Operator: Hello, everyone. Thank you for joining us, and welcome to the Lucky Strike Entertainment Q4 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Bobby Lavan, Chief Financial Officer. Bobby, please go ahead.

Robert Lavan: Good morning to everyone on the call. This is Bobby Lavan, Lucky Strike's President and Chief Financial Officer. Welcome to our conference call to discuss Lucky Strike's fourth quarter 2026 earnings. Today, we issued a press release announcing our financial results for the period ending June 29, 2026. A copy of the press release is available in the Investor Relations section of our website. Joining me on the call today is Thomas Shannon, our Founder and Chief Executive. I would 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 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 measures most directly comparable to each non-GAAP financial measure discussed and 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 will now turn the call over to Tom.

Thomas Shannon: Thanks, everyone, for joining today's call. Despite a weak consumer at the lower end of the K and general macro uncertainty, we finished fiscal 2026 with a same-store sales comp of minus 0.2%, a 3.5-point improvement over the prior year and our best comp performance since fiscal 2023. Total revenue grew 4% to $1.245 billion, and adjusted EBITDA was $333 million, reflecting a year of deliberate investment in marketing in our water park platform and in the technology and leadership that position us for fiscal 2027. Had it not been for the World Cup and its record-breaking viewership and the conflict in the Middle East that drove consumer confidence to its lowest level in 70 years, our full year comp would almost certainly have been positive. There are green shoots across the business, and they are broadening. Ex-California, the company comped up plus 0.9% for the year. Retail bowling and shoe revenue comped plus 2.9%. Leagues grew plus 3.6% and accelerated in each of the last 4 months. Food comped plus 8%, and events, one of our most important product lines, turned positive in May and June for the first time since 2024 and remained positive in July and August, its best stretch in years. The fourth quarter started well. April was roughly flat, May swung to plus 2%, and we entered June with strong momentum. That momentum was disrupted by an extraordinary stretch of at-home sports viewership. On June 11, the most watched World Cup in American television history kicked off on home soil for the first time in a generation. The July 19 World Cup final drew roughly 66 million viewers across platforms, the largest American television audience since the Super Bowl. Layered on top of that, the Knicks won their first NBA title in 53 years in the most watched finals in 28 years, averaging more than 20 million viewers a night in our largest market with 33 million people watching the final game. For 5 straight weeks, millions of consumers who would ordinarily be bowling on a Friday or Saturday night were watching sports from home. June comped minus 7% and pulled an otherwise positive quarter and year slightly into the negative. I want to be precise about what that was and what it was not. It was not a weakening consumer. As we have seen through every exogenous shock since I started this company, the consumer has a short memory and adjusts to new realities quickly. And that is exactly what happened here. Our trends inflected the week after the final, and August is rebounding. It was a onetime 5-week programming event on home soil, and it does not repeat next summer. California remains our weakest market, but it is trending better. We made meaningful upgrades to the operating team there, including replacing leadership, and we are overhauling our corporate sales organization in the state. As I outlined on our last call, the full earnings benefit of the cost actions we took beginning in mid-January would land in the fourth quarter, and that is exactly what happened. The second quarter's $6 million payroll overrun became a payroll tailwind in the fourth quarter and remained one in July. We made significant advancements this year in analytics, pricing, leagues and capital efficiency. And with AI, our data and insights into the business are accelerating and our ability to optimize key functions like labor management. We reduced capital expenditures by 19% to $114 million from $141 million last year and $194 million 2 years ago. This is a reduction of $80 million in 2 years. On marketing, not all of our spending delivered the ROI we expected. We doubled working media and gained significant awareness, but the creative did not generate enough intent. Going forward, our investments will be more targeted, more measurable and held to a higher return threshold. In fiscal 2027, every marketing dollar needs to generate a return. Otherwise, we will consider reducing marketing as a percentage of revenue. Water parks represented the largest operational change of our summer. A year ago, we directly managed 2 water parks. This summer, we directly managed 5, including Raging Waters Los Angeles, which we closed on in January for $45 million. We are in 5 really good markets with very strong positions, the largest water parks in North Carolina, Illinois and California and 2 very good parks in the Florida Panhandle. That is a step change in operating complexity, and the organization rose to it. Strategically, the season was about striking the right balance between price, attendance and labor. Across the water park portfolio, per capita spending is up double digits and payroll was down mid-single digits as we staffed to demand. Price and cost discipline held what weather took and it is the same pattern the large regional park operators described in their calls this month, attendance pressured by weather, per capita spending up and the economics protected through revenue management. The weather impact was real and concentrated. Raging Waves, our 54-acre water park outside Chicago, saw attendance fall significantly against the June that ran cooler than normal with rainfall well above normal. As I've said before, in this business, pricing has a lot less to do with demand than weather, and a water park cannot comp through a cold, wet summer month. We remain very bullish here. I've described the water parks as a coiled spring. On a trailing 12-month basis through July, the water parks produced $56 million of revenue and $22 million of EBITDA, up from $23 million of revenue and $11 million of EBITDA in fiscal 2025. Roughly 80% of summer water park earnings land in our September quarter, which is in fiscal 2027. The business is highly countercyclical and will only get better as we become more experienced operators in this business. The fixes for next season are simple: sell season passes earlier to hedge out weather and further optimize price and admissions. We are very happy with our Boomers Parks, which are counterseasonal, high margin and EBITDA positive in every period, delivering $11 million of EBITDA this year, nearly double the prior year. Turning to guidance. For fiscal 2027, we expect adjusted EBITDA of $340 million to $360 million. We run a short-cycle business, and we do not give guidance blindly or optimistically. So we are deliberately guiding conservatively as we work through the year. Importantly, this range reflects prudence around the environment, not the trajectory of our plan. The consumer has already told us in August that they want what we sell, and the keys to this year will be events booking for December and a clean second half after more disturbances than we have ever seen historically. Thank you. With that, let's turn it over to Q&A.

Operator: [Operator Instructions] Your first question comes from the line of Steven Wieczynski from Stifel.

Steven Wieczynski: So Tom or Bobby, I mean if we think about your guidance for this year, if we kind of look at where the assumptions around margins, I mean you guys are kind of forecasting margins somewhere, I think it's a 27% number versus the 30% long-term target you laid out in the presentation. So as we think about fiscal year '27, wondering what might be weighing a little bit there on that margin versus your long-term goal. And I know you kind of called out maybe some marketing initiatives and some other things in there as well. But any kind of color around the margin target for this year versus the long-term target would be helpful.

Robert Lavan: Yes. So we've spent a lot of time on this topic. And we added a slide to our investor deck that will show you that $900 million of revenue in the portfolio runs at a 42% 4-wall EBITDA margin, and all of that's the pre-2022 properties. And then there is $300 million that runs at 30%, and that's everything that we've invested in, built or acquired over post-COVID. And when you look at the math there, when we get that $300 million up, you get back to the 30%. I think the 32% is a little bit harder to achieve in a world where we've taken marketing from 1% to 2.5% to 3% of revenue. I mean that's just an automatic reduction in margin. But we're still very confident in the long-term 30% to 32%. We just want to be prudent with our guide this year as we invest in marketing, as we invest in systems, as we continue to ramp the water parks and making sure that the organizational structure is there. But ultimately, this continues to be an investment year, but we're pretty happy with the trajectory we're on.

Steven Wieczynski: Okay. Got you. And then Bobby, probably one for you as well. Wondering maybe how we should think about cadence same-store sales cadence for the -- for fiscal year '27. Your commentary, I think Tom's commentary around July and August were positive. That sounds good. So it sounds like the first quarter should be positive just based on maybe how September ends up. But any color around the last 3 quarters of the year in terms of how you guys are maybe -- I know it's tough to kind of forecast that, but what you guys are kind of thinking from a same-store sales perspective? And then maybe anything from a headwinds or tailwinds for the last 3 quarters of the year as well that we should be thinking about?

Robert Lavan: Yes. So moving backwards, June was the worst month I've ever seen here. And so that is going to be a tailwind next year. We're not going to have the World Cup. And hopefully, the weather in Chicago is better. So June has some tailwinds -- last year, we had about $10 million of revenue hit from 2 different distinct snowstorms in the March quarter. And the weather is the weather, but ultimately, those were very unique. The quarter that I'm most focused on is our December quarter. We have completely restructured our events platform. Events, as we talked about a lot, has been this $40 million top line drawdown over the past 3 years. And that business has been positive for the past 4 months. But most importantly, the -- going into the end of September last year, the December backlog was tracking down $30 million. This year, it's tracking up $10 million, so we feel -- and it's still early, and that's on like a lower base of events, but we're pretty happy with where events is going. And if the trajectory stays, the December quarter is going to be a proof of concept that we can execute on the initiatives we lay out.

Operator: Your next question comes from the line of Eric Handler from ROTH Capital.

Eric Handler: I wonder if we could dig in a little deeper on events. A while back, you talked about how you were moving salespeople back into the facilities, and there were various initiatives to get the local community to come in and have like tasting programs and everything. What's been going on there? And how are you seeing the results from that?

Robert Lavan: Yes. So we are moving the business forward every day. On July 1, we announced a full restructure. We went to a hybrid model where we have a split of our inbound business between huge companies and localized companies. And then we have our call center, which used to be unique to individual centers, is now covering parties sub-12. So it's a very rebalanced structure where the team can focus on outbound. And it's still early, but we're seeing the fruits of the labor there where we're developing clients. We had a client this week who was going to have a party in New York and their other offices grabbed on and had parties as well. So it's sort of everybody in the company was doing the same thing. And we're really building that outbound structure. And so again, this $40 million that we've lost over the past 3 years, I think, is very achievable to rebuild over the next few years.

Eric Handler: Great. That's helpful. And then digging in a little bit more on SG&A was up a good amount year-over-year and sequentially. How much of that was due to promotion of the water parks? How much -- where -- what were the initiatives that didn't play out as expected? And what are some of the shifts that you're planning here?

Robert Lavan: Yes. I mean the biggest thing is we are releasing a new CRM in October. And so those investments have been very heavy in the June and September, and they'll be heavy in the September quarter. It's the largest IT initiative the company has ever had. And so those just flow through SG&A. SG&A sequentially is flat to down.

Operator: Your next question comes from the line of Randy Konik from Jefferies.

Randal Konik: I guess, Tom, in the press release and in your remarks on the quarter, you talked about -- I mean you talked about the capital expenditures coming down fairly dramatically from peak levels. And I think there was a point made that if those will continue to be kind of, I guess, restrained going forward. Can you kind of elaborate on that? Let's dig into that a little bit more and think about on a multiyear basis, how do you think through what you believe is the appropriate levels of capital expenditure in the business? And then as you kind of look to generate and accelerate more free cash flow, how are you thinking about deploying that? Where are we with share repurchase activity and so on and so forth? That would be really helpful.

Thomas Shannon: Well, our CapEx budget for fiscal 2027 is $90 million. So it continues to trend meaningfully lower. In that number, we are finishing the remaining Lucky Strike rebrands, and we are doing the AMF rebrands, most of which are already AMF, but not all. Some are transitioning from Bowlero brand or an independent brand to AMF. So by the end of this fiscal year, I think we will have finished the rebrandings, and we will only have 2 brands, which will make the marketing message much more focused and efficient, Lucky Strike and AMF. There's been, in the last 2 years, a significant amount of CapEx spent to sort of catch up deferred maintenance in the water parks and the Boomers that we acquired, and that wasn't a surprise. That was part of the investment thesis. And we bought these assets for very attractive prices, but there was a reason and they needed to be refreshed. So we're meaningfully through that cycle. We're also just much more efficient. So we've really become very, very good at doing large CapEx projects like a roof replacement or a parking lot replacement or HVAC upgrade for close to half or even less than we were paying historically by using national vendors with national contracts and all of that. So I think ultimately, the CapEx once we get through this rebranding cycle, we'll probably move into the $70 million to $80 million range. Again, we peaked, I think it was $194 million 2 years ago, down to $114 million in the last year and $90 million budgeted for this year. So a pretty good trajectory.

Randal Konik: Great. Super helpful. I guess for Bobby, when you look at the guidance, I think it's slightly up on EBITDA at the midpoint. When you think about I guess, it's higher, excuse me, I was looking different guidance. But when you look at the different holdbacks you talked about, let's say, this year in the World Cup, investment in marketing, the difficult weather impacting the water parks, the California business being subdued or down. Maybe could you kind of dimensionalize for us how impactful those items have been on the P&L, whether from a revenue perspective or an EBITDA perspective to get some perspective of how potentially conservative this fiscal year guide could be for 2027?

Robert Lavan: Yes. So weather in the third quarter was $10 million. The World Cup was at least $7 million in June, if not $10 million to $12 million. We were tracking in May very -- like I was super happy in May. May, we ended plus 2, and the momentum out of that was great. And then June 3rd happened, and on June 3rd was the first night of the Knicks championship. And we looked at the numbers the next day, and we're like, wow, this does not bode well for the World Cup. So it's at least $7 million, if not $12 million, because the World Cup did go until July 19. So you have, frankly, high single-digit, low double-digit comps the first few weeks of July. And then you had the water parks are about $3 million to $5 million of incremental weather, like there's always some weather. So all of those are there. That's what gives us confidence in a 1% to 3% comp this year. But if things go our way, it could be better -- but weather is something that we found is more volatile lately. So we're trying to not say, okay, everything is going to be perfect. So those numbers are partially derisked in the 1 to 3, but not fully derisked.

Randal Konik: And maybe just finally, can you just give us a little bit more color on California in terms of just reminding us how big of a contribution it is to the business? How much -- how difficult it's been over the last year or 2. You talked about changing leadership. It sounds like things are getting sequentially better, i.e., less negative. So just kind of unpack that a little bit more. And do you think California can turn positive this next fiscal year? And if so, what quarter would that be most likely to occur in?

Robert Lavan: Yes. So California comped minus 4% last year versus the rest of the company was plus 1%. So it's about 20% of the business. California is going to be driven by two things: retail, which we keep talking about marketing. Marketing continues to get better, but I'm not going to say that, that's going to be a key driver this year. Marketing -- California goes the way events go. So if events is -- continues momentum, I would expect California to turn, but we're not factoring that into our forecast this year.

Operator: Your next question comes from the line of Eric Wold from Texas Capital Securities.

Eric Wold: So 2 questions. I guess, first off, I know you mentioned, Bobby, a little bit on the parks in terms of trailing 12 months and the plan to kind of sell season passes earlier to maybe hedge out the weather a little bit. Can you just update us on the larger projects that are still at hand for the parks that you plan in the off-season and kind of what we could see next year from kind of capital improvements and new offerings that weren't there this year or what you think they could do?

Thomas Shannon: This is Tom Shannon. I'll take this one. So we didn't close on Raging Waters Los Angeles, which is our biggest park, until January. And we inherited a deficit, a significant deficit in season passes. As a result, no season passes were really sold in the fall as the seller got ready to transact. The transaction was delayed because it required approval by L.A. County, which is the landlord for the park. And so the water parks were suboptimal, right, but we just acquired them, and we just acquired the 2 biggest in the portfolio. So there's a lot of things that will be done better and certainly with more runway, one of which is having more of a runway to sell season passes, at least in our 2 biggest water parks, but also there were some decisions made last year to open the Panhandle parks later in the year and to keep them open later, which is happening. And so some of the revenue deficit in Q4 of fiscal 2026 is a result of not having the 2 parks in the Panhandle open earlier and -- but they are going to go later. So let me just give you an interesting data point. Big Kahuna's in Destin, Florida, has had a positive attendance comp in 25 out of the last 30 days and Shipwreck Island in Panama City Beach has had a positive attendance comp in 19 out of the last 30 days. So it's a long summer season, and there were some pretty meaningful headwinds in the quarter that are not necessarily representative of, #1, the business as a whole, the water park business, but even of the summer because there's a lot of this revenue that we can make up and will and probably have made up already in the first quarter of fiscal '27. So it's hard to look at this business sort of on a snapshot basis. But that I think that explains a little bit about what happened and a little bit about what's happened since the fiscal year ended. With regard to CapEx, there are some semi-large projects that we like to do. I'd say semi-large on order of $5 million each in Shipwreck Island and in Big Kahuna's. I doubt if either of those will be approved in time to do in fiscal '27. So the CapEx in aggregate in the water parks will be pretty minimal, I would say, this -- in all likelihood this fiscal year. And then in the following year, we'd like to do these 2 large slide towers that would be -- would have a lot of presence from the street and drive traffic, also increase the nature of the parks, broaden the audience a little bit. And so that $10 million, give or take, is likely to happen in fiscal '28.

Eric Wold: Got it. And then secondly, maybe update us on where you are with the labor efficiency moves. I know you talked a little bit about towards the end of the year, the savings kind of say maybe baseball analogy, but kind of how far along are you on kind of what's been saved so far? How much more do you think you can pull out of the bowling centers? And how far have you taken those initiatives at the water parks and FECs?

Robert Lavan: Yes. So let's separate water parks and FECs and Bowling because water parks and FECs we're still figuring out what's the optimal labor model. On Bowling, we're running down $1 million year-over-year right now. So $1 million of savings a month. Our model assumes that, that flattens out and that there's actually an inflationary adjustment on payroll as we invest in people, we invest in sort of bonuses deeper in the system that ultimately drive KPIs that drive revenue. But it's a tailwind today, but I would assume it is moderate to flat to some investments that drive revenue throughout the rest of the year.

Operator: Your next question comes from the line of Jeremy Hamblin from Craig-Hallum Capital Group.

Jeremy Hamblin: So you guys are reducing your CapEx spend as you absorb some of these initiatives in the parks. I wanted to just understand in terms of thinking about the go forward, you've done several acquisitions here over the last few years. And in terms of thinking about the go-forward strategy, there has been a lot to absorb, including the FECs, which have probably a slightly different business model and certainly investment needs. But just thinking about, should we expect here over the next year or 2 as you absorb these that there may be a kind of reduced kind of acquisition strategy in total? As you work on kind of fine-tuning the operations for the water parks or as you kind of get through finishing the Lucky Strike conversions?

Thomas Shannon: Yes. That is accurate to say. We're still in the M&A game, but only opportunistically. We're not actively looking for deals because there is so much opportunity to optimize the existing portfolio. But I want to be very clear that we view the water park and FEC acquisitions as extremely good even when the year is not ideal. There's still -- we're still in these for probably 6.5 to 7x. They are counterseasonal, so we generated a lot of cash this summer that we wouldn't have otherwise. There were nearly every -- other than the last week of the month or first week of the month when rent is paid or interest is paid, every week was cash flow positive on an operating basis, which we've never seen before because things slowed down on the Bowling side in the summer, but with the addition of these assets, we generated a lot of cash. And so we feel really, really good about them, but we are focused on 2 things: operational improvements, organic EBITDA growth and effective delevering.

Jeremy Hamblin: Got it. And then, Tom, you noted that you're going to very carefully look at marketing investments that are being made and looking for high ROI on those investments. I think, Bobby, you said you've gone from 1% marketing budget to 2% or 2.5%. In terms of thinking about making those incremental investments, how are you viewing the channel of where you're spending on that? Do you feel like there's fine-tuning? And then how quickly do you get feedback on whether or not a particular marketing strategy has been effective or hitting the ROI that you're looking for?

Robert Lavan: Yes. So we raised spend from $17 million to $30 million. Our impressions went from about 75 million a quarter to 350 million a quarter, but our engagement rate is not good enough. And so we're super focused on not taking the person who has intent to bowl and showing them our website more. We're focused on the people who don't necessarily have intent to bowl and getting them to want to bowl. And that is what we need to push this year. The feedback loop is instantaneous at this point. We have a lot of data that's just driving our -- the engagement with our content. We continue to invest in content. And so ultimately, we need to convert the people who don't have intent to intent, and that's where the growth will come from. We are seeing very significant growth in our lane reservations platform, which is the tip of the spear and the bottom of the funnel. And we need to continue to bring people in there that have more intent, and that's how we're looking at it.

Jeremy Hamblin: Got it. And then just a quick follow-up. In terms of your marketing spend, portion of that spend is on your events business. It seems like that's quite a bit more volatile in general. But wondering what portion of your total marketing budget goes into the events portion of your business?

Robert Lavan: Great question. It is none right now. So it is an opportunity.

Operator: Your next question comes from the line of Michael Kupinski from NOBLE Capital Markets.

Michael Kupinski: I just got a little color around the water parks a little bit. I know that you said that you're looking for higher per cap spending and improved labor efficiency. And I was just wondering if you can maybe quantify the expected incremental revenue and EBITDA contribution from the water parks in fiscal '27, particularly in September, if you could just add a little bit more color there.

Robert Lavan: Yes. So TTM EBITDA in June was $14 million. Then it became $22 million at the end of July. It will be -- August is still not over. So August can be -- will drive that TTM to $26 million to $28 million, and then we'll have an incremental few million dollars more from September. One of the issues that Tom discussed is we do staff some of the water parks with J-1. So these are international students who come in. Instead of them coming in, in May, they came in for August and September. And so we're testing, pushing the season out. So there is a little bit of volatility in how much earnings we get in August and September, and that will also be dependent on the weather.

Michael Kupinski: Got you. And then you're mentioning about the opportunity on events. How significant is events to the overall same-store revenue opportunity? And if you could just give us some sense of how bookings are going through the fall and into the holiday periods.

Robert Lavan: Yes. So events has been the entire comp decline over the past 3 years. We've quantified it's about $40 million that we had in '23 that we don't have today. Ultimately, on top of the quantum, there is an element of events, corporate events during the week is very tip of the spear to traffic. Ultimately, if you go to a company event, you walk in, you have the wow factor of the Lucky Strike and you go, I'm bringing my kids this weekend. And so we've lost some of that over the past 3 years. And ultimately, our events business is a tiny percentage of the global or national events business. And so we just want to go out and get that. From our perspective, the December is our Super Bowl. Events becomes 40% of revenue in December. Last year, we were down the first 2 weeks of December. And so that business right now is tracking up.

Michael Kupinski: Got you. And if I could squeeze 1 more in. You have, in the past, discussed rationalizing the location portfolio as capital intensity comes down. I was just wondering how many of your locations will you characterize as underperforming? And then should investors expect a meaningful number of closures, sales or other portfolio actions in fiscal '27?

Thomas Shannon: Well, in one sense, you could say they all underperform their potential. The number of centers that we have that are EBITDA negative is like maybe two or three, one of which is a legacy property we inherited from when we bought Lucky Strike that we sort of knew we were just going to exit at the end of the lease term, which is coming up in the next 15 months or so. I would estimate in the next -- in this fiscal year, we'll probably shed on order of 10 properties. And most or all of these are properties that we acquired in the last 5 years after we went public, and we had a flurry of M&A activity because there was a focus on unit count, which in retrospect was a mistake and it's the mistake that won't be repeated. So we're just rationalizing the portfolio. There won't be anything that I would characterize as seismic. It's really just getting rid of centers in markets where they're peripheral and they're more of a hassle to manage than they're really additive to the portfolio.

Robert Lavan: Yes. We're very focused on leverage. And so if we have properties that on a 4-wall basis, we can sell at an accretive leverage multiple and when you blow it down and say, 'What does it cost to send the field there, what is IT support, what is insurance support,' it's very accretive to our leverage position to sort of sell some of these fringe assets. And we've done a comprehensive review, looked at land values, go-dark values. And ultimately, there is an ability to use asset sales to delever the business.

Operator: Your next question comes from the line of Ian Zaffino from Oppenheimer.

Ian Zaffino: I just wanted to kind of dig into the comment about the per caps, water parks. What basically is driving some of that, call it, pricing power? Maybe there and then versus like your kind of other concepts, what's kind of being the differentiating factor there?

Thomas Shannon: Well, the per caps in the water park were up this year on order of 15%, 15% to 20% as a range. So we decided after last year, which was a pretty good year that there were a lot of pricing opportunities. The season pass was simply too cheap last year in our view, and we took price. We introduced a super premium tier called Elite. And it surprisingly sold about 10% of them of the season passes were the Elite. So there was demand at the high end, certainly for that product, which was good. We deemphasized the season pass this year and we were successful in driving up per cap. It was partially responsible for decline in attendance, but our biggest water park in Los Angeles, it didn't reach 80 degrees there for the first month that it was open. And an air temp of 80 degrees is just not sufficient for a water park. The water temperature was frigid. So we lost -- I don't know, I haven't done the math, but probably 60% of attendance. We were down probably 60% in that month. Now it has rebounded. But one of the problems with having a slow start to the season is that is when it's most attractive for someone to buy a season pass, right? Because you get to amortize it over the rest of the summer. As you move through the summer, the season pass becomes relatively less attractive. We now view season pass in a completely different way than we did 4 months ago. 4 months ago, we viewed it really as a matter of pricing strategy and mix. We now view it as weather insurance. And so if it had been a good weather season for the water parks, we would look really, really smart for holding on to this premium price model. The problem is that you can't predict the weather. And if you have, in the case of Raging Waters Los Angeles, a slow start to the season or at Raging Waves in Yorkville, Illinois, an abnormally cold rainy summer, you need that built-in season pass revenue to reduce volatility. So this coming year, we'll strike more of a balance between volume and price. And I think we'll get closer to optimal on that.

Ian Zaffino: Okay. And then just as a follow-up, Bobby, I know you said the trends were improving since your decline. But what are we kind of looking at now? Are we back to that 2% we saw in May? Is there any type of acceleration or any type of notable trends that you're seeing let's just say, July and August?

Robert Lavan: Yes. So I mean, July, we're going to have to carry the first 2 weeks, first 2.5 weeks of World Cup. So July was down low single digits. August is flattening out, but it's not fully there. Events is strong, leagues is strong. The school shift and the Labor Day shift is a little weird. So ultimately, this weekend will be very important, whether August flips positive or negative. And so ultimately, we're more focused on the December quarter. But generally, we are expecting plus 1% to plus 3% throughout the year.

Operator: Your next question comes from the line of David Hargreaves from Barclays.

David Hargreaves: If we look at the 2027 guide of $340 million to $360 million, can you give us an idea of how much the contribution from the water parks and Boomers will be in that number?

Robert Lavan: Yes. Water parks will be sort of somewhere between $28 million and $33 million, which really comes down to how September plays out and how June -- May and June next year play out. Boomers, which Boomers excludes Big Kahuna's, which came with Boomers. Boomers right now is $11 million of EBITDA. And with all the CapEx we put in there, that's anywhere between $10 million and $15 million for the next 12 months.

David Hargreaves: Got it. And then if we take the midpoint of the guidance, interest, I imagine tax payments will be negligible and $90 million of CapEx. I think free cash flow should probably be around $50 million. I'm just wondering if that's a fair number to assume.

Robert Lavan: That is a fair number to assume. That does not include any asset sales we do.

David Hargreaves: So about -- okay. No, okay, it doesn't include asset sales. About half of that we could assume maybe is debt repayment?

Robert Lavan: The goal would be to pay down the revolver by June. So yes.

Operator: Your next question comes from the line of Gregory Miller from Truist Securities.

Gregory Miller: Just one question for me. I'd like to dive more into the league performance, if possible, and your engagement with league players. I saw a press release intra-quarter that spoke about the decision to invest in lane conditioning and oil patterns. And I'm curious if that was driven by customer surveys and just how important that is to their satisfaction as league bowlers.

Thomas Shannon: I think machine reliability and lane conditions are critically important to the league bowlers, and we are super focused on that now. We've made some structural changes to be able to ensure better machine reliability. We've upgraded the quality of the oil in league-heavy houses, and we're keeping a very close eye on it through feedback that we get both directly and through social media. So it's a big initiative. It coincides with a, I would say, reinvigorated league business. The league business is outperforming all of our other business lines right now, and it's an important business unit. It's $110 million, $120 million before ancillary spend. And so we view it as a significant growth vector for us going forward, but we have to deliver the product.

Operator: There are no further questions at this time, and we have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect.