09/05/2024 | Press release | Distributed by Public on 09/05/2024 14:06
RICHMOND, Va.--(BUSINESS WIRE)-- 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 fourth quarter and full year of fiscal year 2024, which ended on June 30, 2024.
Quarter Highlights:
Fiscal Year Highlights:
"We ended fiscal year 2024 on a high note with a superior same-store-sales comp and total growth. Our proven ability to deploy capital across our portfolio and operate acquired assets more efficiently while investing in our people and brand showed results with Adjusted EBITDA growing 29%+ year-over-year in the quarter," said Thomas Shannon, Founder, Chairman, and CEO. "Season Pass sales across our portfolio hit a record $11 million and helped drive consumer traffic. We also saw an increase in customer satisfaction from the ancillary benefits of the passes, including in arcade play and food promotions. The enormous success of the Summer Pass has compelled us to offer a Fall Season Pass for October and November prior to the holiday and winter push."
"Bowlero's primary strength is its ability to optimize assets through efficiencies, analytics and now scale, resulting in class-leading returns on invested capital. This year, we acquired 22 locations, including the flagship Lucky Strike locations and the 60-acre Raging Waves waterpark in Yorkville, Illinois. The initial results of these acquisitions have been outstanding, including record profitability at Lucky Strike and double digit year-over-year revenue growth at Raging Waves. We expect to achieve returns similar to our successes with the acquisitions of centers from AMF, Brunswick, Bowl America, and 40+ independents. Recently, economic factors have increased M&A opportunities, and we expect to continue executing our playbook of buying assets at attractive prices and systemically improving them. We are offsetting slight weakness in the consumer with what we believe are market share gains in the location-based entertainment sector. We expect low to mid single-digit positive same-store-sales comp in the upcoming year."
Fiscal Year 2025 Guidance
Today, the Company provided financial guidance for fiscal year 2025. We expect total Revenue to be up mid-single digits to 10%+ year-over-year, which equates to $1.22 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.
Share Repurchase and Capital Return Program Update
From April 1, 2024 through June 30, 2024, the Company repurchased 3.0 million shares of Class A common stock for approximately $35 million, bringing total repurchases in fiscal year 2024 to approximately 22.8 million. Since 2021, the Company has spent approximately $469 million retiring all SPAC-related warrants, repurchasing 34.1 million shares of common stock, and 5.0 million as-converted preferred shares, reducing common stock outstanding by about 20%. As of June 30, 2024, the company had $164 million remaining on its share repurchase program.
As previously announced on August 5, 2024, the Board of Directors of the Company declared a regular quarterly cash dividend of $0.055 per common share. The dividend is payable on September 6, 2024, to stockholders of record on August 23, 2024.
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 September 5, 2024 in the Events & Presentations section of the Bowlero Investor Relations website at https://ir.bowlerocorp.com/overview/default.aspx .
About Bowlero Corp.
Bowlero Corp. is one of the world's premier operators of location-based entertainment. With over 350 bowling locations across North America, plus the Raging Waves waterpark in Yorkville, IL, 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:
GAAP Financial Information
Bowlero Corp. Condensed Consolidated Balance Sheets (Amounts in thousands, except share and per share amounts) (Unaudited) |
|||||||
June 30, 2024 |
July 2, 2023 |
||||||
Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
66,972 |
$ |
195,633 |
|||
Accounts and notes receivable, net |
6,757 |
3,092 |
|||||
Inventories, net |
13,171 |
11,470 |
|||||
Prepaid expenses and other current assets |
25,316 |
18,395 |
|||||
Assets held-for-sale |
1,746 |
2,069 |
|||||
Total current assets |
113,962 |
230,659 |
|||||
Property and equipment, net |
887,738 |
715,764 |
|||||
Operating lease right of use assets |
559,168 |
449,085 |
|||||
Finance lease right of use assets, net |
524,392 |
515,339 |
|||||
Intangible assets, net |
47,051 |
90,986 |
|||||
Goodwill |
833,888 |
753,538 |
|||||
Deferred income tax asset |
112,106 |
73,807 |
|||||
Other assets |
35,730 |
12,096 |
|||||
Total assets |
$ |
3,114,035 |
$ |
2,841,274 |
|||
Liabilities, Temporary Equity and Stockholders' (Deficit) Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable and accrued expenses |
$ |
135,784 |
$ |
121,226 |
|||
Current maturities of long-term debt |
9,163 |
9,338 |
|||||
Current obligations of operating lease liabilities |
28,460 |
23,866 |
|||||
Other current liabilities |
9,399 |
14,281 |
|||||
Total current liabilities |
182,806 |
168,711 |
|||||
Long-term debt, net |
1,129,523 |
1,138,687 |
|||||
Long-term obligations of operating lease liabilities |
561,916 |
431,295 |
|||||
Long-term obligations of financing lease liabilities |
680,213 |
652,450 |
|||||
Long-term financing obligations |
440,875 |
9,005 |
|||||
Earnout liability |
137,636 |
112,041 |
|||||
Other long-term liabilities |
26,471 |
25,375 |
|||||
Deferred income tax liabilities |
4,447 |
4,160 |
|||||
Total liabilities |
3,163,887 |
2,541,724 |
|||||
Commitments and Contingencies (Note 11) |
|||||||
June 30, 2024 |
July 2, 2023 |
||||||
Temporary Equity |
|||||||
Series A preferred stock |
$ |
127,410 |
$ |
144,329 |
|||
Stockholders' (Deficit) Equity |
|||||||
Class A common stock |
11 |
11 |
|||||
Class B common stock |
6 |
6 |
|||||
Additional paid-in capital |
510,675 |
506,112 |
|||||
Treasury stock, at cost |
(385,015 |
) |
(135,401 |
) |
|||
Accumulated deficit |
(303,159 |
) |
(219,659 |
) |
|||
Accumulated other comprehensive income |
220 |
4,152 |
|||||
Total stockholders' (deficit) equity |
(177,262 |
) |
155,221 |
||||
Total liabilities, temporary equity and stockholders' (deficit) equity |
$ |
3,114,035 |
$ |
2,841,274 |
Bowlero Corp. Condensed Consolidated Statements of Operations (Amounts in thousands) (Unaudited) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
June 30, 2024 |
July 2, 2023 |
June 30, 2024 |
July 2, 2023 |
||||||||||||
Revenues |
$ |
283,868 |
$ |
239,420 |
$ |
1,154,614 |
$ |
1,058,790 |
|||||||
Costs of revenues |
216,530 |
182,172 |
840,435 |
716,384 |
|||||||||||
Gross profit |
67,338 |
57,248 |
314,179 |
342,406 |
|||||||||||
Operating expenses: |
|||||||||||||||
Selling, general and administrative expenses |
40,438 |
35,082 |
155,203 |
137,919 |
|||||||||||
Asset impairment |
59,802 |
1,028 |
60,211 |
1,601 |
|||||||||||
Loss (gain) on sale of assets |
571 |
(70 |
) |
1,222 |
(2,240 |
) |
|||||||||
Other operating expense |
782 |
1,701 |
5,953 |
4,326 |
|||||||||||
Total operating expense |
101,593 |
37,741 |
222,589 |
141,606 |
|||||||||||
Operating (loss) profit |
(34,255 |
) |
19,507 |
91,590 |
200,800 |
||||||||||
Other expenses: |
|||||||||||||||
Interest expense, net |
47,036 |
30,785 |
177,611 |
110,851 |
|||||||||||
Change in fair value of earnout liability |
10,915 |
(73,406 |
) |
25,456 |
85,352 |
||||||||||
Other expense |
10 |
1,436 |
76 |
6,792 |
|||||||||||
Total other expense |
57,961 |
(41,185 |
) |
203,143 |
202,995 |
||||||||||
(Loss) income before income tax benefit |
(92,216 |
) |
60,692 |
(111,553 |
) |
(2,195 |
) |
||||||||
Income tax benefit |
(30,039 |
) |
(85,528 |
) |
(27,972 |
) |
(84,243 |
) |
|||||||
Net (loss) income |
$ |
(62,177 |
) |
$ |
146,220 |
$ |
(83,581 |
) |
$ |
82,048 |
Bowlero Corp. Condensed Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited) |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
June 30, 2024 |
July 2, 2023 |
June 30, 2024 |
July 2, 2023 |
||||||||||||
Net cash provided by operating activities |
$ |
6,732 |
$ |
8,985 |
$ |
154,830 |
$ |
217,787 |
|||||||
Net cash used in investing activities |
(99,696 |
) |
(65,269 |
) |
(385,656 |
) |
(253,218 |
) |
|||||||
Net cash (used in) provided by financing activities |
(52,130 |
) |
90,993 |
102,157 |
98,957 |
||||||||||
Effect of exchange rate changes on cash |
(363 |
) |
(120 |
) |
8 |
(129 |
) |
||||||||
Net (decrease) increase in cash and cash equivalents |
(145,457 |
) |
34,589 |
(128,661 |
) |
63,397 |
|||||||||
Cash and cash equivalents at beginning of period |
212,429 |
161,044 |
195,633 |
132,236 |
|||||||||||
Cash and cash equivalents at end of period |
$ |
66,972 |
$ |
195,633 |
$ |
66,972 |
$ |
195,633 |
Balance Sheet and Liquidity
As of June 30, 2024 and July 2, 2023, our calculation of net debt was as follows:
June 30, 2024 |
July 2, 2023 |
|||||
Cash and cash equivalents |
$ |
66,972 |
$ |
195,633 |
||
Bank debt and loans |
1,152,200 |
1,164,662 |
||||
Net debt |
$ |
1,085,228 |
$ |
969,029 |
As of June 30, 2024 and July 2, 2023, our cash on hand and revolving borrowing capacity was as follows:
(in thousands) |
June 30, 2024 |
July 2, 2023 |
||||||
Cash and cash equivalents |
$ |
66,972 |
$ |
195,633 |
||||
Revolver Capacity (1) |
285,000 |
235,000 |
||||||
Revolver capacity committed to letters of credit |
(15,834 |
) |
(10,386 |
) |
||||
Total cash on hand and revolving borrowing capacity |
$ |
336,138 |
$ |
420,247 |
(1) |
On August 23, 2024, the Revolver commitment was increased by $50,000 to an aggregate amount of $335,000. |
GAAP to non-GAAP Reconciliations
Three Months Ended |
Twelve Months Ended |
|||||||
(in thousands) |
June 30, 2024 |
July 2, 2023 |
June 30, 2024 |
July 2, 2023 |
||||
Total Revenue - Reported |
$283,868 |
$239,420 |
$1,154,614 |
$1,058,790 |
||||
less: Service Fee Revenue |
(939) |
(4,088) |
(5,462) |
(21,064) |
||||
Revenue Excluding Service Fee Revenue |
$282,929 |
$235,332 |
$1,149,152 |
$1,037,726 |
||||
less: Non-Location Related (including Closed Locations) |
(4,859) |
(7,490) |
(20,520) |
(25,351) |
||||
Total Location Revenue |
$278,070 |
$227,842 |
$1,128,632 |
$1,012,375 |
||||
less: Acquired Revenue |
(35,598) |
(1,094) |
(142,774) |
(26,438) |
||||
Same Store Revenue |
$242,472 |
$226,748 |
$985,858 |
$985,937 |
||||
% Year-over-Year Change |
||||||||
Total Revenue - Reported |
18.6% |
9.1% |
||||||
Total Revenue excluding Service Fee Revenue |
20.2% |
10.7% |
||||||
Total Location Revenue |
22.0% |
11.5% |
||||||
Same Store Revenue |
6.9% |
-% |
Adjusted EBITDA Reconciliation |
||||||||
Three Months Ended |
Twelve Months Ended |
|||||||
(in thousands) |
June 30, 2024 |
July 2, 2023 |
June 30, 2024 |
July 2, 2023 |
||||
Consolidated |
||||||||
Revenue |
$283,868 |
$239,420 |
$1,154,614 |
$1,058,790 |
||||
Net income (loss) - GAAP |
(62,177) |
146,220 |
(83,581) |
82,048 |
||||
Net income (loss) margin |
(21.9)% |
61.1% |
(7.2)% |
7.7% |
||||
Adjustments: |
||||||||
Interest expense |
48,860 |
32,095 |
185,181 |
112,160 |
||||
Income tax benefit |
(30,039) |
(85,528) |
(27,972) |
(84,243) |
||||
Depreciation and amortization |
41,064 |
30,665 |
147,362 |
115,680 |
||||
Impairment and other charges |
60,931 |
1,028 |
61,340 |
1,601 |
||||
Share-based compensation |
4,032 |
3,851 |
13,775 |
15,742 |
||||
Closed location EBITDA (1) |
2,228 |
1,692 |
9,006 |
3,319 |
||||
Foreign currency exchange loss (gain) |
59 |
(128) |
378 |
(53) |
||||
Asset disposition loss (gain) |
571 |
(70) |
1,222 |
(2,240) |
||||
Transactional and other advisory costs (2) |
4,157 |
6,804 |
21,303 |
23,635 |
||||
Changes in the value of earnouts (3) |
10,915 |
(73,406) |
25,456 |
85,352 |
||||
Other, net (4) |
2,830 |
1,270 |
8,027 |
1,343 |
||||
Adjusted EBITDA |
$83,431 |
$64,493 |
$361,497 |
$354,344 |
||||
Adjusted EBITDA Margin |
29.4% |
26.9% |
31.3% |
33.5% |
(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. Certain prior year amounts have been reclassified to conform to current year presentation. |
(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. |
Bowlero Corp. Investor Relations
[email protected]
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