Lucky Strike Entertainment Corporation · NYSE:LUCK
Lucky Strike Entertainment — Bowlero — Q4 2023 Earnings Presentation
22 slides from Lucky Strike Entertainment's earnings presentation, Sep 11, 2023
Slide 1: Investor Presentation September 2023
INVESTOR PRESENTATION SEPTEMBER 2023
Slide 2: Disclaimer
Disclaimer Forward-looking statements Some of the statements contained in this presentation are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risk, assumptions a
Slide 3: Why Bowlero is Distinct
Why Bowlero is Distinct Scaled Operator Well-Capitalized Multiple Accretive with a Sustainable and Self-Funding Uses of Capital Growth Algorithm Pioneer in Out-of-Home Becoming Digital- Experiential Entertainment led Secular Trend Industry Leader Diversified Affordable Leisure Owner-operated Portfol
Slide 4: Consistent Top and Bottom-line Growth
Consistent Top and Bottom-line Growth Total Revenue - Reported Adjusted EBITDA1 ($ in M) ($ in M) % Margin(1) 24.1% 34.7% 33.5% $1,059 $354 $316 $912 $672 $162 FY19 FY22 FY23 FY19 FY22 FY23 4 (1) See "Non-GAAP Financial Measures" above for more details. See the Appendix for reconciliation of non-GAA
Slide 5: Fiscal Year 2024 Guidance
Fiscal Year 2024 Guidance Total Revenue growth of 10%-15%(1), with Same Store Revenue(2) flattish Adjusted EBITDA % Margin(2) of 32%-34% Total and Same Store Revenue Adjusted EBITDA(2) ($ in M) ($ in M) % Margin(2) 33.5% 32%-34% ~$1,140 - ~$1,190 ~$365 - ~$405 $1,059 $354 FY23 FY24 Guidance FY23
Slide 6: Scaled Operator with a Sustainable Growth Algorithm
Scaled Operator with a Sustainable Growth Algorithm Same Store Revenue Growth Acquisitions in a Favorable Market Dynamic1 New Builds in Marquee Markets (# of centers) (Gray boxes denote sample current or previous new builds) • CPI-level annual price increases Miami Average • Bundled offerings Tysons
Slide 7: Growing Portfolio of Assets in Diversified and Attractive Markets
Growing Portfolio of Assets in Diversified and Attractive Markets Bowlero Lucky Strike AMF/Other 328 operating centers as of July 2, 2023, 342 pro forma for pending closing of Lucky Strike acquisition Well positioned in highly attractive markets across North America Robust acquisition pipeline
Slide 8: Center Growth Potential
Center Growth Potential Acquisitions + New Builds provide avenue for continued center growth over the long-term Center Count Opportunity to roll up ~500 - 1,000 centers + ~200 new build opportunities 342 315 FY22 FY23 PF Future Potential 8
Slide 9: Growing Wallet Share with Strong Incrementals
Growing Wallet Share with Strong Incrementals Average Unit Volumes have reset to a new base driven by higher Average Revenue Per Customer Margin expansion through high contribution margins across all products and cost management through scale and efficiencies Average Unit Volumes Have Reset to a
Slide 10: Self-Funding Flywheel Drives Sustainable Long-Term Growth
Self-Funding Flywheel Drives Sustainable Long-Term Growth Normalized Calendar SSS CAGR(1) 12.8% FY22-FY23 4.9% FY16-FY19 Robust Free Cash Flow Available for Reinvestment SSS Growth Cash Flow & Growth(1) Generation ~$200M in both FY22 & FY23 Conversions Multi- Higher Foot Center Acquisitions / New Bu
Slide 11: Attractive ROI Across Multi-Pronged Reinvestment Strategy
Attractive ROI Across Multi-Pronged Reinvestment Strategy Indicative One-Year Unlevered Returns (FY16-FY22 Dataset) # of Centers 76 38 9 40%+ 35%-40% 25%-30% (1) (2) Conversions Acquisitions New Builds Accelerating Capital Deployment in FY24 Note: Dollars deployed across strategies in underlying dat
Slide 12: Superior Margin and Cash Flow Profile vs. Peers
Superior Margin and Cash Flow Profile vs. Peers INDUSTRY-LEADING TOP-TIER PROFITABILITY FREE CASH FLOW CONVERSION LTM CY Q2 CY23 EBITDA margin Maintenance LTM CY Q2 CY23 (EBITDA – total capital expenditures) / EBITDA capex is 3%-4% of revenue 1 85% 67% 64% 33% 33% 58% includes growth 19% 19% capex 2
Slide 13: Appendix
—— Appendix
Slide 14: High Cash Flow Generation Provides Capital for Reinvestment
High Cash Flow Generation Provides Capital for Reinvestment Highly profitable model and low maintenance requirements yield ~$200 million of cash flow per year for reinvestment in centers, acquisitions, new builds, and share buybacks Twelve months ended Twelve months ended (dollars in thousands) July
Slide 15: Conversions Are Multi-Phased Paths to an Upscale, Experiential Center
Conversions Are Multi-Phased Paths to an Upscale, Experiential Center Phase I: Pre-Investment – Illustrative ▲ Arcades – update and/or add an arcade ▲ Cosmetics – Flooring, paint (interior and exterior), and lighting ▲ Audio-visual – Video screens at the end of the lanes and upgraded sound system Ph
Slide 16: Illustrative Examples of Converted Centers
Illustrative Examples of Converted Centers Bowlero Manteca Bowl America Falls Church 16
Slide 17: Illustrative Example of a New Build Center – Bowlero Dania Beach
Illustrative Example of a New Build Center – Bowlero Dania Beach 17
Slide 18: Non-GAAP reconciliations
Non-GAAP reconciliations Same Store Reconciliation – FY23 vs. FY19 (dollars in thousands) Q1 FY19 Q2 FY19 Q3 FY19 Q4 FY19 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY19 FY23 Total Revenue – Reported $141,248 $170,410 $205,023 $155,494 $230,260 $273,385 $315,725 $239,420 $672,175 $1,058,790 less: Non-Center Re
Slide 19: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Same Store Reconciliation – FY23 vs. FY22 (dollars in thousands) Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 FY22 FY23 Total Revenue – Reported $180,978 $205,190 $257,820 $267,717 $230,260 $273,385 $315,725 $239,420 $911,705 $1,058,790 less: Non-
Slide 20: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Adjusted EBITDA Reconciliation Twelve Months Ended (in thousands) July 2, 2023 July 3, 2022 Consolidated Revenue $1,058,790 $911,705 Net income (loss) 82,048 (29,934) Net income (loss) margin 7.7% (3.3)% Adjustments: Interest expense 112,160 94,460 Income tax (benef
Slide 21: Non-GAAP reconciliations (cont'd)
Non-GAAP reconciliations (cont’d) Adjusted EBITDA Reconciliation for the Quarter Ended September 26, December 26, March 27, October 2, January 1, (in thousands) 2021 2021 2022 July 3, 2022 2022 2023 April 2, 2023 July 2, 2023 Consolidated Revenue $180,978 $205,190 $257,820 $267,717 $230,260 $273,385
Slide 22: Fully Diluted Share Count
Fully Diluted Share Count Since going public, the fully diluted share count has been reduced by 19.9 million shares or 9.5% while retiring all warrants and 32% of the preferred shares PF as August 30, 2023 Fully Diluted Share Count Adj. for Share (assumes share price of $17.50) (shares in thousands)