Bowlero (US:BOWL)2026-02-04 21:19Financial Performance - Total revenue for the quarter ended December 28, 2025, was $306,861, representing an increase of $6,787, or 2%, compared to the same period last fiscal year [112]. - Operating income decreased to $33,327, down 29% from $46,873 in the same quarter last year [112]. - Net loss for the quarter was $12,656, compared to a net income of $28,307 in the same period last year [112]. - For the six months ended December 28, 2025, total revenues reached $599,139, reflecting an increase of $38,870, or 7%, compared to the same period last fiscal year [127]. - Adjusted EBITDA for the six months ended December 28, 2025, was $150,124,000, a decrease from $161,700,000 for the same period in 2024, reflecting a decline of approximately 7.8% [141]. - Net cash provided by operating activities decreased to $41,656,000 for the six months ended December 28, 2025, down 39% from $68,147,000 in the prior year [146]. Acquisitions and Investments - The company acquired 58 existing properties for $306,000, spanning 16 states, which is expected to reduce annual rent obligations and enhance financial flexibility [109]. - The company completed the acquisition of Wet 'n Wild Emerald Pointe water park and signed an agreement to acquire Raging Waters Los Angeles, California's largest water park [109]. - The company used $354,141,000 in investing activities during the six months ended December 28, 2025, compared to $133,214,000 in the same period of 2024, indicating a significant increase in cash outflow [148]. - The company plans to utilize available cash for capital expenditures related to new locations and upgrades, as well as for a share repurchase program to return value to shareholders [144]. Operating Costs - Location operating costs increased by $16,973, or 21%, primarily due to growth in location count and increased marketing expenses [117]. - Location operating costs as a percentage of revenues rose from 28% to 32%, attributed to higher costs in family entertainment centers and water parks [118]. - Location operating costs increased by $28,571, or 17%, primarily due to growth in location count and increased marketing expenses of approximately $6,600 [130]. - Selling, general and administrative expenses increased by $4,688, or 14%, mainly due to increased labor costs in marketing and operational teams [121]. - Selling, general and administrative expenses increased by $5,222, or 8%, mainly due to higher SG&A labor costs associated with investments in marketing and operational teams [134]. Payroll and Benefits - Location payroll and benefit costs increased by $7,006, or 10%, driven by location count growth and additional bonus incentives [119]. - Location payroll and benefit costs rose by $14,814, or 11%, driven by location count growth and additional bonus incentives [132]. Tax and Interest - The effective tax rate for the six months ended December 28, 2025, was (13)%, influenced by state taxes related to property repurchases and changes in fair value of earnout liabilities [139]. - Interest expense increased by $6,048, or 6%, primarily due to increased debt from the issuance of 7.25% Senior Secured Notes [136]. - An increase or decrease of 1.0% in the effective interest rate would result in a change of approximately $12,850 in interest expense over a twelve-month period on outstanding debt [156]. Market Risks - The company is exposed to market risks including fluctuations in commodity prices, which could materially impact food costs and overall financial performance [158]. Company Classification - The company is currently classified as an emerging growth company and has elected to delay adopting new accounting standards until it loses this status on June 28, 2026 [154].