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): April 16, 2013
DAVE & BUSTER’S, INC.
(Exact name of registrant as specified in its charter)
|
Missouri (State of incorporation) |
001-15007 (Commission File Number) |
43-1532756 (IRS Employer Identification Number) |
2481 Manana Drive
Dallas TX 75220
(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
| 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 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 April 16, 2013, Dave & Buster’s, Inc. issued a press release announcing its fourth quarter and fiscal year-end 2012 results. A copy of this Press Release is attached hereto as Exhibit 99.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 99 Press release dated April 16, 2013. |
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, INC. | ||
| Date: April 17, 2013 | By: | /s/ Jay L. Tobin |
| Jay L. Tobin | ||
| Senior Vice President, General Counsel | ||
| and Secretary | ||
EXHIBIT 99
 |
News Release For further information contact: Fitzhugh Taylor / Raphael Gross of ICR 203-682-8261 / 203-682-8253
|
Dave & Buster’s, Inc. Announces Fourth Quarter and Full Year 2012 Results
-Achieves Full Year Adjusted EBITDA Growth of 22.5%-
DALLAS, TX—(BUSINESS WIRE)—April 16, 2013—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.
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.
Conference Call
Management will hold a conference call to discuss these results today at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). The conference call can be accessed over the phone by dialing 1-888-395-3227 or for international callers by dialing 1-719-457-1035. A replay will be available after the call for one year beginning at 1:00 p.m. Central Time (2:00 p.m. Eastern Time) and can be accessed by dialing 1-877-870-5176 or for international callers by dialing 1-858-384-5517; the passcode is 5321488.
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, 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. For additional information on Dave & Buster’s, please visit www.daveandbusters.com.
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.
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.
Consolidated Statements of Operations
(dollars 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.
Consolidated Statements of Operations
(dollars 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.