Lucky Strike Entertainment Corporation Class A

Entertainment first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Bobby Lavin, Chief Financial Officer, please go ahead.

Good afternoon to everyone on the call. This is Bobby Lavin, Lucky Strike's Chief Financial Officer. Welcome to our conference call to discuss Lucky Strike's first quarter 2026 earnings. Today, we issued a press release announcing our financial results for the period ended September 28th, 2025. A copy of the press release is available in the investor relations section of our website. Joining me on the call today are Thomas Shannon, our founder and chief executive, and Lev Exter, our president. I'd like to remind you that during today's conference call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance, and therefore one should not place undue reliance on them. Forward-looking statements are also subject to the inherent risk 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 SEC. Lucky Strike Entertainment undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after today's call. Also during today's call, the company may discuss certain non-GAAP financial measures, as defined by SEC Regulation G. The GAAP financial measure is most directly comparable to each non-GAAP financial measure discussed in the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the company's website. I'll now turn the call over to Tom.

Thanks, everyone, for joining today's call. I am Thomas Shannon, Lucky Strikes founder and CEO. Starting with performance, total revenue in the quarter grew 12%, and adjusted EBITDA was up 15%. Same store sales were close to flat at negative four-tenths of 1%, with retail revenue up 1.4% and league revenue up 2.1%, which shows healthy customer engagement across our core bowling and entertainment venues. We continue to see encouraging momentum in our online booking funnel, which grew double digits in the quarter. Our offline events business, which on a dollar-weighted basis is mostly corporate event bookings, was down 11%, creating roughly a 160 basis point drag on total comps. That said, trends have clearly turned the corner. October was our strongest month of the year for both offline and total events, which gives us confidence heading into the holiday season. Our primary focus remains on improving free cash flow through disciplined cost management and capital efficiency. CapEx for the quarter came in at $26 million down from $42 million a year ago, reflecting tighter capital allocation and benefits for our procurement function. In July, we made a strategic real estate investment, acquiring the land and buildings for 58 of our existing locations for $306 million. This enhances flexibility, lowers exposure to future rent increases, and sets us up for future accretive sale leaseback or refinancing opportunities should we choose to pursue those. In September, we closed a $1.7 billion refinancing that extends debt maturities to 2032 at an average weighted cost of capital of 7%. We also expanded our roughly 370 location platform through the acquisition of two large and very profitable water parks, Raging Waters Los Angeles and Wet and Wild Emerald Point in Greensboro, North Carolina. along with three high-performing family entertainment centers in Southern California, the 24-acre Castle Park in Riverside, California, Boomers Vista and Boomers Palm Springs. Together, these destinations welcome more than a million annual guests and broaden our leadership across water parks, amusement, and family entertainment. The $90 million transaction is expected to generate returns above our historical average, with most of the financial contribution coming next summer. We also continue to invest in our people. This quarter, we welcomed Brandon Briggs as Chief Revenue Officer, bringing global experience from major cruise lines, and Laura Kobos as Vice President of Field Training, following her three-decade career at Texas Roadhouse. Both are already having a measurable impact on our service and culture. Our teams are energized, engaged, and executing with precision. We're selling with confidence, serving with heart, and continuing to raise the bar for hospitality and out-of-home entertainment. Keeping it short and sweet, with that, let's turn it over to Q&A.