Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Bowlero Corp., Q4 and Fiscal Year 2022 Earnings Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Ashley De Simone, you may begin.

Ashley DeSimone

afternoon. Good from DeSimone ICR. Ashley I'm to Corp., year quarter fiscal Bowlero earnings Welcome conference fourth XXXX call. and the All participants will be in a listen-only mode.

During certain statements current expectations, statements company today, and may forward-looking as on future the views Such management's based to company's reflect this statements. the of respect events estimates, are that call, constitute with make to those projections, beliefs and cause to in risks of number that statements. assumptions, information. can subject from forecasts, and events actual differ the forward-looking results and a described These statements materially uncertainties are

risks details concerning February uncertainties, further final For our prospectus XXXX. with these on and SEC please the see filed X,

otherwise, to statements, law. applicable as company disclaims result required information, a The or or review new publicly whether any except as any forward-looking obligation by of expressly developments update future

EBITDA, today's company be in call, evaluating useful be company in to net under the believe be will non-GAAP income of EBITDA and our today's disclosures. will press in referring we the which included in financial EBITDA. Form Throughout year adjusted At XXXX. and the you times, associated found to will and reconciled addition, hear all calculated to the In fiscal net our for can during earnings measures, release could fourth and company adjusted our Reconciliation performance. discuss adjusted therein quarter to refer XX-Q as the conversation, described EBITDA is income GAAP,

Officer Officer today. Bowlero; of being Financial ahead. would to turn is a like President recorded Shannon, call I Tom go Parker, Please and and reminder, of conference this Executive As over the Bowlero. now Brett Chief Chief to

Tom Shannon

all value looking endeavor for we're as create full and Corp. to I'm today the of year We Chairman 'XX. value company. them. CEO Thomas of updates state your some time call Corporation exciting Good Bowlero to earnings forward evening, Bowlero shareholders fiscal to the join and our on and the sharing discussion of year appreciate the of for and taking Shannon, QX We to continuously welcome the the

massive million from Much the to our $XXX million has footprint, of XXXX, changed and XXXX in COVID-XX, grew million and of EBITDA In fiscal publicly year million adjusted public $XXX year relentlessly record as lingering recovered revenue fiscal Bowlero XX to upgraded despite transitioned $XXX and by $XXX This operational million. costs, adjusted respectively, from trailing levels, of million center $XXX negatively revenues comes generated month company 'XX, and focused of of EBITDA one. on COVID-XX transitional headwinds Compared year fiscal or pre-pandemic held expanded improvements and improvement we was record higher the disruptions have December impacted XXXX. private and XX.X% XX%. or over a by a nearly of which company as $XXX our

Fiscal When compared operating was QX million. basis. revenues store same and fiscal period, year year, takes 'XX fiscal year revenue $XXX activities of from a you weeks with XX% total the of which this extremely September growing X In record to produced robust, has remained revenue of cash first for nine higher corresponding week same XX%, to the pre-pandemic XX%. were higher total were X by 'XX growing XX% same year store and 'XX on versus year levels revenues revenue by the revenue fiscal 'XX,

count and XX doing in During portfolio, by fiscal centers our XX%. added grew year XXXX, approximately we to center so new the

basis robust, additional The strong centers continue have own accelerated with our pipeline XXX center our acquisition these of peers. it's are figure This and ethos, been than newbuilds. core additional to of these performance is growth the fiscal pre-pandemic in the deals and of came lies is Adjusted real margins of by we newbuilds. as 'XX XX.X%. margin by operational at returns in world was with, a Results in of were anticipated to that XX these majority company relentless pursuit and well. excess in estate continues prior better class acquisitions new added points, two and significant and line higher were A testament EBITDA pursue and well deliver centers through additions. than for or to

of we no XX, solutions under our to capital utilization in our Ongoing On structure drive the continuing our time NYSE, publicly Since to returns. company management maximize improvements. known proprietary as began the bolsters BOWL, operating quantitative B-O-W-L. QMS trade have tool, the to wasted on continuous then December optimize to shareholder ability ticker XXXX,

Furthermore, we XX, we warrants. all began retired company's to of outstanding capital As returning XXXX, shareholders. the May

buyback announced in process Under shareholders XXXX $XX.X only year X.X year poised success. and million transformative year Bowlero. fiscal All-in-all X for XXXX, has that continued a during fiscal in shares our was million over company performed previously million months. The is to over $XXX very authorization, repurchased we well for returning

Brett I to a our the year. review Brett? quarter of then Parker that, to turn over more take provide And we CFO, will With will detailed President and and questions. it

Brett Parker

year the Thank XXXX. you, Tom. ended QX performance our Were extremely pleased X, fiscal July in with and

As a level pre-pandemic of resulted total our and the materially to in true EBITDA and in basis. both for the revenue continues on company's same highest adjusted Revenue performance, is QX store year, outperform performance QX history. the in in any in

strong ended margins only in the TTM 'XX months June being period the XX.X% margin EBITDA documented XX the very produced ended adjusted trailing compared December of XX.X% with also XXXX, XX, XXXX. cost we as well all FY XX.X% in to and pressures, the Despite

As us continue noted, of our continued execute operations, also Tom strategy. growth to positions to generate levels prodigious to we cash from favorably which

by quarter in increase increased higher also support year-over-year material levels. levels emergence from and and by acceleration in XX.X%. of has the to week an The as Same increased consecutive revenue strong expansion performance growth September revenue, by quarter, in ended leagues for which revenue very was the performance events rose league store continued X, this and and XXXX. resulted of a growth revenue strong event XX.X% for in to revenue, relative growth, by growth sales through pre-pandemic was the walk continued has as pre-pandemic surpassed revenue. retail in second supported the well driven in XX% potential Driving This

Incremental even store the a versus performance being basis longer calendar. adjusted million year. every expanded also versus construction adjusting XX.X% Adjusted week by was periods said, remains were is In relative reporting calendar in in prior prior revenue $XX.X the week, 'XX comparable part than of the each the and to revenue. and company's $XXX.X for produced That a quite million, and QX XX.X% the That was performance which of also supported the revenue extra FY pre-pandemic. seven years, impressive. week, year XX pre-pandemic QX, performance same XX.X% on increasing pre-pandemic.

fiscal basis. the same $XX.X $XX.X Adjusted was a EBITDA of for XX.X% million higher versus XXX.X% was of an which a store an Furthermore XX or quarter, $XX.X XX.X% year, XX.X% Adjusting revenue increase week an on increase the basis relative million on to pre-pandemic revenue pre-pandemic performance. year-over-year, was the million XXX.X% or increase and of performance. year-over-year in $XXX.X million, performance assessing and and relative was pre-pandemic which represents to

warrants, XX.X% $XXX.X $XX.X XXX.X%. for million repurchases Adjusted and the cash and noted, shares year. along or with the July XXX.X to retirement generated share and the of the level share million the million as the buyback by outstanding. We the the of million effect X, and associated company issuance the the total B year million exceeded and EBITDA Tom operations Class in from $XXX.X As by year was under pre-pandemic XXXX, A nearly had $XXX.X Giving in program, for prior QX Class

and earnings see can bowling you shared in materials, QX center an the the extension the our of that X we of recent This Page releases. is revenue. On trends chart in QX

the period. takeaway which and produce mentioned Results to this assessment recession. results inflation something do data to the is August key Bowlero calls to that return to of QX of That the is our earnings outpacing pre-pandemic very continued related to we compared trend, the and the is during and that FY strong indefinitely. this general well. expect prior through extended as waning impact extremely challenged during not the is are here 'XX end COVID, favorably by release The office macro the of environment, and As said, of of we fears

we just with management, On EBITDA therefore as margin $XXX.X The EBITDA of margin versus costs levels. 'XX XX.X% in XXXX input comparable also of revenue million, cost margin FY we EBITDA XX.X% equivalent Despite performance, Adjusted to and adjusted was seasonally from XXX QX level expanded in versus strong broadly laid a X, pre-pandemic disciplined the coupled revenue was. to basis how FY the in period. increases QX smaller the and higher adjusted pre-pandemic Page pre-pandemic XX% period. have increase out 'XX, led TTM was XX.X% EBITDA points by year than is documented quarter. in the Center an XX% to macro

steep page on the the X consistent business from of chart COVID levels last of The year. impacted the illustrates recovery and

expansion can fiscal quarter-by-quarter of EBITDA First, of of year see you of end the fiscal of trailing through year XXXX adjusted QX from XX the end QX month the XXXX.

the million the million. XX.X% the than For FY line pre-COVID comparable by FY shows adjusted as orange $XX.X stand adjusted in EBITDA versus $XXX.X 'XX at higher million now EBITDA, of grew context, or we alone. 'XX We $XXX.X QX pre-pandemic of level

economics bowling continued X level Page illustrates how center the to improve.

pre-pandemic COVID the comparable year and the charted versus total have impacted quarters. We also the versus prior quarter

the performance. which XXX center discussed, and revenue Bowling and included to grew growth from versus revenue expanded events. among margins significantly. walk-in were As EBITDA were pre-pandemic flat and broad-based guest, was year prior This points leagues basis derived XX%,

cash for X flows Page the the out lays quarter.

balances continued $XX.X which and for previously, As optimization the in as The the $XXX to the FY $XXX.X noted I deploying cash cash as the activities quarter in acquisition, with activities of position $XX.X a during well to financing 'XX, centers of in of million million conversion investing our year. finished support million million nearly building QX of company strong cash structure. during provides very capital despite company generated and

outpace performance In well-positioned to and summary, forward be extremely center I through again the continues FY produce annual next new to growth Thank levels, a look organic improved combination of an presenting to performance performance time, that 'XX and solid very pre-pandemic and the demonstrating business for cementing QX Bowlero's your to continued you quarter. further additions.

we can now Operator, questions. take

Operator

Instructions] [Operator a we session. poll time, One we Thank for you. moment at And conducting be questions. while will please we question-and-answer this

line first Partners. Eric Our the from Handler your question. with question Please MKM with of comes proceed

Eric Handler

in for strength, question. about if third than Good I were you you the supposed quarter. second and the just could fourth better be your wondered afternoon. quarter was talk theory, your your to second Thanks for quarters

things shot pretty week, league If your similar that quarter. that It third the you up. of much and to the point difference extra take events it revenue high away really between was a was seasonal of

Tom Shannon

Brett, that? you want do to take

Brett Parker

Sure.

thank Eric, yeah, Effectively, the So question. yes. you for

if March. pop it we So we chart look key the the time, over thing didn't the you sales see until is, got you into really at growth that that include can of

So and persisted in league in And throughout couple in year. back months first substantial still of QX the we general this Then QX but growth that QX the heavily business, in also until part of COVID. that impacted of events the didn't and see by of level quarter. the of more performance were business into of entirety business, just comparable

So normally of see sort what from standpoint. seasonal that's where that to you flattening expect seeing you're of a would

Eric Handler

of as seasonal we as to left are -- just your peak the even to holiday not But I the not be I'm period, which year. for curious -- there's then the relative last and look just a tracking And and ahead, mean how events, so, we -- events quarter. first a of it. couple Got weeks look

Tom Shannon

the very season what events. like would say. be going to has Well, it's know strong the and to too holiday in strengthen, But of been to continues is trajectory terms early I event

Eric Handler

say, When do for start let's normally people booking holiday events?

Tom Shannon

a flurry of around of first the see after to activity start You November.

book that's a people but Some small earlier, percentage. very

in in to people You it some happening cases. few really out booking but really a are start days see November, until up

the in short relatively as we're But So I business event a now. cycle tremendous said, a amount of businesses seeing event is strength the business.

Eric Handler

much. so you thank Great,

Operator

you. Thank

Our line CJS Crist proceed Please Securities. with with question comes question. Stefanos next your from of the

Stefanos Crist

Hey, great for my quarter. Thanks taking questions.

many start on through give for Could your the maybe to the the during next little want XX Just how us conversions. you went months? on plans quarter, color a conversions centers more and

Tom Shannon

say the for don't that's don't lower, centers. got ballpark. but I sort they know per higher, had know process. they substantial continuous many progress I completed guess, we all The se. a It's that thanks Hey, be to a Stefanos. improved. a little If probably XX a would of I made were might how Sure completed, might got comments. be I good but pretty meaningfully little number on

converting are of we've takes to acquisitions potential, from lot of months recently We number the ongoing these completion. a are have that a permitting and of high It that made in of process the processes. sort

stages And then building. announced so number we're new locations. we're in getting ready of on to We And of various those. a start a number

on construction recently start we'll be broadening of and to about then couple a our those. We're of the existing purchased facility. most upgrade And

projects a But I a being as get revenue to those. quarter, they in matter, from a start So matter. the doesn't really lift tell How completed of once lot many you. in there's see a always you start can't practical it Because substantive improved, works.

Stefanos Crist

corporate know to still of home. people to lot I questions. That's just of great think that know on then guess to a the gone mean work Bowlero. back I events the have events, come room people color. up enough following are Thank there's of you. that one for still anecdotally, from working And people previous events you I as office? I a also Do lot rebound through

Tom Shannon

I now, that of environment, think I a preserve to I camaraderie pent-up from think time. companies events it's face. to also can lot from had be the culture even And have is haven't home going the extended that but for that going strong that face only and and to have together in of forward not get there think to years period for happen extremely demand work only you you an

you effective don't your the go time. to and need periodically job. meet you with we've all at to to be But Now I have to need think office your colleagues do that that learned face actually

think a I so is And that in a lot activity happening of social actually more function.

people still that for a working if from activity even and and people you're extended the I see corporate are so that where going of meet going necessarily home of they're time, period an to in still office. social not if come home, those maybe think lot And even into in from environment, working

Stefanos Crist

great. Thank so much for you That's my taking questions.

Tom Shannon

pleasure. My

Operator

JPMorgan. your line Our next Please proceed Heenan question. the from comes with question of Kevin with

Kevin Heenan

Hi, just level majority that to the and you than it? with I guess as build of fiscal cost higher a Do of 'XX taking were guys. your you margin base front, about just revenue comes forward, result, And how I best my finished limited Congrats to this on strong kind see on very to for mean, the thanks materially go questions. from? a you add variable think given Thanks. pre-pandemic.

Brett Parker

Yes, sure.

environment, I because to think we for margin can say, continue you of grow this on as don't a time, inflationary everything. really sold and we everything. in price goods cost raising we're But long have

don't fact, our sold goods In of have the we on cost of revenue. majority

in is historically, to business way minimizes to input a etc. have and not going it It think I food, the costs, that may be we're think I our continue very operating profit. utilities, really So But designed on great been do costs has labor, we're margin other see as as we maximizes model rising input because fortunate beverage, improvement. that

is I see going which volume see you're we're and of revenue to continues over time. a continued to both think as margin going So that function price expansion, grow,

Kevin Heenan

this Great, macro seen leaves and could insulated a discernible from environment? the notable pressures you played? Have what I games impact visits qualitatively, any lot. date maybe on those or on tied bowling And macro. to in follow-up then inflation, to relatively either Thanks or

Tom Shannon

gas your easily of bowling and Sure, is safe community. well. inflation. and it's When inflation wars seen relatively in any a crazy disruption this, and is I haven't affordable. haven a and accessible in have No, you impact prices, we would bowling It's world. high say

COVID this lockdowns. So through X/XX, great company significant crises, financial we've crisis, three run

as recent came soon the few we most in found to open case, what reassuring. in you as there able it familiar back, cases, as were or because soon to was them. people as last all, ways at in was the stability And rushing was comfortable, some is It any

from gives these that businesses think few shocks an very immunity that have. bowling I So other exogenous

Kevin Heenan

very Okay, much. thanks

Tom Shannon

thanks. Sure,

Operator

Please comes of the our question your next Noble Kupinski with question. line And proceed Capital Michael from with Markets.

Michael Kupinski

as me offer your questions, on you taking quarter let congratulations my my Thank for and well.

prospects? acquisition plan in you of centers if or a full the How you you're just make? would talked talk I the can about year, this let's maybe on the about quarter, of refurbish the what can to little Then look a expecting CapEx you coming the many do pipeline us say You of into acquisitions. plan you you for just number like wondering acquisitions fiscal the little give color year, especially as just that next to anticipate, the for bit that maybe year? was And little we bit a are year, what the if

Tom Shannon

that getting Michael, ballpark newbuilds and I'd done XX at, in we're looking say year. of acquisitions fiscal this between

opportunity change it's is is number pipe. continue really good sort wildly that never you know good looking high because ballpark comes what see XX to the quality way subject is to we What's Now number. around deal The acquisitions. of a now,

buy what to at multiple we're We're market's prices. between valued accretive paying of There's the being attractive and relatively we still immediately every deals. time what at arbitrage able do a these one and we're

operations. always the we course, well expansion as from improved get Of margin

So XX ballpark, relatively high and quality.

number CapEx the that of for terms have handy? in do year, you this Brett, Then

Brett Parker

a going not to number. We're guide

historically. say in I should unit would with they've line to will cost be the And scale So been that. per relatively it what

the put one The closed other this numbers deal. far year around that that is already 'XX have just in on to so I frame would we new

centers. three those. incremental then pipeline contract behind additional eight leases new under and a properties prodigious of for coming acquisitions We deals have signed And for

to continue work So lot of on. that and dialed sort lot already in, a we there's more a then

Michael Kupinski

you. other Got question. And one just

a are at your you time. allocation about shares. plus just forth? What thoughts was million your the of where is levels further repurchases on your stock wondering this X.X little so can bit purchased talk trading on if I current just You and capital

Tom Shannon

spaces that shares and acquisitions or average shares price we to that make, sub-XX. opportunistic, believe, I we're extends we sign, Well, deals that we do, repurchase paid companies etc. to was, The we both we repurchase

very attractive. it the imagine. forward you tied So to somewhat to how was can it But is as price, going as share we're forward. can't guidance to give I much going going repurchase

So needs, we of fulfill enough repurchasing and renovating, generate all shares, you. we cash our building, have have what cash whether buying, it's to enough

need capital activities don't we return high the very, that So as a to do to go our we're these that very any to raise in of very core we position, good to do debt, functionality. markets

know that. specifically. answers question had attractive able So opportunity I doing about in don't this to us. We've do always the and if front We've a very that of make haven't of this to fortunately, set But been we or decisions that. investments

Michael Kupinski

and Thanks, Perfect. congratulations again.

Tom Shannon

Thanks, one all total repurchases just I the that $XX.XX last the clarify, thing Mike. across year. average was made would The we

for So year. be we to was last but level continue will the that opportunistic,

Operator

question-and-answer call We end the have reached management will to back the for session, of turn over remarks. our now I closing

Tom Shannon

right. and Thomas again, you support. call for and on we'll Thanks like your this just quarter. All I'd much, Shannon, your thank for to talk so Well is you CEO. and participation the next Chairman to

Operator

concludes participation. at you concludes Thank this for today's your your This disconnect this lines may you and conference time.

Lucky Strike Entertainment (LUCK) 15 Sep 222022 Q4 Earnings call transcript