Quarterly Report for Quarter Ending July 31, 2022 (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form

(Mark One)

FOR THE QUARTERLY PERIOD ENDED July 31, 2022

OR

FOR THE TRANSITION PERIOD FROM TO

Commission File

Dave & Buster's Entertainment, Inc.

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in of the Exchange Act). Yes ☐ No ☒

As of September 1, 2022, the registrant had 48,235,675 shares of common stock, $0.01 par value per share, outstanding.

DAVE & BUSTER'S ENTERTAINMENT, INC.

FORM FOR QUARTERLY PERIOD ENDED JULY 31, 2022

TABLE OF CONTENTS

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PART I - FINANCIAL INFORMATION

DAVE & BUSTER'S ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

See accompanying notes to consolidated financial statements.

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		Thirteen Weeks			Thirteen Weeks
	Ended			Ended
	July 31, 2022			August 1, 2021
Food and beverage revenues		$	156,995			$	123,006
Amusement and other revenues			311,364				254,632
Total revenues			468,359				377,638
Cost of food and beverage			46,461				33,127
Cost of amusement and other			29,075				24,584
Total cost of products			75,536				57,711
Operating payroll and benefits			113,674				80,623
Other store operating expenses			142,440				105,116
General and administrative expenses			37,710				18,470
Depreciation and amortization expense			38,614				34,875
Pre-opening costs			3,913				1,676
Total operating costs			411,887				298,471
Operating income			56,472				79,167
Interest expense, net			17,118				13,728
Loss on debt refinancing			1,479				-
Income before provision for income taxes			37,875				65,439
Provision for income taxes			8,787				12,669
Net income			29,088				52,770
Unrealized foreign currency translation gain (loss)			19				(15	)
Unrealized gain on derivatives, net of tax			1,372				1,372
Total other comprehensive income			1,391				1,357
Total comprehensive income		$	30,479			$	54,127
Net income per share:
Basic		$	0.60			$	1.10
Diluted		$	0.59			$	1.07
Weighted average shares used in per share calculations:
Basic			48,831,639				48,178,611
Diluted			49,271,521				49,229,817

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DAVE & BUSTER'S ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

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See accompanying notes to consolidated financial statements.

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DAVE & BUSTER'S ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

See accompanying notes to consolidated financial statements.

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DAVE & BUSTER'S ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

(in thousands, except share amounts)

See accompanying notes to consolidated financial statements.

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DAVE & BUSTER'S ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

See accompanying notes to consolidated financial statements.

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Table of Contents

291,678 164,811 177,847 134,177 Basic weighted average shares outstanding are reconciled to diluted weighted average shares outstanding as follows:

- We reviewed the accounting pronouncements that became effective for our fiscal year 2022 and determined that either they were not applicable, or they did not have a material impact on the consolidated financial statements. We also reviewed the recently issued accounting pronouncements to be adopted in future periods and determined that they are not expected to have a material impact on the consolidated financial statements.

Note 2: Business Combinations

The Main Event Acquisition was made at a price above the determined fair value of the acquired identifiable net assets, resulting in goodwill, primarily due to expectations of the synergies that will be realized by combining the businesses and the benefits that will be gained from the assembled workforce. These synergies include the elimination of redundant facilities, functions, and staffing. None of the goodwill recorded from this business combination is expected to be tax deductible.

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The preliminary allocation of the purchase price for the Acquisition was based on estimates of the fair value of the net assets acquired and are subject to adjustment for up to one year upon finalization, largely with respect to acquired property and equipment; lease assets and liabilities; deferred taxes; and contingent consideration. Measurements of these items inherently require significant estimates and assumptions considered to be Level Three fair value estimates.

		Amount			Useful Life(Yrs)
Favorable/unfavorable lease contracts, net		$	8,694				5-10
Tradenames			111,100				Indefinite
Total acquisition-related intangible assets		$	119,794

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		Thirteen Weeks Ended			Twenty-six Weeks Ended
		July 31, 2022			August 1, 2021			July 31, 2022			August 1, 2021
Revenues		$	544,554			$	486,769			$	1,120,074			$	841,351
Net i ncome		$	12,621			$	53,687			$	84,822			$	69,572

Balance at January 31, 2021		$	272,597
Currency adjustment			-
Balance at January 30, 2022			272,597
Currency adjustment			2
Acquisition of Main Event			456,065
Balance at July 31, 2022		$	728,664

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		July 31, 2022			January 30, 2022
		Gross Amount			Accumulated Amortization			Net Amount			Gross Amount			Accumulated Amortization			Net Amount
Favorable/unfavorable lease contracts, net		$	8,694			$	(84	)		$	8,610			$	-			$	-			$	-
Tradenames (indefinite lived)		$	190,100				N/A				N/A			$	79,000				N/A				N/A

Remainder of 2022		$	505
2023		$	1,011
2024		$	1,011
2025		$	1,011
2026		$	1,011

Note 4: Accrued Liabilities

Accrued liabilities consist of the following as of the end of each period:

Note 5: Leases

We currently lease most of the buildings or sites for our stores, store support centers, and warehouse space under facility operating leases. These leases typically have initial terms ranging from ten to twenty years and include one or more options to renew. When determining the lease term, we include option periods for which renewal is reasonably certain. Most of the leases require us to pay property taxes, insurance, and maintenance of the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating leases also includes certain equipment leases that have a term in excess of one year. Certain facility leases also have provisions for additional contingent rentals based on revenues.

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Table of Contents

		Thirteen Weeks Ended			Twenty-Six Weeks Ended
		July 31, 2022			August 1, 2021			July 31, 2022			August 1, 2021
Operating lease cost		$	38,824			$	33,297			$	73,606			$	66,591
Variable lease cost			9,023				7,241				18,870				14,630
Short-term lease cost			195				187				312				310
Amortization of favorable/unfavorable lease contracts, net			84				-				84				-
Total		$	48,126			$	40,725			$	92,872			$	81,531

Remainder of 2022		$	87,998
2023			191,510
2024			191,626
2025			192,813
2026			194,074
Thereafter			1,786,702
Total future operating lease liability		$	2,644,723
Less: interest			(971,763	)
Present value of operating lease liabilities		$	1,672,960

Table of Contents

Our debt agreements contain restrictive covenants that, among other things, place certain limitations on our ability to incur additional indebtedness, make loans or advances to subsidiaries and other entities, pay dividends, acquire other businesses or sell assets. The Credit Facility also requires the Company to maintain a maximum net total leverage ratio, as defined, as of the end of each fiscal quarter, beginning with the Company's first full fiscal quarter after the Closing Date.

		Thirteen Weeks Ended			Twenty-six Weeks Ended
		July 31, 2022			August 1, 2021			July 31, 2022			August 1, 2021
Stock options		$	307				84			$	568				358
Restricted stock units			4,391				3,103				7,685				5,800
Share-based compensation expense		$	4,698			$	3,187			$	8,253			$	6,158

		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 30, 2022			933,379			$	42.50				73,554			$	8.33
Granted			188,793				36.49				-				-
Exercised			(160,091	)			34.95				(6,059	)			8.69
Forfeited			(8,847	)			57.33				-				-
Outstanding at July 31, 2022			953,234			$	42.43				67,495			$	8.30
Exercisable at July 31, 2022			764,441			$	43.90				67,495			$	8.30

					Wtd. Avg.
		Shares			Fair Value
Outstanding at January 30, 2022			922,799			$	24.88
Granted			824,972				39.77
Performance adjusted units			11,808				46.75
Vested			(484,492	)			22.56
Forfeited			(54,106	)			50.51
Outstanding at July 31, 2022			1,220,981			$	34.94

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read together with the accompanying unaudited consolidated financial statements and the related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our Annual Report on Form as filed with the Securities and Exchange Commission ("SEC") on March 29, 2022. Unless otherwise specified, the meanings of all defined terms in "Management's Discussion and Analysis of Financial Condition and Results of Operations" are consistent with the meanings of such terms as defined in the Notes to Unaudited Consolidated Financial Statements. This discussion contains statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 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 report 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 quarterly report as a result of various factors, including those set forth in the section entitled "Risk Factors" in our Annual Report on Form filed with the SEC on March 29, 2022. 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 Form such results or developments may not be indicative of results or developments in subsequent periods.

Recent Events

On June 29, 2022, the Company completed its previously announced Main Event Acquisition. As of July 31, 2022, there were 49 family entertainment centers under the name Main Event and 3 family entertainment centers under the name The Summit (collectively referred to as "Main Event"), operating in seventeen states. Refer to Note 2, , to the Unaudited Consolidated Financial Statements for further details.

Quarterly Financial Highlights

General

We are a leading owner and operator of high-volume venues in North America that combine dining and entertainment for both adults and families under the names "Dave & Buster's" and "Main Event". The core of our concept is to offer our customers the opportunity to "Eat Drink Play and Watch" all in one location. Eat and Drink are offered through a full menu of entrées and appetizers and a full selection of and alcoholic beverages. Our Play and Watch offerings provide an extensive assortment of

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entertainment attractions centered around playing games, bowling, and watching live sports and other televised events. Our brands appeal to a relatively balanced mix of male and female adults, as well as families and teenagers. We believe we appeal to a diverse customer base by providing a highly customizable experience in a dynamic and fun setting.

Our Dave & Buster's stores, which average 40,000 square feet, range in size between 16,000 and 70,000 square feet. Our Main Event stores, which average 54,000 square feet, range in size between 46,000 and 74,000 square feet. Generally, our stores are open seven days a week, with normal hours of operation generally from between 10:00 to 11:30 a.m. until midnight, with stores typically open for extended hours on weekends.

Key Measures of Our Performance

We monitor and analyze several key performance measures to manage our business and evaluate financial and operating performance. These measures include:

Comparable store sales are a comparison of sales to the same period of prior years for the comparable store base. We historically define the comparable store base to include those stores open for a full 18 months before the beginning of the fiscal year and excluding stores permanently closed during the period. Due to the limitations of store operations during the pandemic, the comparable store base for fiscal 2022 is defined as stores open for a full 18 months before the beginning of fiscal 2020 and excludes two stores that the Company elected not to reopen after they were closed in March 2020 due to local operating limitations and one store in Cary, North Carolina that was closed and relocated during the fourth quarter of fiscal 2021. For the first and second quarter of fiscal 2022, our comparable store base consisted of 113 stores. Our Main Event stores were not included in comparable store sales for the thirteen and weeks ended July 31, 2022.

Our ability to expand our business and reach new customers is influenced by the opening of additional stores in both new and existing markets. The success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models. Between August 1, 2021 and July 31, 2022, we closed and relocated one Dave & Buster's store and opened an additional six new Dave & Buster's stores.

Financial Measures

In addition to the results provided in accordance with generally accepted accounting principles ("GAAP"), we provide measures which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include Adjusted EBITDA, Adjusted EBITDA Margin, Store Operating Income Before Depreciation and Amortization and Store Operating Income Before Depreciation and Amortization Margin (defined below). These measures do not represent and should not be considered as an alternative to net income or cash flows from operations, as determined in accordance with GAAP, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Although we use these measures to assess the operating performance of our business, they have significant limitations as an analytical tool because they exclude certain material costs. For example, Adjusted EBITDA does not take into account a number of significant items, including our interest expense and depreciation and amortization expense. In addition, Adjusted EBITDA excludes and other costs which may be important in analyzing our GAAP results. Because Adjusted EBITDA does not account for these expenses, its utility as a measure of our operating performance has material limitations. Our calculations of Adjusted EBITDA adjust for these amounts because they vary from period to period and do not directly relate to the ongoing operations of the currently underlying business of our stores and therefore complicate comparison of underlying business between periods. Nevertheless, because of the limitations described above, management does not view Adjusted EBITDA or Store Operating Income Before Depreciation and Amortization in isolation and also uses other measures, such as revenues, gross margin, operating income and net income, to measure operating performance.

. We define "Adjusted EBITDA" as net income (loss) plus interest expense, net, loss on debt extinguishment or refinancing, provision (benefit) for income taxes, depreciation and amortization expense, loss on asset disposal, impairment of long-lived assets, share-based compensation, costs, currency transaction (gains) losses and other costs. "Adjusted EBITDA Margin" is defined as Adjusted EBITDA divided by total revenues.

Adjusted EBITDA is presented because we believe that it provides useful information to investors and analysts regarding our operating performance. By reporting Adjusted EBITDA, we provide a basis for comparison of our business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance.

We define "Store Operating Income Before Depreciation and Amortization" as operating income (loss) plus depreciation and amortization expense, general and administrative expenses and costs. "Store Operating Income Before Depreciation and Amortization Margin" is defined as Store Operating Income Before

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Depreciation and Amortization divided by total revenues. Store Operating Income Before Depreciation and Amortization Margin allows us to evaluate operating performance of each store across stores of varying size and volume.

We believe that Store Operating Income Before Depreciation and Amortization is another useful measure in evaluating our operating performance because it removes the impact of general and administrative expenses, which are not incurred at the store-level, and the costs of opening new stores, which are at the store-level, and thereby enables the comparability of the operating performance of our stores for the periods presented. We also believe that Store Operating Income Before Depreciation and Amortization is a useful measure in evaluating our operating performance within the entertainment and dining industry because it permits the evaluation of store-level productivity, efficiency, and performance, and we use Store Operating Income Before Depreciation and Amortization as a means of evaluating store financial performance compared with our competitors. However, because this measure excludes significant items such as general and administrative expenses and costs, as well as our interest expense, net and depreciation and amortization expense, which are important in evaluating our consolidated financial performance from period to period, the value of this measure is limited as a measure of our consolidated financial performance.

Presentation of Operating Results

We operate on a 52 or fiscal year that ends on the Sunday after the Saturday closest to January 31. Each quarterly period has 13 weeks, except in a year when the fourth quarter has 14 weeks. All references to the second quarter of 2022 relate to the period ended July 31, 2022. All references to the second quarter of 2021 relate to the period ended August 1, 2021. All references to the second quarter of 2019 relate to the period ended August 4, 2019. Fiscal 2022, fiscal 2021 and fiscal 2019 consist of 52 weeks. All dollar amounts are presented in thousands, unless otherwise noted, except share and per share amounts.

Store-Level Variability, Quarterly Fluctuations, Seasonality and Inflation

We have historically operated stores varying in size and have experienced significant variability among stores in volumes, operating results and net investment costs.

Our new stores historically open with sales volumes in excess of their expected long-term levels, which we refer to as a "honeymoon" effect. We traditionally expect our new store sales volumes in year two to be approximately 10% to 20% lower than our year one targets, and to grow in line with the rest of our comparable store base thereafter. As a result of the substantial revenues associated with each new store, the number and timing of new store openings may result in significant fluctuations in quarterly results.

In the first year of operation new store operating margins (excluding expenses) typically benefit from honeymoon sales leverage on occupancy, management labor, and other fixed costs. This benefit is partially offset by normal inefficiencies in hourly labor and other costs associated with establishing a new store. In year two, operating margins may decline due to the loss of honeymoon sales leverage on fixed costs which is partially offset by improvements in store operating efficiency. Furthermore, rents in our new stores are typically higher than our comparable store base.

Our operating results fluctuate significantly due to seasonal factors. Typically, we have higher revenues associated with spring and holidays which will continue to be susceptible to the impact of severe or unseasonably mild weather on customer traffic and sales during that period. Our third quarter, which encompasses the fall season, has historically had lower revenues as compared to the other quarters.

We expect that economic and environmental conditions and changes in regulatory legislation will continue to exert pressure on both supplier pricing and consumer spending related to entertainment and dining alternatives. Although there is no assurance that our cost of products will remain stable or that federal, state, or local minimum wage rates will not increase beyond amounts currently legislated, the effects of any supplier price increase or wage rate increases might be partially offset by selected menu price increases if competitively appropriate. In addition, how quickly, and to what extent, normal economic and operating conditions can resume cannot be predicted, and the resumption of normal business operations may be delayed or constrained by lingering effects of the pandemic on us or our suppliers, third-party service providers, and/or customers.

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Thirteen Weeks Ended July 31, 2022 Compared to Thirteen Weeks Ended August 1, 2021

The following table sets forth selected data, in thousands of dollars and as a percentage of total revenues (unless otherwise noted) for the periods indicated. All information is derived from the accompanying unaudited consolidated statements of comprehensive income.

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Reconciliations of Financial Measures

Adjusted EBITDA

The following table reconciles (in dollars and as a percent of total revenues) Net income to Adjusted EBITDA for the periods indicated:

Store Operating Income Before Depreciation and Amortization

The following table reconciles (in dollars and as a percent of total revenues) Operating income to Store Operating Income Before Depreciation and Amortization for the periods indicated:

Capital Additions

The table below reflects accrual-based capital additions. Capital additions do not include any reductions for accrual-based leasehold improvement incentives or proceeds from sale-leaseback transactions (collectively, "Payments from landlords").

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Results of Operations

Revenues

In March 2020, a novel strain of coronavirus outbreak was declared a global pandemic and a National Public Health Emergency. Shortly after the national emergency declaration, state and local officials began placing restrictions on businesses, some of which allowed or curbside service only while others limited capacity in the dining room or arcade "(Midway"). By March 20, 2020, all our 137 operating stores were temporarily closed. On April 30, 2020, our first store to the public, and by the end of fiscal 2020, 107 of our 140 stores were open and operating. These stores were operating with a combination of limited menus, reduced dining room seating, reduced game availability in the Midway, reduced operating hours and other restrictions referred to as "limited operations" or "operating in limited capacity." As of the end of the first quarter of fiscal 2021, 138 of our 141 stores were operating in some limited capacity. The Company the remaining stores that had been temporarily closed by the end of the second quarter of fiscal 2021. During the first quarter of fiscal 2022 any remaining local related operating restrictions on stores were removed.

On June 29, 2022, the Company completed the Main Event Acquisition, acquiring 49 Main Event and 3 The Summit stores.

Selected revenue and store data for the periods indicated are as follows:

Total revenues increased $90,721, or 24.0%, to $468,359 in the second quarter of fiscal 2022 compared to total revenues of $377,638 in the second quarter of fiscal 2021. The increase in revenue is attributable to $51,405 in revenue from our Main Event stores, an additional 70 new Dave & Buster's store operating weeks, and a 5.7% increase in comparable store sales. The table below represents our revenue mix for the fiscal periods indicated. The shift in mix from amusement sales to food and beverage sales of 90 basis points is due, in part, to increased special events, beverage price increases during the second quarter of fiscal 2022, and food price increases effective midway through the third quarter of fiscal 2021.

Comparable store revenue increased $17,961 or 5.7%, in the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021, due to the reasons noted above, including a 1.7% increase in comparable store operating weeks. Comparable store sales in the second quarter of fiscal 2022 increased 9.6% compared to the second quarter of fiscal 2019.

Food sales at comparable stores increased by $10,176, or 14.6%, to $79,722 in the second quarter of fiscal 2022 from $69,546 in the second quarter of fiscal 2021. Beverage sales at comparable stores increased by $2,809, or 8.6%, to $35,319 in the second quarter of fiscal 2022 from $32,510 in the 2021 comparison period. Comparable store amusement and other revenues in the second quarter of fiscal 2022 increased by $4,976, or 2.3%, to $218,926 from $213,950 in the comparable period of fiscal 2021.

Dave & Buster's store revenue increased $15,559 in the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021, for the same reasons noted above, including 70 more store operating weeks.

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Cost of products

The total cost of products was $75,536 for the second quarter of fiscal 2022 and $57,711 for the second quarter of fiscal 2021. The total cost of products as a percentage of total revenues increased 80 basis points to 16.1% for the second quarter of fiscal 2022 compared to 15.3% for the second quarter of fiscal 2021.

Cost of food and beverage products increased to $46,461 compared to $33,127 for the second quarter of fiscal 2021. Cost of food and beverage products, as a percentage of food and beverage revenues, increased 270 basis points to 29.6% for the second quarter of fiscal 2022 from 26.9% for the second quarter of fiscal 2021. The unfavorable impacts of commodity cost increases primarily in meat and dairy products during the second quarter of fiscal 2022 were partially offset by food and beverage price increases.

Cost of amusement and other increased to $29,075 in the second quarter of fiscal 2022 compared to $24,584 in the second quarter of fiscal 2021. The costs of amusement and other, as a percentage of amusement and other revenues, decreased 40 basis points to 9.3% for the second quarter of fiscal 2022 from 9.7% in the second quarter of fiscal 2021. This decrease was driven primarily by a change in prices at the game level implemented late in fiscal 2021.

Operating payroll and benefits

Total operating payroll and benefits increased by $33,051, or 41.0%, to $113,674 in the second quarter of fiscal 2022 compared to $80,623 in the second quarter of fiscal 2021. Total operating payroll and benefits for the second quarter of fiscal 2022 included approximately $14,000 of payroll and benefits from our Main Event stores. The total cost of operating payroll and benefits as a percentage of total revenues was 24.3% in the second quarter of fiscal 2022 compared to 21.3% in the second quarter of fiscal 2021. This increase is primarily due to an hourly wage rate increase, offset slightly by lower incentive compensation as the second quarter of fiscal 2021 included referral and retention incentives.

Other store operating expenses

Other store operating expenses increased by $37,324, or 35.5%, to $142,440 in the second quarter of fiscal 2022 compared to $105,116 in the second quarter of fiscal 2021. The increase is primarily due to the addition of operating costs related to our Main Event stores, the impact of new Dave & Buster's store openings, higher security cost, cleaning services and higher marketing spend associated with the " " campaign. Other store operating expense as a percentage of total revenues increased to 30.4% in the second quarter of fiscal 2022 compared to 27.9% in the second quarter of fiscal 2021. This increase in basis points was due primarily to increased security costs, cleaning services, and higher marketing spend.

General and administrative expenses

General and administrative expenses increased by $19,240, or 104.2%, to $37,710 in the second quarter of fiscal 2022 compared to $18,470 in the second quarter of fiscal 2021. The increase in general and administrative expenses was driven primarily by $13,858 of transaction and integration costs related to the Main Event Acquisition, $1,841 impairment of the existing Main Event corporate office asset, an increase in share-based compensation expense, and higher payroll and incentive compensation, including the addition of Main Event store support center personnel. General and administrative expenses, as a percentage of total revenues increased to 8.1% in the second quarter of fiscal 2022 compared to 4.9% in the second quarter of fiscal 2021 due to the reasons noted above.

Depreciation and amortization expense

Depreciation and amortization expense increased to $38,614 in the second quarter of fiscal 2022 compared to $34,875 in the second quarter of fiscal 2021, primarily due to the addition of Main Event. Incremental depreciation for Main Event was partially offset by a net decrease in depreciation expense at Dave & Buster's stores as the impact of assets reaching the end of their depreciable lives exceeded expense increases due to recent capital expenditures for new stores, operating initiatives, games, and maintenance capital.

costs

costs increased by $2,237 to $3,913 in the second quarter of fiscal 2022 compared to $1,676 in the second quarter of fiscal 2021 due largely to an increase in the number of new Dave & Buster's store openings compared to the same time period of the previous year and to a lesser extent, due to the addition of costs related to Main Event stores.

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Interest expense, net and loss on debt refinancing

Interest expense, net increased by $3,390 to $17,118 in the second quarter of fiscal 2022 compared to $13,728 in the second quarter of fiscal 2021 due primarily to an increase in average outstanding debt. The Company recorded a loss of $1,479 related to the June 29, 2022 debt refinancing, which is explained in Note 6 to the Consolidated Financial Statements.

Provision for income taxes

The effective tax rate for the second quarter of fiscal 2022 was 23.2%, compared to 19.4% for the second quarter of fiscal 2021. The previous quarter tax provision includes higher excess tax benefits associated with share-based compensation and credits associated with the reversal of certain tax valuation allowances.

Weeks Ended July 31, 2022 Compared to Weeks Ended August 1, 2021

The following table sets forth selected data, in thousands of dollars and as a percentage of total revenues (unless otherwise noted) for the periods indicated. All information is derived from the accompanying unaudited consolidated statements of comprehensive income.