Dave & Buster's, Inc. Announces Fiscal Third Quarter Results

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Dave & Buster's, Inc. (NYSE:DAB), a leading operator of upscale restaurant/entertainment complexes, today announced its operating results for its fiscal third quarter and 39 weeks ending October 31, 2004.

Total revenue for the third quarter increased 1.4 percent to $84.0 million from $82.9 million in the prior year's comparable quarter. Food and beverage revenue increased 2.1 percent, and amusement and other revenue increased 0.6 percent. Revenue from comparable stores decreased 1.6 percent for the quarter. Comparable store revenue was impacted by approximately 55 basis points by the four hurricanes and flooding the East Coast experienced during the quarter. Special event revenue on a comparable store basis was 14.5 percent of total revenue, compared to 13.8 percent of total revenue in the third quarter last year. Operating income for the quarter was $.8 million, compared to $1.0 million in the prior year. The current quarter includes $.9 million in pre-opening expenses related to the new store opened during the quarter. The company was net income breakeven for the quarter, compared to a net loss of ($0.5) million, or ($0.04) per basic share for the same period last year.

Total revenues for the 39-week period increased 2.3 percent to $268.9 million from $262.8 million for the comparable period last year. Food and beverage revenue increased 2.7 percent, and amusement and other revenue increased 1.9 percent. Special event revenue on a comparable store basis was 13.5 percent of total revenue, compared to 12.2 percent of total revenue in the comparable period last year. Operating income was $12.3 million, compared to $11.7 million for the prior year. Pre-opening expenses during the 39-week period were $1.0 million. There were no pre-opening expenses in the prior year. Net income was $5.8 million, or $0.42 per diluted share, compared to $4.0 million, or $0.31 per diluted share, in the prior year. The number of diluted shares outstanding increased 15.8 percent to 16.460 million, for the 39 weeks compared to 14.218 million during the same period last year.

"Our year-over-year profitability improvement continues. This marks the 7th consecutive improved quarter," remarked Buster Corley, the company's CEO. "Recently we successfully completed the acquisition of the majority of Jillian's largest entertainment complexes, adding nine stores to our existing base of 34. We are looking forward to the opportunities these new locations will bring to the company as we work together with the Jillian's team members to build this portion of our business."

"On September 29, 2004 we opened our new store in Arcadia, California," stated Dave Corriveau, President of the company. "The opening was very successful and we are optimistic about the store's future. Next year, we expect to add at least two new Dave & Buster's locations. We feel this pace is appropriate as we absorb the nine new Jillian's locations."

Outlook

W. C. Hammett, the company's CFO stated, "We anticipate our annual revenue to be toward the lower to middle of our original range of $374 million to $382 million, before the impact of the Jillian's acquisition. We remain comfortable with our annual earnings guidance of $0.89 to $0.93 per diluted share before the Jillian's impact.

"The company previously announced the acquisition of nine Jillian's mall-based stores on November 1, 2004," Hammett said. "These stores should be immediately accretive to earnings in the fourth quarter. We expect the Jillian's acquisition to add $18 million to $20 million in revenue and $0.03 to $0.05 per diluted share to the earnings for the 2004 fiscal year. To finance the transaction we increased our senior bank agreement to a commitment of $115 million, consisting of a $60 million revolver and a $55 million term A loan. The term of the loan is for five years at an interest rate of Euro dollar plus 250 basis points. We expect total long-term debt, including $30 million of convertible debt, to be $82 million to $85 million at the end of the fiscal year."

Celebrating 22 years of operations, Dave & Buster's was founded in 1982 and is one of the country's leading upscale, restaurant/entertainment concepts with 34 Dave & Buster's locations and nine Jillian's locations throughout the United States and in Canada.

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Date Listed: 2004-12-08

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Industry: Restaurants
Category: Financial
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