Bowlero Announces Fourth Quarter and Full Year Results for Fiscal Year 2023
- 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
- None.
Record Full Year 2023 with
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 and54.1% 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 and57.8% versus Fiscal Year 2019 -
Normalized Calendar Same Store Revenue growth of
12.8% versus prior year and31.9% 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
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
Fiscal Year 2024 Guidance
Today, the Company provided financial guidance for fiscal year 2024. We expect Revenue to be up
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
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
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 |
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 |
|
|
|
|
|
|
||
Net income (loss) - GAAP |
|
|
|
|
|
|
||
Net income (loss) margin |
|
|
|
|
|
(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 |
|
|
|
|
|
|
||
Adjusted EBITDA Margin |
|
|
|
|
|
|
||
(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:
Bowlero Corp. Public Relations
PR@BowleroCorp.com
For Investors:
Bowlero Corp. Investor Relations
IRSupport@BowleroCorp.com
Ashley DeSimone
Ashley.DeSimone@icrinc.com
Source: Bowlero Corp
