DALLAS, Dec. 10, 2024 (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 third quarter ended November 5, 2024.
Third Quarter 2024 Financial Summary
- Third quarter revenue of $453.0 million decreased 3.0% from the third quarter of fiscal 2023.
- Comparable store sales decreased 7.7% compared to the same calendar period in fiscal 2023.
- Net loss totaled $32.7 million, or $(0.84) per diluted share, compared with a net loss of $5.2 million, or $(0.12) per diluted share in the third quarter of fiscal 2023. Adjusted Net loss totaled $17.5 million, or $(0.45) per diluted share, compared with an Adjusted Net income of $0.4 million, or $0.01 per diluted share in the third quarter of fiscal 2023.
- Adjusted EBITDA of $68.3 million decreased 16.3%, or $13.3 million, from the third quarter of fiscal 2023.
- Chris Morris, the Company's Chief Executive Officer ("CEO”), has tendered his resignation as CEO and Director to pursue other interests. The Board has been working with Heidrick & Struggles, a global executive search firm, for the last few months to assist in identifying the Company's next permanent CEO and has already started meeting potential candidates. In the interim, Kevin Sheehan, the Company's current Chair of the Board, will also serve as the Company's interim CEO until the appointment by the Board of a permanent CEO. In addition, the Board has appointed James Chambers, current Director, as Vice Chair of the Board. During this transition, Michael Griffith, current Director, will temporarily assume the role of Lead Independent Director of the Board.
- The Company opened two new Dave & Buster's stores - one in Barboursville, WV and another in Lombard, IL - and one new Main Event store in Grand Rapids, MI in the third quarter. Subsequent to the end of the quarter, the Company opened one new Dave & Buster's store in Clarksville, TN.
- During the third quarter, the Company opportunistically refinanced a portion of its debt to extend maturities, minimize interest costs and increase liquidity. It raised a new $700.0 million term loan due in 2031, redeemed the remaining outstanding $440.0 million principal amount of its senior notes due in 2025, paid down $200.0 million of existing term loan principal due in 2029, upsized the capacity of its revolving credit facility to $650.0 million, and extended the maturity of its revolving credit facility to 2029.
- The Company closed on an additional sale leaseback transaction for the real estate of one Dave & Buster's store with an institutional real estate investor and generated $28.5 million in proceeds.
- During the third quarter, the Company repurchased $28.0 million of shares, bringing its total repurchases year to date to $88.0 million representing 2.0 million shares or 5.1% of the Company's outstanding shares as of the end of fiscal 2023. The Company has $112.0 million remaining on its share repurchase authorization.
"On behalf of our whole Board, I would like to thank Chris for the effort he put into this great company over the past two and a half years and wish him well in his future endeavors,” said Kevin Sheehan, Chair of the Board and interim CEO of Dave & Buster's. "The Board worked closely with Chris to create our company's strategic direction and has the utmost confidence in this management team and the company's strategy. Overall, I am proud of the team's commitment and dedication to creating memorable experiences for our valued guests each and every day and we are confident our initiatives will lead to growth in same store sales, revenue, and cash flow in the coming quarters for the benefit of our shareholders.”
Third Quarter 2024 Results
Total revenue was $453.0 million, a decrease of 3.0% from $466.9 million in the third quarter of fiscal 2023.
Comparable store sales decreased 7.7% versus the comparable 91 days of 2023. The comparable 91 days of 2023 (August 9, 2023 through November 7, 2023) used in this calculation differ from the Company's third quarter of fiscal 2023 to properly align the most comparable days of the calendar due to the calendar shift resulting from fiscal 2023 consisting of 53 weeks, as well as an additional two day shift resulting from the Company optimizing its fiscal periods to end on a Tuesday rather than a Sunday to gain operational efficiencies.
Operating loss totaled $6.3 million, or 1.4% of revenue, compared with operating income of $18.6 million, or 4.0% of revenue in the third quarter of fiscal 2023.
Net loss totaled $32.7 million, or $(0.84) per diluted share, compared with a net loss of $5.2 million, or $(0.12) per diluted share in the third quarter of fiscal 2023. Adjusted Net loss totaled $17.5 million, or $(0.45) per diluted share, compared with an Adjusted Net income of $0.4 million, or $0.01 per diluted share in the third quarter of fiscal 2023.
Adjusted EBITDA totaled $68.3 million, or 15.1% of revenue, compared with Adjusted EBITDA of $81.6 million, or 17.5% of revenue in the third quarter of fiscal 2023.
Store operating income before depreciation and amortization totaled $92.6 million, or 20.4% of revenue, compared with store operating income before depreciation and amortization of $102.9 million, or 22.0% of revenue in the third quarter of fiscal 2023.
Balance Sheet, Liquidity, Cash Flow and Share Repurchases
The Company had $7.2 million in operating cash outflow during the third quarter, ending the quarter with $8.6 million in cash and $537.4 million of availability under its $650.0 million revolving credit facility. The Company ended the quarter with a Net Total Leverage Ratio of 2.6x 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 (each as defined in the credit agreement). The Company's maximum permitted Net Total Leverage Ratio is 3.5x.
Year to date, the Company has repurchased 2.0 million shares at a total cost of $88.0 million and representing 5.1% of the Company's outstanding shares as of the end of fiscal 2023. The Company has $112.0 million remaining on its share repurchase authorization.
Quarterly Report on Form 10-Q Available
The Company's Quarterly Report on Form 10-Q, which 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 third quarter ended November 5, 2024.
Investor Conference Call and Webcast
Management will host a conference call to report these results on Tuesday, December 10, 2024 at 4:00 p.m. Central Time (5:00 p.m. Eastern Time). A live and archived webcast of the conference call will be available at ir.daveandbusters.com. Additionally, 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 7480019. 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 is 6404437.
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 228 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 168 Dave & Buster's branded stores in 43 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 60 Main Event branded stores in 21 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 can be identified by the use of forward-looking terminology, including the terms "believes,” "estimates,” "anticipates,” "expects,” "intends,” "may,” "will” or "should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not a guarantee of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this release as a result of various factors, including those set forth in the section entitled "Risk Factors” in our Annual Report on Form 10-K filed with the SEC on April 2, 2024. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this release, such results or developments may not be indicative of results or developments in subsequent periods.
Non-GAAP Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("GAAP”), the Company uses the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Credit Adjusted EBITDA (calculated in accordance with the Company's Credit Facility), Store operating income before depreciation and amortization, Adjusted Net income, and Adjusted Net income per share - Diluted, reconciliations of which can be found on the following pages (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.
For Investor Relations Inquiries:
Cory Hatton, VP Investor Relations & Treasurer
Dave & Buster's Entertainment, Inc.
| DAVE & BUSTER'S ENTERTAINMENT, INC. Consolidated Statements of Operations (unaudited, in millions, except per share amounts) | |||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||
| November 5, 2024 (1) | October 29, 2023 (1) | November 5, 2024 (1) | October 29, 2023 (1) | ||||||||||||||||||||||||
| Entertainment revenues | $ | 294.6 | 65.0 | % | $ | 302.0 | 64.7 | % | $ | 1,056.0 | 66.1 | % | $ | 1,055.9 | 65.7 | % | |||||||||||
| Food and beverage revenues | 158.4 | 35.0 | % | 164.9 | 35.3 | % | 542.2 | 33.9 | % | 550.4 | 34.3 | % | |||||||||||||||
| Total revenues | 453.0 | 100.0 | % | 466.9 | 100.0 | % | 1,598.2 | 100.0 | % | 1,606.3 | 100.0 | % | |||||||||||||||
| Cost of entertainment (2) | 25.1 | 8.5 | % | 30.5 | 10.1 | % | 91.2 | 8.6 | % | 101.0 | 9.6 | % | |||||||||||||||
| Cost of food and beverage (2) | 42.7 | 27.0 | % | 45.9 | 27.8 | % | 145.7 | 26.9 | % | 156.8 | 28.5 | % | |||||||||||||||
| Total cost of products | 67.8 | 15.0 | % | 76.4 | 16.4 | % | 236.9 | 14.8 | % | 257.8 | 16.0 | % | |||||||||||||||
| Operating payroll and benefits | 120.9 | 26.7 | % | 119.9 | 25.7 | % | 393.7 | 24.6 | % | 377.5 | 23.5 | % | |||||||||||||||
| Other store operating expenses (2) | 171.7 | 37.9 | % | 167.7 | 35.9 | % | 515.4 | 32.2 | % | 499.3 | 31.1 | % | |||||||||||||||
| General and administrative expenses | 27.2 | 6.0 | % | 28.4 | 6.1 | % | 89.1 | 5.6 | % | 92.0 | 5.7 | % | |||||||||||||||
| Depreciation and amortization expense | 53.9 | 11.9 | % | 51.9 | 11.1 | % | 174.2 | 10.9 | % | 149.9 | 9.3 | % | |||||||||||||||
| Pre-opening costs | 5.2 | 1.1 | % | 4.0 | 0.9 | % | 12.6 | 0.8 | % | 12.7 | 0.8 | % | |||||||||||||||
| Total operating costs | 446.7 | 98.6 | % | 448.3 | 96.0 | % | 1,421.9 | 89.0 | % | 1,389.2 | 86.5 | % | |||||||||||||||
| Operating income | 6.3 | 1.4 | % | 18.6 | 4.0 | % | 176.3 | 11.0 | % | 217.1 | 13.5 | % | |||||||||||||||
| Interest expense, net | 32.9 | 7.3 | % | 28.9 | 6.2 | % | 99.9 | 6.3 | % | 92.5 | 5.8 | % | |||||||||||||||
| Loss on debt refinancing | 15.2 | 3.4 | % | - | - | % | 15.2 | 1.0 | % | 11.2 | 0.7 | % | |||||||||||||||
| Income (loss) before provision for income taxes | (41.8 | ) | -9.2 | % | (10.3 | ) | -2.2 | % | 61.2 | ||||||||||||||||||