Cover Page
Cover Page - shares | 6 Months Ended | |
Aug. 02, 2020 | Sep. 04, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 2, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Quarterly Report | true | |
Entity Registrant Name | Dave & Buster’s Entertainment, Inc. | |
Entity Central Index Key | 0001525769 | |
Entity Filer Category | Large Accelerated Filer | |
Current Fiscal Year End Date | --02-02 | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 001-35664 | |
Entity Incorporation, State or Country Code | DE | |
Entity Common Stock, Shares Outstanding | 47,594,912 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Address, Address Line One | 2481 Mañana Drive | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
City Area Code | 214 | |
Entity Address, Postal Zip Code | 75220 | |
Local Phone Number | 357-9588 | |
Entity Tax Identification Number | 35-2382255 | |
Entity Shell Company | false | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | PLAY | |
Title of 12(b) Security | Common Stock $0.01 par value | |
Security Exchange Name | NASDAQ | |
Preferred Stock [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | PLAY | |
Title of 12(b) Security | Preferred Stock Purchase Rights | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Aug. 02, 2020 | Feb. 02, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 224,305 | $ 24,655 |
Inventories | 31,189 | 34,477 |
Prepaid expenses | 12,751 | 14,269 |
Income taxes receivable | 23,805 | 2,331 |
Other current assets | 934 | 3,245 |
Total current assets | 292,984 | 78,977 |
Property and equipment (net of $739,805 and $686,824 accumulated depreciation as of August 2, 2020 and February 2, 2020, respectively) | 872,010 | 900,637 |
Operating lease right of use assets | 1,062,266 | 1,011,568 |
Deferred tax assets | 21,491 | 7,639 |
Tradenames | 79,000 | 79,000 |
Goodwill | 272,650 | 272,636 |
Other assets and deferred charges | 19,566 | 19,682 |
Total assets | 2,619,967 | 2,370,139 |
Current liabilities: | ||
Current installments of long-term debt | 15,000 | 15,000 |
Accounts payable | 59,539 | 65,359 |
Accrued liabilities | 238,651 | 207,452 |
Income taxes payable | 624 | 3,054 |
Total current liabilities | 313,814 | 290,865 |
Deferred income taxes | 19,102 | |
Operating lease liabilities | 1,285,533 | 1,222,054 |
Other liabilities | 38,603 | 35,779 |
Long-term debt, net | 731,646 | 632,689 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, par value $0.01; authorized: 400,000,000 shares; issued: 60,422,212 shares at August 2, 2020 and 43,386,852 shares at February 2, 2020; outstanding: 47,594,912 shares at August 2, 2020 and 30,603,340 shares at February 2, 2020 | 604 | 434 |
Preferred stock, 50,000,000 authorized; none issued | ||
Paid-in capital | 526,253 | 339,161 |
Treasury stock, 12,827,300 and 12,783,512 shares as of August 2, 2020 and February 2, 2020, respectively | (595,728) | (595,041) |
Accumulated other comprehensive loss | (12,077) | (8,369) |
Retained earnings | 331,319 | 433,465 |
Total stockholders' equity | 250,371 | 169,650 |
Total liabilities and stockholders' equity | $ 2,619,967 | $ 2,370,139 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Aug. 02, 2020 | Feb. 02, 2020 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 739,805 | $ 686,824 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 60,422,212 | 43,386,852 |
Common stock, shares outstanding | 47,594,912 | 30,603,340 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Treasury stock, shares | 12,827,300 | 12,783,512 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2020 | Aug. 04, 2019 | Aug. 02, 2020 | Aug. 04, 2019 | |
Total revenues | $ 50,833 | $ 344,599 | $ 210,639 | $ 708,181 |
Total cost of products | 8,684 | 59,623 | 36,756 | 121,348 |
Operating payroll and benefits | 13,756 | 80,927 | 57,493 | 163,800 |
Other store operating expenses | 62,682 | 104,376 | 158,354 | 210,621 |
General and administrative expenses | 9,278 | 15,991 | 23,841 | 32,837 |
Depreciation and amortization expense | 35,160 | 32,745 | 70,512 | 63,886 |
Pre-opening costs | 2,388 | 4,723 | 6,211 | 11,725 |
Total operating costs | 131,948 | 298,385 | 353,167 | 604,217 |
Operating income (loss) | (81,115) | 46,214 | (142,528) | 103,964 |
Interest expense, net | 8,163 | 4,605 | 14,278 | 8,661 |
Income (loss) before provision (benefit) for income taxes | (89,278) | 41,609 | (156,806) | 95,303 |
Provision (benefit) for income taxes | (30,676) | 9,253 | (54,660) | 20,504 |
Net income (loss) | (58,602) | 32,356 | (102,146) | 74,799 |
Unrealized foreign currency translation gain | 304 | 134 | (131) | (57) |
Unrealized gain (loss) on derivatives, net of tax | 1,372 | (3,373) | (3,577) | (5,907) |
Total other comprehensive income (loss) | 1,676 | (3,239) | (3,708) | (5,964) |
Total comprehensive income (loss) | $ (56,926) | $ 29,117 | $ (105,854) | $ 68,835 |
Net income (loss) per share: | ||||
Basic | $ (1.24) | $ 0.91 | $ (2.59) | $ 2.07 |
Diluted | $ (1.24) | $ 0.90 | $ (2.59) | $ 2.03 |
Weighted average shares used in per share calculations: | ||||
Basic | 47,111,763 | 35,407,965 | 39,470,874 | 36,117,815 |
Diluted | 47,111,763 | 36,015,710 | 39,470,874 | 36,803,001 |
Amusement and Other Revenues [Member] | ||||
Total revenues | $ 33,831 | $ 206,678 | $ 129,717 | $ 422,039 |
Cost of amusement and other | 4,025 | 22,689 | 14,753 | 45,660 |
Food and Beverage [Member] | ||||
Total revenues | 17,002 | 137,921 | 80,922 | 286,142 |
Cost of food and beverage | $ 4,659 | $ 36,934 | $ 22,003 | $ 75,688 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Cumulative effect of a change in accounting principle, net of tax | Common Stock [Member] | Paid-In Capital [Member] | Treasury Stock at Cost [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Retained Earnings [Member]Cumulative effect of a change in accounting principle, net of tax |
Beginning balance at Feb. 03, 2019 | $ 387,837 | $ (145) | $ 432 | $ 331,255 | $ (297,129) | $ (683) | $ 353,962 | $ (145) |
Beginning balance, shares at Feb. 03, 2019 | 43,177,476 | 5,655,391 | ||||||
Net income (loss) | 74,799 | 74,799 | ||||||
Unrealized foreign currency translation (loss) gain | (57) | (57) | ||||||
Unrealized gain (loss) on derivatives, net of tax | (5,907) | (5,907) | ||||||
Share-based compensation | 3,732 | 3,732 | ||||||
Issuance of common stock | 613 | $ 1 | 612 | |||||
Issuance of common stock, shares | 159,649 | |||||||
Repurchase of common stock | (200,733) | $ (200,733) | ||||||
Repurchase of common stock, shares | 4,702,900 | |||||||
Dividends declared | (10,837) | (10,837) | ||||||
Ending balance at Aug. 04, 2019 | 249,302 | $ 433 | 335,599 | $ (497,862) | (6,647) | 417,779 | ||
Ending balance, shares at Aug. 04, 2019 | 43,337,125 | 10,358,291 | ||||||
Beginning balance at May. 05, 2019 | 360,125 | $ 433 | 333,515 | $ (361,186) | (3,408) | 390,771 | ||
Beginning balance, shares at May. 05, 2019 | 43,323,049 | 6,958,291 | ||||||
Net income (loss) | 32,356 | 32,356 | ||||||
Unrealized foreign currency translation (loss) gain | 134 | 134 | ||||||
Unrealized gain (loss) on derivatives, net of tax | (3,373) | (3,373) | ||||||
Share-based compensation | 1,907 | 1,907 | ||||||
Issuance of common stock | 177 | 177 | ||||||
Issuance of common stock, shares | 14,076 | |||||||
Repurchase of common stock | (136,676) | $ (136,676) | ||||||
Repurchase of common stock, shares | 3,400,000 | |||||||
Dividends declared | (5,348) | (5,348) | ||||||
Ending balance at Aug. 04, 2019 | 249,302 | $ 433 | 335,599 | $ (497,862) | (6,647) | 417,779 | ||
Ending balance, shares at Aug. 04, 2019 | 43,337,125 | 10,358,291 | ||||||
Beginning balance at Feb. 02, 2020 | 169,650 | $ 434 | 339,161 | $ (595,041) | (8,369) | 433,465 | ||
Beginning balance, shares at Feb. 02, 2020 | 43,386,852 | 12,783,512 | ||||||
Net income (loss) | (102,146) | (102,146) | ||||||
Unrealized foreign currency translation (loss) gain | (131) | (131) | ||||||
Unrealized gain (loss) on derivatives, net of tax | (3,577) | (3,577) | ||||||
Share-based compensation | 2,345 | 2,345 | ||||||
Issuance of common stock | 184,917 | $ 170 | 184,747 | |||||
Issuance of common stock, shares | 17,035,360 | |||||||
Repurchase of common stock | (687) | $ (687) | ||||||
Repurchase of common stock, shares | 43,788 | |||||||
Ending balance at Aug. 02, 2020 | 250,371 | $ 604 | 526,253 | $ (595,728) | (12,077) | 331,319 | ||
Ending balance, shares at Aug. 02, 2020 | 60,422,212 | 12,827,300 | ||||||
Beginning balance at May. 03, 2020 | 192,635 | $ 496 | 411,048 | $ (595,077) | (13,753) | 389,921 | ||
Beginning balance, shares at May. 03, 2020 | 49,578,351 | 12,786,624 | ||||||
Net income (loss) | (58,602) | (58,602) | ||||||
Unrealized foreign currency translation (loss) gain | 304 | 304 | ||||||
Unrealized gain (loss) on derivatives, net of tax | 1,372 | 1,372 | ||||||
Share-based compensation | 2,734 | 2,734 | ||||||
Issuance of common stock | 112,579 | $ 108 | 112,471 | |||||
Issuance of common stock, shares | 10,843,861 | |||||||
Repurchase of common stock | (651) | $ (651) | ||||||
Repurchase of common stock, shares | 40,676 | |||||||
Ending balance at Aug. 02, 2020 | $ 250,371 | $ 604 | $ 526,253 | $ (595,728) | $ (12,077) | $ 331,319 | ||
Ending balance, shares at Aug. 02, 2020 | 60,422,212 | 12,827,300 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended |
Aug. 04, 2019 | Aug. 04, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per share | $ 0.15 | $ 0.30 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 02, 2020 | Aug. 04, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (102,146) | $ 74,799 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 70,512 | 63,886 |
Non-cash interest expense | 2,201 | |
Impairment of long-lived assets | 13,727 | |
Deferred taxes | (31,609) | 4,659 |
Loss on disposal of fixed assets | 417 | 826 |
Share-based compensation | 2,345 | 3,732 |
Other, net | 173 | 376 |
Changes in assets and liabilities: | ||
Inventories | 3,288 | (94) |
Prepaid expenses | 2,089 | (4,811) |
Income tax receivable | (21,474) | 311 |
Other current assets | 2,311 | (444) |
Other assets and deferred charges | 107 | (1,163) |
Accounts payable | 6,646 | (428) |
Accrued liabilities | 37,522 | 22,057 |
Income taxes payable | (2,430) | (7,362) |
Other liabilities | 2,817 | 346 |
Net cash provided by (used in) operating activities | (13,504) | 156,690 |
Cash flows from investing activities: | ||
Capital expenditures | (63,486) | (117,875) |
Proceeds from sales of property and equipment | 152 | 375 |
Net cash used in investing activities | (63,334) | (117,500) |
Cash flows from financing activities: | ||
Proceeds from debt | 138,000 | 233,000 |
Payments of debt | (38,500) | (59,500) |
Net proceeds from the issuance of common stock | 182,207 | |
Proceeds from the exercise of stock options | 359 | 613 |
Repurchase of common stock under share repurchase program | (200,147) | |
Dividends paid | (4,891) | (10,837) |
Repurchases of common stock to satisfy employee withholding tax obligations | (687) | (586) |
Net cash provided by (used in) financing activities | 276,488 | (37,457) |
Increase in cash and cash equivalents | 199,650 | 1,733 |
Beginning cash and cash equivalents | 24,655 | 21,585 |
Ending cash and cash equivalents | 224,305 | 23,318 |
Supplemental disclosures of cash flow information: | ||
Decrease in fixed asset accounts payable | (12,466) | (6,101) |
Cash paid for income taxes, net | 752 | 22,850 |
Cash paid for interest, net | $ 11,295 | $ 8,050 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Aug. 02, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1: Summary of Significant Accounting Policies The accompanying unaudited consolidated financial statements include the accounts of Dave & Buster’s Entertainment, Inc. (referred to herein as the “Company”, “we,” “us” and “our”), any predecessor companies and its wholly-owned subsidiaries, Dave & Buster’s Holdings, Inc. (“D&B Holdings”), which owns 100% of the outstanding common stock of Dave & Busters, Inc. (“D&B Inc”), the operating company. All intercompany balances and transactions have been eliminated in consolidation. The Company, headquartered in Dallas, Texas, is a leading operator of high-volume entertainment and dining venues (“stores”) in North America for adults and families under the name “Dave & Buster’s”. The Company operates its business as one operating and one reportable segment. As of August 2, 2020, we owned and operated 137 stores located in 39 states, Puerto Rico and one Canadian province. The Company operates on a 52 or 53-week 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 the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Our quarterly financial data should be read in conjunction with the audited financial statements and notes thereto for the year ended February 2, 2020, included in our Annual Report on Form 10-K Going concern — the period from March 14, 2020 to March 20, 2020, the Company c losed % of its operating stores in compliance with guidance and orders issued by federal, state and local governments to combat the spread of the COVID-19 re-opening re-engaging re-opened off-premise re-opened stores in states, Puerto Rico and Canada. Subsequent to the end of our second quarter, we re-opened COVID-19 re-imposed re-engage The Company has taken several steps to reduce operating costs and to conserve cash. The Company initially furloughed nearly all its workforce, except a small team of essential personnel and temporarily reduced pay and benefits for the remaining employees for a twelve-week period. On March 18, 2020, the Company borrowed substantially all the remaining availability under its revolving credit facility, and the Company continues to actively manage its daily cash flows. During our first and second quarter, the Company obtained additional liquidity through the sale of common stock, which resulted in net proceeds of $182,207. Additionally, the Company initiated ongoing discussions with landlords and other vendors to negotiate relief from cash payments under existing lease and trade payable obligations. As of August 2, 2020, a total of 92 rent relief agreements related to our operating locations and corporate headquarters were executed, which generally provide for full deferral for three months beginning April 2020, with partial deferral continuing for periods of up to six months, at approximately 50% of those locations. We have also been successful in negotiating extended and reduced payment terms with several vendors. Effective April 14, 2020, the Company negotiated an amendment to its existing credit facility, which included relief from compliance with financial covenants for the periods ended May 3, 2020, August 2, 2020 and November 1, 2020. During the financial covenant suspension period, the Company is required to maintain a minimum liquidity amount of $30,000. If the Company is not in compliance with financial covenants after the suspension period or some other event of default arises, the Company’s lenders could instruct the administrative agent under the existing credit facility to exercise remedies including declaring the principal of and accrued interest on all outstanding indebtedness due and payable, terminating all remaining commitments and obligations under the revolving credit facility and requiring the posting of cash collateral in respect of 103% of agreements would become due. Although the lenders under the existing credit facility may waive the default or forebear the exercise of remedies, they are not obligated to do so. Failure to obtain additional waivers would have a material adverse effect on the Company’s liquidity, financial condition and results of operations and may result in filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to implement a restructuring plan. The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements and for the period then ended. Actual results could differ from those estimates. Operating results for the twenty-six Cash and cash equivalents (used in) Fair value of financial instruments The carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, and other current liabilities approximate fair value because of their short-term nature. We believe that the carrying amount of our credit facility approximates its fair value because the interest rates reflect 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 fair value of the Company’s interest rate swap is determined based upon Level Two inputs which includes valuation models as reported by our counterparties. These valuation models are based on the present value of expected cash flows using forward rate curves. Non-financial right-of-use The disruption in operations and reduction in revenues have led the Company to consider the impact of the COVID-19 During the first quarter of fiscal 2020, each store’s past and present operating performance was reviewed in combination with projected future results primarily through projected undiscounted cash flows that included management’s current expectation of future financial impacts from COVID-19. were determined to be through comparison of the asset’s carrying value to its undiscounted cash flows, the Company compared the carrying amount of each store’s assets to its fair value as estimated by management to calculate the impairment amount The fair value of the store’s assets is generally determined using a discounted cash flow projection model, which is based on Level Three inputs. Store asset impairment charges represent the excess of the carrying amount over the estimated fair value of the store asset. first qu ar c COVID-19 During the second quarter of fiscal 2020, the Company did not identify additional triggering events which would require a change in management’s estimate regarding the recoverability of store asset values, and no a dditional impairment related to our operating stores was recognized . twenty-six s COVID-19 Additionally, the Company is c ontinu ing twenty-six related to these projects, which is included in “Other store operating expenses” in the Consolidated Statements of Comprehensive Income (Loss). Interest rate swaps one-month The Company initially designated its interest rate swap agreements as a cash flow hedge and accounted for the underlying activity in accordance with hedge accounting. Effective April 14, 2020, the Company amended its existing credit facility agreement to obtain relief from its financial covenants, and as a result, the variable interest rate terms were modified to create an interest rate floor of (de-designation date). Given the continued existence of the hedged interest payments, the Company will reclassify its accumulated other comprehensive loss as of the de- d e gnation date The amount of pre-tax losses in accumulated other comprehensive loss that was reclassified into interest expense subsequent to the de-designation date was $ and $ for the thirt een and twenty -six weeks ended August 2, 2020 , respectively, and the Company expects to reclassify $ within the next twelve months. Effective with the de-designation, any gain or loss on the derivatives are recognized in earnings in the period in which the change occurs. For the thirteen and twenty-six weeks ended August 2, 2020, a loss of $ and $ was recognized, respectively, are Prior to the de-designation, Credit risk related to the failure of the our counterparties to perform under the terms of the swap agreements is minimized by entering into transactions with carefully selected, credit-worthy parties and the fact that the swap contracts are distributed among several financial institutions to reduce the concentration of credit risk. Our swap agreements with our derivative counterparties contain a provision where if the Company defaults on any of its indebtedness, and repayment of the indebtedness has been accelerated, the Company could also be declared in default on its derivative obligations. The following derivative instruments were outstanding as of the end of the periods indicated: Fair Value Balance Sheet Location August 2, 2020 February 2, 2020 Interest rate swaps Accrued liabilities $ (8,215 ) $ (3,518 ) Interest rate swaps Other liabilities (8,724 ) (6,967 ) Total derivatives (1) $ (16,939 ) $ (10,485 ) (1) The balance at August 2, 2020 relates to our swap agreements after hedge accounting was discontinued, effective April 14, 2020. The following table summarizes the activity in accumulated other comprehensive loss related to our derivative instruments: Thirteen Weeks Ended Twenty-six August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Amount of loss recorded in accumulated other comprehensive income $ — 4,668 $ 7,602 8,140 Amount of loss reclassified into income (1) $ (1,887 ) (27 ) $ (2,680 ) (12 ) Income tax expense (benefit) in accumulated other comprehensive income $ 515 (1,268 ) $ (1,345 ) (2,221 ) (1) Amounts reclassified into income are included in “Interest expense, net” in the Consolidated Statements of Comprehensive Income (Loss). Revenue recognition 2,500 and $ , respectively, related to the amount in deferred amusement revenue as of the end of fiscal 2019. In jurisdictions where we do not have a legal obligation to remit unredeemed gift card balances to a legal authority, we recognize revenue on unredeemed gift cards in proportion to the pattern of redemption by the customers. During the thirteen and twenty-six 140 40 Stockholders’ equity twenty-six s In our consolidated financial statements, the Company treats shares withheld for tax purposes on behalf of our employees in connection with the vesting of time-based and performance restricted stock units as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan. During the twenty-six twenty-six Effective March 18, 2020, the Board of Directors of the Company adopted a 364-day one-ten On April 14, 2020, pursuant to an open market sale agreement, the Company sold 6,149,936 shares of its common stock at a price of $12.20 per share, for proceeds of $75,000, prior to deducting offering expenses related to the offering. On May 4, 2020, the Company entered into an underwriting agreement, pursuant to which it sold 9,578,545 shares of its common stock at a price of $10.44 per share, and on May 18, 2020, the underwriter exercised its over-allotment option for an additional 1,014,871 shares at $10.44 per share, resulting in additional proceeds of $110,600 prior to deducting offering costs. On June 23, 2020, shareholders approved a proposal to amend our 2014 Omnibus Incentive Plan (“Plan”) to increase the number of shares available for awards under the Plan by 3,000,000 shares. Recently adopted accounting guidance 2016-13 , Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In January 2017, the FASB issued ASU 2017-04 , Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recent accounting pronouncements December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which removes certain exceptions related to the approach for tax allocations, the calculation of income taxes in interim periods, and the recognition of deferred taxes for taxable goodwill. The guidance is effective for fiscal years beginning after December 15, 2020 and for interim periods within those years, with early adoption permitted. The Company is currently assessing the impact of this new standard on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Reform on Financial Reporting de-designation |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Aug. 02, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Accrued Liabilities | Note 2: Accrued Liabilities Accrued liabilities consist of the following as of the end of each period: August 2, 2020 February 2, 2020 Deferred amusement revenue $ 78,159 $ 75,113 Current portion of operating lease liabilities, net (1) 52,636 45,611 Rent payable (note 4) 31,589 — Variable rent liabilities (note 4) 9,037 1,331 Deferred gift card revenue 10,832 11,253 Property taxes 9,936 7,226 Compensation and benefits 8,664 23,421 Current portion of derivatives 8,215 3,518 Current portion of long-term insurance 6,200 6,500 Utilities 4,219 4,442 Customer deposits 1,840 4,324 Inventory liabilities 1,737 2,179 Sales and use taxes 973 4,000 Dividend payable — 4,891 Other 14,614 13,643 Total accrued liabilities $ 238,651 $ 207,452 (1) The balance of leasehold incentive receivables of $2,231 and $6,339 at August 2, 2020 and February 2, 2020, respectively, is reflected as a reduction of the current portion of operating lease liabilities. |
Debt
Debt | 6 Months Ended |
Aug. 02, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 3: Debt Long-term debt consists of the following as of: August 2, 2020 February 2, 2020 Credit facility — $ 258,750 $ 266,250 Credit facility — 489,000 382,000 Total debt outstanding 747,750 648,250 Current installments — (15,000 ) (15,000 ) Debt issuance costs — (1,104 ) (561 ) Long-term debt, net $ 731,646 $ 632,689 On August 17, 2017, we entered into a senior secured credit facility that provides a $300,000 term loan facility and a $500,000 revolving credit facility with a maturity date of August 17, 2022. The $500,000 revolving credit facility includes a $35,000 letter of credit sub-facility sub-facility. The interest rates per annum applicable to loans, other than swing loans, under our existing credit facility are currently set based on a defined LIBOR rate plus an applicable margin. Swing loans bear interest at a base rate plus an applicable margin. Our credit facility contains restrictive covenants that, among other things, place certain limitations on our ability to incur additional indebtedness, make loans or advances to subsidiaries and other entities, pay dividends, acquire other businesses or sell assets. In addition, our credit facility requires us to maintain certain financial ratio covenants. Effective April 14, 2020, we amended our existing credit facility, which included relief from compliance with financial covenants for the quarterly periods ended May 3, 2020, August 2, 2020 and November 1, 2020. During the financial covenant suspension period, a $30,000 liquidity covenant was added as well as certain additional reporting requirements, and the termination of additional borrowings under our revolving credit facility during the suspension period. The interest rate increased to LIBOR plus 2.00% with a LIBOR floor of 1.00%. For the twenty-six Interest expense, net Thirteen Weeks Ended Twenty-six Weeks Ended August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Interest expense on credit facilities $ 5,865 4,708 $ 11,163 8,903 Interest associated with swap agreements 1,887 27 2,680 12 Amortization of issuance cost 411 198 654 396 Interest income — (25 ) (22 ) (51 ) Capitalized interest — (303 ) (197 ) (599 ) Total interest expense, net $ 8,163 $ 4,605 $ 14,278 $ 8,661 |
Leases
Leases | 6 Months Ended |
Aug. 02, 2020 | |
Leases | |
Leases | Note 4: Leases We currently lease the building or site for our stores, corporate office and warehouse space under facility operating leases. These leases typically have initial terms ranging from ten to twenty years and include one or more options to renew. When determining the lease term, we include option periods for which renewal is reasonably certain. Most of the leases require us to pay property taxes, insurance and maintenance of the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating leases also includes certain equipment leases that have a term in excess of one year. Certain facility leases also have provisions for additional contingent rentals based on revenues. Operating lease cost, variable lease cost and short-term lease cost related primarily to our facilities is included in “Other store operating expenses” for our operating stores, “Pre-opening The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and property taxes, are as follows for the fiscal year ended: Thirteen Weeks Ended Twenty-six August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Operating lease cost $ 33,321 30,448 $ 66,884 60,240 Variable lease cost 5,688 6,713 13,054 14,643 Short-term lease cost 140 116 227 217 Total $ 39,149 $ 37,277 $ 80,165 $ 75,100 During the twenty-six COVID-19 twenty-six COVID-19 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 02, 2020 | |
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, slip-and-fall The Company is currently a defendant in several lawsuits filed in courts in California alleging violations of California Business and Professions Code, industry wage orders, wage-and-hour |
Earnings per share
Earnings per share | 6 Months Ended |
Aug. 02, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per share | Note 6: Earnings per share Potential dilutive shares consist of the incremental common shares issuable upon the exercise of outstanding stock options (both vested and unvested), unvested time-based restricted stock units (RSU’s) and unvested performance RSU’s to the extent performance measures were attained as of the end of the reporting period, calculated using the treasury-stock method. Potential dilutive shares are excluded from the computation of earnings per share (“EPS”) if their effect is anti-dilutive. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and, accordingly, are excluded from the calculation. The weighted average anti-dilutive options excluded from the calculation of common equivalent shares were 160,967 and 97,502 in the thirteen and twenty-six The following table sets forth the computation of EPS, basic and diluted for the periods indicated: Thirteen Weeks Thirteen Weeks Ended Ended August 2, 2020 August 4, 2019 Numerator: Net income (loss) $ (58,602 ) $ 32,356 Denominator: Weighted average number of common shares 47,111,763 35,407,965 Weighted average dilutive impact of equity-based — 607,745 Weighted average number of common and common 47,111,763 36,015,710 Net income (loss) per share: Basic $ (1.24 ) $ 0.91 Diluted $ (1.24 ) $ 0.90 Twenty-Six Weeks Twenty-Six Weeks Numerator: Net income (loss) $ (102,146 ) $ 74,799 Denominator: Weighted average number of common shares outstanding (basic) 39,470,874 36,117,815 Weighted average dilutive impact of equity-based awards (1) — 685,186 Weighted average number of common and common equivalent shares 39,470,874 36,803,001 Net income (loss) per share: Basic $ (2.59 ) $ 2.07 Diluted $ (2.59 ) $ 2.03 (1) Due to the net loss for the thirteen and twenty-six |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Aug. 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Note 7: Share-Based Compensation Compensation expense related to stock options, time-based and performance-based RSU’s is included in general and administrative expenses and is as follows: Thirteen Weeks Ended Twenty-six August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Stock options $ 290 804 $ 830 1,563 RSU’s 2,444 1,103 1,515 2,169 Share-based compensation expense $ 2,734 $ 1,907 $ 2,345 $ 3,732 Transactions related to stock option awards during the twenty-six weeks ended August , were as follows: 2014 Stock Incentive Plan 2010 Stock Incentive Plan Number Wtd. Avg. Number Wtd. Avg. of Options Exercise Price of Options Exercise Price Outstanding at February 2, 2020 1,323,495 $ 36.97 266,900 $ 6.72 Granted — — — — Exercised — — (79,142 ) 4.54 Forfeited (82,741 ) 38.60 — — Outstanding at August 2, 2020 1,240,754 $ 36.86 187,758 $ 7.64 Exercisable at August 2, 2020 1,037,513 $ 34.49 187,758 $ 7.64 The total intrinsic value of options exercised during the twenty-six weeks ended August , was $ . The unrecognized expense related to our stock option plan totaled approximately $ as of August , and will be expensed over a weighted average period of years. Transactions related to time-based and performance-based RSU’s during the twenty-six weeks ended August , , were as follows: Wtd. Avg. Shares Fair Value Outstanding at February 2, 2020 216,815 $ 51.58 Granted 1,061,926 12.74 Change in performance units 4,352 59.67 Vested (62,411 ) 53.81 Forfeited (48,409 ) 28.14 Outstanding at August 2, 2020 1,172,273 $ 17.27 Fair value of our time-based and performance-based RSU’s is based on our closing stock price on the date of grant. The unrecognized expense related to our time-based and performance-based RSU’s was $12,658 as of August 2, 2020 and will be expensed over a weighted average period of 2.3 years. During the twenty-six |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 02, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8: Income Taxes On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). Intended to provide economic relief to those impacted by the COVID-19 The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annualized effective tax rate for the full fiscal year to “ordinary” income or loss for the reporting period. Due to the uncertainty created by the events surrounding the COVID-19 twenty-six twenty-six twenty-six |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Aug. 02, 2020 | |
Accounting Policies [Abstract] | |
Description of the business | The accompanying unaudited consolidated financial statements include the accounts of Dave & Buster’s Entertainment, Inc. (referred to herein as the “Company”, “we,” “us” and “our”), any predecessor companies and its wholly-owned subsidiaries, Dave & Buster’s Holdings, Inc. (“D&B Holdings”), which owns 100% of the outstanding common stock of Dave & Busters, Inc. (“D&B Inc”), the operating company. All intercompany balances and transactions have been eliminated in consolidation. The Company, headquartered in Dallas, Texas, is a leading operator of high-volume entertainment and dining venues (“stores”) in North America for adults and families under the name “Dave & Buster’s”. The Company operates its business as one operating and one reportable segment. As of August 2, 2020, we owned and operated 137 stores located in 39 states, Puerto Rico and one Canadian province. The Company operates on a 52 or 53-week 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 the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Our quarterly financial data should be read in conjunction with the audited financial statements and notes thereto for the year ended February 2, 2020, included in our Annual Report on Form 10-K |
Going Concern | Going concern — the period from March 14, 2020 to March 20, 2020, the Company c losed % of its operating stores in compliance with guidance and orders issued by federal, state and local governments to combat the spread of the COVID-19 re-opening re-engaging re-opened off-premise re-opened stores in states, Puerto Rico and Canada. Subsequent to the end of our second quarter, we re-opened COVID-19 re-imposed re-engage The Company has taken several steps to reduce operating costs and to conserve cash. The Company initially furloughed nearly all its workforce, except a small team of essential personnel and temporarily reduced pay and benefits for the remaining employees for a twelve-week period. On March 18, 2020, the Company borrowed substantially all the remaining availability under its revolving credit facility, and the Company continues to actively manage its daily cash flows. During our first and second quarter, the Company obtained additional liquidity through the sale of common stock, which resulted in net proceeds of $182,207. Additionally, the Company initiated ongoing discussions with landlords and other vendors to negotiate relief from cash payments under existing lease and trade payable obligations. As of August 2, 2020, a total of 92 rent relief agreements related to our operating locations and corporate headquarters were executed, which generally provide for full deferral for three months beginning April 2020, with partial deferral continuing for periods of up to six months, at approximately 50% of those locations. We have also been successful in negotiating extended and reduced payment terms with several vendors. Effective April 14, 2020, the Company negotiated an amendment to its existing credit facility, which included relief from compliance with financial covenants for the periods ended May 3, 2020, August 2, 2020 and November 1, 2020. During the financial covenant suspension period, the Company is required to maintain a minimum liquidity amount of $30,000. If the Company is not in compliance with financial covenants after the suspension period or some other event of default arises, the Company’s lenders could instruct the administrative agent under the existing credit facility to exercise remedies including declaring the principal of and accrued interest on all outstanding indebtedness due and payable, terminating all remaining commitments and obligations under the revolving credit facility and requiring the posting of cash collateral in respect of 103% of agreements would become due. Although the lenders under the existing credit facility may waive the default or forebear the exercise of remedies, they are not obligated to do so. Failure to obtain additional waivers would have a material adverse effect on the Company’s liquidity, financial condition and results of operations and may result in filing a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code to implement a restructuring plan. The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements and for the period then ended. Actual results could differ from those estimates. Operating results for the twenty-six |
Cash and cash equivalents | Cash and cash equivalents (used in) |
Fair value of financial instruments | Fair value of financial instruments The carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, and other current liabilities approximate fair value because of their short-term nature. We believe that the carrying amount of our credit facility approximates its fair value because the interest rates reflect 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 fair value of the Company’s interest rate swap is determined based upon Level Two inputs which includes valuation models as reported by our counterparties. These valuation models are based on the present value of expected cash flows using forward rate curves. Non-financial right-of-use The disruption in operations and reduction in revenues have led the Company to consider the impact of the COVID-19 During the first quarter of fiscal 2020, each store’s past and present operating performance was reviewed in combination with projected future results primarily through projected undiscounted cash flows that included management’s current expectation of future financial impacts from COVID-19. were determined to be through comparison of the asset’s carrying value to its undiscounted cash flows, the Company compared the carrying amount of each store’s assets to its fair value as estimated by management to calculate the impairment amount The fair value of the store’s assets is generally determined using a discounted cash flow projection model, which is based on Level Three inputs. Store asset impairment charges represent the excess of the carrying amount over the estimated fair value of the store asset. first qu ar c COVID-19 During the second quarter of fiscal 2020, the Company did not identify additional triggering events which would require a change in management’s estimate regarding the recoverability of store asset values, and no a dditional impairment related to our operating stores was recognized . twenty-six s COVID-19 Additionally, the Company is c ontinu ing twenty-six related to these projects, which is included in “Other store operating expenses” in the Consolidated Statements of Comprehensive Income (Loss). |
Interest rate swap | Interest rate swaps one-month The Company initially designated its interest rate swap agreements as a cash flow hedge and accounted for the underlying activity in accordance with hedge accounting. Effective April 14, 2020, the Company amended its existing credit facility agreement to obtain relief from its financial covenants, and as a result, the variable interest rate terms were modified to create an interest rate floor of (de-designation date). Given the continued existence of the hedged interest payments, the Company will reclassify its accumulated other comprehensive loss as of the de- d e gnation date The amount of pre-tax losses in accumulated other comprehensive loss that was reclassified into interest expense subsequent to the de-designation date was $ and $ for the thirt een and twenty -six weeks ended August 2, 2020 , respectively, and the Company expects to reclassify $ within the next twelve months. Effective with the de-designation, any gain or loss on the derivatives are recognized in earnings in the period in which the change occurs. For the thirteen and twenty-six weeks ended August 2, 2020, a loss of $ and $ was recognized, respectively, are Prior to the de-designation, Credit risk related to the failure of the our counterparties to perform under the terms of the swap agreements is minimized by entering into transactions with carefully selected, credit-worthy parties and the fact that the swap contracts are distributed among several financial institutions to reduce the concentration of credit risk. Our swap agreements with our derivative counterparties contain a provision where if the Company defaults on any of its indebtedness, and repayment of the indebtedness has been accelerated, the Company could also be declared in default on its derivative obligations. The following derivative instruments were outstanding as of the end of the periods indicated: Fair Value Balance Sheet Location August 2, 2020 February 2, 2020 Interest rate swaps Accrued liabilities $ (8,215 ) $ (3,518 ) Interest rate swaps Other liabilities (8,724 ) (6,967 ) Total derivatives (1) $ (16,939 ) $ (10,485 ) (1) The balance at August 2, 2020 relates to our swap agreements after hedge accounting was discontinued, effective April 14, 2020. The following table summarizes the activity in accumulated other comprehensive loss related to our derivative instruments: Thirteen Weeks Ended Twenty-six August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Amount of loss recorded in accumulated other comprehensive income $ — 4,668 $ 7,602 8,140 Amount of loss reclassified into income (1) $ (1,887 ) (27 ) $ (2,680 ) (12 ) Income tax expense (benefit) in accumulated other comprehensive income $ 515 (1,268 ) $ (1,345 ) (2,221 ) (1) Amounts reclassified into income are included in “Interest expense, net” in the Consolidated Statements of Comprehensive Income (Loss). |
Revenue recognition | Revenue recognition 2,500 and $ , respectively, related to the amount in deferred amusement revenue as of the end of fiscal 2019. In jurisdictions where we do not have a legal obligation to remit unredeemed gift card balances to a legal authority, we recognize revenue on unredeemed gift cards in proportion to the pattern of redemption by the customers. During the thirteen and twenty-six 140 40 |
Stockholders' equity | Stockholders’ equity twenty-six s In our consolidated financial statements, the Company treats shares withheld for tax purposes on behalf of our employees in connection with the vesting of time-based and performance restricted stock units as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan. During the twenty-six twenty-six Effective March 18, 2020, the Board of Directors of the Company adopted a 364-day one-ten On April 14, 2020, pursuant to an open market sale agreement, the Company sold 6,149,936 shares of its common stock at a price of $12.20 per share, for proceeds of $75,000, prior to deducting offering expenses related to the offering. On May 4, 2020, the Company entered into an underwriting agreement, pursuant to which it sold 9,578,545 shares of its common stock at a price of $10.44 per share, and on May 18, 2020, the underwriter exercised its over-allotment option for an additional 1,014,871 shares at $10.44 per share, resulting in additional proceeds of $110,600 prior to deducting offering costs. On June 23, 2020, shareholders approved a proposal to amend our 2014 Omnibus Incentive Plan (“Plan”) to increase the number of shares available for awards under the Plan by 3,000,000 shares. |
Recently adopted accounting guidance | Recently adopted accounting guidance 2016-13 , Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In January 2017, the FASB issued ASU 2017-04 , Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement |
Recent accounting pronouncements | Recent accounting pronouncements December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which removes certain exceptions related to the approach for tax allocations, the calculation of income taxes in interim periods, and the recognition of deferred taxes for taxable goodwill. The guidance is effective for fiscal years beginning after December 15, 2020 and for interim periods within those years, with early adoption permitted. The Company is currently assessing the impact of this new standard on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Reform on Financial Reporting de-designation |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Aug. 02, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The following derivative instruments were outstanding as of the end of the periods indicated: Fair Value Balance Sheet Location August 2, 2020 February 2, 2020 Interest rate swaps Accrued liabilities $ (8,215 ) $ (3,518 ) Interest rate swaps Other liabilities (8,724 ) (6,967 ) Total derivatives (1) $ (16,939 ) $ (10,485 ) (1) The balance at August 2, 2020 relates to our swap agreements after hedge accounting was discontinued, effective April 14, 2020. |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block] | The following table summarizes the activity in accumulated other comprehensive loss related to our derivative instruments: Thirteen Weeks Ended Twenty-six August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Amount of loss recorded in accumulated other comprehensive income $ — 4,668 $ 7,602 8,140 Amount of loss reclassified into income (1) $ (1,887 ) (27 ) $ (2,680 ) (12 ) Income tax expense (benefit) in accumulated other comprehensive income $ 515 (1,268 ) $ (1,345 ) (2,221 ) (1) Amounts reclassified into income are included in “Interest expense, net” in the Consolidated Statements of Comprehensive Income (Loss). |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Aug. 02, 2020 | |
Text Block [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of the following as of the end of each period: August 2, 2020 February 2, 2020 Deferred amusement revenue $ 78,159 $ 75,113 Current portion of operating lease liabilities, net (1) 52,636 45,611 Rent payable (note 4) 31,589 — Variable rent liabilities (note 4) 9,037 1,331 Deferred gift card revenue 10,832 11,253 Property taxes 9,936 7,226 Compensation and benefits 8,664 23,421 Current portion of derivatives 8,215 3,518 Current portion of long-term insurance 6,200 6,500 Utilities 4,219 4,442 Customer deposits 1,840 4,324 Inventory liabilities 1,737 2,179 Sales and use taxes 973 4,000 Dividend payable — 4,891 Other 14,614 13,643 Total accrued liabilities $ 238,651 $ 207,452 (1) The balance of leasehold incentive receivables of $2,231 and $6,339 at August 2, 2020 and February 2, 2020, respectively, is reflected as a reduction of the current portion of operating lease liabilities. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Aug. 02, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-term debt consists of the following as of: August 2, 2020 February 2, 2020 Credit facility — $ 258,750 $ 266,250 Credit facility — 489,000 382,000 Total debt outstanding 747,750 648,250 Current installments — (15,000 ) (15,000 ) Debt issuance costs — (1,104 ) (561 ) Long-term debt, net $ 731,646 $ 632,689 |
Recorded Interest Expense, Net | Interest expense, net Thirteen Weeks Ended Twenty-six Weeks Ended August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Interest expense on credit facilities $ 5,865 4,708 $ 11,163 8,903 Interest associated with swap agreements 1,887 27 2,680 12 Amortization of issuance cost 411 198 654 396 Interest income — (25 ) (22 ) (51 ) Capitalized interest — (303 ) (197 ) (599 ) Total interest expense, net $ 8,163 $ 4,605 $ 14,278 $ 8,661 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Aug. 02, 2020 | |
Lessee, Operating Lease, Disclosure | The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and property taxes, are as follows for the fiscal year ended: Thirteen Weeks Ended Twenty-six August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Operating lease cost $ 33,321 30,448 $ 66,884 60,240 Variable lease cost 5,688 6,713 13,054 14,643 Short-term lease cost 140 116 227 217 Total $ 39,149 $ 37,277 $ 80,165 $ 75,100 |
Earnings per share (Tables)
Earnings per share (Tables) | 6 Months Ended |
Aug. 02, 2020 | |
Earnings Per Share [Abstract] | |
Summary of Calculation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of EPS, basic and diluted for the periods indicated: Thirteen Weeks Thirteen Weeks Ended Ended August 2, 2020 August 4, 2019 Numerator: Net income (loss) $ (58,602 ) $ 32,356 Denominator: Weighted average number of common shares 47,111,763 35,407,965 Weighted average dilutive impact of equity-based — 607,745 Weighted average number of common and common 47,111,763 36,015,710 Net income (loss) per share: Basic $ (1.24 ) $ 0.91 Diluted $ (1.24 ) $ 0.90 Twenty-Six Weeks Twenty-Six Weeks Numerator: Net income (loss) $ (102,146 ) $ 74,799 Denominator: Weighted average number of common shares outstanding (basic) 39,470,874 36,117,815 Weighted average dilutive impact of equity-based awards (1) — 685,186 Weighted average number of common and common equivalent shares 39,470,874 36,803,001 Net income (loss) per share: Basic $ (2.59 ) $ 2.07 Diluted $ (2.59 ) $ 2.03 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Aug. 02, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | Compensation expense related to stock options, time-based and performance-based RSU’s is included in general and administrative expenses and is as follows: Thirteen Weeks Ended Twenty-six August 2, 2020 August 4, 2019 August 2, 2020 August 4, 2019 Stock options $ 290 804 $ 830 1,563 RSU’s 2,444 1,103 1,515 2,169 Share-based compensation expense $ 2,734 $ 1,907 $ 2,345 $ 3,732 |
Share-based Compensation, Stock Options, Activity [Table Text Block] | Transactions related to stock option awards during the twenty-six weeks ended August , were as follows: 2014 Stock Incentive Plan 2010 Stock Incentive Plan Number Wtd. Avg. Number Wtd. Avg. of Options Exercise Price of Options Exercise Price Outstanding at February 2, 2020 1,323,495 $ 36.97 266,900 $ 6.72 Granted — — — — Exercised — — (79,142 ) 4.54 Forfeited (82,741 ) 38.60 — — Outstanding at August 2, 2020 1,240,754 $ 36.86 187,758 $ 7.64 Exercisable at August 2, 2020 1,037,513 $ 34.49 187,758 $ 7.64 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Transactions related to time-based and performance-based RSU’s during the twenty-six weeks ended August , , were as follows: Wtd. Avg. Shares Fair Value Outstanding at February 2, 2020 216,815 $ 51.58 Granted 1,061,926 12.74 Change in performance units 4,352 59.67 Vested (62,411 ) 53.81 Forfeited (48,409 ) 28.14 Outstanding at August 2, 2020 1,172,273 $ 17.27 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) $ / shares in Units, $ in Thousands | Jun. 23, 2020shares | May 18, 2020$ / sharesshares | May 04, 2020USD ($)$ / sharesshares | Apr. 14, 2020USD ($)$ / sharesshares | Mar. 20, 2020 | Mar. 18, 2020 | Aug. 02, 2020USD ($)StatesStoresSegmentshares | May 03, 2020USD ($) | Aug. 04, 2019shares | Aug. 02, 2020USD ($)StatesStoresSegmentshares | Aug. 04, 2019USD ($)shares | Mar. 30, 2020Stores$ / shares | Feb. 02, 2020USD ($) |
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Number of stores | Stores | 137 | 137 | 137 | ||||||||||
Number of states store operates | States | 39 | 39 | |||||||||||
Number of operating segment | Segment | 1 | ||||||||||||
Number of reportable segment | Segment | 1 | ||||||||||||
Book overdrafts reclassified to accounts payable | $ 0 | $ 0 | $ 14,026 | ||||||||||
Share repurchase program authorized amount | 800,000 | 800,000 | |||||||||||
Share repurchase program remaining authorized amount | 172,820 | 172,820 | |||||||||||
Payments Related to Tax Withholding for Share-based Compensation | 687 | $ 586 | |||||||||||
National amount of the swap agreement | $ 350,000 | $ 350,000 | |||||||||||
Derivative, Average Fixed Interest Rate | 2.47% | 2.47% | |||||||||||
Percentage Of Stores | 100.00% | ||||||||||||
Percentage Posting of cash collateral on letters of credit outstanding | 103.00% | ||||||||||||
Required liquidity amount | $ 30,000 | $ 30,000 | |||||||||||
Impairment of Long-Lived Assets | $ 13,727 | ||||||||||||
Shares Paid for Tax Withholding for Share Based Compensation | shares | 43,788 | 11,336 | |||||||||||
Proceeds from Issuance | $ 182,207 | ||||||||||||
2014 Stock Incentive Plan [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Share based payment award, number of additional shares authorized | shares | 3,000,000 | ||||||||||||
Shareholder Rights Plan [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Dividends Payable, Date Declared | Mar. 18, 2020 | ||||||||||||
Dividends Payable, Nature Description | one preferred share purchase right for each outstanding share of common stock | ||||||||||||
Preferred Stock, Par Value Per Share | $ / shares | $ 0.01 | ||||||||||||
Exercise price of rights | $ / shares | $ 45 | ||||||||||||
Dividends Payable, Date of Record | Mar. 30, 2020 | ||||||||||||
Settlement Of Cash Obligation [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Stock issued during period, shares, issued for services | shares | 150,455 | ||||||||||||
Cash obligation | 2,351 | ||||||||||||
Interest Rate Swap [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Interest payments reclassified to interest expense | 17,609 | ||||||||||||
Interest payments to be reclassified during next 12 months | 7,547 | ||||||||||||
Interest payments reclassified to interest expense during the period | 1,887 | 2,201 | |||||||||||
Interest Rate Swap [Member] | Other Store Operating Expenses [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Loss on Derivative | $ 976 | $ 1,796 | |||||||||||
COVID19 [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Number of stores | Stores | 83 | 83 | |||||||||||
Number of states store operates | States | 27 | 27 | |||||||||||
Impairment of Long-Lived Assets | $ 0 | $ 6,746 | |||||||||||
Impairment loss and contract termination costs of abandoned projects | $ 2,178 | $ 6,981 | |||||||||||
COVID19 [Member] | Off Premise Dining Option [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Number of stores | Stores | 2 | 2 | |||||||||||
Common Stock [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Stock Issued During Period | shares | 9,578,545 | 6,149,936 | 10,843,861 | 14,076 | 17,035,360 | 159,649 | |||||||
Sale of Stock, Price Per Share | $ / shares | $ 10.44 | $ 12.20 | |||||||||||
Proceeds from Issuance | $ 110,600 | $ 75,000 | $ 182,207 | $ 182,207 | |||||||||
Common Stock [Member] | Over-Allotment Option [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Stock Issued During Period | shares | 1,014,871 | ||||||||||||
Sale of Stock, Price Per Share | $ / shares | $ 10.44 | ||||||||||||
Dave And Busters Holdings Inc [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Percentage of outstanding common stock owned | 100.00% | 100.00% | |||||||||||
Canada [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Number of Canadian province | Segment | 1 | 1 | |||||||||||
Amusement Revenue [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Deferred revenue recognized | $ 2,500 | $ 12,100 | |||||||||||
Gift Card Revenue [Member] | |||||||||||||
Description Of Business And Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Deferred amusement revenue | 140 | 1,440 | |||||||||||
Gift card breakage revenue | $ 40 | $ 210 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Derivative Instruments Outstanding (Details) - USD ($) $ in Thousands | Aug. 02, 2020 | Feb. 02, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Current portion of derivatives | $ (8,215) | $ (3,518) | |
Non-current portion of derivatiives | (8,724) | (6,967) | |
Total derivatives | [1] | $ (16,939) | $ (10,485) |
[1] | The balance at August 2, 2020 relates to our swap agreements after hedge accounting was discontinued, effective April 14, 2020. |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Accumulated Other Comprehensive Loss (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Aug. 02, 2020 | Aug. 04, 2019 | Aug. 02, 2020 | Aug. 04, 2019 | ||
Amount of loss recorded in accumulated other comprehensive income | $ 4,668 | $ 7,602 | $ 8,140 | ||
Income tax expense (benefit) in accumulated other comprehensive income | $ 515 | (1,268) | (1,345) | (2,221) | |
Interest Expense [Member] | |||||
Amount of loss reclassified into income | [1] | $ (1,887) | $ (27) | $ (2,680) | $ (12) |
[1] | Amounts reclassified into income are included in “Interest expense, net” in the Consolidated Statements of Comprehensive Income (Loss). |
Accrued Liabilities - Accrued L
Accrued Liabilities - Accrued Liabilities (Detail) - USD ($) $ in Thousands | Aug. 02, 2020 | Feb. 02, 2020 |
Accrued Liabilities, Current [Abstract] | ||
Deferred amusement revenue | $ 78,159 | $ 75,113 |
Current portion of operating lease liabilities, net (1) | 52,636 | 45,611 |
Rent payable (note 4) | 31,589 | |
Variable rent liabilities (note 4) | 9,037 | 1,331 |
Deferred gift card revenue | 10,832 | 11,253 |
Property taxes | 9,936 | 7,226 |
Compensation and benefits | 8,664 | 23,421 |
Current portion of derivatives | 8,215 | 3,518 |
Current portion of long-term insurance | 6,200 | 6,500 |
Utilities | 4,219 | 4,442 |
Customer deposits | 1,840 | 4,324 |
Inventory liabilities | 1,737 | 2,179 |
Sales and use taxes | 973 | 4,000 |
Dividend payable | 4,891 | |
Other | 14,614 | 13,643 |
Total accrued liabilities | $ 238,651 | $ 207,452 |
Accrued Liabilities - Accrued_2
Accrued Liabilities - Accrued Liabilities (Parenthetical) (Detail) - USD ($) $ in Thousands | Aug. 02, 2020 | Feb. 02, 2020 |
Accrued Liabilities, Current [Abstract] | ||
Receivables for tenant improvement allowances | $ 2,231 | $ 6,339 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Aug. 17, 2017 | Aug. 02, 2020 | Apr. 14, 2020 | Aug. 04, 2019 |
Debt Instrument [Line Items] | ||||
Required liquidity amount | $ 30,000,000 | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate | 1.25% | |||
Derivative, Variable Interest Rate | 1.00% | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument interest rate | 2.00% | |||
Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Senior secured credit facility | $ 300,000,000 | |||
Revolving credit facility, maximum borrowing capacity | $ 500,000,000 | |||
Maturity date | Aug. 17, 2022 | |||
Revolving credit facility, letter of credit sub-facility maximum borrowing capacity | $ 35,000,000 | |||
Revolving credit facility, swing loan sub-facility maximum borrowing capacity | 15,000,000 | |||
Term loan repayment of principal | $ 3,750,000 | |||
Frequency of periodic payment | quarter | |||
Letter of credit facility outstanding | $ 9,686,000 | |||
Borrowing available | $ 1,314,000 | |||
Debt instrument interest rate | 2.00% | |||
Weighted average effective interest | 3.98% | 4.11% | ||
Debt instrument, description of variable rate basis | The loans bear interest subject to a pricing grid based on a total leverage ratio, at one-month LIBOR plus a spread ranging from 1.25% to 2.00% for the term loans and the revolving loans. | |||
Debt Instrument, covenant compliance | Our credit facility contains restrictive covenants that, among other things, place certain limitations on our ability to incur additional indebtedness, make loans or advances to subsidiaries and other entities, pay dividends, acquire other businesses or sell assets. In addition, our credit facility requires us to maintain certain financial ratio covenants. | |||
Required liquidity amount | $ 30,000,000 | |||
Debt issuance costs | $ 2,000,000 |
Debt - Long-Term Debt (Detail)
Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands | Aug. 02, 2020 | Feb. 02, 2020 |
Debt Instrument [Line Items] | ||
Total debt outstanding | $ 747,750 | $ 648,250 |
Less current installments—term | (15,000) | (15,000) |
Long-term debt, net | 731,646 | 632,689 |
Credit Facility—term [Member] | ||
Debt Instrument [Line Items] | ||
Total debt outstanding | 258,750 | 266,250 |
Less current installments—term | (15,000) | (15,000) |
Less debt issuance costs—term | (1,104) | (561) |
Credit Facility—revolver [Member] | ||
Debt Instrument [Line Items] | ||
Total debt outstanding | $ 489,000 | $ 382,000 |
Debt - Recorded Interest Expens
Debt - Recorded Interest Expense, Net (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2020 | Aug. 04, 2019 | Aug. 02, 2020 | Aug. 04, 2019 | |
Debt Disclosure [Abstract] | ||||
Interest expense on credit facilities | $ 5,865 | $ 4,708 | $ 11,163 | $ 8,903 |
Interest associated with swap agreements | 1,887 | 27 | 2,680 | 12 |
Amortization of issuance cost and discount | 411 | 198 | 654 | 396 |
Interest income | 0 | (25) | (22) | (51) |
Capitalized interest | 0 | (303) | (197) | (599) |
Total interest expense, net | $ 8,163 | $ 4,605 | $ 14,278 | $ 8,661 |
Leases - Lease Expense (Detail)
Leases - Lease Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2020 | Aug. 04, 2019 | Aug. 02, 2020 | Aug. 04, 2019 | |
Leases | ||||
Operating lease cost | $ 33,321 | $ 30,448 | $ 66,884 | $ 60,240 |
Variable lease cost | 5,688 | 6,713 | 13,054 | 14,643 |
Short-term lease cost | 140 | 116 | 227 | 217 |
Total | $ 39,149 | $ 37,277 | $ 80,165 | $ 75,100 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 3 Months Ended | 6 Months Ended |
Aug. 04, 2019 | Aug. 04, 2019 | |
Earnings Per Share [Abstract] | ||
Weighted average anti-dilutive options excluded from calculation of common equivalent shares | 160,967 | 97,502 |
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 | 6 Months Ended | |||
Aug. 02, 2020 | Aug. 04, 2019 | Aug. 02, 2020 | Aug. 04, 2019 | ||
Numerator: | |||||
Net income (loss) | $ (58,602) | $ 32,356 | $ (102,146) | $ 74,799 | |
Denominator: | |||||
Weighted average number of common shares outstanding (basic) | 47,111,763 | 35,407,965 | 39,470,874 | 36,117,815 | |
Weighted average dilutive impact of equity-based awards | [1] | 607,745 | 685,186 | ||
Weighted average number of common and common equivalent shares outstanding (diluted) | 47,111,763 | 36,015,710 | 39,470,874 | 36,803,001 | |
Net income (loss) per share: | |||||
Basic | $ (1.24) | $ 0.91 | $ (2.59) | $ 2.07 | |
Diluted | $ (1.24) | $ 0.90 | $ (2.59) | $ 2.03 | |
[1] | Due to the net loss for the thirteen and twenty-six weeks ended August 2, 2020, zero incremental shares are included because the effect would be anti-dilutive. |
Earnings Per Share - Summary _2
Earnings Per Share - Summary of Calculation of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares | 3 Months Ended | 6 Months Ended |
Aug. 02, 2020 | Aug. 02, 2020 | |
Earnings Per Share [Abstract] | ||
Weighted average dilutive impact of equity-based awards | 0 | 0 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 02, 2020 | Aug. 04, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Excess income tax benefit related to stock-based compensation plans | $ 477 | $ 884 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total intrinsic value of stock options exercised | 792 | |
Unrecognized expense related to stock option plan | $ 1,157 | |
Unrecognized compensation expense, weighted average years | 1 year 6 months | |
Restricted Stock Units (RSU's) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense, weighted average years | 2 years 3 months 18 days | |
Unrecognized expense related to unvested restricted stock and RSUs | $ 12,658 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Compensation Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2020 | Aug. 04, 2019 | Aug. 02, 2020 | Aug. 04, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||||
Stock options | $ 290 | $ 804 | $ 830 | $ 1,563 |
RSU's | 2,444 | 1,103 | 1,515 | 2,169 |
Share-based compensation expense | $ 2,734 | $ 1,907 | $ 2,345 | $ 3,732 |
Share-Based Compensation - Tran
Share-Based Compensation - Transactions Related to Stock Option Awards (Detail) | 6 Months Ended |
Aug. 02, 2020$ / sharesshares | |
2014 Stock Incentive Plan [Member] | |
Number of Options | |
Options outstanding at February 2, 2020 | shares | 1,323,495 |
Forfeited | shares | (82,741) |
Options outstanding at , August 2, 2020 | shares | 1,240,754 |
Options exercisable at , August 2, 2020 | shares | 1,037,513 |
Weighted Average Exercise Price | |
Options outstanding at February 2, 2020 | $ / shares | $ 36.97 |
Forfeited | $ / shares | 38.60 |
Options outstanding at , August 2, 2020 | $ / shares | 36.86 |
Options exercisable at , August 2, 2020 | $ / shares | $ 34.49 |
2010 Stock Incentive Plan [Member] | |
Number of Options | |
Options outstanding at February 2, 2020 | shares | 266,900 |
Exercised | shares | (79,142) |
Options outstanding at , August 2, 2020 | shares | 187,758 |
Options exercisable at , August 2, 2020 | shares | 187,758 |
Weighted Average Exercise Price | |
Options outstanding at February 2, 2020 | $ / shares | $ 6.72 |
Exercised | $ / shares | 4.54 |
Options outstanding at , August 2, 2020 | $ / shares | 7.64 |
Options exercisable at , August 2, 2020 | $ / shares | $ 7.64 |
Share-Based Compensation - Tr_2
Share-Based Compensation - Transactions Related to Time-based and Performance-based RSU's and Restricted Stock (Detail) - Time-Based and Performance-Based RSU's [Member] | 6 Months Ended |
Aug. 02, 2020$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Stock Awards, February 2, 2020 | shares | 216,815 |
Restricted Stock Awards, Granted | shares | 1,061,926 |
Restricted Stock Awards, Change in units based on performance | shares | 4,352 |
Restricted Stock Awards, Vested | shares | (62,411) |
Restricted Stock Awards, Forfeited | shares | (48,409) |
Restricted Stock Awards, August 2, 2020 | shares | 1,172,273 |
Weighted Average Grant Date Fair Value, February 2, 2020 | $ / shares | $ 51.58 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 12.74 |
Weighted Average Fair Value Grant Date, Change in units based on performance | $ / shares | 59.67 |
Weighted Average Fair Value, Vested | $ / shares | 53.81 |
Weighted Average Fair Value, Forfeited | $ / shares | 28.14 |
Weighted Average Fair Value, August 2, 2020 | $ / shares | $ 17.27 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Aug. 02, 2020 | Aug. 04, 2019 | |
Income Taxes [Line Items] | ||
Corporate tax rate | 34.90% | 21.50% |
Net operating loss carryback, Percentage | 35.00% | |
CARES Act [Member] | ||
Income Taxes [Line Items] | ||
Deferred social security tax | $ 1,448 |