Lucky Strike Entertainment (LUCK) 12 May 222022 Q3 Earnings call transcript

Good day and welcome to the Bowlero Corp. Q3 2022 Earnings Conference Call. All participants will be in a listen-only mode.

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

except result risks developments review For further prospectus required with whether any as obligation company forward-looking SEC the to uncertainties, or The a see February XXXX. disclaims our statements filed X, law. and of on expressly applicable details future final please publicly otherwise new these information, concerning any by update as or

release In year addition, the non-GAAP our in our believe XXXX. useful during under our fiscal today's company for and XX-Q EBITDA, quarter will Form press of be evaluating income net call, could will third financial discuss the can be performance. in adjusted in GAAP we included measures, of the calculated Reconciliations which found be earnings

reminder, As conference is now the I recorded. turn ahead. a to go Brett this like conference please to would over being Parker,

welcome Good earnings Brett CFO Corp. Bowlero to year discussion of Parker, President evening, I'm fiscal of the 'XX. and QX and for Corp. Bowlero

in direct are discussion I of presentation, accordance in with presentation. the measures EBITDA, you a reconciliation the non-GAAP this the of with Page X disclaimer begin, part non-GAAP of In well you the things, that will for to GAAP. I is Before in Both not appendix. or as an on integral prepared of, adjusted financial measures deck other which among accordance find which as to alternative measure is a this an

first the nine our with performance of pleased the year. in and extremely are the quarter We months

in company's and pre-pandemic both of is The QX revenue history. same-store in resulted total highest now performance in materially and adjusted a in level EBITDA the basis. Our outperforming on performance, business the

by of by the year-over-year, in Same-store performance growth $XX to very an was by the in the pre-pandemic million the first XX.X%. increased pre-pandemic EBITDA walk-in which operations, rose execute and which for million emerging XXX.X% levels million revenue revenue, This increased level or relative of levels to EBITDA acceleration by performance QX, from cash We positions in retail supported in strong Driving the to XX.X% favorably $XXX.X continued expansion and trailing revenue to represents pandemic. XX.X% XXX.X% April strategy. and was revenue, operations from higher increase prodigious the ended a strong or has cash performance. which sales of to pre-pandemic an resulted of growth our year-over-year, increase the continue also driven potential XX.X%. million of QX. At us We to generated the in week event this source material continued generate also million continue by of quarter, $XX was relative quarter support since our adjusted growth pre-pandemic in an has of onset revenue levels. XXXX. through and This XX, end exceeded growth Adjusted $XXX.X of increase was XX-week and surpassed $XX.X

nearly is QX, traded publicly repurchased all the revenue. release. warrants. also expected in privately earnings well we QX as shared stock, April warrants. and extension to recent the On be On of in common of shares held can completed materials, trends an by chart see This we of you of remaining we is May that Page center the as X X.X During This XXth. the bowling XXX,XXX our redemption announced A redemption Class XX, million

related the said, As to of waning of the do the we on Omicron being and call, data is of to this earnings we assessment That restrictions release COVID this is eased mentioned not the QX impact during that expect something extended business. indefinitely.

business, which both to key event a As comping event excluding have revenue. business total total Omicron’s the here and revenue revenue to takeaway impact and center The pre-pandemic events a into tailwind has revenue that higher presented we now was up was is center events levels. than is felt in the headwind most in turned excluding Omicron due strongly QX relative

As a has the overall there transition the a to step relative change result, in is this occurred pre-pandemic notable during growth performance. It been quarter. trend that

X was. are was disciplined and over XX.X% just was comparable documented But EBITDA part XX.X% impacted. of in quarter. the initial continued well quarter The in out still revenue Page recovery macro the EBITDA initial management, the total and shown So the COVID pre-pandemic the increases we the equivalent million EBITDA of with Adjusted strong from last part adjusted performance, to in QX in points the on the pre-pandemic The coupled from levels. than growth the versus versus XX% as to by increase QX, the consistent of the to quarter. costs, recovery latter led levels higher event of quarter Despite the On $XX here, chart how pre-pandemic part year. broadly the illustrates business cost steep also of revenue. adjusted we heavily have expanded reflective margin laid as the Page XXX the of impacted of input X, an basis business, quarter

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

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

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

quarter. as centers led Gross of result EBITDAR more basis for implementation walk-in As largely model. from total, our centers and events. in for the the the a the $XXX quarter, another versus discussed, out revenue and significantly. million quarter, the XX% X Phase the company. pre-pandemic significantly for redesigned the by of increases points bowling revenue expanded cash In was record generated in efficient This guests business grew margin flows of derived XX to lays

of As and company acquisition, QX summary, of pre-pandemic $XX.X time. our presenting additions. I that levels, noted of and provides strong Thank next accelerated during balances to you centers. to 'XX The again QX forward In growth, and to a very to which conversion continues cash FY building improved combination take million in support finished cash million. quarter for I Operator, outpace well FY look can of produce quarter. generated now very Bowlero's demonstrating the position business a performance be further performance organic center previously, the with through in your And 'XX, nearly we for questions. $XXX company positioned the continued

Thank you.

We will the now begin question-and-answer session.

it Turning Shannon over to Parker. and Brett Tom

Eric with comes first The Partners. from MKM Handler question

could that of if How you about on your wondered impact? couple One, impact A mandate things. particularly was City meaningful the York lifted? talk New the was when mask centers

saw the the and down largely And that Eric. of would dormant New say in then until was business Tom went an moderately York is guess, New It's Shannon. driven about by When York now really vaccine comping XX%. away. the in or really vaccine We come are I Hey, Center important. corporate earnest. really, it it mandate. it I couple market that event the the stopped market mandate after And properties by up last event basis. back was enforcing our The on New killed was corporate went happened, event months, York the thing they us

and the to having of And specifically, going. used the just mask way or back coming guess, be the then again, they determination not sort to ready enforcement things mandate by were to of sort So mandate material; important. vaccine general, much that's companies more I been go and events that mask that

little follow-up, how the terms And could pipeline? terms if things with then, of and of are a builds backlog a as of remodels, update bit you new in in acquisition wondered of numbers an looking the give

been their stronger, the XX way new combination worth XX continues well. various acquisitions. Well, it a I through about in there pipeline, say remodels builds as to stages probably it's we're then strengthen. locations at working are never And now and would of about

it give like they of the -- long end or what's be by will then us take remodels, any just perspective will for those And there? 'XX complete how

have Yes, I'd but of say them through that's we underway, probably XX currently the working scope, their way pretty accurate. on Depends the system.

So end should by I would cohort be calendar -- year. that finished say those finished sure, of nearly or the the

and XXXX, in lead have openings that signed, that been ones more. to already had two long were that But hopefully landlord issues. signed times the will related have We occur

quality every seeing deal signing week of XX So It's increased acquisitions. flow terms and deal high openings LOI those extremely that are we're and seemingly robust and flow. we're in

this you'll think So just decent we’ll number year next I year centers I think, see, that to and going of is a be gangbusters. acquire

Stefanos with comes Crist CJS question The next Securities. from

taking on Thanks for questions the my and quarter. congratulations

You talked and is maybe expansion, in just much of maybe the quantify about where you recovery? return for that events. more the there stage Can how Is room of league more?

back for on even about Well, thanks Sure. We're the to congratulations. leagues.

good leagues a cases, increase or any in increase price years. meaningful I any remaining there many price think in number for upside there's of because been hasn't

below So and it league can where think pricing, be. is far I should

positive business I business, of in in end The positive to actually of think would have highly a -- December, children's high year, event birthday and was combination the corporate, down event On everything from events comped for last parties. November are Omicron. trending except been

And on We of the there at it. because room versus to some not back, same-store we've point. a certainly I all XXXX seen but basis this of run there's corporate come are positive think

activity of I parties, fair We've based, all. at think business back, kids' which birthday social what's corporate come amount point but birthday driving is a is the seen the gatherings. not largely event retail certainly this parties,

think events. continued run to there's I room in corporate So

what then impact and been about seeing business you've you And managing that? with through follow-up. inflation Can how to you're and just talk the the rising

quite mandated and significant which good impacted of are inflation. the labor bowling The little five is about that or and labor years business, of to was for about another shoes and again, out news and bowling in our two-thirds Arcade -- has bit cost. that shoes least a arcade Well, is [technical to a four, not no But states. we'll by we're our have Sure. business. on to last any of a increases increase that seeing A the it can But of price and time cities business. and we the seems only that. and third difficulty] over input continue seen majority our being. a we've food continue without raise number beverage, On at is we've costs average having price flattened little taken the that's issue of by lot do

across prices immune on good raise pretty input we sort inflation, not inputs, the we're position the and a our from yet but board, because have on in of costs So majority able we're don't of We're revenue. balance. to

gross I terms mean way going quantifiably its in to both see and in a I add. terms margins, of you of on was basis EBITDA. just that driving through

it's in So, expanding. real they're But happening time.

The next question comes Capital Markets. from Noble Kupinski with Michael

questions. A couple of

it are develop I are it the to for even get of of back maybe the how that revenue from -- work talked prospects revenue aspect your was maybe the in thoughts need revenue league work be other that is there. and and play? league at as that even Do that play social I it that holding work back might you to prices looking the a further? back play, different can people trajectory what you about offices see perspective development and going people think But might Or of accelerate You it it raise improve. on components kind and at and here like terms mean -- you league there components the to really sounded in

but Hey, divorced be is activity. used companies Michael. anymore. work up No, aren't They from set not anymore. by play league really Leagues to

So are unrelated. two the

just did terms obviously, Because but that's and And period then was the unusual maybe inflation, a in on how strong, not And you your But prepared in manage I mentioned. thoughts what little everybody's downturn? of a was about us it your now. there you looking general more better the prospects. is What was past you give COVID. an and the like downturn? be really can through an of market, performed as at impacted thoughts business talk of extremely that an was react won't sheet more by And a kind economic I'm an COVID. But might and recession if probably business in might COVID you're managed bit forth. -- economic excluding how on markets is their and even right be for wondering if your through balance downturn, concerned you about so economic seems how how from you are downturn Certainly your like so just inflation, I maybe more can and the back you prospect a obviously, recession, minds going about on about

are car general real done pull recessions. Not paying it Well, Brett and I'll close is It's we've think high value data spend? cost, Where terms exorbitant to some easiest I'll it for inflation, to in And that you low airplane. have prices. you so not gas of some close over to then thoughts distances, if we And on They're easiest you hotel on past prices, give to They're spending. home, it, got them the in spend about because reins getting not home. But he's how turn them activity. for if about right? people in that. to getting back the an high

have may but probably meaningful And really have impact and predict. if guess hard we and an it to it. us, we either recession, in is a My impact could so will minor from on direction. it may see on It's benefit some be our we revenue,

point, So in the market, the to be would If the that we the But only reduction might anything, still locations recession, heavily would a very six that because environment. us worst heavily, even corporate was we money lose me in profound, it we for that at event see profitable. XXXX weighted which, company was in had slight inconceivable were profitability. of to solidly we

profits. So, a But healthy yes, our even recession, very, robust. balance sheet is in very we make

Brett turn on So to more that. it for detail let me over

alternative Sure. a the to so low high business Thanks, take dislocation. high Tom. distributed, largely unit step times bowling makes close back, great to cost the Yes, to home, economic be being in count value, of place a

than is looking the example financial which impacts best worse crisis, now. and AMF digits, the of really people horizon considering, broad, was low in are what of that its declines deep terms peak saw be So obviously the extremely in that back might think at and even Bowling trough X% business the on only decline. the revenue of sub revenue And single center I to worst in

sounding is maximize ahead acquisition did, AMF business it, managed problems revenue a stayed lower that sort trained we that we or we bad 'XX And Tom the we cycles, managing plan and not. there dusted perspective. to the shelf into times since kept us well were situation. time. from on the and about more very that's we a the to businesses analysis perspective, soon positioned again, frankly, left the it been done. at, then that and risk a were unit or were we X/XX. I been know the business the EBITDA coming, mission through of that of the are thing, eyed So is COVID, 'XX, is called to not a was extremely have in strength. or business centers heading to having I of And saw best is react we 'XX, at steeper this through know preservation never high. again, we pretty horizon, And very kept of immodest, where we and and aggressively with button but of marking get served be say as ahead and clear the that and on the what together And how at and on always resilience bowling shelf able for the the stay year. situation at revenue now was, off a plan, AMF management at well because coming terms a ahead We that of deal bowling in which count, levers events ahead The plan. center is, the as the enterprise. Tom caught Tom That's management exposed X% profitability, through think highly dealing the of a then, belly multiple be worse something you of that able better of needs in to risk to with whether of from that, of what contingency at said, I several softness declines looking following very to being down was would we we cut and were off looking of flat of where going that know all, us any and the the expanded 'XX grew are We saw not of before we RCP to recession for manifestation back It's from ready, footed. And it. And it not businesses time, because extremely what come or urban, which position got as to running that extreme Brunswick, that a we've of theoretical sort sort developed cost what our than And -- And actually do. may are, in to some you're well

analysts' or echo So extremely is, extent that. versus how performing know would -- trends top the an on expectations, what comparative we're a strong. basis, in with said how on which line expectations, was Tom resilient, absolute I to deal the there any that to is is business extremely the time, same At earlier, ours we and interruption basis the demand, say

clear come. at bar starting about eyed we're from high whatever very the but may time, a same So

Skillz going? the that's an how just give question. on with update And partnership us and you final Can

it Yes, It's mean, self-fulfilling of effort. I I not for marketing driver People It's a of more sort a economic it's game. there. play mean, progresses. of dramatic performance the out us.

have But I So to people don't it's engage continue particular share it. this with stats time. at out there to and

question with Our Brian James. comes Vaccaro from last Raymond

reflect the convert increases of My could comps that you've more increases plus XX% I in and the if the April? just What recent question in terms that details these sales and strengthening was appendix. you're And recent seeing, monthly on revenue help was seen you and wondering in March 'XX? versus the does months XX% in what appreciate

Those are 'XX. versus comps

that That's not I total 'XX… comps. comps Oh, was revenue versus and thought

you're -- comps? mean saying No, sorry. same-store I'm you

Correct.

Yes, that a quarter. But we're we not get high be to just level is -- we'll once company through on more comp basis. store meant break basis, than rather the really out a informative total on this

-- go Yes, And Okay. ahead.

Sorry.

were I going total back, was right, in quarter a see the say, the can to if comps same-store back, that, the just basis look on quarter, weeks that’s what was compare a actual to on XX% You basis. can on you a what correlated few you right? March

And and York could that you perspective previously lagging range comps on seeing provide best regions? to the from on more in regions broadly, some seeing what your touched worst some a but performing across And you're some the regional where more recently? New ballpark color, Maybe between country? the you City perspective just earlier, maybe have recovered you're

for this to California hey, outperform Tom us. Well, is continues Shannon.

the of if And we're the correct same-store like of neighborhood East probably that the XX% more I'm up. to in so, out then there the the there. ballpark, XX% on And -- me Coast, is Brett, basis best world XX%. part wrong, and

would be that range. So the

And currently view where to wanted traffic to levels do sales flow levels the model to then your I brought par the as you recover? there during specifically, And whatever costs margin back, profitability, then some made labor be very about speak, to significant need changes just sustainable? reset pandemic? so ask as these some seeing perhaps are certain that levels the Or your wanted versus are, recent ask understanding you I that staffing obviously through to to continues recover. are strong as And about

gap. last XX% at probably at year success of be. we'd about about haven't much Well, where to closing we the we're number or That's that the had been so. for And like Sure.

not [inefficiency] enforces grow. problem seems frankly, worst the So in it satisfaction the because revenue it's and continues world, and to guest high to in be

the you our nothing is theoretical we're corporate level The we we're they're add have overhead about would both at the or the at in someone add an is on add, have clerk fully the we else consistently. basis, we only costs or payroll below and think level. example, company a we the we unit to percentage company, support powers, growth that fact all. our for more centers. overhead to So that a new at The IT staffing bodies an meaningful might back. it's And that of the organic number of a level XX% new capacity, that is And means staffed, add of person are But but driving profitable. when just optimal. certainly a tend down not as revenue or There standpoint from from

conference. our for concludes attending for today's turn remarks. over Brett to thank And I'd Tom everyone and like session. question-and-answer final to it This

you there. is Parker. operator much, Thank very Brett This

time, to participation Just would with information in forward have the this to distribute to the and one we just folks the And for position continuing it. of be call do interact for and in as the -- thank support the joining. Thanks company. a everybody, I last we look and

a So thank you terrific and evening. have

conference now The today's for presentation. attending concluded. has you Thank

now You disconnect. may