DS - Earnings call transcript Q1 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Chelsea, and I will be your conference operator today. At this time, I would like to welcome everyone to Drive Shack’s First Quarter Year 2022 Earnings Conference Call. Currently, all lines have been placed on mute to prevent any background noise. After the prepared remarks, we will have a question-and-answer session. at given be will that time. Instructions is call being recorded. Today’s [Operator Instructions]. I like this Financial the call At Officer. hand Chief over would Interim to time, Buchhorn, to Kelley Ms. Buchhorn, you may begin.

Kelley Buchhorn

to I’d and call. to morning, Chelsea, first everyone. Thanks, welcome XXXX good you Drive earnings Shack’s quarter like

not to on if today ir.driveshack.com. is press a may I’d Please I’d posted had over Hana encourage reports We’ve supplement Chief and release Officer, President forward-looking results differ at that, statements. you factors the We call me from Relations investor to review website these you made the supplement those and Actual out like in do download now to take quarterly the the the Hana. today considered and to And Khouri. to now, risk so to our to Joining like include review annual the SEC. have with that moment presentation statements. our Executive a and remarks by chance certain to our will Investor already. call contained filed turn investor materially in the with disclaimers point

Hana Khouri

everyone. Thanks to incredible us today. for XXXX an is off joining start. morning, Good

million in million the first quarter last company we delivered XX% revenue up For X compared total XX or year. QX to

results Our sales year last above with American Drive four remained quarter. golf core same solid business courses Shack renews delivering XX and

Charlotte, in our North Our two total exceeded and X.X in Puttery Carolina Texas located generating Colony, revenue. a venues expectations, the combined million

revenue EBITDA across expectations. sales at Adjusted the increase of for and is more the last X this was with strong million and future with than and to portfolio Golf. to American Total events our our we and quarter entire line experience QX continue in from strong private year, X walk-in $X year brand including events. event at Our venues and million has exceptionally million up social largely momentum for courses. was remains private corporate, our Demand coming X.X million event over normalized business in

come in QX. our it it golf in last given which course in quarter EBITDA While last of million QX courses five year, we X.X after below together first traditional year's contributed expected did was exited

We also in remain results, expenses related related investments expense and the throughout and of EBITDA year million XX investments to incremental year, these business. roughly in of and headcount our last to yet strategic realized made other of X QX was 'XX. development full that XXXX QX Puttery goal With that this our growth million our to be of for adjusted had on incurred we QX to Including in track year. deliver support

Golf a foundation business strong both venues Shack our courses. We core and Drive have with American

I our mentioned, normalized walk-in and accelerating. is As events demand business for has

our sales a margins addressable our ahead two with large entertainment of gaining slightly in and of the are plan their concept results of venues, market expectations. venue-based a business. proof delivering both clear ahead We Puttery generating profitability There's

are presents for the near-term growth. Puttery best the investing capital development new our path of forward Puttery venues We our towards as

locations in quarter. seven are which Chicago XXXX next to to end Penn plan open venue Washington in planned by with track We the open open Houston locations are month, the next to on our by Quarter third of followed DC's our

this more the any we across the decision is this economics this that We -- well to more tough are moments Puttery speak are XX with discussion in aggressively venue on builds are to into in of pursuing required to and project are landlords for I'll new made compelling. a in few any Drive active the the XXXX future suspend currently The few capital development future of we've million country. returns spend leases Shack New a openings to sites further complete redirecting moments. in where Orleans for capital our location. and incremental in and multiple excess With speak investment project

over time currently are visitors this the our venue pursuing EBITDA this Manhattan. the continue costs impairment Orleans more we site to we charge we took XX.X in decision, venue for island for which any have New to QX share. of well and with sales each developing believe We our island an current you fixed and Shaft and incurred-to-date the Shack Drive Randall's venues We alternatives margins this deliver above plan in to With X will totaled it's building when million on million. year. we Drive At will assets, update for the

company the new to of are to brief again a the our of six included turning on deck, deck So you story. who our we've Page those history on for

four Over transformation the Drive company. Shack significant years, business entertainment has Inc undergone plus traditional a golf to past from a operating an

XX%. the took entertainment months Dallas venues Shack XXXX. Shack indoor operate opened course in last followed growth our X.X of mid-December During that of the their Palm of from our location of significantly of mainly and and generation today. year owned development in September into golf beating four outside August, entertainment Beach. and we outperforming initial experience. number our venues XXXX colony that in this them Drive our which developed first in West since opened around time, and of with venues year, golf These strong, the in Puttery our is our by opened October immersive XXXX the a XXXX, we April three opened We've learnings the portfolio managed Orlando Drive by opening in experience three and plans new our just courses, we pudding sold expectations majority converted Puttery, fund We of Orlando specifically Raleigh, to first We venue technology Richmond in of business a September three an and later Charlotte

meeting venues to underway by a open total the XX are to XXXX. of of goal We end our Puttery

view our timeline summary for now courses and and a of Turning to venues. seven Page

we Manhattan across Puttery XXXX. Carolina. side two Houston, of Philadelphia, end additional golf at lease open the and in we've XX X these currently On Island, Drive QX to committed to City. additional we currently Palm four expect we which venues Randall’s in seven eight business, Pittsburgh Kansas the Raleigh, of and states owned, Miami, late year their with on Behind nine American North in located managed have in courses and one With with XX leased Golf DC, Texas Chicago, operate open Charlotte, and to West the we these Richmond in venues of this to Shack planned Colony, and our committed XX leases are courses helped business, Orlando, entertainment with

the District expected open in is early located Meatpacking venue Manhattan to XXXX. Our in

XXXX We are future beyond. U.S. in several aggressively robust markets Puttery of have a pipeline the openings locations in across for and we pursuing

We with on timeline moments. in sites a are and landlords few country. currently active discussions the speak I'll multiple plans development across more our in to

operations Moving on the of business. now update our an to

Let's start brand Puttery nine. Page we on again, newest Puttery Today venues with our open. have two

performing the line market half Colony of a with in months menu Puttery ahead eight months. most open relatively venues our urban been in over with now. and recent about been expectations. suburban. our first their Both little Even for are and differences slightly one in four one a And has another open has and Our one are for Charlotte

both For XX%. revenue EBITDA QX, total and generated they delivered $X venue of of margins each just over million

ago, path of we and put us proof to gaining month-over-month for even to the giving a brand venue, analyze continue date concept each years these growth. trends are clear a while forward venue over performance two two best We that fully Puttery forward supports we our Puttery near-term confidence in today the or more is venues for in economics

it's and here, delivered With by business for a walk-in me We're With that weeks our total visit also also QX spend results of this difficult EBITDA as compare results F&B operating recap by which led more The the to last effectively leveraging margin colony. was by in Charlotte, only which while in two strong for Let a variable total provided expenses delivered in the X.X a more the now colony business. quarter Charlotte revenue we million they driven businesses XX% each X.X bit million led largely walk-in quickly XXXX. as per open driven a their the quarter. were revenue, higher stabilized to their venue. helped QX

two outside golf courses. nine-hole these venues. the nine-hole courses. revenue in a the you urban and As differences suburban is shows reminder, a four the more feet is bit two you'll XX,XXX market a between Colony That with square clearly. Dallas, a little breakdown between and XX, just in the to of the Page market of see a Charlotte square more mix When QX feet XX,XXX around turn with under

in visitors Colony XX% QX. had nearly walk-in For reference, the Charlotte during more

could handful forma guest similar number and per our generated a just SMB per each around of The alcohol, to provide with who concepts our liquor. a each. venues, numbers play. average so holding is generated at observe sales planned of the in remains gameplay, courses around much the revenue higher intentional than for different about their XX% and Colony. pro nine-hole across they Walk-in to both percentage each revenue square an venues response through the XX we the of Colony QX different venue. very that taking quarter course advance a Charlotte reservation venue differences guests We the beverage were while visit footage platform of higher courses. and our visit venues Alcohol through in of specifically F&B it of as same these million revenue in positive. each via we number the with of online earlier, and revenue in percentage of both size sizes over first mainly sales, X.X spend total this had across Even minutes XX% mentioned is trends of continue comprised I higher While their of the courses And generated at

We're are strong becoming success particularly future first Golf performance economics. clear venue-based we exception. of expect huge easy on best is returns passing will I with investment. level We experimenting our addressable pleased Puttery EBITDA the our venue our to venues projected from is two date, is a are of will optimize business each venue no level that concept our can't deliver at within with to and with experience mix fun activity. courses with that generating number and extremely similar is very say size results. Puttery proof the the our that of The entertainment each and venue month, results market. we positive know enough, that access a venues well greatest and this the And

our a inside Quarter. XX,XXX very courses three we're square with and DC fact, nine-hole historic venue, today which in soon with and Colony the foot doing Penn In Charlotte will have building that

and country we the have working today in We across that More are new potential the dozens the we sites in locations will few expect moments. in several with on of this finalize weeks. landlords pipeline on a coming

business now Page to on Moving XX. Drive Shack our

nearly by the higher sales, up increase XX continues X.X came from That's XXX% XX% while of our four saw to event in was just year. well. For our of was million strong million million increase, driven of total exceptionally all venues venues, we up last X.X quarter, Raleigh, And last nearly generated which year, of the perform QX dollar under across of to half QX event which revenue. versus demand the

Our guest a led to in to by and Raleigh. walk-in returned increase normalize revenue again last delivered year levels traffic largely is X%

X.X QX year year. of of loss behind. or Shack QX XX% Drive this of to led margin delivered Raleigh to QX broke West X the an QX EBITDA last in compared combined EBITDA in Orlando XXXk Palm million again or in EBITDA venues once group Our last year. with in million right of of even compared XX% a an margin

results While in contribution expectations. our our their delivered their with plan, venues revenue exceeded EBITDA line

controllable managing leveraging teams are returns to than better us expected give expenses job this a quarter. of doing Our fantastic costs and

the run at Our projections. Drive traditional their expect rate golf delivering And Shack demand for or increasing solid. for to business venues stable demand remains and The strong, them us. continue are above we with events,

which returns and business strong year-over-year. with very and a earnings have continues American to We generate Golf profitable stable

see to under Golf’s XX million, total excluding Page As quarter. up year's on was you'll X% XX. revenue first for management American fee QX revenue last just was and

in year, work exceptionally This revenue focused private XXXX% events last in to saw million part X.X this quarter driven our from primarily increase or a impressive for we increase came an from The across events an event year. demand X.X drove rates is all our million large which higher events of to doing team up courses. conversion strong the

last public year for and metrics. quarter exceptionally against year's high in still was an was performance, traditional below this golf when levels QX, demand near courses business activities. COVID indoor outdoor place our we're all year's private were strong the just across extremely walk-in last While restrictions our year, slightly And that given up last for

maintain continue all at of our to private clubs. We capacity XX%

With our courses here is to only golf the of golfers to momentum and alike. solid performance continue will game continue non-golfers to The at gain to live deliver. with stay and

Let's We we in venue-based for believe presentation an intend addressable locations states opportunity the openings. Puttery as a a When existing know future. development out venue our capitalizing at where plans. move well business on where for golf new we on market our Page as we development a look exists exists of the plans and visual entertainment now location, the Puttery maintain XX, you to we've to scale have on we this laid near-term large across country opportunity large entertainment focus and continue that as

includes hundreds Our strategy sites to the potential markets and new target choose. XX current today country across coverage over our well under of with

With profitability sites, the number and to new and vast of margin best we returns. size layouts are to the determine with courses different mix availability and venue of experimenting optimize potential

in the within have Both will a in and three. a a another less venue gaining venue courses. similar third a real and location. soon data Colony larger sales venue we Again, fewer ranges Colony will are deliver But DC which to concept proof we and and Charlotte expected from larger continue for course one the returns. market add venue with a a generating of the courses slightly to returns four our that with from but have We will we huge are data open clearly we're than with confident one margin smaller

provided opening overview Moving timeline. where of now our an XX, new to Page we venue

the and least currently venues Colony total Charlotte. two committed open We with in are XX Puttery to today

and additional to QX. third all Miami next are month, expect followed We quarter. City the an Houston open in in to Puttery open DC Pittsburgh, venues slated throughout Philadelphia, by Kansas new seven XXXX starting in Chicago currently and

Additionally, we in planned in district to Manhattan's open a XXXX. Puttery venue Meatpacking early

include of Manhattan. the including Puttery plans in new opening XX XXXX, venues Our

new beyond. are pursuing leases As and call, I today's throughout openings we said aggressively for in XXXX

have pipeline review. new sites identified We with number that on active are in discussions to a coming and an significant XXXX expect leases for the XXXX we sites plan these, will throughout active currently in expanding finalize operating landlords multiple Behind with executing we under openings We of weeks. in continue beyond. continually and

to clear as it the continue and will communicating to open be to number we when very transparent expect venues them. we when comes open possible to and of We as expect

openings and are strategy approach amount time remain the the We given thoughtful to market between appropriate builds and with our conditions. taking current of

and by the present. While on GC the supply presented still labor chain obstacles strain are

we and We're open is wherever attainable And realistic. on continue growth We planned our venue that XXXX confident forward the track. and company. best economics possible was are the to for timeline we the confident ago, of working ahead to that projected will several challenges that venues back seven path Puttery the to in development quarters very our remain put of at keep be level looking

are ability Drive as Puttery of construct to to those our venue less between business venue you and and to X X entertainment projections, and venue. months XX to venues. have months with venue and approximately generates XX million Again, in our and to big Shack X with in adjacency million to here to X the our where plan well and of generate million higher for our who build EBITDA But With the and to to economic XX an see a seen golf level For to to XX between build we and million each Puttery are capital Drive seen us quickly economics clear are Puttery Puttery each. taking level Compare providing outlines illustrated generating that current Shack million not expect that a Charlotte gives is page takes nine spend months here. ahead are venues unit physically million both each. venue and the venue ranges we real million million XX expect our spend can approximately six and complete gaining expectations. between risk X a result XX we of each to EBITDA returns within box two Drive results Shack venue as we're proof between which proof concept the we Colony grow

capital So you I'll to take and Kelley over strategy now to our turn results. financial through it

Kelley Buchhorn

Hana, everyone. Thanks, good again morning and

of XX deck. Page the on start Let's

and before, market venue-based a Hana entertainment business. is there addressable again As the we've mentioned in discussed today huge

for For us growth. greatest opportunity Puttery near-term the represents

We ability and growth the will of sheet balance strong balance to future the invest the Puttery. need to with fund retain to development capital a

secure unlevered of source have sheet which balance will We a relatively to one new today, as enable funding. us capital

We also sales to have asset as potential a source of funding. the future utilize

a a secured offering $XX follow-on in equity February reminder, XXXX. million in As we

to XXXX. liquidity openings complete our for X of X available have planned We venue

to venues XX our two with We continue on so XXXX most Puttery XX of in to planned additional this get that new later the the we new year next have XXXX to ground remaining large the $XX fund to to opening work will require track year. open which openings, pipeline we venues approximately remain the openings expect and With of venues million development through XXXX goal for that we capital of year, sign new off to a our get this timeline. for

our meet needs fund is additional this of plan, sufficient will XXXX expect do opening not all XXXX. through to XX we planned venues to fully our capital be While it early

independent to lead $XX our significant in the financing industry an experience advisory have with firm initiative. million entertainment We engaged financial

and are and weeks and diligence team on working the the project. their discovery the We last phase of nearing few with due outreach lender have spent marketing

While three we over from next are we finalizing towards are deal, a months. still several funding away weeks the working

in will sufficient in year-end we plans before timely capacity XXXX complete to but us source put development place planned additional openings the not only on begin XXXX to we next ahead, have openings plant Looking funding have to year. our capital to enable ensure the to XX also

we'll us available maintaining options that balance our pursue meet us growth while objectives to to a healthy path and a have enables sheet. We to continue

our quarter. Let's turn the financial the review of for for to Page deck now performance XX summary in a

For Drive QX, of QX million. total first million compared of this down million was million, year, of in to we increase side increase compared revenue our which or up year. or total year's XX.X% an four we driven year. million to quarter venues, XX.X% a Shack generated revenue of increase due X.X $X.X last million in total and to with at total to last company business, quarter of $XX.X event revenue this The a million the Puttery of in by venues first Shack $X entertainment higher our year our last Drive revenue company X.X million, the this increase $X.X revenue $XX golf break When generated $XX.X the includes

our new venues Puttery million X quarter. Additionally, of generated this total revenue $X.X

golf traditional the generated Golf On total American million, revenue course $XX.X of $XX million. including business, reimbursements managed of our side of

sales decrease a due quarter loss year. $XX.X to event total of $X.X million, profitability reimbursements, last million. $XX.X or primarily versus American for increased course this million of million million, in increase Golf’s Excluding loss QX of reimbursements The managed in which $XX.X year. was course million an X.X total managed last was included operating $XX.X revenue year, Operating revenue of revenue compared in QX X.X% in higher total to the

by to New proceeds change spend year, venue charges primarily for the mentioned capital future charges our net million our million of was other year. last to loss The net proceeds the assets of or in of charges for five year due year's this loss to primarily compared EBITDA $X.XX venues. Golf I just the the related recorded office was EBITDA of last $X.X approximately Consolidated million year. year, last The and decrease impairment Net shareholders net the at in in in first Shack impairment were to discussed. $XX.X after impairment for in courses American invest compared was to following million per QX year last former quarter building were $XX.X common to included offset due first damages in share, this the quarter loss corporate on last Orleans, the to development Last applicable Hana Total same $XX.X year. QX exited decision courses year, company period into to $X.X a located $X Drive insurance $X.X The related American adjusted As profitability is to the which QX just million QX quarter per first last year. was mentioned, versus two QX loss $X income and consolidated impairment New the $XX.X decline million York. $X.XX insurance Puttery year last primarily applicable the fixed Last charges. $X.XX to million our of in for million from approximately million received net or year is Golf compared this the share. that from to shareholders common adjusted

to growth investments of last made year realized in quarter has incurred and Puttery related incremental throughout strategic and In that investments and quarter other to year. support XXXX first headcount related expenses these of development to in the the expense we $X this in the be million was addition, first in approximately yet

this XXXX. traditional is to the million and QX $X again company quarter the that the adjusted to GAAP XX in It entertainment and note provided segment reconciliations the then of of course for important contributions for and on year total and reference, For include of was XXXX of $XX.X presentation golf year-end million been details associated have decrease XX non-GAAP XX, cash venues future quarter. EBITDA to first and $XX equivalents Pages capital EBITDA earnings was $XX.X as of of our XX, December track Puttery due incurred deliver The adjusted EBITDA expectations, remain was of million compared with this XXXX. expenditures on to and we of primarily for the development to XXXX, XXXX. full in as Cash line March million, with and to year our

Finally, of record beginning ending And are and X, of XX, The the to holders July XXXX. dividends to with XXXX. stock the that, closing for July X, the Directors on Hana our on I'll May August Board call XXXX, declared preferred company's for on remarks. payable dividends period XXXX turn back X

Hana Khouri

Thank that continue teams you, Puttery. I to everything the our helps company do profitability the questions. Kelley. operator that, want thank to to to across over drive us for of turn And they it and with I'll the for growth

Operator

our with Instructions] from Peter Saleh [Operator We'll take first question BTIG.

Peter Saleh

and Great. you've the scheduled Good and DC thanks and Putterys to guys morning, for that you Hana, mentioned quarter. open Houston in taking month is third opening got Chicago the next question. then

open their you quarter. four on Could open that you have will terms and bit units leave the I those construction the where in quarter? confidence to stand the a fourth of four getting fourth little about give left think us in units in those in those you of color

Hana Khouri

this Yes, started cetera. want sure. as well opening York to given sure that terms think that City, and QX others, But out year. of Yes, And permitting all Kansas get into I and underway contractors assumed originally what through mentioned make Pittsburgh identifying New supply the put Chicago. complexities, long it of is DC, or to they're issues. I equipment chain Because we so and Houston we should and general ordering -- Meatpacking, push see some DC, that We well of the complexities some locations, in we hauling went let's are we next City, specifically are Philadelphia, Chicago, But as Houston because different those in of honestly, in phases, right. and Miami, reason, say, where et were to of further of we going QX year. I that are of we've we than already in obvious

And a our goes of taken in from in they way different So physical like to in electrical lot manner. tiniest components breaker everything all establishment. timely holes ensure the can electrical that in has our an our, team our steps for get a panel golf that actual things to the

So the of that all various in and world in phases construction, not sooner. I open end by permitting will I have all they the they're of in the say would QX, faith if or Peter, but

Peter Saleh

XX% it's Great. EBITDA you two just that Yes, I have XX% generating smaller about very Charlotte open, level are similar. on maybe And margin the revenue actual Dallas. think EBITDA same I then the is and dollars than think of locations Puttery the

the of size. these think what in terms going is like it format different of feels So, I vastly right forward? in size terms similar are, If two and economics. Yes,

Hana Khouri

question. great Yes,

and but So when Colony, going for is which playing is, we're location we what year. venue, was three that, to courses and DC and square its in see me and up But the started to coming clear see thought some to that happens, well EBITDA XX,XXX as Charlotte's do okay, it very again, location that we the model when I it higher alcohol risk that the location this, say just others this attribute much the in testing was four is They obviously the in, you'll we would it's XX,XXX, sure with we saw a foot kind Charlotte for of what that to course does. the differences said in we're Colony spend a take the slight have area, be in category going than to two course, demographic. revenue I numbers. differences as And in well

if in I in courses. think flagship two it what think increasing course up to-date courses, to I future, Obviously, I we a will seen we're somewhere, we've locations what right be the think it did size to at think look easily, long we our don't what when be ideal So be don't as do offering. look now given at for that with four is four what proven demographic the But size. would we the I could needs into two we requirements going go relatively as these we've be to markets,

Peter Saleh

Understood. All right.

it and couple my a on just questions more I'll end, pass along. So

of seasonality In the of terms the at Puttery. business

the that seeing to a what the of among be and for strongest the now pattern first with to that and in quarter fourth this continue the expected had dip you you Is XQ. expect maybe right balance the think quarter is that you're I reacceleration then in year? Puttery’s

Hana Khouri

Yes. far, QX. couple And I of but And you've kind we're just that obviously, continue Charlotte what the it will learning at. just of absolutely what for looking our we're within only reiterate a in would outlined is, open weeks say expectations. is expect, location it's we to still was so what I is

we So we holidays. obviously, seasonality then QX we performing have do to lower a be QX, in do QX, bit for ramp effect better But data Charlotte. really in for on and then here for expect than QX than the for the the to prevalent Colony, with

Peter Saleh

million? Any capital many can And exact Great. my And then you mentioned your the I guys elaborate in or have with capital on raise thoughts have that capital you, need impact the Can you how I units -- on comment little get had plans bit end. and how to timing? you open terms much of another on just lastly, guess, that available just more XX you has do think available development? a on you today today?

Kelley Buchhorn

It's Peter. Kelley. Hi,

year. have available in year, this seven of of we fund planned this do the and to liquidity So terms for five what we openings enough have capital

I later think in with we've about, the with very that spoke to four year since we us QX early we've that this take equity here first raise have again, said, runway diligence, the in venues been lender us million end the get Hana working the talking certainly did will in last are through QX, start the QX. that we well year. openings, opening Conversations through we Certainly the when marketing going about the working follow-on enough five just year due with outreach, completing we'll still the into materials, future. that advisory like we're teams our really early through engaged, $XX near firm towards of the

QX good QX forward report in hopefully where sit update we QX as think and before with I certainly guys you the today hopefully So we'll of certainly, we earnings. we before feeling early move pretty end

with you come And good. we'll and have more really I yes, right with share. are So when to things update think to we more conversations going now well again, really back

Operator

question Alex Fuhrman will Craig-Hallum. next from with come Our

Alex Fuhrman

are that taking to get opened for year. two Great. first I longer Nice planned to took the and just other to remain shortage Putterys know constraints? kind seven it just question. then more going this a locations after reopening Charlotte, Just it getting much smooth able Dallas track bit post starting labor first open see to due last the now COVID process on to originally Are is you lot Thanks in compared to those these the you've to easing very see year? predictable? my been constraints the open, to of and be a make first or to the openings curious, how streamline little to

Hana Khouri

I for planning the were that getting actually Thanks question. as Colony. Colony say on the Charlotte, would first, construction We started the Alex. hit. Hey, and specifically COVID

we just the COVID. able do So weren't by that imposed of restrictions to because of all

So that very days. early was

still And are year, COVID that some there working about definitely -- of And one we're that there at the time. to And was So world still although obviously, But venue's that, itself things had, that I to majority our due within. those terms allowed delays completely constraints favor, timing during the was the I the should fact were looked this in want a of I just around are we different. in I opening would say would COVID. as work the at eased clear attribute that colony point, manner, to timely no say be And expect. this in that play. just specifically not definitely versus to the venue the effects COVID the

We expect Kansas the last might can year the year something get not Charlotte be of for we to the that builds. easily could this developed get things these mantra that we of other for City or builds unexpected just DC kind have or one

great to So doing what the we're team work possible. trying as deal of as done normalize has and a much

Because, things at point, going each before what out. around smooth to a while normalize. that good The those again, we But in think that our that hiccups weeks one everything it. we So this I kind try buy. using resources two is really like, to order to in chain it's team, us it still, I'm a of And that internal said, well, one me going our supply around are folks, difficult there lot are be world that to have for is given Head get? of of job, Procurement, build week, our And really they've peace encounter. the all this to changes kind this of to again, month, question we're a point. Because over everything actually ensuring means that be of this done and purchasing build at all his

just so and can approach a year. So have forward everything issues purchased taking any of we stored, don't kind and this we're we getting that look possibly

Alex Fuhrman

of healthy couple more beverage like more mix know they but mix next Hana. do is Or Thanks, food helpful. few food you see location you poles would you as food going a profitability you the due sure, you'll impossible really mix things really, it, the That's the guess to of Charlotte between for expect your Charlotte to and of of it's look see expect at really openings you be kind like next look openings. part that the Great. think and of mostly would the to what as next then beverage openings. And curious beverage in for Colony? and the strong of before to the to your open, few just terms your those of I in or mentioned are

Hana Khouri

will our of terms majority the of venues the that Charlotte expect like mix. I So look in

deal love put great have here. of clear of put things a well they the we socialize to effort learning as And drinks but doing food into And people Now, has game. increase the menu. the the play foods. we're have also have as a to our in great us works and we're deal beverage to they it when obviously, the food team It's effort, try and to we've come to menu, and things our to

the think clear areas I of the follow yes, kind They this the Charlotte, I we'll But them similar all to we've beverage remain for but in to for expect also than a would more future liquor to even on would percentage, food most larger take So specifically to expect of leader, them alcohol that. you'd that and this locations just this many year that the see in selected Colony is look like in path to are Charlotte. I of year's don't because more populated openings. densely what specifically, have

Operator

with from Reilly last Our come question will EF Eddie Hutton.

Eddie Reilly

thanks achieve unpack past managed EBITDA variable I venues, is Puttery in this margin operating bit fourth my which expenses the guys, Hey, was for you quarter question. for wondering if how little a to increases your you taking the quarter? could

Hana Khouri

Sorry, what thing was that last the you said?

Eddie Reilly

the achieved Just first to in margin the your managing achieve EBITDA expenses variable quarter how you fourth increases operating quarter. versus such higher

Hana Khouri

Yes.

labor that incorporate are the for quarter, we new would see we the slightly surge staffed we opening that we're sure to that we of want quarter, fourth -- you do, want a whatever what lot And kind might So, way. fourth any appropriately to we make also in overstaffed. our call come ensure we

So opening, to that in have go things we a experience they as b) staff do a) an guests great cover enough have always the wrong, that. which

more cost by game driven today, alcohol our I But we are take coming of would that those be And goods that's and favorably what say more going obviously, you're view. So at than normalized is expected. one sales. also a step to in to further, sales looking

is place budget about all that looking team in over. the of want is at coming in I is due we now, locations, really, the to our supported. market will And say higher if good right that we that's wages, just one labor labor feels Our both slightly really to the know not our make labor sure everything right

staffing are at to favorable But more than point. wouldn't due And anywhere. budgeted. a then, this over definitely on And expenses not line labor far to we're We're So I venue require that's see less expect anymore might savings upkeep, newer might. the And our many or that year locations know then, also, maintenance we venues five how a these four really and of much didn't maintenance old a need. things. one operating

were So our all as between And that own restaurant. savings. we've and something outperformed taking that we a cost it think a expectations we if of calculated really on the looking I into Drive Shack consideration, even venue at

job these things are field making really cared closely, in are Our that pretty and sure and doing valued. doing fantastic of also a guests the feel our managing employees making all for that our they're like while operators -- of sure they're

Eddie Reilly

kind expect you. take to to Got two of to you steady EBITDA new venues And state reach three you. margins? Thank maybe these quarters for

Hana Khouri

looks this it Charlotte two reached mean, it. like Charlotte well, I Colony of very X.X And reached I the at the mean, this quarters, December. in roughly. opened end in case,

quarter. one in it reached Charlotte So

least open, we've the stabilization venues. we my seen some relatively agree? there. they're would Drive -- seen So should that first after And be At happens see expectation that's that we you quarter it quickly. here. would Kelley, have what Shack in also And our

Kelley Buchhorn

continue and them, lot a ensuring managing to we I we're our that would agree. to ensuring the with And it level think also I too, just rates. a their that expenses these so but can teams field that, is out reasonable of they're supporting in drive continually margins working at the

sitting kind that's of think I yes, at. we're where So,

Operator

no additional Ms. my All It the to pleasure for additional turn questions have or call we remarks. in right. Buchhorn queue. back time, any At closing now to this the is over

Kelley Buchhorn

forward And the to next you, look year updates. thank we you we'll us Yes. you today. when in quarter we everybody, particular Again, soon. for QX throughout the to Thanks and reach end give more and joining again talk talking to of

Operator

for we conclude does thank This program and participation. today's you your

any You may at disconnect time.

Drive Shack (DSHK) 10 May 222022 Q1 Earnings call transcript