Good afternoon, everyone. Welcome to the Dave & Buster's Entertainment Incorporated Third Quarter 2021 Earnings Results Conference Call. Today's conference is being recorded. Now, I would like to turn the conference over to Scott Bowman, Chief Financial Officer for opening remarks. Please go ahead.

Thank you, Keith, and thank you all for joining us today. Joining me on today’s call are Kevin Sheehan, Interim Chief Executive Officer; and Margo Manning, Chief Operating Officer. After our prepared comments, we'll be happy to take your questions. This call is being recorded on behalf of Dave & Buster's Entertainment Incorporated and is copyrighted. Before we begin our discussion on the company's results, I'd like to call your attention to the fact that in our remarks and our responses to questions, certain items may be discussed which are not entirely based on historical facts. Any of these items should be considered forward-looking statements relating to future events within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Information on the various risk factors and uncertainties have been published in our filings with the SEC which are available on our website. In addition, our remarks today will include references to financial measures that are not defined under Generally Accepted Accounting Principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings announcement released this afternoon, which is also available on our website. Now, I'll turn the call over to Kevin.

Thanks, Scott. Good morning, everyone. I'm very excited to be in this new role here at Dave & Buster's at this central point in our story. We have an exceptional business model, strong assets and a talented group of team members who are delivering outstanding service and experiences to our guests. And we continue to add talented individuals to our organization. As announced in a separate press release, we are welcoming Antonio Bautista to our management team to fill a newly created role of SVP and Head of International Development. He brings outstanding experience and an impressive track record of growing businesses internationally, and we believe Antonio is the right person to take Dave & Buster's to international markets. Also, stay tuned for the impending announcement on Scott’s replacement. Scott has been the consummate CFO, and his efforts will be greatly missed. I want to thank him on behalf of the Board and the D&B team for his outstanding service. As you know, we have made great progress in reopening and building back sales, but we also know there is a lot more to do to unlock the substantial potential of this business. As I said in our press release, we are beginning a new phase of innovation, growth and value creation here at Dave & Buster's. Let me share with you what I mean. We have a great brand with significant scale, a passionate team, and accretive stores in high-traffic, high-volume destination trade areas. Our intent is to optimize our current stores’ full potential and accelerate innovation to drive incremental traffic to our brands. In order to accomplish this goal, we are laser-focused on organic growth. This will be accomplished by optimizing the performance of our existing stores while continuing to achieve best-in-class returns on our new stores. With respect to organic growth, we will broaden our entertainment offering to include more immersive sports viewing experiences, including improvements to the watch environment and the addition of fantasy sports and sports betting options as permitted. We also see significant opportunity to drive traffic in our off-peak days and dayparts, and we are evaluating a variety of initiatives to extract more value out of our existing stores. Finally, we will amplify our best-in-class arcade with the summer games rollout supported by a significant marketing campaign. To help fuel organic growth, we will accelerate a refresh remodel program that will give our existing stores a fresh look. And we are also evaluating relocation opportunities in some of our legacy markets where we can open new, more efficient stores and capitalize on higher potential locations. Think of one 75,000 square foot store built 30 years ago in a part of town that has become less optimal and replacing that store nearing the end of its lease term with possibly two strategically located new stores in more relevant parts of town that accelerate growth in that market. Think one plus one equals three. Finally, we will continue to refine our store layouts and sizes to optimize their market potential. We are making significant progress in this area and recent results are showing much higher returns than anticipated. This will meaningfully expand our brand's potential in coming years. I'm very excited about the future of this company. We have meaningful upside. And as you can see from our third quarter results, we are on our way to realizing that potential. At this time, Scott is going to cover our third quarter results and share some thoughts on our expectations for the fourth quarter. After that our COO, Margo Manning will update us on our operations. Scott?

Thanks, Kevin. Our third quarter demonstrated our ability to drive significant improvement and profitability with relatively flat comps for sales compared with 2019. Despite the COVID-related headwinds, adjusted EBITDA increased 47% compared with the same period in 2019, which eclipses the 39% increase we experienced in the second quarter. We continue to see benefit from a higher mix of amusements and a linear operating model and lower preopening expenses due to fewer new store openings. Even with the headwinds from wage and commodity inflation, we have continued to grow margins and have offset these impacts through a more efficient labor model enabled by technology, proactive menu price adjustments, and more effective marketing investments. Looking forward, we are pleased for our stores to return to new levels benefiting from the removal of COVID restrictions, and return to Special Events, and the efforts of recent initiatives. For third quarter sales, we experienced a 1.1% comp excluding the seven comp stores located in markets that had vaccine mandates during the quarter. Including all stores, we experienced a negative 0.4% comp and total growth at 6.2% compared with 2019, reflecting softness due to the Delta variant and associated mask and vaccine mandates. Our walk-in sales continued to post strong comp at 6%, although our Special Events business continued to lag at negative 64% compared with 2019, which has been more significantly impacted by fewer corporate events. By month, our overall comps were negative 1.2% in August, 2.9% in September, and 2.2% in October, excluding the seven comp stores located in markets that had vaccine mandates during the quarter. Regarding sales mix, amusements and other had a positive 12% comp and was 66% of our overall mix compared with 58% of our mix in 2019. This was mainly due to minimal discounting and a continued shift to higher denomination Power Cards. Food and beverage had a negative comp of 17% compared with 2019, a substantial portion of which was due to the Special Events business. Adjusted EBITDA for the quarter was $68.2 million or 47% higher than the same period in 2019, which reflects a 21.5% adjusted EBITDA margin which was nearly 600 basis points higher compared with the same period in 2019. The improved performance was primarily driven by a higher amusements mix, leverage on labor due to a more efficient model and lower marketing costs. Net income of $10.6 million increased $10.1 million in a quarter compared with 2019 resulting in EPS of $0.21 per diluted share. These results generated positive operating cash flow in the quarter, despite the semiannual interest payment on our senior secured notes, the receipt of significant WIN! redemption merchandise and the payout of our first half bonus plan, which, as we explained previously, was done because of the uncertain environment for this year. We ended the quarter with $27 million in cash and zero outstanding on our revolving facility. Total long-term debt was $495 million at the end of the quarter, consisting of our senior secured notes maturing in 2025. During the quarter, we redeemed $55 million of our senior secured notes, which resulted in a $1.7 million expense to redeem the notes but will save $4.2 million in annualized interest. Subsequent to the end of the third quarter, we redeemed another 10% of the notes bringing our balance to $440 million. The second redemption will result in the same $1.7 million in expense and $4.2 million annualized interest savings. Turning to capital spending, we invested a total of $23 million in capital additions, net of tenant allowances, and opened one new store during the quarter. In the fourth quarter, we plan to open one additional new store in Brooklyn, New York, and relocate an existing store to finish the year with four new openings and one relocation, which will bring us to 144 stores by the end of the fiscal year. Overall, we are very pleased with third quarter results and the sound financial footing we have established going into the final quarter of the year. Turning to our outlook, I would like to offer some insights for the fourth quarter of fiscal 2021. Regarding sales trends our comp sales for the first five weeks have been 3.5% compared with 2019, which continues to be negatively impacted by our Special Events business. Our walk-in business is up 14% on a quarter-to-date basis, and we are encouraged by the strong start. We expect continued softness in the Special Events business for the remainder of the quarter, which will be more impactful in December when we typically have a much higher penetration due to the holiday parties. Additionally, we'll experience a negative impact due to a calendar shift in our key holiday periods. This year, both the Christmas and New Year's holidays fall on a Friday and Saturday compared with Tuesday and Wednesday in 2019. We estimate that this will result in a negative revenue impact of approximately $9.5 million in the fourth quarter. Including these impacts we expect fourth quarter comp sales to be slightly positive. From an expense standpoint, we'll have a higher investment in marketing, as we invest more heavily in the holiday time period and expect commodity and wage inflation to be at or slightly above current levels. Overall, we expect adjusted EBITDA margin to increase by approximately 200 basis points compared with the same period in 2019. From a CapEx perspective, we expect to invest approximately $100 million in 2021 net of tenant allowances with approximately 43% dedicated to new stores and improvements to our existing stores, 14% for games, and 43% for infrastructure upgrades and replacements. In summary, our team continues to execute on our initiatives to drive organic growth, improve profitability, and produce significant cash flow from the business. We are pleased with our progress and are well-positioned as we finish the year and look forward to 2022. Now, before I turn it over to Margo, I’d just like to say it’s been my pleasure and honor to work for Dave & Buster’s for the past two and a half years. And I will take away many memories and friendships from my time here. The company has a truly outstanding team, which is at the heart of what makes it successful. And with the plans in place, I am confident that the company will continue to be successful. And I would like to wish the entire Dave & Buster's team and the Board of Directors all the best in the future. With that, I'll turn it over to Margo.

Thank you, Scott. And good afternoon, everyone. Let me provide some insights into the third quarter operating results and give you an update on our key initiatives. We continue to be laser-focused on simplifying store operations, executing new beverage and food offerings, enhancing our entertainment and refining our service model to drive sales and profitability. Regarding our food offerings, we are excited by our seasonal differentiated limited time offers. Our winter limited time offer introduces new menu additions, such as Black & Bleu Flatbread, Cajun BBQ Shrimp, Butternut Squash Ravioli, and a delicious Apple Tart à la Mode to celebrate the holiday season. Turning to our beverage menu, we are featuring limited time offers such as the Peanut Butter Old Fashioned and Monkey Shoulder Punch, and have refined our overall beverage offerings with targeted enhancements that expand our menu’s reach and appeal. We'll be launching a tightly curated beverage venue this quarter that elevates the experience, adds new flavor profiles and improves relevancy in an effort to drive beverage sales. In Q2 and Q3, we launched several tests to determine the entertainment appeal of programming. We successfully hosted themed Trivia Night with Geeks Who Drink! and have expanded the test to a dozen more markets. We also set out to amplify the D&B football experience complete with interactive hosted events with NC’s entertaining guests before the games, during commercial breaks, and at halftime. The activities and prize giveaways have created a game energy in our test stores that has resonated with our guests. Our Q2 and Q3 tests indicate that our guests have an appetite for new entertainment offerings, so we will continue to fine-tune these offerings with the goal of giving our guests more reasons to visit. New programs and our tests include twists on Murder Mystery parties, Bingo Game shows, Standup and Improv Nights and competitive karaoke nights. Moving to our Q4 marketing campaign, we are very excited about our Everyone's a Winner sweepstakes promotion that began on November 15. This promotion gives guests the chance to enter for a 100% chance of winning a prize, including the chance to win $250,000 or free gameplay for life. Guests are welcome to come back every day beginning November 15 through January 2, and when applied, once per day during this period. Through the first two weeks of the campaign, we've seen an encouraging result with over 120,000 new e-mail addresses captured. The new D&B rewards program, which is linked to the D&B app, launched on November 8, and incentivizes guests for games played similar to airline programs that incentivize for miles flown. The three-tier status earned by playing games will bestow unique rewards and benefits that deepen the member connection with our brands. While it's early, our loyalty guests have quickly embraced the concept of tackling in-store challenges, and we have already seen some promising guest engagements. On the people front, the labor market remains difficult, and we have seen stacking challenges in a handful of our markets. However, the third quarter typically brings seasonally low volumes, so we saw less overall pressure in our stores with regards to staffing. We have ramped up our hiring efforts to attract the talented team members that we need for the busy holiday season. The brand-wide rollout of our new service model is complete and provides a more integrated in-store guest experience. The new service model combines tablets and a mobile web platform to enable a completely contactless order-pay experience. We are now leveraging insights from our guest feedback through Medallia to identify how we can further refine our service models so that we continuously drive an improved guest experience. To wrap up, we've recently completed our first employee engagement survey in over 18 months. I am pleased to report that according to Gallup, our engagement levels are 24% higher than the current average for the U.S. workforce. Our team is responsible for bringing the fun to life every day in our stores, and we are proud of their high level of engagement. Lastly, I want to thank the entire D&B family for their commitment to our guest experience. Your passion for the brand makes a meaningful difference. And now, Kevin, I'll hand the call back over to you.

Thanks, Margo. As you have heard, we are pleased with the results we delivered in the third quarter despite numerous headwinds, including vaccine mandates, mask requirements, age and labor pressures, supply chain challenges and a lagging special events business. We look forward to seeing a more normalized post-COVID environment in the future as each of these headwinds will become tailwinds, helping to further fuel our business. As I said earlier, we have an exceptional business model, strong assets and a talented team. There's meaningful upside potential for this company, and we are laser-focused on driving that to reality. Our team is extremely excited about the prospects for 2022 and 2023 and well beyond. Now let's take your questions.

Our first question is from Andy Barish with Jefferies.

Let me get one in for Kevin and then maybe one for Brian, real quick. Just, Kevin, on being involved in the business, obviously, closer day in and day out, what are you seeing that kind of gives you confidence from the programs that were put in place under the prior CEO? I assume international is going to be a focus going forward, given the announcement today. But any other areas we should be thinking about as you occupy the Interim CEO role?

Sure. Let me start by saying thanks for that question. It enables me to actually explain a little bit here. As most of you know, and let me start by saying, this is my strength: coming in and taking a fresh look at everything and determining the odd and the possible. I'll just give you two perspectives on some of my past experiences. So I came to Avis Rental Car when it was an employee-owned business. We converted that and turned it into a very successful IPO. And then I returned years later to buy a second car rental brand, Budget, and optimized that to the best result of leveraging one commercial brand with a leisure brand, and as you can imagine, taking advantage of all of the opportunities in that transaction. Another was Norwegian cruise line, where they were on the brink of bankruptcy, and we went on to be best-in-class. Most recently at Scientific Games, they were overwhelmed with acquisitions and its core values and responsibilities to their shareholders towards driving operational improvement, market share improvement and realizing the substantial opportunity that was there. Each experienced significantly increased organic growth, improved margins and return on invested capital and outsized valuation improvements, by the way. We have a very similar situation here, as you could expect having gone through a few years of having a very difficult time with organic growth and then moving into this period of COVID. We need to spring back into action and boldly lead our brand to the optimal position. So as you can imagine, having been the Chairman here, I was able to glean and understand a lot of what was going on, and I saw what I believed were opportunities. Having been here for a couple of months, it has enabled me to clearly see the enormous opportunities that lie ahead. And job one is the organic growth. Organic growth is job one. It's critical. It's what we need to do each and every day. And we have an enormous number of opportunities. Margo mentioned a few in her part of the call on the broadening of the experience during the evening hours, but we also have huge opportunities when you look at each and every day and every daypart. So we'll be focused on all of those opportunities. As we talked about, we also are going to benefit from the refresh and remodel. I talked about some of these relocations where we could take these big stores that are in parts of town that might have been optimal 30, 35 years ago, but maybe not the same today, and taking that opportunity and moving it into a couple of different stores in more prominent parts of town. So those are some of the opportunities. But when you get to some of the bigger things that we alluded to, sports viewing, and we're working very hard in getting to an agreement on sports betting and fantasy sports. To me, there's a great opportunity there first because of the economics that go along with that agreement. But the other part of it, and that's where the art is to make sure we get the best result, is in the promotional activities that we can create with the partner that we have in that agreement. So that's the second step. And then the biggest part of this opportunity is if we are successful with that initiative, you're going to bring more people into the stores. You'll increase frequency, and where you're really going to get the icing on the cake is people will stay longer. They might have an additional beverage, or another appetizer or some other food offering. So think about all the side benefits that go along with that. Also, other dayparts, just as examples, late evening, lounge. So we have a good group of people that come in the evening time. Having them stay a little bit longer, maybe introducing a DJ or something, to expand that experience and drive more traffic as people know about that opportunity. We're looking at Thursday nights very seriously as our opportunity to get people to start thinking about their weekends and how we can get more traffic in the stores on that evening. So lots of things going on, and just stay tuned for what we come out with as the coming quarters come together.

Thanks, Kevin. It's awesome. I look forward to seeing a lot of that getting brought to life. And then, Brian, just real quick on the margin guide for the fourth quarter. It's in line with kind of the long-term improvements that you've talked about coming through the labor efficiencies and things like that. But are you willing to share with us just how much you think the softness in Special Events and just the holiday shift of nearly $10 million in revenue is impacting the margin?

Yes. It's certainly impacting comp store sales. The softness in Special Events hit us especially hard in the fourth quarter. The penetration is about double that of the other three quarters in general. So it's about 15% of our total sales historically in 2019. The other three quarters are 7% to 8%. So it does impact us more. It is improving, but it's just slower to improve than the walk-in business. So we are encouraged with the walk-in business. And we do think that there's some kind of more informal get-togethers that are coming in from a walk-in standpoint that is bolstering that business. From a margin standpoint, as you look at the fourth quarter, a couple of things to think about there. I don't expect us to expand the margin as much in Q4. Part of it is the weakness in the Special Events business. But also from a marketing standpoint, we are much heavier in marketing in Q4 than Q3, about $3 million more. So that does have an impact. And then when you think about just labor in general, we'll be a little bit more fully staffed. Wage inflation will be slightly higher, we think, and then commodity costs, we think, will impact that margin a bit as well in the fourth quarter relative to Q3.

I want to highlight the significant advantage we have going into this fourth quarter. We anticipate a strong performance. Looking ahead to 2022, as Scott mentioned, we experienced a 64% decline in Special Events, which accounts for nearly 10% of our business. We expect this segment to recover to its normal size, which aligns with 2019 levels. This presents a great opportunity for us in 2022, and we are confident in our ability to capitalize on it.

We'll take our next question from Jake Bartlett with Truist Securities.

Yes, my first one was just a clarification. I think I'm clear, I just want to double check. But the guidance for slightly positive same-store sales in the fourth quarter, that includes the negative impact from the holiday shift, the $9.5 million. So it truly would be reported as slightly positive, correct?

That's right, Jake.

Right. And that's the power of what's really had to be here.

Great. And then the other question is just the visibility you have on the fourth quarter. I know a lot of the business obviously comes during the holiday season. I think 15% of the fourth quarter comp base sales were Special Events in '19. And then so you see a much larger percent. Maybe if you could share what percentage of that is in, say, December? But how much visibility do you have on that business? You expect it to be down. But do you have visibility that it might not be down so much? It does seem like a lot can really make up from the walk-in side of the business. So any clarity on what you have in terms of visibility there would be helpful.

Sure, Jake. First off, in the month of December, Special Events typically, based on 2019 numbers, is about 20% of the business. Okay? And then from a visibility standpoint, we do have a fair amount of visibility as we see the bookings come in for that business. And so as we look at our forecast, we'll look at those booking numbers and see how they're trending and that shapes the forecast that we have.

Okay. Can you discuss what will be driving sales in the fourth quarter? What do you have planned and what is on the horizon? Regarding new amusements, is the Transformers VR still on track? Additionally, it seems your marketing approach is now more targeted during peak times. What will the marketing window be in the fourth quarter, and how does the marketing strategy for the fourth quarter of '21 compare to '19?

Yes. I'll begin with the marketing aspect. We launched our marketing campaign in mid-November, which will continue until the end of December. The key takeaway is that our marketing periods are shorter than they were in 2019, where we had a nearly continuous presence, but we struggled to achieve the necessary reach. With these shorter periods, we can increase our reach, and we are already seeing positive impacts on our results. We are very encouraged by what we are experiencing thus far. Our marketing strategy has improved, and our creative is better, which is evident in our performance. Each campaign we execute, including this second major one under the new strategy, provides us with valuable insights that will assist us in refining our marketing strategy for next year.

Great. And then my last question. Yes?

I was just going to follow up on your questions about amusement. Amusements will have a new Summer of Games kind of event for next year, similar to what we did this year. We will roll out several new games, a couple of VR titles. So Transformers won't be out until the March timeframe, so it will be ready for spring break. And then we've talked about in the past, our Top Gun VR attraction, which we're looking forward to. With the delay of the movie, we've had to delay that attraction. It appears that the movie is on track to launch over the Memorial Day weekend, and we will time to roll that out or our VR attractions shortly after that movie. So those two VR attractions as well as several new games that we're excited about will be part of the Summer of Games, and we think that, that will give us some nice traction on our amusements and will be supported by some marketing as well.

Okay. And then last question is really on the comments around remodels and the scrapes and rebuild. First, on the remodels, how extensive do you plan that to be? I know you went through a pretty extensive process. I think it was from about 11 to 15. Is that the kind of depth of the remodel that you expect going forward? Or is it much less than that? I'm trying to figure out how much incremental you think it could be to sales. And then the question about the scrapes. I think the guidance for next year for '22 is six to eight openings. Do those include some scrapes and rebuild? So I guess I'm trying to make sure I understand what the net growth would be that we should expect in '22.

Sure. The cost and scope of remodels can differ. We have what we call a refresh, which is a smaller remodel that updates certain aspects of the building. Then there is a complete remodel, which can exceed $2 million, while a refresh might cost around $0.5 million. As we consider our store base, our long-term plan extends beyond 2022, focusing on a programmatic strategy. With our 143 stores, we will prioritize them based on their needs, determining whether they require a refresh or a full remodel, and identifying the most appropriate year for each store's work. The coming year will serve as the initial phase of this strategy. Once we complete a few remodels, we will gain a clearer understanding of the long-term requirements and necessary adjustments. The key takeaway is that we will adopt a programmatic approach, beginning this journey next year and continuing to remodel stores as needed.

I want to emphasize that this programmatic approach is extremely important, and it's easy for companies to overlook it. It's necessary to maintain that focus and refresh stores every six or seven years, or else they begin to deteriorate. I believe if you examine a few stores in our portfolio that are below our standards, those will be prioritized for attention.

We'll take our next question from Nicole Miller with Piper Sandler.

The first question, what kind of food inflation are you seeing? And are you able to use the menu you talked about today, for example, as a way to optimize or offset some of the commodity inflation?

Sure, Nicole. Right now, we're seeing commodity inflation in the high single digits. As we rolled out the new menu, we are seeing some benefit from the new menu in terms of its structure and on cost. That is helping to offset that. We don't want to change the menu just because of commodity costs by themselves. We think we have a good menu, and we're getting good response from our guests. Any changes that we make to the menu would be either limited time offers or driven by feedback from our guests. Overall, we've been able to keep commodity inflation and labor inflation mostly offset by what we've done on our leaner operating model and some of the technology that we put in our stores to improve efficiencies.

Was there a new price increase associated with the seasonal menu? And how much price is in the system currently?

Not necessarily with the seasonal menu. We did take some price kind of across the board for our menu of about 5%, but seasonal items are more variety versus a menu pricing action.

And then just a last question on the Special Events space. I mean it's clear it's a drag, and we appreciate that, but it's obviously also the inverse is it is rebounding. So is it the local social guest that's coming back? Or something on the business side? As you think about the opportunity to remodel, is there something different you would do with that space over time?

So in terms of what we're seeing, we certainly noticed the social business picking up earlier. The team has indicated that during the holiday season, there is also activity on the corporate side. In the upcoming year, you will see a sales team that has been strategically repositioned to focus on corporate sales. We are very optimistic about the opportunity to fully bring this back next year, as we believe it will be a strong asset for us. Regarding the Special Events space, it's interesting that you mentioned it, as we have discussed various ways to enhance flexibility in that area, especially as we develop the programming aspect of our operations. I don't have specific details to share at this moment, but it is a consideration we are actively exploring to increase the use of that space in a broader capacity.

I think the important thing there is it's not necessarily an either/or. Being flexible, like Margo mentioned, we can still use it for Special Events, but when we're not using it for Special Events, that opens up the opportunity for other uses.

We'll take our next question from Brian Mullan with Deutsche Bank.

Kevin, I'm hoping you could provide some of your thoughts on the long-term unit growth opportunity domestically and whether you're taking a fresh look at that with you taking over. I mean do you have a sense today of how many stores you think the U.S. can support over the long term? Maybe what's the right pace of growth that the organization can handle in a normalized environment, while still driving consistent same-store sales at the existing base of stores?

Yes, let me address that question. We have discovered that our new slightly smaller stores yield better returns and utilize space more effectively. This concept allows us to expand our brand into many more markets, and we have significant growth potential for many years ahead. Additionally, we need to reconsider some of the larger locations that have historically performed well but have declined due to changing traffic patterns and market dynamics. By converting those larger stores into multiple smaller ones, we can increase our footprint. There’s a lot of potential here, and we need to approach it carefully. We've discussed the chance to reassess all our stores to ensure that when customers return, they experience something refreshing and new. We aim to create an immersive arrival experience that truly enhances their visit, which is a significant opportunity for us moving forward. Moreover, investing in our existing stores can rejuvenate them, attracting customers back and increasing traffic and demand in those markets. It's crucial for us to balance improving existing stores for our guests while utilizing our strong cash flow to build new locations each year. We must manage our capital allocation thoughtfully to benefit our shareholders. Lastly, I want to emphasize a point we may have overlooked: we need someone to take ownership of this initiative. Without clear leadership, progress will stall. We've complicated our marketing approach too much. A straightforward franchise model can lead to success when implemented correctly. We're receiving numerous requests for new stores globally, and we need to establish our presence in these markets. I'm not predicting immediate economic improvements in 2022 or 2023, but laying the groundwork now will benefit us in 2024 and beyond. Over several years, these efforts will contribute incrementally to our top line growth. When considering revenue growth, we must examine various opportunities, not just organic growth or new stores, but also how we can improve in every area. I hope that answers your question.

Yes, that was great color. And then just as a follow-up, it was encouraging to see the share repurchase authorization. Can you just talk about how you plan to approach deploying that? Do you expect to be more programmatic in nature? Or perhaps more opportunistic? And is there a target leverage ratio investors should be mindful of as you think about managing your capital allocation from here?

Yes. I'll begin with that, and I'm sure Scott has some insights as well. Our leverage at the end of the year is nearly a stable market, around 1x. We have a duty to our shareholders to create value for them, and it's important for every leader in our company to recognize that we come to work each day to drive that value, which is essential for our jobs. As for cash allocation, we’ve discussed the number of stores we are constructing, which is fully on track for 2022. We are also investing in our existing stores, new games, maintenance, and so on. We still have a significant amount of cash on our balance sheet. The question is, what do we do with that cash? Instead of keeping it in the bank with minimal returns, we want to make wise decisions that benefit our shareholders. Given the current investment sentiment and our industry's position, we are trading at a low multiple. It's our responsibility to return a fair amount of capital to our shareholders as our business allows. We will act prudently and avoid being reckless. We want to gain more clarity in the marketplace and see improvements in the environment. When we feel confident about that, it makes sense to consider share buybacks thoughtfully to reduce our share count and benefit our shareholders.

Yes. So we'll continue to monitor trends, and we want to be opportunistic. We think that we are undervalued, and we are pretty close to the business, and we think that's the case. We want to have that flexibility to get back into the market at some point when the time is right. As far as the leverage ratio, we don't have a specific target right now. We are very happy with the lower leverage ratio we've been able to attain. Longer term, it really depends on the opportunities in front of us, whether that be internal investments, buybacks and things like that will balance those needs and those opportunities against our leverage. That will help us kind of form a definite leverage target here in the future.

We'll take our next question from Jeff Farmer with Gordon Haskett.

Great. If you guys were to theoretically pursue a sports betting partnership, what would the next steps include? Would you guys end up testing this in a few markets for several quarters? Basically, the question is, how quickly could you move forward with sports betting if you decided to pull that trigger?

I think there's a bunch of answers to that question because you want to make sure that we develop the right relationship, and we're talking to a couple of prominent players in that field. When we get that deal done, you want to make sure there's a deep partnership because we can both benefit by having a deep relationship. That's part of the process that we're going through currently. Once you get that deal done, then you start to roll it out. As you're right, you're going to focus more on the states with sports betting already in place and test the concepts and constructs over a course of a couple of quarters. I see it quickly moving out across the brand, at least with the sports fantasy and the opportunities to talk about our capabilities.

Okay. Unrelated to that, I'd like to ask about your observations over the past several quarters, going back to 2020, regarding the fluctuations in COVID case numbers and related headlines. How have these factors influenced your customer traffic trends? Where do we currently stand in terms of traffic to your business when customers read about Omicron or see news regarding it?

We haven't really seen a big impact to our traffic with the Omicron variant at this point. Our walk-in business continues to be very strong, and we haven't really seen a big impact there. Our Special Events business, with or without Omicron, we expected that to be softer for the fourth quarter. But we're very encouraged by the strength of the walk-in business.

Okay. And then just a final question along those lines. There has been nice sequential improvement this quarter compared to the same-store sales performance versus 2019. Is there any specific driver or initiative that you would highlight as contributing to that improvement?

I would point to a couple of things. We've rolled out our new loyalty program and our marketing campaign. Our marketing campaign started in the mid-November timeframe. Similar to the summer marketing campaign, we've seen some lift in our business. At least part of that is due to the marketing, based on some of the testing that we've done and some of the analysis that we've completed. I hesitate to say that it's all due to that as there are many variables, but we're seeing some good trends with this kind of condensed marketing period with heavier weighting. We're seeing that as definitely playing a part here, and we look forward to continuing to refine that strategy.

We'll take our next question from Andrew Strelzik with BMO.

Great. My first one, Kevin, in the first answer in the Q&A that you gave when you went through some of your prior experiences you mentioned, the prior times when you've grown those sales and margins. Obviously, there's been a lot of focus on the top line side so far in terms of the strategy and the outlook there. I'm curious on the margin potential and how you think about the margin potential of the business. Obviously, Scott has outlined 200 basis points or so of structural improvement. But do you think that there is, over time, more upside there? Some of that can be tied to the sales volumes as well, but just separate from that, I'm just curious how you're thinking about the margin potential of the business going forward.

It's a good question. Some of that will depend on market conditions. If we see a bit of an improvement in the labor market and if commodity costs decline somewhat, there's a lot of noise in obtaining goods and services nowadays. I believe things will stabilize at some point next year. Additionally, taking a fresh perspective allows us to assess our initiatives. We are examining how we operate, whether we are efficient, and if we are effectively reaching the market. The team has done an excellent job, with Margo and her team implementing technology solutions to enhance efficiency in labor costs. If we succeed with our organic initiatives, I believe our margins should at least remain steady, and we may begin to benefit as the market normalizes and as we continue working on various initiatives behind the scenes.

Okay. That's helpful. And then obviously, the 14%, I believe there was comp growth on the walk-in side. I know that was a quarter-to-date number. So maybe you don't want to speak to that. But just more broadly, I remember you were seeing pretty significant check growth. I’m curious how that's continued to evolve. How much do you think could be sustainable or you would hang on to kind of as we go forward into next year?

We're still seeing significant growth in check and specialty and amusement. We've talked on prior calls that our per cap on amusements has been close to 30%, and it's been pretty consistent. It's still in that range. We feel like there is staying power with that higher ticket, especially in amusement for the remainder of the quarter, and then we'll see and kind of reassess as we get into 2022.

Okay. And then my last question is just on G&A, which was a bit higher than we anticipated for the quarter. Was there anything in there to kind of call out? Or is that a reasonable kind of run rate for Q4 and moving forward? Just curious for any color on that would be great.

Sure. There's a couple of things to note in our G&A costs. One is, there's about $2.7 million in additional severance costs. We had about $1.4 million additional in bonus and about $2 million additional in stock-based compensation. So that really kind of bridges the gap between this year and 2019.

And Scott, I just want to wish you all the best in your next chapter.

Appreciate it. Thank you.

And we'll take our last question of the day from Alex Vasti with William Blair.

Just start with one quick one. Thanks for the color on the monthly comps in the quarter. Could you maybe talk about per card spend and how that has held up?

Yes, per card spend, it's held up very nicely for us. It still is about 30% higher than 2019. We're very encouraged by the consistency that we've seen there. That does give us some confidence that we feel it has some staying power for the remainder of the quarter.

And then on the recent announcement with Antonio taking over international, how are you guys planning to frame up that opportunity there, maybe in size, if you can? And then how quickly do you guys expect to reach any partner agreements there?

Yes. It's a little early. He doesn't start until January 1, but he's a go-getter, and that was one of the things that attracted me to him; he's like a bull in a china shop in getting stuff done, which I think we need to do in getting this off the ground. To be realistic, '22 and '23 are investment years in getting the contacts, starting to develop the relationships, getting agreements in place, and selecting partners, et cetera. So you're not going to see EBITDA from that until '25. Then it starts to ramp up from '25 to, say, 2030 to the point where it's a good-sized number. When I look at it, based on my experience, I see it as being an achievable business model. Are you going to be aggressively moving on that once he starts in January?

Ladies and gentlemen, this does conclude today's question-and-answer session. I would like to turn the conference back to your speakers for additional or closing remarks.

Hey guys, just thanks, everybody, for taking the time to listen to us. I'd just ask you to stay tuned. We've got lots happening. We're really excited. We've got a huge opportunity here and just stay tuned. Thanks so much for the call, and happy holidays, everybody.

Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.