In the news release titled, "Dave & Buster’s Reports Second
Quarter Financial Results; Provides Update on Status of Store
Re-openings and Encouraging Business Recovery Trends" from
September 10, 2020 the Company is issuing an updated version to
clarify that the second quarter comparable store sales decrease of
87% was for the entire 115 comparable store sales base, 47 of which
were closed, and also to update the sales figure for all 115
comparable stores and for the 68 reopened comparable stores during
the two-week period ended September 7, 2020. The complete corrected
text follows:
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 second quarter 2020, which ended on
August 2, 2020.
The Company’s second quarter 2020 financial
results were severely impacted by the effects of the COVID-19
pandemic when compared against the results of the second quarter of
2019. As of March 20, 2020, all of the Company’s stores were
temporarily closed in compliance with state-by-state COVID-19
mitigation mandates. The Company reopened 1 store on April 30, had
re-opened 26 stores by the end of May, 66 stores by the end of
June, and ended the second quarter with 84 re-opened stores in 27
states. As of September 9, the Company had reopened 89 stores, all
operating under reduced hours and capacity limitations as dictated
by each locality, new seating and game configurations to promote
social distancing, a temporarily condensed food and beverage menu,
and extensive incremental cleaning and sanitation procedures to
protect the health and safety of guests and team members.
Key Second Quarter 2020 Highlights (all comparisons to
second quarter 2019)
- Revenues totaled $50.8 million, a decrease of 85 percent
compared with $344.6 million
- Comparable store sales decreased 87% (115 stores in the comp
store base vs. 99 comp stores in the second quarter of 2019)
- Net loss totaled $58.6 million, or $1.24 per share (47.1
million shares), compared with net income of $32.4 million, or
$0.90 per diluted share (36.0 million diluted shares)
- EBITDA loss totaled $46.0 million compared with EBITDA of $79.0
million
- Adjusted EBITDA loss totaled $38.5 million compared with
adjusted EBITDA of $86.0 million
- Ended the quarter with $224 million in cash and equivalents,
including $110.6 million in proceeds from an offering of 10.6
million common shares at a price of $10.44 per share completed in
May
- Cash burn rate (excluding effects of the May 2020 equity
offering) averaged $3.3 million per week
Brian Jenkins, Dave & Buster’s Chief
Executive Officer, said, “I am extremely pleased with the agility,
resilience and commitment demonstrated by our team members. We have
made steady progress re-opening our stores while rapidly
implementing numerous initiatives that are accelerating our
business recovery and positioning us for long-term success.
“By continuing to refine our lean operating
model, we believe we have lowered our near-term enterprise EBITDA
breakeven sales index benchmark to approximately 50 percent to 55
percent of prior year sales, compared with the 60 percent sales
index we initially estimated in June.”
Jenkins concluded, “We remain confident in our
brand, our people, and our plan, and optimistic about our ability
to emerge in an even stronger competitive position to deliver fun
to our guests and value to our shareholders.”
Second Quarter 2020
Results(All comparisons are between second quarter
2020 and second quarter 2019, unless otherwise noted)
Total revenues decreased 85.2% to $50.8 million
from $344.6 million. Sales at the Company’s 115 comparable stores
(of which 47 were closed) decreased 87% for the entire quarter,
beginning the quarter down 99 percent and gradually improving to
finish down 78 percent during the week ended August 2, 2020 and
down 70% during the two-week period ended September 7, 2020. Among
the 84 re-opened stores at the end of the second quarter, sales at
the 68 re-opened comparable stores declined 42% for the two-week
period ended September 7, 2020. Non-comparable store second-quarter
revenue totaled $10.4 million compared with $36.5 million. Second
quarter 2019 comparable store sales decreased 1.8%.
Operating loss totaled $81.1 million, or
(159.6)% of revenues, compared with operating income of $46.2
million, or 13.4% of revenues.
Net loss totaled $58.6 million, or $1.24 per
share (47.1 million share base) compared with net income of $32.4
million, or $0.90 per diluted share (36.0 million diluted share
base).
EBITDA loss totaled $46.0 million, or (90.4)% of
revenues, compared with EBITDA of $79.0 million, or 22.9% of
revenues.
Adjusted EBITDA loss totaled $38.5 million, or
(75.7)% of revenues, compared with adjusted EBITDA of $86.0
million, or 25.0% or revenues.
Store operating loss before depreciation and amortization
totaled $34.3 million, or (67.5)% of revenues, compared with store
operating income before depreciation and amortization of $99.7
million, or 28.9% of revenues.
Balance Sheet, Liquidity, Cash Flow and
Capital Allocation
The Company used approximately $43.0 million of
cash during the second quarter, excluding $110.6 million raised
through an equity offering of 10.6 million common shares at a price
of $10.44 per share completed in May, ending the period with
approximately $224 million in cash and equivalents and
approximately $746.6 million outstanding under its credit
facility.
In light of the continuing unprecedented degree
of uncertainty, the Company is not in a position to provide fiscal
2020 financial guidance at this time.
Quarterly Report on Form 10-Q
Available
The Company’s Quarterly Report on Form 10-Q,
will be available at www.sec.gov and at the Company’s investor
relations website, contains a thorough review of its financial
results for the second quarter ended August 2, 2020.
Investor Conference Call and
Webcast
Management will hold a conference call today at
4:00 p.m. Central Time (5:00 p.m. Eastern Time). The conference
call can be accessed over the phone by dialing (720) 452-9217 or
toll-free (888) 394-8218. A replay will be available after the call
for one year beginning at 7:00 p.m. Central Time (8:00 p.m. Eastern
Time) and can be accessed by dialing (412) 317-6671 or toll-free
(844) 512-2921; the passcode is 9125231.
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 Dallas,
Texas, Dave & Buster's Entertainment, Inc., is the owner and
operator of 136 venues in North America that combine entertainment
and dining and offer customers the opportunity to "Eat Drink Play
and Watch," all in one location. Dave & Buster's 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. Dave &
Buster's currently has stores in 40 states, Puerto Rico, and
Canada.
Forward-Looking Statements
The Company cautions that this release contains
forward-looking statements, including, without limitation,
statements relating to the impact on our business and operations of
the global spread of the novel coronavirus outbreak. These
forward-looking statements involve risks and uncertainties and,
consequently, could be affected by the uncertain and unprecedented
impact of the coronavirus on our business and operations and the
related impact on our liquidity needs; 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; the
duration of government-mandated and voluntary shutdowns; the speed
with which our stores safely can be reopened and the level of
customer demand following reopening; the economic impact of the
coronavirus and related disruptions on the communities we serve;
our overall level of indebtedness; general business and economic
conditions, including as a result of the coronavirus; 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, including
as a result of the coronavirus; 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,
Store operating income before depreciation and amortization, and
store operating income before depreciation and amortization margin
(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.
(Financial Tables Follow)
DAVE & BUSTER'S ENTERTAINMENT, INC. |
Condensed Consolidated Balance Sheets |
(in thousands) |
|
|
|
|
|
|
ASSETS |
|
August 2, 2020 |
|
February 2, 2020 |
|
|
(unaudited) |
|
(audited) |
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
224,305 |
|
$ |
24,655 |
Other current assets |
|
|
68,679 |
|
|
54,322 |
|
|
|
|
|
Total current assets |
|
|
292,984 |
|
|
78,977 |
|
|
|
|
|
Property and equipment,
net |
|
|
872,010 |
|
|
900,637 |
|
|
|
|
|
Operating lease right of use
assets |
|
|
1,062,266 |
|
|
1,011,568 |
|
|
|
|
|
Intangible and other assets,
net |
|
|
392,707 |
|
|
378,957 |
|
|
|
|
|
Total assets |
|
$ |
2,619,967 |
|
$ |
2,370,139 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
$ |
313,814 |
|
$ |
290,865 |
|
|
|
|
|
Operating lease
liabilities |
|
|
1,285,533 |
|
|
1,222,054 |
|
|
|
|
|
Other long-term
liabilities |
|
|
38,603 |
|
|
54,881 |
|
|
|
|
|
Long-term debt, net |
|
|
731,646 |
|
|
632,689 |
|
|
|
|
|
Stockholders' equity |
|
|
250,371 |
|
|
169,650 |
|
|
|
|
|
Total liabilities and stockholders' equity |
|
$ |
2,619,967 |
|
$ |
2,370,139 |
|
|
|
|
|
DAVE & BUSTER'S ENTERTAINMENT, INC. |
Consolidated Statements of Operations
(Unaudited) |
(in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended |
|
13 Weeks Ended |
|
|
August 2, 2020 |
|
August 4, 2019 |
|
|
|
|
|
|
|
|
|
Food and beverage revenues |
|
$ |
17,002 |
|
|
33.4 |
% |
|
$ |
137,921 |
|
|
40.0 |
% |
Amusement and other
revenues |
|
|
33,831 |
|
|
66.6 |
% |
|
|
206,678 |
|
|
60.0 |
% |
Total revenues |
|
|
50,833 |
|
|
100.0 |
% |
|
|
344,599 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
Cost of food and beverage (as a
percentage of food and beverage revenues) |
|
|
4,659 |
|
|
27.4 |
% |
|
|
36,934 |
|
|
26.8 |
% |
Cost of amusement and other (as a
percentage of amusement and other revenues) |
|
|
4,025 |
|
|
11.9 |
% |
|
|
22,689 |
|
|
11.0 |
% |
Total cost of products |
|
|
8,684 |
|
|
17.1 |
% |
|
|
59,623 |
|
|
17.3 |
% |
Operating payroll and
benefits |
|
|
13,756 |
|
|
27.1 |
% |
|
|
80,927 |
|
|
23.5 |
% |
Other store operating
expenses |
|
|
62,682 |
|
|
123.2 |
% |
|
|
104,376 |
|
|
30.3 |
% |
General and administrative
expenses |
|
|
9,278 |
|
|
18.3 |
% |
|
|
15,991 |
|
|
4.6 |
% |
Depreciation and amortization
expense |
|
|
35,160 |
|
|
69.2 |
% |
|
|
32,745 |
|
|
9.5 |
% |
Pre-opening costs |
|
|
2,388 |
|
|
4.7 |
% |
|
|
4,723 |
|
|
1.4 |
% |
Total operating costs |
|
|
131,948 |
|
|
259.6 |
% |
|
|
298,385 |
|
|
86.6 |
% |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
(81,115 |
) |
|
-159.6 |
% |
|
|
46,214 |
|
|
13.4 |
% |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
8,163 |
|
|
16.0 |
% |
|
|
4,605 |
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
Income (loss) before provision (benefit) for income taxes |
|
|
(89,278 |
) |
|
-175.6 |
% |
|
|
41,609 |
|
|
12.1 |
% |
Provision (benefit) for income
taxes |
|
|
(30,676 |
) |
|
-60.3 |
% |
|
|
9,253 |
|
|
2.7 |
% |
Net income (loss) |
|
$ |
(58,602 |
) |
|
-115.3 |
% |
|
$ |
32,356 |
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.24 |
) |
|
|
|
$ |
0.91 |
|
|
|
Diluted |
|
$ |
(1.24 |
) |
|
|
|
$ |
0.90 |
|
|
|
Weighted average shares used
in per share calculations: |
|
|
|
|
|
|
|
|
Basic shares |
|
|
47,111,763 |
|
|
|
|
|
35,407,965 |
|
|
|
Diluted shares |
|
|
47,111,763 |
|
|
|
|
|
36,015,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other information: |
|
|
|
|
|
|
|
|
Company-owned stores at end of period |
|
|
137 |
|
|
|
|
|
130 |
|
|
|
Store operating weeks in the period |
|
|
628 |
|
|
|
|
|
1,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
August 2, 2020 |
|
August 4, 2019 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(58,602 |
) |
|
-115.3 |
% |
|
$ |
32,356 |
|
|
9.4 |
% |
Add back: Interest expense, net |
|
|
8,163 |
|
|
|
|
|
4,605 |
|
|
|
Provision (benefit) for income taxes |
|
|
(30,676 |
) |
|
|
|
|
9,253 |
|
|
|
Depreciation and amortization expense |
|
|
35,160 |
|
|
|
|
|
32,745 |
|
|
|
EBITDA |
|
|
(45,955 |
) |
|
-90.4 |
% |
|
|
78,959 |
|
|
22.9 |
% |
Add back: Loss on asset disposal |
|
|
264 |
|
|
|
|
|
406 |
|
|
|
Impairment of long-lived assets |
|
|
2,178 |
|
|
|
|
|
- |
|
|
|
Share-based compensation |
|
|
2,734 |
|
|
|
|
|
1,907 |
|
|
|
Pre-opening costs |
|
|
2,388 |
|
|
|
|
|
4,723 |
|
|
|
Other costs |
|
|
(88 |
) |
|
|
|
|
(13 |
) |
|
|
Adjusted EBITDA |
|
$ |
(38,479 |
) |
|
-75.7 |
% |
|
$ |
85,982 |
|
|
25.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
August 2, 2020 |
|
August 4, 2019 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
(81,115 |
) |
|
-159.6 |
% |
|
$ |
46,214 |
|
|
13.4 |
% |
Add back: General and administrative expenses |
|
|
9,278 |
|
|
|
|
|
15,991 |
|
|
|
Depreciation and amortization expense |
|
|
35,160 |
|
|
|
|
|
32,745 |
|
|
|
Pre-opening costs |
|
|
2,388 |
|
|
|
|
|
4,723 |
|
|
|
Store operating income (loss) before depreciation and
amortization |
|
$ |
(34,289 |
) |
|
-67.5 |
% |
|
$ |
99,673 |
|
|
28.9 |
% |
|
|
|
|
|
|
|
|
|
DAVE & BUSTER'S ENTERTAINMENT, INC. |
Consolidated Statements of Operations
(Unaudited) |
(in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
26 Weeks Ended |
|
26 Weeks Ended |
|
|
August 2, 2020 |
|
August 4, 2019 |
|
|
|
|
|
|
|
|
|
Food and beverage revenues |
|
$ |
80,922 |
|
|
38.4 |
% |
|
$ |
286,142 |
|
|
40.4 |
% |
Amusement and other
revenues |
|
|
129,717 |
|
|
61.6 |
% |
|
|
422,039 |
|
|
59.6 |
% |
Total revenues |
|
|
210,639 |
|
|
100.0 |
% |
|
|
708,181 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
Cost of food and beverage (as a
percentage of food and beverage revenues) |
|
|
22,003 |
|
|
27.2 |
% |
|
|
75,688 |
|
|
26.5 |
% |
Cost of amusement and other (as a
percentage of amusement and other revenues) |
|
|
14,753 |
|
|
11.4 |
% |
|
|
45,660 |
|
|
10.8 |
% |
Total cost of products |
|
|
36,756 |
|
|
17.4 |
% |
|
|
121,348 |
|
|
17.1 |
% |
Operating payroll and
benefits |
|
|
57,493 |
|
|
27.3 |
% |
|
|
163,800 |
|
|
23.1 |
% |
Other store operating
expenses |
|
|
158,354 |
|
|
75.3 |
% |
|
|
210,621 |
|
|
29.8 |
% |
General and administrative
expenses |
|
|
23,841 |
|
|
11.3 |
% |
|
|
32,837 |
|
|
4.6 |
% |
Depreciation and amortization
expense |
|
|
70,512 |
|
|
33.5 |
% |
|
|
63,886 |
|
|
9.0 |
% |
Pre-opening costs |
|
|
6,211 |
|
|
2.9 |
% |
|
|
11,725 |
|
|
1.7 |
% |
Total operating costs |
|
|
353,167 |
|
|
167.7 |
% |
|
|
604,217 |
|
|
85.3 |
% |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
(142,528 |
) |
|
-67.7 |
% |
|
|
103,964 |
|
|
14.7 |
% |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
14,278 |
|
|
6.7 |
% |
|
|
8,661 |
|
|
1.2 |
% |
|
|
|
|
|
|
|
|
|
Income (loss) before provision (benefit) for income taxes |
|
|
(156,806 |
) |
|
-74.4 |
% |
|
|
95,303 |
|
|
13.5 |
% |
Provision (benefit) for income
taxes |
|
|
(54,660 |
) |
|
-25.9 |
% |
|
|
20,504 |
|
|
2.9 |
% |
Net income (loss) |
|
$ |
(102,146 |
) |
|
-48.5 |
% |
|
$ |
74,799 |
|
|
10.6 |
% |
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(2.59 |
) |
|
|
|
$ |
2.07 |
|
|
|
Diluted |
|
$ |
(2.59 |
) |
|
|
|
$ |
2.03 |
|
|
|
Weighted average shares used
in per share calculations: |
|
|
|
|
|
|
|
|
Basic shares |
|
|
39,470,874 |
|
|
|
|
|
36,117,815 |
|
|
|
Diluted shares |
|
|
39,470,874 |
|
|
|
|
|
36,803,001 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other information: |
|
|
|
|
|
|
|
|
Company-owned stores open at end of period |
|
|
137 |
|
|
|
|
|
130 |
|
|
|
Store operating weeks in the period |
|
|
1,461 |
|
|
|
|
|
3,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
table sets forth a reconciliation of net income to EBITDA and
Adjusted EBITDA for the periods shown: |
|
|
|
|
|
|
|
|
|
|
|
26 Weeks Ended |
|
26 Weeks Ended |
|
|
August 2, 2020 |
|
August 4, 2019 |
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(102,146 |
) |
|
-48.5 |
% |
|
$ |
74,799 |
|
|
10.6 |
% |
Add back: Interest expense, net |
|
|
14,278 |
|
|
|
|
|
8,661 |
|
|
|
Provision (benefit) for income taxes |
|
|
(54,660 |
) |
|
|
|
|
20,504 |
|
|
|
Depreciation and amortization expense |
|
|
70,512 |
|
|
|
|
|
63,886 |
|
|
|
EBITDA |
|
|
(72,016 |
) |
|
-34.2 |
% |
|
|
167,850 |
|
|
23.7 |
% |
Add back: Loss on asset disposal |
|
|
417 |
|
|
|
|
|
826 |
|
|
|
Impairment of long-lived assets |
|
|
13,727 |
|
|
|
|
|
- |
|
|
|
Share-based compensation |
|
|
2,345 |
|
|
|
|
|
3,732 |
|
|
|
Pre-opening costs |
|
|
6,211 |
|
|
|
|
|
11,725 |
|
|
|
Other costs |
|
|
59 |
|
|
|
|
|
33 |
|
|
|
Adjusted EBITDA |
|
$ |
(49,257 |
) |
|
-23.4 |
% |
|
$ |
184,166 |
|
|
26.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
table sets forth a reconciliation of operating income to store
operating income before depreciation and amortization for the
periods shown: |
|
|
|
|
|
|
|
|
|
|
|
26 Weeks Ended |
|
26 Weeks Ended |
|
|
August 2, 2020 |
|
August 4, 2019 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
$ |
(142,528 |
) |
|
-67.7 |
% |
|
$ |
103,964 |
|
|
14.7 |
% |
Add back: General and administrative expenses |
|
|
23,841 |
|
|
|
|
|
32,837 |
|
|
|
Depreciation and amortization expense |
|
|
70,512 |
|
|
|
|
|
63,886 |
|
|
|
Pre-opening costs |
|
|
6,211 |
|
|
|
|
|
11,725 |
|
|
|
Store operating income (loss) before depreciation and
amortization |
|
$ |
(41,964 |
) |
|
-19.9 |
% |
|
$ |
212,412 |
|
|
30.0 |
% |
|
|
|
|
|
|
|
|
|
For Investor Relations Inquiries:
Scott Bowman, CFODave & Buster’s Entertainment,
Inc.972.813.1151scott.bowman@daveandbusters.com
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