QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of Incorporation) |
(I.R.S. Employer ID) | |
( | ||
(Address of principal executive offices) (Zip Code) |
(Registrant’s telephone number) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging Growth Company |
Page |
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PART I |
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Item 1. |
3 |
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Item 2. |
18 |
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Item 3. |
33 |
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Item 4. |
33 |
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PART II |
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Item 1. |
33 |
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Item 1A. |
33 |
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Item 2. |
36 |
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Item 6. |
37 |
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38 |
Item 1. |
Financial Statements |
November 1, 2020 |
February 2, 2020 |
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(unaudited) |
(audited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Inventories |
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Prepaid expenses |
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Income taxes receivable |
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Other current assets |
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Total current assets |
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Property and equipment (net of $ |
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Operating lease right of use assets |
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Deferred tax assets |
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Tradenames |
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Goodwill |
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Other assets and deferred charges |
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Total assets |
$ | $ | ||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Current installments of long-term debt |
$ | — | $ | |||||
Accounts payable |
||||||||
Accrued liabilities |
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Income taxes payable |
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Total current liabilities |
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Deferred income taxes |
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Operating lease liabilities |
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Other liabilities |
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Long-term debt, net |
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Commitments and contingencies |
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Stockholders’ equity: |
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Common stock, par value $ |
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Preferred stock, |
||||||||
Paid-in capital |
||||||||
Treasury stock, |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Retained earnings |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ |
$ |
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|
|
|
Thirteen Weeks Ended November 1, 2020 |
Thirteen Weeks Ended November 3, 2019 |
|||||||
Food and beverage revenues |
$ | $ | ||||||
Amusement and other revenues |
||||||||
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|
|||||
Total revenues |
||||||||
Cost of food and beverage |
||||||||
Cost of amusement and other |
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Total cost of products |
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Operating payroll and benefits |
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Other store operating expenses |
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General and administrative expenses |
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Depreciation and amortization expense |
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Pre-opening costs |
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|
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Total operating costs |
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|
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Operating income (loss) |
( |
) | ||||||
Interest expense, net |
||||||||
Loss on debt refinance |
— | |||||||
|
|
|
|
|||||
Income (loss) before benefit for income taxes |
( |
) | ||||||
Benefit for income taxes |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net income (loss) |
( |
) | ||||||
|
|
|
|
|||||
Unrealized foreign currency translation gain |
||||||||
Unrealized gain (loss) on derivatives, net of tax |
( |
) | ||||||
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|
|
|||||
Total other comprehensive income (loss) |
( |
) | ||||||
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|
|
|
|||||
Total comprehensive loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Net income (loss) per share: |
||||||||
Basic |
$ | ( |
) | $ | ||||
Diluted |
$ | ( |
) | $ | ||||
Weighted average shares used in per share calculations: |
||||||||
Basic |
||||||||
Diluted |
Thirty-Nine Weeks Ended November 1, 2020 |
Thirty-Nine Weeks Ended November 3, 2019 |
|||||||
Food and beverage revenues |
$ | $ | ||||||
Amusement and other revenues |
||||||||
|
|
|
|
|||||
Total revenues |
||||||||
Cost of food and beverage |
||||||||
Cost of amusement and other |
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|
|
|
|
|||||
Total cost of products |
||||||||
Operating payroll and benefits |
||||||||
Other store operating expenses |
||||||||
General and administrative expenses |
||||||||
Depreciation and amortization expense |
||||||||
Pre-opening costs |
||||||||
|
|
|
|
|||||
Total operating costs |
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|
|
|
|
|||||
Operating income (loss) |
( |
) | ||||||
Interest expense, net |
||||||||
Loss on debt refinance |
— | |||||||
|
|
|
|
|||||
Income (loss) before provision (benefit) for income taxes |
( |
) | ||||||
Provision (benefit) for income taxes |
( |
) | ||||||
|
|
|
|
|||||
Net income (loss) |
( |
) | ||||||
|
|
|
|
|||||
Unrealized foreign currency translation gain (loss) |
( |
) | ||||||
Unrealized loss on derivatives, net of tax |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total other comprehensive loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total comprehensive income (loss) |
$ | ( |
) | $ | ||||
|
|
|
|
|||||
Net income (loss) per share: |
||||||||
Basic |
$ | ( |
) | $ | ||||
Diluted |
$ | ( |
) | $ | ||||
Weighted average shares used in per share calculations: |
||||||||
Basic |
||||||||
Diluted |
Thirteen Weeks Ended November 1, 2020 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
Balance August 2, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Unrealized foreign currency translation gain |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Unrealized gain on derivatives, net of tax |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock |
— | — | — | — | ||||||||||||||||||||||||||||
Repurchase of common stock |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||
|
|
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|
|
|
|
|
|
|
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|
|||||||||||||||||
Balance November 1, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended November 3, 2019 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
Balance August 4, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Unrealized foreign currency translation gain |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Unrealized loss on derivatives, net of tax |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock |
— | — | — | — | ||||||||||||||||||||||||||||
Repurchase of common stock |
— | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||
Dividends declared ($ |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
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|
|||||||||||||||||
Balance November 3, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended November 1, 2020 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
Balance February 2, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Unrealized foreign currency translation loss |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Unrealized loss on derivatives, net of tax |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock |
— | — | — | — | ||||||||||||||||||||||||||||
Repurchase of common stock |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||||||||||||||
Balance November 1, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-Nine Weeks Ended November 3, 2019 |
||||||||||||||||||||||||||||||||
Common Stock |
Paid-In Capital |
Treasury Stock At Cost |
Accumulated Other Comprehensive Loss |
Retained Earnings |
Total |
|||||||||||||||||||||||||||
Shares |
Amt. |
Shares |
Amt. |
|||||||||||||||||||||||||||||
Balance February 3, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ |
$ | ||||||||||||||||||||||
Cumulative effect of a change in accounting principle, net of tax |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Unrealized foreign currency translation gain |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Unrealized loss on derivatives, net of tax |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Share-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Issuance of common stock |
— | — | — | — | ||||||||||||||||||||||||||||
Repurchase of common stock |
— | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||||
Dividends declared ($ |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
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|
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|
|||||||||||||||||
Balance November 3, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ||||||||||||||||||||||
|
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|
|
|
November 1, |
November 3, |
|||||||
Cash flows from operating activities: |
||||||||
Net income (loss) |
$ | ( |
) | $ | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization expense |
||||||||
Non-cash interest expense |
||||||||
Impairment of long-lived assets |
||||||||
Deferred taxes |
( |
) | ||||||
Loss on disposal of fixed assets |
||||||||
Loss on debt refinance |
||||||||
Share-based compensation |
||||||||
Other, net |
||||||||
Changes in assets and liabilities: |
||||||||
Inventories |
( |
) | ||||||
Prepaid expenses |
( |
) | ||||||
Income tax receivable |
( |
) | ( |
) | ||||
Other current assets |
||||||||
Other assets and deferred charges |
( |
) | ( |
) | ||||
Accounts payable |
( |
) | ||||||
Accrued liabilities |
||||||||
Income taxes payable |
( |
) | ( |
) | ||||
Other liabilities |
||||||||
|
|
|
|
|||||
Net cash provided by (used in) operating activities |
( |
) | ||||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
( |
) | ( |
) | ||||
Proceeds from sales of property and equipment |
||||||||
|
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|
|
|||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
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|
|||||
Cash flows from financing activities: |
||||||||
Proceeds from debt |
||||||||
Payments of debt |
( |
) | ( |
) | ||||
Net proceeds from the issuance of common stock |
||||||||
Proceeds from the exercise of stock options |
||||||||
Repurchase of common stock under share repurchase program |
( |
) | ||||||
Dividends paid |
( |
) | ( |
) | ||||
Debt issuance costs |
( |
) | ||||||
Repurchases of common stock to satisfy employee withholding tax obligations |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
( |
) | ||||||
|
|
|
|
|||||
Decrease in cash and cash equivalents |
( |
) | ( |
) | ||||
Beginning cash and cash equivalents |
||||||||
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|
|||||
Ending cash and cash equivalents |
$ | $ | ||||||
|
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|
|||||
Supplemental disclosures of cash flow information: |
||||||||
Decrease in fixed asset accounts payable |
$ | ( |
) | $ | ( |
) | ||
Cash paid (refund received) for income taxes, net |
$ | ( |
) | $ | ||||
Cash paid for interest, net |
$ | $ | ||||||
Dividend declared, not paid |
$ | $ |
Fair Value |
||||||||||||
Balance Sheet Location |
November 1, 2020 |
February 2, 2020 |
||||||||||
Interest rate swaps |
Accrued liabilities |
$ |
( |
) |
$ |
( |
) | |||||
Interest rate swaps |
Other liabilities |
( |
) |
( |
) | |||||||
|
|
|
|
|||||||||
Total derivatives (1) |
$ |
( |
) |
$ |
( |
) | ||||||
|
|
|
|
(1) |
The balance at November 1, 2020 relates to our swap agreements after hedge accounting was discontinued, effective April 14, 2020. |
Thirteen Weeks Ended |
Thirty-Nine Weeks Ended |
|||||||||||||||
November 1, 2020 |
November 3, 2019 |
November 1, 2020 |
November 3, 2019 |
|||||||||||||
Amount of loss recorded in accumulated other comprehensive income |
$ | $ | ||||||||||||||
Amount of loss reclassified into income (1) |
$ | ( |
) | ( |
) | $ | ( |
) | ( |
) | ||||||
Income tax expense (benefit) in accumulated other comprehensive income |
$ | ( |
) | $ | ( |
) | ( |
) |
(1) |
Amounts reclassified into income are included in “Interest expense, net” in the Consolidated Statements of Comprehensive Income (Loss). |
November 1, 2020 |
February 2, 2020 |
|||||||
Deferred amusement revenue |
$ | $ | ||||||
Current portion of operating lease liabilities, net (1) |
||||||||
Rent payable ( Note 4) |
— | |||||||
Variable rent liabilities ( Note 4) |
||||||||
Deferred gift card revenue |
||||||||
Property taxes |
||||||||
Compensation and benefits |
||||||||
Current portion of derivatives |
||||||||
Current portion of long-term insurance |
||||||||
Utilities |
||||||||
Customer deposits |
||||||||
Inventory liabilities |
||||||||
Sales and use taxes |
||||||||
Dividend payable |
— | |||||||
Other |
||||||||
|
|
|
|
|||||
Total accrued liabilities |
$ | $ | ||||||
|
|
|
|
(1) | The balance of leasehold incentive receivables of $ |
November 1, 2020 |
February 2, 2020 |
|||||||
Senior Secured Notes |
$ | $ | — | |||||
Credit facility - term |
— | |||||||
Credit facility - revolver |
||||||||
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|
|||||
Total debt outstanding |
||||||||
Current installments |
— | ( |
) | |||||
Debt issuance costs |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Long-term debt, net |
$ | $ | ||||||
|
|
|
|
Thirteen Weeks Ended |
Thirty-Nine Weeks Ended |
|||||||||||||||
November 1, 2020 |
November 3, 2019 |
November 1, 2020 |
November 3, 2019 |
|||||||||||||
Interest expense on debt |
$ | $ | ||||||||||||||
Interest associated with swap agreements |
||||||||||||||||
Amortization of issuance cost |
||||||||||||||||
Interest income |
— | ( |
) | ( |
) | ( |
) | |||||||||
Capitalized interest |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total interest expense, net |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
Thirty-Nine Weeks Ended |
|||||||||||||||
November 1, 2020 |
November 3, 2019 |
November 1, 2020 |
November 3, 2019 |
|||||||||||||
Operating lease cost |
$ | $ | ||||||||||||||
Variable lease cost |
||||||||||||||||
Short-term lease cost |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
Thirteen Weeks Ended November 1, 2020 |
Thirteen Weeks Ended November 3, 2019 |
|||||||
Numerator: |
||||||||
Net income (loss) |
$ | ( |
) | $ | ||||
Denominator: |
||||||||
Weighted average number of common shares outstanding (basic) |
||||||||
Weighted average dilutive impact of equity-based awards (1) |
— | |||||||
Weighted average number of common and common equivalent shares outstanding (diluted) |
||||||||
Net income (loss) per share: |
||||||||
Basic |
$ | ( |
) | $ | ||||
Diluted |
$ | ( |
) |
$ | ||||
Thirty-Nine Weeks Ended November 1, 2020 |
Thirty-Nine Weeks Ended November 3, 2019 |
|||||||
Numerator: |
||||||||
Net income (loss) |
$ |
( |
) |
$ |
||||
Denominator: |
||||||||
Weighted average number of common shares outstanding (basic) |
||||||||
Weighted average dilutive impact of equity-based awards (1) |
— |
|||||||
Weighted average number of common and common equivalent shares outstanding (diluted) |
||||||||
Net income (loss) per share: |
||||||||
Basic |
$ |
( |
) |
$ |
||||
Diluted |
$ |
( |
) |
$ |
(1) |
Due to the net loss for the thirteen and thirty-nine weeks ended November 1, 2020, |
Thirteen Weeks Ended |
Thirty-Nine Weeks Ended |
|||||||||||||||
November 1, 2020 |
November 3, 2019 |
November 1, 2020 |
November 3, 2019 |
|||||||||||||
Stock options |
$ | $ | ||||||||||||||
RSU’s |
||||||||||||||||
|
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|
|
|
|
|
|
|||||||||
Share-based compensation expense |
$ | $ | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
2014 Stock Incentive Plan |
2010 Stock Incentive Plan |
|||||||||||||||
Number of Options |
Wtd. Avg. Exercise Price |
Number of Options |
Wtd. Avg. Exercise Price |
|||||||||||||
Outstanding at February 2, 2020 |
$ | $ | ||||||||||||||
Granted |
— | — | — | — | ||||||||||||
Exercised |
— | — | ( |
) | ||||||||||||
Forfeited |
( |
) | — | — | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Outstanding at November 1, 2020 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
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|
|||||||||
Exercisable at November 1, 2020 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
Shares |
Wtd. Avg. Fair Value |
|||||||
Outstanding at February 2, 2020 |
$ | |||||||
Granted |
||||||||
Change in performance units |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
|
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|
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Outstanding at November 1, 2020 |
$ | |||||||
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | reduced expenses broadly, including by furloughing all of our hourly store team members and approximately 94% of store management personnel, on or about March 19, 2020, while enacting 12-week salary reductions for remaining |
managers. In addition, effective March 24, 2020, the Company furloughed all but a small team of essential corporate and administrative staff, enacted 12-week salary reductions ranging from 10% to 50%, and suspended all cash board fees through the remainder of fiscal 2020. As stores reopen with a reduced workforce a portion of the furloughed personnel at our stores and corporate office have returned to work; |
• | canceled or delayed all non-essential planned capital spending for the remainder of fiscal 2020; |
• | halted or delayed planned store openings after our one store opening in Chattanooga, TN, on March 16, 2020, with the exception of two new stores that opened during the third quarter and several planned store openings, all of which commenced construction prior to the pandemic; |
• | stopped work on future planned sites and commenced negotiations to terminate related contracts, as applicable; |
• | suspended our share repurchase program and declaration of dividends; |
• | negotiated amendments to our credit facility resulting in an extension of the maturity date of our revolving credit facility to August 17, 2024; |
• | issued $550,000 of senior secured notes, maturing November 1, 2025; |
• | sold shares of our common stock, which generated gross proceeds of approximately $185,600; and |
• | negotiated with our landlords, vendors, and other business partners to temporarily reduce our lease and contract payments and obtain other concessions. As of November 1, 2020, a total of 123 rent relief agreements related to our operating locations and corporate headquarters were executed, which generally provide for full deferral for three months beginning April 2020, with partial deferral continuing for periods of up to six months, at approximately 50% of those locations. |
Thirteen Weeks Ended November 1, 2020 |
Thirteen Weeks Ended November 3, 2019 |
|||||||||||||||
Food and beverage revenues |
$ | 38,346 | 35.2 | % | $ | 124,637 | 41.6 | % | ||||||||
Amusement and other revenues |
70,706 | 64.8 | 174,715 | 58.4 | ||||||||||||
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|||||||||
Total revenues |
109,052 | 100.0 | 299,352 | 100.0 | ||||||||||||
Cost of food and beverage (as a percentage of food and beverage revenues) |
10,664 | 27.8 | 33,384 | 26.8 | ||||||||||||
Cost of amusement and other (as a percentage of amusement and other revenues) |
7,244 | 10.2 | 18,796 | 10.8 | ||||||||||||
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Total cost of products |
17,908 | 16.4 | 52,180 | 17.4 | ||||||||||||
Operating payroll and benefits |
27,704 | 25.4 | 76,165 | 25.4 | ||||||||||||
Other store operating expenses |
70,783 | 64.9 | 110,713 | 37.1 | ||||||||||||
General and administrative expenses |
11,746 | 10.8 | 16,210 | 5.4 | ||||||||||||
Depreciation and amortization expense |
34,384 | 31.5 | 33,340 | 11.1 | ||||||||||||
Pre-opening costs |
2,570 | 2.4 | 4,245 | 1.4 | ||||||||||||
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Total operating costs |
165,095 | 151.4 | 292,853 | 97.8 | ||||||||||||
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|
|||||||||
Operating income (loss) |
(56,043 | ) | (51.4 | ) | 6,499 | 2.2 | ||||||||||
Interest expense, net |
8,213 | 7.6 | 6,110 | 2.1 | ||||||||||||
Loss on debt refinance |
904 | 0.8 | — | — | ||||||||||||
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Income (loss) before benefit for income taxes |
(65,160 | ) | (59.8 | ) | 389 | 0.1 | ||||||||||
Benefit for income taxes |
(17,117 | ) | (15.7 | ) | (93 | ) | (0.1 | ) | ||||||||
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Net income (loss) |
$ | (48,043 | ) | (44.1 | )% | $ | 482 | 0.2 | % | |||||||
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Change in comparable store sales (1) |
(65.6 | )% | (4.1 | )% | ||||||||||||
Company-owned stores at end of period (1) |
137 | 134 | ||||||||||||||
Comparable stores at end of period (1) |
114 | 99 |
(1) As |
of the end of the third quarter of fiscal 2020, 104 of our 137 stores were open and 84 of our 114 comparable stores were open. Our total and comparable store counts as of the end of the third quarter of fiscal 2020 exclude a store in Chicago, Illinois and a store in Houston, Texas which are near the end of their respective lease terms which the Company has decided not to re-open. Our store in Duluth (Atlanta), Georgia permanently closed on March 3, 2019 as we did not exercise the renewal option and is excluded from fiscal 2019 store counts and comparable store sales. |
Thirteen Weeks Ended November 1, 2020 |
Thirteen Weeks Ended November 3, 2019 |
|||||||||||||||
Net income (loss) |
$ | (48,043 | ) | -44.1 | % | $ | 482 | 0.2 | % | |||||||
Interest expense, net |
8,213 | 6,110 | ||||||||||||||
Loss on debt refinance |
904 | — | ||||||||||||||
Benefit for income taxes |
(17,117 | ) | (93 | ) | ||||||||||||
Depreciation and amortization expense |
34,384 | 33,340 | ||||||||||||||
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EBITDA |
(21,659 | ) | -19.9 | % | 39,839 | 13.3 | % | |||||||||
Loss on asset disposal |
124 | 458 | ||||||||||||||
Share-based compensation |
2,999 | 1,747 | ||||||||||||||
Pre-opening costs |
2,570 | 4,245 | ||||||||||||||
Other costs (1) |
(5 | ) | 1 | |||||||||||||
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Adjusted EBITDA |
$ | (15,971 | ) | -14.6 | % | $ | 46,290 | 15.5 | % | |||||||
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(1) |
Primarily represents costs related to currency transaction (gains) or losses. |
Thirteen Weeks Ended November 1, 2020 |
Thirteen Weeks Ended November 3, 2019 |
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Operating income (loss) |
$ | (56,043 | ) | -51.4 | % | $ | 6,499 | 2.2 | % | |||||||
General and administrative expenses |
11,746 | 16,210 | ||||||||||||||
Depreciation and amortization expense |
34,384 | 33,340 | ||||||||||||||
Pre-opening costs |
2,570 | 4,245 | ||||||||||||||
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Store Operating Income Before Depreciation and Amortization |
$ | (7,343 | ) | -6.7 | % | $ | 60,294 | 20.1 | % | |||||||
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Thirteen Weeks Ended November 1, 2020 |
Thirteen Weeks Ended November 3, 2019 |
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New store and operating initiatives |
$ | 7,700 | $ | 52,147 | ||||
Games |
361 | 2,825 | ||||||
Maintenance capital |
1,208 | 5,831 | ||||||
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Total capital additions |
$ | 9,269 | $ | 60,803 | ||||
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Payments from landlords |
$ | 4,709 | $ | 7,240 |
Thirteen weeks ended November 1, 2020 |
Thirteen weeks ended November 3, 2019 |
Change |
||||||||||
Total revenues |
$ | 109,052 | $ | 299,352 | $ | (190,300 | ) | |||||
Total store operating weeks |
1,221 | 1,722 | (501 | ) | ||||||||
Comparable store revenues |
$ | 89,592 | $ | 260,131 | $ | (170,539 | ) | |||||
Comparable store operating weeks |
993 | 1,482 | (489 | ) | ||||||||
Noncomparable store revenues |
$ | 20,092 | 40,131 | $ | (20,039 | ) | ||||||
Noncomparable store operating weeks |
228 | 240 | (12 | ) | ||||||||
Other revenues |
$ | (632 | ) | $ | (910 | ) | $ | 278 |
Thirty-Nine Weeks Ended November 1, 2020 |
Thirty-Nine Weeks Ended November 3, 2019 |
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Food and beverage revenues |
$ | 119,268 | 37.3 | % | $ | 410,779 | 40.8 | % | ||||||||
Amusement and other revenues |
200,423 | 62.7 | 596,754 | 59.2 | ||||||||||||
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Total revenues |
319,691 | 100.0 | 1,007,533 | 100.0 | ||||||||||||
Cost of food and beverage (as a percentage of food and beverage revenues) |
32,667 | 27.4 | 109,072 | 26.6 | ||||||||||||
Cost of amusement and other (as a percentage of amusement and other revenues) |
21,997 | 11.0 | 64,456 | 10.8 | ||||||||||||
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Total cost of products |
54,664 | 17.1 | 173,528 | 17.2 | ||||||||||||
Operating payroll and benefits |
85,197 | 26.6 | 239,965 | 23.8 | ||||||||||||
Other store operating expenses |
229,137 | 71.8 | 321,334 | 31.9 | ||||||||||||
General and administrative expenses |
35,587 | 11.1 | 49,047 | 4.9 | ||||||||||||
Depreciation and amortization expense |
104,896 | 32.8 | 97,226 | 9.6 | ||||||||||||
Pre-opening costs |
8,781 | 2.7 | 15,970 | 1.6 | ||||||||||||
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Total operating costs |
518,262 | 162.1 | 897,070 | 89.0 | ||||||||||||
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Operating income (loss) |
(198,571 | ) | (62.1 | ) | 110,463 | 11.0 | ||||||||||
Interest expense, net |
22,491 | 7.0 | 14,771 | 1.5 | ||||||||||||
Loss on debt refinance |
904 | 0.3 | — | — | ||||||||||||
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Income (loss) before provision (benefit) for income taxes |
(221,966 | ) | (69.4 | ) | 95,692 | 9.5 | ||||||||||
Provision (benefit) for income taxes |
(71,777 | ) | (22.4 | ) | 20,411 | 2.0 | ||||||||||
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Net income (loss) |
$ | (150,189 | ) | (47.0 | ) | $ | 75,281 | 7.5 | % | |||||||
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Change in comparable store sales (1) |
(70.2 | )% | (1.9 | )% | ||||||||||||
Company-owned stores at end of period (1) |
137 | 134 | ||||||||||||||
Comparable stores at end of period (1) |
114 | 99 |
(1) |
As of the end of the third quarter of fiscal 2020, 104 of our 137 stores were open and 84 of our 114 comparable stores were open. Our total and comparable store counts as of the end of the third quarter of fiscal 2020 exclude a store in Chicago, Illinois and a store in Houston, Texas which are near the end of their respective lease terms which the Company has decided not to re-open. Our store in Duluth (Atlanta), Georgia permanently closed on March 3, 2019 as we did not exercise the renewal option and has been excluded from fiscal 2019 store counts and comparable store sales. |
Thirty-Nine Weeks Ended November 1, 2020 |
Thirty-Nine Weeks Ended November 3, 2019 |
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Net income (loss) |
$ | (150,189 | ) | -47.0 | % | $ | 75,281 | 7.5 | % | |||||||
Interest expense, net |
22,491 | 14,771 | ||||||||||||||
Loss on debt refinance |
904 | — | ||||||||||||||
Provision (benefit) for income taxes |
(71,777 | ) | 20,411 | |||||||||||||
Depreciation and amortization expense |
104,896 | 97,226 | ||||||||||||||
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|
|||||||||||||
EBITDA |
(93,675 | ) | -29.3 | % | 207,689 | 20.6 | % | |||||||||
Loss on asset disposal |
541 | 1,284 | ||||||||||||||
Impairment of long-lived assets |
13,727 | — | ||||||||||||||
Share-based compensation |
5,344 | 5,479 | ||||||||||||||
Pre-opening costs |
8,781 | 15,970 | ||||||||||||||
Other costs (1) |
54 | 34 | ||||||||||||||
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Adjusted EBITDA |
$ | (65,228 | ) | -20.4 | % | $ | 230,456 | 22.9 | % | |||||||
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|
|
(1) |
Primarily represents costs related to currency transaction (gains) or losses. |
Thirty-Nine Weeks Ended November 1, 2020 |
Thirty-Nine Weeks Ended November 3, 2019 |
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Operating income (loss) |
$ | (198,571 | ) | -62.1 | % | $ | 110,463 | 11.0 | % | |||||||
General and administrative expenses |
35,587 | 49,047 | ||||||||||||||
Depreciation and amortization expense |
104,896 | 97,226 | ||||||||||||||
Pre-opening costs |
8,781 | 15,970 | ||||||||||||||
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|
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Store Operating Income Before Depreciation and Amortization |
$ | (49,307 | ) | -15.4 | % | $ | 272,706 | 27.1 | % | |||||||
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|
Thirty-Nine Weeks Ended November 1, 2020 |
Thirty-Nine Weeks Ended November 3, 2019 |
|||||||
New store and operating initiatives |
$ | 48,222 | $ | 143,594 | ||||
Games |
9,079 | 12,667 | ||||||
Maintenance capital |
2,988 | 16,316 | ||||||
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|
|
|||||
Total capital additions |
$ | 60,289 | $ | 172,577 | ||||
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|
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Payments from landlords |
$ | 8,723 | $ | 28,581 |
Thirty-nine weeks ended November 1, 2020 |
Thirty-nine weeks ended November 3, 2019 |
Change |
||||||||||
Total revenues |
$ | 319,691 | $ | 1,007,533 | $ | (687,842 | ) | |||||
Total store operating weeks |
2,682 | 5,012 | (2,330 | ) | ||||||||
Comparable store revenues |
$ | 268,426 | $ | 901,837 | $ | (633,411 | ) | |||||
Comparable store operating weeks |
2,184 | 4,446 | (2,262 | ) | ||||||||
Noncomparable store revenues |
$ | 54,763 | $ | 110,231 | $ | (55,468 | ) | |||||
Noncomparable store operating weeks |
498 | 566 | (68 | ) | ||||||||
Other revenues |
$ | (3,498 | ) | $ | (4,535 | ) | $ | 1,037 |
• | reduced expenses broadly; |
• | canceled or delayed all non-essential planned capital spending for the remainder of fiscal 2020 and halted or delayed all planned store openings; |
• | suspended our share repurchase program and our dividend; |
• | drew down substantially all the remaining credit available under our $500,000 revolving credit facility; |
• | negotiated an amendment with our lenders, which included relief from compliance with financial covenants for the first, second and third quarterly periods of fiscal 2020; |
• | sold shares of our common stock, which generated gross proceeds of $185,600; |
• | initiated negotiations with our landlords, vendors, and other business partners to temporarily reduce our lease and contract payments and obtain other concessions; and |
• | submitted a proposal, approved by our shareholders, increasing the number of shares available for incentive awards, which enables management to maintain key talent while preserving the Company’s liquidity by minimizing cash outlays. |
• | continued discussions with our landlords, vendors and other business partners to reduce our lease and contract payments and obtain concessions. As of November 1, 2020, a total of 123 rent relief agreements relating to our operating locations and corporate headquarters were executed, which generally provide for full deferral for three months beginning April 2020, with partial deferral continuing for periods of up to six months, at approximately 50% of those locations; |
• | negotiated a second amendment with our lenders, resulting in an extension of the maturity date of our revolving credit facility and extended relief from compliance with financial covenants until the first quarter of fiscal year 2022; and |
• | issued $550,000 of senior secured notes, maturing November 1, 2025. |
Total |
1 Year |
2-3 Years |
4-5 Years |
After 5 Years |
||||||||||||||||
Senior Secured Notes |
$ | 550,000 | $ | — | $ | — | $ | 550,000 | $ | — | ||||||||||
Credit Facility - Revolver (1) |
26,000 | — | — | 26,000 | — | |||||||||||||||
Interest requirements (2) |
225,395 | 46,328 | 91,087 | 87,980 | — | |||||||||||||||
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|
|
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Total |
$ | 801,395 | $ | 46,328 | $ | 91,087 | $ | 663,980 | $ | — | ||||||||||
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|
(1) |
Available commitments under the revolving credit facility were $464,314 as of November 1, 2020, subject to a $150,000 liquidity covenant. |
(2) |
The cash obligations for the variable portion of the interest requirements on the outstanding balance of the revolving credit facility and the unused commitment are based on an interest rate of 6.00% and 0.50%, respectively, through the end of the first quarter of fiscal year 2022, reduced to 4.00% and 0.40%, respectively, for the remainder of the term of the credit facility. The interest requirement on the Notes is based on a fixed rate of 7.625%. |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors |
• | the uncertain and unprecedented impact of the coronavirus and the disease it causes (COVID-19) 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 additional waivers or amendments, and thereafter continue to satisfy covenant requirements (even as they may be amended), under our amended credit agreement and derivative contract payables; |
• | our ability to access other funding sources; |
• | the duration of government-mandated and voluntary shutdowns, and the impact of ongoing mitigation restrictions on our operations once our stores can re-open; |
• | the speed with which our stores safely can be re-opened and the level of customer demand following re-opening; |
• | the economic impact of COVID-19 and related disruptions on the communities we serve; and |
• | our overall level of indebtedness. |
• | making it more difficult for us to satisfy our obligations with respect to our debt, and any failure to comply with the obligations under our debt instruments, including restrictive covenants, could result in an event of default under the agreements governing our indebtedness increasing our vulnerability to general economic and industry conditions, including as a result of disruption caused by the global COVID-19 pandemic; |
• | requiring a substantial portion of our cash flow from operations to be dedicated to the payment of obligations with respect to our debt, thereby reducing our ability to use our cash flow to fund our operations, lease payments, capital expenditures, selling and marketing efforts, product development, future business opportunities and other purposes; |
• | exposing us to the risk of increased interest rates as a substantial portion of our borrowings are at variable rates; |
• | restricting us from making strategic acquisitions; |
• | limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and |
• | limiting our ability to plan for, or adjust to, changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less highly leveraged. |
• | incur or guarantee additional indebtedness or issue certain disqualified or preferred stock; |
• | pay dividends or make other distributions on, or redeem or purchase, any equity interests or make other restricted payments; |
• | make certain acquisitions or investments; |
• | create or incur liens; |
• | transfer or sell assets; |
• | incur restrictions on the payments of dividends or other distributions from our restricted subsidiaries; |
• | alter the business that we conduct; |
• | enter into transactions with affiliates; and |
• | consummate a merger or consolidation or sell, assign, transfer, lease or otherwise dispose of all or substantially all of our assets. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Item 6. |
Exhibits |
* | Filed herein |
DAVE & BUSTER’S ENTERTAINMENT, INC., a Delaware corporation | ||||
Date: December 10, 2020 | By: | /s/ Brian A. Jenkins | ||
Brian A. Jenkins | ||||
Chief Executive Officer | ||||
Date: December 10, 2020 | By: | /s/ Scott J. Bowman | ||
Scott J. Bowman | ||||
Chief Financial Officer |
Exhibit 10.1
DAVE & BUSTERS SELECT EXECUTIVE RETIREMENT PLAN
This Select Executive Retirement Plan (the Plan) is amended and restated by Dave & Busters Management Corporation, Inc., effective, unless otherwise provided for herein, as of January 1, 2017.
ARTICLE I
PURPOSE; FINANCING PLAN BENEFITS
1.1 Purpose. The purpose of this Plan is to provide a select group of management or highly compensated Employees of the Employer with certain deferred compensation benefits as described herein. The Employer intends that the Plan shall constitute an unfunded plan for purposes of the Code and Title I of ERISA, as amended, and that any Participant or Beneficiary shall have the status of an unsecured general creditor of the Employer as to the Plan and any trust fund that may be established by the Employer, or asset identified specifically by the Employer, as a reserve for the discharge of its obligations under the Plan.
1.2 Financing Plan Benefits. All Benefits under this Plan shall be paid or provided directly by the Employer. Such Benefits shall be general obligations of the Employer which shall not require the segregation of any funds or property therefor. Notwithstanding the foregoing, in the discretion of the Employer, the Employers obligations hereunder may be satisfied from a grantor trust established by the Employer, the terms of which will be substantially similar to the terms of the model trust issued by the Internal Revenue Service in Revenue Procedure 92-64, or from an insurance contract or contracts owned by the Employer. The assets of any such trust and any such insurance policy shall continue for all purposes to be a part of the general funds of the Employer, shall be considered solely a means to assist the Employer to meet its contractual obligations under this Plan and shall not create a funded account or security interest for the benefit of any Participant under this Plan. All such assets shall be subject to the claims of the general creditors of the Employer in the event the Employer is Insolvent. To the extent that any person acquires a right to receive a payment from the Employer under the Plan, such right shall be no greater than the right of any unsecured general creditor of the Employer. If a trust is established as provided for in this Section 1.2, earnings and/or losses of the trust attributable to amounts credited to a Participants Account shall increase or, if applicable, decrease such Participants Account for purposes of determining the Participants Benefits payable hereunder, and each Participant shall be given the opportunity to direct the investment of the trusts assets attributable to his Account among investment options selected by the Employer from time to time. Any such investment election by a Participant shall be subject to the terms of the trust and the approval of the trustee thereof.
1
ARTICLE II
DEFINITIONS
The following words and phrases when used in this Plan shall have the respective meanings set forth below unless the context clearly indicates otherwise:
2.1 Account means the separate bookkeeping account established with respect to each Participant to which his Benefits are credited in accordance with Article IV hereof.
2.2 Administrator means the Compensation Committee of Board of Directors for Dave & Busters, Inc., except to the extent that the Compensation Committee of Board of Directors for Dave & Busters, Inc. has appointed another person or persons to serve as the Administrator with respect to the Plan.
2.3 Anniversary Date means each December 31 during the term of this Plan.
2.4 Beneficiary means the person designated in writing by a Participant pursuant to Section 5.8 to receive his Benefits in the event of his death.
2.5 Benefits mean amounts representing Participants Deferred Compensation Elections and, for Periods of Service prior to calendar year 2006, Special Deferred Compensation Elections described in Sections 4.2 and 4.3, and the vested portion of Employer Contributions described in Section 4.4 credited to each Participants Account, plus earnings thereon and less losses allocable thereto, if any, attributable to the investment of such amounts, if applicable pursuant to Section 1.2 hereof.
2.6 Change of Control means (i) with respect to an Employer other than Dave & Busters Management Corporation, Inc. the date on which (A) any one person, or more than one person acting as a group, acquires ownership of stock of the Employer that, together with stock held by such person or group, constitutes more than fifty percent (50%) of either the total fair market value or total voting power of the stock of the Employer; or (B) any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Employer that have a total gross fair market value equal to or more than eighty percent (80%) of the total gross fair market value of all of the assets of the Employer immediately prior to such acquisition or acquisitions, and (ii) with respect to Dave & Busters Management Corporation, Inc. the date on which (A) any one person, or more than one person acting as a group, acquires a capital or profits interest in Dave & Busters Management Corporation, Inc. that, together with the capital or profits interest held by such person or group, constitutes more than fifty percent (50%) of either the capital or profits interests of Dave & Busters Management Corporation, Inc.; or (B) any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from Dave & Busters Management Corporation, Inc. that have a total gross fair market value equal to or more than eighty percent (80%) of the total gross fair market value of all of the assets of Dave & Busters Management Corporation, Inc. immediately prior to such acquisition or acquisitions; provided that in each case the foregoing shall only be deemed a Change of Control if such transaction is a permitted distribution event for purposes of Section 409A(a)(2)(A)(v) of the Code and the regulations promulgated thereunder. In addition, for purposes of applying any Change of Control provision under the Plan with respect to a Participants Benefits, a Change of Control will be deemed to occur with respect to a particular Participant only if the Change of Control event affects the Employer for whom the Participant performs services or a corporate majority shareholder (owning more than fifty percent (50%) of the total fair market value and total voting power of that Employer) or any corporation in that chain of corporations in which each corporation is a majority shareholder of another corporation in the chain ending in the Employer for whom the Participant performs services or a corporate majority shareholder of the Employer. References in the preceding sentence to corporations and corporate majority shareholders shall be deemed to include partnerships and holders of a majority capital or profits interest to the extent permitted under Section 409A of the Code with respect to change of control events.
2
2.7 Code means the Internal Revenue Code of 1986, as amended.
2.8 Committee means the Benefits Management Committee, as constituted from time to time, appointed by the Administrator to perform the duties and responsibilities allocated to it pursuant to the terms hereof. The Committee shall consist of at least three members and shall be entitled to act with respect to any matter hereunder for which it is responsible in accordance with the decision of a majority of its members. Upon the occurrence of a Change of Control, the members of the Committee, as then constituted, may not be removed for a period of two years following such event without their written consent.
2.9 Compensation means, for Periods of Service beginning after calendar year 2005, amounts paid to a Participant by the Employer as base salary without regard to any bonus payments.
2.10 Deferred Compensation means the amount credited to a Participants Account pursuant to a Participants Deferred Compensation Elections in accordance with Section 4.2 hereof.
2.11 Deferred Compensation Election means the election by a Participant to defer his Compensation in accordance with Section 4.2.
2.12 Deferred Compensation/Participation Agreement means the individual agreement executed by each Participant under the Plan pursuant to which the Participant designates a Beneficiary and makes his Deferred Contribution Election and/or for Periods of Service prior to calendar year 2006, his Special Deferred Compensation Election. A Participant may direct the investment of assets credited to his Account on the Deferred Compensation/Participation Agreement, if permitted pursuant to Section 1.2 hereof.
2.13 Designated Employee means any Employee who has a job title with the Employer of President, Chief Executive Officer, Senior Vice President, Vice President, Regional Operations Director, Assistant Vice President, Senior Director, Director or General Manager.
2.14 Disability means that the Participant is (a) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participants Employer.
2.15 Eligible Employee means each Designated Employee or any such other Employee who has been designated as eligible to participate in the Plan pursuant to Section 3.1 for a Period of Service.
2.16 Employee means any person employed by the Employer who is included on the Federal Insurance Contribution Act rolls of the Employer.
2.17 Employer means Dave & Busters Management Corporation, Inc. and any successor or successors thereto that adopts the Plan on behalf of its employees.
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2.18 Employer Contributions means amounts credited to a Participants Account pursuant to Section 4.4 hereof.
2.19 ERISA means the Employee Retirement Income Security Act of 1974, as amended.
2.20 Insolvent means the Employer being unable to pay its debts as they mature or being subject to a pending proceeding as a debtor under the United States Bankruptcy Code.
2.21 Normal Retirement Age means the date a Participant attains age 65.
2.22 Participant means a Designated Employee and any other Employee who is selected by the Administrator to participate in the Plan, as provided in each case in Section 3.1 hereof and who has elected to participate in the Plan by executing a Deferred Compensation/Participation Agreement in accordance with Section 4.2 and/or for Periods of Service prior to calendar year 2006, Section 4.3 hereof.
2.23 Period of Service means the twelve-month period ending each December 31, or such portion thereof that an Employee has been designated as eligible to participate in the Plan.
2.24 Special Deferred Compensation Election means the election by a Participant for Periods of Service prior to calendar year 2006, to defer a percentage or stated dollar amount of his bonus as described in Section 4.3 hereof. No Special Deferred Compensation Elections may be under the Plan with respect to bonuses for services performed by a Participant after 2005.
ARTICLE III
ELIGIBILITY
3.1 Eligibility to Participate. Each Designated Employee shall be eligible to participate in the Plan. The Administrator shall, prior to each Period of Service during the term of this Plan, irrevocably specify the name of each other Employee who shall be entitled to participate in the Plan for the immediately following Period of Service. In addition, the Administrator may, during a Period of Service, designate an individual who has become an Employee during that Period of Service as eligible to participate in the Plan for the remaining portion of that Period of Service. An Employee who becomes a Designated Employee during a Period of Service shall be eligible to participate in the Plan as of the date such Employee becomes a Designated Employee for the remaining portion of that Period of Service. An Employee shall be eligible to receive a benefit hereunder if such Employee is a Designated Employee or has been designated as an eligible Employee pursuant to the preceding sentences of this Section 3.1 and has, in either case, entered into a Deferred Compensation/Participation Agreement with the Employer in accordance with Section 4.2 and/or for Periods of Service prior to calendar year 2006, Section 4.3 hereof. If the Administrator fails to designate an Employee, other than a Designated Employee, as eligible to participate in the Plan for a particular Period of Service and such Employee was eligible to participate in the Plan for the immediately preceding Period of Service, the Administrator shall notify the Employee in writing of his ineligibility to participate in the Plan as soon as administratively possible after making its decision regarding his eligibility.
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3.2 Cessation of Participation. A Participant will cease to be a Participant as of the earlier of (i) the date on which the Plan terminates or (ii) the date on which he ceases to be an eligible Employee under Section 3.1.
ARTICLE IV
PARTICIPATION, PLAN BENEFITS AND VESTING
4.1 General. Subject to the vesting provisions of Section 4.5 hereof and the provisions of Article V, the Benefits to which a Participant and, if applicable, his Beneficiary shall be entitled under the Plan will consist of Deferred Compensation and Employer Contributions credited to such Participants Account, plus earnings thereon and less losses allocable thereto, if any, attributable to the investment of such amounts pursuant to Section 1.2 hereof.
4.2 Participation Election; Deferred Compensation Elections. Unless the Administrator determines otherwise prior to a Period of Service, the maximum percentage of Compensation that an Eligible Employee may elect to defer for a Period of Service shall not exceed fifty percent (50%). Subject, for Periods of Service prior to calendar year 2006, to a Participants Special Deferred Compensation Election with respect to bonuses as described in Section 4.3, before the beginning of each Period of Service for which Compensation is earned by an Eligible Employee, the Employee must elect in writing the percentage of his Compensation that will be deferred for such period by executing a Deferred Compensation/Participation Agreement in such form as the Administrator shall prescribe. Notwithstanding the preceding sentence, for the first Period of Service in which an Employee becomes Eligible to participate in the Plan, the Eligible Employee may elect within 30 days after the date the Employee becomes Eligible to participate in the Plan to defer Compensation with respect to Compensation for services performed subsequent to the election. From time to time during each Period of Service for which a Participant has executed a Deferred Compensation/Participation Agreement, the Employer will credit the amount of the Participants Deferred Compensation to his Account. If an Eligible Employee does not execute a Deferred Compensation/Participation Agreement for a particular Period of Service in accordance with this Section 4.2, he may not participate in the Plan for that Period of Service with respect to a Deferred Compensation Election, but he may make a separate Special Deferred Compensation Election, for Periods of Service prior to calendar year 2006, with respect to a bonus in accordance with Section 4.3. Thereafter, he may elect to make a Deferred Compensation Election and participate in the Plan with respect to future Periods of Service, if he is then eligible to participate in the Plan pursuant to Section 3.1 hereof, by executing a Deferred Compensation/Participation Agreement and electing to defer a percentage of Compensation prior to any such future Period of Service.
4.3 Special Deferred Compensation Election for Bonuses. For Periods of Service prior to calendar year 2006, in addition to the Deferred Compensation Election described in Section 4.2, an Eligible Employee may make a Special Deferred Compensation Election with respect to a discretionary bonus payable to an Eligible Employee for any Period of Service, provided that an Eligible Employee makes such election prior to the date the discretionary bonus is declared by executing a Deferred Compensation/Participation Agreement setting forth his Special Deferred Compensation Election. An Eligible Employee may elect to defer a percentage or a stated dollar amount of a bonus as part of his Special Deferred Compensation Election or may elect not to defer any portion of his bonus. If a Special Deferred Compensation Election is not made by a Participant pursuant to this Section 4.3 and he has made a Deferred Compensation Election pursuant to Section 4.2 for a particular Period of Service, the rate a deferral elected in that Deferred Compensation Election shall determine the portion of his bonus to be deferred for that Period of Service. No Special Deferred Compensation Elections may be made for any Period of Service after calendar year 2005.
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4.4 Employer Contributions. The Employer may credit each Participants Account from time to time with amounts that represent Employer Contributions, which will be based on the Participants Deferred Compensation Election. Whether Employer Contributions are credited to a Participants Account for a particular Period of Service shall be determined in the sole discretion of the Employer based, among other things, on the Employers profitability, and such contributions shall be credited only to Participants who are Employees on the last day of the particular Period of Service for which the contributions are credited. The value of such amounts (as determined under Section 4.1) will be used, along with the Participants Deferred Compensation, to determine the Participants Benefits as specified herein.
4.5 Vesting. In the event of a Participants termination of employment, he will be entitled to receive:
(a) | 100% of the portion of his Account attributable to his Deferred Compensation, including the earnings thereon if such amounts are invested pursuant to Section 1.2 hereof; and |
(b) | the vested portion of his Account attributable to Employer Contributions based on his years of service as determined below and as otherwise provided below, including the earnings thereon if such amounts are invested pursuant to Section 1.2 hereof. |
Each Participant will vest in the portion of his Account attributable to Employer Contributions at the rate of 20% per year for each calendar year during which he performs 1,000 hours of service for the Employer beginning with the calendar year in which the Participant first becomes eligible to participate in the Plan. Notwithstanding the preceding sentence, a Participant will become fully vested in his Account (i) in the event of his termination of employment on or after his Normal Retirement Age, or by reason of his Disability or death and (ii) upon a Change of Control, subject to the conditions contained in Section 2.6 applicable to determining whether a Change of Control has occurred with respect to a Participant.
ARTICLE V
DISTRIBUTIONS
5.1 Payment of Benefits. The amount credited to a Participants Account pursuant to Article IV hereof, to the extent vested pursuant to Section 4.5, shall be payable to the Participant or, if applicable, to his Beneficiary in accordance with the provisions of this Article V. Subject to the provisions of Section 5.8, payment of any Benefit under the Plan shall be made as soon as administratively practicable, following the occurrence of the event causing the Benefit to become payable as determined by the Administrator in its sole discretion, but not later than sixty (60) days following the occurrence of the event.
5.2 Retirement, Disability, or Death. Upon termination of the Participants employment with the Employer on or after his Normal Retirement Age, or by reason of his Disability or death, the Employer will pay the full value of his Account to him in the form of a single sum cash payment.
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5.3 Other Termination of Employment. In the event the Participants employment with the Employer terminates for any reason other than retirement on or after Normal Retirement Age, death, or Disability, the value of the vested portion of his Account will be paid in the form of a single sum cash payment.
5.4 Timing of Certain Payments. Notwithstanding any other provision of this Plan to the contrary, Benefits shall be paid to Participants prior to the time such Benefits otherwise would be payable hereunder if the Committee in good faith determines that either of the following conditions or events has occurred:
(a) | A Change of Control of the Employer, subject to the conditions contains in Section 2.6 applicable to determining whether a Change of Control has occurred with respect to the payment of a Participant. |
(b) | An unforeseeable emergency of the Participant. An unforeseeable emergency is a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant, the Participants spouse, or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participants property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. An unforeseeable emergency will exist only if, as determined under regulations issued by the Internal Revenue Service under Code Section 409A, the amount distributed to a Participant on account of an unforeseeable emergency does not exceed the amount reasonably necessary to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise, or by liquidation of the Participants assets (to the extent the liquidation of such assets would not itself cause a severe financial hardship). |
5.5 Form of Payment. The Participants Benefits shall be paid in the form of a single sum payment in cash, or for Periods of Service prior to calendar year 2006, in accordance with the installment form of payment, if applicable, elected by the Participant in his Deferred Compensation/Participation Agreement.
5.6 Designation of Beneficiary. Each Participant must designate a Beneficiary to receive his Benefits in the event of his death, by completing his Deferred Compensation/Participation Agreement and filing it with the Administrator. The Administrator will recognize the most recent written Beneficiary designation on file prior to a Participants death. If a designated Beneficiary is not living at the time of the Participants death, then the Administrator will pay Participants Benefits to the Participants personal representative, executor, or administrator, as specified by the appropriate legal jurisdiction. Any such payment to the Participants Beneficiary or, if applicable, to his personal representative, executor or administrator shall operate as a complete discharge of all obligations of the Administrator, the Committee and the Employer to the extent of the payment so made.
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5.7 Special Code Section 409A Related Election Rights for 2005. Notwithstanding any provision of the Plan to the contrary, each Participant may elect, during a reasonable period designated by the Employer for purposes of this Section 5.7 prior to December 31, 2005, to cancel his outstanding Deferred Compensation Election and/or Special Deferred Compensation Election for 2005 as provided for in Notice 2005-1, Q&A-20 issued by the Internal Revenue Service. All elections made by Participants pursuant to this Section 5.7, including earnings, if any on the amounts deferred under the Deferred Compensation Elections being cancelled, shall be in writing on a form authorized by the Company for such purpose and all Benefits payable as a result of the elections made by Participants pursuant to this Section 5.7 shall be paid in a single sum payment, in cash, as soon as administratively practicable following the date of such elections, but no later than December 31, 2005. If a Participant elects to cancel a deferred compensation election pursuant to this Section 5.7, no Employer Contributions will be credited to the Participants Account with respect to the amounts associated with that election.
5.8 Deferred Payments for Certain Key Employees. Notwithstanding any other provision contained in the Plan to the contrary, if, upon the advice of its counsel, the Employer determines that (a) at the time of the Participants separation from service with the Employer (as described in Section 5.9), he is a specified employee as defined in Section 409A of the Code and (b) that any payments to be provided to the Participant under the Plan are or may become subject to the additional tax under Section 409A(a)(l)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code (409A Taxes) if paid at the time such payments are otherwise required under the Plan then such payments shall be delayed until the earlier of the date that is six months after the date of the Participants separation from service or the Participants death. The provisions of this Section 5.8 shall only apply to the minimum extent required to avoid the Participants incurrence of any 409A Taxes.
5.9 Section 409A Separation from Service. Notwithstanding any provision contained in the Plan to the contrary, no amount shall be paid pursuant to the Plan relating to a Participants termination of employment with the Employer unless such termination of employment constitutes a separation from service (as such term is defined under Section 409A of the Code).
ARTICLE VI
PLAN ADMINISTRATION
6.1 Authority of the Committee and the Administrator. The Committee shall have full power and authority to interpret, construe and administer the Plan. The Committees interpretation and construction hereof, and actions hereunder, including any determination of the amount or recipient of any payment to be made under the Plan, shall be binding and conclusive on all persons and for all purposes. In addition, the Committee may employ attorneys, accountants, and other professional advisors to assist the Committee and the Administrator in their administration of the Plan. The Employer shall pay the reasonable fees of any such advisor employed by the Committee. The Administrator shall implement the actions and decisions of the Committee regarding the administration of the Plan. To the extent permitted by law, the Administrator, any member of the Committee and any employee of the Employer shall not be liable to any person for any action taken or omitted in connection with the interpretation and administration of the Plan unless attributable to his own willful misconduct or lack of good faith.
6.2 Claims Procedure. The Administrator and the Committee shall be responsible for administering claims for Benefits under the Plan pursuant to the procedures contained in this Section 6.2.
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(a) | In the event that Benefits are not paid to a Participant (or to his Beneficiary in the case of the Participants death) and such claimant believes he is entitled to receive Benefits, then a written claim must be made to the Administrator within sixty days from the date payments are refused. The Administrator will review the written claim, and if the claim is denied in whole or in part, the Administrator will provide in writing within ninety days of receipt of the claim the specific reasons for such denial, reference to the pertinent provisions of the Plan upon which the denial is based, and a description of any additional material or information necessary to perfect the claim. Such written notice will further indicate the additional steps to be taken by the claimant if a further review of the claim denial is desired, including a statement that the claimant may (i) request a review upon written application to the Committee, (ii) review pertinent plan documents, and (iii) submit issues and comments in writing. If notice of the denial is not furnished in accordance with the above procedure, the claim shall be deemed denied and the claimant shall be permitted to proceed with the review procedure described in paragraph (b) below. A claim will be deemed denied if the Administrator fails to take any action with the said ninety-day period. |
(b) | A request by the claimant for a review of the denied claim must be delivered to the Committee within sixty days after receipt by such claimant of written notification of the denial of such claim (or the date that the claim is deemed denied). The Committee shall, not later than sixty days after receipt of a request for a review, decide concerning the claim. A written statement stating the decision on review, the specific reasons for the decision, and the specific provisions of the Plan on which the decision is based shall be mailed or delivered to the claimant within such sixty-day period. If the decision on review is not furnished within the appropriate time, the claim shall be deemed denied on review. |
All communications from the Administrator and the Committee to the claimant shall be written in a manner calculated to be understood by the claimant. All interpretations, determinations and decisions by the Administrator and by the Committee in respect of any matter hereunder will be final, conclusive, and binding upon the Employer, Participants, Beneficiaries, and all other persons claiming an interest in the Plan.
6.3 Arbitration. If the claimant continues to dispute the denial of Benefits following the procedures described in Section 6.2, then the claimant may submit the dispute to a board of arbitration for final arbitration. Such board will consist of one member selected by the claimant, one member selected by the Committee, and a third member selected by the first two members. The board will operate under generally recognized arbitration rules. The claimant, the Committee, and their respective heirs, personal representatives, successors, and assigns will be bound by the decision of such board with respect to any controversy submitted to it for determination.
6.4 Cost of Administration. The cost of this Plan and the expenses of administering the Plan shall be paid by the Employer.
6.5 Limitations on Plan Administration. Neither the Administrator, the Committee, nor any other person to whom discretionary authority is granted hereunder shall vote or act upon any matter involving his own rights, benefits or participation in the Plan.
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ARTICLE VII
AMENDMENT AND TERMINATION
7.1 Amendment. Dave & Busters Management Corporation, Inc. shall have the right to amend this Plan at any time and from time to time, including, to the extent permitted by Section 409A of the Code, a retroactive amendment. Any such amendment shall become effective upon the date stated therein; provided, however, that no such action shall affect any Benefit adversely to which a Participant would be entitled had his employment been terminated immediately before such amendment was effective and no amendment may change the provisions of Section 5.4 for a period of two years following the occurrence of an event described in such Section.
7.2 Termination of the Plan. Dave & Busters Management Corporation, Inc. has established this Plan with the bona fide intention and expectation that from year to year it will deem it advisable to continue it in effect. However, Dave & Busters Management Corporation, Inc., in its sole discretion, reserves the right to terminate the Plan in its entirety at any time; provided, however, that no such action shall affect any Benefit adversely to which a Participant would be entitled had his employment been terminated immediately before such termination was effective and any such termination shall be accomplished in a manner intended to comply with the requirements of Section 409A of the Code.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Rights Against Employer. The Plan shall not be deemed to be a consideration for, or an inducement for, the employment of any Employee by the Employer. Nothing contained in the Plan shall be deemed to give any Employee the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Employee at any time, without regard to the effect such discharge may have on any rights under the Plan.
8.2 Action Taken in Good Faith. To the extent permitted by ERISA, the Administrator, the members of the Committee and each employee and officer of the Employer who have duties and responsibilities with respect to the establishment or administration of the Plan shall be fully protected with respect to any action taken or omitted to be taken by them in good faith.
8.3 Indemnification of Employees and Directors. The Employer hereby indemnifies the Administrator, each member of the Committee and each other employee and officer of the Employer who are delegated responsibilities under the Plan against any and all liabilities and expenses, including attorneys fees, actually and reasonably incurred by them in connection with any threatened, pending or completed legal action or judicial or administrative proceeding to which they may be a party, or may be threatened to be made a party, by reason of membership on the Committee or other delegation of responsibilities, except with regard to any matters as to which they shall be adjudged in such action or proceeding to be liable for gross negligence or willful misconduct in connection therewith.
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8.4 Payment Due an Incompetent. If the Administrator shall find that any person to whom any payment is payable under the Plan is unable to care for his affairs because of mental or physical illness, accident, or death, or is a minor, any payment due (unless a prior claim therefor shall have been made by a duly appointed guardian, committee or other legal representative) may be paid to the spouse, a child, a parent, a brother or sister or any person deemed by the Administrator, in its sole discretion, to have incurred expenses for such person otherwise entitled to payment, in such manner and proportions as the Administrator may determine. Any such payment shall be a complete discharge of the liabilities of the Employer under this Plan, and the Employer shall have no further obligation to see to the application of any money so paid.
8.5 Spendthrift Clause. No right, title or interest of any kind in the Plan shall be transferable or assignable by any Participant or Beneficiary or be subject to alienation, anticipation, encumbrance, garnishment, attachment, execution or levy of any kind, whether voluntary or involuntary, nor subject to the debts, contracts, liabilities, engagements, or torts of the Participant or Beneficiary. Any attempt to alienate, anticipate, encumber, sell, transfer, assign, pledge, garnish, attach or otherwise subject to legal or equitable process or encumber or dispose of any interest in the Plan shall be void.
8.6 Severability. In the event that any provision of this Plan shall be declared illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provisions of this Plan but shall be fully severable and this Plan shall be construed and enforced as if said illegal or invalid provision had never been inserted herein.
8.7 Construction. The article and section headings and numbers are included only for convenience of reference and are not to be taken as limiting or extending the meaning of any of the terms and provisions of this Plan. Whenever appropriate, words used in the singular shall include the plural or the plural may be read as the singular. When used herein, the masculine gender includes the feminine gender. The Plan shall be construed and interpreted by the Committee to the maximum extent possible in a manner to avoid any adverse tax consequences to Participants under Section 409A of the Code.
8.8 Governing Law. The validity and effect of this Plan, and the rights and obligations of all persons affected hereby, shall be construed and determined in accordance with the laws of the State of Texas unless superseded by federal law.
IN WITNESS WHEREOF, the Employer has caused the Plan to be amended and restated effective as of the day and year first above written.
DAVE & BUSTERS MANAGEMENT CORPORATION, INC. | ||
By: | /s/ Jennifer Yarbrough |
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Exhibit 31.1
CERTIFICATION
I, Brian A. Jenkins, Chief Executive Officer of Dave & Busters Entertainment, Inc., certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Dave & Busters Entertainment, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: December 10, 2020 | /s/ Brian A. Jenkins | |||
Brian A. Jenkins | ||||
Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, Scott J. Bowman, Chief Financial Officer of Dave & Busters Entertainment, Inc., certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Dave & Busters Entertainment, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants third fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: December 10, 2020 | /s/ Scott J. Bowman | |||
Scott J. Bowman | ||||
Chief Financial Officer |
Exhibit 32.1
CERTIFICATION
In connection with the Quarterly Report of Dave & Busters Entertainment, Inc. (the Company) on Form 10-Q for the period ended November 1, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Brian A. Jenkins, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that:
(1) | The Report fully complies with the applicable requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: December 10, 2020
/s/ Brian A. Jenkins |
Brian A. Jenkins |
Chief Executive Officer |
Exhibit 32.2
CERTIFICATION
In connection with the Quarterly Report of Dave & Busters Entertainment, Inc. (the Company) on Form 10-Q for the period ended November 1, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Scott J. Bowman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, that:
(1) | The Report fully complies with the applicable requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: December 10, 2020
/s/ Scott J. Bowman |
Scott J. Bowman |
Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Nov. 01, 2020 |
Feb. 02, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 767,510 | $ 686,824 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 60,483,730 | 43,386,852 |
Common stock, shares outstanding | 47,642,029 | 30,603,340 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Treasury stock, shares | 12,841,701 | 12,783,512 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 01, 2020 |
Nov. 03, 2019 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
Total revenues | $ 109,052 | $ 299,352 | $ 319,691 | $ 1,007,533 |
Total cost of products | 17,908 | 52,180 | 54,664 | 173,528 |
Operating payroll and benefits | 27,704 | 76,165 | 85,197 | 239,965 |
Other store operating expenses | 70,783 | 110,713 | 229,137 | 321,334 |
General and administrative expenses | 11,746 | 16,210 | 35,587 | 49,047 |
Depreciation and amortization expense | 34,384 | 33,340 | 104,896 | 97,226 |
Pre-opening costs | 2,570 | 4,245 | 8,781 | 15,970 |
Total operating costs | 165,095 | 292,853 | 518,262 | 897,070 |
Operating income (loss) | (56,043) | 6,499 | (198,571) | 110,463 |
Interest expense, net | 8,213 | 6,110 | 22,491 | 14,771 |
Loss on debt refinance | 904 | 904 | 0 | |
Income (loss) before benefit for income taxes | (65,160) | 389 | (221,966) | 95,692 |
Benefit for income taxes | (17,117) | (93) | (71,777) | 20,411 |
Net income (loss) | (48,043) | 482 | (150,189) | 75,281 |
Unrealized foreign currency translation gain | 34 | 59 | (97) | 2 |
Unrealized loss on derivatives, net of tax | 1,370 | (1,568) | (2,207) | (7,475) |
Total other comprehensive income (loss) | 1,404 | (1,509) | (2,304) | (7,473) |
Total comprehensive loss | $ (46,639) | $ (1,027) | $ (152,493) | $ 67,808 |
Net income (loss) per share: | ||||
Basic | $ (1.01) | $ 0.02 | $ (3.56) | $ 2.19 |
Diluted | $ (1.01) | $ 0.02 | $ (3.56) | $ 2.15 |
Weighted average shares used in per share calculations: | ||||
Basic | 47,613,741 | 30,980,878 | 42,185,163 | 34,405,503 |
Diluted | 47,613,741 | 31,515,454 | 42,185,163 | 35,042,311 |
Amusement and Other Revenues [Member] | ||||
Total revenues | $ 70,706 | $ 174,715 | $ 200,423 | $ 596,754 |
Cost of amusement and other | 7,244 | 18,796 | 21,997 | 64,456 |
Food and Beverage [Member] | ||||
Total revenues | 38,346 | 124,637 | 119,268 | 410,779 |
Cost of food and beverage | $ 10,664 | $ 33,384 | $ 32,667 | $ 109,072 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended |
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Nov. 03, 2019 |
Nov. 03, 2019 |
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Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per share | $ 0.16 | $ 0.46 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Note 1: Summary of Significant Accounting Policies The accompanying unaudited consolidated financial statements include the accounts of Dave & Buster’s Entertainment, Inc. (referred to herein as the “Company”, “we,” “us” and “our”), any predecessor companies and its wholly-owned subsidiaries, Dave & Buster’s Holdings, Inc. (“D&B Holdings”), which owns 100% of the outstanding common stock of Dave & Busters, Inc. (“D&B Inc”), the operating company. All intercompany balances and transactions have been eliminated in consolidation. The Company, headquartered in Dallas, Texas, is a leading operator of high-volume entertainment and dining venues (“stores”) in North America for adults and families under the name “Dave & Buster’s”. The Company operates its business as one operating and one reportable segment. During the thirty- nine re-open two stores located in the Chicago, Illinois area and Houston, Texas area, which are near the end of their respective lease terms, and The Company operates on a 52 or 53-week fiscal year that ends on the Sunday after the Saturday closest to January 31. Each quarterly period reported has 13 weeks. Fiscal 2020 and 2019, which end on January 31, 2021 and February 2, 2020, respectively, contain 52 weeks.The Company’s financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States for interim financial information as prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Our quarterly financial data should be read in conjunction with the audited financial statements and notes thereto for the year ended February 2, 2020, included in our Annual Report on Form 10-K as filed with the SEC.COVID-19 Considerations — On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic and on March 13, 2020, the United States declared a National Public Health Emergency. As a result, several state and local mandates were implemented that encouraged the practice of social distancing, placed restrictions from individuals gathering in groups and, in many areas, placed complete restrictions on non-essential movement outside of the home. Shortly after the national emergency declaration, state and local officials began placing restrictions on businesses , some of which allowed To-Go or curbside service only while others limited capacity in the dining room or midway. By March 20, 2020, all of our 137 operating stores were temporarily closed (including our one new store that opened on March 16). re-opened to the public with limited food and beverage offerings and two additional stores offered off-premise dining options. During our second and third quarters, we have progressively re-opened limited operations in an additional 101 stores and one new store in Manchester, New Hampshire and one new store in Lehigh Valley, Pennsylvania. Two stores that re-opened during the second quarter were re-closed during the third quarter (one of which re-opened on November 14, 2020). As of November 1, 2020, 33 of the Company’s stores were closed to in-person guests as a result of local COVID-19 restrictions (31 of which have been closed since March 20, 2020). Subsequent to the third quarter, some local and state governments began to roll back their re-opening plans in light of climbing COVID-19 case counts. As of December 4, 2020, 4 8 stores were closed due to jurisdictional restrictions. The Company has been in ongoing discussions with landlords and other vendors to negotiate relief from cash payments under existing lease and trade payable obligations. As of November 1, 2020, a total of 123 rent relief agreements related to our operating locations and corporate headquarters were executed, which generally provide for full deferral for three months beginning April 2020, with partial deferral continuing for periods of up to six months, at approximately 50% of those locations. We have also been successful in negotiating extended and reduced payment terms with several vendors. In addition to reducing expenses, including capital expenditures and discretionary spending , the Company obtained additional liquidity through the sale of common stock during our first and second quarters, which resulted in net proceeds of $182,207. On October 27, 2020, D&B Inc, a wholly owned subsidiary, completed the private sale of $550,000 in aggregate principal amount of 7.625% senior secured notes due 2025. At the same time, the revolving credit commitments under our existing credit facility were extended through August 17, 2024 , and the suspension of our financial ratio covenants was extended until the last day of the first quarter of fiscal year 2022. See Note 3, Debt, for more information on these transactions. The measures taken by the Company provide sufficient liquidity to meet estimated cash flow needs and covenant compliance obligations for at least the next twelve months from the issuance of the financial statements. The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements and for the period then ended. Actual results could differ from those estimates. Operating results for the thirteen and thirty-nine weeks ended November 1, 2020 are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending January 31, 2021. Cash and cash equivalents Fair value of financial instruments The carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, and other current liabilities approximate fair value because of their short-term nature. We believe that the carrying amount of our debt, which was refinanced during the third quarter, approximates its fair value because the interest rates reflect current market conditions. The fair value of the Company’s debt was determined to be a Level Two instrument as defined by GAAP. The fair value of the Company’s interest rate swap is determined based upon Level Two inputs which includes valuation models as reported by our counterparties. These valuation models are based on the present value of expected cash flows using forward rate curves. Non-financial assets and liabilities recognized or disclosed at fair value in the consolidated financial statements on a nonrecurring basis include such items as property and equipment, right-of-use During the first quarter of fiscal 2020, the Company recorded an impairment charge for its long-lived assets, including ROU assets, of $6,746, primarily driven by the expected impact of the COVID-19 pandemic on future cash flows of specific stores. During the second and third quarters of fiscal 2020, the Company did not identify additional triggering events which would require a change in management’s estimate regarding the recoverability of store asset values, and no additional impairment related to our operating stores was recognized. The Company has determined no events and circumstances existed during the thirty-nine weeks ended November 1, 2020 that would indicate it is more likely than not that its goodwill or tradename are impaired. The ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. Additionally, the Company is continuing discussions to terminate or delay possession on several executed lease contracts that have not yet commenced. The Company has also curtailed several potential new store projects that were in the early stage of development. During the thirteen and thirty-nine weeks ended November 1, 2020, we recorded an impairment loss and related contract termination costs of $0 and $6,981, respectively, related to these projects, which is included in “Other store operating expenses” in the Consolidated Statements of Comprehensive Income (Loss). Interest rate swaps one-month LIBOR in exchange for the payment of a fixed rate of interest throughout the life of the agreements. The notional amount of the swap agreements, which mature August 17, 2022, totals $350,000 and the fixed rate of interest for all agreements is 2.47%.The Company initially designated its interest rate swap agreements as a cash flow hedge and accounted for the underlying activity in accordance with hedge accounting. Effective April 14, 2020, the Company amended its existing credit facility agreement to obtain relief from its financial covenants, and as a result, the variable interest rate terms were modified to create an interest rate floor of 1.00%. Accordingly, and as a result of the current forward interest rate curve, the Company discontinued the hedging relationship as of April 14, 2020 (de-designation date). Given the continued existence of the hedged interest payments, the Company isreclassifying its accumulated other comprehensive loss of $ 17,609 as of the de-designation date into “Interest expense, net” using a straight-line approach over the remaining life of the originally designated hedging relationship. The amount of pre-tax losses in accumulated other comprehensive loss that was reclassified into interest expense subsequent to the de-designation date was $ 1,886 and $ 4,088 for the thirteen and thirty-nine weeks ended November 1, 2020, respectively, and the Company expects to reclassify $ 7,547 within the next twelve months. Effective with the de-designation, any gain or loss on the derivatives are recognized in earnings in the period in which the change occurs. For the thirteen and thirty-nine weeks ended November 1, 2020, a gain of $ 218 and a loss of $ 1,578 were recognized, respectively, which are included in “Other store operating expenses” in the Consolidated Statements of Comprehensive Income (Loss). Prior to the de-designation, changes in the fair values of the interest rate swaps were recorded as a component of other comprehensive loss until the interest payments being hedged were recorded as interest expense, at which time the amounts in accumulated other comprehensive loss were reclassified as an adjustment to interest expense. Cash flows related to the interest rate swaps were included as a component of interest expense and in operating activities.Credit risk related to the failure of our counterparties to perform under the terms of the swap agreements is minimized by entering into transactions with carefully selected, credit-worthy parties and the fact that the swap contracts are distributed among several financial institutions to reduce the concentration of credit risk. Our swap agreements with our derivative counterparties contain a provision where if the Company defaults on any of its indebtedness, and repayment of the indebtedness has been accelerated, the Company could also be declared in default on its derivative obligations. The following derivative instruments were outstanding as of the end of the periods indicated:
The following table summarizes the activity in accumulated other comprehensive loss related to our derivative instruments:
Revenue recognition . In jurisdictions where we do not have a legal obligation to remit unredeemed gift card balances to a legal authority, we recognize revenue on unredeemed gift cards in proportion to the pattern of redemption by the customers. During the thirteen and thirty-nine weeks ended November 1, 2020, we recognized revenue of approximately $640 and $2,080, respectively, related to the amount in deferred gift card revenue as of the end of fiscal 2019, of which approximately $380 and $590 was breakage revenue. Stockholders’ equity — Our Board of Directors has approved a share repurchase program under which the Company may repurchase shares on the open market, through privately negotiated transactions and through trading plans. The total share repurchase authorization is $ 800,000 and the share repurchase authorization expires at the end of fiscal 2020. During the first quarter of fiscal 2020, the Company indefinitely suspended all share repurchase activity. As of August 2, 2020, we have approximately $ 172,820 of share repurchase authorization remaining under the current plan. In our consolidated financial statements, the Company treats shares withheld for tax purposes on behalf of our employees in connection with the vesting of time-based and performance restricted stock units as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan. During the thirty-nine weeks ended November 1, 2020 and November 3, 2019, we withheld 58,189 and 11,536 shares of common stock to satisfy $916 and $595 of employees’ tax obligations, respectively. The share activity in the thirty-nine weeks ended November 1, 2020 includes the settlements of $2,517 cash obligations through the issuance of 160,540 shares of common stock. Effective March 18, 2020, the Board of Directors of the Company adopted a 364-day duration Shareholder Rights Plan (the “Rights Plan”) and declared a dividend of one preferred share purchase right for each outstanding share of common stock to shareholders of record on March 30, 2020 to purchase from the Company one-ten thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company for an exercise price of $45.00 once the rights become exercisable, subject to adjustment as provided in the related rights agreement.On April 14, 2020, pursuant to an open market sale agreement, the Company sold 6,149,936 shares of its common stock at a price of $12.20 per share, for proceeds of $75,000, prior to deducting offering expenses related to the offering. On May 4, 2020, the Company entered into an underwriting agreement, pursuant to which it sold 9,578,545 shares of its common stock at a price of $10.44 per share, and on May 18, 2020, the underwriter exercised its over-allotment option for an additional 1,014,871 shares at $10.44 per share, resulting in additional proceeds of $110,600 prior to deducting offering costs. On June 23, 2020, shareholders approved a proposal to amend our 2014 Omnibus Incentive Plan (“Plan”) to increase the number of shares available for awards under the Plan by 3,000,000 shares. Recently adopted accounting guidance 2016-13 , Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In January 2017, the FASB issued ASU 2017-04 , Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement Recent accounting pronouncements 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Reform on Financial Reporting de-designation of the instrument, provided certain criteria are met. As of the end of the third quarter of fiscal 2020, the Company’s exposure to LIBOR rates included its credit facility and swap agreements. The Company is currently evaluating the impact of this new standard on our consolidated financial statements. |
Accrued Liabilities |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Note 2: Accrued Liabilities Accrued liabilities consist of the following as of the end of each period:
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Note 3: Debt Long-term debt consists of the following as of:
Effective April 14, 2020, we amended our existing credit facility, which provided relief from compliance with financial covenants through the third quarter of fiscal 2020. The interest rate increased to LIBOR plus 2.00% with a LIBOR floor of 1.00%. On October 27, 2020, the Company issued $550,000 aggregate principal amount of 7.625% senior secured notes (the “Notes”). Interest on the Notes accrues from October 27, 2020 and is payable in arrears on November 1 and May 1 of each year, commencing on May 1, 2021. The Notes mature on November 1, 2025, unless earlier redeemed, and are subject to the terms and conditions set forth in the related indenture. The Notes were issued by D&B Inc and are unconditionally guaranteed by D&B Holdings and certain of D&B Inc’s existing and future wholly owned material domestic subsidiaries, which is substantially the same as the guarantors of the Company’s existing credit facility. Concurrent and subject to the issuance of the Notes, the Company entered into a second amendment to its existing credit facility, which included relief from testing compliance with certain financial covenants until the last day of the fiscal quarter ending on May 1, 2022. During the financial covenant suspension period the Company is required to maintain minimum liquidity (primarily availability under the credit facility) of $ 150,000. The second amendment 500,000extended the maturity date of the $ revolving portion of the facility from August 17, 2022 to August 17, 2024, and the interest rate spread increased from 2.00% to 4.00% during the financial covenant suspension period, with an additional 1.00% utilization fee due at maturity. After the financial covenant suspension period, the interest rate spread ranges from 1.25% to 3.00%. The second amendment terminated the term loan portion of the credit facility, which triggered payment of $ 1,900 of lender debt costs associated with the first amendment. The Company used the proceeds of the Notes offering, along with cash on hand, to repay the $255,000 principal balance of the term loan facility, $463,000 of borrowings under the revolving credit facility, and related accrued interest. The Company incurred debt costs of $18,200, which are being amortized over the terms of the respective Notes and revolving credit facility. As of November 1, 2020, approximately $3,300 of these debt costs had not been paid. The Company also recorded a loss of $904 related to the unamortized debt costs associated with the term portion of the credit facility. For the thirty-nine weeks ended November 1, 2020, and November 3, 2019, the Company’s weighted average interest rate on outstanding borrowings was 4.17% and 4.03%, respectively. As of November 1, 2020, we had letters of credit outstanding of $9,686 and an unused commitment balance of $464,314 under the revolving credit facility. Our credit facility and Notes contain restrictive covenants that, among other things, place certain limitations on our ability to incur additional indebtedness, make loans or advances to subsidiaries and other entities, pay dividends, acquire other businesses or sell assets. Interest expense, net
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Leases | Note 4: Leases We currently lease the building or site for our stores, corporate office and warehouse space under facility operating leases. These leases typically have initial terms ranging from ten to twenty years and include one or more options to renew. When determining the lease term, we include option periods for which renewal is reasonably certain. Most of the leases require us to pay property taxes, insurance and maintenance of the leased assets. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating leases also includes certain equipment leases that have a term in excess of one year. Certain facility leases also have provisions for additional contingent rentals based on revenues. Operating lease cost, variable lease cost and short-term lease cost related primarily to our facilities is included in “Other store operating expenses” for our operating stores, “Pre-opening costs” for our stores not yet operating, or “General and administrative expenses” for our corporate office and warehouse, in the Consolidated Statements of Comprehensive Income (Loss).The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and property taxes, are as follows for the fiscal year ended:
During the thirty-nine weeks ended November 1, 2020, the Company entered into 123 rent relief agreements with our respective landlords on operating locations and our corporate headquarters. Under these agreements, certain rent payments will be abated, deferred or modified without penalty for various periods, generally providing for full deferral for three months beginning April 2020, with partial deferrals continuing for periods of up to six months at approximately 50% of those locations. The Company has elected to account for lease concessions and deferrals resulting directly from
COVID-19 as though the enforceable rights and obligations to the deferrals existed in the respective contracts at lease inception and will not account for the concessions as lease modifications, unless the concession results in a substantial increase in the Company’s obligations. During the thirty-nine weeks ended November 1, 2020, 113 of our 123 rent relief agreements qualified for this accounting election, and the remaining agreements were treated as lease modifications, primarily due to a significant extension of the lease term. Further, as a result of the COVID-19 pandemic and its impact on our financial condition, the Company has chosen not to pay rent or to pay a portion of operating lease obligations as they become due for eight properties without rent relief agreements as of the end of the third quarter. As of November 1, 2020, we have bifurcated our current operating lease liabilities into the portion that remains subject to accretion and the portion that is accounted for as a deferral of payments or as short payments. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5: Commitments and Contingencies We are subject to certain legal proceedings and claims that arise in the ordinary course of our business, including claims alleging violations of federal and state law regarding workplace and employment matters, discrimination, slip-and-fall The Company is currently a defendant in several lawsuits filed in courts in California alleging violations of California Business and Professions Code, industry wage orders,
wage-and-hour , as well as other lawsuits, |
Earnings per share |
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Earnings per share | Note 6: Earnings per share Potential dilutive shares consist of the incremental common shares issuable upon the exercise of outstanding stock options (both vested and unvested), unvested time-based restricted stock units (RSU’s) and unvested performance RSU’s to the extent performance measures were attained as of the end of the reporting period, calculated using the treasury-stock method. Potential dilutive shares are excluded from the computation of earnings per share (“EPS”) if their effect is anti-dilutive. Stock options for which the exercise price exceeds the average market price over the period are anti-dilutive and, accordingly, are excluded from the calculation. The weighted average anti-dilutive options excluded from the calculation of common equivalent shares were 235,368 and 134,450 in the thirteen and thirty-nine weeks ended November 3, 2019. The following table sets forth the computation of EPS, basic and diluted for the periods indicated:
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Share-Based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Note 7: Share-Based Compensation Compensation expense related to stock options and restricted stock units (“RSU’s”) is included in “ General and administrative expenses ” in the Consolidated Statements of Comprehensive Income (Loss) and is as follows:
Transactions related to stock option awards during the thirty-nine weeks ended November 1, 2020 were as follows:
The total intrinsic value of options exercised during the thirty-nine weeks ended November 1, 2020 was $904. The unrecognized expense related to our stock option plan totaled approximately $869 as of November 1, 2020 and will be expensed over a weighted average period of 1.2 years. Transactions related to RSU’s during the thirty-nine weeks ended November 1, 2020, were as follows:
Fair value of our RSU’s is based on our closing stock price on the date of grant. The unrecognized expense related to the RSU’s was $9,919 as of November 1, 2020 and will be expensed over a weighted average period of 2.2 years. During the thirty-nine weeks ended November 1, 2020 and November 3, 2019, excess tax expense (benefit) of $431 and ($912), respectively, were recognized as an expense (benefit) in the “Provision (benefit) for income taxes” in the Consolidated Statement of Comprehensive Income (Loss) and classified as a source in operating activities in the Consolidated Statement of Cash Flows. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8: Income Taxes On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). Intended to provide economic relief to those impacted by the COVID-19 pandemic, the CARES Act includes provisions, among others, addressing the carryback of net operating losses for specific periods, temporary modifications to the limitations placed on the tax deductibility of net interest expenses, and technical amendments for qualified improvement property. Additionally, the The Company has historically calculated the provision for income taxes during interim reporting periods by applying an estimate of the annualized effective tax rate for the full fiscal year to “ordinary” income or loss for the reporting period. Due to the uncertainty created by the events surrounding the COVID-19 pandemic, the actual effective tax rate for the year to date period was used to calculate the income tax benefit for the thirty-nine weeks ended November 1, 2020. The effective tax rate for the thirty-nine weeks ended November 1, 2020, was a benefit of %, compared to an expense of 21.3% for the thirty-nine weeks ended November 3, 2019, primarily due to the impact of a decrease in operating earnings before income tax and the impact of the tax provisions within the CARES Act. As a result of the impact of the technical amendments for qualified improvement property within the CARES Act, the Company generated a taxable loss in 2019, which together with the taxable loss in 2020, can be carried back to prior years when the statutory federal tax rate was approximately %. As of November 1, 2020, the Company has recognized a current benefit of $34,090 related to estimated fiscal year 2019 and 2020 tax net operating losses that will be carried back to recover taxes paid in prior periods. The estimated tax benefit from the net operating losses is included in “Income taxes receivable” in the Consolidated Balance Sheets. |
Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of the business | The accompanying unaudited consolidated financial statements include the accounts of Dave & Buster’s Entertainment, Inc. (referred to herein as the “Company”, “we,” “us” and “our”), any predecessor companies and its wholly-owned subsidiaries, Dave & Buster’s Holdings, Inc. (“D&B Holdings”), which owns 100% of the outstanding common stock of Dave & Busters, Inc. (“D&B Inc”), the operating company. All intercompany balances and transactions have been eliminated in consolidation. The Company, headquartered in Dallas, Texas, is a leading operator of high-volume entertainment and dining venues (“stores”) in North America for adults and families under the name “Dave & Buster’s”. The Company operates its business as one operating and one reportable segment. During the thirty- nine re-open two stores located in the Chicago, Illinois area and Houston, Texas area, which are near the end of their respective lease terms, and The Company operates on a 52 or 53-week fiscal year that ends on the Sunday after the Saturday closest to January 31. Each quarterly period reported has 13 weeks. Fiscal 2020 and 2019, which end on January 31, 2021 and February 2, 2020, respectively, contain 52 weeks.The Company’s financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States for interim financial information as prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and notes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Our quarterly financial data should be read in conjunction with the audited financial statements and notes thereto for the year ended February 2, 2020, included in our Annual Report on Form
10-K as filed with the SEC. |
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COVID-19 Considerations | COVID-19 Considerations — On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a global pandemic and on March 13, 2020, the United States declared a National Public Health Emergency. As a result, several state and local mandates were implemented that encouraged the practice of social distancing, placed restrictions from individuals gathering in groups and, in many areas, placed complete restrictions on non-essential movement outside of the home. Shortly after the national emergency declaration, state and local officials began placing restrictions on businesses , some of which allowed To-Go or curbside service only while others limited capacity in the dining room or midway. By March 20, 2020, all of our 137 operating stores were temporarily closed (including our one new store that opened on March 16). re-opened to the public with limited food and beverage offerings and two additional stores offered off-premise dining options. During our second and third quarters, we have progressively re-opened limited operations in an additional 101 stores and one new store in Manchester, New Hampshire and one new store in Lehigh Valley, Pennsylvania. Two stores that re-opened during the second quarter were re-closed during the third quarter (one of which re-opened on November 14, 2020). As of November 1, 2020, 33 of the Company’s stores were closed to in-person guests as a result of local COVID-19 restrictions (31 of which have been closed since March 20, 2020). Subsequent to the third quarter, some local and state governments began to roll back their re-opening plans in light of climbing COVID-19 case counts. As of December 4, 2020, 4 8 stores were closed due to jurisdictional restrictions. The Company has been in ongoing discussions with landlords and other vendors to negotiate relief from cash payments under existing lease and trade payable obligations. As of November 1, 2020, a total of 123 rent relief agreements related to our operating locations and corporate headquarters were executed, which generally provide for full deferral for three months beginning April 2020, with partial deferral continuing for periods of up to six months, at approximately 50% of those locations. We have also been successful in negotiating extended and reduced payment terms with several vendors. In addition to reducing expenses, including capital expenditures and discretionary spending , the Company obtained additional liquidity through the sale of common stock during our first and second quarters, which resulted in net proceeds of $182,207. On October 27, 2020, D&B Inc, a wholly owned subsidiary, completed the private sale of $550,000 in aggregate principal amount of 7.625% senior secured notes due 2025. At the same time, the revolving credit commitments under our existing credit facility were extended through August 17, 2024 , and the suspension of our financial ratio covenants was extended until the last day of the first quarter of fiscal year 2022. See Note 3, Debt, for more information on these transactions. The measures taken by the Company provide sufficient liquidity to meet estimated cash flow needs and covenant compliance obligations for at least the next twelve months from the issuance of the financial statements. The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities at the date of the consolidated financial statements and for the period then ended. Actual results could differ from those estimates. Operating results for the thirteen and thirty-nine weeks ended November 1, 2020 are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending January 31, 2021. |
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Cash and cash equivalents | Cash and cash equivalents |
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Fair value of financial instruments | Fair value of financial instruments The carrying amounts of cash and cash equivalents, accounts and notes receivable, accounts payable, and other current liabilities approximate fair value because of their short-term nature. We believe that the carrying amount of our debt, which was refinanced during the third quarter, approximates its fair value because the interest rates reflect current market conditions. The fair value of the Company’s debt was determined to be a Level Two instrument as defined by GAAP. The fair value of the Company’s interest rate swap is determined based upon Level Two inputs which includes valuation models as reported by our counterparties. These valuation models are based on the present value of expected cash flows using forward rate curves. Non-financial assets and liabilities recognized or disclosed at fair value in the consolidated financial statements on a nonrecurring basis include such items as property and equipment, right-of-use During the first quarter of fiscal 2020, the Company recorded an impairment charge for its long-lived assets, including ROU assets, of $6,746, primarily driven by the expected impact of the COVID-19 pandemic on future cash flows of specific stores. During the second and third quarters of fiscal 2020, the Company did not identify additional triggering events which would require a change in management’s estimate regarding the recoverability of store asset values, and no additional impairment related to our operating stores was recognized. The Company has determined no events and circumstances existed during the thirty-nine weeks ended November 1, 2020 that would indicate it is more likely than not that its goodwill or tradename are impaired. The ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore, it is possible that impairments could be identified in future periods, and such amounts could be material. Additionally, the Company is continuing discussions to terminate or delay possession on several executed lease contracts that have not yet commenced. The Company has also curtailed several potential new store projects that were in the early stage of development. During the thirteen and thirty-nine weeks ended November 1, 2020, we recorded an impairment loss and related contract termination costs of $0 and $6,981, respectively, related to these projects, which is included in “Other store operating expenses” in the Consolidated Statements of Comprehensive Income (Loss). |
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Interest rate swap | Interest rate swaps one-month LIBOR in exchange for the payment of a fixed rate of interest throughout the life of the agreements. The notional amount of the swap agreements, which mature August 17, 2022, totals $350,000 and the fixed rate of interest for all agreements is 2.47%.The Company initially designated its interest rate swap agreements as a cash flow hedge and accounted for the underlying activity in accordance with hedge accounting. Effective April 14, 2020, the Company amended its existing credit facility agreement to obtain relief from its financial covenants, and as a result, the variable interest rate terms were modified to create an interest rate floor of 1.00%. Accordingly, and as a result of the current forward interest rate curve, the Company discontinued the hedging relationship as of April 14, 2020 (de-designation date). Given the continued existence of the hedged interest payments, the Company isreclassifying its accumulated other comprehensive loss of $ 17,609 as of the de-designation date into “Interest expense, net” using a straight-line approach over the remaining life of the originally designated hedging relationship. The amount of pre-tax losses in accumulated other comprehensive loss that was reclassified into interest expense subsequent to the de-designation date was $ 1,886 and $ 4,088 for the thirteen and thirty-nine weeks ended November 1, 2020, respectively, and the Company expects to reclassify $ 7,547 within the next twelve months. Effective with the de-designation, any gain or loss on the derivatives are recognized in earnings in the period in which the change occurs. For the thirteen and thirty-nine weeks ended November 1, 2020, a gain of $ 218 and a loss of $ 1,578 were recognized, respectively, which are included in “Other store operating expenses” in the Consolidated Statements of Comprehensive Income (Loss). Prior to the de-designation, changes in the fair values of the interest rate swaps were recorded as a component of other comprehensive loss until the interest payments being hedged were recorded as interest expense, at which time the amounts in accumulated other comprehensive loss were reclassified as an adjustment to interest expense. Cash flows related to the interest rate swaps were included as a component of interest expense and in operating activities.Credit risk related to the failure of our counterparties to perform under the terms of the swap agreements is minimized by entering into transactions with carefully selected, credit-worthy parties and the fact that the swap contracts are distributed among several financial institutions to reduce the concentration of credit risk. Our swap agreements with our derivative counterparties contain a provision where if the Company defaults on any of its indebtedness, and repayment of the indebtedness has been accelerated, the Company could also be declared in default on its derivative obligations. The following derivative instruments were outstanding as of the end of the periods indicated:
The following table summarizes the activity in accumulated other comprehensive loss related to our derivative instruments:
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Revenue recognition | Revenue recognition . In jurisdictions where we do not have a legal obligation to remit unredeemed gift card balances to a legal authority, we recognize revenue on unredeemed gift cards in proportion to the pattern of redemption by the customers. During the thirteen and thirty-nine weeks ended November 1, 2020, we recognized revenue of approximately $640 and $2,080, respectively, related to the amount in deferred gift card revenue as of the end of fiscal 2019, of which approximately $380 and $590 was breakage revenue. |
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Stockholders' equity | Stockholders’ equity — Our Board of Directors has approved a share repurchase program under which the Company may repurchase shares on the open market, through privately negotiated transactions and through trading plans. The total share repurchase authorization is $ 800,000 and the share repurchase authorization expires at the end of fiscal 2020. During the first quarter of fiscal 2020, the Company indefinitely suspended all share repurchase activity. As of August 2, 2020, we have approximately $ 172,820 of share repurchase authorization remaining under the current plan. In our consolidated financial statements, the Company treats shares withheld for tax purposes on behalf of our employees in connection with the vesting of time-based and performance restricted stock units as common stock repurchases because they reduce the number of shares that would have been issued upon vesting. These withheld shares of common stock are not considered common stock repurchases under our authorized common stock repurchase plan. During the thirty-nine weeks ended November 1, 2020 and November 3, 2019, we withheld 58,189 and 11,536 shares of common stock to satisfy $916 and $595 of employees’ tax obligations, respectively. The share activity in the thirty-nine weeks ended November 1, 2020 includes the settlements of $2,517 cash obligations through the issuance of 160,540 shares of common stock. Effective March 18, 2020, the Board of Directors of the Company adopted a 364-day duration Shareholder Rights Plan (the “Rights Plan”) and declared a dividend of one preferred share purchase right for each outstanding share of common stock to shareholders of record on March 30, 2020 to purchase from the Company one-ten thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company for an exercise price of $45.00 once the rights become exercisable, subject to adjustment as provided in the related rights agreement.On April 14, 2020, pursuant to an open market sale agreement, the Company sold 6,149,936 shares of its common stock at a price of $12.20 per share, for proceeds of $75,000, prior to deducting offering expenses related to the offering. On May 4, 2020, the Company entered into an underwriting agreement, pursuant to which it sold 9,578,545 shares of its common stock at a price of $10.44 per share, and on May 18, 2020, the underwriter exercised its over-allotment option for an additional 1,014,871 shares at $10.44 per share, resulting in additional proceeds of $110,600 prior to deducting offering costs. On June 23, 2020, shareholders approved a proposal to amend our 2014 Omnibus Incentive Plan (“Plan”) to increase the number of shares available for awards under the Plan by 3,000,000 shares. |
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Recently adopted accounting guidance | Recently adopted accounting guidance 2016-13 , Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, In January 2017, the FASB issued ASU 2017-04 , Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement |
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Recent accounting pronouncements | Recent accounting pronouncements 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Reform on Financial Reporting de-designation of the instrument, provided certain criteria are met. As of the end of the third quarter of fiscal 2020, the Company’s exposure to LIBOR rates included its credit facility and swap agreements. The Company is currently evaluating the impact of this new standard on our consolidated financial statements. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of derivative instruments outstanding | The following derivative instruments were outstanding as of the end of the periods indicated:
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Summary of accumulated other comprehensive loss | The following table summarizes the activity in accumulated other comprehensive loss related to our derivative instruments:
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Accrued Liabilities (Tables) |
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Accrued Liabilities | Accrued liabilities consist of the following as of the end of each period:
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Debt (Tables) |
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Long-Term Debt | Long-term debt consists of the following as of:
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Recorded Interest Expense, Net | Interest expense, net
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Leases (Tables) |
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Lessee, Operating Lease, Disclosure | The components of lease expense, including variable lease costs primarily consisting of common area maintenance charges and property taxes, are as follows for the fiscal year ended:
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Earnings per share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Calculation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of EPS, basic and diluted for the periods indicated:
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Share-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 01, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | Compensation expense related to stock options and restricted stock units (“RSU’s”) is included in “ General and administrative expenses ” in the Consolidated Statements of Comprehensive Income (Loss) and is as follows:
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Share-based Compensation, Stock Options, Activity [Table Text Block] | Transactions related to stock option awards during the thirty-nine weeks ended November 1, 2020 were as follows:
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | Transactions related to RSU’s during the thirty-nine weeks ended November 1, 2020, were as follows:
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Summary of Significant Accounting Policies - Summary of Derivative Instruments Outstanding (Details) - USD ($) $ in Thousands |
Nov. 01, 2020 |
Feb. 02, 2020 |
||
---|---|---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Current portion of derivatives | $ (8,191) | $ (3,518) | ||
Non-current portion of derivatiives | (6,479) | (6,967) | ||
Total derivatives | [1] | $ (14,670) | $ (10,485) | |
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Summary of Significant Accounting Policies - Summary of Accumulated Other Comprehensive Loss (Details) - Interest Rate Swap [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Nov. 01, 2020 |
Nov. 03, 2019 |
Nov. 01, 2020 |
Nov. 03, 2019 |
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Amount of loss recorded in accumulated other comprehensive income | $ 0 | $ 2,483 | $ 7,602 | $ 10,623 | ||
Income tax expense (benefit) in accumulated other comprehensive income | 516 | (589) | (829) | (2,810) | ||
Interest Expense [Member] | ||||||
Amount of loss reclassified into income | [1] | $ (1,886) | $ (326) | $ (4,566) | $ (338) | |
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Accrued Liabilities - Accrued Liabilities (Detail) - USD ($) $ in Thousands |
Nov. 01, 2020 |
Feb. 02, 2020 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Deferred amusement revenue | $ 79,210 | $ 75,113 |
Current portion of operating lease liabilities, net (1) | 51,850 | 45,611 |
Rent payable (Note 4) | 40,542 | |
Variable rent liabilities (Note 4) | 7,559 | 1,331 |
Deferred gift card revenue | 10,330 | 11,253 |
Property taxes | 10,285 | 7,226 |
Compensation and benefits | 9,914 | 23,421 |
Current portion of derivatives | 8,191 | 3,518 |
Current portion of long-term insurance | 5,100 | 6,500 |
Utilities | 4,111 | 4,442 |
Customer deposits | 1,594 | 4,324 |
Inventory liabilities | 1,948 | 2,179 |
Sales and use taxes | 1,160 | 4,000 |
Dividend payable | 4,891 | |
Other | 12,369 | 13,643 |
Total accrued liabilities | $ 244,163 | $ 207,452 |
Accrued Liabilities - Accrued Liabilities (Parenthetical) (Detail) - USD ($) $ in Thousands |
Nov. 01, 2020 |
Feb. 02, 2020 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Receivables for tenant improvement allowances | $ 5,434 | $ 6,339 |
Debt - Long-Term Debt (Detail) - USD ($) $ in Thousands |
Nov. 01, 2020 |
Feb. 02, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt outstanding | $ 576,000 | $ 648,250 |
Less current installments | (15,000) | |
Long-term debt, net | 561,815 | 632,689 |
Credit Facility - term [Member] | ||
Debt Instrument [Line Items] | ||
Total debt outstanding | 266,250 | |
Less current installments | (15,000) | |
Less debt issuance costs | (14,185) | (561) |
Credit Facility - revolver [Member] | ||
Debt Instrument [Line Items] | ||
Total debt outstanding | 26,000 | $ 382,000 |
Secured Debt [Member] | Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Senior Secured Notes | $ 550,000 |
Debt - Recorded Interest Expense, Net (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 01, 2020 |
Nov. 03, 2019 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
Debt Disclosure [Abstract] | ||||
Interest expense on debt | $ 6,092 | $ 5,769 | $ 17,255 | $ 14,672 |
Interest associated with swap agreements | 1,886 | 326 | 4,566 | 338 |
Amortization of issuance cost and discount | 427 | 198 | 1,081 | 594 |
Interest income | (24) | (22) | (75) | |
Capitalized interest | (192) | (159) | (389) | (758) |
Total interest expense, net | $ 8,213 | $ 6,110 | $ 22,491 | $ 14,771 |
Leases - Lease Expense (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 01, 2020 |
Nov. 03, 2019 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
Leases | ||||
Operating lease cost | $ 33,278 | $ 31,489 | $ 100,162 | $ 91,729 |
Variable lease cost | 5,351 | 7,692 | 18,405 | 22,335 |
Short-term lease cost | 102 | 108 | 329 | 324 |
Total | $ 38,731 | $ 39,289 | $ 118,896 | $ 114,388 |
Earnings Per Share - Additional Information (Detail) - shares |
3 Months Ended | 9 Months Ended |
---|---|---|
Nov. 03, 2019 |
Nov. 03, 2019 |
|
Earnings Per Share [Abstract] | ||
Weighted average anti-dilutive options excluded from calculation of common equivalent shares | 235,368 | 134,450 |
Earnings Per Share - Summary of Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Nov. 01, 2020 |
Nov. 03, 2019 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|||
Numerator: | ||||||
Net income (loss) | $ (48,043) | $ 482 | $ (150,189) | $ 75,281 | ||
Denominator: | ||||||
Weighted average number of common shares outstanding (basic) | 47,613,741 | 30,980,878 | 42,185,163 | 34,405,503 | ||
Weighted average dilutive impact of equity-based awards | [1] | 534,576 | 636,808 | |||
Weighted average number of common and common equivalent shares outstanding (diluted) | 47,613,741 | 31,515,454 | 42,185,163 | 35,042,311 | ||
Net income (loss) per share: | ||||||
Basic | $ (1.01) | $ 0.02 | $ (3.56) | $ 2.19 | ||
Diluted | $ (1.01) | $ 0.02 | $ (3.56) | $ 2.15 | ||
|
Earnings Per Share - Summary of Calculation of Basic and Diluted Earnings Per Share (Parenthetical) (Detail) - shares |
3 Months Ended | 9 Months Ended |
---|---|---|
Nov. 01, 2020 |
Nov. 01, 2020 |
|
Earnings Per Share [Abstract] | ||
Weighted average dilutive impact of equity-based awards | 0 | 0 |
Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Nov. 01, 2020 |
Nov. 03, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Excess income tax benefit related to stock-based compensation plans | $ 431 | $ 912 |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total intrinsic value of stock options exercised | 904 | |
Unrecognized expense related to stock option plan | $ 869 | |
Unrecognized compensation expense, weighted average years | 1 year 2 months 12 days | |
Restricted Stock Units (RSU's) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation expense, weighted average years | 2 years 2 months 12 days | |
Unrecognized expense related to unvested restricted stock and RSUs | $ 9,919 |
Share-Based Compensation - Summary of Compensation Expenses (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Nov. 01, 2020 |
Nov. 03, 2019 |
Nov. 01, 2020 |
Nov. 03, 2019 |
|
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||||
Stock options | $ 269 | $ 731 | $ 1,099 | $ 2,294 |
RSU's | 2,730 | 1,016 | 4,245 | 3,185 |
Share-based compensation expense | $ 2,999 | $ 1,747 | $ 5,344 | $ 5,479 |
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Nov. 01, 2020 |
Nov. 03, 2019 |
|
Income Taxes [Line Items] | ||
Corporate tax rate | 32.30% | 21.30% |
Net operating loss carryback, Percentage | 35.00% | |
CARES Act [Member] | ||
Income Taxes [Line Items] | ||
Deferred social security tax | $ 3,398 | |
Tax Year 2019 and 2020 [Member] | ||
Income Taxes [Line Items] | ||
Net tax operating losses that can be carried back | $ 34,090 |
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