SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 28, 2023
(Exact name of registrant as specified in its charter)
(State of incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||||||
| (Address of principal executive offices) | ||
Registrant’s telephone number, including area code: (214 ) 357-9588
Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the reporting obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act | |||||
| Soliciting material pursuant to Rule 14a-12 of the Exchange Act | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) Exchange Act | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) Exchange Act | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Section 2 – Financial Information
Item 2.02. Results of Operations and Financial Condition.
The information contained in Item 2.02 of this Current Report on Form 8-K, including the Exhibit attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Furthermore, the information contained in Item 2.02 of this Current Report on Form 8-K shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
On March 28, 2023, Dave & Buster’s Entertainment, Inc. (the “Company”) issued a press release announcing results its fourth quarter 2022 results. A copy of this Press Release is attached hereto as Exhibit 99.1.
Item 8.01. Other Events.
In the Press Release, the Company also announced that on March 27, 2023, the Board of Directors authorized a $100 million share repurchase program through the end of fiscal 2023. The Company may repurchase shares from time to time in open market transactions and may also repurchase shares in accelerated share repurchases, tender offers, privately negotiated transactions or by other means, and by plans pursuant to Rule 10b5-1 under the Securities and Exchange Act of 1934, as amended, and the timing and amount of transactions will be determined by the Company’s management in consultation with the Finance Committee of the Board of Directors based on an evaluation of market conditions, the Company’s share price, legal requirements, restricted payment capacity under its debt instruments and other factors.
Item 9.01. Financial Statements and Exhibits
(d)Exhibits.
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document). | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DAVE & BUSTER’S ENTERTAINMENT, INC. | ||||||||
| Date: March 28, 2023 | By: | /s/ Michael Quartieri | ||||||
| Michael Quartieri | ||||||||
| Senior Vice President and Chief Financial Officer | ||||||||
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Exhibit 99.1
Dave & Buster’s Reports Record Fourth Quarter and Fiscal Year End 2022 Financial Results;
Company Announces $100 Million Share Repurchase Program and Achievement of its Synergy Target
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.
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“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."
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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
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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
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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 | |||||||||||||||||||||||||||||
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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 | % | |||||||||||||||||||||||
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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 | |||||||||||||||||||||||||||||
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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 | % | |||||||||||||||||||||||
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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 | ||||
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DAVE & BUSTER'S ENTERTAINMENT, INC.
Condensed Consolidated Balance Sheets
(in thousands)
| ASSETS | January 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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