EXHIBIT 99.1
NEWS RELEASE
For Immediate Release
For further information contact:
Investor Relations - 214-904-2288
DAVE & BUSTER'S REPORTS FIRST QUARTER 2003 EARNINGS
DALLAS (JUNE 3, 2003) DALLAS - Dave & Buster's Inc. (NYSE:DAB), a leading
operator of upscale restaurant/entertainment complexes, announced earnings for
its first quarter ended May 4, 2003.
Net income for the quarter was $3.0 million, or $.23 per diluted share, compared
to a net loss in the same period last year of $(4.2) million, or $(.31) per
diluted share, which included a one-time charge of $7.1 million representing the
cumulative effect of a change in accounting for goodwill. Prior to the change in
accounting for goodwill, net income in the prior year's comparable quarter was
$2.9 million, or $.22 per diluted share. Operating income was $6.7 million
compared to $6.6 million in the prior year's comparable quarter.
The Company achieved an increase in net income (prior to the change in
accounting for goodwill) even though total revenues declined for the quarter as
compared to the prior year. These results indicate that Dave & Buster's
strategic initiatives to reduce costs are yielding results. Total revenues
decreased 5.8 percent to $91.6 million from $97.2 million in the prior year's
comparable quarter. The softness was led by the amusements portion of the
business with a decline of just over 9 percent. Food and beverage revenue
declined slightly more than 2 percent. Revenues for comparable stores decreased
7.5 percent during the quarter. There are currently 28 stores in the comparable
store base as compared to 26 stores during the 2002 fiscal year.
"We are aggressively moving to counter the softness in our revenues that we
experienced during the first quarter as a result of the continuing economic
environment, and the impact of the war with Iraq. Due to the extensive
television coverage, or what has been called the 'CNN effect', we believe this
impacted our revenues beginning several weeks before the actual start of the war
and continued for several weeks after the major fighting ended," stated Buster
Corley, CEO of Dave & Buster's. "Our strategic cost reduction plan is
comprehensive and compelling. The progress we have made with this program to
date has helped us improve our margins and positions us for further potential
savings when the economy improves. As we discussed last quarter, we have
identified between $10 million and $11 million dollars of savings. We are
continuing the process of identifying and implementing additional measures,
including an additional yearly savings of nearly $3.4 million associated with
our redemption games which will be implemented by fiscal 2004."
"We are focused on rebuilding revenues and we believe that upgraded amusement
programs represent our biggest area of opportunity. We are making a major
commitment to our amusement business with a new game rollout of over $9 million,
which is larger than we have implemented over the last two years combined. More
than one-third of this rollout was committed during our first quarter. In
addition, we announced last week that Maria Miller has joined our management
team as Senior Vice President - Marketing. Our marketing programs will benefit
from her focus and expertise. We expect these programs to be a further benefit
to our revenues," said Dave Corriveau, President of the Company.
"We are executing strategies to carefully manage our resources and cut costs,
while prudently reinvesting in our business and continuing to reduce our debt,"
stated W.C. Hammett, Dave & Buster's CFO. "We are starting to experience the
benefits of these strategies on our bottom line. During the quarter, we further
reduced our long-term debt by $4.1 million." Mr. Hammett continued, "The current
economic
conditions continue to make revenue projects difficult, so we still do not feel
comfortable providing quarterly guidance. However, the strength of the success
of our initiatives in improving our bottom line, even in this challenging
environment, permits us to reconfirm our previously announced fiscal year 2003
earnings per share guidance of $0.77 to $0.85."
The Company will hold a conference call on Tuesday, June 3 at 4:15 p.m. CDT.
Interested parties may listen to the call over the Internet through Dave &
Buster's website, www.daveandbusters.com. To listen to the live call, please
access the website at least fifteen minutes before the call to register,
download, and install any necessary audio software. For those who cannot listen
to the live broadcast a replay will be available shortly after the call on the
website. The archived call will be available for two weeks.
Celebrating over 20 years of operations, Dave & Buster's was founded in 1982 and
is one of the country's leading upscale, restaurant/entertainment concepts with
32 locations throughout the United States. Additionally, Dave & Buster's has
international agreements for the Pacific Rim, Canada, the Middle East and
Mexico.
FORWARD-LOOKING STATEMENTS
Certain information contained in this press release includes forward-looking
statements. Forward-looking statements include statements regarding our
expectations, beliefs, intentions, plans, projections, objectives, goals,
strategies, future events or performance and underlying assumptions and other
statements which are other than statements of historical facts. These statements
may be identified, without limitations, by the use of forward looking
terminology such as "may," "will," "anticipates," "expects," "projects,"
"believes," "intends," "should," or comparable terms or the negative thereof.
All forward-looking statements included in this press release are based on
information available to us on the date hereof. Such statements speak only as of
the date hereof. These statements involve risks and uncertainties that could
cause actual results to differ materially from those described in the
statements. These risks and uncertainties include, but are not limited to, the
following: our ability to open new high-volume restaurant/entertainment
complexes; our ability to raise and access sufficient capital in the future;
changes in consumer preferences, general economic conditions or consumer
discretionary spending; the outbreak or continuation of war or other hostilities
involving the United States; potential fluctuation in our quarterly operating
result due to seasonality and other factors; the continued service of key
management personnel; our ability to attract, motivate and retain qualified
personnel; the impact of federal, state or local government regulations relating
to our personnel or the sale of food or alcoholic beverages; the impact of
litigation; the effect of competition in our industry; additional costs
associated with compliance with the Sarbanes-Oxley Act and related regulations
and requirements; and other risk factors described from time to time in our
reports filed with the SEC.
# # #
DAVE & BUSTER'S INC.
Consolidated Balance Sheet
(in thousands)
<Table>
<Caption>
May 4, 2003 February 2, 2003
------------ ----------------
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 2,934 $ 2,530
Other current assets 32,157 30,819
------------ ------------
Total current assets 35,091 33,349
Property and equipment, net 249,324 249,451
Other assets 8,170 8,412
------------ ------------
$ 292,585 $ 291,212
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities $ 39,377 $ 37,580
Other long-term liabilities 24,987 24,536
Long-term Debt 55,369 59,494
Stockholders' Equity
Common stock 132 132
Paid in capital 116,813 116,678
Restricted Stock 674 608
Retained earnings 57,079 54,030
------------ ------------
174,698 171,448
Less: Treasury stock (1,846) (1,846)
------------ ------------
Total stockholders' equity 172,852 169,602
------------ ------------
$ 292,585 $ 291,212
============ ============
</Table>
DAVE & BUSTER'S INC.
Consolidated Statements of Income
(dollars in thousands, except per share amounts)
(unaudited)
<Table>
<Caption>
13 Weeks Ended 13 Weeks Ended
May 4, 2003 May 5, 2002
----------------------------- ------------------------------
Food and beverage revenues $ 47,664 52.0% $ 48,743 50.1%
Amusements and other revenues 43,923 48.0% 48,499 49.9%
------------ ------------
Total revenues 91,587 100.0% 97,242 100.0%
Cost of revenues 16,671 18.2% 18,116 18.6%
Operating payroll and benefits 26,799 29.3% 30,765 31.6%
Other store operating expenses 28,192 30.8% 27,943 28.7%
General and administrative expenses 5,939 6.5% 6,111 6.3%
Depreciation and amortization expense 7,307 8.0% 7,555 7.8%
Preopening costs -- 0.0% 152 0.2%
------------ ------------
Total other expenses 84,908 92.7% 90,642 93.2%
Operating income 6,679 7.3% 6,600 6.8%
Interest expense, net 2,060 2.2% 2,008 2.1%
------------ ------------
Income before provision for income taxes 4,619 5.0% 4,592 4.7%
and cumulative effect of a change in
an accounting principle
Provision for income taxes 1,570 1.7% 1,676 1.7%
------------ ------------
Income before cumulative effect of a
change in an accounting principle $ 3,049 3.3% $ 2,916 3.0%
Cumulative effect of a change in an
accounting principle -- 0.0% 7,096 7.3%
------------ ------------
Net income $ 3,049 3.3% $ (4,180) -4.3%
============ ============
Net income per share - basic
Before cumulative effect of a change
in an accounting principle $ 0.23 $ 0.22
Cumulative effect of a change in an
accounting principle -- (0.55)
------------ ------------
$ 0.23 $ (0.33)
Net income per share - diluted
Before cumulative effect of a change
in an accounting principle $ 0.23 $ 0.22
Cumulative effect of a change in an
accounting principle -- (0.53)
------------ ------------
$ 0.23 $ (0.31)
============ ============
Basic weighted average shares outstanding 13,090 12,971
Diluted weighted average shares outstanding 13,283 13,307
Other information:
Company operated stores open 32 32
EBITDA (Earnings before interest, taxes, depreciation
and amortization):
Total operating income $ 6,679 $ 6,600
Add back depreciation and amortization 7,307 7,555
------------ ------------
EBITDA $ 13,986 $ 14,155
</Table>