Dave & Buster’s, Inc. Reports Financial Results for Its Fourth Quarter and Fiscal Year 2010

DALLAS--(BUSINESS WIRE)-- Dave & Buster's, Inc., a leading operator of high volume entertainment/dining complexes, today announced results for its fourth quarter and fiscal year ended January 30, 2011.

Total revenues increased 1.4% to $135.5 million in the fourth quarter of 2010, compared to $133.6 million</money> in the fourth quarter of 2009. The year-over-year revenue increase was driven by a 1.2% increase in comparable store sales and a $3.0 million increase in revenues from non-comparable stores and other revenue sources. These revenue increases were partially offset by the loss of $2.7 million in revenues associated with the flood-related closure of our store in Nashville, Tennessee. Total Food and Beverage revenues increased 0.2%, while revenues from Amusements and Other increased 2.6%.

Adjusted EBITDA increased 12.3% to $28.0 million versus $24.9 million in the fourth quarter of fiscal 2009.

Total revenues for the 52-week period increased 0.1% to $521.5 million from $520.8 million for the comparable period last year. Revenue gains of $17.4 million from our non-comparable stores and other revenue sources were offset by a 1.9% decline in comparable store sales and the loss of $7.4 million in revenues associated with the flood-related closure of the Company’s store in Nashville, Tennessee. Total Food and Beverage revenues decreased 0.9%, while revenues from Amusements and Other increased 1.3%.

Adjusted EBITDA for the 52-week period increased 3.8% to $86.3 million versus $83.1 million for the comparable period last year. The Adjusted EBITDA for the quarter and year-to-date was not adversely affected by the closure of our Nashville store as the result of coverage under our business interruption insurance policy.

“I am very proud of the sales growth that our team delivered during the fourth quarter. We coupled that performance with exceptional cost control to deliver significant profit growth,” said Steve King, Chief Executive Officer. “Even more encouraging is the broad based sales momentum we have seen in both our walk in and special events business during early 2011.”

The Company estimates that for the first 10 weeks of fiscal 2011, comparable store sales increased by approximately 5.3% versus the same period in fiscal 2010.

Non-GAAP Financial Measures

A reconciliation of EBITDA and Adjusted EBITDA to net income, the most directly comparable financial measure presented in accordance with GAAP, is set forth in the attachment to this release.

The Company will hold a conference call to discuss fourth quarter results on Thursday, April 14, 2011, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). To participate in the conference call please dial (866) 765-2661 a few minutes prior to the start time and reference conference ID# 57296517. Additionally, a live and archived webcast of the conference call will be available on the Company's website, www.daveandbusters.com.

Founded in 1982 and headquartered in Dallas, Texas, Dave & Buster’s is the premier national owner and operator of 57 high-volume venues that offer interactive entertainment options for adults and families, such as skill/sports-oriented redemption games and technologically advanced video and simulation games, combined with a full menu of high quality food and beverages. Dave & Buster’s currently has stores in 24 states and Canada. For additional information on Dave & Buster’s, please visit www.daveandbusters.com.

The statements contained in this release that are not historical facts are forward-looking statements.These forward-looking statements involve risks and uncertainties and, consequently, could be affected by our level of indebtedness, general business and economic conditions, 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, changes in demographic trends, changes in governmental regulations, unfavorable publicity, our ability to open new stores, and acts of God.

NOTE

(1) As previously reported by the Company, on June 1, 2010, affiliates of Oak Hill Capital Partners acquired all of the outstanding capital stock of our direct parent, Dave & Buster’s Holdings, Inc. Accounting principles generally accepted in the United States require operating results for the Company prior to the June 1, 2010 acquisition to be presented as Predecessor’s results in the historical financial statements. Operating results for the Company subsequent to the June 1, 2010 acquisition are presented or referred to as Successor’s results in our historical financial statements. References to the 52 week period ended January 30, 2011, included in this release relate to the combined 244 day period ended January 30, 2011 of the Successor and the 120 day period ended May 31, 2010 of the Predecessor. The results for the Successor period include the impacts of purchase accounting. However, we believe that the discussion of our combined operational results is appropriate as we highlight operational changes as well as purchase accounting related items.

(2) The number of stores open at January 30, 2011 includes our stores in Roseville, California and Wauwatosa, Wisconsin which opened on May 3, 2010 and March 1, 2010, respectively. The store counts as of the end of both fiscal years include one franchise location in Canada (opened June 25, 2009) and our location in Nashville, Tennessee, which temporarily closed on May 2, 2010 due to flooding. The Nashville location remains closed as of January 30, 2011.

(3) EBITDA, a non-GAAP measure, is defined as net income (loss) before income tax expense (benefit), interest expense (net) and depreciation and amortization. Adjusted EBITDA, also a non-GAAP measure, is defined as EBITDA plus (gain) loss on asset disposal, share-based compensation expense, pre-opening costs, reimbursement of affiliate expenses, and other non-cash or non-recurring charges. The company believes that EBITDA and Adjusted EBITDA (collectively, “EBITDA – Based Measures”) provide useful information to debt holders regarding the Company’s operating performance and its capacity to incur and service debt and fund capital expenditures. The Company believes that the EBITDA – Based Measures are used by many investors, analysts and rating agencies as a measure of performance. In addition, Adjusted EBITDA is approximately equal to “Consolidated EBITDA” as defined in our Senior Credit Facility and indentures relating to the Company’s senior notes. Neither of the EBITDA – Based Measures is defined by GAAP and neither should be considered in isolation or as an alternative to other financial data prepared in accordance with GAAP or as an indicator of the Company’s operating performance. EBITDA and Adjusted EBITDA as defined in this release may differ from similarly titled measures presented by other companies.

Halliburton Investor Relations
Geralyn DeBusk, 972-458-8000

Source: Dave & Buster's, Inc.