Bowlero Corp. Announces Record-Breaking Results for the Second Quarter of Fiscal Year 2023

  • Revenue was a record-breaking $273.4 million in the second quarter, growing $68.2 million, or 33.2%, year-over-year, and $88.5 million, or 47.9%, relative to the corresponding pre-pandemic period.1 Same-store revenue increased $54.4 million, or 27.3%, year-over-year, and grew $53.9 million, or 30.2%, vs. the comparable pre-pandemic period.2
  • Net income in the second the quarter was $1.4 million, impacted by the non-cash expense related to the revaluation of the earnout shares ($30.8 million). Adjusted for this non-cash expense, Normalized Net Income was $32.2 million.
  • Adjusted EBITDA in the second quarter was $97.0 million, $30.2 million, or 45.2%, higher vs. the prior year's quarter, and $44.1 million, or 83.3%, higher relative to pre-pandemic performance.
  • Trailing Twelve Month (TTM) Revenue was $1.03 billion, a high watermark in the Company's history. The TTM Revenue was $151 million or 17% higher than the corresponding projection provided in the December 2021 go-public transaction.
  • TTM Adjusted EBITDA was $353.0 million with a 34.3% margin and increased $158 million or 80.8% compared to prior year TTM period.
  • MoneyBowl™, the Company’s proprietary skill-based gamification app, is active in 37 centers as of February 15, 2023, which represents over 11% of the center population.
  • The Company added 8 new centers during the quarter. Total centers in operation as of January 1, 2023 were 326. Subsequent to the quarter-end, the Company acquired an additional 1 center bringing the updated center count to 327, and signed leases for another 6 locations to be newly constructed.

Bowling Center Trailing 13-week Revenue Growth Trend (Graphic: Business Wire)

RICHMOND, Va.--()--Bowlero Corp. (NYSE: BOWL) (“Bowlero” or the “Company”), the world’s largest owner and operator of bowling centers, today provided financial results for the second quarter of the 2023 fiscal year, which ended on January 1, 2023. Bowlero announced revenue of $273.4 million, which was driven by dramatic growth in event revenue and a solid increase in walk-in-retail and league revenue. Event Revenue grew 74% ($29.6 million) vs. the prior year's quarter and 59% ($25.8 million) vs. the pre-pandemic quarter. Total revenue grew by 33.2% on a year-over-year basis and 47.9% compared to pre-pandemic performance. Same-store sales rose by 27.3% year-over-year and 30.2% relative to pre-pandemic quarter.

"The Company’s second quarter top-line and bottom-line growth was extraordinary. The re-investment in our people that we made in the first quarter prepared us for a record holiday season that delivered on every facet. Event Revenue continued to drive revenue growth with event sales up $30 million over prior year’s quarter, more than offsetting the estimated $10 million loss in revenue due to the emergence of the COVID-19 Omicron variant in the prior year,” said Thomas Shannon, Founder and Chief Executive Officer. "The future for the Company is as bright as ever. In addition to record financial performance in the quarter, we continue to achieve exciting milestones, including surpassing $1.0 billion in TTM revenue, $350 million in TTM Adjusted EBITDA, and rolling out MoneyBowl™, our entirely in-house gamification app to 37 centers and counting, which we anticipate will revolutionize how bowlers interact with the lanes."

Second-Quarter 2023 Operating Results

Tremendous growth in Revenue during the second quarter, totaling $273.4 million, up 33.2% on a year-over-year basis, and up 47.9% relative to pre-pandemic performance. Same-store sales increased 27.3% year-over-year, demonstrating the Company's ability to continue to drive organic growth.

Net income for the quarter was $1.4 million, after giving effect to $30.8 million of non-cash expenses related to the increase in the fair value of earnouts. In the prior year, Net loss for the quarter was $34.5 million, driven primarily by non-recurring expenses related to the successful de-SPAC transaction net of the non-cash decrease in expenses related to fair value of the earnouts ($48.9 million). Adjusted for the non-cash expense, normalized Net Income was $14.4 million in the prior year’s quarter. Normalized Net Income increased $17.8 million or 123.1% vs. the prior year’s quarter. Adjusted EBITDA for the quarter was $97.0 million, up 45.2% year-over-year and 83.3% relative to pre-pandemic performance. The Company was able to expand margin as a result of the QMS's tech-enabled financial performance optimization tool and operating leverage from higher revenue generation in the quarter.

Brett Parker, President and CFO of Bowlero, said, "We had a fantastic quarter. The second quarter's margin improvement was the result of our relentless pursuit of operating leverage in the business while simultaneously driving sales in order to maximize EBITDA. Through our proprietary, algorithmic-based technology toolkit, management remained hyper-focused on maximizing both revenue and profit. We had a strong and balanced performance across all segments of our bowling business--walk-in retail, leagues, and events--and saw robust demand throughout the quarter."

Financial Position

As of January 1, 2023, cash, cash equivalents, and restricted cash totaled $89.8 million and total debt was $887.7 million, resulting in net debt of $797.9 million. At the end of the second quarter of 2023, Bowlero’s Net Leverage Ratio was 2.3x TTM Adjusted EBITDA. For the second quarter of 2023, Net Cash provided by operating Activities was $80.3 million, and Net Cash generated from Adjusted Operating Activities was $106.0 million when adjusted for the $25.7 million in interest expense paid in cash.

Share Repurchase Program

The Company repurchased 629,677 shares of Class A common stock during the second quarter at an average price of $12.62, bringing the total shares repurchased to 4,528,447 shares (average price per share of $10.59) and bringing the total Class A and Class B shares outstanding down to 162.4 million as of January 1, 2023. The Company has now repurchased more than 100% of the shares issued as a result of the warrant redemption in May 2022. Bowlero has $146.6 million of share repurchase authorization remaining as of January 1, 2023.

Bowling Center Trailing 13-week Revenue Growth Trend3

[Please see the Bowling Center Trailing 13-week Revenue Growth Trend Chart]

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 February 15, 2023 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 the worldwide leader in bowling entertainment. With more than 325 bowling centers across North America, Bowlero Corp. serves nearly 30 million guests each year through a family of brands that includes Bowlero and AMF. Bowlero Corp. is also home to the Professional Bowlers Association, which boasts thousands of members and millions of fans across the globe. For more information on Bowlero Corp., 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. These forward-looking statements are generally identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology and include preliminary results. 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: the impact of COVID-19 or other adverse public health developments on our business; our ability to grow and manage growth profitably, maintain relationships with customers, compete within our industry and retain our key employees; changes in consumer preferences and buying patterns; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; the risk that the market for our entertainment offerings may not develop on the timeframe or in the manner that we currently anticipate; general economic conditions and uncertainties affecting markets in which we operate and economic volatility that could adversely impact our business, including the COVID-19 pandemic 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 15, 2022, 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 net income, normalized for extraordinary and non-recurring items, cash generated from Adjusted Operating Activities, net, Adjusted EBITDA, and trailing twelve month Adjusted EBITDA as “non-GAAP measures” that 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, net cash provided (used) by operating activities 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.

Net income normalized for extraordinary and non-recurring items represents Net income (loss) before non-cash expenses or income related to Changes in the value of earnouts and warrants. Cash generated from Adjusted Operating Activities, net represents Net cash provided by operating activities before cash interest. Adjusted EBITDA represents Net income (loss) before Interest, Income Taxes, Depreciation and Amortization, Share-based Compensation, EBITDA from Closed Centers, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, Charges attributed to new initiatives, Extraordinary unusual non-recurring gains or losses and Changes in the value of earnouts and warrants and settlement costs. Trailing twelve month Adjusted EBITDA represents Adjusted EBITDA over the most recent twelve month period.

The Company considers net income normalized for extraordinary and non-recurring items as an important financial measure because it provides an indicator of performance that is not affected by fluctuations in certain costs or other items. However, this measure 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 it does not reflect every cash expenditure and is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.

The Company considers Cash generated from Adjusted Operating Activities, net as an important financial measure because it provides an indicator of cash flow that is not affected by how the Company finances its operations. However, this measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of cash generation as reported under GAAP.

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. Additionally, we believe trailing twelve month Adjusted EBITDA provides the current run-rate for trending purposes, rather than annualizing the respective quarters, as the Company’s business is seasonal, with the second and third fiscal quarters being higher than the first and last quarters.

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 and trailing twelve month 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.

Bowlero Corp.

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

(Unaudited)

 

 

January 1, 2023

 

July 3, 2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

79,446

 

 

$

132,236

 

Restricted cash

 

10,363

 

 

 

 

Marketable securities

 

12,125

 

 

 

 

Accounts and notes receivable, net of allowance for doubtful accounts
of $609 and $504, respectively

 

8,807

 

 

 

5,227

 

Inventories, net

 

11,407

 

 

 

10,310

 

Prepaid expenses and other current assets

 

14,206

 

 

 

12,732

 

Assets held-for-sale

 

2,552

 

 

 

8,789

 

Total current assets

 

138,906

 

 

 

169,294

 

 

 

 

 

Property and equipment, net

 

652,847

 

 

 

534,721

 

Internal use software, net

 

14,901

 

 

 

11,423

 

Property and equipment under capital leases, net

 

254,583

 

 

 

262,703

 

Intangible assets, net

 

92,795

 

 

 

92,593

 

Goodwill

 

748,594

 

 

 

742,669

 

Other assets

 

38,643

 

 

 

41,022

 

Total assets

$

1,941,269

 

 

$

1,854,425

 

 

 

 

 

Liabilities, Temporary Equity and Stockholders’ Deficit

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

44,590

 

 

$

38,217

 

Accrued expenses

 

76,612

 

 

 

62,854

 

Current maturities of long-term debt

 

5,821

 

 

 

4,966

 

Other current liabilities

 

11,995

 

 

 

13,123

 

Total current liabilities

 

139,018

 

 

 

119,160

 

 

 

 

 

Long-term debt, net

 

876,856

 

 

 

865,090

 

Long-term obligations under capital leases

 

394,836

 

 

 

397,603

 

Earnout liability

 

282,557

 

 

 

210,952

 

Other long-term liabilities

 

79,354

 

 

 

54,418

 

Deferred income tax liabilities

 

15,213

 

 

 

14,882

 

Total liabilities

 

1,787,834

 

 

 

1,662,105

 

 

 

 

 

Commitments and Contingencies (Note 10)

 

 

 

 

 

 

 

Temporary Equity

 

 

 

Series A preferred stock

 

211,667

 

 

 

206,002

 

 

January 1, 2023

 

July 3, 2022

Stockholders’ Deficit

 

 

 

Class A common stock

$

11

 

 

$

11

 

Class B common stock

 

6

 

 

 

6

 

Additional paid-in capital

 

336,261

 

 

 

335,015

 

Treasury stock, at cost

 

(47,968

)

 

 

(34,557

)

Accumulated deficit

 

(344,950

)

 

 

(312,851

)

Accumulated other comprehensive loss

 

(1,592

)

 

 

(1,306

)

Total stockholders’ deficit

 

(58,232

)

 

 

(13,682

)

Total liabilities, temporary equity and stockholders’ deficit

$

1,941,269

 

 

$

1,854,425

 

Bowlero Corp.

Condensed Consolidated Statements of Operations

(Amounts in thousands)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

January 1,
2023

 

December 26,
2021

 

January 1,
2023

 

December 26,
2021

Revenues

$

273,385

 

 

$

205,190

 

 

$

503,645

 

 

$

386,168

 

Costs of revenues

 

179,706

 

 

 

141,383

 

 

 

344,908

 

 

 

268,251

 

Gross profit

 

93,679

 

 

 

63,807

 

 

 

158,737

 

 

 

117,917

 

 

 

 

 

 

 

 

 

Operating (income) expenses:

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

34,452

 

 

 

93,283

 

 

 

66,946

 

 

 

114,698

 

Asset impairment

 

 

 

 

 

 

 

84

 

 

 

 

Gain on sale of assets

 

(1,823

)

 

 

(124

)

 

 

(1,978

)

 

 

(154

)

Other operating expense

 

614

 

 

 

3,332

 

 

 

1,976

 

 

 

3,809

 

Total operating expense

 

33,243

 

 

 

96,491

 

 

 

67,028

 

 

 

118,353

 

 

 

 

 

 

 

 

 

Operating profit (loss)

 

60,436

 

 

 

(32,684

)

 

 

91,709

 

 

 

(436

)

 

 

 

 

 

 

 

 

Other expenses:

 

 

 

 

 

 

 

Interest expense, net

 

27,379

 

 

 

23,880

 

 

 

50,949

 

 

 

46,808

 

Change in fair value of earnout liability

 

30,776

 

 

 

(22,542

)

 

 

71,536

 

 

 

(22,542

)

Change in fair value of warrant liability

 

 

 

 

70

 

 

 

 

 

 

70

 

Other income

 

(678

)

 

 

 

 

 

(630

)

 

 

 

Total other expense

 

57,477

 

 

 

1,408

 

 

 

121,855

 

 

 

24,336

 

 

 

 

 

 

 

 

 

Income (loss) before income tax expense
(benefit)

 

2,959

 

 

 

(34,092

)

 

 

(30,146

)

 

 

(24,772

)

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

1,524

 

 

 

362

 

 

 

1,953

 

 

 

(5,882

)

Net income (loss)

$

1,435

 

 

$

(34,454

)

 

$

(32,099

)

 

$

(18,890

)

Bowlero Corp.

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

January 1,
2023

 

December 26,
2021

 

January 1,
2023

 

December 26,
2021

Net cash provided by operating activities

$

80,306

 

 

$

27,745

 

 

$

115,879

 

 

$

59,285

 

Net cash used in investing activities

 

(100,513

)

 

 

(65,124

)

 

 

(163,005

)

 

 

(160,848

)

Net cash (used in) provided by financing
activities

 

(41

)

 

 

31,121

 

 

 

5,126

 

 

 

30,213

 

Effect of exchange rate changes on cash

 

(304

)

 

 

(145

)

 

 

(427

)

 

 

(84

)

Net decrease in cash, cash equivalents and
restricted cash

 

(20,552

)

 

 

(6,403

)

 

 

(42,427

)

 

 

(71,434

)

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash at
beginning of period

 

110,361

 

 

 

122,062

 

 

 

132,236

 

 

 

187,093

 

 

 

 

 

 

 

 

 

Cash, cash equivalents and restricted cash
at end of period

$

89,809

 

 

$

115,659

 

 

$

89,809

 

 

$

115,659

 

GAAP to non-GAAP Reconciliations

 

 

 

Adjusted EBITDA Reconciliation

 

 

Three Months Ended

 

Six Months Ended

(in thousands)

 

January 1,
2023

December
26, 2021

December
29, 2019

 

January 1,
2023

December
26, 2021

December
29, 2019

Consolidated

 

 

 

 

 

 

 

 

Revenues

 

$

273,385

 

$

205,190

 

$

184,842

 

 

$

503,645

 

$

386,168

 

$

333,412

 

Net income (loss) - GAAP

 

 

1,435

 

 

(34,454

)

 

6,448

 

 

 

(32,099

)

 

(18,890

)

 

(13,271

)

Adjustments:

 

 

 

 

 

 

 

 

Interest expense

 

 

27,379

 

 

23,880

 

 

19,805

 

 

 

50,949

 

 

46,808

 

 

39,470

 

Income tax expense (benefit)

 

 

1,524

 

 

362

 

 

153

 

 

 

1,953

 

 

(5,882

)

 

306

 

Depreciation, amortization and
   impairment charges

 

 

29,303

 

 

25,660

 

 

21,772

 

 

 

55,654

 

 

48,501

 

 

42,874

 

Share-based compensation

 

 

4,036

 

 

42,555

 

 

852

 

 

 

7,684

 

 

43,356

 

 

1,721

 

Closed center EBITDA (1)

 

 

768

 

 

398

 

 

1,885

 

 

 

1,147

 

 

818

 

 

3,001

 

Foreign currency exchange (gain) loss

 

 

(182

)

 

86

 

 

(236

)

 

 

(253

)

 

121

 

 

(236

)

Asset disposition (gain) loss

 

 

(1,823

)

 

(123

)

 

219

 

 

 

(1,978

)

 

(153

)

 

285

 

Transactional and other advisory
   costs (2)

 

 

5,880

 

 

29,149

 

 

1,087

 

 

 

8,106

 

 

31,978

 

 

2,395

 

Charges attributed to new initiatives (3)

 

 

40

 

 

65

 

 

230

 

 

 

85

 

 

206

 

 

529

 

Extraordinary unusual non-recurring
   losses (gains) (4)

 

 

(2,181

)

 

1,662

 

 

673

 

 

 

(520

)

 

1,221

 

 

745

 

Changes in the value of earnouts and
   warrants (5)

 

 

30,776

 

 

(22,472

)

 

 

 

 

71,536

 

 

(22,472

)

 

 

Adjusted EBITDA

 

$

96,955

 

$

66,768

 

$

52,888

 

 

$

162,264

 

$

125,612

 

$

77,819

 

Adjusted EBITDA Margin

 

 

35.5

%

 

32.5

%

 

28.6

%

 

 

32.2

%

 

32.5

%

 

23.3

%

 

 

 

 

 

 

 

 

 

Bowling Operations SG&A Expense

 

 

26,366

 

 

20,219

 

 

19,617

 

 

 

50,861

 

 

37,133

 

 

38,974

 

Media & Other Income

 

 

(5,323

)

 

(4,228

)

 

(316

)

 

 

(9,068

)

 

(8,397

)

 

(500

)

Center EBITDA

 

$

117,998

 

$

82,759

 

$

72,189

 

 

$

204,057

 

$

154,348

 

$

116,293

 

  1. The closed center adjustment is to remove EBITDA for closed centers. Closed centers are those centers that are closed for a variety of reasons, including permanent closure, newly acquired or built centers prior to opening, centers closed for renovation or rebranding and conversion. Closed centers do not include centers closed in compliance with local, state and federal government restrictions due to COVID-19. If a center is not open on the last day of the reporting period, it will be considered closed for that reporting period. If the center is closed on the first day of the reporting period for permanent closure, the center 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 charges is to remove charges attributed to new initiatives include charges with the undertaking and/or implementation of new initiatives, business optimization activities, cost savings initiatives, cost rationalization programs, operating expense reductions and/or synergies and/or similar initiatives and/or programs (including in connection with any integration, restructuring or transition, any reconstruction, decommissioning, recommissioning, or reconfiguration of fixed assets for alternative uses, any office or facility opening and/or pre-opening), including any inventory optimization program and/or any curtailment, any business optimization charge, any restructuring charge (including any charges relating to any tax restructuring), any charge relating to the closure or consolidation of any office or facility (including but not limited to rent terminations, moving costs and legal costs), any systems implementation charge, any severance charge, any one time compensation charge, any charge relating to entry into a new market, any charge relating to any strategic initiative or contract, any charge relating to any entry into new markets and contracts, any lease run-off charge, any charge associated with improvements to information technology (IT) or accounting functions, losses related to temporary decreases in work volume and expenses related to maintaining underutilized personnel, any charge relating to a new contract, any consulting charge and/or any corporate development charge; provided, that, in this case of any such charge, the results of any such action relating to such charge are projected by in good faith to be achieved with 24 months of undertaking.
  4. The adjustment for extraordinary unusual non-recurring gains or losses is to remove extraordinary gains and losses, which include any gain or charge from any extraordinary item as determined in good faith by the Company and/or any non-recurring or unusual item as determined in good faith by the Company and/or any charge associated with and/or payment of any legal settlement, fine, judgment or order.
  5. The adjustment for changes in the value of earnouts and warrants is to remove the impact of the revaluation of the earnouts and warrants. As a result of the Company's de-SPAC transaction, the Company recorded liabilities for earnouts and warrants. Changes in the fair value of the earnout and warrant liabilities are recognized in the statement of operations. Decreases in the liability will have a favorable impact on the income statement and increases in the liability will have an unfavorable impact.

Trailing twelve month Adjusted EBITDA Reconciliation

Net loss - GAAP and Adjusted EBITDA

 

(in thousands)

June 27,
2021

September
26, 2021

December
26, 2021

March 27,
2022

July 3,
2022

October 2,
2022

January 1,
2023

Consolidated

 

 

 

 

 

 

 

Revenues

$

395,234

 

$

526,281

 

$

657,483

 

$

803,091

 

$

911,705

 

$

960,987

 

$

1,029,182

 

Net loss - GAAP

$

(126,461

)

$

(70,125

)

$

(55,442

)

$

(50,338

)

$

(29,934

)

$

(79,032

)

$

(43,143

)

Adjustments:

 

 

 

 

 

 

 

Interest expense

 

88,857

 

 

90,612

 

 

92,239

 

 

92,229

 

 

94,460

 

 

95,102

 

 

98,601

 

Income tax (benefit) expense

 

(1,035

)

 

(7,403

)

 

(7,147

)

 

(7,457

)

 

(690

)

 

5,983

 

 

7,145

 

Depreciation, amortization
   and impairment charges

 

91,851

 

 

92,241

 

 

95,363

 

 

102,359

 

 

108,505

 

 

112,015

 

 

115,658

 

Share-based compensation

 

3,164

 

 

3,116

 

 

44,975

 

 

47,169

 

 

50,236

 

 

53,083

 

 

14,564

 

Closed center EBITDA (1)

 

4,039

 

 

3,880

 

 

3,374

 

 

3,179

 

 

1,480

 

 

1,439

 

 

1,809

 

Foreign currency exchange
   (gain) loss

 

(188

)

 

(155

)

 

126

 

 

(68

)

 

5

 

 

(101

)

 

(369

)

Asset disposition (gain) loss

 

(46

)

 

(77

)

 

(58

)

 

(1,723

)

 

(4,109

)

 

(4,234

)

 

(5,934

)

Transactional and other
   advisory costs (2)

 

10,737

 

 

12,056

 

 

40,474

 

 

43,379

 

 

38,140

 

 

37,537

 

 

14,268

 

Charges attributed to new
   initiatives (3)

 

531

 

 

540

 

 

489

 

 

396

 

 

362

 

 

266

 

 

241

 

Extraordinary unusual non-
   recurring losses (4)

 

1,670

 

 

65

 

 

3,374

 

 

3,009

 

 

5,131

 

 

7,233

 

 

3,390

 

Changes in the value of
   earnouts and warrants and
   settlement costs (5)

 

 

 

 

 

(22,472

)

 

44,145

 

 

52,789

 

 

93,549

 

 

146,797

 

Adjusted EBITDA

$

73,119

 

$

124,750

 

$

195,295

 

$

276,279

 

$

316,375

 

$

322,840

 

$

353,027

 

Adjusted EBITDA Margin

 

18.5

%

 

23.7

%

 

29.7

%

 

34.4

%

 

34.7

%

 

33.6

%

 

34.3

%

  1. The closed center adjustment is to remove EBITDA for closed centers. Closed centers are those centers that are closed for a variety of reasons, including permanent closure, newly acquired or built centers prior to opening, centers closed for renovation or rebranding and conversion. Closed centers do not include centers closed in compliance with local, state and federal government restrictions due to COVID-19. If a center is not open on the last day of the reporting period, it will be considered closed for that reporting period.If the center is closed on the first day of the reporting period for permanent closure, the center 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 charges is to remove charges attributed to new initiatives include charges with the undertaking and/or implementation of new initiatives, business optimization activities, cost savings initiatives, cost rationalization programs, operating expense reductions and/or synergies and/or similar initiatives and/or programs (including in connection with any integration, restructuring or transition, any reconstruction, decommissioning, recommissioning, or reconfiguration of fixed assets for alternative uses, any office or facility opening and/or pre-opening), including any inventory optimization program and/or any curtailment, any business optimization charge, any restructuring charge (including any charges relating to any tax restructuring), any charge relating to the closure or consolidation of any office or facility (including but not limited to rent terminations, moving costs and legal costs), any systems implementation charge, any severance charge, any one time compensation charge, any charge relating to entry into a new market, any charge relating to any strategic initiative or contract, any charge relating to any entry into new markets and contracts, any lease run-off charge, any charge associated with improvements to information technology (IT) or accounting functions, losses related to temporary decreases in work volume and expenses related to maintaining underutilized personnel, any charge relating to a new contract, any consulting charge and/or any corporate development charge; provided, that, in this case of any such charge, the results of any such action relating to such charge are projected by in good faith to be achieved with 24 months of undertaking.
  4. The adjustment for extraordinary unusual non-recurring gains or losses is to remove extraordinary gains and losses, which include any gain or charge from any extraordinary item as determined in good faith by the Company and/or any non-recurring or unusual item as determined in good faith by the Company and/or any charge associated with and/or payment of any legal settlement, fine, judgment or order.
  5. The adjustment for changes in the value of earnouts and warrants is to remove the impact of the revaluation of the earnouts and warrants. As a result of the Company's de-SPAC transaction, the Company recorded liabilities for earnouts and warrants. Changes in the fair value of the earnout and warrant liabilities are recognized in the statement of operations. Decreases in the liability will have a favorable impact on the income statement and increases in the liability will have an unfavorable impact. The adjustment also includes realized costs associated with the settlement of warrants during past reporting periods.

NORMALIZED NET INCOME RECONCILIATION

 

 

 

 

 

Three Months Ended

 

Six Months Ended

(in thousands)

 

January 1,
2023

 

December 26,
2021

 

January 1,
2023

 

December 26,
2021

 

 

 

 

 

 

 

 

 

Net Income (loss) - GAAP

 

$

1,435

 

$

(34,454

)

 

$

(32,099

)

 

$

(18,890

)

 

 

 

 

 

 

 

 

 

Change in fair value of earnouts and warrants

 

 

30,776

 

 

(22,472

)

 

 

71,536

 

 

 

(22,472

)

Share-based compensation

 

 

 

 

42,212

 

 

 

 

 

 

42,212

 

Transactional and other advisory costs

 

 

 

 

29,149

 

 

 

 

 

 

29,149

 

 

 

 

 

 

 

 

 

 

Normalized Net Income

 

$

32,211

 

$

14,435

 

 

$

39,437

 

 

$

29,999

 

NET OPERATING ACTIVITIES RECONCILIATION

 

 

 

 

 

 

 

Three Months Ended

(in thousands)

 

January 1, 2023

 

December 26,
2021

 

 

 

 

 

Net Cash Provided by Operating Activities - GAAP

 

$

80,306

 

$

27,745

 

 

 

 

 

Cash Paid for Interest

 

 

25,694

 

 

20,820

 

 

 

 

 

Adjusted Operating Activities, net

 

$

106,000

 

$

48,565

1 The pre-pandemic comparable period for quarter ended January 1, 2023 is the quarter ended on December 29, 2019.

2 Same-store sales are measured by comparing revenues for centers open for the entire duration of both the current and comparable measurement periods.

3 Revenue growth is calculated as the growth in Bowling Center Revenue compared to the comparable week during the pre-pandemic 52-week period beginning March 2019 and ending February 2020. Total Bowling Center Revenue (i) excludes media-related revenue and closed bowling centers from both current period and pre-pandemic and prior year periods and (ii) includes new bowling centers that have opened since March 2020. For weeks ending between September 26, 2021 and December 26, 2021, the percentages above are calculated by comparing each week to the comparable week in 2019. For weeks ending between January 2, 2022 and February 27, 2022, the percentages above are calculated by comparing each week to the comparable week in 2020. For weeks ending between March 6, 2022 and February 5, 2023, the percentages above are calculated by comparing each week to the comparable week in 2019. Total Bowling Center Revenue for each date is the 13-week rolling average of weekly Total Bowling Center Revenue. We use the 13-week rolling average because the revenue performance in individual weeks can be positively or negatively impacted by timing shift of holiday/sporting events, holidays moving to weekends, and extreme weather events. Data for all weeks following the close of the quarter ended on January 1, 2023 are preliminary and have not been audited or reviewed and are forward-looking statements based solely on information available to us as of the date of this announcement.

Contacts

For Media:
Bowlero Corp. Public Relations
PR@BowleroCorp.com

For Investors:
Bowlero Corp. Investor Relations
IRSupport@BowleroCorp.com

Ashley DeSimone
Ashley.DeSimone@icrinc.com

Contacts

For Media:
Bowlero Corp. Public Relations
PR@BowleroCorp.com

For Investors:
Bowlero Corp. Investor Relations
IRSupport@BowleroCorp.com

Ashley DeSimone
Ashley.DeSimone@icrinc.com