World News: 13:00 GMT Friday 14th September 2018. [Dave & Buster's Entertainment, Inc. via Globe Newswire via SPi World News]
DALLAS, Sept. 14, 2018 (GLOBE NEWSWIRE) -- Dave & Buster's Entertainment, Inc., (NASDAQ:), ("Dave & Buster's" or "the Company"), an owner and operator of entertainment and dining venues, today announced financial results for its second quarter 2018, which ended on August 5, 2018.
“We delivered meaningful sequential improvement in comparable store sales and double-digit revenue growth during the second quarter. We are pleased with the strong guest response to our proprietary VR platform and look forward to building on this momentum. Our team is laser-focused on executing on our key strategic priorities to drive further improvement in performance. Meanwhile, our new stores are tracking well and we remain well-positioned to capitalize on the long-term opportunity to more than double our store base in the US and Canada,” said Brian Jenkins, Chief Executive Officer.
“We are raising guidance on key metrics in light of our second quarter results. We are excited to be in a strong financial position to return value to shareholders, including the just announced cash dividend and increased share repurchase authorization, while continuing to invest in future growth initiatives,” said Joe DeProspero, Interim Chief Financial Officer.
On September 11, 2018, the Company’s Board of Directors initiated a quarterly cash dividend of $0.15 per common share, payable on October 10, 2018 to shareholders of record on September 25, 2018.
On September 11, 2018, the Board increased the Company’s total share repurchase authorization $100 million and extended the share repurchase program through the end of fiscal 2020. All other terms of the share repurchase program remain in effect. During the second quarter of 2018, we repurchased approximately 729,000 shares for $33.7 million, with an additional 212,000 shares for $11.3 million through September 11, 2018 during the third quarter. As of the same date, cumulatively, we had repurchased 4.8 million shares for $253.1 million. Including the additional authorization, we now have approximately $146.9 million available for share repurchases.
The Board appointed Brian A. Jenkins, Chief Executive Officer, to the Company’s Board of Directors effective September 13, 2018. Dave & Buster’s Board of Directors now consists of nine members inclusive of his appointment.
Total revenues increased 13.7% to $319.2 million from $280.8 million in the second quarter 2017, or 11.4% on a comparable week basis. Across all stores, Food and Beverage revenues increased 9.7% to $130.2 million from $118.7 million and Amusement and Other revenues increased 16.6% to $188.9 million from $162.1 million. Food and Beverage represented 40.8% of total revenues while Amusements and Other represented 59.2% of total revenues in the second quarter 2018. In last year’s second quarter, Food & Beverage represented 42.3% of total revenues while Amusements and Other represented 57.7% of total revenues.
Comparable store sales decreased 2.4% in the second quarter 2018 compared to a 1.1% increase in the same period last year. Our comparable store sales decline was driven by a 2.6% decrease in walk-in sales and a 0.1% increase in special events sales. Comparable store sales in Amusements & Other decreased 1.2% and in Food & Beverage decreased 4.1%. Non-comparable store revenues increased $39.3 million, or 99.6% in the second quarter 2018 to $78.8 million, also on a comparable week basis.
Operating income increased to $45.9 million in the second quarter of 2018 from $39.2 million in last year's second quarter. As a percentage of total revenues, operating income increased 50 basis points to 14.4% from 13.9%.
Net income was $33.8 million, or $0.84 per diluted share (40.3 million diluted share base) in the second quarter of 2018 compared to $30.4 million, or $0.71 per diluted share (42.8 million diluted share base) in the second quarter of 2017.
EBITDA increased 17.1% to $75.0 million in the second quarter of 2018 from $64.0 million in the second quarter of 2017. As a percentage of total revenues, EBITDA increased 70 basis points to 23.5% from 22.8%. On a comparable week basis, and excluding the 2017 litigation settlement expense, EBITDA increased 6.7% and as a percentage of total revenue was down 100 basis points.
Adjusted EBITDA increased 16.7% to $82.4 million in the second quarter of 2018 from $70.6 million in the second quarter of 2017. As a percentage of total revenues, Adjusted EBITDA increased 70 basis points to 25.8% from 25.1%. On a comparable week basis, and excluding the 2017 litigation settlement expense, Adjusted EBITDA increased 7.4% and as a percentage of total revenue, was down 100 basis points.
Store operating income before depreciation and amortization increased 11.4% to $95.1 million in the second quarter 2018 from $85.3 million in last year's second quarter. As a percentage of total revenues, Store operating income before depreciation and amortization decreased 60 basis points to 29.8% from 30.4%.
In fiscal 2018, we remain on track to open 14 to 15 new stores, representing 13% to 14% unit growth. At the top end of the range, these store openings include 11 large, two small and two 17K format stores, and will skew towards new markets for our brand. We currently have eight stores under construction.
We opened five stores during the second quarter in Salt Lake City, Utah (a new state for us); Massapequa, New York; Torrance, California; Staten Island, New York; and Northridge, California.
We are raising guidance on key metrics for fiscal 2018, which ends on February 3, 2019:
Management will hold a conference call to discuss these results today at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). The conference call can be accessed over the phone by dialing (323) 794-2423 or toll-free (800) 289-0438. A replay will be available after the call for one year beginning at 11:00 a.m. Central Time (12:00 p.m. Eastern Time) and can be accessed by dialing (412) 317-6671 or toll-free (844) 512-2921; the passcode is 8904435.
Additionally, a live and archived webcast of the conference call will be available at under the Investor Relations section.
Founded in 1982 and headquartered in Dallas, Texas, Dave & Buster's Entertainment, Inc., is the owner and operator of 117 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 38 states, Puerto Rico, and Canada.
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. 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.
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.
For Investor Relations Inquiries:
Arvind Bhatia, CFADave & Buster’s Entertainment, Inc.214.904.2202
Globe Newswire: 13:00 GMT Friday 14th September 2018
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