Hall of Fame Resort & Entertainment Company

Q4 2022 Earnings Conference Call


spk_0: good morning and welcome to the hall of fame resort and entertainment of the fourth quarter twenty twenty to earn a conference call this conference call it being recorded and all participants are no listen have enough will open the conference out for questions than answers follow the prepared remarks i will not or the conference over to and graphics executive vice president global marketing and public affairs
spk_1: the morning and thank you all for joining us for our fourth quarter twenty twenty two earnings conference call our late press release supplemental slides and form ten k were posted yesterday evening after market hours these documents can be found in the investor relations section of our website at h o f r e c l dot com after my brief introduction michael crawford our president and ceo will give an update on the company's outlook and benjamin lee our chief financial officer or provide analysis of the chorus financial results in an update on the company's fiscal year twenty three financial guidance during during today's call will make forward looking statements that reflect the company's current expectations about future plans and performance these statements rely on assumptions and estimates and actual results may differ materially due to risks and uncertainties i encourage you to read the full disclosure concerning forward looking statements in the earnings press release additionally please note the companies as non gaap results to have a performance internally as detailed in our press release we have posted a supplementary slide deck summarizing the quarterly results as well the slides can be accessed on our website and will be archived there along with the replay of this call if you have any additional questions after today's call please contact me directly it's now my pleasure to turn the call over to michael crawford life
spk_0: the morning thank the on and good morning everybody thank you for joining or call this morning
spk_2: nice or press release yesterday got the indication that was in to me the how we choose we're see a very good results based on the execution of the company specifically and twenty twenty two but also you for i do understand it as a society and as americans we like to compare
spk_0: your order were quarter earnings we like to look at your over your results i also would get back but i i look out for a company like ours the train line of execution
spk_2: because when you look into trim line this is what really needs us to the desired results we were too cute over the last few years and i think or train line has been really positive direction the execution though that we've talked about it starts with the reality of the environment restricts the supply chain constrained environment and yet construction who still continued on time and on budget as of today almost unthinkable in the context of what's going on what you say probably even your daily lives we continue to book major events we continue to increase attendance to campus we sign new tenants that are going to create wonderful new experiences when just come to visit the village
spk_0: interfere engagement zone and in or center for excellence in our office complex that really creates a wonderful unique environment for collaboration we're building new media or pipeline is continuing to be filled and you actually saw some about execution during during superbowl weekend with the airing of the perfect colonel fuck about that and just a few moments and we're supporting the the gaming division and the executioner damage to your seeing things like he sports come to life on campus or our whole a fantasy and sports betting fortunately for us we're able to procure to the necessary licenses to have a retail sports books and online sports betting park
spk_2: before i go on know i just want to make reference to the fact that we have been strategic and purposeful in the decisions were made for the long term success of the whole thing resort in entertainment company now some of these decisions are not popular i get that but i can also tell you that sometimes leadership is now
spk_0: popular and it's not a popularity contest when you're considering the future of company the team it's shareholders and frankly the community and all of our fans guest we have to make sound long term business decisions that said our company up for success over and over again
spk_2: i've talked about the fact that we've continued to be a positron like
spk_0: we've also been very transparent about why we've made certain decisions we always talk about we'd say what we're going to do and we do what we're going to say
spk_2: it's an incredibly difficult and barb and while many companies
spk_0: he had taken i would consider to be more severe steps to ensure short term successes
spk_2: i personally and our company leadership team cannot think that way about a company that is literally building from the ground up in every way
spk_0: the company that is driving growth through synergy which is what our strategy was all about from business unit the busy a company that you're shipping board to choose to invest in without fail or confidence in our clan and yet we continue to be flexible make dynamic choices to preserve value
spk_2: spend money wisely and needed and drive growth and revenue across our business use that to take away from me from last year and from to for belt before ago and i want to take a step back and you know usually we talk about each particular business unit and we give you an update on all of progress it's being made but i think it's important that we state some of the more fundamental things that are company philosophically is focused on of
spk_0: courses shareholders you need to expect short term near term execution and i think we're demonstrating we are constantly talking about the plan and the execution against the plant and you're starting could see that in every single robot vertical that we have and it's important that you understand that in the context of the strategy we are collectively building in every way it all comes down to the fact that we believe in this thread him even it's potential but we have to be flexible and dynamic to create shareholder value and i think that's what we're doing i spoke of many times about the executive team and the board increasing ownership in the company to purchases in the open market or even taking part of their compensation their cash compensation in stock to increase their ownership in the company again i want to reiterate you know if the belief is that way we're making short term decisions that are going to harm our shareholders or the value that they told him the company i'm not sure where that belief comes from over that perception comes from know in in our company has sold shares no one has reduced their ownership position and fact between the board and management team we own approximately thirty five percent of the company collectible we are all in this together i realize the share price is not where we wanted to be the value of the company frankly is woefully under valued and our our speaker that i'm just a moment but we're utilizing this ownership mindset to make the right decisions for the company for the long term success we're not doing things to just try and make something happen to get a short term blip in our stock price that's what other companies do in this sort of difficult environment
spk_2: and recent war meeting i recommended to our board and our board approved it but even my own compensation the stock that would be ordered to me would only be awarded true performance grants performance stockton it's not restricted stockings and so my twenty twenty three compensation is
spk_0: going to be based on as will twenty twenty two performance and that's what i think you should expect for me as his presidency of this company i am invested in it i believe in it so deeply and i believe in the execution of our team it's been amazing or company is undervalued that will change and i want to show my demonstration to that by saying i don't want shares that i haven't earned i want shares based on performance and aligning my interest with the company has always been my belief in long term success again ownership mindset focus not only on the dated execution but make sure our strategy is continuing to evolve and me make dynamic decisions to put in place
spk_2: the assets the content in the environments that we need to have the in a high quality way or long term success our largest shareholder industrial really group just continues to be amazing for us the support that they provide not only in terms of loan support direct financial support but indirect financial support by helping us restructure some of the debt
spk_0: the balance sheet continues to improve we're not done that
spk_2: can we continue to have conversations with i er g they are here in it for the long term again you will have seen they have nots ownership and in fact for their support they have continued to say we want to take stock the in the company because we believe in that the management team and the plan so deeply that value is going to continue to grow not only is it our largest shareholder
spk_0: the community how the political system in ohio
spk_2: the an account in the city
spk_0: we have been very purposeful again i use that word and strategic around where financing comes from and make no mistake this is a difficult traditional lenny gemar you see rates continue to rise we're in an inflationary environment and yet the world is is with the banking system sort of unsure about the
spk_2: that is going to take we haven't just simply sat back and said we're going to place our eggs in a traditional lending bank be at large read your small we've gone out and gotten loans from public and private financing like tdd bonding a team i'd transformation a mixed use development which is not alone we have taken out pace lending this this clean energy financing a lot of these things that we've done to put in place to support our cap stack are really longer term higher quality death
spk_0: and while i've heard comments from some shareholders that adept profile of the company continues to be a concern for me i have seen and if you watched over the last two years the evolution of our capital sack and that profile to allow us to get the right runway to be successful for the long term the group group that i lead and the board that oversees the governance of the company sees a very strong upward trajectory and a long term success plan that we continue to believe you're deeply that long term mindset allows us to make those tough decisions that i talked about now one of those obviously was over split that we completed in december now many of you probably on this call would say and did say that was going to destroy the value of this company and that management was doing this for selfish game that we were only interested in our own wellbeing and i'm again i'm going to make a pretty a couple pretty bold statements year when i just as think about the couple of things that i talked about over the last few points that i made this this company sound like a company that is interested in only diluting it shareholders are selfish gene i'm not sure how anyone who really understands what our company has accomplished all are considering what's best for our shareholders make these types of assumptions i'm really not
spk_2: thirty five percent of the company owned by internal shareholders companies have gone out after they've done these rivers stocks woods
spk_0: and raise capital immediately diluting our shareholders again we did not do that and in fact we haven't even use the at the market offering since last september why because we want to be responsible for how we're spending money where we're bringing money and to ensure that we're trying to preserve the value of our company and personally but yet we saw traders that don't really understand long term strategy to greater is better in this for a day traders that are trying to make a quick buck sell shares a significant discounts to asset values pushing are priced a book ratio down to point two x multiple and a market capitalization to below forty million dollars it's astonishing to me when you look at our numbers and we finish queue for with roughly fifty million dollars of cash in the bank
spk_2: roughly four hundred and fifty million dollars of assets built many of which are up and operational another hundred and seventy million dollars of assets being built right now how anyone to justify that valuation for our company we are severely on your back edward read that way because i do believe that there is this narrative there is a misguided assumptions being made about the actually you taken to support our growth and false assertions of doing things to intentionally devalue the company in her to shareholders of which were thirty vipers
spk_0: a again i make that point to really reemphasize the fact that do not listen to the rhetoric do not listen to people who are trying to purposely cause damage for their games that's not what this company is about and it's not what it's been about you see execution you see that were planning and we're building according to our strategy that we've articulated now that strategy starts with putting together a high quality products and experiences and experience is a product that people want in desire pete product and experiences that people are ready are participating in the doubletree hotel ranks in the top five percent of service of all double trees nationwide
spk_2: that's in canton ohio to part of our company we have stressed that we want to high quality acid there with great service period last week we open don shula is american kitchen one of a kind restaurant one of a kind for our destinies
spk_0: this location has been a while from the time you walk into the for to the first time you taste the food to the service she received and we're getting five star ratings across the board people are experiencing the level of good product and an environment in our in our region the i think that's a newsstand we're booking talent like dave chappelle last year that enables great talent like kevin hard to come back this year journey to zac brown there are more of these talents that you're going to be hearing about it i mean it's very near term the u s f l came last year and said wow you guys made it impossible for us not to come back that you they play their semi finals new championship you what do they do this year they add to permanent teams from their league to play out of our comments and all things stadium because of the service that they got because of the visitors that attended those games because of the reclusive package in the synergy we could offer with meeting rooms and food and beverage and hotel stays and now they're seeing all of these other assets come to life with just enhances their ability to create an environment where their guests and our to come to enjoy over and over you everything we're building fits together in a purposeful way to realize synergies across all our business units i'm seeing it all come together i am really pleased with the team and how they're executed the story we've been discussing with the public is now starting to bear fruit or revenue grew significantly year over year
spk_2: even without recognizing revenue from our largest sponsor johnson controls which contributed roughly four million dollars and twenty twenty one
spk_0: we not only didn't miss that revenue we exceeded that rabbit as some he said yeah but if you had a had that revenue you would have exceeded more i can't deny that but the the reason why i'm so pleased as we've diversified as we've always said were revenue comes from now it's not just about sponsorships in the early days of this company we had partners the boonies so deeply and division they were willing to invest sponsorship partnership dollars to help us build a row now you're seeing revenue come from different areas to sing it come from tenant leaves and you see it come from food and beverage him to see it come from rides you're seeing it come from our media and gaming division in a more meaningful what if you're looking at our presentation on line you see that thing i call the wheel of fortune why is it the wheel of fortune because it's so it's it's sort of like a flywheel it's interconnected once it starts moving
spk_2: the inertia it continues it growing and it keeps moving faster and faster i'm seeing the we'll start to turn on it's own i've discussed the strategy earlier and
spk_3: what synergy does and for my background working for a company like the walt disney company when you a business verticals that you can create an experience you can create a physical asset in one your goal should be to traverse the other two and drive value that
spk_2: we give you an example of that
spk_0: us are valid two teams playing out of our comments and half instead we receive revenue for the rental in that state with rear seat concession revenue every time the games played music receive hotel rubbing we see rentals for up practicing out and are for avalon sports complex and in our center for performance these are nationally televised games so it enhances our ability to attract new sponsors because new sponsor say wow you have x number of games being played nationally now you have media content that helps drive new sponsored partners at exciting to me fans come out to play at to enjoy these games he also go to shoelace the also good a brutal or topped off and play and half on food and beverage experience is there up golf raquel opens in the next month
spk_2: again giving ourselves more ways to monetize people that are visiting was always part of the goal having them go require to plaza now with the red zone giant we'll open where riders are hours riding paying for those rides bundling packages together to include a visit to the pro football fan a ride on the forward past maybe food and beverage
spk_0: we had the ability to create an even more dynamic environment by having our entire property being set up as a designated outdoor recreation area which allows guess to go from one facility to another with a cocktail in their hand and really create this immersive environment that i continue to talk about one that people want to be yeah the execution of the strategy is working in it's growing and that's how we continue to drive rabbit
spk_2: i'll talk about fantasy fantasy football is another way in which we drive synergy we're hosting a very large scale fantasy football conference at the beginning of the nfl season on campus that event will be held at the cfp that's rental revenue for the c a p that's food and beverage revving it's revenue that feeds our strategy model with guess staying at the doubletree hotel having meetings and meeting rooms they're being entertained and our fan engagements out and play action plaza the point that i'm making is one plus one equals
spk_0: the synergy strategy it's not about you get one thing it's director ave it's one thing that has direct revenue that equates to multiple areas and indirect driven we achieved record attendance and apply twenty two
spk_2: and we will build up going forward our expectation just as one example when we don't report overall attendance numbers in twenty two year we had a roughly three hundred thousand participants playing and any number of different sports out at our for avalon sports complex weeks back to increase that almost almost four hundred thousand in addition to the for our on sports complex reopen the center for performance in november we immediately filled that location every single day
spk_0: none i was sports were not hosting large scale dinners and conventions never home and garden show coming we have major events like the fantasy event that i talked about they're going there it's a unique accent that allows us to flatten seasonality or to d season allies were revenue comes from when you live in an environment like ohio
spk_2: revenue sometimes can be limited this is a fact i'm not creating our this to to have a narrative i really enjoy cedar point cedar point is something i grew up with but when you have an outdoor iron ride park it can only operate seven months out of the year you have a blip in were revenue can come in as seasonality factor we're trying to flatten that seasonality so that we have a more balanced view of were revenue using we can maximize the assets you around and the partnerships that are available to us or extended even further as we do have that opportunity to maximize revenue look we proven we can be creative
spk_0: and how we balance growth
spk_2: when you balance growth you also balance revenue growth and you reduce that seasonality i talked about
spk_0: we have added partnerships and content and we monetize those in multiple different way the media vertical a good example that only are creating traditional media
spk_2: but we're also creating non traditional media as well use the hall of fame village pass the in a p to digital collectible that comes with entitlements that comes with a closer connection to all of the product that we have gaining access to exclusive things and parties gaining access to information
spk_0: that are around things prior to other gas coming to the village are just doing some of our media content or being involved in our our gaming environments we sold out of our diamond passes navy passes are now the very limited quality we will continue to enhance that type of experience for those that are deeply committed to our company the perfect ten distribution was also something that i thought was incredible for a media company that literally has been stood up for about a year maybe a year and a half if you want to argue that we have now added multiple things to the pipeline
spk_2: some of which you've heard gone fishing with jimmy johnson rasheed wallace shannon sharpe partnerships perfect ten distribution these are things that i would say or media team has had significant accomplishment and a very short period of time in the perfect ten being distributed over national television on fox tv the weekend of the superbowl saturday night before the super bowl is unprecedented for a company or sides it shows you the type of content the store or is that we can create or so valuable and so you need that even a company like fox stuff as well
spk_0: we want that we want that to be part of our offering sports betting what live in january
spk_2: we have put a lot of effort into our mobile betting partner better i think the company is off to a great start were exceeding where we thought we were going to be and where they thought we were going to be micro betting is a very engaging way to play sports bets on in that ecosystem they have enhance their platform with more traditional batting
spk_0: opportunities as well i think that's attracting you guessed that we wanted to make sure we separate separate ourselves in a new betting environment against other very large competitors traditional contenders we wanted to give just an opportunity for that micro betting space to really take hold and it has we didn't just those say we wanted better to be our onsite partner this was another strategic decision that we made as a company instead of taking cash you took an investment position in better long term thinking ownership thinking that type of mentality allows us to the for is why we're risk comes in at the company love and also divert lousy diverse of i were revenue comes a better has now gone on and received a betting application of putting betting applications and received approval from the state of massachusetts and also virgin already our investment
spk_2: what it's valued at is going to let raider yield for us simply because we had a vision to say we want you to be successful i'll but your success everywhere else you want to be a part of his well and then last week we're continuing to build that gaming division you saw we had a sports tournaments we've announced more he sports tournaments
spk_0: tournaments drive attendance attendance drive bys the tenants dry stays attendants drives awareness around all the things that were doing a new look at it package
spk_2: the types of events now that the campus of the village is hosting between magic shows to football games
spk_0: the big scale concerts like kevin hart zac brown the fact that we're creating an immersive environment there for enshrinement weekend black college for the holiday kick off classic the list of events is growing and we're giving things to this region that had never been given before we're giving them opportunities to experience are proud
spk_2: rock and the quality of our product i'll start by saying and they'll come back after our q and a we're going to do it's a little nontraditional me today i'd like to take you and after been makes his remarks on the financing from i'm going to start by saying we're being responsible
spk_0: with what we do an example of that is the cash on hand that we had at the end it's you for roughly fifty million dollars
spk_2: we're being responsible as to when we spend that we spending it when needed you're going to your been talk about just in time financing up talked about that for years there's no reason to go out and spend cash for take cash and before we need it
spk_0: the water park is starting to be built very quickly we're going to start spending cash there but in the meantime we're not letting their cash said in a non interest bearing checking account we put it in short term interest bearing vehicles to generate revenue to our company which is what you would expect in a responsible way
spk_2: it's it's it's the another example of how management looks at managing decisions meeting the company in a strategic way that sets up for mid and long term success vs just focusing on short term execution to be able to set here on these calls and say look at what we did this quarter you should be asking as what are you doing to ensure our long term success the reverse split with a decision we needed to make to ensure compliance of nasdaq listening rules so that you shareholders had access to your shares and you can trade them free
spk_4: the more execution that we do the more the train line the positive continues to grow the more results that you're going to be able to expect from us both from a financial point of view but also from the creation of experiences and assets that are going to drive long term value for us and for uber shareholders for many many many years to come then let me turn it over tuna ethics mike and good morning everyone living out to financial results and and mentioned earlier we found our fiscal twenty twenty two form ten k postmark a yesterday that document is available on the fcc the website as well as our investor relations say fourth quarter total revenue was three point one million dollars which represents an increase of two percent from the same period in the prior year fiscal year twenty twenty two revenue was sixteen million an increase of forty eight percent from the prior year for your revenue growth was primarily driven by higher as and revenue at a whole same village and significant increases and operating revenue and are doubletree hotel while sponsorship revenue is down from the prior year due to the previously disclosed dispute with johnson controls revenue growth and diversification have improved the company's revenue max has evolved significantly over the past three years as we've completed construction of many phase two assets and realized revenue from our media and gaming verticals for example and twenty twenty sponsorship revenue accounted for approximately ninety percent of total revenue compared to only seventeen percent of total revenue and twenty twenty two this change in revenue mix highlights the synergies and the diverse revenue streams were creating from event revenue can attain and rentals hotel and restaurant revenue media in gaming we expect the revenue streams will continue to broaden and brown fourth quarter adjusted hiva was minus five point five million dollars in minus twenty five point three million for the full year the company continue to invest in headcount and other resource needs as we've opened destination assets and developed or other business verticals we expect to see operating leverage improve throughout the course of this year the company posted a net loss of eighteen point five million and a quarter partially offset by the change and fair value of our weren't liabilities which increased by four hundred thousand the us gap the fair value of these liabilities or decline and income will improve if the company stock price declines the company would experience the opposite effect when or stock price moves higher while this line item on the financial statements will vary based on the company stock price it does not impact our cash flow from operations cash and cash equivalents or liquidity for all prior feature periods moving to the balance sheet we finish the quarter with the cash and liquid investment bounce approximately fifty one million dollars compared to thirty three million at the end of the third quarter both values are inclusive over are restricted cash balances and investments helped maturity with a larger cash balance we been investing excess funds and short term treasury's do to attractive yields into better match timing of cash outflows the company's primary usage of cash continues to be driven by construction expenditures with approximately seventeen million spent during the fourth quarter this cash usage was offset by proceeds obtained from various financing instruments during the quarter or net debt balance increase to one hundred and seventy one million dollars compared to one one hundred and sixty four million at the end of the third quarter and one hundred and one million at the end of twenty twenty one the increase the notes payable during the quarter was primarily due to increased principal amounts related to tdd bonds in addition the company finalize too long term sell least back transactions relayed to the fan engagement zone and waterpark totally sixty eight point two million dollars
spk_5: during twenty twenty two we lengthen maturities considerably while maintaining an average interest rate well below current high yield death rates this information is highlighted in the supplemental slides posted on there be investor relations website
spk_4: our ability to complete the transaction that favorable rates shows that are thoughtful and pragmatic approach is allowing us to position the balance sheet for future growth likewise our ability to secure this critical financing is supported by our largest shareholder industrial realty group and many other active stakeholders including the city of canton start county and the state of ohio i'd also like to provide a bit more detail on the company's current debt profile as it's important to highlight to a very key points first the company's ability to execute and raise capital and an ever changing credit and macro environment and to or intense focus on taking on the right kind of debt and optimizing the capita stack for each asset we recognize that all that is not treated equal so we act to take advantage of the most favorable structures available to us a provide a few examples
spk_6: first and as previously noted the hall of fame village is situated in a tourism development district or tdd that allows for the collection of additional sales taxes in the district to support future development
spk_4: the company is able to bond against this feature tax revenue whereby we receive upfront loan proceeds with future debt service being covered by the ongoing sales tax with in the district which we own and manage and twenty twenty two we raised seven point five million dollars to this program supported by the state of ohio's and enterprise bonfire we have also use tax increment financing whereby a portion of feature real estate taxes associated with developed assets are used to pay for improvements made as a final example the company was awarded fifteen point eight million dollars and transformational mixed use development tax credits as a result of the positive economic impact or development is expected have on the region in the state the key message here is that we've been able to restructure debt to align with the company's growth path leave used numerous types of creating creative financing vehicles and will continue to work towards achieving the best capital structure for the long term success of the company moving to guidance previously we provided our fiscal twenty twenty three outlook during the third quarter earnings call november at this time we are reiterating are forecast for twenty twenty three revenue growth in excess of seventy five percent when compared to twenty twenty two adjusted ebitda is expected to improve by approximately sixty percent driven by our focus on monetizing existing and newly developed developed physical and virtual assets in closing the company as mindful of the current economic environment and will remain intensely focused on driving profitability through synergistic and diversified revenue streams and disciplined cost management while making strategic investments to support or continued growth we will continue to analyze and optimize our capital
spk_0: dr to deliver long term value to all shareholders and finally as you've come to expect we will continue to provide transparent and timely updates to all of our shareholders as you move ahead operator we were now like to open line for any questions thank you will now be conducting a question and answer session if you would like us through question please post star one on your telephone keeper a confirmation tone when the gate and line is on the question kill you make restore to people to move your question for the kids but markets which is it's bigger equipment and may be necessary to pick up your hands
spk_7: that the focus and thirty one moment please while ago for question
spk_0: thank you our first question is from david mars with singular research was pretty with your question
spk_4: are you morning as a couple that housekeeping questions on financial reporting quickly if i may on first which was hard to the extent fly you guys had there been importing commission extent as as separate lineitem throughout the fiscal year but if not reported it as standalone night i'm in the fourth quarter is just wondering where that move to
spk_7: yeah a damn good question we just that up it's religious to simplify reporting really check condense some of the line items that were in the financials as you can imagine for a reader it gets to be complex as we move ahead as a company so it's really just simplification of up were a forty year we
spk_0: he can certainly follow up with you and are on our call after this and we have some time schedule to review exactly how that lays out in the financial statements
spk_8: okay and then next with regard to the gaming that goal
spk_4: as that will you be reporting that as a separate line item going forward and once we start realizing avenue and to one yeah good question or right away
spk_7: probably not likely however as we move ahead as we continue to grow as an organization you know that something that will consider making sure that we're reporting by business vertical more segment type of reporting were just started a point yet to do that in terms of scale and scope of revenue but certainly for transparency for future financial statements that something will look into
spk_4: okay and then with regarding the and estimates on the balance sheet you classified some as have the maturity which is interesting something of a kid the david see and of financial institution type of reporting are these it's a duration longer than one year in the case of the held the maturity now really everything we've been focused on and make eluded to this in his opening comments and myself as well in in my prepared remarks is that we're investing everything that we have in terms of cash very short term so very short duration assets
spk_0: all you know fully credit secured so us treasuries
spk_7: israeli where we've been focused and everything that we've invested to date has been six months or less
spk_0: okay really helpful and then i'm just in terms of a operational business operational question if i may
spk_4: with regard to the gaming work or could you guys provide enough day i mean we are here it's like march twenty eighth street is left in the quarter could you give us some idea some flavor of on you know what you see in terms of revenue from better and man could you provide us with an operational update with regard to local sports book was going to be on campuses
spk_2: the i can take a break that in a row had a rabbit barack i'll take the first app on better my again and if you want i want to jump in on better probably make such as well as a i might my talked about this in his opening comments in our betters after a great start we've seen them feed the first couple months through their results what we are expecting to see what they are expected to see on on both handle and gaming revenue and jobs for by say it's been rough big focus of ours is staying in tune with them throughout this initial couple of months of of start up and stand up on that company yeah i'd i'd only add that you know when you think about like how we structured the better deal there are several forms of guaranteed revenue and then there's obviously a percentage of the bad we we get an annual ah form a guaranteed revenue that increases over the life of the better deal which is a two year deal so there is guaranteed revenue coming in on that front there is sponsorship revenue the come soon as well and then there's a percentage of the but now with mobile betting one of those things that you have to take a look at his engagement
spk_0: i'm customer acquisition and then later the time spent with the app i'd serve our engagement and betting that a a are on all of those fronts we're ahead of where with the projections we originally thought were going to be recalled also we have that shareholding interest that is continuing to be valuable and continued to grow in value as they are successful in obtaining other licenses in other states himself we feel very good about where we're at i mean were three months in today's and were really starting put more effort around activation in a responsible way we want to make sure that betting as it's a very regulated environment this is not for people under age we don't want us to be something that we have to worry about in the context of bringing the wrong types of individuals we want people are in tibet responsibly i've talked about this enhancing the way are you engage with sport not necessarily becoming something that creates harm for you or of the company or or the organization better
spk_2: adding joey levy has done a really good job of eating that company and and again being thoughtful around how they continued to expand and grow they recently added more traditional betting ah where you can parlaying you can have over under and you can have a win lose arm vs just got on the next player
spk_0: or that on the field goal or whatever the case may be i've enjoyed watching this environment continue to grow in our efforts have been solely focused on getting that environment stood up and stood up and a successful way as it relates to the on site location
spk_2: you for we completed it which we're excited about and were in the process now have you know finalizing that the partnership and the way in which we look at the partnership there so that we can continue to be about the inside of that facility and offer a compelling onsite retail sports book that
spk_0: something that will continue to update everybody on as we make more progress but i i do believe that we wanted to be thoughtful around starting with the mobile and then turn our attention to the retail sports book which also includes a significant food and beverage component to it as well and so it's it's slightly more complicated versus standing up
spk_7: the online booking
spk_2: and sports betting opportunely through a mobile app do you have any after a time when the physical retail location might be open for for business well i think we're going to take it in two parts i think the the first part would be destructuring of the food and beverage because i think we have a demand for food and beverage on site quicker
spk_0: we're in conversations with i'll say we're in conversations with some pretty high profile food beverage operators that are incredibly excited remember this location sits at the corner of mean in maine and yep you sheds into the stadium you have you sheds to center for performance to play action plaza and so it's a really unique position on our property and so will focus on and try to have something like that open by the end of this year and then the sports betting component will continue to make updates dates announcements on as as we make progress on
spk_9: okay thanks for me yet turn notorious honestly thanks thank you thank you our next question is from jack vander ark with maxim group please proceed the a question
spk_0: a great ugh morning guys i proceed the update on a good to see the construction and momentum continue on to to michael i believe the long run opportunities should remain the bigger focus on a good just want to touch on twenty twenty performance because new revenue growth why
spk_2: was up nearly fifty percent year over year and a twenty twenty three revenue got at yeah seventy five percent growth keep in touch on what drives your carpet in that you're clearly accelerating growth outlook and twenty twenty three based on what you you expect to roll out and in law shit that at the village yeah look i think it's a lot about timing and you know if you think back to when the company went public in twenty july twenty the first year of the company was simply existence rate survival and making sure that we're making decisions battening down the hatches and making good business decisions to get it
spk_0: through the majority of covered
spk_2: i and allowing ourselves the opportunity to then continuing and we did construction so that as people started to feel comfortable coming back to social environment stadiums out restaurants etc that we're in a position to start to open these assets are you know they said jack and i think people cannot underestimate the you probably feel their sins
spk_0: your own personal lives go out and order refrigeration you go out and order something that has deal and or petroleum based products you're talking about weeks if not months to get some of the stuff i give a lot of credit to our team are construction meant to kill smith project management team are being creative and leveraging the channels ah that they have out there to get access to necessary equipment soon i'll give you an example there is a permanent power box and ontario's american kitchen that was supposed to arrive on property in november of last year we have yet to receive it now we've done a a very good work around and we have the of the facility open but that's an example of it's hard to grab revenue and you're facing these types of ah supply chain constraints and hesitancy remember other companies are going through this is well you have slower we have slower commitments lieutenants because they're dealing with their own financial situations you have guests are dealing with inflation or environments in a personal lives making decisions on how to spend ah ab to their discretionary income and yet we continue to build and we continue the open we continue to see success and so for me why i get so excited as i think about what this team is accomplished in that kind of environment
spk_2: and as we emerge from that and i think there is rough you walk bumpy waters ahead of us but it gives me a lot of hope being what i'm saying for my chair how rapidly were increasing booking of events how rapidly the perception of what we're building an opening is changing and evolving at shoeless isn't doing incredibly
spk_0: well as a restaurant concept the first week the numbers i'd been really impressed me but more importantly the experience itself is the highest quality adding new rides adding arm or media content is filling up on gaming environment is really starting to take hold so i think all of that and remember i'll just go back and say and that are of applause for a moment
spk_2: the synergy the king be driven out of us fl hosting two teams permanently you know our stadium this year for the season play offs and then championship again drives room nights food revenue meeting revenue facility revenue tenant revenue the opportunity
spk_7: for national television immediate drives partnerships and sponsorship growth so we if you look at the performance i think you can say year over year we grown and we've grown exponentially i expect the same thing as them said our guidance for this year has not changed and we read forecast every single month and we still have their good line of sight on were that road is going to come from
spk_0: great and ethical or there and and then michael maybe he i believe you mentioned your growing attendants levels and twenty twenty two ah about three hundred thousand or so i'm just bigger picture with the face to road map out the new hotels and be ah encouraging to hear you broke ground on the water park
spk_2: this past quarter to to touch and on your overall long term outlook with the water park and the new hotel town in just what that means we're overall attendance levels how that compares that yeah i think about it in two ways why actually three you don't phase one we created as set of assets high quality that can host events face to we're creating our destination where people can come and stay and play and enjoy they can come for a day visit as well but our our ultimate goal is to take that toothless million annual attendance and increase that to five plus million and you or tenants were going to increase attendance this year you're going to see exponential growth in attendance this year center for performances adding to that management zone do outdoor rides the ab fab fair idea for avalon sports complex more events in our stadium all of that attributes to hire attendance growth and by the way year round
spk_0: with the ability to flatten that seasonality was indoor environments
spk_2: where i see as going over the next couple of years and as we add an asset like the water park and the site hotel you take that leap this day so you take attendance and it grows but now you also grow the week the stay from maybe a half a day to day and a half maybe two days so now you have an opera
spk_0: to that he the service gas and give them more experiences that they can experience over a multi day period of time and then the more weed adding and the more events that sort of pulse through the the destination the more the intend to return increases so it's three magic triggered straight it's increased attendance it's linked to stay and intend to return we're already seeing that grow even with the assets we've added in the events that we have on it
spk_2: on a regular basis now by way we're getting ready to announce you're going to see in the very near term more announcements were events i think that's what separates us from so many other destinations that are out there and really puts us on a different playing field there has been a need for this in northeast ohio the demand for it regionally is there were seeing it all around us a hundred plus mile drive radius people are coming for the experiences i it the
spk_10: the be high quality they have to be worth the drive worth the money and was to stay we're getting feedback that they are and that's our commitment to excellence around the types of experiences that we're creating so long term the water park enhances that lead to stay the water park enhancers that were in every repeat visitation and the water
spk_0: park enhances that synergy we can now have the ability to package water park rides pro football hall of fame a meal and a hotel stay that's a pretty compelling package for at least a couple daily to stay and frankly this area has been starved for this type of entertainment experience for many many years okay and i really appreciate the color that it for me thanks
spk_2: baxter
spk_0: thank you very much further questions but this time i like the had the floor back over them michael crawford from closing remarks yeah thank you so just a couple of days in closing because i do think it's important for us to recap over the last year a lot of concern about the does the company has taken on i can tell you that if you been watching the news we've made we have not only flattened the that profile where we reduced it as well now in some cases we've had to increase it because we're taking on a building more assets creating more media creating more dynamic gaming bombs we're still very much an investment mode that's where we are as a company but we're in this transition from investing in assets investing in in environments investing immediate to actually monetizing those and operationalize in news so i i would just reiterate don't be concerned about the that thought profile we will continue to work on that the balance sheet is a focus for hours at but i think we made significant improvements over the last year and i congratulate been in his team and others that have worked on his financial performance if you're not seeing it you need to be seen we're growing quarter over quarter year over year and yes while he ty has increased in terms of it's lot it's increase because we're continually investing in the experiences at some point in time that investment stops in the growth in what the experience represents starts to might be able to be monetized
spk_2: and so the financial performance increases gods you as as an example we invested don shula is is an asset that we as a company oh we invested in that it's our asset sure as management group overseas it and they do a phenomenal job that after now opening last week is starting to generate meaningful ravin for us but it also enables us to have special events map so indirect events from us a call from kevin hart and enshrinement from the list goes on and on now that gives us another asset the monetize again so i expect one and two performances been reiterated or guidance to continue to increase an increase in a exponentially significant way the more assets we open the more media we create a more me bombs the other key take away that i just want to lead the call in there and those on it with as this concept of ownership mentality do not be fooled by the social media rhetoric that out there telling you that management is making decisions for selfish gains management is not sell the single share of this company and in fact management is invested it's
spk_0: oh money it's own cash yes is part of compensation management is issued shares but if you look at the as for that are filed you'll see they differed cash compensation to take it or in my case i've been invested my own cash into the company because i believe this company is going to be successful
spk_2: people don't make bad decisions just to make a statement people make good decisions based on information they have that's the information i have and that's why make investments in this company in our board makes the same investments in our largest shareholder and the state and the city and the county have stood behind this company and of help it grow and of help to grow in a way where the cost of the growth has been maintained at a very reasonable level versus what other companies have been doing we're not a biotech of were not bio pharma we're not going out the looting shareholders raising our sorry doing or split rate doing another raise the looting shareholders
spk_0: driving the stock price down doing another race that's not a psycho we'd been in it's not a cycle we're going to be and
spk_2: we have committed to make sure we're making the right decisions for us as a company for us shareholders because we're shareholders we're a significant amount of the shareholding percentage of this company i think partners are seeing this and we're attracting new different types of partnerships and sponsor partners to come into our company
spk_0: synergy is a key it's a strategy we like situated it's a strategy now that starting to bear fruit i talked about these things over and over again you can see how directly hosting events directly creating media content or gaming environment needs to multiple revenue streams and we intend to continue to monetize days and we will and we have exceptional experiences it starts with white is great people will calm and they will span and they will do that over and over again when your commitment to quality and excellence is that it is undeniable when you step on campus when you see media we've created we nice see the gaming environments and partnerships that we struck you know some balance that we're creating excellence we're not doing it on the cheap we're creating something that has the ability to sustain itself in grow and so that's a big focus of ours i talked about revenue strategies i think that there are things that we will continue to evolve and we will continue to refine were operating company that has transition from construction and investment in certain ways to operations and you're seeing the growth there but as we grow were making better decisions were focus on cost efficiency we're focused on investing dollars where we're going to get the highest returns and we're focused on creating a critical mass where people say wow this is an unbelievable amount of opportunity for us to engage with their products were telling stories where the creating gaming environment where the
spk_3: creating physical assets by the way we're not done with creating his glasses we're now in the process and mean engaged with a master plan or with hired a master planner the do face to it
spk_0: phase three is now literally being planned and so look for updates on that in months to come but as i've always said we say what was going to do and we do what we're going to say this is what we said we're going to do a year ago we said we're going to take on more debt a year ago we're doing the plan your implementing the plan that we said we are going to implement the final thing i'll say this we're committed to long term shareholder that we will be dynamic we will continue to look for short term execution
spk_2: but we want investors that understand the strategy and that are committed to helping our company graph
spk_0: we realized the river stock split people sold at a discounted i said and they left i think that was the right decision for them they were not in a company that was going to day by day make short term decisions to try and get a blip in a stock price that is of course strategy it's not when i subscribe to it's not one this company has implemented we've implemented a strategy of execution quality needs to results that's what we've been focused on it's what will continue to be focus on and i'll just say thank you for your belief thank you for your continued questions and your thoughtful that input and response we're open to that we like to be transparent and also just say thank you to our team and our shareholders and to team their belief eve and their support as what gotten answers to this point this team is high quality this team executes a team wakes up thinking everyday how we're going to execute a game plan how are going to evolve game plan that's going to yield results the world isn't a difficult place we will and have continued to managed through that and on the other side you're going to start to see a company that has a forty fifty million dollar market cap with fifty million in cash and four hundred and fifty million of assets and another hundred and seventy million of those glasses being built in the next two years and a media pipeline and a gaming universe it's very unique

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