Record Full Year 2023 with $1,059 million of
Revenue. 16.1% Revenue Growth over FY22 and 57.5% Revenue Growth
over FY19
Bowlero Corp. (NYSE: BOWL) (“Bowlero” or the “Company”), the
world’s largest owner and operator of bowling centers, today
provided financial results for the fourth quarter and the full 2023
Fiscal Year, which ended on July 2, 2023. Fourth quarter 2022 and
Fiscal Year 2022 had an extra week of results compared to Fourth
quarter 2023 and Fiscal Year 2023.
Fourth Quarter
Highlights:
- Revenue was $239.4 million, down $28.3 million or (10.6)% from
$267.7 million in the prior year, in which out-of-period Service
Revenue and the 53rd week & related calendar shift totaled
$29.7 million. Revenue was up 54.0% versus Fourth quarter Fiscal
Year 2019
- Total Bowling Center Revenue grew $5.4 million or 2.4% versus
prior year and 54.1% versus Fourth quarter Fiscal Year 2019
- Normalized Calendar Same Store Revenue decline of (2.6)% versus
prior year and growth of 29.3% versus Fourth quarter Fiscal Year
2019
- Net income of $146.2 million
- Adjusted EBITDA of $64.5 million
- Total centers in operation as of July 2, 2023 were 328
Fiscal Year 2023
Highlights:
- Revenue was $1,058.8 million, up $147.1 million or 16.1% versus
$911.7 million in the prior year, which included revenue from the
53rd week & related calendar shift totaling $20.7 million.
Revenue was up 57.5% versus Fiscal Year 2019
- Total Bowling Center Revenue grew $165.2 million or 19.4%
versus prior year and 57.8% versus Fiscal Year 2019
- Normalized Calendar Same Store Revenue growth of 12.8% versus
prior year and 31.9% versus Fiscal Year 2019
- Net income of $82.0 million
- Adjusted EBITDA of $354.3 million
- 16 new centers added to the portfolio
"We finished Fiscal Year 2023 with 16% growth over Fiscal Year
2022 and 58% over Fiscal Year 2019. The same-store comp against a
strong fourth quarter in Fiscal 2022 was down low-single digits in
one of our seasonally smallest quarters. While April began with a
decline versus the prior year, we saw an improving trend over the
course of the quarter in conjunction with innovating our offerings
to encourage more retail spend in our centers. We are in the early
stages of pioneering new ways to increase wallet share from our
vast customer base, and these changes are resonating with our
guests,” said Tom Shannon, Founder, Chief Executive Officer and
President. "The capital deployment opportunities are significant.
Fiscal Year 2024 will be an investment year to drive top and bottom
line growth. We remain confident in the upcoming fiscal year in
which we have several exciting initiatives underway, including the
acquisition of Lucky Strike, a robust M&A pipeline, new build
activity in marquee markets, accelerated center conversions, and
the continued rollout of initiatives to enhance the customer
experience and increase wallet share. Additionally, as we
anniversary the second year of our go-public transaction and 27th
since our first center acquisition, we are excited to provide
Fiscal Year 2024 guidance.”
Remediation of Material Weaknesses
In our Fiscal Year 2022 Form 10-K, material weaknesses were
identified in controls and procedures as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as
amended, related to certain financial reporting processes.
Throughout fiscal year 2023, management implemented measures
designed to remediate the identified material weaknesses.
Management has determined that the material weaknesses identified
in the prior year have been remediated as of July 2, 2023.
Share Repurchase Program
During the quarter, the Company repurchased 6.4 million shares
of Class A common stock at an average price of $12.64, bringing the
total shares acquired under the program to 11.3 million and the
average purchase price to $11.90. Pro forma for additional Class A
common stock repurchased subsequent to quarter end, the total Class
A and Class B shares outstanding as of August 30, 2023 are 160.2
million. On September 6, 2023, the Board authorized an increase to
the share repurchase program to $200 million.
Fiscal Year 2024 Guidance
Today, the Company provided financial guidance for fiscal year
2024. We expect Revenue to be up 10% to 15% excluding the $21
million of Service Revenue, which equates to $1.14 billion to $1.19
billion of Revenue. Adjusted EBITDA margin is expected to be 32% to
34%, which equates to Adjusted EBITDA of $365 million to $405
million. We expect to heavily reinvest in the business in fiscal
year 2024, with more than $160 million allocated to acquisitions,
$40 million to new builds, and $75 million to conversions.
Investor Webcast Information
Listeners may access an investor webcast hosted by Bowlero. The
webcast and results presentation will be accessible at 10:00 AM ET
on September 11, 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 328 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, 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 centers; 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 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 11,
2023, 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 Total Bowling Center Revenue, Normalized
Calendar 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.
Total Bowling Center Revenue represents Total Revenue less
Non-Center Related Revenue, Revenue from Closed Centers (as defined
below), Service Revenue, and Revenue from the 53rd Week and
associated Calendar Shift, if applicable. Normalized Calendar Same
Store Revenue represents Total Revenue less Non-Center Related
Revenue, Revenue from Closed Centers, Service Revenue, Revenue from
the 53rd Week and associated Calendar Shift, if applicable, and
Acquired Revenue. 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, changes in the value of
earnouts and warrants and settlement costs, and other.
The Company considers Total Bowling Center Revenue as an
important financial measure because it provides a financial measure
of revenue directly associated with bowling center operations. The
Company also considers Normalized Calendar Same Store Revenue as an
important financial measure because it provides comparable revenue
for centers open for the entire duration of both the current and
comparable measurement periods, and removes the impact of the 53rd
week and associated calendar shift that are non-recurring in
nature.
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.
GAAP Financial Information
Bowlero Corp.
Condensed Consolidated
Balance Sheets
(Amounts in thousands,
except share and per share amounts)
(Unaudited)
July 2, 2023
July 3, 2022
Assets
Current assets:
Cash and cash equivalents
$
195,633
$
132,236
Accounts and notes receivable, net of
allowance for doubtful accounts of $551 and $504, respectively
3,092
5,227
Inventories, net
11,470
10,310
Prepaid expenses and other current
assets
18,395
12,732
Assets held-for-sale
2,069
8,789
Total current assets
230,659
169,294
Property and equipment, net
697,850
534,721
Internal use software, net
17,914
11,423
Property and equipment under capital
leases, net
—
262,703
Operating lease right of use assets,
net
449,085
—
Finance lease right of use assets, net
515,339
—
Intangible assets, net
90,986
92,593
Goodwill
753,538
742,669
Deferred income tax asset
73,807
—
Other assets
12,096
41,022
Total assets
$
2,841,274
$
1,854,425
Liabilities, Temporary Equity and
Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses
$
121,226
$
101,071
Current maturities of long-term debt
9,338
4,966
Current obligations of operating lease
liabilities
23,866
—
Other current liabilities
14,281
13,123
Total current liabilities
168,711
119,160
Long-term debt, net
1,138,687
865,090
Long-term obligations under capital
leases
—
397,603
Long-term obligations of operating lease
liabilities
431,295
—
Long-term obligations of financing lease
liabilities
652,450
—
Earnout liability
112,041
210,952
Other long-term liabilities
34,380
54,418
Deferred income tax liabilities
4,160
14,882
Total liabilities
2,541,724
1,662,105
Commitments and Contingencies
Temporary Equity
Series A preferred stock
$
144,329
$
206,002
Stockholders’ Equity (Deficit)
Class A common stock
11
11
Class B common stock
6
6
Additional paid-in capital
506,112
335,015
Treasury stock, at cost
(135,401
)
(34,557
)
Accumulated deficit
(219,659
)
(312,851
)
Accumulated other comprehensive income
(loss)
4,152
(1,306
)
Total stockholders’ equity (deficit)
155,221
(13,682
)
Total liabilities, temporary equity and
stockholders’ equity (deficit)
$
2,841,274
$
1,854,425
Bowlero Corp.
Condensed Consolidated
Statements of Operations
(Amounts in thousands)
(Unaudited)
Three Months Ended
Twelve Months Ended
July 2,
2023
July 3,
2022
July 2,
2023
July 3,
2022
Revenues
$
239,420
$
267,717
$
1,058,790
$
911,705
Costs of revenues
182,172
185,229
716,384
609,971
Gross profit
57,248
82,488
342,406
301,734
Operating (income) expenses:
Selling, general and administrative
expenses
35,082
35,689
137,919
180,702
Asset impairment
1,028
1,548
1,601
1,548
Gain on sale of assets
(70
)
(2,354
)
(2,240
)
(4,109
)
Other operating expense
1,701
1,260
4,326
6,968
Total operating expense
37,741
36,143
141,606
185,109
Operating profit
19,507
46,345
200,800
116,625
Other expenses (income):
Interest expense, net
30,785
25,359
110,851
94,460
Change in fair value of earnout
liability
(73,406
)
2,564
85,352
25,800
Change in fair value of warrant
liability
—
6,092
—
26,840
Other expense
1,436
(12
)
6,792
149
Total other (income) expense
(41,185
)
34,003
202,995
147,249
Income (loss) before income tax
benefit
60,692
12,342
(2,195
)
(30,624
)
Income tax (benefit) Expense
(85,528
)
5,399
(84,243
)
(690
)
Net income (loss)
146,220
6,943
82,048
(29,934
)
Bowlero Corp.
Condensed Consolidated
Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
Three Months Ended
Twelve Months Ended
July 2,
2023
July 3,
2022
July 2,
2023
July 3,
2022
Net cash provided by operating
activities
$
8,985
$
34,809
$
217,787
$
177,670
Net cash used in investing activities
(65,269
)
(41,601
)
(253,218
)
(220,345
)
Net cash provided by (used in) financing
activities
90,993
(33,888
)
98,957
(12,136
)
Effect of exchange rate changes on
cash
(120
)
(61
)
(129
)
(46
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
34,589
(40,741
)
63,397
(54,857
)
Cash, cash equivalents and restricted cash
at beginning of period
161,044
172,977
132,236
187,093
Cash, cash equivalents and restricted
cash at end of period
$
195,633
$
132,236
$
195,633
$
132,236
GAAP to non-GAAP Reconciliations
Same Store Reconciliation –
FY23 vs. FY19
Same Store Reconciliation –
FY23 vs. FY22
(in thousands)
4Q FY19
4Q FY23
FY19
FY23
4Q FY22
4Q FY23
FY22
FY23
Total Revenue - Reported
$
155,494
$
239,420
$
672,175
$
1,058,790
$
267,717
$
239,420
$
911,705
$
1,058,790
less: Non-Center Related
(including Closed Centers)
(6,344
)
(5,545
)
(28,387
)
(21,613
)
(7,868
)
(5,545
)
(25,287
)
(21,613
)
less: Service Revenue
—
(4,088
)
—
(21,019
)
(14,796
)
(4,088
)
(14,796
)
(21,019
)
less: 53rd Week / Calendar Shift
—
—
—
—
(20,663
)
—
(20,663
)
—
Total Bowling Center Revenue
$
149,150
$
229,787
$
643,788
$
1,016,158
$
224,390
$
229,787
$
850,959
$
1,016,158
less: Acquired Revenue
(1,382
)
(38,729
)
(17,419
)
(189,715
)
(168
)
(11,406
)
(47,168
)
(109,737
)
Normalized Calendar Same Store Revenue
$
147,768
$
191,058
$
626,369
$
826,443
$
224,222
$
218,381
$
803,791
$
906,421
% Year-over-Year
Change
Total Revenue – Reported
54.0
%
57.5
%
(10.6
)%
16.1
%
Total Bowling Center Revenue
54.1
%
57.8
%
2.4
%
19.4
%
Normalized Calendar Same Store Revenue
29.3
%
31.9
%
(2.6
)%
12.8
%
Adjusted EBITDA
Reconciliation
Three Months Ended
Twelve Months Ended
(in thousands)
July 2, 2023
July 3, 2022
July 2, 2023
July 3, 2022
Consolidated
Revenue
$239,420
$267,717
$1,058,790
$911,705
Net income (loss) - GAAP
$146,220
$6,943
$82,048
$(29,934)
Net income (loss) margin
61.1%
2.6%
7.7%
(3.3)%
Adjustments:
Interest expense
32,095
25,359
112,160
94,460
Income tax (benefit) expense
(85,528)
5,399
(84,243)
(690)
Depreciation, amortization and impairment
charges
31,693
30,018
117,281
108,505
Share-based compensation
3,851
3,860
15,742
50,236
Closed center EBITDA (1)
1,692
51
3,319
1,480
Foreign currency exchange (gain) loss
(128)
(26)
(53)
5
Asset disposition gain
(70)
(2,355)
(2,240)
(4,109)
Transactional and other advisory costs
(2)
6,804
2,762
23,635
43,512
Changes in the value of earnouts and
warrants (3)
(73,406)
8,644
85,352
52,789
Other, net (4)
1,270
1,737
1,343
121
Adjusted EBITDA
$64,493
$82,392
$354,344
$316,375
Adjusted EBITDA Margin
26.9%
30.8%
33.5%
34.7%
(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. 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 changes in the value of
earnouts and warrants is to remove of the impact of the revaluation
of the earnouts and warrants. As a result of the Business
Combination, 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
statement of operations 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.
(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 and (ii) other individually de minimis expenses.
Certain prior year amounts have been reclassified to conform to
current year presentation.
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version on businesswire.com: https://www.businesswire.com/news/home/20230911336163/en/
For Media: Bowlero Corp. Public Relations PR@BowleroCorp.com
For Investors: Bowlero Corp. Investor Relations
IRSupport@BowleroCorp.com
Ashley DeSimone Ashley.DeSimone@icrinc.com
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