12/07/2021 | Press release | Distributed by Public on 12/07/2021 16:08
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
35-2382255
|
|
(State of Incorporation)
|
(I.R.S. Employer ID)
|
|
2481 Mañana Drive, Dallas, Texas, 75220
|
(214)
357-9588
|
|
(Address of principal executive offices) (Zip Code)
|
(Registrant's telephone number)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange
on which registered
|
||
Common Stock $0.01 par value
|
PLAY
|
NASDAQ Global Select Market
|
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated
filer
|
☐ | Smaller reporting company | ☐ | |||
Emerging Growth Company | ☐ |
Page
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||||||
PART I
|
FINANCIAL INFORMATION
|
3
|
||||
Item 1.
|
Financial Statements
|
3
|
||||
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
18
|
||||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
31
|
||||
Item 4.
|
Controls and Procedures
|
32
|
||||
PART II
|
OTHER INFORMATION
|
32
|
||||
Item 1.
|
Legal Proceedings
|
32
|
||||
Item 1A.
|
Risk Factors
|
32
|
||||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
33
|
||||
Item 6.
|
Exhibits
|
34
|
||||
Signatures
|
35
|
Item 1.
|
Financial Statements
|
October 31,
|
January 31,
|
|||||||
2021
|
2021
|
|||||||
(unaudited)
|
(audited)
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 27,005 | $ | 11,891 | ||||
Inventories
|
37,256 | 23,807 | ||||||
Prepaid expenses
|
12,376 | 11,878 | ||||||
Income taxes receivable
|
67,646 | 70,064 | ||||||
Other current assets
|
2,101 | 1,231 | ||||||
Total current assets
|
146,384 | 118,871 | ||||||
Property and equipment (net of $891,352 and $798,804 accumulated depreciation as of October 31, 2021 and January 31, 2021, respectively)
|
779,518 | 815,027 | ||||||
Operating lease right of use assets
|
1,038,269 | 1,037,569 | ||||||
Deferred tax assets
|
9,467 | 5,874 | ||||||
Tradenames
|
79,000 | 79,000 | ||||||
Goodwill
|
272,561 | 272,597 | ||||||
Other assets and deferred charges
|
25,517 | 23,886 | ||||||
Total assets
|
$ | 2,350,716 | $ | 2,352,824 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 39,295 | $ | 36,400 | ||||
Accrued liabilities
|
250,948 | 234,790 | ||||||
Income taxes payable
|
435
|
446 | ||||||
Total current liabilities
|
290,678 | 271,636 | ||||||
Deferred income taxes
|
12,606 | 13,658 | ||||||
Operating lease liabilities
|
1,270,929 | 1,267,791 | ||||||
Other liabilities
|
45,267 | 50,119 | ||||||
Long-term debt, net
|
484,677 | 596,388 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' equity:
|
||||||||
Common stock, par value $0.01; authorized: 400,000,000 shares; issued: 61,364,015 shares at October 31, 2021 and 60,488,833 shares at January 31, 2021; outstanding: 48,342,301 shares at October 31, 2021 and 47,646,606 shares at January 31, 2021
|
614 | 605 | ||||||
Preferred stock,
50,000,000 authorized; none issued
|
- | - | ||||||
Paid-in
capital
|
545,168 | 531,191 | ||||||
Treasury stock, 13,021,714 and 12,842,227 shares as of October 31, 2021 and January 31, 2021, respectively
|
(603,745 | ) | (595,970 | ) | ||||
Accumulated other comprehensive loss
|
(4,959 | ) | (9,085 | ) | ||||
Retained earnings
|
309,481 | 226,491 | ||||||
Total stockholders' equity
|
246,559 | 153,232 | ||||||
Total liabilities and stockholders' equity
|
$ | 2,350,716 | $ | 2,352,824 | ||||
Thirteen Weeks
|
Thirteen Weeks
|
|||||||
Ended
|
Ended
|
|||||||
October 31, 2021
|
November 1, 2020
|
|||||||
Food and beverage revenues
|
$ | 107,747 | $ | 38,346 | ||||
Amusement and other revenues
|
210,229 | 70,706 | ||||||
Total revenues
|
317,976 | 109,052 | ||||||
Cost of food and beverage
|
30,082 | 10,664 | ||||||
Cost of amusement and other
|
22,531 | 7,244 | ||||||
Total cost of products
|
52,613 | 17,908 | ||||||
Operating payroll and benefits
|
78,995 | 27,704 | ||||||
Other store operating expenses
|
103,322 | 70,783 | ||||||
General and administrative expenses
|
22,104 | 11,746 | ||||||
Depreciation and amortization expense
|
34,381 | 34,384 | ||||||
Pre-opening
costs
|
2,092 | 2,570 | ||||||
Total operating costs
|
293,507 | 165,095 | ||||||
Operating income (loss)
|
24,469 | (56,043 | ) | |||||
Interest expense, net
|
13,423 | 8,213 | ||||||
Loss on debt extinguishment / refinancing
|
2,829 | 904 | ||||||
Income (loss) before benefit for income taxes
|
8,217 | (65,160 | ) | |||||
Benefit for income taxes
|
(2,368 | ) | (17,117 | ) | ||||
Net income (loss)
|
10,585 | (48,043 | ) | |||||
Unrealized foreign currency translation gain (loss)
|
(34 | ) | 34 | |||||
Unrealized gain on derivatives, net of tax
|
1,371 | 1,370 | ||||||
Total other comprehensive income
|
1,337 | 1,404 | ||||||
Total comprehensive income (loss)
|
$ | 11,922 | $ | (46,639 | ) | |||
Net income (loss) per share:
|
||||||||
Basic
|
$ | 0.22 | $ | (1.01 | ) | |||
Diluted
|
$ | 0.21 | $ | (1.01 | ) | |||
Weighted average shares used in per share calculations:
|
||||||||
Basic
|
48,277,358 | 47,613,741 | ||||||
Diluted
|
49,283,503 | 47,613,741 |
Thirty-Nine Weeks
|
Thirty-Nine Weeks
|
|||||||
Ended
|
Ended
|
|||||||
October 31, 2021
|
November 1, 2020
|
|||||||
Food and beverage revenues
|
$ | 316,511 | $ | 119,268 | ||||
Amusement and other revenues
|
644,443 | 200,423 | ||||||
Total revenues
|
960,954 | 319,691 | ||||||
Cost of food and beverage
|
86,366 | 32,667 | ||||||
Cost of amusement and other
|
63,729 | 21,997 | ||||||
Total cost of products
|
150,095 | 54,664 | ||||||
Operating payroll and benefits
|
209,897 | 85,197 | ||||||
Other store operating expenses
|
292,883 | 229,137 | ||||||
General and administrative expenses
|
57,665 | 35,587 | ||||||
Depreciation and amortization expense
|
104,355 | 104,896 | ||||||
Pre-opening
costs
|
5,427 | 8,781 | ||||||
Total operating costs
|
820,322 | 518,262 | ||||||
Operating income (loss)
|
140,632 | (198,571 | ) | |||||
Interest expense, net
|
41,971 | 22,491 | ||||||
Loss on debt extinguishment / refinancing
|
2,829 | 904 | ||||||
Income (loss) before provision (benefit) for income taxes
|
95,832 | (221,966 | ) | |||||
Provision (benefit) for income taxes
|
12,842 | (71,777 | ) | |||||
Net income (loss)
|
82,990 | (150,189 | ) | |||||
Unrealized foreign currency translation gain (loss)
|
12 | (97 | ) | |||||
Unrealized gain (loss) on derivatives, net of tax
|
4,114 | (2,207 | ) | |||||
Total other comprehensive income (loss)
|
4,126 | (2,304 | ) | |||||
Total comprehensive income (loss)
|
$ | 87,116 | $ | (152,493 | ) | |||
Net income (loss) per share:
|
||||||||
Basic
|
$ | 1.73 | $ | (3.56 | ) | |||
Diluted
|
$ | 1.68 | $ | (3.56 | ) | |||
Weighted average shares used in per share calculations:
|
||||||||
Basic
|
48,050,558 | 42,185,163 | ||||||
Diluted
|
49,257,269 | 42,185,163 |
Thirteen Weeks Ended October 31, 2021
|
||||||||||||||||||||||||||||||||
Common Stock
|
Paid-In
Capital |
Treasury Stock At Cost
|
Accumulated
Other Comprehensive Loss |
Retained
Earnings |
Total
|
|||||||||||||||||||||||||||
Shares
|
Amt.
|
Shares
|
Amt.
|
|||||||||||||||||||||||||||||
Balance August 1, 2021
|
61,276,473 | $ | 613 | $ | 540,348 | 13,020,098 | $ | (603,686 | ) | $ | (6,296 | ) | $ | 298,896 | $ | 229,875 | ||||||||||||||||
Net income
|
- | - | - | - | - | - | 10,585 | 10,585 | ||||||||||||||||||||||||
Unrealized foreign currency translation loss
|
- | - | - | - | - | (34 | ) | - | (34 | ) | ||||||||||||||||||||||
Unrealized gain on derivatives, net of tax
|
- | - | - | - | - | 1,371 | - | 1,371 | ||||||||||||||||||||||||
Share-based compensation
|
- | - | 3,778 | - | - | - | - | 3,778 | ||||||||||||||||||||||||
Issuance of common stock
|
87,542 | 1 | 1,042 | - | - | - | - | 1,043 | ||||||||||||||||||||||||
Repurchase of common stock
|
- | - | - | 1,616 | (59 | ) | - | - | (59 | ) | ||||||||||||||||||||||
Balance October 31, 2021
|
61,364,015 | $ | 614 | $ | 545,168 | 13,021,714 | $ | (603,745 | ) | $ | (4,959 | ) | $ | 309,481 | $ | 246,559 | ||||||||||||||||
Thirteen Weeks Ended November 1, 2020
|
||||||||||||||||||||||||||||||||
Common Stock
|
Paid-In
Capital |
Treasury Stock At Cost
|
Accumulated
Other Comprehensive Loss |
Retained
Earnings |
Total
|
|||||||||||||||||||||||||||
Shares
|
Amt.
|
Shares
|
Amt.
|
|||||||||||||||||||||||||||||
Balance August 2, 2020
|
60,422,212 | $ | 604 | $ | 526,253 | 12,827,300 | $ | (595,728 | ) | $ | (12,077 | ) | $ | 331,319 | $ | 250,371 | ||||||||||||||||
Net loss
|
- | - | - | - | - | - | (48,043 | ) | (48,043 | ) | ||||||||||||||||||||||
Unrealized foreign currency translation gain
|
- | - | - | - | - | 34 | - | 34 | ||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax
|
- | - | - | - | - | 1,370 | - | 1,370 | ||||||||||||||||||||||||
Share-based compensation
|
- | - | 2,999 | - | - | - | - | 2,999 | ||||||||||||||||||||||||
Issuance of common stock
|
61,518 | 1 | 271 | - | - | - | - | 272 | ||||||||||||||||||||||||
Repurchase of common stock
|
- | - | 14,401 | (229 | ) | - | - | (229 | ) | |||||||||||||||||||||||
Balance November 1, 2020
|
60,483,730 | $ | 605 | $ | 529,523 | 12,841,701 | $ | (595,957 | ) | $ | (10,673 | ) | $ | 283,276 | $ | 206,774 | ||||||||||||||||
Thirty-Nine Weeks Ended October 31, 2021
|
||||||||||||||||||||||||||||||||
Common Stock
|
Paid-In
Capital |
Treasury Stock At Cost
|
Accumulated
Other Comprehensive Loss |
Retained
Earnings |
Total
|
|||||||||||||||||||||||||||
Shares
|
Amt.
|
Shares
|
Amt.
|
|||||||||||||||||||||||||||||
Balance January 31, 2021
|
60,488,833 | $ | 605 | $ | 531,191 | 12,842,227 | $ | (595,970 | ) | $ | (9,085 | ) | $ | 226,491 | $ | 153,232 | ||||||||||||||||
Net income
|
- | - | - | - | - | - | 82,990 | 82,990 | ||||||||||||||||||||||||
Unrealized foreign currency translation gain
|
- | - | - | - | - | 12 | - | 12 | ||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax
|
- | - | - | - | - | 4,114 | - | 4,114 | ||||||||||||||||||||||||
Share-based compensation
|
- | - | 9,936 | - | - | - | - | 9,936 | ||||||||||||||||||||||||
Issuance of common stock
|
875,182 | 9 | 4,041 | - | - | - | - | 4,050 | ||||||||||||||||||||||||
Repurchase of common stock
|
- | - | - | 179,487 | (7,775 | ) | - | - | (7,775 | ) | ||||||||||||||||||||||
Balance October 31, 2021
|
61,364,015 | $ | 614 | $ | 545,168 | 13,021,714 | $ | (603,745 | ) | $ | (4,959 | ) | $ | 309,481 | $ | 246,559 | ||||||||||||||||
Thirty-Nine Weeks Ended November 1, 2020
|
||||||||||||||||||||||||||||||||
Common Stock
|
Paid-In
Capital |
Treasury Stock At Cost
|
Accumulated
Other Comprehensive Loss |
Retained
Earnings |
Total
|
|||||||||||||||||||||||||||
Shares
|
Amt.
|
Shares
|
Amt.
|
|||||||||||||||||||||||||||||
Balance February 2, 2020
|
43,386,852 | $ | 434 | $ | 339,161 | 12,783,512 | $ | (595,041 | ) | $ | (8,369 | ) | $ | 433,465 | $ | 169,650 | ||||||||||||||||
Net loss
|
- | - | - | - | - | - | (150,189 | ) | (150,189 | ) | ||||||||||||||||||||||
Unrealized foreign currency translation loss
|
- | - | - | - | - | (97 | ) | - | (97 | ) | ||||||||||||||||||||||
Unrealized loss on derivatives, net of tax
|
- | - | - | - | - | (2,207 | ) | - | (2,207 | ) | ||||||||||||||||||||||
Share-based compensation
|
- | - | 5,344 | - | - | - | - | 5,344 | ||||||||||||||||||||||||
Issuance of common stock
|
17,096,878 | 171 | 185,018 | - | - | - | - | 185,189 | ||||||||||||||||||||||||
Repurchase of common stock
|
- | - | 58,189 | (916 | ) | - | - | (916 | ) | |||||||||||||||||||||||
Balance November 1, 2020
|
60,483,730 | $ | 605 | $ | 529,523 | 12,841,701 | $ | (595,957 | ) | $ | (10,673 | ) | $ | 283,276 | $ | 206,774 | ||||||||||||||||
Thirty-Nine Weeks
Ended
October 31, 2021
|
Thirty-Nine Weeks
Ended November 1, 2020 |
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | 82,990 | $ | (150,189 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Depreciation and amortization expense
|
104,355 | 104,896 | ||||||
Non-cash
interest expense
|
5,660 | 4,088 | ||||||
Impairment of long-lived assets
|
- | 13,727 | ||||||
Deferred taxes
|
(6,191 | ) | (17,730 | ) | ||||
Loss on disposal of fixed assets
|
634 | 541 | ||||||
Loss on debt extinguishment or refinancing
|
2,829 | 904 | ||||||
Share-based compensation
|
9,936 | 5,344 | ||||||
Other, net
|
3,250 | 1,292 | ||||||
Changes in assets and liabilities:
|
||||||||
Inventories
|
(13,449 | ) | 7,745 | |||||
Prepaid expenses
|
(498 | ) | 2,761 | |||||
Income tax receivable
|
2,418 | (42,243 | ) | |||||
Other current assets
|
(870 | ) | 2,580 | |||||
Other assets and deferred charges
|
(1,859 | ) | (3 | ) | ||||
Accounts payable
|
(3,419 | ) | (11,945 | ) | ||||
Accrued liabilities
|
19,069 | 44,742 | ||||||
Income taxes payable
|
(11 | ) | (2,639 | ) | ||||
Other liabilities
|
(6,346 | ) | 4,375 | |||||
Net cash provided by (used in) operating activities
|
198,498 | (31,754 | ) | |||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(63,559 | ) | (72,604 | ) | ||||
Proceeds from sales of property and equipment
|
550 | 234 | ||||||
Net cash used in investing activities
|
(63,009 | ) | (72,370 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from debt
|
37,000 | 688,000 | ||||||
Payments of debt
|
(152,000 | ) | (760,250 | ) | ||||
Net proceeds from the issuance of common stock
|
- | 182,207 | ||||||
Proceeds from the exercise of stock options
|
4,050 | 465 | ||||||
Dividends paid
|
- | (4,891 | ) | |||||
Repurchases of common stock to satisfy employee withholding tax obligations
|
(7,775 | ) | (16,805 | ) | ||||
Debt issuance costs and prepayment premiums
|
(1,650 | ) | (916 | ) | ||||
Net cash provided by (used in) financing activities
|
(120,375 | ) | 87,810 | |||||
Increase (decrease) in cash and cash equivalents
|
15,114 | (16,314 | ) | |||||
Beginning cash and cash equivalents
|
11,891 | 24,655 | ||||||
Ending cash and cash equivalents
|
$ | 27,005 | $ | 8,341 | ||||
Supplemental disclosures of cash flow information:
|
||||||||
Increase (decrease) in fixed asset accounts payable
|
$ | 6,314 | $ | (12,315 | ) | |||
Cash paid (refund received) for income taxes, net
|
$ | 16,043 | $ | (9,281 | ) | |||
Cash paid for interest, net
|
$ | 43,910 | $ | 17,306 |
Fair Value
|
||||||||||||
Balance Sheet Location
|
October 31, 2021
|
January 31, 2021
|
||||||||||
Interest rate swaps
|
Accrued liabilities | $ | (6,384 | ) | $ | (8,350 | ) | |||||
Interest rate swaps
|
Other liabilities | - | (4,416 | ) | ||||||||
Total derivatives
|
$ | (6,384 | ) | $ | (12,766 | ) | ||||||
Thirteen weeks ended
|
Thirty-nine weeks ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
October 31, 2021
|
November 1, 2020
|
|||||||||||||
Loss recorded in accumulated other
comprehensive income |
$ | - | $ | - | $ | - | $ | 7,602 | ||||||||
Loss reclassified into income (1)
|
$ | (1,886 | ) | $ | (1,886 | ) | $ | (5,660 | ) | $ | (4,566 | ) | ||||
Income tax expense (benefit) in
accumulatedother comprehensive income |
$ | 515 | $ | 516 | $ | 1,546 | $ | (829 | ) |
(1)
|
Amounts reclassified into income are included in "Interest expense, net" in the Consolidated Statements
of
Comprehensive
Income
(Loss).
|
Thirteen weeks ended
|
Thirty-nine weeks ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
October 31, 2021
|
November 1, 2020
|
|||||||||||||
Basic weighted average shares outstanding
|
48,277,358 | 47,613,741 | 48,050,558 | 42,185,163 | ||||||||||||
Weighted average dilutive impact of awards (1)
|
1,006,145 | - | 1,206,711 | - | ||||||||||||
Diluted weighted average shares outstanding
|
49,283,503 | 47,613,741 | 49,257,269 | 42,185,163 |
(1)
|
Amounts exclude all potential common and common equivalent shares for periods when there is a net loss.
|
October 31, 2021
|
January 31, 2021
|
|||||||
Deferred amusement revenue
|
$ | 92,909 | $ | 78,852 | ||||
Current portion of operating lease liabilities, net (1)
|
51,735 | 46,471 | ||||||
Compensation and benefits
|
24,702 | 13,846 | ||||||
Current portion of deferred occupancy costs
|
22,564 | 36,121 | ||||||
Property taxes
|
10,449 | 8,149 | ||||||
Deferred gift card revenue
|
9,564 | 10,918 | ||||||
Current portion of derivatives
|
6,384 | 8,350 | ||||||
Utilities
|
5,453 | 4,151 | ||||||
Current portion of long-term insurance
|
5,100 | 5,100 | ||||||
Sales and use taxes
|
4,177 | 1,385 | ||||||
Customer deposits
|
4,130 | 1,373 | ||||||
Accrued interest
|
256 | 11,321 | ||||||
Other
|
13,525 | 8,753 | ||||||
Total accrued liabilities
|
$ | 250,948 | $ | 234,790 | ||||
(1) |
The balance of leasehold incentive receivables of $3,823 and $8,763 as of October 31, 2021 and January 31, 2021, respectively, is reflected as a reduction of the current portion of operating lease liabilities
.
|
October 31, 2021
|
January 31, 2021
|
|||||||
Senior secured notes
|
$ | 495,000 | $ | 550,000 | ||||
Credit facility - revolver
|
- | 60,000 | ||||||
Total debt outstanding
|
495,000 | 610,000 | ||||||
Less debt issuance costs
|
(10,323 | ) | (13,612 | ) | ||||
Long-term debt, net
|
$ | 484,677 | $ | 596,388 | ||||
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
October 31, 2021
|
November 1, 2020
|
|||||||||||||
Interest expense on debt
|
$ | 10,782 | $ | 6,092 | $ | 33,921 | $ | 17,255 | ||||||||
Interest associated with swap agreements
|
1,886 | 1,886 | 5,660 | 4,566 | ||||||||||||
Amortization of issuance cost
|
1,070 | 427 | 3,275 | 1,081 | ||||||||||||
Interest income
|
- | - | - | (22 | ) | |||||||||||
Capitalized interest
|
(315 | ) | (192 | ) | (885 | ) | (389 | ) | ||||||||
Total interest expense, net
|
$ | 13,423 | $ | 8,213 | $ | 41,971 | $ | 22,491 | ||||||||
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
October 31, 2021
|
November 1, 2020
|
|||||||||||||
Operating lease cost
|
$ |
33,915
|
33,278 | $ |
100,506
|
100,162 | ||||||||||
Variable lease cost
|
7,862
|
5,351 |
22,492
|
18,405 | ||||||||||||
Short-term lease cost
|
121
|
102 |
431
|
329 | ||||||||||||
Total
|
$ | 41,898 | $ | 38,731 | $ | 123,429 | $ | 118,896 | ||||||||
Thirteen Weeks Ended
|
Thirty-Nine Weeks Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
October 31, 2021
|
November 1, 2020
|
|||||||||||||
Stock options
|
$ | 88 | 269 | $ | 446 | 1,099 | ||||||||||
Restricted stock units
|
3,690 | 2,730 | 9,490 | 4,245 | ||||||||||||
Share-based compensation expense
|
$ | 3,778 | $ | 2,999 | $ | 9,936 | $ | 5,344 | ||||||||
2014 Stock Incentive Plan
|
2010 Stock Incentive Plan
|
|||||||||||||||
Number
|
Wtd. Avg.
|
Number
|
Wtd. Avg.
|
|||||||||||||
of Options
|
Exercise Price
|
of Options
|
Exercise Price
|
|||||||||||||
Outstanding at January 31, 2021
|
1,231,601 | $ | 36.77 | 173,563 | $ | 7.51 | ||||||||||
Granted
|
- | - | - | - | ||||||||||||
Exercised
|
(203,861 | ) | 16.48 | (100,009 | ) | 6.90 | ||||||||||
Forfeited
|
(13,167 | ) | 45.75 | - | - | |||||||||||
Outstanding at October 31, 2021
|
1,014,573 | $ | 40.73 | 73,554 | $ | 8.33 | ||||||||||
Exercisable at October 31, 2021
|
950,187 | $ | 39.97 | 73,554 | $ | 8.33 | ||||||||||
Wtd. Avg.
|
||||||||
Shares
|
Fair Value
|
|||||||
Outstanding at January 31, 2021
|
1,116,341 | $ | 17.32 | |||||
Granted
|
301,847 | 47.82 | ||||||
Performance adjusted units
|
362,491 | 15.30 | ||||||
Vested
|
(571,312 | ) | 15.39 | |||||
Forfeited
|
(51,686 | ) | 38.01 | |||||
Outstanding at October 31, 2021
|
1,157,681 | $ | 24.67 | |||||
• |
Revenues totaled $317,976 compared with $299,352 in the third quarter of 2019. Revenues totaled $109,052 in the third quarter of 2020, which ended with 104 of our 137 stores open and operating in limited capacity.
|
• |
Overall comparable store sales were relatively flat, decreasing 0.4% compared with the same period in 2019 and increased 189.3% compared with the same period in 2020, which ended with 84 of our 114 comparable stores open and operating in limited capacity.
|
• |
Net income totaled $10,585, or $0.21 per diluted share, compared with net income of $482, or $0.02 per diluted share in the same period of 2019. In the same period of 2020, we recorded a net loss of $48,043.
|
• |
EBITDA totaled $58,850, or 18.5% of revenues, compared with EBITDA of $39,839 or 13.3% of revenues in the third quarter of 2019. The increase in EBITDA over fiscal 2019 is largely driven by the higher mix of amusements, reductions in hourly labor costs, and reduced discretionary marketing spend. We recorded an EBITDA loss of $21,659 in the third quarter of 2020.
|
• |
Ended the quarter with $27,005 in cash and approximately $340,000 of liquidity available under the Company's revolving credit facility, net of a $150,000 minimum liquidity covenant and $10,486 in letters of credit.
|
Thirteen Weeks
|
Thirteen Weeks
|
|||||||||||||||
Ended
|
Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
|||||||||||||||
Food and beverage revenues
|
$ | 107,747 | 33.9 | % | $ | 38,346 | 35.2 | % | ||||||||
Amusement and other revenues
|
210,229 | 66.1 | 70,706 | 64.8 | ||||||||||||
Total revenues
|
317,976 | 100.0 | 109,052 | 100.0 | ||||||||||||
Cost of food and beverage (as a percentage of food and beverage revenues)
|
30,082 | 27.9 | 10,664 | 27.8 | ||||||||||||
Cost of amusement and other (as a percentage of amusement and other revenues)
|
22,531 | 10.7 | 7,244 | 10.2 | ||||||||||||
Total cost of products
|
52,613 | 16.5 | 17,908 | 16.4 | ||||||||||||
Operating payroll and benefits
|
78,995 | 24.8 | 27,704 | 25.4 | ||||||||||||
Other store operating expenses
|
103,322 | 32.5 | 70,783 | 64.9 | ||||||||||||
General and administrative expenses
|
22,104 | 7.0 | 11,746 | 10.8 | ||||||||||||
Depreciation and amortization expense
|
34,381 | 10.8 | 34,384 | 31.5 | ||||||||||||
Pre-opening
costs
|
2,092 | 0.7 | 2,570 | 2.4 | ||||||||||||
Total operating costs
|
293,507 | 92.3 | 165,095 | 151.4 | ||||||||||||
Operating income (loss)
|
24,469 | 7.7 | (56,043 | ) | (51.4 | ) | ||||||||||
Interest expense, net
|
13,423 | 4.2 | 8,213 | 7.6 | ||||||||||||
Loss on debt extinguishment / refinancing
|
2,829 | 0.9 | 904 | 0.8 | ||||||||||||
Income (loss) before benefit for income taxes
|
8,217 | 2.6 | (65,160 | ) | (59.8 | ) | ||||||||||
Benefit for income taxes
|
(2,368 | ) | (0.7 | ) | (17,117 | ) | (15.7 | ) | ||||||||
Net income (loss)
|
$ | 10,585 | 3.3 | % | $ | (48,043 | ) | (44.1 | )% | |||||||
Change in comparable store sales (1)
|
189.3 | % | (65.6 | )% | ||||||||||||
Company-owned stores at end of period (1)
|
143 | 137 | ||||||||||||||
Comparable stores at end of period (1)
|
114 | 114 |
(1)
|
As of the end of the third quarter of fiscal 2020, 104 of our 137 total stores and 84 of our 114 comparable stores were open and operating in limited capacity. Our comparable store count as of the end of the third quarter of fiscal 2020 excludes a store in Chicago, Illinois and a store in Houston, Texas, which were at or near the end of their respective lease terms, when the Company decided not to
re-open.
|
Thirteen Weeks
|
Thirteen Weeks
|
|||||||||||||||
Ended
|
Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
|||||||||||||||
Net income (loss)
|
$ | 10,585 | 3.3 | % | $ | (48,043 | ) | -44.1 | % | |||||||
Interest expense, net
|
13,423 | 8,213 | ||||||||||||||
Loss on debt extinguishment / refinancing
|
2,829 | 904 | ||||||||||||||
Benefit for income taxes
|
(2,368 | ) | (17,117 | ) | ||||||||||||
Depreciation and amortization expense
|
34,381 | 34,384 | ||||||||||||||
EBITDA
|
58,850 | 18.5 | % | (21,659 | ) | -19.9 | % | |||||||||
Loss on asset disposal
|
377 | 124 | ||||||||||||||
Share-based compensation
|
3,778 | 2,999 | ||||||||||||||
Pre-opening
costs
|
2,092 | 2,570 | ||||||||||||||
Other costs (1)
|
3,112 | (5 | ) | |||||||||||||
Adjusted EBITDA
|
$ | 68,209 | 21.5 | % | $ | (15,971 | ) | -14.6 | % | |||||||
(1)
|
Primarily represents costs related to currency transaction (gains) or losses. The third quarter of fiscal 2021 includes a $3,230 severance obligation to the Company's former Chief Executive Officer, who terminated his service in this position effective September 30, 2021.
|
Thirteen Weeks
|
Thirteen Weeks
|
|||||||||||||||
Ended
|
Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
|||||||||||||||
Operating income (loss)
|
$ | 24,469 | 7.7 | % | $ | (56,043 | ) | -51.4 | % | |||||||
General and administrative expenses
|
22,104 | 11,746 | ||||||||||||||
Depreciation and amortization expense
|
34,381 | 34,384 | ||||||||||||||
Pre-opening
costs
|
2,092 | 2,570 | ||||||||||||||
Store Operating Income Before Depreciation and Amortization
|
$ | 83,046 | 26.1 | % | $ | (7,343 | ) | -6.7 | % | |||||||
Thirteen Weeks
|
Thirteen Weeks
|
|||||||
Ended
|
Ended
|
|||||||
October 31, 2021
|
November 1, 2020
|
|||||||
New store and operating initiatives
|
$ | 20,616 | $ | 7,700 | ||||
Games
|
195 | 361 | ||||||
Maintenance capital
|
8,402 | 1,208 | ||||||
Total capital additions
|
$ | 29,213 | $ | 9,269 | ||||
Payments from landlords
|
$ | 5,717 | $ | 4,709 |
Thirteen Weeks Ended
|
||||||||||||
October 31, 2021
|
November 1, 2020
|
Change
|
||||||||||
Total revenues
|
$ | 317,976 | $ | 109,052 | $ | 208,924 | ||||||
Total store operating weeks
|
1,854 | 1,221 | 633 | |||||||||
Comparable store revenues
|
$ | 259,206 | $ | 89,592 | $ | 169,614 | ||||||
Comparable store operating weeks
|
1,482 | 993 | 489 | |||||||||
Noncomparable store revenues
|
$ | 55,356 | 20,092 | $ | 35,264 | |||||||
Noncomparable store operating weeks
|
372 | 228 | 144 | |||||||||
Other revenues and deferrals
|
$ | 3,414 | $ | (632 | ) | $ | 4,046 |
Thirty-Nine Weeks
|
Thirty-Nine Weeks
|
|||||||||||||||
Ended
|
Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
|||||||||||||||
Food and beverage revenues
|
$ | 316,511 | 32.9 | % | $ | 119,268 | 37.3 | % | ||||||||
Amusement and other revenues
|
644,443 | 67.1 | 200,423 | 62.7 | ||||||||||||
Total revenues
|
960,954 | 100.0 | 319,691 | 100.0 | ||||||||||||
Cost of food and beverage (as a percentage of food and beverage revenues)
|
86,366 | 27.3 | 32,667 | 27.4 | ||||||||||||
Cost of amusement and other (as a percentage of amusement and other revenues)
|
63,729 | 9.9 | 21,997 | 11.0 | ||||||||||||
Total cost of products
|
150,095 | 15.6 | 54,664 | 17.1 | ||||||||||||
Operating payroll and benefits
|
209,897 | 21.8 | 85,197 | 26.6 | ||||||||||||
Other store operating expenses
|
292,883 | 30.5 | 229,137 | 71.8 | ||||||||||||
General and administrative expenses
|
57,665 | 6.0 | 35,587 | 11.1 | ||||||||||||
Depreciation and amortization expense
|
104,355 | 10.9 | 104,896 | 32.8 | ||||||||||||
Pre-opening
costs
|
5,427 | 0.6 | 8,781 | 2.7 | ||||||||||||
Total operating costs
|
820,322 | 85.4 | 518,262 | 162.1 | ||||||||||||
Operating income (loss)
|
140,632 | 14.6 | (198,571 | ) | (62.1 | ) | ||||||||||
Interest expense, net
|
41,971 | 4.3 | 22,491 | 7.0 | ||||||||||||
Loss on debt extinguishment / refinancing
|
2,829 | 0.3 | 904 | 0.3 | ||||||||||||
Income (loss) before provision (benefit) for income taxes
|
95,832 | 10.0 | (221,966 | ) | (69.4 | ) | ||||||||||
Provision (benefit) for income taxes
|
12,842 | 1.4 | (71,777 | ) | (22.4 | ) | ||||||||||
Net income (loss)
|
$ | 82,990 | 8.6 | % | $ | (150,189 | ) | (47.0 | )% | |||||||
Change in comparable store sales (1)
|
195.8 | % | (70.2 | )% | ||||||||||||
Company-owned stores at end of period (1)
|
143 | 137 | ||||||||||||||
Comparable stores at end of period (1)
|
114 | 114 |
(1)
|
As of the end of the third quarter of fiscal 2020, 104 of our 137 total stores and 84 of our 114 comparable stores were open and operating in limited capacity. Our comparable store count as of the end of the third quarter of fiscal 2020 excludes a store in Chicago, Illinois and a store in Houston, Texas, which were at or near the end of their respective lease terms, when the Company decided not to
re-open.
|
Thirty-Nine Weeks
|
Thirty-Nine Weeks
|
|||||||||||||||
Ended
|
Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
|||||||||||||||
Net income (loss)
|
$ | 82,990 | 8.6 | % | $ | (150,189 | ) | -47.0 | % | |||||||
Interest expense, net
|
41,971 | 22,491 | ||||||||||||||
Loss on debt extinguishment / refinancing
|
2,829 | 904 | ||||||||||||||
Provision (benefit) for income taxes
|
12,842 | (71,777 | ) | |||||||||||||
Depreciation and amortization expense
|
104,355 | 104,896 | ||||||||||||||
EBITDA
|
244,987 | 25.5 | % | (93,675 | ) | -29.3 | % | |||||||||
Loss on asset disposal
|
634 | 541 | ||||||||||||||
Impairment of long-lived assets and lease termination costs
|
- | 13,727 | ||||||||||||||
Share-based compensation
|
9,936 | 5,344 | ||||||||||||||
Pre-opening
costs
|
5,427 | 8,781 | ||||||||||||||
Other costs (1)
|
3,082 | 54 | ||||||||||||||
Adjusted EBITDA
|
$ | 264,066 | 27.5 | % | $ | (65,228 | ) | -20.4 | % | |||||||
(1)
|
Primarily represents costs related to currency transaction (gains) or losses. The third quarter of fiscal 2021 includes a $3,230 severance obligation to the Company's former Chief Executive Officer, who terminated his service in this position effective September 30, 2021.
|
Thirty-Nine Weeks
|
Thirty-Nine Weeks
|
|||||||||||||||
Ended
|
Ended
|
|||||||||||||||
October 31, 2021
|
November 1, 2020
|
|||||||||||||||
Operating income (loss)
|
$ | 140,632 | 14.6 | % | $ | (198,571 | ) | -62.1 | % | |||||||
General and administrative expenses
|
57,665 | 35,587 | ||||||||||||||
Depreciation and amortization expense
|
104,355 | 104,896 | ||||||||||||||
Pre-opening
costs
|
5,427 | 8,781 | ||||||||||||||
Store Operating Income Before Depreciation and Amortization
|
$ | 308,079 | 32.1 | % | $ | (49,307 | ) | -15.4 | % | |||||||
Thirty-Nine Weeks
|
Thirty-Nine Weeks
|
|||||||
Ended
|
Ended
|
|||||||
October 31, 2021
|
November 1, 2020
|
|||||||
New store and operating initiatives
|
$ | 40,372 | $ | 48,222 | ||||
Games
|
12,809 | 9,079 | ||||||
Maintenance capital
|
16,692 | 2,988 | ||||||
Total capital additions
|
$ | 69,873 | $ | 60,289 | ||||
Payments from landlords
|
$ | 7,802 | $ | 8,723 |
Thirty-Nine Weeks Ended
|
||||||||||||
October 31, 2021
|
November 1, 2020
|
Change
|
||||||||||
Total revenues
|
$ | 960,954 | $ | 319,691 | $ | 641,263 | ||||||
Total store operating weeks
|
5,304 | 2,682 | 2,622 | |||||||||
Comparable store revenues
|
$ | 794,033 | $ | 268,426 | $ | 525,607 | ||||||
Comparable store operating weeks
|
4,243 | 2,184 | 2,059 | |||||||||
Noncomparable store revenues
|
$ | 179,603 | 54,763 | $ | 124,840 | |||||||
Noncomparable store operating weeks
|
1,061 | 498 | 563 | |||||||||
Other revenues and deferrals
|
$ | (12,682 | ) | $ | (3,498 | ) | $ | (9,184 | ) |
• |
sold shares of our common stock, generating gross proceeds of $185,600;
|
• |
negotiated two amendments with our lenders, resulting in an extension of the maturity date of our revolving credit facility to August 17, 2024 and relief from testing compliance with certain financial covenants until the last day of the fiscal quarter ending on May 1, 2022;
|
• |
issued $550,000 of senior secured notes, maturing November 1, 2025; and
|
• |
negotiated with our landlords, vendors, and other business partners to temporarily reduce our lease and contract payments and obtain other concessions. During fiscal 2020, a total of 126 initial rent relief agreements related to our operating locations and corporate headquarters were initially executed, which generally provide for full deferral for three months beginning April 2020, with partial deferral continuing for periods of up to six months, at approximately 50% of those locations. As the
COVID-19
pandemic continued to impact our business into the fourth quarter, the Company renewed negotiations with the majority of these landlords in order to provide additional rent relief, generally seeking to delay or extend the terms of deferral pay back periods and/or provide rent relief beyond the periods in the initial agreements. The second phase of negotiations resulted in 99 additional rent relief agreements, the last of which were executed in the third quarter of fiscal 2021.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description
|
|
10.1* | Transition and Separation Agreement and Release by and between Brian A. Jenkins and Dave & Buster's Entertainment, Inc. and Dave & Buster's Management Corporation. | |
10.2* | Interim CEO Letter Agreement by and between Kevin Sheehan and Dave & Buster's Entertainment, Inc. and Dave & Buster's Management Corporation. | |
10.3* | Form of Restricted Stock Unit Agreement by and between Kevin Sheehan and Dave & Buster's Entertainment, Inc. | |
10.4* | Form of Restricted Stock Unit Agreement by and between Kevin Sheehan and Dave & Buster's Entertainment, Inc. | |
31.1* | Certification of Kevin Sheehan, Interim Chief Executive Officer of the Registrant, pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a). | |
31.2* | Certification of Scott J. Bowman, Chief Financial Officer of the Registrant, pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a). | |
32.1* | Certification of Kevin Sheehan, Interim Chief Executive Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2* | Certification of Scott J. Bowman, Chief Financial Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS | XBRL Inline Instance Document-the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
101.SCH | XBRL Inline Taxonomy Extension Schema Document | |
101.CAL | XBRL Inline Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Inline Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Inline Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Inline Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
* |
Filed herein
|
DAVE & BUSTER'S ENTERTAINMENT, INC.,
a Delaware corporation
|
|||||
Date: December 7, 2021 | By: | /s/ Kevin Sheehan | |||
Kevin Sheehan | |||||
Interim Chief Executive Officer | |||||
Date: December 7, 2021 | By: | /s/ Scott J. Bowman | |||
Scott J. Bowman | |||||
Chief Financial Officer |