Good day, and welcome to the Dave & Buster's Entertainment, Inc. fourth quarter 2021 earnings results conference call. Today's conference is being recorded. Now, I would like to turn the conference over to Michael Quartieri, Chief Financial Officer, for opening remarks.
Thank you, operator, and thank you all for joining us today. Joining me on today's call are Kevin Sheehan, Board Chair and Interim Chief Executive Officer, and Margo Manning, Chief Operating Officer. After our prepared comments, we will be happy to take your questions. This call is being recorded on behalf of Dave & Buster's Entertainment, Inc. and is copyrighted. Before we begin our discussion on the company's results, I'd like to call to your attention to the fact that in our remarks and our responses to questions, certain items will be discussed which are not entirely based on historical fact. Any of these items should be considered forward-looking statements relating to future events within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated.
Information on the various risk factors and uncertainties have been published in our filings with the SEC, which are available on our website. In addition, our remarks today will include references to financial measures that are not defined under generally accepted accounting principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings announcement released yesterday, which is also available on our website. Now I'll turn the call over to Kevin.
Thank you, Mike. Good morning, everyone. We're pleased to be speaking with you today as we reported another strong quarter of financial results. We have an exceptional business model, strong assets, and a talented group of team members who are delivering outstanding service and experiences to our guests. We've made great progress as the fourth quarter revenue approached pre-COVID levels, while net income and adjusted EBITDA exceeded pre-COVID results compared to the fourth quarter of 2019. However, there's much more opportunity to unlock the potential of this business. We've begun a new phase of innovation, growth, and value creation here at Dave & Buster's. As I said last quarter, we have a great brand with significant scale, a passionate team, and a fleet of stores in high traffic, high volume destination trade areas.
We are focused on optimizing our current stores' full potential and accelerating innovation to drive incremental traffic to our brand. We're ramping up our unit growth this year, and we'll begin a more formal program to remodel our stores and give them a fresh look that's more in line with our new prototype. We're broadening our entertainment offering to include more immersive sports viewing experiences, including improvements to the watch environment. As Margo will detail shortly, we recently announced a partnership with UFC and WWE to bring all their pay-per-view events to our D&B locations across North America. Finally, our best-in-class arcade will get even better with our summer of games rollout, supported by a significant marketing campaign. As you can tell, I'm very excited about the future of this company.
We have meaningful upside, and as you can see from our fourth quarter, we are on our way to realizing that potential. At this time, Mike is gonna cover the fourth quarter results and share some thoughts on our expectations for the first quarter and fiscal year 2022. After that, our COO, Margo Manning, will update you on our operations. Mike?
Thanks, Kevin. Our fourth quarter results demonstrated our ability to drive significant improvement in profitability with relatively flat comp store sales compared to 2019, despite COVID implications. We continue to see a benefit from a higher mix of amusements and a leaner operating model. Even with headwinds from wage and commodity inflation, we've continued to grow margins and have offset these impacts through a more efficient labor model enabled by technology, lean process improvements, proactive pricing adjustments, and more effective marketing investments. Looking forward, we are poised for our stores to return to new levels benefiting from the removal of COVID restrictions, the return of special events, and the efforts of recent initiatives. For fourth quarter sales, we experienced a comp store sales decrease of 2.6%, excluding the 14 stores that had vaccine mandates during the quarter.
Including all stores, we experienced -6.8% comp and total revenue decline of 1.2% compared with 2019, reflecting softness due to the Omicron variant and associated vaccine mandates and the reduced special events business due to COVID. Our walk-in sales continued to post positive comps at 2.1%, although our special event business continued to lag at -58% compared to 2019. By month, our overall comps were positive 7.5% in November, -14.9% in December, and -8.4% in January, which highlights the timing of when the Omicron variant hit.
Our walk-in comps, which excluded the impact of our lagging special events business during a seasonally strong holiday party season, were positive 13.9% in November, negative 4.1% in December, and negative 0.9% in January. Regarding sales mix, amusements and other had a positive 7% comp, and with 65% of our overall mix compared with 56% of our mix in 2019. This is mainly due to minimal discounting and a continued shift to higher denomination Power Cards. F&B had a negative 24% comp compared with 2019, a substantial portion of which was due to the special events business. Adjusted EBITDA for the quarter was $87.7 million or 12.7% higher than the same period in 2019.
This reflects a 25.5% adjusted EBITDA margin, which was over 300 basis points higher compared to the same period in 2019. The improved performance was primarily driven by the higher amusement mix and leverage on our labor due to a more efficient model. Net income increased $700,000 to $25.7 million in the quarter compared with 2019, resulting in EPS of $0.52 per diluted share. These results generated positive operating cash flow in the quarter. We ended the quarter with $26 million in cash and approximately $492.5 million of liquidity under our $500 million revolving credit facility, net of the outstanding letters of credit, and our net leverage ratio was only 1.2x.
Total long-term debt was $440 million at the end of the quarter, consisting of our senior notes maturing in 2025. During the quarter, we redeemed $55 million of our senior secured notes, which resulted in a $1.7 million dollar expense to redeem the notes, but will save $4.2 million in annualized interest. Turning to capital spending, we invested $26 million in capital additions, net of tenant allowances. We opened 1 new store during the quarter. In the first quarter, we plan to open 2 additional stores in April. In fiscal year 2022, we plan to open a total of 8 new stores. As you can tell, we're pleased with the fourth quarter results and the sound financial footing we've established going into fiscal year 2022.
Turning to our outlook, I'd like to offer some insights for the first quarter of fiscal year 2022. Regarding sales trends, our comp sales for the first 8 weeks have been positive 5.4% compared to 2019. Our walk-in business is up 9.1% on a quarter to date basis, and our special events business is down 42% on a quarter to date basis. Fiscal 2022 projected capital additions, net of tenant allowances, are expected to be approximately $200 million, with 70% dedicated to new stores and improvements to the existing stores, 10% for games and 20% for infrastructure upgrades and replacements. In summary, our team continues to execute on our initiatives to drive organic growth, improve profitability and produce significant cash flow for the business.
We are pleased with our progress and are well-positioned as we enter in fiscal 2022. With that, I'll turn it over to Margo.
Thank you, Mike, and good morning, everyone. We continue our commitment to simplify store operations, improving our guest experience and enhancing our food, beverage and entertainment offerings to drive sales and profitability. Our guest satisfaction scores show the menu change made in May of 2021 is appealing to our guests. Additionally, we have established a new cadence of four food and beverage limited time offers per year aimed at driving checks and food attachment. Starting in Q1, we are rolling out reservation capabilities throughout the brand to make it even easier for our guests to dine with us. Guests will now be able to reserve a table in our dining rooms directly through the D&B website or via OpenTable. Our new beverage menu was designed to expand both reach and appeal.
In Q4, we launched a tightly curated beverage selection that elevates the experience, adds new flavor profiles and improves relevancy. In Q1, we'll make a strong push to revitalize our late night segment through a combination of marketing and programming efforts. Our Late Night Happy Hour initiative consists of a series of D&B nights complete with custom content, AV takeovers featuring club mixes from nationally known and regional DJs taking over the airwaves of D&B Live. As discussed on prior calls, we have launched several tests to determine the entertainment appeal of programming. These tests indicate our guests have an appetite for new entertainment offerings, and we are continuing to refine these offerings with the goal of giving our guests more reason to visit.
As Kevin mentioned, early in Q1, we launched a nationwide partnership with both UFC and WWE to bring their pay-per-view events to the D&B locations across North America. This effort is to make Dave & Buster's the place to see all fights in an exciting up-tempo environment. The partnership with WWE will launch with WrestleMania on April second and third and continues with the SummerSlam this July. In addition, we've brought more attention to March Madness showings with visible signage and more integration on our digital signage, including a digital bracket that was updated throughout the tournament. We have also been investing in enhanced technology to support our entertainment initiatives with the phased rollout of live remote streaming capabilities into our stores that will allow us to broadcast real-time, high-definition video content such as DJ sets, concerts and stand-up comedy.
Next, let's move to event sales recovery, which was depressed in Q4 during Omicron. While lagging walk-in sales, event sales have accelerated in recent weeks. Specifically, we are seeing our corporate segment start to rebound. With the centralization of our sales team, we believe we are positioned to optimize outbound call activity to drive incremental sales. Our new centralized sales center, augmented by local store management, has already demonstrated an increased booking level per sales representative. The new D&B Rewards program, which is linked to the D&B app, launched on November 8 and continues to exceed projections. In Q1, a localized marketing campaign leveraging connected TV will be used to support spring break week throughout our brand. In addition, we are bringing back one of our most successful promotions.
Our Eat & Play Combo will run as a limited time offer for the length of April to capitalize on pent-up demand from our more value-oriented guests. We believe as structured, this will drive incremental spending behavior and expose new guests to our brand. Lastly, I'm pleased to share that we've been able to improve our stores' hourly staffing levels. We've seen an increase in our applicant flow, which is a positive and refreshing trend for our team. This trend has enabled us to shift our focus on entertaining these new hires through training, skills development, and providing a great employee experience. To the entire D&B family, thank you for all of your efforts this past year. You are the heart of this brand and the reason the fun comes to life in our stores. With that, I'll hand the call back over to you, Kevin.
Thanks, Margo. We're pleased with the results we delivered in the fourth quarter despite numerous headwinds, including vaccine mandates, Omicron, wage and labor pressures, supply chain challenges, and the lagging special events business. We are optimizing our return to a more normalized post-COVID environment as the headwinds we have experienced become tailwinds, fueling our business as we move forward. We have an exceptional business model, strong assets, and a talented team. There is meaningful upside potential for this company, and we are laser-focused on driving that to reality. Our team is extremely excited about the prospects for 2022 and 2023, and well beyond. Let me end with these thoughts. We came very close to reporting record fourth quarter revenue despite being significantly impacted by Omicron.
We're starting to see a recovery in our special events business, which was down by 72% on an annual basis in 2021 compared to 2019. We are shaping our strategic initiatives and also making great progress improving margins. Our international efforts will start to blend in, we believe, beginning in the latter part of 2023, and then you can add in our heightened focus on sports viewing and sports betting. All of these actions will begin to write the script for the next couple of years. Tighten your seatbelts as we are on the move. Now we'll take your questions. Thank you.
All right, thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We kindly ask that you limit yourself to only one question and one follow-up question. Again, that is star one to ask a question. We can go ahead and take our first question from Andy Barish with Jefferies.
Yeah. Hey, good morning, guys. Wanted to focus on the quarter to date results here in 2022, which are impressive. Just kinda give us your sense if there is anything kind of coming through as a key contributor and/or, you know, spring break calendars, if there's anything to point out there. I know obviously the last couple of years that's been a little messy, but let me stop there and then, you know, ask one more after this.
Andy, thanks for that question. That it's actually very important because when you dig into the numbers, it really tells the true story of what's going on in this company, which is really significant. As we were going through the fourth quarter and we went through the first number of weeks, we were doing our growth was up 7.6%. Then around the middle of December, Omicron, as you know, hit us. That was such an important part because holiday time and also a big time for special events that were really starting to recover nicely. The first portion of the quarter was up 7.5, 7.6%, and the second portion of the quarter was down 12.2%.
That tells you inside those numbers, the power of where we were going before the breakout of Omicron. Then when you do the same sort of mathematics in the first quarter. In the first three weeks, we were down 8.3%. Then once that all became subsided and we went back to business, our last five weeks have been up 13%. You can really fully understand that other than the Omicron, this business is on fire. It's just the beginning of it. We've got so many things that we've talked about on other calls that we're starting to shape to drive demand. We're excited about where we are today, and we're excited about the prospects for the future.
I think with that incremental guidance that you guys can better understand what's going on inside the business and how we were significantly impacted by the Omicron that's now behind us, you can understand why we feel so good about where we're going as a company.
Thanks, Kevin. Just quickly, it seems like you're enjoying and having fun in the Interim CEO role. Can you give us?
Just some perspective on kind of where that search process stands, given you know, you've been in the role for a fairly extended period of time now.
Yeah. I mean, the reality is I'm 68 going on 69, and we deserve a younger, energetic, driven skill set that's gonna build this brand in all the ways that we've talked about for the next 5+ years. I think that deserves some new blood, some fresh blood into our business. We have a great process going on in our nom and governance committee of the board, and we've been very careful and very selective to try to find the right candidate because this is such an important opportunity, and getting the right person in for this next period of growth and innovation is critical. I would say that, you know, as the nom and gov has been working their like mad interviewing and vetting candidates.
We right now have, I would say, multiple, very serious candidates that, over the coming quarter, hopefully, will announce a new CEO. Just stay tuned on that.
Okay. Thanks, Tim. Thanks, guys.
All right. Again, that is star one to ask a question. If you find your question has been answered, you may remove yourself from the queue by pressing star two. We'll go ahead and take our next question from Jeff Farmer with Gordon Haskett.
Hi. Good morning. Thank you, guys. You did touch on it, but I'm curious if you could provide some additional color on how your customers are responding to that rewards program rollout, and what that has meant for their visit frequency and spend or any other relevant metric.
Hi, Jeff. It's Margo. I have a little bit of information that, you know, we are excited to see the spend in terms of the per person spend of our loyalty members increase compared to the prior nine months. We've seen an increase in the user engagement being in the program longer, so they're spending more time on the average day. Just the user retention is also trending up. I don't have any current stats on spend, but I will tell you on launch, we were seeing the spend that was early on in the week, higher per person as well. We're encouraged. I mean, think about it, we just launched it in November the eighth. We're excited about its potential because the early start has been very promising.
Okay. That's helpful. Then just as a follow-up to Andy's question on the CEO. I heard what you said loud and clear, but the question is, from a business strategy perspective, are there decisions that will not be made until a new CEO is announced? Meaning, are there some things that are pent up in terms of strategic opportunities that the company will not pursue until a new CEO is announced? If so, understanding this is a challenging question, but what types of sort of decisions or strategic sort of direction type things would those be?
Yeah. I would say that on the. You know, when you sit back and take a clean sheet of paper and say, "What are the opportunities for this company? There is a lot of different things that we can be doing in this interim period that are gonna drive demand and drive the success of this company. Having said that, I'm very cognizant of when the new CEO comes in, he or she has the ability to shape their future strategy with their own thoughts. So, you know, I'm trying to be sensitive not to do things that are gonna conflict with that.
But as I said, we have so much opportunity here that are clearly things that we could do that anybody coming in would say, "Wow, that makes sense t hat makes sense. We're running on all of those, but also being thoughtful not to take away from the great opportunity of a new person coming in.
Okay. Thank you.
Yeah.
All right. We'll go ahead and take our next question from Jake Bartlett with Truist Securities.
Great. Thanks for taking the question. My first is on the decision to go back to the Eat & Play Combo. You know, throughout the pandemic, you've benefited from a very strong check or a very strong spend with less discounting. You know, I'm wondering what that might do to your amusement check or that benefit and whether that's this could be the beginning of focusing more on traffic than just the check driver that you've seen.
You know, it doesn't sound like it, given the 13%, you know, more recent comps, but are you seeing any sort of wobbling from your consumer, you know, given gas prices, other concerns that investors have about the consumer here as they're, you know, contending with major inflation for non-discretionary items?
You know, so far to date, I think we've been through most of the nuances. We're seeing the strong demand continuing. Of course, we're being eyes wide open as to the emerging trends to make sure we're anticipating all of that. You know, one interesting thing I'm gonna bring out that was missing in my view for this company, and Margo was hugely supportive of this. We just recently had our general managers meeting in Las Vegas, where we had all 144 GMs and the regional GMs and the leadership of the company together. We introduced a new long-term incentive plan for the first time for all of our GMs.
I focused. I don't know if anybody knows my history about entrepreneurship and feeling like you're the owner. We made every one of these GMs eligible for a program that is 100% focused on organic growth of your store, of your domain. It's a four-year program, and you can ride through it a little bit below or a little bit above in each of the years. On the four-year basis, a CAGR of 3% gets you into the money. A CAGR above that gets you a disproportionate upside. We're excited about this because now they've raised the focus. They own their store. They own what goes on. They own the days of the week.
They own the hours of their day. We are now equipping them with a bag of tricks. I call it a bag of tricks. This is the Kevin world of simple ways of delivering things, of things that we can help them to be better at driving their incremental store. There's lots of those kinds of things going on. That one in particular, I can tell you know, Margo will echo this, the team was wildly excited about now owning their store and, you know, they're gonna do everything possible every single day to drive that. Because if they hit their numbers, it and, you know, it's based on today's stock prices, which we all know is so significantly undervalued because we need to prove to you guys that we're in business now for organic growth.
When we get to that finish line, if we deliver on that organic growth, these stock prices are gonna be hugely different, and they're based off of today's price. These guys and gals can make a huge payout in four years. They've raised the focus on that. I think that's just another example of the stuff that we're doing to drive behaviors of our team.
Yeah. I think just one other point to add on. This is Mike Quartieri. Let me just add on one other point on just the kind of the mindset around understanding inflation and, you know, gas prices and what that's doing to everybody. When we take a step back and just look at our business, you know, seven days a week, vast majority of our business is coming through on that Friday, Saturday, Sunday period. We also got to look for opportunities on how we can fill the midweek, whether that's through, you know, promotional opportunities that we now see that are available and the like. It's really kind of driving through as many process of change from a sales perspective to kind of fill in the rest of the week, which we believe will just continue to add incremental revenue into the bottom line.
Great. Thanks. That's really helpful. Then, you know, my other question was about, you know, regional performance, and I imagine you're seeing more recovery these days from markets like California and the Northeast. Can you let us know just in the context of kind of quarter to date, you know, are the sales still down versus pre-COVID in big markets like California and in the Northeast? I'm trying to understand really the juice that's still left in the tank as those markets recover.
For the most part, you can see a dramatic recovery quickly as people are out and about and wanting to enjoy themselves. I would say there's still some room to continue in some of the markets. They're not all perfect, but we've enjoyed in the last number of weeks quite a bit of that recovery. The thing that is gonna provide some nice benefit as we move forward, because we're seeing it, our bookings on special events are back to actually above historic levels on a week-to-week basis. So that's an emerging trend that, you know, given the environment that we're in, hopefully stays the same, will bring us back very quickly towards where we were pre-pandemic.
This is Margo. I'll just add in. As you know, in the Northeast and in California, we were facing vaccine mandates, which were burdensome for the stores for sure and dragging on sales. The Northeast is lifted. We still have a little bit in California, so those would be outliers. Other than that, those markets have been performing very well for us.
Great. Thank you very much.
Yes.
All right. We'll go ahead and take our next question from Brian Mullan with Deutsche Bank.
Hey, thank you. You know, the prior management had provided a framework of 200 basis points of EBITDA margin expansion versus 2019, you know, once the average weekly sales were fully recaptured. You know, since that framework was first given, there's been an acceleration of inflation across the economy. We've also seen, you know, Kevin and Mike, both of you assume your new roles. Just think it'd be helpful to clarify for everyone, you know, does that EBITDA margin expansion framework still stand, or have there been any changes worth calling out or noting?
Yeah, a couple of different points. Back to 2019, we're up 300 basis points, that's obviously north of the 200 that we were talking about previously under old management. Now, some of that is coming from just a mix because amusement is 65% of our business versus 56%. Much lower level of labor associated with that. We are getting some benefit from that, which is roughly about 900 basis points. About a third of that is coming from that mix. The rest of it, when you think about inflation, not just from a labor perspective and a commodity, you know, the price changes have helped offset that and the labor model changes that we made. Just think about the introduction of OneDine.
OneDine allowed us to increase the number of tables that a server can handle by about a third. You take that translation into your labor model. That means less headcount necessary, more efficient model. That helps offset that labor rate inflation, which is sitting today at about 20% for us. I don't see that changing because I don't see employees taking pay cuts in the future. That's gonna be here to stay, and it's something that we've all got eyes wide open on how we manage and adjust to that. From a commodity perspective, it's primarily around meat, so your protein, so chicken and beef. But again, we're able to offset that with a slight increase in pricing on our F&B, which is only about 5%.
If you think about that, there was no price increases prior to the last two years. It's a very modest and reasonable price increase according to what we're seeing in the market. The combination of all of that is keeping us at that margin that we talked about, that roughly 200% or 200 basis.
In other words, we have confidence that 200 BPS will continue through this calendar year budget.
Correct.
on into the future as we get better and better at honing in on our cost structure.
Okay, great. Thank you for all that. Just a question on development. You know, thanks for the guidance on 8 new units to open this year. You know, can you just speak to what type of formats you expect those to be? I'm asking just to try to gauge if you'd expect the average weekly sales on those new units to, you know, to mirror the existing base of stores, or might they be different for some reason in your planning? If you'd be willing to speak to how the pipeline is building for 2023 and beyond, you know, would you expect that to accelerate next year given all the work that you're doing now?
Yeah, sure. To start off with, the 8 stores that we're opening is gonna be a mix. Generally, we're kind of targeting around that 25,000 sq ft location. There are gonna be some opportunities where we're able to get into space that's larger than that, and we'll be able to take advantage of that with the different types of formats. It's really about what the location allows for, as opposed to we're only going with a set target and that's it. We have some flexibility around that, and that's what the plan is for these 8 stores coming up this year. As we get beyond that, we've got a solid pipeline already under development that takes us through the end of 2024.
Along that line, as I said earlier, where we are kind of targeting that prime spot of about a 25,000-square-foot store, that level allows us to, you know, I'll say, integrate into markets with more density. As opposed to one mega center, we could have two smaller footprints and still yield the same return on invested capital as we've always had.
The other critically important thing for everyone to understand is that it's not just the management team, the board is 100% behind this concept of we are going to invest in our existing stores to the point where we get everything closer to the footprint of what we're building today. Once we get through this, it's gonna take us 2 or 3 years to get through all the stores, but then stay on a cycle so that every store continues to have that fresh feel. Then with certain small modifications, we can keep it rolling. Every seventh year, every store should get a major look and change. That will help as well.
That is somewhat funded by the efficiency of the smaller stores, which is muted a little bit by the cost of parts and building the stores, as you guys all know, because of what's going on in the environment. At the end of the day, with not a lot incremental capital, we're gonna be able to accomplish this. We're really excited about this because I think investing in our existing stores and making them feel fresh and exciting is gonna drive organic growth as well.
All right, we can go ahead and take our next question from Andrew Strelzik, my apologies, from BMO.
Great. Thank you very much. Good morning. I guess following up on the margin questions, you know, how much inflation across labor and commodities work here? What are you thinking about as it stands today, for 2022?
Yeah. I think from an overall rate perspective for labor, it's roughly about 20%, and we don't see that changing anytime in the future. As I said, being able to do a more efficient labor model with Extyn and other improvements that we've made, we're able to offset a significant portion of that. Plus, again, the mix between amusement versus F&B helps provide some of that extra margin that covers those costs. In addition, you know, in the future, you're gonna see the return of special events. Our special events business is really about 60% of our F&B results. That will carry a slightly higher margin than normal F&B because you have better planning for that and a more efficient labor model in the back of house for those types of events.
Got it. Okay. That makes sense. Michael, I guess I was just curious. You know, you talked about the balance sheet, the net leverage on the balance sheet and some of the CapEx dynamics. I guess I'm just curious at a high level how you think about utilizing the balance sheet, the right levels of leverage. You know, over time and any other thoughts. I know, you know, last quarter obviously announced the share repo authorization. I'm just curious how you're thinking about those dynamics. Thanks.
Look, our net debt is 1.2 times. Obviously, you know, and Kevin can weigh in as well, the balance sheet can support more leverage, but we're not gonna add leverage just for the sake of adding it. We're gonna have to make sure that what we do is very strategic that grows the long-term value of the company. Also from a strategic perspective, it's really about long-term growth. We have a balance sheet that allows us to do that, and we'll take advantage of that when the time comes.
I mean, at the end of the day, you have to expect that the management team will be evaluating the alternative uses of cash because we don't want to miss the return to our shareholders by paying down debt when we're 1.2 times levered. Of course, we will do that until we have some sort of a really successful strategic alternative. But you know, at some point it gets inefficient for our shareholders to pay down, you know, inexpensive debt.
Great. Thank you very much.
We'll go ahead and take our next question from Brian Vaccaro with Raymond James.
Thanks and good morning. I wanted to circle back on the quarter to date comments, if we could, and just to make sure we're all on the same page. Mike, could you share what average weekly sales were in the quarter to date period, if you have that handy?
What we looked at for the first eight weeks, we've been looking right about $250 or $250,000 per store, compared to $245 for the previous period. Now there is some seasonality, but at this point, that's kinda washed itself just based on the timing of when spring breaks are and the like. At this point we're kind of behind that, so we feel that it's a relatively comparable period.
Just remember, when you break that weekly performance down between the first three weeks, as I had alluded to earlier in the call, and the last five weeks, you'll see the bigger bump in the weekly results.
Yep, understood. The comment on spring breaks, you know, if we compare back to 2019, I think Easter is just a few days difference, you know, back to 2019. Has there been a shift in spring breaks? You know, historically we've talked about, you know, taking March and April together. Has March benefited from some spring breaks that may be disconnected from Easter, so to speak?
No, the differential would be like one week to the next week. That's all behind us at this point.
Okay.
When we talk about the first full eight weeks, any seasonality around spring break just is all behind us.
Okay. On the pricing front, I believe you were testing some price increases on amusements. Could you share how much of an increase did you settle on, and when was that taken?
Yeah, we're actually testing just to make sure we get this right. I would say at the end of the day, the price increases that we've pushed out are gonna pretty much be in the double digit on a net basis as we go forward, but maybe even a bit better than that.
Okay. I guess in test, on that pricing, I'm curious how much of an improvement in per cap spend you saw or you are seeing. I'm just thinking behaviorally about the consumer response. Does the average customer sort of have a set spend, say load 15 or 25 on a card, and when it's gone, it's gone and they leave? Or are you seeing, you know, some behavior where they're more inclined to reload the card and extend the visit?
No, I think it's a combination of both, which it's always been. I think really the meaningful adjustment was back in October when we raised the actual, what we'll call the buy-in price. So when you had a minimum of, let's say, a $20 card and you increased that to $25, that's when we saw a little bit more of a bump up versus what we'll call the COVID coming out of COVID increased spend, which you saw in Q1, Q2. When you get to Q4, 'cause I'm so used to doing regular calendar quarters now. We got this adjusted and damn retail calendar, it's confusing.
When you get to the start of Q4, you saw that price increase go into effect, but it didn't change the pricing of the actual game itself. It just changed the buy-in. From that, we saw the positive impact. Really no change in consumer behavior at that point. We've done some testing about changing the actual price of the game itself. That's still in test, but we still haven't seen any real change in customer behavior at this point, but it's still-
We've seen a slight increase in recharge, but not significant. We're still working that test.
Okay, great. That's that's helpful. I guess last one for me. Mike, I appreciate the business update with the quarter to date comps, but given all the moving pieces and movements in margin lines, labor, other OpEx, et cetera, would you be willing to give some high level guardrails on the first quarter as it relates to EBITDA or even the annual sort of EBITDA expectation that you would have, assuming no change in COVID circumstances?
I think we're trying to get away from the guidance part of this, so that we've got everybody looking out at the business as we shape. You know, simple mathematics done by anybody looking at that, the breakdown of the first quarter, the way I described it with the pain the first few weeks and then the acceleration in the last five weeks, to extrapolate that through the quarter, you can do the math and I suspect you're gonna come out that we're gonna be in good shape for the quarter. Sorry to be
Fair enough. Mm-hmm. Fair enough. I'll pass it along. Thank you.
That will conclude today's question and answer session. Mr. Sheehan, at this time, I will turn the conference back to you for any additional or closing remarks.
Oh, thanks everybody for taking the time to listen to us this morning. I gotta tell you, we're very excited about the prospects and all the different. We walked away from this general managers meeting about a week and a half ago with a lot of enthusiasm and excitement that was addictive to all of the people at the meeting. We're on the beginning of a new generation of growth in this business and a lot of innovation. We're thinking differently.
The way I like to describe it is, we, you know, we're not tainted by a long history, which is a very solid history, so don't get me wrong, but coming in and taking a clean sheet of paper and saying, "What is the art of the possible?" Mike alluded to the days of the week and the times of the day, and we're trying very hard to figure out what are the things that we can do late night with building that back to a level that people wanna be there in the evenings to come and hang out with their friends, to different types of events that could draw traffic on the lower volume days. So lots to come. Stay tuned and we're very happy with where we are and excited about the future. Thank you so much for joining us.
This concludes today's call. Thank you all for your participation. You may now disconnect.