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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
__________________
FORM 10-Q
X QUARTERLY REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
--- FOR THE QUARTER ENDED MAY 5, 1996.
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
ACT OF 1934 FOR THE TRANSACTION PERIOD FROM _______ TO _______.
COMMISSION FILE NUMBER: 0-25858
___________________
DAVE & BUSTER'S, INC.
(Exact Name of Registrant as Specified in Its Charter)
MISSOURI 43-1532756
(State of Incorporation) (I.R.S. Employer Identification No.)
2751 ELECTRONIC LANE
DALLAS, TEXAS 75220
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(214) 357-9588
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares of the Registrant's common stock, $.01 par value,
outstanding as of June 7, 1996 was 7,267,056 shares.
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PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
DAVE & BUSTER'S, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
13 Weeks Ended
-------------------
May 5, April 30,
1996 1995
------- ---------
Food and beverage revenues $11,085 $ 6,622
Amusement and other revenues 9,132 5,645
------- ---------
Total revenues 20,217 12,267
------- ---------
Cost of revenues 4,176 2,465
Operating payroll and benefits 5,809 3,646
Other restaurant operating expenses 4,748 2,569
General and administrative expenses 1,335 787
Depreciation and amortization expense 1,230 715
Preopening cost amortization 486 0
Earn-out and special compensation 0 564
------- ---------
Total costs and expenses 17,784 10,746
------- ---------
Operating income 2,433 1,521
Interest (income) expense, net (15) 26
------- ---------
Income before provision for income taxes 2,448 1,495
Provision for income taxes 1,029 632
------- ---------
Net income $ 1,419 $ 863
======= =========
Earnings per common share $ 0.20 $ 0.17
======= =========
Weighted average number of common shares outstanding 7,267 5,197
See accompanying notes to consolidated financial statements.
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DAVE & BUSTER'S, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
ASSETS
May 5,
1996 February 4,
(unaudited) 1996
----------- -----------
Current assets:
Cash and cash equivalents $ 1,828 $ 4,325
Inventories 2,666 2,621
Prepaid expenses 478 360
Preopening costs 2,282 1,946
Other current assets 874 831
----------- -----------
Total current assets 8,128 10,083
Property and equipment, net 62,009 56,384
Intangible assets:
Goodwill, net of accumulated amortization of $456 and $361 9,205 9,300
Other 150 170
Other assets 275 264
----------- -----------
$79,767 $76,201
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,970 $ 2,456
Accrued liabilities 1,489 1,354
Deferred income taxes 588 639
Income taxes payable 387 0
----------- -----------
Total current liabilities 4,434 4,449
Deferred income taxes 1,346 1,368
Other liabilities 1,060 876
Long-term debt 2,500 500
Commitments and contingencies
Stockholders' equity:
Preferred stock, 10,000,000 authorized; none issued 0 0
Common stock, $0.01 par value, 50,000,000 authorized;
7,267,056 shares issued and outstanding as of May 5, 1996
and February 4, 1996 73 73
Paid in capital 66,981 66,981
Retained earnings 3,373 1,954
----------- -----------
Total stockholders' equity 70,427 69,008
----------- -----------
$79,767 $76,201
=========== ===========
See accompanying notes to consolidated financial statements.
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DAVE & BUSTER'S, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
(UNAUDITED)
Common Stock
-------------- Paid in Retained
Shares Amount Capital Earnings Total
------ ------ ------- -------- -------
Balance, February 4, 1996 7,267 $73 $66,981 $1,954 $69,008
Net income 0 0 0 1,419 1,419
------ ------ ------- -------- -------
Balance, May 5, 1996 7,267 $73 $66,981 $3,373 $70,427
====== ====== ======= ======== =======
See accompanying notes to consolidated financial statements.
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DAVE & BUSTER'S, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
13 Weeks Ended
-------------------
May 5, April 30,
1996 1995
------- ---------
Cash flows from operating activities
Net income $ 1,419 $ 863
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 1,716 715
Provision for deferred income taxes (73) 67
Changes in assets and liabilities
Inventories (45) 74
Prepaid expenses (118) (293)
Preopening costs (822) (69)
Other assets (54) (277)
Accounts payable (486) (97)
Accrued liabilities 135 76
Accrued earn-out compensation 0 518
Income taxes payable 387 0
Other liabilities 184 74
Other 0 57
------- --------
Net cash provided by operating activities 2,243 1,708
Cash flows from investing activities
Capital expenditures (6,740) (2,503)
Cash flows from financing activities
Net transactions with Edison Brothers 0 761
Borrowings under long-term debt 2,000 0
------- --------
Cash used (2,497) (34)
Beginning cash and cash equivalents 4,325 1,233
------- --------
Ending cash and cash equivalents $ 1,828 $ 1,199
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See accompanying notes to consolidated financial statements.
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DAVE & BUSTER'S, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 5, 1996
(UNAUDITED)
NOTE 1: RESULTS OF OPERATIONS
The results of operations for the interim periods reported are not
necessarily indicative of results to be expected for the year. The information
furnished herein reflects all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of management, necessary to present a
fair statement of the results for the interim periods.
NOTE 2: BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Dave &
Buster's, Inc. (the "Company") and all wholly-owned subsidiaries. The primary
business of the Company is the ownership and operation of
restaurant/entertainment complexes (a "Complex") under the name "Dave &
Buster's" which are located in Texas, Georgia, Pennsylvania, Illinois and
Florida.
NOTE 3: EARNINGS PER COMMON SHARE
Earnings per common share are computed by dividing net income by the
weighted average number of shares of common stock and dilutive options
outstanding during the period. For the period ended April 30, 1995, the
weighted average number of shares outstanding is based on the assumption that
5,197,000 shares of common stock were outstanding. Primary and fully diluted
earnings per share are not materially different for the interim periods
presented.
NOTE 4: CONTINGENCIES
The Company is subject to certain legal proceedings and claims that arise
in the ordinary course of its business. In the opinion of management, based on
discussions with and advice of legal counsel, the amount of ultimate liability
with respect to these actions will not materially affect the consolidated
results of operations or financial condition of the Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations - 13 Weeks Ended May 5, 1996 Compared to 13 Weeks Ended
April 30, 1995
Total revenues for the 13 weeks ended May 5, 1996 increased by 64.8% over
the 13 weeks ended April 30, 1995. The increase was attributable to revenues
at the Company's two new Chicago stores opened in the fourth quarter of fiscal
year 1995.
Cost of revenues, as a percentage of revenues, increased to 20.7% from
20.1% in the prior comparable period. The increase in cost of revenues was a
result of higher costs associated with food revenues. Operating payroll and
benefits decreased to 28.7% from 29.7% in the prior comparable period.
Operating payroll and benefits was lower due to cost reductions in fixed labor
offset by higher variable labor costs. Other operating expenses increased to
23.5% compared to 20.9% in the prior comparable period. Other operating
expenses were lower in 1995 due to a one time credit for rent related charges.
General and administrative costs increased by $548,000 over the prior
comparable period as a result of increased administrative payroll and related
costs for new personnel and additional costs resulting from the Company
operating as a public company in the current period. As a percentage of
revenues, general and administrative expenses increased to 6.6% compared to
6.4% for the comparable prior period.
Depreciation and amortization expense, as a percentage of revenues,
increased to 8.5% from 5.8% due to opening two new stores in the Chicago area
in the fourth quarter of 1995.
Liquidity and Capital Resources
Prior to June 29, 1995, the Company financed its capital expenditures and
operations through cash flows from operations and advances from Edison
Brothers. Subsequent to June 29, 1995, the Company has financed its capital
expenditures and operations through cash flows from operations, draws under a
line of credit agreement and a common stock offering.
Cash flows from operations increased from $1.7 million in the first
13 weeks of fiscal 1995 to $2.2 million in the first 13 weeks of fiscal 1996.
This increase was due to the opening of two new stores in the Chicago area in
the fourth fiscal quarter of 1995 offset by an increase in preopening costs
related to the new openings.
The Company has a secured revolving line of credit which permits borrowing
up to a maximum of $23,500,000. At May 5, 1996, $21,000,000 was available.
In 1995, the Company completed a public offering of common stock for the
sale of 2,070,000 shares at $15.00 per share for net proceeds of approximately
$28,653,000, after deducting related offering costs.
The Company's plan is to open two new stores in fiscal 1996. One store
opened in South Florida, in the Hollywood/Fort Lauderdale market on April 25,
1996. The other store in the White Flint Mall, North Bethesda, Maryland market
will open later in fiscal 1996. In fiscal 1997, the Company's goal is to open
three new stores. The Company estimates that its capital expenditures will be
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approximately $24.0 million and $31.0 million for 1996 and 1997, respectively.
The Company intends to finance this development with cash flow from operations
and the unused portion of the revolving line of credit described above.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995
Certain statements in this Form 10-Q constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors with may cause the actual results,
performance or achievements of Dave & Buster's, Inc. to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among
others, the following: general economic and business conditions; competition;
development and operating costs; adverse publicity; consumer trial and
frequency; availability, locations and terms of sites for complex development;
quality of management; business abilities and judgement of personnel;
availability of qualified personnel; food, labor and employee benefit costs;
changes in, or the failure to comply with, government regulations; and other
risks indicated in this filing.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the 13 weeks ended
May 5, 1996.
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SIGNATURE
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 thereunto duly authorized.
DAVE & BUSTER'S, INC.
Dated: June 18, 1996 by /s/ DAVID O. CORRIVEAU
------------- -----------------------------------
David O. Corriveau
Co-Chairman of the Board,
Co-Chief Executive Officer and
President
Dated: June 18, 1996 by /s/ CHARLES MICHEL
------------- -----------------------------------
Charles Michel
Vice President,
Chief Financial Officer and
Treasurer
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EXHIBIT INDEX
27 Financial Data Schedule
5
1,000
3-MOS
JAN-02-1997
MAY-05-1996
1,828
0
0
0
2,666
8,128
73,002
10,993
79,767
4,434
2,500
0
0
73
70,354
79,767
20,217
20,217
4,176
4,176
13,608
0
0
2,448
1,029
1,419
0
0
0
1,419
.20
.20
