bowl-20240929

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 29, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-40142

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BOWLERO CORP.

(Exact name of registrant as specified in its charter)

___________________________________


Delaware									98-1632024
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

7313 Bell Creek Road
Mechanicsville, Virginia									23111
(Address of Principal Executive Offices)									(Zip Code)

(804) 417-2000

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	BOWL	The New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The registrant had outstanding 88,394,235 shares of Class A common stock, 58,519,437 shares of Class B common stock, and 117,087 shares of Series A preferred stock as of October 30, 2024.

Table of Contents

Index to Notes

Table of Contents


		Page
Part I - Financial Information
Item 1.	Financial Statements	i
	Condensed Consolidated Balance Sheets (unaudited)	1
	Condensed Consolidated Statements of Operations (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)	4
	Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders’ (Deficit) Equity (unaudited)	5
	Condensed Consolidated Statements of Cash Flows (unaudited)	6
	Index for Notes to Condensed Consolidated Financial Statements (unaudited)	8
	Notes to Condensed Consolidated Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
Item 4.	Controls and Procedures	29

Part II - Other Information
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 6.	Exhibits and Financial Statement Schedules	30

Signatures		31

Table of Contents

Index to Notes

Bowlero Corp.

Condensed Consolidated Balance Sheets

(Amounts in thousands)

(Unaudited)

Item 1. Condensed Financial Statements


	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 (Note 8)

Table of Contents

Index to Notes


	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

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Index to Notes

Bowlero Corp.

Condensed Consolidated Statements of Operations

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

(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

Series A preferred stock dividends	(2,214)		(1,962)
Earnings allocated to Series A preferred stock	(1,293)		(1,049)
Net income attributable to common stockholders	$	19,588	$	15,208

Net income per share attributable to Class A and B common stockholders
Basic	$	0.13	$	0.09
Diluted	$	0.13	$	0.09
Weighted-average shares used in computing net income per share attributable to common stockholders
Basic	145,766,779		160,929,391
Diluted	154,957,384		168,903,508

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Index to Notes

Bowlero Corp.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Amounts in thousands)

(Unaudited)


	Three Months Ended
	September 29, 2024		October 1, 2023
Net income	$	23,095	$	18,219
Other comprehensive loss, net of income tax:
Unrealized loss on derivatives	(709)		(340)
Foreign currency translation adjustment	(985)		(487)
Other comprehensive loss	(1,694)		(827)
Total comprehensive income	$	21,401	$	17,392

See accompanying notes to unaudited condensed consolidated financial statements.

Table of Contents

Index to Notes

Bowlero Corp.

Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders’ (Deficit) Equity

(Amounts in thousands, except share amounts)

(Unaudited)


	Series A preferred stock			Class A common Stock			Class B common Stock			Treasury stock			Additional Paid-in capital		Accumulated deficit		Accumulated other comprehensive income		Total stockholders’ equity
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance, July 2, 2023	136,373	$	144,329	107,666,301	$	11	60,819,437	$	6	11,312,302	$	(135,401)	$	506,112	$	(219,659)	$	4,152	$	155,221
Net income	—	—		—	—		—	—		—	—		—		18,219		—		18,219
Foreign currency translation adjustment	—	—		—	—		—	—		—	—		—		—		(487)		(487)
Unrealized loss on derivatives	—	—		—	—		—	—		—	—		—		—		(340)		(340)
Conversion of Class B common stock into Class A common stock	—	—		2,300,000	—		(2,300,000)	—		—	—		—		—		—		—
Share-based compensation	—	—		15,489	—		—	—		—	—		1,823		—		—		1,823
Repurchase of Class A common stock into Treasury stock	—	—		(12,131,185)	(1)		—	—		12,131,185	(132,662)		—		—		—		(132,663)
Balance, October 1, 2023	136,373	$	144,329	97,850,605	$	10	58,519,437	$	6	23,443,487	$	(268,063)	$	507,935	$	(201,440)	$	3,325	$	41,773

Series A preferred stock

Class A
common Stock

Class B
common Stock

Treasury stock

SEC Form 10-Q filed by Bowlero Corp.