Good afternoon, and thank you for attending today's Excel Entertainment Q1 2025 Earnings Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to queue for a question on today's call, you can do so by dialing star 1 on your telephone keypad. I'll now hand the call over to Scott Levin, Chief Legal Officer, to begin. You may proceed.

Welcome to Excel Entertainment's first quarter 2025 earnings call. Participating on the call today are Andy Rubenstein, Excels' Chief Executive Officer, Matt Ellis, Excels' Chief Financial Officer, and Mark Phelan, Excels' President of U.S. Gaming. Please refer to our website for the press release and supplemental information that will be discussed on this call. Today's call is being recorded and will be available on our website under Events and Presentations within the Investor Relations section of our website. Some of the comments in today's call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those discussed today, and the company undertakes no obligation to update these statements unless required by law. For a more detailed discussion of these and other risk factors, investors should review the forward-looking statements section of the earnings press release available on our website, as well as other risk factor disclosures in our filings with the SEC. Any projected financial information presented in this call is for illustrative purposes only and should not be relied upon as being predictive of future results. The inclusion of any financial forecast information in this call should not be regarded as a representation by any person that the results reflected in such forecasts will be achieved. During the call, we may discuss certain non-GAAP financial measures. For reconciliation of the non-GAAP measures, as well as other information regarding these measures, please refer to our earnings release and other materials in the investor relations section of our website. I will now turn the call over to Andy.

Thank you, Scott, and good afternoon, everyone. Thank you for joining today's call. I'm pleased to report we had another record-setting quarter with total revenue of $344 million, which is our highest quarterly revenue since going public. And we also had strong adjusted EBITDA of $50 million. Both revenue and adjusted EBITDA grew 7% year over year, demonstrating again the strength of our local distributed gaming model operated in 10 states and four time zones. During the first quarter, we continue to see stable revenue growth in our largest markets of Illinois and Montana, with 4% and 8% Q1 year-over-year revenue growth, respectively. We see this trend continuing into Q2. Nebraska and Georgia continue to generate strong double-digit revenue growth, albeit from a smaller base, while Nevada experienced a small revenue decline in the first quarter as we worked through the loss of a key customer due to an ownership change. We've now completed the integration of our recently acquired operations in Louisiana and are looking forward to the revenue growth opportunities that this acquisition should generate. As a reminder, in late 2024, we took control over QCAN Gaming, which will continue to be led by its founder, Dan Giedros, who has over 22 years of local market industry experience. Operationally, the acquisition further expands Excel's southeastern exposure, adding 96 locations and 614 terminals as of the end of the first quarter. As the combined entity continues to roll out operations, bringing together previously separate businesses, including legacy truck stops and organically developed distributed gaming routes, we expect to drive further synergies and performance improvements over time. Finally, we are proud to announce that Fairmont Park Casino opened on April 18th, being the first racino in Illinois' history. Mark will provide more details on Fairmont, and we look forward to it being another growth driver for Excel. Across our national footprint, we continue to refine our customer acquisition and retention efforts to drive profitable sales growth. Distributed gaming is a dynamic and competitive market, and Excel is differentiated by its scale and innovation, which will enable us to continue to grow and prosper. In addition, we continue to review our markets and operations to find areas of improvement. As a result, we identified additional efficiencies and opportunities for growth that will contribute to expanding free cash flow. We'd like to remind analysts, investors, and potential investors that our business, providing safe, convenient, and fun local gaming entertainment, is fundamentally straightforward and delivers compelling returns on invested capital. Unlike larger gaming operators with capital tied up in large, immobile projects, our model spreads capital across thousands of retail locations in multiple states and regions. This decentralized approach gives us the diversification and flexibility to reallocate capital efficiently based on local demand trends. Over the past four years, we've expanded beyond our home market of Illinois into new gaming jurisdictions through our distributed gaming model. We've made significant investments to integrate key operating platforms, procurement, logistics, finance, and reporting, and have worked closely with our local leaders to ensure all of Excel is aligned in delivering a superior gaming experience for our local players. Today, I'm confident in our ability to scale our proprietary products and services across our national footprint, delivering unmatched value to our retail location partners. I also believe our growing scale will continue to drive operational efficiencies enhance financial performance, and deliver enhanced free cash flow growth. With that, I'm going to turn it over to Mark to provide an update on Fairmont.

Thanks, Andy. From day one of the Fairmont acquisition, we had a clear goal to complete the construction of phase one of the Fairmont Racino project at or below budget. This project included the construction of our phase one casino, the addition of high quality food and beverage amenities improvements to the track infrastructure and the recruitment licensing and training of a premier customer service team all well ahead of fairmont park's biggest racing event of the year derby day which coincided with the kentucky derby this past weekend thanks to the relentless commitment of both our on-site team and shared services team fairmont park casino and racing successfully opened its casino on april 18th approximately four and a half months after the acquisition was completed in just two weeks ahead of derby day and all slightly under our phase one construction budget the racing season at fairmont started on april 22nd despite minimal marketing ahead of the opening our team has done an outstanding job generating interest in both the casino and the broader improvements at fairmont park now open for just over two weeks we are encouraged by the early results. This past Saturday, May 3rd, 2025, we hosted Derby Day at the track. Despite the inclement weather forcing us to cancel races, we still had a fantastic turnout that drove very strong play at the casino. As marketing efforts ramp up and our full-service freestanding restaurant, Longshot, comes online, we are increasingly confident in the casino's appeal as the most engaging and freshest slot floor in the greater St. Louis area, as well as Fairmount Park's growing reputation as a premier regional destination for racing and entertainment. Before Matt walks us through the numbers, I'd like to quickly turn it back to Andy.

Thanks. As you probably saw, we issued a press release last week announcing Matt's departure as CFO, effective May 9th. I want to express my gratitude to Matt for his leadership and partnership to excel these last six years. Matt has played a pivotal role in shaping our company's growth initiatives, financial strength, and company culture. We wish Matt the very best in his future endeavors. While Matt's departure represents a leadership change, we are pleased that Mark will be stepping into the role of acting CFO. With Mark's experience in finance and financial markets and deep operational insights, as president of U.S. Gaming, we expect a stable and seamless transition while we conduct a search to build a position on a permanent basis.

With that, we'll turn it over to Matt. Thanks, Andy, and good afternoon, everyone. I'd like to thank Andy, our management team, board of directors, stakeholders, partners, customers, and the entire team at Excel for all their support over the last six years. I am proud that I'm leaving Excel in a strong and stable position, supported by a resilient business model that gives me great confidence in its continued success for years to come. For the first quarter, we had total revenue of $324 million, a year-over-year increase of 7.3%, and adjusted EBITDA of $50 million, dollars, a year-over-year increase of 7.1%. As of March 31st, we had 27,180 terminals in 4,391 locations, year-over-year increases of 4.4 and 2.9 percent, respectively. Revenue per location for the quarter in our core states was as follows. Illinois was $885 per day, an increase of 2.9 percent year-over-year. Montana was $610 per day, an increase of 2.7 percent year-over-year. Nevada was $802 per day, a decrease of 5.3 percent year-over-year. Louisiana was $972 per day. Nebraska was $263 per day, an increase of 12.9 percent year-over-year. And Georgia was $145 per day, an increase of 59.3 percent year-over-year. Our growth in Illinois, Montana, Nebraska, and Georgia emphasizes the strength and resilience of both our business model and, more importantly, the fact that consumers continue to choose and use our high-quality, local, and convenient gaming offerings. Capital expenditures for the first quarter were $27 million of cash spent. At the end of the first quarter, we had approximately $309 million of net debt and $422 million dollars of liquidity, consisting of $272 million of cash on our balance sheet and $150 million of availability on our credit facility. We are reiterating our full-year CapEx forecast of $75 to $80 million, comprised of $39 to $41 million in our existing markets, $5 to $7 million in Louisiana, and $31 to $32 million for Fairmont. As a reminder, the CapEx for Fairmont includes both phase one and initial construction for phase two after fairmont and the initial capex in louisiana we expect company-wide normalized annual capex to return to 40 to 45 million dollars which will be an encouraging boost to free cash flow and returns on capital on our capital allocation strategy we continue to view share repurchases favorably as an effective way to return capital to our shareholders. During the first quarter, we repurchased 1 million shares at an average purchase price of $10.34 per share for a total of $10 million. With our strong balance sheet and low leverage, we are in a unique position where we can invest in and grow our business while returning capital to shareholders. With that, I'd like to turn it back over to Andy.

Thanks, Matt. As I mentioned earlier, we are very pleased with our strong first quarter performance and the continued and growing momentum across our businesses. And we are proud that while delivering record Q1 revenue, we also reached our first major milestone at Fairmont with the opening of the casino a few weeks ago. We remain focused on executing our simple but compelling growth model of generating solid organic revenue growth with expanding margins and improved free cash flow. Excel continues to have a strong competitive position, as evidenced by our results and healthy balance sheet, which enable us to pursue a multi-pronged approach to return-focused capital allocation, making us a compelling investment. Local gaming is an attractive growing niche within the broader gaming market with multiple opportunities to generate strong and consistent revenue and EBITDA growth, as well as strong free cash flow. We will now take your questions.

We will now open the line for questions. If you would like to ask a question at this time, please dial star 1 on your telephone keypad. If for any reason you need to remove that question, you can dial star 2. Again, to ask a question, dial star 1. As a reminder, if you're using a speakerphone on today's call, please remember to pick up your handset before asking your question. We'll pause here briefly to allow questions to generate in the queue. The first question is from the line of Chad Baynon with Macquarie. Your line is now open.

Hi. Good afternoon, Andy, Matt, Mark. Congrats on the record Q1. And Matt, best of luck with everything going forward. Thanks for all the help. Wanted to start with the tariff impact. So, you know, it's been several weeks since Liberation Day. We've heard from some of the competitors or other players in the space with maybe bigger projects that they have this is a year where where you do actually have a slightly bigger project so just wondering how you're thinking about this impact near term I know you just give guidance for CapEx but how you're thinking about you know what this could mean and if this changes at all how you're thinking about future growth with other opportunities. Thanks.

Thanks, Chad. This is Andy. As far as our existing business, most of our CapEx spend for the year, the prices have been locked in, so it will have minimal effect on us. We've seen minor effect in parts. As we look forward in terms of the Fairmont construction. I'll let Mark give that answer. But consumer demand continues to be strong. So we haven't seen any turf impact from that perspective. Go ahead, Mark.

Hey, Chad. So in terms of construction, obviously steel's gone up a significant amount, And you'd use a bunch of that in the phase two project. But given the sort of volatility of laws and announcements and tariffs, it's really hard to tell the project that the phase one project was well finished and prices were well set before any of these tariffs hit. So right now, you know, there doesn't seem to be much of an impact.

OK, great to hear. And then on the on the performance, I guess, a two parter. We've heard a lot of companies call out weather in the first quarter. Are you able to quantify maybe what this impact may have been for your portfolio? And then more importantly, you said that April trends, I guess we're through all of April, haven't really changed in terms of the strength with the consumer. Can you just confirm that? And are you seeing any pockets of weakness across the fleet?

Hey, Chad, it's Matt. And thanks for the wishes at the beginning. We'll take that one part of the time. Weather, all in all, pretty neutral when we look at it quarter over quarter, right? There's always a cold week here, a rainy week there, but as Andy talked about, we're well diversified. So weather was a neutral factor in a good, positive way. When it comes to the other piece of your question, April is trending like we expect it to. We are not seeing sort of that, any sort of change in consumer behavior. You know, it's a busy season for us with tax refund season, but kind of pleased to report that everything's following our initial forecast for the year, despite some of the recent political events.

Great. Appreciate it. Thank you very much.

Thank you. The next question is from the line of Steve Pazella with Deutsche Bank. Your line is now open.

Hey, good afternoon, everybody. Matt, Thanks for all your help over the years, and good luck with your future endeavors. Just looking at Illinois, it looks like locations were down, again, quarter over quarter, location win per day, up year over year. Is that still part of the strategy to kind of prune the bottom part of the portfolio?

Thanks, Steve. This is Andy. Yeah, we're continuing on that program, and to be honest, it will. be a continuous part of our optimization of our business. We are always looking to increase our profitability, evaluate locations that aren't performing where the margin isn't what we expect, and reallocate the assets into better performing situations. We have This whole utilization of our equipment reinforces our efforts to scale to our new markets, improve our return on those investments, and really optimize our overall CapEx expenditures, which ultimately will help our free cash flow. So I think you'll see this program continue market after market as it's a natural evolution of our business.

Okay, thank you. And then just wanted to follow up if you could give us any more color on how Louisiana is going, if this same kind of Illinois strategy applies to some of the other Montana, Nevada, Louisiana, Nebraska markets also, if we could get kind of an update there on the strategy.

Steve, yeah, I'll take Louisiana and I'll let Mark provide some color on Georgia and Nebraska. So Louisiana, it's very early. Obviously, we just closed in the latter part of Q4. It's all trends and early indications are very positive. We were accomplishing a lot of the remodeling, updating, optimization that we had planned for, and the results of that today has been very positive and indicating that we should continue down that trend. So we'll keep you abreast as that progresses in the future quarters. Go ahead, Mark.

Hey, Steve. um i'll try to kind of give an overview of all the markets but um generally as andy pointed out we spent a fair amount of time and effort in the last four years expanding outside illinois and i think now you're starting to see the the fruits of that process as we've integrated a lot of these markets and been able to share with them sort of common technology uh in the form of like payments and loyalty and customer service as well as content in the form of electronic gaming machines some of which are proprietary to excel through gdg and some of which are third party made that we purchase and distribute to our our different markets um illinois continues to be uh the bedrock of this company and uh continues to outperform uh nevada i would point out had a pretty robust uh growth and in part that's because of differentiated content strategy we have there where we uh have games that no one else has and and therefore perform higher um you could say the same for nebraska and georgia as well steve although in those markets in particular we've been able to scale centuries uh technology acumen they they've always been really good at technology because their markets are so competitive because it's not a it's not the register there's negotiated so they really had to differentiate themselves and we've been able to use their products enhance

them and apply them to these other markets where they're really differentiated and been able to allow us to to grow um you know much higher than than sort of the the market rate okay great thanks and then just real quick in the 1q was there any impact from fairmont in the uh the sports book or any startup costs we should be aware of hey steve it's matt i can take that um yes there were startup Startup costs, right?

We started, the main hiring bulk came in March. So, you know, we had that period of, call it a month, month and a half, where the labor started hitting us ahead of any revenue. But as Mark discussed and Andy discussed, we're off to a good start in Fairmont. But yes, there were some startup in Q1.

Okay, I appreciate it. Thank you, guys.

Thank you. Again, if you'd like to ask a question, please dial star one. The next question is from the line of Greg Jibbis with Northland. Your line is now open.

Great. Good afternoon, Andy, Matt, and Mark. Thanks for taking the questions. Matt, I really appreciate the help over the years and wish you all the best going forward.

To touch on, I guess, phase one with that being completed at Fairmont, could you maybe give us an update on the timing of phase two and what are the key next steps from a regulatory standpoint? um i'll take that one correct so uh one of the great things about fairmont is it's a it provides us a lot of optionality and that's why we chose sort of the phase one approach uh and so now that we have a casino up with improved food beverage amenities and this uh single site location called long shots which will be forthcoming uh we have the potential and the ability to sort of see how it operates and see what kind of demand and supply we have there in terms of our competitors uh and so i would say you know we'll have a lot more clarity on this once sort of the racing season comes to an end uh which is in october uh before we really want to sort of say what we're going to do for phase two we're definitely at a phase two but uh we want to learn from uh the field and and take its input and feedback before we kind of give a more formal answer That's helpful.

And if I could follow up on Louisiana, you know, that was a stronger than expected performance, you know, in Q1. You know, certainly a step up from, you know, the run rates when you acquire the businesses. I wanted to see if there's any drivers worth calling out there. Is that kind of seasonality? Or do you kind of view this as, you know, maybe the run rate being pretty sustainable, you know, prior to future growth in the state?

Thanks, Greg. I would say the run rate will continue to improve throughout the year as we are optimizing, remodeling a lot of the truck stops. So I don't know where we're going to land, but I think we're on a real upward trend. And the market, although it's a mature market, has a lot of legacy equipment. And as we upgrade and do what we consider as best practices, as well as bring proprietary technology to the market, we will see us outperform what our competitors are doing in that market.

Okay, that's fair, Andy. And I guess the last quick one, I'm pretty sure you touched on CapEx expectations, but I wanted to follow up.

I think I missed that piece of the prepared comments. what are the expectations for 2025 versus kind of the normalized levels hey greg it's matt and thanks for the wishes at the beginning of the q a um so 75 to 80 for 2025 split as follows uh five to seven for louisiana 31 to 32 for fairmont and that fairmont includes some phase two initial construction and then 39 to 41 for our our main market shall we call it now that's for this year when we get everything done we expect 40 to 45 for everything including fairmont and louisiana plus all the main markets perfect thanks for clearing that up thank you there are no further questions in queue so as a final reminder it is star one if you'd like to ask a question.

If there are no further questions, I'll hand the call back over to Andy Rubenstein for concluding remarks.

Thank you everyone for joining us for this Q1 call. We're excited to share with you more growth that we're seeing at Fairmont, as Mark alluded to, and we will be talking to you in July with some good news and continued positive improvement in a lot of our markets. Have a good spring and we'll talk to you in summer.

That concludes today's conference call. Thank you for your participation. You can now disconnect your lines.