Dave & Buster's Revenues Up 15% in Third Quarter
Dave & Buster's Entertainment announced financial results for its third quarter of 2014, which ended Nov. 2, 2014.
The company also issued guidance for the full year 2014, which ends Feb. 1, 2015.
Key highlights from the third quarter 2014 compared to the third quarter 2013 include the company raising $98.6 million in net proceeds through an initial public offering and repaying $100 million of indebtedness.
Total revenues increased 14.9 percent to $163.5, and comparable store sales increased 8.7 percent. Dave & Buster's also pened two stores.
"The company delivered an exceptionally strong performance with record-setting third quarter revenues," says Steve King, CEO.
"Our comparable store sales growth of 8.7 percent was the result of the successful conclusion to our 'Summer of Games' promotion along with traction from advertising D&B Sports, which together enabled us to outpace the competitive industry benchmark for the tenth consecutive quarter."
King adds, "We have a significant whitespace opportunity and we believe our long-term market potential in North America is in excess of 200 stores, which is approximately three times our current store base.
"Our disciplined real estate strategy combined with our long-standing track record of delivering robust results in our new store openings provides us with the foundation to grow our brand domestically and over time, internationally as well. Having now successfully completed our initial public offering, we are excited to be executing our strategic growth plan and intend to open seven to eight new stores in 2015."
Initial Public Offering
On Oct. 16, 2014, the company closed on an initial public offering of 5,882,353 shares of common stock at $16 per share. On Oct. 21, 2014, the company issued and sold an additional 882,352 shares of common stock reflecting the full exercise of the underwriters' Greenshoe option.
Total net proceeds, after deducting underwriter discounts and commissions and certain offering expenses, were $98.6 million, and together with cash on hand, were used to repay $100 million of indebtedness.
Review of Third Quarter 2014 Operating Results
Total revenues increased 14.9 percent to $163.5 million from $142.3 million in the third quarter of 2013. Across all stores, food and beverage revenues increased 12.9 percent to $78.2 million and amusements and other revenues increased 16.7 percent to $85.3 million.
In the year-ago period, the company generated $2.6 million in revenues from its store in Bethesda, Maryland, which has since closed.
Comparable store sales increased 8.7 percent in the third quarter of 2014 compared to a 2.4 percent increase in the same period last year. Comparable store sales increase was driven by a 9.1 percent increase in walk-in sales and a 4.5 percent increase in special events sales.
Non-comparable store revenues increased by $10.3 million in the third quarter of 2014 to $28.3 million, principally fueled by 75 additional store weeks from four stores opened in 2013 and five stores opened through the end of the third quarter of 2014.
Operating income increased to $0.9 million in the third quarter of 2014 from a loss of $0.9 million in last year's third quarter.
Net loss narrowed to $4.6 million, or $0.13 per basic share, compared to net loss of $10.2 million, or $0.31 per basic share, in the third quarter of last year. Pro forma net loss, a non-GAAP measure, was $2.3 million, or $0.06 per basic share, compared to $4.4 million, or $0.11 per basic share, in the third quarter of 2013.
During the third quarter of 2014, the company opened one store in the Hollywood area of Los Angeles, California, and one store in Manchester, Connecticut.
Subsequent to the end of the third quarter, the company opened three additional stores located in Albuquerque, New Mexico; Portland, Oregon; and Greenville, South Carolina, which completed its development plans for eight new stores in 2014.
For 2014, total capital additions net of tenant improvement allowances are expected in the $105 million to $110 million range and include development costs for store openings, several remodeling and related projects, new games, and maintenance capital.