Dave & Buster's Entertainment Inc., which has temporarily closed all 137 of its entertainment-dining venues, says the coronavirus pandemic will require audits and delay filings, and it outlined its response to the oubreak's impact.
The Dallas-based company released preliminary unaudited results for fiscal 2019, which ended Feb. 2, said same-store sales had declined 4.7% in the fourth quarter and were down 2.6% for the full year.
“In recent weeks, the COVID-19 pandemic has created challenges unlike anything our company, industry or the U.S. economy has previously experienced, resulting in the temporary closure of all of our stores,” said Brian Jenkins, Dave & Buster’s CEO, in a statement.
The company said it was using temporary relief provided by the Securities and Exchange Commission to delay filing its 2019 annual report for up to 45 days because of the shutdowns and other disruptions caused by the COVID-19 pandemic.
“We have thoughtfully and quickly implemented a comprehensive plan to help mitigate the impact of this pandemic, and we are now working to enhance liquidity and preserve store restart capabilities so that we can safely reopen as soon as local conditions allow,” Jenkins said.
Parts of that coronavirus plan included:
Shutdown of All Stores: As of March 20, the company temporarily closed 137 locations in 39 States, Canada and Puerto Rico.
Financial Flexibility: The company said it has reduced capital spending by halting new store construction and curtailing remodels and maintenance.
Furloughed workers: Dave & Buster’s said it had put 15,000 hourly workers on temporary furlough, reduced store management and corporate staff by about 90%, reduced senior leadership pay by 50% and suspended directors’ cash compensation for the year.
Suspended Dividends: The company suspended its quarterly dividend and share repurchase program.
Drawdown of Credit: With its recent full drawdown of its revolving credit facility, the company said it had about $100 million cash on hand as of March 31.
Landlords and Vendors: The company is pursuing discussions with landlords and vendors to reduce expenses, extend payment terms and obtain other payment concessions. Dave & Buster’s is in also discussion with lenders about debt.
“We continue to closely monitor this fluid situation while complying with all federal, state and local health and safety guidelines, as well as government mandates,” Jenkins said. “The primary objectives of our comprehensive response to this unprecedented challenge are to position us to emerge on the other side even stronger than before, and to welcome our valued team members and guests back as soon as circumstances enable us to safely reopen.”
In unaudited results for the fourth quarter ended Feb. 2, Dave & Buster’s reported net income was $25 million, or 80 cents a share, compared to $29.4 million, or 75 cents a share, in the prior-year period. Revenues increased 4.6%, to $347.2 million, from $331.8 million, driven by a 5.6% increase in amusements and a 3.5% increase in food and beverage revenue.
As of Jan. 13, Dave & Buster's founded in 1982, had 137 venues in North America, covering 39 states, Puerto Rico and Canada.
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