Bowlero (BOWL) - 2025 Q3 - Quarterly Results

Executive Summary & Highlights Lucky Strike Entertainment's Q3 FY2025 results show mixed performance, strategic acquisitions, capital returns, and no forward guidance Quarter Highlights Q3 FY2025 saw slight revenue growth, but declines in Same Store Revenue, Net Income, and Adjusted EBITDA, alongside strategic acquisitions and strong Summer Season Pass sales - Retail and Leagues businesses remained stable, Food sales grew by high single digits, while Corporate Events business declined, most notably in tech-aligned markets (California and Seattle)[3] - Summer Season Pass program sales are over 200% higher than the prior year, indicating strong consumer demand for high-value entertainment[4] - The company acquired three water parks (including Shipwreck Island) and seven family entertainment centers this year, expecting greater scale during slower summer months[4] - Capital expenditures are down 20% year-to-date, reflecting a disciplined approach to expense management and prioritization of high-return capital investments[4] Q3 FY2025 Financial Highlights (vs. Prior Year) | Metric | Q3 FY2025 (in millions) | Q3 FY2024 (in millions) | Change (%) | | :--------------------- | :---------------------- | :---------------------- | :--------- | | Total Revenue | $339.9 | $337.7 | +0.7% | | Same Store Revenue | - | - | -5.6% | | Net Income | $13.3 | $23.8 | -44.2% | | Adjusted EBITDA | $117.3 | $122.8 | -4.5% | - As of May 8, 2025, the company operates 367 locations, having acquired one family entertainment center and one water park between December 30, 2024, and May 8, 2025, with 34 current Lucky Strike locations progressing on rebrand initiatives[5] Share Repurchase and Capital Return Program Update Lucky Strike Entertainment updated on its capital return program, detailing recent share repurchases and the declaration of a quarterly cash dividend for the fourth quarter of fiscal year 2025 Share Repurchase Activity (Dec 30, 2024 - May 5, 2025) | Metric | Value | | :-------------------------------- | :----------- | | Shares Repurchased (Class A common stock) | 4.5 million | | Total Cost | ~$47 million | | Remaining under program | $92 million | - The Board of Directors declared a quarterly cash dividend of $0.055 per share of common stock for the fourth quarter of fiscal year 2025, payable on June 6, 2025, to stockholders of record on May 23, 2025[6] Guidance Due to increasing economic uncertainty, Lucky Strike Entertainment is not issuing forward-looking guidance at this time but plans to reassess later in the year, expressing confidence in its long-term resilience and growth strategies - The Company will not be issuing guidance at this time due to increasing economic uncertainty, with an intention to reassess later in the year[7] - Management remains confident in the Company's resiliency and its ability to drive revenue growth through strategic initiatives, targeted capital investments, and selective acquisitions[7] Company Overview This section provides an overview of Lucky Strike Entertainment's business, operations, and investor webcast details About Lucky Strike Entertainment Lucky Strike Entertainment is a leading location-based entertainment platform operating over 360 locations across North America, offering diverse experiential entertainment and owning the Professional Bowlers Association - Lucky Strike Entertainment is one of the world's premier location-based entertainment platforms with over 360 locations across North America[8] - The company provides experiential offerings in bowling, amusements, water parks, and family entertainment centers[8] - Lucky Strike Entertainment also owns the Professional Bowlers Association (PBA), a major league of bowling[8] Investor Webcast Information Information regarding the investor webcast for Lucky Strike Entertainment's Q3 FY2025 results, including access details - An investor webcast hosted by Lucky Strike Entertainment was accessible at 9:00 AM ET on May 8, 2025, in the Events & Presentations section of its Investor Relations website[8] Financial Performance (GAAP) This section presents Lucky Strike Entertainment's GAAP financial statements, including balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheets The condensed consolidated balance sheets provide a snapshot of Lucky Strike Entertainment's financial position as of March 30, 2025, compared to June 30, 2024, detailing assets, liabilities, temporary equity, and stockholders' deficit Condensed Consolidated Balance Sheets (Amounts in thousands) | Item | March 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :----------------------------------- | :---------------------------- | :--------------------------- | | Assets | | | | Total current assets | $128,386 | $113,962 | | Property and equipment, net | $933,532 | $887,738 | | Operating lease right of use assets | $583,094 | $559,168 | | Finance lease right of use assets, net | $512,106 | $524,392 | | Goodwill | $841,550 | $833,888 | | Total assets | $3,195,717 | $3,114,035 | | Liabilities, Temporary Equity and Stockholders' Deficit | | | | Total current liabilities | $201,800 | $182,806 | | Long-term debt, net | $1,273,231 | $1,129,523 | | Long-term obligations of operating lease liabilities | $596,851 | $561,916 | | Long-term obligations of finance lease liabilities | $682,169 | $680,213 | | Earnout liability | $50,172 | $137,636 | | Total liabilities | $3,282,121 | $3,163,887 | | Series A preferred stock | $127,325 | $127,410 | | Total stockholders' deficit | $(213,729) | $(177,262) | | Total liabilities, temporary equity and stockholders' deficit | $3,195,717 | $3,114,035 | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations present Lucky Strike Entertainment's revenues, costs, and net income for the three and nine months ended March 30, 2025, compared to the corresponding periods in the prior fiscal year Condensed Consolidated Statements of Operations (Amounts in thousands) | Item | Three Months Ended March 30, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Nine Months Ended March 30, 2025 (in thousands) | Nine Months Ended March 31, 2024 (in thousands) | | :------------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Revenues | | | | | | Bowling | $159,756 | $165,528 | $420,926 | $427,253 | | Food & beverage | $120,452 | $118,032 | $319,393 | $304,137 | | Amusement & other | $59,674 | $54,110 | $159,832 | $139,356 | | Total revenues | $339,882 | $337,670 | $900,151 | $870,746 | | Costs and expenses | | | | | | Total costs and expenses | $277,697 | $266,658 | $778,147 | $744,901 | | Operating income | $62,185 | $71,012 | $122,004 | $125,845 | | Other (income) expenses | | | | | | Interest expense, net | $49,414 | $46,890 | $146,879 | $130,575 | | Change in fair value of earnout liability | $(18,886) | $(8,868) | $(87,489) | $14,541 | | Total other expense | $30,545 | $38,025 | $60,207 | $145,182 | | Income (loss) before income tax expense (benefit) | $31,640 | $32,987 | $61,797 | $(19,337) | | Income tax expense (benefit) | $18,348 | $9,141 | $(2,897) | $2,067 | | Net income (loss) | $13,292 | $23,846 | $64,694 | $(21,404) | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows illustrate the movement of cash from operating, investing, and financing activities for the three and nine months ended March 30, 2025, and their impact on the company's cash and cash equivalents Condensed Consolidated Statements of Cash Flows (Amounts in thousands) | Item | Three Months Ended March 30, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Nine Months Ended March 30, 2025 (in thousands) | Nine Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Net cash provided by operating activities | $86,620 | $76,899 | $154,767 | $148,098 | | Net cash used in investing activities | $(33,198) | $(39,294) | $(166,412) | $(285,960) | | Net cash (used in) provided by financing activities | $(55,174) | $(15,451) | $23,925 | $154,287 | | Effect of exchange rate changes on cash | $85 | $320 | $(164) | $371 | | Net (decrease) increase in cash and cash equivalents | $(1,667) | $22,474 | $12,116 | $16,796 | | Cash and cash equivalents at beginning of period | $80,755 | $189,955 | $66,972 | $195,633 | | Cash and cash equivalents at end of period | $79,088 | $212,429 | $79,088 | $212,429 | Liquidity and Capital Resources This section details Lucky Strike Entertainment's net debt and available liquidity, including cash and revolving borrowing capacity Balance Sheet and Liquidity This section details Lucky Strike Entertainment's net debt and available liquidity, including cash on hand and revolving borrowing capacity, as of March 30, 2025, and June 30, 2024 Net Debt (in thousands) | Item | March 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :------------------ | :---------------------------- | :--------------------------- | | Cash and cash equivalents | $79,088 | $66,972 | | Bank debt and loans | $1,295,308 | $1,152,200 | | Net debt | $1,216,220 | $1,085,228 | Cash on Hand and Revolving Borrowing Capacity (in thousands) | Item | March 30, 2025 (in thousands) | June 30, 2024 (in thousands) | | :---------------------------------------- | :---------------------------- | :--------------------------- | | Cash and cash equivalents | $79,088 | $66,972 | | Revolver Capacity | $335,000 | $285,000 | | Revolver capacity committed to letters of credit | $(22,422) | $(15,834) | | Total cash on hand and revolving borrowing capacity | $391,666 | $336,138 | Non-GAAP Financial Measures & Reconciliations This section defines Lucky Strike Entertainment's non-GAAP financial measures and provides reconciliations for Same Store Revenue and Adjusted EBITDA Non-GAAP Measures Definitions This section defines Lucky Strike Entertainment's non-GAAP financial measures, including Revenue Excluding Service Fee Revenue, Total Location Revenue, Same Store Revenue, and Adjusted EBITDA, explaining their utility for investors and management, as well as their inherent limitations - Non-GAAP measures (Revenue Excluding Service Fee Revenue, Total Location Revenue, Same Store Revenue, Adjusted EBITDA) are used to assist investors and management in analyzing and benchmarking business performance and value[11] - Definitions: Revenue Excluding Service Fee Revenue (Total Revenue less Service Fee Revenue), Total Location Revenue (Total Revenue less Non-Location Related Revenue, Revenue from Closed Locations, and Service Fee Revenue), Same Store Revenue (Total Location Revenue less Acquired Revenue), and Adjusted EBITDA (Net Income (Loss) before various non-operating and non-cash items)[12] - Adjusted EBITDA has limitations as an analytical tool, as it does not reflect capital expenditures, changes in working capital, interest expense, income tax, non-cash equity compensation, or the impact of non-ongoing operations[14][15] Same Store Revenue Reconciliation This reconciliation details the calculation of Same Store Revenue for the three months ended March 30, 2025, showing a 5.6% year-over-year decrease, despite a slight increase in reported total revenue Same Store Revenue Reconciliation (in thousands) | Item | Three Months Ended March 30, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Total Revenue - Reported | $339,882 | $337,670 | | less: Service Fee Revenue | $(636) | $(1,270) | | Revenue Excluding Service Fee Revenue | $339,246 | $336,400 | | less: Non-Location Related (including Closed Centers) | $(4,746) | $(4,096) | | Total Location Revenue | $334,500 | $332,304 | | less: Acquired Revenue | $(21,191) | $(320) | | Same Store Revenue | $313,309 | $331,984 | | % Year-over-Year Change | | | | Total Revenue – Reported | 0.7% | | | Same Store Revenue | (5.6)% | | Adjusted EBITDA Reconciliation The Adjusted EBITDA reconciliation provides a detailed breakdown from GAAP Net Income to Adjusted EBITDA for the three months ended March 30, 2025, showing a decrease in Adjusted EBITDA and its margin compared to the prior year Adjusted EBITDA Reconciliation (in thousands) | Item | Three Months Ended March 30, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :------------------------------------------ | :----------------------------------------------- | :----------------------------------------------- | | Consolidated Revenue | $339,882 | $337,670 | | Net income - GAAP | $13,292 | $23,846 | | Net income margin | 3.9% | 7.1% | | Adjustments: | | | | Interest expense | $49,414 | $49,177 | | Income tax expense | $18,348 | $9,141 | | Depreciation and amortization | $40,741 | $36,765 | | Loss on impairment, disposals, and other charges, net | $648 | $1,011 | | Share-based compensation (1) | $8,788 | $4,143 | | Closed location EBITDA (2) | $251 | $2,159 | | Transactional and other advisory costs (3) | $4,485 | $3,813 | | Changes in the value of earnouts (4) | $(18,886) | $(8,868) | | Other, net (5) | $179 | $1,619 | | Adjusted EBITDA | $117,260 | $122,806 | | Adjusted EBITDA Margin | 34.5% | 36.4% | - Adjustments to Net Income include a non-recurring settlement of equity awards related to an executive's retirement, contributing an additional $4,809 thousand to share-based compensation expense[25] - Adjustments also account for EBITDA from closed locations, transactional and other advisory costs, and changes in the fair value of earnout liabilities[26][27][28] Legal & Disclaimers This section outlines the company's forward-looking statements disclaimer, highlighting inherent risks and uncertainties Forward Looking Statements This section serves as a standard disclaimer, indicating that certain statements in the press release are forward-looking and involve risks, assumptions, and uncertainties that could cause actual results to differ materially from expectations - The press release contains forward-looking statements subject to risks, assumptions, and uncertainties, which are identified by terms such as 'anticipate,' 'believe,' 'expect,' etc[9] - These statements reflect management's current views but offer no assurance that expectations will be correct, as future events or results could differ materially due to factors largely outside the company's control[9] - Risks include, but are not limited to, business strategy execution, consumer preferences, competition, publicity, leases, key personnel retention, indebtedness, expansion plans, litigation, intellectual property, employee retention, commodity costs, cybersecurity, catastrophic events, regulatory changes, operating results fluctuations, and economic conditions (interest rates, inflation, recession)[9] - The company disclaims any obligation to publicly update or review forward-looking statements, except as required by applicable law[10] Company Information This section provides contact information for Lucky Strike Entertainment's investor relations Contacts This section provides the contact information for Lucky Strike Entertainment's Investor Relations - For investor relations inquiries, contact IR@LSEnt.com[30]