Dave & Buster’s, Inc. Reports First Quarter Ended May 2, 2010 Financial Results
Total revenues increased 2.3% to $141.6 million in the first quarter of 2010, compared to $138.4 million in the first quarter of 2009.
Dave & Buster’s, Inc., a leading operator of high volume entertainment/dining complexes, today announced results for its first quarter ended May 2, 2010.
“We are especially encouraged by the positive momentum we are seeing in our Special Events business, which was so dramatically affected by the recession this past year.”
Total revenues increased 2.3% to $141.6 million in the first quarter of 2010, compared to $138.4 million in the first quarter of 2009. Our year-over-year revenue growth was driven by a $6.5 million increase in revenues from non-comparable operations, partially offset by a 2.5% decline in our comparable store sales. Total Food and Beverage revenues increased 0.5%, while revenues from Amusements and Other increased 4.1%.
Adjusted EBITDA decreased 2.1% to $27.0 million versus $27.5 million in the first quarter of fiscal 2009.
“While the first quarter of 2010 was negatively impacted by unusually harsh winter weather in February on the East Coast, our underlying sales trends for the quarter improved versus prior year,” said Steve King, Chief Executive Officer of Dave & Buster’s. “We are especially encouraged by the positive momentum we are seeing in our Special Events business, which was so dramatically affected by the recession this past year.”
Founded in 1982 and headquartered in Dallas, Texas, Dave & Buster’s is the premier national owner and operator of 57 high-volume venues that offer interactive entertainment options for adults and families, such as skill/sports-oriented redemption games and technologically advanced video and simulation games, combined with a full menu of high quality food and beverages. Dave & Buster’s currently has stores in 24 states and Canada.
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DAVE & BUSTER’S, INC. Condensed Consolidated Balance Sheets (in thousands) |
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| ASSETS | May 2, 2010 | January 31, 2010 | ||||||
| (unaudited) | (audited) | |||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 19,017 | $ | 16,682 | ||||
| Other current assets | 35,305 | 30,104 | ||||||
| Total current assets | $ | 54,322 | $ | 46,786 | ||||
| Property and equipment, net | 285,732 | 294,151 | ||||||
| Intangible and other assets, net | 142,517 | 142,703 | ||||||
| Total assets | 482,571 | 483,640 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Total current liabilities | $ | 71,230 | $ | 74,805 | ||||
| Other long-term liabilities | 88,168 | 89,775 | ||||||
| Long-term debt, less current liabilities | 226,169 | 226,414 | ||||||
| Stockholders’ equity | 97,004 | 92,646 | ||||||
| Total liabilities and stockholders’ equity | 482,571 | 483,640 | ||||||
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DAVE & BUSTER’S, INC. Consolidated Statements of Operations (dollars in thousands) (unaudited) |
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| 13 Weeks Ended
May 2, 2010 |
13 Weeks Ended
May 3, 2009 |
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| Food and beverage revenues | $ | 71,357 | 50.4 | % | $ | 71,000 | 51.3 | % | ||||||||||
| Amusement and other revenues | 70,218 | 49.6 | 67,426 | 48.7 | ||||||||||||||
| Total revenues | 141,575 | 100.0 | % | 138,426 | 100.0 | % | ||||||||||||
| Cost of products | 27,863 | 19.7 | % | 26,955 | 19.5 | % | ||||||||||||
| Store operating expenses | 79,073 | 55.8 | % | 77,136 | 55.7 | % | ||||||||||||
| General and administrative expenses | 8,617 | 6.1 | % | 7,405 | 5.4 | % | ||||||||||||
| Depreciation and amortization | 12,501 | 8.8 | % | 12,733 | 9.2 | % | ||||||||||||
| Pre-opening costs | 1,189 | 0.8 | 1,146 | 0.8 | ||||||||||||||
| Total operating expenses | 129,243 | 91.2 | % | 125,375 | 90.6 | % | ||||||||||||
| Operating income | 12,332 | 8.8 | % | 13,051 | 9.4 | % | ||||||||||||
| Interest expense, net | 5,348 | 3.8 | 5,549 | 4.0 | ||||||||||||||
| Income before provision for income taxes | 6,984 | 5.0 | % | 7,502 | 5.4 | % | ||||||||||||
| Income tax provision | 3,073 | 2.2 | 2,335 | 1.7 | ||||||||||||||
| Net income (loss) | 3,911 | 2.8 | 5,167 | 3.7 | ||||||||||||||
| Other information: | ||||||||||||||||||
| Stores open at end of period (1) | 57 | 53 | ||||||||||||||||
| The following table sets forth a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the periods shown: | ||||||||||||||||||
| Total net income | $ | 3,911 | $ | 5,167 | ||||||||||||||
| Add back: Provision for income taxes | 3,073 | 2,335 | ||||||||||||||||
| Interest expense, net | 5,348 | 5,549 | ||||||||||||||||
| Depreciation and amortization | 12,501 | 12,733 | ||||||||||||||||
| EBITDA | 24,833 | 25,784 | ||||||||||||||||
| Add back: Loss on asset disposal | 200 | 173 | ||||||||||||||||
| Share-based compensation | 251 | 9 | ||||||||||||||||
| Currency transaction (gain) loss | (85 | ) | (24 | ) | ||||||||||||||
| Pre-opening costs | 1,189 | 1,146 | ||||||||||||||||
| Affiliate expense reimbursement | 188 | 188 | ||||||||||||||||
| Severance | — | 31 | ||||||||||||||||
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Amusement revenue deferral and redemption liability adjustments |
230 | 230 | ||||||||||||||||
| Transaction costs | 160 | — | ||||||||||||||||
| Adjusted EBITDA (2) | 26,966 | 27,537 | ||||||||||||||||
NOTE
(1) The number of stores open at May 2, 2010 includes our stores in Indianapolis, Indiana, Niagara Falls, Ontario, Canada, Columbus, Ohio and Wauwatosa, Wisconsin which opened on June 15, 2009, June 25, 2009, October 12, 2009 and March 1, 2010. The store in Niagara Falls, Ontario, Canada is a franchise location. On May 3, 2010 we opened the 58th store in the Dave & Buster’s system in Roseville, California, a suburb of Sacramento.
(2) EBITDA, a non-GAAP measure, is defined as net income (loss) before income tax expense (benefit), interest expense (net) and depreciation and amortization. Adjusted EBITDA, also a non-GAAP measure, is defined as EBITDA plus share-based compensation expense, pre-opening costs, Affiliate expense reimbursement, loss on asset disposal and other non-cash or non-recurring charges. The company believes that EBITDA and Adjusted EBITDA (collectively, “EBITDA – Based Measures”) provide useful information to debt holders regarding the Company’s operating performance and its capacity to incur and service debt and fund capital expenditures. The Company believes that the EBITDA – Based Measures are used by many investors, analysts and rating agencies as a measure of performance. In addition, Adjusted EBITDA is approximately equal to “Consolidated EBITDA” as defined in our Senior Credit Facility and indentures relating to the Company’s senior notes. Neither of the EBITDA – Based Measures is defined by GAAP and neither should be considered in isolation or as an alternative to other financial data prepared in accordance with GAAP or as an indicator of the Company’s operating performance. EBITDA and Adjusted EBITDA as defined in this release may differ from similarly titled measures presented by other companies.
