Lucky Strike Entertainment Corporation Class A

There will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Bobby Laban, CFO of Lucky Strike Entertainment. Please go ahead.

Good morning to everyone on the call. This is Bobby Laban, Lucky Strike's Chief Financial Officer. Welcome to our conference call to discuss Lucky Strike's second quarter 2025 earnings. Today, we issued a press release announcing our financial results for the period ended December 29th, 2024. A copy of the press release is available in the investor relations section of our website. Joining me on the call today are Thomas Shannon, our founder and chief executive, and Lev Ekster, our president. I'd like to remind you that during today's conference call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance, and therefore one should not place undue reliance on them. Forward-looking statements are also subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release, as well as the risk factors contained in the company's filings with the Securities and Exchange Commission. But Detroit Entertainment undertakes no obligation to revise or update any forward-looking statements, reflect events, or circumstances that occur after today's call. Also, during today's call, the company may discuss certain non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed in the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website. I'll now turn the call over to Tom.

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