FALSE000184057200018405722023-11-072023-11-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 8-K
___________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

November 7, 2023
Date of Report (date of earliest event reported)
___________________________________
BOWLERO CORP.
(Exact name of registrant as specified in its charter)
___________________________________

Delaware
(State or other jurisdiction of
incorporation or organization)
001-40142
(Commission File Number)
98-1632024
(I.R.S. Employer Identification Number)
7313 Bell Creek Road
Mechanicsville, Virginia 23111
(Address of principal executive offices and zip code)
(804) 417-2000
(Registrant's telephone number, including area code)
___________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Class A common stock, par value $0.0001BOWLThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
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.
☐



Item 2.02 - Results of Operations and Financial Condition

On November 7, 2023, Bowlero Corp. (the “Company”) issued a press release announcing its preliminary financial results for the first quarter of fiscal year 2024, which ended on October 1, 2023. A copy of the Company’s press release is being furnished herewith as Exhibit 99.1.

The information furnished with this Item 2.02 (including Exhibit 99.1 referenced under Item 9.01 below) of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 7.01 - Regulation FD Disclosure
The Company will host a webcast on November 7, 2023 at 10:00 a.m. Eastern Time to review its results for the first quarter of fiscal year 2024, which ended on October 1, 2023.

The presentation to be used for the webcast, any future investor presentations or updates thereto will be available on the Company’s website at https://ir.bowlerocorp.com/overview/default.aspx. These presentations will be accessible by the public on such website for a limited period of time.

The information referenced under Item 7.01 of this Current Report on Form 8-K is being “furnished” under “Item 7.01. Regulation FD Disclosure” and, as such, shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall the information be deemed incorporated by reference in any filings under the Securities Act or the Exchange Act.

Item 9.01 - Financial Statements and Exhibits
(d) Exhibits:

Exhibit No.Description
99.1
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)







SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BOWLERO CORP.
Date: November 7, 2023
By:
/s/ Robert M. Lavan
Name:
Robert M. Lavan
Title:
Chief Financial Officer



Bowlero Announces First Quarter Results for Fiscal Year 2024

Reiterates FY24 Guidance and Provides 2Q24 Guidance


RICHMOND, Va. November 7, 2023 – 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 2024 Fiscal Year, which ended on October 1, 2023.
First Quarter Highlights:

•Revenue decreased 1.2% to $227.4 million versus the prior year and increased 53.1% versus 1QFY20 (quarter ended September 29, 2019)
•Revenue excluding Service Fee Revenue increased 0.3% to $225.8 million versus the prior year and was up 52.0% versus 1QFY20
•Total Bowling Center Revenue down 0.7% versus the prior year and was up 52.9% versus 1QFY20
•Same Store Revenue declined 5.5% versus the prior year and grew 27.1% versus 1QFY20
•Net income of $18.2 million versus prior year loss of $33.5 million and a loss of $19.7 million in 1QFY20
•Adjusted EBITDA of $52.1 million versus prior year of $65.3 million and $24.9 million in 1QFY20
•Added 18 centers during the quarter, 17 from acquisitions and 1 new build out
•Total centers in operation as of November 7, 2023 is 350
•Post quarter end, entered into a transaction with VICI Properties Inc. on October 19, 2023 relating to the transfer of land and real estate assets of 38 bowling entertainment centers for an aggregate value of $432.9 million

“First quarter fiscal year 2024 met our expectations. Because our first quarter is typically our seasonally lowest quarter, we used this time to test a variety of promotions and new bundled pricing structures. This experimentation drove a meaningful reduction in same-store revenue from late July through early September. Based on what we learned, we quickly struck the right balance between mid-week and weekend pricing and got a deeper understanding of our different customer segments. Same-store revenue turned positive in mid-October. We are happy with those results and continue to push forward with our plan to ensure double-digit revenue growth this year,” said Thomas Shannon, Chief Executive Officer and President.

Mr. Shannon continued, “In addition to strong momentum on dynamic pricing, this quarter saw transformational changes to our business. We entered into a partnership with VICI Properties in a sale-leaseback of 38 properties for $432.9 million of value. VICI will be an important partner as we continue our proven capital efficiency model of self-funding bowling center acquisitions through sale-leasebacks. We acquired the Lucky Strike brand and all 14 of Lucky Strike’s centers. We also acquired two premium centers in Scottsdale, with Mavrix and Octane Raceway, and three additional centers. Year to date we have spent $130 million on acquisitions. We remain confident with a robust M&A pipeline, new build activity in marquee markets, accelerated center conversions, and the continued rollout of initiatives to enhance the customer experience and increase wallet share.”




Share Repurchase Program
During the quarter, the Company repurchased 12.1 million shares of Class A common stock, bringing the total common shares acquired under the program to 23.4 million. Pro forma for additional Class A common stock repurchased subsequent to quarter end, the total Class A and Class B shares outstanding as of November 1, 2023 are 151,287,782.

Fiscal Year 2024 and Second Quarter 2024 Guidance
The Company reiterated financial guidance for fiscal year 2024 provided on September 11, 2023. The Company expects Revenue to be up 10% to 15% at the end of fiscal year 2024, excluding the $21 million of Service Fee Revenue from prior year revenue, which equates to $1.14 billion to $1.19 billion of Revenue. Adjusted EBITDA margin is expected to be 32% to 34%, which equates to Adjusted EBITDA of $365 million to $405 million. The Company expects second quarter fiscal year 2024 to have Revenue Excluding Service Fee Revenue of $295 million to $310 million and Adjusted EBITDA of $100 million to $110 million. The Company expects to heavily reinvest in the business in fiscal year 2024, with more than $160 million allocated to acquisitions, $40 million to new builds, and $75 million to conversions.


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 November 7, 2023 in the Events & Presentations section of the Bowlero Investor Relations website at https://ir.bowlerocorp.com/overview/default.aspx.

About Bowlero Corp.
Bowlero is the global leader in bowling entertainment. With approximately 350 bowling centers across North America, Bowlero serves more than 30 million guests each year through a family of brands that includes Bowlero, Lucky Strike and AMF. In 2019, Bowlero acquired the Professional Bowlers Association, the major league of bowling, which boasts thousands of members and millions of fans across 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 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 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 11, 2023, 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 Bowling Center 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 second quarter and fiscal year 2024 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, stock-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 Bowling Center Revenue represents Total Revenue less Non-Center Related Revenue, Revenue from Closed Centers (as defined below), and Service Fee Revenue, if applicable. Same Store Revenue represents Total Revenue less Non-Center Related Revenue, Revenue from Closed Centers, Service Fee Revenue, if applicable, and Acquired Revenue. Adjusted EBITDA represents Net Income (Loss) before Interest Expense, 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 Revenue Excluding Service Fee Revenue as an important financial measure because provides a financial measure of revenue directly associated with consumer discretionary spending and 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 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.

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)
October 1, 2023July 2, 2023
Assets
Current assets:
Cash and cash equivalents$40,088 $195,633 
Accounts and notes receivable, net of allowance for doubtful accounts
4,087 3,092 
Inventories, net13,183 11,470 
Prepaid expenses and other current assets 19,393 18,395 
Assets held-for-sale2,069 2,069 
Total current assets78,820 230,659 
Property and equipment, net773,057 697,850 
Internal use software, net20,792 17,914 
Operating lease right of use assets, net550,113 449,085 
Finance lease right of use assets, net540,186 515,339 
Intangible assets, net100,087 90,986 
Goodwill825,522 753,538 
Deferred income tax asset86,237 73,807 
Other assets12,582 12,096 
Total assets$2,987,396 $2,841,274 
Liabilities, Temporary Equity and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses$141,164 $121,226 
Current maturities of long-term debt9,595 9,338 
Current obligations of operating lease liabilities26,194 23,866 
Other current liabilities16,650 14,281 
Total current liabilities193,603 168,711 
Long-term debt, net1,276,371 1,138,687 
Long-term obligations of operating lease liabilities541,937 431,295 
Long-term obligations of financing lease liabilities678,720 652,450 
Earnout liability71,364 112,041 
Other long-term liabilities35,220 34,380 
Deferred income tax liabilities4,079 4,160 
Total liabilities2,801,294 2,541,724 
Commitments and Contingencies


October 1, 2023July 2, 2023
Temporary Equity
Series A preferred stock$144,329 $144,329 
Stockholders’ Equity
Class A common stock10 11 
Class B common stock6 6 
Additional paid-in capital507,935 506,112 
Treasury stock, at cost(268,063)(135,401)
Accumulated deficit(201,440)(219,659)
Accumulated other comprehensive income3,325 4,152 
Total stockholders’ equity41,773 155,221 
Total liabilities, temporary equity and stockholders’ equity$2,987,396 $2,841,274 


Bowlero Corp.
Condensed Consolidated Statements of Operations
(Amounts in thousands)
(Unaudited)
Three Months Ended
October 1,
2023		October 2,
2022
Revenues$227,405 $230,260 
Costs of revenues182,921 165,202 
Gross profit44,484 65,058 
Operating (income) expenses:
Selling, general and administrative expenses37,765 32,494 
Asset impairment26 84 
Gain on sale or disposal of assets(27)(155)
Other operating expense1,364 1,362 
Total operating expense39,128 33,785 
Operating profit5,356 31,273 
Other (income) expenses:
Interest expense, net37,449 23,570 
Change in fair value of earnout liability(40,682)40,760 
Other expense53 48 
Total other (income) expense(3,180)64,378 
Income (loss) before income tax (benefit) expense8,536 (33,105)
Income tax (benefit) expense(9,683)429 
Net income (loss)$18,219 $(33,534)


Bowlero Corp.
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)


Three Months Ended
October 1, 2023October 2, 2022
Net cash provided by operating activities$16,083 $35,573 
Net cash used in investing activities(176,576)(62,492)
Net cash provided by financing activities5,091 5,167 
Effect of exchange rate changes on cash(143)(123)
Net decrease in cash and cash equivalents(155,545)(21,875)
Cash and cash equivalents at beginning of period195,633 132,236 
Cash and cash equivalents at end of period$40,088 $110,361 



GAAP to non-GAAP Reconciliations

FY24 vs. FY20FY24 vs. FY23
(in thousands)September 29, 2019October 1, 2023October 2, 2022October 1, 2023
Total Revenue - Reported$148,570$227,405$230,260$227,405
less: Service Fee Revenue— (1,556)(4,975)(1,556)
Revenue excluding Service Fee Revenue$148,570$225,849$225,285$225,849
less: Non-Center Related (including Closed Centers)(5,693)(7,419)(5,245)(7,419)
Total Bowling Center Revenue$142,877$218,430$220,040$218,430
less: Acquired Revenue(541)(37,497)(347)(10,784)
Same Store Revenue$142,336$180,933$219,693$207,646
% Year-over-Year Change
Total Revenue – Reported53.1%(1.2)%
Total Revenue excluding Service Fee Revenue52.0%0.3%
Total Bowling Center Revenue52.9%(0.7)%
Same Store Revenue27.1%(5.5)%





Adjusted EBITDA Reconciliation
Three Months Ended
(in thousands)October 1, 2023October 2, 2022September 29, 2019
Consolidated
Revenue$227,405$230,260$148,570
Net income (loss) - GAAP18,219(33,534)(19,719)
Net income (loss) margin8.0%(14.6)%(13.3)%
Adjustments:
Interest expense39,03223,57019,665
Income tax (benefit) expense(9,683)429153
Depreciation, amortization and impairment charges32,02626,35121,102
Share-based compensation1,9113,648869
Closed center EBITDA (1)
2,4623791,116
Foreign currency exchange loss (gain)79(71)—
Asset disposition gain(27)(155)66
Transactional and other advisory costs (2)
8,3984,1661,308
Changes in the value of earnouts (3)
(40,682)40,760—
Other, net (4)
399(234)371
Adjusted EBITDA$52,134$65,309$24,931
Adjusted EBITDA Margin22.9%28.4%16.8%

(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 is to remove of the impact of the revaluation of the earnouts. As a result of the Business Combination, the Company recorded liabilities for 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 and (ii) other individually de minimis expenses. Certain prior year amounts have been reclassified to conform to current year presentation.



Contacts:
Bowlero Corp. Investor Relations
IRSupport@BowleroCorp.com


v3.23.3
Cover
Nov. 07, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 07, 2023
Entity Registrant Name BOWLERO CORP.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40142
Entity Tax Identification Number 98-1632024
Entity Address, Address Line One 7313 Bell Creek Road
Entity Address, City or Town Mechanicsville
Entity Address, State or Province VA
Entity Address, Postal Zip Code 23111
City Area Code 804
Local Phone Number 417-2000
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A common stock, par value $0.0001
Trading Symbol BOWL
Security Exchange Name NYSE
Entity Emerging Growth Company true
Entity Ex Transition Period false
Amendment Flag false
Entity Central Index Key 0001840572
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