Lucky Strike Entertainment Corporation · NYSE:LUCK
Lucky Strike Entertainment — Bowlero — SPAC Merger (September 2021)
37 slides from Lucky Strike Entertainment's SPAC merger presentation, September 2021
Slide 1: Discussion Materials
Discussion Materials September 2021
Slide 2: Disclaimer
Disclaimer This presentation (this “Presentation”) has been prepared to assist interested parties in making their own evaluation with respect to a potential business combination between Bowlero Corp. (“Bowlero”) and Isos Acquisition Corporation (“ISOS”) and related potential investment in ISOS (toge
Slide 3: Disclaimer (cont’d)
Disclaimer (cont’d) Forecast and Illustrative Scenarios This Presentation contains information with respect to Bowlero’s projected results. This forecast is based on currently available information and Bowlero’s estimates. Bowlero’s independent auditors have not audited, reviewed, compiled or perfor
Slide 4: Our Journey
OUR JOURNEY 1938 1997 2013 2014 2014 2018 2019 2020 2021 The original Tom Shannon Bowlmor Lanes Bowlmor AMF Bowlmor AMF acquires Bowlmor AMF Bowlero Corp Begin Gaming Launched QMS Bowlmor acquires and acquires AMF launches its new the Brunswick embraces its purchases the initiatives; technology Lane
Slide 5: The Bowlero Ecosystem
The Bowlero Ecosystem Powerful and reinforcing growth flywheel R E A L E S TAT E M ED IA Significant value creation opportunity Ownership of PBA creates strong through acquisitions and go-forward brand equity and prestige amongst optionality bowlers, which maximizes standalone profitability and driv
Slide 6: Bowlero at a glance
Bowlero at a glance Largest operator of Rapid business Clear line of sight Strong Consistent bowling centers recovery and positive post-COVID historical financials organic growth in the world outlook 3221 $13mm $878mm $746mm 4% Centers in FY2021A consolidated CY2022E Feb’20A TTM run-rate Same-store-
Slide 7: World's largest owner / operator of bowling centers
World's largest owner / operator of bowling centers Industry fragmentation creates enormous consolidation opportunity MARKET LANDSCAPE ~3,500 (# of centers) 3221 ~7x next largest operator 44 15 14 13 Independent centers 7 Source: Company websites and management estimates 1 Location count, includes c
Slide 8: Portfolio of assets in highly attractive markets
Portfolio of assets in highly attractive markets Well positioned in highly attractive markets across North America – 310 centers currently operating (302 in the U.S., 6 in Mexico and 2 in Canada) – 3 additional new build centers in development – 9 additional centers signed or under LOI 74%+ of r
Slide 9: Balanced, growing and recurring revenue streams
Balanced, growing and recurring revenue streams RETAIL LEAGUE EVENTS AMUSEMENTS Walk-in / recreational bowlers League bowlers remain a large and Considerable guest recurrence at Amusements are an excellent source including families, millennials, “date stable source of recurring revenue event
Slide 10: Track record of strong, consistent organic growth
Track record of strong, consistent organic growth QUARTERLY SSS GROWTH 9.6% 8.0% 7.9% 6.8% 7.0% 5.7% 2016-2019 average 4.9% 4.1% 4.4% 4.4% 4.5% 4.1% 3.8% 2.9% 2.8% 2.2% (0.3%) 2016 2017 2018 2019 10 Note: Values represent quarterly same store sales
Slide 11: Our strong organic performance is enhanced by our new locations
Our strong organic performance is enhanced by our new locations ADDED 26 LOCATIONS TO OUR FOOTPRINT THROUGH ACQUISITIONS AND NEW BUILDS SINCE JUNE 2021 EBITDA multiple paid # of Net cash 1 – Year ND TTM2 ROI3 WA MT MN MI ($MM) centers invested fwd ME ID SD WI OR VT MI WY NY NH Acquisitions 5 $29 8.4
Slide 12: Attractive Center Level EBITDAR / EBITDA margin driven by significant operational leverage
Attractive Center Level EBITDAR / EBITDA margin driven by significant operational leverage CENTER LEVEL EBITDAR CENTER LEVEL EBITDA $365 $280 $310 $278 $234 $250 $259 $206 $183 $189 FY '16A FY '17A FY '18A FY '19A Feb '20 FY '16A FY '17A FY '18A FY '19A Feb '20 TTM run-rate TTM run-rate % of leisure
Slide 13: Top tier profitability and cash flow conversion
Top tier profitability and cash flow conversion INDUSTRY LEADING TOP TIER PROFITABILITY FREE CASH FLOW CONVERSION CY2019 EBITDA margin1,2 CY2019 (EBITDA – total capital expenditures) / EBITDA1,3 29% 68% Average maintenance capex of only $10mm4 20% 54% 16% 49% 11% 40% Theatres FECs Casual dining Casu
Slide 14: Highly attractive returns on invested capital
Highly attractive returns on invested capital BOWLERO’S STRONG TRACK RECORD OF ROI FY2014-FY2019 66% 37% 31% Bowlmor / Bowlero conversions 1 New games & Amusements New centers Per center metric Number of centers invested 41 1682 13 Avg. investment capex $2,338,219 $215,310 $3,823,0484 Avg. increment
Slide 15: Highly attractive returns on invested capital (cont’d)
Highly attractive returns on invested capital (cont’d) Illustrative case studies NORTH BETHESDA, JUPITER, SCOTTSDALE, MARYLAND FLORIDA ARIZONA $3.4mm 29% 3.4 $3.4mm 45% 2.2 $2.0mm 56% 1.8 Net cash invested ROI Payback years Net cash invested ROI Payback years Net cash invested ROI Payback years Fo
Slide 16: Significant opportunity to accelerate already robust organic growth through center upgrades
Significant opportunity to accelerate already robust organic growth through center upgrades SAME STORE REVENUE CAGR SAME STORE EBITDA CAGR FY2014 – Feb 2020 FY2014 – Feb 2020 11% 9% 7% 7% 4% 2% Total portfolio Converted centers Low investment centers Total portfolio Converted centers Low investment
Slide 17: Leisure revenue production well ahead of pre-pandemic performance
Leisure revenue production well ahead of pre-pandemic performance LEISURE REVENUE1 % GROWTH / (DECLINE) 2021 VS. 2019 Grow by revenue stream vs. 2019 April May June July August September to date2 Retail Bowling 1% 12% 20% 26% 25% 54% League Bowling (43%) (20%) (15%) (8%) (12%) (33%) Event Bowling (1
Slide 18: Strong and improving center-level economics
Strong and improving center-level economics Gross profit and EBITDAR margins expanded +600 bps over Q4 ‘19 Q4 ($MM) '21A '21E ‘19A Q4 ’21 revenues across all major product lines surpassed Bowling & shoe $80 $62 $80 expectations and recovered beyond Q4 ’19 results Food & Beverage 53 42 53 Amuseme
Slide 19: Q4 FY’21 EBITDA was 82% greater than the comparable pre-COVID quarter
Q4 FY’21 EBITDA was 82% greater than the comparable pre-COVID quarter CONSOLIDATED REALIZED EBITDA1 ($MM) Realized EBITDA1 in Q4 '21 exceeded Q4 '19 by nearly $20mm or 82% $43 +82% Retail Bowling & Shoe and Amusements revenues were 11% and 29% higher than pre-pandemic levels, respectively Sign
Slide 20: Significantly outperformed FY2021 guidance
Significantly outperformed FY2021 guidance due to recovery in businesses and accelerating operational efficiencies CONSOLIDATED REVENUE ($MM) CONSOLIDATED ADJUSTED EBITDA1 ($MM) % Beat: +2% +14% $395 $105 $386 $92 FY '21E FY '21A FY '21E FY '21A Note: FY as of 6/30 20 1 Adjusted EBITDA as defined by
Slide 21: Increasing CY2022E consolidated adjusted EBITDA guidance by $10mm
Given base business outperformance, we are increasing CY2022E consolidated adjusted EBITDA1 guidance by $10mm or 4% vs. prior plan Increase in guidance Base Business assumes existing center revenue $285 $4 $3 $10 growth of 10% vs. pre-pandemic and the effect of $8 $16 additional conversions $19
Slide 22: Strong cash generation strengthened our financial position
Strong cash generations from operations strengthened our financial position and provided increased flexibility $54mm of cash generated from operations in Q4 FY2021 $33mm of permanent annualized savings through reduced costs $58mm in reduced capital expenditures ($ ‘000s) Three months ending Ju
Slide 23: Consolidated long term growth forecast
Consolidated long term growth forecast CONSOLIDATED REVENUE CONSOLIDATED ADJUSTED EBITDA UNLEVERED FREE CASH FLOW1 $955 $910 $878 $817 $307 $746 $285 $295 $267 $672 $619 $520 $201 $144 $187 $167 $161 $131 $128 $136 $395 $114 $105 $81 $66 $63 $48 FY '18A FY '19A Feb '20 FY '20A FY '21A FY '22E CY '22
Slide 24: Global expansion represents a significant opportunity to further accelerate growth
Global expansion represents a significant opportunity to further accelerate growth Bowlero’s powerful brands are primed for monetization Significant international growth could be achieved through a combination of acquisition and licensing Bowling is a fast-growing sport internationally and has signi
Slide 25: Fast growing PBA diversifies and reinforces business model
Fast growing PBA diversifies and reinforces business model Over 70 hours / year of original first-run linear programming $3mm+ dollar media rights contract with Fox Sports $550k+ in additional media rights fees from CBS Sports Network and OTT platform, FloBowling Largest viewing audience in
Slide 26: Innovation in sports betting and digital gaming
Innovation in sports betting and digital gaming to elevate in- center experience and drive upside RUMBLE G A M I N G S P O N S O RS H I P S IN-CENTER GAMING SPORTS BETTING AND W I T H B E T TO RV I E W D I G I TA L G A M I N G International virtual tournaments in Partnered with Bettorview, a dig
Slide 27: Proven, proprietary technology drives continuous operational improvement
Proven, proprietary technology drives continuous operational improvement QMS enables businesses to consistently access available operating leverage and drive better, more predictable performance Management SaaS platform powered by a multilayered algorithm Developed in-house to optimize the manag
Slide 28: Transaction overview
Transaction over view
Slide 29: Transaction summary
Transaction summary $2,474mm pre-transaction enterprise value ($2,616 pro forma enterprise Sources SPAC cash in trust (assuming no redemptions) $255 value) PIPE 2502 Implies 9.2x post-money FV / CY2022E adjusted EBITDA1 Exchange common equity for convertible preferred 105 Bowlero stockholders
Slide 30: Overview of ISOS Acquisition Corp
Over view of ISOS Acquisition Corp Summary of ISOS IPO Backed by leading institutional investors IPO date: March 3rd, 2021 $255mm, including over-allotment Offering size: • Upsized from initial $200mm size 25.5mm units consisting of one Class A Units offered: ordinary share and 1/3 of 1 warrant ($11
Slide 31: ISOS team overview
ISOS team overview George Barrios Michelle Wilson Winston Meade Co-CEO Co-CEO Managing Director Award winning C-suite executive with proven Forbes’ and Sports Illustrated’s 10 Most Influential 20+ years of M&A experience as an investment track record of creating shareholder value in and Powerf
Slide 32: Investment thesis
Investment thesis Bowlero: A premium consumer experience with opportunity for significant value creation INDUSTRY LEADER WELL-POSITIONED HIGHLY PROFITABLE Industry leader in massive Well-positioned to benefit Highly profitable business model addressable market of $11bn1 for from secular shift in wit
Slide 33: Appendix
Appendix
Slide 34: Non-GAAP reconciliations
Non-GAAP reconciliations Full Year ($MM) FY2021A Consolidated net (loss) income ($126) Adjustments: Interest expense 89 Income tax expense (benefit) (1) Depreciation and amortization 92 Share-based compensation 3 Closed center EBITDA1 4 Foreign currency exchange (gain) loss (0) Asset disposition los
Slide 35: Non-GAAP reconciliations (cont’d)
Non-GAAP reconciliations (cont’d) Q4 ($MM) FY2019A FY2021A Consolidated net (loss) income ($16) ($13) Adjustments: Interest expense 15 23 Income tax expense (benefit) 2 (1) Depreciation and amortization 26 24 Share-based compensation 1 1 Closed center EBITDA1 (3) 2 Foreign currency exchange (gain) l
Slide 36: Non-GAAP reconciliations (cont’d)
Non-GAAP reconciliations (cont’d) ($ ‘000s) Three months ending June 27, 2021 Twelve months ending June 27, 2021 Net cash provided by operating activities $41,091 $58,232 Business Interruption Insurance proceeds 0 (20,187) Interest on debt 13,317 46,460 Effect of exchange rates on cash 44 27 Operati
Slide 37: Thank You
THANK YOU