Bowlero Corp. Announces Strong Results for the First Quarter of Fiscal Year 2023
November 16, 2022 at 16:05 PM EST
Continued momentum in revenue and normalizing margins and seasonality driving performance:
Bowlero Corp. (NYSE: BOWL) (“Bowlero�� or the “Company”), the world’s largest owner and operator of bowling centers, today provided financial results for the first quarter of the 2023 fiscal year, which ended on October 2, 2022. Bowlero announced revenue of $230.3 million, which was driven by dramatic growth in event revenue, the recovery of league business, and solid walk-in retail performance. Event Revenue grew 90% ($20 million) vs. the prior year's quarter and 69% ($17 million) vs. pre-pandemic quarter. Total revenue grew by 27.2% on a year-over-year basis and 55.0% compared to pre-pandemic performance. Same-store sales rose by 19.9% year-over-year and 37.6% relative to pre-pandemic quarter.1
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The revenue performance in individual weeks can be positively or negatively impacted by timing shift of holiday/sporting events, holidays moving to weekends, and extreme weather events. (Graphic: Business Wire)
“Bowling is booming and we are pleased with our continued world-class performance in the first quarter, particularly relative to the prior year's comparable period which reflected a rapid recovery from the pandemic and corresponding staffing shortages. We never lost focus on our goal to provide delightful experiences for our guests and are now well positioned to do so through fiscal year 2023. This showed in the tremendous results with year-over-year Revenue growth of nearly 30% and Adjusted EBITDA growth of more than 11%,” said Thomas Shannon, Founder and Chief Executive Officer. "Additionally, the development pipeline is extremely active and continues to provide strong results and opportunities to consolidate the industry. The Company has added 9 new centers in the current fiscal year and added 38 new centers since the start of fiscal year 2022 and we are just getting started," according to Shannon.
“The first quarter saw both the event and league business return with a vengeance. We saw Event revenue nearly double and League business surge nearly 20% versus pre-pandemic levels,” said Brett Parker, President and CFO of Bowlero Corp. “Even more impressive, Adjusted EBITDA margin expanded almost 1,200 basis points relative to pre-pandemic levels, despite slight year-over-year margin contraction which reflects more normalized staffing levels compared to the first quarter of last year when we operated with pandemic related staffing shortages. This margin improvement demonstrates the inherent operating leverage that exists in the business and management’s strong focus on maximizing profitability. Furthermore, we have recently adjusted pricing to better reflect the current environment and offset macro input cost pressures.”
Total Bowling Center Revenue Performance Trend4
[Please see the Total Bowling Center Revenue Performance Trend Chart]
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 16, 2022 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 more than 300 bowling centers across North America, Bowlero Corp. serves more than 27 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. These forward-looking statements are generally identified by the use of words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology and include preliminary results. 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: the impact of COVID-19 or other adverse public health developments on our business; our ability to grow and manage growth profitably, maintain relationships with customers, compete within our industry and retain our key employees; changes in consumer preferences and buying patterns; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; the risk that the market for our entertainment offerings may not develop on the timeframe or in the manner that we currently anticipate; general economic conditions and uncertainties affecting markets in which we operate and economic volatility that could adversely impact our business, including the COVID-19 pandemic 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 15, 2022, 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.
GAAP Financial Information
Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined under Generally Accepted Accounting Principles (“GAAP”), we disclose net income, normalized for extraordinary and non-recurring items, Adjusted EBITDA and trailing twelve month 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, net cash provided (used) by operating activities 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.
Net income normalized for extraordinary and non-recurring items represents Net income (loss) before non-cash expenses or income related to Changes in the value of earnouts and warrants. Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“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, Charges attributed to new initiatives, Extraordinary unusual non-recurring gains or losses and Changes in the value of earnouts and warrants and settlement costs. Trailing twelve month Adjusted EBITDA represents Adjusted EBITDA over the most recent twelve month period.
The Company considers net income normalized for extraordinary and non-recurring items as an important financial measure because it provides an indicator of performance that is not affected by fluctuations in certain costs or other items. However, this measure 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 it does not reflect every cash expenditure and is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.
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. Additionally, we believe trailing twelve month Adjusted EBITDA provides the current run-rate for trending purposes, rather than annualizing the respective quarters, as the Company’s business is seasonal, with the second and third fiscal quarters being higher than the first and last quarters.
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 and trailing twelve month Adjusted EBITDA:
1 Same-store sales are measured by comparing revenues for centers open for the entire duration of both the current and comparable measurement periods. The pre-pandemic comparable period for the quarter ended October 2, 2022 is the quarter ended on September 29, 2019.