Lucky Strike Entertainment Corp
For the period ended Sep 27, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 27, 2026 · Filed Nov 5, 2026
LUCK$3.80+1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-29; filed 2026-05-06.
0001628280-26-030914
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-27; filed 2026-11-05.
0001628280-26-070587
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 67 current paragraphs.
28 unchanged; 23 reworded; 15 added; 28 removed; 9 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
•Brand Consolidation: The Company converted an additional 42 bowling locations to the Lucky Strike brand during the quarter and began transitioning locations to the refreshed AMF brand, which was unveiled in July 2026, with approximately 60 locations planned. As of September 27, 2026, the Company had 174 Lucky Strike and 81 AMF bowling locations, and expects to complete the consolidation of its bowling portfolio under these two brands during fiscal 2027.
Current report
•Water Parks: The quarter was the first summer season in which the Company directly operated its five water parks, including Raging Waters Los Angeles, acquired in January 2026. The water park business is highly seasonal, with the majority of annual revenue recognized in the Company’s first fiscal quarter; accordingly, the expanded portfolio was the primary driver of year-over-year total revenue growth.
Current report
•Events Organization: The Company completed the realignment of its events sales organization during the quarter, combining national and local account coverage with a centralized booking center for smaller groups. The new model is intended to strengthen the Company’s corporate and group events business while allowing location-based sales teams to focus on their local markets.
Current report
•Capital Allocation: Reducing indebtedness is the Company’s capital allocation priority for fiscal 2027. Consistent with this priority, subsequent to quarter-end, on October 29, 2026, the Board of Directors suspended the Company’s quarterly cash dividend in order to apply cash that would otherwise be used for dividends to debt reduction. See “Liquidity and Capital Resources” for further discussion.
Current report
*Represents a change equal to or in excess of 100% or one that is not meaningful.
Current report
Same-store revenues decreased $7,316, or 3%, during the quarter ended September 27, 2026 compared to the same period of the prior fiscal year. The decrease was primarily attributable to comparable bowling locations (approximately $4,700), with smaller decreases at comparable FEC locations (approximately $1,200) and water park locations (approximately $700). At comparable bowling locations, walk-in bowling revenues declined approximately $3,000, reflecting lower shoe rentals and lower revenues from promotional programs, certain of which launched later than in the prior-year period. Amusement and other revenues declined approximately $2,500 on lower arcade play, and alcoholic beverage revenues declined approximately $1,500. These declines were partially offset by growth in food and non-alcoholic beverage revenues of approximately $1,400, led by an 11% increase in non-alcoholic beverage revenues, and by a 2% increase in event revenues, which management believes benefited from the realignment of our events sales organization and enhancements to our online lane reservation and booking experience. League revenues were consistent with the prior-year period, and league participation increased heading into the peak league season, as reflected in higher league-related deposits at quarter-end compared to the prior year. Management also believes that macroeconomic uncertainty continued to weigh on discretionary consumer spending.
Current report
Location operating costs increased $1,424, or 1%, during the quarter ended September 27, 2026 compared to the same period of the prior fiscal year. The increase was driven by our new water park and FEC locations, which contributed approximately $4,300 of operating and occupancy costs over the comparable period, reflecting a full summer season at Raging Waters Los Angeles and Wet n’ Wild Emerald Pointe, our new Lucky Strike Aliso Viejo location (approximately $600), and higher marketing expense of approximately $1,400 reflecting increased investment in support of our brand initiatives. These increases were partially offset by lower costs at comparable locations, primarily supplies and services, amusement costs consistent with lower arcade revenue, and credit card processing fees, as well as the closure of locations since the prior-year period.
Current report
Selling, general and administrative expenses (“SG&A”): SG&A expenses increased $4,989 or 14%, during the quarter ended September 27, 2026 compared to the same period of the prior fiscal year. The increase was primarily attributable to a $2,800 credit recognized in the comparable period of the prior fiscal year in connection with the settlement of a COVID-19-related insurance claim. Excluding the settlement, SG&A expenses increased approximately $2,200, driven by an increase of approximately $1,700 in system modernization costs, substantially all of which related to consulting services for the modernization of the Company’s customer relationship management (CRM) platform, higher software costs of approximately $1,100 and higher event sales costs of approximately $700, partially offset by lower acquisition-related professional fees.
Current report
Depreciation and amortization: Depreciation and amortization decreased $716 or 2%, for the quarter ended September 27, 2026 compared to the same period of the prior fiscal year. The decrease was primarily due to lower capital expenditures and certain assets becoming fully depreciated.
Current report
Interest expense, net: Interest expense primarily relates to interest on debt, finance leases, and financing obligations. Interest expense decreased $1,358, or 3%, during the quarter ended September 27, 2026 compared to the same period of the prior fiscal year. The decrease is primarily attributable to $3,300 of deferred financing costs associated with the Bridge Term Loan that were amortized to interest expense in the prior-year period and did not recur, as the Bridge Term Loan was repaid in connection with the Company’s fiscal 2026 refinancing.
Current report
(3)The adjustment for system modernization costs represents non-capitalizable third-party consulting, professional, and related costs incurred on discrete initiatives to modernize the Company's technology platforms. They are incremental to, and not part of, the Company's normal, recurring operating expenses. The adjustment excludes depreciation and amortization, recurring software subscription and licensing fees, and costs to operate, support, or maintain the platforms after the applicable initiatives are complete. To date, substantially all of these costs relate to a discrete initiative to modernize the Company’s customer relationship management (CRM) platform, which began in fiscal 2026 and is expected to be completed in the fourth quarter of fiscal 2027. For the quarter ended September 28, 2025, the $512 of system modernization costs was previously included in transactional and other advisory costs and has been reclassified to conform to the current period presentation.
Current report
Available cash on hand and proceeds from any asset sales may also be used to reduce outstanding indebtedness beyond scheduled principal payments, including repayment of revolver borrowings, and to fund our share repurchase program, which was implemented as a method to return value to our shareholders. No shares were repurchased during the quarter. Additionally, the Company has paid a quarterly cash dividend on its common stock, including $8,734 paid during the quarter.
Current report
Reducing indebtedness is our capital allocation priority for fiscal 2027. Consistent with this priority, on October 29, 2026, the Board of Directors suspended the Company’s quarterly cash dividend in order to apply cash that would otherwise be used for dividends to debt reduction and to preserve liquidity and financial flexibility. The suspension reflects a decision regarding the allocation of available cash; future dividends, if any, will be at the discretion of the Board. The Company may also from time to time seek to repurchase its outstanding Senior Secured Notes in open market purchases, privately negotiated transactions or otherwise, depending on market conditions, liquidity, contractual restrictions and other factors. The amounts involved in any such transactions may be material.
Current report
*Represents a change equal to or in excess of 100% or one that is not meaningful.
Current report
Operating activities provided $17,104 as compared to using $6,408 during the same period of the prior fiscal year. The increase in cash provided by operating activities primarily reflects lower cash interest payments of approximately $14,200, as the prior-year period included the settlement of accrued interest on indebtedness repaid in connection with the Company’s fiscal 2026 refinancing, as well as the non-recurrence of third-party costs expensed in connection with the refinancing.
Removed paragraphs (28)
Previous report
•Property Acquisition from Carlyle: The Company acquired 58 existing properties that were previously subject to a master lease agreement with Carlyle for aggregate consideration of $306,000. The acquired portfolio spans 16 states and includes prime locations in California, Illinois, Georgia, Arizona, and Colorado. This transaction reduced annual rent obligations by eliminating the associated lease liabilities, while providing meaningful financial and operational flexibility in support of the Company's long-term growth strategy.
Previous report
•Water Park and FEC Acquisitions: The Company completed the acquisitions of Wet ‘n Wild Emerald Pointe water park, Raging Waters Los Angeles water park, Castle Park, and two additional Boomers Parks locations, further expanding the Company’s water park and FEC portfolio.
Previous report
•New Location Opening: The Company completed construction of and opened a newly built Lucky Strike entertainment location in Southern California during the period.
Previous report
•Lucky Strike Rebrand Initiative: The Company continued to make meaningful progress on the Lucky Strike rebrand initiative with an additional 66 locations converted. As of March 29, 2026, we had 110 Lucky Strike locations.
Previous report
•Debt Refinancing: The Company refinanced its existing term loan with a new $1,200,000 term loan, issued $500,000 aggregate principal amount of 7.25% Senior Secured Notes, and increased its revolving credit facility commitment to $425,000. Management believes this refinancing strengthens the Company's balance sheet and provides enhanced financial flexibility to support ongoing growth initiatives.
Previous report
Same-store revenues remained relatively flat during the quarter ended March 29, 2026 compared to the same period of the prior fiscal year. Within the quarter, walk-in bowling entertainment revenues and food and non-alcoholic beverage revenues at same-store bowling entertainment locations remained strong, contributing approximately $7,400 of incremental same-store revenues during the period. This strength was partially offset by combined declines in same-store alcoholic beverage revenues and amusement and other revenues, resulting in overall same-store revenue stability for the quarter. Results were impacted by significant adverse weather during the quarter, including Winter Storm Fern in January 2026, which brought severe winter conditions across a significant portion of our markets, and separate adverse weather conditions across portions of our markets in February and March 2026. Management believes these weather events negatively impacted customer traffic at certain locations during those periods. Additionally, consumer confidence declined in March 2026, which management believes was driven in part by rising energy prices and broader macroeconomic uncertainty stemming from geopolitical tensions in the Middle East, including the ongoing conflict with Iran. These conditions contributed to increased volatility in fuel costs and adversely impacted consumer spending patterns during the period.
Previous report
Location operating costs increased $7,156, or 8%, during the quarter ended March 29, 2026 compared to the same period of the prior fiscal year. Increases were broad-based across most cost categories, including amusement costs, marketing, property taxes, insurance, and utilities. The overall increase was primarily driven by location count growth and strategic operational initiatives, as further described below.
Previous report
Water park and FEC locations contributed approximately $3,200 to the increase over the comparable period, and new bowling locations contributed approximately $590. In addition, marketing expense increased approximately $2,300 compared to the prior year period, reflecting management's initiative to increase marketing investment. Management believes the increased marketing spend supported retail entertainment revenue performance during the quarter, notwithstanding the adverse weather and consumer confidence headwinds discussed above. Marketing expense decreased approximately $1,300 compared to the immediately preceding quarter as we became more disciplined in deploying our marketing budget during the current quarter.
Previous report
Location operating costs as a percent of revenues increased from 27% to 29% during the quarter ended March 29, 2026 compared to the same period of the prior fiscal year. The increase as a percentage of revenues is primarily attributable to the FEC and water park locations within our portfolio, which typically generate their highest sales volumes during the fourth and first quarters of our fiscal year due to favorable weather conditions and the timing of their operating seasons. As a result, location operating costs for these locations tend to increase at a higher rate than revenues during the second and third quarters of our fiscal year, consistent with the seasonal pattern observed in the current period.
Previous report
Notwithstanding the year-over-year increase, location operating costs as a percent of revenues improved sequentially from 33% in the first quarter of fiscal 2026 to 32% in the second quarter of fiscal 2026 to 29% in the current quarter, reflecting the Company's ongoing efforts to optimize location-level cost efficiency.
Previous report
Selling, general and administrative expenses (“SG&A”): SG&A expenses decreased $5,676 or 14%, during the quarter ended March 29, 2026 compared to the same period of the prior fiscal year. The decrease was primarily driven by a $5,800 reduction in share-based compensation expense, reflecting a non-recurring charge of $4,809 in the prior year period associated with the settlement of equity awards in connection with the retirement of a long-time executive of the Company. The decreases were partially offset by an increase of $553 in severance expense incurred during the current quarter in connection with reductions to corporate headcount.
Previous report
Depreciation and amortization: Depreciation and amortization decreased $8,180 or 20%, during the quarter ended March 29, 2026 compared to the same period of the prior fiscal year. The decrease primarily reflects the impact of a change in the estimated useful lives of certain fixed assets, which resulted in a reduction in depreciation expense of approximately $8,157 during the quarter.
Previous report
Interest expense, net: Interest expense primarily relates to interest on debt, finance leases, and financing obligations. Interest expense increased $1,326, or 3%, during the quarter ended March 29, 2026 compared to the same period of the prior fiscal year. The increase is primarily attributable to higher debt levels relative to the third quarter of fiscal 2025, driven by two principal factors: (i) the issuance of the 7.25% Senior Secured Notes (the "Notes") late in the first quarter of fiscal 2026, and (ii) amounts outstanding on the Revolver during the quarter, where no such amounts were outstanding during the comparable prior year period. Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year. As of March 29, 2026, we had approximately $19,000 of accrued interest related to the Notes, of which approximately $9,200 was accrued during the third quarter of fiscal 2026. Interest expense on the Revolver increased approximately $1,000 as compared to the third quarter of fiscal 2025. These increases were partially offset by a $4,806 decrease in interest expense related to finance leases and a $4,300 decrease in interest expense related to term loan debt. The decrease in finance lease interest expense reflects the purchase of certain previously leased assets during the first quarter of fiscal 2026. The decrease in term loan debt interest expense reflects both lower outstanding principal balances and more favorable interest rates achieved in connection with the refinancing completed in the first quarter of fiscal 2026.
Previous report
Nine Months Ended March 29, 2026 Compared to the Nine Months Ended March 30, 2025
Previous report
Revenues: For the nine months ended March 29, 2026, revenues totaled $941,370 and represented an increase of $41,219, 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.
Previous report
Same-store revenues remained relatively flat during the nine months ended March 29, 2026 compared to the same period of the prior fiscal year, consistent with the relative flatness observed through the first half of fiscal 2026. Management believes the continued flatness in same-store revenues reflects the cumulative impact of the adverse weather conditions and consumer confidence headwinds experienced during the third quarter of fiscal 2026, as described above. Partially offsetting these headwinds, walk-in bowling entertainment revenue at same-store locations remained strong during the third quarter, contributing approximately $7,800 of incremental same-store revenues. This strength in walk-in business was partially offset by declines in our events business during the period.
Previous report
Location operating costs: Location operating costs increased $35,727, or 14%, during the nine months ended March 29, 2026 compared to the same period of the prior fiscal year. Increases were broad-based across most cost categories, including amusement costs, marketing, rent, property taxes, insurance, and utilities. The overall increase was primarily driven by location count growth and strategic operational initiatives, as further described below.
Previous report
Water park and FEC locations contributed approximately $13,600 to the increase over the comparable period, and new bowling locations contributed approximately $7,500. In addition, marketing expense increased approximately $9,500 compared to the prior year period, reflecting management's initiative to align marketing spend more closely with industry benchmarks. Management believes the increased marketing investment has contributed to growth in retail entertainment revenue during the period.
Previous report
Location operating costs as a percent of revenues increased from 29% to 32% for the nine months ended March 29, 2026 compared to the same period of the prior fiscal year, consistent with the seasonal dynamics of our FEC and water park locations described above. As a result, location operating costs for these locations tend to increase at a higher rate than revenues during the second and third quarters of our fiscal year, consistent with the seasonal pattern observed in the current period. Notwithstanding this increase, location operating costs as a percent of revenues improved sequentially in each quarter of fiscal 2026 to date, as described above, reflecting the Company's ongoing efforts to optimize location-level cost efficiency.
Previous report
Location payroll and benefit costs: Location payroll and benefit costs increased $19,992, or 9%, during the nine months ended March 29, 2026 compared to the same period of the prior fiscal year. The increase is primarily driven by location count growth, additional bonus incentives, and an overall increase in labor hours per location. Water park and FEC locations had a significant impact, contributing approximately $10,100 to the increase over the comparable period. The remaining increase reflects higher labor hours and bonus incentive costs across existing same-store locations during the period.
Previous report
Selling, general and administrative expenses (“SG&A”): SG&A expenses decreased $454 or less than 1% for the nine months ended March 29, 2026 compared to the same period of the prior fiscal year. The decrease is primarily attributable to a decline in share-based compensation expense of approximately $8,600, driven by a non-recurring settlement of equity awards in the prior year period related to the retirement of a long-tenured executive of the Company. Partially offsetting this decrease, SG&A labor increased approximately $7,200, reflecting strategic investments in our marketing, water park, and FEC teams. The increase in marketing headcount is directly aligned with our initiative to increase our overall marketing budget, as management believes a larger and more capable marketing team is necessary to effectively deploy the expanded investment. The water park and FEC teams consist primarily of year-round staff who support peak seasonal operations during the summer months.
Previous report
Depreciation and amortization: Depreciation and amortization decreased $20,664 or 18% for the nine months ended March 29, 2026 compared to the same period of the prior fiscal year. The decrease primarily reflects the impact of a change in the estimated useful lives of certain fixed assets, which resulted in a reduction in depreciation expense of approximately $23,942 compared to the same period of the prior fiscal year. This decrease was partially offset by depreciation and amortization associated with capital expenditures and acquired assets since the third quarter of fiscal 2025.
Previous report
Interest expense, net: Interest expense increased $7,374, or 5% for the nine months ended March 29, 2026 compared to the same period of the prior fiscal year. The higher interest expense is primarily attributable to increases in debt since the third quarter of fiscal 2025. Specifically, the Notes, which were issued late in the first quarter of fiscal 2026. We have approximately $19,000 of interest accrued related to the Notes as of March 29, 2026. In addition to the impact of the Notes, the increase is attributable to the amortization of approximately $3,300 of deferred financing costs associated with the Bridge Term Loan during the first quarter of fiscal 2026. The increases in interest expense were partially offset by a $14,245 decrease in interest expense for finance leases due to the purchase of previously leased assets.
Previous report
(1)Includes the non-recurring settlement of equity awards related to the retirement of a long-time executive of the Company during the period ended March 30, 2025, which resulted in an additional $4,809 of share-based compensation expense.
Previous report
Nine Months Ended March 29, 2026 Compared to the Nine Months Ended March 30, 2025
Previous report
Operating activities provided $115,853 as compared to providing $154,767 during the same period of the prior fiscal year. The decrease in cash provided by operating activities is due primarily to unfavorable changes in working capital coupled with lower net income.
Previous report
Emerging Growth Company Accounting Election
Previous report
We are currently an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. We will lose our emerging growth company status on June 28, 2026, which is the last day of the fiscal year following the fifth anniversary of Isos’ IPO (March 5, 2026).
Reworded paragraphs (23)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial of Lucky Strike. These statements are based on the beliefs and assumptions of our management. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about our business strategy, financial projections, anticipated growth and market opportunities.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of Lucky Strike. These statements are based on the beliefs and assumptions of our management. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. Forward-looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, statements about our business strategy, financial projections, anticipated growth and market opportunities.
Previous wording
During the nine months ended March 29, 2026, Lucky Strike Entertainment continued to execute on its long-term growth strategy, delivering total revenue growth of 5% and further expanding its three core verticals: bowling, water parks, and FECs. The following summarizes the Company’s significant developments during the period:
Current wording
During the three months ended September 27, 2026, Lucky Strike Entertainment continued to execute on its long-term strategy across its three core verticals — bowling, water parks and family entertainment centers (“FECs”) — delivering total revenue growth of 4%, driven by its expanded water park and FEC portfolio. The following summarizes the Company’s significant developments during the period:
Previous wording
Lucky Strike Entertainment is one of the world’s premier operators of location-based entertainment. The Company operates traditional bowling locations under its AMF and Bowl America brands, as well as more upscale entertainment venues under its Lucky Strike and Bowlero brands, featuring lounge seating, arcades, enhanced food and beverage offerings, and elevated customer service for both individuals and group events. The Company also hosts and oversees professional and non-professional bowling tournaments and related broadcasting activities. In addition, the Company operates other forms of location-based entertainment, including family entertainment centers (“FECs”) and water parks, under brands including Octane Raceway, Raging Waves, Shipwreck Island, Big Kahuna’s, Wet ‘n Wild Emerald Pointe, Raging Waters Los Angeles, Castle Park, and Boomers Parks.
Current wording
Lucky Strike Entertainment is one of the world’s premier operators of location-based entertainment. The Company operates traditional bowling locations under its AMF brand, as well as more upscale entertainment venues under its Lucky Strike and Bowlero brands, featuring lounge seating, arcades, enhanced food and beverage offerings, and elevated customer service for both individuals and group events. The Company also hosts and oversees professional and non-professional bowling tournaments and related broadcasting activities. In addition, the Company operates other forms of location-based entertainment, including FECs and water parks, under brands including Raging Waves, Shipwreck Island, Big Kahuna’s, Wet 'n Wild, Raging Waters, Castle Park, Boomers Parks, and Octane Raceway.
Previous wording
The Company remains focused on creating long-term shareholder value through continued organic growth, the conversion and upgrading of existing locations to more upscale entertainment experiences offering a broader range of offerings, the opening of new locations and strategic acquisitions.
Current wording
The Company remains focused on creating long-term shareholder value through continued organic growth and the conversion and upgrading of existing locations to more upscale entertainment experiences with a broader range of offerings. The Company also selectively evaluates new locations and acquisitions. In addition, the Company routinely evaluates the performance of its location portfolio and may rationalize locations that no longer align with its long-term strategic and financial objectives.
Previous wording
There are a number of factors that could materially affect our future profitability, including changing economic conditions with the resulting impact on our sales, profitability, and capital spending, changes in our debt levels and applicable interest rates, and increasing prices of labor and inventory, which includes food and beverage costs. For example, the Company continues to monitor the impacts of various macroeconomic trends, such as inflationary pressure, changes in monetary policy, decreasing consumer confidence and spending, and the introduction of or changes in tariffs. The Company also monitors geopolitical developments, including the ongoing conflict involving Iran and related regional instability, which have contributed to volatility in global energy markets, supply chain disruptions, and broader macroeconomic uncertainty. Such changes in macroeconomic conditions may lead to increased costs for the business. Furthermore, these macroeconomic and geopolitical trends could adversely affect the Company’s customers, which could impact their willingness to visit the Company’s locations, which could harm the financial results. Additionally, sales and results of operations could be impacted by acquisitions and restructuring projects. Restructuring can include various projects, including closure of locations not performing well, cost reductions through staffing reductions, and optimizing and allocating resources to improve profitability.
Current wording
There are a number of factors that could materially affect our future profitability, including changing economic conditions with the resulting impact on our sales, profitability, and capital spending, changes in our debt levels and applicable interest rates, and increasing prices of labor and inventory, which includes food and beverage costs. For example, the Company continues to monitor the impacts of various macroeconomic trends, such as inflationary pressure, changes in monetary policy, decreasing consumer confidence and spending, and the introduction of or changes in tariffs. The Company also monitors geopolitical developments, including the ongoing conflict involving Iran and related regional instability, which have contributed to volatility in global energy markets, supply chain disruptions, and broader macroeconomic uncertainty. Such changes in macroeconomic conditions may lead to increased costs for the business. Furthermore, these macroeconomic and geopolitical trends could adversely affect the Company’s customers, which could impact their willingness to visit the Company’s locations, which could harm our financial results. Attendance at our locations may also be affected by major televised sporting and entertainment events, which can reduce visitation during peak periods, as occurred during the FIFA World Cup in June and July 2026. Additionally, sales and results of operations could be impacted by acquisitions and restructuring projects. Restructuring can include various projects, such as closing or divesting locations not performing well or that are peripheral to our core markets, cost reductions through staffing reductions, and optimizing and allocating resources to improve profitability.
Previous wording
Our operating results fluctuate seasonally. For our bowling locations, we typically generate our highest sales volumes during the third quarter of each fiscal year due to the timing of leagues, holidays and changing weather conditions. For our FEC and water park locations, we typically generate our highest sales volumes during the fourth and first quarters of our fiscal year due to more favorable weather conditions and the timing of operating seasons. School operating schedules, holidays and weather conditions may also affect our sales volumes in some operating regions differently than others. Because of the seasonal nature of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.
Current wording
Our operating results fluctuate seasonally. For our bowling locations, we typically generate our highest sales volumes during the third quarter of each fiscal year due to the timing of leagues, holidays and changing weather conditions. For our FEC and water park locations, we typically generate our highest sales volumes during the fourth and first quarters of our fiscal year due to more favorable weather conditions and the timing of operating seasons. As a result of our expanded water park portfolio, the seasonal peak of the water park business partially offsets the seasonally lower sales volumes of our bowling locations in the first fiscal quarter. Water park attendance is also highly sensitive to weather conditions during the operating season. School operating schedules, holidays and weather conditions may also affect our sales volumes in some operating regions differently than others. Because of the seasonal nature of our business, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.
Previous wording
Revenues: For the quarter ended March 29, 2026, revenues totaled $342,231 and represented an increase of $2,349, or 1%, over the same period of last fiscal year. The increase is primarily attributable to newly acquired or opened locations.
Current wording
Revenues: For the quarter ended September 27, 2026, revenues totaled $302,644 and represented an increase of $10,366, or 4%, over the same period of last fiscal year. The increase is primarily attributable to newly acquired or opened locations.
Previous wording
(1) Revenues from 360 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 30, 2025, revenues from 348 locations were included in the same-store revenue.
Current wording
(1) Revenues from 360 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 September 28, 2025, revenues from 351 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.
Current wording
Same-store revenues include 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.
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 increased $5,178, or 7%, during the quarter ended March 29, 2026 compared to the same period of the prior fiscal year. The increase is primarily driven by location count growth, additional bonus incentives, and an overall increase in labor hours per location. Water park and FEC locations had a significant impact, contributing approximately $2,400 to the increase over the comparable period. The remaining increase reflects higher labor hours and bonus incentive costs across existing same-store locations during the period.
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 increased $3,019, or 4%, during the quarter ended September 27, 2026 compared to the same period of the prior fiscal year. The increase was driven by our new water park and FEC locations, which contributed approximately $4,100 over the comparable period, reflecting the seasonal staffing of a full summer season, together with our new Lucky Strike Aliso Viejo location. These increases were partially offset by lower payroll at comparable bowling locations, reflecting reduced staff hours in line with lower same-store revenue and lower bonus expense, partially offset by higher benefit costs, as well as the closure of locations since the prior-year period.
Previous wording
Location food & beverage costs: Location food & beverage costs as a percentage of food & beverage revenue remained flat at 22%. Location food & beverage costs increased $1,334, or 2%. The increase in location food & beverage costs is mainly attributable to increased food & beverage revenue as compared to the same period of the prior fiscal year.
Current wording
Location food & beverage costs: Location food & beverage costs as a percentage of food & beverage revenue remained flat at 23%. Location food & beverage costs increased $658, or 3%. The increase in location food & beverage costs is mainly attributable to increased food & beverage revenue as compared to the same period of the prior fiscal year.
Previous wording
Change in fair value of earnouts: The impact on the statement of operations during the quarter ended March 29, 2026 is due to the decrease in the fair value of the earnouts. The decrease in the fair value of the earnouts is primarily driven by the decrease in the Company’s stock price and the limited remaining vesting period associated with the earnouts, which reduce the estimated probability of vesting.
Current wording
Change in fair value of earnouts: The impact on the statement of operations during the quarter ended September 27, 2026 is due to the decrease in the fair value of the earnout liability to zero as of September 27, 2026. The decrease is primarily driven by the decrease in the Company’s stock price and the limited remaining vesting period associated with the earnouts, which ends December 15, 2026, and which together reduce the estimated probability of vesting.
Previous wording
Income tax expense: The income tax expense and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. During the current year, the Company determined that its estimated AETR was not possible to reliably estimate due to the timing of results and the existence of a valuation allowance against interest limitation due to IRC Section 163(j). As a result, the Company utilized the discrete method. The effective tax rate of 26% for the quarter ended March 29, 2026 was primarily attributed to the change in fair value of the earnout liability, unrealizable Section 163(j) interest limitation, and permanent differences.
Current wording
Income tax expense: The income tax expense and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. Subsequent to Q1 of the prior year, the Company determined that its estimated AETR was not possible to reliably estimate due to the timing of results and the existence of a valuation allowance against interest limitation due to IRC Section 163(j). As a result, the Company utilized the discrete method. The effective tax rate of (19)% primarily reflects approximately $9,800 of valuation allowance recorded during the quarter, including approximately $4,600 against general business credits based on the Company’s assessment of their realizability and the change in fair value of the earnout liability. See Note 7 -Income Taxes.
Previous wording
Adjusted EBITDA is a non-GAAP financial measure that is not in accordance with, or an alternative to, measures prepared in accordance with GAAP. The Company believes certain financial measures which meet the definition of non-GAAP financial measures provide important supplemental information. The Company considers Adjusted EBITDA as an important financial measure because it provides a financial measure of the quality of the Company’s earnings. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure. Adjusted EBITDA is used by management in addition to and in conjunction with the results presented in accordance with GAAP. We have presented Adjusted EBITDA solely as a supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as Interest Expense, Income Taxes, Depreciation and Amortization, Impairment Charges, Share-based Compensation, EBITDA from Closed Locations, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, Changes in the value of earnouts, and Other. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
Current wording
Adjusted EBITDA is a non-GAAP financial measure that is not in accordance with, or an alternative to, measures prepared in accordance with GAAP. The Company believes certain financial measures which meet the definition of non-GAAP financial measures provide important supplemental information. The Company considers Adjusted EBITDA as an important financial measure because it provides a financial measure of the quality of the Company’s earnings. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure. Adjusted EBITDA is used by management in addition to and in conjunction with the results presented in accordance with GAAP. We have presented Adjusted EBITDA solely as a supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, such as Interest Expense, Income Taxes, Depreciation and Amortization, Impairment Charges, Share-based Compensation, EBITDA from Closed Locations, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, System modernization costs, Changes in the value of earnouts, and Other. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.
Previous wording
The following table provides a reconciliation from net income (loss) to Adjusted EBITDA for each reporting period:
Current wording
The following table provides a reconciliation from net loss to Adjusted EBITDA for each reporting period:
Previous 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.
Current 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.
Previous 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, and dispositions, in each case, regardless of whether consummated.
Current 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, and dispositions, in each case, regardless of whether consummated.
Previous 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.
Current wording
(4)The adjustment for changes in the value of earnouts is to remove the impact of the revaluation of the earnouts. Changes in the fair value of the earnout liability are 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
A core tenet of our long-term strategy is to grow the size and scale of the Company in order to improve our operating profit margins through leveraging our fixed costs. As such, one of the Company’s known cash requirements is for capital expenditures related to the construction of new locations and upgrading and converting existing locations. We believe our financial position, generation of cash, available cash-on-hand, existing credit facility, and access to potentially obtain additional financing from sale-lease-back transactions or other sources will provide sufficient capital resources to fund our operational requirements, capital expenditures, and material short and long-term commitments for the foreseeable future. We also plan to use available cash-on-hand to fund our share repurchase program, which was implemented as a method to return value to our shareholders. However, there are a number of factors that may hinder our ability to access these capital resources, including but not limited to our degree of leverage, and potential borrowing restrictions imposed by our lenders. See “Risk Factors” included in our previously filed Annual Report on Form 10-K for the fiscal year ended June 29, 2025 for further information.
Current wording
Our long-term strategy includes continued investment in our location portfolio. As such, one of the Company’s known cash requirements is for capital expenditures related to upgrading and converting existing locations and, on a selective basis, constructing new locations. We believe our financial position, generation of cash, available cash on hand, existing credit facility, and ability to obtain additional financing from sale-leaseback transactions or other sources will provide sufficient capital resources to fund our operational requirements, capital expenditures, and material short- and long-term commitments for the foreseeable future. However, there are a number of factors that may hinder our ability to access these capital resources, including but not limited to our degree of leverage, and potential borrowing restrictions imposed by our lenders. See “Risk Factors” included in our previously filed Annual Report on Form 10-K for the fiscal year ended June 28, 2026 for further information.
Previous wording
At March 29, 2026, we had approximately $58,654 of available cash and cash equivalents.
Current wording
As of September 27, 2026, we had $37,912 of available cash and cash equivalents.
Previous wording
Investing activities used $429,682 as compared to $166,412 during the same period of the prior fiscal year. The increase in cash used in investing activities mainly reflects the purchase of previously leased assets offset by a decrease in purchases of property and equipment.
Current wording
Investing activities used $21,521 as compared to $315,147 during the same period of the prior fiscal year. The decrease in cash used in investing activities mainly reflects the purchase of previously leased assets in the prior fiscal year, which did not recur in the current fiscal year, along with a decrease in purchases of property and equipment.
Previous wording
Financing activities provided $312,308 as compared to using $23,925 during the same period of the prior fiscal year. The increase in cash provided by financing activities primarily reflects the proceeds from the Fifteenth Amendment to the First Lien Credit Agreement and the issuance of Senior Secured Notes. This was partially offset by the repayment of outstanding debt and payment of deferred financing costs.
Current wording
Financing activities provided $3,004 as compared to $292,671 during the same period of the prior fiscal year. The decrease was mainly due to the prior fiscal year’s refinancing activity, which did not recur in the current period. That activity consisted of proceeds from the Fifteenth Amendment to the First Lien Credit Agreement and the issuance of the Senior Secured Notes, partially offset by the repayment of outstanding debt and the payment of deferred financing costs.
Previous wording
Our contractual obligations primarily include, but are not limited to, debt service, self-insurance liabilities, and leasing arrangements. We believe our sources of liquidity, namely available cash on hand, history of generating positive operating cash flows, and access to capital markets will continue to be adequate to meet our contractual obligations, as well as fund working capital, planned capital expenditures, location acquisitions, and execute purchases under our share repurchase program.
Current wording
Our contractual obligations primarily include, but are not limited to, debt service, self-insurance liabilities, and leasing arrangements. We believe our sources of liquidity, namely available cash on hand, history of generating positive operating cash flows, and access to capital markets will continue to be adequate to meet our contractual obligations, as well as fund working capital, planned capital expenditures, location acquisitions, reduce outstanding indebtedness beyond scheduled principal payments, and execute purchases under our share repurchase program.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Three Months Ended September 27, 2026 Compared to the Three Months Ended September 28, 2025
Rearranged previous paragraphs (9)
Previous report — wording carried elsewhere
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Previous report — wording carried elsewhere
Location food & beverage costs: Location food & beverage costs as a percentage of food & beverage revenue remained flat at 23%. Location food & beverage costs decreased $801, or 3%. The decrease in location food & beverage costs is mainly attributable to decreased food & beverage revenue as compared to the same period of the prior fiscal year.
Previous report — wording carried elsewhere
Analysis of Consolidated Statement of Operations. The following table displays certain items from our condensed consolidated statements of operations for the periods presented below:
Previous report — wording carried elsewhere
(1) Percent calculated as a percentage of revenues and may not total due to rounding.
Previous report — wording carried elsewhere
The following table summarizes our revenues on a same-store-basis for nine months ended March 29, 2026 as compared to the corresponding period last fiscal year:
Previous report — wording carried elsewhere
(1) Revenues from 350 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 30, 2025, revenues from 327 locations were included in the same-store revenue.
Previous report — wording carried elsewhere
(2) Service fee revenue is a mandatory gratuity passed through to the employee, which is a non-contributor to earnings and is being phased out across our locations.
Previous report — wording carried elsewhere
Change in fair value of earnouts: The impact on the statement of operations during nine months ended March 29, 2026 is due to the decrease in the fair value of the earnouts. The decrease in the fair value of the earnouts is primarily driven by the decrease in the Company’s stock price and the limited remaining vesting period associated with the earnouts, which reduce the estimated probability of vesting.
Previous report — wording carried elsewhere
Income tax expense (benefit): Income tax expense (benefit) and deferred tax assets and liabilities reflect management’s assessment of the Company’s tax position. During the nine months ended March 29, 2026, the Company determined that its estimated AETR was not possible to reliably estimate due to the timing of results and the existence of a valuation allowance against interest limitation due to IRC Section 163(j). As a result, the Company utilized the discrete method. The effective tax rate of (1,099)% for nine months ended March 29, 2026 was primarily attributed to state taxes incurred relating to the repurchase of the 58 properties under the Carlyle master lease agreement, the change in fair value of the earnout liability, permanent differences, and other discrete tax items.