Latitude 360, Inc
(OTCQX: LATX)
CEO: Brent Brown
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Interview Transcripts:
WSA: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Brent Brown, the CEO of Latitude 360. The company trades on the OTCQX, ticker symbol LATX. Thanks for joining us today, Brent.
Brent Brown: Hey, good morning. Thanks for having me. I appreciate it.
WSA: Anytime. So, starting of please give us a history and overview there of the company?
Brent Brown: Sure. I’m the CEO/Founder. We are a restaurant entertainment owner and operator and we basically have a concept that is very unique. I feel it’s disruptive in the restaurant industry where we’re menu-centric, we are restaurant 360 Grille, and we surround the restaurant with a platform, a platform for multiple entertainment options, multi-dimensional. And we have three currently open and one in Jacksonville Florida, one in Pittsburgh, one in Indianapolis. They range from 50,000 square feet to 75,000 square feet. We currently have three under construction that will be open over the next six months. And then, we’re looking at another six over the next few years. So, right now, we’re in heavy expansion mode and our concept has really taken off. The first one opened in January of 2011. So, it is four years old, and it’s done nothing but grow there in Jacksonville and we’re very excited.
WSA: Great, and you opened a location in Upstate New York at Crossgates.
Brent Brown: Yes. Yes, we have. And the three that we have under construction the strategy is the first three that we open were standalone boxes in B markets. And as we’ve proven the concept now, there’s a tremendous demand for us from shopping centers, you know, retail areas with what’s happened in the real estate market and with a lot of the bigger box operators consolidating, closing the bricks and mortar and focusing more on online sales that creates a tremendous opportunity for us because there’s not a lot of anchor operators out there.
So we’re not only an anchor operator but we target the adults, the 25 to 65 where we out scale our product. And mostly, your bigger box operators are focused more on the younger people and children. And so, we’re able to help the retail area reinvent itself really as a destination. And so, it makes us very scalable, and I couldn’t pick a better time in history really of our country to really roll out a bigger model like this. So, you know what really makes us disruptive is, this platform that Brand Synergy Group. We just announced a partnership there–
WSA: Right, yeah.
Brent Brown: –that’s going to help this program. We’re very excited about that partnership. And with this platform that we build around our restaurant, the movie theater, the Center Grille, the dining movie theater, the latitude live room, which is a live entertainment showroom. They’re very similar with your Vegas-style showroom, very high tech. There’s Sports Theater with sports viewing. We have an access bar, and then we also have a stage there for live entertainment. And then we have luxury bowling lanes, we’ve got an arcade, and of course the focus which is the 360 Grille Restaurant. And Brand Synergy Group here in New York is where they’re headquartered, they’re going to program us nationally on this platform with musicians, comedians, artists, movie producers, you know, other businesses that want to do a product launch or showcase their business–Really focusing on taking our platform and helping other brands out. In turn, by them using our platform they’re bringing people into our restaurant. That’s a huge competitive edge for us because there’s no other restaurant out there that can truly schedule events to bring people to the restaurant like we can whether it’s a comedy show scheduled, a movie scheduled, sporting event scheduled, and then we do a tremendous amount of group event business, you know, corporate, charity, and all different types of, local community events and from your boxing weigh-ins to your celebrity signings, you name it, and it really drives the traffic to the restaurant.
WSA: Yeah. It certainly helped some pretty big clients there in the past and what are some of the other key areas in the sector that you’ll be focusing on?
Brent Brown: Really, we’re very heavily focused here on the Northeast. We have four projects currently in New York that we’re working on, Brooklyn, Jersey City, the 23 Wall Street Building, JP Morgan building, and then we’re working on something in Times Square, a location in Times Square, a smaller location. So, right now, five locations are urban, eight cities urban. And we feel that we are going to be a hit in these markets because you have high traffic obviously pass your doorstep, and we hit the residential, the people that are living in the area in the market. And we hit the businesses with corporate and group events.
And then, in these areas, there are tourists. They are tourist destinations so we hit on the tourists. So, we’re really hitting every avenue, every opportunity, I should say in these urban markets. We feel, you know, very, very good about rolling out the next five locations in these markets.
WSA: Certainly. And so, what are some of the other key goals or milestones that you’re hoping to accomplish over the course of the next year?
Brent Brown: Well, over the course of the next year, we’re going to open up three new venues over the next six months. And then, we have one venue that potentially could open in November and December. And then, the following year, we’ll open up another four venues. And our focus really is now, getting the story out, who we are, where really no one has ever taken this upscale casual dining market and combine it with the entertainment industry like we have. No one has ever done it.
And now that we’re starting to get some visibility people are really starting to take notice. Especially, you look at our customers who are year over year positive every year, and we just launched our membership program which is really a game changer for us and I think a game changer in the restaurant business where you can sign up as a member, a 360 club member and a paying member every month, and we give you two movie tickets, two comedy tickets an hour of free bowling, a game card, and a concierge service.
So, what this does is it gives us reoccurring revenue, which is substantial, and it also gives us the opportunity to grab more reservations on a weekly basis. We have thousands and thousands of reservations now on a weekly basis. You know, between reserving for the theater, reserving for the comedy show, or the sports theater, or the bowling lanes. And more importantly, it’s really helping us build a relationship with our customers. And no other competitor can do that because they won’t–they don’t have the dimensions or the fixed cost that they can hand out. I’m not handing out free food or beverage.
So, it really levels the playing field because I’m a bigger operator, and so I’ve got more overhead. Now, I level that playing field. Because of that space, that extra cost, now I can more than offset that with membership dues. And in just six months–we launched it six months ago–we have over 2500 paying members, which is amazing. And the customers love it, they get four times the value every month, and obviously, they build up loyalty reward cards and they keep coming back for more.
So, our fourth quarter, we were up 15% year over year. In January, this month, we’re up 22% year over year in the same short sales. So, it really, really fueled our concept. And like I said, it’s really bringing us into our customer’s life. We’re a lifestyle brand, we have a concierge service. If their child is having a birthday party they hit Meg in the concierge–If they want to see the NFL game in the sports theater late at night or they want to see the comedy on a weekend, or if they want to have a corporate event. So, now we become that lifestyle brand and we all know that those are the brands that really, really excel in today’s world.
WSA: And perhaps you can walk us through your background and experience Brent, and talk a little bit about the management team there.
Brent Brown: Sure. I’m a Naval Academy, I’m an Indianapolis grad. At that time I started this concept which is in 2007, I was in real estate development and started looking–was introduced to kind of the renaissance of bowling as far as being an anchor in some of the retail centers around the country. So, I started looking at a lot of different concepts like Lucky Strike, Splitsville and Pin Strikes, all of the Bowlmor, all the different brands that are out there. And then the Dave & Buster’s and a lot of the boutique theaters that are out there like Fork & Screen or Center Bistro where I picked up, and started developing this concept. And what I’ve done is put together a team that is from all different aspects of these industries, all different areas of the industry to come, the entertainment, the music, obviously the food and beverage, and the team is fantastic.
We have really built something that no one has ever done. We’re a restaurant. We’re an entertainment booking company, right. We’re a group and a banquette company. We’re a membership company now with thousands and thousands of members. We’ve been increasing every day. And we’re really up to this point, we’ve really been our own investors—We’ve gone out and raise our money. We have over 600 shareholders, since 2009 when I started raising money. So, we’ve raised over $37 million for the company, since 2009. And that was obviously a very, very difficult time economically in this country.
And so, I put together a very strategic board. It’s an independent board. Myself I’m the chairman. I’ve got Greg Garson our President who’s on the board. His background is a lot on investment banking. And then, we have Mike Simon who is a lawyer and he’s a sports agent. We’ve got a real estate guy, John Alexon. And then, we’ve got Casey Gunnel who is our–kind of our audit committee. He was a former CFO of AutoNation.
We have, last year, as two big highlights for us, we brought on Michael Norris who is the COO of Sodexo and was the former president of Loews Cineplex Entertainment, you know, Loews. So, he ran–he rolled out Loews across the country. And so, he’s a wealth of knowledge on the operational side. On the food and beverage side, I brought on Tim Gannon who was a Cofounder of Outback Steakhouse and he’s a chef, and he’s really helped us with our hand crafted items on our menu, and constantly we’re working on every six months changing our menu, tweaking it, and bringing new items to our customers.
WSA: Right. And so, when it comes to investors in the financial community, Brent, do you believe that your message, and upside, and this cruise ship on a land concept are starting to become better understood?
Brent Brown: You said it. I mean, like anything, it takes time, the biggest challenge we have with the investment community, they are obviously investors always wants a comparable right. So, what is the Latitude 360 like? Well, we’re not Cheesecake Factory, right. We’re not Dave & Busters. So, it’s tough as a comparable on a concept level, right so–but, on a financial level, I would tell you that our margins are fantastic and our growth, you’re getting in the beginning of our growth here. I feel we have the potential with the funding coming through this year of doubling our sales every year for the next few years. That would be our goal.
And with the proper funding and being able to roll out what I have in our pipeline as far as locations. So, we’re excited. There’s not many–I don’t think, not many restaurants now that are positioned the way we are. We have some of the competitive edges from the 360 experiences to the demand from the landlord that are now offering [inaudible] [0:14:55] allowance in the lease to us. We’ve got a very, very experienced board of directors. We’ve got a very, very good restaurant market right now. And we got a concept and got a platform.
We’re a blank canvass saying that when we come in New York, it’s going to be a New York 360 experience, or you know, Minneapolis, or Jacksonville, or Indianapolis. So, we’re able to program this platform like Brand Synergy Group that’s why I brought them on. You know, the talent that works here in New York, with the chefs that work here in New York, and so we’re able to really lower the rig when we take our brand in now going into any market.
We’re very close at signing our first franchise agreement for Qatar and Saudi Arabia, and we should be able to announce that within the next few weeks, and we’re very excited about that. And again, they like our brand because we are a platform. We’ve been bringing this 360 experience for the Middle East. We bring what they like about the American culture whether it’d be the music, the movies, some of our food, and then we take this platform and we’re able to work within their culture.
And it’s a perfect mix versus me being a one-dimensional brand, hoping that they like it. So, they’re excited and I think that we have an international attempt to look forward to. We’ll have an announcement soon on that. And like I said large-scale ability and the calls that are coming in from developers and building owners or landlords across the country.
WSA: Good. And so, once again joining us today is Brent Brown, CEO of Latitude 360. The company trades on the OTCQX, ticker symbol LATX. Currently trading at 1.39 a share, market cap is north of 160 million. And before we conclude here Brent to briefly recap some of your key points, why do you believe investors should consider the company as a good investment opportunity today?
Brent Brown: The two main competitive edges that we have is the platform that we have surrounding our restaurant is groundbreaking, disruptive. And the membership program is a financial foundation that we will have, and we’ll continue to grow that our competitors will not be able to duplicate because they don’t have the offering to give to the members.
We can drive traffic to the restaurant. And at the end of the day, we are where brands or experiences need to be. You look at the one, the number one brands in world, look at what they do to their stadiums. There’s been a half a billion, a billion dollars on this stock. It has nothing to do with the ball game. That has everything to do with the experience, the technology, the LED screens, the seats, and the upgraded food. You know, it’s all about the experience.
Today’s customer is very difficult to stimulate, extremely difficult to stimulate. They got everything at their fingertips, okay. If I want to know where I’m going, I get maps. If I want to know the weather outside, I get weather. Well, with Latitude 360, if my child is having a birthday party, I get my concierge. If I want to go out this weekend, I’ll get my concierge. If I want a corporate event, I get my concierge. We are that lifestyle brand and we are or no doubt the double vision of dining and entertainment.
WSA: Well, we certainly look forward to continue to track the company’s growth and report on your upcoming progress, and we’d like to thank you for taking the time to join us today, Brent, and update investors on LATX. It was great to have you on.
Brent Brown: Thank you very much. I really appreciate it. Thanks for having us.
