Company: ACEL
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001698991-25-000023
Chunk: 43

Company: Accel Entertainment, Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Item 1
Chunk 43
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11.3%, compared to the prior-year period. The increase was attributable to higher compensation-related costs, as we continue to grow our operations, partially offset by lower parts and repair expense. 

Depreciation and amortization of property and equipment

Depreciation and amortization of property and equipment for the three months ended March 31, 2025 was $12.3 million, an increase of $1.9 million, or 17.9%, compared to the prior-year period due to an increased number of gaming terminals.

Amortization of intangible assets and route and customer acquisition costs

Amortization of intangible assets and route and customer acquisition costs for the three months ended March 31, 2025 were $6.3 million, an increase of $0.9 million, or 15.7%, compared to the prior-year period due to higher amortization expenses on location contracts acquired.

Other expenses, net

Other expenses, net for the three months ended March 31, 2025 were $2.8 million, an increase of $0.4 million, or 16.1%, compared to the prior-year period. The increase was primarily attributable to higher non-recurring expenses related to acquisitions.

32

Interest expense, net

Interest expense, net for the three months ended March 31, 2025 was $8.7 million, which was essentially flat compared to the prior-year period. We experienced an increase in average outstanding debt, which was offset by lower interest expense. For the three months ended March 31, 2025, the weighted average interest rate, excluding the impact of our interest rate caplets, was approximately 6.5% compared to 7.7% in the prior-year period.

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

The change in the fair value of contingent earnout shares for the three months ended March 31, 2025 was a gain of $2.4 million, compared to a loss of $4.7 million the prior-year period. The change was primarily due to the change in the market value of our Class A-1 common stock, which is the primary input to the valuation of the contingent earnout shares. 

Income tax expense

Income tax expense for the three months ended March 31, 2025 was $5.0 million, an increase of $0.2 million, or 4.7%, compared to the prior-year period. The effective tax rate for