Q4 2023 Bowlero Corp Earnings Call

Greetings and welcome to the Bolero Corp, fourth quarter and full year 2023 conference call.

Speaker 1: Greetings and welcome to the Bolero fourth quarter and full year 2020 three conference call.

It is now my pleasure to hand, the call over to Bobby you haven't of Valero. Please go ahead.

Speaker 1: It is now my pleasure to hand the call over to Bobby Lavin of Valero. Please go ahead.

Speaker 2: Good morning to everyone on this call. This is Bobby Lavin, Bolero's Chief Financial Officer.

Good morning to everyone on this call.

Bobby Lavan, Polaris Chief Financial Officer welcome.

Speaker 2: Welcome to our conference call to discuss our fourth quarter 2023.

Welcome to our conference call to discuss our fourth quarter of 2023 earnings.

Speaker 2: This morning, we issued a press release announcing our financial results for the period ending July 2nd, 2023.

We issued a press release announcing our financial results for the period ending July 2nd 2023.

A copy of the press release is available in the Investor Relations section of our website at IR Dot Bolero Corp Dot com.

Speaker 2: The copy of the press release is available in the investor relations section of our website at ir.bolero.com.

Speaker 2: Joining me on the call today are Tom Shannon, our founder, chief executive, and president, and Jeff Kleiner, Bolero's chief operating officer.

Joining me on the call today are Tom Shannon, our founder Chief Executive and President and Jeff cleaner, all arrows Chief operating officer.

Speaker 2: I would like to remind you that during today's Comm Call, we may make certain forward-looking statements about the company's performance.

I'd like to remind you that during today's call. We may make certain forward looking statements about the company's performance.

Speaker 2: such forward-looking statements are not guaranteed to future performance, and therefore, one should not place undue reliance.

Forward looking statements are not guarantees of future performance and therefore, one should not place undue reliance on them.

Forward looking statements are also subject to inherent risks and uncertainties that could cause.

Speaker 2: forward-looking statements are also subject to inherent risks and uncertainties. It can cause actual results that differ materially from those...

Cause actual results to differ materially from those expressed.

Operator: Greetings, and welcome to the Belarro Corp. 4th quarter and full year 2023 conference call.

Speaker 2: for additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements. You should refer to the cautionary statements contained in our press release, as well as the risk factors contained in the company's filing with the S&P.

For additional information concerning factors that could cause actual results to differ from those discussed in our forward looking statements you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the company's filings with the SEC.

Operator: It is now my pleasure to hand the call over to Bobby Lavin of Belarro. Please go ahead. Good morning to everyone on this call.

Bobby Lavin: This is Bobby Lavin, Belarro's Chief Financial Officer. Welcome to our conference call to discuss our 4th quarter 2023 earnings. This morning, we issued a press release announcing our financial results for the period ending July 2nd 2023. The copy of the press release is available in the Investor Relations section of our website at ir.bolarrocorp.com.

Bolero Corporation undertakes no obligation to revise or update any forward looking statements reflect events or circumstances that occur after today's call.

Speaker 2: Bolero Corporation undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after today's call.

Also during today's call the company may discuss certain non-GAAP financial measures as defined by SEC regulation G.

Speaker 2: Also, during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC regulations.

Speaker 2: The GAAP financial measures are the most directly comparable to each non-GAAP financial measure discussed, and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website. I will now turn the call over to...

The GAAP financial measures are the most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the Companys website I will now turn the call over to Tom.

Bobby Lavin: Joining me on the call today are Tom Shannon, our founder, chief executive, and president and Jeff Kleiner, Bolero's Chief Operating Officer. I would like to remind you that during today's conference, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantee the future performance, and therefore, once and not place, undo reliance on them. Forward-looking statements are also subject to inherent risks and uncertainties that can cause actual results to differ materially from those expressed.

Bobby Lavin: For additional information concerning factors that could cause actual results to differ from those discussed in our 4th looking statements, you should refer to the cautionary statements contained in our press release, as well as the risk factors contained in the company's filing with the FCC.

Good morning, and thank you for joining us today, I'm, Thomas Shannon founder CEO and President of Bolero Corp.

Speaker 3: Good morning and thank you for joining us today. I'm Thomas Shannon, founder, CEO , and president of Bolero Corp.

Speaker 3: Volero started with one bowling center in New York City in 1997. This past year we crossed $1 billion of revenue for the first time, a milestone for the country.

<unk> started with one bowling center in New York City in 1997.

This past year, we crossed $1 billion of revenue for the first time, a milestone for the company.

With the acquisition of Lucky strike in September we will have approximately 350 bowling centers and add an iconic brand to our portfolio.

Speaker 3: With the acquisition of Lucky Strike in September , we will have approximately 350 bowling centers and add an iconic brand to our portfolio.

Speaker 3: With the Lucky Strike acquisition, we will add a center in Hawaii to our portfolio, which will be the 36th state in which we operate.

Lucky strike acquisition, we will add a center in Hawaii to our portfolio, which will be the 36 state in which we operate.

Bobby Lavin: Bolero Corporation undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after today's call.

Speaker 3: Our path to growth has never been clearer. We continue to redefine family and location-based entertainment across the country.

Our path to growth has never been clearer, we continue to redefine family and location based entertainment across the country.

Bobby Lavin: Also, during today's call, the company may discuss certain non-gap financial measures as defined by FCC regulation G. The gap financial measures are the most directly comparable to each non-gap financial measure discussed in the reconciliation of the differences between each non-gap financial measure and the comparable gap financial measure. We found on the company's website.

<unk> combination of open bowling events and lead play make us not only the premier Global Bowling company.

Speaker 3: Bolero's combination of open bowling events and league play make us not only the premier global bowling company But also a leader

But also a leader in the entertainment industry.

We continued to identify attractive locations for new builds and we have seven leases currently signed and four of those already under construction in Mark key markets for new bolero locations.

Speaker 3: We continue to identify attractive locations for new builds and we have seven leases currently signed and four of those already under construction in marquee markets for new Bolero locations.

Operator: I'll now turn the call over to Tom.

Thomas Shannon: Good morning and thank you for joining us today. I'm Thomas Shannon, Founder CEO and President of Bolero Corp. Bolero has started with one bowling center in New York City in 1997. This past year, we crossed $1 billion of revenue for the first time, a milestone for the company. With the acquisition of Lucky Strike in September, we will have approximately 350 bowling centers and add an iconic brand to our portfolio. With the Lucky Strike acquisition, we will add a center in Hawaii to our portfolio, which will be the 36th state in which we operate.

Speaker 3: Our newest center in the Westfield Valley Fair Mall in San Jose, California, opened this past weekend.

Our newest centre in the Westfield Valley Fair Mall in San Jose, California opened this past weekend.

Speaker 3: And at the end of August , we acquired the co-located Mavericks and Octane properties in a premier location in Scottsdale, Arizona for $33.5 million.

And at the end of August we acquired the co located Mavericks and octane properties.

Premier location in Scottsdale, Arizona for $33 $5 million we.

We have three more acquisitions expected to close in the next month, including Lucky strike totaling more than $130 million of purchase price and adding approximately $100 million of annualized revenues.

Speaker 3: We have three more acquisitions expected to close in the next month, including Lucky Strike, totaling more than $130 million of purchase price and adding approximately $100 million of annualized revenue.

Speaker 3: Two of the acquisitions come with real estate, augmenting our asset portfolio and potential sale leaseback funding.

Two of the acquisitions come with real estate, augmenting, our asset portfolio and potential sale leaseback funding sources.

Thomas Shannon: Our path to growth has never been clearer. We continue to redefine family and location-based entertainment across the country. Bolero's combination of open bowling events and league play make us not only the premier global bowling company, but also a leader in the entertainment industry. We continue to identify attractive locations for new builds and we have seven leases currently signed, and four of those already under construction in marquee markets for new Bolero locations.

Speaker 3: Our fiscal year same store sales comp was plus 12.7% year over year, plus 12.7%

Our fiscal year same store sales comp was plus 12, 7% year over year, plus 12, 7%.

Speaker 3: As mentioned in the Q&A portion of the last earnings call, we saw a slowdown in the fourth quarter of fiscal year 23, with same-store sales for that quarter at negative 2.7%. Nevertheless, total revenue for the quarter increased 2.4% year over year.

As mentioned in the Q&A portion of the last earnings call. We saw a slowdown in the fourth quarter of fiscal year 'twenty three with same store sales for that quarter, a negative two 7%.

Nevertheless, total revenue for the quarter increased two 4% year over year.

Thomas Shannon: Our newest center in the Westfield Valley Fair Mall in San Jose, California opened this past weekend. And at the end of August, we acquired the co-located Mavericks and Octane properties in a premiere location in Scottsdale, Arizona for $33.5 million.

We view ourselves as perpetual optimizer of the business and we reacted swiftly to early signs of a softening retail consumer to innovate on our offerings.

Speaker 3: We view ourselves as perpetual optimizers of the business.

Speaker 3: and we reacted swiftly to early signs of a softening retail consumer to innovate on our own.

Speaker 3: The high incremental margins in our business make it a priority for us to encourage guests to bowl, for example, a third game, or stay longer in our centers buying food or playing in our own.

High incremental margins in our business make it a priority for us to encourage guests to bowl for example, a third game or stay longer in our centers buying food are playing in our case.

Thomas Shannon: Sanders. We have three more acquisitions expected to close in the next month, including Lucky Strike, totaling more than $130 million of purchase price and adding approximately $100 million of annualized revenues. Two of the acquisitions come with real estate, augmenting our asset portfolio and potential sale lease-back funding sources. Our fiscal year, same-store sales comp was plus 12.7% year-over-year, plus 12.7%. As mentioned in the Q&A portion of the last earnings call, we saw a slowdown in the fourth quarter of fiscal year 23 with same-store sales for that quarter negative 2.7%.

Speaker 3: The past few years of high post-COVID demand made most of our center associates order takers and service providers with no requirement

Past few years of high post Covid demand made most of our center associates order takers and service providers with no requirement to sell.

To address this in June we launched a bundled offering called the special which allows guests to prepay. The third game at a discounted price and receive a complimentary five dollar arcade card to encourage ancillary spending.

Speaker 3: To address this, in June , we launched a bundled offering called The Special, which allows guests to prepay the third game at a discounted price and receive a complimentary $5 arcade card to encourage ancillary spending.

We are seeing a 60 plus percent take rate with this offering over hundreds of thousands of transactions and continue to test new combinations.

Speaker 3: We are seeing a 60 plus percent take rate with this offering over hundreds of thousands of transactions and continue to A B test new combinations.

Speaker 3: Over the past three weeks, we rolled out a pizza and pitcher special that is nearing a million dollars in sales in a very short period of time. These programs are providing consumers extra value while improving ticket size.

Over the past three weeks, we rolled out a pizza and picture specials that is nearing $1 billion in sales in a very short period of time. These.

Thomas Shannon: Nevertheless, total revenue for the quarter increased 2.4% year-over-year. We view ourselves as perpetual optimizers of the business, and we reacted swiftly to early signs of a softening retail consumer to innovate on our offerings. The high incremental margins in our business make it a priority for us to encourage guests to bowl, for example, a third game, or stay longer in our centers buying food or playing in our arcades. The past few years of high post-COVID demand made most of our center associates order takers and service providers with no requirement to sell.

These programs are providing consumers extra value, while improving ticket size early results show average number of games bolt is up 5%.

Speaker 3: Early results show average number of games bold is up five per

We added these specials and pulled back on deeply discounted promotional base. However over the past few months, we've realized we pulled back too hard on midweek and late night promotions. The cult following an all you can bowl Knight strike $2 Tuesdays was greater than expected.

Speaker 3: We added these specials and pulled back on deeply discounted promotional.

Speaker 3: However, over the past few months, we have realized we pulled back too hard on midweek and late night promotions.

Speaker 3: The cult following on All You Can Bowl, Night Strike, $2 Tuesdays was greater than expected.

So we've seen results Monday, Tuesday, and late Friday would be up double digits in the slow days of summer and a reinstating this programs almost immediately.

Speaker 3: So we've seen results Monday, Tuesday, and late Friday be off double digits in the slow days of summer and are reinstating those programs almost immediately.

Thomas Shannon: To address this in June, we launched a bundle of offering called The Special, which allows guests to pre-pay the third game at a discounted price and receive a complimentary $5 arcade card to encourage ancillary spending. We are seeing a 60-plus-percent take rate with this offering over hundreds of thousands of transactions and continue to AB test new combinations. Over the past three weeks, we roll that a pizza and pitcher special that is nearing a million dollars in sales in a very short period of time.

Speaker 3: I am confident experimentation will result in happier customers who become more loyal customers and who will return more often.

I am confident experimentation will result in happier customers, who become more loyal customers and who will return more often consumer.

Speaker 3: consumer discretionary spend may be dropping, but consumers still want to go out and we provide better value to more expensive alternatives.

Discretionary spend may be dropping the consumers still want to go out and we provide better value to more expensive alternatives.

Speaker 3: The brightest star in our business the past few years has been a.

The brightest star in our business the past few years has been events.

Speaker 3: Event sales were up 43% in fiscal year 23 over fiscal year 22, up 43% year over year, and up 53% in fiscal year 23 over fiscal year 19.

<unk> sales were up 43% in fiscal year 'twenty three over fiscal year, 'twenty, two up 43% year over year and up 53% in fiscal year 'twenty three over fiscal year 19.

Thomas Shannon: These programs are providing consumers extra value while improving ticket size. Early results show average number of games bold is up 5%. We added these specials and pulled back on deeply discounted promotional nights. However, over the past few months, we have realized we pulled back too hard on midweek and late night promotions. The cult following on all you can bowl nights dry $2 Tuesdays was greater than expected. So we've seen results Monday Tuesday and late Friday be off double digits in the slow days of summer and are reinstating this programs almost immediately.

In fiscal year, 'twenty, three we booked $218 million of bowling events and there is still room to go with a growing team of more than 200 sales associates.

Speaker 3: In fiscal year 23, we booked $218 million of bowling events, and there was still room to go, with a growing team of more than 200 sales associates.

Right now I'm in Las Vegas, with our event sales team gearing up for a robust holiday season, we're having our national sales conference here.

Speaker 3: Right now, I'm in Las Vegas with our event sales team gearing up for a robust holiday season.

Speaker 3: Last year, in the week prior to Christmas, we booked more than $10 million of event sales in a single week.

Last year in the week prior to Christmas, we booked more than $10 million of event sales in a single week.

Speaker 3: In a world where companies are cutting costs, we provide solutions for businesses to invest in bringing their people together in a very affordable way.

In a world where companies are cutting costs, we provide solutions for businesses to invest in bringing their people together in a very affordable way R.

Thomas Shannon: I am confident experimentation will result in happier customers who become more loyal customers and who will return more often. Consumer discretionary spend may be dropping, but consumers don't want to go out and we provide better value to more expensive alternatives.

Speaker 3: Our event business was up 7% year over year in the fourth quarter and has accelerated recently from that level. We believe there are significant changes in the

Our event business was up 7% year over year in the fourth quarter.

And has accelerated recently from that level.

We believe there is significant upside in this category.

Bolero is getting more analytical and insightful everyday we have established a flywheel in our business that will enable us to compound top line growth over the long term fueled by self funded investment.

Speaker 3: Bolero is getting more analytical and insightful every day. We have established a flywheel in our business that will enable us to compound top-line growth over the long term fueled by self-funded investments.

Thomas Shannon: The brightest start in our business the past few years has been events. Event sales are up 43% in fiscal year 23 over fiscal year 22. Up 43% year over year and up 53% in fiscal year 23 over fiscal year 19. In fiscal year 23, we booked $218 million of bowling events and they're still room to go with a growing team of more than 200 sales[inaudible] and James Schitz. Right now, I'm in Las Vegas with our event sales team gearing up for a robust holiday season.

Speaker 3: Our high free cash flow generation offers us a sustainable source of capital.

Our high free cash flow generation offers us a sustainable source of capital.

Speaker 3: that we use to reinvest in our business at highly attractive return levels, including acquisitions, existing center conversions, and building new centers.

We used to reinvest in our business at highly attractive return levels, including acquisitions existing center conversions and building new centers.

Speaker 3: With a focus on enhancing the customer experience, our centers will continue to grow at the unit level, resulting in additional cash flow and ultimately more momentum in the flywheel.

With a focus on enhancing the customer experience our centers will continue to grow at the unit level, resulting in additional cash flow and ultimately more momentum in the flywheel.

Thomas Shannon: We're having our National Sales Conference here. Last year, in the week prior to Christmas, we booked more than $10 million of event sales in a single week. In a world where companies are cutting costs, we provide solutions for businesses to invest in bringing their people together in a very affordable way. Our event business was up 7% year-over-year in the fourth quarter and has accelerated recently from that level. We believe there are significant upside in this category.

Speaker 3: Given this dynamic, we have made the deliberate decision to double down on investment in our business in fiscal year 2024, positioning us for strong growth in fiscal year 2025 and beyond.

Given this dynamic we have made the deliberate decision to double down on investment in our business in fiscal year 'twenty 'twenty four positioning us for strong growth in fiscal year 2025 and beyond.

Speaker 3: I would now like to turn the call over to Bobby Lavin to review our financial results for the quarter and year and offer financial guidance for the upcoming fiscal year. Bobby?

I would now like to turn the call over to Bobby Robin to review, our financial results for the quarter and year and offer our financial guidance for the upcoming fiscal year Bobby.

Thank you Tom happy to be here.

In the fourth quarter, we generated total revenue of $239 4 million and adjusted EBITDA of $64 5 million.

Speaker 2: In the fourth quarter, we generated total revenue of $239.4 million and adjusted EBITDA of $64.5 million, reflecting a 26.9% increase in revenue.

Thomas Shannon: Bowlero is getting more analytical and insightful every day. We have established a flywheel in our business that will enable us to compound top-line growth over the long term fueled by self-funded investment. Our high-free cash flow generation offers us a sustainable source of capital that we use to reinvest in our business at highly attractive return levels. We also have a lot of funds including acquisitions, existing center conversions and building new centers. With a focus on enhancing the customer experience, our centers will continue to grow at the unit level, resulting in additional cash flow and ultimately more momentum in the flywheel.

Thomas Shannon: Given this dynamic, we have made the deliberate decision to double-band on investment in our business in fiscal year 2024, positioning us for strong growth in fiscal year 2025 and beyond.

<unk> of 26, 9% EBITDA margin.

Last year, we reported $267 7 million of revenue and adjusted EBITDA of $82 4 million in the fourth quarter.

Speaker 2: Last year, we reported $267.7 million of revenue and adjusted EBITDA of $82.4 million in the fourth quarter of fiscal 2020.

2022.

Speaker 2: Fourth quarter last year, out of period service revenue in the 53rd week and related calendar shifts totaled

Fourth quarter last year out of period service revenue and the 50, <unk> week and related calendar shifts totaled $29 7 million.

Speaker 2: excluding these impacts, total bowling center revenue was plus 2.4 percent year over year.

Excluding these impacts total bowling center revenue was plus two 4% year over year.

Service revenue of pass through to employees that were required to book as revenue was 21.0 million in FY2023.

Speaker 2: Service revenue, a pass-through to employees that we required to book as revenue, was $21.0 million in FY20.

You should expect that to be low few million dollars in FY 'twenty four.

Speaker 2: You should expect that to be low few millions in FYI.

Speaker 2: Additionally, in the quarter we took 2 million of revenue charges that flowed to the bottom line for out of period.

Additionally, in the quarter, we took $2 million of revenue charges that flowed to the bottom line for out of period adjustment.

Bobby Lavin: I would now like to turn the call over to Bobby Lavin to review our financial results for the quarter and year and offer financial guidance for the upcoming fiscal year. Bobby, thank you Tom. Happy to be here. In the fourth quarter, we generated total revenue of 239.4 million and adjusted EBITDA to 64.5 million, reflecting a 26.9% EBITDA margin. Last year, we reported 267.7 million of revenue and adjusted EBITDA 82.4 million in the fourth quarter of fiscal 2022.

On a fiscal year basis revenue was $1 6 billion and adjusted EBITDA reached $354 million 30.

Speaker 2: On a fiscal year basis, revenue was $1.06 billion and adjusted EBITDA reached $354 million at a 33.5% margin. Same store revenue grew 12.8% supported by record.

<unk> 33, 5% margin.

Same store revenue grew 12, 8% supported by record seasonally significant second and third quarters.

Speaker 2: relative to the prior total revenue grew 147 million or 16.1.

Let's move to the prior year total revenue grew $147 million or 16, 1%.

Speaker 2: At the center level, in the most recent quarter, we saw growth in events and leagues and tournaments, offset by declining walks.

At the center level and the most recent quarter, we saw growth in events and leagues and tournament offset by a decline in walk in retail.

Speaker 2: In the fourth quarter, we also raised standard level wages to invest in our people to raise the bar of talent and retain our associates.

In the fourth quarter. We also raised the entry level wages to invest in our people to raise the bar on talent and retain our associates.

Bobby Lavin: Fourth quarter last year, out of period service revenue in the 53rd week in related counterships, totaled 29.7 million. Excluding these impacts, total bowling center revenue was plus 2.4% year over year. Service revenue, a pass through to employees that we required to book as revenue, was 21.0 million in FY23. We should expect that to be low few millions in FY24. Additionally, in the quarter, we took 2 million of revenue charges that flowed to the bottom line for out of period adjustment.

Speaker 2: is proving effective, and better talent means better consumer experiences and enhanced sales culture and environment.

Is proving effective and better talent and better consumer experiences and enhanced sales culture environment.

Speaker 2: This costs us $2 to $3 million of incremental wages in the quarter. There will be a $10 million headwind at centers in FY24.

It cost us $2 million to $3 million of incremental wages in the quarter will be a $10 million headwind at centers in FY 'twenty four.

Speaker 2: We will offset these with cost saves at corporate and removing some post-COVID excesses at the

We'll offset these with cost saves at corporate and removing some post COVID-19 exercises at the centers.

Speaker 2: In general, we continue to generate industry-leading margins and unmatched free cash flow conversion at 85%.

In general we continue to generate industry, leading margins and unmatched free cash flow conversion at 85%.

For the fiscal year, we generated $196 million of cash flow available for reinvestment in growth and maintenance Capex is elevated from Covid deferrals.

Speaker 2: For the fiscal year, we generate $196 million of cash flow available for reinvestment and growth as maintenance CapEx is elevated from COVID to furrow.

Bobby Lavin: On a fiscal year basis, revenue was 1.06 billion and adjusted EBITDA reached 354 million at a 33.5% margin. Same-store revenue grew 12.8% for the by record seasonally significant second and third quarters, relative to the prior total revenue grew 147 million or 16.1%. At the center level, in the most recent quarter, we saw growth in events and leagues in tournaments offset by the crime and walk-in retail. In the fourth quarter, we also raised center level wages to invest in our people to raise the bar of talent and retain our associates.

Speaker 2: The company finished the quarter with robust liquidity underpinned by over $195 million in cash on the balance sheet and roughly $225 million of undrawn capacity on a revolver.

The company finished the quarter with robust liquidity underpinned by over $195 million in cash on the balance sheet and roughly 225 million of undrawn capacity on our revolver.

We continue to evaluate lower cost funding sources, including looking at our unencumbered real estate.

Speaker 2: We continue to evaluate lower cost funding sources, including looking at our unencumbered real.

Our unique model of cash flow and a 7% to 8% cost of capital versus a long runway of 20% plus returns underpins the quality of our story and long term trajectory of the business.

Speaker 2: our unique model of cash flow in a seven to 8% cost of capital versus a long runway of 20% plus

Bobby Lavin: It is proving effective and better talent in better consumer experiences than enhanced sales culture and bars. This costs us 2 to 3 million of the incremental wages in the quarter will be a $10 million headwind at centers in FY24. We will offset these with cost saves at corporate and removing some post-COVID excesses at the centers. In general, we continue to generate industry leading margins in unmatched free cash flow conversion at 85%.

Speaker 2: underpins the quality of our story and long-term trajectory of the business.

Looking ahead in terms of fiscal year 'twenty 'twenty four we expect total revenue to be up 10%, 15%, excluding the $21 million of service fee, which equates to $1. One four to $1 one 9 billion of revenue.

Speaker 2: Looking ahead, in terms of fiscal year 2024, we expect total revenue to be up 10 to 15%, excluding the $21 million services.

Speaker 2: equates to 1.14 to 1.19 billion in revenue.

Speaker 2: Game store revenue growth will be flattish as we come through plus 32% comp from FY 19 and plus 12.8% from FY 22.

<unk> store revenue growth will be flattish as we've come through plus 32% comp from FY 19.

Plus 12, 8% from FY 'twenty two.

Speaker 2: We expect same sort of performance to improve over the course of the year. It's a one Q2 4 comp tracking downside percent. And in the quarter total rev reported revenue flat year over year as we reactivate to non peak time promotions.

We expect same store performance to improve over the course of the year with a <unk> 24 comp tracking down 5%.

Bobby Lavin: For the fiscal year, we generate $196 million of cash flow available for reinvesting and growth as maintenance capex is elevated from COVID deferrals. The company finished the quarter with robust liquidity underpinned by over $195 million in cash on the balance sheet and roughly $225 million of undrawn capacity on a revolver. We continue to evaluate lower cost funding sources, including looking at our unencumbered real estate. Our unique model of cash flow and a 78% cost of capital versus a long run rate of 20% plus returns underpinned the quality of our story in long-term trajectory of the business.

And in the quarter total reported revenue flat year over year as we reactivate the nonpeak time promotions that Tom mentioned.

Note that promotions are very important to the summer months, but less material to our second quarter third quarter, but it did impact late July August more than we expected and we are addressing it.

Speaker 2: Note that promotions are very important to the summer months, but less material to our second quarter, third quarter. But it did impact late July , August more than we expected and we are addressing.

We expect adjusted EBITDA margin to be 32% to 34% in FY 'twenty four.

Speaker 2: We expect adjusted EBITDA margins to be 32 to 34% in FY20.

Speaker 2: We have a multi-pronged reinvestment strategy with a long runway of opportunities to deploy capital, all of which have strong track records of producing 20% plus unlevered returns.

We have a multi pronged reinvestment strategy with a long runway of opportunity to deploy capital all of which have strong track record of producing 20% plus unlevered returns.

And the next year, we anticipate allocating at least $150 million to M&A in.

Speaker 2: In the next year, we anticipate allocating at least $160 million to M&A.

Bobby Lavin: Looking ahead, in terms of fiscal year 2024, we expect total revenue to be up 10 to 15%, excluding the $21 million service fee, which equates to 1.14 to 1.19 billion of revenue. Same-store revenue growth will be flatish as we come through plus 32% come from FY19 and plus 12.8% from FY22. We expect same-store performance that improve over the course of the year. It's a 1.224 comp tracking downside percent and in the quarter total revenue flat year-over-year as we reactivate the non-peak time promotion that Tom mentioned.

Speaker 2: in addition to $40 million for new builds and more than $75 million for converters.

In addition to $40 million for Newbuild and more than 75 million for conversions for.

For those newer to the story conversion is a multi phase project that transforms the center to an upscale experiential locations.

Speaker 2: For those newer to the story, Inversion is a multi-phase project that transforms the center to an upscale, experiential location.

Speaker 2: We are also evaluating leaning into the lucky strike brand.

We are also evaluating reading into it lucky strike brand more to come.

Speaker 2: Since our third quarter 23 earnings call on May 16th, we have repurchased $127 million of shares, retiring approximately 11 million shares. We reduced fully diluted share count.

Since our third quarter 23 earnings call on May 16, we have repurchased $127 million of shares retiring approximately 11 million shares.

Reduced fully diluted share count by 9% over the past year.

Speaker 2: In continued support of this reinvestment strategy, on September 6, 2023, the company's board of directors authorized an increase in our share of buyback to $200 million.

And continued support of this reinvestment strategy.

Timber six 2023, the company's board of directors authorized an increase in our share buyback $200 million we.

Bobby Lavin: Note that promotions are very important to the summer month, less material to our second quarter third quarter, but it did impact late July, August, more than we expected and we are addressing it. We expect adjusted EBITDA margin to be 32 to 34% and FY24. We have a multi-pronged green investment strategy with a long run way of opportunity to deploy capital, all of which have strong track records of producing 20% plus on leverage returns.

Speaker 2: We continue to evaluate driving shareholder returns through capital returns, particularly at the share.

We continue to evaluate driving shareholder returns through capital returns, particularly at these share price levels.

In closing we have several exciting initiatives underway and are continuing to evolve and innovate.

Speaker 2: In closing, we have several exciting initiatives underway and are continuing to evolve.

Speaker 2: Nevertheless, we continue to believe in our fundamental offering in ABC, or Acquisition, New Build, and Conversion strategy, as part of our operating ethos. As Tom highlighted, we remain enthusiastic about our long-term growth trajectory. Thank you for your time.

We continue to believe in our fundamental offering an ADC or acquisition Newbuild and conversion strategy as part of our operating ethos.

Bobby Lavin: In the next year, we anticipate allocating at least 160 million to M&A in addition to 40 million from new build and more than 75 million for conversions. For those newer to the story, conversion is a multi-fade project that transforms the center to an upscale experiential location. We are also evaluating leaning into the lucky strike band more to come. Since our third quarter 23 earnings call on May 16, we have repurchased $127 million of shares, retiring, proxying 11 million shares. We reduced fully deluded share account by 9% over the past year and continued support of this reinvesting strategy. On September we continue to evaluate driving shareholder returns through capital returns, particularly at the share price levels.

As Tom highlighted we remain enthusiastic about our long term growth trajectory.

Thank you for your time, and we look forward to seeing you on the road in coming months.

We will now open it up to Q&A operator.

Speaker 1: Thank you. We will now be conducting a question and answer session. We ask that all callers limit themselves to one question and one follow-up. If you have additional questions, you may re-queue and those questions will be addressed time permitting.

Thank you we will now be conducting a question and answer session. We ask that all callers limit themselves to one question and one follow up if you have additional questions you may re queue and those questions will be addressed time permitting.

Speaker 1: If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question.

I would like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue.

You May press Star two if you would like to remove your question from the queue.

Speaker 1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Thank you. Our first question comes from the line of Matthew Boss with Jpmorgan. Please proceed with your question.

Speaker 1: Thank you. Our first question comes from the line of Matthew Boss with J.P. Morgan. Please proceed with your question.

Bobby Lavin: In closing, we have several exciting initiatives underway and are continuing to evolve and innovate. Nevertheless, we continue to believe in our fundamental offering in ABC or acquisition, new build, and conversion strategy as part of our operating ethos. As Tom highlighted, we remain enthusiastic about our long-term growth trajectory. Thank you for your time and we look forward to seeing you on the road in coming months.

Great. Thanks, Tom.

Speaker 3: Great, thanks. So, Tom, maybe could you speak to the progression of demand and traffic trends since April ? Maybe elaborate on what you've seen across group events segments relative to walk-in retail. And then just as we think about your FY24 comp outlook, what have you baked in for conversions relative to pricing as well as traffic improvement of the year?

Maybe could you speak to the progression of demand and traffic trends since April maybe elaborate on what you've seen across group events segment relative to work in retail and then just as we think about your FY 'twenty four comp outlook, what have you baked in for conversions relative to pricing.

Operator: Q&A.

As well as traffic improvement as the year progresses.

Operator: Operator? Thank you.

Operator: We will now be conducting a question and answer session. We asked that all callers limit themselves to one question and one follow-up. If you have additional questions, you may recue and those questions will be addressed time permitting. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your lines from the question Q. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your hands up before pressing the star keys. One moment, please, while we pull for questions. Thank you.

Hey, Matt. Thanks for the question, let me turn this over to Bob because he is able to give a more detailed answer.

Speaker 3: Hey Matt, thanks for the question. Let me turn this over to Bobby because he's able to give a more detailed answer.

Speaker 2: Hey Matt, so from a in one in 4Q.

Hey, Matt.

So from a and one in <unk>.

Speaker 2: April was was weak, but traffic picked back up in June . July started strong and as we kind of got into the doldrums of summer, the pullback on promotional activity actually hit our traffic.

April was weak, but traffic picked back up in June .

July started.

And as we kind of got into the doldrums of summer.

The pullback on promotional activity actually hit our traffic.

Speaker 2: sort of I would say low mid single digits. If you think about promotions, the heavy...

I would say low mid single digit.

If you think about promotion.

The heavy promotion all you can.

Matthew Boss: Our first question comes from a line of Matthew Boss with JP Morgan. Please proceed with your questions. Great, thanks.

Speaker 2: right, that happens during the week is kind of 10 to 15% of our revenue, but it's higher in the summer months. And we just turn those off. And so those businesses are down significantly. We've turned them back on this.

That happens during the week is kind of 10% to 15% of our revenue, but it's higher in the summer months and we can turn those off.

Thomas Shannon: So, Tom, maybe could you speak to the progression of demand and traffic trends since April? Maybe elaborate on what you've seen across group event segment relative to walk-in retail. And then just as we think about your FY24 comp outlook, what have you baked in for conversions, relative to pricing as well as traffic improvement as the year progresses? Hey Matt, thanks for the question. Let me turn this over to Bob because he's able to give a more detailed answer.

So those businesses are down significantly we've turned them back on this week.

We do expect sort of the comp in the first quarter to be about minus 5%, which is down retail up event.

Speaker 2: So we do expect sort of the comp in the first quarter to be about minus 5%, which is down retail up event. But we expect that to flatten out in second quarter, third quarter, and then be up in the fourth quarter.

We expect that to flatten out in second quarter third quarter, and then be off in the fourth quarter.

From a pricing perspective, I think the special is proving to take price, it's effectively a silent price increase it's a bundle it delivers the consumer value. So we are getting some price.

Speaker 2: From a pricing perspective, I think the special is proving to take price. It's effectively a silent price increase. It's a bundle, it delivers the consumer value. So we are getting some price, but ultimately, the days of mid to high single digit price increases are behind us. So our focus right now is flattening out traffic and having a strong event order in the second and third quarter.

Thomas Shannon: Hey Matt. So, in four queue, April was weak, the traffic picked back up in June. July started strong and as we kind of got into the dull drums of summer, the pullback on promotional activity actually hit our traffic, you know, sort of I would say low mid single digits. If you think about promotion, the heavy promotion stuff, all you can write that happens during the week is kind of 10 to 15% revenue, but it's higher in the summer month and we just turn those off.

But ultimately the days of mid to high single digit price increases are behind us. So our focus right now is flattening out traffic and having a strong event.

And the second and third quarter.

Great and then maybe just as a follow up Bobby.

Speaker 3: Great. And then maybe just as a follow-up, Bobby, so you characterized in the release FY24 as an investment year. So is there a way to elaborate on investments that you think are needed across the P&L? If there's anything in labor, staffing, relative to food and beverage costs?

You characterized it in the release FY 'twenty four as an investment year.

They're a way to elaborate on investments that you think are needed across the P&L, if theres anything in labor staffing relative to food and beverage costs.

Speaker 3: And then maybe the other side of it is obviously the acquisition, so the 160 million guidance for acquisition. If you could just parse out expectations for new center growth and your visibility to the unit pipeline over the next 12 months.

And then maybe the other side of it is obviously the acquisition so the $160 million guidance for acquisition. If you could just parse out expectations for New center growth and your visibility to the unit pipeline over the next 12 months.

Thomas Shannon: And so those businesses are down significantly. We've turned them back on this week. So, you know, we do expect sort of the comp in the first quarter to be about minus 5%, which is down retail up event, but we expect that to flatten out in second quarter, third quarter and then be off in the fourth quarter. From a pricing perspective, you know, I think the special is proving to take price. It's effectively a styling price increase.

Yes, so from an investment year at the capital investment here.

Speaker 2: Yeah, so from an investment year, it's a capital investment year. You know, we did put 10 million into employees, but we'll offset that with cost savings. So this is really more on the balance sheet side. You know, in FY23.

We did put $10 million and to employees, but we'll offset that with cost savings. So this is really more on the balance sheet side.

In FY2023.

$63 million in conversions, we're going to spend 75, plus in FY 'twenty four.

Thomas Shannon: It's a bundle. It delivers the consumer values. We are getting some price, but ultimately, you know, it's the days of mid-high single digit price increases are behind us. So, it's, you know, our focus right now is flattening out traffic and having a strong event quarter in the second and third quarter. Great.

Speaker 2: $63 million on conversions, we're going to spend 75 plus in FY24. From an M&A perspective, we have line of sight of at least 160 million of M&A, we could do more. So that's sort of the focus for us from an investment perspective. We're really focused on driving profitability and the incremental margin. So it's not expense investment, it's capital investments. So that's what we're doing.

M&A perspective, we have line of sight of at least $160 million of M&A, we could do more.

So that's sort of the focus for us.

That's been perspective, we're really focused on driving profitability and the incremental margin. So it is not expense investment its capital investments.

Bobby Lavin: And then maybe just as a follow up, Bobby.

Bobby Lavin: So, you characterize in the release FY24 as an investment year. So, is there a way to elaborate on investments that you think are needed across the PNL? There's anything in labor, staffing, relative to food and beverage costs. And then maybe the other side of it all is obviously the acquisition. So, the 160 million guidance for acquisition, if you could just parse out expectations for new center growth and your visibility to the unit pipelines over the next 12 months. Yeah.

Great clarification best of luck.

Thanks.

Our next question comes from the line of Steve <unk> with Stifel. Please proceed with your question.

Speaker 1: Our next question comes from a line of Steve Wisinski with Steve-O. Please proceed with your question.

Speaker 4: Hey guys, good morning. Tom, in the past, you guys have talked about that low to mid single-digit, same store sales growth. Analog seems pretty fair in a normalized.

Yeah, Hey, guys good morning.

So Tom in the past you guys have talked about kind of that low to mid single digit same store sales growth analog seems pretty fair in a normalized.

Speaker 4: operating environment, and you kind of laid that out on slide five in your deck this morning. But as you guys think about reinvesting so aggressively in the business this year, and as we kind of move forward, how would you think about that same metric, that same store sales growth metric, as we look more out into 25 and beyond?

Operating environment like you kind of laid that out on slide five in your deck this morning, but.

Bobby Lavin: So, from an investment year, it's a capital investment year. You know, we did put 10 million into employees. We'll offset that with cost savings. So, this is really more on the balance sheet side. You know, in FY23. 333 million on conversions. We're going to spend 75 plus in FY 24. From an M&A perspective, we have line of sight of at least 160 million of M&A. We could do more. So that's sort of the focus for us from an investment perspective. We're really focused on driving profitability in the incremental margin, so it's not expense investment, it's capital investments.

As you guys think about reinvesting so aggressively in the business this year and as we kind of move forward.

Matthew Boss: Great clarification. Best of luck. Thanks.

How would you think about that same metric that same store sales growth metric as we look more out into 'twenty five and beyond.

Well look as we said the reinvestment is really investment in growth right. So.

Speaker 5: Well, look, as we said, the reinvestment is really investment in growth, right? So the centers are operating very well. And we've taken incremental labor spend that was really the point of that was to get

But the centers are operating very well and we've taken.

Incremental labor spend that was really.

Got it.

Pointed that was to get a better candidate for.

Work and to retain our best talent and it's worked.

Speaker 5: work and to retain our best talent and it's worked tremendously. We've really seen a slow down and turnover and so mission accomplished there. With regard to sort of the forward outlook, let me turn it over to Bobby to go into greater detail there. Yeah, if you think about our comp, it's really two parts. Part.

Steve Weissinski: Our next question comes from a line of Steve Weissinski with Steve Bowle. Please receive it with your question. Yeah, hey guys, good morning. So Tom in the past, you guys have talked about kind of that low to mid single digit, same-store sales growth. You know, analog seems pretty fair in a normalized operating environment. And you know, you kind of laid that out on slide five in your deck this morning.

Tremendously, we've really seen a slowdown in turnover and so mission accomplished there with regard to sort of a forward outlook, let me turn it over to Bobby to go into greater detail. There. If you think about our comp its really two parts. It's price and then it sort of a step up that happens from conversions.

Speaker 2: And then it's sort of a step up that happens from conversions. So if we spend seventy five million on conversions, we should get twenty five plus million that goes to the top line and flows heavily to the bottom line. And that's right.

$75 million on conversions, we should get.

Thomas Shannon: But you know, as you guys think about reinvesting so aggressively in the business this year, and as we kind of move forward, how would you think about that same metric, that same-store sales growth metric, as we look more out into 25 and beyond? Well, look, as we said, the reinvestment is really investment in growth. Right? So the centers are operating very well. And we've taken incremental labor spend that was really the point of that was to get a better candidate work and to retain our best talent, and it's worked tremendously. We've really seen the slowdown and turnover and submission accomplished there with regard to sort of the forward outlook.

Five plus million dollars that goes to the top line and close heavily to the bottom line.

That drive to come there.

Speaker 2: The special, which we've shown works, is really focusing on ARPU, ARPIC, whatever metrics you want to use, because we just want to get more money from the consumer, right? And so the better selling we do, the better kitchen, the more attachment we're going to get to bowling. So ultimately, long term, we are at a mid single digit comp, right? But it's not necessarily based on volume, it's really price, attachment, and increasing the consumer experience.

Special which we've shown works is really focusing on an <unk> whatever metric you want to use because we just want to get more money from the consumer and so the better selling we do the better kitchens more attachment, we're going to get to Boeing.

Ultimately long term, we are at a mid single digit comp right, but it's not necessarily based on volume, it's really price attachment and increasing the consumer experience.

Speaker 4: Okay, gotcha. Thanks for that. And then and then Tom or Bobby or both of you guys, you know, both both of you guys in your prepared remarks, you know, made some type of comment towards your your excess land and how you potentially plan to use that excess land moving forward. So, you know, to us, that sounds like you're you're probably a good bit a long way down that road in terms of, you know, doing something a little bit more robust with your real estate holding. So just, you know, just wondering, you know, what you guys can say, maybe a little bit more around, you know, around those comments.

Okay got you thanks for that and then Tom or Bobby or both of you guys. Both both of you guys in your prepared remarks.

Beat some type of comment towards your excess land and how you potentially plan to use that excess land moving forward.

Bobby Lavin: Let me turn it over to Bobby to go into greater detail there. Yeah, if you think about our comp, it's really two parts. It's bright, and then it's sort of a step up that happens from conversions. So if we spend 75 million conversions, we should get 25 plus millions that goes to the top line and close heavily to the bottom line. And that drives the comp. The special, which we've shown work, is really focusing on our pick, whatever metrics you want to use, which is we just want to get more money from the consumer.

It sounds like Youre, probably a good bit of long way down that road in terms of.

Something a little bit more robust with your real estate holdings. So just I was just wondering what you guys can say, maybe a little bit more around around those comments.

Yes, we have 43 unencumbered properties and we're actually bringing two more in with recent announced acquisition. So we're always going to look at opportunities too.

Speaker 2: Yeah, we have 43 unencumbered properties and we're actually bringing two more in with recent announced acquisition. So we're always going to look at opportunities to

Speaker 2: Look for lower cost funding sources like right now. You know, we can hit sort of the debt market for 8, 8 and a half percent, but if we can get something below that, we will.

Look for lower cost funding sources like right now.

Can hit sort of the debt markets for 885%, but if we can get something below that we will.

Bobby Lavin: And so the better selling we do, the better kitchen, the more attachment we're going to get to bowling. So ultimately, long term, we are at a mid single digit comp, right? But it's not necessarily based on volume. It's really price, attachment, and increasing the consumer experience.

Okay got it thanks, guys appreciate it.

Steve Weissinski: Okay, gotcha. Thanks for that.

Our next question comes from the line of Derek Glynn Greenblatt with Jefferies. Please proceed with your question.

Speaker 1: Our next question comes from a line of Garrett Greenblatt with Jefferies. Please proceed with your questions.

Speaker 6: Thanks for taking my question today. I was wondering if you could just follow up on the acquisition stuff. How do you think about the health of the acquisition pipeline in the current environment given interest rates and all that? Mike

Hi, Thanks for taking my question to that.

I was wondering if you just follow up on the acquisition stuff.

Thomas Shannon: And then Tom or Bobby are both of you guys, both of you guys in your prepared remarks, made some type of comment towards your excess land and how you potentially plan to use that excess land moving forward to us. That sounds like you're probably a good bit, a long way down that road in terms of, you know, doing something a little bit more robust with your real estate holding.

How are you thinking about the health of the acquisition pipeline and the current environment.

Given interest rates and all that.

Well I'd say, it's never been better.

Speaker 5: You know, this month we closed Mavericks and Octane, which is a marquee property, the best property in Phoenix by far.

This month.

We closed Mavericks and octane, which is marquee property the best property in Phoenix by far.

Speaker 5: That co-located business was doing almost $20 million of revenue when we bought it. We're acquiring Lucky Strike. Plan closing date is one week from today, another $80 million. And then we've announced two in Michigan that should close over the next month or two. And then there's

That that co located business was doing almost $20 million of revenue when we bought it and where.

Steve Weissinski: And so just, you know, just wondering, you know, what you guys can say, you know, maybe a little bit more around, you know, around those comments. Yeah, we have 43 unencumbered properties, and we're actually bringing two more in with recent announced acquisition. So we're always going to look at opportunities to, and, you know, look for lower-cost funding sources. Like, right now, you know, we can hit sort of the debt markets for eight and a half percent, but if we can get something below that, we will. Okay, Gotcha. Thanks guys. Appreciate it.

We're acquiring lucky strike playing closing date is one week from today, another $80 million and then we've announced two in Michigan.

That should close over the next month or two and then there is.

A dozen in the pipeline well, let's say, 15% to 20 more in the pipeline behind that that could close this fiscal year as I mentioned seven leases signed four of those under construction now probably another.

Speaker 5: a dozen in the pipeline, well, let's say 15 to 20 more in the pipeline behind that that could close this fiscal year. As I mentioned, seven leases signed, four of those under construction now, probably another.

Garrett Greenblatt: Our next question comes from line of Garrett Greenblatt with Jeffries. Please proceed with your question. All right. Thanks for raising my question to that. I was wondering if you just follow up on the acquisition stuff. How do you think about the health of the acquisition pipeline in the current environment? Given interest rates and all that?

6% to seven in various stages of negotiation. So it's it's extremely <unk>.

Speaker 5: six to seven in various stages of negotiation. So it's extremely healthy and robust pipeline, one of the best we've ever seen.

<unk> robust pipeline one of the best we've ever seen.

Great and I Wonder if you could just give me color on.

Speaker 6: Great, and I wonder if you could just give me a call around the engagement you're seeing with Bolero. Sorry about Money Bowl.

Engagement youre seeing with Valero.

I started out money ball.

Thomas Shannon: Well, I'd say it's never been better. You know, this month, we closed Maverick's Noctain, which is a marquee property, the best property in Phoenix by far. That co-located business was doing them with $20 million of revenue when we bought it. And we're acquiring Lucky Strike, playing closing date is one week from today, another $80 million. And then we've announced two in Michigan that should close over the next month or two. And then there's a dozen in the pipeline.

I mean money ball.

Speaker 2: is in 64 centers, we're pushing on it still in those centers. We are implementing a customer acquisition tool in MoneyBowl. And so we wanna see, can we go effectively spend 15, 20 bucks to bring people into the center? And so I think that's sort of the next evolution. Here at the same time, we are updating our website. So in early 24, we'll have a new website that integrates in with MoneyBowl. And that's gonna be very exciting to generate incremental demand from the consumer.

Isn't it 64 centers were pushing on it still in those centers, we are implementing a customer acquisition tool in <unk> and so we want to see can we go effectively spend 15 to 20 Bucks to bring people in the center and so I think that's sort of the next evolution here at the same time, we are we are.

<unk> our website. So in early 'twenty four we will have a new website that integrates in with money Bowl and thats going to be very exciting to generate incremental demand from the consumer.

Thomas Shannon: Well, let's say 15 to 20 more in the pipeline behind that that could close this fiscal year. As I mentioned, seven leases signed four of those under construction now, probably another six to seven in various stages of negotiation.

Great. Thank you.

Yeah.

Our next question comes from the line of Ian Zaffino with Oppenheimer. Please proceed with your question Hi, great. Thank you very much.

Speaker 1: Our next question comes from the line of Ian Cifino with Oppenheimer. Please proceed with your question.

Speaker 7: Hi, Groot. Thank you very much. Hey, Bobby, can you maybe give us a bridge on EBITDA, how you're getting from 23 to 24 guidance? I don't know if you could do the best you can as far as bucketing it between what you think you might get from M&A or conversions or organic, and then I know there's some investment you want to make. So that'd be an offset. But I don't need to have exact numbers, but by just directing.

Hey, Bobby can you maybe give us a bridge on EBITDA, how are you getting from 'twenty three to 'twenty for guidance.

Thomas Shannon: So it's extremely healthy and robust pipeline, one of the best we've ever seen.

I don't know if you could do the best you can as far as bucket. It between you know when do you think you might get from M&A or conversions or organic and then I know, there's some investment you wanted to make so that being offset.

Thomas Shannon: And what if you just just call it on the engagement you're seeing with Valera? I'm sorry, Money Bowl. Yeah, I mean, Money Bowl is in 64 centers. We're pushing on it still in those centers. We are implementing a customer acquisition tool in Money Bowl. And so we want to see, can we go effectively spend 15, 20 bucks to bring people in in the center? And so I think that's sort of the next evolution.

Hum.

Exact numbers, but just directionally can you help us out.

Yes, so I mean.

Speaker 2: Yeah, so I mean this year we did 355 million of EBITDA, right? And next year we're...

Year, we did $355 million.

EBITDA right and next year.

Speaker 2: 15% revenue growth and that flows through at 30, 35% margin. I mean, it's a little bit more complicated than that. Like M&A, you've got Lucky Strike, you've got Maverick, Octane, both of those are going to be a big part of it. And ultimately, though, the flow through game is pretty straightforward for us.

10% revenue growth and that flows through at.

Thomas Shannon: You know, at the same time, we are updating our website. So in early 24, we'll have a new website that integration with Money Bowl. And that's going to be very exciting to generate incremental demand from the consumer.

30%, 35% margin.

Garrett Greenblatt: Great.

Little bit more complicated than that like M&A, you've got Lucky strike you got Maverick octane both of those are going to be big part of it.

Ian Zaffino: Thank you.

And ultimately though it.

The flow through game, it's pretty straightforward for us.

Speaker 2: You know, from an organic basis, we are saying that we think our centers, the core centers will be flat. But then we'll have to figure out how we're going to do that.

From an organic basis, we are saying that we think our centers the core centers will be flat.

Bobby Lavin: Our next question comes from line of Ian Saphino with Oppenheimer, please repeat your question. Hi, Greg. Thank you very much. Bobby, can you maybe give us a bridge on EBITDA, how you're getting from 23 to 24 guidance? You know, I don't know if you could do the best you can as far as bucketing it between what you think you might get from M&A or conversions or organic. And then I know there's some investment you want to make.

But then we will have.

Significant growth from M&A and the acquired centers that we acquired throughout the year of FY2023.

Speaker 2: significant growth from M&A and the acquired centers that we acquired throughout the year of FY23.

Speaker 7: Okay, perfect. Thank you very much. And then if I could squeeze in maybe one more. On the M&A, how are we thinking about M&A going forward? Is it going to be pure bowling? Are you going to be looking for other opportunities? Maybe give us a holistic description of what you guys are doing. And if I could sneak in, Bobby, cash interest, what should we expect for next year? Thanks.

Okay perfect. Thank you very much and then if.

If I can squeeze in maybe one more on the M&A how are we thinking about M&A going forward.

Bobby Lavin: So that being offset, I don't need to have exact numbers, but I just directly can help us out. Thanks. Yeah, so I mean this year we did 355 million of EBITDA, right? And next year we're we're 10% revenue growth. And that flows through at, you know, at 30, 35% margin. I mean, it's a little bit more complicated than that. Like M&A, you've got lucky strike, you've got Navarit, Octane, both of those are going to be big part of it.

Is it going to be pure bowling or are you going to be looking for other opportunities maybe kind of give us a holistic sort of.

A description of like what you guys are doing and if I could sneak in just Bobby cash interests, what should we expect for next year. Thanks.

I'll take the M&A part.

There are probably five to 700 viable acquisition candidates in the U S.

Speaker 5: There are probably five to 700 viable acquisition candidates in the US and...

Yeah.

To build opportunities on the Boeing front so we.

Speaker 5: to build opportunities on the bowling front. So we don't have any current plans to expand beyond bowling. People made a big deal out of the Octane acquisition in Scottsdale. Octane and Mavericks were co-located. It was one business.

Bobby Lavin: And ultimately, so it's, you know, the flow through gain is pretty straightforward for us. You know, from an organic basis, we are saying that we think our centers, the core centers will be flat. But then we'll have, you know, significant growth from M&A and the acquired centers that we acquired throughout the year of FY23.

We don't have any current plans to expand beyond bowling people made a big deal out of the octane acquisition in Scottsdale Octane and Mavericks were co located it was one business.

Bobby Lavin: Okay, perfect. Thank you very much.

Speaker 5: in two buildings with a shared courtyard. So it wasn't like we were moving a whole hog into something new. Now, it may be that we learn things in the Octane acquisition that make us bullish on some product line extensions, but Boeing's a great business and...

In two buildings with a shared courtyard. So it wasn't like we were moving a whole hog into something new now it may be that we learn things in the octane acquisition that make us bullish on.

Thomas Shannon: And then if I could squeeze in maybe one more on the M&A, how are we thinking about M&A going forward? You know, is it going to be pure bowling? Are you going to be other opportunities? Maybe kind of give us a holistic sort of, you know, description of like what you guys are doing.

Some product line extensions, but Boeing is a great business and.

No.

The weakness that we've seen lately and our cost number.

Speaker 5: The weakness that we've seen lately in our comp number came in the slowest part of the year and was largely driven by experimentation. And frankly, I have no regrets that we did that because the things that we learned are gonna power the company for a very long time to come. Incremental spend from the special is very powerful. We now have food specials. We're actually selling our products for the first time in the company's history in a retail basis.

<unk> in the slowest part of the year and was largely driven by experimentation.

Bobby Lavin: And if I could sneak in just Bobby Cash interest, what should we expect for next year? Thanks.

And frankly I have no regrets that we did that because the things that we learned.

The power of the company for a very long time to come incremental spend from the special.

Thomas Shannon: I'll take the M&A part. I mean, there are probably five to 700 viable acquisition candidates in the U.S, and build opportunities on the bowling front. So we don't have any current plans to expand beyond bowling. People made a big deal out of the octane acquisition in Scottsdale. Octane and Mavericks were co-located. It was one business in two buildings with a shared courtyard. So it wasn't like we were moving a whole hog into something new.

It's very powerful we now have food specials were actually selling our products for the first time in the Companys history on a retail basis.

Speaker 5: As mentioned, the event business continues to be strong. That is, we think there might be as much as $100 million of upside in that business over the next couple of years. And we're going to add on order of $100 million.

As mentioned the event business continues to be strong.

That is that we think there might be as much as $100 million of upside in that business over the next couple of years and we're going to add on order.

$100 million to $110 million of revenue just from the stuff, that's announced and closing in very short order. So.

Speaker 5: 100 to $110 million of revenue just from the stuff that's announced and closing in very short order. So the bowling business is.

The bowling business is a very good.

Thomas Shannon: Now, it may be that we learned things in the octane acquisition that make us bullish on some product might extensions. But bowling is a great business. And, you know, the weakness that we've seen lately in our cost number came in the slowest part of the year and was largely driven by experimentation. And frankly, I have no regrets that we did that because the things that we learned are going to power the company for a very long time to come incremental spend from the special is very powerful.

Speaker 5: extremely profitable business that has proven to be much more resilient than our peers, certainly, over the last couple of months. We feel very.

Greenlee profitable business that has proven to be much more resilient than our peers certainly over the last couple of months and we feel very bullish so.

Speaker 5: We looked at every other business in the entertainment space. We've never found one that we liked from a margin perspective, from a return perspective, from a stability perspective.

We've looked at every other business in the entertainment space. We've never found one that we liked from a margin perspective from a return perspective from a stability perspective.

Speaker 5: That is a long way of saying we remain extremely bullish on Boeing with no plans to move beyond it.

And so that's a long way of saying we remain extremely bullish on Boeing with no plans to really move beyond it.

And interest expenses of 140.

Thomas Shannon: We now have food specials actually selling our products for the first time in the company's history on a retail basis. As mentioned, the event business continues to be strong. That is that, you know, we think there might be as much as $100 million of upside in that business over the next couple of years. And we're going to add on order of $100 to $110 million of revenue just from the stuff that's announced and closing in very short order.

Our next question comes from the line of Jason Tilton with Canaccord Genuity. Please proceed with your question.

Speaker 1: Our next question comes from the line of Jason Tilchin with Canaccord Genuity. Please proceed with your question.

Speaker 5: Great morning and thanks for taking the question. You talked a lot about a lot of the capital investments plan for fiscal 24. I'm just curious as you contemplate stimulating demand and getting traffic back in how you view the marketing budget. This year, and also how some of the recent digital strategies have impacted either demand or uptake of some of the additional bundled offerings over the past few months. Thanks.

Great. Good morning, and thanks for taking the question you talked a lot about a lot of the capital investments planned for fiscal 'twenty four I'm, just curious as you contemplate stimulating demand and getting traffic back and how you view the marketing budget. This year and also how some of the recent digital strategies that have impacted.

Thomas Shannon: So, you know, the bowling business is a very extremely profitable business that is proven to be much more resilient than our peers certainly over the last couple of months. And we feel very bullish. So we've looked at every other business in the entertainment space who've never found one that we liked from a margin perspective from a return perspective from a stability perspective. And so that's a long way of saying we remain extremely bullish on bowling with no plans to really move beyond it.

Their demand or uptake of some of the additional bundled offerings over the past few months. Thanks.

Yes, we've always viewed.

Speaker 2: Yeah, we've always viewed our business as very captive, walk-in. We are investing in the website and we are evaluating.

Our business is very captive walk in.

We are investing in the website and we are evaluating.

Speaker 2: a changing some center's name to Lucky Strike. So we'll probably invest a little bit more in marketing. We budgeted that. But I don't think you're going to see us go outright double, triple marketing. We've never seen the return. The website change is probably the only place that we could potentially ramp up dollars if customer acquisition is very profitable.

A changing some centers named Lucky strike.

But we'll probably invest a little bit more in marketing, we budgeted that but I don't think youre going to see US go outright double triple marketing like we just we've never seen the return.

The website changed its probably the only place that we could potentially ramp up dollars that customer acquisition as is.

Bobby Lavin: An interest expense is 140.

Jason Tilchen: Our next question comes from a line of Jason Tilton with can accord genuity. Please proceed with your question. Great morning and thanks for taking the question. You talked a lot about a lot of the capital investments plan for fiscal 24. I'm just curious as you contemplate stimulating demand and getting traffic back in, how you view the marketing budget this year, and also how some of the recent digital strategies have impacted either demand or uptake some of the additional fundable offerings over the past few months.

Very profitable.

Speaker 5: Great. That's helpful. I just want to follow up. Is there any color you can share on how demand trends and traffic trends varied in different regions across the country, both during Q4 and also in the period since then? Thank you.

Great. That's helpful and just one quick follow up is there any color you can share on how demand trends in traffic trends varied in different regions across the country. Both side during Q4 and also in the period. Since then thank you.

Yes, I would say probably the week it was in the Midwest, which was the Midwest. If you look at it is probably our highest promotional requirement.

Speaker 2: Yeah, I would say probably the weakest was in the Midwest, which was the Midwest, if you look at it, is probably our highest promotional requirement region. The Northeast was pretty strong. And so Northeast responds less to promotions, Central responds more to promotions. We did see a little bit of weakness from the heat.

Region, the northeast towards was pretty strong and so northeast responds to promotion central respond more to promotion, we did see a little bit of weakness from the heat and.

Jason Tilchen: Yes, we've always viewed our business as very captive walk-in. We are investing in the website and we are evaluating a changing some center's name to Lucky Strike, so we'll probably invest a little bit more in marketing. We've budgeted that, but I don't think we're going to see us go outright double triple marketing. We've never seen the return. The website change is probably the only place that we could potentially ramp up dollars if customer acquisition is very profitable.

Speaker 2: in the past few months. So heat is okay for our business, too much heat means people don't go outside. Really, the weakness in our business was mostly in central where there is just a heavy promotional environment.

In the past few months, so heated heat.

He did okay for our business too much heat mean people don't go outside really the weakness in our business was mostly in central where there is just a heavy promotional environment.

Great. Thank you very much.

Speaker 1: Our next question comes from the line of Daniel Moore with CJS Securities. Please proceed with your question.

Our next question comes from the line of Daniel Moore with CJS Securities. Please proceed with your question.

Thank you and thanks for all color most of mine have been answered, but maybe a little bit more detail on cadence as we think about fiscal 'twenty. Four Q1 guide very helpful. In terms of same store sales would you expect them to remain you know down slightly through Q2, and then perhaps an improvement as we looked at the back half of the year.

Speaker 8: Thank you. Thanks for all the color. Most of them might have been answered, but maybe a little bit more detail on cadence as we think about fiscal 24 Q1 guide, very helpful. In terms of same store sales, would you expect them to remain down slightly through Q2 and then perhaps an improvement as we look at the back half of the year getting to kind of flattish and similarly, you know, EBITDA margins on a year-over-year basis. Any color on cadence there would be a little bit more detailed.

Thomas Shannon: Great, that's how fine I just want to follow up. Is there any color you can share on how demand trends and traffic trends vary in different regions across the country, both during Q4 and also in Korea since then? Thank you. Yeah, I would say probably the weakest was in the Midwest, which was the Midwest, if you look at it, is probably our highest promotional requirement region. The Northeast was pretty strong, and so Northeast responds less to promotion, central, more to promotion.

We're getting to kind of flattish and similarly, EBITDA margins on a year over year basis.

Any color on the cadence there would be helpful. Thanks.

Speaker 2: Yeah, so minus five for first quarter should be flattish in the second and third quarter and then up in the fourth quarter. As it relates to EBITDA margins, the cadence from last year is the one I would follow. So it's obviously we have high incrementals, so we'll have much higher EBITDA margins in the second and third quarter than we do in the first and fourth quarter. We've given a range 32 to 34 and we feel good about that for now and going forward.

Yes.

Minus five for first quarter should be flattish in the second and third quarter and then up in the fourth quarter.

Thomas Shannon: We did see a little bit of weakness from the heat in the past few months, so heat is okay for our business too much heat, mean people don't go outside. Really, the weakness in our business was mostly in central where it's just a heavy promotional environment.

As it relates to EBITDA margin.

Cadence from last year is the one I would follow.

Obviously, we have high Incrementals and so we'll have a much higher EBITDA margins in the second and third quarter than we do in the first and the fourth quarter.

And it is.

Even a range 32 to 34 and that's we feel good about that.

Daniel Moore: Great, thank you very much.

For now and going forward.

Daniel Moore: Our next question comes from a line of Daniel Moore with CJS Securities. Please receive your question. Thanks, you, thanks for all color.

Very helpful. Thank you again.

Our next question comes from the line of Eric Wold with B Riley. Please. Please proceed with your question.

Speaker 1: Our next question comes from the line of Eric Wold with B Riley. Please, please proceed with your question.

Daniel Moore: Most might have been answered, but maybe a little bit more detail on cadence as we think about fiscal 24, Q1 guide, very helpful. In terms of same-store sales, it would do expect them to remain down slightly through Q2, and then perhaps an improvement as we look at the back half of the year, getting to kind of flatish, and similarly, you know, EBITDA margins on a year-over-year basis, any color on cadence there would be helpful, thanks.

Thanks.

Speaker 4: Thanks. Good morning. So you mentioned a couple times about digital rebranding of some centers as Lucky Strike and leading into that brand, I guess first off, you

So you mentioned a couple of times about.

Because you'll rebranding of some some centers as lucky strike and leading into that brand I guess first off.

Speaker 4: Remind us what the plans are for the existing Lucky Strike Center's new quad in terms of how much needs to change either structurally or operationally within those and then what makes that determination on whether a new builder existing center would be switched over to Lucky Strike and then what needs to happen if you do make that change in terms of you know within the center is it merely more by name and branding around it.

Remind us what the plans are for the existing Lucky strike's turns required in terms of how much needs to change either structurally operationally within those and then what makes that determination on whether a newbuild or existing center would be so.

Daniel Moore: Yeah, so, you know, minus five for first quarter should be flatish in the second, third quarter, and then up in the fourth quarter as it relates to EBITDA margin, like the cadence from last year is the one I would follow, so it's obviously we have high incremental, so we'll have much higher EBITDA margins in the second and third quarter than we will do in the first and fourth quarter. You know, and it's, you know, we've given a range 32 to 34, and that's, you know, we feel good about that, you know, for now and going forward.

Wished over to Lucky strike and then what needs to happen. If you do make that change in terms of within the center or is it really more of a name and branding around it.

Speaker 6: So the Lucky Trade portfolio is kind of unique in that they have, most of their centers are in really marquee locations. So LA Live, Hollywood, Bellevue, Washington, which is an important tech center right side of Seattle. Downtown Denver, downtown Chicago, downtown Boston, you know.

Yes.

So look you straight portfolio is kind of unique in that they have most of their centers are in really marquee location. So live Hollywood.

Daniel Moore: Very helpful, thank you again.

<unk>, Washington, which is <unk>.

<unk> Tech center routes out of Seattle downtown Denver Downtown Chicago Downtown Boston.

Downtown Philly so it's really a irreplaceable set of assets now Lucky strike has sort of been financially challenged for a long time. They haven't had the reinvestment capital. So a lot of the properties are very tired.

Speaker 4: downtown Philly. So it's really a irreplaceable set of assets. Now, Lucky Strike has sort of been financially challenged for a long time. They haven't had the reinvestment capital. So a lot of the properties are very tired. So we've got a significant capital budget that we've allocated to refreshing the properties, but they're in no way meaningfully impaired. They're just tired looking. So that's an easy fix.

Eric Wold: Our next question comes from line of Eric Wolve with B. Riley. Please, please review with your question. Thanks. Good morning. So, you mentioned a couple times about injury branding and some centers of lucky strike and leading into that branding.

So we've got a significant capital budget that we've allocated to refreshing the properties, but they are they are in no way.

Thomas Shannon: I guess, first off, it might as if the plans are for the existing lucky strike sounds you caught in terms of how much needs to change either structurally or operationally within those, and then you what makes that determination on whether a new building or existing center would be switched over to lucky strike, and then what needs to happen if you do make that change in within the center to really more of a name and branding around it. So the luxury trade portfolio is kind of unique in that they have most of their centers are in really marquee locations.

Meaning fully impaired they're just tired looking so that's an easy fix.

We have done.

Speaker 4: We've hired Nielsen to do a brand study and they came back and said that the Lucky Strike brand was meaningfully more powerful than Bolero.

We've hired.

Nielsen to do a brand study and they came back and said that the Lucky strike brand was meaningfully more powerful than bolero.

Speaker 4: And that was sort of our intuitive sense as well. And so we're going to open a couple of new centers under the lucky strike brand and sort of see how that goes. Now it's hard to tell, right? We have a new center.

And that was sort of our intuitive sense as well and so we're going to open a couple of new centers under the Lucky strike brand and sort of see how that goes out it's hard to tell right. When you have a new center.

Thomas Shannon: So L.A. Live, Pollywood, they're from Bellevue, Washington, which is the important, you know, tech center right side of Seattle, downtown Denver, downtown Chicago, downtown Boston, you know, downtown Philly, so it's really a irreplaceable set of assets. Now, Lucky Strike has sort of been financially challenged for a long time and they haven't had the re-investment capital, so a lot of the properties are very tired. So we've we've got a significant capital budget that we've allocated to refreshing the properties, but there there in no way, you know, meaningfully impaired, they're just tired looking, so that's an easy fix.

Speaker 4: did it do better as a Lucky Strike than it would have as a Bolero? But I think we'll at least have a strong intuitive sense after that, whether or not we got a lift. And if so, um, then I wouldn't rule out eventually rebranding all the Boleros as Lucky Strikes. Certainly all the new builds would come online as Lucky Strikes. I'm not.

Did it do better as a lucky strike then than it would've visit bolero, but I think.

Well at least have a strong intuitive sense after that whether or not we got a lift and if so.

Then I wouldn't rule out eventually rebranding all of the Polaris is lucky Strike's certainly all of the new builds would come online as Lucky Strike's I'm not.

Speaker 4: predicting it, but I'm saying we're certainly open to it. You know, I think everyone we've spoken to says, thinks that the Lecky Strike brand is better. That's our sense as well, and so we're happy to roll that out. hey guys

Predicting it but I am saying were certainly open to it.

Everyone we've spoken to.

Lucky strike brand is better.

Our sense as well so.

We're happy to roll that out.

Got you and then just a follow up question.

Yeah.

So on the Q3 call you noted.

Thomas Shannon: We've done, we've we've hired Nielsen to do a brand study and they came back and said that the Lucky Strike brand was meaningfully more powerful than Bolero, and that was sort of our intuitive sense as well. And so we're going to open a couple of new centers under the Lucky Strike brand and sort of see how that goes. Now it's hard to tell, right, we have a new center, did it do better as a Lucky Strike than it would have as a Bolero, but I think, you know, we'll at least have a strong intuitive sense after that whether or not we got a lift, and if so, then I wouldn't rule out eventually rebranding all the Bolero's as Lucky Strikes, certainly all the new builds would come online as Lucky Strikes.

Speaker 4: You know, some of the in lane ordering kiosk, maybe it's not going as well given the need for kind of training and staffing are going to train the staff around them any updates on how that's progressing. And if you've seen. Any improvements in engagement or or check size. With the centers you have focused there.

Some of the lane ordering kiosks, maybe not going as well given the need for kind of training and staffing.

Train the staff around them any updates on how that's progressing and if you've seen any improvement in engagement or check size.

With the centers you have focus there.

Okay.

Well I think thats part and parcel of what we've been talking about with creating the selling culture. So.

Speaker 4: Well, I think that's part and parcel of what we've been talking about with creating the selling culture. So, unrelated to kiosks specifically, but the fact that the people were not adequately using the kiosks because they weren't being taught and sold from the staff was basically the problem that we're addressing. And so we started out with the special. And it's important for, I think, listeners to understand just how successful the special has been.

Unrelated to kiosks, specifically, but but the fact that the people were not adequately using the kiosks because they werent being taught and sold from the staff, which basically was the problem that we're addressing and so we started out with a special and it's important for I think listeners to understand.

Thomas Shannon: I'm not predicting it, but I'm saying we're certainly open to it, you know, I think everyone we've spoken to says things that the Lucky Strike brand is better, that's our sense as well, and so we're happy to roll that out.

Just how successful the special has been so.

Speaker 4: So we started out with a very simple proposition, which was.

So we started out with a very simple proposition which was.

Speaker 4: Bull a third game because all of our data suggested that people bowled 1.8 1.9 games per visit. So pre-pay for a third game.

Paul a third game because all of our data suggested that people bold 1819 games per visit so prepay for a third game.

Eric Wold: Guys, I mean, the follow-up question, yeah.

Thomas Shannon: So on a Q3 call, you noted, you know, some of the inline ordering kiosk, maybe they're not going as well, given the need for kind of training and staffing, you know, are going to train the staff around them, any updates on how that's progressing and if you've seen any improvements in engagement or check size with the centers you have to focus there. Well, I think that's part and parcel of what we've been talking about with creating the selling culture. So unrelated to kiosk specifically, but the fact that the key people were not adequately using the kiosk because they weren't being taught and sold from the staff was basically was the problem that we're addressing.

And we will sell to you for $5 and we will give you a five dollar arcade code.

Speaker 4: and we'll sell it to you for $5 and we'll give you a $5 arcade card.

And.

Overtime.

Speaker 4: Over time, we've raised that $5 special in certain centers to $6 and even $7 because the man was so hot. Over hundreds and hundreds of thousands of transactions, the take rate on that has been north of 60%. On some days, it's even higher than 70%. So we've gone from a culture where there was no selling going on to a culture where there is selling and tremendously successful results.

Raised that $5 special in certain centers to six and even $7 because demand was so hot over hundreds and hundreds of thousands of transactions that take rate on that has been north of 60% on some days, it's even higher than 70%. So we've gone from a culture, where there was no.

Selling going onto a culture, where there is selling a tremendously successful result.

Speaker 4: Um, we broadened that to an arcade upsell called a power up and then.

We broadened that to an arcade up so called the power up and then three weeks ago, the Pizza and picture special which is actually two specials, a pizza with one topping at a picture of soda or a pizza with one topping a pitcher of beer.

Speaker 4: three weeks ago, the pizza and pitcher special, which is actually two specials. A pizza with one topping and a pitcher of soda or a pizza with one topping and a pitcher of beer.

Thomas Shannon: And so we started out with the special and it's important for I think listeners to understand just how successful the special has been. So we started out with a very simple proposition which was both a third game because it's all of our data suggested that people bold 1.8, 1.9 games per visit. So prepay for a third game and we'll sell to you for $5 and we'll give you $5 arcade code. And over time, we've raised that $5 special in certain centers to fix any been $7 because the man was so hot.

Speaker 4: And then in short order, there will be an upsell on the beer from domestic to imported premium.

And then in <unk>.

Short order it will be an upsell of the beer from.

Domestic to imported premium.

Speaker 4: In the first three weeks from a standing start, we did over a million dollars on pizza and pitcher in the slowest part of the year. So we've really gone from

In the first three weeks from a standing start we did over $1 million on pizza and picture in the slowest part of the year. So we've really gone from.

Speaker 4: the employees would literally process the request.

The employees would literally process the request.

Speaker 4: and they came in order takers. So now we have a fairly.

Came in order takers to now we have.

A fairly.

Speaker 4: wrong cultural basis on which we're building with a selling culture. And I think that long term that could have a, and will have a very meaningful impact on the business.shots fired

Strong cultural basis on which we're building with the selling culture and I think that long term that could have a and we will have a very meaningful impact on the business.

Thomas Shannon: Over hundreds and hundreds of thousands of transactions that take rate on that has been north of 60 percent on some days it's even higher than 70 percent. So we've gone from a culture where there was no selling going on to a culture where there is selling and tremendously successful results. We broaden that to an arcade upsell called the Power Up, and then three weeks ago the pizza and pitcher special, which is actually two specials, pizza with one topping and a pitcher of soda or a pizza with one topping and a pitcher of beer, and then in short order will be an upsell on the beer from domestic to imported premium.

Very helpful. Thank you.

Thomas Shannon: In the first three weeks from a standing start we did over a million dollars on pizza and pitcher in the slowest part of the year. So we've really gone from the employees would literally process the request and they came in order takers. Now we have a fairly wrong cultural basis on which we're building with a selling culture.

Speaker 1: Our next question comes from a line of Jeremy Hamblin with Craig Hallam. Please proceed with your questions.

Our next question comes from the line of Jeremy Hamblin with Craig Hallum. Please proceed with your question.

Thomas Shannon: And I think that long term that could have a and we'll have a very meaningful impact on the business. Very helpful.

Thanks, and congrats on a strong year last year, one of them if I could just start by getting some clarification in what's included in the acquisition.

Speaker 9: Thanks and congrats on a strong year last year. I want to see if I could just start by getting some clarification in what's included in the acquisition.

Speaker 9: for your guidance for the year. So you noted that your closing deals that would have annualized run rates 100 million or a little bit higher than that.

For your guidance for the year. So you noted that.

Youre closing deals that would have annualized run rates.

A $100 million or a little bit higher than that but you havent closed the biggest acquisition thus far.

Speaker 9: But you haven't closed the biggest acquisition thus far. You're, you know, nearly done with the first quarter. So, you know, my baseline assumption is even if you included that, you couldn't contribute more than...

Nearly.

Tom with the first quarter. So my baseline assumption is even if you included that it could contribute more than <unk>.

Speaker 9: you know, 75 million or 80 million.

75 million or $80 million.

Speaker 9: to the four-year guidance, but Bobby, I wanted to see if you could clarify within that 1.14 to 1.19 billion, you know, how much of that is kind of the legacy organic business versus the acquired business.

For the full year guidance, probably I wanted to see if you could clarify.

And that 1.14 to $1 9 billion.

How much of that.

Kind of the legacy organic business.

Versus.

The acquired business.

Jeremy Hamblin: Thank you. Our next question comes for line of Jeremy Hamblin with Craig Hallum. Please receive with your question.

Yes, our guidance is the organic business is flat.

Speaker 2: Yeah, our guidance is the organic business is flat, so that all of it's M&A, plus some conversions kind of toward the end of the year. Lucky closes next week.

All of it's M&A.

Jeremy Hamblin: Thanks and congrats on a strong year last year. I wonder if I could just start by getting some clarification in what's included in the acquisition for your guidance for the year. So you noted that you're closing deals that would have annualized run rates 100 million or a little bit higher than that. But you haven't closed the biggest acquisition thus far. You're nearly done with the first quarter. So my baseline assumption is even if you know your guides, but I wanted to just see if you could clarify within that 1.14 to 1.19 billion.

Plus some conversions kind of towards the end of the year.

Lucky.

Is next week.

Speaker 2: Maverick's Octane closed at the end of August . You know, those are kind of the two biggest acquisitions, so that's really the fuel and the fire of the guidance.

Maverick dock being closed at the end of August .

Those are kind of the two biggest acquisition so that's really the.

Fuel in the fire of the guidance.

Okay. So not a specific range on what portion of Lucky strike's being included on that for the full year.

Speaker 9: Okay, so not a specific range on what portion of Lucky Strikes being included on that for the full year?

Yeah, I mean, it's going to be three quarters of Lucky strike.

Speaker 2: Yeah, I mean, it's going to be three quarters of Lucky's rank.

And you remember Lucky strike like our events businesses is very heavy in the second and third quarter.

Speaker 2: And you remember Lucky Strike, like our event business, is very heavy in the second and third quarter.

Speaker 9: Great. And as a follow up, you know, in terms of how are the Lucky Strike centers performing, you know, so if you guys have kind of fallen into comps running in this down low single digit to, you know, down mid single digit range, you know, how are the Lucky Strike centers performing in this environment?

Great.

Follow up in terms of how are the lucky strike.

<unk> performing so if you guys have kind of.

Jeremy Hamblin: You know, how much of that is kind of the legacy organic business versus the acquired business? Yeah, our guidance is your organic business is flat to all of its M&A plus some conversions kind of toward the end of the year. Lucky closes next week. You know, Maverick's acting closed at the end of August. You know, those are kind of the two biggest acquisition. So that's really the fuel and the fire of the guidance.

One into comps running down low single digits.

Down mid single digit range.

How are the lucky strike centers performing in this environment.

Yes.

And our costs.

Okay.

Okay and then the last thing is you.

Speaker 9: Okay, and then the last thing is you've reflected, Tom you've talked about how if you have a softer consumer environment, I know you've had a lot of questions about what happens if we go into recess and how does the business perform, and you've noted that you can take out maybe as much as 30% out of your SG&A. In the June quarter you saw gross margins down pretty significantly.

Collected Tom you've talked about how.

You have a softer consumer environment.

I know you've had a lot of questions about what happens if we go on to assess and how does the business perform and.

But you can take out maybe as much as 30% out of your SG&A.

Jeremy Hamblin: Okay, so that is specific range and what portion of Lucky Strikes being included on that for the whole year? Yeah, I mean, it's going to be, you know, three-quarters of Lucky Strikes. And you remember Lucky Strikes like our event's businesses is very heavy in the second and third quarter.

In the June quarter, we saw gross margins down pretty significantly.

Speaker 9: And my assumption is you're going to see some of that same degradation here in the September quarter. But, you know, how are you thinking about, you know, kind of the split of your performance in this 32 to 34 percent, you know, even the margin guide? You know, how much of that, Bobby, is...

And my assumption is youre going to youre going to see some of that same degradation here.

In the September quarter, but how.

How are you thinking about kind of the split of your performance in the 32% to 34%.

Bobby Lavin: Great. And then it's power up, you know, in terms of how are the Lucky Strikes centers performing? You know, so if you guys have kind of fallen into comps running in this down, those single digit to, you know, down, mid-simple digit range, you know, how are the Lucky Strikes centers performing in this environment? Yeah, I mean, it's a very, very working bus. Okay, and then the last thing is, you've reflected, you know, Tommy talked about how, you know, if you have a softer consumer environment, you know, I know you've had a lot of questions about what happens if we go into recession, how does it do this perform?

EBITDA margin guide.

How much of that Bobby is is.

The gross margin.

Speaker 9: gross margin degradation versus SG&A savings and then included within that guidance. I just wanted to see if you could give us some color on what your transactional and advisory costs are expected for the year.

Gradation versus SG&A savings and then included within that guidance I just wanted to see if you could give us some color on what you are.

Transactional and advisory costs are expected for the year.

Speaker 2: Thank you. So from a cost perspective, we are implementing significant cost saves. So they're kind of

Thank you, yes, so from a cost perspective.

Our implementing significant cost saves so they're kind of.

Two primary buckets.

Speaker 2: two primary buckets, what I would call our excesses at the centers. The centers had post-COVID excess security. That was a huge one. They have sort of were overspending on what I would call consultants. And so this is money we can kind of bring in at the centers. So these are the people who install AV. These are the people who do maintenance. Like we, costs have just been ramped up. And so we're going to pull those.

What I would call our excesses at the centers those centers had both COVID-19 excess securities.

Bobby Lavin: And you've noted that you can take out maybe as much as 30% out of your FGNA. You know, in the June quarter, you saw gross margins down pretty significantly. And my assumption is you're going to see some of that same degradation here in the September quarter. But, you know, how are you thinking about, you know, kind of the split of your performance in this 32 to 34%, you know, even the margin guide.

That was a huge one they have sort of we're overspending on sort of what I would call consultants and so this is money we can kind of bring in at the centers. So these are the people who install a V that people who do maintenance.

Cost have just been ramped up and so we're going to pull those back.

Speaker 2: At the same time, there's a lot of opportunities at corporate, whether it's insurance, whether it's IT, there's a lot of different opportunities to cut costs, but we are gonna reinvest on that. So, you know, one we talked about on the call is we have raised wages at the centers, about 10 million on an annualized basis, that will pay for itself in spades. It just takes a few quarters to flow through. So at the end of the day, I think sequentially, you're gonna see SG&A blad, but you'll see gross margin go up with revenue.

At the same time, there is a lot of opportunities at corporate whether it's insurance, whether it's Nike theres a lot of different opportunities.

Bobby Lavin: You know, how much of that, Bobby, is in the gross margin, you know, degradation versus, you know, FGNA savings. And then included within that guidance, I just wanted to see if you could give us some color on what you're, your transactional advisory costs are expected for the year. Thank you. So, from a cost perspective, we are implementing significant costs. So they're kind of two primary buckets. What I would call are our accesses at the centers.

But we are going to reinvest some of that so when we talked about on the call is we have raised wages at the centers about $10 million on annualized basis that will pay for itself and stayed it just takes a few quarters to flow through so at the end of the day I think sequentially, you're going to see SG&A flat, but youll see gross margin go up.

With revenues.

Our next question comes.

Speaker 1: Our next question comes from a line of Eric Handler with Ross MKM. Please proceed with your question.

Our next question comes from the line of Eric Handler with Ross and can please proceed with your question.

Yes, good morning, and thanks for the questions I had a little technical glitch earlier, so hopefully I'm not asking something that was already asked.

Speaker 6: Yes, good morning and thanks for the questions. I had a little technical glitch earlier, so hopefully I'm not asking something that was already asked. But what is the total capex outlook for this year? And then in terms of the amount of money you're spending on upgrades, how many centers does that?

Bobby Lavin: The centers had post COVID access security. That was a huge one. They have, you know, sort of were overspending on sort of what I would call consultants. And so this is money we can kind of bring in at the centers. So these are the people who install a V, these are people who do maintenance like we, you know, cost have just been ramped up. And so we're going to pull those back.

What is the total capex outlook for this year and then in terms of the amount of money youre spending on upgrades, how many centers does that.

Speaker 6: suggest and how many centers are actually left in your portfolio.

Suggest and how many centers are actually left in your portfolio to upgrade.

Bobby Lavin: At the same time, there's a lot of opportunities at corporate, whether it's insurance, whether it's IT, there's a lot of different opportunities to cut costs. But we are going to reinvest them. So, you know, when we talked about on the call is we have raised wages at the centers about 10 million on annualize basis. That will pay for itself in state. It just takes a few quarters to close through. So at the end of the day, I think, you're going to see FGNA Vlad, but you'll see gross margin go up with revenue.

Okay.

Speaker 2: So there is about 100 to 150 centers that still upgrade. Like we make conscious decisions on whether or not to upgrade full lead houses. You won't see us put like pin strings into lead houses.

So there is about 100 to 150 centers, there's still upgrade like we make conscious decisions on whether or not to upgrade full week houses. So you won't see it put like payment streams into weekend.

Operator: Our next question comes.

But there is still a long runway of about $300 million today.

Speaker 2: but there's still a long runway, about 300 million today. And as we do M&A, that does replenish that pipeline. From a total CapEx perspective, maintenance CapEx, which is still elevated, should be about 40 million. Conversions are 75 million. And those are kind of the two primary buckets of CapEx. There's a little bit of corporate CapEx, there's about 10 million. But that's how you should look at sort of our total investment in 24.

As we do M&A that does replenish that pipeline.

A total capex perspective, maintenance Capex, which is still elevated should be about $40 million conversions are $75 million.

And those are kind of the two primary buckets of Capex. There is a little bit of corporate Capex was about $10 million, but that's how you should look at sort of our total investment in 'twenty four.

Operator: Our next question comes from a line of Eric handler with Ross MKM. Please proceed with your question. Yes. Good morning and thanks for the questions. I had a little technical lich earlier. So hopefully I'm not asking something that was already asked.

Thank you.

Our next question comes from the line of Michael Kaplinsky with Noble capital markets. Please proceed with your question.

Speaker 1: Our next question comes from the line of Michael Kavinsky with Noble Capital Markets. Please proceed with your questions.

Bobby Lavin: But what is the total capex outlook for this year? And then in terms of the amount of money you're spending on upgrades, how many centers does that suggest and how many centers are actually left in your portfolio to upgrade? So there is about 100 to 150 centers to still upgrade. Like we make conscious decisions on whether or not to upgrade full league houses. You won't see us put like pin and string into recap sort of, but there's still a long runway of about 300 million today.

Speaker 6: Thank you for taking my questions. Just a quick one here. Obviously there's been a little bit of resurgence in COVID across the country and I was just wondering in terms of your current traffic patterns are they reflective of that increase or is it more just the macroeconomic trends that you're seeing that are affecting the traffic patterns?

Thank you for taking my questions just a quick one here.

Obviously, theres been a little bit of resurgence in COVID-19 across the country and I was just wondering in terms of your current traffic pattern, partly reflective of that increase or is it more just the macroeconomic trends that youre seeing that affect what the traffic patterns.

Yeah, we haven't seen any COVID-19 I will say.

Speaker 2: Yeah, we haven't seen any COVID. I will say...

Speaker 2: I will say that the traffic when we look at it on a day to day basis. The traffic for full time retail is is flat. Versus the traffic on promotion.

I will say that the traffic when we look at it on a day to day basis, the traffic for a full time retail is flat.

Bobby Lavin: You know, and as we do MNA that does replenish that pipeline from a total capex perspective maintenance capex, which is still elevated to be about 40 million. Conversions are 75 million and those are kind of the two primary buckets of capex are a little bit of corporate capex. There's about 10 million. But that's how you should look at sort of our total investment in 24. Thank you.

Versus the traffic on promotional activity is down double digits.

Speaker 2: So we actually think we're getting the beneficiary of people pulling back a little bit. Like obviously everybody taking vacation in August has impacted everyone. But ultimately, we're feeling actually pretty good about the consumer, particularly with the green shoots we have and more leagues have come back, more events are happening. It really is. We pull back on promotions to our customers.

So we actually think we're getting the beneficiary of people pulling back a little bit like obviously, everybody taking vacation in August .

Packet everyone.

But ultimately we're feeling actually pretty good about the consumer, particularly with the green shoots we having more leads have come back more events are happening it really as we pulled back on promotions to our.

Michael Kupinski: Our next question comes to line of Michael Kupinski with noble capital markets. Please proceed with your questions. Thank you for taking my question, but just a quick one here.

Yes.

Speaker 4: Yeah, there's there's there's an there's there was an interesting take.

There is.

There was an interesting take off.

We haven't mentioned and that is that we.

Speaker 4: we haven't mentioned, and that is that we effectively raised price with the bundle. We raised prices in events. We raised prices on leagues going into the fall. And all of those businesses that people are seeing are getting mixed prices through dollarablyballG Badminton. Right, and KrNev 10 Good morning from Mumad snaps

Thomas Shannon: Obviously, there's been a little bit of resurgence in COVID across the country, and I was just wondering in terms of your current traffic pattern, are the reflective of that increase or is it more just the macroeconomic trends that you're seeing that are affecting the traffic patterns. Yeah, we haven't seen any COVID. I will say that the traffic, when we look at it on a day-to-day basis, the traffic for full-time retail is flat versus the traffic on promotional activities down the old district.

We effectively raised price with the bundle we raised prices in events, we raised prices on leagues going into the fall and all of those businesses increased.

Speaker 4: where we eliminated some of the promotions, the very deeply discounted nights, we saw a big reduction. And so the takeaway

Where are we where we eliminated some of the promotions very deeply discounted nights, we saw a big reduction.

And so the takeaway from that is that we.

We have a very wide range of customers in terms of price sensitivity.

Speaker 4: we have a very wide range of customers in terms of price sensitivity.

So.

Speaker 4: Tremendous insight, right? That some people are really interested in, you know.

The tremendous insight right that some people are really interested in it.

Thomas Shannon: So we actually think we're getting the beneficiary of people pulling back a little bit. Like, obviously, everybody taking vacation in August has impacted everyone, but ultimately, we're feeling actually pretty good about the consumer, particularly with the green shoots we have, and more leads have come back, more events are happening. It really is, we pull back on promotions to art.

A very cheap all you can bolt on a off night of the week Tuesday Night for example, but the retail the prime time walk into customer is much less price sensitive than perhaps we realized and so these insights are very very powerful and we.

Speaker 4: a very cheap all-you-can-bowl on a off night of the week, a Tuesday night, for example, but that the retail, the prime time walk-in customer is much less price sensitive than perhaps we realize.

Speaker 4: And so these insights are very, very powerful. And we took them, we took the cost of learning them in.

Took them, we took the cost of learning them in our slowest part of the year. So.

Speaker 4: our slowest part of the year. So if you strip out the impact of the elimination of all of the promotions, we're effectively flat through the summer, which again, you know.

Thomas Shannon: Yeah, let me add, there's an interesting take. We haven't mentioned, and that is that we effectively raised price with the bundle. We raised prices in events. We raised prices on leagues going into the fall, and all of those businesses increased, where we eliminated some of the promotions with the very deeply discounted nights, we saw a big reduction, and so the takeaway from that is that we have a very wide range of customers in terms of price sensitivity.

If you strip out the impact of the elimination of all of the promotions were effectively flat through the summer which again.

Speaker 4: given the general weakness that people see in the consumer, certainly our peers and what we know and.

Given given the general weakness that people see the consumer certainly our peers.

Yes.

It seems like everyone. We know traveled.

Speaker 4: It seems like everyone we know traveled.

But the results are actually.

Speaker 4: pretty respectable and we're a hell of a lot smarter now than we were three months ago when we embarked on this process. So a really interesting insight, where we had the most promotionally focused consumers in the Midwest, we were down by far the most. And where we have the least, on the coast, we weren't really down at all. And so we have learned an awful lot about consumer behavior in the last couple of months, I'll say that. That's really interesting.

Pretty respectable and we're a hell of a lot smarter now than we were three months ago. When we embarked on this process. So a really interesting insight where we had the most.

Promotion Lee focused consumers in the Midwest, we were down by far the most and where we have the least on the coast, we werent really down at all and so we have learned an awful lot about consumer behavior over the last couple of months I will say that.

Thomas Shannon: So a tremendous insight, right, that some people are really interested in a very cheap, all-you-can-bowl on an off-night of the week, a Tuesday night, for example, but that the retail, the prime time, walk-in customer is much less price sensitive than perhaps we realized. And so these insights are very, very powerful, and we took them, we took the cost of learning them in our slowest part of the year. So if you strip out the impact of the elimination of all of the promotions, we're effectively flat through the summer, which, again, given the general weakness that people see in the consumer, certainly our peers, and what we know anecdotely, it seems like everyone we know traveled, that the results were actually pretty respectable, and we're a hell of a lot smarter now than we were three months ago when we embarked on this process.

That's really interesting thanks for the color that's all I have.

Speaker 1: Thank you. We have no further questions at this time. I would now like to turn the floor back over to management for closing comments.

Thank you we have no further questions at this time I would now like to turn the floor back over to management for closing comments.

Thanks, everyone. We look forward to talking to you soon.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.

Speaker 1: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Thomas Shannon: So a really interesting insight, where we had the most promotionally focused consumers in the Midwest, we were down by far the most, and where we had the least on the coast, we weren't really down at all. And so we have learned an awful lot of that consumer behavior in the last couple of months. I'll say that.

Michael Kupinski: That's really interesting. Thanks for the color, that's all I have. Thank you.

Operator: We have no further questions at this time.

Bobby Lavin: I would now like to turn the floor back over to management for closing comments. Thanks everyone, we look forward to talking to you soon.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You made this connector lines at this time.

Operator: Thank you for your participation and have a wonderful day.