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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________
FORM 10-Q
___________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-40142

Bowlero_Corporation_Logo (1).jpg
___________________________________
BOWLERO CORP.
(Exact name of registrant as specified in its charter)
___________________________________
Delaware98-1632024
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
7313 Bell Creek Road
Mechanicsville, Virginia
23111
(Address of Principal Executive Offices)(Zip Code)
(804) 417-2000
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock,
par value $0.0001 per share
BOWLThe New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The registrant had outstanding 90,361,083 shares of Class A common stock, 58,519,437 shares of Class B common stock, and 126,387 shares of Series A preferred stock as of May 1, 2024.


Table of Contents
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Part I - Financial Information
Item 1.
Item 2.
Item 3.
Item 4.
Part II - Other Information
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.

i

Bowlero Corp.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
Item 1. Condensed Financial Statements
March 31, 2024July 2, 2023
Assets
Current assets:
Cash and cash equivalents$212,429 $195,633 
Accounts and notes receivable, net
5,668 3,092 
Inventories, net14,955 11,470 
Prepaid expenses and other current assets26,723 18,395 
Assets held-for-sale2,069 2,069 
Total current assets261,844 230,659 
Property and equipment, net811,648 697,850 
Internal use software, net24,165 17,914 
Operating lease right of use assets561,655 449,085 
Finance lease right of use assets, net531,985 515,339 
Intangible assets, net97,995 90,986 
Goodwill832,311 753,538 
Deferred income tax asset75,540 73,807 
Other assets34,391 12,096 
Total assets$3,231,534 $2,841,274 
Liabilities, Temporary Equity and Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable and accrued expenses$153,810 $121,226 
Current maturities of long-term debt9,203 9,338 
Current obligations of operating lease liabilities31,163 23,866 
Other current liabilities9,568 14,281 
Total current liabilities203,744 168,711 
Long-term debt, net1,131,803 1,138,687 
Long-term obligations of operating lease liabilities559,171 431,295 
Long-term obligations of finance lease liabilities682,153 652,450 
Long-term financing obligations438,819 9,005 
Earnout liability126,659 112,041 
Other long-term liabilities27,088 25,375 
Deferred income tax liabilities4,321 4,160 
Total liabilities3,173,758 2,541,724 
Commitments and Contingencies (Note 10)
1

March 31, 2024July 2, 2023
Temporary Equity
Series A preferred stock$133,760 $144,329 
Stockholders’ (Deficit) Equity
Class A common stock9 11 
Class B common stock6 6 
Additional paid-in capital512,621 506,112 
Treasury stock, at cost(349,770)(135,401)
Accumulated deficit(240,982)(219,659)
Accumulated other comprehensive income2,132 4,152 
Total stockholders’ (deficit) equity(75,984)155,221 
Total liabilities, temporary equity and stockholders’ (deficit) equity$3,231,534 $2,841,274 
See accompanying notes to unaudited condensed consolidated financial statements.
2

Bowlero Corp.
Condensed Consolidated Statements of Operations
(Amounts in thousands, except share and per share amounts)
(Unaudited)
Three Months EndedNine Months Ended
March 31,
2024
April 2,
2023
March 31,
2024
April 2,
2023
Revenues$337,670 $315,725 $870,746 $819,370 
Costs of revenues225,894 189,304 623,905 534,212 
Gross profit111,776 126,421 246,841 285,158 
Operating expenses:
Selling, general and administrative expenses39,488 35,891 114,765 102,837 
Asset impairment354 489 409 573 
Loss (gain) on sale of assets657 (192)651 (2,170)
Other operating expense265 649 5,171 2,625 
Total operating expense40,764 36,837 120,996 103,865 
Operating profit71,012 89,584 125,845 181,293 
Other expenses:
Interest expense, net46,890 29,117 130,575 80,066 
Change in fair value of earnout liability(8,868)87,222 14,541 158,758 
Other expense3 5,986 66 5,356 
Total other expense38,025 122,325 145,182 244,180 
Income (loss) before income tax expense (benefit)32,987 (32,741)(19,337)(62,887)
Income tax expense (benefit)9,141 (668)2,067 1,285 
Net income (loss)23,846 (32,073)(21,404)(64,172)
Series A preferred stock dividends(2,353)(4,401)(6,278)(10,004)
Earnings allocated to Series A preferred stock (1,430)   
Net income (loss) attributable to common stockholders$20,063 $(36,474)$(27,682)$(74,176)
Net income (loss) per share attributable to Class A and B common stockholders
Basic$0.14 $(0.22)$(0.18)$(0.45)
Diluted$0.13 $(0.22)$(0.18)$(0.45)
Weighted-average shares used in computing net income (loss) per share attributable to common stockholders
Basic148,102,841 165,698,500 152,945,921 163,676,194 
Diluted157,874,876 165,698,500 152,945,921 163,676,194 
See accompanying notes to unaudited condensed consolidated financial statements.
3

Bowlero Corp.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Amounts in thousands)
(Unaudited)
Three Months EndedNine Months Ended
March 31,
2024
April 2,
2023
March 31,
2024
April 2,
2023
Net income (loss)$23,846 $(32,073)$(21,404)$(64,172)
Other comprehensive income (loss), net of income tax:
Unrealized gain (loss) on derivatives765  (2,685) 
Foreign currency translation adjustment486 1,477 665 1,191 
Other comprehensive income (loss)1,251 1,477 (2,020)1,191 
Total comprehensive income (loss)$25,097 $(30,596)$(23,424)$(62,981)
See accompanying notes to unaudited condensed consolidated financial statements.
4

Bowlero Corp.
Condensed Consolidated Statements of Changes in Temporary Equity and Stockholders’ (Deficit) Equity
(Amounts in thousands, except share amounts)
(Unaudited)
Series A preferred stockClass A
common Stock
Class B
common Stock
Treasury stockAdditional
Paid-in
capital
Accumulated
deficit
Accumulated
other
comprehensive
loss
Total
stockholders’
deficit
SharesAmountSharesAmountSharesAmountSharesAmount
Balance, July 3, 2022200,000 $206,002 110,395,630 $11 55,911,203 $6 3,430,667 $(34,557)$335,015 $(312,851)$(1,306)$(13,682)
Net loss— — — — — (33,534)— (33,534)
Foreign currency translation adjustment— — — — — — (367)(367)
Share-based compensation— 50,317— — — 3,279 — — 3,279 
Repurchase of Class A common stock into Treasury stock— (468,103)— — 468,103 (5,462)— — — (5,462)
Balance, October 2, 2022200,000$206,002 109,977,844$11 55,911,203$6 3,898,770$(40,019)$338,294 $(346,385)$(1,673)$(49,766)
Net income— — — — — 1,435 — 1,435 
Foreign currency translation adjustment— — — — — — 81 81 
Share-based compensation— 377,927— — — 3,632 — — 3,632 
Accrual of paid-in-kind dividends on Series A preferred stock5,665 — — — — — (5,665)— — (5,665)
Repurchase of Class A common stock into Treasury stock— (629,677)— — 629,677 (7,949)— — — (7,949)
Balance, January 1, 2023200,000$211,667 109,726,094$11 55,911,203$6 4,528,447$(47,968)$336,261 $(344,950)$(1,592)$(58,232)
Net loss— — — — — (32,073)— (32,073)
Foreign currency translation adjustment— — — — — — 1,477 1,477 
Share-based compensation— 46,553— — — 3,709 — — 3,709 
Settlement of Earnout Shares— 4,670,495— 4,908,234— — 180,656 — — 180,656 
Settlement of Series A preferred stock(5,000)(5,291)— — — (1,533)— — (1,533)
Repurchase of Class A common stock into Treasury stock— — (370,612)— — — 370,612 (5,562)— — — (5,562)
Balance, April 2, 2023195,000$206,376 114,072,530$11 60,819,437$6 4,899,059$(53,530)$519,093 $(377,023)$(115)$88,442 
5

Series A preferred stockClass A
common Stock
Class B
common Stock
Treasury stockAdditional
Paid-in
capital
Accumulated
deficit
Accumulated
other
comprehensive
income
Total
stockholders’
(deficit) equity
SharesAmountSharesAmountSharesAmountSharesAmount
Balance, July 2, 2023136,373 $144,329 107,666,301 $11 60,819,437 $6 11,312,302 $(135,401)$506,112 $(219,659)$4,152 $155,221 
Net income— — — — — 18,219 — 18,219 
Foreign currency translation adjustment— — — — — — (487)(487)
Unrealized loss on derivatives— — — — — — (340)(340)
Conversion of Class B common stock into Class A common stock— 2,300,000— (2,300,000)— — — — — — 
Share-based compensation— 15,489— — — 1,823 — — 1,823 
Repurchase of Class A common stock into Treasury stock— (12,131,185)(1)— 12,131,185 (132,662)— — — (132,663)
Balance, October 1, 2023136,373$144,329 97,850,605$10 58,519,437$6 23,443,487$(268,063)$507,935 $(201,440)$3,325 $41,773 
Net loss— — — — — (63,469)— (63,469)
Foreign currency translation adjustment— — — — — — 666 666 
Unrealized loss on derivatives— — — — — — (3,110)(3,110)
Share-based compensation— 330,846— — — 4,099 — — 4,099 
Dividends on Series A preferred stock— — — — (3,969)— — (3,969)
Repurchase of Class A common stock into Treasury stock— (7,516,855)(1)— 7,516,855 (80,962)— — — (80,963)
Balance, December 31, 2023136,373$144,329 90,664,596$9 58,519,437$6 30,960,342$(349,025)$508,065 $(264,909)$881 $(104,973)
Net income— — — — — 23,846 — 23,846 
Foreign currency translation adjustment— — — — — — 486 486 
Unrealized gain on derivatives— — — — — — 765 765 
Settlement of Series A preferred stock(9,986)(10,569)752,497— — — 9,737 81 — 9,818 
Share-based compensation— 64,137— — — 3,549 — — 3,549 
Common stock dividend— — — — (8,730)— — (8,730)
Repurchase of Class A common stock into Treasury stock— (68,120)— — 68,120 (745)— — — (745)
Balance, March 31, 2024126,387$133,760 91,413,110$9 58,519,437$6 31,028,462$(349,770)$512,621 $(240,982)$2,132 $(75,984)
See accompanying notes to unaudited condensed consolidated financial statements.
6

Bowlero Corp.
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
Nine Months Ended
March 31,
2024
April 2,
2023
Operating activities
Net loss$(21,404)$(64,172)
Adjustments to reconcile net loss to net cash provided by operating activities:
Asset impairment409 573 
Depreciation and amortization104,750 85,014 
Loss (gain) on sale of assets, net651 (2,170)
Income from equity method investment(518)(329)
Amortization of deferred financing costs2,703 2,585 
Amortization of deferred rent incentive (452)
Non-cash interest expense on capital lease obligation 4,850 
Non-cash interest expense on finance lease obligation6,778  
Reduction of operating lease right of use assets25,642  
Non-cash portion of gain on lease modification(499) 
Amortization of deferred sale lease-back gain (767)
Deferred income taxes1,828 397 
Share-based compensation9,743 11,891 
Distributions from equity method investments240 323 
Change in fair value of earnout liability14,541 158,758 
Change in fair value of marketable securities (852)
Changes in assets and liabilities, net of business acquisitions:
Accounts receivable and notes receivable, net(2,580)(934)
Inventories(2,477)(1,410)
Prepaids, other current assets and other assets(6,082)(5,987)
Accounts payable and accrued expenses32,664 20,100 
Operating lease liabilities(19,665) 
Other current liabilities(126)(1,166)
Other long-term liabilities1,500 2,550 
Net cash provided by operating activities148,098 208,802 
Investing activities
Purchases of property and equipment(147,063)(112,044)
Purchases of intangible assets(259)(22)
Proceeds from sale of property and equipment 6,518 
Proceeds from sale of intangibles65 200 
Purchase of marketable securities (44,855)
Proceeds from sale of marketable securities 45,707 
Acquisitions, net of cash acquired(138,703)(83,453)
Net cash used in investing activities(285,960)(187,949)
7

Nine Months Ended
March 31,
2024
April 2,
2023
Financing activities
Repurchase of Class A common stock into Treasury stock$(219,412)$(22,036)
Proceeds from share issuance1,274 590 
Payments for tax withholdings on share-based compensation(1,469)(5,750)
Payment of cash dividends(12,699) 
Settlement of Series A preferred stock(751)(6,824)
Settlement of contingent consideration 1,000 
Proceeds from First Lien Credit Facility Term Loan 900,000 
Payoff of previous First Lien Credit Facility Term Loan (786,166)
Payment of long-term debt(9,640)(4,629)
Payment on finance leases(4,745) 
Proceeds from long-term debt 15,418 
Proceeds from Revolver draws175,000  
Payoff of Revolver(175,000)(86,434)
Proceeds from sale-leaseback financing 408,510 10,363 
Payment of deferred financing costs(6,781)(8,058)
Construction allowance receipts 490 
Net cash provided by financing activities154,287 7,964 
Effect of exchange rates on cash371 (9)
Net increase in cash and cash equivalents16,796 28,808 
Cash and cash equivalents at beginning of period195,633 132,236 
Cash and cash equivalents at end of period$212,429 $161,044 
See accompanying notes to unaudited condensed consolidated financial statements.
8


Bowlero Corp.
9

Bowlero Corp.
Notes to Condensed Consolidated Financial Statements
(In thousands, except share and per share data)
(Unaudited)
(1) Description of Business and Significant Accounting Policies
Bowlero Corp., a Delaware corporation, and its subsidiaries (referred to herein as, the “Company”, “Bowlero”, “we,” “us” and “our”) is one of the world’s premier operators of location-based entertainment.
The Company operates entertainment venues under different brand names. Our AMF and Bowl America branded locations are traditional bowling centers, while the Bowlero and Lucky Strike branded locations offer a more upscale entertainment concept with lounge seating, enhanced food and beverage offerings, and more robust customer service for individuals and group events. Additionally, within the brands, there exists a spectrum where some AMF branded locations are more upscale and some Bowlero branded locations are more traditional. All of our locations, regardless of branding, are managed in a fully integrated and consistent basis since all of our locations are in the same business of operating location-based entertainment.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Our quarterly financial data should be read in conjunction with the audited financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended July 2, 2023.
Principles of Consolidation: The condensed consolidated financial statements and related notes include the accounts of Bowlero Corp. and the subsidiaries it controls. Control is determined based on ownership rights or, when applicable, based on whether the Company is considered to be the primary beneficiary of a variable interest entity. We use the equity method to account for investments in which we have the ability to exercise significant influence over the investee’s operating and financial policies, or in which we hold a partnership or limited liability company interest in an entity with specific ownership accounts, unless we have virtually no influence over the investee’s operating and financial policies. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates: The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the balance sheets, statement of operations and accompanying notes. Significant estimates made by management include, but are not limited to, cash flow projections; the fair value of assets and liabilities in acquisitions; derivatives with hedge accounting; share-based compensation; depreciation and impairment of long-lived assets; carrying amount and recoverability analyses of property and equipment, assets held for sale, goodwill and other intangible assets; valuation of deferred tax assets and liabilities and income tax uncertainties; and reserves for litigation, claims and self-insurance costs. Actual results could differ from those estimates.
Fair-value Estimates:    We have various financial instruments included in our financial statements. Financial instruments are carried in our financial statements at either cost or fair value. We estimate fair value of assets and liabilities using the following hierarchy using the highest level possible:
Level 1:     Quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities.
Level 2:    Observable prices that are based on inputs not quoted on active markets, but are corroborated by market data.
Level 3:    Unobservable inputs are used when little or no market data is available.
Cash and Cash Equivalents:    The Company considers all highly liquid investments with a maturity date of three months or less when purchased to be cash equivalents. The Company accepts a range of debit and credit cards, and these transactions are generally transmitted to a bank for reimbursement within 24 hours. The payments due from the banks for these debit and credit card transactions are generally received, or settled, within 24 to 48 hours of the transmission date. The Company considers all debit and credit card transactions that settle in less than seven days to be cash equivalents.
10

Equity Method Investments:    The aggregate carrying amounts of our equity method investments was $25,848 and $1,180 as of March 31, 2024 and July 2, 2023, and are included as a component of Other Assets in our accompanying condensed consolidated balance sheets. Substantially all of our equity method investments consist of a limited partner interest in a subsidiary of VICI Properties Inc. (“VICI”). Equity method investments are adjusted to recognize (1) our share, based on percentage ownership or other contractual basis, of the investee’s net income or loss after the date of investment, (2) additional contributions made or distributions received, (3) amortization of the recorded investment that exceeds our share of the book value of the investee’s net assets, and (4) impairments resulting from other-than-temporary declines in fair value. Cash distributions received from our equity method investments are considered returns on investment and presented within operating activities in the condensed consolidated statement of cash flows to the extent of cumulative equity in net income of the investee. Additional distributions in excess of cumulative equity are considered returns of our investment and are presented as investing activities.
Derivatives:    We are exposed to interest rate risk. To manage this risk, we entered into interest rate collar derivative transactions associated with a portion of our outstanding debt. The interest rate collars, which are designated for accounting purposes as cash flow hedges, establish a cap and floor on the Secured Overnight Financing Rate (SOFR). The Company's interest rate collars expire on March 31, 2026.
For financial derivative instruments that are designated as a cash flow hedge for accounting purposes, the effective portion of the gain or loss on the financial derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction, and in the same period or periods during which the forecasted transaction affects earnings. Gains and losses on the financial derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.
The interest rate collar agreements effectively modified our exposure to interest rate risk by converting a portion of our interest payments on floating rate debt to include a cap and floor, thus reducing the impact of interest rate changes on future interest expense. See Note 8 - Debt for more information.
Net Income (Loss) Per Share Attributable to Common Stockholders:    We compute net income (loss) per share of Class A common stock and Class B common stock under the two-class method. Holders of Class A common stock and Class B common stock have equal rights to the earnings of the Company. Our participating securities include the Series A preferred stock that have a non-forfeitable right to dividends in the event that a dividend is paid on common stock, but do not participate in losses, and thus are not included in a two-class method in periods of loss. In periods where the Company reports a net loss, all potentially dilutive securities are excluded from the calculation of the diluted net loss per share attributable to common stockholders as their effect is antidilutive and accordingly, basic and diluted net loss per share attributable to common stockholders will be the same. Dilutive securities include Series A preferred stock, earnouts, stock options, and restricted stock units (“RSUs”). See Note 15 - Net Income (Loss) Per Share.
Emerging Growth Company Status: The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with those of another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult because of the potential differences in accounting standards used.
Recently Issued Accounting Standards:    We reviewed the accounting pronouncements that became effective for fiscal year 2024 and determined that either they were not applicable, or they did not have a material impact on the consolidated financial statements. We also reviewed the recently issued accounting pronouncements to be adopted in future periods and determined that they are not expected to have a material impact on the consolidated financial statements.
11

(2) Revenue
The following table presents the Company’s revenue disaggregated by major revenue categories:
Three Months EndedNine Months Ended
March 31,
2024
% of revenuesApril 2,
2023
% of revenuesMarch 31,
2024
% of revenuesApril 2,
2023
% of revenues
Major revenue categories:
Bowling$165,528 49 %$154,960 49 %$427,253 49 %$401,713 49 %
Food and beverage118,032 35 %111,708 35 %304,137 35 %291,388 36 %
Amusement and other48,493 14 %42,715 14 %124,277 14 %110,272 13 %
Media5,617 2 %6,342 2 %15,079 2 %15,997 2 %
Total revenues$337,670 100 %$315,725 100 %$870,746 100 %$819,370 100 %
(3) Business Acquisitions
Acquisitions: The Company continually evaluates potential acquisitions, which can be either business combinations or asset purchases, that strategically fit within the Company’s existing portfolio of locations as a key part of the Company’s overall growth strategy in order to expand our market share in key geographic areas, and to improve our ability to leverage our fixed costs.
2024 Business Acquisitions: For business combinations, the Company allocates the consideration transferred to the identifiable assets acquired and liabilities assumed based on their preliminary estimated fair values as of the acquisition date. We estimate the fair values of the assets acquired and liabilities assumed using valuation techniques, such as the income, cost and market approaches. During the nine months ended March 31, 2024, the Company acquired substantially all of the assets of Lucky Strike Entertainment, LLC (“Lucky Strike”), which includes 14 locations, for a total consideration of $89,936. The Company also had four other acquisitions in which we acquired five locations for a total consideration of $48,767. The Company is still in the process of finalizing its valuation analysis. The remaining fair value estimates include working capital, intangibles, property and equipment, and operating and finance lease assets and liabilities. If necessary, for business combinations, we will continue to refine our estimates throughout the permitted measurement period, which may result in corresponding offsets to goodwill. We expect to finalize the valuations as soon as possible, but no later than one year after the acquisition dates.
12

The following table summarizes the preliminary purchase price allocations for the fair values of the identifiable assets acquired and liabilities assumed, components of consideration transferred and the transactional related expenses using the acquisition method of accounting:
Identifiable assets acquired and liabilities assumedLucky StrikeOther AcquisitionsTotal
Current assets$994 $152 $1,146 
Property and equipment40,672 17,581 58,253 
Operating lease ROU95,835 12,923 108,758 
Finance lease ROU25,303  25,303 
Identifiable intangible assets (1)
9,895 2,170 12,065 
Goodwill48,818 29,955 78,773 
Deferred income tax asset2,594  2,594 
Total assets acquired224,111 62,781 286,892 
Current liabilities(3,307)(1,091)(4,398)
Operating lease liabilities(107,473)(12,923)(120,396)
Finance lease liabilities(23,164) (23,164)
Other liabilities(231) (231)
Total liabilities assumed(134,175)(14,014)(148,189)
Total fair value, net of cash of $137
$89,936 $48,767 $138,703 
Components of consideration transferred
Cash$89,936 $47,873 $137,809 
Holdback (2)
 894 894 
Total$89,936 $48,767 $138,703 
(1)    Of the identifiable intangible assets acquired, $8,360 relates to the indefinite-lived Lucky Strike trade name. The remaining identifiable intangible assets acquired consist of definite-lived trade names, customer relationships, and non-compete agreements and indefinite-lived liquor licenses. See Note 4 - Goodwill and Other Intangible Assets for more information.
(2)    The holdback represents a portion of the consideration transferred that is retained or placed in escrow to indemnify the Company for general claims during a certain period subsequent to the acquisition date (the “holdback period”). Holdback funds, to the extent any funds remain, are released to the seller upon expiration of the holdback period.
During the nine months ended March 31, 2024, we acquired one additional location, which was previously managed by the Company, for $6,065 that did not meet the definition of a business under ASC 805. Therefore, this acquisition was accounted for as an asset acquisition, using a cost accumulation model. The assets acquired and liabilities assumed were recognized at cost, which was the consideration transferred to the seller, including direct transaction costs, on the acquisition date. The cost of the acquisition was then allocated to the assets acquired based on their relative fair values. Goodwill was not recognized.

(4) Goodwill and Other Intangible Assets
Goodwill:
The changes in the carrying amount of goodwill for the period ended March 31, 2024:
Balance as of July 2, 2023
$753,538 
Goodwill resulting from acquisitions during fiscal year 202478,773 
Balance as of March 31, 2024
$832,311 
13

Intangible Assets:
March 31, 2024July 2, 2023
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
Gross
carrying
amount
Accumulated
amortization
Net
carrying
amount
Finite-lived intangible assets:
AMF trade name$9,900 $(9,748)$152 $9,900 $(9,253)$647 
Other acquisition trade names3,890 (2,221)1,669 2,630 (1,423)1,207 
Customer relationships24,015 (21,862)2,153 23,712 (18,755)4,957 
Management contracts1,800 (1,754)46 1,800 (1,726)74 
Non-compete agreements4,254 (2,183)2,071 3,211 (1,572)1,639 
PBA member, sponsor & media relationships1,400 (711)689 1,400 (627)773 
Other intangible assets921 (503)418 921 (377)544 
46,180 (38,982)7,198 43,574 (33,733)9,841 
Indefinite-lived intangible assets:
Liquor licenses12,437 — 12,437 11,145 — 11,145 
PBA trade name3,100 — 3,100 3,100 — 3,100 
Lucky Strike trade name8,360 — 8,360  —  
Bowlero trade name66,900 — 66,900 66,900 — 66,900 
90,797 — 90,797 81,145 — 81,145 
$136,977 $(38,982)$97,995 $124,719 $(33,733)$90,986 
The following table shows amortization expense for finite-lived intangible assets for each reporting period:
Three Months EndedNine Months Ended
March 31, 2024April 2, 2023March 31, 2024April 2, 2023
Amortization expense$1,774 $1,959 $5,315 $5,403 
(5) Property and Equipment
As of March 31, 2024 and July 2, 2023, property and equipment consists of:
March 31, 2024July 2, 2023
Land$101,909 $98,896 
Building and leasehold improvements
632,613 522,846 
Equipment, furniture, and fixtures551,600 472,146 
Construction in progress44,890 43,271 
1,331,012 1,137,159 
Accumulated depreciation(519,364)(439,309)
Property and equipment, net of accumulated depreciation$811,648 $697,850 
The following table shows depreciation expense related to property and equipment for each reporting period:
Three Months EndedNine Months Ended
March 31, 2024April 2, 2023March 31, 2024April 2, 2023
Depreciation expense$28,758 $22,319 $82,389 $64,583 

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(6) Leases
The Company leases various assets under non-cancellable operating and finance leases. These assets include location-based entertainment venues, office space, vehicles, and equipment.
Most of our leases contain payments for some or all of the following: base rent, contingent rent, common area maintenance, insurance, real-estate taxes, and other operating expenses. Rental payments are subject to escalation depending on future changes in designated indices or based on pre-determined amounts agreed upon at lease inception.
VICI Transaction:
On October 19, 2023, the Company completed a transaction with VICI relating to the transfer of the land and real estate assets of 38 locations for an aggregate value of $432,900. The transaction was structured as a tax-deferred capital contribution with cash proceeds of $408,510 and a $24,390 limited partner interest in a subsidiary of VICI, which is accounted for as an equity method investment.
Simultaneously with the transfer, the Company entered into a triple-net master lease agreement with VICI. The master lease has an initial total annual rent of $31,600, and will escalate at the greater of 2.0% or the consumer price index (CPI) (subject to a 2.5% ceiling). The master lease has an initial term of 25 years, and six five-year tenant renewal options. Based on an analysis of the economic, market, asset and contractual characteristics of the master lease, the Company determined that all six renewal options were reasonably assured, and therefore, the lease term for accounting purposes is 55 years.
The Company concluded that the transfer was not a sale for accounting purposes as control of the underlying assets remained with the Company, and therefore, the Company recognized a financing obligation equal to the contribution value of $432,900, net of transaction costs. Consistent with the Company’s other financing obligations, the lease payments will be allocated between principal and interest on the financing obligation.
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The following table summarizes the components of the net lease cost for each reporting period:
Three Months EndedNine Months Ended
Lease Costs:Location on Consolidated Statements of OperationsMarch 31, 2024March 31, 2024
Operating Lease Costs: (1)
Operating lease costs associated with master leases for locationsPrimarily cost of revenues$4,428 $13,284 
Operating lease costs associated with non-master leases for locationsPrimarily cost of revenues14,027 38,121 
Percentage rental costs for locations (2)
Primarily cost of revenues1,854 5,240 
Equipment and other operating lease costs (3)
Primarily cost of revenues2,048 5,912 
Total Operating Lease Costs:22,357 62,557 
Finance Lease Costs:
Amortization of right-of-use assetsPrimarily cost of revenues4,391 12,881 
Interest expenseInterest expense, net12,462 36,950 
Total Finance Lease Costs:16,853 49,831 
Financing Obligation Costs:
Interest expenseInterest expense, net10,022 18,266 
Total Financing Obligation Costs:10,022 18,266 
Other Costs, Net:
Variable occupancy costs (4)
Primarily cost of revenues14,751 43,909 
Gains from modifications to operating leases
Other operating expense
 (499)
Other lease costs (5)
Primarily cost of revenues2,011 5,532 
Sublease income (6)
Revenues(1,302)(3,930)
Total Other Costs, Net15,460 45,012 
Total Lease Costs, Net$64,692 $175,666 
(1)Operating lease costs includes both cash and non-cash expenses for operating leases. The operating lease costs associated with our locations are recognized evenly over the lease term, therefore, the timing of the expense may differ from the timing of actual cash payments. Cash payments and lease costs can differ due to (a) the timing of cash payments relative to the level expense, (b) non-cash adjustments as a result of purchase accounting, and (c) various other non-cash adjustments to lease costs. Please see the table below for cash paid for amounts included within our lease liabilities.
(2)Percentage rental costs for our locations primarily represents leases where we pay an extra rental amount based on a percentage of revenue in excess of predetermined revenue thresholds.
(3)Equipment and other operating lease costs primarily represents operating leases costs for equipment leases, common area maintenance charges, and other variable lease costs for operating leases where the lease payments escalate based on an index or rate.
(4)Variable occupancy costs primarily represents utilities, property insurance, and real estate taxes.
(5)Other lease costs primarily includes short-term lease costs and other variable payments for various equipment leases.
(6)Sublease income primarily represents short-term leases with pro-shops and various retail tenants.









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Cash paid for amounts included in the measurement of lease liabilities for the nine months ended March 31, 2024:
March 31, 2024
Cash paid for amounts included in the measurement of lease liabilities (1)
Operating leases:
Operating cash flows paid for operating leases$48,664 
Total cash paid for operating lease liabilities48,664 
Finance leases:
Operating cash flows paid for interest portion of finance leases33,804 
Financing cash flows paid for principal portion of finance leases4,727 
Total cash paid for finance lease liabilities38,531 
Financing Obligations:
Operating cash flows paid for interest portion of financing obligations14,627 
Financing cash flows paid for principal portion of finance obligations19 
Total cash paid for financing obligations:14,646 
Total cash amounts paid that are included in the measurement of lease liabilities: (2)
$101,841 
(1)This table includes cash paid for amounts included in the measurement of our lease liabilities. Since the lease liability only includes amounts that are contractually fixed, this table excludes cash paid for amounts that are variable in nature, such as utilities, common area maintenance, property insurance, real estate taxes, and percentage rent.
(2)The total cash amounts within the above table include deferred repayments of $3,215 for operating leases and $6,934 for finance leases. As of March 31, 2024, approximately $9,615 in deferred payments are remaining, which will be repaid on a monthly basis through December 31, 2024, and are included within our lease liabilities.
Supplemental balance sheet information related to leases as of March 31, 2024:
Balance Sheet LocationMarch 31, 2024
Operating leases:
ROU Assets, netOperating lease ROU assets, net$561,655 
Lease liabilities, Short-termOperating lease liabilities, ST31,163 
Lease liabilities, Long-termOperating lease liabilities, LT559,171 
Finance leases:
ROU Assets, netFinance lease ROU assets, net531,985 
Lease liabilities, Short-termOther current liabilities3,945 
Lease liabilities, Long-termFinance lease liabilities, LT682,153 
Financing Obligations:
Financing obligation, short-termOther current liabilities 
Financing obligation, long-termOther long-term liabilities438,819 
Lease incentive receivables from landlords of $13,801 as of March 31, 2024 are reflected as a reduction of the operating and finance lease liability. The Company received $1,910 from landlords for lease incentives on operating leases during the year, which are recorded as operating cash inflows within the change in operating lease liabilities within our condensed consolidated statement of cash flows.
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(7) Accounts Payable and Accrued Expenses
As of March 31, 2024 and July 2, 2023, accounts payable and accrued expenses consist of:
March 31, 2024July 2, 2023
Accounts Payable$55,565 $53,513 
Customer deposits31,304 12,703 
Taxes and licenses16,123 13,076 
Deferred revenue15,173 7,144 
Compensation14,553 14,670 
Insurance6,848 6,168 
Utilities4,488 4,607 
Professional fees4,243 4,307 
Interest1,389 904 
Other4,124 4,134 
Total accounts payable and accrued expenses
$153,810 $121,226 
(8)