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8-K - DAVE & BUSTERS INC | v205954_8k.htm |
EXHIBIT
99
News
Release
|
For
further information contact:
Jeff
Elliott or Geralyn DeBusk
Halliburton
Investor Relations
972-458-8000
|
Dave
& Buster’s, Inc. Reports Financial Results
for
its Fiscal 2010 Third Quarter
DALLAS—December
14 2010—Dave & Buster's, Inc., a leading operator of high volume
entertainment/dining complexes, today announced results for its third quarter
ended October 31, 2010.
Total
revenues decreased 0.5% to $116.6 million in the third quarter of 2010, compared
to $117.2 million in the third quarter of 2009. The year-over-year revenue
decline was driven by a 1.3% decline in comparable store sales and the loss of
$2.3 million in revenues associated with the flood-related closure of our store
in Nashville, Tennessee. These revenue declines were partially offset by a $3.1
million increase in revenues from non-comparable stores and other revenue
sources. Total Food and Beverage revenues decreased 1.6%, while revenues from
Amusements and Other decreased 0.6%.
Adjusted
EBITDA increased 14.6% to $13.1 million versus $11.4 million in the third
quarter of fiscal 2009.
Total
revenues for the 39-week period decreased 0.3% to $386.1 million from $387.1
million for the comparable period last year. This revenue reduction was
comprised of a 3.0% decline in comparable store sales and the loss of $4.7
million in revenues associated with the flood-related closure of the Company’s
store in Nashville, Tennessee. These revenue declines were partially offset by
an $14.6 million increase in revenues from non-comparable stores and other
revenue sources. Total Food and Beverage revenues decreased 1.3%, while revenues
from Amusements and Other increased 0.8%.
Adjusted
EBITDA for the 39-week period increased 0.1% to $58.3 million versus $58.2
million for the comparable period last year. The Adjusted EBITDA for the quarter
and year-to-date was not adversely affected by the closure of our Nashville
store as the result of coverage under our business interruption insurance
policy.
"We have
seen a strengthening in both our walk-in and special events business, and the
improved profitability for the third quarter reflects this trend.” said Steve
King, Chief Executive Officer. “We're also encouraged by early fourth quarter
results.”
Non-GAAP
Financial Measures
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.
The
Company will hold a conference call to discuss third quarter results on Tuesday,
December 14, 2010, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). To
participate in the conference call please dial (866) 765-2661 a few minutes
prior to the start time and reference conference ID# 30468102. Additionally, a
live and archived webcast of the conference call will be available on the
Company's website, www.daveandbusters.com.
Founded
in 1982 and headquartered in Dallas, Texas, Dave & Buster’s is the premier
national owner and operator of 57 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 24 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)
ASSETS
|
October
31, 2010
|
January
31, 2010
|
||||||
(unaudited)
|
(audited)
|
|||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 18,886 | $ | 16,682 | ||||
Other
current assets
|
38,965 | 30,104 | ||||||
Total
current assets
|
$ | 57,851 | $ | 46,786 | ||||
Property
and equipment, net
|
306,072 | 294,151 | ||||||
Intangible
and other assets, net
|
378,860 | 142,703 | ||||||
Total
assets
|
$ | 742,783 | $ | 483,640 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Total
current liabilities
|
$ | 73,064 | $ | 74,805 | ||||
Other
long-term liabilities
|
88,370 | 89,775 | ||||||
Long-term
debt, less current liabilities, net unamortized discount
|
346,355 | 226,414 | ||||||
Stockholders'
equity
|
234,994 | 92,646 | ||||||
Total
liabilities and stockholders' equity
|
$ | 742,783 | $ | 483,640 |
DAVE
& BUSTER’S, INC.
Consolidated
Statements of Operations
(dollars
in thousands)
(unaudited)
13
Weeks Ended
|
13
Weeks Ended
|
|||||||||||||||
October
31, 2010
|
November
1, 2009
|
|||||||||||||||
Food
and beverage revenues
|
$ | 59,594 | 51.1 | $ | 60,549 | 51.7 | ||||||||||
Amusement
and other revenues
|
56,996 | 48.9 | 56,636 | 48.3 | ||||||||||||
Total
revenues
|
116,590 | 100.0 | 117,185 | 100.0 | ||||||||||||
Cost
of products
|
23,378 | 20.1 | 23,636 | 20.2 | ||||||||||||
Store
operating expenses
|
73,663 | 63.1 | 75,842 | 64.7 | ||||||||||||
General
and administrative expenses
|
8,379 | 7.2 | 7,202 | 6.2 | ||||||||||||
Depreciation
and amortization
|
11,896 | 10.2 | 13,932 | 11.9 | ||||||||||||
Pre-opening
costs
|
371 | 0.3 | 983 | 0.8 | ||||||||||||
Total
operating expenses
|
117,687 | 100.9 | 121,595 | 103.8 | ||||||||||||
Operating
income (loss)
|
(1,097 | ) | -0.9 | (4,410 | ) | -3.8 | ||||||||||
Interest
expense, net
|
8,388 | 7.2 | 5,598 | 4.8 | ||||||||||||
Income
(loss) before provision for income taxes
|
(9,485 | ) | -8.1 | (10,008 | ) | -8.6 | ||||||||||
Income
tax provision (benefit)
|
(3,257 | ) | -2.8 | (4,518 | ) | -3.9 | ||||||||||
Net
income (loss)
|
$ | (6,228 | ) | -5.3 | $ | (5,490 | ) | -4.7 | ||||||||
Other
information:
|
||||||||||||||||
Stores
open at end of period (1)
|
58 | 56 |
The following table sets forth a
reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the
periods shown:
Total
net income
|
$ | (6,228 | ) | $ | (5,490 | ) | |||
Add back: Provision for income taxes | (3,257 | ) | (4,518 | ) | |||||
Interest
expense, net
|
8,388 | 5,598 | |||||||
Depreciation
and amortization
|
11,896 | 13,932 | |||||||
EBITDA
|
10,799 | 9,522 | |||||||
Add
back:
|
Loss
on asset disposal
|
357 | 414 | ||||||
Gain
on Acquisition of limited partnership
|
- | (18 | |||||||
Share-based
compensation
|
382 | 261 | |||||||
Currency
translation (gain) loss
|
(55 | ) | 11 | ||||||
Pre-opening
costs.
|
370 | 983 | |||||||
Affiliate
expense reimbursement
|
65 | 188 | |||||||
Severance
|
967 | (24 | ) | ||||||
Amusement
revenue deferral and
|
|||||||||
redemption
liability adjustments
|
155 | 104 | |||||||
Transaction
costs….
|
74 | - | |||||||
Adjusted
EBITDA (2)
|
$ | 13,114 | $ | 11,441 |
DAVE
& BUSTER’S, INC.
Consolidated
Statements of Operations
(dollars
in thousands)
(unaudited)
39
Weeks Ended
|
39
Weeks Ended
|
|||||||||||||||
October
31, 2010
|
November
1, 2009
|
|||||||||||||||
Food
and beverage revenues
|
$ | 195,502 | 50.6 | $ | 198,140 | 51.2 | ||||||||||
Amusement
and other revenues
|
190,579 | 49.4 | 188,998 | 48.8 | ||||||||||||
Total
revenues
|
386,081 | 100.0 | 387,138 | 100.0 | ||||||||||||
Cost
of products
|
77,456 | 20.1 | 76,797 | 19.8 | ||||||||||||
Store
operating expenses
|
229,237 | 59.4 | 232,187 | 60.0 | ||||||||||||
General
and administrative expenses
|
34,573 | 9.0 | 22,279 | 5.8 | ||||||||||||
Depreciation
and amortization
|
37,112 | 9.6 | 39,833 | 10.3 | ||||||||||||
Pre-opening
costs
|
1,837 | 0.4 | 3,181 | 0.8 | ||||||||||||
Total
operating expenses
|
380,215 | 98.5 | 374,277 | 96.7 | ||||||||||||
Operating
income (loss)
|
5,866 | 1.5 | 12,861 | 3.3 | ||||||||||||
Interest
expense, net
|
24,141 | 6.2 | 16,782 | 4.3 | ||||||||||||
Income
(loss) before provision for income taxes
|
(18,275 | ) | -4.7 | (3,921 | ) | -1.0 | ||||||||||
Income
tax provision (benefit)
|
(6,479 | -1.6 | (3,661 | ) | -0.9 | |||||||||||
Net
income (loss)
|
$ | (11,796 | ) | -3.1 | $ | (260 | ) | -0.1 | ||||||||
Other
information:
|
||||||||||||||||
Stores
open at end of period (1)
|
58 | 56 |
The following table sets forth a
reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the
periods shown:
Total
net income
|
$ | (11,796 | ) | $ | (260 | ) | |||
Add
back:
|
Provision
for income taxes
|
(6,479 | ) | (3,661 | ) | ||||
Interest
expense, net
|
24,141 | 16,782 | |||||||
Depreciation
and amortization
|
37,112 | 39,833 | |||||||
EBITDA
|
42,978 | 52,694 | |||||||
Add
back:
|
Loss
on asset disposal
|
930 | 1,031 | ||||||
Gain
on Acquisition of limited partnership
|
- | (357 | ) | ||||||
Share-based
compensation
|
2,228 | 475 | |||||||
Currency
translation (gain) loss
|
(89 | ) | (124 | ) | |||||
Pre-opening
costs
|
1,836 | 3,181 | |||||||
Affiliate
expense reimbursement
|
422 | 563 | |||||||
Severance
|
967 | 194 | |||||||
Amusement
revenue deferral and
|
|||||||||
redemption
liability adjustments
|
583 | 587 | |||||||
Transaction
costs.
|
8,454 | - | |||||||
Adjusted
EBITDA (2)
|
$ | 58,309 | $ | 58,244 |
NOTE
(1) The
number of stores open at October 31, 2010 includes our stores in Roseville,
California and Wauwatosa, Wisconsin which opened on May 3, 2010 and March 1,
2010, respectively. Also included in the store count is one franchise location
in Canada and our location in Nashville, Tennessee, which temporarily closed on
May 2, 2010 due to flooding. The Nashville location remains closed as of October
31, 2010.
(2)
EBITDA, a non-GAAP measure, is defined as net income (loss) before income tax
expense (benefit), interest expense (net) and depreciation and amortization.
Adjusted EBITDA, also a non-GAAP measure, is defined as EBITDA plus share-based
compensation expense, pre-opening costs, Affiliate expense reimbursement, loss
on asset disposal 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 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.