Bowlero (BOWL) 17 May 232023 Q3 Earnings call transcript

Greetings, and welcome to Bowlero Corp.

Third Quarter 2023 Conference Call.

It is now my pleasure to hand over the call to Ashley DeSimone of ICR.

Good afternoon, and welcome to the Bowlero Corp. third quarter fiscal 2023 earnings conference call. in mode. be will participants a listen-only All

with During that beliefs information. Private constitute the and company are company's Securities of our events certain estimates, statements may make forecasts, views the forward-looking reflect current Reform based Such this to today and Act. future as call, Litigation statements respect management's statements expectations, on under the assumptions, projections,

materially and and are statements subject differ those These results that events cause actual number the risks to in can uncertainties of to forward-looking from described a statements.

report the Form uncertainties, the For that Form further SEC such and risks SEC as these with XX-Q details XXXX, reports reports on on current with fillings other company filed as concerning quarterly will Form please well and see September X-K. as XX, make our annual or on XX-K the made on have

expressly The required forward-looking a whether as disclaims to review or or except obligation new developments any company publicly statements, law. future otherwise, of any result update information, by as

In discuss release. we non-GAAP the and be press addition, in for in useful non-GAAP financial company performance. reconciliations evaluating found will the could be which measures believe earnings measures, can today's call, during Definitions

As conference recorded. is a reminder, being this

Shannon to call turn I would now like Corp. over of to Please the Thomas Bowlero ahead. go

and recently Bowlero Officer of Parker, Bobby Lavan, today's call. CEO and I conference joined Chief welcome earnings joined discussion Shannon, Thank in participating Chairman Chairman as Financial for I'm Bowlero and Vice afternoon, to Good Corp. President; by XXXX. am the for QX who of Designate. and you fiscal Corp. Founder, Brett Thomas

company with and experience CFO welcome and as We're our is to thrilled family. as the a be a tomorrow, of will fit Bowlero company's brings the who him culture. to team natural extensive CFO public Bobby,

our have as sheet we'll several to cover we transactions we we focus on the performance share. updates exciting to create remarks, have completed and Starting optimization During and important value. as topics balance shareholder many ways financial to several with in prepared today's quarter continue deliver

happy by highlights, quarter. that with financial EBITDA three a largest the million sales had was by XX% and from XX%. decade report equating growth margin This to quarter contributions I revenue was we $XXX million, with newly pre-pandemic, $XXX growth healthy reaching to the adjusted driven Year-over-year Beginning and revenues higher the am and XX.X% revenue for combination opened to reaching growth in our history, nearly far revenue same-store of relative acquired was a centers. and by

XX% and pre-pandemic. With same-store year-over-year, increasing sales versus XX%

across We organization. the and across proprietary our a which In our consistent our the various to new These the continued of to efforts, operating of high business model. reflect results walk-in-retail, lines, our prioritize demand our team's are business output leagues, all and fundamental levels execution remains strong addition events. strength ethos. technology This testament watermark of

Overall, our same-store Bowlero’s trajectory sales ability to generate consistence is shaped by growth.

and XX% frontier fragmented disciplined new execution. been Our now and and MoneyBowl, the team highly (X:XX), in a upscale which such innovation of centers on introduced activated to continue dedication XX We operational ABC industry world-class strategic as includes and innovations execution our pioneered experiential has experience, focus to or through customer exemplified our next as and about portfolio. the technology, technology proprietary strategy, continued to which growth our excellence conversions, acquisitions, and bowling in builds of

support take access differentiated excited of And to strategy. bowling are is expected current downloads this heights. Moreover, proven our launch team play and Bowlero or We in appreciate increase the our reach to in new will quarter, which the version your free gamified across to we're nation XX,XXX. to Total our experience. over continued fiscal further to trust and

the lead it would Brett to discussion. I balance like off to to Parker that, of hand With the

everyone. evening, good Thank you, and

our adjusted we mentioned, EBITDA In happy record margin. fiscal million We significant $XXX the million a of a XXXX, $XXX Thomas third quarter revenues had quarter and historically, with EBITDA Bowlero XX.X% of of performing of most report are adjusted year ever. positive extremely our number seasonally to strongest developments. quarter As generated

cash pre-pandemic, translated XX% This $XXX XX%. operating adjusted EBITDA adjusted Compared by $XX from by by XX% $XX and grew million QX, expanded higher million or or EBITDA prior into XX%. was million year's activities. the million million Compared of adjusted revenue or or $XXX to and $XX expanded to revenue

$XX loss million. Net was for quarter the

quarter much across a our a generative to fuel related However, to adjusted operating growth. the strategy multi-pronged for net cash future we We of non-cash income shares, highly the expense redeployed reinvestment to of earnout million. value had adjusted and flow $XX flow was cash continue

to grew revenue million EBITDA basis, and acquisitions, period. XX-month XX% trailing center with From a TTM reached $X.X $XXX to adjusted active respect million the million grew conversions. margin. at builds we have or to revenue and a remained perspective, On new a XX.X% prior TTM compared year fleet $XXX

XXX. center centers third in and new subsequent two one current to bringing added to third additional center the the of end count the We our quarter quarter,

to We Two currently and are construction are in this two purchase year. under to calendar expected agreements centers builds also acquire additional new have definitive open quarter. the fourth

real our owned through The raise came for optionality underway. the which Since new which fiscal or have projects XXXX, with There capital XX currently traditional long-term added to transactions majority of start leaseback we estate, more conversion XX than mortgages. provides to are portfolio. sale us centers of

with same-store as robust, our remains well our further organically serving to central as opportunity pipeline as grow with ample in growth inorganically algorithm the ingredient sales our Overall, success.

to two dynamic we of in in the demand were business subsequent sustained in performance of ahead the our saw this the first XQ, intact, pre-pandemic month of quarter our levels. and quarters, looking upon to each Reflecting robust prior particularly in fourth quarter, relative the level the fiscal financial remains

COVID-XX will operating has provide performance light Since to forward-looking After calendar have over provide longer performing decreased the pandemic. the elapsed. as how view the its beginning time quarter, was we chart pre-pandemic of XXXX, of to we into relative of a sharing business a growth the pre-pandemic been periods, year this relevance snapshot the in given no that

inflation continued level as rising strong. interest XX% and or such levels center headwinds continues rates, macro and pre-pandemic been versus has despite perform growth to Nevertheless, higher sales same-store revenue

While period XX grew are ending May revenue preliminary, results compared recent the most impressive week pre-pandemic. X, the the XX% an in to

third As the of we all have in that will year-over-year comparable COVID-XX wave quarter stated performance of half less we Omicron the naturally as in the of subsided. the previously, fourth surge comping we and as last pronounced expect over demand become year the the quarter fiscal latter begin

items comparability. fourth affect briefly year-over-year like I that will that would our On note, and to fiscal talk about quarter

estimated revenue fiscal was million factors. benefited our the a last quarter in that reminder, from a fourth calendar in As two revenue. added an XX-week year XXXX in One, $XX fiscal there

a fourth million methodology for change quarter. the revenue, in two, positive in service which of fee $X a the And resulted accounting in impact net

is fiscal year's an the recognition for service bartenders. 'XX context, million. figure revenue all our quarter, servers fourth quarter fourth for related fee service baseline the on gratuity XX% F&B of the the paid Adjusting is all and For revenue revenue impact of fee comparable revenue, XX-week charged the $XXX QX revenue in last is which to and

of heart The economics. our profile. operation overall level center our to and financial our Turning

year $XX well and up XX% growing revenue the pre-pandemic robust or million million see comparable levels XX% prior with group year. or year-over-year $XX bowling period, XX%. over center prior and above $XX or Total million performance growth and to walk-in-retail continue increased We level events

$XXX period This significant over reaching strong an and a growth the jumped XX% pre-pandemic line EBITDA, top into which adjusted center translated million. impressive in increase year-over-year XX%

Our XX% adjusted center basis EBITDA XXX points margin year. prior versus decreased

pre-pandemic period. However, it increased comparable XXX the to basis points compared

in points. margin latter related quarter. benefited demand year for XX% half coincided Adjusted of the which the to Normalized credit, EBITDA and expanded XXX the from a EBITDA and the center prior prior with $X.X million adjusted basis staffing rent year-over-year year COVID-XX rent adjusted in shortages, expanded surge in by EBITDA the concession

credit. On margin leverage basis rent the variable adjusted above largely was function prior level stream. revenue $X.X Relative the business our margin of XX.X%, inherent input the margins surged the EBITDA XXX cost which contribution year, basis almost adjusted the inflation. aforementioned metrics, expanded well XX% to and points XXX points margin a for wide portfolio when individual adjusted the pre-pandemic center leverage exemplifies operating basis, is benefits at across documented overall a both EBITDA This despite comparable levels. million This of in portfolio consolidated

undrawn our cash of center sheet facility. flow on cash XXXX, adjusted on the of a across new and fiscal from operations redeployed quarter with to cash existing million over and with The $XXX robust renovations. liquidity in by flow our of cash underpinned upgrades we finished the From quarter in balance center revolving much our million the history, company million $XXX perspective, $XXX year third portfolio Consistent acquisitions, we period. roughly and million in self-fund in $XXX comparable prior this the credit builds versus generated capacity

discuss several capital let's updates. Now noteworthy markets

As recall, with you extended B we notional of amended million in may our XXXX term $XXX February, February loan principal. through and of

nearly hedged XXX floating approximately one-month the total or We have points through of XX, loan in basis basis million XX March XX% defined into points rate of exposure locking of the SOFR to our now by $XXX term a XXXX. band

achieve risk It cashless a upfront a premium zero without as to rate cost us this contain paying premium protection so. to interest do dollar in utilize collar we to

was interest term effective X.X%. the B the XXXX, X, April of As rate on loan

have we term our We generate to this interest XX%-plus with strategy the tapped we on returns B rate particularly our ago. that the annual X%, referenced multi-pronged given reinvestment loan I are very moments at expense which compares pleased outcome, across

of We of outstanding. and in principal buybacks million completed transactions, Pro convertible for for $XX end. forma these preferred Further, separate structure occurred transactions, cash funded $XXX to subsequent which approximately have we the notional of $XXX XX% to remains million buyback $XX capital million also these salient the quarter two with of the million discussion, hand. shares on our

basis. by Importantly, impact measured reduce fully diluted as X.X share million count on a these as-converted shares two the an transactions potential

the an buyback of have X calendar May been support Since common $XX have million of bought price shareholder reinvestment authorized This of stock We or also on XXXX, million average increase XXth, Board per share. $XX of through we XX, to year A million. repurchased May share X.X in Class of back our $XX.XX common program, per via continued Directors In an share. to inception average have to million an roughly for shares share of million to the we $XXX equating buybacks. returning $XX.XX strategy, company's active the shares this capital for

is it earned earnout noting of the first X. Lastly, worth on March tranche that shares were

remaining issued XX.XX. shares our diluted fully as result, only since by resulted The earnout of public of May combination a that in transactions is these redemption, reduction related a one count various million of shares in our company, in tranche nearly the has there as share X.X vest net As at warrant despite part quarter completed common share XXXX. full X.X the which shares first a million

share chart see have and we of As the you diluted XXXX. can reduced consistently fully since coming the count public table, in in December the

a of financial In new EBITDA recap highlights, million closing, we've of set performance quarter $XXX million, of with many high terms EBITDA to XX.X%. of $XXX substantial adjusted a in margin and revenue with watermark adjusted positive record

XX% to of dollar $XXX our and us and term We We cost one-third convertible it our diluted simplify to X.X nearly the zero million of of upfront million roughly on count by continue principal to premium and B fully reducing million for successfully this X%. our or executed share loan retiring hedge risk. ensure shares preferred $XX notional by approximately capital structure the

addition And Bobby our augmented finally, Lavan as the our team CFO. of with management we

must ways remain finding shareholders. in deliver fronts very we value to our a exciting on and multiple say, was it active You quarter to

despite that about trajectory remain growth we macro term dynamics enthusiastic highlighted, the discussed. Thomas some As our near of we

Founder, and you by we Thomas the quarter. begin for led Shannon. a CEO, now forward for line your presenting Operator, Chairman, look brief to and Thank time, questions. We'll Q&A next please open all our

Thank you.

question. session. Please will conducting now be from Matthew JPMorgan. with proceed question-and-answer We with your Instructions] Our comes [Operator a Boss first question

congrats quarter. and nice Thanks, a on

Matt. Thanks,

Thanks, Matt.

that third traffic you you saw walk-in-retail? quarter, overall in you May. Tom, demand could maybe trends demand group progression between April notable And more changes in So to and maybe in the any speak recently or of the seen events to have relative

slowing. a no been has there Well, doubt. There's

be the seems but as in saw comps April, to the progressed, slowed. now. the in So We quarter it -- flattening that

I in we So high ago coming through sugar not back more all history a importantly biggest lot flowing the And off not with money at of back system. year a were people at our business, the maybe work, probably school. of kids the think for

money. of amount had and a lot And huge a this combination of so idle you unparalleled of time

growth, of resume that's been any business. growth we'll but and needed for think be not really to pause a I double-digit think years I it's sustainable obviously, we there -- X.X because

concerned not So I'm about it.

see it's We more pronounced I back that slowdown it market also strong. which probably, was see at most came point. some We think did California, the it. the inevitable was in the

just months. sort of did so on side. than stability positive more growth. now the a probably trends two And to yes, since event sort time first are more I'm again, or normalization. But of But in So side for of return on to seeing return we the last the or three a the the XXXX notice it retail

offerings, underlying we maybe sustainable of as sales to think best some of as your think about power, XXXX. How drivers we upgraded about into the about same-store growth, then a of next follow-up And comps? the year drivers Great. think just pricing underlying your of some moving FY

of are they renovated, getting cases bars, centers either being some the a getting first We have. they're they're kitchens that have that time, for in lot arcades didn't

of So a those time, it a while renovated and contribute facilities become done more. we've for lot but over acquisitions then they to takes

one that's tailwind have. we So

packages, to ability to that The to able continue we like second the guest is, revenue I the other to and optimize us visit. will increase think give that things pricing things and continue get per we're

robust we lastly, pipeline. then a acquisition And very have

to So I for months. the builds, think flow sort be positive new acquisitions underlying next I will very the of trends think of the the the come, all between renovations, XX the business, just

Great. Best luck. of

you. Thank

you. Thank

your with Capital comes question next Group. proceed Jeremy with Please question. Our Craig-Hallum Hamblin from

the I was versus question sales on trailing levels. it a you pre-pandemic the I on wanted that were same-store because does XX-week terms period, How you understood up follow-up congrats ask make just strong of and Thanks a results. quarter-to-date sure said XX% that to basis? saying, that in translate what

speaking. Brett Sure. Hamblin, Parker it's

We've outside fairly released haven't quarter cautious the We detail. of numbers level of been the that on itself.

And out you then of can you of giving if the purposes putting at and February, been the incremental see look March consistently I done happening. and and we've So back kind uptick and look at year, big that's April chart prior of year, visibility. this was the for so think this when into kind

to meaningfully trends the saw as then and meaningfully happen continue comp, up then we saying, knew than And those that pre-pandemic comps. And So continuing said. deceleration higher. would to difficult Tom some we as come we Tom trend higher against intact as it's more are

positive those Got want from you comments It interpret do It not. Thomas. it. not hard Any comp Okay. that went to from to or was just at whether or trends were clarify all? -- Q-to-date

to Well, into we the numbers we're it. on not quarter get going until give the comp

think total a would had the to of be higher most what to quarter I that easiest most the and was and basis the a basis. articulating was on part front difficult revenue comps on high keep Tom keep difficult comp

Got it.

centers expected then, you color Wanted two costs that pending MoneyBowl drive ask or QX of in intended see a rolled trip free would downloads. willing to play. to that your games would you to are or notable pretty that provide I It could associated anything the meaningful goals, app with to in then with you said incur now. it you you test at here? is in What also the to XX% And this looks as almost launch with wanted with played point the like frequency out that for in in launching share the if saw comment uptick of time? this you beta be on any that ability about Okay. like, looks

to to by directionality is respect exist. it's certainly, what the level, of give we're data free yet the respect see. already encouraged seeing. systems location to instances, But it because very we're data with the at with specific the we're that to just looking many to we're zero cost play to then but And points the de out, performance the where and set system, minimis what roll in rich, aggregate the So isn't hesitant in

an it's the support of development dedicated overall It's to cost didn't allocation just to that and team So we heads effort. just the where really add MoneyBowl.

the terms a significant in requirements or expense, what at anything push. we're were if like of different for that, there plan which So from meaningful centers at advertising or simple would be today, that is looking needed capital it very incremental just

And last Okay. hop Got me it. then one before for I out queue. the of

you terms on bit grab it you to to in week. wanted here. of, in It quite media quite share Wanted is anything that? you were of but EEOC I last of Just the there's anything there bit some pending to that. to that on a comment can’t, been see review probably that's attention know a related to of been willing noise seemed if the

on I entirely terms those I not allegations in Sure. development. the to noted, as first EEOC cnbc.com a It's deny you, new able mean limited, claims all, false were years you we're made been there in tell to The for strongest them of we information would dragging seven that in disclosed the investigation but any we're all Yeah. you're is hide. filings, we've the right of share, have the in that and are we article and regulatory over are nothing accurate.

cooperated documents and to to information this have whole document process. throughout We EEOC the provided fully and

determinations their conclusion. with date, EEOC that any To substantiated methodology the has any evidence viable not their or supports

battle thrown claims to substantiated not in the of tolerate and does also of reasons continue own thorough enterprise, not our claims the to facts any investigation we Overall, prohibiting Bowlero demeaning discrimination. Our have violation discriminatory employment out. are policies wrongdoing any any a form evidence the why These has into context. or these based values

or priorities. against not outcome materially us distract our it impact from will the executing our business is, Whatever strategic

focus Post At stand exceptional and about results to note not We that the York the culture. stand made of excellence. wrote leader in commitment story that track talking stale XXXX. say. there's she workplace earnings unwavering visionary of and and narrative by claims we and we by now that a can article in similar much cnbc.com our misleading that, we Our the by the positive essentially stand New regurgitates end author talent beyond record cultivating reflect I'd the we're our also same the day, in our our latest

Best it. Thanks Got the wishes color. for guys.

Thank you.

you. Thank

your with with Konik comes question question. Please proceed next Randy from Our Jefferies.

Hey, currently guys. focus just, really appreciate on to my long and we amount ones productivity the then discuss kiosk per if perspective, the and to us remind just I want about enhancement. Thanks you kiosk of will, session, of first opportunities a the have Can lanes questions noticeable with versus lot. some kiosks have lane Really want think lane centers of kind it. And the term first, without. for the in what the difference of percent lane installed? the bowling in maybe seen us give some kind lane you a centers I F&B or

some Just going lane higher and because seems just like for good perspective higher per and driving, a F&B it forward. revenue want get kind there to unlock of

Randy. Yeah, This is Tom.

our I think certainly to it's senior some spending question. people today. time kiosks funny my underperformed their it's was that I a talking is a as about The potential. and reality them great for coincidence, have And expectations of something

time. have spent a We is And highest We of XX good. technology of in grossing them the lot very our centers.

of version very on I X works product the think X we're or well.

getting in. resulted I it centers sort should. of of level the in were that not the problems It attention two think there that have

raised a a dramatic meaningful in Because the managers, to hadn't seen through pay managers, increases. first in all broad-based turnover, needed our workforce, facility general which managers, addressed level mechanics. a quite some happened center the operations in made mitigate of The general we've turnover we while, by our even that those we managers we managers, What giving we've of and since the raises to the positions we stabilization managerial assistant is, management lot had workforce. is

attributes you a have getting like of with in number matters because the terms optimized a that turnover. ramped of train process something have can't is a let's or managers reason you The kiosks say if quasi-complicated and stick process

do for So address turnover we to lot reasons. of need to a

to at casualties lanes, orders the managers entire to customer they order, because it front which the from of a server avenue value utilization by turnover through says them, high cetera. are as kitchen adjunct a the by that provides server et an One understand was end, whether an the and journey that is the to to this making replacement experience the of delivery and kiosk educating a sure or can it the executed need them properly to really

a utilized being recently wide range So how the what found kiosks in of we centers. was are

Some a centers quite utilize them lot.

some basically a Some centers at them all. digital menu, centers as didn't and utilize utilize them

technology a The we of thing is than effort more for dedicated And this think, more and really the once it's news a need, this, to is product think will. that very is, spearhead meaningful. a So cultural of possibility solve thing. this and I we that thing we good training a it I champion

be looking And high we in in that food have that end And would hospitality, we that very no I a it At company the But rapidly it's hasn't we're in a would not is of else these people like in what the the But turnover with this there's by retail it's unfortunately solution. based mean? high-single growing or on. centers double-digit everyone digit low even is getting hoped. the is something a root problem shouldn't a addressable and like does culturally this day, issue. taken increase technological at utilized. reason sales focused say,

it these obviously, just We in about can And blah that could It as when forward you going investing like, out. to seems want almost or in me go I almost food, help the order just because to if huge a blah. and be feels can like, to But years offline. greeter someone the you talk simple hey, lanes, the if just over that does interesting. lanes someone kiosks walk a as, It's No. ahead. blah

group consideration growth around more I that's when right? question ago, like I about quarter. there a that's Bowlero went years party for of very a everything. over remodels But I used a almost X, massive in way the back the as with improved good thought the a this few some consideration about as being XX second for kid think was almost and the you the bowling parties. The social, the non- How in in last dormancy I it centers? the seems you into a there. bowling is do Obviously, comes that? -- party. kind that years still about versus ahead like How was last events, Bowlero Bowlero party guess kid felt party do in think us Like, just to being was perspective give bowling opportunity So it My

I TTM I it's of the we of an events. would what but event don't million do is, the I neighborhood mean, robust enormously business. imagine $XXX Well, know in

birthday So, it others. bedrock markets the party may bowling is stronger kind American be a in of than some institution

to parties all the West Manhattan. Angeles, say I out on their Same they at weekends LA. other the at kids birthday end in side kids of people going our bowling centers on know do example, for Los is there For thing in or

reasons. So, you events, those right? You've got have that or grow not population by will to one long you you think grow continue and corporate other holiday it's have birthday it's term I events, growth will adult think of party business, all right? have I business, social, kids business either

keep of they companies together is workers it we're employees requires much intact, because the the previously actually doing great to get to did office culture going that. by in helped some way a as this and I not way think as to

We're was companies in doing say. previously get office as a They come back So people back. it home, work trend to we're a is together, to get many I for to which they're think say would negative to fighting result people and that. that need than seen stronger a great We've activity relative creative of or companies, seems that. from of benefiting be very what I the where way corporate what I want from to should

segments event us, the think perpetuity. is for go really robust segments business are that in that market for So I all almost extremely and into growth the us that

Thank helpful. Super Yeah. you.

Sure.

you. Thank

Oppenheimer. from Our Zaffino question. Please with your next question with Ian comes proceed

you Hi. much. very Great. Thank

I on event build things the that to wanted question. of two business. hearing Just on I'm guess different kind

that really they think sugar just and high get that were fact, companies trying did bit high. referring I something the way have previously and guess sugar to just Because like guess, I retail is with retail have originally high in that would to I retail it interpreted have down, little mentioned employees was do seems it else? a you or you're back I strong. would is probably but that come to slowing to a related a sugar is now

maybe interpretation the is of So sugar different. high my

maybe recession? the retail I I maybe environment? would do cetera, et a then think And be, recession, question in we other macro know in think And we're into slowing if into – of think we going event, a does people Going don't are. How how Thanks. the business perform

you glad asked. I'm So

weakness the the the reported the social clarify. events. was end Let of me The in in we quarter business just at event

most I sugar biggest corporate, business that typically indiscriminately dramatically. high So who the is And the is, on that was basis is year people were were come a going small groups of business social out on where was think that not ago. slowed that the a spending the of weekends. That and that in people where there sort they together

business Corporate remained little. strong. a in came very that So

question. glad was So the that the weakness you asked and I'm

really impacted all to the They're not recessions. sort With different. history. and shallow through XX.X of number We're regard meaningfully them in company's by of year a we've recession, been

one we're low park anywhere, theme local. easily to We're or going business community, a value spiked, and For So a we're that's other we're cost. improved we're offering a So prices opportunities, we're traveling to the sporting thing, a certainly event when gas right? in cheaper we're compared or local, and because alternative entertainment why our than most actually accessible to right?

So recessions us. don't bother

because Now recessions spigot But things business, way problematic turn business, of events. and these things the great are segment that have the hurts and profitable segment. really us. of very a the meaningfully don't are in for had good crisis, any corporate are very that's our just only financial That for companies none off we us like, when catastrophic our

event than for very revenues think, And us, opportunities. of or default like presents to the be much So I become imagine garden alternative. points. that, being you low It's the cost down a revenue in negative recession because meaningful might slowing have even down we a hard business variety a a of flat couple recession when of five more a it

that becomes first is acquisition that The much market the better.

So we've been of deals. doing a lot

in was was we've last been expectations lower. you it of years high good have everyone recession, bring. the going to sellers of the industry that is what for resets facing few expectations and When very the a future things One the had business

So the more at favorable more pricing. and come perhaps market assets on

time of very we've every benefited We the great been a of a a Bowl lot acquired to financial emerge of AMF deal. COVID COVID, led around, So -- AMF. turned attractively. bankruptcy crisis there's and others. recession, out of deals We it number America

and they're a to with. we So money important number of make money It's make business. ever less money, lose not but lot our we begin not like one, that we to

a a have? tended the But standpoint, some lot that Do you spent of happened consequential. us. data of slight to thing you've to we an reduction talk past. if not worse thing recessions Brett, in M&A sort be growth talking what actual from balance, in years time better in it than want about of about that profitability, on a for a So has there's really

Sure. Tom. Thanks,

absolutely of to would the stack before on -- you're the matters. would I based kind even data, get value just I what saying, top of I So offering just

that You're also very high has low talking and business margins natural decremental. a about

on The managers in go effectively training very riding just through have every bust the the we boom curve year. to be year and throughout feet. cycle nimble the seasonality the field ability our course So out of our

And then mentioned, of before as we've since, been the Tom together senior doing X/XX. terms this in team,

COVID, lasting of things So you X/XX, and, us. GFC, impact on had none any, these know,

was that's those financial for Tom positive the of the to saying. one, a of that's was the looking pull that really some And anything have the couple of during which what great of was to So than true large AMF now. at look other indicative portfolio portfolio only as on Number assets stats, at diversified back crisis, we reasons. national really

only smaller during that we the and unmanaged essentially the the running time. the markets, urban et with exposure at cetera. had to was, trough And down to more were were And GFC, they X.X% dense business was peak business that the

So XX a because on in pain and we very the managing XX, it we we were little bit front more to of grew it out line, actively. top actually but were EBITDA,

the recession plan be and terms stagnation and all to in is then lists across or in are the analysis RCP, is it down to response depression rows, what a what actions a remains from a we of that are button undertaken the way who each part we we location contingent call Now of thousands essentially of to which do belly something stimulus. to core

we because We and it as ‘XX save know this And game we XX% it what a and out that on of is any map that January doing XXXX. there around does out every plan road months. And SG&A follow. It's sets works our running it updated soon wonkiness needed. since computers been if can of that COVID. for plan started handful is us a can of it was in as We've

So, sort our that all button at hovers times. of above finger

never gives that able our before. those haven't down it's have and of entrepreneurial us We we've will all handle pipe it seen a confidence we lot through that to it whatever because to roots. be that unlikely We've be things the comes forgotten anything come

very helpful. actually That's Okay.

I in you say, do location decrementals how the store next just, location then to today's market, think guess, if reasonable. keep about in XX today's the do to versus months to the levers in a the times, incrementals guess, location environment How months. next think growth good growth. high the we is and downtimes, or downturn do very look XX we So we growth, just enough the in let's you think over about say, pull And moderately maybe economy? we have we I I about model you guess, in have just think way very about Thanks. growth general How over mentioned

next Well, think growth. months a very, good XX Thanks. very going we're of have I to

had opening. XX centers say, the combination I XX builds in to So if of would neighborhood that new and ballpark, are I acquisitions new of to

places several in construction right under are We now.

We have through of working pipeline. deals number a the the way

that announced closed even been hasn't we acquisition yesterday In yet. on fact, an

which in first I So Tennessee. our Tennessee, is in believe

put So and markets new we expand foothold from we'll into there. go continue to in a

-- we a We we are deals. that who is a have an corporate have people of process level infrastructure at geared growth, So for lot right?

ever that's upon us really deep if We future. about is streamline The well, think said, needed right? organization is and grow. If the that, to recession uncertain we we okay. situation We have continuing robustness a the ever the we're to severe, predicated to

also centers. can terms As very in massive parse can of said, in we go backwards overhead. the of cost Brett take rapidly And you out management fixed

are are is We staffed maximize in revenue in times. different The bad good staffing we model times. to

operating is on up, on leverage there leverage down way operating So different. there's the way that's the

them, pretty three has shocks we've new to environmental company all existed. is not the navigated since So and And severe been through of we've macro the playbook us.

extent look, I one, recessions to different the industry. think predicting that but a said, and that are every that So, there's not I'm for recession

want car to great I money. cost estate familiar, it's to agent. want necessarily a a bowling to wouldn't you I a real dealer. of neighborhood, your alley, to a want don't go, But low spend lot in if be place be wouldn't

So We a that to volatility. extent the much there's recession. that don't just have

Good That's night. Okay, great. much. very you color. Thank great

Thanks, Ian.

Wieczynski from comes with you. question. question your with next Please [Operator Instructions] Steven Our Stifel. Thank proceed

on congrats Hey, and guys. Good the quarter. afternoon

Is actually reductions? there, let's number X%. of about could a declines for much us start that really threw help on let's in there could on decline So to your of say the like cost business, in us demand. if think guess I stay there Brett, Tom we stay any offset how help declines say to fact that point witness you did it's by and be scalability if way out a if revenues about to there, expense think do is to we across number, pick any you way

if just ballpark. conservative maybe inaccurate, XX and Well, let's to probably Haven't more, me done it's this overhead but be million then per before, here. so but of center, XX,XXX just forgive

so goods you have have cost reductions then sold, XX.X food in reduction to XX,XXX, what some And if that fixed bat. in reduction have the right have million about off million, corresponding XX.X extent So you right? some in that reductions revenue, you and be would in beverage. in you of also cost So the food and beverage,

aggregate if XX say, So million. well, million, you that is in XX

think again, numbers. I I very conservative are And these

react impact total see profit in But before sort of You're we're you see softer have going or whatever, reduction don't to want seen of company revenue plus results You right? that If historically, is, through if terms recession say, a if you that. some talking over going than a, about shallow, it, we're reduction. any a do you've to shallow you to X% you right? well,

probably for change things if we've that methodology growth hopefully little investments would bolstered and had slow made because come. positioned operating So, really we the great started accelerated company and have that our to a bit the not we've growth us to

enormous immediately. out answer a is, two what you is, The act in example, have cost. we concern for in But if took I real happens recession? we can weeks, the almost if COVID, mean,

to we do. so, can need we what do And

turn consequential. that also to I think stuff to doesn't that that be though don't overreact we out

That's great. Yes.

Sorry.

that, you do of was company not add. even their the -- have level the a and from type evaporations are key performance the percent those So in mean, couple I anyway to sorts of a really just centers optimizing to because is for those of going scenarios. Yeah. through I performance used much there's to parent the thing like

do, I of there's environment. levers of profitability mean, that the to a on we or lot lot can pull maintain a we So, can expand depending that things

In difficult. just But probably so are you've for talked very your lot you color. at to talking make be remarks, a want about investors year-over-year more clear of this to And great That's just Okay. that's comparisons about panic. slowdown. of And here kind called then CA, much your point started you. second Tom, question, going you're

-- You're the their spend not way? retail stores. your normal seeing a am thinking in your right that I spending as customers they power about enter material Is that or appetite change to

consistent, these we've comps are. when double-digit You that is, I really alluding to had high And slowed. very what has was year-after-year-after-year

price for one Okay. the have take on standpoint price, price point pushed are still this is the to And quick. you're you more at you much real at or you geographic location? price you point? taking can then where think do where guys you And if room think just a too I add depending do From there and more maybe on

price going in ways that explore. we're to to value that But I -- we're on taking that pause there addressing are of think mode or start price. other are

thing things a La all (ph) Carte one bundling. is on historically So It's done that we retail like a haven't been basis.

their or like competitors the where some also increase course provide And meal do value increase profit, bundle is value and and our visit to we but most guests right, happy a of our customers greater things And that combo still there I probably of buy can to think per spend meal, that guest. bundle, revenue, bundle. guest are would places the a famous is which value the of McDonald's majority or

earnest. And factor started think growth things in be us. an are going to important we're explore And so to I those that start already them. that We've could to explore for

of a bit a spot. it's probably I think blind

it's our I the very side, on event think been pricing sophisticated.

our pricing think the on I side has the retail been opposite.

opportunity us. environment, it's price And price are this to that, increase. so warranted. be going not for don't But think a that's great increases a I in

take Now price typically we fall. the in increases

we'll tea can not at we're leaves busiest point, this at but be it take price so going price, may into season. we see, feel that look And looking what we the increases. the And like like

it. color. Okay. Appreciate Great Thanks guys.

you. Thank

Steve. Thanks,

you. Thank

Genuity. question. Jason comes next Our Please with your proceed Canaccord from Tilchan with question

it year-over-year Great. EBITDA, clarify XX% which sort earlier a and interpretation just of on that of to margin deck month total compression. taking in sort you. annual XX significant sort relative sort year-over-year about indicated indicated whether to on of note imply of trailing side, is some a mix. I within Thanks the would in for Thank the profitability just the wanted of about the for There month, pretty compression I'm QX the profitability calendar. was relative curious you the commentary question. the margin that talk key the Can takes accurate? QX the of and total seasonality puts trailing year-over-year differences

seeing there's QX just of from indication – quarters an the our sequential of margin What which things smallest margin biggest is you're of compression. we No, quarter QX. into state compression, not as go Yeah. our it's year-over-year one natural

always million QX year, going $XX you're – be versus bit little this week it's So a just most then repeated margin to versus the the last of year, And that won't from around year. QX particularly, QX XXrd difference come this in those of is QX. revenue see incremental

those year wanted coming be in we we that's what just items with and to So But folks from could last impacts anomalous into some what have were that. going were QX. clear that a on you have reasonable setup so

Okay.

make just So that. follow I sure, to

So of of modest those to sort think – a margin not a it's sort dynamics impact, have way but sort could year-over-year the significant about a it? modest of impact

they that an impact Yeah. margins. a on actual There's even Yeah, because through. not way it's not go

a less, in to it going cost. you're of one-week if difference less huge You just right? and a revenue make You terms have doesn't really substantially have

the on the questions about business. some of helpful. earlier just events one And That's Okay. follow-up other

wise curious us XX be Just understand one corporate, bit the size the you kids, quarter basis between mix little events helpful. of within maybe business sort stacks trailing this and gatherings, sort up if each of social a parties or help either can smaller would how

you I that later, information. have don't do provide to want because that Brett,

event inverse. mean, I event view we And dollars minority retail is the of is that because which I different. fine. corporate spend and per then parties up social you That's person and a just count Yeah. and/or majority make the events, the materially event what would a as the tell of is it's the, are and what birthday

of and the then earlier, the end really And gatherings? helpful. weakness has really what side quarter through on to said more demand commented there the reiterate That's of corporate great. Okay, he the last just Tom sort was at social that on strong smaller remained

than same revenue And Yeah. across last were XX% was mean, the higher really XX% higher were than I pre-pandemic. million than strong. store higher year $XX store. basis year in mean than on quarter the even same at it's higher aggregate last event I and a the sales XX% in pre-pandemic quarter events XX%

pretty the TTM was quite event mean $XXX did the just right And -- the button. I It's business number, it. So on mention wall, FYI much robust. He Tom the million. was overall business because

Great. Very lot. helpful. Thanks a

Sure.

you. Thank

Handler question Our from proceed NKM. with next Eric Please comes with Roth your question.

for Good Two questions. you afternoon. Thank questions. the

is tightening, economic helpful for hindrance deals? of a the terms that or an with in First, M&A potential of volume pipeline

always good Well, us. been it's historically, for

more downturn. rely expectations don't in on financing to inverse So these have buyers. true the boom times, we're We and cash price sell reluctant higher in is are done. to get quality sellers deals And and assets

don't we M&A. up long cycles to these it for enough So, shows silver in this and realize lining enough recessions, wish been we've doing do a and but through that downturns have

Yeah.

things regards of COVID. Okay. to builds, lease slowed new in the during signings obviously, And terms down with then

have little look like, of a deals, with And, would could tightening? of you are bit like, there more the to What opportunities your good what you more like active are a that, economic sort situation as COVID. things new out build look So, at the thrown XX said, a being as does now now You coming months from lot pipeline? goal for in what be way? of

We amount have the tremendous now. a pipeline in

XX mall, started up of preliminary as location mall. best of competition. construction. Moore the of which which in certainly Park, currently the in Jose, I'd in under out it's in top Right in of one some top done near, out heart Oaks, near zero grossing locations. construction highest is like, Miami outside five We've LA. end Calabasas should sort Thousand of our, more say World exceptional XX% in San Miami the the Fair construction a Miami, under construction, well Valley fantastic than Center, we're which in We one So country, done in Westfield malls is

that have I signed leases signed. likely six and We seven think that six or or get behind seven to there are are

A twice rest almost a country lot the new good. on do which our phenomenal. been average build from California pipeline it's of And the does. California, -- of centers this about has are our actually never locations standpoint, So what the

California. in we love California we buying It's love market. building So and in biggest our

And hear XX more about in already. true. months. next Despite all locations I that about XX see could that the headwinds We have the are you adding which XX in California,

cultural not The bowl, population, to why an just and amount of you I disposable to would you love a just which bowl. propensity Californian’s reality know is do. but enormous huge expect, that they income have don't

got pipeline, part we continue do we we've California half expand and But dozen so of And as so. a or there. to great in this

mentioned. Denver, New Miami as builds in couple California, I in

And ever been. so it's the best it's

Tom. Thanks, Great.

you. Thank Sure.

further this will closing not Brett to call you. we do Thank Parker now turn have for remarks. time time, questions. I any the for At

to all and that look you. in thank call. the world business to class We pleased you XXXX. Thanks with us appreciate structure our today. the of time achieved. support for And your team today's extremely the joining capital continuing speaking again We your of forward very We're breaking greatly also proud interest build. sound that fundamentally you management Thank quarter of with we're initiatives We're record on for we fiscal executed. to that you after the conclusion our

teleconference. today's concludes This

lines at your for time. you disconnect may participation. You Thank your this