Bowlero Reports First Quarter Results for Fiscal Year 2025
Quarter Highlights:
-
Revenue increased 14.4% to
$260.2 million from$227.4 million in the previous year - Total Location Revenue increased 17.5% versus the prior year
- Same Store Revenue increased 0.4% versus the prior year
-
Net income of
$23.1 million versus prior year income of$18.2 million -
Adjusted EBITDA of
$62.9 million versus$52.1 million in the prior year -
From
July 1, 2024 throughNovember 4, 2024 , opened two new builds and acquired one bowling location, five family entertainment centers and one water park. Total locations in operation as ofNovember 4, 2024 is 3611
“Total Location Revenue grew 17.5% year over year in the quarter as we outperformed the market driven by increased customer wallet share through heightened food, beverage, and experiential offerings,” said Founder, Chairman, and CEO
“Cash flow from operations in the quarter was a record for the seasonally small first quarter as we focus on operational efficiencies to expand margins and improve cash flow conversion. Mobile ordering is now available in all locations. We also have reformatted our income statement to provide investors new visibility into revenue segments and 4-wall profitability,” added
Share Repurchase and Capital Return Program Update
From
The Board of Directors declared a quarterly cash dividend of
Fiscal Year 2025 Guidance
After completing the first quarter,
Investor Webcast Information
Listeners may access an investor webcast hosted by
About
Forward Looking Statements
Some of the statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risk, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions and forecasts. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "anticipate," "believe," “confident,” “continue,” "could," "estimate," "expect," "intend," “likely,” "may," "plan," “possible,” "potential," "predict," "project," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date of this release and are based on our management’s current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to: our ability to design and execute our business strategy; changes in consumer preferences and buying patterns; our ability to compete in our markets; the occurrence of unfavorable publicity; risks associated with long-term non-cancellable leases for our locations; our ability to retain key managers; risks associated with our substantial indebtedness and limitations on future sources of liquidity; our ability to carry out our expansion plans; our ability to successfully defend litigation brought against us; our ability to adequately obtain, maintain, protect and enforce our intellectual property and proprietary rights and claims of intellectual property and proprietary right infringement, misappropriation or other violation by competitors and third parties; failure to hire and retain qualified employees and personnel; the cost and availability of commodities and other products we need to operate our business; cybersecurity breaches, cyber-attacks and other interruptions to our and our third-party service providers’ technological and physical infrastructures; catastrophic events, including war, terrorism and other conflicts; public health emergencies and pandemics, such as the COVID-19 pandemic, or natural catastrophes and accidents; changes in the regulatory atmosphere and related private sector initiatives; fluctuations in our operating results; economic conditions, including the impact of increasing interest rates, inflation and recession; and other factors described under the section titled “Risk Factors” in the Company's Annual Report on Form 10-K filed with the
Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined under Generally Accepted Accounting Principles (“GAAP”), we disclose Revenue Excluding Service Fee Revenue, Total Location Revenue, Same Store Revenue and Adjusted EBITDA as “non-GAAP measures”, which management believes provide useful information to investors because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for revenue, net income, or any other operating performance or liquidity measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Our fiscal year 2025 guidance measures (other than revenue) are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measure because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Such items include, but are not limited to, acquisition related expenses, share-based compensation and other items not reflective of the company's ongoing operations.
Revenue Excluding Service Fee Revenue represents total Revenue less Service Fee Revenue. Total Location Revenue represents total Revenue less Non-Location Related Revenue, Revenue from Closed Locations, and Service Fee Revenue, if applicable. Same Store Revenue represents total Revenue less Non-Location Related Revenue, Revenue from Closed Locations, Service Fee Revenue, if applicable, and Acquired Revenue. Adjusted EBITDA represents Net Income (Loss) before Interest Expense, Income Taxes, Depreciation and Amortization, Impairment and Other Charges, Share-based Compensation, EBITDA from Closed Locations, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, changes in the value of earnouts, and other.
The Company considers Revenue Excluding Service Fee Revenue as an important financial measure because it provides a financial measure of revenue directly associated with consumer discretionary spending and Total Location Revenue as an important financial measure because it provides a financial measure of revenue directly associated with location operations. The Company also considers Same Store Revenue as an important financial measure because it provides comparable revenue for locations open for the entire duration of both the current and comparable measurement periods.
The Company considers Adjusted EBITDA as an important financial measure because it provides a financial measure of the quality of the Company’s earnings. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure. Adjusted EBITDA is used by management in addition to and in conjunction with the results presented in accordance with GAAP. We have presented Adjusted EBITDA solely as a supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA:
- 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.
1 Two properties from a recent acquisition are excluded from the count
GAAP Financial Information
|
Condensed Consolidated Balance Sheets |
(Amounts in thousands, except share and per share amounts) |
(Unaudited) |
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
38,448 |
|
|
$ |
66,972 |
|
Accounts and notes receivable, net |
|
5,666 |
|
|
|
6,757 |
|
Inventories, net |
|
13,650 |
|
|
|
13,171 |
|
Prepaid expenses and other current assets |
|
30,365 |
|
|
|
25,316 |
|
Assets held-for-sale |
|
20 |
|
|
|
1,746 |
|
Total current assets |
|
88,149 |
|
|
|
113,962 |
|
|
|
|
|
||||
Property and equipment, net |
|
892,782 |
|
|
|
887,738 |
|
Operating lease right of use assets |
|
554,474 |
|
|
|
559,168 |
|
Finance lease right of use assets, net |
|
520,218 |
|
|
|
524,392 |
|
Intangible assets, net |
|
45,111 |
|
|
|
47,051 |
|
|
|
833,961 |
|
|
|
833,888 |
|
Deferred income tax asset |
|
122,847 |
|
|
|
112,106 |
|
Other assets |
|
34,884 |
|
|
|
35,730 |
|
Total assets |
$ |
3,092,426 |
|
|
$ |
3,114,035 |
|
|
|
|
|
||||
Liabilities, Temporary Equity and Stockholders’ Deficit |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable and accrued expenses |
$ |
146,022 |
|
|
$ |
135,784 |
|
Current maturities of long-term debt |
|
9,106 |
|
|
|
9,163 |
|
Current obligations of operating lease liabilities |
|
28,811 |
|
|
|
28,460 |
|
Other current liabilities |
|
8,381 |
|
|
|
9,399 |
|
Total current liabilities |
|
192,320 |
|
|
|
182,806 |
|
|
|
|
|
||||
Long-term debt, net |
|
1,130,141 |
|
|
|
1,129,523 |
|
Long-term obligations of operating lease liabilities |
|
567,209 |
|
|
|
561,916 |
|
Long-term obligations of finance lease liabilities |
|
681,222 |
|
|
|
680,213 |
|
Long-term financing obligations |
|
442,980 |
|
|
|
440,875 |
|
Earnout liability |
|
88,741 |
|
|
|
137,636 |
|
Other long-term liabilities |
|
26,093 |
|
|
|
26,471 |
|
Deferred income tax liabilities |
|
4,129 |
|
|
|
4,447 |
|
Total liabilities |
|
3,132,835 |
|
|
|
3,163,887 |
|
|
|
|
|
||||
Commitments and Contingencies |
|
|
|
||||
|
|
|
|
||||
|
|
|
|
||||
Temporary Equity |
|
|
|
||||
Series A preferred stock |
$ |
123,918 |
|
|
$ |
127,410 |
|
|
|
|
|
||||
Stockholders’ Deficit |
|
|
|
||||
Class A common stock |
|
11 |
|
|
|
11 |
|
Class B common stock |
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
509,929 |
|
|
|
510,675 |
|
|
|
(392,735 |
) |
|
|
(385,015 |
) |
Accumulated deficit |
|
(280,064 |
) |
|
|
(303,159 |
) |
Accumulated other comprehensive (loss) income |
|
(1,474 |
) |
|
|
220 |
|
Total stockholders’ deficit |
|
(164,327 |
) |
|
|
(177,262 |
) |
Total liabilities, temporary equity and stockholders’ deficit |
$ |
3,092,426 |
|
|
$ |
3,114,035 |
|
|
Condensed Consolidated Statements of Operations |
(Amounts in thousands) |
(Unaudited) |
|
Three Months Ended |
||||||
|
|
|
|
||||
Revenues |
|
|
|
||||
Bowling |
$ |
122,203 |
|
|
$ |
116,430 |
|
Food & beverage |
|
88,039 |
|
|
|
74,913 |
|
Amusement & other |
|
49,953 |
|
|
|
36,062 |
|
Total revenues |
|
260,195 |
|
|
|
227,405 |
|
|
|
|
|
||||
Costs and expenses |
|
|
|
||||
Location operating costs, excluding depreciation and amortization |
|
86,228 |
|
|
|
73,373 |
|
Location payroll and benefit costs |
|
67,436 |
|
|
|
63,054 |
|
Location food and beverage costs |
|
20,530 |
|
|
|
16,685 |
|
Selling, general and administrative expenses, excluding depreciation and amortization |
|
34,811 |
|
|
|
38,124 |
|
Depreciation and amortization |
|
36,983 |
|
|
|
31,352 |
|
Loss (gain) on impairment and disposal of fixed assets, net |
|
1,472 |
|
|
|
(1 |
) |
Other operating income, net |
|
(211 |
) |
|
|
(538 |
) |
Total costs and expenses |
|
247,249 |
|
|
|
222,049 |
|
|
|
|
|
||||
Operating income |
|
12,946 |
|
|
|
5,356 |
|
|
|
|
|
||||
Other (income) expenses |
|
|
|
||||
Interest expense, net |
|
48,670 |
|
|
|
37,449 |
|
Change in fair value of earnout liability |
|
(48,921 |
) |
|
|
(40,682 |
) |
Other expense |
|
— |
|
|
|
53 |
|
Total other income |
|
(251 |
) |
|
|
(3,180 |
) |
|
|
|
|
||||
Income before income tax benefit |
|
13,197 |
|
|
|
8,536 |
|
|
|
|
|
||||
Income tax benefit |
|
(9,898 |
) |
|
|
(9,683 |
) |
Net income |
$ |
23,095 |
|
|
$ |
18,219 |
|
|
Condensed Consolidated Statements of Cash Flows |
(Amounts in thousands) |
(Unaudited) |
|
Three Months Ended |
||||||
|
|
|
|
||||
Net cash provided by operating activities |
$ |
29,413 |
|
|
$ |
16,083 |
|
Net cash used in investing activities |
|
(39,924 |
) |
|
|
(176,576 |
) |
Net cash (used in) provided by financing activities |
|
(17,806 |
) |
|
|
5,091 |
|
Effect of exchange rate changes on cash |
|
(207 |
) |
|
|
(143 |
) |
Net decrease in cash and cash equivalents |
|
(28,524 |
) |
|
|
(155,545 |
) |
|
|
|
|
||||
Cash and cash equivalents at beginning of period |
|
66,972 |
|
|
|
195,633 |
|
|
|
|
|
||||
Cash and cash equivalents at end of period |
$ |
38,448 |
|
|
$ |
40,088 |
|
Balance Sheet and Liquidity
As of
(in thousands) |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
38,448 |
|
$ |
66,972 |
||
Bank debt and loans |
|
|
1,151,951 |
|
|
1,152,200 |
||
Net debt |
|
$ |
1,113,503 |
|
$ |
1,085,228 |
As of
(in thousands) |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
38,448 |
|
|
$ |
66,972 |
|
Revolver Capacity |
|
|
335,000 |
|
|
|
285,000 |
|
Revolver capacity committed to letters of credit |
|
|
(18,584 |
) |
|
|
(15,834 |
) |
Total cash on hand and revolving borrowing capacity |
|
$ |
354,864 |
|
|
$ |
336,138 |
|
GAAP to non-GAAP Reconciliations
|
|
Same Store Revenue |
||||||
|
|
Three Months Ended |
||||||
(in thousands) |
|
|
|
|
||||
Total Revenue - Reported |
|
$ |
227,405 |
|
|
$ |
260,195 |
|
|
|
|
|
|
||||
less: Service Fee Revenue |
|
|
(1,621 |
) |
|
|
(650 |
) |
|
|
|
|
|
||||
Revenue Excluding Service Fee Revenue |
|
$ |
225,784 |
|
|
$ |
259,545 |
|
|
|
|
|
|
||||
less: Non-Location Related (including Closed Centers) |
|
|
(7,985 |
) |
|
|
(3,597 |
) |
|
|
|
|
|
||||
Total Location Revenue |
|
$ |
217,799 |
|
|
$ |
255,948 |
|
|
|
|
|
|
||||
less: Acquired Revenue |
|
|
(1,211 |
) |
|
|
(38,425 |
) |
|
|
|
|
|
||||
Same Store Revenue |
|
$ |
216,588 |
|
|
$ |
217,523 |
|
|
|
|
|
|
||||
% Year-over-Year Change |
|
|
|
|
||||
Total Revenue – Reported |
|
|
|
|
14.4 |
% |
||
Total Revenue excluding Service Fee Revenue |
|
|
|
|
15.0 |
% |
||
Total Location Revenue |
|
|
|
|
17.5 |
% |
||
Same Store Revenue |
|
|
|
|
0.4 |
% |
|
|
Adjusted EBITDA Reconciliation |
||||||
|
|
Three Months Ended |
||||||
(in thousands) |
|
|
|
|
||||
Consolidated |
|
|
|
|
||||
Revenue |
|
$ |
260,195 |
|
|
$ |
227,405 |
|
Net income - GAAP |
|
|
23,095 |
|
|
|
18,219 |
|
Net income margin |
|
|
8.9 |
% |
|
|
8.0 |
% |
Adjustments: |
|
|
|
|
||||
Interest expense |
|
|
48,670 |
|
|
|
39,032 |
|
Income tax benefit |
|
|
(9,898 |
) |
|
|
(9,683 |
) |
Depreciation and amortization |
|
|
37,437 |
|
|
|
32,000 |
|
Loss (gain) on impairment, disposals, and other charges, net |
|
|
1,472 |
|
|
|
(1 |
) |
Share-based compensation |
|
|
4,503 |
|
|
|
1,911 |
|
Closed location EBITDA (1) |
|
|
2,205 |
|
|
|
2,462 |
|
Transactional and other advisory costs (2) |
|
|
3,259 |
|
|
|
8,398 |
|
Changes in the value of earnouts (3) |
|
|
(48,921 |
) |
|
|
(40,682 |
) |
Other, net (4) |
|
|
1,121 |
|
|
|
478 |
|
Adjusted EBITDA |
|
$ |
62,943 |
|
|
$ |
52,134 |
|
Adjusted EBITDA Margin |
|
|
24.2 |
% |
|
|
22.9 |
% |
[1] |
The closed location adjustment is to remove EBITDA for closed locations. Closed locations are those locations that are closed for a variety of reasons, including permanent closure, newly acquired or built locations prior to opening, locations closed for renovation or rebranding and conversion. If a location is not open on the last day of the reporting period, it will be considered closed for that reporting period. If the location is closed on the first day of the reporting period for permanent closure, the location will be considered closed for that reporting period. |
|
[2] |
The adjustment for transaction costs and other advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and costs in connection with an initial public offering, in each case, regardless of whether consummated. |
|
[3] |
The adjustment for changes in the value of earnouts is to remove of the impact of the revaluation of the earnouts. Changes in the fair value of the earnout liability is recognized in the statement of operations. Decreases in the liability will have a favorable impact on the statement of operations and increases in the liability will have an unfavorable impact. |
|
[4] |
Other includes the following related to transactions that do not represent ongoing or frequently recurring activities as part of the Company’s operations: (i) non-routine expenses, net of recoveries for matters outside the normal course of business, (ii) costs incurred that have been expensed associated with obtaining an equity method investment in a subsidiary of VICI, (iii) severance expense, and (iv) other individually de minimis expenses. Certain prior year amounts have been reclassified to conform to current year presentation. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241104846708/en/
IR@BowleroCorp.com
Source: