Dave & Buster’s Achieves 9.5% Revenue and 8.8% EPS Growth in First Quarter
Key highlights from the first quarter 2019 compared to the first quarter 2018 include:
- Total revenues increased 9.5% to
$363.6 million from$332.2 million - Opened seven new stores compared to six new stores
- Comparable store sales decreased 0.3%
- Net income of
$42.4 million , or$1.13 per diluted share, vs. net income of$42.2 million , or$1.04 per diluted share - EBITDA increased 3.2% to
$88.9 million from$86.1 million - Adjusted EBITDA increased 2.4% to
$98.2 million from$95.9 million - Launched Marvel Contest of Champions and Star Trek Dark Remnant, our third proprietary virtual reality title
- Repurchased 1.3 million shares for
$63.5 million and paid a quarterly cash dividend of$0.15 per share
“We delivered robust revenue and EPS growth and our new store performance remained strong, but comparable store sales were below expectations largely due to the Easter shift, which proved unfavorable this year. We are fully committed to executing on our four strategic priorities to strengthen the brand and remain focused on creating significant shareholder value over the long term,” said
“Dave & Buster’s is a clear leader in its category with an excellent track record and a long runway for growth. I’m delighted to be joining this powerful brand and look forward to working with the team to drive future success,” said
Review of First Quarter 2019 Operating Results Compared to First Quarter 2018
Total revenues increased 9.5% to
Comparable store sales decreased 0.3% in the first quarter 2019, compared to a decrease of 4.9% in the comparable period last year. Our comparable store sales decrease was driven by a 0.6% decline in walk-in sales, though special events sales were up 3.0%. Comparable store sales increased 1.8% in Amusements & Other but decreased 3.3% in Food & Beverage. Non-comparable store revenues increased
Operating income decreased 1.5% to
Net income was
EBITDA increased 3.2% to
Adjusted EBITDA increased 2.4% to
Store operating income before depreciation and amortization increased 3.6% to
Development
In fiscal 2019, we remain on track to open 15 to 16 new locations, representing unit growth of approximately 12% (net of
During the first quarter of 2019, we opened seven new stores in
Capital Allocation Initiatives
During the first quarter of 2019, we repurchased approximately 1.3 million shares for
Adoption of New Accounting Guidance
The Company adopted Accounting Standards Codification 842, Leases (Topic 842) (“ASC 842”) during the first quarter of 2019. ASC 842 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. The adoption of ASC 842 resulted in the recognition of operating lease right-of-use assets and lease liabilities on the Company’s consolidated balance sheet. The effect of the adoption of ASC 842 on the Company’s net income and cash flows was immaterial.
Financial Outlook
We are revising guidance on key metrics for fiscal 2019, which ends on
- Total revenues of
$1.365 billion to $1.390 billion (vs.$1.370 billion to $1.400 billion ) - Comparable store sales of -1.5.% to +0.5% (vs. Flat to +1.5%)
- 15 to 16 new stores (unchanged)
- Net income of
$103 million to $113 million (vs.$105 million to $117 million ) - Effective tax rate of 22.0% to 22.5% (unchanged) and diluted share count of approximately 36.5 million shares (vs. approximately 37 million shares)
- EBITDA of
$283 million to $295 million (vs.$285 million to $300 million ) - Total capital additions (net of tenant improvement allowances and other landlord payments) of
$190 million to $200 million (unchanged)
Conference Call Today
Management will hold a conference call to discuss these results today at
Additionally, a live and archived webcast of the conference call will be available at www.daveandbusters.com under the Investor Relations section.
About Dave & Buster’s
Founded in 1982 and headquartered in
Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements. These forward-looking statements involve risks and uncertainties and, consequently, could be affected by our level of indebtedness, general business and economic conditions, 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, 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.
| DAVE & BUSTER'S ENTERTAINMENT, INC. | |||||
| Condensed Consolidated Balance Sheets | |||||
| (in thousands) | |||||
| ASSETS | May 5, 2019 | February 3, 2019 | |||
| (unaudited) | (audited) | ||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 20,353 | $ | 21,585 | |
| Other current assets | 52,620 | 69,508 | |||
| Total current assets | 72,973 | 91,093 | |||
| Property and equipment, net | 834,522 | 805,337 | |||
| Operating lease right of use assets | 879,647 | - | |||
| Intangible and other assets, net | 377,749 | 376,757 | |||
| Total assets | $ | 2,164,891 | $ | 1,273,187 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Total current liabilities | $ | 259,070 | $ | 244,390 | |
| Operating lease liabilities | 1,074,140 | - | |||
| Other long-term liabilities | 43,782 | 262,491 | |||
| Long-term debt, net | 427,774 | 378,469 | |||
| Stockholders' equity | 360,125 | 387,837 | |||
| Total liabilities and stockholders' equity | $ | 2,164,891 | $ | 1,273,187 | |
| DAVE & BUSTER'S ENTERTAINMENT, INC. | |||||||||||
| Consolidated Statements of Operations (Unaudited) | |||||||||||
| (in thousands, except share and per share amounts) | |||||||||||
| 13 Weeks Ended | 13 Weeks Ended | ||||||||||
| May 5, 2019 | May 6, 2018 | ||||||||||
| Food and beverage revenues | $ | 148,221 | 40.8 | % | $ | 139,755 | 42.1 | % | |||
| Amusement and other revenues | 215,361 | 59.2 | % | 192,435 | 57.9 | % | |||||
| Total revenues | 363,582 | 100.0 | % | 332,190 | 100.0 | % | |||||
| Cost of food and beverage (as a percentage of food and beverage revenues) | 38,754 | 26.1 | % | 36,020 | 25.8 | % | |||||
| Cost of amusement and other (as a percentage of amusement and other revenues) | 22,971 | 10.7 | % | 21,119 | 11.0 | % | |||||
| Total cost of products | 61,725 | 17.0 | % | 57,139 | 17.2 | % | |||||
| Operating payroll and benefits | 82,873 | 22.8 | % | 72,894 | 21.9 | % | |||||
| Other store operating expenses | 106,245 | 29.2 | % | 93,340 | 28.2 | % | |||||
| General and administrative expenses | 16,846 | 4.6 | % | 15,654 | 4.7 | % | |||||
| Depreciation and amortization expense | 31,141 | 8.6 | % | 27,506 | 8.3 | % | |||||
| Pre-opening costs | 7,002 | 1.9 | % | 7,053 | 2.1 | % | |||||
| Total operating costs | 305,832 | 84.1 | % | 273,586 | 82.4 | % | |||||
| Operating income | 57,750 | 15.9 | % | 58,604 | 17.6 | % | |||||
| Interest expense, net | 4,056 | 1.1 | % | 2,857 | 0.8 | % | |||||
| Income before provision for income taxes | 53,694 | 14.8 | % | 55,747 | 16.8 | % | |||||
| Provision for income taxes | 11,251 | 3.1 | % | 13,597 | 4.1 | % | |||||
| Net income | $ | 42,443 | 11.7 | % | $ | 42,150 | 12.7 | % | |||
| Net income per share: | |||||||||||
| Basic | $ | 1.15 | $ | 1.06 | |||||||
| Diluted | $ | 1.13 | $ | 1.04 | |||||||
| Weighted average shares used in per share calculations: | |||||||||||
| Basic shares | 36,827,665 | 39,695,421 | |||||||||
| Diluted shares | 37,591,944 | 40,612,388 | |||||||||
| Other information: | |||||||||||
| Company-owned and operated stores open at end of period | 127 | 112 | |||||||||
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 | ||||||||||
| May 5, 2019 | May 6, 2018 | ||||||||||
| Net income | $ | 42,443 | 11.7 | % | $ | 42,150 | 12.7 | % | |||
| Add back: Interest expense, net | 4,056 | 2,857 | |||||||||
| Provision for income taxes | 11,251 | 13,597 | |||||||||
| Depreciation and amortization expense | 31,141 | 27,506 | |||||||||
| EBITDA | 88,891 | 24.4 | % | 86,110 | 25.9 | % | |||||
| Add back: Loss on asset disposal | 420 | 262 | |||||||||
| Share-based compensation | 1,825 | 2,388 | |||||||||
| Pre-opening costs | 7,002 | 7,053 | |||||||||
| Other costs | 46 | 95 | |||||||||
| Adjusted EBITDA | $ | 98,184 | 27.0 | % | $ | 95,908 | 28.9 | % | |||
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 | ||||||||||
| May 5, 2019 | May 6, 2018 | ||||||||||
| Operating income | $ | 57,750 | 15.9 | % | $ | 58,604 | 17.6 | % | |||
| Add back: General and administrative expenses | 16,846 | 15,654 | |||||||||
| Depreciation and amortization expense | 31,141 | 27,506 | |||||||||
| Pre-opening costs | 7,002 | 7,053 | |||||||||
| Store operating income before depreciation and amortization | $ | 112,739 | 31.0 | % | $ | 108,817 | 32.8 | % | |||
For Investor Relations Inquiries:
Dave & Buster’s
214.904.2202
arvind.bhatia@daveandbusters.com
Source: Dave & Buster's Entertainment, Inc.