Dave & Buster�s Reports Fourth Quarter 2021 and Full-Year Financial Results; Company Provides First Quarter FY 2022 Business Update and Outlook

DALLAS, March 28, 2022 (GLOBE NEWSWIRE) — Dave & Buster’s Entertainment, Inc., (NASDAQ:PLAY), (“Dave & Buster’s” or “the Company”), an owner and operator of entertainment and dining venues, today announced financial results for its fourth quarter and fiscal year ended January 30, 2022.

As of January 30, 2022, all of the Company�s 142 stores in the United States and Puerto Rico were open, including 1 new store opened during the quarter. The Company’s two Canadian stores were required by provincial mandate to temporarily close in early January. Both Canadian stores reopened in early Fiscal 2022.

Key Fourth Quarter 2021 Highlights

• Revenue decreased by 1.2% from the fourth quarter of 2019 to $343.1 million compared with $116.8 million in the fourth quarter of 2020 and $347.2 million in the fourth quarter of 2019
• Comparable store sales declined 2.6% compared with the same period in 2019 excluding 14 stores located in markets that had vaccine mandates during the quarter. Including all stores, comparable store sales decreased 6.8% compared with the same period in 2019
• Net income totaled $25.7 million, or $0.52 per diluted share, compared with net loss of $56.8 million, or $(1.19) per share in the fourth quarter of 2020 and net income of $25.0 million, or $0.80 per diluted share in the fourth quarter of 2019
• Adjusted EBITDA increased 12.7% from the fourth quarter of 2019 to $87.7 million, or 25.5% of revenue, compared with Adjusted EBITDA loss of $16.0 million in the fourth quarter of 2020 and Adjusted EBITDA of $77.8 million, or 22.4% of revenue in the fourth quarter of 2019
• During the fourth quarter, the Company redeemed $55 million of 7.625% senior secured notes at 103% of principal, saving approximately $4.2 million in annualized interest. The Company’s net debt leverage ratio was approximately 1.2x as of January 30, 2022

Key Fiscal Year 2021 Highlights

• Revenue decreased by 3.7% from fiscal year 2019 to $1.30 billion compared with $436.5 million in fiscal year 2020 and $1.35 billion in fiscal year 2019
• Overall comparable store sales decreased 10.6% compared with the same period in 2019
• Net income totaled $108.6 million, or $2.21 per diluted share, compared with net loss of $207.0 million, or $(4.75) per share in fiscal year 2020 and net income of $100.3 million, or $2.94 per diluted share in fiscal year 2019
• Adjusted EBITDA increased by 14.1% from fiscal year 2019 to $351.7 million, or 27.0% of revenue, compared with Adjusted EBITDA loss of $81.3 million in fiscal year 2020 and Adjusted EBITDA of $308.2 million, or 22.8% of revenue in fiscal year 2019

“We are pleased to report strong fourth quarter and fiscal year financial results,” said Kevin Sheehan, Dave & Buster’s Board Chair and Interim Chief Executive Officer. “Fiscal 2021 was a demanding year but our store management teams – and all of our team members rose to the challenge working tirelessly to return our stores to fully operational status. Despite continuing headwinds from COVID-19 (including vaccine requirements in certain markets) we saw strong sales across our stores in fiscal 2021. We also generated a double-digit Adjusted EBITDA increase in the year driven, in part, by our strong focus on process improvement and lean initiatives across our business. This Company has significant upside potential and with our continued focus on innovation, growth and value creation, we are driving toward unlocking that value. We are optimistic about the future and look forward to sharing our ongoing progress with everyone.”

Fourth Quarter 2021 Results

Total revenue of $343.1 million increased 193.7% from $116.8 million in the fourth quarter of 2020 and decreased 1.2% from $347.2 million in the fourth quarter of 2019. Comparable store sales decreased 6.8% compared with the fourth quarter of 2019 (the Company has chosen to continue reporting comparable store sales versus 2019 in order to provide a more meaningful comparison). Walk-in comparable store sales increased 2.1% while Special Event comparable store sales declined 58.0% compared with the same period in 2019. Non-comparable store revenue totaled $65.8 million compared with $27.3 million in the fourth quarter of 2020.

Operating income totaled $46.5 million, or 13.6% of revenue, compared with operating loss of $54.0 million, or (46.3)% of revenue in the fourth quarter of 2020 and operating income $37.6 million, or 10.8% of revenue in the fourth quarter of 2019.

Net income totaled $25.7 million, or $0.52 per diluted share, compared with net loss of $56.8 million, or $(1.19) per share in the fourth quarter of 2020 and net income of $25.0 million, or $0.80 per diluted share in the fourth quarter of 2019.

Adjusted EBITDA totaled a record $87.7 million, or 25.5% of revenue, compared with Adjusted EBITDA loss of $16.0 million, or (13.7)% of revenue in the fourth quarter of 2020 and Adjusted EBITDA of $77.8 million, or 22.4% of revenue in the fourth quarter of 2019.

Store operating income before depreciation and amortization totaled $101.1 million, or 29.5% of revenue, compared with store operating loss before depreciation and amortization of $6.0 million, or (5.2)% of revenue in the fourth quarter of 2020 and store operating income before depreciation and amortization of $96.3 million, or 27.7% of revenue in the fourth quarter of 2019.

Fiscal Year 2021 Results

Total revenue of $1.30 billion increased 198.7% from $436.5 million in fiscal year 2020 and decreased 3.7% from $1.35 billion in fiscal year 2019. Comparable store sales decreased 10.6% compared with fiscal year 2019 (the Company has chosen to continue reporting comparable store sales versus 2019 in order to provide a more meaningful comparison). Walk-in comparable store sales declined 3.6% while Special Event comparable store sales declined 71.6% compared to 2019. Non-comparable store revenue totaled $250.3 million compared with $83.2 million in fiscal year 2020.

Operating income totaled $187.2 million, or 14.4% of revenue, compared with operating loss of $252.6 million, or (57.9)% of revenue in fiscal year 2020 and operating income $148.1 million, or 10.9% of revenue in fiscal year 2019.

Net income totaled $108.6 million, or $2.21 per diluted share, compared with net loss of $207.0 million, or $(4.75) per share in fiscal year 2020 and net income of $100.3 million, or $2.94 per diluted share in fiscal year 2019.

Adjusted EBITDA totaled $351.7 million, or 27.0% of revenue, compared with Adjusted EBITDA loss of $81.3 million, or (18.6)% of revenue in fiscal year 2020 and Adjusted EBITDA of $308.2 million, or 22.8% of revenue in fiscal year 2019.

Store operating income before depreciation and amortization totaled $409.2 million, or 31.4% of revenue, compared with store operating loss before depreciation and amortization of $55.3 million, or (12.7)% of revenue in fiscal year 2020 and store operating income before depreciation and amortization of $369.0 million, or 27.2% of revenue in fiscal year 2019.

Balance Sheet, Liquidity and Cash Flow

The Company generated approximately $84.6 million in operating cash flow during the fourth quarter, ending the quarter with $25.9 million in cash and approximately $492.5 million of availability under its $500 million revolving credit facility, net $7.5 million in letters of credit.

Total long-term debt consisting of 7.625% senior secured notes maturing in 2025, totaled $440 million at January 30, 2022. As part of its ongoing capital allocation strategy, the Company redeemed $55 million of its senior secured notes during the fourth quarter utilizing a redemption option in the Company’s October 2020 indenture agreement, resulting in annualized interest savings of approximately $4.2 million.

The Company’s net debt leverage ratio was approximately 1.2x as of January 30, 2022.

First Quarter 2022 Business Update and Outlook

The Company’s business has strengthened through the first eight weeks of the first quarter, during which comparable store sales increased 5.4% compared with the same period in 2019. Walk-in comparable store sales increased 9.1% while Special Event comparable store sales declined 42.0% for the eight-week period compared with 2019.

Annual Report on Form 10-K Available

The Company’s Annual Report on Form 10-K, available at www.sec.gov and at the Company’s investor relations website, contains a thorough review of its financial results for the fourth quarter and fiscal year ended January 30, 2022.

Investor Conference Call and Webcast

Management will hold a conference call to report these results on Tuesday, March 29, 2022 at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). The conference call can be accessed over the phone by dialing (720) 543-0302 or toll-free (888) 224-1005. A replay will be available after the call for one year beginning at 10:30 a.m. Central Time (11:30 a.m. Eastern Time) and can be accessed by dialing (412) 317-6671 or toll-free (844) 512-2921; the passcode is 1540828. Additionally, a live and archived webcast of the conference call will be available under the Investor Relations section at www.daveandbusters.com.

About Dave & Buster’s Entertainment, Inc.

Founded in 1982 and headquartered in Coppell, Texas, Dave & Buster’s Entertainment, Inc., is the owner and operator of 144 venues in North America that combine entertainment and dining and offer customers the opportunity to “Eat Drink Play and Watch,” all in one location. Dave & Buster’s offers a full menu of entrées and appetizers, a complete selection of alcoholic and non-alcoholic beverages, and an extensive assortment of entertainment attractions centered around playing games and watching live sports and other televised events. Dave & Buster’s currently has stores in 40 states, Puerto Rico, and Canada.

Forward-Looking Statements

The Company cautions that this release contains forward-looking statements, including, without limitation, statements relating to the impact on our business and operations of the coronavirus pandemic. These forward-looking statements involve risks and uncertainties and, consequently, could be affected by the uncertain and unprecedented impact of the pandemic and new coronavirus variants on our business and operations and the related impact on our liquidity needs; our ability to continue as a going concern; our ability to obtain waivers, and thereafter continue to satisfy covenant requirements, under our revolving credit facility; our ability to access other funding sources; the implementation and duration of government-mandated and voluntary shutdowns and restrictions; the speed with which our stores safely can be reopened and fully operated and the level of customer demand following reopening and full operations; the economic impact of the pandemic and related disruptions on the communities we serve; our overall level of indebtedness; general business and economic conditions, including as a result of the pandemic; the impact of competition; the seasonality of the Company’s business; adverse weather conditions; future commodity prices; guest and employee complaints and litigation; fuel and utility costs; labor costs and availability; changes in consumer and corporate spending, including as a result of the pandemic; changes in demographic trends; changes in governmental regulations; unfavorable publicity, our ability to open new stores, and acts of God. Accordingly, actual results may differ materially from the forward-looking statements, and the Company therefore cautions you against relying on such forward-looking statements. Dave & Buster’s intends these forward-looking statements to speak only as of the time of this release and does not undertake to update or revise them as more appropriate information becomes available, except as required by law.

*Non-GAAP Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, the Company uses the following non-GAAP financial measures: EBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, Store operating income before depreciation and amortization, and store operating income before depreciation and amortization margin (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of our operating performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP measures used by the Company in this press release may be different from the measures used by other companies.

DAVE & BUSTER’S ENTERTAINMENT, INC.
Condensed Consolidated Balance Sheets
(in thousands)
ASSETS		January 30, 2022			January 31, 2021
		(audited)			(audited)
Current assets:
Cash and cash equivalents		$	25,910		$	11,891
Other current assets			119,661			106,980
Total current assets			145,571			118,871
Property and equipment, net			778,597			815,027
Operating lease right of use assets			1,037,197			1,037,569
Intangible and other assets, net			384,425			381,357
Total assets		$	2,345,790		$	2,352,824
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities		$	311,515		$	271,636
Operating lease liabilities			1,277,539			1,267,791
Other long-term liabilities			49,881			63,777
Long-term debt, net			431,395			596,388
Stockholders’ equity			275,460			153,232
Total liabilities and stockholders’ equity		$	2,345,790		$	2,352,824

	DAVE & BUSTER’S ENTERTAINMENT, INC.
	Consolidated Statements of Operations (Unaudited)
	(in thousands, except share and per share amounts)
			13 Weeks Ended						13 Weeks Ended							13 Weeks Ended
			January 30, 2022						January 31, 2021							February 2, 2020
	Food and beverage revenues		$	120,126		35.0	%		$	40,233			34.4	%		$	152,797		44.0	%
	Amusement and other revenues			222,976		65.0	%			76,588			65.6	%			194,361		56.0	%
	Total revenues			343,102		100.0	%			116,821			100.0	%			347,158		100.0	%
	Cost of food and beverage (as a percentage of food and beverage revenues)			32,757		27.3	%			12,540			31.2	%			39,124		25.6	%
	Cost of amusement and other (as a percentage of amusement and other revenues)			22,119		9.9	%			7,701			10.1	%			20,659		10.6	%
	Total cost of products			54,876		16.0	%			20,241			17.3	%			59,783		17.2	%
	Operating payroll and benefits			77,366		22.5	%			32,278			27.6	%			83,005		23.9	%
	Other store operating expenses			109,778		32.0	%			70,327			60.3	%			108,097		31.2	%
	General and administrative expenses			17,836		5.2	%			11,628			10.0	%			20,422		5.9	%
	Depreciation and amortization expense			33,974		9.9	%			33,893			29.0	%			35,234		10.1	%
	Pre-opening costs			2,723		0.8	%			2,495			2.1	%			3,001		0.9	%
	Total operating costs			296,553		86.4	%			170,862			146.3	%			309,542		89.2	%
	Operating income (loss)			46,549		13.6	%			(54,041	)		-46.3	%			37,616		10.8	%
	Interest expense, net			11,939		3.5	%			14,399			12.3	%			6,166		1.7	%
	Loss on debt extinguishment / refinancing			2,788		0.8	%			–			0.0	%			–		0.0	%
	Income (loss) before provision (benefit) for income taxes			31,822		9.3	%			(68,440	)		-58.6	%			31,450		9.1	%
	Provision (benefit) for income taxes			6,172		1.8	%			(11,655	)		-10.0	%			6,468		1.9	%
	Net income (loss)		$	25,650		7.5	%		$	(56,785	)		-48.6	%		$	24,982		7.2	%
	Net income (loss) per share:
	Basic		$	0.53					$	(1.19	)					$	0.82
	Diluted		$	0.52					$	(1.19	)					$	0.80
	Weighted average shares used in per share calculations:
	Basic shares			48,416,687						47,644,062							30,584,360
	Diluted shares			49,268,800						47,644,062							31,158,919
	Other information:
	Company-owned stores at end of period			144						140							136
	Store operating weeks in the period			1,857						1,240							1,757
	Total revenue per store operating weeks in the period		$	185					$	94						$	198
	The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown:
			13 Weeks Ended						13 Weeks Ended							13 Weeks Ended
			January 30, 2022						January 31, 2021							February 2, 2020
	Net income (loss)		$	25,650		7.5	%		$	(56,785	)		-48.6	%		$	24,982		7.2	%
	Add back: Interest expense, net			11,939						14,399							6,166
	Loss on debt extinguishment / refinancing			2,788						–							–
	Provision (benefit) for income taxes			6,172						(11,655	)						6,468
	Depreciation and amortization expense			33,974						33,893							35,234
	EBITDA			80,523		23.5	%			(20,148	)		-17.2	%			72,850		21.0	%
	Add back: Loss on asset disposal			758						36							529
	Impairment of long-lived assets and lease termination costs			912						–							–
	Share-based compensation			2,536						1,641							1,378
	Pre-opening costs			2,723						2,495							3,001
	Severance and other costs			207						(69	)						8
	Adjusted EBITDA		$	87,659		25.5	%		$	(16,045	)		-13.7	%		$	77,766		22.4	%
	The following table sets forth a reconciliation of operating income to store operating income before depreciation and amortization for the periods shown:
			13 Weeks Ended						13 Weeks Ended							13 Weeks Ended
			January 30, 2022						January 31, 2021							February 2, 2020
	Operating income (loss)		$	46,549		13.6	%		$	(54,041	)		-46.3	%		$	37,616		10.8	%
	Add back: General and administrative expenses			17,836						11,628							20,422
	Depreciation and amortization expense			33,974						33,893							35,234
	Pre-opening costs			2,723						2,495							3,001
	Store operating income (loss) before depreciation and amortization		$	101,082		29.5	%		$	(6,025	)		-5.2	%		$	96,273		27.7	%

	DAVE & BUSTER’S ENTERTAINMENT, INC.
	Consolidated Statements of Operations
	(in thousands, except share and per share amounts)
			52 Weeks Ended						52 Weeks Ended							52 Weeks Ended
			January 30, 2022						January 31, 2021							February 2, 2020
	Food and beverage revenues		$	436,637		33.5	%		$	159,501			36.5	%		$	563,576		41.6	%
	Amusement and other revenues			867,419		66.5	%			277,011			63.5	%			791,115		58.4	%
	Total revenues			1,304,056		100.0	%			436,512			100.0	%			1,354,691		100.0	%
	Cost of food and beverage (as a percentage of food and beverage revenues)			119,123		27.3	%			45,207			28.3	%			148,196		26.3	%
	Cost of amusement and other (as a percentage of amusement and other revenues)			85,848		9.9	%			29,698			10.7	%			85,115		10.8	%
	Total cost of products			204,971		15.7	%			74,905			17.2	%			233,311		17.2	%
	Operating payroll and benefits			287,263		22.0	%			117,475			26.9	%			322,970		23.8	%
	Other store operating expenses			402,661		30.9	%			299,464			68.6	%			429,431		31.8	%
	General and administrative expenses			75,501		5.8	%			47,215			10.8	%			69,469		5.1	%
	Depreciation and amortization expense			138,329		10.6	%			138,789			31.8	%			132,460		9.8	%
	Pre-opening costs			8,150		0.6	%			11,276			2.6	%			18,971		1.4	%
	Total operating costs			1,116,875		85.6	%			689,124			157.9	%			1,206,612		89.1	%
	Operating income (loss)			187,181		14.4	%			(252,612	)		-57.9	%			148,079		10.9	%
	Interest expense, net			53,910		4.2	%			36,890			8.4	%			20,937		1.5	%
	Loss on debt extinguishment / refinancing			5,617		0.4	%			904			0.2	%			–		0.0	%
	Income (loss) before provision (benefit) for income taxes			127,654		9.8	%			(290,406	)		-66.5	%			127,142		9.4	%
	Provision (benefit) for income taxes			19,014		1.5	%			(83,432	)		-19.1	%			26,879		2.0	%
	Net income (loss)		$	108,640		8.3	%		$	(206,974	)		-47.4	%		$	100,263		7.4	%
	Net income (loss) per share:
	Basic		$	2.26					$	(4.75	)					$	3.00
	Diluted		$	2.21					$	(4.75	)					$	2.94
	Weighted average shares used in per share calculations:
	Basic shares			48,142,090						43,549,887							33,450,217
	Diluted shares			49,263,720						43,549,887							34,099,378
	Other information:
	Company-owned stores at end of period			144						140							136
	Store operating weeks in the period			7,161						3,922							6,769
	Total revenue per store operating weeks in the period		$	182					$	111						$	200
	The following table sets forth a reconciliation of net income to EBITDA and Adjusted EBITDA for the periods shown:
			52 Weeks Ended						52 Weeks Ended							52 Weeks Ended
			January 30, 2022						January 31, 2021							February 2, 2020
	Net income (loss)		$	108,640		8.3	%		$	(206,974	)		-47.4	%		$	100,263		7.4	%
	Add back: Interest expense, net			53,910						36,890							20,937
	Loss on debt extinguishment / refinancing			5,617						904							–
	Provision (benefit) for income taxes			19,014						(83,432	)						26,879
	Depreciation and amortization expense			138,329						138,789							132,460
	EBITDA			325,510		25.0	%			(113,823	)		-26.1	%			280,539		20.7	%
	Add back: Loss on asset disposal			1,392						577							1,813
	Impairment of long-lived assets and lease termination costs			912						13,727							–
	Share-based compensation			12,472						6,985							6,857
	Pre-opening costs			8,150						11,276							18,971
	Other costs			3,289						(15	)						42
	Adjusted EBITDA		$	351,725		27.0	%		$	(81,273	)		-18.6	%		$	308,222		22.8	%
	The following table sets forth a reconciliation of operating income to store operating income before depreciation and amortization for the periods shown:
			52 Weeks Ended						52 Weeks Ended							52 Weeks Ended
			January 30, 2022						January 31, 2021							February 2, 2020
	Operating income (loss)		$	187,181		14.4	%		$	(252,612	)		-57.9	%		$	148,079		10.9	%
	Add back: General and administrative expenses			75,501						47,215							69,469
	Depreciation and amortization expense			138,329						138,789							132,460
	Pre-opening costs			8,150						11,276							18,971
	Store operating income (loss) before depreciation and amortization		$	409,161		31.4	%		$	(55,332	)		-12.7	%		$	368,979		27.2	%

For Investor Relations Inquiries:

Michael Quartieri, CFO
Dave & Buster’s Entertainment, Inc.
972.813.1151
Michael.Quartieri@daveandbusters.com