Bowlero Corp. (NYSE: BOWL) (“Bowlero” or the “Company”), one of
the world’s premier operators of location-based entertainment,
today provided financial results for the first quarter of the 2025
Fiscal Year, which ended on September 29, 2024.
Quarter Highlights:
- Revenue increased 14.4% to $260.2 million from $227.4 million
in the previous year
- Total Location Revenue increased 17.5% versus the prior
year
- Same Store Revenue increased 0.4% versus the prior year
- Net income of $23.1 million versus prior year income of $18.2
million
- Adjusted EBITDA of $62.9 million versus $52.1 million in the
prior year
- From July 1, 2024 through November 4, 2024, opened two new
builds and acquired one bowling location, five family entertainment
centers and one water park. Total locations in operation as of
November 4, 2024 is 3611
“Total Location Revenue grew 17.5% year over year in the quarter
as we outperformed the market driven by increased customer wallet
share through heightened food, beverage, and experiential
offerings,” said Founder, Chairman, and CEO Thomas Shannon. “Raging
Waves, the largest waterpark in Illinois, outperformed expectations
throughout the summer, in part from an expanded season pass
offering. We acquired Boomers Parks, a leading family entertainment
center brand in California and Florida. In addition, we recently
acquired Spectrum Entertainment Complex, a 52-lane bowling and
events venue near Grand Rapids, Michigan, and opened two Lucky
Strike locations in Denver. We expect to open the flagship Lucky
Strike Beverly Hills and Lucky Strike Ladera Ranch California,
shortly. The M&A market is extremely active, and we look to
continue to deploy capital at attractive returns through our
long-proven underwriting process and operational excellence.”
“Cash flow from operations in the quarter was a record for the
seasonally small first quarter as we focus on operational
efficiencies to expand margins and improve cash flow conversion.
Mobile ordering is now available in all locations. We also have
reformatted our income statement to provide investors new
visibility into revenue segments and 4-wall profitability,” added
Bobby Lavan, Chief Financial Officer.
Share Repurchase and Capital Return Program Update
From July 1, 2024 through October 30, 2024, the Company
repurchased 0.8 million shares of Class A common stock for
approximately $8 million. The company has $156 million currently
remaining under the share repurchase program.
The Board of Directors declared a quarterly cash dividend of
$0.055 per share of common stock for the second quarter of fiscal
year 2025. The dividend will be payable on December 6, 2024, to
stockholders of record on November 22, 2024.
Fiscal Year 2025 Guidance
After completing the first quarter, Bowlero is increasing the
low end of its total revenue guidance for fiscal year 2025 by $10
million. We expect total Revenue to be up mid-single digits to 10%+
year-over-year, which equates to $1.23 billion to $1.28 billion of
total Revenue. Adjusted EBITDA margin is expected to be 32% to 34%,
which equates to Adjusted EBITDA of $390 million to $430
million.
Investor Webcast Information
Listeners may access an investor webcast hosted by Bowlero. The
webcast and results presentation will be accessible at 4:30 PM ET
on November 4, 2024 in the Events & Presentations section of
the Bowlero Investor Relations website at
https://ir.bowlerocorp.com/overview/default.aspx.
About Bowlero Corp.
Bowlero Corporation is one of the world’s premier operators of
location-based entertainment. With over 360 locations across North
America, including bowling and our other location-based
entertainment offerings like Octane Raceway, Raging Waves water
park and Boomers Parks, the Company serves more than 40 million
guest visits annually through a family of brands that include Lucky
Strike, Bowlero and AMF. In 2019, Bowlero acquired the Professional
Bowlers Association, the major league of bowling and a growing
media property that boasts millions of fans around the globe. For
more information on Bowlero, please visit BowleroCorp.com.
Forward Looking Statements
Some of the statements contained in this press release are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that involve risk,
assumptions and uncertainties, such as statements of our plans,
objectives, expectations, intentions and forecasts. These
forward-looking statements are generally identified by the use of
forward-looking terminology, including the terms "anticipate,"
"believe," “confident,” “continue,” "could," "estimate," "expect,"
"intend," “likely,” "may," "plan," “possible,” "potential,"
"predict," "project," "should," "target," "will," "would" and, in
each case, their negative or other various or comparable
terminology. These forward-looking statements reflect our views
with respect to future events as of the date of this release and
are based on our management’s current expectations, estimates,
forecasts, projections, assumptions, beliefs and information.
Although management believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no
assurance that these expectations will prove to have been correct.
All such forward-looking statements are subject to risks and
uncertainties, many of which are outside of our control, and could
cause future events or results to be materially different from
those stated or implied in this document. It is not possible to
predict or identify all such risks. These risks include, but are
not limited to: our ability to design and execute our business
strategy; changes in consumer preferences and buying patterns; our
ability to compete in our markets; the occurrence of unfavorable
publicity; risks associated with long-term non-cancellable leases
for our locations; our ability to retain key managers; risks
associated with our substantial indebtedness and limitations on
future sources of liquidity; our ability to carry out our expansion
plans; our ability to successfully defend litigation brought
against us; our ability to adequately obtain, maintain, protect and
enforce our intellectual property and proprietary rights and claims
of intellectual property and proprietary right infringement,
misappropriation or other violation by competitors and third
parties; failure to hire and retain qualified employees and
personnel; the cost and availability of commodities and other
products we need to operate our business; cybersecurity breaches,
cyber-attacks and other interruptions to our and our third-party
service providers’ technological and physical infrastructures;
catastrophic events, including war, terrorism and other conflicts;
public health emergencies and pandemics, such as the COVID-19
pandemic, or natural catastrophes and accidents; changes in the
regulatory atmosphere and related private sector initiatives;
fluctuations in our operating results; economic conditions,
including the impact of increasing interest rates, inflation and
recession; and other factors described under the section titled
“Risk Factors” in the Company's Annual Report on Form 10-K filed
with the U.S. Securities and Exchange Commission (the “SEC”) by the
Company on September 5, 2024, as well as other filings that the
Company will make, or has made, with the SEC, such as Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K. These factors
should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included
in this press release and in other filings. We expressly disclaim
any obligation to publicly update or review any forward-looking
statements, whether as a result of new information, future
developments or otherwise, except as required by applicable
law.
Non-GAAP Financial Measures
To provide investors with information in addition to our results
as determined under Generally Accepted Accounting Principles
(“GAAP”), we disclose Revenue Excluding Service Fee Revenue, Total
Location Revenue, Same Store Revenue and Adjusted EBITDA as
“non-GAAP measures”, which management believes provide useful
information to investors because each measure assists both
investors and management in analyzing and benchmarking the
performance and value of our business. Accordingly, management
believes that these measurements are useful for comparing general
operating performance from period to period, and management relies
on these measures for planning and forecasting of future periods.
Additionally, these measures allow management to compare our
results with those of other companies that have different financing
and capital structures. These measures are not financial measures
calculated in accordance with GAAP and should not be considered as
a substitute for revenue, net income, or any other operating
performance or liquidity measure calculated in accordance with
GAAP, and may not be comparable to a similarly titled measure
reported by other companies. Our fiscal year 2025 guidance measures
(other than revenue) are provided on a non-GAAP basis without a
reconciliation to the most directly comparable GAAP measure because
the Company is unable to predict with a reasonable degree of
certainty certain items contained in the GAAP measures without
unreasonable efforts. For the same reasons, the Company is unable
to address the probable significance of the unavailable
information. Such items include, but are not limited to,
acquisition related expenses, share-based compensation and other
items not reflective of the company's ongoing operations.
Revenue Excluding Service Fee Revenue represents total Revenue
less Service Fee Revenue. Total Location Revenue represents total
Revenue less Non-Location Related Revenue, Revenue from Closed
Locations, and Service Fee Revenue, if applicable. Same Store
Revenue represents total Revenue less Non-Location Related Revenue,
Revenue from Closed Locations, Service Fee Revenue, if applicable,
and Acquired Revenue. Adjusted EBITDA represents Net Income (Loss)
before Interest Expense, Income Taxes, Depreciation and
Amortization, Impairment and Other Charges, Share-based
Compensation, EBITDA from Closed Locations, Foreign Currency
Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional
and other advisory costs, changes in the value of earnouts, and
other.
The Company considers Revenue Excluding Service Fee Revenue as
an important financial measure because it provides a financial
measure of revenue directly associated with consumer discretionary
spending and Total Location Revenue as an important financial
measure because it provides a financial measure of revenue directly
associated with location operations. The Company also considers
Same Store Revenue as an important financial measure because it
provides comparable revenue for locations open for the entire
duration of both the current and comparable measurement
periods.
The Company considers Adjusted EBITDA as an important financial
measure because it provides a financial measure of the quality of
the Company’s earnings. Other companies may calculate Adjusted
EBITDA differently than we do, which might limit its usefulness as
a comparative measure. Adjusted EBITDA is used by management in
addition to and in conjunction with the results presented in
accordance with GAAP. We have presented Adjusted EBITDA solely as a
supplemental disclosure because we believe it allows for a more
complete analysis of results of operations and assists investors
and analysts in comparing our operating performance across
reporting periods on a consistent basis by excluding items that we
do not believe are indicative of our core operating performance.
Adjusted EBITDA has limitations as an analytical tool, and you
should not consider it in isolation or as a substitute for analysis
of our results as reported under GAAP. Some of these limitations
are that Adjusted EBITDA:
- do not reflect every expenditure, future requirements for
capital expenditures or contractual commitments;
- do not reflect changes in our working capital needs;
- do not reflect the interest expense, or the amounts necessary
to service interest or principal payments, on our outstanding
debt;
- do not reflect income tax (benefit) expense, and because the
payment of taxes is part of our operations, tax expense is a
necessary element of our costs and ability to operate;
- do not reflect non-cash equity compensation, which will remain
a key element of our overall equity based compensation package;
and
- do not reflect the impact of earnings or charges resulting from
matters we consider not to be indicative of our ongoing
operations.
1 Two properties from a recent acquisition are excluded from the
count
GAAP Financial Information
Bowlero Corp.
Condensed Consolidated Balance
Sheets
(Amounts in thousands, except
share and per share amounts)
(Unaudited)
September 29, 2024
June 30, 2024
Assets
Current assets:
Cash and cash equivalents
$
38,448
$
66,972
Accounts and notes receivable, net
5,666
6,757
Inventories, net
13,650
13,171
Prepaid expenses and other current
assets
30,365
25,316
Assets held-for-sale
20
1,746
Total current assets
88,149
113,962
Property and equipment, net
892,782
887,738
Operating lease right of use assets
554,474
559,168
Finance lease right of use assets, net
520,218
524,392
Intangible assets, net
45,111
47,051
Goodwill
833,961
833,888
Deferred income tax asset
122,847
112,106
Other assets
34,884
35,730
Total assets
$
3,092,426
$
3,114,035
Liabilities, Temporary Equity and
Stockholders’ Deficit
Current liabilities:
Accounts payable and accrued expenses
$
146,022
$
135,784
Current maturities of long-term debt
9,106
9,163
Current obligations of operating lease
liabilities
28,811
28,460
Other current liabilities
8,381
9,399
Total current liabilities
192,320
182,806
Long-term debt, net
1,130,141
1,129,523
Long-term obligations of operating lease
liabilities
567,209
561,916
Long-term obligations of finance lease
liabilities
681,222
680,213
Long-term financing obligations
442,980
440,875
Earnout liability
88,741
137,636
Other long-term liabilities
26,093
26,471
Deferred income tax liabilities
4,129
4,447
Total liabilities
3,132,835
3,163,887
Commitments and Contingencies
September 29, 2024
June 30, 2024
Temporary Equity
Series A preferred stock
$
123,918
$
127,410
Stockholders’ Deficit
Class A common stock
11
11
Class B common stock
6
6
Additional paid-in capital
509,929
510,675
Treasury stock, at cost
(392,735
)
(385,015
)
Accumulated deficit
(280,064
)
(303,159
)
Accumulated other comprehensive (loss)
income
(1,474
)
220
Total stockholders’ deficit
(164,327
)
(177,262
)
Total liabilities, temporary equity and
stockholders’ deficit
$
3,092,426
$
3,114,035
Bowlero Corp.
Condensed Consolidated Statements
of Operations
(Amounts in thousands)
(Unaudited)
Three Months Ended
September 29,
2024
October 1, 2023
Revenues
Bowling
$
122,203
$
116,430
Food & beverage
88,039
74,913
Amusement & other
49,953
36,062
Total revenues
260,195
227,405
Costs and expenses
Location operating costs, excluding
depreciation and amortization
86,228
73,373
Location payroll and benefit costs
67,436
63,054
Location food and beverage costs
20,530
16,685
Selling, general and administrative
expenses, excluding depreciation and amortization
34,811
38,124
Depreciation and amortization
36,983
31,352
Loss (gain) on impairment and disposal of
fixed assets, net
1,472
(1
)
Other operating income, net
(211
)
(538
)
Total costs and expenses
247,249
222,049
Operating income
12,946
5,356
Other (income) expenses
Interest expense, net
48,670
37,449
Change in fair value of earnout
liability
(48,921
)
(40,682
)
Other expense
—
53
Total other income
(251
)
(3,180
)
Income before income tax
benefit
13,197
8,536
Income tax benefit
(9,898
)
(9,683
)
Net income
$
23,095
$
18,219
Bowlero Corp.
Condensed Consolidated Statements
of Cash Flows
(Amounts in thousands)
(Unaudited)
Three Months Ended
September 29,
2024
October 1, 2023
Net cash provided by operating
activities
$
29,413
$
16,083
Net cash used in investing activities
(39,924
)
(176,576
)
Net cash (used in) provided by financing
activities
(17,806
)
5,091
Effect of exchange rate changes on
cash
(207
)
(143
)
Net decrease in cash and cash
equivalents
(28,524
)
(155,545
)
Cash and cash equivalents at beginning of
period
66,972
195,633
Cash and cash equivalents at end of
period
$
38,448
$
40,088
Balance Sheet and Liquidity
As of September 29, 2024 and June 30, 2024, our calculation of
net debt was as follows:
(in thousands)
September 29, 2024
June 30, 2024
Cash and cash equivalents
$
38,448
$
66,972
Bank debt and loans
1,151,951
1,152,200
Net debt
$
1,113,503
$
1,085,228
As of September 29, 2024 and June 30, 2024, our cash on hand and
revolving borrowing capacity was as follows:
(in thousands)
September 29, 2024
June 30, 2024
Cash and cash equivalents
$
38,448
$
66,972
Revolver Capacity
335,000
285,000
Revolver capacity committed to letters of
credit
(18,584
)
(15,834
)
Total cash on hand and revolving borrowing
capacity
$
354,864
$
336,138
GAAP to non-GAAP Reconciliations
Same Store Revenue
Three Months Ended
(in thousands)
October 1, 2023
September 29, 2024
Total Revenue - Reported
$
227,405
$
260,195
less: Service Fee Revenue
(1,621
)
(650
)
Revenue Excluding Service Fee Revenue
$
225,784
$
259,545
less: Non-Location Related (including
Closed Centers)
(7,985
)
(3,597
)
Total Location Revenue
$
217,799
$
255,948
less: Acquired Revenue
(1,211
)
(38,425
)
Same Store Revenue
$
216,588
$
217,523
% Year-over-Year
Change
Total Revenue – Reported
14.4
%
Total Revenue excluding Service Fee
Revenue
15.0
%
Total Location Revenue
17.5
%
Same Store Revenue
0.4
%
Adjusted EBITDA
Reconciliation
Three Months Ended
(in thousands)
September 29, 2024
October 1, 2023
Consolidated
Revenue
$
260,195
$
227,405
Net income - GAAP
23,095
18,219
Net income margin
8.9
%
8.0
%
Adjustments:
Interest expense
48,670
39,032
Income tax benefit
(9,898
)
(9,683
)
Depreciation and amortization
37,437
32,000
Loss (gain) on impairment, disposals, and
other charges, net
1,472
(1
)
Share-based compensation
4,503
1,911
Closed location EBITDA (1)
2,205
2,462
Transactional and other advisory costs
(2)
3,259
8,398
Changes in the value of earnouts (3)
(48,921
)
(40,682
)
Other, net (4)
1,121
478
Adjusted EBITDA
$
62,943
$
52,134
Adjusted EBITDA Margin
24.2
%
22.9
%
[1]
The closed location adjustment is to remove EBITDA for closed
locations. Closed locations are those locations that are closed for
a variety of reasons, including permanent closure, newly acquired
or built locations prior to opening, locations closed for
renovation or rebranding and conversion. If a location is not open
on the last day of the reporting period, it will be considered
closed for that reporting period. If the location is closed on the
first day of the reporting period for permanent closure, the
location will be considered closed for that reporting period.
[2]
The adjustment for transaction costs and other advisory costs is
to remove charges incurred in connection with any transaction,
including mergers, acquisitions, refinancing, amendment or
modification to indebtedness, dispositions and costs in connection
with an initial public offering, in each case, regardless of
whether consummated.
[3]
The adjustment for changes in the
value of earnouts is to remove of the impact of the revaluation of
the earnouts. Changes in the fair value of the earnout liability is
recognized in the statement of operations. Decreases in the
liability will have a favorable impact on the statement of
operations and increases in the liability will have an unfavorable
impact.
[4]
Other includes the following related to transactions that do not
represent ongoing or frequently recurring activities as part of the
Company’s operations: (i) non-routine expenses, net of recoveries
for matters outside the normal course of business, (ii) costs
incurred that have been expensed associated with obtaining an
equity method investment in a subsidiary of VICI, (iii) severance
expense, and (iv) other individually de minimis expenses. Certain
prior year amounts have been reclassified to conform to current
year presentation.
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Bowlero Corp. Investor Relations IR@BowleroCorp.com
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