FORM
☒ | QUARTERLY REPORT |
31, 2021
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
or Other Jurisdiction ofIncorporation or Organization) Identification No.)
2481 Mañana Drive
Dallas, Texas 75220
(Address
(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 |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||
Emerging | ☐ |
Page | ||||||
PART I | ||||||
| 3 | |||||
Item 1. | ||||||
Item 2. | ||||||
Item 3. | ||||||
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| 31 | |||||
Item 4. | 32 | |||||
PART II | 32 | |||||
Item 1. | 32 | |||||
Item 1A. | 32 | |||||
Item 2. | 33 | |||||
Item 6. | 34 | |||||
35 |
Item 1. | Financial Statements |
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 | ||||||
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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 | ||||||
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Total assets | $ | 1,137,197 | $ | 1,052,733 | ||||
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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 | ||||||
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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 | ||||||
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Total stockholders’ equity | 425,550 | 439,452 | ||||||
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Total liabilities and stockholders’ equity | $ | 1,137,197 | $ | 1,052,733 | ||||
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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 | ||||
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 | ||||||
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Total revenues | 249,979 | 228,659 | ||||||
Cost of food and beverage | 28,387 | 26,560 | ||||||
Cost of amusement and other | 16,220 | 15,581 | ||||||
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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 | ||||||
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Total operating costs | 230,053 | 209,986 | ||||||
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Operating income | 19,926 | 18,673 | ||||||
Interest expense, net | 2,156 | 1,578 | ||||||
Loss on debt refinancing | 718 | — | ||||||
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Income before provision for income taxes | 17,052 | 17,095 | ||||||
Provision for income taxes | 4,895 | 6,340 | ||||||
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Net income | 12,157 | 10,755 | ||||||
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Unrealized foreign currency translation loss | (225 | ) | (106 | ) | ||||
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Total comprehensive income | $ | 11,932 | $ | 10,649 | ||||
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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 |
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 | ||||||
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Total revenues | 834,878 | 734,976 | ||||||
Cost of food and beverage | 91,562 | 83,772 | ||||||
Cost of amusement and other | 50,481 | 48,628 | ||||||
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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 | ||||||
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Total operating costs | 711,561 | 629,130 | ||||||
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Operating income | 123,317 | 105,846 | ||||||
Interest expense, net | 6,073 | 5,573 | ||||||
Loss on debt refinancing | 718 | — | ||||||
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Income before provision for income taxes | 116,526 | 100,273 | ||||||
Provision for income taxes | 31,217 | 36,845 | ||||||
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Net income | 85,309 | 63,428 | ||||||
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Unrealized foreign currency translation gain | 203 | 180 | ||||||
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Total comprehensive income | $ | 85,512 | $ | 63,608 | ||||
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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 |
(UNAUDITED)
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 | ||||||||||||||||||||||
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Balance October 29, 2017 (unaudited) | 42,627,975 | $ | 426 | $ | 318,379 | 1,700,589 | $ | (105,406 | ) | $ | (520 | ) | $ | 212,671 | $ | 425,550 | ||||||||||||||||
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Thirteen Weeks Ended October 31, 2021 | ||||||||||||||||||||||||||||||||
Common Stock | Paid-In Capital | Treasury Stock At Cost | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||
Shares | Amt. | Shares | Amt. | |||||||||||||||||||||||||||||
Balance August 1, 2021 | 61,276,473 | $ | 613 | $ | 540,348 | 13,020,098 | $ | (603,686 | ) | $ | (6,296 | ) | $ | 298,896 | $ | 229,875 | ||||||||||||||||
Net income | — | — | — | — | — | — | 10,585 | 10,585 | ||||||||||||||||||||||||
Unrealized foreign currency translation loss | — | — | — | — | — | (34 | ) | — | (34 | ) | ||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | — | 1,371 | — | 1,371 | ||||||||||||||||||||||||
Share-based compensation | — | — | 3,778 | — | — | — | — | 3,778 | ||||||||||||||||||||||||
Issuance of common stock | 87,542 | 1 | 1,042 | — | — | — | — | 1,043 | ||||||||||||||||||||||||
Repurchase of common stock | — | — | — | 1,616 | (59 | ) | — | — | (59 | ) | ||||||||||||||||||||||
Balance October 31, 2021 | 61,364,015 | $ | 614 | $ | 545,168 | 13,021,714 | $ | (603,745 | ) | $ | (4,959 | ) | $ | 309,481 | $ | 246,559 | ||||||||||||||||
Thirteen Weeks Ended November 1, 2020 | ||||||||||||||||||||||||||||||||
Common Stock | Paid-In Capital | Treasury Stock At Cost | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||
Shares | Amt. | Shares | Amt. | |||||||||||||||||||||||||||||
Balance August 2, 2020 | 60,422,212 | $ | 604 | $ | 526,253 | 12,827,300 | $ | (595,728 | ) | $ | (12,077 | ) | $ | 331,319 | $ | 250,371 | ||||||||||||||||
Net loss | — | — | — | — | — | — | (48,043 | ) | (48,043 | ) | ||||||||||||||||||||||
Unrealized foreign currency translation gain | — | — | — | — | — | 34 | — | 34 | ||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | — | 1,370 | — | 1,370 | ||||||||||||||||||||||||
Share-based compensation | — | — | 2,999 | — | — | — | — | 2,999 | ||||||||||||||||||||||||
Issuance of common stock | 61,518 | 1 | 271 | — | — | — | — | 272 | ||||||||||||||||||||||||
Repurchase of common stock | — | — | 14,401 | (229 | ) | — | — | (229 | ) | |||||||||||||||||||||||
Balance November 1, 2020 | 60,483,730 | $ | 605 | $ | 529,523 | 12,841,701 | $ | (595,957 | ) | $ | (10,673 | ) | $ | 283,276 | $ | 206,774 | ||||||||||||||||
Thirty-Nine Weeks | 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 | ||||||
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Net cash provided by operating activities | 201,063 | 174,550 | ||||||
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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 | ||||||
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Net cash used in investing activities | (147,026 | ) | (130,453 | ) | ||||
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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 | ||||||
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Net cash used in financing activities | (58,862 | ) | (54,868 | ) | ||||
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Decrease in cash and cash equivalents | (4,825 | ) | (10,771 | ) | ||||
Beginning cash and cash equivalents | 20,083 | 25,495 | ||||||
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Ending cash and cash equivalents | $ | 15,258 | $ | 14,724 | ||||
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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. | Shares | Amt. | |||||||||||||||||||||||||||||
Balance January 31, 2021 | 60,488,833 | $ | 605 | $ | 531,191 | 12,842,227 | $ | (595,970 | ) | $ | (9,085 | ) | $ | 226,491 | $ | 153,232 | ||||||||||||||||
Net income | — | — | — | — | — | — | 82,990 | 82,990 | ||||||||||||||||||||||||
Unrealized foreign currency translation gain | — | — | — | — | — | 12 | — | 12 | ||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax | — | — | — | — | — | 4,114 | — | 4,114 | ||||||||||||||||||||||||
Share-based compensation | — | — | 9,936 | — | — | — | — | 9,936 | ||||||||||||||||||||||||
Issuance of common stock | 875,182 | 9 | 4,041 | — | — | — | — | 4,050 | ||||||||||||||||||||||||
Repurchase of common stock | — | — | — | 179,487 | (7,775 | ) | — | — | (7,775 | ) | ||||||||||||||||||||||
Balance October 31, 2021 | 61,364,015 | $ | 614 | $ | 545,168 | 13,021,714 | $ | (603,745 | ) | $ | (4,959 | ) | $ | 309,481 | $ | 246,559 | ||||||||||||||||
Thirty-Nine Weeks Ended November 1, 2020 | ||||||||||||||||||||||||||||||||
Common Stock | Paid-In Capital | Treasury Stock At Cost | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||
Shares | Amt. | Shares | Amt. | |||||||||||||||||||||||||||||
Balance February 2, 2020 | 43,386,852 | $ | 434 | $ | 339,161 | 12,783,512 | $ | (595,041 | ) | $ | (8,369 | ) | $ | 433,465 | $ | 169,650 | ||||||||||||||||
Net loss | — | — | — | — | — | — | (150,189 | ) | (150,189 | ) | ||||||||||||||||||||||
Unrealized foreign currency translation loss | — | — | — | — | — | (97 | ) | — | (97 | ) | ||||||||||||||||||||||
Unrealized loss on derivatives, net of tax | — | — | — | — | — | (2,207 | ) | — | (2,207 | ) | ||||||||||||||||||||||
Share-based compensation | — | — | 5,344 | — | — | — | — | 5,344 | ||||||||||||||||||||||||
Issuance of common stock | 17,096,878 | 171 | 185,018 | — | — | — | — | 185,189 | ||||||||||||||||||||||||
Repurchase of common stock | — | — | 58,189 | (916 | ) | — | — | (916 | ) | |||||||||||||||||||||||
Balance November 1, 2020 | 60,483,730 | $ | 605 | $ | 529,523 | 12,841,701 | $ | (595,957 | ) | $ | (10,673 | ) | $ | 283,276 | $ | 206,774 | ||||||||||||||||
Thirty-Nine Weeks Ended October 31, 2021 | Thirty-Nine Weeks Ended November 1, 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | 82,990 | $ | (150,189 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization expense | 104,355 | 104,896 | ||||||
Non-cash interest expense | 5,660 | 4,088 | ||||||
Impairment of long-lived assets | — | 13,727 | ||||||
Deferred taxes | (6,191 | ) | (17,730 | ) | ||||
Loss on disposal of fixed assets | 634 | 541 | ||||||
Loss on debt extinguishment or refinancing | 2,829 | 904 | ||||||
Share-based compensation | 9,936 | 5,344 | ||||||
Other, net | 3,250 | 1,292 | ||||||
Changes in assets and liabilities: | ||||||||
Inventories | (13,449 | ) | 7,745 | |||||
Prepaid expenses | (498 | ) | 2,761 | |||||
Income tax receivable | 2,418 | (42,243 | ) | |||||
Other current assets | (870 | ) | 2,580 | |||||
Other assets and deferred charges | (1,859 | ) | (3 | ) | ||||
Accounts payable | (3,419 | ) | (11,945 | ) | ||||
Accrued liabilities | 19,069 | 44,742 | ||||||
Income taxes payable | (11 | ) | (2,639 | ) | ||||
Other liabilities | (6,346 | ) | 4,375 | |||||
Net cash provided by (used in) operating activities | 198,498 | (31,754 | ) | |||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (63,559 | ) | (72,604 | ) | ||||
Proceeds from sales of property and equipment | 550 | 234 | ||||||
Net cash used in investing activities | (63,009 | ) | (72,370 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from debt | 37,000 | 688,000 | ||||||
Payments of debt | (152,000 | ) | (760,250 | ) | ||||
Net proceeds from the issuance of common stock | — | 182,207 | ||||||
Proceeds from the exercise of stock options | 4,050 | 465 | ||||||
Dividends paid | — | (4,891 | ) | |||||
Repurchases of common stock to satisfy employee withholding tax obligations | (7,775 | ) | (16,805 | ) | ||||
Debt issuance costs and prepayment premiums | (1,650 | ) | (916 | ) | ||||
Net cash provided by (used in) financing activities | (120,375 | ) | 87,810 | |||||
Increase (decrease) in cash and cash equivalents | 15,114 | (16,314 | ) | |||||
Beginning cash and cash equivalents | 11,891 | 24,655 | ||||||
Ending cash and cash equivalents | $ | 27,005 | $ | 8,341 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Increase (decrease) in fixed asset accounts payable | $ | 6,314 | $ | (12,315 | ) | |||
Cash paid (refund received) for income taxes, net | $ | 16,043 | $ | (9,281 | ) | |||
Cash paid for interest, net | $ | 43,910 | $ | 17,306 |
Basis
We operate
30, 2022.
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.
Our financial instruments consist
Non-financial assets and liabilities recognized or disclosed atinput within the fair value in the consolidated financial statements on a nonrecurring basis include such items ashierarchy.
Share repurchase programimpairment charges related to our potential future sites during the thirty-nine weeks
Fair Value | ||||||||||||
Balance Sheet Location | October 31, 2021 | January 31, 2021 | ||||||||||
Interest rate swaps | Accrued liabilities | $ | (6,384 | ) | $ | (8,350 | ) | |||||
Interest rate swaps | Other liabilities | — | (4,416 | ) | ||||||||
Total derivatives | $ | (6,384 | ) | $ | (12,766 | ) | ||||||
Thirteen weeks ended | Thirty-nine weeks ended | |||||||||||||||
October 31, 2021 | November 1, 2020 | October 31, 2021 | November 1, 2020 | |||||||||||||
Loss recorded in accumulated other comprehensive income | $ | 0 | $ | 0 | $ | — | $ | 7,602 | ||||||||
Loss reclassified into income (1) | $ | (1,886 | ) | $ | (1,886 | ) | $ | (5,660 | ) | $ | (4,566 | ) | ||||
Income tax expense (benefit) in accumulated income | $ | 515 | $ | 516 | $ | 1,546 | $ | (829 | ) |
(1) | Amounts reclassified into income are included in “Interest expense, net” in the Consolidated Statements of ComprehensiveIncome (Loss). |
Recent161,093 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. |
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 impactallocations, the calculation of diluted earnings per share by excluding excess tax benefits fromincome taxes in interim periods, and the calculationrecognition of assumed proceeds available to repurchase shares under the treasury-stock method. The impact of the new guidance was as follows:
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. Theof fiscal year 2021, and the adoption did not have a material impact on the Company’sour consolidated results of operations and
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 expectstatements due to the adoption
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 . |
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 | ||||
|
|
|
|
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 | ||||
The interest rates per annum applicableterm portion of the credit facility.
Future debt obligations$10,486 and an unused commitment balance of $489,514 under the revolving credit facility.
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 | ||||||||
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 | ||||||||
On June 30, 2017, we agreed to settle litigation Legal costs related to allegedsuch claims are expensed as incurred.
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 inpresently known. Accordingly, the table above.
Note 5: Earnings per share
Potential dilutive shares consistultimate 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 exerciseremaining
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 | ||||||||
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 | ||||||||||
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 | |||||
Our Growth Strategies and Outlook
Our growth is based primarily on the following strategies:
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
114 stores.
stores (three in fiscal 2020 and three in fiscal 2021).
Liquidity and Cash Flows
The primary source of cash flow is from our operating activities and availability under the revolving credit facility.
We also expect seasonality
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
November 1, 2020
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. |
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. |
Thirteen Weeks Ended Operating income General and administrative expenses Depreciation and amortization expense Pre-opening costs Store Operating Income Before Depreciation and Amortization Store Operating Income Before Depreciation and Amortization Margin New store Operating initiatives, including remodels Games Maintenance Capital Total capital additions Payments from landlords Thirteen Weeks
Ended October 29, 2017 October 30, 2016 $ 19,926 $ 18,673 13,432 13,506 25,672 22,864 5,609 4,553 $ 64,639 $ 59,596 25.9 % 26.1 % $ 24,469 7.7 % $ (56,043 ) -51.4 % 22,104 11,746 34,381 34,384 2,092 2,570 $ 83,046 26.1 % $ (7,343 ) -6.7 % following table represents totalbelow reflects accrual-based additions to property and equipment. Total capital additions. Capital additions do not include any reductions for accrual-based tenantleasehold improvement allowances (“Paymentsincentives or proceeds from sale-leaseback transactions (collectively, “Payments from landlords”). Thirteen Weeks Thirteen Weeks Ended Ended October 29, 2017 October 30, 2016 $ 51,232 $ 49,115 2,762 3,258 2,229 348 4,912 4,667 $ 61,135 $ 57,388 $ 2,618 $ 6,118 $ 20,616 $ 7,700 195 361 8,402 1,208 $ 29,213 $ 9,269 $ 5,717 $ 4,709
Thirteen Weeks Ended | ||||||||||||
October 31, 2021 | November 1, 2020 | Change | ||||||||||
Total revenues | $ | 317,976 | $ | 109,052 | $ | 208,924 | ||||||
Total store operating weeks | 1,854 | 1,221 | 633 | |||||||||
Comparable store revenues | $ | 259,206 | $ | 89,592 | $ | 169,614 | ||||||
Comparable store operating weeks | 1,482 | 993 | 489 | |||||||||
Noncomparable store revenues | $ | 55,356 | 20,092 | $ | 35,264 | |||||||
Noncomparable store operating weeks | 372 | 228 | 144 | |||||||||
Other revenues and deferrals | $ | 3,414 | $ | (632 | ) | $ | 4,046 |
The increased revenuesshift 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.
changes in local
Non-comparable store revenue increased $22,916, for the third quarter of fiscal 20172021 compared to the third quarter of fiscal 2016. The increase innon-comparable2020, 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.
2020.
effective midway through the third quarter of fiscal 2021.
supply chain.
fiscal 2021.
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 20172021 compared to 5.9%64.9% in the third quarter of fiscal 20162020. This decrease was due primarily to favorable leveragesales leveraging on sales.
Depreciationoccupancy costs and amortization expense
Depreciationutilities and amortization expense increased by $2,808, or 12.3%, to $25,672reduced marketing spend in the third quarter of fiscal 2017 compared2021.
after construction was reduced as a result of impacts of the
and Loss on debt extinguishment / refinancing
Loss on debt refinancing
In connection with the August 17, 2017September 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.
Thirty-ninetax provisions within the CARES Act.
November 1, 2020
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 | ||||||||||||
|
|
|
|
|
|
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| |||||||||
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 | ||||||||||||
|
|
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|
|
|
|
| |||||||||
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. |
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. |
Operating income General and administrative expenses Depreciaton and amortization expense Pre-opening costs Store Operating Income Before Depreciation and Amortization Store Operating Income Before Depreciation and Amortization Margin New store Operating initiatives, including remodels Games Maintenance capital Total capital additions Payments from landlords Thirty-nine Weeks Thirty-nine Weeks Ended Ended October 29, 2017 October 30, 2016 $ 123,317 $ 105,846 45,172 40,131 74,447 65,108 14,626 10,390 $ 257,562 $ 221,475 30.9 % 30.1 % $ 140,632 14.6 % $ (198,571 ) -62.1 % 57,665 35,587 104,355 104,896 5,427 8,781 $ 308,079 32.1 % $ (49,307 ) -15.4 % following table represents totalbelow 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 $ 119,638 $ 106,134 14,830 17,890 10,521 15,180 10,448 11,058 $ 155,437 $ 150,262 $ 24,292 $ 16,779 $ 40,372 $ 48,222 12,809 9,079 16,692 2,988 $ 69,873 $ 60,289 $ 7,802 $ 8,723
Thirty-Nine Weeks Ended | ||||||||||||
October 31, 2021 | November 1, 2020 | Change | ||||||||||
Total revenues | $ | 960,954 | $ | 319,691 | $ | 641,263 | ||||||
Total store operating weeks | 5,304 | 2,682 | 2,622 | |||||||||
Comparable store revenues | $ | 794,033 | $ | 268,426 | $ | 525,607 | ||||||
Comparable store operating weeks | 4,243 | 2,184 | 2,059 | |||||||||
Noncomparable store revenues | $ | 179,603 | 54,763 | $ | 124,840 | |||||||
Noncomparable store operating weeks | 1,061 | 498 | 563 | |||||||||
Other revenues and deferrals | $ | (12,682 | ) | $ | (3,498 | ) | $ | (9,184 | ) |
The increased revenues were derivedshift 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
Foodcomparable period of fiscal 2020. Beverage sales at comparable stores decreasedincreased by $6,378,$49,967, or 3.2%145.3%, to $192,070$84,348 in the thirty-nine weeks ended October 29, 201731, 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, 201731, 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 $93,550,$150,095 for the thirty-nine weeks ended October 29, 2017 compared to31, 2021 and $54,664 for the samecomparable 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 and31, 2021 compared to 17.1% for the thirty-nine weekcomparable period ended October 30, 2016, respectively.
of fiscal 2020.
supply chain.
fiscal 2021.
any impairment charges in fiscal 2021.
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 periodweeks 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 20162021 and 20172020 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.
after construction was reduced as a result of impacts of the
and Loss on debt extinguishment / refinancing
Loss on debt refinancing
In connection with the August 17, 2017September 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.
Liquidity2020, the Company took the following actions to enable it to meet its obligations over the next twelve months:
Overview
We financerelief from testing compliance with certain financial covenants until the last day of the fiscal quarter ending on May 1, 2022;
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%.
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 othernon-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 whichNotes, the Company may repurchase shares on the open market, through privately negotiated transactions, and through trading plans designedredeem up to comply with Rule10b5-110% of the Securities Exchange Actoriginal principal amount of 1934, as amended. The share repurchase program may be modified, suspended or discontinuedthe Notes at any time. Effective September 7, 2017, an additional $100,000 in common shares authorization was approved by our Boarda redemption price of Directors. As103% 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 expiresmay 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 eachcertain 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.
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.
interestsignificant 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 rangingany specific point in time is subject to many variables, including seasonality, the timing of cash receipts and payments, and vendor payment terms.
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 forincreased $230,252 in the thirty-nine weeks ended October 29, 201731, 2021 compared to $174,550 for the thirty-nine weeks ended October 30, 2016. Increased cash flows from operations wereNovember 1, 2020 driven primarily by increased cash flowsthe impact of approximately 2,600 more store weeks.
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 periodprimarily reflects capital expenditures.
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.
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.
The following table sets forth
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 | ||||||||||
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reported on
31, 2021.
pronouncements
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
We are exposed to interest rate risk arising from changes in interest rates due to the
We have a substantial number
Item 4. | Controls and Procedures |
significant changes in our internal control over financial reporting (as defined in the Exchange Actthirteen weeksthird quarter ended October 29, 2017,31, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.ITEMLEGAL PROCEEDINGS
Item 1A. | Risk Factors |
There have been no material changes in
our business, financial condition, and results of operations.
Item 2. | Unregistered Sales of Equity Securities |
Information regarding repurchase
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 |
Item 6. | Exhibits |
* | Filed herein |
DAVE & BUSTER’S ENTERTAINMENT, INC., a Delaware corporation | ||||||
Date: December | By: | /s/ | ||||
Interim Chief Executive Officer | ||||||
Date: December | By: | /s/ | ||||
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