Dave & Buster's Entertainment (PLAY) 10-Q 7 Jun 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	May. 01, 2016	Jun. 02, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 1, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	PLAY
Entity Registrant Name	Dave & Buster's Entertainment, Inc.
Entity Central Index Key	1,525,769
Current Fiscal Year End Date	--01-29
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		41,756,787

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	May. 01, 2016	Jan. 31, 2016
Current assets:
Cash and cash equivalents	$ 28,123	$ 25,495
Inventories	18,497	19,529
Prepaid expenses	14,898	12,954
Deferred income taxes		30,257
Income taxes receivable	871	4,146
Other current assets	22,059	17,699
Total current assets	84,448	110,080
Property and equipment (net of $329,714 and $309,345 accumulated depreciation as of May 1, 2016 and January 31, 2016, respectively)	547,176	523,891
Deferred income taxes, net	2,863
Tradenames	79,000	79,000
Goodwill	272,577	272,694
Other assets and deferred charges	17,509	18,036
Total assets	1,003,573	1,003,701
Current liabilities:
Current installments of long-term debt	7,500	7,500
Accounts payable	50,274	42,836
Accrued liabilities	104,370	103,614
Income taxes payable	10,036	2,697
Total current liabilities	172,180	156,647
Deferred income taxes, net	12,675	35,347
Deferred occupancy costs	134,330	125,259
Other liabilities	11,026	10,194
Long-term debt, net	$ 292,095	$ 329,916
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value, 400,000,000 authorized shares; 41,735,327 and 41,618,933 issued shares as of May 1, 2016 and January 31, 2016, respectively	$ 417	$ 416
Preferred stock, 50,000,000 authorized; none issued
Paid-in capital	$ 284,155	$ 280,828
Accumulated other comprehensive loss	(530)	(970)
Retained earnings	97,225	66,064
Total stockholders' equity	381,267	346,338
Total liabilities and stockholders' equity	$ 1,003,573	$ 1,003,701

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	May. 01, 2016	Jan. 31, 2016
Statement of Financial Position [Abstract]
Property and equipment, accumulated depreciation	$ 329,714	$ 309,345
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	41,735,327	41,618,933
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Statement of Comprehensive Income [Abstract]
Food and beverage revenues	$ 117,124	$ 103,565
Amusement and other revenues	144,863	119,110
Total revenues	261,987	222,675
Cost of food and beverage	29,639	26,780
Cost of amusement and other	16,512	15,766
Total cost of products	46,151	42,546
Operating payroll and benefits	56,377	48,992
Other store operating expenses	71,530	61,194
General and administrative expenses	13,040	12,844
Depreciation and amortization expense	20,810	18,577
Pre-opening costs	2,905	2,774
Total operating costs	210,813	186,927
Operating income	51,174	35,748
Interest expense, net	2,110	4,650
Income before provision for income taxes	49,064	31,098
Provision for income taxes	17,903	11,556
Net income	31,161	19,542
Unrealized foreign currency translation gain	440	155
Total comprehensive income	$ 31,601	$ 19,697
Net income per share:
Basic	$ 0.75	$ 0.49
Diluted	$ 0.72	$ 0.46
Weighted average shares used in per share calculations:
Basic	41,659,879	40,235,141
Diluted	43,112,141	42,377,014

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - 3 months ended May. 01, 2016 - USD ($) $ in Thousands	Total	Common Stock [Member]	Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]
Beginning balance at Jan. 31, 2016	$ 346,338	$ 416	$ 280,828	$ (970)	$ 66,064
Beginning balance, shares at Jan. 31, 2016		41,618,933
Net income	31,161				31,161
Unrealized foreign currency translation gain	440			440
Stock-based compensation	1,360		1,360
Excess income tax benefit related to stock-based compensation plans	1,538		1,538
Issuance of common stock upon exercise of options and restricted shares	430	$ 1	429
Issuance of common stock upon exercise of options and restricted shares, shares		116,394
Ending balance at May. 01, 2016	$ 381,267	$ 417	$ 284,155	$ (530)	$ 97,225
Ending balance, shares at May. 01, 2016		41,735,327

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Cash flows from operating activities:
Net income	$ 31,161	$ 19,542
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	20,810	18,577
Deferred taxes	4,722	5,569
Excess income tax benefit related to stock-based compensation plans	(1,538)	(2,874)
Loss on disposal of fixed assets	170	289
Share-based compensation charges	1,360	549
Other, net	699	505
Changes in assets and liabilities:
Inventories	1,032	(507)
Prepaid expenses	(1,944)	(1,881)
Income taxes receivable	3,275	2,241
Other current assets	(4,231)	(3,177)
Other assets and deferred charges	465	6
Accounts payable	1,671	2,673
Accrued liabilities	223	48
Income taxes payable	8,877	3,375
Deferred occupancy costs	9,071	6,711
Other liabilities	832	59
Net cash provided by operating activities	76,655	51,705
Cash flows from investing activities:
Capital expenditures	(38,121)	(36,837)
Proceeds from sales of property and equipment	1	116
Net cash used in investing activities	(38,120)	(36,721)
Cash flows from financing activities:
Borrowings under Credit Facility	6,000
Repayments of Credit Facility	(43,875)
Proceeds from the exercise of stock options	430	1,346
Excess income tax benefit related to stock-based compensation plans	1,538	2,874
Net cash provided by (used in) financing activities	(35,907)	4,220
Increase in cash and cash equivalents	2,628	19,204
Beginning cash and cash equivalents	25,495	70,876
Ending cash and cash equivalents	28,123	90,080
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net	1,028	302
Cash paid for interest, net of amounts capitalized	1,916	4,371
Increase in fixed asset accounts payable	$ 5,767	$ 3,954

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	May. 01, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 1: Summary of Significant Accounting Policies Basis of presentation The accompanying unaudited consolidated financial statements include the accounts of D&B Entertainment and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. 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 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 financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the thirteen weeks ended May 1, 2016 are not necessarily indicative of results that may be expected for any other interim period or for the year ending January 29, 2017. Our quarterly financial data should be read in conjunction with the audited financial statements and notes thereto for the year ended January 31, 2016, included in our Annual Report on Form 10-K as filed with the SEC. We operate on a 52 or 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 year when the fourth quarter has 14 weeks. Fiscal 2016 and fiscal 2015, which end on January 29, 2017 and January 31, 2016, respectively, both consist of 52 weeks. Certain amounts within the fiscal 2015 Consolidated Statements of Cash Flows have been aggregated to conform to the fiscal 2016 presentation. Our cash management system provides for the 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 of $13,314 and $14,180 are presented in “Accounts payable” in the Consolidated Balance Sheets as of May 1, 2016 and January 31, 2016, respectively. Changes in the book overdraft position are presented within “Net cash provided by operating activities” within the Consolidated Statements of Cash Flows. The balance of “Other current assets” includes construction allowance receivables of $17,975 and $13,097 as of May 1, 2016 and January 31, 2016, respectively, related to our new store openings. Fair value of financial instruments Our financial instruments consist 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 fair value because of their short maturities. We believe that the carrying amount of our credit facility approximates fair value because the interest rates are adjusted regularly based on current market conditions. Non-financial assets and liabilities recognized or disclosed at fair value in the consolidated financial statements on a nonrecurring basis include such items as property and equipment, goodwill, tradenames and other assets. These assets are measured at fair value if determined to be impaired. During the quarter, there were no fair value adjustments. Related party transactions We have a stockholders’ agreement with Oak Hill Capital Management, LLC which provides for the reimbursement of certain costs and expenses, and we made payments of $12 and $14 during the thirteen weeks ended May 1, 2016 and May 3, 2015, respectively. We paid compensation of $18 during each of the thirteen weeks ended May 1, 2016 and May 3, 2015 to David Jones, who serves as a senior advisor to the Oak Hill Funds. Recently adopted accounting pronouncements In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30), and in August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. ASU 2015-03 changes the presentation of debt issuance costs and generally requires debt issuance costs related to a recognized debt liability to be reported as a direct reduction from the carrying amount of the debt. ASU 2015-15 clarifies that debt issuance costs incurred in connection with line-of-credit arrangements may continue to be presented as an asset, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The new standards do not change the recognition and measurement of debt issuance costs. This guidance requires retrospective application and we adopted this guidance in the first quarter of fiscal 2016 on a restrospective basis. As a result, we reclassified debt issuance costs related to our term loan facility of $834 included in “Other assets and deferred charges” to “Long-term debt, net” on our previously reported consolidated balance sheet as of January 31, 2016. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (Subtopic 350-40) . Recent accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires a lessee to recognize an asset and liability for lease arrangements longer than twelve months. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact of the updated guidance on our consolidated financial statements, but expect this adoption will result in a significant increase in our assets and liabilities on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, 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. The guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. In May 2014, the FASB issued guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes most current revenue recognition guidance and outlines a single comprehensive model for entities to use in accounting for revenue. The guidance provides a five step framework to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to be entitled to receive in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 delaying the effective date for adoption. The update is now effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The update permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact of this guidance on our consolidated financial statements and the transition method that we will apply.

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	May. 01, 2016
Text Block [Abstract]
Accrued Liabilities	Note 2: Accrued Liabilities Accrued liabilities consist of the following as of: May 1, 2016 January 31, 2016 Deferred amusement revenue $ 24,804 $ 22,623 Compensation and benefits 20,432 25,054 Amusement redemption liability 13,678 12,816 Rent 13,299 12,277 Deferred gift card revenue 5,711 6,705 Property taxes 4,611 3,556 Customer deposits 4,093 2,734 Current portion of long-term insurance reserves 3,591 3,591 Sales and use taxes 3,111 3,669 Utilities 2,689 2,753 Other 8,351 7,836 Total accrued liabilities $ 104,370 $ 103,614

Long-Term Debt

Long-Term Debt	3 Months Ended
	May. 01, 2016
Debt Disclosure [Abstract]
Long-Term Debt	Note 3: Long-Term Debt Long-term debt consists of the following as of: May 1, 2016 January 31, 2016 Credit Facility - term $ 144,375 $ 146,250 Credit Facility - revolver 156,000 192,000 Total debt outstanding 300,375 338,250 Less: Current installments 7,500 7,500 Debt issuance costs - term 780 834 Long-term debt, net $ 292,095 $ 329,916 Credit facility — As of May 1, 2016, we had letters of credit outstanding of $5,016 and $188,984 of borrowing available under our Credit Facility. We believe that the carrying amount of the Credit Facility approximates its fair value because the interest rates are adjusted regularly based on current market conditions. The fair value of the Company’s Credit Facility was determined to be a Level Two instrument as defined by GAAP. The interest rates per annum applicable to loans, other than swingline loans, under the Credit Facility are currently set based on a defined LIBOR rate plus an applicable margin. Swingline 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 from 1.50% to 2.25% for the term loans and the revolving loans. The stated weighted average interest rate on the Credit Facility at May 1, 2016 was 2.19%. The weighted average effective interest rate incurred on our borrowings under the Credit Facility was 2.60%. The weighted average effective rate includes amortization of debt issuance costs, commitment and other fees. Our Credit Facility contains restrictive covenants that, among other things, places 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. In addition, our Credit Facility requires us to maintain certain financial ratio covenants. As of May 1, 2016, we were in compliance with the restrictive and financial ratio covenants under the Credit Facility. Future debt obligations May 1, 2016 1 year or less $ 7,500 2 years 7,500 3 years 7,500 4 years 7,500 5 years 270,375 Thereafter — Total future payments $ 300,375 The following tables set forth our recorded interest expense, net for the periods indicated: Thirteen Weeks Thirteen Weeks Ended Ended May 1, 2016 May 3, 2015 Credit facility interest expense $ 1,932 $ 4,701 Amortization of issuance cost and discount 169 333 Interest income (66 ) (67 ) Less capitalized interest (131 ) (317 ) Change in fair value of interest rate cap 206 — Total interest expense, net $ 2,110 $ 4,650 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 effective date of the interest rate cap agreement is October 7, 2015, and the 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 value of the interest rate cap are recognized as interest expense. The Company’s investment in the interest rate cap, with a fair value of $239 at May 1, 2016, is included in “Other assets and deferred charges” in the Consolidated Balance Sheets and was valued using an analysis based on market observable inputs, representing Level Two assets as defined by GAAP. The fair value of the Company’s interest rate cap represents the amount the Company would receive to terminate the contract. For the thirteen weeks ending May 1, 2016, interest expense includes $206 related to the change in the fair value of the interest rate cap since the end of fiscal 2015.

Income Taxes

Income Taxes	3 Months Ended
	May. 01, 2016
Income Tax Disclosure [Abstract]
Income Taxes	Note 4: Income Taxes The effective income tax rate decreased to 36.5% for the first quarter of fiscal 2016 compared to 37.2% in the first quarter of fiscal 2015. The decline in our effective rate is primarily the result of comparatively lower estimated state tax rates as of May 1, 2016, partially offset by the reduced impact of the FICA Tip Credit on our effective rate as a result of higher pre-tax income. As of May 1, 2016, we had no remaining available federal tax credit carryovers. We had approximately $57,200 of state net operating loss carryforwards, which can generally be carried forward for 20 years. Included in our state net operating loss carryforwards is approximately $11,200 related to excess stock compensation that will be recorded in additional paid-in capital when realized as a reduction in taxes payable.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	May. 01, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 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 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. We lease certain property and equipment under various non-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 May 1, 2016: 1 year or less $ 73,740 2 years 73,076 3 years 69,116 4 years 63,190 5 years 55,766 Thereafter 491,900 Total future payments $ 826,788 As of May 1, 2016 our signed operating lease agreements included future sites in Oakville (Toronto), Ontario, Las Vegas, Nevada and Carlsbad, California which are expected to open in the future. 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 May 1, 2016, we have signed seventeen additional 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 agreements are not included in the table. Subsequent to the quarter ended May 1, 2016, our future sites located in Fresno, California and Toledo, Ohio, included in the seventeen lease agreements noted above, have been delivered by the landlord resulting in future commitments of approximately $17,000 and $21,000, respectively.

Earnings per share

Earnings per share	3 Months Ended
	May. 01, 2016
Earnings Per Share [Abstract]
Earnings per share	Note 6: Earnings per share Basic earnings per share (“EPS”) represents net income divided by the weighted average number of common shares outstanding during the period. Diluted EPS represents net income divided by the basic weighted average number of common shares plus, if dilutive, potential common shares outstanding during the period. Potential common shares consist of incremental common shares issuable upon the exercise of outstanding stock options or the fulfillment of restricted and performance share vesting conditions. The dilutive effect of potential common shares is determined using the treasury stock method, whereby outstanding stock options are assumed exercised at the beginning of the reporting period and the exercise proceeds from such stock options, the average measured but unrecognized compensation cost during the period and certain tax benefits that will be credited to additional paid-in capital upon exercise are assumed to be used to repurchase our common stock at the average market price during the period. The following tables set forth the computation of EPS, basic and diluted for the periods indicated: (in thousands, except share and per share data) Thirteen Weeks Thirteen Weeks Ended Ended May 1, 2016 May 3, 2015 Numerator: Net income $ 31,161 $ 19,542 Denominator: Basic weighted average common shares outstanding 41,659,879 40,235,141 Effect of dilutive common shares for equity-based awards 1,452,262 2,141,873 Diluted weighted average common shares outstanding 43,112,141 42,377,014 Net income per share: Basic $ 0.75 $ 0.49 Diluted $ 0.72 $ 0.46 We had 3,235,728 and 4,397,575 stock option awards and unvested time-based restricted stock awards outstanding under our incentive stock plans as of May 1, 2016 and May 3, 2015, respectively, which were included in the computation of dilutive common shares. Unvested performance-based restricted stock units (“RSU’s”) were not included in the calculation of dilutive common shares as they did not meet the criteria for inclusion per GAAP guidance.

Equity-Based Compensation

Equity-Based Compensation	3 Months Ended
	May. 01, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Equity-Based Compensation	Note 7: Equity-Based Compensation Compensation expense related to stock options, RSU’s and restricted stock is as follows: Thirteen Weeks Thirteen Weeks Ended Ended May 1, 2016 May 3, 2015 Stock options $ 953 $ 481 RSU’s and restricted stock 407 68 Total equity-based compensation expense $ 1,360 $ 549 Transactions related to stock option awards during the thirteen weeks ended May 1, 2016, were as follows: 2014 Stock Incentive Plan 2010 Stock Incentive Plan Service based options Service based options Performance based options Weighted Weighted Weighted Average Average Average Number Exercise Number Exercise Number Exercise of Options Price of Options Price of Options Price Outstanding at January 31, 2016 699,179 $ 21.72 451,401 $ 7.07 1,890,424 $ 4.57 Granted 279,915 39.14 — — — — Exercised — — (6,661 ) 4.46 (88,732 ) 4.51 Outstanding at May 1, 2016 979,094 $ 26.70 444,740 $ 7.11 1,801,692 $ 4.57 Exercisable at May 1, 2016 105,382 $ 31.71 275,001 $ 6.49 1,801,692 $ 4.57 The total intrinsic value of options exercised during the thirteen weeks ended May 1, 2016 and May 3, 2015 was $3,151 and $7,133, respectively. The unrecognized expense related to our stock option plan totaled approximately $6,234 as of May 1, 2016 and will be expensed over a weighted average period of 1.9 years. The average remaining term for all options outstanding at May 1, 2016 is 6.1 years. Transactions related to restricted shares and RSU’s during the thirteen weeks ended May 1, 2016 were as follows: Weighted Average Shares Average Fair Outstanding at January 31, 2016 70,534 $ 31.75 Granted 71,222 39.15 Vested (10,799 ) 31.94 Outstanding at May 1, 2016 130,957 $ 35.76 Fair value of our restricted shares and RSU’s is based on our closing stock price on the date of grant. The unrecognized expense related to our unvested restricted shares and RSU’s was $4,580 as of May 1, 2016 and will be expensed over a weighted average period of 2.4 years.

Summary of Significant Accoun14

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	May. 01, 2016
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation The accompanying unaudited consolidated financial statements include the accounts of D&B Entertainment and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. 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 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 financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the thirteen weeks ended May 1, 2016 are not necessarily indicative of results that may be expected for any other interim period or for the year ending January 29, 2017. Our quarterly financial data should be read in conjunction with the audited financial statements and notes thereto for the year ended January 31, 2016, included in our Annual Report on Form 10-K as filed with the SEC. We operate on a 52 or 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 year when the fourth quarter has 14 weeks. Fiscal 2016 and fiscal 2015, which end on January 29, 2017 and January 31, 2016, respectively, both consist of 52 weeks. Certain amounts within the fiscal 2015 Consolidated Statements of Cash Flows have been aggregated to conform to the fiscal 2016 presentation. Our cash management system provides for the 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 of $13,314 and $14,180 are presented in “Accounts payable” in the Consolidated Balance Sheets as of May 1, 2016 and January 31, 2016, respectively. Changes in the book overdraft position are presented within “Net cash provided by operating activities” within the Consolidated Statements of Cash Flows. The balance of “Other current assets” includes construction allowance receivables of $17,975 and $13,097 as of May 1, 2016 and January 31, 2016, respectively, related to our new store openings.
Fair value of financial instruments	Fair value of financial instruments Our financial instruments consist 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 fair value because of their short maturities. We believe that the carrying amount of our credit facility approximates fair value because the interest rates are adjusted regularly based on current market conditions. Non-financial assets and liabilities recognized or disclosed at fair value in the consolidated financial statements on a nonrecurring basis include such items as property and equipment, goodwill, tradenames and other assets. These assets are measured at fair value if determined to be impaired. During the quarter, there were no fair value adjustments.
Related party transactions	Related party transactions We have a stockholders’ agreement with Oak Hill Capital Management, LLC which provides for the reimbursement of certain costs and expenses, and we made payments of $12 and $14 during the thirteen weeks ended May 1, 2016 and May 3, 2015, respectively. We paid compensation of $18 during each of the thirteen weeks ended May 1, 2016 and May 3, 2015 to David Jones, who serves as a senior advisor to the Oak Hill Funds.
Recently adopted accounting pronouncements and Recent accounting pronouncements	Recently adopted accounting pronouncements In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30), and in August 2015, the FASB issued ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. ASU 2015-03 changes the presentation of debt issuance costs and generally requires debt issuance costs related to a recognized debt liability to be reported as a direct reduction from the carrying amount of the debt. ASU 2015-15 clarifies that debt issuance costs incurred in connection with line-of-credit arrangements may continue to be presented as an asset, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The new standards do not change the recognition and measurement of debt issuance costs. This guidance requires retrospective application and we adopted this guidance in the first quarter of fiscal 2016 on a restrospective basis. As a result, we reclassified debt issuance costs related to our term loan facility of $834 included in “Other assets and deferred charges” to “Long-term debt, net” on our previously reported consolidated balance sheet as of January 31, 2016. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (Subtopic 350-40) . Recent accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires a lessee to recognize an asset and liability for lease arrangements longer than twelve months. The updated guidance is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact of the updated guidance on our consolidated financial statements, but expect this adoption will result in a significant increase in our assets and liabilities on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, 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. The guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements. In May 2014, the FASB issued guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes most current revenue recognition guidance and outlines a single comprehensive model for entities to use in accounting for revenue. The guidance provides a five step framework to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to be entitled to receive in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 delaying the effective date for adoption. The update is now effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The update permits the use of either the retrospective or cumulative effect transition method. We are currently evaluating the impact of this guidance on our consolidated financial statements and the transition method that we will apply.

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	May. 01, 2016
Text Block [Abstract]
Accrued Liabilities	Accrued liabilities consist of the following as of: May 1, 2016 January 31, 2016 Deferred amusement revenue $ 24,804 $ 22,623 Compensation and benefits 20,432 25,054 Amusement redemption liability 13,678 12,816 Rent 13,299 12,277 Deferred gift card revenue 5,711 6,705 Property taxes 4,611 3,556 Customer deposits 4,093 2,734 Current portion of long-term insurance reserves 3,591 3,591 Sales and use taxes 3,111 3,669 Utilities 2,689 2,753 Other 8,351 7,836 Total accrued liabilities $ 104,370 $ 103,614

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	May. 01, 2016
Debt Disclosure [Abstract]
Long-Term Debt	Long-term debt consists of the following as of: May 1, 2016 January 31, 2016 Credit Facility - term $ 144,375 $ 146,250 Credit Facility - revolver 156,000 192,000 Total debt outstanding 300,375 338,250 Less: Current installments 7,500 7,500 Debt issuance costs - term 780 834 Long-term debt, net $ 292,095 $ 329,916
Future Debt Payment Obligation	Future debt obligations May 1, 2016 1 year or less $ 7,500 2 years 7,500 3 years 7,500 4 years 7,500 5 years 270,375 Thereafter — Total future payments $ 300,375
Recorded Interest Expense, Net	The following tables set forth our recorded interest expense, net for the periods indicated: Thirteen Weeks Thirteen Weeks Ended Ended May 1, 2016 May 3, 2015 Credit facility interest expense $ 1,932 $ 4,701 Amortization of issuance cost and discount 169 333 Interest income (66 ) (67 ) Less capitalized interest (131 ) (317 ) Change in fair value of interest rate cap 206 — Total interest expense, net $ 2,110 $ 4,650

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	May. 01, 2016
Commitments and Contingencies Disclosure [Abstract]
Lease Commitments	The following table sets forth our lease commitments as of May 1, 2016: 1 year or less $ 73,740 2 years 73,076 3 years 69,116 4 years 63,190 5 years 55,766 Thereafter 491,900 Total future payments $ 826,788

Earnings per share (Tables)

Earnings per share (Tables)	3 Months Ended
	May. 01, 2016
Earnings Per Share [Abstract]
Summary of Calculation of Basic and Diluted Earnings Per Share	The following tables set forth the computation of EPS, basic and diluted for the periods indicated: (in thousands, except share and per share data) Thirteen Weeks Thirteen Weeks Ended Ended May 1, 2016 May 3, 2015 Numerator: Net income $ 31,161 $ 19,542 Denominator: Basic weighted average common shares outstanding 41,659,879 40,235,141 Effect of dilutive common shares for equity-based awards 1,452,262 2,141,873 Diluted weighted average common shares outstanding 43,112,141 42,377,014 Net income per share: Basic $ 0.75 $ 0.49 Diluted $ 0.72 $ 0.46

Equity-Based Compensation (Tabl

Equity-Based Compensation (Tables)	3 Months Ended
	May. 01, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Compensation Expense	Compensation expense related to stock options, RSU’s and restricted stock is as follows: Thirteen Weeks Thirteen Weeks Ended Ended May 1, 2016 May 3, 2015 Stock options $ 953 $ 481 RSU’s and restricted stock 407 68 Total equity-based compensation expense $ 1,360 $ 549
Transactions Related to Stock Options Awards	Transactions related to stock option awards during the thirteen weeks ended May 1, 2016, were as follows: 2014 Stock Incentive Plan 2010 Stock Incentive Plan Service based options Service based options Performance based options Weighted Weighted Weighted Average Average Average Number Exercise Number Exercise Number Exercise of Options Price of Options Price of Options Price Outstanding at January 31, 2016 699,179 $ 21.72 451,401 $ 7.07 1,890,424 $ 4.57 Granted 279,915 39.14 — — — — Exercised — — (6,661 ) 4.46 (88,732 ) 4.51 Outstanding at May 1, 2016 979,094 $ 26.70 444,740 $ 7.11 1,801,692 $ 4.57 Exercisable at May 1, 2016 105,382 $ 31.71 275,001 $ 6.49 1,801,692 $ 4.57
Transactions Related to Restricted Shares and RSU's	Transactions related to restricted shares and RSU’s during the thirteen weeks ended May 1, 2016 were as follows: Weighted Average Shares Average Fair Outstanding at January 31, 2016 70,534 $ 31.75 Granted 71,222 39.15 Vested (10,799 ) 31.94 Outstanding at May 1, 2016 130,957 $ 35.76

Summary of Significant Accoun20

Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	3 Months Ended
	May. 01, 2016USD ($)StoresStates	May. 03, 2015USD ($)	Jan. 31, 2016USD ($)
Description Of Business And Basis Of Presentation [Line Items]
Number of stores opened | Stores	84
Accounts Payable [Member]
Description Of Business And Basis Of Presentation [Line Items]
Book overdrafts reclassified to accounts payable	$ 13,314		$ 14,180
United States and Canada [Member]
Description Of Business And Basis Of Presentation [Line Items]
Number of states store operates | States	30
Construction [Member]
Description Of Business And Basis Of Presentation [Line Items]
Construction allowance receivables	$ 17,975		$ 13,097
Board of Directors and Management [Member]
Description Of Business And Basis Of Presentation [Line Items]
Percentage of outstanding common stock owned	1.00%		1.00%
Credit Facility - Term [Member]
Description Of Business And Basis Of Presentation [Line Items]
Unamortized debt issuance costs	$ 780		$ 834
Oak Hill Capital Management LLC [Member]
Description Of Business And Basis Of Presentation [Line Items]
Percentage of outstanding common stock owned	9.60%		18.00%
Reimbursement expenses	$ 12	$ 14
Oak Hill Capital Management LLC [Member] | Director [Member]
Description Of Business And Basis Of Presentation [Line Items]
Board members compensation	$ 18	$ 18
Public [Member]
Description Of Business And Basis Of Presentation [Line Items]
Percentage of outstanding common stock owned	89.40%

Accrued Liabilities - Accrued L

Accrued Liabilities - Accrued Liabilities (Detail) - USD ($) $ in Thousands	May. 01, 2016	Jan. 31, 2016
Accrued Liabilities, Current [Abstract]
Deferred amusement revenue	$ 24,804	$ 22,623
Compensation and benefits	20,432	25,054
Amusement redemption liability	13,678	12,816
Rent	13,299	12,277
Deferred gift card revenue	5,711	6,705
Property taxes	4,611	3,556
Customer deposits	4,093	2,734
Current portion of long-term insurance reserves	3,591	3,591
Sales and use taxes	3,111	3,669
Utilities	2,689	2,753
Other	8,351	7,836
Total accrued liabilities	$ 104,370	$ 103,614

Long-Term Debt - Long-Term Debt

Long-Term Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands	May. 01, 2016	Jan. 31, 2016
Debt Instrument [Line Items]
Total debt outstanding	$ 300,375	$ 338,250
Current installments	7,500	7,500
Long-term debt, net	292,095	329,916
Credit Facility - Term [Member]
Debt Instrument [Line Items]
Total debt outstanding	144,375	146,250
Debt issuance costs - term	780	834
Credit Facility - Revolver [Member]
Debt Instrument [Line Items]
Total debt outstanding	$ 156,000	$ 192,000

Long-Term Debt - Additional Inf

Long-Term Debt - Additional Information (Detail) - USD ($)	May. 15, 2015	Oct. 31, 2015	May. 01, 2016	Nov. 01, 2015
Debt Instrument [Line Items]
Purchase of interest rate cap		$ 920,000
Notional amount under interest rate agreement		$ 200,000,000
Interest rate cap Libor rate description			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 effective date of the interest rate cap agreement is October 7, 2015, and the 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 value of the interest rate cap are recognized as interest expense. The Company’s investment in the interest rate cap, with a fair value of $239 at May 1, 2016, is included in “Other assets and deferred charges” in the Consolidated Balance Sheets and was valued using an analysis based on market observable inputs, representing Level Two assets as defined by GAAP. The fair value of the Company’s interest rate cap represents the amount the Company would receive to terminate the contract. For the thirteen weeks ending May 1, 2016, interest expense includes $206 related to the change in the fair value of the interest rate cap since the end of fiscal 2015.
Cap interest rate		3.00%
Effective date of interest rate cap agreement		Oct. 7, 2015
Maturity date of interest rate cap agreement		Oct. 7, 2019
Fair value of interest rate cap			$ 239,000
Change in fair value of interest rate cap			$ 206,000
Minimum [Member]
Debt Instrument [Line Items]
Debt instrument interest rate			1.50%
Maximum [Member]
Debt Instrument [Line Items]
Debt instrument interest rate			2.25%
Credit Facility [Member]
Debt Instrument [Line Items]
Senior secured credit facility	$ 150,000,000
Revolving credit facility, maximum borrowing capacity	$ 350,000,000
Maturity date	May 15, 2020
Revolving credit facility, letter of credit sub-facility maximum borrowing capacity	$ 20,000,000
Revolving credit facility, swingline sub-facility maximum borrowing capacity	$ 10,000,000
Term loan repayment of principal				$ 1,875,000
Frequency of periodic payment			Quarterly
Letter of credit facility outstanding			$ 5,016,000
Borrowing available			$ 188,984,000
Weighted average interest rate on the Credit Facility			2.19%
Weighted average effective interest			2.60%
Debt instrument, description of variable rate basis			The loans bear interest subject to a pricing grid based on a total leverage ratio, at LIBOR plus a spread ranging from 1.50% to 2.25% for the term loans and the revolving loans.
Debt Instrument, covenant compliance			Our Credit Facility contains restrictive covenants that, among other things, places 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. In addition, our Credit Facility requires us to maintain certain financial ratio covenants. As of May 1, 2016, we were in compliance with the restrictive and financial ratio covenants under the Credit Facility.

Long-Term Debt - Future Debt Pa

Long-Term Debt - Future Debt Payment Obligation (Detail) $ in Thousands	May. 01, 2016USD ($)
Debt Disclosure [Abstract]
1 year or less	$ 7,500
2 years	7,500
3 years	7,500
4 years	7,500
5 years	270,375
Thereafter	0
Total future payments	$ 300,375

Long-Term Debt - Recorded Inter

Long-Term Debt - Recorded Interest Expense, Net (Detail) - USD ($) $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Debt Disclosure [Abstract]
Credit facility interest expense	$ 1,932	$ 4,701
Amortization of issuance cost and discount	169	333
Interest income	(66)	(67)
Less capitalized interest	(131)	(317)
Change in fair value of interest rate cap	206
Total interest expense, net	$ 2,110	$ 4,650

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended
	May. 01, 2016	May. 03, 2015
Income Taxes [Line Items]
Effective tax rate	36.50%	37.20%
Federal [Member]
Income Taxes [Line Items]
Net operating loss carryforwards	$ 0
State and Local Jurisdiction [Member]
Income Taxes [Line Items]
Net operating loss carryforwards	57,200,000
Net operating loss carryforwards	$ 11,200,000

Commitments and Contingencies -

Commitments and Contingencies - Lease Commitments (Detail) $ in Thousands	May. 01, 2016USD ($)
Leases [Abstract]
1 year or less	$ 73,740
2 years	73,076
3 years	69,116
4 years	63,190
5 years	55,766
Thereafter	491,900
Total future payments	$ 826,788

Commitments and Contingencies28

Commitments and Contingencies - Additional Information (Detail) $ in Thousands	May. 01, 2016USD ($)Lease_Agreement
Operating Leases [Line Items]
Operating leases future minimum payments due	$ 826,788
Additional Lease Agreements [Member]
Operating Leases [Line Items]
Number of additional lease agreements signed | Lease_Agreement	17
Additional Lease Agreements [Member] | Fresno, California [Member]
Operating Leases [Line Items]
Operating leases future minimum payments due	$ 17,000
Additional Lease Agreements [Member] | Toledo, Ohio [Member]
Operating Leases [Line Items]
Operating leases future minimum payments due	$ 21,000

Earnings Per Share - Summary of

Earnings Per Share - Summary of Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Numerator:
Net income	$ 31,161	$ 19,542
Denominator:
Basic weighted average common shares outstanding	41,659,879	40,235,141
Effect of dilutive common shares for equity-based awards	1,452,262	2,141,873
Diluted weighted average common shares outstanding	43,112,141	42,377,014
Net income per share:
Basic	$ 0.75	$ 0.49
Diluted	$ 0.72	$ 0.46

Earnings Per share - Additional

Earnings Per share - Additional Information (Detail) - shares	May. 01, 2016	May. 03, 2015
Stock Option and Unvested Time-Based Restricted Stock Awards [Member]
Earnings Per Share [Line Items]
Stock option awards outstanding	3,235,728	4,397,575

Equity-Based Compensation - Sum

Equity-Based Compensation - Summary of Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Share-based Compensation [Abstract]
Stock options	$ 953	$ 481
RSU's and restricted stock	407	68
Total equity-based compensation expense	$ 1,360	$ 549

Equity-Based Compensation - Tra

Equity-Based Compensation - Transactions Related to Stock Option Awards (Detail)	3 Months Ended
	May. 01, 2016$ / sharesshares
2014 Stock Incentive Plan [Member] | Service Based Option [Member]
Number of Options
Options outstanding at January 31, 2016 | shares	699,179
Granted | shares	279,915
Options outstanding at May 1, 2016 | shares	979,094
Options exercisable at May 1, 2016 | shares	105,382
Weighted Average Exercise Price
Options outstanding at January 31, 2016 | $ / shares	$ 21.72
Granted | $ / shares	39.14
Options outstanding at May 1, 2016 | $ / shares	26.70
Options exercisable at May 1, 2016 | $ / shares	$ 31.71
2010 Stock Incentive Plan [Member] | Service Based Option [Member]
Number of Options
Options outstanding at January 31, 2016 | shares	451,401
Exercised | shares	(6,661)
Options outstanding at May 1, 2016 | shares	444,740
Options exercisable at May 1, 2016 | shares	275,001
Weighted Average Exercise Price
Options outstanding at January 31, 2016 | $ / shares	$ 7.07
Exercised | $ / shares	4.46
Options outstanding at May 1, 2016 | $ / shares	7.11
Options exercisable at May 1, 2016 | $ / shares	$ 6.49
2010 Stock Incentive Plan [Member] | Performance Based Options [Member]
Number of Options
Options outstanding at January 31, 2016 | shares	1,890,424
Exercised | shares	(88,732)
Options outstanding at May 1, 2016 | shares	1,801,692
Options exercisable at May 1, 2016 | shares	1,801,692
Weighted Average Exercise Price
Options outstanding at January 31, 2016 | $ / shares	$ 4.57
Exercised | $ / shares	4.51
Options outstanding at May 1, 2016 | $ / shares	4.57
Options exercisable at May 1, 2016 | $ / shares	$ 4.57

Equity-Based Compensation - Add

Equity-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	May. 01, 2016	May. 03, 2015
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of stock options exercised	$ 3,151	$ 7,133
Unrecognized expense related to stock option plan	$ 6,234
Unrecognized compensation expense, weighted average years	1 year 10 months 24 days
Average remaining term for all options outstanding	6 years 1 month 6 days
Restricted Stock Units (RSU's) and Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense, weighted average years	2 years 4 months 24 days
Unrecognized expense related to unvested restricted shares and RSUs	$ 4,580

Equity-Based Compensation - T34

Equity-Based Compensation - Transactions Related to Restricted Shares and RSU's (Detail) - Restricted Stock Units (RSU's) and Restricted Stock [Member]	3 Months Ended
	May. 01, 2016$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Stock Awards, January 31, 2016 | shares	70,534
Restricted Stock Awards, Granted | shares	71,222
Restricted Stock Awards, Vested | shares	(10,799)
Restricted Stock Awards, May 1, 2016 | shares	130,957
Weighted Average Fair Value, January 31, 2016 | $ / shares	$ 31.75
Weighted Average Fair Value, Granted | $ / shares	39.15
Weighted Average Fair Value, Vested | $ / shares	31.94
Weighted Average Fair Value, May 1, 2016 | $ / shares	$ 35.76