公司需要保留什麼，就營運資金而言，每年在股票回購方面應該使用什麼？馬特，你提到資本支出確實下降了。因此，我只是想找出部署其他一些現金的機會，主要是在 25 年。謝謝。

Hey, Chad, it's Matt. Thanks for the question. So I think you hit the nail on the head. Free cash flow generation is going to go up. I mean, the first deployment for us is always growth. As these M&A opportunities come up, we will pursue them. And like Andy said, we have the team for it. We also have the financial capacity for it. So that comes first.

嘿，查德，我是馬特。謝謝你的提問。所以我認為你擊中了要害。自由現金流的產生將會增加。我的意思是，我們的首要部署始終是成長。當這些併購機會出現時，我們將抓住它們。正如安迪所說，我們有專門的團隊。我們也有這個經濟能力。所以這是第一位的。

Next would be returning capital to shareholders. We generally want to use our free cash flow to do that because we think that's far more attractive than repaying any debt. So don't want to quite get to an exact number, but if we continue to perform and generate this cash, I would expect our return to capital to shareholders to kind of creep up a bit from where we've been today.

接下來是向股東返還資本。我們通常希望利用自由現金流來做到這一點，因為我們認為這比償還任何債務更具吸引力。因此，不想得到確切的數字，但如果我們繼續表現並產生現金，我預計我們對股東的資本回報率會比今天上升。

That's great to hear. Thank you very much, guys. Appreciate it. Nice quarter.

很高興聽到這個消息。非常感謝你們，夥伴們。欣賞它。不錯的季度。

Thanks, Chad.

謝謝，查德。

(Operator Instructions) Greg Gibas, Northland.

（操作員說明）Greg Gibas，Northland。

Hey, Andy, Mark, Matt. Thanks for taking the questions. If I could just follow up on some of the dynamics in the quarter. You spoke to the slight Nevada declines being related to increased supply. Do you expect more supply growth to continue in that market? And then secondly, with the new equipment driving more play, I'm guessing more overall, particularly in Illinois, how long should we expect that to be a tailwind?

嘿，安迪，馬克，馬特。感謝您提出問題。如果我能跟進本季的一些動態就好了。您談到內華達州的小幅下降與供應增加有關。您預期該市場的供應量會持續成長嗎？其次，隨著新設備推動更多的遊戲，我猜測總體而言，特別是在伊利諾伊州，我們應該期望這會持續多久？

Thanks, Greg. It's Andy. For the Nevada market, the locals market continues to have new supply come on. As you saw, happened in late 2023, and there's a lot more new construction coming on. But at the same time, the Nevada market, especially the Las Vegas market, is a growing population. So we think demand will continue.

謝謝，格雷格。是安迪。內華達市場方面，本地市場持續有新的供應出現。正如您所看到的，這發生在 2023 年底，並且有更多新建築即將動工。但與此同時，內華達市場，尤其是拉斯維加斯市場的人口正在不斷增長。因此我們認為需求將會持續下去。

Now, other macro factors, I don't know how that will impact the local market, but we see a continuance of demand in the near future. As far as Illinois, there, you look at the ratio of slot machines to people or population, we're still underserved in the market on a relative basis. The quality of the equipment that we continue to bring to our customer improves, which basically increases the demand.

現在，其他宏觀因素，我不知道這將如何影響當地市場，但我們看到在不久的將來需求將會持續。就伊利諾伊州而言，你看看老虎機與人口或人口的比率，相對而言，我們在市場上的服務仍然不足。我們不斷為客戶提供的設備品質不斷提高，這基本上增加了需求。

So we believe that our local convenient offering will always be the most attractive, and we see continued growth. The cost of our entertainment is not affected by inflation. So it is a value proposition for dollars that they have for their time.

因此，我們相信我們本地的便利服務將永遠是最具吸引力的，我們看到持續成長。我們的娛樂費用不受通貨膨脹的影響。因此，這是他們在時間上所擁有的美元的價值主張。

Got it. That's helpful. And if I could follow up on your M&A commentary, is it fair to say that nothing's really changed from a priority perspective following the recent Fairmount purchase? I guess -- we shouldn't assume that you're going to be less aggressive in the near term. I just kind of wanted to confirm that your stance on M&A isn't really changing. Is that fair?

知道了。這很有幫助。如果我可以跟進您的併購評論，可以公平地說，從最近收購費爾蒙特之後的優先角度來看，沒有任何真正改變？我想——我們不應該假設你在短期內會變得不那麼激進。我只是想確認一下您對併購的立場並沒有真正改變。這樣公平嗎？

Yeah, I would not say we're going to be less aggressive. That's probably not a fair comment. The timing of Fairmount is such that allows us to continue pursuing a lot these opportunities that we've been working on for the last 12 to 18 months. I think you'll see that we'll continue with finding local gaming opportunities that are within our economics, and we have significant liquidity to execute on these. And we have the team to be successful in the local gaming entertainment market. And we're looking forward to showing the investor community that Accel delivers over and over again.

是的，我不會說我們會變得不那麼激進。這可能不是一個公平的評論。Fairmount 的時機恰到好處，使我們能夠繼續尋求過去 12 至 18 個月以來我們一直在努力的機會。我認為您會看到，我們將繼續尋找符合我們經濟狀況的本地博彩機會，並且我們擁有大量流動性來執行這些機會。我們擁有在當地遊戲娛樂市場取得成功的團隊。我們期待著向投資者社群一次又一次地展示 Accel 所提供的服務。

Got it. That's helpful. Thanks, and congrats.

知道了。這很有幫助。謝謝，恭喜。

Thank you.

謝謝。

(Operator Instructions) With no questions remaining at this time, I will pass it back over to Andy Rubenstein for closing remarks.

（操作員指示）此時沒有問題了，我會將其轉回給安迪·魯賓斯坦 (Andy Rubenstein) 進行結束語。

Thank you. I just wanted to thank everyone for joining us today. A few weeks ago when we announced the Fairmount transaction, we're looking forward to sharing an update on that on the next call. I think you'll see that the direction that Accel is going is exciting, and Fairmount is the beginning of a new trajectory where Accel will continue growing in markets across the United States.

謝謝。我只是想感謝大家今天加入我們。幾週前，當我們宣布費爾蒙特交易時，我們期待在下次電話會議上分享最新情況。我想您會發現 Accel 的發展方向令人興奮，而 Fairmount 是新軌蹟的開始，Accel 將在美國市場繼續成長。

So enjoy the summer, and we'll see you again in the fall. Thanks.

所以享受夏天吧，我們秋天再見。謝謝。

This concludes the conference call. Thank you for your participation. You may now disconnect your lines.

電話會議到此結束。感謝您的參與。現在您可以斷開線路。