UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~FORM~~

Form

10-Q

(Mark One)

☒	QUARTERLY REPORT ~~UNDER~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED October ~~29, 2017~~

31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM
TO

Commission File

No. 001-35664

Dave & Buster’s Entertainment, Inc.

(Exact name of registrant as specified in its charter)


Delaware		35-2382255
(State ~~or Other Jurisdiction~~ of ~~Incorporation or Organization)~~ Incorporation)		(I.R.S. Employer ~~Identification No.)~~ ID)

2481 Mañana Drive, Dallas, Texas, 75220		(214) 357-9588
(Address of principal executive offices) (Zip Code)		(Registrant’s telephone number)

~~2481 Mañana Drive~~

~~Dallas, Texas 75220~~

~~(Address~~

Securities registered pursuant to Section 12(b) of ~~principal executive offices)~~

~~(Zip Code)~~

~~(214)357-9588~~

~~(Registrant’s telephone number, including area code)~~

the Act:


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

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~~

(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 ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation

S-T

(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

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

12b-2

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

Rule 12b-2

of the Exchange Act). Yes ☐ No ☒

As of ~~November 30, 2017, there were 40,694,355~~December 2, 2021, the registrant had 48,422,820 shares of ~~the Issuer’s~~ common stock, $0.01 par value per share, outstanding.

Table of Contents

DAVE & BUSTER’S ENTERTAINMENT, INC.

FORM
10-Q
FOR QUARTERLY PERIOD ENDED OCTOBER ~~29, 2017~~

31, 2021

TABLE OF CONTENTS


		Page
PART I	FINANCIAL INFORMATION

~~ITEM 1.~~	~~FINANCIAL STATEMENTS~~		3

~~ITEM 2.~~ Item 1.	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Financial Statements		163

~~ITEM 3.~~ Item 2.	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Management’s Discussion and Analysis of Financial Condition and Results of Operations		2918

~~ITEM 4.~~ Item 3.	~~CONTROLS AND PROCEDURES~~Quantitative and Qualitative Disclosures About Market Risk		30

~~PART II~~	~~OTHER INFORMATION~~

~~ITEM 1.~~	~~LEGAL PROCEEDINGS~~		30

~~ITEM 1A.~~	~~RISK FACTORS~~		30

~~ITEM 2.~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~		31

~~ITEM 6.~~ Item 4.	~~EXHIBITS~~Controls and Procedures		32

PART II	~~SIGNATURES~~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

Table of Contents

PART I – FINANCIAL INFORMATION

~~ITEM~~

Item 1.

~~FINANCIAL STATEMENTS~~

Financial Statements

DAVE & BUSTER’S ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

   October 29, January 29,
   2017 2017
   (unaudited) (audited)
ASSETS
Current assets:

Cash and cash equivalents
   $ 15,258 $ 20,083
Inventories
   26,107 21,860
Prepaid expenses
   18,221 15,828
Income taxes receivable
   1,611 5,901
Other current assets
   17,916 11,932


Total current assets
   79,113 75,604
Property and equipment (net of $449,572 and $387,505 accumulated depreciation as of October 29, 2017 and January 29, 2017, respectively)
   686,858 606,865
Deferred tax assets
   3,926 2,446
Tradenames
   79,000 79,000
Goodwill
   272,600 272,629
Other assets and deferred charges
   15,700 16,189


Total assets
   $ 1,137,197 $ 1,052,733


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:

Current installments of long-term debt
   $ 15,000 $ 7,500
Accounts payable
   62,444 55,278
Accrued liabilities
   129,287 112,327
Income taxes payable
   396 2,692


Total current liabilities
   207,127 177,797
Deferred income taxes
   12,978 14,497
Deferred occupancy costs
   170,579 147,592
Other liabilities
   21,023 16,767
Long-term debt, net
   299,940 256,628
Commitments and contingencies

Stockholders’ equity:

Common stock, par value $0.01; authorized: 400,000,000 shares; issued: 42,627,975 shares at October 29, 2017 and 42,469,570 shares at January 29, 2017; outstanding: 40,927,386 shares at October 29, 2017 and 42,204,587 shares at January 29, 2017
   426 425
Preferred stock, 50,000,000 authorized; none issued
   —   —
Paid-in capital
   318,379 310,230
Treasury stock, 1,700,589 and 264,983 shares as of October 29, 2017 and January 29, 2017, respectively
   (105,406 ) (14,817 )
Accumulated other comprehensive loss
   (520 ) (723 )
Retained earnings
   212,671 144,337


Total stockholders’ equity
   425,550 439,452


Total liabilities and stockholders’ equity
   $ 1,137,197 $ 1,052,733


	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		0			0
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; NaN issued		0—			0—
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

See accompanying notes to consolidated financial statements.

Table of Contents

DAVE & BUSTER’S ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands, except share and per share amounts)

   Thirteen Weeks Thirteen Weeks
   Ended Ended
   October 29, 2017 October 30, 2016
Food and beverage revenues
   $ 107,690 $ 101,343
Amusement and other revenues
   142,289 127,316


Total revenues
   249,979 228,659
Cost of food and beverage
   28,387 26,560
Cost of amusement and other
   16,220 15,581


Total cost of products
   44,607 42,141
Operating payroll and benefits
   57,967 55,034
Other store operating expenses
   82,766 71,888
General and administrative expenses
   13,432 13,506
Depreciation and amortization expense
   25,672 22,864
Pre-opening costs
   5,609 4,553


Total operating costs
   230,053 209,986


Operating income
   19,926 18,673
Interest expense, net
   2,156 1,578
Loss on debt refinancing
   718 —


Income before provision for income taxes
   17,052 17,095
Provision for income taxes
   4,895 6,340


Net income
   12,157 10,755


Unrealized foreign currency translation loss
   (225 ) (106 )


Total comprehensive income
   $ 11,932 $ 10,649


Net income per share:

Basic
   $ 0.30 $ 0.26
Diluted
   $ 0.29 $ 0.25
Weighted average shares used in per share calculations:

Basic
   41,077,206 42,061,235
Diluted
   42,250,611 43,327,812


	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

See accompanying notes to consolidated financial statements.

Table of Contents

DAVE & BUSTER’S ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands, except share and per share amounts)

   Thirty-Nine Weeks    Thirty-Nine Weeks
   Ended    Ended
   October 29, 2017    October 30, 2016
Food and beverage revenues
   $ 356,190    $ 326,139
Amusement and other revenues
   478,688    408,837




Total revenues
   834,878    734,976
Cost of food and beverage
   91,562    83,772
Cost of amusement and other
   50,481    48,628




Total cost of products
   142,043    132,400
Operating payroll and benefits
   187,610    166,614
Other store operating expenses
   247,663    214,487
General and administrative expenses
   45,172    40,131
Depreciation and amortization expense
   74,447    65,108
Pre-opening costs
   14,626    10,390




Total operating costs
   711,561    629,130




Operating income
   123,317    105,846
Interest expense, net
   6,073    5,573
Loss on debt refinancing
   718    —




Income before provision for income taxes
   116,526    100,273
Provision for income taxes
   31,217    36,845




Net income
   85,309    63,428




Unrealized foreign currency translation gain
   203    180




Total comprehensive income
   $ 85,512    $ 63,608




Net income per share:

Basic
   $ 2.05    $ 1.52
Diluted
   $ 1.99    $ 1.47
Weighted average shares used in per share calculations:

Basic
   41,521,802    41,863,932
Diluted
   42,888,659    43,234,767


	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

DAVE & BUSTER’S ENTERTAINMENT, INC.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share amounts)

         Paid-In
Capital    Accumulated
Other
Comprehensive
Gain (Loss) Retained
Earnings Total

            Treasury Stock
   Common Stock       At Cost
   Shares    Amt.       Shares Amt.
Balance January 29, 2017 (audited)
   42,469,570    $ 425    $ 310,230    264,983 $ (14,817 ) $ (723 ) $ 144,337 $ 439,452
Net income
   —      —      —      —   —   —   85,309 85,309
Unrealized foreign currency translation gain
   —      —      —      —   —   203 —   203
Share-based compensation
   —      —      7,006    —   —   —   —   7,006
Cumulative effect of a change in accounting principle
   —      —      —      —   —   —   782 782
Issuance of common stock
   158,405    1    1,143    —   —   —   —   1,144
Repurchase of common stock
   —      —      —      1,778,484 (109,988 ) —   —   (109,988 )
Issuance of treasury stock
   —      —      —      (342,878 ) 19,399 —   (17,757 ) 1,642








Balance October 29, 2017 (unaudited)
   42,627,975    $ 426    $ 318,379    1,700,589 $ (105,406 ) $ (520 ) $ 212,671 $ 425,550


	Thirteen Weeks Ended October 31, 2021
	Common Stock				Paid-In Capital		Treasury Stock At Cost					Accumulated Other Comprehensive Loss			Retained Earnings		Total
	Shares		Amt.		Paid-In Capital		Shares		Amt.			Accumulated Other Comprehensive Loss			Retained Earnings		Total

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.		Paid-In Capital		Shares		Amt.			Accumulated Other Comprehensive Loss			Retained Earnings			Total


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

See accompanying notes to consolidated financial statements.

Table of Contents

DAVE & BUSTER’S ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~STOCKHOLDERS’ EQUITY (UNAUDITED)

(in ~~thousands)~~

   Thirty-Nine Weeks Thirty-Nine Weeks
   Ended Ended
   October 29,2017 October 30, 2016
Cash flows from operating activities:

Net income
   $ 85,309 $ 63,428
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense
   74,447 65,108
Deferred taxes
   (2,217 ) 4,445
Excess income tax benefit related to share-based compensation plans
   —   (9,124 )
Loss on debt refinancing
   718 —
Loss on disposal of fixed assets
   1,205 987
Share-based compensation
   7,006 4,665
Other, net
   1,034 1,261
Changes in assets and liabilities:

Inventories
   (4,247 ) (1,028 )
Prepaid expenses
   (2,393 ) (2,284 )
Income tax receivable
   4,290 (3,284 )
Other current assets
   (6,647 ) 10,056
Other assets and deferred charges
   (119 ) 1,194
Accounts payable
   2,007 2,972
Accrued liabilities
   17,088 10,855
Income taxes payable
   (2,296 ) 9,059
Deferred occupancy costs
   23,249 14,071
Other liabilities
   2,629 2,169


Net cash provided by operating activities
   201,063 174,550


Cash flows from investing activities:

Capital expenditures
   (150,278 ) (131,284 )
Proceeds from sales of property and equipment
   52 31
Collections of notes receivable
   3,200 800


Net cash used in investing activities
   (147,026 ) (130,453 )


Cash flows from financing activities:

Proceeds from debt
   431,000 68,000
Payments of debt
   (379,750 ) (127,625 )
Payment of debt issuance costs
   (2,910 ) —
Proceeds from the exercise of stock options
   1,144 2,920
Proceeds from issuance of treasury stock
   1,642 77
Repurchase of common stock
   (109,988 ) (7,364 )
Excess income tax benefit related to share-based compensation plans
   —   9,124


Net cash used in financing activities
   (58,862 ) (54,868 )


Decrease in cash and cash equivalents
   (4,825 ) (10,771 )
Beginning cash and cash equivalents
   20,083 25,495


Ending cash and cash equivalents
   $ 15,258 $ 14,724


Supplemental disclosures of cash flow information:

Increase in fixed asset accounts payable
   $ 5,159 $ 18,978
Cash paid for income taxes, net
   $ 31,439 $ 26,606
Cash paid for interest, net
   $ 5,319 $ 5,083

thousands, except share amounts)


	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.		Paid-In Capital		Shares		Amt.			Accumulated Other Comprehensive Loss			Retained Earnings		Total

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.		Paid-In Capital		Shares		Amt.			Accumulated Other Comprehensive Loss			Retained Earnings			Total

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

See accompanying notes to consolidated financial statements.

Table of Contents

DAVE & BUSTER’S ENTERTAINMENT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

Note 1: Summary of Significant Accounting Policies

~~Basis~~

The accompanying unaudited consolidated financial statements include the accounts of ~~presentation~~— Dave & Buster’s Entertainment, Inc. ~~(“D&B Entertainment”) is a Delaware corporation formed in June 2010. References~~(referred to herein as the “Company”, ~~“we”,~~“we,” “us”, and “our” ~~refer to D&B Entertainment,~~), any predecessor companies and its wholly-owned subsidiaries, Dave & Buster’s Holdings, Inc. (“D&B Holdings”), ~~a holding company~~ which owns 100% of the outstanding common stock of Dave & ~~Buster’s,~~Busters, Inc. (“D&B Inc”), the operating company. All intercompany balances and transactions have been eliminated in consolidation. The Company, headquartered in

Dallas, Texas, is a leading operator of high-volume entertainment and dining venues (“stores”) in North America for adults and families under the name “Dave & Buster’s”. The Company operates its business as ~~one~~1 operating and ~~one~~1 reportable segment. ~~As of~~During the thirteen weeks ended October ~~29, 2017,~~31, 2021, we opened 1 new store located in Bellevue, Washington and during the thirty-nine weeks ended October 31, 2021, we opened three new stores. At October 31, 2021, we owned and operated ~~101~~143 stores located in 3440 states, Puerto Rico and ~~one~~1 Canadian province.

The ~~accompanying unaudited consolidated financial statements include~~Company operates on a 52 or

53-week

fiscal year that ends on the ~~accounts of~~Sunday after the ~~Company~~Saturday closest to January 31. Each quarterly period reported has 13 weeks. Fiscal 2021 and ~~its wholly-owned subsidiaries. All intercompany accounts~~2020, which end on January 30, 2022 and ~~transactions have been eliminated in consolidation.~~ January 31, 2021, respectively, contain 52 weeks

The Company’s financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States for interim financial information as prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and ~~footnotes~~notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. The preparation of consolidated financial statements in conformity with GAAP requires us to make certain estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the thirteen and thirty-nine weeks ended October 29, 2017 are not necessarily indicative of results that may be expected for any other interim period or for the year ending February 4, 2018. Our quarterly financial data should be read in conjunction with the audited financial statements and notes thereto for the year ended January ~~29, 2017,~~31, 2021, included in our Annual Report on Form

10-K

as filed with the SEC.

~~We operate~~

COVID-19

Considerations

— On March 11, 2020, the World Health Organization declared the

COVID-19

outbreak to be a global pandemic and on March 13, 2020, the United States declared a ~~52 or 53 week fiscal year~~National Public Health Emergency. As a result, several state and local mandates were implemented that ~~ends~~encouraged the practice of social distancing, placed restrictions from individuals gathering in groups and, in many areas, placed complete restrictions on

non-essential

movement outside of the ~~Sunday~~home. Shortly after the ~~Saturday closest~~ national emergency declaration, state and local officials began placing restrictions on businesses, some of which allowed

To-Go

or curbside service only while others limited capacity in the dining room or midway. By March 20, 2020, all our 137 operating stores were temporarily closed. On April 30, 2020, our first store

re-opened

to ~~January 31. Each quarterly period has 13 weeks, except~~the public, as state and local guidelines began to allow dining rooms and arcades to open at limited capacity and/or limited hours of operation. By the end of fiscal 2020,

107 of our 140 stores were open and operating in limited capacity, including five new stores for which construction had commenced prior to the outbreak of the COVID-19 pandemic. The Company re-opened the remaining

34 stores that had been temporarily

closed by August 1, 2021, the end of the second quarter of fiscal 2021.

As stores were

re-opened

during fiscal 2020, typically in limited capacity, the Company reduced labor and other operating costs. During fiscal 2020, the Company also negotiated with landlords and other vendors to negotiate relief from cash payments under existing lease and trade payable obligations, extending or reducing payment terms with several vendors. Regarding negotiations with landlords, a ~~53 week year when~~total of 126 initial rent relief agreements related to our operating locations and corporate headquarters were executed during fiscal 2020, which generally provided for rent deferrals on all or a portion of rent for up to six months. As the

COVID-19

pandemic continued to impact our business into the fourth quarter, ~~has 14 weeks. Fiscal 2017~~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.

In addition to reducing or deferring expenditures, including capital expenditures and ~~2016,~~discretionary spending, during the first half of fiscal 2020, the Company obtained additional liquidity through the sale of common stock, which ~~end~~resulted in net proceeds of $182,207. On October 27, 2020, D&B Inc completed the private sale of $550,000 in aggregate principal amount of 7.625% senior secured notes due 2025. At the same time, the revolving credit commitments under our existing credit facility were extended through August 17, 2024, and the suspension of our financial ratio covenants was extended until the last day of the first quarter of fiscal year 2022. On September 20, 2021, the Company redeemed $55,000 outstanding principal amount of the senior secured notes. See Note 3, Debt, for more information on ~~February 4, 2018~~these

transactions.

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The measures taken by the Company as well as the

re-opening

of the Company’s stores provide sufficient liquidity to meet estimated cash flow needs and covenant compliance obligations for at least the next twelve months from the issuance of the financial statements. We cannot predict whether, when or the manner in which the conditions surrounding

COVID-19,

particularly as a result of new variants of

COVID-19,

will change, including possible vaccination or mask mandates, capacity restrictions or

re-closures

of our currently open stores and customer engagement with our brand.

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements and for the period then ended. Actual results could differ from those estimates. Operating results for the thirty-nine weeks ended October 31, 2021 are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending January ~~29, 2017, contain 53 and 52 weeks, respectively.~~

30, 2022.

Cash and cash equivalents

— We consider transaction settlements in process from credit card companies and all ~~highly liquid temporary~~highly-liquid investments with original maturities of three months or less to be cash equivalents. Our cash management system provides for the daily funding of all major bank disbursement accounts ~~on a daily basis~~ as checks are presented for payment. Under this system, outstanding checks ~~are~~ in excess of the cash balances at certain banks ~~which~~ creates book overdrafts. ~~Book overdrafts~~A book overdraft of ~~$9,761 and $10,065 are~~$8,168 is presented in “Accounts payable” in the Consolidated Balance Sheets as of January 31, 2021. There was no book overdraft as of October ~~29, 2017 and January 29, 2017, respectively.~~31, 2021. Changes in the book overdraft position are presented within “Net cash provided by (used in)

operating

activities” within the Consolidated Statements of Cash Flows.

~~Other current assets~~~~— The balance includes construction allowance receivables of $8,685 and $7,021 as of October 29, 2017 and January 29, 2017, respectively, related to our new store openings.~~

~~Provision for income taxes~~— The provision for income taxes includes a credit for the tax effect of recognizing excess tax benefits on share-based payments of $11,419 and $0 for the thirty-nine weeks ended October 29, 2017 and October 30, 2016, respectively.

Fair value of financial instruments

— Fair value is defined as the price wethat would ~~receive~~be received to sell an asset or ~~pay~~paid to transfer a liability ~~(exit price)~~ in an orderly transaction between market participants at the measurement ~~date.~~date under current market conditions. In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value as follows: Level One inputs are quoted prices available for identical assets ~~and~~or liabilities in active ~~markets at the measurement date;~~markets; Level Two inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets ~~and~~or liabilities in active ~~markets or other inputs that are observable or can be corroborated by observable market data;~~markets; and Level Three inputs are ~~less observable~~unobservable and reflect ~~our~~management’s own assumptions.

~~Our financial instruments consist~~

The carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, and ~~our credit facility. The carrying amount of cash and cash equivalents, accounts and notes receivable and accounts payable approximates~~other current liabilities approximate fair value because of their ~~short maturities. We believe that the carrying amount of our credit facility approximates its fair value because the interest rates are adjusted regularly based on current market conditions.~~short-term nature. The fair value of the Company’s interest rate swap is determined based upon Level Two inputs which includes valuation models as reported by our counterparties and third-party valuation specialists. These valuation models are based on the present value of expected cash flows using forward rate curves. The fair value of borrowings under our revolving credit facility was $62,114 as of January 31, 2021, and the fair value of our senior secured notes was $527,776 and $576,033 as of October 31, 2021 and January 31, 2021, respectively. The fair value of the Company’s debt is determined ~~to be~~based on a discounted cash flow method, using a sector-specific yield curve based on market-derived, trade price data as of the measurement date, and is classified as a Level Two ~~instrument as defined by GAAP.~~

~~Non-financial~~ ~~assets and liabilities recognized or disclosed at~~input within the fair value ~~in the consolidated financial statements on a nonrecurring basis include such items as~~hierarchy.

The Company also measures certain

non-financial

assets (primarily property and equipment,

right-of-use

(“ROU”) assets, goodwill, tradenames and other ~~assets. These assets are measured~~assets) at fair value ~~if determined to be impaired.~~on a

non-recurring

basis in connection with its periodic evaluations of such assets for potential impairment.

During the thirteen and thirty-nine weeks ended November 1, 2020, the Company recorded an impairment charge for its long-lived assets, including ROU assets, of $0 and $6,746, respectively, primarily driven by the expected impact of the

COVID-19

pandemic on future cash flows of specific stores. During the thirty-nine weeks ended October ~~29, 2017, there~~31, 2021, the Company did not identify triggering events which would require a change in management’s estimate regarding the recoverability of store asset values, and 0 impairment related to our operating stores was recognized. The Company has determined no events and circumstances existed during the thirty-nine weeks ended October 31, 2021 that would indicate it is more likely than not that its goodwill or tradename are impaired. The ultimate severity and longevity of the

COVID-19

pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material.

During the thirteen and thirty-nine weeks ended November 1, 2020, the Company recorded an impairment loss and related contract termination costs of $0 and $6,981 related to projects in development and discussions to terminate several executed lease contracts that had not yet commenced, which is included in “Other store operating expenses” in the Consolidated Statements of Comprehensive Income (Loss). There were no ~~impairments recognized.~~

~~Share repurchase program~~impairment charges related to our potential future sites during the thirty-nine weeks

ended October 31, 2021.

Interest rate swaps

— ~~Our Board~~Effective February

28, 2019, the Company entered into three interest rate swap agreements to manage our exposure to interest rate movements on our variable rate credit facility. The agreements entitle the Company to receive at specified intervals, a variable rate of ~~Directors approved~~interest based on

one-month

LIBOR in exchange for the payment of a ~~share repurchase program, under~~fixed rate of interest throughout the life of the agreements. The notional amount of

the

swap agreements, which mature August 17, 2022, totals $

350,000

and the fixed rate of interest for all agreements is

2.47

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The Company initially designated its interest rate swap agreements as a cash flow hedge and accounted for the underlying activity in accordance with hedge accounting. Effective April 14, 2020, the Company amended its existing credit facility agreement to obtain relief from its financial covenants, and as a result, the variable interest rate terms were modified to create an interest rate floor of 1.00%. Accordingly, and as a result of the then current forward interest rate curve, the Company discontinued the hedging relationship as of April 14, 2020

(de-designation

date). Given the continued existence of the hedged interest payments, the Company is reclassifying its accumulated other comprehensive loss of $17,609 as of the

de-designation

date into “Interest expense, net” using a straight-line approach over the remaining life of the originally designated hedging relationship. The amount of

pre-tax

losses in accumulated other comprehensive loss reclassified into interest expense subsequent to the

de-designation

date was $5,660 and $4,088 for the thirty-nine weeks ended October 31, 2021 and November 1, 2020, respectively, and the Company expects to reclassify $5,975 within the next twelve months. Effective with the

de-designation,

any gain or loss on the derivatives are recognized in earnings in the period in which the ~~Company may repurchase shares on~~change occurs. For the ~~open market, through privately negotiated transactions,~~thirty-nine weeks ended October 31, 2021 and ~~through trading plans designed~~November 1, 2020, a gain of $92 and a

loss of $1,578, respectively, were recognized, which are included in “Other store operating expenses” in the Consolidated Statements of Comprehensive Income (Loss).

Prior to ~~comply with Rule10b5-1~~the

de-designation,

changes in the fair values of the ~~Securities Exchange Act~~interest rate swaps were recorded as a component of ~~1934,~~other comprehensive loss until the interest payments being hedged were recorded as ~~amended. The share repurchase program may be modified, suspended or discontinued~~interest expense, at ~~any time. Effective September 7, 2017,~~which time the amounts in accumulated other comprehensive loss were reclassified as an ~~additional $100,000~~adjustment to interest expense. Cash flows related to the interest rate swaps were included as a component of interest expense and in ~~common shares authorization was approved~~operating activities.

Credit risk related to the failure of our counterparties to perform under the terms of the swap agreements is minimized by entering transactions with carefully selected, credit-worthy parties and the fact that the swap contracts are distributed among several financial institutions to reduce the concentration of credit risk. Our swap agreements with our ~~Board of Directors. As of October 29, 2017,~~derivative counterparties contain a provision where if the Company defaults on any of its indebtedness, and repayment of the indebtedness has ~~a total share repurchase authorization~~been accelerated, the Company could also be declared in default on its derivative obligations.

The following derivative instruments were outstanding as of ~~$300,000 which expires at~~ the end of ~~fiscal 2018.~~the periods indicated:


			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	)

The following table summarizes the activity in accumulated other comprehensive loss related to our derivative instruments:


	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	$	0		$	0		$	—		$	7,602
Loss reclassified into income (1)	$	(1,886	)	$	(1,886	)	$	(5,660	)	$	(4,566	)
Income tax expense (benefit) in accumulated other 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).

Revenue recognition

— Amusement revenues are primarily recognized upon utilization of game play credits on power cards purchased and

used

by customers to activate video and redemption games. Redemption games allow customers to earn tickets, which may be redeemed for prizes in our WIN! area. We have deferred a portion of amusement revenues for the estimated unfulfilled performance obligations based on an estimated rate of future use by customers of unused game play credits and the material right provided to customers to redeem tickets in the future for prizes. During the thirteen and thirty-nine weeks ended October ~~29, 2017,~~31, 2021, we recognized revenue of approximately $12,900 and $37,700, respectively, related to the amount in

deferred

amusement revenue as of the end of fiscal 2020.

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In jurisdictions where we do not have a legal obligation to remit unredeemed gift card balances to a legal authority, we recognize revenue on unredeemed gift cards in proportion to the pattern of redemption by the customers. During the thirteen and thirty-nine weeks ended October 31, 2021, we recognized revenue of approximately $1,200 and $3,000, respectively, related to the amount in deferred gift card revenue as of the end of fiscal 2020,

which approximately $690 and $930, respectively, was breakage

revenue

Stockholders’ equity

— In our consolidated financial statements, the Company ~~purchased 240,342~~treats shares withheld for tax purposes on behalf of our employees in connection with the vesting of time-based and ~~1,778,484~~performance restricted stock units as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. During the thirty-nine weeks ended October 31, 2021 and November 1, 2020, we withheld 179,487 and 58,189 shares of common stock to satisfy $7,775 and $916 of employees’ tax obligations, respectively. The share activity in the thirty-nine weeks ended November 1, 2020 includes the settlements of $2,517 cash obligations through the issuance of 160,540 shares of common stock.

On April 14, 2020, pursuant to an open market sale agreement, the Company sold 6,149,936 shares of its common stock at ~~an average cost~~a price of ~~$48.69 and $61.84~~$12.20 per share, for proceeds of $75,000, prior to deducting offering expenses related to the offering. During May 2020, the Company entered into an underwriting agreement, pursuant to which it sold an additional 10,593,416 shares of its common stock (including shares under an over-allotment option) at a price of $10.44 per share, for proceeds of $110,600, prior to deducting offering costs.

Effective March 18, 2020, the Board of Directors of the Company adopted a

364-day

duration Shareholder Rights Plan (the “Rights Plan”) and declared a dividend of one preferred share purchase right for each outstanding share of common stock to shareholders of record on March 30, 2020 to purchase from the Company one

one-ten

thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company for an exercise price of $45.00, once the rights become exercisable, subject to adjustment as provided in the related rights agreement. The

Rights Plan expired on March 17, 2021.

Earnings per share

— Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the basic weighted average number of common shares outstanding for the reporting period. Diluted net income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted net income (loss) per share, the basic weighted average shares outstanding is increased by the dilutive effect of stock options and restricted share awards. Stock options and restricted share awards with an anti-dilutive effect are not included in the diluted net income (loss) per share calculation. For the thirteen weeks ended October 31, 2021 and November 1, 2020, the Company excluded anti-dilutive awards from the calculation of approximately 236,279 and 1,652,925, respectively. AsFor the thirty-nine weeks ended October 31, 2021 and November 1, 2020, the Company excluded anti-dilutive awards from the calculation of ~~October 29, 2017, we have~~ approximately ~~$161,188 of share repurchase authorization remaining under the current plan.~~

~~Recent~~161,093 and 1,523,945, respectively. Basic weighted average shares outstanding are reconciled to diluted weighted average shares outstanding as follows:

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    0      1,206,711    0
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.

Recently adopted accounting ~~pronouncements~~guidance

—In ~~January 2017,~~December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)~~2017-04,~~ ~~Intangibles – Goodwill and Other~~

2019-12,

Income Taxes (Topic ~~350)~~740): Simplifying the Accounting for Income Taxes

, which ~~eliminates Step 2 from~~removes certain exceptions related to the goodwill impairment test. Under the new standard, annual and interim goodwill impairment tests will compare the fair value of a reporting unit with its carrying amount. An impairment charge will be recognizedapproach for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill. The pronouncement is effective for goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied on a prospective basis. The Company does not expect the adoption will have a material impact on our consolidated financial statements when we perform future annual impairment tests.

~~In August 2016, the FASB issued ASU2016-15,~~ Statement of Cash Flows (Topic 230), which addresses eight specific cash flow issues and is intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

~~In March 2016, the FASB issued ASU2016-09,~~ Improvements to Employee Share-Based Payment Accounting (Topic 718), which simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, as well as classification in the statement of cash flows. The Company adopted the new guidance in the first quarter of fiscal 2017. The ASU’s incomeintraperiod tax ~~aspects also impact~~allocations, the calculation of ~~diluted earnings per share by excluding excess tax benefits from~~income taxes in interim periods, and the ~~calculation~~recognition of ~~assumed proceeds available to repurchase shares under the treasury-stock method. The impact of the new guidance was as follows:~~

~~As a result of the adoption in the first quarter of fiscal 2017, we recorded an adjustment to retained earnings of $782 to recognize~~ deferred ~~tax assets related to certain state net operating loss carryforwards attributable to excess tax benefits in stock compensation that had not been previously recognized in additional paid in capital.~~

~~During the thirteen and thirty-nine weeks ended October 29, 2017, excess tax benefits of $1,285 and $11,419, respectively, were recognized as a benefit in the “Provision~~taxes for ~~Income Taxes” in the Consolidated Statement of Comprehensive Income and classified as a source in operating activities in the Consolidated Statement of Cash Flows.~~

The Company elected to prospectively adopt the effect on the statement of cash flows and accordingly, did not restate the Consolidated Statement of Cash Flows for the thirty-nine weeks ended October 30, 2016.

~~In July 2015, the FASB issued ASU2015-11,~~ ~~Simplifying the Measurement of Inventory (Topic 330), which changes the subsequent measurement of inventory from lower of cost or market to lower of cost and net realizable value.~~taxable goodwill. The Company adopted this standard ~~prospectively,~~as of the beginning ~~January 30, 2017. The~~of fiscal year 2021, and the adoption did not have a material impact on ~~the Company’s~~our consolidated ~~results of operations and~~

financial ~~condition.~~

statements.

Recent accounting pronouncements

— In ~~May 2014,~~March 2020, the FASB issued ~~guidance in~~ ASU~~2014-09,~~ ~~Revenue from Contracts with Customers~~

2020-04,

Reference Rate Reform (Topic ~~606)~~848): Facilitation of the Effects of Reference Reform on Financial Reporting

, which ~~supersedes most~~provides temporary optional expedients and exceptions to the current ~~revenue recognition~~ guidance for contract modifications and ~~outlines a single comprehensive model for entities to use in accounting for revenue. In August 2015, the FASB issued ASU2015-14~~ ~~delaying the effective date for adoption. The update is now effective for interim and annual periods beginning after~~hedging relationships through December ~~15, 2017. The guidance provides a five step framework to recognize revenue to depict the transfer of goods~~31, 2022, that reference LIBOR or ~~services to customers in an amount that reflects the consideration it expects~~another reference rate expected to be ~~entitled to receive~~discontinued because of reference rate reform. A contract modification resulting from reference rate reform may be accounted for as a continuation of the existing contract rather than the creation of a new contract. Additionally, changes in ~~exchange for those goods or services. We intend to apply~~the critical terms of hedging relationships, caused by reference rate reform, should not result in the

de-designation

of the instrument, provided certain criteria are met. Although the Company has swap agreements based on LIBOR rates, the guidance ~~retrospectively with the cumulative effect recognized as of the date of adoption. We do~~is not ~~believe that the new revenue recognition standard will~~expected to have ~~a material~~an impact ~~on our recognition of revenues.~~

~~In February 2016, the FASB issued ASU2016-02,~~ ~~Leases (Topic 842). The new guidance requires the present value of committed operating lease payments to be recorded asright-of-use~~ lease assets and lease liabilities on the balance sheet. As of October 29, 2017, the Company had an estimated $1,400,000 in undiscounted future minimum lease commitments. Enhanced disclosures will also be required to give financial statement users the ability to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance is effective for interim and annual periods beginning after December 15, 2018, using a modified retrospective adoption method and early adoption is permitted. We are currently evaluating the impact of the updated guidance on our consolidated financial ~~statements. We expect~~statements due to the ~~adoption~~

de-designation

of ~~this guidance will result~~our hedging relationships in ~~a material increase in the assets and liabilities on our Consolidated Balance Sheets and will likely have an insignificant impact on our Consolidated Statements~~fiscal 2020.

Table of ~~Comprehensive Income.~~

Contents

Note 2: Accrued Liabilities

Accrued liabilities consist of the following as ~~of:~~

   October 29, 2017    January 29, 2017
Deferred amusement revenue
   $ 30,708    $ 28,305
Compensation and benefits
   19,840    20,886
Amusement redemption liability
   17,599    15,431
Rent
   16,233    14,260
Property taxes
   7,650    4,650
Customer deposits
   5,804    3,003
Deferred gift card revenue
   5,173    6,957
Current portion of long-term insurance
   4,070    4,460
Sales and use taxes
   3,376    3,872
Utilities
   3,332    2,969
Inventory liabilities
   4,070    2,659
Other (refer to Note 4)
   11,432    4,875




Total accrued liabilities
   $ 129,287    $ 112,327

of the end of each period:


	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 .

Note 3: Debt

Long-term debt ~~consists~~consi

ts of the ~~following as of:~~

   October 29, 2017    January 29, 2017
Credit facility - term
   $ 300,000    $ 138,750
Credit facility - revolver
   16,000    126,000




Total debt outstanding
   316,000    264,750
Less:

Current installments - term
   (15,000 )    (7,500 )
Debt issuance costs - term
   (1,060 )    (622 )




Long-term debt, net
   $ 299,940    $ 256,628

following:


	October 31, 2021			January 31, 2021

Senior secured notes	$	495,000		$	550,000
Credit facility - revolver		0			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

On ~~August 17, 2017, we entered into a~~October 27, 2020, the Company issued $550,000 aggregate principal amount of 7.625% senior secured ~~credit facility that provides a $300,000 term loan facility~~notes (the “Notes”). Interest on the Notes accrues from October 27, 2020 and ~~a $500,000 revolving credit facility~~is payable in arrears on November 1 and May 1 of each year, commencing on May 1, 2021. The Notes mature on November 1, 2025, unless earlier redeemed, and are subject to the terms and conditions set forth in the related indenture. Prior to November 1, 2022, but not more than once during any twelve-month period commencing with ~~a maturity~~the issue date of ~~August 17, 2022.~~the Notes, the Company may redeem up to 10% of the original principal amount of the Notes at a redemption price of 103% of the principal amount, plus accrued and unpaid interest, at the redemption date. After November 1, 2022, the Company may redeem the Notes, in whole or in part, at certain specified redemption prices, plus accrued and unpaid interest, at the redemption date. The ~~$500,000 revolving credit facility includes a $35,000 letter of creditsub-facility~~ ~~and a $15,000 swing loansub-facility.~~ The revolving credit facility is available to provide financing for general purposes. Principal payments on the term loan facility of $3,750 per quarter are required beginning December 31, 2017 through maturity, when the remaining balance is due. Our current credit facility is securedNotes were issued by ~~the assets of~~ D&B Inc and isare unconditionally guaranteed by D&B Holdings and ~~each~~certain of ~~its direct~~D&B Inc’s existing and ~~indirect~~future wholly owned material domestic ~~wholly-owned subsidiaries. As~~subsidiaries, which is substantially the same as the guarantors of ~~October 29, 2017, we had letters of~~the Company’s existing credit ~~outstanding of $4,971 and $479,029 of borrowing available under our credit~~ facility.

The ~~majority of~~Company used the proceeds of ~~this senior secured~~the Notes offering, along with cash on hand, to repay the $255,000 principal balance of the term loan facility, $463,000

of borrowings under the revolving credit facility, ~~were used to refinance in full the May 15, 2015 credit facility (of which $291,000 was outstanding)~~ and ~~to pay~~ related ~~interest and expenses. In connection with the new credit facility we~~accrued interest. The Company incurred debt costs of ~~$2,910,~~

$18,300, which are being amortized over the terms of ~~which $397 was expensed as~~the respective Notes and revolving credit facility. The Company also recorded a loss ~~on debt refinancing. The remaining debt costs incurred~~ of ~~$1,826 and $687 are included in Other assets and deferred charges and Long-term debt, net, respectively, in~~$904 related to the ~~Consolidated Balance Sheets. Total loss on debt refinancing, including the write off of a portion of~~ unamortized debt costs ~~totaled $718 during~~associated with the ~~thirteen weeks ended October 29, 2017.~~

~~The interest rates per annum applicable~~term portion of the credit facility.

Concurrent and subject to ~~loans, other than swing loans, under our~~the issuance of the Notes, the Company entered into a second amendment to its existing credit facility, which included relief from testing compliance with certain financial covenants until the last day of the fiscal quarter ending on May 1, 2022. During the financial covenant suspension period the Company is required to maintain minimum liquidity (primarily availability under the credit facility) of $150,000. The second amendment extended the maturity date of the $500,000 revolving portion of

the

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facility from August 17, 2022 to August 17, 2024, increased the interest rate spread to 4.00% during the financial covenant suspension period, and instituted a 1.00% utilization fee during that same time. The utilization fee is due at maturity. The financial covenant suspension period may end earlier, at the Company’s election, if certain predetermined financial covenant ratios are ~~currently set based on a defined LIBOR~~achieved. After the financial covenant suspension period, the interest rate ~~plus an applicable margin. Swing loans bear interest at a base rate plus an applicable margin. The loans bear interest subject to a pricing grid based on a total leverage ratio, at LIBOR plus a~~ spread ~~ranging~~ranges from 1.25% to ~~2.00% for~~3.00%. The second amendment terminated the term ~~loans~~loan portion of the credit facility, which triggered payment of $1,900 of lender debt costs associated with the first amendment. The first amendment, effective April 14, 2020, provided initial relief from compliance with financial covenants after the

COVID-19

pandemic and increased the ~~revolving loans. The stated weighted average~~ interest rate ~~at October 29, 2017 was 2.49%~~spread on variable rate debt to 2.00% plus a LIBOR floor of 1.00%. ~~Theyear-to-date~~ ~~weighted average effective interest rate was 3.06%. The weighted average effective rate includes amortization of debt issuance costs, commitment and other fees.~~

Our credit facility ~~contains~~and Notes contain restrictive covenants that, among other things, place certain limitations on our ability ~~to:~~to incur additional indebtedness, make loans or advances to subsidiaries and other entities, pay dividends, acquire other businesses or sell assets.

On September 20, 2021, the Company redeemed $55,000 outstanding principal amount of the Notes. In ~~addition, our~~connection with the early redemption of the Notes, the Company paid a prepayment premium of $1,650, plus accrued and unpaid interest to the date of redemption, pursuant to the terms of the indenture governing the Notes. Additionally, the early redemption of the Notes resulted in a

loss on extinguishment of $1,179 related to a proportionate amount of unamortized issuance

costs. Refer to Note 8 regarding additional early redemption in fiscal 2021.

For the thirty-nine weeks ended October 31, 2021 and November 1, 2020, respectively, the Company’s weighted average interest rate on outstanding borrowings was 10.26% and 4.17%, respectively. At October 31, 2021, we had letters of credit ~~facility requires us to maintain certain financial ratio covenants. As~~outstanding of ~~October 29, 2017, we were in compliance with our restrictive covenants.~~

~~Future debt obligations~~$10,486 and an unused commitment balance of $489,514 under the revolving credit facility.

Interest expense, net

— The following table sets forth our ~~future debt principal payment obligations as of October 29, 2017 by fiscal year:~~

2017
   $ 3,750
2018
   15,000
2019
   15,000
2020
   15,000
2021
   15,000
2022
   252,250


Total future payments
   $ 316,000

~~Interest expense, net~~~~— The following tables set forth our~~ recorded interest expense, ~~net for the periods indicated:~~

   Thirteen Weeks    Thirteen Weeks
   Ended    Ended
   October 29, 2017    October 30, 2016
Interest expense on credit facilities
   $ 2,252    $ 1,582
Amortization of issuance cost
   195    168
Interest income
   (31 )    (58 )
Less: capitalized interest
   (250 )    (112 )
Change in fair value of interest rate cap
   (10 )    (2 )




Total interest expense, net
   $ 2,156    $ 1,578




   Thirty-nine Weeks    Thirty-nine Weeks
   Ended    Ended
   October 29, 2017    October 30, 2016
Interest expense on credit facilities
   $ 5,959    $ 5,216
Amortization of issuance cost
   528    506
Interest income
   (166 )    (184 )
Less: capitalized interest
   (507 )    (322 )
Change in fair value of interest rate cap
   259    357




Total interest expense, net
   $ 6,073    $ 5,573

net:


	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

Note 4: Leases

We are exposed to interest rate risk arising from changes in interest rates due to the variable rate indebtedness under our Credit Facility. In October 2015, the Company purchased an interest rate cap agreement for $920 with a notional amount of $200,000 to manage our exposure to interest rate movements on our variable rate credit facility when~~one-month~~ LIBOR exceeds 3.0%. The interest rate cap agreement matures on October 7, 2019. The derivative is not designated as a hedge and does not qualify for hedge accounting. Accordingly, changes in the fair valuecurrently lease most of the ~~interest rate cap are recognized as interest expense. The Company’s investment~~buildings or sites for our stores, corporate office, 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 ~~the interest rate cap, with a fair value~~excess of ~~$38 at October 29, 2017,~~one year. Certain facility leases also have provisions for additional contingent rentals based on revenues.

Operating lease cost, variable lease cost and short-term lease cost related primarily to our facilities is included in “Other ~~assets~~store operating expenses” for our operating stores,

“Pre-opening

costs” for our stores not yet operating, or “General and administrative expenses” for our corporate office and warehouse, in the Consolidated Statements of Comprehensive Income (Loss).

The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and property taxes, are as follows for the fiscal year ended:


	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

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During fiscal 2020, the Company entered into 126 initial rent relief agreements with our

respective landlords on operating locations and our corporate headquarters. Under these agreements, certain rent payments will be abated, deferred ~~charges”~~or modified without penalty for various periods, generally providing for full deferral for three months beginning April 2020, with partial deferrals 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 of fiscal 2020, 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. The Company has elected to apply the practical expedient to account for lease concessions and deferrals resulting directly from COVID-19 as though the enforceable rights and obligations to the deferrals existed in the respective contracts at lease inception and will not account for the concessions as lease modifications unless the concession results in a substantial increase in the Company’s obligations. A total of 208 of our 225 rent relief agreements qualified for this accounting election, and the remaining agreements were treated as lease modifications, primarily due to a significant extension of the lease term. The Company has bifurcated our current operating lease liabilities into the portion that remains subject to accretion and the portion that is accounted for as a deferral of payments or as short payments. The current portion of deferred occupancy costs or short pays is included in “Accrued liabilities” and the balance, or

$12,175 and $16,243 as of October 31, 2021 and January 31, 2021, respectively, is included in “Other liabilities” in the Consolidated Balance Sheets and was valued using an analysis based on market observable inputs representing Level Two assets as defined by GAAP. For the thirteen and thirty-nine weeks ending October 29, 2017, interest expense (income) includes $(10) and $259 related to the change in the fair value of the interest rate cap.

Sheets.

Note 4:5: Commitments and Contingencies

We are subject to certain legal proceedings and claims that arise in the ordinary course of our business, including claims alleging violations of federal and state law regarding workplace and employment matters, discrimination,

slip-and-fall

and other customer-related incidents and similar matters. In the opinion of management, based upon consultation with legal counsel, the amount of ultimate liability, with respect to such legal proceedings and claims will not materially affect the consolidated results of our operations or our financial condition.

~~On June 30, 2017, we agreed to settle litigation~~ Legal costs related to ~~alleged~~such claims are expensed as incurred.

The Company is a defendant in several lawsuits filed in courts in California alleging violations of California Business and Professions Code, industry wage orders,

wage-and-hour

laws and rules and regulations pertaining primarily to the ~~Employee Retirement Income Security Act. Once~~failure to pay proper regular and overtime wages, failure to pay for missed meals and rest periods, pay stub violations, failure to pay all wages due at the ~~settlement agreement is finalized, it will~~time of termination and other employment related claims (the “California Cases”). Some of the California Cases purport or may be ~~subject~~determined to ~~court approval. To cover~~be class actions or Private Attorneys General Act representative actions and seek substantial damages and penalties. During fiscal 2020, the Company settled a portion of the cases at the approximate amount estimated ~~net costs~~and accrued. For the remaining cases, the Company’s assessments are based on assumptions that have been deemed reasonable by management, but that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause the Company to change those estimates and assumptions. Management’s assessment of ~~settlement, including estimated payment to anyopt-in~~ ~~members and class attorneys,~~these California Cases, as well as ~~related settlement administration costs, we recorded a net charge~~other lawsuits, could change because of ~~$2,550 (representing $7,500~~future determinations or the discovery of gross settlement costs less $4,950 of insurance recoveries) during the thirteen-week period ended July 30, 2017. The charge was recorded in general and administrative expenses in our Consolidated Statements of Comprehensive Income. No additional settlement liabilities or recoveries related to this litigation were recorded in the thirteen week period ended October 29, 2017. The actual amount of any settlement payment could vary from our estimate and will be subject to many factors including approval by the court, the claims process and other matters typically associated with the settlement of litigation.

~~We lease certain property and equipment under variousnon-cancelable~~ operating leases. Some of the leases include options for renewal or extension on various terms. Most of the leases require us to pay property taxes, insurance and maintenance of the leased assets. Certain leases also have provisions for additional contingent rentals based on revenues.

~~The following table sets forth our lease commitments as of October 29, 2017:~~

1 year or less
   $ 100,701
2 years
   99,749
3 years
   93,456
4 years
   88,142
5 years
   79,860
Thereafter
   941,902


Total future payments
   $ 1,403,810

As of October 29, 2017, we have signed operating lease agreements for ten future sites which are expected to open in the last quarter of fiscal 2017 and early fiscal 2018. The landlord has fulfilled the obligations to commit us to the lease terms under these agreements and therefore, the future obligations related to these locations are included in the table above.

As of October 29, 2017, we have signed nineteen additional operating lease agreements for future sites. Our commitments under these agreements are contingent, upon among other things, the landlord’s delivery of access to the premises for construction. Future obligations related to these agreementsfacts that are not ~~included in~~presently known. Accordingly, the ~~table above.~~

~~Note 5: Earnings per share~~

~~Potential dilutive shares consist~~ultimate costs of resolving these cases may be substantially higher or lower than estimated. The Company continues to aggressively defend the ~~incremental common shares issuable upon the exercise~~remaining

cases.

Table of outstanding stock options (both vested and unvested), unvested time-based restricted stock units (RSU’s) and unvested performance RSU’s to the extent performance measures were attained as of the end of the reporting period, calculated using the treasury-stock method. Potential dilutive shares are excluded from the computation of earnings per share (“EPS”) if their effect is anti-dilutive. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and, accordingly, are excluded from the calculation. We excluded 188,229 anti-dilutive options from the calculation of common equivalent shares as of the thirteen and thirty-nine weeks ended October 29, 2017.

~~The following table sets forth the computation of EPS, basic and diluted for the periods indicated:~~

(in thousands, except share and per share data)    Thirteen Weeks
Ended
October 29, 2017    Thirteen Weeks
Ended
October 30, 2016
Numerator:

Net income
   $ 12,157    $ 10,755
Denominator:

Weighted average number of common shares outstanding (basic)
   41,077,206    42,061,235
Weighted average dilutive impact of equity-based awards
   1,173,405    1,266,577
Weighted average number of common and common equivalent shares outstanding (diluted)
   42,250,611    43,327,812
Net income per share:

Basic
   $ 0.30    $ 0.26
Diluted
   $ 0.29    $ 0.25
(in thousands, except share and per share data)    Thirty-nine
Weeks Ended
October 29, 2017    Thirty-nine
Weeks Ended
October 30, 2016
Numerator:

Net income
   $ 85,309    $ 63,428
Denominator:

Weighted average number of common shares outstanding (basic)
   41,521,802    41,863,932
Weighted average dilutive impact of equity-based awards
   1,366,857    1,370,835
Weighted average number of common and common equivalent shares outstanding (diluted)
   42,888,659    43,234,767
Net income per share:

Basic
   $ 2.05    $ 1.52
Diluted
   $ 1.99    $ 1.47

Contents

Note 6: Share-Based Compensation

Compensation ~~expenses~~expense related to stock options ~~time-based and performance-based RSU’s~~ and restricted stock ~~are~~units is included in ~~general~~“General and administrative ~~expenses~~expenses” in the Consolidated Statements of Comprehensive Income (Loss) and ~~were~~is as follows:

   Thirteen Weeks Ended    Thirty-nine Weeks Ended
   October 29, 2017    October 30, 2016    October 29, 2017    October 30, 2016
Stock options
   $ 1,584    $ 1,088    $ 4,240    $ 3,138
RSU’s and restricted stock
   973    580    2,766    1,527








Total share-based compensation expense
   $ 2,557    $ 1,668    $ 7,006    $ 4,665


	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

Transactions related to stock option awards during the thirty-nine weeks ended October ~~29, 2017~~31, 2021 were as follows:

   2014 Stock Incentive Plan    2010 Stock Incentive Plan
      Weighted       Weighted
      Average       Average
   Number    Exercise    Number    Exercise
   of Options    Price    of Options    Price
Outstanding at January 29, 2017
   833,499    $ 26.93    1,225,053    $ 5.35
Granted
   190,379    57.74    —      —
Exercised
   (16,522 )    34.81    (483,008 )    4.58
Forfeited
   (4,631 )    47.33    —      —








Outstanding at October 29, 2017
   1,002,725    $ 32.56    742,045    $ 5.86








Exercisable at October 29, 2017
   421,687    $ 26.48    688,249    $ 5.66


	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

The total intrinsic value of options exercised during the thirty-nine weeks ended October ~~29, 2017 and October 30, 2016~~31, 2021 was ~~$29,235 and $23,186, respectively.~~$8,756. The unrecognized expense related to our stock option plan totaled approximately ~~$2,375~~$125 as of October ~~29, 2017~~31, 2021 and will be expensed over a weighted average period of ~~1.7~~0.4 years.

Transactions related to ~~time-based and performance-based RSU’s and~~ restricted stock units during the thirty-nine weeks ended October ~~29, 2017~~31, 2021, were as follows:

      Weighted
      Average
   Shares    Fair Value
Outstanding at January 29, 2017
   128,088    $ 37.19
Granted
   70,357    58.78
Vested
   (10,485 )    40.68
Forfeited
   (3,395 )    51.65




Outstanding at October 29, 2017
   184,565    $ 44.96


				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

Fair value of our time-based and performance-based ~~RSU’s and~~ restricted stock units is based on our closing stock price on the date of grant. The grant date fair value of market stock units was determined using a Monte-Carlo simulation model. The unrecognized expense related to ~~our time-based and performance-based RSU’s and unvested~~ restricted stock units was ~~$5,338~~$13,692 as of October ~~29, 2017~~31, 2021 and will be expensed over a weighted average period of ~~2.2~~1.8 years.

During the thirty-nine weeks ended October 31, 2021 and November 1, 2020, excess tax expense (benefit) of $(6,034) and $431, respectively, were recognized in the “Provision (benefit) for income taxes” in the Consolidated Statement of Comprehensive Income (Loss) and classified as a source in operating activities in the Consolidated Statement of Cash Flows.

Note 7: Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law. Intended to provide economic relief to those impacted by the

COVID-19

pandemic, the CARES Act includes provisions, among others, allowing for the carryback of net operating losses generated in fiscal 2018, 2019 and 2020 and technical amendments regarding the expensing of qualified improvement property. The application of the technical amendments made by the CARES Act to qualified improvement property resulted in additional tax net operating losses which were carried back from fiscal 2020 and fiscal 2019 to years with a higher federal corporate income tax rate. During the second quarter of fiscal 2021, the Company filed the fiscal 2020 carryback claims for federal tax refunds of approximately $57,400. Due to government delays in processing these claims, we do not expect to receive

majority of these funds until fiscal 2022.

Table of Contents

The effective tax rate for the thirty-nine weeks ended October 31, 2021, was

13.4%, compared to a benefit of 32.3% for the thirty-nine weeks ended November 1, 2020. The current year tax provision includes higher excess tax benefits associated with share-based compensation while the prior year tax provision was a tax benefit primarily due to the impact of the

pre-tax

loss and the impact of the tax provisions within the CARES Act.

Note 8: Subsequent Event

On November 11, 2021, the Company redeemed an additional

$55,000

outstanding principal amount of the Notes using available cash and funds from its revolving credit facility. In connection with the early redemption of the Notes, the Company paid a prepayment premium of

$1,650

, plus accrued and unpaid interest to the date of redemption, pursuant to the terms of the indenture governing the Notes. The early redemption of the Notes resulted in a loss on extinguishment of approximately

$1,100

related to a proportionate amount of unamortized issuance costs. At November 28, 2021, the Company’s total debt outstanding was $

463,000

, consisting of $

440,000

of Notes and $

23,000

in borrowing under the revolving

credit facility.

On December 7, 2021, the Company filed notice with the credit facility administrative agent to immediately terminate the covenant suspension period.

~~ITEM 2.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

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

10-K

as filed with the Securities and Exchange Commission (“SEC”) on March ~~28, 2017.~~31, 2021. 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 ~~guarantees~~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 ~~annual~~quarterly report 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 March ~~28, 2017.~~31, 2021. 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

10-Q,

those results or developments may not be indicative of results or developments in subsequent periods.

Recent Developments

On March 11, 2020, the World Health Organization declared the

COVID-19

outbreak to be a global pandemic and on March 13, 2020, the United States declared a National Public Health Emergency. Shortly after the national emergency declaration, state and local officials began placing restrictions on businesses, some of which allowed

To-Go

or curbside service only while others limited capacity in the dining room or midway. By March 20, 2020, all our 137 operating stores were temporarily closed. On April 30, 2020, our first store

re-opened

to the public, as state and local guidelines began to allow dining rooms and arcades to open at limited capacity and/or limited hours of operation. By the end of fiscal 2020, 107 of our 140 stores were open and operating in limited capacity, including five new stores for which construction had commenced prior to the outbreak of the

COVID-19

pandemic. The Company

re-opened

the remaining 34 stores that had been temporarily closed by August 1, 2021, the end of the second quarter of fiscal 2021.

The Company continues to be subject to risks and uncertainties as a result of the

COVID-19

pandemic, particularly as a result of new variants of

COVID-19,

which appears to be causing an increase in

COVID-19

cases. Public health officials and medical professionals have warned that a resurgence of

COVID-19

cases may continue, particularly if vaccination rates do not quickly increase or if additional potent variants emerge. It is unclear how long a resurgence may last, how severe it may be, and what safety measures governments may impose in response to it. For instance, a few jurisdictions that our stores operate have recently imposed proof of vaccination requirements for our customers and team members, and many of our stores have face mask requirements. We cannot predict with certainty how quickly our customers will return to our stores once all restrictions have been lifted or the impact this will have on consumer spending habits. Additionally, in connection with the

COVID-19

pandemic, there have been disruptions in various food and amusement supply chains, and we have incurred expenses to recall, hire and retain team members as our operating stores have

re-opened

and the majority of operating hour and capacity restrictions have been lifted.

Key Third Quarter 2021 Highlights

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.

Table of Contents

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.

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 name “Dave & Buster’s”. Founded in 1982, 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 ~~“Fun American New Gourmet”~~ entrées and appetizers and a full selection of

non-alcoholic

and alcoholic beverages. Our Play and Watch offerings provide an extensive assortment of entertainment attractions centered around playing games and watching live sports and other televised events. Our ~~customer~~brand appeals to a relatively balanced mix ~~skews moderately to males, primarily between the ages~~ of 21male and ~~39, and we believe we also serve~~female adults, as ~~an attractive venue for~~well as families ~~with children~~ and teenagers. We believe we appeal to a diverse customer base by providing a highly customizable experience in a dynamic and fun setting.

Our stores, which average ~~42,000~~40,000 square feet, range in size between 16,000 and ~~66,000~~70,000 square ~~feet and~~feet. Our stores are generally open seven days a week, with normal hours of operation typically from 11:30 a.m. to ~~midnight on Sunday through Thursday and 11:30 a.m. to 2:00 a.m. on Friday and Saturday.~~

~~Our Growth Strategies and Outlook~~

~~Our growth is based primarily on the following strategies:~~

midnight.

~~Pursue disciplined new store growth;~~

~~Grow our comparable stores sales; and~~

~~Expand the Dave & Buster’s brand internationally.~~

We intend for new store expansion to be a key growth driver. Our long-term plan is to open new stores at an annual rate of at least 10% of our existing stores. During the first thirty-nine weeks of fiscal 2017, the Company opened nine new stores, compared to seven new store openings in the comparable 2016 period. As of October 29, 2017, there were 101 stores in the United States and Canada. To increase comparable store sales we plan to provide our customers with the latest exciting games, leverage the D&B Sports concept by building awareness through national cable advertising and drive customer frequency by enhancing customer experience through providing new product offerings in each of the “Eat, Drink, Play and Watch” components of our business. We currently anticipate opening fourteen new stores in fiscal 2017.

We believe that in addition to the growth potential that exists in North America, the Dave & Buster’s brand can also have significant appeal in certain international markets. We have signed a seven store agreement for licensed development in six countries in the Middle East, and we are targeting our first international opening outside of Canada in 2018.

We believe that we are well positioned for growth with a corporate infrastructure and national marketing platform that can support a larger store base than we currently have, and that we will benefit from economies of scale as we expand.

~~For further information about our growth strategies and outlook, see the section entitled “Business – Our Growth Strategies” in our Annual Report on Form10-K~~ ~~filed with the SEC.~~

Key Measures of Our Performance

Adjusted EBITDA and Adjusted EBITDA Margin

. 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,
pre-opening
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.

Store Operating Income Before Depreciation and Amortization and Store Operating Income Before Depreciation and Amortization Margin.

We define “Store Operating Income Before Depreciation and Amortization” as operating income (loss), plus depreciation and amortization expense, general and administrative expenses and
pre-opening
costs. “Store Operating Income Before Depreciation and Amortization Margin” is defined as Store Operating Income Before 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
non-recurring
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
pre-opening
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 ~~53 week~~
53-week
fiscal year that ends on the Sunday after the Saturday closest to January 31. Each quarterly period has 13 weeks, except in a ~~53 week~~
53-week
year when the fourth quarter has 14 weeks. All references to the third quarter of ~~2017~~2021 relate to the ~~13 week~~
13-week
period ended October ~~29, 2017.~~31, 2021. All references to the third quarter of ~~2016~~2020 relate to the ~~13 week~~
13-week
period ended ~~October 30, 2016.~~November 1, 2020. All references to the third quarter of 2019 relate to the
13-week
period ended November 3, 2019. Fiscal ~~2017~~2021, fiscal 2020 and fiscal ~~2016~~2019 consist of ~~53 and~~ 52 ~~weeks, respectively.~~weeks. All dollar amounts are presented in thousands, unless otherwise noted, except share and per share amounts.
~~Liquidity and Cash Flows~~
~~The primary source of cash flow is from our operating activities and availability under the revolving credit facility.~~

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 ~~locations typically~~stores historically open with sales volumes in excess of their expected ~~long term~~long-term
run-rate
levels, which we refer to as a “honeymoon” effect. We traditionally expect our new store sales volumes in year two to be 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 ~~will~~may result in significant fluctuations in quarterly results.

In the first year of operation new store operating margins (excluding
pre-opening
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 ~~location.~~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.
~~We also expect seasonality~~

Our operating results fluctuate significantly due to ~~be a factor in the operation or results of the business in the future with~~seasonal factors. Typically, we have higher ~~first and fourth quarter~~ revenues associated with ~~the~~ spring and
year-end ~~holidays. Customer traffic and sales during these quarters may~~
holidays which will continue to be susceptible to the ~~unfavorable~~ impact of severe or unseasonably mild weather ~~or to the generally favorable impact of cold weather.~~on customer traffic and sales during that period. Our third quarter, which encompasses the
back-to-school
fall season, has historically had lower revenues as compared to the other quarters.

We expect that economic and environmental conditions and changes in ~~tax and other~~ 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

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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 ~~increases~~increase or wage rate increases ~~are expected to~~might be partially offset by selected menu price increases ~~where~~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
COVID-19
pandemic on us or our suppliers, third-party service providers, and/or customers.
Thirteen Weeks Ended October ~~29, 2017~~31, 2021 Compared to Thirteen Weeks Ended ~~October 30, 2016~~
November 1, 2020
Results of operations.
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.~~

   Thirteen Weeks
Ended Thirteen Weeks
Ended
   October 29, 2017 October 30, 2016
Food and beverage revenues
   $ 107,690    43.1 % $ 101,343    44.3 %
Amusement and other revenues
   142,289    56.9 127,316    55.7






Total revenues
   249,979    100.0 228,659    100.0
Cost of food and beverage (as a percentage of food and beverage revenues)
   28,387    26.4 26,560    26.2
Cost of amusement and other (as a percentage of amusement and other revenues)
   16,220    11.4 15,581    12.2






Total cost of products
   44,607    17.8 42,141    18.4
Operating payroll and benefits
   57,967    23.2 55,034    24.1
Other store operating expenses
   82,766    33.1 71,888    31.4
General and administrative expenses
   13,432    5.4 13,506    5.9
Depreciation and amortization expense
   25,672    10.3 22,864    10.0
Pre-opening costs
   5,609    2.2 4,553    2.0






Total operating costs
   230,053    92.0 209,986    91.8






Operating income
   19,926    8.0 18,673    8.2
Interest expense, net
   2,156    0.9 1,578    0.7
Loss on debt refinancing
   718    0.3 —      —






Income before provision for income taxes
   17,052    6.8 17,095    7.5
Provision for income taxes
   4,895    1.9 6,340    2.8






Net income
   $ 12,157    4.9 % $ 10,755    4.7 %






Change in comparable store sales
      (1.3 )%    5.9 %
Company-owned stores open at end of period
      101    88
Comparable stores open at end of period
      76    66
income (loss).


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.
21

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Reconciliations of
Non-GAAP
Financial Measures

Adjusted EBITDA

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

   Thirteen Weeks Thirteen Weeks
   Ended Ended
   October 29, 2017 October 30, 2016
Net income
   $ 12,157 $ 10,755
Interest expense, net
   2,156 1,578
Loss on debt refinancing
   718 —
Provision for income taxes
   4,895 6,340
Depreciation and amortization expense
   25,672 22,864


EBITDA
   45,598 41,537
Loss on asset disposal
   321 514
Share-based compensation
   2,557 1,668
Pre-opening costs
   5,609 4,553
Other costs⁽¹⁾
   46 (5 )


Adjusted EBITDA⁽²⁾
   $ 54,131 $ 48,267


Adjusted EBITDA Margin⁽²⁾
   21.7 % 21.1 %

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.
⁽²⁾ ~~Beginning in the fourth~~ The third quarter of ~~2016 we revised our calculation of Adjusted EBITDA~~fiscal 2021 includes a $3,230 severance obligation to ~~exclude adjustments for changes~~the Company’s former Chief Executive Officer, who terminated his service in ~~deferred amusement revenue and ticket liabilities. This change has been applied retrospectively to all periods presented.~~this position effective September 30, 2021.
Store Operating Income Before Depreciation and Amortization
The following table reconciles (in dollars and as a percent of total revenues) Operating income (loss) to Store Operating Income Before Depreciation and Amortization for the periods indicated:


Thirteen Weeks
Ended
Thirteen Weeks
Ended
   October 29, 2017 October 30, 2016
Operating income
   $ 19,926 $ 18,673
General and administrative expenses
   13,432 13,506
Depreciation and amortization expense
   25,672 22,864
Pre-opening costs
   5,609 4,553


Store Operating Income Before Depreciation and Amortization
   $ 64,639 $ 59,596


Store Operating Income Before Depreciation and Amortization Margin
   25.9 % 26.1 %


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 %





Capital Additions
The ~~following~~ table ~~represents total~~below reflects accrual-based ~~additions to property and equipment. Total~~ capital additions. Capital additions do not include any reductions for accrual-based ~~tenant~~leasehold improvement ~~allowances (“Payments~~incentives or proceeds from sale-leaseback transactions (collectively, “Payments from landlords”).

   Thirteen Weeks    Thirteen Weeks
   Ended    Ended
   October 29, 2017    October 30, 2016
New store
   $ 51,232    $ 49,115
Operating initiatives, including remodels
   2,762    3,258
Games
   2,229    348
Maintenance Capital
   4,912    4,667




Total capital additions
   $ 61,135    $ 57,388




Payments from landlords
   $ 2,618    $ 6,118


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
22

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Results of Operations
Revenues
In response to the
COVID-19
outbreak, which was declared a global pandemic on March 11, 2020 and a National Public Health Emergency in the United States on March 13, 2020, the Company temporarily closed all of our stores by March 20, 2020. On April 30, 2020, our first store
re-opened
to the public, as state and local guidelines began to allow dining rooms and arcades to open with capacity and other restrictions, with two additional stores offering limited food and beverage for
off-premises
dining by the end of our first quarter of fiscal 2020. By the end of the third quarter of fiscal 2020, 104 of our 137 stores were open and operating with a combination of limited menus, reduced dining room seating, reduced games in the midway, reduced operating hours and other restrictions referred to as “limited operations”. Of these 104 open stores, 84 were comparable stores. By the end of our second quarter of the current fiscal year, all of the Company’s stores were open and operating, the majority of which having no operating restrictions.
Selected revenue and store data for the periods indicated are as follows:

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
Total revenues increased ~~$21,320,~~$208,924, or ~~9.3%~~191.6%, to ~~$249,979~~$317,976 in the third quarter of fiscal ~~2017~~2021 compared to total revenues of ~~$228,659~~$109,052 in the third quarter of fiscal ~~2016.~~2020. The increase in revenue is attributable primarily to more store operating weeks in the third quarter of fiscal 2021 compared to the prior year due to temporary store closures during the third quarter of fiscal 2020, as a result of the
COVID-19
pandemic. For the thirteen weeks ended October ~~29, 2017,~~1, 2021, we derived ~~29.1%~~22.7% of our total revenue from food sales, ~~14.0%~~11.2% from beverage sales, ~~56.1%~~65.5% from amusement sales and ~~0.8%~~0.6% from other sources. For the thirteen weeks ended ~~October 30, 2016,~~November 1, 2020, we derived ~~29.8%~~23.2% of our total revenue from food sales, ~~14.5%~~12.0% from beverage sales, ~~54.9%~~64.4% from amusement sales and ~~0.8%~~less than 0.4% from other sources.
The ~~increased revenues~~shift in mix from food and beverage sales to amusement sales of 109 basis points is due, in part, to reduced special events and less discounting of amusements, offset somewhat by food price increases effective midway through the third quarter of fiscal ~~2017 were from the following sources:~~

Comparable stores
   $ (2,496 )
Non-comparable stores
   22,916
Other
   900


Total
   $ 21,320


2021.
Comparable store revenue ~~decreased $2,496,~~increased $169,614 or ~~1.3%~~189.3%, in the third quarter of fiscal ~~2017~~2021 compared to the third quarter of fiscal ~~2016.~~2020, due primarily to an 49.2% increase in comparable store operating weeks. Comparable store ~~revenue compared to prior year was in part negatively impacted by catastrophic events occurring~~sales in the third quarter of fiscal ~~2017, including Hurricane Harvey and Hurricane Irma as well as wildfires in California. Comparablewalk-in~~ ~~revenues, which accounted for 90.7%~~2021 were approximately 99.6% of ~~comparable store revenue for~~the levels achieved
pre-pandemic
during the third quarter of fiscal ~~2017, decreased $1,574, or 0.9% compared~~2019. Our individual comparable stores generally experienced gradual increases in weekly sales performance as operating weeks increased. Individual store performance after
re-opening
was also impacted by changes in local operating restrictions and consumer reactions to the third quarter of fiscal 2016. Comparable store special events revenues, which accounted for 9.3% of comparable store revenue for the third quarter of fiscal 2017, decreased $922, or 4.8% compared to the third quarter of fiscal 2016.
changes in local
COVID-19
infection rates.
Food sales at comparable stores ~~decreased~~increased by ~~$2,489,~~$39,049, or ~~4.2%~~187.8%, to ~~$56,838~~$59,842 in the third quarter of fiscal ~~2017~~2021 from ~~$59,327~~$20,793 in the third quarter of fiscal ~~2016.~~2020. Beverage sales at comparable stores ~~decreased~~increased by ~~$1,194,~~$19,129, or ~~4.1%~~176.6%, to ~~$27,833~~$29,959 in the third quarter of fiscal ~~2017~~2021 from ~~$29,027~~$10,830 in the ~~third quarter of fiscal 2016. The decrease in food and beverage unit sales at comparable stores was partially offset by an overall increase in menu prices.~~2020 comparison period. Comparable store amusement and other revenues in the third quarter of fiscal ~~2017~~2021 increased by ~~$1,187,~~$111,436, or ~~1.1%~~192.2%, to ~~$111,702~~$169,405 from ~~$110,515~~$57,969 in the comparable period of fiscal 2020.
Non-comparable
store revenue increased $35,264 in the third quarter of fiscal 2016, due to an increase in the revenue per Power Card sold. The growth over fiscal 2016 in amusement sales was driven in part by national advertising which highlighted our entertainment offerings, including a limited time offer which allowed customers to play certain new games for free.
~~Non-comparable~~ ~~store revenue increased $22,916, for the third quarter of fiscal 2017~~2021 compared to the third quarter of fiscal ~~2016. The increase innon-comparable~~2020, for the same reasons noted above, including 144 more store ~~revenue was primarily driven by 170 additional~~ operating ~~store weeks contributed by our twenty-fivenon-comparable~~ ~~stores.~~
weeks.
Cost of products
The total cost of products was ~~$44,607~~$52,613 for the third quarter of fiscal ~~2017~~2021 and ~~$42,141~~$17,908 for the third quarter of fiscal ~~2016.~~2020. The total cost of products as a percentage of total revenues ~~was 17.8% and 18.4%~~increased 10 basis points to 16.5% for the third quarter of fiscal ~~2017 and~~2021 compared to 16.4% for the third quarter of fiscal ~~2016, respectively.~~
2020.
23
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Cost of food and beverage products increased to ~~$28,387 in the third quarter of fiscal 2017~~$30,082 compared to ~~$26,560~~$10,664 for the third quarter of fiscal ~~2016 due primarily to the increased sales volume related to new store openings.~~2020. Cost of food and beverage products, as a percentage of food and beverage revenues, increased 2010 basis points to ~~26.4%~~27.9% for the third quarter of fiscal ~~2017~~2021 from ~~26.2%~~27.8% for the third quarter of fiscal ~~2016. Higher product costs~~2020. The impact of year-over-year cost increases primarily in meat and poultry products were partially offset by lower closure-related spoilage costs and food price increases ~~in food and beverage prices.~~
effective midway through the third quarter of fiscal 2021.

Cost of amusement and other increased to ~~$16,220~~$22,531 in the third quarter of fiscal ~~2017~~2021 compared to ~~$15,581~~$7,244 in the third quarter of fiscal ~~2016 as cost reductions at comparable stores were more than offset by costs related to ournon-comparable~~ ~~stores.~~2020. The costs of amusement and other, as a percentage of amusement and other revenues, ~~decreased 80~~increased 50 basis points to ~~11.4%~~10.7% for the third quarter of fiscal ~~2017~~2021 from ~~12.2% for~~10.2% in the third quarter of fiscal ~~2016. The decrease in~~2020. This increase was driven primarily by higher freight costs and higher cost ~~of amusement and other as a percentage of revenue is due to price increases implemented earlier~~per ticket resulting from disruptions in the ~~year and a shift in game play from redemption tonon-redemption~~ ~~games.~~
supply chain.

Operating payroll and benefits

Total operating payroll and benefits increased by ~~$2,933,~~$51,291, or ~~5.3%~~185.1%, to ~~$57,967~~$78,995 in the third quarter of fiscal ~~2017~~2021 compared to ~~$55,034~~$27,704 in the third quarter of fiscal ~~2016. This increase was primarily due~~2020. Nearly all our store workforce, except a small team of essential personnel, were furloughed in
mid-March
2020. Hourly team members began to ~~labor associated with the additional operating store weeks of ournon-comparable~~ ~~stores.~~return as stores
re-opened
at reduced staffing levels. The total cost of operating payroll and benefits as a percentage of total revenues ~~decreased 90 basis points to 23.2%~~was 24.8% in the third quarter of fiscal ~~2017~~2021 compared to ~~24.1% for~~25.4% in the third quarter of fiscal ~~2016.~~2020. This decrease ~~was~~is primarily due to ~~store-level~~favorable leveraging on management labor and benefits and lower labor hours due to labor efficiency initiatives and hourly labor staffing shortages, partially offset by increases in the hourly labor cost and higher incentive compensation, including referral and ~~payroll related benefits which together decreased approximately 80 basis points. Additionally, increased focus on labor management helped reduce~~retention incentives implemented during the ~~adverse impact~~second quarter of ~~wage rate increases on operating margins.~~
fiscal 2021.

Other store operating expenses

Other store operating expenses increased by ~~$10,878,~~$32,539, or ~~15.1%~~46.0%, to ~~$82,766~~$103,322 in the third quarter of fiscal ~~2017~~2021 compared to ~~$71,888~~$70,783 in the third quarter of fiscal ~~2016,~~2020. The increase is primarily due to ~~new~~the impact of increased store ~~openings. Other store operating expenses as a percentage of total revenues increased 170 basis points to 33.1% in~~weeks during the third quarter of fiscal ~~2017 compared to 31.4% in the third quarter of fiscal 2016. This increase was due primarily to increased margin pressure~~2021 on ~~occupancy~~ costs ~~associated with our recent~~such as utilities, supplies, maintenance, and other services. Other store ~~openings, higher marketing costs and incremental sports viewing costs.~~
~~General and administrative expenses~~
General and administrative expenses decreased by $74, or 0.5%, to $13,432 in the third quarter of fiscal 2017 compared to $13,506 in the third quarter of fiscal 2016, due to lower incentive compensation expenses which were partially offset by increased labor costs at our corporate headquarters and incremental compensation costs related to our share-based awards. General and administrative expenses,operating expense as a percentage of total revenues decreased ~~50 basis points~~ to ~~5.4%~~32.5% in the third quarter of fiscal ~~2017~~2021 compared to ~~5.9%~~64.9% in the third quarter of fiscal ~~2016~~2020. This decrease was due primarily to favorable ~~leverage~~sales leveraging on ~~sales.~~
~~Depreciation~~occupancy costs and ~~amortization expense~~
~~Depreciation~~utilities and ~~amortization expense increased by $2,808, or 12.3%, to $25,672~~reduced marketing spend in the third quarter of fiscal ~~2017 compared~~2021.

General and administrative expenses

General and administrative expenses increased by $10,358, or 88.2%, to ~~$22,864~~$22,104 in the third quarter of fiscal ~~2016.~~2021 compared to $11,746 in the third quarter of fiscal 2020. The increase in general and administrative expenses was driven primarily by higher incentive compensation, professional fees, salaries and benefits, board fees, officer insurance, and share-based compensation. The third quarter of fiscal 2021 also 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. During the third quarter of fiscal 2020, some corporate team members continued on furlough and board fees remained suspended.

Depreciation and amortization expense

Depreciation and amortization expense was relatively flat at $34,381 in the third quarter of fiscal 2021 compared to $34,384 in the third quarter of fiscal 2020. Increased depreciation due to our ~~2016~~2021 and ~~2017~~2020 capital expenditures for new stores, operating initiatives, ~~including remodels,~~ games and maintenance capital, was ~~partially~~ offset by other assets reaching the end of their depreciable lives.

Pre-opening

costs

Pre-opening

costs ~~increased~~decreased by ~~$1,056~~$478 to ~~$5,609~~$2,092 in the third quarter of fiscal ~~2017~~2021 compared to ~~$4,553~~$2,570 in the third quarter of fiscal ~~2016~~2020 due ~~primarily~~ to a decrease in the number ~~and timing~~ of planned new store openings ~~and stores in development.~~
after construction was reduced as a result of impacts of the
COVID-19
pandemic which began during the first quarter of fiscal 2020.

Interest expense, net
and Loss on debt extinguishment / refinancing

Interest expense, net increased by ~~$578~~$5,210 to ~~$2,156~~$13,423 in the third quarter of fiscal ~~2017~~2021 compared to ~~$1,578~~$8,213 in the third quarter of fiscal ~~2016~~2020 due primarily to ~~higher variable~~an increase in the weighted average effective interest ~~rates and~~rate, offset slightly by a ~~slight increase~~decrease in average outstanding debt.
~~Loss on debt refinancing~~
In connection with the ~~August 17, 2017~~September 20, 2021 early extinguishment of a portion of the Notes, The Company recorded a loss on extinguishment of $2,829 during the third quarter of fiscal 2021. In connection with the October 27, 2020 debt refinancing, ~~(see Note 3,~~~~Debt~~~~, of Notes to Unaudited Consolidated Financial Statements for further discussion),~~ the Company recorded a charge of ~~$718~~$904 during the third quarter of fiscal ~~2017.~~
2020. These events are explained further in Note 3 to the Unaudited Consolidated Financial Statements.

Table of Contents
Provision (benefit) for income taxes
The ~~effective income tax rate decreased to 28.7% for the thirteen weeks ended October 29, 2017 compared to 37.1% in the thirteen weeks ended October 30, 2016. The decrease in the~~ effective tax rate ~~primarily reflects~~for the third quarter of fiscal 2021 was a ~~favorable 7.5% impact from~~benefit of 28.8%, compared to a benefit of 26.3% for the ~~recognition~~third quarter of fiscal 2020. The current quarter tax provision includes higher excess tax benefits ~~on share-based payments through income tax expense. Refer to Note 1,~~~~Summary of Significant Accounting Policies~~~~, of Notes to Unaudited Consolidated Financial Statements, for information with respect to the tax impacts~~ associated with share-based ~~awards as~~compensation and the reduction of certain valuation allowances related to our state net operating loss carryovers. The prior quarter tax provision was a ~~result~~tax benefit primarily due to the impact of ~~adoption~~the
pre-tax
loss and the impact of ~~new accounting guidance in~~ the ~~first quarter of fiscal 2017.~~
~~Thirty-nine~~tax provisions within the CARES Act.
Thirty-Nine Weeks Ended October ~~29, 2017~~31, 2021 Compared to ~~Thirty-nine~~the Thirty-Nine Weeks Ended ~~October 30, 2016~~
November 1, 2020
Results of operations.
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 ~~accompanying~~ consolidated statements of comprehensive ~~income.~~

   Thirty-nine Weeks Thirty-nine Weeks
   Ended Ended
   October 29, 2017 October 30, 2016
Food and beverage revenues
   $ 356,190    42.7 % $ 326,139    44.4 %
Amusement and other revenues
   478,688    57.3 408,837    55.6






Total revenues
   834,878    100.0 734,976    100.0
Cost of food and beverage (as a percentage of food and beverage revenues)
   91,562    25.7 83,772    25.7
Cost of amusement and other (as a percentage of amusement and other revenues)
   50,481    10.5 48,628    11.9






Total cost of products
   142,043    17.0 132,400    18.0
Operating payroll and benefits
   187,610    22.5 166,614    22.7
Other store operating expenses
   247,663    29.6 214,487    29.1
General and administrative expenses
   45,172    5.4 40,131    5.5
Depreciation and amortization expense
   74,447    8.9 65,108    8.9
Pre-opening costs
   14,626    1.8 10,390    1.4






Total operating costs
   711,561    85.2 629,130    85.6






Operating income
   123,317    14.8 105,846    14.4
Interest expense, net
   6,073    0.7 5,573    0.8
Loss on debt refinancing
   718    0.1 —      —






Income before provision for income taxes
   116,526    14.0 100,273    13.6
Provision for income taxes
   31,217    3.8 36,845    5.0






Net income
   $ 85,309    10.2 % $ 63,428    8.6 %






Change in comparable store sales
      0.8 %    3.4 %
Company owned stores open at end of period
      101    88
Comparable stores open at end of period
      76    66
income (loss).


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.
25

Table of Contents

Reconciliations of
Non-GAAP
Financial Measures

Adjusted EBITDA

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

   Thirty-nine Weeks Thirty-nine Weeks
   Ended Ended
   October 29, 2017 October 30, 2016
Net income
   $ 85,309 $ 63,428
Interest expense, net
   6,073 5,573
Loss on debt refinancing
   718 —
Provision for income taxes
   31,217 36,845
Depreciation and amortization expense
   74,447 65,108


EBITDA
   197,764 170,954
Loss on asset disposal
   1,205 987
Share-based compensation
   7,006 4,665
Pre-opening costs
   14,626 10,390
Other costs⁽¹⁾
   (329 ) 68


Adjusted EBITDA⁽²⁾
   $ 220,272 $ 187,064


Adjusted EBITDA Margin⁽²⁾
   26.4 % 25.5 %

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.
⁽²⁾ ~~Beginning in the fourth~~ The third quarter of ~~2016 we revised our calculation of Adjusted EBITDA~~fiscal 2021 includes a $3,230 severance obligation to ~~exclude adjustments for changes~~the Company’s former Chief Executive Officer, who terminated his service in ~~deferred amusement revenue and ticket liabilities. This change has been applied retrospectively to all periods presented.~~this position effective September 30, 2021.
Store Operating Income Before Depreciation and Amortization
The following table reconciles (in dollars and as a percent of total revenues) Operating income (loss) to Store Operating Income Before Depreciation and Amortization for the periods indicated:

   Thirty-nine Weeks Thirty-nine Weeks
   Ended Ended
   October 29, 2017 October 30, 2016
Operating income
   $ 123,317 $ 105,846
General and administrative expenses
   45,172 40,131
Depreciaton and amortization expense
   74,447 65,108
Pre-opening costs
   14,626 10,390


Store Operating Income Before Depreciation and Amortization
   $ 257,562 $ 221,475


Store Operating Income Before Depreciation and Amortization Margin
   30.9 % 30.1 %


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 %





Capital Additions
The ~~following~~ table ~~represents total~~below reflects accrual-based ~~additions to property and equipment. Total~~ capital additions. Capital additions do not include any reductions for Payments from landlords.

   Thirty-nine Weeks    Thirty-nine Weeks
   Ended    Ended
   October 29, 2017    October 30, 2016
New store
   $ 119,638    $ 106,134
Operating initiatives, including remodels
   14,830    17,890
Games
   10,521    15,180
Maintenance capital
   10,448    11,058




Total capital additions
   $ 155,437    $ 150,262




Payments from landlords
   $ 24,292    $ 16,779


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
26

Table of Contents
Results of Operations
Revenues
Selected revenue and store data for the periods indicated are as follows:

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 )
Total revenues increased ~~$99,902,~~$641,263, or ~~13.6%~~200.6%, to ~~$834,878~~$960,954 in the thirty-nine weeks ended October ~~29, 2017~~31, 2021 compared to total revenues of ~~$734,976~~$319,691 in the comparable period of fiscal 2020. The increase in revenue is attributable primarily to more store operating weeks in the thirty-nine weeks ended October ~~30, 2016.~~31, 2021 compared to the prior year which was impacted by more temporary store closures and store capacity limitations due to the
COVID-19
pandemic. For the thirty-nine weeks ended October ~~29, 2017,~~31, 2021, we derived ~~29.1%~~22.4% of our total revenue from food sales, ~~13.6%~~10.5% from beverage sales, ~~56.6%~~66.7% from amusement sales and ~~0.7%~~0.4% from other sources. For the thirty-nine weeks ended ~~October 30, 2016,~~November 1, 2020, we derived ~~30.2%~~24.6% of our total revenue from food sales, ~~14.2%~~12.7% from beverage sales, ~~54.8%~~62.2% from amusement sales and ~~0.8%~~0.5% from other sources.
The ~~increased revenues were derived~~shift in mix from food and beverage sales to amusement sales of 452 basis points is due, in part, to reduced special events, less discounting of amusements, and greater capacity restrictions in our dining area due to the ~~following sources:~~

Comparable stores
   $ 5,453
Non-comparable stores
   93,550
Other
   899


Total
   $ 99,902


impacts of the
COVID-19
pandemic.
Comparable store revenue increased ~~$5,453,~~$525,607 or ~~0.8%~~195.8%, in the thirty-nine weeks ended October ~~29, 2017~~31, 2021 compared to the ~~thirty-nine weeks ended October 30, 2016.~~comparable period of fiscal 2020, due primarily to a 94.3% increase in comparable store operating weeks. Comparable store~~walk-in~~ ~~revenues, which accounted for 90.9% of consolidated~~ sales and comparable store ~~revenue~~weeks in the thirty-nine weeks ended October ~~29, 2017, increased $5,836, or 1.0% compared to~~31, 2021 were approximately 88.0% and 95.4%, respectively, of the levels achieved
pre-pandemic
during the thirty-nine weeks ended ~~October 30, 2016. Comparable~~November 3, 2019. Our individual comparable stores generally experienced gradual increases in weekly sales performance as operating weeks increased. Individual store ~~special events revenues, which accounted for 9.1% of consolidated~~performance after
re-opening
was impacted by changes in local operating restrictions and consumer reactions to changes in local
COVID-19
infection rates.
Food sales at comparable ~~store revenue~~stores increased by $111,111, or 169.3%, to $176,738 in the thirty-nine weeks ended October ~~29, 2017, decreased $383, or 0.6% compared to~~31, 2021 from $65,627 in the ~~thirty-nine weeks ended October 30, 2016.~~
~~Food~~comparable period of fiscal 2020. Beverage sales at comparable stores ~~decreased~~increased by ~~$6,378,~~$49,967, or ~~3.2%~~145.3%, to ~~$192,070~~$84,348 in the thirty-nine weeks ended October ~~29, 2017~~31, 2021 from ~~$198,448~~$34,381 in the thirty-nine weeks ended October 30, 2016. Beverage sales at comparable stores decreased by $3,680, or 3.9%, to $90,574 in the thirty-nine weeks ended October 29, 2017 from $94,254 in the thirty-nine weeks ended October 30, 2016. The decrease in food and beverage unit sales at comparable stores was partially offset by price increases.2020 comparison period. Comparable store amusement and other revenues in the thirty-nine weeks ended October ~~29, 2017~~31, 2021 increased by ~~$15,511,~~$364,529, or ~~4.2%~~216.4%, to ~~$382,578~~$532,947 from ~~$367,067~~$168,418 in the comparable thirty-nine weeks of fiscal 2020.
Non-comparable
store revenue increased $124,840 in the thirty-nine weeks ended October ~~30, 2016 due~~31, 2021 compared to ~~an increase in~~ the ~~revenue per Power Card sold.~~ comparable period of fiscal 2020, for the same reasons noted above, including 563 more store operating weeks.
Cost of products
The ~~growth over fiscal 2016 in amusement sales~~total cost of products was driven by national advertising, which highlighted our new games offerings (including games available only at Dave & Buster’s stores) and included the introduction of several games with highly recognizable and marketable content. Our new amusement offerings included limited time offers which allowed customers to play certain new games for free.
~~Non-comparable~~ ~~store revenue increased $93,550,~~$150,095 for the thirty-nine weeks ended October ~~29, 2017 compared to~~31, 2021 and $54,664 for the ~~same~~comparable period of fiscal ~~2016. The increase innon-comparable~~ ~~store revenue was primarily driven by 515 additional operating store weeks contributed by our twenty-fivenon-comparable~~ ~~stores.~~
~~Cost of products~~
~~The total cost of products was $142,043 for the thirty-nine week period ended October 29, 2017 and $132,400 for the thirty-nine week period ended October 30, 2016.~~2020. The total cost of products as a percentage of total revenues ~~was 17.0% and 18.0%~~decreased 150 basis points to 15.6% for the thirty-nine weeks ended October ~~29, 2017 and~~31, 2021 compared to 17.1% for the ~~thirty-nine week~~comparable period ~~ended October 30, 2016, respectively.~~
of fiscal 2020.
Cost of food and beverage products increased to ~~$91,562 in~~$86,366 for the thirty-nine ~~week period~~weeks ended October ~~29, 2017~~31, 2021 compared to ~~$83,772 in~~$32,667 for the ~~thirty-nine week~~comparable period ~~ended October 30, 2016 due primarily to the increased sales volume at ournon-comparable~~ ~~stores.~~of fiscal 2020. Cost of food and beverage products, as a percentage of food and beverage revenues, ~~was 25.7%~~decreased 10 basis points to 27.3% for ~~both~~ the thirty-nine ~~week period~~weeks ended October ~~29, 2017 and~~31, 2021 from 27.4% for the ~~thirty-nine week~~comparable period ~~ended October 30, 2016, due to savings~~of fiscal 2020. The impact of year-over-year cost increases in ~~our~~food products, including meat and ~~seafood categories~~poultry, were offset by ~~higher poultry costs and the impact~~lower closure-related spoilage costs.
27
Table of ~~our largernon-comparable~~ ~~store group.~~
Contents

Cost of amusement and other increased to ~~$50,481~~$63,729 in the thirty-nine ~~week period~~weeks ended October ~~29, 2017~~31, 2021 compared to ~~$48,628~~$21,997 in the ~~thirty-nine week~~comparable period ~~ended October 30, 2016.~~of fiscal 2020. The costs of amusement and other, as a percentage of amusement and other revenues, decreased ~~140~~110 basis points to ~~10.5%~~9.9% for the thirty-nine weeks ended October ~~29, 2017~~31, 2021 from ~~11.9% for~~11.0% in the ~~thirty-nine weeks ended October 30, 2016.~~comparable period of fiscal 2020. This decrease was ~~due~~driven primarily toby lower ticket redemption activity as a ~~$2,531, or 70 basis point, amusement~~percent of tickets issued during the first half of fiscal 2021, offset somewhat by higher freight costs and higher cost ~~reduction~~per ticket resulting from disruptions in the first quarter of fiscal 2017 due to the favorable settlement of a multi-year use tax audit by the state of Texas. This cost reduction represents the excess use tax on redemption items during the period from July 2011 through January 2017. Additionally, the decrease in cost of amusement and other as a percentage of revenue was positively impacted by a shift in game play from redemption to~~non-redemption~~ ~~games and price increases implemented earlier in the year.~~
supply chain.

Operating payroll and benefits

Total operating payroll and benefits increased by ~~$20,996,~~$124,700, or ~~12.6%~~146.4%, to ~~$187,610~~$209,897 in the thirty-nine ~~week period~~weeks ended October ~~29, 2017~~31, 2021 compared to ~~$166,614~~$85,197 in the thirty-nine ~~week period~~weeks ended ~~October 30, 2016, primarily due~~November 1, 2020. Nearly all our store workforce, with the exception of a small team of essential personnel, were furloughed in
mid-March
2020. Hourly team members began to ~~labor associated with additional operating store weeks of ournon-comparable~~ ~~stores.~~return as stores
re-opened
at reduced staffing levels. The total cost of operating payroll and benefits as a ~~percent~~percentage of total revenues ~~decreased 20 basis points to 22.5% for the thirty-nine weeks ended October 29, 2017 from 22.7%~~was 21.8% in the thirty-nine weeks ended October ~~30, 2016.~~31, 2021 compared to 26.6% in the thirty-nine weeks ended November 1, 2020. This decrease ~~was~~is primarily due to ~~store-level incentive compensation~~favorable leveraging on management labor and ~~payroll related~~ benefits ~~which decreased approximately 30 basis points,~~and lower labor hours due to labor efficiency initiatives and hourly labor staffing shortages, partially offset by anincreases in the hourly ~~wage rate increase~~labor costs and higher incentive compensation, including referral and retention incentives implemented during the second quarter of ~~approximately 4.8% and normal labor inefficiencies associated with ournon-comparable~~ ~~store base.~~
fiscal 2021.

Other store operating expenses

Other store operating expenses increased by ~~$33,176,~~$63,746, or ~~15.5%~~27.8%, to ~~$247,663,~~$292,883 in the thirty-nine ~~week period~~weeks ended October ~~29, 2017~~31, 2021 compared to ~~$214,487~~$229,137 in the thirty-nine ~~week period~~weeks ended ~~October 30, 2016,~~November 1, 2020. The increase is primarily due to ~~new~~the impact of increased store ~~openings.~~weeks during the thirty-nine weeks ended October 31, 2021 on costs such as utilities, supplies, maintenance, and other services. These increases were offset somewhat by a $13,727 charge for impairment of long-lived assets and lease termination costs incurred during the thirty-nine weeks ended November 1, 2020. Other store operating ~~expenses during the thirty-nine week period ended October 29, 2017,~~expense as a percentage of total revenues ~~increased 50 basis points~~decreased to ~~29.6% from 29.1%~~30.5% in the thirty-nine weeks ended October ~~30, 2016.~~31, 2021 compared to 71.8% in the thirty-nine weeks ended November 1, 2020. This ~~increase~~decrease was due primarily to ~~increased margin pressure~~favorable sales leveraging on occupancy costs ~~associated with our recent store openings partially offset by favorable leverage~~and utilities and the absence of ~~marketing expenses on increased revenue.~~
any impairment charges in fiscal 2021.

General and administrative expenses

General and administrative expenses increased by ~~$5,041,~~$22,078, or ~~12.6%~~62.0%, to ~~$45,172~~$57,665 in the thirty-nine ~~week period~~weeks ended October ~~29, 2017~~31, 2021 compared to ~~$40,131~~$35,587 in the thirty-nine ~~week period~~weeks ended ~~October 30, 2016.~~November 1, 2020. The increase in general and administrative expenses was driven primarily ~~driven~~ by higher incentive compensation, salaries and benefits, professional fees, board fees, officer insurance, and share-based compensation. The third quarter of fiscal 2021 also includes a ~~second quarter $2,550 charge for net litigation settlement costs, increased labor costs at~~$3,230 severance obligation to the Company’s former Chief Executive Officer, who terminated his service in this position effective September 30, 2021. Effective near the end of March 2020, as a result of the impacts of the
COVID-19
pandemic, most of our corporate ~~headquarters~~team members were furloughed, with reduced pay and ~~incremental~~benefits for the remaining team members for a twelve-week period, and board fees were temporarily suspended. Share-based compensation ~~costs related~~was also lower during that same time due to ~~our share-based awards partially offset by lower incentive compensation expenses. General~~changes in performance stock unit expense.

Depreciation and ~~administrative expenses, as a percentage of total revenues, decreased 10 basis points to 5.4%~~amortization expense

Depreciation and amortization expense was relatively flat at $104,355 in the thirty-nine weeks ended October ~~29, 2017~~31, 2021 compared to ~~5.5% in the same period of fiscal 2016 due to favorable leverage on sales.~~
~~Depreciation and amortization expense~~
~~Depreciation and amortization expense increased by $9,339, or 14.3%, to $74,447~~$104,896 in the thirty-nine ~~week period~~weeks ended ~~October 29, 2017 compared to $65,108 in the thirty-nine week period ended October 30, 2016.~~November 1, 2020. Increased depreciation due to our ~~2016~~2021 and ~~2017~~2020 capital expenditures for new stores, operating initiatives, ~~including remodels,~~ games and maintenance capital, was ~~partially~~ offset by other assets reaching the end of their depreciable lives.

Pre-opening

costs

Pre-opening

costs ~~increased~~decreased by ~~$4,236~~$3,354 to ~~$14,626~~$5,427 in the thirty-nine ~~week period~~weeks ended October ~~29, 2017~~31, 2021 compared to ~~$10,390~~$8,781 in the thirty-nine ~~week period~~weeks ended ~~October 30, 2016~~November 1, 2020 due to a decrease in the number ~~and timing~~ of planned new store openings ~~and stores in development.~~
after construction was reduced as a result of impacts of the
COVID-19
pandemic which began during the first quarter of fiscal 2020.

Interest expense, net
and Loss on debt extinguishment / refinancing

Interest expense, net increased by ~~$500~~$19,480 to ~~$6,073~~$41,971 in the thirty-nine ~~week period~~weeks ended October ~~29, 2017~~31, 2021 compared to ~~$5,573~~$22,491 in the thirty-nine ~~week period~~weeks ended ~~October 30, 2016~~November 1, 2020 due primarily to ~~higher variable~~an increase in the weighted average effective interest ~~rates~~rate, offset slightly by a ~~slight reduction~~decrease in average outstanding debt.
~~Loss on debt refinancing~~
In connection with the ~~August 17, 2017~~September 20, 2021 early extinguishment of a portion of the Notes, the Company recorded a loss on extinguishment of $2,829 during the third quarter of fiscal 2021. In connection with the October 27, 2020 debt refinancing, ~~(see Note 3,~~~~Debt~~~~, of Notes to Unaudited Consolidated Financial Statements for further discussion),~~ the Company recorded a charge of ~~$718~~$904 during the third quarter of fiscal ~~2017.~~
2020. These events are explained further in Note 3 to the Unaudited Consolidated Financial Statements.

Table of Contents
Provision (benefit) for income taxes
The effective ~~income~~ tax rate ~~decreased to 26.8%~~ for the thirty-nine weeks ended October ~~29, 2017~~31, 2021, was 13.4%, compared to ~~36.7% in~~a benefit of 32.3% for the thirty-nine weeks ended ~~October 30, 2016.~~November 1, 2020. The ~~decrease in the effective~~current year tax ~~rate primarily reflects a favorable 9.8% impact from the recognition of~~provision includes higher excess tax benefits ~~on share-based payments through income tax expense. Refer to Note 1,~~~~Summary of Significant Accounting Policies~~~~, of Notes to Unaudited Consolidated Financial Statements, for information with respect to the tax impacts~~ associated with share-based ~~awards as~~compensation while the prior year was a ~~result~~tax benefit primarily due to the impact of ~~adoption~~the
pre-tax
loss and the impact of ~~new accounting guidance~~the tax provisions within the CARES Act.
Liquidity and Capital Resources
In response to the business disruption caused by the
COVID-19
pandemic which began in the first quarter of fiscal ~~2017.~~
~~Liquidity~~2020, the Company took the following actions to enable it to meet its obligations over the next twelve months:
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 ~~Capital Resources~~
~~Overview~~
~~We finance~~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 ~~activities through~~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.
Although uncertainty persists surrounding
COVID-19,
particularly as a result of new variants of
COVID-19,
including the potential that a resurgence of
COVID-19
cases may continue, how long such a resurgence may last, how severe it may be, and what safety measures governments may impose in response to it, as well as how quickly customers will return to our stores, the Company has taken measures to provide sufficient liquidity to meet estimated cash flow ~~from operations~~needs and ~~availability under our existing credit facility. As~~covenant compliance obligations for at least the next twelve months. All the Company’s stores were open and operating as of the end of the third quarter of fiscal 2021, and as of October ~~29, 2017, we~~31, 2021, the Company had cash and cash equivalents of ~~$15,258,~~$27,005. We expect to spend between $95,000 and $100,000, net ~~working~~of payments from landlords in capital ~~deficit~~additions during fiscal 2021. On an ongoing basis, we will continue to pursue long-term operating efficiencies and other cost savings initiatives.
The Company is also taking measures to strengthen its financial position. During the third quarter of ~~$128,014~~fiscal 2021, the Company redeemed $55,000 outstanding principal amount of the Notes, and subsequent to the end of our third quarter, the Company redeemed an additional $55,000 outstanding ~~debt obligations~~principal amount of ~~$316,000. We also had $479,029 in borrowing availability under~~the Notes. The early redemptions are expected to reduce net cash interest on the Notes by approximately $8,400 annually.
Debt and Derivatives
Effective April 14, 2020, we amended our existing credit ~~facility.~~
~~We currently have,~~facility, to provide relief from compliance with financial covenants through the third quarter of fiscal 2020. The interest rate spread increased to 2.00% plus a LIBOR floor of 1.00%.
On October 27, 2020, the Company issued $550,000 aggregate principal amount of 7.625% senior secured notes (the “Notes”). Interest on the Notes accrues from October 27, 2020 and ~~anticipate that~~is payable in arrears on November 1 and May 1 of each year, commencing on May 1, 2021. The Notes mature on November 1, 2025, unless earlier redeemed, and are subject to the terms and conditions set forth in the ~~future we may continue~~related indenture. Prior to ~~have, negative working capital balances. We are able to operate~~November 1, 2022, but not more than once during any twelve-month period commencing with a working capital deficit because cash from sales is usually received before related liabilities for product, supplies, labor and services become due. Funds available from sales not needed immediately to pay for operating expenses have typically been used for capital expenditures and paymentthe issue date of ~~long-term debt obligations.~~
~~Short-term liquidity requirements.~~ ~~We generally consider our short-term liquidity requirements to consist of those items that are expected to be incurred within~~ the next twelve months and believe those requirements to consist primarily of funds necessary to pay operating expenses, interest and principal payments on our debt, capital expenditures related to the new store construction and other expenditures associated with acquiring new games, remodeling facilities and recurring replacement of equipment and improvements.
As of October 29, 2017, we expect our short-term liquidity requirements to include approximately (a) $190,000 to $200,000 of capital additions (net of tenant improvement allowances and other payments from landlords), (b) lease obligation payments of $101,000, (c) estimated cash income tax payments of $61,000, (d) scheduled debt service payments (see “Contractual Obligations and Commercial Commitments”) and (e) the repurchase of our common stock.
~~Long-term liquidity requirements.~~ We generally consider our long-term liquidity requirements to consist of those items that are expected to be incurred beyond the next twelve months and believe these requirements consist primarily of funds necessary for new store development and construction, replacement of games and equipment, performance-necessary renovations and other~~non-recurring~~ capital expenditures that need to be made periodically to our stores, principal and interest payments on our outstanding term loan and scheduled lease obligation payments. We intend to satisfy our long-term liquidity requirements through various sources of capital, including our existing cash on hand, cash provided by operations, and borrowings under the revolving portion of our credit facility.
~~Our Board of Directors approved a share repurchase program, under which~~Notes, the Company may ~~repurchase shares on the open market, through privately negotiated transactions, and through trading plans designed~~redeem up to ~~comply with Rule10b5-1~~10% of the ~~Securities Exchange Act~~original principal amount of ~~1934, as amended. The share repurchase program may be modified, suspended or discontinued~~the Notes at ~~any time. Effective September 7, 2017, an additional $100,000 in common shares authorization was approved by our Board~~a redemption price of ~~Directors. As~~103% of ~~October 29, 2017.~~the principal amount, plus accrued and unpaid interest, at the redemption date. After November 1, 2022, the Company ~~has a total share repurchase authorization of $300,000 which expires~~may redeem the Notes, in whole or in part, at certain specified redemption prices, plus accrued and unpaid interest, at the end of fiscal 2018. During the thirteen and thirty-nine weeks ended October 29, 2017, the Company purchased 240,342 and 1,778,484 shares of common stock at an average cost of $48.69 and $61.84 per share, respectively. As of October 29, 2017, we have approximately $161,188 of share repurchase authorization remaining under the current plan.
Based on our current business plan, we believe the cash flows from operations, together with our existing cash balances and availability of borrowings under the revolving portion of our credit facility will be sufficient to meet our anticipated cash needs for working capital, capital expenditures, debt service needs, and share repurchases in the foreseeable future. Our ability to make scheduled principal and interest payments, or to refinance our indebtedness, or to fund planned capital expenditures and share repurchases, will depend on future performance, which is subject to general economic conditions, competitive environment and other factors.
~~Borrowing Capacity~~
~~Our existing credit facility provides a $300,000 term loan facility and a $500,000 revolving credit facility and has a maturity date of August 17, 2022.~~redemption date. The ~~$500,000 revolving credit facility includes a $35,000 letter of creditsub-facility~~ ~~and a $15,000 swing loansub-facility.~~ The revolving facility was established to provide financing for general purposes. Principal payments on the term loan facility of $3,750 per quarter are required beginning December 31, 2017 through maturity, when the remaining balance is due. Our credit facility is securedNotes were issued by ~~the assets of~~ Dave & Buster’s, Inc. and isare unconditionally guaranteed by Dave & Buster’s Holdings, Inc. and ~~each~~certain of Dave & Buster’s, Inc. existing and future wholly owned material domestic subsidiaries, which is substantially the same as the guarantors of the Company’s existing credit facility.
29
Table of Contents

The Company used the proceeds of the Notes offering, along with cash on hand, to repay the $255,000 principal balance of the term loan facility, $463,000 of borrowings under the revolving credit facility, and related accrued interest. The Company incurred debt issuance costs of $18,300, which are being amortized over the terms of the respective Notes and revolving credit facility. The Company also recorded a loss of $904 related to the unamortized debt costs associated with the term portion of the credit facility.

Concurrent and subject to the issuance of the Notes, the Company entered into a second amendment to its ~~direct~~existing credit facility, which included relief from testing compliance with certain financial covenants until the last day of the fiscal quarter ending on May 1, 2022. During the financial covenant suspension period the Company is required to maintain a minimum liquidity (primarily availability under the credit facility) of $150,000. The second amendment extended the maturity date of the $500,000 revolving portion of the facility from August 17, 2022 to August 17, 2024, increased the interest rate spread to 4.00% during the financial covenant suspension period, and ~~indirect domestic wholly-owned subsidiaries.~~
instituted a 1.00% utilization fee during that same time. The utilization fee is due at maturity. The financial covenant suspension period may end earlier, at the Company’s election, if certain predetermined financial covenant ratios are achieved. After the financial covenant suspension period, the interest rate spread ranges from 1.25% to 3.00%. The second amendment terminated the term loan portion of the credit facility, which triggered payment of $1,900 of lender debt costs associated with the first amendment.

On September 20, 2021, the Company redeemed $55,000 outstanding principal amount of the Notes. In connection with the early redemption of the Notes, the Company paid a prepayment premium of $1,650, plus accrued and unpaid interest to the date of redemption, pursuant to the terms of the indenture governing the Notes. Additionally, the early redemption of the Notes resulted in a loss on extinguishment of $1,179 related to a proportionate amount of unamortized issuance costs.

For the thirty-nine weeks ended October 31, 2021 and November 1, 2020, the Company’s weighted average interest rate on outstanding borrowings was 10.26% and 4.17%, respectively. The rate has increased due to the issuance of the Notes and the second amendment to the credit facility. As of October ~~29, 2017,~~31, 2021, we had letters of credit outstanding of ~~$4,971~~$10,486 and ~~$479,029~~an unused commitment balance of ~~borrowing available~~$489,514 under the revolving credit facility.

Our credit facility and Notes 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.

During fiscal 2019, we entered into interest rate swap agreements to manage our exposure to fluctuations in interest rates on our variable rate credit facility. Our swap agreements with our derivative counterparties contain a provision where if the Company defaults on any of its indebtedness and repayment of the indebtedness has been accelerated, the Company could also be declared in default on its derivative obligations. Refer to Note 1 of the Consolidated Financial Statements for further discussion of our swap agreements, which were
de-designated
as hedges effective April 14, 2020, the date of the first amendment to our credit facility. ~~The interest rates per annum applicable~~

Dividends and Share Repurchases

As a result of the impacts to ~~loans, other than swing loans, under~~ our ~~credit facility~~business arising from the
COVID-19
pandemic, dividend payments are currently ~~set based~~suspended, and the previously established share repurchase program was allowed to expire at the end of fiscal 2020.

Cash Flow Summary

The Company had cash and cash equivalents of $27,005 on October 31, 2021.

Operating Activities

— Cash flow from operations typically provides us with a ~~defined LIBOR rate plus an applicable margin. Swing loans bear interest at a base rate plus an applicable margin. The loans bear~~
~~interest~~significant source of liquidity. Our operating cash flows result primarily from cash received from our customers, offset by cash payments we make for products and services, employee compensation, operations, and occupancy costs. Cash from operating activities is also subject to ~~a pricing grid based on a total leveraged ratio,~~changes in working capital. Working capital at ~~LIBOR plus a spread ranging~~any specific point in time is subject to many variables, including seasonality, the timing of cash receipts and payments, and vendor payment terms.

Cash flow from ~~1.25% to 2.00% for the term loans and the revolving loans. The stated weighted average interest rate on our credit facility at October 29, 2017 was 2.49%. Theyear-to-date~~ weighted average effective interest rate incurred on our borrowings under our credit facility was 3.06%. The weighted average effective rate includes amortization of debt issuance costs, commitment and other fees.
~~Cash Flows~~
~~The following table presents a summary of our net cash provided by (used in) operating, investing and financing activities:~~

   Thirty-nine Weeks    Thirty-nine Weeks
   Ended October 29, 2017    Ended October 30, 2016
Net cash provided by (used in):

Operating activities
   $ 201,063    $ 174,550
Investing activities
   (147,026 )    (130,453 )
Financing activities
   (58,862 )    (54,868 )
~~Net cash provided by~~ operating activities ~~was $201,063 for~~increased $230,252 in the thirty-nine weeks ended October ~~29, 2017~~31, 2021 compared to ~~$174,550 for~~ the thirty-nine weeks ended ~~October 30, 2016. Increased cash flows from operations were~~November 1, 2020 driven primarily by ~~increased cash flows~~the impact of approximately 2,600 more store weeks.

Investing Activities

— Cash flow from ~~additionalnon-comparable~~ ~~store sales and slightly increased comparable store sales and improved operating margins.~~
~~Net cash used in~~ investing activities ~~was $147,026 for the thirty-nine weeks ended October 29, 2017 compared to $130,453 for the same period~~primarily reflects capital expenditures.

Table of fiscal 2016. Capital expenditures increased $18,994 to $150,278 (excluding the increase in fixed asset accounts payable of $5,159) in the thirty-nine weeks of fiscal 2017 from $131,284 in the thirty-nine weeks of fiscal 2016. During the thirty-nine weeks of fiscal 2017, the Company spent $114,663 ($90,371 net of tenant improvement allowances and other payments from landlords) for new store construction, $14,825 related to major remodel projects on four existing stores, several smaller scale remodel projects and operating improvement initiatives, $11,024 for game refreshment and $9,766 for maintenance capital. Contents
During the thirty-nine weeks ended October ~~30, 2016, we~~31, 2021, the Company spent $88,039 ($71,260 net of tenant improvement allowances from landlords) for new store construction, $17,131 related to major remodel projects on six existing stores, several smaller scale remodel projects and operating improvement initiatives, $15,048 for game refreshment and $11,066 for maintenance capital.
Net cash used in financing activities increased by $3,994 to $58,862 in the thirty-nine weeks ended October 29, 2017 compared to $54,868 in the same period of fiscal 2016. The increase in cash used in financing activities was primarily due to increased repurchases of common stock of $102,624 offset by net borrowings of debt of $51,250 in the thirty-nine weeks ended October 29, 2017 compared to net repayments of $59,625 in the thirty-nine weeks ended October 30, 2016.
We plan on financing future growth through existing cash on hand, future operating cash flows, debt facilities and tenant improvement allowances from landlords. We expect to spend between $231,000 and $236,000 ($195,000 to $200,000 net of tenant improvement allowances) in capital additions during fiscal 2017. The fiscal 2017 additions are expected to include approximately ~~$195,000 to $200,000 ($159,000 to $164,000 net of tenant improvement allowances)~~$35,700 for new store construction and operating improvement initiatives ~~including four store remodels, $16,000~~($27,900 net of payments from landlords), $12,800 for game refreshment and ~~$20,000~~$15,000 for maintenance capital.
During the thirty-nine weeks ended November 1, 2020, the Company spent approximately $55,800 for new store construction and operating improvement initiatives ($47,100 net of payments from landlords), $9,500 for game refreshment and $7,300 for maintenance capital.
Financing Activities
— During the thirty-nine weeks ended October 31, 2021, the Company had net repayments of $60,000 of its revolving credit facility and a repayment related to the early extinguishment of $55,000 principal of the Notes. During the third quarter of fiscal 2020, the Company issued $550,000 of the Notes in ~~maintenance capital. A~~a private offering, from which the proceeds, along with cash on hand, were used to pay debt issuance costs, the $255,000 balance of the term portion of the ~~2017 new store spend is related~~credit facility, and $463,000 of outstanding borrowings under the revolving portion of the credit facility. Prior to ~~stores that will be under construction in 2017 but will not be open until 2018.~~
the offering and primarily during the first and second quarters of fiscal 2020, the Company received $95,750 of net proceeds from borrowings of debt and approximately $182,200 of net proceeds from the issuance of shares of our common stock.
Contractual Obligations and ~~Commercial~~ Commitments
~~The following table sets forth~~
There have been no material changes outside the ordinary course of business to our ~~expected future annual~~ contractual obligations ~~and commercial commitments~~since January 31, 2021, as ~~of October 29, 2017:~~

   Total    1 Year    2-3 Years    4-5 Years    After 5
Years
Credit Facility₍₁₎
   $ 316,000    $ 15,000    $ 30,000    $ 271,000    $ —
Interest requirements₍₂₎
   33,969    7,920    14,406    11,643    —
Operating leases₍₃₎
   1,403,810    100,701    193,205    168,002    941,902










Total
   $ 1,753,779    $ 123,621    $ 237,611    $ 450,645    $ 941,902










⁽¹⁾ The Credit Facility includes a $300,000 term loan facility and $500,000 revolving credit facility. As of October 29, 2017, we had borrowings of $300,000 under the term loan facility and borrowings of $16,000 under the revolving credit facility.
⁽²⁾ ~~The cash obligations for interest requirements consist of variable rate debt obligations at rates in effect on October 29, 2017 of 2.49%.~~
⁽³⁾ Our operating leases generally provide for one or more renewal options. These renewal options allow us to extend the term of the lease for a specified time at an established annual lease payment. Future obligations related to lease renewal options that have been exercised or were reasonably assured to be exercised as of the lease origination date, have been included in the table above.
reported on
Form10-K
filed with the SEC on March 31, 2021.
Accounting policies and estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosures of contingent assets and liabilities. These estimates and assumptions affect amounts of assets, liabilities, revenues and expenses and the disclosure of gain and loss contingencies at the date of the consolidated financial statements. Our current estimates are subject to change if different assumptions as to the outcome of future events were made. We evaluate our estimates and judgments on an ongoing basis, and we adjust our assumptions and judgments when facts and circumstances dictate. Since future events and their effects cannot be determined with absolute certainty, actual results may differ from the estimates we used in preparing the accompanying consolidated financial statements. A complete description of our critical accounting policies and estimates is included in our annual consolidated financial statements and the related notes in our Annual Report on~~Form10-K~~ Form
10-K
filed with the SEC on March ~~28, 2017.~~
31, 2021.
Recent accounting ~~pronouncements.~~
pronouncements
Refer to Note 1~~Summary of Significant Accounting Policies, of Notes~~ to the Unaudited Consolidated Financial Statements for information regarding new accounting pronouncements.
~~ITEM~~
Item 3.
~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~
Quantitative and Qualitative Disclosures About Market Risk
Commodity Price Risk
We are exposed to market price fluctuation in food and beverage product prices. Given the historical volatility of certain of our food product prices, including proteins, seafood, produce, dairy products, and cooking oil, these fluctuations can materially impact our food costs. While our purchasing commitments partially mitigate the risk of such fluctuations, there is no assurance that supply and demand factors such as disease or inclement weather will not cause the prices of the commodities used in our restaurant operations to fluctuate. ~~In a rapidly-fluctuating commodities market, it~~Additionally, the cost of purchased materials may ~~prove difficult for us to adjust~~be influenced by tariffs and other trade regulations which are outside of our ~~menu prices to respond to any price fluctuations. Therefore, to~~control. To the extent that we do not pass along cost increases to our customers, our results of operations may be adversely affected. At this time, we do not use financial instruments to hedge our commodity risk.
Interest Rate Risk
~~We are exposed to interest rate risk arising from changes in interest rates due to the~~
Our variable rate indebtedness under our ~~credit facility. Borrowings pursuant to our~~$500,000 revolving credit facility ~~bear interest at~~is based on
one-month
LIBOR, with a ~~floating rate based on~~ LIBOR plus an applicable margin. Accordingly, fluctuations in market interest rates may increase or decrease our interest expense which will, in turn, increase or decrease our net income and cash flow. In October 2015, the Company purchased anfloor of 1.00%. Our interest rate ~~cap agreement for $920~~swap agreements, with a combined notional amount of ~~$200,000~~$350,000, convert
one-month
LIBOR to ~~manage our exposure to~~a fixed interest rate ~~movements on our variable rate credit facility when~~of approximately 2.47% through August 17, 2022. At October 31, 2021,
one-month
LIBOR ~~exceeds 3.0%~~is below 1.00%. ~~The interest rate cap agreement matures on October 7, 2019. As of October 29, 2017,one-month~~ ~~LIBOR was 1.24%. We estimate that a hypothetical 25 basis point increase inone-month~~ ~~LIBOR would increase our annualized interest expense in the next year by approximately $800, assuming no change in the balance of the revolving portion of the credit facility.~~
Inflation
The primary inflationary factors affecting our operations are food, amusement offerings, labor costs, and energy costs. Many of our leases require us to pay taxes, maintenance, repairs, insurance, and utilities, all of which are generally subject to inflationary increases. Finally, the cost of constructing our stores is subject to inflationary increases in the costs of labor and material.
~~We have a substantial number~~
31
Table of Contents

A large portion of our hourly employees ~~who~~ are paid wage rates at or based on the applicable federal, state or city minimum wage and increases in the minimum wage will increase our labor costs. ~~Key~~Several states and local jurisdictions in which we operate ~~including California and New York,~~ have ~~recently~~ enacted legislation to increase the minimum wage and/or minimum tipped wage rates by varying ~~amounts. Several other states and local jurisdictions in which we operate have also enacted legislation to increase the minimum wage and/or minimum tipped wage~~amounts, with more planned increases ~~planned~~ in the future.

In general, we have been able to partially offset cost increases resulting from inflation by increasing ~~menu~~ prices of food and amusement offerings, improving productivity, or other operating changes. We may or may not be able to offset cost increases in the future.

~~ITEM~~

Item 4.

~~CONTROLS AND PROCEDURES~~

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Interim Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules
13a-15
and
15d-15
promulgated under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Based on that evaluation, the Interim Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There were no ~~significant~~ changes in our internal control over financial reporting (as defined in the Exchange Act
Rules 13a-15(f)
and
15d-15(f))
that occurred during our ~~thirteen weeks~~third quarter ended October ~~29, 2017,~~31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

~~ITEM~~

Item 1.

~~LEGAL PROCEEDINGS~~

Legal Proceedings

Information regarding legal proceedings is incorporated by reference from Note 45 to our Unaudited Consolidated Financial Statements set forth in Part I of this report.

~~ITEM~~

Item 1A.

~~RISK FACTORS~~

Risk Factors

~~There have been no material changes in~~

The Company is supplementing the ~~risk factors~~Risk Factors previously disclosed in ~~our~~Item 1A of the Annual Report ~~as filed~~ on Form
10-K
for the fiscal year ended January 31, 2021, (the “Annual Report”). The following risk factor should be read in conjunction with the Risk Factors disclosed in the Annual Report.

The Occupational Safety and Health Administration vaccine mandate for employers with more than 100 employees could have a material adverse impact on ~~March 28, 2017.~~
our business, financial condition, and results of operations.

On September 9, 2021, President Biden announced plans for the federal Occupational Safety and Health Administration (“OSHA”) to issue an Emergency Temporary Standard (“ETS”) mandating that all employers with more than 100 employees ensure their workers are either fully vaccinated against
COVID-19
or produce, on a weekly basis, a negative COVID test (the “vaccine mandate”). On November 4, 2021, OSHA issued the ETS, which will require covered employers to comply with the vaccine mandate beginning January 4, 2022 or face substantial penalties for
non-compliance.
Currently, the implementation of the vaccine mandate has been blocked by a federal appeals court, subject to the resolution of ongoing litigation challenging the constitutionality of the rules. In addition to the vaccine mandate, it is possible that additional mandates may be announced by local jurisdictions that could impact our workforce and operations. Such mandates could result in increased labor attrition and disruption, as well as difficulty securing future labor needs, and could adversely impact our results of operations.

Although we cannot predict with certainty the impact that the potential vaccine mandate and any other related measures may have on our workforce and operations, these requirements and any future requirements may require significant managerial time and attention to implement, increase our operating costs, result in attrition, including attrition of key employees, and impede our ability to recruit and retain our workforce. These measures also may further disrupt the national supply chain, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Table of Contents
~~ITEM~~
Item 2.
~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~
Unregistered Sales of Equity Securities
~~Information regarding repurchase~~
There were no repurchases of our common stock ~~in thousands, except~~under our share ~~and per share amounts,~~repurchase plan during the thirteen weeks ended October ~~29, 2017:~~

Period (1)
   Total Number
of Shares
Repurchased    Average Price
Paid per Share    Total Number of Shares
Repurchased as Part of
Publicly Announced Plan (2)    Approximate Dollar Value of
Shares That May Yet Be
Repurchased Under the Plan (2)
July 31, 2017 – August 27, 2017
   —      $ —      —      $ 72,889
August 28, 2017 - October 1, 2017
   75,000    $ 50.31    75,000    $ 169,116
October 2, 2017 - October 29, 2017
   165,342    $ 47.95    165,342    $ 161,188
31, 2021.
33
Table of Contents

⁽¹⁾

Item 6.

~~Monthly information is presented by reference to our fiscal periods during the thirteen weeks ended October 29, 2017.~~

Exhibits

⁽²⁾

Our Board of Directors approved a share repurchase program, under which the Company may repurchase shares on the open market, through privately negotiated transactions, and through trading plans designed to comply with Rule~~10b5-1~~ of the Securities Exchange Act of 1934, as amended. The share repurchase program may be modified, suspended or discontinued at any time. Effective September 7, 2017, an additional $100,000 in common shares authorization was approved by our Board of Directors. As of October 29, 2017, the Company has a total share repurchase authorization of $300,000 which expires at the end of fiscal 2018.

~~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 ~~Stephen M. King,~~Kevin Sheehan, Interim Chief Executive Officer of the Registrant, pursuant to17 CFR 240.13a-14(a) or 17CFR 240.15d-14(a).

31.2*		Certification of ~~Brian A. Jenkins, Senior Vice President and~~Scott J. Bowman, Chief Financial Officer of the Registrant, pursuant to 17CFR 240.13a-14(a) or 17 CFR240.15d-14(a).

32.1*		Certification of ~~Stephen M. King,~~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 ~~Brian A. Jenkins, Senior Vice President and~~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~~101.INS		XBRL Inline Instance Document—the instance document does not appear in the Interactive Data ~~files~~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

Table of Contents~~SIGNATURES~~
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DAVE & BUSTER’S ENTERTAINMENT, INC.,
a Delaware corporation
Date: December ~~5, 2017~~7, 2021 By:
/s/ ~~Stephen M. King~~
Kevin Sheehan
~~Stephen M. King~~Kevin Sheehan
Interim Chief Executive Officer
Date: December ~~5, 2017~~7, 2021 By:
/s/ ~~Brian A. Jenkins~~
Scott J. Bowman
~~Brian A. Jenkins~~Scott J. Bowman
~~Senior Vice President and~~ Chief Financial Officer
33
35


	October 29,			January 29,
	2017			2017
	(unaudited)			(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	15,258		$	20,083
Inventories		26,107			21,860
Prepaid expenses		18,221			15,828
Income taxes receivable		1,611			5,901
Other current assets		17,916			11,932

Total current assets		79,113			75,604
Property and equipment (net of $449,572 and $387,505 accumulated depreciation as of October 29, 2017 and January 29, 2017, respectively)		686,858			606,865
Deferred tax assets		3,926			2,446
Tradenames		79,000			79,000
Goodwill		272,600			272,629
Other assets and deferred charges		15,700			16,189

Total assets	$	1,137,197		$	1,052,733

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current installments of long-term debt	$	15,000		$	7,500
Accounts payable		62,444			55,278
Accrued liabilities		129,287			112,327
Income taxes payable		396			2,692

Total current liabilities		207,127			177,797
Deferred income taxes		12,978			14,497
Deferred occupancy costs		170,579			147,592
Other liabilities		21,023			16,767
Long-term debt, net		299,940			256,628
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; authorized: 400,000,000 shares; issued: 42,627,975 shares at October 29, 2017 and 42,469,570 shares at January 29, 2017; outstanding: 40,927,386 shares at October 29, 2017 and 42,204,587 shares at January 29, 2017		426			425
Preferred stock, 50,000,000 authorized; none issued		—			—
Paid-in capital		318,379			310,230
Treasury stock, 1,700,589 and 264,983 shares as of October 29, 2017 and January 29, 2017, respectively		(105,406	)		(14,817	)
Accumulated other comprehensive loss		(520	)		(723	)
Retained earnings		212,671			144,337

Total stockholders’ equity		425,550			439,452

Total liabilities and stockholders’ equity	$	1,137,197		$	1,052,733


	Thirty-Nine Weeks		Thirty-Nine Weeks
	Ended		Ended
	October 29, 2017		October 30, 2016
Food and beverage revenues	$	356,190	$	326,139
Amusement and other revenues		478,688		408,837

Total revenues		834,878		734,976
Cost of food and beverage		91,562		83,772
Cost of amusement and other		50,481		48,628

Total cost of products		142,043		132,400
Operating payroll and benefits		187,610		166,614
Other store operating expenses		247,663		214,487
General and administrative expenses		45,172		40,131
Depreciation and amortization expense		74,447		65,108
Pre-opening costs		14,626		10,390

Total operating costs		711,561		629,130

Operating income		123,317		105,846
Interest expense, net		6,073		5,573
Loss on debt refinancing		718		—

Income before provision for income taxes		116,526		100,273
Provision for income taxes		31,217		36,845

Net income		85,309		63,428

Unrealized foreign currency translation gain		203		180

Total comprehensive income	$	85,512	$	63,608

Net income per share:
Basic	$	2.05	$	1.52
Diluted	$	1.99	$	1.47
Weighted average shares used in per share calculations:
Basic		41,521,802		41,863,932
Diluted		42,888,659		43,234,767


					Paid-In Capital								Accumulated Other Comprehensive Gain (Loss)			Retained Earnings			Total

							Treasury Stock
	Common Stock						At Cost
	Shares		Amt.				Shares			Amt.
Balance January 29, 2017 (audited)		42,469,570	$	425	$	310,230		264,983		$	(14,817	)	$	(723	)	$	144,337		$	439,452
Net income		—		—		—		—			—			—			85,309			85,309
Unrealized foreign currency translation gain		—		—		—		—			—			203			—			203
Share-based compensation		—		—		7,006		—			—			—			—			7,006
Cumulative effect of a change in accounting principle		—		—		—		—			—			—			782			782
Issuance of common stock		158,405		1		1,143		—			—			—			—			1,144
Repurchase of common stock		—		—		—		1,778,484			(109,988	)		—			—			(109,988	)
Issuance of treasury stock		—		—		—		(342,878	)		19,399			—			(17,757	)		1,642

Balance October 29, 2017 (unaudited)		42,627,975	$	426	$	318,379		1,700,589		$	(105,406	)	$	(520	)	$	212,671		$	425,550


	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


	October 29, 2017		January 29, 2017
Deferred amusement revenue	$	30,708	$	28,305
Compensation and benefits		19,840		20,886
Amusement redemption liability		17,599		15,431
Rent		16,233		14,260
Property taxes		7,650		4,650
Customer deposits		5,804		3,003
Deferred gift card revenue		5,173		6,957
Current portion of long-term insurance		4,070		4,460
Sales and use taxes		3,376		3,872
Utilities		3,332		2,969
Inventory liabilities		4,070		2,659
Other (refer to Note 4)		11,432		4,875

Total accrued liabilities	$	129,287	$	112,327


	October 29, 2017			January 29, 2017
Credit facility - term	$	300,000		$	138,750
Credit facility - revolver		16,000			126,000

Total debt outstanding		316,000			264,750
Less:
Current installments - term		(15,000	)		(7,500	)
Debt issuance costs - term		(1,060	)		(622	)

Long-term debt, net	$	299,940		$	256,628


2017	$	3,750
2018		15,000
2019		15,000
2020		15,000
2021		15,000
2022		252,250

Total future payments	$	316,000


1 year or less	$	100,701
2 years		99,749
3 years		93,456
4 years		88,142
5 years		79,860
Thereafter		941,902

Total future payments	$	1,403,810


(in thousands, except share and per share data)	Thirteen Weeks Ended October 29, 2017		Thirteen Weeks Ended October 30, 2016
Numerator:
Net income	$	12,157	$	10,755
Denominator:
Weighted average number of common shares outstanding (basic)		41,077,206		42,061,235
Weighted average dilutive impact of equity-based awards		1,173,405		1,266,577
Weighted average number of common and common equivalent shares outstanding (diluted)		42,250,611		43,327,812
Net income per share:
Basic	$	0.30	$	0.26
Diluted	$	0.29	$	0.25

(in thousands, except share and per share data)	Thirty-nine Weeks Ended October 29, 2017		Thirty-nine Weeks Ended October 30, 2016
Numerator:
Net income	$	85,309	$	63,428
Denominator:
Weighted average number of common shares outstanding (basic)		41,521,802		41,863,932
Weighted average dilutive impact of equity-based awards		1,366,857		1,370,835
Weighted average number of common and common equivalent shares outstanding (diluted)		42,888,659		43,234,767
Net income per share:
Basic	$	2.05	$	1.52
Diluted	$	1.99	$	1.47


	2014 Stock Incentive Plan					2010 Stock Incentive Plan
				Weighted					Weighted
				Average					Average
	Number			Exercise		Number			Exercise
	of Options			Price		of Options			Price
Outstanding at January 29, 2017		833,499		$	26.93		1,225,053		$	5.35
Granted		190,379			57.74		—			—
Exercised		(16,522	)		34.81		(483,008	)		4.58
Forfeited		(4,631	)		47.33		—			—

Outstanding at October 29, 2017		1,002,725		$	32.56		742,045		$	5.86

Exercisable at October 29, 2017		421,687		$	26.48		688,249		$	5.66


	Thirteen Weeks Ended				Thirteen Weeks Ended
	October 29, 2017				October 30, 2016
Food and beverage revenues	$	107,690	43.1	%	$	101,343	44.3	%
Amusement and other revenues		142,289	56.9			127,316	55.7

Total revenues		249,979	100.0			228,659	100.0
Cost of food and beverage (as a percentage of food and beverage revenues)		28,387	26.4			26,560	26.2
Cost of amusement and other (as a percentage of amusement and other revenues)		16,220	11.4			15,581	12.2

Total cost of products		44,607	17.8			42,141	18.4
Operating payroll and benefits		57,967	23.2			55,034	24.1
Other store operating expenses		82,766	33.1			71,888	31.4
General and administrative expenses		13,432	5.4			13,506	5.9
Depreciation and amortization expense		25,672	10.3			22,864	10.0
Pre-opening costs		5,609	2.2			4,553	2.0

Total operating costs		230,053	92.0			209,986	91.8

Operating income		19,926	8.0			18,673	8.2
Interest expense, net		2,156	0.9			1,578	0.7
Loss on debt refinancing		718	0.3			—	—

Income before provision for income taxes		17,052	6.8			17,095	7.5
Provision for income taxes		4,895	1.9			6,340	2.8

Net income	$	12,157	4.9	%	$	10,755	4.7	%

Change in comparable store sales			(1.3	)%			5.9	%
Company-owned stores open at end of period			101				88
Comparable stores open at end of period			76				66


Comparable stores	$	(2,496	)
Non-comparable stores		22,916
Other		900

Total	$	21,320


	Thirty-nine Weeks			Thirty-nine Weeks
	Ended October 29, 2017			Ended October 30, 2016
Net cash provided by (used in):
Operating activities	$	201,063		$	174,550
Investing activities		(147,026	)		(130,453	)
Financing activities		(58,862	)		(54,868	)


	Total		1 Year		2-3 Years		4-5 Years		After 5 Years
Credit Facility₍₁₎	$	316,000	$	15,000	$	30,000	$	271,000	$	—
Interest requirements₍₂₎		33,969		7,920		14,406		11,643		—
Operating leases₍₃₎		1,403,810		100,701		193,205		168,002		941,902

Total	$	1,753,779	$	123,621	$	237,611	$	450,645	$	941,902


Period (1)	Total Number of Shares Repurchased		Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plan (2)		Approximate Dollar Value of Shares That May Yet Be Repurchased Under the Plan (2)
July 31, 2017 – August 27, 2017		—	$	—		—	$	72,889
August 28, 2017 - October 1, 2017		75,000	$	50.31		75,000	$	169,116
October 2, 2017 - October 29, 2017		165,342	$	47.95		165,342	$	161,188


	DAVE & BUSTER’S ENTERTAINMENT, INC., a Delaware corporation

Date: December ~~5, 2017~~7, 2021	By:	/s/ ~~Stephen M. King~~ Kevin Sheehan
		~~Stephen M. King~~Kevin Sheehan
		Interim Chief Executive Officer

Date: December ~~5, 2017~~7, 2021	By:	/s/ ~~Brian A. Jenkins~~ Scott J. Bowman
		~~Brian A. Jenkins~~Scott J. Bowman
		~~Senior Vice President and~~ Chief Financial Officer

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