Lucky Strike Entertainment Corp

Previous wording

Lucky Strike’s results for the six months ended December 29, 2024 exhibited the expected total revenue growth and shift of focus to internal initiatives while also increasing liquidity in anticipation of what we believe will be an increased acquisition environment during the 2025 fiscal year to further diversify our location based entertainment offerings. To highlight the Company’s recent activity during the six months ended December 29, 2024:

Current wording

Lucky Strike’s results for the nine months ended March 30, 2025 exhibited the expected total revenue growth and shift of focus to internal initiatives while also increasing liquidity in anticipation of what we believe will be an increased acquisition environment during the 2025 fiscal year. To highlight the Company’s recent activity during the nine months ended March 30, 2025:

Previous wording

•We reported total revenue growth of 5% despite an unfavorable calendar shift.

Current wording

•We reported total revenue growth of 3%.

Previous wording

•We effected the rebranding of the Company from Bowlero to Lucky Strike Entertainment.

Current wording

•We rebranded the Company from Bowlero to Lucky Strike Entertainment.

Previous wording

•We completed and opened four newly built Lucky Strike locations in prime markets with two others underway.

Current wording

•We completed and opened four newly-built Lucky Strike locations in prime markets.

Previous wording

•We completed the acquisitions of Boomers Parks and Spectrum Entertainment Complex to further enhance our location-based entertainment offerings.

Current wording

•We completed the acquisitions of Boomers Parks, Spectrum Entertainment Complex, and Adventure Park to further enhance our location-based entertainment offerings. We also signed a definitive agreement to acquire Shipwreck Island water park, which closed in April.

Previous wording

Revenues: For the quarter ended December 29, 2024, revenues totaled $300,074 and represented a slight decrease of $5,597, or 2%, over the same period of last fiscal year. The slight decrease in revenues is primarily attributable to a decline in revenues on a same-store basis, which was partially offset by an increase in revenue from newly acquired or leased locations.

Current wording

Revenues: For the quarter ended March 30, 2025, revenues totaled $339,882 and represented a slight increase of $2,212, or 1%, over the same period of last fiscal year. The slight increase is primarily attributable to an increase in revenue from newly acquired or leased locations, which was partially offset by a decline in revenues on a same-store basis.

Previous wording

(1) Revenues from 347 locations are included in the same-store comparable location base for the comparison in the above table. In our previously filed Form 10-Q for the three months ended December 31, 2023, revenues from 315 locations were included in the same-store revenue.

Current wording

(1) Revenues from 348 locations are included in the same-store comparable location base for the comparison in the above table. In our previously filed Form 10-Q for the three months ended March 31, 2024, revenues from 322 locations were included in the same-store revenue.

Previous wording

Same-store revenues includes revenue from locations that are open in periods presented (open in both the current period and the prior period being reported) and excludes revenues from locations that are not open in periods presented such as acquired new locations or locations closed for upgrades, renovations or other such reasons, as well as media revenues and service fee revenues. The decrease in same-store revenues during the quarter ended December 29, 2024 was primarily attributable to a reduction in group events business relative to the consumer environment during the same period of last fiscal year. In addition, revenues on a same-store basis were impacted by an unfavorable calendar shift.

Current wording

Same-store revenues includes revenue from locations that are open in periods presented (open in both the current period and the prior period being reported) and excludes revenues from locations that are not open in periods presented such as acquired new locations or locations closed for upgrades, renovations or other such reasons, as well as media revenues and service fee revenues. The decrease in same-store revenues during the quarter ended March 30, 2025 was primarily attributable to a reduction in our corporate event business relative to the same period of last fiscal year.

Previous wording

Location operating costs increased $3,857, or 5%. Increases in costs were in various areas including amusement costs, advertising, property taxes, insurance, and utilities. The increase in costs was mainly attributable to location count growth from acquisitions and lease agreements. For instance, Raging Waves water park and Boomers Parks location operating costs contributed $5,000 to the increase. The increase in costs were partially offset by cost management initiatives with reductions noted in supplies and repairs and maintenance. Location operating costs as a percent of revenues increased from 26% during the second quarter of fiscal 2024 to 28% during the second quarter of fiscal 2025, mainly due to the aforementioned location count growth and fixed costs.

Current wording

Location operating costs increased $5,802, or 7%. Increases in costs were in various areas including advertising, property taxes, insurance, and utilities. The increase in costs was mainly attributable to location count growth from acquisitions and lease agreements. For instance, Raging Waves water park and Boomers Parks location operating costs contributed $4,300 to the increase. The increase in costs were partially offset by cost management initiatives, which resulted in a $1,900 decrease in repairs and maintenance expense. Location operating costs as a percent of revenues increased from 26% during the third quarter of fiscal 2024 to 27% during the third quarter of fiscal 2025, mainly due to the aforementioned location count growth and fixed costs.

Previous wording

Location payroll and benefit costs: Location payroll and benefit costs consist of employee costs that directly support location operations. Location payroll and benefit costs decreased $6,866, or 9%. The decrease in location payroll and benefit costs reflects the impact of the ongoing staffing optimization initiative. This is further illustrated by the decrease as a percent of revenues from 25% during the second quarter of fiscal 2024 to 24% during the second quarter of fiscal 2025. The decrease driven by staffing optimization was partially offset by location count growth. For instance, Raging Waves water park and Boomers Parks added $2,600 of location payroll and benefit costs.

Current wording

Location payroll and benefit costs: Location payroll and benefit costs consist of employee costs that directly support location operations. Location payroll and benefit costs decreased $3,028, or 4%. The decrease in location payroll and benefit costs reflects the impact of the ongoing staffing optimization initiative. This is further illustrated by the decrease as a percent of revenues from 23% during the third quarter of fiscal 2024 to 22% during the third quarter of fiscal 2025. The decrease driven by staffing optimization was partially offset by location count growth. For instance, Raging Waves water park and Boomers Parks added $2,400 of location payroll and benefit costs.

Previous wording

Location food & beverage costs: Location food & beverage costs increased $3,150, or 8%. The increase in location food & beverage costs is mainly attributable to increased food & beverage revenue as compared to the second quarter of fiscal 2024.

Current wording

Location food & beverage costs: Location food & beverage costs increased $449, or 2%. The increase in location food & beverage costs is mainly attributable to increased food & beverage revenue as compared to the third quarter of fiscal 2024.

Previous wording

Depreciation and amortization: Depreciation and amortization increased $7,678 or 11%. The increase in depreciation and amortization reflects the added depreciable assets, finite-lived intangible assets, and finance leases through acquisitions and capital expenditures.

Current wording

Depreciation and amortization: Depreciation and amortization increased $3,998 or 11%. The increase in depreciation and amortization reflects the added depreciable assets, finite-lived intangible assets, and finance leases through acquisitions and capital expenditures.

Previous wording

Interest expense, net: Interest expense primarily relates to interest on debt, finance leases, and financing obligations. Interest expense increased $2,559, or 6%. The higher interest expense is primarily the result of an added financing obligation within the second quarter of fiscal 2024 coupled with lower interest income as compared to the second quarter of fiscal 2024.

Current wording

Interest expense, net: Interest expense primarily relates to interest on debt, finance leases, and financing obligations. Interest expense increased $2,524, or 5%. The higher interest expense is primarily attributable to the $150,000 incremental term loan obtained in the second quarter of fiscal 2025 coupled with lower interest income as compared to the third quarter of fiscal 2024.

Previous wording

Income Taxes: Income tax expense and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. The effective tax rate of (67)% for the quarter ended December 29, 2024 was primarily attributed to the change in fair value of the earnout liability, and permanent differences.

Current wording

Income Taxes: Income tax expense and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. The effective tax rate of 58% for the quarter ended March 30, 2025 was primarily attributed to the change in fair value of the earnout liability, and permanent differences.

Previous wording

Revenues: For the six months ended December 29, 2024, revenues totaled $560,269 and represented an increase of $27,193, or 5%, over the same period of last fiscal year. The increase in revenues is primarily attributable to revenue from newly acquired or leased locations. The increase in revenue from newly acquired or leased locations was partially offset by a decline in revenues on a same-store basis.

Current wording

Revenues: For the nine months ended March 30, 2025, revenues totaled $900,151 and represented an increase of $29,405, or 3%, over the same period of last fiscal year. The increase in revenues is primarily attributable to revenue from newly acquired or leased locations, which was partially offset by a decline in revenues on a same-store basis.

Previous wording

The following table summarizes our revenues on a same-store-basis for six months ended December 29, 2024 as compared to the corresponding period last fiscal year:

Current wording

The following table summarizes our revenues on a same-store-basis for nine months ended March 30, 2025 as compared to the corresponding period last fiscal year:

Previous wording

(1) Revenues from 327 locations are included in the same-store comparable location base for the comparison in the above table. In our previously filed 10-Q for the six months ended December 31, 2023, revenues from 312 locations were included in the same-store revenue.

Current wording

(1) Revenues from 327 locations are included in the same-store comparable location base for the comparison in the above table. In our previously filed 10-Q for the nine months ended March 31, 2024, revenues from 311 locations were included in the same-store revenue.

Previous wording

The decrease in same-store revenues during the six months ended December 29, 2024 was primarily attributable to a reduction in group events business relative to the consumer environment during the same period of last fiscal year. In addition, revenues on a same-store basis were impacted by an unfavorable calendar shift.

Current wording

The decrease in same-store revenues during the nine months ended March 30, 2025 was primarily attributable to a reduction in our corporate event business relative to the same period of last fiscal year.

Previous wording

Location operating costs: Location operating costs increased $16,712, or 11%. Increases in costs were in most areas and include amusement costs, advertising, rent, property taxes, and utilities. The increase in costs was mainly attributable to location count growth from acquisitions and lease agreements. For instance, Raging Waves water park and Boomers Parks location operating costs contributed $6,300 to the increase. The increase in costs were partially offset by cost management initiatives with reductions noted in supplies and repairs and maintenance. Location operating costs as a percent of revenues increased from 29% during the second quarter of fiscal 2024 to 30% during the second quarter of fiscal 2025, mainly due to the aforementioned location count growth and fixed costs.

Current wording

Location operating costs: Location operating costs increased $22,514, or 9%. Increases in costs were in most areas and include amusement costs, advertising, rent, property taxes, and utilities. The increase in costs was mainly attributable to location count growth from acquisitions and lease agreements. For instance, Raging Waves water park and Boomers Parks location operating costs contributed $10,600 to the increase. The increase in costs were partially offset by cost management initiatives with reductions noted in supplies and repairs and maintenance of $2,200 and $3,500, respectively. Location operating costs as a percent of revenues increased from 27% during the third quarter of fiscal 2024 to 29% during the third quarter of fiscal 2025, mainly due to the aforementioned location count growth and fixed costs.

Previous wording

Location payroll and benefit costs: Location payroll and benefit costs decreased $2,484, or 2%. The decrease in location payroll and benefit costs reflects the impact of the ongoing staffing optimization initiative. This is further illustrated by the decrease as a percent of revenues from 26% during the second quarter of fiscal 2024 to 25% during the second quarter of fiscal 2025. The decrease driven by staffing optimization was partially offset by location count growth. For instance, Raging Waves water park and Boomers Parks added $3,900 of location payroll and benefit costs.

Current wording

Location payroll and benefit costs: Location payroll and benefit costs decreased $5,512, or 3%. The decrease in location payroll and benefit costs reflects the impact of the ongoing staffing optimization initiative. This is further illustrated by the decrease as a percent of revenues from 25% during the third quarter of fiscal 2024 to 24% during the third quarter of fiscal 2025. The decrease driven by staffing optimization was partially offset by location count growth. For instance, Raging Waves water park and Boomers Parks added $6,300 of location payroll and benefit costs.

Previous wording

Location food & beverage costs: Location food & beverage costs decreased $695, or 3%. The decrease in location food & beverage costs is mainly attributable to decreased food & beverage revenue as compared to the second quarter of fiscal 2024.

Current wording

Location food & beverage costs: Location food & beverage costs increased $3,599, or 5%. The increase in location food & beverage costs is mainly attributable to increased food & beverage revenue as compared to the third quarter of fiscal 2024.

Previous wording

Selling, general and administrative expenses (“SG&A”): SG&A expenses decreased $4,764 or 6%. The decrease is mainly attributable to a decrease in professional fees, which was partially offset by an increase in share-based compensation expense. The decrease in professional fees is mainly attributable to less acquisition activity as compared to the same period of the prior year and cost management initiatives at corporate. The cost management initiatives at corporate have also resulted in decreased payroll expense as compared to the same period of the prior fiscal year. The increase in share-based compensation expense is mainly attributable to less forfeiture activity as compared to the same period of fiscal 2024 coupled with an increase in share-based awards granted thus far in fiscal 2025.

Current wording

Selling, general and administrative expenses (“SG&A”): SG&A expenses decreased $643 or 1%. The decrease is mainly attributable to a decrease in professional fees, which contributed approximately $10,000 to the decrease in SG&A expenses. This was partially offset by an increase in share-based compensation expense, which increased approximately $8,200. The decrease in professional fees is mainly attributable to less acquisition activity as compared to the same period of the prior year and cost management initiatives at corporate. The cost management initiatives at corporate also resulted in a decrease in SG&A labor of approximately $900. The increase in share-based compensation expense is primarily due to the non-recurring settlement of equity awards related to the retirement of a long-time executive of the Company, which resulted in an additional $4,809 of share-based compensation expense. This was coupled with less forfeiture activity as compared to the same period of fiscal 2024 and an increase in share-based awards granted thus far in fiscal 2025.

Previous wording

Depreciation and amortization: Depreciation and amortization increased $2,047 or 6%. The increase in depreciation and amortization reflects the added depreciable assets, finite-lived intangible assets, and finance leases through acquisitions and capital expenditures.

Current wording

Depreciation and amortization: Depreciation and amortization increased $11,676 or 11%. The increase in depreciation and amortization reflects the added depreciable assets, finite-lived intangible assets, and finance leases through acquisitions and capital expenditures.

Previous wording

Interest expense, net: Interest expense increased $13,780, or 16%. The higher interest expense is primarily the result of an added financing obligation within the second quarter of fiscal 2024 coupled with lower interest income as compared to the second quarter of fiscal 2024.

Current wording

Interest expense, net: Interest expense increased $16,304, or 12%. The higher interest expense is primarily the result of an added financing obligation within the second quarter of fiscal 2024, the $150,000 incremental term loan obtained in the second quarter of fiscal 2025, and lower interest income as compared to the third quarter of fiscal 2024.

Previous wording

Change in fair value of earnouts: The impact on the statement of operations during six months ended December 29, 2024 is due to the decrease in the fair value of the earnouts, which mainly reflects the decrease in the Company’s stock price in the current quarter.

Current wording

Change in fair value of earnouts: The impact on the statement of operations during nine months ended March 30, 2025 is due to the decrease in the fair value of the earnouts, which mainly reflects the decrease in the Company’s stock price in the current quarter.

Previous wording

Income Taxes: Income tax expense and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. The effective tax rate of (70)% for six months ended December 29, 2024 was primarily attributed to the change in fair value of the earnout liability, permanent differences, and other discrete tax items.

Current wording

Income Taxes: Income tax expense and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. The effective tax rate of (5)% for nine months ended March 30, 2025 was primarily attributed to the change in fair value of the earnout liability, permanent differences, and other discrete tax items.

Previous wording

(1)The closed location adjustment is to remove EBITDA for closed locations. Closed locations are those locations that are closed for a variety of reasons, including permanent closure, newly acquired or built locations prior to opening, locations closed for renovation or rebranding and conversion. If a location is not open on the last day of the reporting period, it will be considered closed for that reporting period. If the location is closed on the first day of the reporting period for permanent closure, the location will be considered closed for that reporting period.

Current wording

(2)The closed location adjustment is to remove EBITDA for closed locations. Closed locations are those locations that are closed for a variety of reasons, including permanent closure, newly acquired or built locations prior to opening, locations closed for renovation or rebranding and conversion. If a location is not open on the last day of the reporting period, it will be considered closed for that reporting period. If the location is closed on the first day of the reporting period for permanent closure, the location will be considered closed for that reporting period.

Previous wording

(2)The adjustment for transaction costs and other advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and costs in connection with an initial public offering, in each case, regardless of whether consummated.

Current wording

(3)The adjustment for transaction costs and other advisory costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, dispositions and costs in connection with an initial public offering, in each case, regardless of whether consummated.

Previous wording

(3)The adjustment for changes in the value of earnouts is to remove of the impact of the revaluation of the earnouts. Changes in the fair value of the earnout liability is recognized in the statement of operations. Decreases in the liability will have a favorable impact on the statement of operations and increases in the liability will have an unfavorable impact.

Current wording

(4)The adjustment for changes in the value of earnouts is to remove of the impact of the revaluation of the earnouts. Changes in the fair value of the earnout liability is recognized in the statement of operations. Decreases in the liability will have a favorable impact on the statement of operations and increases in the liability will have an unfavorable impact.

Previous wording

(4)Other includes the following related to transactions that do not represent ongoing or frequently recurring activities as part of the Company’s operations: (i) non-routine expenses, net of recoveries for matters outside the normal course of business, (ii) costs incurred that have been expensed associated with obtaining an equity method investment in a subsidiary of VICI, (iii) severance expense, and (iv) other individually de minimis expenses. Certain prior year amounts have been reclassified to conform to current year presentation.

Current wording

(5)Other includes the following related to transactions that do not represent ongoing or frequently recurring activities as part of the Company’s operations: (i) non-routine expenses, net of recoveries for matters outside the normal course of business, (ii) costs incurred that have been expensed associated with obtaining an equity method investment in a subsidiary of VICI, (iii) severance expense, and (iv) other individually de minimis expenses. Certain prior year amounts have been reclassified to conform to current year presentation.

Previous wording

We manage our liquidity through assessing available cash-on-hand, our ability to generate cash and our ability to borrow or otherwise raise capital to fund operating, investing and financing activities. The Company remains in a positive financial position with available cash balances.

Current wording

We manage our liquidity through assessing available cash-on-hand, our ability to generate cash and our ability to borrow or otherwise raise capital to fund operating, investing and financing activities.

Previous wording

At December 29, 2024, we had approximately $80,755 of available cash and cash equivalents.

Current wording

At March 30, 2025, we had approximately $79,088 of available cash and cash equivalents.

Previous wording

Operating activities provided $68,147 as compared to $71,199 during the same period of the prior fiscal year. The decrease in cash provided by operating activities primarily reflects an increase in interest expense partially offset by higher revenues and lease incentive receipts.

Current wording

Operating activities provided $154,767 as compared to $148,098 during the same period of the prior fiscal year. The increase in cash provided by operating activities primarily reflects an increase in revenues and lease incentive receipts partially offset by higher interest expense.

Previous wording

Investing activities used $133,214 as compared to $246,666 during the same period of the prior fiscal year. The decrease in cash used in investing activities mainly reflects a reduction in capital expenditures and less acquisition activity as compared to the same period of the prior year. This was partially offset by the purchase of 66 acres of land adjacent to Raging Waves water park for $9,400.

Current wording

Investing activities used $166,412 as compared to $285,960 during the same period of the prior fiscal year. The decrease in cash used in investing activities mainly reflects a reduction in capital expenditures and less acquisition activity as compared to the same period of the prior year. This was partially offset by the purchase of 66 acres of land adjacent to Raging Waves water park for $9,400.

Previous wording

Financing activities provided $79,099 as compared to $169,738 during the same period of the prior fiscal year. The decrease in cash provided by financing activities primarily reflects the proceeds from the transaction with VICI during the same period of the prior year and increased cash dividends during the six months ended December 29, 2024. This was partially offset by less share buyback activity as compared to the same period of the prior year and the impact of the $150,000 incremental term loan.

Current wording

Financing activities provided $23,925 as compared to $154,287 during the same period of the prior fiscal year. The decrease in cash provided by financing activities primarily reflects the proceeds from the transaction with VICI during the same period of the prior year, increased cash dividends, and the settlement of equity awards during the nine months ended March 30, 2025. This was partially offset by less share buyback activity as compared to the same period of the prior year and the impact of the $150,000 incremental term loan.