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Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the iPic Entertainment Second Quarter 2018 Conference Call. [Operator Instructions] Please note that this conference is being recorded today, August 8, 2018. On the call today, we have Hamid Hashemi, Founder and Chief Executive Officer of iPic Entertainment; and Paul Westra, Chief Financial Officer. And now, I would like to turn the call over to Paul Westra to begin.
Thank you, operator, and good afternoon, everyone. By now, you should have access to our earnings press release, which can be found on our Investor Relations website at investors.ipictheaters.com, in the news release section. Before we begin, I need to remind everyone that part of our discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We will refer all of you to our annual report on Form 10-K, which is filed with the SEC on May 1, 2018, for a more detailed discussion of the risks that could impact our future operating results and financial conditions. During today's call, we will also discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations to comparable GAAP measures are available on today's earnings release, which is available on our website. With that, I would like to turn the call over to Hamid Hashemi, Founder and Chief Executive Officer.
Thank you, Paul. Good afternoon, everyone, and thank you, all, for joining the call today. We appreciate your interest in iPic Entertainment. This is a very exciting time for our company as we are at the very early stages of our growth story. On today's call, I'd like to start with how we view iPic's strategic positioning and then provide an update on our growth plans. Paul will later review our second quarter results and reiterate our 2018 guidance. I will then conclude with a few additional comments before turning the call over for Q&A. Every day, our teams are working hard to deliver world-class hospitality experience in our innovative restaurant and theater destinations, which we believe are among the finest in the world. Our newest locations combine 3 distinct areas: a polished casual restaurant; a farm-to-glass full-service bar; and our world-class luxury theater auditorium, with in-theater dining, bringing the most common forms of entertainment under 1 roof and creating an urban country club, a single destination for a night out. Our alternative contents such as magic shows, mentalism and comedy expands the use of the auditorium beyond just movies and make our theater a center for the performing arts. We are currently installing permanent stages with proper sound and lighting systems to enable us to potentially book music, dance and other live programs that are not commonly found in local neighborhoods.
Our team members strive to anticipate our guests' everyday needs. Our chefs and mixologists create crave-able food and drink offerings that are outstanding, and it is this unique positioning that has made iPic the destination of choice, resulting in the highest revenue per seat, per auditorium or per square foot of any theater brand in the country. It is this combination of service and execution that has resulted in approximately 54% of our trailing 12-month total revenue coming from food and beverage and 30% coming from traditional box office receipts during the second quarter of 2018. This compares to a traditional theater that has only about 30% of their revenue derived from food and beverage and 65% from theatrical box office. Looking at our second quarter performance, we are pleased to report comparable store sales increased 6.9%, with store-level EBITDA increased by 66% to $5 million compared to prior year quarter. While our box office comp performance may appear to have been below the theater industry on the top line, which was up nearly 23%, driven by strong summer blockbusters, we believe our growth of 6.9% was in line based on the number of screens per location and number of seats per auditorium for our theaters. With only 6 to 8 screens per location, iPic units have about half as many screens as a typical megaplex and thus we cannot devote as many screens to blockbusters as our traditional peers. For example, a typical megaplex can devote as many as 6, 8 or 10 auditoriums to titles such as Avengers: Infinity War, Incredibles 2 or Deadpool 2 for multiple weeks, and still be able to play all other titles available in the market. Whereas given the limited number of screens, we rarely play a picture in more than 1 auditorium because of our commitment to studios to play, if not all, at least, the majority of their pictures. At the individual auditorium level, with 40 to 80 seats per screen, iPic has significantly less seats compared to most other movie theater auditoriums that have over 200 seats. Our complexes, on average, have under 500 total seats amongst all 8 auditoriums. Additionally, iPic's Premium-Plus seats already run over 3x higher utilization rate of about 40% versus the industry near 12%. And as such, we simply have much fewer empty seats to sell when blockbuster movies sell out auditoriums. On the flip side, we tend to outperform the theater industry in periods of very weak film slates when industry comps significantly decline as we need fewer titles and fewer people to fill our theaters. More importantly, the majority of our revenue is derived from food and beverage. Over the years, we have managed to further diversify our revenue base through offering higher-priced ticketed live-event shows and we also derived significant revenue from branded partnership compared to traditional theaters. The seamless integration of our restaurant, bars and design of our dine-in theater afford us the special programming opportunities that partnerships -- and partnerships that have made our theaters the highest-grossing facilities from a productivity perspective. On a trailing 12-month basis, our theater circuit generated a revenue per screen of over $1.2 million, which is over twice the industry average of less than $500,000. And more impressively, our 4 most-recent-opened locations, which are Generation III theaters, generated over $1.6 million of revenue per screen over the past 12 months, which is over 3x industry average. Moving on to our growth plans. In order to take advantage of the significant opportunity ahead, we are focused on 4 key strategic initiatives: one, improving existing location profitability; two, opening new [ high-end ] returning iPic locations domestically; three, pursuing international growth opportunity; and four, expanding our non-box office revenue relating to branded partnership, memberships and other digital growth options. We believe that executing on these strategic initiatives will meaningfully improve our top and bottom line results over time and create long-term value for our stockholders. In terms of improving the profitability of our existing locations, our primary tactic for 2018 has been executing our remodeling program. As we updated for the last quarter, we plan for 5 remodels this year compared to our original guidance of up to 3 remodeled locations. To date, we have completed the remodeling of our Scottsville, Arizona and Pasadena, California locations in April to full Premium-Plus seating, and we expect to complete similar remodels at 3 more locations this year, including Austin and Fairview in Texas, and Redmond, Washington. By year-end and inclusive of all 5 remodels slated for 2018, we will have only 2 remaining locations with Generation I auditorium configurations targeted for remodel in 2019. As a reminder, about 2/3 of the seats at Generation I auditoriums are premium and only about 1/3 are Premium-Plus, which our guests continue to prefer by a 4:1 ratio, even with typical seating upcharge of over $8. We're happy to share with you that our sales lifts at the 2 completed locations, Pasadena and Scottsdale, have generated better-than-expected overall results than we forecasted, where their comparative sales lifts have shown an increase of between 10% and 25% in their first 3 months following their remodel. Our second key strategic initiative is to open new iPic locations domestically. Today, we operate 115 screens at 15 locations in 9 states. As previously announced, with leases -- lease signings for Atlanta, Georgia and Hicksville, New York, and most recently, Irvine, California, we now have 6 signed leases at sites under development or construction, and an additional robust pipeline of another 12 sites where we have signed agreements that are in various stages of final lease negotiations. We think there is tremendous white space opportunity to expand in both existing and new U.S. markets. And we have, therefore, invested in our infrastructure through new hires at our corporate office to enable us to continue growing with discipline. Our ultimate long-term goal is reaching 200 locations and some 1,600 screens across the United States. In 2019 through 2021, the majority of our dozen planned openings are targeted to help achieve critical location market scale in our core markets in Florida, Texas, California and the Tri-State area. Our third key strategic initiative is to pursue international growth opportunity. Over the last year, I've made several trips to Saudi Arabia to meet with Saudi government officials as well as developers to discuss the new theater regulations and licensing process. As a result of these in-person meetings and related conversation, we continue to expect that we will be granted a license to operate cinema in the Kingdom of Saudi Arabia. We have no new updates to announce today on the KSA licensing process but remain busy behind the scenes with our operating and funding partners so that we're ready once the licensing process is completed. We're very excited about the opportunity that lies ahead for us in Saudi Arabia because our goal is for iPic to become an integral part of the country's Saudi Vision 2030 plan to transform the overall economy towards more recreation and tourism spending. In fact, it is the combination of our robust domestic pipeline as well as our opportunities abroad that puts us on target to open up to 4 locations annually beginning in 2019. Lastly, our fourth key strategic initiative is to increase our alternative revenue streams. We are increasing revenue associated with customer membership and corporate sponsorship at a faster pace than our 4-wall revenue. This was achieved in the second quarter of 2018 and through the first half of 2018 as well. Helping us to reach this goal was the creation of 4 classes of membership earlier this year, with 3 of the 4 representing paid membership classes.
The key part of our plan to grow membership revenue is by greatly expanding the value offering to paid members by providing them with more one-of-a-kind deals such as a pre-offering from our branded partners, access to exclusive film series and ongoing monthly special events, as well as discounts exclusive to our paid members for live events and gift cards. Over time, we expect to materially expand both the quantity and quality of special offers and giveaways to our members. By doing so, the financial value of their annual membership fee will continue to grow far above the current $29-per-year membership fee. The last example of such an agreement is our recently-signed branded partnership with Danone. Beginning in October, we will be providing our paid members and newly signed members with a custom collectible iPic box containing 2 collectible etched bottles of their Evian and Badoit waters. Moving on to our efforts to grow our sponsorship revenue. Our primary focus in 2018 has been on our iPic Life content, which is a 20-minute film segment that plays on the theater screens before the previews start and where we showcase some of our partner brands and products as well as our latest menu dishes. Our current sponsorship partners include luxury brands like Louis Vuitton, Lexus and Burberry, as well as Google, M&M and many more. This year and beyond, we believe there's meaningful opportunity to grow this revenue stream by leveraging our large growing membership base, which has very favorable demographics, including 60% female and average household income of $120,000. So putting it all together, we are in the very early stages of our growth story and are laser-focused on executing our 4 strategic pillars in order to capitalize on the significant opportunity ahead. We are committed to expanding our presence, both domestically and internationally, and leveraging our membership network and brand strength through revenue-driving sponsorship and partnerships. With that, I'd like to now turn the call over to Paul to provide more detail on our financial results.
Thanks, Hamid. Our second quarter performance demonstrated improvement in our top and bottom line results. Financial highlights for the 3-month period, which ended June 30, 2018, are as follows: total revenue for the second quarter increased 11% to $37.5 million, primarily driven by the addition of one new location in May of 2017 in Dobbs Ferry, New York, as well as an increase in comparable store sales. Notably, our other revenue line, while small, more than doubled in the second quarter driven by higher membership revenue, which is part of our plan to grow alternative revenue streams at a faster rate than base revenue. Comparable store sales for the second quarter increased 6.9%, which included a negative 1% impact from lost capacity as a result of screen closures during our 2 remodels that were completed in April. Additionally, we continue to experience below-average performance from our 5 remaining Generation I auditorium locations, which is offset by our Generation II and III locations that, again, outperformed our circuit-wide comps during the second quarter. Store-level EBITDA, a non-GAAP measure, increased $2 million or by 66% to $5 million in the second quarter of 2018 from $3 million in the second quarter of 2017. As a percentage of total revenue, store-level EBITDA margin increased 440 basis points to 13.3% versus 8.9% last year. The increase was driven by leverage on our positive comparable store sales, lower cost of goods sold, labor and occupancy cost, which is partially offset by higher other operating expenses. Digging into each of the cost line items a bit deeper. On our total cost of goods sold, we experienced a year-over-year decline of 140 basis points to 31.2%, driven mainly by lower food and beverage cost, which declined 160 basis points year-over-year to 25.8% of applicable revenues. This was due to menu price increases and greater efficiency that was only partially offset by modest input cost inflation. We also experienced 40 basis points of lower costs for theater-related revenue of 39.3%, which was driven by an increasing revenue mix of nontraditional revenue and positive film slate changes. For the full year, we continue to expect year-over-year leverage on the overall cost of goods sold line. On the labor line, we saw a 350-basis point decline year-over-year to 24%. This was largely due to the benefit of the $1.3 million bonus accrual reversal well as from a combination of leverage on our positive comparable store sales of 6.9% and from our new, more efficient labor scheduling module that was able to more than offset labor cost inflation of mid-single digits. For the full year of 2018, we continue to expect our labor cost percentage to improve versus 2017. Our occupancy costs in the second quarter were 12.3%, down 70 basis points compared to last year, driven by leverage from positive comparable store sales and lower occupancy costs at our newer locations. For the full year of 2018, we continue to expect our occupancy cost to be roughly comparable to 2017 as a percentage of revenue. On the other operating expense line, excluding the impact of nonrecurring items, which were a $282,000 expense during second quarter of 2018, compared to a $354,000 gain last year, other operating expenses increased by 110 basis points in the second quarter of this year to 19.1%, primarily due to investments in temporary stages for our live show initiative and, to a lesser extent, for fixed operating cost deleverage that was incurred during the screen closures of our 2 remodels. In the second quarter, we ran 33 live show events compared to 0 events during the second quarter of 2017. In August, we added a permanent stage to our Fulton Market location, and we will be targeting additional locations for permanent stages in the back-half of the year, including all 3 remodel locations. Going forward, all new iPic locations will also have a permanent live stage.
For the full year of 2018, we now expect other operating costs to be higher in 2017 -- than in 2017 as a percentage of revenue. Moving now further down the income statement, G&A expense was $4.8 million during the second quarter, a sequential increase of $0.3 million compared to the first quarter of 2018, and was primarily driven by higher board compensation expense. For the full year, we remain on track to achieve our guidance range for G&A of between $18 million and $19 million. Total adjusted EBITDA, another non-GAAP measure, decreased to a profit of $185,000 for the second quarter versus $275,000 in the second quarter of 2017. To note, we expensed $269,000 of stock comp expense during the quarter that, as a reminder, is not included in our adjusted EBITDA calculations. Going forward, we continue to believe that we have the key strategic initiatives in place to drive meaningful top and bottom line year-over-year improvement as we look to leverage our unique and disruptive offering in pursuit of becoming America's premier entertainment destination. This, we believe, will lead to per-store sales and profit growth in 2018 and beyond. Looking ahead, we are reiterating our full year of 2018 outlook but now project to be at the lower end of our guided ranges. This is a consequence of our performance in the first half of the year and slightly lower expectations for the second half of the year, but is largely a result of the expected net negative impact of 3 remodels now scheduled for completion in October that will result in an estimated 500 basis points of negative impact due to screen capacity during the third quarter and additional 100 basis points of negative impact on screen capacity in the fourth quarter. In short, our original guidance contemplated 3 remodels to be completed by April that was expected to have a net neutral impact on the year's guidance ranges for sales and profit. Our updated view now acknowledges a drag in full year revenues from the late-year timing of now 3 remodel locations for approximately 100 to 150 basis points, or by approximately $1.5 to $2 million. And more importantly, this lost revenue comes with high negative flow-through margins given the high minimum staffing requirements at our locations under remodel, and even when 25-or-more percent of those screens are closed for renovation. As such, we now expected to be at the lower end of the following guided range: total revenue growth of between 3% and 7%; comparable store sales growth in the range of 0 to 5%; and the third quarter, again, could be negatively impacted by 500 basis points of lost screen capacity, and the fourth quarter to be negatively impacted by 100 basis points of lost screen capacity due to the 3 additional remodels under construction during this period; store-level EBITDA of $17 million to $18 million; general and administrative expenses, excluding stock comp expense, of $18 million to $19 million; an adjusted EBITDA loss of between $1.5 million to $0.5 million; and net capital expenditures of between $20 million and $25 million, including the remodel of 5 Generation I iPic locations. Let me now provide you some additional color on some of the important metrics that underpin our 2018 guidance and support our strategic initiatives. With respect to strategic pillar 1, growing per-store profits, we have completed 2 remodels thus far this year and are in the process of completing 3 additional remodels, for a total of 5, that will be fully ready for the holiday blockbuster season. As a reminder, these remodels involve converting the vast majority of seating into our latest-generation Premium-Plus Pod seating at a 4x higher utilization rate, drawing approximately 60% higher average seat prices and generate approximately 80% more on food and beverage sales per guest. Importantly, we are pleased with the results so far of our first 2 remodels that are returning in excess of our 20% return on capital goal, with both showing double-digit comparable sales lifts in the initial 3-month period following their respective remodels. In the third quarter of 2018, we've begun 3 remodel projects, which will be completed in October or during the first month of the fourth quarter. As a result, for modeling purposes, we would expect our remodels to reduce screen capacity in the third quarter by 500 basis points without any material offsetting impact from expected sales lifts following the remodel. For 4Q '18, screen closures are expected to reduce capacity by approximately 100 basis points so our fourth quarter comps will likely show a new more neutral impact from the remodels since all 3 will be completed ahead of the busy holiday season. To note, historically, iPic units typically generate approximately 20% of their revenue and approximately 30% of their store EBITDA during the last 2 months of the year because of the holiday season. With respect to strategic pillar 2, growing our U.S. presence, as Hamid noted earlier, we now have 6 signed leases in projects now under development and an additional 12 signed agreements for sites that are in various stages of final lease negotiations that give us confidence in achieving our total unit growth goal of up to 4 new units per year starting in 2019.
With respect to strategic pillar 3, growing our international opportunity, we believe that iPic's concept has significant global growth potential. We plan to provide investor updates on our progress as we believe that there is a significant growth opportunity for iPic within the premium retail market of Saudi Arabia, with the potential of 25 to 30 iPic locations within the next 10 years. Finally, with respect to our fourth strategic pillar, expanding our alternative revenue streams. In 2Q '18, I'd note that 48% of our total revenue came from members on a trailing 12-month basis, which is the highest percentage of member sales that we are aware of within the food service and/or theater industries. We believe there is a potential for significant network effect opportunities as we continue to grow in scale both locally, domestically and internationally. As more units increase the number of iPic members, it would then likely lead to more sponsorship interest from brand partners, and in turn would then increase value of being an iPic member, driving increasing membership rates.
Finally, before passing the call over to Hamid for closing remarks, I want to announce that our application to list our common -- our Class A common stock on the NASDAQ Capital Market has been approved, and our securities will be transferred to the NASDAQ Capital Market from the NASDAQ Global Market before the market opens on this Friday, August 10, and we will be filing an 8-K to that effect tomorrow. And with that said, I will now hand the call over back to Hamid.
Thank you, Paul. Let me thank our team members for their hard work, hospitality and dedication to our brand. They're the reason why we have such a loyal and growing membership base. We think it is very clear that the iPic story is just getting started and that if we stay focused on executing our strategic initiative, we can successfully grow the brand across the U.S. and internationally, and generate long-term profitable growth and increase value to our stockholders over time. We greatly appreciate you taking the time today to follow our story, and we look forward to updating you on our future calls. And with that, we'd like to open the floor for questions.
[Operator Instructions] Our first question comes from David Bain with Roth Capital.
My first question, and I have 3, but Saudi Arabia, when you model the longer-term target of 25 to 30 locations, do you envision those as $10 million revenue units on average? And maybe if you can speak to some of the initial locations, what you would expect there? And then I thought that you mentioned 4 by early 2019, Hamid, in your prepared remarks, but I'm not sure I got that correct, and if we're still looking for a late 2018 opening? Or is it just too hard to call with the licensing process?
As far as the revenue per location in Saudi Arabia, frankly, it's a little early to tell. We have modeled based on the typical U.S. model in terms of occupancy. However, the market right now, as you know, there are 2 theaters opened up. These theaters are running at 100% capacity. And to assume that, that trend is going to continue, I think that is not a good way to look at it. That's short-term. I think ones they -- we're looking at it as a mature market. We're assuming that it's going to be 3,000 screens eventually in the market, and our forecast for revenue, it falls in the range of $12 million to $15 million on the top line and similar performance on the bottom line as we have in this country. So it is a conservative approach. I think initially, we substantially outperformed those numbers, but we don't think that some of the numbers that are -- some of our peers are looking at on a continuous -- continually operating in that market are realistic of achieving north of 60% occupancy rate. We're more in the range of 40% and below that than what we have here.
Okay. And then, is there any -- just a follow-up on that. Anything that you can share with us from a royalty perspective with your partnership at this point?
Yes. We're not disclosing any details. Obviously, we have not finalized any formal agreements with respect to royalty payments. But I think it would be expected to be largely in line from what you've seen elsewhere for those negotiating and have negotiated international contracts in the past. Again, we're accomplished [ in exploring ] many different versions with partners, whether we will be an operating partner and own some of the equity or a straight licensing royalty payment, but I think they would be -- largely fall in line with similar contracts.
Okay. Great. And, Hamid, you get some thoughts on how you -- how we can think about iPic and how it could potentially outperform when there are not multiple blockbusters out there at once at the traditional movie theaters. When you compare your performance, what benchmark do you use then? Do you use upscale casual restaurants same-store sales? I mean, traditional theaters or mix? I mean, there's no pure comp because you're unique. So what do you think The Street should think about as a benchmark to your own performance, if anything?
I think upscale casual restaurants are more in line with our performance. And I think, as I mentioned during the call, we only have anywhere from 60 to 80 seats spread between 6 to 8 auditoriums. So we don't have the ability to dedicate 500 or 1,000 seats for a blockbuster. But on the positive side of it, we continue to -- it's likely to sell 60 seats or 80 seats in September and October for a movie than selling in a 500-seat complex versus selling 200 seats in a 4,000-seat complex or a 3,000-seat complex. So our business -- our box office business remains fairly flat. I mean, we're still subject to the quality of the movies. I mean, when we have -- and they're big blockbuster movies, and obviously, we drive more attendance towards the afternoons or slower times of the day because the prime times are pretty much sold out. I mean, regardless of the time of the year or the quality of the movie, Friday, Saturday nights are sold out. It's a matter of -- for us, it's a matter of how many tickets you're going to sell in the afternoon or how many tickets you're going to sell on a Monday or Tuesday night. And that fluctuates with the quality of movies. But overall, again, we're not as susceptible or vulnerable, frankly, on the downtime and unfortunately, we don't pick up the gain on the upside of it.
Yes, and if you think about it, David, it [ obviously ] blends somewhat of a restaurant, somewhat of a theater, but we're really just sort of local destination. It's hard to quantify. But in periods like the second quarter, where the theater industry performed so well, our theater portion of our business cannot perform year-over-year to such heights. But the blockbusters allow us to outperform the restaurant industry. I would say our comps really outperform the restaurant industry, which is over half our sales if you look at food and beverage sales. I tend to look at it as an amalgamation of restaurant, theater and general retail, and we think that's a great position to be in.
Great. And then just final one, I guess, Paul, for you. I know you outlined guidance. I was trying to write down some of the thoughts you had around it, but does your guidance contemplate similar returns as fast as we saw it at Scottsdale and Pasadena? Because it just seems like if I were to take 2Q and then, if you get everything done ahead of that stronger seasonal 4Q, especially the last 2 months of the year like was mentioned, I understand, like, we're going to get more disruption than we probably thought in 3Q, but that sounded like it would have been in 2Q? So I guess this is a sloppy question, but can you review just that or how to think about it from a quarterly cadence standpoint from here, 3Q and 4Q?
Yes. I mean, so on a per screen basis rather on a per location basis, each screen during the remodel is down for up to 4 weeks. So it's almost 7% or 8% of the screens' full year capacity. So obviously, if the 2 remodels we just did were only sort of remodeled for 3 quarters of the remainder of the year, you can do the math of what the comp needs to do to kind of break [ even ], right? So obviously, we have up to 24 screens off market and in 3 locations, and they'll only have 2 months of the year to -- it's obviously not going to [indiscernible].
Right. That makes sense. Okay. I got that now. Okay. So the -- so you are -- constantly that wasn't one-off to Pasadena and Scottsdale? We're thinking we're going to see similar returns from those next 3 remodels?
Yes. But you'll see that in earnest, I would say, in 2019, but obviously we'll see it internally and within the fourth quarter numbers, starting in November, December, offset by the October closure [indiscernible]. But we are seeing, just so -- the headline this year is we are seeing better-than-expected sales lifts from both those locations and, as Hamid mentioned, between a 10% to 25% sales lift ranges already in the first 3 months and we think the remodel will build over time. So we'll keep you posted the best we can once we have all the data available.
Our next question comes from Brian Kinstlinger with Alliance Global Partners.
I'm curious if you think the serves in the use and subscription base of MoviePass hurt your first half traffic numbers because iPic theaters didn't accept that. And then, subsequently, obviously, they're having some trouble. It's well publicized. If they experienced significant churn, do you think that would alternatively benefit your business as some of those 3 million subscribers who leave now aren't maybe tied to using the MoviePass from a mental standpoint and spending money? I get it's a different product just seeing a movie, but I'm curious of your perspective on that.
Thank you, Brian. This is Hamid. I think MoviePass -- the MoviePass customers are really not, in general, our customers. I think those who look for a subscription-based or a discounted operation are not the guys that are coming to our theaters. I mean, the guys that are coming -- people that are visiting our theaters, they're there for a quality experience, they're willing to pay and they're not looking for that discount. I mean, I'm not convinced that we were hurt and I don't believe that we're going to gain anything if MoviePass didn't exist. I think we'll be neutral either way.
Okay. And then my other question is, the slate of movies in the first half was superb. How do you think the second half slate compares? Obviously, there's seasonality given the holiday season, but I'm curious how you think about that second half slate impacting your per-store trends?
I think the second half product is actually more in line with our audience. I think the first half, as you noted, there's a lot of big blockbusters and a lot of the attendance at the blockbusters is driven by the teenagers and the younger audience. I mean, the movies like Avengers and -- but, I mean, Incredibles, it's really a -- it's a family audience, which is really not our core audience here. I think typically, in the second half of the year, you have the better-quality product, the Academy Award nominees, that start coming out, and that's really more in line with what our audience desires. And that's been a trend in the past. I mean, we -- our second quarters are -- I mean, second half of the year, given the product really shifts to more sophisticated product, we perform accordingly.
Our next question comes from Jim Goss with Barrington.
I was wondering if during the week, you would tend to ever consider dynamic pricing to attract more of the attendance or do you remain at full price? And on a related vein, do you get a lot of spillover into the restaurants during the weekday-type attendance? I think you said there are sort of opposite trends of weekend and weekdays.
Jim, yes, that's correct. I mean, I think in terms of discounting, again, we're not big believers in discounting. We currently have discount for our members. We -- our prices -- is typically on the weekend is $25 as a member. During the midweek, that ticket price drops down to $18. So we're already offering substantial discounts to our members, and we don't believe that we can go any lower than that and still maintain the quality and the level of experience to the point that it exists today. And your second question in terms of driving more traffic to our restaurant. It is -- we believe that the people who go to the movies midweek or go to restaurants are typically, they're either on a date or they're empty nesters. I mean, the audience that goes to the movies or the restaurant in the midweek is very different than the weekend. And the guys that are going out midweek, they're out, again, for a night out. I mean, they have more leisurely time or they're on a date. They're not as pressed who're going to work or to start earlier. So we do get more crossover in midweek than we do during the weekends. During the weekends, we have more of our guests that frequent our restaurants are just going to the restaurant and leaving. I mean, they're -- it's just the dynamic of the business, the way it works out.
Okay. Related to Saudi Arabia, totally different subject, when is the soonest do you think you'd be able to get a theater in operation? And what would be -- you talked about the numbers over a 10-year period, but how would that likely scale in, in an ideal way you envision it?
I think the country as a whole, to date, there's only 3 licenses that have been issued. There's only 2 theaters opened up, and those who 2 theaters were already existing sites. I think the government and the authorities that are dealing with this process, they're learning as they go along. This is an industry that didn't exist. Things are taking a lot longer than everybody hoped for or anticipated, on all fronts, frankly. I mean, from the labor side of it, from the government side of it, the developers, the deals that are being cut, everything is taking a lot longer. And right now, I can tell you first hand that given the temperatures there, I mean, a lot of people are on vacation. You have people typically go away, everybody in the government or private sector. For the most part, the month of July and August, they're not there, so things slow down. So in terms of when we anticipate the first one to open, we have our first location. We have a letter of intent. We have a lease that's going back and forth right now and our goal was to open it by Q4 this year, but I don't think that's going to happen. It's going to slip into next year only because of the -- just that's the way things work in that country right now. I mean, things are moving slower than everybody hoped for because that will be the learning that's taking place.
Okay. And lastly, I know you had decided to focus on the refurbishments to get up to the current state-of-the-art in some of the existing locations. You -- after that, you should be moving back into the new build phase and try to get back to the 4 per year, I think, that you had intended to do. When do you think that will take place? And what is the lead time in coming up with an entirely new facility?
Well, we're opening our first new location in February of 2019. That's in Del Ray Beach, Florida. The one following it is in Irvine, California. That site is in development process right now. And then there -- our goal is still to get to 4 sites per year, and we've signed leases and we have projects in the pipeline that are -- letter of intents have been signed and leases are in the final stages, and we're pursuing the approvals along the way. I mean, these sites, by the time we sign leases, we usually make sure that we can get all of our approvals from the communities that we're going into. So we're on track to build 4. I mean, the 4 next year will include, hopefully, at least 1, if not 2, sites in Saudi Arabia.
And, Jim, to answer your question, as far as timing, once we have the assignment of the facility, it takes about 9 months total construction time. So we're already, obviously, well under way. Del Ray Beach, we are taking over facility within the next 2 weeks in Irvine, California. You can count 9 months after that for a potential opening in Irvine. We'll keep you up to date, but we'll have the next 2 by year-end.
Okay. Maybe one final one, do you ever consider having multiple restaurants at an identical -- at the same location, even it's maybe in an adjoining property in a strip mall that you might have your facility located in?
We've had many developers that had asked us about doing multiple restaurants, but we've been really careful in executing at the highest level. And when we feel comfortable that we can go into the multiple restaurants, we will definitely go there. But I would tell you today, we have a lot more work to do with the remodel of our existing sites, the more fine-tuning of the Gen III. I mean, I can tell you -- I mean, the next step for us is, frankly, Del Ray -- our Del Ray Beach location has a rooftop bar that's really great. We have 2 other locations right behind it that have outdoor spaces and rooftops that are actually -- they're more in -- more desirable today than having another restaurant. I mean, we have the infrastructure in place. We try to create efficiencies wherever we can by utilizing the same kitchen, and the rooftop bar is just something that it sits right on top of it. We believe that the economics of it is substantially greater. That's a space we basically are not paying any additional rent. Whereas if we add a second restaurant, you're going to be paying rent.
We would like to turn the call back over to management for closing comments.
Great. Well, thank you, everyone, for your interest entertainment in iPic Entertainment. Give me a call, Paul Westra here, if you have any follow-up questions for a one-on-one, and we look forward to seeing you and talking to you again shortly.
Thank you, everyone.
This concludes today's conference. You may disconnect your lines at this time, and thank you for your participation.