• Dave & Buster’s Reports Record Fourth Quarter and Fiscal Year End 2022 Financial Results

    المصدر: Nasdaq GlobeNewswire / 28 مارس 2023 16:05:00   America/New_York

    DALLAS, March 28, 2023 (GLOBE NEWSWIRE) -- Dave & Buster’s Entertainment, Inc., (NASDAQ: PLAY), (“Dave & Buster’s” or “the Company”), an owner and operator of entertainment and dining venues, today announced financial results for its fourth quarter and fiscal year ended January 29, 2023.

    Key Fourth Quarter 2022 Highlights

    • Revenue of $563.8 million in the quarter increased 64.3% from the fourth quarter of 2021 and increased 62.4% from the fourth quarter of 2019. Including the pro forma contribution of Main Event in the fourth quarter of 2021 and 2019, this quarter’s revenue grew 27.7% and 30.1%, respectively.
    • Pro forma combined comparable store sales (including Main Event branded stores) increased 19.0% compared with the same period in 2021 and 14.1% compared with the same period in 2019.
    • Net income totaled $39.1 million, or 80 cents per diluted share, compared with net income of $25.7 million, or 52 cents per diluted share in the fourth quarter of 2021 and net income of $25.0 million, or 80 cents per diluted share in the fourth quarter of 2019.
    • Adjusted EBITDA (as newly defined to not add back pre-opening expense) of $138.4 million in the quarter increased 62.9% from the fourth quarter of 2021 and increased 85.1% from the fourth quarter of 2019. Including the pro forma contribution of Main Event in the fourth quarter of 2021 and 2019, this quarter’s Adjusted EBITDA grew 30.7% and 48.4%, respectively.
    • The Company opened a new Main Event store in Beaumont, TX.
    • The Company ended the quarter with $672.7 million of liquidity, which included $181.6 million in cash and $491.1 million available under its $500 million revolving credit facility.

    Key Fiscal Year 2022 Highlights

    • Revenue of $2.0 billion in fiscal year 2022 increased 50.6% from fiscal year 2021 and increased 45.0% from fiscal year 2019.
    • Net income totaled $137.1 million, or $2.79 per diluted share, in fiscal year 2022 compared with net income of $108.6 million, or $2.21 per diluted share, in fiscal year 2021 and net income of $100.3 million, or $2.94 per diluted share in fiscal 2019.
    • The Company completed its acquisition of Main Event on June 29, 2022. The Company successfully achieved implementation of the activities for its forecasted $25 million annual synergy target previously disclosed and continues to identify opportunities in excess of that target.
    • The Company opened seven new Dave & Buster’s locations and one new Main Event location in fiscal year 2022. Subsequent to the end of the year, the Company has opened an additional Dave & Buster’s location in Puerto Rico and two additional Main Event locations in Little Rock, AR and Tucson, AZ taking the total combined store count to 207.
    • Adjusted EBITDA of $480.4 million in fiscal year 2022 increased 42.8% from fiscal year 2021 and increased 58.3% from fiscal year 2019.

    “Driven by robust comparable walk-in sales growth and the tailwind of our special events business continuing its recovery toward pre-pandemic norms, we are pleased to report another strong quarter of financial results to mark our first fiscal year-end as a combined company. As a testament to this strength as well as the confidence we have in our future growth initiatives, our Board authorized a share repurchase program up to $100 million,” said Chris Morris, Dave & Buster’s Chief Executive Officer. “Fresh off the heels of our annual general manager’s conference, our exceptional team of operators and shared service center employees is motivated and energized to deliver on our goals we’ve set for the business in 2023 and beyond to realize our full potential. We look forward to sharing our progress with you throughout the course of the year as we continue to drive value creation for our stakeholders.”

    Fourth Quarter 2022 Results

    Total revenue was a record $563.8 million, an increase of 64.3% from $343.1 million in the fourth quarter of 2021 and an increase of 62.4% from $347.2 million in the fourth quarter of 2019. Including the pro forma contribution of Main Event stores in the prior periods, total revenue increased 27.7% versus the fourth quarter of 2021 and increased 30.1% versus the fourth quarter of 2019.

    Pro forma combined comparable store sales (including Main Event branded stores) increased 19.0% compared with the fourth quarter of 2021 and increased 14.1% compared with the fourth quarter of 2019. Pro forma combined walk-in comparable store sales increased 12.1% while Special Event comparable store sales increased 89.5% compared with the same period in 2021. Pro forma combined walk-in comparable store sales increased 18.0% while consolidated Special Event comparable store sales declined 6.4% compared with the same period in 2019. Non-comparable store revenue totaled $131.5 million in the fourth quarter.

    Operating income totaled $77.2 million, or 13.8% of revenue, compared with operating income of $46.5 million, or 13.6% of revenue in the fourth quarter of 2021 and operating income of $37.6 million, or 10.9% of revenue in the fourth quarter of 2019.

    Net income totaled $39.1 million, or 80 cents per diluted share, compared with net income of $25.7 million, or 52 cents per diluted share in the fourth quarter of 2021 and net income of $25.0 million, or 80 cents per diluted share in the fourth quarter of 2019.

    Adjusted EBITDA totaled $138.4 million, or 24.5% of revenue, compared with Adjusted EBITDA of $84.9 million, or 24.8% of revenue in the fourth quarter of 2021 and Adjusted EBITDA of $74.8 million, or 21.5% of revenue in the fourth quarter of 2019.

    Store operating income before depreciation and amortization totaled $169.1 million, or 30.0% of revenue, compared with store operating income before depreciation and amortization of $101.1 million, or 29.5% of revenue in the fourth quarter of 2021 and store operating income before depreciation and amortization of $96.3 million, or 27.7% of revenue in the fourth quarter of 2019.

    Balance Sheet, Liquidity and Cash Flow

    The Company generated $143.5 million in operating cash flow during the fourth quarter, ending the quarter with $181.6 million in cash and $491.1 million of availability under its $500 million revolving credit facility, net of $8.9 million in outstanding letters of credit. The Company ended the year with a Net Total Leverage Ratio of 1.9x as defined under its Credit Agreement as the ratio of the aggregate principal amount of any Consolidated Debt less Unrestricted Cash and unrestricted Permitted Investments to Credit Adjusted EBITDA. The Company’s maximum permitted Net Total Leverage Ratio is 3.5x.

    “Entering our strongest quarter from a seasonal cash generation perspective with nearly $673 million of liquidity, we are in an enviable position to execute on our long-term new store growth goals, remodel existing stores to drive incremental traffic, and return capital to shareholders,” said Michael Quartieri, Dave & Buster’s Chief Financial Officer. “We’ve completed all the initiatives required to achieve our previously disclosed $25 million synergy target ahead of schedule, which is a testament to the incredible work our team has done to integrate these two great brands. We remain committed to achieving operational excellence and continuous improvement as we progress into the future.”

    Share Repurchase Authorization

    The Company announced today that its Board of Directors has approved a share repurchase program authorizing the Company to repurchase up to $100 million of its common stock through the end of fiscal 2023. The program may be suspended or discontinued at any time.

    Annual Report on Form 10-K Available

    The Company’s Annual Report on Form 10-K, will be available at www.sec.gov and on the Company’s investor relations website, contains a thorough review of its financial results for the fiscal year and fourth quarter ended January 29, 2023.

    Investor Conference Call and Webcast

    Management will hold a conference call to report these results on Tuesday, March 28, 2023, at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). Participants can access the conference call by dialing toll-free (877) 883-0383. The international dial-in for participants is (412) 902-6506. The participant entry number is 5052728. A replay will be available after the call for one year beginning at 6:00 p.m. Central Time (7:00 p.m. Eastern Time) and can be accessed by dialing toll-free (877) 344-7529 or by the international toll number (412) 317-0088; the replay access code 4609682. Additionally, a live and archived webcast of the conference call will be available under the Investor Relations section at www.daveandbusters.com.

    About Dave & Buster’s Entertainment, Inc.

    Founded in 1982 and headquartered in Coppell, Texas, Dave & Buster’s Entertainment, Inc., is the owner and operator of 207 venues in North America that offer premier entertainment and dining experiences to guests through two distinct brands: Dave & Buster’s and Main Event. The Company has 152 Dave & Buster’s branded stores in 41 states, Puerto Rico, and Canada and offers guests the opportunity to “Eat Drink Play and Watch,” all in one location. Each store offers a full menu of entrées and appetizers, a complete selection of alcoholic and non-alcoholic beverages, and an extensive assortment of entertainment attractions centered around playing games and watching live sports and other televised events. The Company also operates 55 Main Event branded stores in 18 states across the country, and offers state-of-the-art bowling, laser tag, hundreds of arcade games and virtual reality, making it the perfect place for families to connect and make memories. For more information about each brand, visit daveandbusters.com and mainevent.com.

    Forward-Looking Statements

    The Company cautions that this release contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including: our ability to continue as a going concern; our ability to obtain waivers, and thereafter continue to satisfy covenant requirements, under our revolving credit facility; our ability to access other funding sources; our overall level of indebtedness; general business and economic conditions, including as a result of the coronavirus pandemic and any new coronavirus variants; the impact of competition; the seasonality of the Company’s business; adverse weather conditions; future commodity prices; guest and employee complaints and litigation; fuel and utility costs; labor costs and availability; changes in consumer and corporate spending; changes in demographic trends; changes in governmental regulations; unfavorable publicity, our ability to open new stores, and acts of God. Accordingly, actual results may differ materially from the forward-looking statements, and the Company therefore cautions you against relying on such forward-looking statements. Dave & Buster’s intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more appropriate information becomes available, except as required by law.

    *Non-GAAP Measures

    To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, the Company uses the following non-GAAP financial measures: EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Credit Adjusted EBITDA (calculated in accordance with the Company’s credit agreement, additional details of which can be found in the Company’s Annual Report on Form 10-K), Credit Adjusted EBITDA margin, Store operating income before depreciation and amortization, Store operating income before depreciation and amortization margin, and pro forma financials including Main Event branded stores prior to the Company’s ownership, reconciliations of which can be found on our website (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of our operating performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP measures used by the Company in this press release may be different from the measures used by other companies.

    For Investor Relations Inquiries:

    Cory Hatton, VP Investor Relations & Treasurer
    Dave & Buster’s Entertainment, Inc.
    cory.hatton@daveandbusters.com


    DAVE & BUSTER’S ENTERTAINMENT, INC.
    Consolidated Statements of Operations
    (in thousands, except share and per share amounts)
    (Unaudited)

     13 Weeks Ended 13 Weeks Ended 13 Weeks Ended
     January 29, 2023 January 30, 2022 February 2, 2020
    Food and beverage revenues$203,571 36.1% $120,126 35.0% $152,797 44.0%
    Amusement and other revenues 360,190 63.9%  222,976 65.0%  194,361 56.0%
    Total revenues 563,761 100.0%  343,102 100.0%  347,158 100.0%
                
    Cost of food and beverage (as a percentage of food and beverage revenues) 55,087 27.1%  32,757 27.3%  39,124 25.6%
    Cost of amusement and other (as a percentage of amusement and other revenues) 31,965 8.9%  22,119 9.9%  20,659 10.6%
    Total cost of products 87,052 15.4%  54,876 16.0%  59,783 17.2%
    Operating payroll and benefits 137,776 24.4%  77,366 22.5%  83,005 23.9%
    Other store operating expenses 169,857 30.1%  109,778 32.0%  108,097 31.1%
    General and administrative expenses 39,053 6.9%  17,836 5.2%  20,422 5.9%
    Depreciation and amortization expense 48,972 8.7%  33,974 9.9%  35,234 10.1%
    Pre-opening costs 3,835 0.7%  2,723 0.8%  3,001 0.9%
    Total operating costs 486,545 86.2%  296,553 86.4%  309,542 89.1%
    Operating income 77,216 13.8%  46,549 13.6%  37,616 10.9%
    Interest expense, net 30,481 5.4%  11,939 3.5%  6,166 1.8%
    Loss on debt extinguishment / refinancing — —%  2,788 0.8%  — —%
    Income before provision for income taxes 46,735 8.4%  31,822 9.3%  31,450 9.1%
    Provision for income taxes 7,591 1.3%  6,172 1.8%  6,468 1.9%
    Net income$39,144 7.1% $25,650 7.5% $24,982 7.2%
                
    Net income per share:           
    Basic$0.81   $0.53   $0.82  
    Diluted$0.80   $0.52   $0.80  
    Weighted average shares used in per share calculations:           
    Basic shares 48,328,524    48,416,687    30,584,360  
    Diluted shares 49,006,140    49,268,800    31,158,919  
                
    Other information:           
    Company-owned stores at end of period 204    144    136  
    Store operating weeks in the period 2,641    1,857    1,757  
    Total revenue per store operating weeks in the period$213   $185   $198  
                   


    The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown:

     13 Weeks Ended 13 Weeks Ended 13 Weeks Ended
     January 29, 2023 January 30, 2022 February 2, 2020
    Net income (loss)$39,144 6.9% $25,650 7.5% $24,982 7.2%
    Add back: Interest expense, net 30,481    11,939    6,166  
    Loss on debt extinguishment / refinancing —    2,788    —  
    Provision (benefit) for income taxes 7,591    6,172    6,468  
    Depreciation and amortization expense 48,972    33,974    35,234  
    EBITDA 126,188 22.4%  80,523 23.5%  72,850 21.0%
    Add back: Loss on asset disposal 157    758    529  
    Impairment of long-lived assets and lease termination costs —    912    —  
    Share-based compensation 8,513    2,536    1,378  
    Merger & integration costs 2,958    —    —  
    Information systems implementation costs and other items 566    207    8  
    Adjusted EBITDA, a non-GAAP measure (1)$138,382 24.5% $84,936 24.8% $74,765 21.5%

    (1)   To more closely align our reported Adjusted EBITDA with recurring operating cash flows, we excluded pre-opening costs from Adjusted EBITDA beginning with the 13 Weeks Ended January 29, 2023. Adjusted EBITDA for the 13 Weeks Ended January 30, 2022 and February 2, 2020 has been adjusted to reflect comparable presentations.


    The following table sets forth a reconciliation of operating income to store operating income before depreciation and amortization for the periods shown:

     13 Weeks Ended 13 Weeks Ended 13 Weeks Ended
     January 29, 2023 January 30, 2022 February 2, 2020
    Operating income$77,216 13.7% $46,549 13.6% $37,616 10.8%
    Add back: General and administrative expenses 39,053    17,836    20,422  
    Depreciation and amortization expense 48,972    33,974    35,234  
    Pre-opening costs 3,835    2,723    3,001  
    Store operating income before depreciation and amortization, a non-GAAP measure$169,076 30.0% $101,082 29.5% $96,273 27.7%
                      


    DAVE & BUSTER’S ENTERTAINMENT, INC.
    Consolidated Statements of Operations
    (in thousands, except share and per share amounts)

     52 Weeks Ended 52 Weeks Ended 52 Weeks Ended
     January 29, 2023 January 30, 2022 February 2, 2020
    Food and beverage revenue$678,333 34.5% $436,637 33.5% $563,576 41.6%
    Amusement and other revenue 1,286,094 65.5%  867,419 66.5%  791,115 58.4%
    Total revenue 1,964,427 100.0%  1,304,056 100.0%  1,354,691 100.0%
                
    Cost of food and beverage (as a percentage of food and beverage revenue) 193,742 28.6%  119,123 27.3%  148,196 26.3%
    Cost of amusement and other (as a percentage of amusement and other revenue) 115,122 9.0%  85,848 9.9%  85,115 10.8%
    Total cost of products 308,864 15.7%  204,971 15.7%  233,311 17.2%
    Operating payroll and benefits 470,729 24.0%  287,263 22.0%  322,970 23.8%
    Other store operating expenses 600,568 30.6%  402,661 30.9%  429,431 31.7%
    General and administrative expenses 137,837 7.0%  75,501 5.8%  69,469 5.1%
    Depreciation and amortization expense 169,302 8.6%  138,329 10.6%  132,460 9.8%
    Pre-opening costs 14,619 0.7%  8,150 0.6%  18,971 1.4%
    Total operating costs 1,701,919 86.6%  1,116,875 85.6%  1,206,612 89.0%
    Operating income 262,508 13.4%  187,181 14.4%  148,079 11.0%
    Interest expense, net 87,363 4.5%  53,910 4.2%  20,937 1.6%
    Loss on debt refinancing / extinguishment 1,479 0.1%  5,617 0.4%  — —%
    Income before provision for income taxes 173,666 8.8%  127,654 9.8%  127,142 9.4%
    Provision for income taxes 36,531 1.9%  19,014 1.5%  26,879 2.0%
    Net income$137,135 6.9% $108,640 8.3% $100,263 7.4%
                
    Net income per share:           
    Basic$2.83   $2.26   $3.00  
    Diluted$2.79   $2.21   $2.94  
    Weighted average shares used in per share calculations:           
    Basic shares 48,498,053    48,142,090    33,450,217  
    Diluted shares 49,176,977    49,263,720    34,099,378  
                
    Other information:           
    Company-owned stores at end of period 204    144    136  
    Store operating weeks in the period 9,304    7,161    6,769  
    Total revenue per store operating weeks in the period$211   $182   $200  
                   


    The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown:

     52 Weeks Ended 52 Weeks Ended 52 Weeks Ended
     January 29, 2023 January 30, 2022 February 2, 2020
    Net income$137,135 7.0% $108,640 8.3% $100,263 7.4%
    Add back: Interest expense, net 87,363    53,910    20,937  
    Loss on debt extinguishment / refinancing 1,479    5,617    —  
    Provision (benefit) for income taxes 36,531    19,014    26,879  
    Depreciation and amortization expense 169,302    138,329    132,460  
    EBITDA 431,810 22.0%  325,510 25.0%  280,539 20.7%
    Add back: Loss on asset disposal 769    1,392    1,813  
    Impairment of long-lived assets and lease termination costs 1,841    912    —  
    Share-based compensation 19,994    12,472    6,857  
    Merger & integration costs 25,257    —    —  
    Information systems implementation costs and other items 696    3,289    42  
    Adjusted EBITDA, a non-GAAP measure (1)$480,367 24.5% $343,575 26.3% $289,251 21.4%

    (1) To more closely align our reported Adjusted EBITDA with recurring operating cash flows, we excluded pre-opening costs from Adjusted EBITDA beginning with the 52 Weeks Ended January 29, 2023. Adjusted EBITDA for the 52 Weeks Ended January 30, 2022 and February 2, 2020 has been adjusted to reflect comparable presentations.


    The following table sets forth a reconciliation of operating income to store operating income before depreciation and amortization for the periods shown:

     52 Weeks Ended 52 Weeks Ended 52 Weeks Ended
     January 29, 2023 January 30, 2022 February 2, 2020
    Operating income$262,508 13.4% $187,181 14.4% $148,079 10.9%
    Add back: General and administrative expenses 137,837    75,501    69,469  
    Depreciation and amortization expense 169,302    138,329    132,460  
    Pre-opening costs 14,619    8,150    18,971  
    Store operating income before depreciation and amortization, a non-GAAP measure$584,266 29.7% $409,161 31.4% $368,979 27.2%
                      


    The following table sets forth a reconciliation of Net income to Credit Adjusted EBITDA, as defined in our senior secured credit facility, for the periods shown:

     13 Weeks Ended
    January 29, 2023    		 52 Weeks Ended
    January 29, 2023
    Net income$39,144 $137,135
    Add back: Interest expense, net 30,481  87,363
    Loss on debt extinguishment / refinancing —  1,479
    Provision for income taxes 7,591  36,531
    Depreciation and amortization expense 48,972  169,302
    EBITDA 126,188  431,810
    Add back: Loss on asset disposal 157  769
    Impairment of long-lived assets and lease termination costs —  1,841
    Share-based compensation 8,513  19,994
    Pre-opening costs 3,835  14,619
    Merger and integration costs 2,958  25,257
    Amusement deferrals 6,383  14,853
    Proforma Main Event adjustments (1)  —  49,886
    Information systems implementation costs and other items 566  696
    Credit Adjusted EBITDA, a non-GAAP measure$148,600 $559,725

    (1) Total adjustment amount for Main Event for periods prior to the Company’s ownership during the trailing four quarter Test Period, as defined on a Pro Forma Basis in our senior secured credit facility.


    The following table provides a calculation of Net Total Leverage Ratio, as defined in our senior secured credit facility, for the period shown:

     As of and for
    Fiscal Year Ended
    January 29, 2023
    Credit Adjusted EBITDA (a)$559,725 
    Total long-term debt$1,231,211 
    Less: Cash and cash equivalents$(181,591)
    Add: Outstanding letters of credit$8,905 
    Net debt (b)$1,058,525 
    Net Total Leverage Ratio (b / a) 1.9 
        


    DAVE & BUSTER’S ENTERTAINMENT, INC.
    Condensed Consolidated Balance Sheets
    (in thousands)

    ASSETSJanuary 29, 2023 January 30, 2022
        
    Cash and cash equivalents$181,591 $25,910
    Other current assets 112,116  119,661
    Total current assets 293,707  145,571
    Property and equipment, net 1,180,231  778,597
    Operating lease right of use assets 1,333,596  1,037,197
    Intangible and other assets, net 953,459  384,425
    Total assets$3,760,993 $2,345,790
        
        
    LIABILITIES AND STOCKHOLDERS’ EQUITY   
        
    Total current liabilities$438,037 $311,515
    Operating lease liabilities 1,567,794  1,277,539
    Other long-term liabilities 121,916  49,881
    Long-term debt, net 1,222,711  431,395
    Stockholders’ equity 410,535  275,460
    Total liabilities and stockholders’ equity$3,760,993 $2,345,790

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