Bowlero Announces Fourth Quarter and Full Year Results for Fiscal Year 2023
Bowlero Corp. reports record full-year revenue of $1,059 million, with 16.1% growth over FY22 and 57.5% growth over FY19. Net income of $82.0 million and adjusted EBITDA of $354.3 million. 16 new centers added to the portfolio. Fiscal Year 2024 guidance expects revenue to be up 10% to 15% excluding $21 million of service revenue, with adjusted EBITDA margin of 32% to 34%. Share repurchase program increased to $200 million.
Positive
Record full-year revenue with significant growth over previous years
Net income and adjusted EBITDA show positive financial performance
Expansion of portfolio with 16 new centers
Guidance for fiscal year 2024 expects continued revenue growth and increased investment in the business
09/11/2023 - 07:31 AM
Record Full Year 2023 with $1,059 million 16.1% Revenue Growth over FY22 and 57.5% Revenue Growth over FY19
RICHMOND, Va. --(BUSINESS WIRE)--
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 $28.3 million $267.7 million $29.7 million 54.0% versus Fourth quarter Fiscal Year 2019
Total Bowling Center Revenue grew $5.4 million 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 $147.1 million 16.1% versus $911.7 million $20.7 million 57.5% versus Fiscal Year 2019
Total Bowling Center Revenue grew $165.2 million 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 $11.90 $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 $1.14 billion $1.19 billion 32% to 34% , which equates to Adjusted EBITDA of $365 million $405 million $160 million $40 million $75 million
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 $504
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,
2 023
July 3,
2 022
July 2,
2 023
July 3,
2 022
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,
2 023
July 3,
2 022
July 2,
2 023
July 3,
2 022
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
$316
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230911336163/en/
For Media:
PR@BowleroCorp.com
For Investors:
IRSupport@BowleroCorp.com
Ashley DeSimone
Ashley.DeSimone@icrinc.com
Source: Bowlero Corp
