Bowlero Corp. (NYSE:BOWL) ("Bowlero" or the "Company"), one of the world's premier operators of location-based entertainment, today provided financial results for the first quarter of the 2025 Fiscal Year, which ended on September 29, 2024.

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 through November 4, 2024, opened two new builds and acquired one bowling location, five family entertainment centers and one water park. Total locations in operation as of November 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 Thomas Shannon. "Raging Waves, the largest waterpark in Illinois, outperformed expectations throughout the summer, in part from an expanded season pass offering. We acquired Boomers Parks, a leading family entertainment center brand in California and Florida. In addition, we recently acquired Spectrum Entertainment Complex, a 52-lane bowling and events venue near Grand Rapids, Michigan, and opened two Lucky Strike locations in Denver. We expect to open the flagship Lucky Strike Beverly Hills and Lucky Strike Ladera Ranch California, shortly. The M&A market is extremely active, and we look to continue to deploy capital at attractive returns through our long-proven underwriting process and operational excellence."

"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 Bobby Lavan, Chief Financial Officer.

Share Repurchase and Capital Return Program Update

From July 1, 2024 through October 30, 2024, the Company repurchased 0.8 million shares of Class A common stock for approximately $8 million. The company has $156 million currently remaining under the share repurchase program.

The Board of Directors declared a quarterly cash dividend of $0.055 per share of common stock for the second quarter of fiscal year 2025. The dividend will be payable on December 6, 2024, to stockholders of record on November 22, 2024.

Fiscal Year 2025 Guidance

After completing the first quarter, Bowlero is increasing the low end of its total revenue guidance for fiscal year 2025 by $10 million. We expect total Revenue to be up mid-single digits to 10%+ year-over-year, which equates to $1.23 billion to $1.28 billion of total Revenue. Adjusted EBITDA margin is expected to be 32% to 34%, which equates to Adjusted EBITDA of $390 million to $430 million.

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 November 4, 2024 in the Events & Presentations section of the Bowlero Investor Relations website at https://ir.bowlerocorp.com/overview/default.aspx.

About Bowlero Corp.

Bowlero Corporation is one of the world's premier operators of location-based entertainment. With over 360 locations across North America, including bowling and our other location-based entertainment offerings like Octane Raceway, Raging Waves water park and Boomers Parks, the Company serves more than 40 million guest visits annually through a family of brands that include Lucky Strike, Bowlero and AMF. In 2019, Bowlero acquired the Professional Bowlers Association, the major league of bowling and a growing media property that boasts millions of fans around the globe. For more information on Bowlero, 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 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 U.S. Securities and Exchange Commission (the "SEC") by the Company on September 5, 2024, 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 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

Bowlero Corp.

Condensed Consolidated Balance Sheets

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

(Unaudited)

	September 29, 2024			June 30, 2024
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
Goodwill		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

	September 29, 2024			June 30, 2024
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
Treasury stock, at cost		(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

Bowlero Corp.

Condensed Consolidated Statements of Operations

(Amounts in thousands)

(Unaudited)

	Three Months Ended
	September 29, 2024			October 1, 2023
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

Bowlero Corp.

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

	Three Months Ended
	September 29, 2024			October 1, 2023
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 September 29, 2024 and June 30, 2024, our calculation of net debt was as follows:

(in thousands)	September 29, 2024		June 30, 2024
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 September 29, 2024 and June 30, 2024, our cash on hand and revolving borrowing capacity was as follows:

(in thousands)	September 29, 2024			June 30, 2024
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)	October 1, 2023			September 29, 2024
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)	September 29, 2024			October 1, 2023
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.

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Bowlero Reports First Quarter Results for Fiscal Year 2025