| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of Principal Executive Offices) (Zip Code) | ||||||||
| Title of Each Class | Trading Symbols | Name of Each Exchange on Which Registered | ||||||
| Large accelerated filer | ☐ | ☒ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
| PART I. | ||||||||
| ITEM 1. | ||||||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) for the three months ended March 31, 2023 and 2022 | ||||||||
Condensed Consolidated Balance Sheets at March 31, 2023 (Unaudited) and December 31, 2022 | ||||||||
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the three months ended March 31, 2023 and 2022 | ||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2023 and 2022 | ||||||||
| Notes to the Condensed Consolidated Financial Statements (Unaudited) | ||||||||
| ITEM 2. | ||||||||
| ITEM 3. | ||||||||
| ITEM 4. | ||||||||
| PART II. | ||||||||
| ITEM 1. | ||||||||
| ITEM 1A. | ||||||||
| ITEM 2. | ||||||||
| ITEM 3. | ||||||||
| ITEM 4. | ||||||||
| ITEM 6. | ||||||||
| (In thousands, except per share amounts) | Three Months Ended March 31, | ||||||||||
| 2023 | 2022 | ||||||||||
| Revenues: | |||||||||||
| Net gaming | $ | $ | |||||||||
| Amusement | |||||||||||
| Manufacturing | |||||||||||
| ATM fees and other revenue | |||||||||||
| Total net revenues | |||||||||||
| Operating expenses: | |||||||||||
| Cost of revenue (exclusive of depreciation and amortization expense shown below) | |||||||||||
| Cost of manufacturing goods sold (exclusive of depreciation and amortization expense shown below) | |||||||||||
| General and administrative | |||||||||||
| Depreciation and amortization of property and equipment | |||||||||||
| Amortization of intangible assets and route and customer acquisition costs | |||||||||||
| Other expenses, net | |||||||||||
| Total operating expenses | |||||||||||
| Operating income | |||||||||||
| Interest expense, net | |||||||||||
| Loss (gain) on change in fair value of contingent earnout shares | ( | ||||||||||
| Income before income tax expense | |||||||||||
| Income tax expense | |||||||||||
| Net income | $ | $ | |||||||||
| Earnings per common share: | |||||||||||
| Basic | $ | $ | |||||||||
| Diluted | |||||||||||
| Weighted average number of shares outstanding: | |||||||||||
| Basic | |||||||||||
| Diluted | |||||||||||
| Comprehensive income | |||||||||||
| Net income | $ | $ | |||||||||
Unrealized (loss) gain on interest rate caplets (net of income taxes of $( | ( | ||||||||||
| Comprehensive income | $ | $ | |||||||||
(In thousands, except par value and share amounts) | March 31, | December 31, | |||||||||
| 2023 | 2022 | ||||||||||
| Assets | (Unaudited) | ||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Prepaid expenses | |||||||||||
| Inventories | |||||||||||
| Income taxes receivable | |||||||||||
| Interest rate caplets | |||||||||||
| Investment in convertible notes | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Noncurrent assets: | |||||||||||
| Route and customer acquisition costs, net | |||||||||||
| Location contracts acquired, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Interest rate caplets, net of current | |||||||||||
| Other assets | |||||||||||
| Total noncurrent assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Current maturities of debt | $ | $ | |||||||||
| Current portion of route and customer acquisition costs payable | |||||||||||
| Accrued location gaming expense | |||||||||||
| Accrued state gaming expense | |||||||||||
| Accounts payable and other accrued expenses | |||||||||||
| Accrued compensation and related expenses | |||||||||||
| Current portion of consideration payable | |||||||||||
| Total current liabilities | |||||||||||
| Long-term liabilities: | |||||||||||
| Debt, net of current maturities | |||||||||||
| Route and customer acquisition costs payable, less current portion | |||||||||||
| Consideration payable, less current portion | |||||||||||
| Contingent earnout share liability | |||||||||||
| Other long-term liabilities | |||||||||||
| Deferred income tax liability, net | |||||||||||
| Total long-term liabilities | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred Stock, par value of $ | |||||||||||
Class A-1 Common Stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Treasury stock, at cost | ( | ( | |||||||||
| Accumulated other comprehensive income | |||||||||||
| Accumulated earnings | |||||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
| (In thousands, except shares) | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||
| Class A-1 | Additional | Treasury | Other | Total | |||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Paid-In | Stock | Comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Shares | Amount | Income | Earnings | Equity | ||||||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2023 | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Exercise of stock-based awards | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Unrealized loss on interest rate caplets | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2023 | $ | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| (In thousands, except shares) | Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||
| Class A-1 | Additional | Treasury | Other | Total | |||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Paid-In | Stock | Comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Shares | Amount | Income | Deficit | Equity | ||||||||||||||||||||||||||||||||||||||||
| Balance, January 1, 2022 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Exercise of stock-based awards | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Unrealized gain on interest rate caplets | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2022 | $ | $ | ( | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
| ACCEL ENTERTAINMENT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||||||
| (In thousands) | Three Months Ended March 31, | ||||||||||
| 2023 | 2022 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization of property and equipment | |||||||||||
| Amortization of intangible assets and route and customer acquisition costs | |||||||||||
| Amortization of debt issuance costs | |||||||||||
| Loss (gain) on change in fair value of contingent earnout shares | ( | ||||||||||
| Stock-based compensation | |||||||||||
| (Gain) on disposal of property and equipment | ( | ( | |||||||||
| Net loss on write-off of route and customer acquisition costs and route and customer acquisition costs payable | |||||||||||
| Remeasurement of contingent consideration | ( | ||||||||||
Payments on consideration payable | ( | ( | |||||||||
Accretion of interest on route and customer acquisition costs payable, contingent consideration, and contingent stock consideration | |||||||||||
| Deferred income taxes | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Accounts receivable, net | |||||||||||
| Inventories | ( | ||||||||||
| Income taxes receivable | |||||||||||
| Route and customer acquisition costs | ( | ( | |||||||||
| Route and customer acquisition costs payable | ( | ( | |||||||||
| Accounts payable and accrued expenses | |||||||||||
| Accrued compensation and related expenses | ( | ( | |||||||||
| Other assets | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Proceeds from the sale of property and equipment | |||||||||||
| Business and asset acquisitions, net of cash acquired | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from debt | |||||||||||
| Payments on debt | ( | ( | |||||||||
| Payments for repurchase of common stock | ( | ( | |||||||||
| Payments on interest rate caplets | ( | ( | |||||||||
| Proceeds from exercise of stock options | |||||||||||
| Payments on consideration payable | ( | ( | |||||||||
| Tax withholding on stock-based payments | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents: | |||||||||||
| Beginning of period | |||||||||||
| End of period | $ | $ | |||||||||
| ACCEL ENTERTAINMENT, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued) (Unaudited) | |||||||||||
| Supplemental disclosures of cash flow information: | |||||||||||
| Cash payments (refunds) for: | |||||||||||
| Interest | $ | $ | |||||||||
| Income taxes | $ | $ | ( | ||||||||
| Supplemental schedules of noncash investing and financing activities: | |||||||||||
| Purchases of property and equipment in accounts payable and accrued liabilities | $ | $ | |||||||||
| Deferred premium on interest rate caplets | $ | $ | |||||||||
| Acquisition of businesses and assets: | |||||||||||
| Total identifiable net assets acquired | $ | $ | |||||||||
| Cash purchase price | $ | $ | |||||||||
| (in thousands) | Three Months Ended March 31, | ||||||||||
| 2023 | 2022 | ||||||||||
| Net revenues by state: | |||||||||||
| Illinois | $ | $ | |||||||||
| Montana | |||||||||||
| Nevada | |||||||||||
| Other | |||||||||||
| Total net revenues | $ | $ | |||||||||
March 31, 2023 | December 31, 2022 | ||||||||||
| Raw materials and manufacturing supplies | $ | $ | |||||||||
| Finished products | |||||||||||
| Total inventories | $ | $ | |||||||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| Gaming terminals and equipment | $ | $ | |||||||||
| Amusement and other equipment | |||||||||||
| Office equipment and furniture | |||||||||||
| Computer equipment and software | |||||||||||
| Leasehold improvements | |||||||||||
| Vehicles | |||||||||||
| Buildings and improvements | |||||||||||
| Land | |||||||||||
| Construction in progress | |||||||||||
| Total property and equipment | |||||||||||
| Less accumulated depreciation and amortization | ( | ( | |||||||||
| Property and equipment, net | $ | $ | |||||||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| Cost | $ | $ | |||||||||
| Accumulated amortization | ( | ( | |||||||||
| Route and customer acquisition costs, net | $ | $ | |||||||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| Cost | $ | $ | |||||||||
| Accumulated amortization | ( | ( | |||||||||
| Location contracts acquired, net | $ | $ | |||||||||
| Goodwill balance as of January 1, 2023 | $ | ||||
| Addition to goodwill for acquisition of Rendezvous | |||||
| Goodwill balance as of March 31, 2023 | $ | ||||
| March 31, 2023 | December 31, 2022 | ||||||||||
| Senior Secured Credit Facility: | |||||||||||
| Revolving credit facility | $ | $ | |||||||||
| Term Loan | |||||||||||
| Delayed Draw Term Loan | |||||||||||
| Total debt on credit facility | |||||||||||
| Add: Interest rate caplet liability | |||||||||||
| Less: Debt issuance costs | ( | ( | |||||||||
| Total debt, net of debt issuance costs | |||||||||||
| Less: Current maturities | ( | ( | |||||||||
| Total debt, net of current maturities | $ | $ | |||||||||
| Cash paid | $ | ||||
| Fair value of stock issued | |||||
| Total consideration | $ | ||||
| Cash and cash equivalents | $ | ||||
| Prepaid expenses | |||||
| Accounts receivable | |||||
| Inventories | |||||
| Income taxes receivable | |||||
| Other current assets | |||||
| Property and equipment | |||||
| Location contracts acquired | |||||
| Other intangible assets | |||||
| Accounts payable and other accrued expenses | ( | ||||
| Accrued compensation and related expenses | ( | ||||
| Other long-term liabilities | ( | ||||
| Deferred income tax liability | ( | ||||
| Net assets acquired | $ | ||||
| Goodwill | $ | ||||
| Three months ended | |||||
| March 31, 2022 | |||||
| Revenues | $ | ||||
| Net income | |||||
| March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
| Current | Long-Term | Current | Long-Term | ||||||||||||||||||||
| TAV | $ | $ | $ | $ | |||||||||||||||||||
| Fair Share Gaming | |||||||||||||||||||||||
| Family Amusement | |||||||||||||||||||||||
| Skyhigh | |||||||||||||||||||||||
| G3 | |||||||||||||||||||||||
| VVS | |||||||||||||||||||||||
| Tom's Amusements | |||||||||||||||||||||||
| Island | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Fair Value Measurement at Reporting Date Using | |||||||||||||||||||||||
| March 31, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Investment in convertible notes | $ | $ | $ | $ | |||||||||||||||||||
| Interest rate caplets | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Fair Value Measurement at Reporting Date Using | |||||||||||||||||||||||
| December 31, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Investment in convertible notes | $ | $ | $ | $ | |||||||||||||||||||
| Interest rate caplets | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Fair Value Measurement at Reporting Date Using | |||||||||||||||||||||||
| March 31, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration | $ | $ | $ | $ | |||||||||||||||||||
| Contingent earnout shares | |||||||||||||||||||||||
| Warrants | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Fair Value Measurement at Reporting Date Using | |||||||||||||||||||||||
| December 31, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration | $ | $ | $ | $ | |||||||||||||||||||
| Contingent earnout shares | |||||||||||||||||||||||
| Warrants | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| 2023 | 2022 | |||||||||||||
| Net income | $ | $ | ||||||||||||
| Basic weighted average outstanding shares of common stock | ||||||||||||||
| Dilutive effect of stock-based awards for common stock | ||||||||||||||
| Diluted weighted average outstanding shares of common stock | ||||||||||||||
| Earnings per common share: | ||||||||||||||
| Basic | $ | $ | ||||||||||||
| Diluted | $ | $ | ||||||||||||
| (in thousands, except %'s) | Three Months Ended March 31, | Increase / (Decrease) | |||||||||||||||||||||
| 2023 | 2022 | Change ($) | Change (%) | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Net gaming | $ | 279,380 | $ | 188,462 | 90,918 | 48.2 | % | ||||||||||||||||
| Amusement | 6,798 | 4,990 | 1,808 | 36.2 | % | ||||||||||||||||||
| Manufacturing | 2,122 | — | 2,122 | N/A | |||||||||||||||||||
| ATM fees and other revenue | 4,908 | 3,439 | 1,469 | 42.7 | % | ||||||||||||||||||
| Total net revenues | 293,208 | 196,891 | 96,317 | 48.9 | % | ||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization expense shown below) | 204,962 | 132,620 | 72,342 | 54.5 | % | ||||||||||||||||||
| General and administrative | 43,018 | 31,119 | 11,899 | 38.2 | % | ||||||||||||||||||
| Depreciation and amortization of property and equipment | 9,063 | 5,841 | 3,222 | 55.2 | % | ||||||||||||||||||
| Amortization of intangible assets and route and customer acquisition costs | 5,242 | 3,548 | 1,694 | 47.7 | % | ||||||||||||||||||
| Other expenses, net | 3,251 | 2,556 | 695 | 27.2 | % | ||||||||||||||||||
| Total operating expenses | 265,536 | 175,684 | 89,852 | 51.1 | % | ||||||||||||||||||
| Operating income | 27,672 | 21,207 | 6,465 | 30.5 | % | ||||||||||||||||||
| Interest expense, net | 7,888 | 4,001 | 3,887 | 97.2 | % | ||||||||||||||||||
| Loss (gain) on change in fair value of contingent earnout shares | 4,602 | (3,417) | 8,019 | 234.7 | % | ||||||||||||||||||
| Income before income tax expense | 15,182 | 20,623 | (5,441) | (26.4) | % | ||||||||||||||||||
| Income tax expense | 6,000 | 4,835 | 1,165 | 24.1 | % | ||||||||||||||||||
| Net income | $ | 9,182 | $ | 15,788 | $ | (6,606) | (41.8) | % | |||||||||||||||
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Net revenues by state: | |||||||||||
| Illinois | $ | 219,843 | $ | 194,859 | |||||||
| Montana | 36,451 | — | |||||||||
| Nevada | 29,961 | — | |||||||||
| All other | 6,953 | 2,032 | |||||||||
| Total net revenues | $ | 293,208 | $ | 196,891 | |||||||
As of March 31, | Increase / (Decrease) | ||||||||||||||||||||||
| 2023 | 2022 | Change | Change % | ||||||||||||||||||||
| Illinois | 2,663 | 2,565 | 64 | 2.5 | % | ||||||||||||||||||
| Montana | 620 | — | 620 | N/A | |||||||||||||||||||
| Nevada | 345 | — | 345 | N/A | |||||||||||||||||||
| Total locations | 3,628 | 2,565 | 1,063 | 41.4 | % | ||||||||||||||||||
| As of March 31, | Increase / (Decrease) | ||||||||||||||||||||||
| 2023 | 2022 | Change | Change % | ||||||||||||||||||||
| Illinois | 14,546 | 13,663 | 758 | 5.6 | % | ||||||||||||||||||
| Montana | 6,247 | — | 6,247 | N/A | |||||||||||||||||||
| Nevada | 2,704 | — | 2,704 | N/A | |||||||||||||||||||
| Total gaming terminals | 23,497 | 13,663 | 9,834 | 72.0 | % | ||||||||||||||||||
| (in thousands) | Three Months Ended March 31, | ||||||||||
| 2023 | 2022 | ||||||||||
| Net income | $ | 9,182 | $ | 15,788 | |||||||
| Adjustments: | |||||||||||
Amortization of intangible assets and route and customer acquisition costs(1) | 5,242 | 3,548 | |||||||||
Stock-based compensation (2) | 1,688 | 1,605 | |||||||||
Loss (gain) on change in fair value of contingent earnout shares (3) | 4,602 | (3,417) | |||||||||
Other expenses, net (4) | 3,251 | 2,556 | |||||||||
Tax effect of adjustments (5) | (2,901) | (2,475) | |||||||||
| Adjusted net income | 21,064 | 17,605 | |||||||||
Depreciation and amortization of property and equipment | 9,063 | 5,841 | |||||||||
| Interest expense, net | 7,888 | 4,001 | |||||||||
Emerging markets (6) | (798) | 485 | |||||||||
| Income tax expense | 8,901 | 7,310 | |||||||||
| Adjusted EBITDA | $ | 46,118 | $ | 35,242 | |||||||
| (in thousands) | Three Months Ended March 31, | ||||||||||
| 2023 | 2022 | ||||||||||
| Net cash provided by operating activities | $ | 37,983 | $ | 22,061 | |||||||
| Net cash used in investing activities | (23,585) | (6,387) | |||||||||
| Net cash used in financing activities | (9,982) | (19,562) | |||||||||
| Period | Total number of shares purchased | Average price paid per share | Maximum approximate dollar value of shares that may yet be purchased under the program (in millions) | |||||||||||||||||
| January 1, 2023 - January 31, 2023 | 249,821 | $8.69 | $109.8 | |||||||||||||||||
| February 1, 2023 - February 28, 2023 | 1,600 | $9.02 | $109.8 | |||||||||||||||||
| March 1, 2023 - March 31, 2023 | 225,297 | $8.97 | $107.8 | |||||||||||||||||
| Total | 476,718 | $8.82 | ||||||||||||||||||
| Exhibit No. | Exhibit | |||||||
| 10.13* ** | ||||||||
| 10.23* ** | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 32.2 | ||||||||
| 101.INS | XBRL Instance Document | |||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Inline XBRL File (included in Exhibit 101) | |||||||
| ACCEL ENTERTAINMENT, INC. | ||||||||
| Date: May 3, 2023 | By: | /s/ Christie Kozlik | ||||||
| Christie Kozlik Chief Accounting Officer | ||||||||
| Participant: | ___________________________ | |||||||
| Date of Grant: | ___________________________ (“Date of Grant”) | |||||||
| Total Number of Restricted Stock Units: | ___________________________ | |||||||
| Vesting Commencement Date: | ___________________________ (“Vesting Commencement Date”) | |||||||
| Vesting Schedule: | Subject to the terms and conditions of the Agreement, the Plan and the other terms and conditions set forth herein, the RSUs shall vest in equal installments on each of the first three anniversaries of the Vesting Commencement Date, so long as you remain continuously employed or engaged by the Company or an Affiliate, as applicable, from the Date of Grant through each such vesting date, other than in the case of your Qualifying Termination or CIC Qualifying Termination. | |||||||
| Qualifying Termination: | In the event of your Qualifying Termination, a pro-rata portion of the RSUs that would have otherwise vested in such 12-month vesting period will vest, determined by multiplying (a) 1/36th of the total number of RSUs by (b) the number of completed months elapsed from the Vesting Commencement Date or the most recent anniversary thereof through the date of such Qualifying Termination, rounded down to the nearest whole share. | |||||||
| CIC Qualifying Termination: | In the event of your CIC Qualifying Termination, the RSUs will vest in full. In the event that the successor company or a parent or subsidiary thereof does not assume the RSUs upon a Change in Control, the RSUs will vest in full upon such Change in Control. The accelerated vesting described in this Grant Notice will be conditioned on your execution and non-revocation of a release of claims in a form acceptable to the Company within the 60-day period following such Qualifying Termination or CIC Qualifying Termination. | |||||||
| ACCEL ENTERTAINMENT, INC. | ||||||||
By: | ||||||||
Title: | ||||||||
Name: | ||||||||
| Participant: | __________ | |||||||
| Date of Grant: | __________, 202_ (“Date of Grant”) | |||||||
| Target Number of PSUs: | __________ | |||||||
| Performance Goals and Vesting Schedule: | Subject to the terms and conditions of the Agreement, the Plan and the other terms and conditions set forth herein, the PSUs shall vest according to the performance goals and vesting schedule set forth in Annex A hereto. | |||||||
| ACCEL ENTERTAINMENT, INC. | ||||||||
By: | ||||||||
Title: | ||||||||
Name: | ||||||||
Threshold Performance | Target Performance | Maximum Performance | |||||||||
Average Performance | 85% of Targeted Adjusted EBITDA | 100% of Targeted Adjusted EBITDA | 115% of Targeted Adjusted EBITDA | ||||||||
Number of PSUs that vest | 50% of the target number of PSUs granted | 100% of the target number of PSUs granted | 200% of the target number of PSUs granted | ||||||||
| Date: May 3, 2023 | /s/ Andrew Rubenstein | |||||||
| Andrew Rubenstein | ||||||||
| Chief Executive Officer (Principal Executive Officer) | ||||||||
| Date: May 3, 2023 | /s/ Mathew Ellis | |||||||
| Mathew Ellis | ||||||||
| Chief Financial Officer (Principal Financial Officer) | ||||||||
/s/ Andrew Rubenstein | ||
| Andrew Rubenstein | ||
| Chief Executive Officer (Principal Executive Officer) | ||
/s/ Mathew Ellis | ||
| Mathew Ellis | ||
| Chief Financial Officer (Principal Financial Officer) | ||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) (unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Statement [Abstract] | ||
| Income taxes for unrealized gain on interest rate caplets | $ (829) | $ 1,934 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
| Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
| Preferred stock, issued (in shares) | 0 | 0 |
| Preferred stock, outstanding (in shares) | 0 | 0 |
| Common stock, shares outstanding (in shares) | 86,444,825 | 86,674,390 |
| Class A-1 Common Stock | ||
| Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
| Common stock, shares issued (in shares) | 94,751,204 | 94,504,051 |
Description of Business |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Description of Business | Description of Business Accel Entertainment, Inc. (and together with its subsidiaries, the “Company” or “Accel”) is a leading distributed gaming operator in the United States. The Company's wholly owned subsidiary, Accel Entertainment Gaming, LLC, has been licensed by the State of Illinois Gaming Board (“IGB”) since March 15, 2012 to be a terminal operator in the State of Illinois. Its Illinois terminal operator license allows the Company to install and operate gaming terminals in licensed gaming locations throughout the State of Illinois as approved by individual municipalities. The Illinois terminal operator license, which is not transferable or assignable, requires compliance with applicable regulations and the license is renewable annually unless sooner cancelled or terminated. In July 2020, the Georgia Lottery Corporation approved one of the Company's consolidated subsidiaries as a licensed operator, or Master Licensee, which allows the Company to install and operate coin operated amusement machines for commercial use by the public for play throughout the State of Georgia. The Company also holds a license from the Pennsylvania Gaming Control Board. On December 30, 2021, one of the Company's consolidated subsidiaries acquired amusement and automated teller machines (“ATMs”) operations in Iowa and registered with the Iowa Department of Inspections and Appeals to conduct such operations in Iowa. On June 1, 2022, the Company acquired Century Gaming, Inc. (“Century”), which is a leading distributed gaming operator in the Montana and Nevada gaming markets. Century is also a manufacturer of gaming terminals in the Montana, Nevada, South Dakota, Louisiana and West Virginia markets. In connection with the acquisition, Accel was granted a two-year terminal operator license by the Nevada Gaming Commission and a manufacturer, distributor and route operator license by the Gambling Control Division of the Montana Department of Justice through June 2023. The Montana license is renewable annually. In June 2022, the Company became a licensed distributor of mechanical amusement devices (“MADs”) in Nebraska and commenced operations in this market. The Company also operates redemption terminals, which also function as ATMs at its gaming locations, and amusement equipment at certain locations. The Company is also subject to various other federal, state and local laws and regulations in addition to gaming regulations.
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Summary of Significant Accounting Policies |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation and preparation: The condensed consolidated financial statements and accompanying notes were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of the Company and of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”). In preparing our condensed consolidated financial statements, we applied the same significant accounting policies as described in Note 2 to the consolidated financial statements in the Form 10-K. Any significant changes to those accounting policies are discussed below. Interim results are not necessarily indicative of results for a full year. Use of estimates: The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates used by the Company include, among other things, the useful lives for depreciable and amortizable assets, income tax provisions, the evaluation of the future realization of deferred tax assets, projected cash flows in assessing the initial valuation of intangible assets in conjunction with business acquisitions, the selection of useful lives for depreciable and amortizable assets in conjunction with business acquisitions, the valuation of level 3 investments, the valuation of contingent earnout shares and interest rate caplets, contingencies, and the expected term of share-based compensation awards and stock price volatility when computing share-based compensation expense. Actual results may differ from those estimates. Segment information: The Company operates as a single reportable operating segment. The Company’s chief operating decision maker (“CODM”) is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. The CODM assesses the Company’s performance and allocates resources based on consolidated results, and this is the only discrete financial information that is regularly reviewed by the CODM. Revenue recognition: The Company generates revenues from the following types of services: gaming terminals, amusements, manufacturing and ATMs. Revenue is disaggregated by type of revenue and is presented on the face of the consolidated statements of operations and comprehensive income. Total net revenues for the three months ended March 31, is disaggregated in the following table by the primary states in which the Company operates given the geographic economic factors that affect the revenues in the states.
Recent accounting pronouncements: In October 2021, the FASB issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805). The guidance in this ASU improves the accounting for revenue contracts with customers acquired in a business combination by addressing diversity in practice and inconsistency related to recognition of contract assets and liabilities acquired in a business combination. The provisions of this ASU require that an acquiring entity accounts for the related revenue contracts in accordance with Accounting Standards Codification (“ASC”) 606 as if it had originated the contracts. The standard is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years with early adoption permitted. The Company does not expect the impact of the adoption of this ASU to be material to its financial statements or disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This ASU provides temporary guidance to ease the potential burden in accounting for reference rate reform primarily resulting from the discontinuation of the London Inter-Bank Offered Rate (“LIBOR”), which began phasing out on December 31, 2021. The amendments in ASU 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The new guidance (i) simplifies accounting analyses under current GAAP for contract modifications; (ii) simplifies the assessment of hedge effectiveness and allows hedging relationships affected by reference rate reform to continue; and (iii) allows a one-time election to sell or transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform. An entity may elect to apply the amendments prospectively from March 12, 2020, through December 31, 2022 by accounting topic. The Company currently references LIBOR for certain debt and hedging arrangements. While no material impacts are expected from the transition from LIBOR to the Secured Overnight Financing Rate (“SOFR”), the Company will continue to evaluate the provisions of this ASU and the impacts of transitioning to the SOFR rate in the second quarter of 2023. Other recently issued accounting standards or pronouncements have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on its condensed consolidated financial statements.
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Inventories |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | Inventories Inventories were as follows (in thousands):
At March 31, 2023 and December 31, 2022, no inventory valuation allowance was determined to be necessary.
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Investment in Convertible Notes |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Investments, Debt and Equity Securities [Abstract] | |
| Investment in Convertible Notes | Investment in Convertible Notes On July 19, 2019, the Company entered into an agreement to purchase up to $30.0 million in convertible notes from Gold Rush Amusements, Inc. (“Gold Rush”), another terminal operator in Illinois, that bore interest at 3% per annum through December 31, 2021. The convertible notes each included an option to convert the notes to common stock of Gold Rush prior to the maturity date upon written notice from the Company. At closing, the Company purchased a $5.0 million convertible promissory note which was subordinated to Gold Rush’s credit facility and matured six months following the satisfaction of administrative conditions. On October 11, 2019, the Company purchased an additional $25.0 million convertible note which was also subordinated to Gold Rush’s credit facility and, beginning on July 1, 2020, the balance of this note, if not previously converted, was payable in equal $1,000,000 monthly installments until all principal has been repaid in full. On July 30, 2020, the Company and Gold Rush entered into the Omnibus Amendment (the “Amendment”) to the original agreement to purchase convertible notes from Gold Rush. The Amendment, among other things, extended the maturity date of the $5.0 million convertible note and the beginning of the payback period for the $25.0 million convertible note until December 31, 2020. On March 9, 2021, the Company and Gold Rush entered into the Second Omnibus Amendment (the “Second Amendment”) to both of the convertible notes and the agreement to purchase the convertible notes. The Second Amendment, among other things, extended the December 31, 2020, maturity and conversion feature of the $5.0 million convertible note to December 31, 2021, the maturity and conversion feature of the $25.0 million convertible note to June 1, 2024 and the beginning of the payback period for the $25.0 million convertible note from December 31, 2020 to January 1, 2022. On July 30, 2021, the Company provided notice to Gold Rush that it was exercising its rights under each of the convertible notes to convert the entire aggregate principal amount and accrued interest into common stock of Gold Rush, subject to approval from the IGB to transfer the common stock to the Company and receipt of other customary closing deliverables. On December 2, 2021, the Company received notice from the administrator of the IGB that he was denying the requested transfer of Gold Rush common stock to the Company. The Company disagreed with the administrator’s ruling and requested that the matter be put before the IGB for a public vote. On January 27, 2022, the IGB affirmed the administrator’s denial. Although the Company is pursuing all administrative remedies available to contest the IGB’s ruling, this denial has impacted the conversion assumptions previously used in the accounting valuation of the convertible notes. On March 9, 2022, the Company filed a lawsuit in the Circuit Court of Cook County, Illinois against Gold Rush relating to the Gold Rush convertible notes. The complaint seeks damages for breach of contract and the implied covenant of good faith and fair dealing as well as unjust enrichment. The lawsuit is publicly available. Based on the IGB denying the Company’s request to transfer Gold Rush common stock despite the Company’s unilateral conversion rights, the convertible notes continue to be accounted for as available for sale debt securities, at fair value, with gains and losses recorded in other comprehensive income (loss). As of the filing of the financial statements, the Gold Rush convertible notes (which the Company converted under the terms of the convertible notes to shares of common stock of Gold Rush, but the IGB has currently denied the distribution of shares to the Company) are deemed in default for disclosure and presentation purposes, assuming non-conversion of the convertible notes, as no repayment or installment payments have been received. The Company has classified the entire $32.1 million accounting fair value of the convertible notes as current on the condensed consolidated balance sheets as the Company hopes to resolve this matter within the next year. The Company did not further adjust the valuation of the convertible notes downward as the Company believes, assuming for accounting purposes that the notes have not been converted, the recorded amounts approximate the accounting fair value. If successful, the Company's legal remedies with respect to its rights to receive the Gold Rush common stock or equivalent amounts it is entitled to receive with respect to the convertible notes could be materially in excess of the current accounting fair value. Changes in the fair value of the convertible notes are included within comprehensive income on the accompanying condensed consolidated statements of operations and comprehensive income, if applicable. For more information on how the Company determined the fair value of the convertible notes, see Note 12.
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Property and Equipment |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment | Property and Equipment Property and equipment consist of the following at March 31, 2023 and December 31, 2022 (in thousands):
Depreciation and amortization of property and equipment was $9.1 million and $5.8 million for the three months ended March 31, 2023, and 2022, respectively. The year-over-year increase in depreciation expense is due to an increased number of locations and gaming terminals primarily attributable to the acquisition of Century in the second quarter of 2022.
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Route and Customer Acquisition Costs |
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Route and Customer Acquisition Costs | Route and Customer Acquisition Costs The Company enters into contracts with third parties and its gaming locations to install and operate gaming terminals. When gaming operations commence, payments are due monthly or quarterly. Gross payments due, based on the number of live locations, were approximately $7.2 million and $7.6 million as of March 31, 2023, and December 31, 2022, respectively. Payments are due over varying terms of the individual agreements and are discounted at the Company’s incremental borrowing rate associated with its long-term debt at the time the contract is acquired. The net present value of payments due was $6.3 million and $6.6 million as of March 31, 2023, and December 31, 2022, respectively, of which approximately $1.5 million is included in current liabilities in the accompanying condensed consolidated balance sheets as of both March 31, 2023, and December 31, 2022. The route and customer acquisition cost asset was comprised of payments made on the contracts of $18.3 million and $17.9 million as of March 31, 2023, and December 31, 2022, respectively. The Company has upfront payments of commissions paid to the third parties for the acquisition of the customer contracts that are subject to a clawback provision if the customer cancels the contract prior to completion. The payments subject to a clawback were $1.0 million and $1.2 million as of March 31, 2023, and December 31, 2022, respectively. Route and customer acquisition costs consisted of the following at March 31, 2023 and December 31, 2022 (in thousands):
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Location Contracts Acquired |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Location Contracts Acquired | Location Contracts Acquired Location contract assets acquired in business acquisitions are recorded at acquisition at fair value based on an income approach. Location contracts acquired consisted of the following at March 31, 2023 and December 31, 2022 (in thousands):
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Goodwill and Other Intangible Assets |
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Mar. 31, 2023 | |||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
| Goodwill and Other Intangible Assets | Goodwill and Other Intangible AssetsThe Company acquired various companies which were accounted for as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The total excess of the purchase price over the tangible and intangible assets acquired and liabilities assumed was recorded as goodwill of $101.6 million and $100.7 million as of March 31, 2023, and December 31, 2022, respectively, of which $41.6 million was deductible for tax purposes as of March 31, 2023. On February 13, 2023, the Company acquired Rendezvous Casino and Burger Bar (“Rendezvous”), a hospitality operation in Billings, Montana, for a total purchase price of $2.6 million. The purchase price included the cost of the land, building and the related Montana All-Alcoholic Beverage License. The hospitality operation is set to be a Century vended location. The following is a roll forward of the Company's goodwill (in thousands):
Other intangible assets Other intangible assets, net of $22.4 million and $23.0 million as of March 31, 2023 and December 31, 2022, respectively, consisted of definite-lived trade names, customer relationships, and software applications. Other intangible assets are related to the acquisition of Century which occurred in the second quarter of 2022. The Company determines the fair value of trade name assets acquired in acquisitions using a relief from royalty valuation method which requires assumptions such as projected revenue and a royalty rate. Other intangible assets are amortized over their estimated 7 to 20-year useful lives. Amortization expense of other intangible assets was $0.6 million for the three months ended March 31, 2023.
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Debt |
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| Debt | Debt The Company’s debt as of March 31, 2023, and December 31, 2022, consisted of the following (in thousands):
Interest rate caplets The Company manages its exposure to some of its interest rate risk through the use of interest rate caplets, which are derivative financial instruments. On January 12, 2022, the Company hedged the variability of the cash flows attributable to the changes in the 1-month LIBOR interest rate on the first $300 million of the term loan under the Credit Agreement by entering into a 4-year series of 48 deferred premium caplets (“caplets”). The Company recognized an unrealized loss on the change in fair value of the caplets of $2.2 million and an unrealized gain of $4.9 million, net of taxes, for the three months ended March 31, 2023 and 2022, respectively. For more information on how the Company determines the fair value of the caplets, see Note 12. Further, as the 1-month LIBOR interest rate exceeded 2% beginning in the second half of 2022, the Company recognized interest income on the caplets of $1.9 million for the three months ended March 31, 2023, which is reflected in interest expense, net in the condensed consolidated statements of operations and other comprehensive income.
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Business and Asset Acquisitions |
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| Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business and Asset Acquisitions | Business and Asset Acquisitions 2023 Business Acquisitions On February 13, 2023, the Company acquired Rendezvous, a hospitality operation in Billings, Montana. The hospitality operation is set to be a Century vended location. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations (“Topic 805”). The total purchase price of $2.6 million was paid in cash at closing and was allocated to the following assets: i) indefinite-lived intangible assets totaling $0.8 million, ii) land totaling $0.5 million, iii) buildings totaling $0.4 million, iv) gaming equipment totaling $0.1 million, and v) goodwill totaling $0.8 million. The results of operations for Rendezvous are included in the condensed consolidated financial statements of the Company from the date of acquisition and were not material. 2022 Business Acquisitions Progressive On December 15, 2022, Century, the Company’s wholly owned subsidiary, acquired from DEP, Inc. (“Progressive”), a gaming operator in Montana, certain gaming assets and locations. The acquisition of Progressive adds 26 Montana gaming locations and approximately 300 gaming terminals to the Century portfolio. The total purchase price was $6.4 million, which Century paid in cash at closing. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with Topic 805. The purchase price was allocated to the following assets: i) gaming terminals and amusement equipment totaling $0.9 million; ii) location contracts totaling $4.3 million; and iii) goodwill totaling $1.2 million. The results of operations for Progressive are included in the condensed consolidated financial statements of the Company for the three months ended March 31, 2023 and were not material. River City On September 9, 2022, the Company acquired from River City Amusement Company (“River City”) all of its operating assets in Nebraska, Iowa and South Dakota. River City's operations in these states consist of the ownership and operation of MAD and amusement equipment, as well as ATMs in the approximately 120 locations it serves. The total purchase price was approximately $2.8 million, which the Company paid in cash at closing. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with Topic 805. The purchase price was allocated to the following assets: i) gaming terminals and equipment totaling $0.1 million; ii) amusement and other equipment totaling $0.9 million; iii) location contracts totaling $1.7 million; and iv) cash totaling $0.1 million. The results of operations for River City are included in the condensed consolidated financial statements of the Company for the three months ended March 31, 2023 and were not material. VVS On August 1, 2022, the Company acquired from VVS, Inc. (“VVS”), a licensed distributor of MADs in Nebraska, substantially all of its MAD and ATM assets. The acquisition of VVS adds approximately 250 locations in the greater Lincoln area. The total purchase price was approximately $12.0 million, of which the Company paid approximately $9.5 million in cash at closing. The remaining $2.5 million of contingent consideration is to be paid in cash if a net revenue target is achieved as of the first anniversary of the consummation of the transaction. The fair value of the contingent consideration was $2.4 million as of December 31, 2022 and is included within consideration payable on the consolidated balance sheet. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with Topic 805. The purchase price was allocated to the following assets: i) gaming terminals and equipment totaling $0.9 million; ii) amusement and other equipment totaling $3.9 million; and iii) location contracts totaling $7.2 million. The results of operations for VVS are included in the condensed consolidated financial statements of the Company for the three months ended March 31, 2023 and were not material. Century On June 1, 2022, the Company completed its previously announced acquisition of all of the outstanding equity interests of Century pursuant to the terms of a Securities Purchase Agreement (the “Purchase Agreement”), dated March 2, 2021, by and among Century, the shareholders of Century, and the Company. Century is Montana’s largest gaming operator and a leader in the Nevada gaming market as well as a manufacturer of gaming terminals. The acquisition aggregate purchase consideration transferred totaled $164.3 million, which included: i) a cash payment made at closing of $45.5 million to the equity holders of Century; ii) repayment of $113.2 million of Century's indebtedness; and iii) 515,622 shares of the Company’s Class A-1 common stock issued to certain members of Century’s management with a fair value of $5.6 million on the acquisition date. The cash payments were financed using cash from a draw of approximately $160 million from the Company’s revolving credit facility and delayed draw term loan facility under the Credit Agreement. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC Topic 805. The purchase price has been preliminarily allocated to the tangible assets and identifiable intangible assets acquired and liabilities assumed based upon their estimated fair values. The areas of the purchase price allocation that are not yet finalized are primarily related to the valuation of location contracts, inventory, property and equipment, and final adjustments to working capital. The excess of the purchase price over the tangible and intangible assets acquired and liabilities assumed of $53.4 million has been recorded as goodwill. The Century acquisition resulted in recorded goodwill as a result of a higher consideration paid driven by the maturity and quality of Century's operations, industry and workforce. Management integrated Century into its existing business structure, which is comprised of a single reporting unit. The following table summarizes the fair value of consideration transferred and the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):
The results of operations for Century are included in the condensed consolidated financial statements of the Company from the date of acquisition. Century's acquired assets generated revenues and net income of $66.3 million and $1.7 million for the three months ended March 31, 2023. Pro Forma Results The following unaudited pro forma consolidated financial information reflects the results of operations of the Company for the three months ended March 31, 2022 as if the acquisition of Century had occurred as of January 1, 2021, after giving effect to certain purchase accounting adjustments. These amounts are based on available financial information of the acquiree prior to the acquisition date and are not necessarily indicative of what the Company’s operating results would have been had the acquisition actually taken place as of January 1, 2021. This unaudited pro forma information does not project revenues and net income post acquisition (in thousands).
Consideration Payable The Company has a contingent consideration payable related to certain locations, as defined in each respective acquisition agreement, which are placed into operation during a specified period after the acquisition date. The fair value of contingent consideration is included in the consideration payable on the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022. The contingent consideration accrued is measured at fair value on a recurring basis. The Company presents on its statement of cash flows, payments for consideration payable within 90-days in investing activities, payments after 90-days and up to the acquisition date fair value in financing activities, and payments in excess of the acquisition date fair value in operating activities. Current and long-term portions of consideration payable consist of the following at March 31, 2023 and December 31, 2022 (in thousands):
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Contingent Earnout Share Liability |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Business Combination and Asset Acquisition [Abstract] | |
| Contingent Earnout Share Liability | Contingent Earnout Share Liability Pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation, the Company authorized and has available for issuance 10,000,000 shares of Class A-2 Common Stock. The holders of the Class A-2 Common Stock do not have voting rights and are not entitled to receive or participate in any dividends or distributions when and if declared from time to time. The Company concluded that the Class A-2 Common Stock should be reflected as a contingent earnout share liability 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. In 2019, 5,000,000 shares of Class A-2 Common Stock were issued, subject to the conditions set forth in a restricted stock agreement (the “Restricted Stock Agreement”), which sets forth the terms upon which the Class A-2 Common Stock will be exchanged for an equal number of validly issued, fully paid and non-assessable Class A-1 Common Stock. The exchange of Class A-2 Common Stock for Class A-1 Common Stock will be subject to the terms and conditions set forth in the Restricted Stock Agreement, with such exchanges occurring in three separate tranches upon the satisfaction of the specified triggers, based either on the Company achieving certain last twelve month EBITDA (“LTM EBITDA”) thresholds in certain periods or the closing sale price of Class A-1 Common Stock exceeding certain prices over certain trading periods. In 2020, the market condition for the settlement of Tranche I was satisfied. As a result, 1,666,636 shares of the 1,666,666 shares of Class A-2 Common Stock were converted into Class A-1 Common Stock. The current thresholds, as approved by a disinterested committee of the Company's board of directors made up of independent directors who do not hold any Class A-2 Common Stock, for the remaining two Tranches are as follows: •Tranche II, equal to 1,666,667 shares of Class A-2 Common Stock, will be exchanged for Class A-1 Common Stock if either (i) the LTM EBITDA threshold (A) as of March 31, 2023 is $172.4 million, and (B) as of June 30, 2023 is $177.4 million; (ii) the closing sale price of Class A-1 Common Stock on the New York Stock Exchange (“NYSE”) equals or exceeds $14.00 for at least twenty trading days in any consecutive thirty trading day period; and •Tranche III, equal to 1,666,667 shares of Class A-2 Common Stock, will be exchanged for Class A-1 Common Stock if either (i) the LTM EBITDA threshold (A) as of December 31, 2023 is $198.5 million and (B) March 31, 2024 or June 30, 2024 is $198.6 million or (ii) the closing sale price of Class A-1 Common Stock on the NYSE equals or exceeds $16.00 for at least twenty trading days in any consecutive thirty trading day period.
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Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and the corresponding disclosure requirements around fair value measurements. This topic applies to all financial instruments that are being measured and reported on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, various methods, including market, income and cost approaches, are used. Based on these approaches, certain assumptions are utilized that the market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. Valuation techniques are utilized that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, it is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1: Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Level 1 also includes U.S. Treasury and federal agency securities and federal agency mortgage-backed securities, which are traded by dealers or brokers in active markets. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. Assets measured at fair value The following tables summarize the Company’s assets that are measured at fair value on a recurring basis (in thousands):
Investment in convertible notes As described in Note 4, on July 30, 2021, the Company provided notice to Gold Rush that it was exercising its rights to convert the convertible notes into common stock of Gold Rush, subject to approval from the IGB to transfer the common stock to the Company. Accordingly, beginning in the third quarter of 2021, given the pending request for regulatory approval on the transfer of equity interest, the fair value of the convertible notes was estimated using a probability-weighted approach. Assuming regulatory approval was received, the fair value of the convertible notes was estimated on an as-converted basis by multiplying the equity value of Gold Rush by the ownership percentage as calculated pursuant to the terms of the convertible note agreements. In the scenario where regulatory approval was not received, the fair value of the convertible notes was estimated using a discounted cash flow approach assuming the Company would request immediate redemption of the principal and accrued interest and the discount rate was estimated based on comparable public debt rates. This assumption did not consider legal claims the Company may have under the convertible notes to receive the economic value of the conversion shares, even if transfer of the actual ownership interest in Gold Rush to Accel was not approved by the IGB. After the IGB Administrator’s denial of the transfer of the equity interest on December 2, 2021, the Company concluded that the fair value of the convertible notes should be calculated as principal plus interest accrued as of December 31, 2021. The Company has considered interest as an input to the accounting fair value for all periods and periodically reevaluates its impact, if any, based on developments including the pending lawsuit against Gold Rush. For the avoidance of doubt, this fair value is less than what Accel maintains Gold Rush owes Accel under the convertible notes, but is consistent with ASC Topic 820. This valuation of the Company's investment in convertible notes is considered to be a Level 3 fair value measurement as the significant inputs are unobservable and the Company is pursuing its legal remedies with respect to the amounts owed by Gold Rush. Interest rate caplets The Company determines the fair value of the interest rate caplets using quotes that are based on models whose inputs are observable LIBOR forward interest rate curves. The valuation of the interest rate caplets is considered to be a Level 2 fair value measurement as the significant inputs are observable. Unrealized changes in the fair value of interest rate caplets are classified within other comprehensive income on the accompanying condensed consolidated statements of operations and comprehensive income. Realized gains on the interest rate caplets are recorded to interest expense, net on the accompanying condensed consolidated statements of operations and comprehensive income and included within cash payments for interest, net on the condensed consolidated statements of cash flow. Liabilities measured at fair value The following tables summarizes the Company’s liabilities that are measured at fair value on a recurring basis (in thousands):
Contingent Consideration The Company uses a discounted cash flow analysis to determine the value of contingent consideration upon acquisition and updates this estimate on a recurring basis. The significant assumptions in the Company's cash flow analysis includes the probability adjusted projected revenues after state taxes, a discount rate as applicable to each acquisition, and the estimated number of locations that “go live” with the Company during the contingent consideration period. The valuation of the Company's contingent consideration is considered to be a Level 3 fair value measurement as the significant inputs are unobservable and require significant judgment or estimation. Changes in the fair value of contingent consideration liabilities are classified within other expenses, net on the accompanying condensed consolidated statements of operations and comprehensive income. Contingent earnout shares The Company determined the fair value of the contingent earnout shares based on the market price of the Company's A-1 Common Stock. The liability, by tranche, is then stated at present value based on i) an interest rate derived from the Company's borrowing rate and the applicable risk-free rate and ii) an estimate on when it expects the contingent earnout shares to convert to A-1 Common Stock. The valuation of the Company's contingent consideration is considered to be a Level 2 fair value measurement. Changes in the fair value of contingent earnout shares are included within loss (gain) on change in fair value of contingent earnout shares on the accompanying condensed consolidated statements of operations and comprehensive income. Warrants The Company has 5,144 warrants outstanding as of March 31, 2023, the liability for which is included in other long-term liabilities on the condensed consolidated balance sheets. The Company determined the fair value of its warrants by using a Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs such as the fair value of the Company's A-1 Common Stock, the risk-free interest rate, expected term, expected dividend yield and expected volatility. The Company's valuation of its warrants is considered to be a Level 2 fair value measurement. Changes in the fair value of the warrants are included within gain on change in fair value of warrants on the accompanying condensed consolidated statements of operations and comprehensive income, if applicable. There was no change in the fair value of the warrants for the three months ended March 31, 2023 and 2022.
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Stockholders' Equity |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Equity [Abstract] | |
| Stockholders' Equity | Stockholders’ Equity Pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation, the Company authorized and has available for issuance the following shares: Class A-1 Common Stock The holders of the Class A-1 Common Stock are entitled to one vote for each share. The holders of Class A-1 Common Stock are entitled to receive dividends or other distributions when and if declared from time to time and share equally on a per share basis in such dividends and distributions, subject to such rights of the holders of preferred stock. Treasury Stock On November 22, 2021, the Company’s Board of Directors approved a share repurchase program of up to $200 million of shares of common stock. The timing and actual number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. Under the repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases or privately negotiated transactions, in compliance with the rules of the United States Securities and Exchange Commission and other applicable legal requirements. The repurchase program does not obligate the Company to acquire any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. As of March 31, 2023, the Company purchased a total of 8,822,001 shares under the plan at a total cost of $92.2 million, of which 476,718 shares at a cost of $4.2 million were purchased during the three months ended March 31, 2023.
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Stock-based Compensation |
3 Months Ended |
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Mar. 31, 2023 | |
| Share-Based Payment Arrangement [Abstract] | |
| Stock-based Compensation | Stock-based Compensation The Company grants various types of stock-based compensation awards. The Company measures its stock-based compensation expense based on the grant date fair value of the award and recognizes the expense over the requisite service period for the respective award. Under the Accel Entertainment, Inc. Long Term Incentive Plan, the Company issued 356,786 restricted stock units (“RSUs”) to the Board of Directors and certain eligible employees during the first quarter of 2023, which will vest over a period of 3 years for employees and a period of approximately 9 months for Board of Directors. The Company also issued 182,494 performance-based restricted stock units (“PSUs”) to certain eligible employees during the first quarter of 2023, which will vest after 3 years. The numbers of shares earned upon vesting of the PSUs, if any, is based on the attainment of performance goals over the performance period, subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. The estimated grant date fair value of these RSUs and PSUs totaled $4.8 million. Stock-based compensation expense, which pertains to the Company’s stock options, RSUs and PSUs, was $1.7 million and $1.6 million for the three months ended March 31, 2023, and 2022, respectively. Stock-based compensation expense is included within general and administrative expenses in the condensed consolidated statements of operations and other comprehensive income.
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Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company recognized income tax expense of $6.0 million and $4.8 million for the three months ended March 31, 2023 and 2022, respectively. The Company calculates its provision for income taxes during interim reporting periods by applying an estimate of the annual effective tax rate to its year-to-date pretax book income or loss. The effective tax rate (income taxes as a percentage of income before income taxes) was 39.5% and 23.4% for the three months ended March 31, 2023 and 2022, respectively. The Company’s effective income tax rate can vary from period to period depending on, among other factors, the amount of permanent tax adjustments and discrete items. The change in the fair value of the contingent earnout shares is considered a discrete item for tax purposes and was the primary driver for the fluctuations in the tax rate year over year.
|
Commitments and Contingencies |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Commitments and Contingencies Lawsuits and claims are filed against the Company from time to time in the ordinary course of business, including related to employee matters, employment of professionals and non-compete clauses and agreements. Other than settled matters explained as follows, these actions are in various stages, and no judgments or decisions have been rendered. Management, after reviewing matters with legal counsel, believes that the outcome of such matters will not have a material adverse effect on the Company’s financial position or results of operations. Accel has been involved in a series of related litigated matters stemming from claims that Accel wrongly contracted with 10 different licensed establishments (the “Defendant Establishments”) in 2012 in violation of the contractual rights held by J&J Ventures Gaming, LLC (“J&J”), as further described below. On August 21, 2012, one of the Company’s operating subsidiaries entered into certain agreements with Jason Rowell (“Rowell”), a member of Action Gaming LLC (“Action Gaming”), which was an unlicensed terminal operator that had exclusive rights to place and operate gaming terminals within a number of establishments, including the Defendant Establishments. Under agreements with Rowell, the Company agreed to pay him for each licensed establishment which decided to enter into an exclusive location agreement with Accel. In late August and early September 2012, each of the Defendant Establishments signed a separate location agreement with the Company, purporting to grant the Company the exclusive right to operate gaming terminals in those establishments. Separately, on August 24, 2012, Action Gaming sold and assigned its rights to all its location agreements to J&J, including its exclusive rights with the Defendant Establishments (the “J&J Assigned Agreements”). At the time of the assignment of such rights to J&J, the Defendant Establishments were not yet licensed by the IGB. Action Gaming, J&J, and other parties, collectively, the Plaintiffs, filed a complaint against the Company, Rowell, and other parties in the Circuit Court of Cook County, Illinois (the “Circuit Court”), on August 31, 2012, as amended on November 1, 2012, December 19, 2012, and October 3, 2013, alleging, among other things, that Accel aided and abetted Rowell in breaches of his fiduciary duties and contractual obligations with Action Gaming and tortiously interfered with Action Gaming’s contracts with Rowell and agreements assigned to J&J. The complaint seeks damages and injunctive and equitable relief. On January 24, 2018, the Company filed a motion to dismiss for lack of subject matter jurisdiction, as further described below. On May 14, 2018, the Circuit Court denied the Company’s motion to dismiss and granted a stay to the case, pending a ruling from the IGB on the validity of the J&J Assigned Agreements. From 2013 to 2015, the Plaintiffs filed additional claims, including J&J Ventures Gaming, LLC et al. v. Wild, Inc. (“Wild”), in various circuit courts seeking declaratory judgments with a number of establishments, including each of the Defendant Establishments, requesting declarations that, among other things, J&J held the exclusive right to operate gaming terminals at each of the Defendant Establishments as a result of the J&J Assigned Agreements. The Company was granted leave to intervene in all of the declaratory judgments. The circuit courts found that the J&J Assigned Agreements were valid because each of the underlying location agreements were between an unlicensed establishment and an unlicensed terminal operator, and therefore did not constitute use agreements that were otherwise precluded from assignment under the IGB’s regulations. Upon the Company’s appeal, the Illinois Appellate Court, Fifth District (the “District Court”), vacated the circuit courts’ judgments and dismissed the appeals, holding that the IGB had exclusive jurisdiction over the matter that formed the basis of the parties’ claims, and declined to consider the merits of the parties’ disputes. On September 22, 2016, and after the IGB intervened, the Supreme Court of Illinois issued a judgment in Wild, affirming the District Court’s decision vacating the circuit courts’ judgments for lack of subject matter jurisdiction and dismissing the appeals, determining that the IGB has exclusive jurisdiction to decide the validity and enforceability of gaming terminal use agreements. Between May 2017 and September 2017, both the Company and J&J filed petitions with the IGB seeking adjudication of the rights of the parties and the validity of the use agreements. Those petitions were recently adjudicated by the IGB, largely in the Company’s favor, and J&J has filed a new lawsuit to challenge the IGB’s rulings. The Company does not have a present estimate regarding the potential damages, if any, that could potentially be awarded in this litigation and, accordingly, has established no reserves relating to such matters. There are also petitions pending with the IGB which could lead to the Company obtaining new locations. On October 7, 2019, the Company filed a lawsuit in the Circuit Court of Cook County, Illinois against Jason Rowell and other parties related to Mr. Rowell’s breaches of his non-compete agreement with Accel. The Company alleged that Mr. Rowell and a competitor were working together to interfere with the Company’s customer relationships. On November 7, 2019, Mr. Rowell filed a lawsuit in the Circuit Court of Cook County, Illinois against the Company alleging that he had not received certain equity interests in the Company to which he was allegedly entitled under his agreement. The Company has answered the complaint and asserted a counterclaim and intends to defend itself against the allegations. Pre-trial discovery is ongoing as of the date of this report. Mr. Rowell's claims and the Company's claims are both being litigated in this lawsuit, while the original lawsuit remains pending against the other defendants. On July 2, 2019, Illinois Gaming Investors, LLC filed a lawsuit against the Company. The lawsuit alleges that a current employee violated his non-competition agreement with Illinois Gaming Investors, LLC, and together with the Company, wrongfully solicited prohibited licensed video gaming locations. The parties settled this dispute in April 2022. On December 18, 2020, the Company received a disciplinary complaint from the IGB alleging violations of the Video Gaming Act and the IGB’s Adopted Rules for Video Gaming. The disciplinary complaint seeks to fine the Company in the amount of $5 million. The Company filed its initial answer to the IGB’s complaint on January 11, 2021. On July 22, 2022, both parties filed motions for summary judgment. The Company expects decisions on the motions in the second quarter of 2023. On March 9, 2022, the Company filed a lawsuit in the Circuit Court of Cook County, Illinois against Gold Rush relating to the Gold Rush convertible notes. The complaint sought damages for breach of contract and the implied covenant of good faith and fair dealing as well as unjust enrichment. The Court granted Gold Rush’s motion to dismiss, with leave to amend, on November 16, 2022. The Company filed an amended complaint on December 22, 2022, and asked the court to summarily dismiss the repealed claims to allow the Company to seek appeal of their dismissal by the Circuit Court. On June 22, 2022, Gold Rush filed a lawsuit in the Circuit Court of Cook County, Illinois against the Company. The lawsuit alleges that the Company tortiously interfered with Gold Rush’s business activities and engaged in misconduct with respect to the Gold Rush convertible notes. The complaint seeks declaratory judgment and damages related to the allegations. Following the Company's motion to dismiss, on November 16, 2022, the Court dismissed two of Gold Rush’s claims against the Company, but allowed four claims to proceed. The Company answered the complaint on December 14, 2022. The parties are currently engaged in the discovery process and no trial date has been set. The Company intends to vigorously defend itself against the allegations in the complaint and denies any allegations of wrongdoing. On April 22, 2022, the Company filed a petition in the Circuit Court of Cook County, Illinois to judicially review the IGB's decision to deny the requested transfer of Gold Rush common stock in respect of the Company’s conversion of the convertible notes. On March 25, 2022, Midwest Electronics Gaming LLC (“Midwest”) filed an administrative review action against the Illinois Gaming Board, the Company and J&J in the Circuit Court of Cook County, Illinois seeking administrative review of decisions of the IGB ruling in favor of the Company and J&J and against Midwest regarding the validity of certain use agreements covering locations currently serviced by Midwest. No monetary damages are sought against the Company. A responsive pleading is not yet due. In July 2022, an enforcement action was brought against the Company by an Illinois municipality related to an alleged violation of an ordinance requiring the collection of an additional tax, the enforceability of which is currently being contested by the Illinois Gaming Machine Operators Association. Rather than litigate the alleged violation, the Company pled no contest and paid an initial penalty to the municipality in October 2022. The Company will pay a similar penalty each month for the remaining months of 2022 and anticipates such payments to continue in 2023. In February 2023, an Illinois municipality issued an order against the Company for the alleged failure to pay a terminal operator tax (“TO Tax”) for the privilege of operating gaming terminals within the municipality. The TO Tax was adopted by the municipality on June 8, 2021, but there was no enforcement of this tax until the Company was issued a notice of hearing in February 2023. In April 2023, the Company, along with numerous other terminal operators, filed a complaint in the Circuit Court of Cook County, Illinois contesting the validity and enforceability of the TO Tax. The results for the three months ended March 31, 2022 included a loss of $1.0 million related to these matters and is included within other expenses, net in the condensed consolidated statements of operations and other comprehensive income.
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Related-Party Transactions |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Related Party Transactions [Abstract] | |
| Related-Party Transactions | Related-Party Transactions Subsequent to the Company's acquisition of certain assets of Fair Share Gaming, LLC (“Fair Share”), G3 Gaming, LLC (“G3”), and Tom’s Amusement Company, Inc., (“Tom's Amusements”), the sellers became employees of the Company. Consideration payable to the Fair Share seller was $1.0 million and $1.1 million as of March 31, 2023 and December 31, 2022, respectively. Payments to the Fair Share seller under the acquisition agreement were $0.3 million and $0.5 million during the three months ended March 31, 2023 and 2022, respectively. Consideration payable to the G3 sellers was $0.4 million as of both March 31, 2023 and December 31, 2022. There were no payments to the G3 sellers under the acquisition agreement during the three months ended March 31, 2023 and 2022. Consideration payable to the Tom's Amusements seller was $0.1 million as of both March 31, 2023 and December 31, 2022. There were no payments to the Tom's Amusements seller during the three months ended March 31, 2023 and 2022. The Company engaged Much Shelist, P.C. (“Much Shelist”), as its legal counsel for general legal and business matters. An attorney at Much Shelist is a related party to management of the Company. Accel paid Much Shelist $0.1 million and less than $0.1 million for the three months ended March 31, 2023 and 2022, respectively. These payments were included in general and administrative expenses within the condensed consolidated statements of operations and comprehensive income.
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Earnings Per Share |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | Earnings Per Share The components of basic and diluted earnings per share (“EPS”) were as follows for the three months ended March 31 (in thousands, except per share amounts):
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Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent EventsOn April 11, 2023, the Company entered into an agreement to acquire an operator in the state of Louisiana and an option to acquire a second operator in the state of Louisiana. In connection therewith, the Company paid $3.5 million as an advance against a portion of the purchase price |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Accounting Policies [Abstract] | |
| Basis of presentation and preparation | Basis of presentation and preparation: The condensed consolidated financial statements and accompanying notes were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements include the accounts of the Company and of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”). In preparing our condensed consolidated financial statements, we applied the same significant accounting policies as described in Note 2 to the consolidated financial statements in the Form 10-K. Any significant changes to those accounting policies are discussed below. Interim results are not necessarily indicative of results for a full year. |
| Use of estimates | Use of estimates: The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and (iii) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates used by the Company include, among other things, the useful lives for depreciable and amortizable assets, income tax provisions, the evaluation of the future realization of deferred tax assets, projected cash flows in assessing the initial valuation of intangible assets in conjunction with business acquisitions, the selection of useful lives for depreciable and amortizable assets in conjunction with business acquisitions, the valuation of level 3 investments, the valuation of contingent earnout shares and interest rate caplets, contingencies, and the expected term of share-based compensation awards and stock price volatility when computing share-based compensation expense. Actual results may differ from those estimates. |
| Segment information | Segment information: The Company operates as a single reportable operating segment. The Company’s chief operating decision maker (“CODM”) is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. The CODM assesses the Company’s performance and allocates resources based on consolidated results, and this is the only discrete financial information that is regularly reviewed by the CODM. |
| Revenue recognition | Revenue recognition: The Company generates revenues from the following types of services: gaming terminals, amusements, manufacturing and ATMs. Revenue is disaggregated by type of revenue and is presented on the face of the consolidated statements of operations and comprehensive income. |
| Recent accounting pronouncements | Recent accounting pronouncements: In October 2021, the FASB issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805). The guidance in this ASU improves the accounting for revenue contracts with customers acquired in a business combination by addressing diversity in practice and inconsistency related to recognition of contract assets and liabilities acquired in a business combination. The provisions of this ASU require that an acquiring entity accounts for the related revenue contracts in accordance with Accounting Standards Codification (“ASC”) 606 as if it had originated the contracts. The standard is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years with early adoption permitted. The Company does not expect the impact of the adoption of this ASU to be material to its financial statements or disclosures. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). This ASU provides temporary guidance to ease the potential burden in accounting for reference rate reform primarily resulting from the discontinuation of the London Inter-Bank Offered Rate (“LIBOR”), which began phasing out on December 31, 2021. The amendments in ASU 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. The new guidance (i) simplifies accounting analyses under current GAAP for contract modifications; (ii) simplifies the assessment of hedge effectiveness and allows hedging relationships affected by reference rate reform to continue; and (iii) allows a one-time election to sell or transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform. An entity may elect to apply the amendments prospectively from March 12, 2020, through December 31, 2022 by accounting topic. The Company currently references LIBOR for certain debt and hedging arrangements. While no material impacts are expected from the transition from LIBOR to the Secured Overnight Financing Rate (“SOFR”), the Company will continue to evaluate the provisions of this ASU and the impacts of transitioning to the SOFR rate in the second quarter of 2023. Other recently issued accounting standards or pronouncements have been excluded because they are either not relevant to the Company, or are not expected to have, or did not have, a material effect on its condensed consolidated financial statements.
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Summary of Significant Accounting Policies (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Disaggregation of Revenue | Total net revenues for the three months ended March 31, is disaggregated in the following table by the primary states in which the Company operates given the geographic economic factors that affect the revenues in the states.
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Inventories (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventories | Inventories were as follows (in thousands):
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Property and Equipment (Tables) |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property and Equipment | Property and equipment consist of the following at March 31, 2023 and December 31, 2022 (in thousands):
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Route and Customer Acquisition Costs (Tables) |
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Route and Customer Acquisition Costs | Route and customer acquisition costs consisted of the following at March 31, 2023 and December 31, 2022 (in thousands):
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Location Contracts Acquired (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Location Contracts Acquired | Location contracts acquired consisted of the following at March 31, 2023 and December 31, 2022 (in thousands):
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Goodwill and Other Intangible Assets (Tables) |
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Mar. 31, 2023 | |||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
| Schedule of Goodwill | The following is a roll forward of the Company's goodwill (in thousands):
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Debt (Tables) |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt Instruments | The Company’s debt as of March 31, 2023, and December 31, 2022, consisted of the following (in thousands):
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Business and Asset Acquisitions (Tables) |
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| Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Consideration Transferred and Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of consideration transferred and the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):
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| Schedule of Unaudited Pro Forma Results | This unaudited pro forma information does not project revenues and net income post acquisition (in thousands).
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| Schedule of Consideration Payable | Current and long-term portions of consideration payable consist of the following at March 31, 2023 and December 31, 2022 (in thousands):
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value, Assets Measured on Recurring Basis | The following tables summarize the Company’s assets that are measured at fair value on a recurring basis (in thousands):
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| Schedule of Liabilities Measured on a Recurring Basis | The following tables summarizes the Company’s liabilities that are measured at fair value on a recurring basis (in thousands):
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Components of Basic and Diluted EPS | The components of basic and diluted earnings per share (“EPS”) were as follows for the three months ended March 31 (in thousands, except per share amounts):
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Description of Business (Details) |
3 Months Ended |
|---|---|
Mar. 31, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Terminal operator license, term | 2 years |
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Disaggregation of Revenue [Line Items] | ||
| Total net revenues | $ 293,208 | $ 196,891 |
| Illinois | ||
| Disaggregation of Revenue [Line Items] | ||
| Total net revenues | 219,843 | 194,859 |
| Montana | ||
| Disaggregation of Revenue [Line Items] | ||
| Total net revenues | 36,451 | 0 |
| Nevada | ||
| Disaggregation of Revenue [Line Items] | ||
| Total net revenues | 29,961 | 0 |
| Other | ||
| Disaggregation of Revenue [Line Items] | ||
| Total net revenues | $ 6,953 | $ 2,032 |
Inventories (Details) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Raw materials and manufacturing supplies | $ 6,003,000 | $ 4,977,000 |
| Finished products | 1,473,000 | 1,964,000 |
| Total inventories | 7,476,000 | 6,941,000 |
| Inventory valuation reserves | $ 0 | $ 0 |
Investment in Convertible Notes (Details) - USD ($) |
Oct. 11, 2019 |
Jul. 19, 2019 |
Mar. 31, 2023 |
Mar. 09, 2021 |
Jul. 30, 2020 |
|---|---|---|---|---|---|
| Debt Securities, Available-for-sale [Line Items] | |||||
| Monthly installment receivable | $ 1,000,000 | ||||
| Convertible Promissory Notes | |||||
| Debt Securities, Available-for-sale [Line Items] | |||||
| Investment purchase | $ 25,000,000.0 | $ 30,000,000.0 | $ 32,100,000 | $ 25,000,000 | $ 25,000,000 |
| Investment interest rate | 3.00% | ||||
| Convertible Promissory Notes | Subordinated Debt | |||||
| Debt Securities, Available-for-sale [Line Items] | |||||
| Investment purchase | $ 5,000,000.0 | $ 5,000,000 | $ 5,000,000 | ||
| Investment maturity | 6 months |
Route and Customer Acquisition Costs - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
| Revenue from Contract with Customer [Abstract] | |||
| Gross payments due | $ 7,200 | $ 7,600 | |
| Net present value of payments due | 6,300 | 6,600 | |
| Current portion of payments due | 1,513 | 1,487 | |
| Customer acquisition cost asset | 18,300 | 17,900 | |
| Capitalized contract cost, subject to claw back | 1,000 | $ 1,200 | |
| Amortization expense (decrease in expense) on route and customer acquisition costs | $ 400 | $ 300 | |
Route and Customer Acquisition Costs - Route and Customer Acquisition Costs (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Revenue from Contract with Customer [Abstract] | ||
| Cost | $ 32,112 | $ 31,805 |
| Accumulated amortization | (13,734) | (13,463) |
| Route and customer acquisition costs, net | $ 18,378 | $ 18,342 |
Location Contracts Acquired - Location Contracts Acquired (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Cost | $ 282,653 | $ 282,653 |
| Accumulated amortization | (97,570) | (93,310) |
| Location contracts acquired, net | $ 185,083 | $ 189,343 |
Location Contracts Acquired - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Finite-Lived Intangible Assets [Line Items] | ||
| Amortization of intangible assets | $ 0.6 | |
| Location Contract | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Amortization of intangible assets | $ 4.3 | $ 3.3 |
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
|---|---|---|---|
Feb. 13, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|
| Acquired Indefinite-Lived Intangible Assets [Line Items] | |||
| Goodwill | $ 101,554 | $ 100,707 | |
| Tax exempt portion of goodwill | 41,600 | ||
| Intangible assets, net (excluding goodwill) | 22,400 | $ 23,000 | |
| Amortization of intangible assets | $ 600 | ||
| Minimum | |||
| Acquired Indefinite-Lived Intangible Assets [Line Items] | |||
| Expected useful life of intangibles (in years) | 7 years | ||
| Maximum | |||
| Acquired Indefinite-Lived Intangible Assets [Line Items] | |||
| Expected useful life of intangibles (in years) | 20 years | ||
| Rendezvous Casino and Burger Bar | |||
| Acquired Indefinite-Lived Intangible Assets [Line Items] | |||
| Goodwill | $ 800 | ||
| Consideration transferred | $ 2,600 |
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Thousands |
3 Months Ended |
|---|---|
|
Mar. 31, 2023
USD ($)
| |
| Goodwill [Roll Forward] | |
| Goodwill, beginning balance | $ 100,707 |
| Addition to goodwill for acquisition of Rendezvous | 847 |
| Goodwill, ending balance | $ 101,554 |
Debt - Long-term Debt Instruments (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Debt Instrument [Line Items] | ||
| Total debt on credit facility | $ 540,750 | $ 545,375 |
| Add: Interest rate caplet liability | 2,784 | 3,025 |
| Less: Debt issuance costs | (5,919) | (6,368) |
| Total debt, net of debt issuance costs | 537,615 | 542,032 |
| Less: Current maturities | (23,469) | (23,466) |
| Total debt, net of current maturities | 514,146 | 518,566 |
| Credit Agreement, Amendment 1 | Revolving credit facility | ||
| Debt Instrument [Line Items] | ||
| Total debt on credit facility | 122,000 | 121,000 |
| Credit Agreement, Amendment 1 | Term Loan | ||
| Debt Instrument [Line Items] | ||
| Total debt on credit facility | 323,750 | 328,125 |
| Credit Agreement, Amendment 1 | Delayed Draw Term Loan | ||
| Debt Instrument [Line Items] | ||
| Total debt on credit facility | $ 95,000 | $ 96,250 |
Debt - Narrative (Details) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
|
Jan. 12, 2022
USD ($)
caplet
|
Mar. 31, 2023
USD ($)
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2022 |
|
| Debt Instrument [Line Items] | ||||
| Unrealized (loss) gain on interest rate caplets, net of tax | $ (2,166,000) | $ 4,864,000 | ||
| Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, after tax | $ 1,900,000 | |||
| Credit Agreement, Amendment 1 | Term Loan | ||||
| Debt Instrument [Line Items] | ||||
| Maximum borrowing capacity | $ 300,000,000 | |||
| Debt instrument, term | 4 years | |||
| Number of deferred premium caplets | caplet | 48 | |||
| Credit Agreement, Amendment 1 | Term Loan | LIBOR | ||||
| Debt Instrument [Line Items] | ||||
| Basis spread on variable rate (as a percent) | 2.00% | |||
Business Combinations and Asset Acquisitions - Schedule of Consideration Transferred and Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Jun. 01, 2022 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|---|
| Business Acquisition [Line Items] | |||
| Goodwill | $ 101,554 | $ 100,707 | |
| Century | |||
| Business Acquisition [Line Items] | |||
| Cash paid | $ 158,681 | ||
| Fair value of stock issued | 5,584 | ||
| Total consideration | 164,265 | ||
| Cash and cash equivalents | 33,229 | ||
| Prepaid expenses | 1,563 | ||
| Accounts receivable | 4,394 | ||
| Inventories | 6,441 | ||
| Income taxes receivable | 189 | ||
| Other current assets | 475 | ||
| Property and equipment | 29,302 | ||
| Location contracts acquired | 40,400 | ||
| Other intangible assets | 24,400 | ||
| Accounts payable and other accrued expenses | (10,766) | ||
| Accrued compensation and related expenses | (1,626) | ||
| Other long-term liabilities | (446) | ||
| Deferred income tax liability | (16,646) | ||
| Net assets acquired | 110,909 | ||
| Goodwill | $ 53,356 |
Business and Asset Acquisitions - Unaudited Pro Forma Results (Details) $ in Thousands |
3 Months Ended |
|---|---|
|
Mar. 31, 2022
USD ($)
| |
| Business Combination and Asset Acquisition [Abstract] | |
| Revenues | $ 196,891 |
| Net income | $ 15,788 |
Business and Asset Acquisitions - Consideration Payable (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Business Acquisition [Line Items] | ||
| Current | $ 7,760 | $ 7,647 |
| Long-Term | 6,521 | 6,872 |
| TAV | ||
| Business Acquisition [Line Items] | ||
| Current | 1,265 | 1,025 |
| Long-Term | 1,446 | 1,918 |
| Fair Share Gaming | ||
| Business Acquisition [Line Items] | ||
| Current | 775 | 951 |
| Long-Term | 231 | 175 |
| Family Amusement | ||
| Business Acquisition [Line Items] | ||
| Current | 2,054 | 2,032 |
| Long-Term | 0 | 0 |
| Skyhigh | ||
| Business Acquisition [Line Items] | ||
| Current | 609 | 606 |
| Long-Term | 4,844 | 4,779 |
| G3 | ||
| Business Acquisition [Line Items] | ||
| Current | 433 | 433 |
| Long-Term | 0 | 0 |
| VVS | ||
| Business Acquisition [Line Items] | ||
| Current | 2,466 | 2,442 |
| Long-Term | 0 | 0 |
| Tom's Amusements | ||
| Business Acquisition [Line Items] | ||
| Current | 58 | 58 |
| Long-Term | 0 | 0 |
| Island | ||
| Business Acquisition [Line Items] | ||
| Current | 100 | 100 |
| Long-Term | $ 0 | $ 0 |
Fair Value Measurements - Narrative (Details) |
Mar. 31, 2023
shares
|
|---|---|
| Fair Value Disclosures [Abstract] | |
| Warrants outstanding (in shares) | 5,144 |
Stockholders' Equity (Details) $ in Thousands |
3 Months Ended | 4 Months Ended | |||
|---|---|---|---|---|---|
|
Sep. 28, 2020
vote
|
Mar. 31, 2023
USD ($)
shares
|
Mar. 31, 2022
USD ($)
|
Mar. 31, 2022
USD ($)
shares
|
Nov. 22, 2021
USD ($)
|
|
| Class of Warrant or Right [Line Items] | |||||
| Stock repurchase program, authorized amount (up to) | $ 200,000 | ||||
| Repurchase of common stock (in shares) | shares | 476,718 | 8,822,001 | |||
| Repurchase of common stock | $ 4,206 | $ 13,934 | $ 92,200 | ||
| Class A-1 Common Stock | |||||
| Class of Warrant or Right [Line Items] | |||||
| Common stock , voting rights, votes per share | vote | 1 | ||||
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Income Tax Disclosure [Abstract] | ||
| Income tax expense (benefit) | $ 6,000 | $ 4,835 |
| Effective tax rate | 39.50% | 23.40% |
Commitments and Contingencies (Details) |
3 Months Ended | |||
|---|---|---|---|---|
|
Nov. 16, 2022
claim
|
Dec. 18, 2020
USD ($)
|
Mar. 31, 2023
defendant
|
Mar. 31, 2022
USD ($)
|
|
| Loss Contingencies [Line Items] | ||||
| Number of defendant establishments | defendant | 10 | |||
| Estimated loss | $ | $ 1,000,000 | |||
| IGB Complaint | ||||
| Loss Contingencies [Line Items] | ||||
| Damages sought | $ | $ 5,000,000 | |||
| Gold Rush | ||||
| Loss Contingencies [Line Items] | ||||
| Loss contingency, claims dismissed, number | claim | 2 | |||
| Loss contingency, pending claims, number | claim | 4 |
Earnings Per Share - Schedule of Components of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
| Earnings Per Share [Abstract] | ||
| Net income | $ 9,182 | $ 15,788 |
| Basic weighted average outstanding shares of common stock (in shares) | 86,885,000 | 92,993,000 |
| Dilutive effect of stock-based awards for common stock (in shares) | 247,000 | 748,000 |
| Diluted weighted average outstanding shares of common stock (in shares) | 87,132,000 | 93,741,000 |
| Earnings per share - basic (in usd per share) | $ 0.11 | $ 0.17 |
| Earnings per share - diluted (in usd per share) | $ 0.11 | $ 0.17 |
| Anti-dilutive options excluded from calculation of diluted EPS (in shares) | 4,907,216 | 4,729,800 |
Subsequent Events (Details) $ in Millions |
Apr. 11, 2023
USD ($)
|
|---|---|
| Subsequent Event | |
| Subsequent Event [Line Items] | |
| Escrow deposit | $ 3.5 |