DAB Dave & Busters

Dave & Buster's, Inc. (NYSE:DAB), a leading operator of upscale restaurant/entertainment complexes, today announced earnings for its first quarter ended May 1, 2005. Total revenue for the first quarter increased 21.9 percent, or $20.8 million, to $115.7 million from $95.0 million in the prior year's comparable quarter. Food and beverage revenue increased 25.2 percent and amusement and other revenue increased 18.3 percent. Revenue from comparable stores decreased 1.7 percent for the quarter. Operating income for the period increased 29.2 percent to $9.0 million compared to $6.9 million last year. EBITDA increased to $18.7 million, or 23.4 percent, from $15.2 million last year. Net income for the quarter was $4.6 million, or $0.30 per diluted share, compared to net income in the same period last year of $3.6 million, or $0.25 per diluted share. "We are pleased with our substantial increase in earnings. These results mark our ninth consecutive quarter of year-over-year profitability improvement," stated Buster Corley, the company's CEO. "While making sustained progress in overall profitability, we remain focused on same store sales improvement. We believe we have the appropriate strategy in place to accomplish this later in the year." "There were costs associated with the Jillian's integration which we expect to be non-recurring," stated W. C. Hammett, the company's CFO. "These costs include items such as training labor and additional food costs related to the new menu roll-out, higher than normal freight costs related to game and equipment transfers and severance and related management relocation costs. We estimate that the impact on total operating expenses for the quarter was approximately $1.0 million." Non-GAAP Financial Measures A reconciliation of EBITDA to net income, the most directly comparable financial measure presented in accordance with GAAP, is set forth in the attachment to this release. The Company will hold a conference call to discuss first quarter results on Tuesday, June 7, 2005, at 11:30 a.m. Eastern Time (10:30 a.m. Central Time). The company plans to release earnings the same day before the market opens. The call will be Webcast by both CCBN and Vcall and can be accessed at Dave & Buster's Web site, www.daveandbusters.com. Individual investors can listen to the call through CCBN's individual investor center, www.companyboardroom.com, or PrecisionIR's Webcast site, www.vcall.com. In addition, investors can access the call by visiting any of the investor sites in the CCBN or PrecisionIR Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, www.streetevents.com. The Webcast will be archived on the company's Web site and available for replay through June 21, 2005. Celebrating over 22 years of operations, Dave & Buster's was founded in 1982 and is one of the country's leading upscale, restaurant/entertainment concepts with 43 locations throughout the United States and in Canada. More information on the company, including the latest investor presentation is available on the company's Website, www.daveandbusters.com. "Safe Harbor" Statements Under the Private Securities Litigation Reform Act of 1995 Certain information contained in this press release includes forward-looking statements. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, projections, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical facts. These statements may be identified, without limitations, by the use of forward-looking terminology such as "may," "will," "anticipates," "expects," "projects," "believes," "intends," "should," or comparable terms or the negative thereof. All forward-looking statements included in this press release are based on information available to us on the date hereof. Such statements speak only as of the date hereof. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the following: our ability to open new high-volume restaurant/entertainment complexes; our ability to raise and access sufficient capital in the future; changes in consumer preferences, general economic conditions or consumer discretionary spending; the outbreak or continuation of war or other hostilities involving the United States; potential fluctuation in our quarterly operating result due to seasonality and other factors; the continued service of key management personnel; our ability to attract, motivate and retain qualified personnel; the impact of federal, state or local government regulations relating to our personnel or the sale of food or alcoholic beverages; the impact of litigation; the effect of competition in our industry; additional costs associated with compliance with the Sarbanes-Oxley Act and related regulations and requirements; and other risk factors described from time to time in our reports filed with the SEC. -0- *T Dave & Buster's, Inc. Consolidated Statements of Income (dollars in thousands, except per share amounts) (unaudited) 13 Weeks Ended 13 Weeks Ended May 1, 2005 May 2, 2004 --------------- --------------- (as restated) Food and beverage revenue $ 61,392 53.0% $49,021 51.6% Amusement and other revenues 54,343 47.0% 45,945 48.4% ------- ------- -------- ------ Total revenues 115,735 100.0% 94,966 100.0% Cost of food and beverage 15,191 13.1% 12,189 12.9% Cost of amusement and other 5,816 5.1% 5,532 5.8% ------- ------- -------- ------ Total cost of product 21,007 18.2% 17,721 18.7% Operating payroll and benefits 32,725 28.3% 26,928 28.4% Other store operating expenses 35,536 30.7% 28,868 30.4% General and administrative expenses 7,692 6.6% 6,299 6.6% Depreciation and amortization expense 9,741 8.4% 8,220 8.7% Preopening costs 78 0.1% - 0.0% ------- ------- -------- ------ Total operating expenses 106,779 92.3% 88,036 92.7% Operating income 8,956 7.7% 6,930 7.3% Interest expense, net 1,773 1.5% 1,478 1.6% ------- ------- -------- ------ Income before provision for income taxes 7,183 6.2% 5,452 5.7% Provision for income taxes 2,622 2.3% 1,852 2.0% ------- ------- -------- ------ Net income $ 4,561 3.9% $ 3,600 3.8% ======= ======= ======== ====== Net income per share Basic $ 0.34 $ 0.27 Diluted $ 0.30 $ 0.25 Weighted average shares outstanding Basic weighted average shares outstanding 13,472 13,205 Diluted weighted average shares outstanding 16,576 16,192 Other information Company operated stores open 43 33 EBITDA, which is earnings before interest, taxes, depreciation and amortization, is used by management, bankers and investors to evaluate a company's ability to repay debt and for compliance of certain debt covenants. Net income $ 4,561 $ 3,600 Add back: depreciation & amortization 9,741 8,220 interest expense, net 1,773 1,478 provision for income taxes 2,622 1,852 -------- --------- EBITDA $18,697 $15,150 Dave & Buster's Inc. Condensed Consolidated Balance Sheets (in thousands) (unaudited) May 1, 2005 Jan. 30,2005 ------------- ------------- Current assets Cash and cash equivalents $ 5,177 $ 7,624 Other current assets 37,126 34,581 ------------- ------------- Total current assets 42,303 42,205 Property and equipment, net 332,111 331,478 Other assets and deferred charges 23,057 23,725 ------------- ------------- $397,471 $397,408 ------------- ------------- LIABILITIES AND STOCKHOLDER'S EQUITY Total current liabilities $ 47,627 $ 49,861 Other long-term liabilities 73,036 70,251 Long-term debt 74,604 80,351 Stockholder's equity Common stock 135 135 Paid in capital 122,723 122,173 Restricted stock awards 1,632 1,454 Accumulated comprehensive income 195 225 Retained earnings 79,365 74,804 ------------- ------------- 204,050 198,791 Less: Treasury stock 1,846 1,846 ------------- ------------- Total stockholders' equity 202,204 196,945 $397,471 $397,408 ------------- ------------- Dave & Buster's, Inc. Consolidated Statements Of Cash Flows (in thousands) (unaudited) 13 Weeks Ended 13 Weeks Ended May 1, 2005 May 2, 2004 -------------- -------------- (as restated) Cash flows from operating activities: Net Income $ 4,561 $ 3,600 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 9,741 8,220 Deferred income tax benefit (166) (152) Tax benefit related to stock options 165 140 Restricted stock awards 178 81 Warrants related to convertible debt 63 63 Other, net (36) (14) Changes in operating assets and liabilities Inventories 280 (700) Prepaid expenses (891) (1,960) Other current assets (1,934) 899 Other assets and deferred charges 1,150 246 Accounts payable (385) (847) Accrued liabilities 825 878 Income taxes payable (2,967) (905) Deferred rent liability 1,064 (240) Other liabilities 1,721 (42) -------------- -------------- Net cash provided by operating activities 13,369 9,267 Cash flows from investing activities: Capital expenditures (10,866) (7,067) Proceeds from sales of property and equipment 17 325 -------------- -------------- Net cash used in investing activities (10,849) (6,742) Cash flows from financing activities: Borrowings under long-term debt - 1,500 Repayments of long-term debt (5,352) (2,833) Proceeds from exercises of stock options 385 761 -------------- -------------- Net cash used in financing activities (4,967) (572) -------------- -------------- Increase (decrease) in cash and cash equivalents (2,447) 1,953 Beginning cash and cash equivalents 7,624 3,897 -------------- -------------- Ending cash and cash equivalents $ 5,177 $ 5,850 ============== ============== *T