Bowlero (BOWL) - 2023 Q4 - Annual Report

Revenue and Profit Growth - Revenue increased by $147.1 million (16.1$1,058.8 million in fiscal year 2023 compared to $911.7 million in fiscal year 2022[192] - Gross profit rose by$40.7 million (13.5%) to $342.4 million, with gross margin slightly decreasing from 33.1$84.2 million (72.2%) to $200.8 million, with operating margin improving from 12.8$82.0 million from a net loss of $29.9 million in the previous fiscal year[192] - Revenues for fiscal 2023 totaled$1,058,790, representing a 16% increase ($147,085) compared to fiscal 2022[244] - Same-store revenues increased by 12$925,143 compared to $823,277 in fiscal 2022[245] - Media, new, and closed centers revenues grew by 51$133,647 in fiscal 2023, up from $88,428 in fiscal 2022[245] - Net income for fiscal 2023 was$82,048, a significant improvement from a net loss of $29,934 in fiscal 2022[250] Expansion and Renovation - The company acquired 16 bowling entertainment centers to expand in key geographic markets[188] - Bowlero renovated or remodeled 38 bowling centers and expanded or refurbished arcades in 26 centers[190] - The company is negotiating four lease agreements and has signed six leases for new bowling entertainment centers in prime markets[189] Financial Management and Debt - Interest expense increased by$16.4 million (17.4%) to $110.9 million due to higher interest rates and increased debt obligations[194] - The company entered into two hedging transactions with an aggregate notional amount of$800,000 to manage interest rate risk[240] - The company secured a new $900,000 term loan maturing in 2028, used to refinance existing debt and for general corporate purposes[254] - Cash and cash equivalents as of July 2, 2023, stood at$195,633[257] - Investing activities utilized $253,218 in fiscal 2023, including$111,664 in capital expenditures and acquisitions[258] Adjusted EBITDA and Non-Core Items - Adjusted EBITDA is used as a key financial measure to assess the quality of earnings, excluding non-core items[196] - Adjusted EBITDA for fiscal 2023 increased to $354,344, up from$316,375 in fiscal 2022[250] Tax and Impairment - The company recorded a non-cash income tax benefit of $135,061 due to the release of valuation allowances for deferred tax assets[247] - The company recognized impairment charges of$1,601 in fiscal 2023, primarily related to long-lived assets for open and closed centers[262] Stock Transactions and Equity - Settlement of premerger Series A preferred stock resulted in a charge of $2,642,587[285] - Conversion of Class A common stock of Old Bowlero to Series A preferred stock involved 105,000 shares[285] - Consideration paid to existing shareholders of Old Bowlero amounted to$22,599,800[285] - Exchange of redeemable Class A common stock of Old Bowlero for Class B common stock involved 51,397,025 shares[285] - Repurchase of Class A common stock into Treasury stock cost $3,430,667[285] - Class A common stock issued in conjunction with exercise of warrants totaled 4,266,439 shares[285] - Conversion of Class B common stock into Class A common stock involved 2,400,000 shares[285] - Balance as of July 3, 2022, showed total equity of$110,395,630[285] Market Risks and Commodity Prices - The company is exposed to market risks including interest rates, credit risk, and foreign currency exchange rates[293] - Commodity price fluctuations in food, beverage, and energy costs can materially impact the company's operations[295]