Good morning and welcome everyone to the Lucky Strike Entertainment Q2 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to turn the call over to Bobby Lavin, CFO of Lucky Strike Entertainment. Please go ahead.

Good morning to everyone on the call. this is Bobby Lavin, Lucky Strike's Chief Financial Officer. Welcome to our conference call to discuss Lucky Strike's second quarter 2025 earnings. Today, we issued a press release announcing our financial results for the period ended December 29th, 2024. A copy of the press release is available in the Investor Relations section of our website. Joining me on the call today are Thomas Shannon, our Founder and Chief Executive, and Lev Exter, our President. I'd like to remind you that during today's conference call, we may make certain forward-looking statements about the company's performance. Such 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 actual results to differ materially from those expressed. 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 Securities and Exchange Commission. Lucky Strike Entertainment 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. The GAAP financial measure is most directly comparable to each non-GAAP financial measure discussed in 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'll now turn the call over to Tom.

Good morning, and thank you for joining us today. I am Thomas Shannon, founder and CEO of Lucky Strike Entertainment. Last week, we celebrated our 28th anniversary, beginning with one bowling alley in Union Square, New York, and undergoing a few name changes along the way. Lucky Strike entertainment reflects our commitments to being a world-class entertainment platform. Our company has navigated through turmoil and disruption on multiple occasions. We were the closest bowling center to ground zero on 9-11. Half of our events revenue disappeared during the great financial crisis. Even though it seems like a distant memory, we're still experiencing the lingering effects of COVID-19 during which we shut down and quickly rebuilt to where we are today. Six months ago, we reported double-digit growth and mid-single-digit same-store sales while our peers were down by double digits. However, this most recent quarter came with heightened macroeconomic uncertainty. We began the quarter with the corporate events business on hold due to concerns over the election outcome. Compounding this, Thanksgiving fell a week later this year, shortening the critical corporate events holiday schedule by about a third. And finally, New Year's Eve fell in our next quarter versus being in the second quarter last year. Our sticky league business continues to grow, and retail walk-in customer traffic has been steady, despite headlines of the weak consumer. So how did we respond to all of this noise? As we always have, we optimized payroll to reflect the uncertain environment, resulting in a double-digit reduction in payroll hours across many of our centers. We tightened capital expenditures, driving down spending by 33% year-over-year in this quarter. Boomers and our two water parks received new offerings that will help improve our earnings this coming summer. We're investing in incremental marketing channels and improving our corporate events operating structure to bring in new business. We leaned into improving food attachment with our new menu, implementing a selling culture among the staff and adding technologies in center to drive efficiencies and wallet share. We rolled out dynamic pricing and added hot new games for our arcade business. Food and amusements grew faster than the rest of our business lines. Despite top line pressure, the underlying performance of the different business lines gives me confidence in our long-term operating leverage. And the core product we have built is better than ever. During this quarter, we opened four new Lucky Strike centers, two in Denver, one in Beverly Hills, and one in Ladera Ranch, California. Lucky Strike Beverly Hills and Lucky Strike Ladera Ranch each generated over $1 million in revenue within their first 30 days of operation, a new record. You can view these four new properties images in our investor deck, and I encourage you to do so. They represent an evolution of our best-in-class product that underscores our position as visionaries and leaders in consumer entertainment. We also began the rebranding of centers to Lucky Strike, with four centers changed to date and the rollout ramping up. We currently have 21 Lucky Strike centers and will end the year near 75. Our ability to consistently grow despite the challenges we have faced over the past 28 years is a testament to our resilience and the endurance of the business model we have built. Thank you for your support. I will now turn it over to Lev Exeter.

Thanks, Tom. As Tom described, there was a lot of noise this past quarter due to calendar shifts and macroeconomic uncertainty, which especially affected our corporate events business. But our job as operators is to focus on the things that we can control, which is why I'm pleased to report on the progress we made on our operating initiatives during the quarter. As you know, we launched a new retail F&B menu last quarter, which has been well received by our customers. Our KPI of food and beverage revenue attachment to bowling revenue grew to $0.80, up from $0.76 the year prior. We continue to lean into our improved F&B offerings at our locations to drive increased average check size and guest satisfaction. Our net promoter score was 74 in the quarter, up from 72 the year prior. We saw improved scores driven by the enhanced food experience as we rolled out the new food menu to our retail business. A new menu is now being introduced into our events business across all locations by the spring, the first change to the events menu in 10 years. We expect this new menu to reinvigorate this channel and drive uptake the next few quarters. In the quarter, we also rolled out handheld tablets for our servers. It is still early days, but we've already noticed signs of efficiencies from the technology, as seen in our payroll benefits costs, being down 9% year-over-year. The tablets should allow our servers to cover more lanes and grow check averages through upsell prompts. Lastly, the team was focused on decreasing the EBITDA loss we've been running at the PBA and managed to cut that in half going into this newly launched season. We expect these results to continue to improve as we work closely with the newly hired UTA agency to bring on new sponsors. Now let me hand it over to Bobby to review the quarter's financial performance. Bobby?

Thanks, Vlad. In the second quarter of 2025, we generated total revenue of $300.1 million and adjusted EBITDA of $98.8 million, compared to the last year of $305.7 million and adjusted EBITDA of $103.1 million. Our total revenue growth was minus 1.8%, and same-store comp was minus 6.2%. The quarter had one less week of holiday events due to the late Thanksgiving year-over-year, and New Year's pushed into the third quarter. The quarter had one less week of holiday events, and that push was about a 300 basis point headwind for the quarter. Our retail business was flat, lead business up small single digits, and event business down mid-single digits in the quarter. Adjusted EBITDA was $98.8 million. We right-sized costs in the quarter to reflect the uncertain macro environment and solve tailwinds from labor, F&B costs, and repairs and maintenance. Same-store sales were a 19 million drag that would flow to the bottom line. We limited negative operating leverage through cost efficiencies, and we expect to maintain those cost levels as revenue improves, driving operating leverage. We earned 3 million VivaDot from new centers, and boomers and raging waves were a $2 million drag in the quarter. The investments we are making in boomers and raging waves more than doubles our total addressable market and smooths out seasonality of our business. Raging waves generated $9 million of EBITDA from June to August last summer, and boomers should generate similar to that over this summer. We have seen, and will see over the rest of the fiscal year, lumpiness in revenue. The benefit we expected to get from school winter breaks being pushed from the third week of December, second week of January, was offset by wildfires in LA. In addition, January, February, March are very important months for our business. We continue to focus on S&D and amusement initiatives, and we expect to see a good lift in the spring and summer from boomers and raising waves. Overall, with current macro uncertainty, we are taking a cautious view of our guidance for the rest of the year, but we still expect to be within our full-year guidance range for the fiscal 2025, as we reiterated in our earnings release this morning. In the quarter, we spent $53 million in capital expenditures. Gross CapEx was $19 million, new build CapEx was $8 million, and maintenance was $12 million. We spent $9 million purchasing incremental land at Raging Waves that flows through the capital expenditures line. CapEx is down $30 million year-to-date from the previous year. Our liquidity at the end of the quarter was $397 million, with nothing drawn on our revolver and $81 million of cash. Net debt was $1.2 billion, and bank credit facility net leverage ratio was 2.9 times. Thank you for your time, and we look forward to seeing you at one of our new facilities in the coming months. Operator, can we now open the line up to questions?

This time, I would like to remind everyone in order to ask a question, simply press start, then the number one on your telephone keypad. I'll pause for just a moment to compile the Q&A roster. And your first question comes from the line of Pat Hill Boss with J.B. Morgan. Please go ahead.

Hey, you've got Zach on for Matt. Tom or Bobby, to start, can you maybe elaborate on the heightened macroeconomic uncertainty you cited and maybe just discuss what you're seeing at walk-in retail versus corporate events and any lead indicators of historical demand you're focused on today?

Hey, I'll take this. This is Les. So, Zach, I think everyone is seeing what's playing out in the macroeconomic environment right now. When you look at the political environment, there's just a lot of uncertainty. And I think the trade down with the consumer is real right now. The consumer is kind of in this wait and see mode. Some people are holding up. They're not going to take that maybe European vacation. we likely would be the beneficiary of that trade-down. But you also see that trade-down in the flight from premium alcohol, for example. And so when you look at our results, food performed really well, but there's definitely some detachment with alcohol. Alcohol sales didn't perform as well as our food sales did. And we're seeing the consumer just elect to not make that premium alcohol purchase. in response to that the team's working on various promotions to drive more foot traffic and late night business to counteract that but I think there's a flight to value right now and we plan to be the beneficiaries of that yeah and just to add to that you know offline events which is really kind of corporate events and office parties which is a big driver in December you know in October, we saw a lot of sort of what I would say election uncertainty.

Um, when we got to December, while, you know, people who had planned six months out, they had, you know, booked their parties when we got to December, sort of the last minute parties, you know, they just, they didn't happen. Um, you know, from our perspective, events or what we call offline events is, you know, 25% of our business in the second quarter, but it drops down to about 13% of our business the rest of the year. And so we really saw a lot of uncertainty on the corporate event side, but we've seen good retail traffic, particularly as sort of the trade down.

Got it. I appreciate it. And then maybe just as a follow-up, kind of following the latest pricing increase you cited last quarter with the the new fmb menus um i was just wondering if you can maybe break down the composition of same center sales between traffic and ticket this quarter and then maybe any initiatives in place moving forward to kind of drive the embedded acceleration in the back half thanks yes yeah i mean traffic was you know was really the comp that was on the event side versus the retail side traffic was flat.

Ultimately, the price increases were offset by detachment on the alcohol side. So we're seeing F&B up. We're seeing traffic sort of down on events, flat on retail. And events is just a bigger portion of the business at this point in the second quarter. So ultimately, it weighed on the comp.

Your next question comes from the line of Stephen Wikinski. with Staple Financial Corp. Stephen, please go ahead.

Hey, guys. Good morning. So, Bobby, just kind of staying on that last topic there. I mean, as we think about the next two quarters, how should we be thinking about same-store sales to kind of get you guys into your guidance range? And I guess what I'm trying to figure out is, you know, look, there's clearly a tailwind now with New Year's being pushed into the third quarter, but, you know, it seems like there's some headwinds as well, whether that's, you know, or California, given the fires. Not sure if you're seeing an impact there. You're just trying to see how we should be thinking about the next two quarters. Then maybe elaborate a little bit more about, I think you said in your prepared remarks, you're looking at your guidance range. I think you said the word cautiously and just trying to understand, you know, a little bit more what that means.

Yeah. So let's talk about the fires for a second. So the fires were sort of a $5 million dollar hit um you know the direct buyer impact was you know we had three centers you know that were down for a while um but generally we saw a significant pullback in corporate events in january so you know january is is going to be you know small down um you know we we expect sort of the rest of the year to be up, but we're cautious on that. So from our perspective, you know, we can make our guide on EBITDA because we've effectively managed payroll costs, which is our single biggest cost. We've spent $300 million. You know, the revenue is going to continue to be a little uncertain, but, you know, ultimately, you know, that events business becomes less important as we go throughout the year. And then you get into the summer month and, you know, we'll have, you know, a revised summer pass, you know, an optimized summer pass. We're going to have boomers, which, you know, boomers in the second quarter did about 6 million revenue. In the fourth quarter, it does 15 million plus. We got raging waves, which were expanding their season. And so, you know, managing through sort of this, this macro uncertainty on the revenue, you know, is it, we're going to be a little bit more cautious or ability to sort of hit our EBITDA targets is something we feel like.

Okay. Gotcha. Thanks for that, Bobby. And then, you know, Tom, maybe a question for you and a little bit of a bigger picture question, but I mean, I mean, we continue to get asked, you know, by investors, you know, what makes Lucky Strike different than, you know, other entertainment options. And what I mean by that is obviously the Dave and Busters, the top golfs of the world are, you know, are, are struggling. And it seems, you know, you guys are just going to continuously get lumped, you know, get lumped in with them, whether that's fair, whether it's not fair. So, you know, you know, how would you combat that narrative and kind of show the investment community that you guys are in fact different from those other entertainment options?

I'll take that. This is love. So lucky Strike Entertainment is just a very special concept. We don't even consider it to be exactly the same as our Bolero concept. So right now, as we mentioned, we're actively working to convert Bolero locations to Lucky Strikes. We've done four in the last four weeks with one additional this week. When we convert these locations, it's not just a sign change. This is a training for the staff it's a totally different level of hospitality in some cases in cold weather environments you're going to find coachek to be included with your experience we've never offered that before the menus are completely different as you know the training of how to sell the menu is completely different the design of the interiors is getting revamped and when you look at a property like Beverly Hills that we opened last month in early December that property only has 22 lanes it did a million dollars in revenue its first month and just think about those kind of results you can only achieve that with a special property and by the way we opened ladera ranch our week and a half later also did a million dollars in its first month so what i would invite the investment community to do is visit some of these properties see it for yourself walk the spaces look at the environments that we've created from the decor to the layouts to our game rooms you know i'm very closely tied to the amusement business um very passionate about it our company i think we do amusements better than anyone in the business we started as a bowling company bowling still came for us but i think today we do amusements better than anyone when you visit some of our redemption stores in these locations at lavera ranch at beverly hills at northfield that we recently opened call the prize vault. It's stunning. And I think the product speaks for itself. I think the results speak for themselves as well. That's good, Keller. Appreciate it. Thanks, guys.

Thanks. Your next question comes from the line of Jason Solzhen with Canaccord Genuity. Jason, please go ahead.

Yeah, good morning and thanks for taking the questions. I guess just following up on one of the comments Lev just made, you talked about how in this rebranding, it's not just sort of changing the signs, but also some of those other improvements in terms of sort of where you guys stand in the overall portfolio and refreshing centers and sort of putting in those upgrades like amusements and things like that. Just wondering if you can give a little bit of an update on where that stands overall in relation to sort of the rebranding progress and that marker that you put out of 75 centers that'll be under the Lucky Strike brand at the end of this fiscal year. Thanks.

Yeah, so the rebranding process has started. We've changed the masthead of MarVista, San Marcos, Atlantic Station, and Houston. And we're going to get, you know, a few done a week starting now. The internal part of the change is happening as well. So, you know, changing the math that, you know, my history always gets you kind of like a 10, 15 percent bump in retail traffic year one. The question is, how do you maintain it? Right. And to maintain it means that, you know, we've got co-checks and cold weather geos. We've upgraded the amusements. We've upgraded the food. We've upgraded. You know, we go from paper boats to, you know, China dishes. Like, there's a lot of different elements to just improving the experience, and that is happening. And, you know, ultimately, I think that this is going to be a big tailwind for the business in that, you know, if you look at Chelsea Pier, Times Square, these are two beautiful bowling centers, two biggest bowling centers in the world. And they haven't really been that refreshed in 10 years. So the world where we rebrand them Lucky Strike, we add that code check, we upgrade the amusement, we upgrade the plateware, we upgrade the food, it's just going to bring it to a different level. And this goes to, you know, Steve's question is, what is the differentiator between us and kind of, you know, some of our competitors? And we are a premium product. But people, when they walk into a lucky strike, they have an amazing experience. So they pay a little extra, sure. But it's a premium experience. And ultimately, people want to come back. And we're building a brand that people can really get fun.

I just want to build on the question that you asked, which was, I think, the volume of these conversions. And I think we've really perfected the process of these over these first four. we're doing one as i mentioned this week as well so the team has gotten the hang of this process because there are a lot of touch points outside and inside the locations you're going to start to see that ramp up as we get into the summer months when we have a little bit more availability in the locations to make these conversions so i think that 75 figures is very realistic what's also really interesting when bobby talks about the tailwind this provides As that number of luckies increases, you know, this week we'll be at 23. As that volume of locations increases, it's also going to open up the opportunity for us to invest more marketing dollars, right? Because we can spread that around more locations. And we haven't really done meaningful brand awareness, brand building marketing for the Lucky Strike brand. But with, you know, 50, 75, 100 of these locations, we can really invest into that now.

Great. That's a really helpful overview there. Just one other follow-up, I think in a prepared remarks, that have been Bobby who mentioned you're working on improving the corporate event operating structure. I'm just wondering if there's anything else you can share in terms of those plans.

I know a lot to come, but we really want to focus on a lot of food tapings.

So if you go back to sort of the ethos of the business Tom built in 1997 with Bulmore is we had these beautiful events, we had these beautiful food and people, you know, we would have parties where, you know, all the event coordinators in the market would kind of come in, you know, we let them bowl, we let them play arcade and we would, you know, serve them this, you know, premium food product. That really stopped with COVID. You know, we really, you know, stopped really engaging sort of the customers in selling them the product. And I think that that's something we're going to bring back, you know, pretty quickly with the way that our F&B portfolio has really been upgraded in the past few years, is you're going to see a lot of sort of pop-up events where we invite in sort of all the, you know, sales coordinators or the event coordinators of different, you know, companies in their markets and say, isn't this a great product? why don't you come in and bring your office? And that's something that really was lost with COVID. And when we talk about kind of the lingering effects of COVID, I think that selling part of the business is something we really want to lean into. Thank you very much.

And your next question comes from the line of Michael Kopinski with Noble Capital Market. Please go ahead.

Thank you. And thanks for taking my questions. I just have a couple of quick ones here. I just wanted to see if you can add a little bit more color on the margins in the second half. I know seasonally you have better margins in the back half. You were trending a little lower than I expected the first half. Can you talk a little bit about where that margin pickup might be coming from, maybe ages, whether it's boomers and raging waves, or how much is going to come from the shift in New York's Eve in the quarter? And are there other dynamics of play in the third quarter and the second half?

Yeah, so, you know, I think there's a few kind of core things. So in the first quarter, you did not see much, if any, benefit from payroll costs being down. In the second quarter, you know, in the comp, we had $10 million of payroll costs down. That's sort of your single biggest driver. F&B, we did change over our food provider, our food partner on October 1. So, you know, we saw a few million dollars of F&B savings in the quarter on the comp. You're going to see that play through the third and the fourth quarter. You know, additionally, in the third quarter, you'll see, you know, a $55, $65 million lift over the second quarter. And so there's just a lot of incremental operating leverage that happens in the third quarter. And that is something that's, you know, really playing out, particularly as, you know, boomers, which this last quarter was $6 million of revenue minus $1 million of EBITDA, you know, in the fourth quarter will be $15 million of revenue and $5 million of EBITDA, right? And so ultimately, that negative operating leverage that we're going to have in the second and third quarter as we invest in more of these summer businesses will get pushed into the fourth.

Gotcha. Thanks for the color. And then how much of your food and beverage is coming from the sale of alcohol and premium liquors? I know that liquor sales industry-wide are down 7%, 8%. And whether that be from macroeconomic issues or simply that consumers are shifting beverage patterns possibly due to healthcare risk. I was just wondering, I know that the younger demographic is moving to like mocktails, and can you talk a little bit about whether or not you think liquor sales will come back, or do you think that there might be a need to retool the offerings that you have there?

Yeah, so, you know, just to clarify, alcohol did still outperform bowling, and overall food outperformed um it was just that uh excuse me smb outperformed food was just way more pronounced and i think that has a lot to do with the new menu the new focus on selling the new menu i think the guest reception to the new menu across our properties has been phenomenal um you know i mentioned our mts score was up i think that's correlated to that as well you know going from 72 to 74. But I don't know if it's a permanent shift away from premium alcohol. We did notice that alcohol lag compared to food. Now, you know, fortunately, we also offer mock sales at our locations and we'll continue to lead into that. But again, we're not going to sit on our hands and try to find out if it's permanent or not. So I mentioned the team is going to be launching food and beverage promotions later this quarter and it's going to have a focus on driving that stronger nighttime traffic with these value-led offerings. So until the consumer comes back and chooses to upgrade their beverage choices, we're going to lean into promotions and traffic generating activities to see if we can drive alcohol sales as strongly as we've been able to do with our food.

We historically have not really done happy hours. You know, there's obviously one competitor in the market who has, or one restaurant competitor in the market that has done exceptionally well. And that was really through, you know, a lot of marketing and a lot of sort of specials. You know, we think that our locations are, you know, very prime for that. is something we've historically not done, and, you know, getting that traffic in 4 to 6 p.m. for happy hour, it's going to be incremental to the victory. Thank you. That's all I have.

And your next question comes from the line of Mike Swartz with Truett Securities. Mike, please go ahead.

Hey, good morning. Bobby, maybe just touch on some of the labor efficiencies. I'm just trying to understand maybe the mechanism by which you're deriving that, and, you know, as we think about the year ahead and, you know, the, I guess, the push to lift comps.

I mean, is there any risk that by removing that labor, you kind of penalize your ability to grow? So, great question. So, huge initiative that has been, you know, sort of a core partnership between myself and Lev in that we really want to optimize payroll in the centers, right? And so, you know, using data, we've looked at historically what the company did was post-September when leagues floored, we ramped up staffing into the holidays, right? And so it's like staffing went from September into December in a straight line. And the business wasn't really there to justify it into September, October timeframe. And so we slowed that down. Now, you know, some inside baseball, have we probably cut a little too much of the F&B revenue facing labor? Yes. But we think that there's some opportunity to continue to optimize. You know, we found that we're relying a little bit too much on the kiosk midweek versus having that server when you've got a league that's, you know, on, you know, 40, 50 lanes, like a server can, you know, really justify itself. But this is sort of a lot of the tinkering that, you know, Tom has talked about in that, you know, we're tinkering with our labor, you know, we think that, you know, it was good before, we're making it better and ultimately we're going to optimize labor in every center by hour by day based on you know very defined revenue forecasts and so ultimately if adding labor is accretive we'll do it if removing labor is accretive we'll do it and you know lev was really the the leader of this so why don't you give some comments yeah look i think we've proven that we can operate efficiently during a time when we have to but like everything else at this company we're going to

continue to fine-tune and add it back where it's justified i want you to also consider other initiatives that where we've rolled out and we're going to continue to optimize like server tablets so server tablets are going to allow a server that historically may be covered four lanes now they can cover maybe 8 to 10 lanes and do it more effectively and get food into the kitchen faster and still provide better guest service and also increase their check sizes because of the problems on the tablet. So it's not just crude labor operating. It's also adding technology into the equation that will allow us to be more efficient with our labor. Okay. And just the The second question, and I know you guys aren't the poster children for tariff risks, but is there anything to think of just in terms of some of the, you know, the prizes or sourcing or anything of that nature, you know, where there might be some risk?

So we buy about $15 million of Amusements merch. Half of that is domestic. Half of that's coming from China. So we have a million bucks of risk on Amusements merch. You know, I think that as it relates to, you know, the global supply chain, there's probably a few more million from China tariffs. You know, we don't have much exposure other than on input costs from Canada, Mexico. But really, I'm more concerned about tariffs from like a consumer perspective. Right now, you know, we're seeing softness on events. We're seeing, you know, like flatness on consumers. and, you know, we're getting the benefit of the trade down on top of, you know, we're going to have this, you know, very optimized summer path coming. But, you know, tariffs really hit sort of that consumer sentiment, you know, that's what keeps me up at night is that from a tariff perspective, not the onesies and twosies on inputs, like those, you know, are never great. But ultimately, I am more concerned about what that would do from a macro perspective. Thanks, Bobby.

And your next question comes from the line of Eric Handler with Roth Capital. Eric, please go ahead.

Thank you. I assume your corporate events staff has a database of all the people that have put parties with you in the past. As they proactively talk to these corporates, you know, are they getting a sense, is this a permanent shift or is this something that, you know, the corporate's view is, A, it's just a temporary situation?

It's a balance.

So I would say there is corporate austerity, you know, going on out there. You know, when we look at sort of the IAFA data, you know, the IAFA data says that, you know, 60% of corporates are expecting, we're expecting the cut in the December quarter. And that's, you know, really what we saw. You know, ultimately, you know, like everything, we're, you know, we're going to, we're going to optimize as much as we can. But, you know, we are, it appears we're going to be optimizing from a lower level to go up. But, you know, we've worked through this in the past. You know, as Tom said, you know, we saw 50% of our events just disappeared during GFC. You know, we're going to have to, you know, up our game. So it's nice that, you know, we really haven't done these F&B tastings. The menu is awesome. You know, I would put our menu against any of our competitors any day. And ultimately, you know, when we get those, you know, event coordinators at the big companies and they come in and they have to choose between us and one of our competitors, you know, sure, maybe they're doing 20%, 30% less business, but they'll give us more business. And that's something that we've, you know, proven in the past we can do. And it's just part of the consolidation that's coming out of COVID.

And then, Bobby, I know, you know, you're saying you're taking a more cautious view with revenue. As you look at the situation, Now, do you still think that we're in a positive same-store comp environment for the year?

There's a lot of innings left in this game. You know, with February-March in front of me, it's hard to, you know, really project that at this point. But again, you know, we'll come in, you know, flattish up, down a little bit. Like, it's not going to be dramatic one way or the other. I think ultimately, you know, though our focus is we are going to be positive total growth and, you know, and EBITDA will be up significantly this year.

Okay, and then one last question. So, you bought some land next to Raging Waters. I assume there's some expansion plans you have there. How fast can you pedal there so that, you know, could this, whatever you're doing there, be ready for the upcoming summer season, or is that going to have to wait a year?

No. That will be a two- to three-year project. We are expanding, raising waves right now. Raising waves has sort of a peak capacity of 6,000 to 7,000. We're putting in some changes this year that should increase that a little bit, but also one of the big changes this year as we're building out an event pavilion. So ultimately, events is something that we haven't really done inside that raging wave. So that will add to sort of like not necessarily peak capacity, but it will add to capacity during the week where we bring in corporates and local schools and things like that. But in two years, you'll see us adding slides. As it relates to the incremental land, that's a two- to three-year project. Got it. Thank you so much.

And your next question comes from the line of Jeremy Hamblin with Craig Halum Capital Group. Jeremy, please go ahead.

I wanted to follow up here just to make sure I understood your kind of expectations on same-store sales trends. So it sounds like January was down maybe low single-digit, you know, several puts and takes there. I think you said $5 million impact from the wildfires, which we would assume is maybe 400 basis points or so, maybe 500 of impact to total comp in the month. but in terms of thinking about uh you know the comment that you're going to expect to be flattish you know plus or minus a little bit here for the year are you still thinking that the march quarter is a is a positive comp um you're lapping clearly a tougher compare uh in the june quarter but just wanted to see, um, expectations here for near term.

Yeah. Um, let's focus on the comp. I mean, total growth in the third quarter will be up. Um, you know, again, as we said, it's a little uncertain at this point. So, you know, we feel good about total growth, you know, particularly with Beverly Hills, with Arrow Ranch, Boomers, you know, we've got a few acquisitions that, you know, will come in in the quarter. And so ultimately, you know, we continue to be focused on total growth, but our confidence on total growth of the year is high.

Got it. Okay. Let's come back to the lucky strike conversions, right? So you're excited about what you're seeing there. I think you indicated that typically you're getting a 10 to 15% lift in the business when you complete those can you just walk us through the timing that it takes from kind of initial uh you know work on getting the remodels and the rebrandings done how much does that cost on average how long does it take um to complete so really varies by location by market a component of that as you can imagine is the permitting that it takes that it requires to change the exterior signage had it not been for that we'd probably do these a lot faster uh but you know that's usually

the prerequisite and then depending on the location the size the amount of punch points in the location anywhere where you would see a bolero is changing a lot of the elements seating the games that stuff changes as well so the cost really varies by location as does the timing and so you know we have our list of focus properties you know that list of 75 that we want to do this year and you just see almost like on a daily basis the locations change in order based on who's coming online faster. So what I also wanted to mention is what happens in parallel to these conversions is a full marketing plan. So again, it's not just a sign change. It's everything that happens outside the location, inside the location, physically, with the staff, with the hospitality. Then there's also a full marketing support plan that piggybacks on all of these. And that plan also varies from a dollar's perspective based on the location and what the revenue there is that we can justify investing marketing in.

Yeah, I would just add, you know, I think the thing that's the most exciting about the Lucky Strike rebrand is, you know, we'll spend $10 million, $12 million this year on marketing. that is half of what the company spent pre-COVID. And, you know, we've directed a lot of dollars, performance marketing, online continues to crush it. And that has, you know, been proven to be, you know, a very good trade. But, you know, as these lucky strikes roll out, our ability to go spend, you know, 50, 100 grand per center to reopen the property, that's how you get, you know, sort of that reintroduction to the events community, to the consumer community, to the birthday community. And so ultimately, we really view the rebrand as a North Star to kind of, you know, really bring the brand back out and drive, you know, that reintroduction to the market. And it's something, you know, frankly, we haven't done pre-COVID.

Just one more for me. So you guys have talked about mobile ordering, you know, improving speed, efficiency. I wanted to just get an update on where you stand in kind of completing the rollout of that and, you know, kind of how it's measuring versus expectation.

So today, we piloted successfully the handheld server tablets at 30 of our locations. We expect that to be at 100 by the end of the quarter. And it's not just rolling them out and leaving it there, right? Like every day, there's learnings from the utilization of these tablets where we're speaking to the associates using them, we're adding modifiers, we're improving the flow on the tablets, we're improving the prompts, the functionality, the reception of these tablets. These are big buildings that you have to cover and you know as I mentioned in the recording these are early innings of a new technology and we're going to continue to tinker and fine-tune it until it's across our entire organization but that will be this year and the efficiencies I think we're going to pick up the benefits are really immense when you again consider just how much more coverage a single server can have with a tablet in their hand instead of running back and forth to a POS station when they take orders and sending that food into the kitchen faster and getting hot food to the lanes faster and giving their customer an opportunity to order on during their bowling session. So if we can improve the guest satisfaction, we're also serving better food, as you know. We're getting it to the consumer faster. They have more time to order additional items, a dessert item, a second drink, another app. All of this is going to really increase our F&B attachment, and that's a really good name of the game for us.

Got it. Thanks for taking our questions. Best wishes.

Again, if you would like to ask a question, simply press star followed by the number one on your telephone keypad. Our next question comes from the line of Ian Sofino with Oppenheimer. Please go ahead.

Hi, great. Thank you very much. You know, I just wanted to drill down on the buyback kind of decision there. Maybe also, Bobby, can you give us kind of a discussion about what cash flow is going to look like for the rest of the year? You know, how you're thinking about deploying that in buybacks versus deleveraging or whatever else you want to do as far as acquisition. So any color you can kind of give there would be helpful. Thanks.

Yeah, we try to balance our buyback with cash generated from operations. You know, we are balancing, you know, these are sort of, you know, December to March, you know, we, you know, we're generating, you know, 30 to 40 million of free cash flow a month. And so, you know, we tie sort of the buyback to that. You know, we're very focused on, you know, analyzing our different voice that exists, you know, on deployment of capital. Right now, the best investments for us effectively are M&A, rebrand, and buying back our stock. So those are sort of kind of the key initiatives. We'll continue to sort of deploy capital in that way. Ultimately, deleveraging is sort of a core focus for mine, but deleveraging doesn't happen in a quarter. It happens over a few years, and that's something that I'm very committed to getting that, you know, least adjusted leverage below five times in the next 24 months.

So are we going to be free cash flow positive for the year backing out, you know, CapEx? I'm just thinking about – okay. Thank you. And then on the lucky side, or just the business in general, you know, I know a lot of the effort and a lot of the focus recently has been on, I call it premiumizing some of the product, you know, larger ones, one that's across the old FTX arena. How does that then square with, I guess, some of the trade down you're seeing or kind of lack of the premium purchases? You know, because it seems like you're kind of going in the opposite direction. So, how are you kind of mitigating that, and how are you thinking about that, you know, from a business planning perspective going forward?

When we say premium in terms of our food menu, we're not saying we're serving caviar and lobster on the menu. We're saying premium product in the sense of quality. So, you know, I mentioned there's a flight to value. When people see the menu and the quality of the product, right, better ingredients, better recipes, you know, more trending items that the consumer is eating today, that's what we mean. We're not going to, you know, filet mignon. So I think maybe it's just a matter of the linguistics. But in terms of, you know, you order a well vodka or a Grey Goose, that's what we're seeing on the alcohol side, but not on the food side. And I don't think our menus are, you know, premium in that sense. It's premium in the sense that we're offering items that the consumer is eating today. You know, they're popular. The quality is much better. The presentation of the product is much better. in terms of the plating, the plate where the menus are much nicer. That's what we're talking about when we say we have a premium food product now.

Okay, thank you very much.

There's no further question at this time. This concludes the meeting. Thank you all for joining. You may now disconnect.