Dave & Buster’s, Inc. Fourth Quarter Total Revenues Increased 15.0%
Comparable store sales increased 3.7% (on a comparable 13 week basis).
Dave & Buster's, Inc., a leading operator of high volume entertainment/dining complexes, today announced financial results for its fourth quarter and full year 2012.
“We delivered a strong fourth quarter and appreciate the entire team for their contributions to this outstanding effort. Our same-store sales gain substantially outpaced the casual dining industry benchmark while the expansion in operating income and Adjusted EBITDA exceeded the top-line increase”
The fourth quarter and full year ended February 3, 2013 included 14 and 53 weeks, respectively, compared to 13 and 52 weeks, respectively, for the fourth quarter and full year ended January 29, 2012. Accordingly, financial results for the fiscal 2012 periods are not directly comparable to those of the corresponding fiscal 2011 periods.
Key highlights from the fourth quarter 2012 (14 weeks) compared to the fourth quarter 2011 (13 weeks) include:
- Total revenues increased 15.0% to $165.6 million from $144.0 million.
- Comparable store sales increased 3.7% (on a comparable 13 week basis).
- Adjusted EBITDA* increased 20.5% to $36.1 million from $29.9 million. As a percentage of total revenues, Adjusted EBITDA increased nearly 100 basis points to 21.8%.
- Operating income increased 24.7% to $14.8 million from $11.9 million. As a percentage of total revenues, operating income increased 69 basis points to 9.0%.
- Two new stores were opened – Dallas, TX and Boise, ID.
Key highlights for the full year 2012 (53 weeks) compared to the full year 2011 (52 weeks) include:
- Total revenues increased 12.3% to $608.1 million from $541.5 million.
- Comparable store sales increased 3.0% (on a comparable 52 week basis).
- Adjusted EBITDA* increased 22.5% to $120.5 million from $98.4 million. As a percentage of total revenues, Adjusted EBITDA increased approximately 165 basis points to 19.8%.
- Operating income increased 28.0% to $43.7 million from $34.1 million. As a percentage of total revenues, operating income increased 88 basis points to 7.2%.
* A reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure presented in accordance with GAAP, is set forth in the attachment to this release.
“We delivered a strong fourth quarter and appreciate the entire team for their contributions to this outstanding effort. Our same-store sales gain substantially outpaced the casual dining industry benchmark while the expansion in operating income and Adjusted EBITDA exceeded the top-line increase,” said Steve King, Chief Executive Officer of Dave & Buster’s, Inc. “The dynamic, high-energy and social experience of Dave & Buster’s is clearly resonating with a growing customer base and underscores our opportunity to grow sales and profits while pursuing disciplined new development.”
King continued, “Looking ahead, we have planned an exciting year at Dave & Buster’s. Within our existing store base, we will continue to introduce new menu items, beverages and games to further enhance the guest experience and we have several initiatives in process geared towards making Dave & Buster’s an even more attractive venue for sports viewing, parties and corporate functions. Our real estate pipeline consists of four to six new openings and these will be supplemented by seven remodeling projects that will help ensure that our venues are kept fresh and contemporary. In a highly competitive and promotionally driven environment for both dining and entertainment dollars, we are proud of our positioning as a differentiated brand with strong appeal.”
Review of Fourth Quarter 2012 Operating Results
Total revenues increased 15.0% to $165.6 million in the fourth quarter of 2012 (14 weeks) compared to $144.0 million in the fourth quarter of 2011 (13 weeks). Across all stores, Food and Beverage revenues increased 13.1% and Amusements and Other revenues increased 17.1%. The additional 14th week increased total revenues by $10.4 million.
Comparable store sales (on a 13 week basis) increased 3.7% in the fourth quarter of 2012. The increase was driven by a 4.4% increase in comparable walk-in sales and a 0.6% increase in comparable special events business sales. Non-comparable store revenues increased $6.7 million (on a 13 week basis) during the fourth quarter.
Adjusted EBITDA increased 20.5% to $36.1 million in the fourth quarter of 2012 from $29.9 million in last year’s fourth quarter. As a percentage of total revenues, Adjusted EBITDA increased approximately 100 basis points to 21.8%. The additional 14th week is estimated to have increased Adjusted EBITDA by approximately $2.4 million.
Operating income increased 24.7% to $14.8 million from $11.9 million. As a percentage of total revenues, operating income increased 69 basis points to 9.0% as the Company leveraged most cost inputs on the higher sales along with the benefit of the incremental operating week.
Development
There were four Dave & Buster’s store openings in 2012: Oklahoma City, OK; Orland Park (Chicago), IL; Dallas, TX; and Boise, ID.
The Company anticipates adding four to six new stores in 2013, of which most are scheduled to open in the second half of the year. Total capital expenditures are estimated at $95 million to $105 million and include new store development, seven remodeling projects, new games and maintenance capital.
About Dave & Buster’s, Inc.
Founded in 1982 and headquartered in Dallas, Texas, Dave & Buster’s is the premier national owner and operator of 61 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 26 states and Canada.
| DAVE & BUSTER'S, INC. | ||||||
| Condensed Consolidated Balance sheets | ||||||
(in thousands) | ||||||
(audited) | ||||||
| ASSETS | February 3, 2013 | January 29, 2012 | ||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 36,117 | $ | 33,684 | ||
| Other current assets | 55,701 | 41,310 | ||||
| Total current assets | $ | 91,818 | $ | 74,994 | ||
| Property and equipment, net | 337,239 | 323,342 | ||||
| Intangible and other assets, net | 375,496 | 380,326 | ||||
| Total assets | $ | 804,553 | $ | 778,662 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
| Total current liabilities | $ | 92,883 | $ | 89,884 | ||
| Other long-term liabilities | 107,115 | 101,746 | ||||
| Long-term debt, less current liabilities, net unamortized discount | 343,579 | 345,167 | ||||
| Stockholders' equity | 260,976 | 241,865 | ||||
| Total liabilities and stockholders' equity | $ | 804,553 | $ | 778,662 | ||
| DAVE & BUSTER'S, INC. | |||||||||||||
| Condensed Statements of Operations | |||||||||||||
(in thousands) | |||||||||||||
(unaudited) | |||||||||||||
| 14 Weeks Ended | 13 Weeks Ended | ||||||||||||
| February 3, 2013 | January 29, 2012 | ||||||||||||
| Food and beverage revenues | $ | 84,687 | 51.1 | % | $ | 74,900 | 52.0 | % | |||||
| Amusement and other revenues | 80,899 | 48.9 | % | 69,056 | 48.0 | % | |||||||
| Total revenues | 165,586 | 100.0 | % | 143,956 | 100.0 | % | |||||||
| Cost of products | 32,554 | 19.7 | % | 29,043 | 20.2 | % | |||||||
| Store operating expenses | 88,786 | 53.5 | % | 77,984 | 54.2 | % | |||||||
| General and administrative expenses | 10,257 | 6.2 | % | 9,192 | 6.4 | % | |||||||
| Depreciation and amortization | 17,884 | 10.8 | % | 14,404 | 10.0 | % | |||||||
| Pre-opening costs | 1,262 | 0.8 | % | 1,428 | 1.0 | % | |||||||
| Total operating expenses | 150,743 | 91.0 | % | 132,051 | 91.8 | % | |||||||
| Operating income (loss) | 14,843 | 9.0 | % | 11,905 | 8.2 | % | |||||||
| Interest expense, net | 8,703 | 5.3 | % | 7,963 | 5.5 | % | |||||||
| Income (loss) before income tax benefit | 6,140 | 3.7 | % | 3,942 | 2.7 | % | |||||||
| Income tax benefit | (1,807 | ) | -1.1 | % | 2,140 | 1.5 | % | ||||||
| Net income (loss) | $ | 7,947 | 4.8 | % | $ | 1,802 | 1.2 | % | |||||
| Other information: | |||||||||||||
| Company-owned and operated stores open at end of period (1) | 61 | 58 | |||||||||||
| The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown: | |||||||||||||
| 14 Weeks Ended | 13 Weeks Ended | ||||||||||||
| February 3, 2013 | January 29, 2012 | ||||||||||||
| Total net income (loss) | $ | 7,947 | $ | 1,802 | |||||||||
| Add back: Interest expense, net | 8,703 | 7,963 | |||||||||||
| Income tax benefit | (1,807 | ) | 2,140 | ||||||||||
| Depreciation and amortization | 17,884 | 14,404 | |||||||||||
| EBITDA | 32,727 | 26,309 | |||||||||||
| Add back: Loss on asset disposal | 688 | 261 | |||||||||||
| Share-based compensation | 233 | 185 | |||||||||||
| Currency transaction loss (gain) | - | 87 | |||||||||||
| Pre-opening costs | 1,262 | 1,428 | |||||||||||
| Reimbursement of affiliate expenses. | (56 | ) | 133 | ||||||||||
Deferred amusement revenue and ticket redemption liability adjustments | 1,188 | 1,149 | |||||||||||
| Transaction and other costs | 51 | 394 | |||||||||||
| Adjusted EBITDA (2) | $ | 36,093 | $ | 29,946 | |||||||||
| DAVE & BUSTER'S, INC. | |||||||||||||
| Condensed Statements of Operations | |||||||||||||
(in thousands) | |||||||||||||
(audited) | |||||||||||||
| 53 Weeks Ended | 52 Weeks Ended | ||||||||||||
| February 3, 2013 | January 29, 2012 | ||||||||||||
| Food and beverage revenues | $ | 298,421 | 49.1 | % | $ | 272,606 | 50.3 | % | |||||
| Amusement and other revenues | 309,646 | 50.9 | % | 268,939 | 49.7 | % | |||||||
| Total revenues | 608,067 | 100.0 | % | 541,545 | 100.0 | % | |||||||
| Cost of products | 119,117 | 19.6 | % | 107,168 | 19.8 | % | |||||||
| Store operating expenses | 338,363 | 55.6 | % | 306,868 | 56.7 | % | |||||||
| General and administrative expenses | 40,356 | 6.6 | % | 34,896 | 6.4 | % | |||||||
| Depreciation and amortization | 63,457 | 10.4 | % | 54,277 | 10.0 | % | |||||||
| Pre-opening costs | 3,060 | 0.5 | % | 4,186 | 0.8 | % | |||||||
| Total operating expenses | 564,353 | 92.7 | % | 507,395 | 93.7 | % | |||||||
| Operating income (loss) | 43,714 | 7.3 | % | 34,150 | 6.3 | % | |||||||
| Interest expense, net | 33,075 | 5.4 | % | 32,516 | 6.0 | % | |||||||
| Income (loss) before income tax provision | 10,639 | 1.9 | % | 1,634 | 0.3 | % | |||||||
| Income tax benefit | (7,358 | ) | -1.2 | % | 679 | 0.1 | % | ||||||
| Net income (loss) | $ | 17,997 | 3.1 | % | $ | 955 | 0.2 | % | |||||
| Other information: | |||||||||||||
| Company-owned and operated stores open at end of period (1) | 61 | 58 | |||||||||||
| The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown: | |||||||||||||
| 53 Weeks Ended | 52 Weeks Ended | ||||||||||||
| February 3, 2013 | January 29, 2012 | ||||||||||||
| Total net income (loss) | $ | 17,997 | $ | 955 | |||||||||
| Add back: Interest expense, net | 33,075 | 32,516 | |||||||||||
| Provision (benefit) for income taxes | (7,358 | ) | 679 | ||||||||||
| Depreciation and amortization | 63,457 | 54,277 | |||||||||||
| EBITDA | 107,171 | 88,427 | |||||||||||
| Add back: Loss on asset disposal | 2,640 | 1,279 | |||||||||||
| Share-based compensation | 1,099 | 1,038 | |||||||||||
| Currency transaction (loss) gain | (13 | ) | 103 | ||||||||||
| Pre-opening costs | 3,060 | 4,186 | |||||||||||
| Reimbursement of affiliate expenses. | 799 | 854 | |||||||||||
Deferred amusement revenue and ticket redemption liability adjustments | 2,470 | 1,539 | |||||||||||
| Transaction and other costs | 3,252 | 946 | |||||||||||
| Adjusted EBITDA (2) | $ | 120,478 | $ | 98,372 | |||||||||
NOTES
(1) The store count excludes one franchise location in Canada.
(2) EBITDA, a non-GAAP measure, is defined as net income (loss) before income tax provision (benefit), interest expense (net) and depreciation and amortization. Adjusted EBITDA, also a non-GAAP measure, is defined as EBITDA plus (gain) loss on asset disposal, share-based compensation expense, pre-opening costs, reimbursement of affiliate expenses, 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 secured 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.
