Dave & Busters (NYSE:DAB)
Historical Stock Chart
From May 2019 to May 2024
Dave & Buster's, Inc. (NYSE:DAB) a leading operator of
upscale restaurant/entertainment complexes, today announced that the
company's second quarter results of operations will fall short of
prevailing estimates, primarily as a result of disappointing
performance at its nine recently acquired Jillian's stores. The
company further announced that it plans to convert most of the
Jillian's locations to its core Dave & Buster's brand and that its
subsidiary has closed the acquired Jillian's complex located in metro
Minneapolis Mall of America.
Total revenue for the second quarter is expected to be
approximately $111 million, an increase of $16 million, from the $95.0
million in the prior year's comparable quarter. Net loss for the
quarter is expected to range from ($.08) to ($.09) per basic share,
compared to $.16 of net income per diluted share in the same period
last year. Net loss for the second quarter includes an estimated
pretax charge of $2.5 million or an estimated $.12 per basic share,
relating to the closure of the Mall of America location. In addition,
the company expects pretax store closing costs related to this
location in the third quarter of approximately $0.5 million.
During the quarter, revenues from the 33 comparable stores, all of
which operate under the Dave & Buster's core brand, increased 0.2% as
compared to the same period last year.
"Although the performance of the Jillian's units overshadowed our
Dave & Buster's same store sales gains during the second quarter, it
is important to note that our Dave & Buster's core brand accounts for
approximately 85% of our consolidated revenues and continues to show
comparable store sales gains of 3% for the first three weeks of the
third quarter," said Dave Corriveau, the company's President.
"We hoped that, despite Jillian's protracted bankruptcy
proceedings, there would be significant opportunities to revitalize
the Jillian's brand upon our acquisition of these stores," stated
Buster Corley, the company's CEO. "However, we purchased these
locations with the knowledge that we could convert the stores to the
Dave & Buster's brand if it became advantageous or necessary to do so.
We believe that the conversion of these stores to the Dave & Buster's
brand will enhance and accelerate our efforts to improve the results
of operations of these stores from the disappointing levels achieved
during the first nine months since completion of the acquisition. As
the Minneapolis Jillian's location accounts for such a significant
portion of this year's shortfall in anticipated results and
approximately 40% of the Jillian's store level losses, we do not
believe that the capital expenditures necessary to re-brand that store
would be justified."
The company has already completed many of the improvements
necessary to convert most of the Jillian's stores to the Dave &
Buster's brand, including facilities enhancements, product quality
improvements, equipment upgrades and additions, new games and
significant store level management changes. The company's advertising
of the Jillian's stores has been at minimal maintenance levels since
the beginning of the year. "Our goal was to make much needed
improvements to Jillian's before we began re-marketing the brand. We
will now aggressively advertise and market these stores as they
convert to the stronger Dave and Buster's brand," continued Mr.
Corley. The company estimates that an additional $5 million in capital
expenditures will be required to complete the re-branding of these
stores during this fiscal year.
"We will re-brand the first Jillian's to Dave and Buster's next
month," stated Dave Corriveau, the company's President. "With our
scheduled 2005 new store openings in tandem with most of the Jillian's
stores converting and the addition of at least two new stores in 2006,
our current plan is to have 10-12 more stores operating under the Dave
and Buster's brand within a year from today."
The company has lowered its previously announced earnings guidance
for the current fiscal year from a range of $1.15 to $1.23 per diluted
share to an estimated range of $.64 to $.70 per diluted share. The
revised estimate includes the approximate $3.0 million pretax charge
associated with the closure of the Mall of America location during the
fiscal year. The company has also decided to reduce its new store
openings in fiscal 2006 to two or three new stores from three or four
new stores, attributable in part to the additional capital
expenditures associated with the re-branding program.
Separately, the company has announced that it has agreed to
purchase the general partner interest in the Jillian's store located
at the Discover Mills Mall in metropolitan Atlanta. The purchase price
for this interest, sold pursuant to an auction held by the bankruptcy
court, is $900,000. The company will also receive a quarterly
management fee from the partnership.
The company will hold a special conference call to discuss these
developments tomorrow, August 25, 2005, at 9:00 a.m. Eastern Time
(8:00 a.m. Central Time).
The company plans to release earnings for the second quarter 2005
before the market opens on September 8, 2005 and will hold a
conference call at 11:30 a.m. Eastern time (10:30 a.m. Central time)
that same day.
The call will be Webcast by CCBN and can be accessed at Dave &
Buster's Web site, www.daveandbusters.com. Individual investors can
listen to the call through CCBN's individual investor center,
www.companyboardroom.com. In addition, investors can access the call
by visiting any of the investor sites in the CCBN Individual Investor
Network. Institutional investors can access the call via CCBN's
password-protected event management site, www.streetevents.com.
The Webcast will be archived on the company's Web site and
available for replay through September 8, 2005.
Celebrating over 22 years of operations, Dave & Buster's was
founded in 1982 and is one of the country's leading upscale,
restaurant/entertainment concepts with 43 locations throughout the
United States and in Canada. More information on the company,
including the latest investor presentation is available on the
company's Website, www.daveandbusters.com.
"Safe Harbor" Statements Under the Private Securities Litigation
Reform Act of 1995
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.