Dave & Buster’s Reports Strong First Quarter 2021 Financial Results
Dave & Buster's (NASDAQ:PLAY) reported strong financial results for Q1 FY2021, ending May 2, with revenues of $265.3 million, a 66% increase from $159.8 million in Q1 2020. The company achieved a net income of $19.6 million or $0.40 per diluted share, compared to a loss of $43.5 million in the same quarter last year. Despite a 35% decline in comparable store sales versus Q1 2019, store-level operating income was positive in 119 locations. Looking ahead, revenues for Q2 2021 are projected between $335 million and $350 million.
- Revenues increased 66% year-over-year to $265.3 million.
- Net income of $19.6 million compared to a loss of $43.5 million in Q1 2020.
- Generated $77 million in operating cash flow and fully paid down revolving credit.
- Store-level operating income positive in 119 stores.
- Projected Q2 2021 revenues between $335 million and $350 million, comparable to Q2 2019.
- Comparable store sales declined by 35% compared to Q1 2019.
- Overall EBITDA down 19% versus Q1 2019 levels.
- Second quarter EBITDA margin expected to contract due to rising costs.
DALLAS, June 10, 2021 (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 first quarter of fiscal year 2021, which ended on May 2, 2021.
The Company began the first quarter with 107 open stores, or approximately 76 percent of its total store base. As of May 2, the Company had 138 open stores, including its New York and California stores which reopened in March and April. The Company also opened one new store during the quarter, bringing its total store count to 141. Most stores open during the quarter operated under reduced hours and capacity limitations for at least a portion of the period, as dictated by each jurisdiction. Comparable results for the first quarter of 2020 were severely impacted by the closure of all stores as of March 20, 2020 as an initial response to the COVID-19 pandemic.
Key First Quarter 2021 Highlights
- Revenues totaled
$265.3 million compared with$159.8 million in the first quarter of 2020 and$363.6 million in the first quarter of 2019 - Overall comparable store sales declined
35% compared with the same period in 2019 - Comparable store sales at fully operational stores declined
17% compared with the same period in 2019 - Net income totaled
$19.6 million , or$0.40 per diluted share, compared with net loss of$43.5 million , or$1.37 per share in the first quarter of 2020 and net income of$42.4 million , or$1.13 per diluted share in the first quarter of 2019 - EBITDA totaled
$72.1 million , or27.2% of revenues, compared with EBITDA loss of$26.1 million in the first quarter of 2020 and EBITDA of$88.9 million , or24.4% of revenues, in the first quarter of 2019 - Store-level operating income before depreciation and amortization was positive in 119 stores during the quarter and in 127 stores for the final month ended May 2, 2021
- Generated
$77 million in operating cash flow and used$60 million to completely pay down revolving credit facility - Ended the quarter with
$20 million in cash and approximately$340 million of liquidity available under the Company’s revolving credit facility, net of a$150 million minimum liquidity covenant and$10 million in letters of credit
Brian Jenkins, Dave & Buster’s Chief Executive Officer, said, “The strength and resilience of the Dave & Buster’s brand has never been more evident. We saw a significant improvement in demand across our store base in the first quarter, including at our recently re-opened New York and California stores. We generated
Mr. Jenkins concluded, “Our brand is back, we have a solid financial foundation, and we are ready to move full speed ahead into summer. We are encouraged by our momentum and are thankful for the hard work and commitment of all of our team members.”
First Quarter 2021 Results
Total revenues of
Operating income totaled
Net income totaled
EBITDA totaled
Adjusted EBITDA totaled
Store operating income before depreciation and amortization totaled
Balance Sheet, Liquidity and Cash Flow
The Company generated approximately
Total long-term debt stood at
Second Quarter 2021 Business Update and Outlook
The Company’s business recovery momentum has continued through the first five weeks of the second quarter, during which comparable store sales declined
Based on current trends, historical seasonal patterns, and barring any renewed operating restrictions or store reclosures, the Company currently expects the following:
- Second quarter revenues in the range of
$335 million to$350 million , comparable to second quarter 2019 revenues of$345 million ; - Second quarter EBITDA margin to contract compared with the first quarter due to higher commodity costs, higher labor and seasonal marketing costs, and a slightly lower mix of Amusement sales;
- Second quarter EBITDA dollars to be in line with second quarter 2019 levels;
- A total of four new store openings during fiscal year 2021 and the relocation of one existing location; and
- Capital additions of approximately
$65 t o$70 million in fiscal 2021, with approximately49% dedicated to new stores and other operating initiatives,19% for games, and32% for maintenance needs.
Quarterly Report on Form 10-Q Available
The Company’s Quarterly Report on Form 10-Q, will be available at www.sec.gov and at the Company’s investor relations website, contains a thorough review of its financial results for the first quarter ended May 2, 2021.
Investor Conference Call and Webcast
Management will hold a conference call today at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). The conference call can be accessed over the phone by dialing (720) 543-0214 or toll-free (888) 204-4368. A replay will be available after the call for one year beginning at 7:00 p.m. Central Time (8:00 p.m. Eastern Time) and can be accessed by dialing (412) 317-6671 or toll-free (844) 512-2921; the passcode is 1782588.
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 Dallas, Texas, Dave & Buster's Entertainment, Inc., is the owner and operator of 141 venues in North America that combine entertainment and dining and offer customers the opportunity to "Eat Drink Play and Watch," all in one location. Dave & Buster's 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. Dave & Buster's currently has stores in 40 states, Puerto Rico, and Canada.
Forward-Looking Statements
The Company cautions that this release contains forward-looking statements, including, without limitation, statements relating to the impact on our business and operations of the global spread of the novel coronavirus outbreak. These forward-looking statements involve risks and uncertainties and, consequently, could be affected by the uncertain and unprecedented impact of the coronavirus on our business and operations and the related impact on our liquidity needs; 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; the duration of government-mandated and voluntary shutdowns and restrictions; the speed with which our stores safely can be reopened and the level of customer demand following reopening; the economic impact of the coronavirus and related disruptions on the communities we serve; our overall level of indebtedness; general business and economic conditions, including as a result of the coronavirus; 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, including as a result of the coronavirus; 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 2, 2021 | January 31, 2021 | ||||
(unaudited) | (audited) | |||||
Current assets: | ||||||
Cash and cash equivalents | $ | 20,154 | $ | 11,891 | ||
Other current assets | 91,289 | 106,980 | ||||
Total current assets | 111,443 | 118,871 | ||||
Property and equipment, net | 792,296 | 815,027 | ||||
Operating lease right of use assets | 1,029,315 | 1,037,569 | ||||
Intangible and other assets, net | 384,921 | 381,357 | ||||
Total assets | $ | 2,317,975 | $ | 2,352,824 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Total current liabilities | $ | 279,220 | $ | 271,636 | ||
Operating lease liabilities | 1,258,169 | 1,267,791 | ||||
Other long-term liabilities | 64,842 | 63,777 | ||||
Long-term debt, net | 537,102 | 596,388 | ||||
Stockholders' equity | 178,642 | 153,232 | ||||
Total liabilities and stockholders' equity | $ | 2,317,975 | $ | 2,352,824 | ||
DAVE & BUSTER'S ENTERTAINMENT, INC. | ||||||||||||||||||||
Consolidated Statements of Operations (Unaudited) | ||||||||||||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||||||||
13 Weeks Ended | 13 Weeks Ended | 13 Weeks Ended | ||||||||||||||||||
May 2, 2021 | May 3, 2020 | May 5, 2019 | ||||||||||||||||||
Food and beverage revenues | $ | 85,758 | 32.3 | % | $ | 63,920 | 40.0 | % | $ | 148,221 | 40.8 | % | ||||||||
Amusement and other revenues | 179,582 | 67.7 | % | 95,886 | 60.0 | % | 215,361 | 59.2 | % | |||||||||||
Total revenues | 265,340 | 100.0 | % | 159,806 | 100.0 | % | 363,582 | 100.0 | % | |||||||||||
Cost of food and beverage (as a percentage of food and beverage revenues) | 23,157 | 27.0 | % | 17,344 | 27.1 | % | 38,754 | 26.1 | % | |||||||||||
Cost of amusement and other (as a percentage of amusement and other revenues) | 16,614 | 9.3 | % | 10,728 | 11.2 | % | 22,971 | 10.7 | % | |||||||||||
Total cost of products | 39,771 | 15.0 | % | 28,072 | 17.6 | % | 61,725 | 17.0 | % | |||||||||||
Operating payroll and benefits | 50,279 | 18.9 | % | 43,737 | 27.4 | % | 82,873 | 22.8 | % | |||||||||||
Other store operating expenses | 84,445 | 31.9 | % | 95,672 | 59.8 | % | 106,245 | 29.2 | % | |||||||||||
General and administrative expenses | 17,091 | 6.4 | % | 14,563 | 9.1 | % | 16,846 | 4.6 | % | |||||||||||
Depreciation and amortization expense | 35,099 | 13.2 | % | 35,352 | 22.1 | % | 31,141 | 8.6 | % | |||||||||||
Pre-opening costs | 1,659 | 0.6 | % | 3,823 | 2.4 | % | 7,002 | 1.9 | % | |||||||||||
Total operating costs | 228,344 | 86.0 | % | 221,219 | 138.4 | % | 305,832 | 84.1 | % | |||||||||||
Operating income (loss) | 36,996 | 14.0 | % | (61,413 | ) | -38.4 | % | 57,750 | 15.9 | % | ||||||||||
Interest expense, net | 14,820 | 5.6 | % | 6,115 | 3.9 | % | 4,056 | 1.1 | % | |||||||||||
Income (loss) before provision (benefit) for income taxes | 22,176 | 8.4 | % | (67,528 | ) | -42.3 | % | 53,694 | 14.8 | % | ||||||||||
Provision (benefit) for income taxes | 2,541 | 1.0 | % | (23,984 | ) | -15.1 | % | 11,251 | 3.1 | % | ||||||||||
Net income (loss) | $ | 19,635 | 7.4 | % | $ | (43,544 | ) | -27.2 | % | $ | 42,443 | 11.7 | % | |||||||
Net income (loss) per share: | ||||||||||||||||||||
Basic | $ | 0.41 | $ | (1.37 | ) | $ | 1.15 | |||||||||||||
Diluted | $ | 0.40 | $ | (1.37 | ) | $ | 1.13 | |||||||||||||
Weighted average shares used in per share calculations: | ||||||||||||||||||||
Basic shares | 47,695,705 | 31,829,985 | 36,827,665 | |||||||||||||||||
Diluted shares | 49,331,092 | 31,829,985 | 37,591,944 | |||||||||||||||||
Other information: | ||||||||||||||||||||
Company-owned stores at end of period | 141 | 137 | 127 | |||||||||||||||||
Store operating weeks in the period | 1,633 | 833 | 1,616 | |||||||||||||||||
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 | ||||||||||||||||||
May 2, 2021 | May 3, 2020 | May 5, 2019 | ||||||||||||||||||
Net income (loss) | $ | 19,635 | 7.4 | % | $ | (43,544 | ) | -27.2 | % | $ | 42,443 | 11.7 | % | |||||||
Add back: Interest expense, net | 14,820 | 6,115 | 4,056 | |||||||||||||||||
Provision (benefit) for income taxes | 2,541 | (23,984 | ) | 11,251 | ||||||||||||||||
Depreciation and amortization expense | 35,099 | 35,352 | 31,141 | |||||||||||||||||
EBITDA | 72,095 | 27.2 | % | (26,061 | ) | -16.3 | % | 88,891 | 24.4 | % | ||||||||||
Add back: Loss on asset disposal | 145 | 153 | 420 | |||||||||||||||||
Impairment of long-lived assets and lease termination | - | 11,549 | - | |||||||||||||||||
Share-based compensation | 2,971 | (389 | ) | 1,825 | ||||||||||||||||
Pre-opening costs | 1,659 | 3,823 | 7,002 | |||||||||||||||||
Other costs | (165 | ) | 147 | 46 | ||||||||||||||||
Adjusted EBITDA | $ | 76,705 | 28.9 | % | $ | (10,778 | ) | -6.7 | % | $ | 98,184 | 27.0 | % | |||||||
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 | ||||||||||||||||||
May 2, 2021 | May 3, 2020 | May 5, 2019 | ||||||||||||||||||
Operating income (loss) | $ | 36,996 | 14.0 | % | $ | (61,413 | ) | -38.4 | % | $ | 57,750 | 15.9 | % | |||||||
Add back: General and administrative expenses | 17,091 | 14,563 | 16,846 | |||||||||||||||||
Depreciation and amortization expense | 35,099 | 35,352 | 31,141 | |||||||||||||||||
Pre-opening costs | 1,659 | 3,823 | 7,002 | |||||||||||||||||
Store operating income (loss) before depreciation and amortization | $ | 90,845 | 34.2 | % | $ | (7,675 | ) | -4.8 | % | $ | 112,739 | 31.0 | % | |||||||
For Investor Relations Inquiries:
Scott Bowman, CFO
Dave & Buster’s Entertainment, Inc.
972.813.1151
scott.bowman@daveandbusters.com
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