10q10k10q10k.net

What changed in Dave & Buster's Entertainment, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of Dave & Buster's Entertainment, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+282 added−279 removedSource: 10-K (2024-04-02) vs 10-K (2023-03-28)

Top changes in Dave & Buster's Entertainment, Inc.'s 2024 10-K

282 paragraphs added · 279 removed · 205 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

79 edited+14 added−21 removed39 unchanged
Biggest changeA typical Dave & Buster’s store employs approximately 115 hourly team members, and a typical Main Event store employs approximately 95 team members, most of which who part-time. The General Manager and the management team are responsible for the day-to-day operation of the store, including the hiring, training, and development of team members, as well as financial and operational performance.
Biggest changeThe General Manager and the management team are responsible for the day-to-day operations of the store, including the hiring, training, and development of team members, as well as financial and operational performance. There is a defined structure of development and progression of job responsibilities within the supporting management positions to ensure that an adequate succession plan exists within each store.
We plan to continually update our games each year through development of innovative and proprietary games and the purchase of new games that will resonate with our customers and drive brand relevance due to a variety of factors, including their large scale, eye-catching appearance, virtual reality features, association with recognizable brands or the fact that they cannot be easily replicated at home.
We plan to continually update our games each year through the development of innovative and proprietary games and the purchase of new games that will resonate with our customers to drive brand relevance due to a variety of factors, including their large scale, eye-catching appearance, virtual reality features, association with recognizable brands or the fact they cannot be easily replicated at home.
We believe that the smaller format maintains the dynamic customer experience that is the foundation of our brand and allows us flexibility in our site selection process. Main Event Stores - Our Main Event stores vary in size from approximately 37,500 to 78,000 square feet. The target size of our future stores is between approximately 40,000 and 55,000 square feet.
We believe the smaller format maintains the dynamic customer experience that is the foundation of our brand and allows us flexibility in our site selection process. Main Event Stores - Our Main Event stores vary in size from approximately 37,500 to 78,000 square feet. The target size of our future stores is between approximately 40,000 and 55,000 square feet.
We believe that our management team’s prior experience, combined with its experience at Dave & Buster’s and Main Event, provides us with insights into our customer base and enables us to create the dynamic environment that is core to our brands.
We believe our management team’s prior experience, combined with its experience at Dave & Buster’s and Main Event, provides us with insights into our customer base and enables us to create the dynamic environment that is core to our brands.
We have invested in connectivity and data infrastructure to modernize and upgrade the capacity of our store systems, continued work on new, customer-facing digital experiences, such as the launch of our new mobile application that supports in-store and off-premise amusement entertainment, and deployed hand-held point-of-sale devices in our stores.
We have invested in connectivity and data infrastructure to modernize and upgrade the capacity of our store systems, continued work on new, customer-facing digital experiences, such as the launch of our new mobile application that supports in-store and off-premise entertainment, and deployed hand-held point-of-sale devices in our stores.
We conduct regular evaluations with each manager to discuss prior performance and future performance goals and continuously evaluate our staffing to proactively plan for growth. We hold an annual General Manager conference in which our General Managers share best practices and receive an operating plan they will execute to drive performance.
We conduct regular evaluations with each manager to discuss prior performance and future performance goals and continuously evaluate our staffing to proactively plan for growth. We hold an Annual Operators Conference in which our General Managers share best practices and receive an operating plan they will execute to drive performance.
Some of these establishments may exist in multiple locations, and we may also face competition on a national basis in the future from other similar concepts. We also face competition from increasingly sophisticated home-based forms of entertainment, such as internet and video gaming and home movie streaming and delivery.
Some of these establishments may exist in multiple locations, and we may also face competition on a national basis in the future from other similar concepts. We also face competition from increasingly sophisticated home-based forms of entertainment, such as internet and video gaming and home movie streaming.
The Midway in each of our stores is an area where we offer a wide array of amusement and entertainment options, some of which are exclusive to our Dave & Buster's and Main Event brands on a permanent or temporary basis.
The Midway in each of our stores is an area where we offer a wide array of entertainment options, some of which are exclusive to our Dave & Buster's and Main Event brands on a permanent or temporary basis.
We utilize a number of other initiatives to continually improve our market effectiveness, including refining our marketing strategy to better reach both young adults and families, creating new advertising campaigns, investing in menu research and development to differentiate our food offerings from our competition and improve key product attributes (quality, consistency, value and overall customer satisfaction) and execution, developing product/promotional strategies to attract new customers and increase spending/length of stay, and reflecting a consistent brand identity that represents our positioning and commitment to quality.
We utilize a number of other initiatives to continuously improve our market effectiveness, including refining our marketing strategy to better reach both young adults and families, creating new advertising campaigns, investing in menu research and development to differentiate our food offerings from our competition and improve key product attributes (quality, consistency, value and overall customer satisfaction) and execution, developing product/promotional strategies to attract new customers and increase spending/length of stay, and reflecting a consistent brand identity that represents our positioning and commitment to quality.
We also strive to improve efficiency by simplifying execution, allowing us to deliver dishes hotter and faster to drive an improved customer experience. We continually update our offerings based on customer research, and optimize our selections to improve execution efficiency.
We also strive to improve efficiency by simplifying execution, allowing us to deliver dishes hotter and faster to drive an improved customer experience. We continually update and innovate our offerings based on customer research and optimize our selections to improve execution efficiency.
Among other key accomplishments, we: • progressed on our goals to improve representation of women and team members who are black, indigenous or people of color (BIPOC) in our corporate and field leadership before the end of FY 2025; • enhanced our commitment to women in leadership through greater participation in membership and activity with Women’s Foodservice Forum; • emphasized our commitment to diversity and belonging throughout the year in internal and external communications, including social media and the expansion of our Diversity Council membership and activity.
Among other key accomplishments, we: • progressed on our goals to improve representation of women and team members who are black, indigenous or people of color (“BIPOC”) in our corporate and field leadership before the end of FY 2025; • enhanced our commitment to women in leadership through greater participation in membership and activity with Women’s Foodservice Forum; and • emphasized our commitment to diversity and belonging throughout the year in internal and external communications, including social media and the expansion of our Diversity Council membership and activity.
In fiscal 2023 and beyond, the number of openings will depend on many factors, including our ability to locate appropriate sites, negotiate acceptable purchase or lease terms, generate sufficient operating cash flows or utilize available cash to finance construction of leasehold improvements and pre-opening costs, obtain necessary local governmental permits, and recruit and train team members.
In fiscal 2024 and beyond, the number of openings will depend on many factors, including our ability to locate appropriate sites, negotiate acceptable purchase or lease terms, generate sufficient operating cash flows or utilize available cash to finance construction of leasehold improvements and pre-opening costs, obtain necessary local governmental permits, and recruit and train team members.
These offerings are rooted in enhanced flavors and quality ingredients across a condensed number of menu items that enables our customers to explore new flavors while offering a balanced selection of familiar dishes. Our menus simplify execution and, along with recent kitchen enhancements, allow us to deliver dishes to customers hotter and faster to drive an improved customer experience.
These offerings are rooted in enhanced flavors and quality ingredients across a condensed number of menu items that enable our customers to explore new flavors while offering a balanced selection of familiar dishes. Our menus simplify execution and, along with recent kitchen enhancements, allow us to deliver dishes to customers hotter and faster to drive an improved customer experience.
We have a high degree of awareness of our brands as a dining and entertainment venue, and a broad customer appeal with an attractive target demographic. The primary target for our Dave & Buster’s locations is adults 21-39, while our Main Event branded stores primarily focus on families with children. Multi-faceted customer experience highlights our value proposition.
We have a high degree of awareness of our brands as an entertainment and dining venue, and a broad customer appeal with an attractive target demographic. The primary target for our Dave & Buster’s locations is adults aged 21-39 and families, while our Main Event stores primarily focus on families with children. Multi-faceted customer experience highlights our value proposition.
We define and calculate cash-on-cash returns for an individual store as (a) Store Operating Income Before Depreciation and Amortization, excluding pre-opening expenses, national marketing expense allocation, non-cash charges related to asset disposals, currency transactions and changes in non-cash deferred amusement revenue, divided by (b) our net development costs.
We define and calculate cash-on-cash returns for an individual store as (a) Store Operating Income Before Depreciation and Amortization, excluding pre-opening expenses, national marketing expense allocation, non-cash charges related to asset disposals, currency transactions and changes in non-cash deferred entertainment revenue, divided by (b) our net development costs.
We believe our store models offering entertainment, food, and beverages options provide certain benefits in comparison to traditional restaurant concepts, which are reflected in our historically higher revenue per store, higher comparable store operating income margins, and higher comparable Store Operating Income Before Depreciation and Amortization Margins (defined in Item 7.
We believe our store models offering entertainment, food, and beverage options provide certain benefits in comparison to traditional restaurant concepts, which are reflected in our historically higher revenue per store, higher comparable store operating income margins, and higher comparable Store Operating Income Before Depreciation and Amortization Margins (defined in Item 7.
We also have certain trade secrets, such as our recipes, processes, proprietary information and certain software programs that we protect by requiring all of our employees to sign a code of ethics, which includes an agreement to keep trade secrets confidential. Government Regulation We are subject to a variety of federal, state and local laws affecting our business.
We also have certain trade secrets, such as our recipes, processes, proprietary information and certain software programs that we protect by requiring all of our employees to sign a code of ethics, which includes an agreement to keep trade secrets confidential. 9 Table of Contents Government Regulation We are subject to a variety of federal, state and local laws affecting our business.
Risk Factors.” Each of our stores is subject to permitting and licensing requirements and regulations by a number of government authorities, which may include, among others, alcoholic beverage control, health and safety, sanitation, environmental, labor and zoning. The development and construction of new stores is subject to compliance with applicable zoning, land use and environmental regulations.
Each of our stores is subject to permitting and licensing requirements and regulations by a number of government authorities, which may include, among others, alcoholic beverage control, health and safety, sanitation, environmental, labor and zoning. The development and construction of new stores is subject to compliance with applicable zoning, land use and environmental regulations.
The key elements that drive our total customer experience and help position us from a competitive standpoint include the following: Strong, distinctive brands with broad customer appeal . We believe that the multi-faceted customer experience at our stores, supported by our extensive marketing reach has helped us create a widely recognized brand.
The key elements that drive our total customer experience and help position us from a competitive standpoint include the following: Strong, distinctive brands with broad customer appeal . We believe that the customer experience at our stores, supported by our extensive marketing reach, has helped us create widely recognized brands.
We deliver high-quality offerings, including a wide variety of starters, one-of-a-kind burgers and handhelds, choice-grade steaks, pasta, and low calorie, vegetarian, and gluten friendly options. We believe our broad menus offer something for everyone and are appropriate for many different occasions. To ensure that we stay on-trend, we update our menus regularly with new food items or limited time offers.
We deliver high-quality offerings, including a wide variety of starters, one-of-a-kind burgers and handhelds, choice-grade steaks, pasta, and low calorie, vegetarian, and gluten-friendly options. We believe our broad menus offer something for everyone and are appropriate for many different occasions. To ensure that we stay on-trend, we update our menus regularly with new food items or tailored promotions.
We offer performance-based compensation programs to our store management and store support center employees. In addition to salaries, these programs (which vary by employee level) include, among other items, bonuses, stock awards, and various employee assistance programs.
We offer performance-based compensation programs to our store management and store support center employees. In addition to salaries, these programs (which vary by employee level) include bonuses, stock awards, and various employee assistance programs.
Our team members share a deep commitment to values that describe the relationships our team members have with our customers and each other. We are devoted to our service philosophy that calls us to provide exceptional service to our customers and to each other every day. Our attitude encourages intensity, hard work, and having fun.
Our team members share a deep commitment to values that describe the relationships our team members have with our customers and each other. We are devoted to our service philosophy that calls for providing exceptional service to our customers and to each other every day. Our attitude encourages intensity, hard work, and having fun.
We execute periodic promotions, create in-store point-of-purchase materials and execute local marketing plans to address specific objectives in individual stores or markets. We work with external advertising, digital, media and design agencies in the development and execution of these programs.
We execute periodic promotions, create in-store point-of-purchase materials and execute local marketing plans to address specific objectives in individual stores or markets. We work with best-in-class external advertising, digital, media and public relations agencies in the development and execution of these programs.
Central to this effort is continued investment in our mobile application and web platforms, which are used to enhance existing customer satisfaction and attract new customers by providing periodic exclusive offers and discounts and providing a convenient way to purchase gaming cards.
Central to this effort is continued investment in our mobile application and web platforms, which are used to enhance existing customer satisfaction and attract new customers by providing periodic exclusive offers and limited-time discounts, while also providing a convenient way to purchase and easily recharge gaming cards.
For a discussion of the risks and potential impact on our business of a failure by us to comply with applicable laws and regulations, see “Item 1A.
For a discussion of the risks and potential impact on our business of a failure by us to comply with applicable laws and regulations, see Item 1A Risk Factors.
We also intend to extend our programming capabilities at Dave & Buster's stores by offering more curated content and creating a calendar of ongoing and one-time events leveraging our investments in the best and latest audio-visual technology. • Align team and integrated experience.
We also intend to extend our programming capabilities at our stores by offering more curated content and creating a calendar of ongoing and one-time events leveraging our investments in the best and latest audio-visual technology.
In fiscal 2022, we began investing in new enterprise resource planning ("ERP"), human capital management ("HCM"), and inventory software to provide our store management and store support teams with the tools necessary to enhance our ability to record and track data, make more effective real-time decisions, and drive process efficiencies.
In fiscal 2022, we began investing in new enterprise resource planning, human capital management, and inventory management software to provide our store management and store support teams with the tools necessary to enhance our ability to record and track data, make more effective real-time decisions, and drive process efficiencies. We plan to fully implement these new systems in fiscal 2024.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures”). Our entertainment offerings have low variable costs, generating a gross margin of 91.0% for fiscal 2022. With 65.5% of our fiscal 2022 revenues from entertainment, we have less exposure than traditional restaurant concepts to food costs.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures”). Our entertainment offerings have low variable costs, generating a gross margin of 90.7% for fiscal 2023. With 65.1% of our fiscal 2023 revenues from entertainment, we have less exposure than traditional restaurant concepts to food costs.
We believe that our games and amusement activities are the core differentiating feature of our brands and staying current with the latest offerings promotes trial and provides an exciting environment to enjoy with friends and family, especially with the latest multiplayer games and challenges.
We believe that our diverse offering of games and amusement activities are the core differentiating feature of our brands. Staying current with the latest offerings promotes trial and provides an exciting environment to enjoy with friends and family, especially with the latest multiplayer games and challenges, as well as social gaming experiences.
Most of our Dave & Buster's stores have an enhanced viewing experience with huge cutting-edge LED “Wow Walls”, that differentiates Dave & Buster’s by delivering an elevated viewing experience and providing a platform for broader programming and marketing opportunities.
Most of our Dave & Buster's branded stores have an enhanced viewing experience with huge cutting-edge LED “Wow Walls”, that deliver an elevated viewing experience and provide a platform for broader programming and marketing opportunities.
Many of our non-redemption games, which include our virtual reality, video, and simulation offerings, can be played by multiple customers simultaneously and include some of the latest high-tech games that are commercially available. Other amusements, including billiards and bowling, represented the remainder of our amusement and other revenues in fiscal 2022.
Many of our non-redemption games, which include our virtual reality, video, and simulation offerings, can be played by multiple customers simultaneously and include some of the latest high-tech games that are commercially 2 Table of Contents available. Other entertainment, including billiards, laser tag and bowling, represented the remainder of our entertainment revenues in fiscal 2023.
We believe that the smaller store format allows us to reduce capital investment risk per store. For the smaller format, we have reduced the back-of-house space and optimized the customer facing area dedicated to video and redemption games.
We believe the smaller store format allows us to reduce capital investment risk per store and enter smaller markets that would not have warranted the investment of a larger box. For the smaller format, we have reduced the back-of-house space and optimized the customer facing area dedicated to video and redemption games.
We compete for customers’ discretionary entertainment dollars with providers of out-of-home entertainment, including localized attraction facilities such as movie theaters, sporting events, bowling alleys, sports activity centers, arcades and entertainment centers, night clubs and restaurants as well as theme parks.
We compete for customers’ discretionary spend on entertainment with localized attraction facilities such as movie theaters, sporting events, bowling alleys, sports activity centers, arcades and entertainment centers, night clubs and restaurants as well as theme parks.
We partner with suppliers who share our commitment to ethical business conduct, fair labor practices, proven environmental, health, and safety practices, and environmental sustainability. We also specifically condemn human trafficking and abuse of child labor.
We will not do business with organizations that employ or condone unfair labor practices. We partner with suppliers who share our commitment to ethical business conduct, fair labor practices, proven environmental, health, and safety practices, and environmental sustainability. We also specifically condemn human trafficking and abuse of child labor.
During the fourth quarter of fiscal 2021, we launched an enhanced loyalty program for our Dave & Buster's brand that now has millions of members and continues to grow. The Dave & Buster’s Rewards Program is a customer recognition program that rewards members primarily for their game chips played.
We launched an enhanced loyalty program for our Dave & Buster's brand in 2021 that now has nearly six million members and continues to grow. The Dave & Buster’s Rewards Program is a customer recognition program that rewards members primarily for their game chips played.
We plan to implement these new systems over the next two years. Food Preparation, Quality Control and Purchasing We strive to maintain high food quality standards. To ensure our quality standards are met, we negotiate directly with independent producers of food products. We provide detailed quality and yield specifications to suppliers for our purchases.
Food Preparation, Quality Control and Purchasing We strive to maintain the highest food quality standards. To ensure our quality standards are met, we negotiate directly with independent producers of food products. We provide detailed quality and yield specifications to suppliers for our purchases.
Each store offers a full menu of entrées and appetizers, a complete selection of alcoholic and non-alcoholic beverages, and an extensive assortment of entertainment attractions centered around playing games and watching live sports and other televised events.
Each store offers a full menu of entrées and appetizers, a complete selection of alcoholic and non-alcoholic beverages, and an extensive assortment of entertainment attractions centered around playing games and watching live sports and other televised events. The Company has 58 Main Event stores in 20 states across the U.S.
Our Store Teams Our typical store team consists of a General Manager supported by an average of six to seven additional management positions per store. Management team members handle various departments within the store including 6 Table of Contents responsibility for hourly team members.
Our Store Teams Our typical store team consists of a General Manager supported by an average of six to seven additional management positions per store. Management team members handle various departments within the store including responsibility for hourly team members. Our stores typically employ approximately 100 hourly team members, most of which are part-time.
We are focused on maintaining a streamlined beverage menu for ease of execution, while using quality ingredients including fresh juices, purees and house-made mixers. Beverage service is typically available throughout the entire store, 2 Table of Contents allowing for multiple point of sale opportunities.
Each of our locations also offers full bar service, including a variety of beers, hand-crafted cocktails, and premium spirits. We are focused on maintaining a streamlined beverage menu for ease of execution, while using quality ingredients including fresh juices, purees and house-made mixers. Beverage service is typically available throughout the entire store, allowing for multiple point of sale opportunities.
We are continuously working with game manufacturers and others to create new games and attractions that include content 3 Table of Contents that is exclusively available at our Dave & Buster’s and Main Event stores on a permanent or temporary basis.
We aim to offer our customers a value proposition comparable or superior to many of the separately available dining and entertainment options. We are continuously working with game manufacturers and others to create new games and attractions that include content that is exclusively available at our Dave & Buster’s and Main Event stores on a permanent or temporary basis.
The Company has 151 Dave & Buster’s branded stores in 41 states, Puerto Rico, and Canada and offers guests the opportunity to "Eat Drink Play and Watch," all in one location.
As of February 4, 2024, the Company had 162 Dave & Buster’s branded stores in 42 states, Puerto Rico, and Canada and offers guests the opportunity to "Eat Drink Play and Watch," all in one location.
After a store has been opened and is operating smoothly, the store managers supervise the training of new team members. Corporate Responsibility Our core values call for each of our team members to care for each other, our customers, and the communities we serve. We will not do business with organizations that employ or condone unfair labor practices.
After a store has been opened and is operating smoothly, the store managers supervise the training of new team members. 7 Table of Contents Corporate Responsibility Our core values call for each of our team members to care for each other, our customers, and the communities we serve.
Information Technology and Cyber Security We utilize several proprietary and third-party management information systems. These systems are designed to enable our games’ functionality, improve operating efficiencies, provide us with timely access to financial and marketing data and reduce store and corporate administrative time and expense. We believe our management information systems are sufficient to support our business plans.
These systems are designed to enable our games’ functionality, improve operating efficiencies, provide us with timely access to financial and marketing data and reduce store and corporate administrative time and expense. We believe our management information systems are sufficient to support our business plans. Information systems projects are prioritized based upon strategic, financial, regulatory and other business advantage criteria.
Our Leadership Team We are led by a strong senior management team with a wealth of experience with national brands spanning casual dining, entertainment, and other consumer-centric industries.
In particular, our leaders work to develop and maintain strong communications and relationships with our team members. 6 Table of Contents Our Leadership Team We are led by a strong senior management team with a wealth of experience with national brands spanning casual dining, entertainment, and other consumer-centric industries.
Most of our games are activated by game play credits on cards or other RFID devices. A customer purchases a card with game play credits or “chips” at an automated kiosk, through our mobile application, or from one of our team members. Our amusement and other revenues accounted for approximately 65% of our total revenues during fiscal 2022.
A customer purchases a card with game play credits or “chips” at an automated kiosk, through our mobile application, or from one of our team members. Our entertainment revenues accounted for approximately 65.1% of our total revenues during fiscal 2023.
ITEM 1. Business Dave & Buster’s Entertainment, Inc. (“D&B Entertainment”) is the owner and operator of 204 venues in North America that offer premier entertainment and dining experiences to its guests.
ITEM 1. Business Dave & Buster’s Entertainment, Inc. (“D&B Entertainment”) is the owner and operator of 220 venues in North America that offer premier entertainment and dining experiences for both adults and families under the Dave & Buster's and Main Event brands.
While we continue to operate in a competitive labor environment, we believe our culture, policies, and labor practices contribute to strong relations with our team members. (See Item 1A.
Our ability to attract and retain an engaged and experienced team is critical to successful execution of our business strategies. While we continue to operate in a competitive labor environment, we believe our culture, policies, and labor practices contribute to strong relations with our team members. (See Item 1A.
We believe our culture, policies, and labor practices contribute to strong engagement with our team members. In particular, our leaders work to develop and maintain strong communications and relationships with our team members.
We believe our culture, policies, and labor practices contribute to strong engagement with our team members.
If an existing building is identified in a target location, we could open a future store outside of this range depending on projected store economics, competition and various other factors. Invest in Foreign Operations We own and operate two stores outside of the United States in the Canadian province of Ontario.
If an existing building is identified in a target location, we could open a future store outside of this range depending on projected store economics, competition and various other factors. Invest in Foreign Operations We are expanding the Dave & Buster's brand through international franchise agreements.
Special Event marketing programs are run in support of our special events team initiatives. Dedicated, target-specific marketing programs are executed primarily utilizing digital, customer relationship management (CRM), and print marketing collateral. We have online booking for social parties to provide additional convenience in booking events for our customers.
Special Event marketing programs are run in support of our special events team initiatives. Dedicated, target-specific marketing programs are executed primarily utilizing digital, customer relationship management, organic social, partnerships/co-op programs, and print marketing collateral.
Wage inflation and other macro-economic pressures could result in increasing expenses, as suppliers may seek to pass higher costs on to us. 9 Table of Contents Intellectual Property We have registered the trademarks Dave & Buster’s ® , Power Card ® , Eat & Play Combo ® , Eat Drink Play ® , Eat Drink Play Watch ® , Main Event ® , Main Event Entertainment ® , and Eat.Bowl.Play ® and have registered or applied to register certain additional trademarks with the United States Patent and Trademark Office and in various foreign countries.
Intellectual Property We have registered the trademarks Dave & Buster’s ® , Power Card ® , Eat & Play Combo ® , Eat Drink Play ® , Eat Drink Play Watch ® , Main Event ® , Main Event Entertainment ® , and Eat.Bowl.Play ® and have registered or applied to register certain additional trademarks with the United States Patent and Trademark Office and in various foreign countries.
We understand that supporting our communities includes being good environmental stewards and striving to conduct business in a sustainable and environmentally responsible manner. 7 Table of Contents In addition, we strongly encourage team members to give back to the communities we serve.
We understand that supporting our communities includes being good environmental stewards and striving to conduct business in a sustainable and environmentally responsible manner. We strongly encourage team members to give back to the communities we serve. Although our Company invests time and resources in many charitable causes, we have two main causes we focus our efforts to support.
We aim to enhance our food, beverage, and entertainment offerings through our service philosophy of providing a high quality and consistent customer experience through dedicated training and development of our team members and a corporate culture that encourages employee engagement. Strategy Our current strategy is built on the following key components: Drive growth in comparable store sales.
We aim to continuously enhance our entertainment, food, and beverage offerings through our service philosophy of providing a high quality and consistent customer experience through dedicated training and development of our team members, supported by a corporate culture that fosters employee engagement.
Our workforce management platform also allows management to quickly add or reduce labor based on real-time business needs and historically assisted our managers in optimizing hourly labor based on anticipated sales volumes.
In addition to our own routines, we leverage a third-party vendor to help ensure quality beverage operations, responsible alcohol service and loss prevention. Our workforce management platform also allows management to quickly add or reduce labor based on real-time business needs and historically assisted our managers in optimizing hourly labor based on anticipated sales volumes.
Racial minorities make up approximately 65% of our U.S. workforce, and we are proud of our diversity, which is summarized below: Male Female Total White 16.8 % 18.6 % 35.4 % Hispanic 14.5 % 16.2 % 30.7 % Black or African American 12.8 % 14.1 % 26.9 % Asian/American Indian/Pacific Islander 1.7 % 2.2 % 3.9 % Two or more races 1.4 % 1.7 % 3.1 % Total 47.2 % 52.8 % 100.0 % In fiscal 2022, we strengthened our commitment to diversity, equity, and inclusion.
Racial minorities make up approximately 64.9% of our U.S. workforce, and we are proud of our diversity, which is summarized below: Male Female Total (1) White 18.1 % 16.7 % 34.8 % Hispanic or Latino 16.5 % 14.2 % 30.7 % Black or African American 13.3 % 12.1 % 25.4 % Asian/American Indian/Pacific Islander 2.3 % 1.7 % 4.0 % Two or more races 1.5 % 1.6 % 3.1 % Unspecified 0.6 % 0.6 % 1.2 % Total 52.3 % 46.9 % 99.2 % (1) Approximately 0.8% of our team members either do not identify as a specific gender or identify as non-binary across all races.
We utilize a customized food and beverage analysis program that determines the theoretical food and beverage costs for each store and provides additional tools and reports to help us identify opportunities, including waste management. In addition to our own routines, we leverage a third-party vendor to help ensure quality beverage operations, responsible alcohol service and loss prevention.
Our managers have daily routines focused on driving consistent execution in entertainment, food and beverage. We utilize a customized food and beverage analysis program that determines the theoretical food and beverage costs for each store and provides additional tools and reports to help us identify opportunities, including waste management.
Each quarterly period has 13 weeks, except in a 53-week year when the fourth quarter has 14 weeks. Fiscal 2022, 2021, and 2020 each contained 52 weeks. We refer to our fiscal years ended January 29, 2023, January 30, 2022 and January 31, 2021 as "fiscal 2022", "fiscal 2021", and "fiscal 2020", respectively, throughout this report.
Our fiscal year consists of 52 or 53 weeks ending on the Sunday after the Saturday closest to January 31. Each quarterly period has 13 weeks, except in a 53-week year when the fourth quarter has 14 weeks. Fiscal 2023 contained 53 weeks and fiscal 2022 and fiscal 2021 each contained 52 weeks.
We believe that we have created an energetic environment that includes a differentiated and interactive viewing experience for customers, and our goal is to build awareness of D&B as “the best place to watch sports” and the “only place to watch the games and play the games.” Competitive Positioning The out-of-home entertainment market is highly competitive.
We believe that we have created an energetic environment that includes a differentiated and interactive viewing experience for customers, and our goal is to build awareness of D&B as “the best place to watch sports” and the “only place to watch the games and play the games.” Food and Beverage We strive to differentiate our food with quality, flavorful offerings guided by an “Inspired American Kitchen” identity at our Dave & Buster’s locations and a “Family Kitchen” at our Main Event locations.
There is a defined structure of development and progression of job responsibilities within the supporting management positions to ensure that an adequate succession plan exists within each store. Each store is overseen by a Regional Operations Director, Senior Regional Operations Director or Vice President of Operations (collectively, “Regional Management”) who directly or indirectly report to our Chief Operating Officer.
Each store is overseen by a Regional Operations Director, Senior Regional Operations Director or Vice President of Operations (collectively, “Regional Management”) who directly or indirectly report to our Chief Operating Officer.
At January 30, 2022, less than 2.0% of our long-lived assets were located outside of the United States. The foreign activities of these and future stores outside the United States are subject to various risks of doing business in a foreign country, including currency fluctuations, changes in laws and regulations and economic and political stability.
These stores generated aggregate revenues of approximately $23.5 million and $24.1 million in fiscal 2023 and fiscal 2022, respectively. The foreign activities of these and future stores outside the United States are subject to various risks of doing business in a foreign country, including currency fluctuations, changes in laws and regulations and economic and political stability.
Our new games in combination with new food and beverage offerings and focused attention to the customer experience help us to retain and generate customer traffic. Our value proposition is enhanced by marketing initiatives, including free game play that often features the introduction of our new games, game play dollar volume discounts, and eat and play promotional offers.
Our value proposition is enhanced by marketing initiatives, including free game play that often features the introduction of our new games, game play dollar volume discounts, and eat and play promotional offers. We believe these initiatives encourage customers to participate more fully across our food, beverage, and entertainment offerings. Store models generate favorable store economics and strong returns.
We intend to differentiate our brands from other food and entertainment alternatives and drive growth in our comparable sales, in a competitive landscape, through the following strategies: • Offer novel food & drink to bring people together.
Strategy We have a multi-faceted growth strategy focused on the following key components: Drive growth in comparable store sales. We intend to differentiate our brands from other entertainment and dining alternatives and drive growth in our comparable sales through the following strategies: • Offer the latest entertainment at competitive prices.
We utilize several forms of media, including investments in linear TV, connected TV, social and digital video, and test new types of programmatic display and digital audio, and have several digital marketing initiatives including search engine marketing and optimization, mobile campaigns, and website improvements.
We utilize a diversified media mix, including connected TV, select linear TV buys, social and digital video, programmatic display, paid social and paid search, along with several digital marketing initiatives including search engine marketing and optimization, organic social, content marketing, mobile campaigns, mobile app and website improvements.
We will focus on delivering personalized messaging that connects with the customer to drive incremental visitation and will focus our advertising on communicating the emotional side of our brand promise. In addition, we will continue to leverage our customer relationship management program and our growing loyalty database by delivering more targeted individualized offers and creative content.
In addition, we will continue to leverage our 4 Table of Contents customer relationship management program and our growing loyalty database by delivering more targeted individualized offers, creative content and exclusive offerings.
Regarding our long-term strategy of new store growth, we base new site selection on an analytical evaluation of a set of drivers we believe increase the probability of successful, high-volume stores, including site visibility, accessibility and traffic volume, and trade area demographics The experience and relationships of our current development team has enabled us to focus our attention on the most relevant network of real estate brokers, which has given us access to a larger pool of qualified potential store sites.
The experience and relationships of our current development team has enabled us to focus our attention on the most relevant network of real estate brokers, which has given us access to a larger pool of qualified potential store sites.
Amusement and Entertainment Game play is a key aspect of the entertainment experience at each of our stores, which we believe is the core differentiating feature of our brands.
We refer to our fiscal years ended February 4, 2024, January 29, 2023 and January 30, 2022 as "fiscal 2023", "fiscal 2022", and "fiscal 2021", respectively, throughout this report. Entertainment Game play is a key aspect of the entertainment experience at each of our stores, which we believe is the core differentiating feature of our brands.
Our Team At January 29, 2023, we employed 22,748 team members across both of our brands, consisting of 342 store support, 164 dedicated special events sales force, 1,583 store management, and 20,659 store hourly team members.
Our Team As of February 4, 2024, we employed 23,258 team members across both of our brands, consisting of 384 store support, 139 dedicated special events sales force, 1,998 store management, and 20,737 store hourly team members.
We expect our average one-year and five-year cash-on-cash returns to be approximately 35% and 25%, respectively.
We target average one-year and five-year cash-on-cash returns of at least 35% a nd 25%, respectively.
To drive international expansion, we have developed key strategic initiatives that uniquely support global market penetration, including a customizable footprint to drive box economics in each market, menu localization with high regional resonance, a proprietary, dynamic pricing model, global marketing programs that are demographically agnostic and locally executable, differentiated and unique amusement strategy and packages, and localized entertainment and 3rd party programming. 5 Table of Contents Human Capital Management Our team members are the heart of our Company, and they help us run the fun in our stores every day.
These include a customizable footprint to drive box economics in each market, menu localization with high regional resonance, a proprietary, dynamic pricing model, global marketing programs that are demographically agnostic and locally executable, differentiated entertainment strategies and packages unique to each demographic, and localized entertainment and 3rd party programming. 5 Table of Contents We also own and operate two stores outside of the United States in the Canadian province of Ontario.
Through fiscal 2022, we have given over $17 million to this worthy cause, and we participate in several events throughout the year both in our stores and at our store support center to raise money for Make-A-Wish. We also volunteer our time and talents. In addition, we invest in helping our own team members during their times of greatest need.
The first is our long-standing partnership with Make-A-Wish, which we have proudly supported in a national partnership since April 2012. Through fiscal 2023, we have given over $17.4 million to this worthy cause, and we participate in several events throughout the year, both in our stores and at our store support center, to raise money for Make-A-Wish.
Main Event offers food, drinks and amusements, including state-of-the-art bowling, laser tag, hundreds of arcade games and virtual reality, making it the perfect place for families to connect and make memories.
Main Event offers food, drinks and entertainment, including state-of-the-art bowling, laser tag, arcade games and virtual reality, making it the perfect place for families to connect and make memories. Unless otherwise provided in this report, references to “Dave & Buster’s,” “we,” “us,” “our” or the “Company” refer to D&B Entertainment and its wholly owned subsidiaries and any predecessor entities.
The D&B H.E.A.R.T. (Helping Employees at Rough Times) Fund was an independent non-profit established to create an employee assistance fund for the benefit of team members who suffer catastrophic events resulting in severe economic hardship. The Main Event Family Fund was also an independent non-profit established employee assistance fund for the benefit of Main Event team members.
We also volunteer our time and talents. In addition, we invest in helping our own team members during their times of greatest need. The Buster's Legacy Fund is an independent non-profit established to create an employee assistance fund for the benefit of team members who suffer catastrophic events resulting in severe economic hardship.
We believe that our high margin beverage offering is complementary to the other offerings at each of our stores. Our alcoholic beverage revenues accounted for approximately 32% of our total food and beverage revenues and approximately 11% of our total revenues during fiscal 2022.
We believe that our high margin beverage offering is complementary to the other offerings at each of our stores. Competitive Positioning The out-of-home entertainment market is highly competitive.
We are a large buyer of traditional and amusement games and as a result believe we receive discounted pricing arrangements.
Suppliers The principal goods used by us are redemption game prizes and food and beverage products, which are available from a number of suppliers. We are a large buyer of traditional and amusement games and, as a result, we receive discounted pricing arrangements.
In February 2023, we combined the two funds into a new independent non-profit employee assistance fund named Buster's Legacy Fund. Both funds and the new Buster's Legacy Fund are financed by contributions from our team members, customers, and business partners. Advertising and Marketing We use advertising and marketing to build awareness and strengthen our brands' relevance.
The Buster's Legacy Fund is financed by contributions from our team members, customers, and business partners. Advertising and Marketing We use advertising and marketing to build awareness, strengthen our brands' relevance and generate and retain new customer demand. We spent approximately $67.8 million and $57.6 million on marketing efforts in fiscal years 2023 and 2022, respectively.
In September 2022, we signed an international franchise partnership to begin expanding the Dave & Buster's brand to locations in the Kingdom of Saudi Arabia, followed by the United Arab Emirates and Egypt. Also, the acquisition of Main Event provides the Company with another brand to expand internationally.
We have signed five international franchise partnerships, expanding the Dave & Buster's brand to locations in the Kingdom of Saudi Arabia, followed by the United Arab Emirates, Egypt, India, Australia, and the Dominican Republic. Under these partnerships, we plan to open 38 franchised Dave & Buster's locations beginning in 2024.
We do not believe there is any material risk associated with the Canadian operations or any dependence by the domestic business upon the Canadian operations. We also plan to expand our Dave & Buster's brand through international franchise agreements.
We do not believe there is any material risk associated with the Canadian operations or any dependence by the domestic business upon the Canadian operations. Human Capital Management Our team members are the heart of our Company, and we depend on them to provide great guest service and to maintain consistently strong operations.
Invest domestically in our brands. We believe that the Dave & Buster’s and Main Event brands have significant domestic growth opportunities in the United States and Canada. In fiscal 2022, we opened seven new Dave & Buster's stores and opened one Main Event store since the Main Event Acquisition was completed.
We also continue to invest in analytics tools and technology upgrades to more efficiently measure and improve performance, drive incremental sales, and continuously monitor costs and profitability. Invest domestically in our brands. We believe the Dave & Buster’s and Main Event brands have significant domestic growth opportunities in the United States and Canada.
Each of our Dave & Buster’s stores typically has approximately 145 redemption and simulation games as well as our proprietary virtual reality platform. Our Main Event locations feature redemption and simulation games as well as bowling, laser tag, billiards and gravity ropes. Some of our Main Event locations also feature mini escape rooms, mini golf and gravity ropes.
Our Dave & Buster’s stores average 135 redemption and simulation games, and our Main Event locations average 115 redemption and simulation games as well as bowling, laser tag, billiards and gravity ropes. Most of our games are activated by game play credits on cards or other RFID devices.
Removed
On June 29, 2022, the Company completed its acquisition of Main Event, which as of January 29, 2023, operated 50 Main Event and 3 The Summit branded stores (collectively referred to as "Main Event") in 17 states across the country.

… 34 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

49 edited+12 added−14 removed122 unchanged
Biggest changeWe regard our intellectual property as having significant value and being important to our marketing efforts. We use a combination of intellectual property rights, such as trademarks and trade secrets, to protect our brands and certain other proprietary processes and information material to our business.
Biggest changeWe use a combination of intellectual property rights, such as trademarks and trade secrets, to protect our brands, including Dave & Buster’s ® , Power Card ® , Eat & Play Combo ® , Eat Drink Play ® , Eat Drink Play Watch ® , Main Event ® , Main Event Entertainment ® , and Eat.Bowl.Play ® , as well as certain other proprietary processes and information material to our business.
Due to these substantial upfront financial requirements to open new stores, the investment risk related to any single store is much larger than that associated with many other restaurant or entertainment venues. Our long-term growth strategy depends, in part, on our ability to remodel existing stores in a manner that achieves appropriate returns on our capital investment.
Due to these substantial upfront financial requirements to open new stores, the investment risk related to any single store is much larger than that associated with many other entertainment or restaurant venues. Our long-term growth strategy depends, in part, on our ability to remodel existing stores in a manner that achieves appropriate returns on our capital investment.
We face potential liability with our gift cards under the property laws of some states. Our gift cards, which may be used to purchase food, beverages, merchandise, and game play credits in our stores, may be considered stored value cards.
We face potential liability with our gift cards and game play cards under the property laws of some states. Our gift cards, which may be used to purchase food, beverages, merchandise, and game play credits in our stores, may be considered stored value cards.
However, based on our analysis of abandoned and unclaimed property laws, we believe that they are not stored value cards and such laws do not apply, although there can be no assurance that states will not take a different position, which may have an adverse effect on our results of operations and financial condition.
However, based on our analysis of abandoned and unclaimed property laws, we believe they are not stored value cards and such laws do not apply, although there can be no assurance that states will not take a different position, which may have an adverse effect on our results of operations and financial condition.
Also, the unplanned loss of a major distributor could adversely affect our business by disrupting our operations as we seek out and negotiate a new distribution contract. Further, a significant percentage of our amusement inventory is directly or indirectly sourced outside the United States and changes in trade policy and tariffs could negatively impact our costs.
Also, the unplanned loss of a major distributor could adversely affect our business by disrupting our operations as we seek out and negotiate a new distribution contract. Further, a significant percentage of our inventory is directly or indirectly sourced outside the United States and changes in trade policy and tariffs could negatively impact our costs.
Compliance with cybersecurity, privacy and similar laws may involve significant cost and any failure to comply could adversely affect our business, reputation, and results of operations. The regulatory environment surrounding information security, privacy, and other matters involving consumer protection is increasingly demanding, with the frequent imposition of new and constantly changing requirements.
Compliance with cybersecurity, privacy and similar laws may involve significant cost and any failure to comply could adversely affect our business, reputation, and results of operations. The statutory and regulatory environment surrounding information security, privacy, and other matters involving consumer protection is increasingly demanding, with the frequent imposition of new and constantly changing laws and requirements.
We may not be able to anticipate and react to changing amusement offerings cost by adjusting purchasing practices or game prices, and a failure to do so could have a material adverse effect on our operating results.
We may not be able to anticipate and react to changing offerings cost by adjusting purchasing practices or game prices, and a failure to do so could have a material adverse effect on our operating results.
We are subject to various federal, state, and local laws and regulations that govern numerous aspects of our business, including, but not limited to, the following: • the Fair Labor Standards Act; federal, state and local laws and regulations that govern employment practices and working conditions, including minimum wage rates, wage and hour practices, gratuities, overtime, labor practices, various family leave mandates, discrimination and harassment, immigration, workplace safety and other areas; • the Americans with Disabilities Act and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas; • the Patient Protection and Affordable Care Act as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (“PPACA”) and uncertainties surrounding future changes to or replacement of our health insurance system; • preparation, sale and labeling of food, including the federal regulations of the Food and Drug Administration, which oversees the safety of the entire food system, including inspection and mandatory food recalls, menu labeling and nutritional content, and additional requirements in certain states and local jurisdictions; • environmental laws and regulations governing, among other things, discharges of pollutants into the air and water as well as the presence, handling, release and disposal of and exposure to hazardous substances; and • other environmental matters, such as climate change, the reduction of greenhouse gases, water consumption and animal health and welfare.
We are subject to various federal, state, and local laws and regulations that govern numerous aspects of our business, including, but not limited to, the following: • the Fair Labor Standards Act; federal, state and local laws and regulations that govern employment practices and working conditions, including minimum wage rates, wage and hour practices, gratuities, overtime, labor practices, various family leave mandates, discrimination and harassment, immigration, workplace safety and other areas; 17 Table of Contents • the Americans with Disabilities Act and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas; • the Patient Protection and Affordable Care Act as amended by the Health Care and Education Affordability Reconciliation Act of 2010 and uncertainties surrounding future changes to or replacement of our health insurance system; • preparation, sale and labeling of food, including the federal regulations of the Food and Drug Administration, which oversees the safety of the entire food system, including inspection and mandatory food recalls, menu labeling and nutritional content, and additional requirements in certain states and local jurisdictions; • environmental laws and regulations governing, among other things, discharges of pollutants into the air and water as well as the presence, handling, release and disposal of and exposure to hazardous substances; and • other environmental matters, such as climate change, the reduction of greenhouse gases, water consumption and animal health and welfare.
The market price of our common stock may be significantly affected by a number of factors, including, but not limited to, actual or anticipated variations in our operating results or those of our competitors as compared to analyst expectations, changes in financial estimates by research analysts with respect to us or others in the restaurant and other entertainment industries, and announcement of significant transactions (including mergers or acquisitions, divestitures, joint ventures or other strategic initiatives) by us or others in the restaurant and other entertainment industries.
The market price of our common stock may be significantly affected by a number of factors, including, but not limited to, actual or anticipated variations in our operating results or those of our competitors as compared to analyst expectations, changes in financial estimates by research analysts with respect to us or others in the entertainment, restaurant or other consumer discretionary industries, and announcement of significant transactions (including mergers or acquisitions, divestitures, joint ventures or other strategic initiatives) by us or others in those industries.
If in the future, we experience a security breach, we could become subject to claims, lawsuits or other proceedings for purportedly fraudulent transactions arising out of the theft of credit or debit card information, compromised security and information systems, failure of our team members to comply with applicable laws, the unauthorized acquisition or use of such information by third parties, or other similar claims, and such claims, lawsuits or other proceedings could have a material and adverse effect on our operations, results of operations, and financial condition.
If we experience a security breach, we could become subject to claims, lawsuits or other proceedings for purportedly fraudulent transactions arising out of the theft of credit or debit card information, compromised security and information systems, failure of our team members to comply with applicable laws, the unauthorized acquisition or use of such information by third-parties, or other similar claims, and such claims, lawsuits or other proceedings could have a material and adverse effect on our operations, results of operations, and financial condition.
Compliance with these requirements can be costly and time-consuming and the costs could adversely impact our results of operations due to necessary system changes and the development of new administrative processes.
Compliance with these laws and requirements can be costly and time-consuming and the costs could adversely impact our results of operations due to necessary system changes and the development of new administrative processes.
Compliance with these laws and regulations and future new laws or changes in laws or regulations that impose additional requirements can be costly. Any failure or perceived failure to comply with these laws or regulations could result in, among other things, revocation of required license, administrative enforcement actions, fines, civil and criminal liability, and/or closure of stores.
Compliance with these laws and regulations and future new laws or changes in laws or regulations that impose additional requirements can be costly. Any failure or perceived failure to comply with these laws or regulations could result in, among other things, revocation of required licenses, administrative enforcement actions, fines, civil and criminal liability, and/or closure of stores.
Although we employ security technologies and practices and have taken other steps to try to prevent a breach, there are no assurances that such measures will prevent or detect cyber security breaches, and we may nevertheless not have the resources or technical sophistication to prevent rapidly evolving types of cyberattacks.
Although we employ security technologies and practices and have taken other steps to try to prevent a breach, there are no assurances that such measures will prevent or detect cybersecurity breaches, and we may nevertheless not have the resources or technical sophistication to prevent rapidly evolving types of cyberattacks.
A cyber incident (generally any intentional or unintentional attack that results in unauthorized access resulting in disruption of 14 Table of Contents systems, corruption of data, theft or exposure of confidential information or intellectual property) that compromises the information of our customers or team members could result in widespread negative publicity, damage to our reputation, a loss of customers, additional costs, litigation claims, legal or regulatory proceedings, fines or penalties, remediation costs, a negative impact on team member morale, or other impacts to our business.
A cyber incident (generally any intentional or unintentional attack that results in unauthorized access resulting in disruption of systems, corruption of data, theft or exposure of confidential information or intellectual property) that compromises the information of our customers or team members could result in widespread negative publicity, damage to our reputation, a loss of customers, additional costs, litigation claims, legal or regulatory proceedings, fines or penalties, remediation costs, a negative impact on team member morale, or other impacts to our business.
Our ability to develop future offerings is dependent on, among other things, obtaining rights to compelling game content and developing new amusement offerings that are accepted by our customers. There is no guarantee that additional licensing rights will be obtained by us or that our customers will accept the future offerings that we develop.
Our ability to develop future offerings is dependent on, among other things, obtaining rights to compelling game content and developing new entertainment offerings that are accepted by our customers. There is no guarantee that additional licensing rights will be obtained by us or that our customers will accept the future offerings that we develop.
Our certificate of incorporation and bylaws include certain provisions that could have the effect of discouraging, delaying or preventing a change of control of our Company or changes in our management, including: restrictions on the ability of our stockholders to fill a vacancy on the Board of Directors; our ability to issue preferred stock with terms that the Board of Directors may determine, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; the inability of our stockholders to call a special meeting of stockholders; requirement that special meetings of our stockholders be called only upon the request of a majority of our Board of Directors or our Chief Executive Officer; the absence of cumulative voting in the election of directors, which may limit the ability of minority stockholders to elect directors; and advance notice requirements for stockholder proposals and nominations, which may discourage or deter a potential acquirer from soliciting proxies to elect a particular slate of directors or otherwise attempting to obtain control of us.
Our certificate of incorporation and bylaws include certain provisions that could have the effect of discouraging, delaying or preventing a change of control of our Company or changes in our management, including: restrictions on the ability of our stockholders to fill a vacancy on the Board of Directors (the “Board” ); our ability to issue preferred stock with terms that the Board may determine, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; the inability of our stockholders to call a special meeting of stockholders; requirement that special meetings of our stockholders be called only upon the request of a majority of our Board or our Chief Executive Officer ( “CEO” ); the absence of cumulative voting in the election of directors, which may limit the ability of minority stockholders to elect directors; and advance notice requirements for stockholder proposals and nominations, which may 19 Table of Contents discourage or deter a potential acquirer from soliciting proxies to elect a particular slate of directors or otherwise attempting to obtain control of us.
In addition, any decrease in availability of new amusement offerings that appeal to customers could lead to decreases in revenues as customers negatively react to a lack of new game options. We have successfully developed several proprietary amusement offerings that are not available to operations outside the Company.
In addition, any decrease in availability of new entertainment offerings that appeal to customers could lead to decreases in revenues as customers negatively react to a lack of new game options. We have successfully developed several proprietary entertainment offerings that are not available to operations outside the Company.
Our fourth amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf; any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, team members or stockholders to our company or our stockholders; any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or any action asserting a claim arising pursuant to any provision of our 20 Table of Contents certificate of incorporation or bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine.
Our fourth amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf; any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, team members or stockholders to our company or our stockholders; any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law ("DGCL") or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or any action asserting a claim arising pursuant to any provision of our certificate of incorporation or bylaws (in each case, as they may be amended from time to time) or governed by the internal affairs doctrine.
Cyber security breaches or other privacy or data security incidents that expose confidential customer, personal employee or other material, confidential information that is stored in our information systems or by third parties may adversely impact our business.
Cybersecurity breaches or other privacy or data security incidents that expose confidential customer, personal employee or other material, confidential information that is stored in our information systems or by third-parties may adversely impact our business.
We maintain a separate insurance policy covering cybersecurity risks and such insurance coverage may, subject to policy terms and conditions, cover certain aspects of cyber risks, but this policy is subject to a retention amount and may not be applicable to a particular incident or otherwise may be insufficient to cover all our losses beyond any retention.
We maintain a separate insurance policy covering cybersecurity risks and such insurance coverage may, subject to policy terms and conditions, cover certain aspects of cyber risks, but this policy is subject to a retention amount and may not be applicable to a particular incident or 14 Table of Contents otherwise may be insufficient to cover all our losses beyond any retention.
As part of our marketing efforts, we use a variety of digital platforms including search engines, mobile, online videos and social media platforms to attract and retain customers. We also test new technology platforms to improve our level of digital engagement with our customers and employees to help strengthen our marketing and related consumer analytics capabilities.
As part of our marketing efforts, we use a variety of digital platforms including search engines, mobile, online videos and social media platforms to attract and retain customers. We also test new technology platforms to improve our level of digital engagement with our customers and team members to help strengthen our marketing and related consumer analytics capabilities.
To date, we have not remitted any amounts relating to unredeemed gift cards to states based upon our assessment of applicable laws. 18 Table of Contents The analysis of the potential application of the abandoned and unclaimed property laws to our gift cards is complex, involving an analysis of constitutional and statutory provisions and factual issues.
To date, we have not remitted any amounts relating to unredeemed gift cards to states based upon our assessment of applicable laws. The analysis of the potential application of the abandoned and unclaimed property laws to our gift cards is complex, involving an analysis of constitutional and statutory provisions and factual issues.
We are also subject to a variety of other claims in the ordinary course of business, including personal injury, lease, and contract claims. We are also subject to “dram shop” statutes in certain states in which our stores are located.
We are also subject to a variety of other claims in the ordinary course of business, including personal injury, lease, and contract claims. 18 Table of Contents We are also subject to “dram shop” statutes in certain states in which our stores are located.
Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money away from operations and hurt our financial performance.
Regardless of whether any claims against us are valid or whether we are liable, claims may be expensive to defend and may divert time and money away from operations and adversely affect our financial performance.
We may fail to effectively integrate or operate our past or future acquisitions. We recently acquired Main Event as part of our expansion effort and may acquire more businesses in the future.
We may fail to effectively integrate or operate our past or future acquisitions. In fiscal 2022, we acquired Main Event as part of our expansion effort and may acquire more businesses in the future.
Should this occur, other jurisdictions that have historically mandated higher wages and greater benefits than what is required under federal law may seek to further increase wages and mandated benefits.
Should such increases occur, other jurisdictions that have historically mandated higher wages and greater benefits than what is required under federal law may seek to further increase wages and mandated benefits.
Changes in our tax expense or an increase in our tax liabilities, whether due to changes in applicable laws and regulation, the interpretation or application thereof, or a final determination of tax audits or litigation, could materially adversely affect our financial performance. Failure of our internal control over financial reporting could harm our business and financial results.
Changes in our tax expense or an increase in our tax liabilities, whether due to changes in applicable laws and regulation, the interpretation or application thereof, or a final determination of tax audits or litigation, could materially adversely affect our financial performance. 20 Table of Contents Failure of our internal control over financial reporting could harm our business, financial results and stock price.
Our ability to meet our business strategy plan is dependent upon, among other things: our ability to increase gross sales and operating profits at existing stores with food, beverage, game and entertainment options desired by our customers, evolve our marketing and branding strategies to appeal to our customers, innovate and implement technology initiatives to provide a unique digital customer experience, identify adequate sources of capital to fund and finance strategic initiatives, grow and expand operations, and improve the speed and quality of our service.
Our ability to meet our business strategy plan is dependent upon, among other things: our ability to increase gross sales and operating profits at existing stores with entertainment, food, and beverage options desired by our customers, evolve our marketing and branding strategies to appeal to our customers, innovate and implement technology initiatives to provide a unique digital customer experience, identify adequate sources of capital to fund and finance strategic initiatives, grow and expand operations, including identifying available, suitable, and economically viable locations for new stores and making strategic acquisitions, and improve the speed and quality of our service.
If we fail to manage our recent or future acquisitions effectively, our results of operations could be adversely affected by any of the following: • incorrect assumptions regarding the future results of acquired operations or assets or expected cost reductions or other synergies to be realized from acquiring operations or assets; • failure to integrate the operations or management of any acquired operations or assets successfully and timely; • potential loss of key employees and customers of the acquired companies; • potential lack of experience operating in a geographic market or product line of the acquired business; • an increase in our expenses, particularly overhead expenses, and working capital requirements; • the possible inability to achieve the intended objectives of the business combination; and • the diversion of management’s attention from existing operations or other priorities.
If we fail to manage our recent or future acquisitions effectively, our results of operations could be adversely affected by any of the following: • incorrect assumptions regarding the future results of acquired operations or assets or expected cost reductions or other synergies to be realized from acquiring operations or assets; • failure to integrate the operations or management of any acquired operations or assets successfully and timely; • potential loss of key team members and customers of the acquired companies; • potential lack of experience operating in a geographic market or product line of the acquired business; • an increase in our expenses, particularly overhead expenses, and working capital requirements; • the possible inability to achieve the intended objectives of the business combination; and • the diversion of management’s attention from existing operations or other priorities. 10 Table of Contents New or improved technologies or changes in consumer behavior facilitated by these technologies could negatively affect our business.
Any failure of these systems could significantly impact our operations. We rely on third-party service providers for certain key elements of our operations including credit card processing, telecommunications, and utilities. Our reliance on systems operated by third parties also presents the risk faced by the third party’s business, including the operational, cyber security, and credit risks of those parties.
We rely on third-party service providers for certain key elements of our operations including credit card processing, telecommunications, and utilities. Our reliance on systems operated by third-parties also presents the risk faced by the third-party’s business, including the operational, cybersecurity, and credit risks of those parties.
Any such delays, material increases in team member turnover rates in existing stores or widespread team dissatisfaction could have a material adverse effect on our business and results of operations. 15 Table of Contents Low unemployment coupled with increases in minimum wages and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting labor costs, reduced levels of legal immigration and a diminishing pool of potential team members, which has been exacerbated by potential team members choosing to exit the workforce, in general and hospitality industry, in particular, especially in certain localities, have and may continue to significantly increase our labor costs and make it more difficult to fully staff our restaurants, any of which could materially adversely affect our financial performance.
Low unemployment coupled with increases in minimum wages and minimum tip credit wages, extensions of personal and other leave policies, other governmental regulations affecting labor costs, reduced levels of legal immigration and a diminishing pool of potential team members, which has been exacerbated by potential team members choosing to exit the workforce, in general, and for hospitality industry in particular, especially in certain localities, have and may continue to significantly increase our labor costs and make it more difficult to fully staff our restaurants, any of which could materially adversely affect our financial performance.
Health care costs continue to rise and are especially difficult to project given that material increases in costs associated with medical claims, or an increase in the severity or frequency of such claims, may cause health care costs to vary substantially from quarter-to-quarter and year-over-year. Any significant changes to the healthcare insurance system could also impact our health care costs.
Health care costs continue to rise and are especially difficult to project given that material increases in costs associated with medical claims, or an increase in the severity or frequency of such claims, may cause health care costs to vary substantially 15 Table of Contents from quarter-to-quarter and year-over-year.
We could also be required to pay a substantial damage award, take a royalty-bearing license, discontinue the use of third-party products used within our operations and/or rebrand our products and services as a result of any such claims. 19 Table of Contents Risks Related to Our Corporate Structure, Our Stock Ownership and Our Common Stock The market price of our common stock is subject to volatility.
We could also be required to pay a substantial damage award, take a royalty-bearing license, discontinue the use of third-party products used within our operations and/or rebrand our products and services as a result of any such claims.
A judgment significantly in excess of our insurance coverage or not covered by insurance could have a material adverse effect on our business, results of operations or financial condition. Also, adverse publicity resulting from these allegations may materially adversely affect our stores and us. Failure to adequately protect our intellectual property could harm our business.
A judgment significantly in excess of our insurance coverage or not covered by insurance could have a material adverse effect on our business, results of operations or financial condition. Also, adverse publicity resulting from these allegations, regardless of whether the allegations are valid or we are ultimately found liable, may materially adversely affect our stores and us.
The number of suppliers from which we can purchase games, amusement offerings and other entertainment-related equipment is limited. To the extent the number of suppliers declines, we could be subject to the risk of distribution delays, pricing pressure, lack of innovation and other associated risks.
To the extent the number of suppliers declines, we could be subject to the risk of distribution delays, pricing pressure, lack of innovation and other associated risks.
Some of these systems have been internally developed or we rely on third party providers and platforms for some of these information technology systems and support. Although we have operational safeguards in place, those technology systems and solutions could become vulnerable to damage, disability, or failures due to theft, fire, power outages, telecommunications failure or other catastrophic events.
Although we have operational safeguards in place, those technology systems and solutions could become vulnerable to damage, disability, or failures due to theft, fire, power outages, telecommunications failure or other catastrophic events. Any failure of these systems could significantly impact our operations.
If we pay higher prices for food or other product costs, our operating costs may increase, and, if we are unable to adjust our purchasing practices or pass any cost increases on to our customers, our operating results could be adversely affected.
If we pay higher prices for food or other product costs, our operating costs may increase, and, if we are unable to adjust our purchasing practices or pass any cost increases on to our customers, our operating results could be adversely affected. 16 Table of Contents Our procurement of new games and entertainment offerings is contingent upon availability, and in some instances, our ability to obtain licensing rights.
Additionally, an increasing number of government and industry groups have established laws and standards for the protection of personal and health information. Risks Related to the Restaurant and Entertainment Industries Our success depends upon our ability to recruit and retain qualified store management and operating personnel while also controlling our labor costs.
Risks Related to the Entertainment and Restaurant Industries Our success depends upon our ability to recruit and retain qualified store management and operating personnel while also controlling our labor costs.
We are required to maintain the highest level of PCI DSS compliance at our store support center and stores. If we do not maintain the required level of PCI compliance, we could be subject to costly fines or additional fees from the card brands that we accept or lose our ability to accept those payment cards.
If we do not maintain the required level of PCI DSS compliance, we could be subject to costly fines or additional fees from the card brands that we accept or lose our ability to accept those payment cards. Additionally, an increasing number of government and industry groups have established laws and standards for the protection of personal and health information.
Although we do not anticipate any material difficulties occurring in the future, the failure to receive or retain a liquor license, or any other required permit or license, in a particular location, or to continue to qualify for, or renew licenses, could have a material adverse effect on operations and our ability to obtain such a license or permit in other locations. 17 Table of Contents We are also subject to amusement licensing and regulation by the states, counties, and municipalities in which our stores are located, due to operating certain entertainment games and attractions, including skill-based games that offer redemption prizes.
Although we do not anticipate any material difficulties occurring in the future, the failure to receive or retain a liquor license, or any other required permit or license, in a particular location, or to continue to qualify for, or renew licenses, could have a material adverse effect on operations and our ability to obtain such a license or permit in other locations.
In addition, unfavorable weather conditions during the winter and spring seasons could have a significant adverse impact on our results.
In addition, unfavorable weather conditions during the winter and spring seasons could have a significant adverse impact on our results. Our operations are susceptible to the changes in cost and availability of commodities and other products, which could negatively affect our operating results.
Material increases in health care costs could materially adversely affect our financial performance.
Any significant changes to the healthcare insurance system could also impact our health care costs. Material increases in health care costs could materially adversely affect our financial performance.
Risks Related to Information Technology and Cyber Security Information technology system failures or interruptions may impact our ability to effectively operate our business. We rely heavily on various information technology systems, including point-of-sale, kiosk and amusement operations systems in our stores, data centers that process transactions, communication systems and various other software applications used throughout our operations.
We rely heavily on various information technology systems, including point-of-sale, kiosk and amusement operations systems in our stores, data centers that process transactions, communication systems and various other software applications used throughout our operations. Some of these systems have been internally developed or we rely on third-party providers and platforms for some of these information technology systems and support.
Changes in consumer preferences and buying patterns could negatively affect our results of operations. The success of our stores depends in large part on leased properties primarily located near high density retail areas such as regional malls, lifestyle centers, big box shopping centers and entertainment centers.
The success of our stores also depends on properties primarily located near high density retail areas such as regional malls, lifestyle centers, big box shopping centers and entertainment centers. We depend on a high volume of visitors at these centers to attract customers to our locations.
A significant financial reporting failure or material weakness in internal control over financial reporting could result in substantial cost to remediate and could cause a loss of investor confidence and decline in the market price of our stock. ITEM 1B. Unresolved Staff Comments Not applicable. 21 Table of Contents
Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and timely or to detect and prevent fraud, could result in substantial cost to remediate, and could cause a loss of investor confidence and decline in the market price of our stock.
We depend on a high volume of visitors at these centers to attract customers to our locations. As demographic and economic patterns change, current locations may or may not continue to be attractive or profitable.
As demographic and economic patterns change, current locations may or may not continue to be attractive or profitable. A decline in development or closures of businesses in these settings or a decline in visitors to retail areas near our locations could negatively affect our sales.
Pursuing the wrong remodel and any delays, cost increases, disruptions or other uncertainties related to those opportunities could adversely affect our results of operations. The COVID-19 pandemic had a material adverse impact on our business, results of operations, liquidity and financial condition.
Pursuing the wrong remodel and any delays, cost increases, disruptions or other uncertainties related to those opportunities could adversely affect our results of operations. Our results can be adversely affected by events, such as adverse weather conditions, natural disasters, climate change, pandemics or other catastrophic events.
Our procurement of new games and amusement and entertainment offerings is contingent upon availability, and in some instances, our ability to obtain licensing rights. Our ability to continue to procure new games, amusement and entertainment offerings, and other entertainment-related equipment is important to our business strategy.
Our ability to continue to procure new games and entertainment offerings, and other entertainment-related equipment is important to our business strategy. The number of suppliers from which we can purchase games and other entertainment-related equipment is limited.
We believe it is becoming increasing likely that the United States federal government will significantly increase the federal minimum wage and tip credit wage (or eliminate the tip credit wage) and require significantly more mandated benefits than what is currently required under federal law.
The federal minimum wage and tip credit wage are under constant pressure from many partisan groups to be increased or eliminated in favor of significantly more mandated benefits than what is currently required under federal law.
Removed
Once an acquisition is finalized, we may not be successful in integrating the business into our existing operations, which 10 Table of Contents may result in unforeseen operational difficulties, diminished financial performance or our inability to report financial results and may require a disproportionate amount of our management’s attention.
Added
Changes in consumer preferences and buying patterns and changes in economic conditions could negatively affect our results of operations.
Removed
E-commerce or online shopping continues to increase and negatively impact consumer traffic at traditional “brick and mortar” retail sites located in regional malls, lifestyle centers, big box shopping centers and entertainment centers. A decline in development or closures of businesses in these settings or a decline in visitors to retail areas near our locations could negatively affect our sales.
Added
The out-of-home entertainment market is highly dependent on consumer discretionary spending levels, which may be negatively affected by economic conditions, such as: fluctuations in disposable income and changes in consumer confidence, the price of fuel and transportation, slow or negative growth, unemployment, credit conditions and availability, volatility in financial markets, inflationary pressures, weakness in the housing market, tariffs and trade barriers, wars or conflict in certain regions, pandemics or public health concerns, and changes in government and central bank monetary policies.
Removed
Future outbreaks of COVID-19, other contagious diseases or other adverse public health developments in the United States or worldwide could have similar impacts on our business. The COVID-19 pandemic had a material adverse impact on our business and results of operations in fiscal 2020 and 2021.
Added
When economic conditions negatively affect consumer spending, discretionary spending for visits to out-of-home entertainment venues will be challenged, our guest traffic may deteriorate, and the average amount guests spend in our stores may be reduced. This will negatively impact our results of operations. This could result in reductions in staff levels, asset impairment charges and potential store closures.
Removed
At the peak of the COVID-19 outbreak in fiscal 2020, all of our stores were closed. As stores re-opened, the Company experienced comparable store sales declines due to modified operating hours, occupancy restrictions, and reduced customer traffic.
Added
Adverse weather conditions, natural disasters, climate change or catastrophic events, such as terrorist acts, can adversely impact our operations.
Removed
In fiscal 2022, all our stores have now re-opened and we do not expect that our operations will be materially impacted by the continuing effects of COVID-19.
Added
Natural disasters such as earthquakes, hurricanes, and severe adverse weather conditions, climate change and health pandemics can keep customers in the affected area from visiting our stores, adversely affect consumer spending and confidence levels and supply availability and costs, cause damage to, or closure of, our stores and result in lost opportunities for our stores.
Removed
However, it remains difficult to predict future outbreaks, including new variants of COVID-19, or similar public health threats and their impact on our business or the broader economy and how consumer behavior may change, and whether such changes would be temporary or permanent.
Added
Our receipt of proceeds under any insurance we maintain with respect to some of these risks may be delayed or the proceeds may be insufficient to cover our losses fully. Risks Related to Information Technology and Cybersecurity Information technology system failures or interruptions may impact our ability to effectively operate our business.
Removed
Additionally, prolonged volatility or significant disruption of global financial markets due to a resurgence of COVID-19 or the emergence of another unforeseen pandemic could have a negative impact on our ability to access capital markets and other funding sources, on acceptable terms or at all, and impede our ability to comply with debt covenants or our ability to obtain additional waivers or amendments, if necessary, and the Company could also incur additional impairment charges of our long-lived assets, goodwill or other intangibles, which may have a significant or material impact on our financial results.
Added
We are required to maintain the highest level of Payment Card Industry Data Security Standards (“PCI DSS”) compliance at our store support center and stores.
Removed
Our existing cyber security policy includes cyber security techniques, tactics, and procedures, including continuous monitoring and detection programs, network protections, annual team member training and awareness and incident response preparedness. In addition, we periodically scan our environment for any vulnerabilities, perform penetration testing and engage third parties to assess effectiveness of our security measures.
Added
Any such delays, material increases in team member turnover rates in existing stores or widespread team dissatisfaction could have a material adverse effect on our business and results of operations.
Removed
We utilize the voluntary NIST Cybersecurity Framework to help manage privacy risk by independently benchmarking our cyber security program and leverage an independent third party to perform the assessment. We also have additional cyber security controls as part of mandatory compliance frameworks that we are subject to, including annual SOX and Payment Card Industry (“PCI”) Data Security Standard ("DSS") audits.
Added
We are also subject to amusement and game licensing and regulation by the states, counties, and municipalities in which our stores are located, due to operating certain entertainment games and attractions, including skill-based games that offer redemption prizes.
Removed
The results of these audits and assessments are shared with our Audit Committee.
Added
Failure to adequately protect our intellectual property could harm our business. We regard our intellectual property as having significant value and being important to our marketing efforts.
Removed
The California Consumer Privacy Act of 2018, for example, provides a private right of action for data breaches and requires companies that process information about California residents to make new disclosures to consumers about their data collection, use and sharing practices and allow consumers to opt out of certain data sharing with third parties.
Added
Risks Related to Our Corporate Structure, Our Stock Ownership and Our Common Stock The market price of our common stock is subject to volatility.
Removed
During fiscal 2020 and 2021, results also fluctuated due to the timing and frequency of temporary closures and operating restrictions due to state and local guidelines imposed due to the COVID-19 pandemic. 16 Table of Contents Our operations are susceptible to the changes in cost and availability of commodities and other products, which could negatively affect our operating results.
Added
There can be no assurance that we will be able to timely remediate material weakness in internal controls (if any) or maintain all of the controls necessary to remain in compliance.
Removed
Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that we would prevent or detect a misstatement of our financial statements or fraud.
Removed
Any failure to maintain an effective system of internal control over financial reporting, including such a failure or inability to provide timely reporting about the effectiveness of their controls of our third-party service providers on whose controls we rely, could limit our ability to report our financial results accurately and timely or to detect and prevent fraud.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed1 unchanged
Biggest changeWe had the follow locations as of the end of fiscal 2022: Location Total Alabama 3 Alaska 1 Arizona 7 Arkansas 2 California 20 Colorado 6 Connecticut 2 Delaware 1 Florida 12 Georgia 8 Hawaii 1 Idaho 1 Illinois 6 Indiana 2 Kansas 4 Kentucky 3 Louisiana 2 Maryland 6 Massachusetts 3 Michigan 3 Minnesota 2 Missouri 4 Nebraska 1 Nevada 1 New Hampshire 1 New Jersey 3 New Mexico 2 New York 13 North Carolina 4 Ohio 8 Oklahoma 4 Oregon 1 Pennsylvania 7 Rhode Island 1 South Carolina 3 South Dakota 1 Tennessee 6 Texas 35 Utah 1 Virginia 4 Washington 3 Wisconsin 3 Puerto Rico 1 Ontario, Canada 2 Total 204 22 Table of Contents
Biggest changeOur leases typically have initial terms ranging from ten to twenty years and most include options to extend the term for one or more 5-year periods. 23 Table of Contents We had the following locations as of the end of fiscal 2023: Location Dave & Buster's Main Event Total Alabama 2 1 3 Alaska 1 — 1 Arizona 5 4 9 Arkansas 2 1 3 California 21 — 21 Colorado 3 4 7 Connecticut 2 — 2 Delaware — 1 1 Florida 9 3 12 Georgia 6 3 9 Hawaii 1 — 1 Idaho 1 — 1 Illinois 4 2 6 Indiana 2 — 2 Iowa 1 — 1 Kansas 3 1 4 Kentucky 2 2 4 Louisiana 2 1 3 Maryland 5 1 6 Massachusetts 3 — 3 Michigan 3 — 3 Minnesota 2 — 2 Missouri 1 3 4 Nebraska 1 — 1 Nevada 2 — 2 New Hampshire 1 — 1 New Jersey 4 — 4 New Mexico 1 1 2 New York 13 — 13 North Carolina 4 1 5 Ohio 6 2 8 Oklahoma 2 2 4 Oregon 1 — 1 Pennsylvania 7 — 7 Rhode Island 1 — 1 South Carolina 3 1 4 South Dakota 1 — 1 Tennessee 4 2 6 Texas 15 22 37 Utah 1 — 1 Virginia 4 — 4 Washington 3 — 3 Wisconsin 3 — 3 Puerto Rico 2 — 2 Ontario, Canada 2 — 2 Total 162 58 220
We also lease the former Main Event corporate office in Plano, Texas, which is no longer being used. The lease for this property expires in April 2029, and the Company is working to sublease the property. As of the end of fiscal 2022, we owned the building or site for four of our 204 operating stores and leased the remainder.
Further, we remain obligated on the lease for the former Main Event corporate office in Plano, Texas, which is no longer being used. The lease for this property expires in April 2029, and the Company is working to sublease the property.
We own land related to five future sites, of which three are expected to open in fiscal 2023. Our leases typically have initial terms ranging from ten to twenty years and most include options to extend the term for one or more 5-year periods.
As of the end of fiscal 2023, we owned the building or site for four of our 220 operating stores and leased the remainder. We own land related to two future sites, which are expected to open in fiscal 2024.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeRefer to Note 12 of Notes to Consolidated Financial Statements for a summary of legal proceedings. ITEM 4. Mine Safety Disclosures Not applicable. PART II
Biggest changeRefer to Note 12 of Notes to Consolidated Financial Statements for additional details. 24 Table of Contents ITEM 4. Mine Safety Disclosures Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+6 added−1 removed0 unchanged
Biggest changeThis does not include persons whose stock is in nominee or “street name” accounts through brokers. On December 6, 2021, our Board of Directors approved a share repurchase program with an authorization limit of $100,000, which expired at the end of fiscal 2022. There were no dividends declared in fiscal 2022 or fiscal 2021.
Biggest changeThis does not include persons whose stock is in nominee or “street name” accounts through brokers. Dividends and Share Repurchases There were no dividends declared or paid in fiscal years 2023, 2022 or 2021. On March 27, 2023, our Board approved a share repurchase program with an authorization limit of $100.0 million.
Future decisions to pay cash dividends or repurchase shares continue to be at the discretion of the Board of Directors and will be dependent on our operating performance, financial condition, capital expenditure requirements and other factors that the Board of Directors considers relevant.
Future decisions to pay cash dividends or repurchase shares continue to be at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements and other factors that the Board considers relevant.
All returns assume a base investment of $100 at the beginning of the five fiscal years (February 4, 2018 — the end of our fiscal year 2017) and the reinvestment of dividends paid, if applicable, since that date.
All returns assume a base investment of $100 at the beginning of the five fiscal years (February 3, 2019 — the end of our fiscal year 2018) and the reinvestment of dividends paid, if applicable, since that date.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Dividend Policy The Company’s common stock trades under the symbol PLAY and is listed on the NASDAQ Global Market (“NASDAQ”). The number of shareholders of record of the Company’s common stock as of March 17, 2023 was 374.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company’s common stock trades under the symbol PLAY and is listed on the NASDAQ Global Market (“NASDAQ”). The number of shareholders of record of the Company’s common stock as of March 22, 2024 was 292.
In lieu of a peer group, we selected the S&P 600 Hotels Restaurants and Leisure index, of which our stock was a member during fiscal 2022. ITEM 6. Reserved 24 Table of Contents
In lieu of a peer group, we selected the S&P 600 Hotels Restaurants and Leisure index, of which our stock was a member during fiscal 2023.
There were no repurchases of our common stock during fiscal 2021. 23 Table of Contents Performance Graph The following performance graph depicts the total returns to shareholders of our stock for the past five fiscal years, relative to the performance of the NASDAQ Composite Index, Standard & Poor’s (“S&P”) 600 Small Cap Index and S&P 600 Hotels Restaurants and Leisure Index.
(4) Represents total cumulative share repurchase authorizations in effect, less cumulative purchases, at the end of each period presented. 25 Table of Contents Performance Graph The following performance graph depicts the total returns to shareholders of our stock for the past five fiscal years, relative to the performance of the NASDAQ Composite Index, Standard & Poor’s (“S&P”) 600 Small Cap Index and S&P 600 Hotels Restaurants and Leisure Index.
The performance shown in the graph is not necessarily indicative of future price performance. 2/4/2018 2/3/2019 2/2/2020 1/31/2021 1/30/2022 1/29/2023 Dave & Buster's Entertainment, Inc. $ 100.00 $ 108.21 $ 94.05 $ 72.70 $ 75.46 $ 88.90 S&P 600 Small Cap $ 100.00 $ 98.95 $ 103.85 $ 125.99 $ 134.80 $ 132.34 S&P 600 Hotels Restaurants & Leisure (1) $ 100.00 $ 109.81 $ 117.42 $ 166.01 $ 122.54 $ 128.09 NASDAQ Composite $ 100.00 $ 100.32 $ 126.38 $ 180.51 $ 190.18 $ 160.50 (1) Due to the limited number of publicly traded companies in our industry, we were unable to identify a suitable peer group for comparison to our market performance.
The performance shown in the graph is not necessarily indicative of future price performance. 2/3/2019 2/2/2020 1/31/2021 1/30/2022 1/29/2023 2/4/2024 Dave & Buster's Entertainment, Inc. $ 100.00 $ 87.71 $ 67.80 $ 70.37 $ 82.91 $ 109.99 S&P 600 Small Cap $ 100.00 $ 103.71 $ 125.81 $ 134.62 $ 132.15 $ 134.80 S&P 600 Hotels Restaurants & Leisure (1) $ 100.00 $ 110.53 $ 161.20 $ 116.43 $ 116.36 $ 117.39 NASDAQ Composite $ 100.00 $ 124.54 $ 177.89 $ 187.42 $ 158.17 $ 212.71 (1) Due to the limited number of publicly traded companies in our industry, we were unable to identify a suitable peer group for comparison to our market performance.
Removed
Issuer Purchases of Equity Securities During fiscal 2022, the Company repurchased 764,988 shares at an average cost per share of $32.70 for a total cost of $25,015.
Added
On April 19, 2023, our Board approved an increase to the authorization limit of $200.0 million for a total of $300.0 million authorized under the program. On September 4, 2023 our Board approved an increase to the authorization limit of $100.0 million for a total of $400.0 million authorized under the program.
Added
During fiscal 2023, the Company repurchased 8.49 million shares at an average of $35.35 per share. The remaining dollar value of shares that may be repurchased under the program is $100.0 million as of February 4, 2024.
Added
Issuer Purchases of Equity Securities Information regarding repurchases of our common stock during the fourth quarter of fiscal 2023: Period (1) Total Number of Shares Repurchased (2) (in thousands of shares) Average Price Paid per Share (2) Total Number of Shares Repurchased as Part of Publicly Announced Plans (2) (3) (in thousands of shares) Approximate Dollar Value of Shares That May Yet Be Repurchased Under the Plans (4) ($ in millions) October 30 to November 26, 2023 — $ — — $ 100.0 November 27 to December 31, 2023 — $ — — $ 100.0 January 1 to February 4, 2024 0.83 $ 48.64 — $ 100.0 (1) The Company uses a "4-5-4" calendar to determine the months in each quarter.
Added
The periods presented represent the 4 week and 5 week periods making up the fourth quarter of fiscal 2023. (2) Represents shares withheld for tax purposes on behalf of our employees in connection with the vesting of time-based and performance restricted stock units. There were no purchases under repurchase program(s) during the fourth quarter of fiscal 2023.
Added
(3) Our Board approved a share repurchase program in March of 2023, with approved increases in April and September of 2023 (see further discussion at Note 10 to our consolidated financial statements).
Added
Under the program, the Company may repurchase shares on the open market, through privately negotiated transactions, and through trading plans designed to comply with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The share repurchase program(s) may be modified, suspended or discontinued at any time.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

64 edited+45 added−38 removed27 unchanged
Biggest changeFiscal Year Ended January 29, 2023 Fiscal Year Ended January 30, 2022 Food and beverage revenues $ 678,333 34.5 % $ 436,637 33.5 % Amusement and other revenues 1,286,094 65.5 867,419 66.5 Total revenues 1,964,427 100.0 1,304,056 100.0 Cost of food and beverage (as a percent of food and beverage revenues) 193,742 28.6 119,123 27.3 Cost of amusement and other (as a percent of amusement and other revenues) 115,122 9.0 85,848 9.9 Total cost of products 308,864 15.7 204,971 15.7 Operating payroll and benefits 470,729 24.0 287,263 22.0 Other store operating expenses 600,568 30.6 402,661 30.9 General and administrative expenses 137,837 7.0 75,501 5.8 Depreciation and amortization expense 169,302 8.6 138,329 10.6 Pre-opening costs 14,619 0.7 8,150 0.6 Total operating costs 1,701,919 86.6 1,116,875 85.6 Operating income 262,508 13.4 187,181 14.4 Interest expense, net 87,363 4.4 53,910 4.2 Loss on debt extinguishment / refinancing 1,479 0.1 5,617 0.4 Income before provision for income taxes 173,666 8.8 127,654 9.8 Provision for income taxes 36,531 1.9 19,014 1.5 Net income $ 137,135 7.0 % $ 108,640 8.3 % Change in comparable store sales 24.8 % 199.1 % Company-owned stores at end of period (1) 204 144 Comparable stores at end of period (1) 113 113 (1) We opened eight new stores and acquired 52 stores as a result of the Main Event Acquisition (see Note 2, Business Combinations , to the Consolidated Financial Statements) during fiscal 2022.
Biggest changeFiscal Year Ended February 4, 2024 January 29, 2023 Entertainment revenues $ 1,434.8 65.1 % $ 1,286.1 65.5 % Food and beverage revenues 770.5 34.9 % 678.3 34.5 % Total revenues 2,205.3 100.0 % 1,964.4 100.0 % Cost of entertainment (1) 134.1 9.3 % 115.1 8.9 % Cost of food and beverage (1) 202.9 26.3 % 193.8 28.6 % Total cost of products 337.0 15.3 % 308.9 15.7 % Operating payroll and benefits 526.0 23.9 % 470.7 24.0 % Other store operating expenses 686.2 31.1 % 600.6 30.6 % General and administrative expenses 122.6 5.6 % 137.8 7.0 % Depreciation and amortization expense 208.5 9.5 % 169.3 8.6 % Pre-opening costs 18.4 0.8 % 14.6 0.7 % Total operating costs 1,898.7 86.1 % 1,701.9 86.6 % Operating income 306.6 13.9 % 262.5 13.4 % Interest expense, net 127.4 5.8 % 87.4 4.5 % Loss on debt refinancing 16.1 0.7 % 1.5 0.1 % Income before provision for income taxes 163.1 7.4 % 173.6 8.8 % Provision for income taxes 36.2 1.6 % 36.5 1.9 % Net income $ 126.9 5.8 % $ 137.1 7.0 % Company-owned stores at end of period 220 204 Comparable stores at end of period 141 113 (1) All revenues and costs are expressed as a percentage of total revenues for the respective period presented, except cost of entertainment, which is expressed as a percentage of entertainment revenues, and cost of food and beverage, which is expressed as a percentage of food and beverage revenues. 30 Table of Contents Reconciliations of Non-GAAP Financial Measures Adjusted EBITDA The following table reconciles Net income to EBITDA and Adjusted EBITDA (in millions of dollars and as a percent of total revenues) for the periods indicated: Fiscal Year Ended February 4, 2024 January 29, 2023 Net income $ 126.9 5.8 % $ 137.1 7.0 % Add back: Interest expense, net 127.4 87.4 Loss on debt refinancing 16.1 1.5 Provision for income tax 36.2 36.5 Depreciation and amortization expense 208.5 169.3 EBITDA 515.1 23.4 % 431.8 22.0 % Add back: Share-based compensation (1) 16.0 20.0 Transaction and integration costs (2) 11.1 25.3 System implementation costs (3) 9.4 — Other costs, net (4) 4.0 3.3 Adjusted EBITDA, a non-GAAP measure $ 555.6 25.2 % $ 480.4 24.5 % (1) Non-cash share-based compensation expense, net of forfeitures, recorded in general and administrative expenses on the consolidated comprehensive income statement.
We assess the potential impairment of our long-lived assets related to each store, including property and equipment and right-of-use (“ROU”) assets, on an annual basis or whenever events or changes in circumstances indicate that the carrying values of these assets may not be recoverable.
We assess the potential impairment of our long-lived assets related to each store, including property and equipment and right-of-use assets, on an annual basis or whenever events or changes in circumstances indicate that the carrying values of these assets may not be recoverable.
We also believe that Store Operating Income Before Depreciation and Amortization is a useful measure in evaluating our operating performance within the entertainment and dining industry because it permits the evaluation of store-level productivity, efficiency, and performance, and we use Store Operating Income Before Depreciation and Amortization as a means of evaluating store financial performance compared with our competitors.
We also believe Store Operating Income Before Depreciation and Amortization is a useful measure in evaluating our operating performance within the entertainment and dining industry because it permits the evaluation of store-level productivity, efficiency, and performance, and we use Store Operating Income Before Depreciation and Amortization as a means of evaluating store financial performance compared with our competitors.
Our amusement offerings provide an extensive assortment of entertainment attractions centered around playing games, bowling, and watching live sports and other televised events. Our brands appeal to a relatively balanced mix of male and female adults, as well as families and teenagers.
Our entertainment offerings provide an extensive assortment of attractions centered around playing games, bowling, and watching live sports and other televised events. Our brands appeal to a relatively balanced mix of male and female adults, as well as families and teenagers.
The third-party valuation firms are supervised by Company personnel who are knowledgeable about valuations and fair value. The Company evaluates the appropriateness of the assumptions and valuation methodologies utilized by the third-party valuation firms. Accounting for impairment of goodwill.
The third-party valuation firms are supervised by Company personnel who are knowledgeable about valuations and fair value. The Company evaluates the appropriateness of the assumptions and valuation methodologies utilized by the third-party valuation firms. Accounting for impairment of goodwill and tradenames.
We expect that economic and environmental conditions and changes in regulatory legislation will continue to exert pressure on both supplier pricing and consumer spending related to entertainment and dining alternatives.
We expect economic and environmental conditions and changes in regulatory legislation will continue to exert pressure on both supplier pricing and consumer spending related to entertainment and dining alternatives.
We consider the following policies to be the most critical in understanding the judgment that is involved in preparing the consolidated financial statements. Accounting for amusement operations . Amusement revenues are primarily recognized upon utilization of game play credits on gaming cards purchased and used by customers to activate video and redemption games.
We consider the following policies to be the most critical in understanding the judgment that is involved in preparing the consolidated financial statements. Accounting for entertainment operations . Entertainment revenues are primarily recognized upon utilization of game play credits on gaming cards purchased and used by customers to activate video and redemption games.
Redemption games allow customers to earn tickets, which may be redeemed for prizes. We have deferred a portion of amusement revenues for the estimated unfulfilled performance obligations based on an estimated rate of future use by customers of unused game play credits and the material right provided to customers to redeem tickets in the future for prizes.
Redemption games allow customers to earn tickets, which may be redeemed for prizes. We have deferred a portion of entertainment revenues for the estimated unfulfilled performance obligations based on an estimated rate of future use by customers of unused game play credits and the material right provided to customers to redeem tickets in the future for prizes.
Store-Level Variability, Quarterly Fluctuations, Seasonality and Inflation We have historically operated stores varying in size and have experienced significant variability among stores in volumes, operating results and net investment costs. Our new stores typically open with sales volumes in excess of their expected long-term run-rate levels, which we refer to as a “honeymoon” effect.
Store-Level Variability, Quarterly Fluctuations, Seasonality and Inflation We operate stores varying in size and have experienced significant variability among stores in volumes, operating results and net investment costs. Our new stores typically open with sales volumes in excess of their expected long-term run-rate levels, which we refer to as a “honeymoon” effect.
General We are a leading owner and operator of high-volume venues in North America that combine dining and entertainment for both adults and families under the “Dave & Buster’s” and “Main Event” brands. The core of our concept is to offer our customers quality dining and various forms of amusement all in one location.
General We are a leading owner and operator of high-volume venues in North America that combine entertainment and dining for both adults and families under the “Dave & Buster’s” and “Main Event” brands. The core of our concept is to offer our customers various forms of entertainment along with quality dining all in one location.
However, because this measure excludes significant items such as general and administrative expenses and pre-opening costs, as well as our interest expense, net, loss on debt extinguishment/refinance and depreciation and amortization expense, which are important in evaluating our consolidated financial performance from period to period, the value of this measure is limited as a measure of our consolidated financial performance.
However, because this measure excludes significant items such as general and administrative expenses and pre-opening costs, as well as our interest expense, net, loss on debt refinancing and depreciation and amortization expense, which are important in evaluating our consolidated financial performance from period to period, the value of this measure is limited as a measure of our consolidated financial performance.
The Credit Facility may be increased through incremental facilities, by an amount equal to the greater of (i) $400,000 and (ii) 0.75 times trailing twelve-month Adjusted EBITDA, as defined, plus additional amounts subject to compliance with applicable leverage ratio and/or interest coverage ratio requirements.
The Credit Facility may be increased through incremental facilities, by an amount equal to the greater of (i) $400.0 million and (ii) 0.75 times trailing twelve-month Adjusted EBITDA, as defined in the Credit Facility, plus additional amounts subject to compliance with applicable leverage ratio and/or interest coverage ratio requirements.
In determining the recoverability of the asset value, an analysis is performed at the individual store level, since this is the lowest level of 35 Table of Contents identifiable cash flows and primarily includes an assessment of historical cash flows and other relevant factors and circumstances, including the maturity of the store, changes in the economic environment, unfavorable changes in legal factors or business climate and future operating plans.
In determining the recoverability of the asset value, an analysis is performed at the individual store level, since this is the lowest level of identifiable cash flows and primarily includes an assessment of historical cash flows and other relevant factors and circumstances, including the maturity of the store, changes in the economic environment, unfavorable changes in legal factors or business climate and future operating plans.
We traditionally expect our new store sales volumes in year two to be 10% to 20% lower than our year one targets, and to grow in line with the rest of our comparable store base thereafter.
We traditionally expect our new store sales volumes in year two to be lower than our year one targets, and to grow in line with the rest of our comparable store base thereafter.
There is no assurance that our cost of products will remain stable or that federal, state, or local minimum wage rates will not increase beyond amounts currently legislated, however, the effects of any supplier price increase or wage rate increases might be partially offset by selective price increases if competitively appropriate. 27 Table of Contents Fiscal 2022 Compared to Fiscal 2021 Results of operations.
There is no assurance that our cost of products will remain stable or that federal, state, or local minimum wage rates will not increase beyond amounts currently legislated, however, the effects of any supplier price increase or wage rate increases might be partially offset by selective price increases if competitively appropriate. 29 Table of Contents Fiscal 2023 Compared to Fiscal 2022 Results of operations.
We believe the presentation of Credit Adjusted 26 Table of Contents EBITDA is appropriate as it provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Credit Facility. Store Operating Income Before Depreciation and Amortization and Store Operating Income Before Depreciation and Amortization Margin.
We believe the presentation of Credit Adjusted EBITDA is appropriate as it provides additional information to investors about the calculation of, and compliance with, certain financial covenants in the Credit Facility. Store Operating Income Before Depreciation and Amortization and Store Operating Income Before Depreciation and Amortization Margin.
After the Company’s third quarter of fiscal 2022, the margin for SOFR revolving loans are subject to a pricing grid based on net total leverage, ranging from 4.25% to 4.75%, and commitment fees are subject to a pricing grid based on net total leverage, ranging from 0.30% to 0.50%.
After the Company’s third quarter of fiscal 2022, the margin for the Revolving Loans became subject to a pricing grid based on net total leverage, ranging from 4.25% to 4.75%, and commitment fees became subject to a pricing grid based on net total leverage, ranging from 0.30% to 0.50%.
The following table sets forth selected data, in thousands of dollars and as a percentage of total revenues (unless otherwise noted) for the periods indicated. All information is derived from the accompanying Consolidated Statements of Comprehensive Income (Loss).
The following table sets forth selected data, in millions of dollars and as a percentage of total revenues (unless otherwise noted) for the periods indicated. All information is derived from the accompanying Consolidated Statements of Comprehensive Income.
Strategy”. 25 Table of Contents Key Measures of Our Performance We monitor and analyze several key performance measures to manage our business and evaluate financial and operating performance, including: Comparable store sales. Comparable store sales are a comparison of sales to the same period of prior years for the comparable store base.
Strategy”. Key Measures of Our Performance We monitor and analyze several key performance measures to manage our business and evaluate financial and operating performance, including: Comparable store sales. Comparable store sales are a comparison of sales to the same period of prior years for the comparable store base.
Our calculations of Adjusted EBITDA adjust for these amounts because they vary from period to period and do not directly relate to the ongoing operations of the currently underlying business of our stores and therefore complicate comparison of the underlying business between periods.
Our calculations of Adjusted EBITDA adjust for these amounts because they do not directly relate to the ongoing operations of the currently underlying business of our stores and therefore complicate comparison of the underlying business between periods.
Other adjustments include (i) amusement deferrals, (ii) the cost of new projects, including store pre-opening costs, (iii) business optimization expenses and other restructuring costs, and (iv) other costs and adjustments as permitted by the Debt Agreements.
Other adjustments include (i) entertainment revenue deferrals, (ii) the cost of new projects, including store pre-opening costs, (iii) business optimization expenses and other restructuring costs, and (iv) other costs and adjustments as permitted by the debt agreements.
We assess the recoverability of goodwill related to our reporting units on an annual basis or more often if circumstances or events indicate impairment may exist. We may elect to perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired.
We assess the recoverability of goodwill and indefinite-lived tradename assets related to our reporting units on an annual basis or more often if circumstances or events indicate impairment may exist. We may elect to perform a qualitative assessment to determine whether it is more likely than not that a reporting unit is impaired.
The previous year tax provision includes higher excess tax benefits associated with share-based compensation and credits associated with the reversal of certain tax valuation allowances. 31 Table of Contents Liquidity and Capital Resources Debt In connection with the closing of the Main Event Acquisition on June 29, 2022, the Company entered into a senior secured credit agreement, which refinanced the $500,000 existing revolving facility, extended the maturity date to June 29, 2027, and added a new term loan facility in the aggregate principal amount of $850,000, with a maturity date of June 29, 2029 (“Credit Facility”).
The previous year tax provision includes higher excess tax benefits associated with share-based compensation. 33 Table of Contents Liquidity and Capital Resources Debt Senior Secured Credit Agreement In connection with the closing of the Main Event Acquisition on June 29, 2022, the Company entered into a senior secured credit agreement, which refinanced the $500.0 million existing revolving facility, extended the maturity date to June 29, 2027, and added a new term loan facility in the aggregate principal amount of $850.0 million, with a maturity date of June 29, 2029 (“Credit Facility”).
This benefit is partially offset by normal inefficiencies in hourly labor and other costs associated with establishing a new store. In year two, operating margins may decline due to the loss of honeymoon sales leverage on fixed costs which is partially offset by improvements in store operating efficiency.
This benefit is partially offset by normal inefficiencies in hourly labor and other costs associated with establishing a new store. In year two, operating margins may decline due to the loss of honeymoon sales leverage on fixed costs which is partially offset by improvements in store operating efficiency. Our operating results have historically fluctuated due to seasonal factors.
The interest rates per annum applicable to Secured Overnight Financing Rate ("SOFR") term loans are based on a defined SOFR rate (with a floor of 0.50%) plus an additional credit spread adjustment of 0.10%, plus a margin of 5.00%.
The original interest rates per annum applicable to SOFR term loans were based on a defined SOFR rate (with a floor of 0.50%) plus an additional credit spread adjustment of 0.10%, plus a margin of 5.00%.
We performed our annual impairment test in the fourth quarter of fiscal 2022 by utilizing the qualitative approach and determined that there were no events or circumstances to indicate that it was more likely than not that the fair value of our reporting units was less than their carrying values. Accounting for impairment of long-lived assets.
We performed our annual impairment test in the fourth quarter of fiscal 2023 by utilizing the qualitative approach and determined that there were no events or circumstances to indicate that it was more likely than not that the fair value of our reporting units, or the Dave & Buster's and Main Event tradenames, was less than their carrying values. 38 Table of Contents Accounting for impairment of long-lived assets.
The proceeds of the term loan, net of an original issue discount of $42,500, were used to pay the consideration for the Acquisition. The revolving credit facility can expire before the stated maturity date if the aggregate outstanding principal amount of the Notes exceeds $100,000 ninety-one days prior to November 1, 2025.
The proceeds of the term loan, net of an original issue discount of $42.5 million, were used to pay the consideration for the Main Event Acquisition. The revolving credit facility can expire before the stated maturity date if the aggregate outstanding principal amount of the Notes, as defined below, exceeds $100.0 million ninety-one days prior to November 1, 2025.
Contractual and Other Commitments The Company had the following obligations as of January 29, 2023: • Long-term debt obligations, including scheduled interest payments (Refer to Note 7 of the Notes to the Consolidated Financial Statements) • Future minimum lease obligations and deferred rent payments under non-cancelable leases (Refer to Note 9 of the Notes to the Consolidated Financial Statements) • Software as a service subscription commitments of approximately $10,000 to be paid in annual installments of approximately $2,000 through fiscal 2028 • Approximately $9,100 of minimum food purchase commitments through the end of fiscal 2023 34 Table of Contents Critical accounting policies and estimates The above discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements.
Contractual and Other Commitments The Company had the following obligations as of February 4, 2024: • Long-term debt obligations, including scheduled interest payments (Refer to Note 7 of the Notes to the Consolidated Financial Statements) • Future minimum lease obligations under non-cancelable leases (Refer to Note 9 of the Notes to the Consolidated Financial Statements) • Software as a service subscription commitments of approximately $8.0 million to be paid in annual installments of approximately $2.0 million through fiscal 2028. • Approximately $9.0 million of minimum food purchase commitments through the end of fiscal 2024. 37 Table of Contents Critical accounting policies and estimates The above discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements.
Adjusted EBITDA and Adjusted EBITDA Margin . We define “Adjusted EBITDA” as net income (loss), plus interest expense, net, loss on debt extinguishment/refinance, provision (benefit) for income taxes, depreciation and amortization expense, loss on asset disposal, impairment of long-lived assets, share-based compensation, currency transaction (gains) losses and other costs.
Adjusted EBITDA and Adjusted EBITDA Margin . We define “Adjusted EBITDA” as net income (loss), plus interest expense, net, loss on debt refinancing, provision for (benefit from) income taxes, depreciation and amortization expense, (gain) loss on property and equipment transactions, impairment of long-lived assets, share-based compensation, currency transaction (gains) losses and other costs.
“Adjusted EBITDA Margin” is defined as Adjusted EBITDA divided by total revenues. Adjusted EBITDA is presented because we believe that it provides useful information to investors and analysts regarding our operating performance.
“Adjusted EBITDA Margin” is defined as Adjusted EBITDA divided by total revenues. Adjusted EBITDA and Adjusted EBITDA Margin are presented because we believe they provide useful information to investors and analysts regarding our operating performance.
Recent accounting pronouncements Refer to Note 1 of Notes to the Consolidated Financial Statements for information regarding new accounting pronouncements.
Recent accounting pronouncements Refer to Note 1 to the Consolidated Financial Statements for discussion of new accounting pronouncements.
Our operating cash flows result primarily from cash received from our customers, offset by cash payments we make for products and services, team member compensation, operations, occupancy, and other operating costs. Cash from operating activities is also subject to changes in working capital.
Operating Activities — Cash flow from operations typically provides us with a significant source of liquidity. Our operating cash flows result primarily from cash received from our customers, offset by cash payments we make for products and services, team member compensation, operations, occupancy, and other operating costs. Cash from operating activities is also subject to changes in working capital.
We believe that Store Operating Income Before Depreciation and Amortization is another useful measure in evaluating our operating performance because it removes the impact of general and administrative expenses, which are not incurred at the store level, and the costs of opening new stores, which are non-recurring at the store level, and thereby enables the comparability of the operating performance of our stores for the periods presented.
Store Operating Income Before Depreciation and Amortization Margin allows us to evaluate operating performance of each store across stores of varying size and volume. 28 Table of Contents We believe Store Operating Income Before Depreciation and Amortization is another useful measure in evaluating our operating performance because it removes the impact of general and administrative expenses, which are not incurred at the store level, and the costs of opening new stores, which are non-recurring at the store level, and thereby enables the comparability of the operating performance of our stores for the periods presented.
The interest rates per annum applicable to SOFR revolving loans are based on the term loan SOFR rate, plus an additional credit spread adjustment of 0.10%, plus an initial margin of 4.75%. Unused commitments under the revolving facility incur initial commitment fees of 0.50%.
The original interest rates per annum applicable to SOFR revolving loans (the “Revolving Loans”) were based on a defined SOFR rate (with a floor of 0.50%) plus an additional credit spread adjustment of 0.10%, plus an initial margin of 4.75%. Unused commitments under the revolving facility incur initial commitment fees of 0.50%.
We historically define the comparable store base to include those stores open for a full 18 months before the beginning of the fiscal year and excluding stores permanently closed during the period.
We historically define the comparable store base to include those stores owned and open for a full 27 Table of Contents 18 months before the beginning of the fiscal year and excluding stores permanently closed during the period. For fiscal 2023, our comparable store base consists of 141 Dave & Buster's branded stores.
We currently plan to open sixteen stores in fiscal 2023. Non-GAAP Financial Measures In addition to the results provided in accordance with generally accepted accounting principles (“GAAP”), we provide non-GAAP measures which present operating results on an adjusted basis.
During fiscal 2023, we opened eleven new Dave & Buster's stores and five Main Event stores. We currently plan to open 15 stores in fiscal 2024. Non-GAAP Financial Measures In addition to the results provided in accordance with generally accepted accounting principles (“GAAP”), we provide non-GAAP measures which present operating results on an adjusted basis.
Provision for income taxes - The effective tax rate for fiscal 2022 was 21.0%, compared to 14.9% in fiscal 2021.
Provision for income taxes - The effective tax rate for fiscal 2023 was 22.2%, compared to 21.0% for fiscal 2022.
The total cost of operating payroll and benefits as a percentage of total revenues was 24.0% in fiscal 2022 compared to 22.0% in fiscal 2021.
Operating payroll and benefits - Total operating payroll and benefits increased to $526.0 million in fiscal 2023 compared to $470.7 million in fiscal 2022. The total cost of operating payroll and benefits as a percentage of total revenues was 23.9% in fiscal 2023 compared to 24.0% in fiscal 2022.
Discussion regarding our financial condition and results of operations for fiscal 2021 compared with fiscal 2020 is included in Item 7 of our fiscal 2021 Annual Report on Form 10-K filed March 29, 2022.
All dollar amounts are presented in millions, unless otherwise noted, except per share amounts. Discussion regarding our financial condition and results of operations for fiscal 2022 compared with fiscal 2021 is included in Item 7 of our fiscal 2022 Annual Report on Form 10-K filed March 28, 2023.
General and administrative expenses, as a percentage of total revenues increased to 7.0% in fiscal 2022 compared to 5.8% in fiscal 2021 due to the reasons noted above. Depreciation and amortization expense - Depreciation and amortization expense increased to $169,302 in fiscal 2022 compared to $138,329 in fiscal 2021.
General and administrative expenses as a percentage of total revenues decreased to 5.6% in fiscal 2023 compared to 7.0% in fiscal 2022 due primarily to the reasons noted above.
In fiscal 2021, the Company spent $92,197 for new store construction and operating improvement initiatives, game refreshment and maintenance capital. In addition to these capital expenditures, the Company completed the Main Event Acquisition in June 2022 for $818,666. See further discussion at Note 2 to the Consolidated Financial Statements.
The Company spent $330.2 million in fiscal 2023 compared to $234.2 million in fiscal 2022 for new store construction and operating improvement initiatives, game refreshment and maintenance capital. In addition to these capital expenditures, the Company completed the Main Event Acquisition in fiscal 2022 for $818.7 million.
Capital additions do not include any reductions for accrual-based tenant improvement allowances or proceeds from sale-leaseback transactions (collectively, “Payments from landlords”).
Capital additions do not include any reductions for accrual-based leasehold improvement incentives (“Payments from landlords”).
Future decisions to pay cash dividends or repurchase shares continue to be at the discretion of the Board of Directors and will be dependent on our operating performance, financial condition, capital expenditure requirements and other factors that the Board of Directors considers relevant. There were no dividends declared in either fiscal 2022 or fiscal 2021.
The remaining dollar value of shares that may be repurchased under the program is $100.0 million as of February 4, 2024. Future decisions to pay cash dividends or repurchase shares continue to be at the discretion of the Board and will be dependent on our operating performance, financial condition, capital expenditure requirements and other factors that the Board considers relevant.
The carrying value of goodwill as of January 29, 2023 was $744,480, of which $272,642 related to the Dave & Buster's operating segment and $471,838 related to the goodwill added as a result of the Main Event Acquisition.
The carrying value of goodwill as of February 4, 2024 was $742.5 million, of which $272.6 million related to the Dave & Buster's operating segment and $469.9 million related to the goodwill added as a result of the Main Event Acquisition.
Other store operating expense as a percentage of total revenues decreased to 30.6% in fiscal 2022 compared to 30.9% in fiscal 2021. This decrease was due primarily to favorable sales leverage. General and administrative expenses - General and administrative expenses increased to $137,837 in fiscal 2022 compared to $75,501 in fiscal 2021.
This increase in expense as a percentage of total revenues was primarily due to increased occupancy and marketing costs. General and administrative expenses - General and administrative expenses decreased to $122.6 million in fiscal 2023 compared to $137.8 million in fiscal 2022.
During fiscal 2020, the Company issued $550,000 aggregate principal amount of 7.625% senior secured notes (the “Notes”). Interest on the Notes is payable in arrears on November 1 and May 1 of each year. The Notes mature on November 1, 2025, unless earlier redeemed, and are subject to the terms and conditions set forth in the related indenture.
Unused commitments under the revolving facility incur initial commitment fees of 0.30% to 0.50%. 7.625% Senior Secured Notes During fiscal 2020, the Company issued $550.0 million aggregate principal amount of 7.625% senior secured notes (the “Notes”). Interest on the Notes is payable in arrears on November 1 and May 1 of each year.
Store Operating Income Before Depreciation and Amortization The following table reconciles Operating income to Store Operating Income Before Depreciation and Amortization for the periods indicated: Fiscal Year Ended January 29, 2023 Fiscal Year Ended January 30, 2022 Operating income $ 262,508 13.4 % $ 187,181 14.4 % General and administrative expenses 137,837 75,501 Depreciation and amortization expense 169,302 138,329 Pre-opening costs 14,619 8,150 Store Operating Income Before Depreciation and Amortization $ 584,266 29.7 % $ 409,161 31.4 % Capital Additions The following table reflects accrual-based capital additions.
Store Operating Income Before Depreciation and Amortization The following table reconciles Operating income to Store Operating Income Before Depreciation and Amortization (in millions of dollars and as a percent of total revenues) for the periods indicated: Fiscal Year Ended February 4, 2024 January 29, 2023 Operating income $ 306.6 13.9 % $ 262.5 13.4 % Add back: General and administrative expenses 122.6 137.8 Depreciation and amortization expense 208.5 169.3 Pre-opening costs 18.4 14.6 Store Operating Income Before Depreciation and Amortization, a non-GAAP measure 656.1 29.8 % 584.2 29.7 % 31 Table of Contents Capital Additions The following table reflects accrual-based capital additions.
The early redemptions of the Notes resulted in a loss on extinguishment of approximately $2,300 related to a proportional amount of unamortized issuance costs. Beginning October 27, 2022, the Company may elect to further redeem the Notes, in whole or in part, at certain specified redemption prices, plus accrued and unpaid interest, at the redemption date.
During fiscal 2021, the Company redeemed a total of $110.0 million outstanding principal amount of the Notes. The Company may elect to further redeem the Notes, in whole or in part, at certain specified redemption prices, plus accrued and unpaid interest, at the redemption date.
Presentation of Operating Results The Company’s fiscal year consists of 52 or 53 weeks ending on the Sunday after the Saturday closest to January 31. Each quarterly period has 13 weeks, except in a 53-week year when the fourth quarter has 14 weeks.
Presentation of Operating Results The Company’s fiscal year consists of 52 or 53 weeks ending on the Sunday after the Saturday closest to January 31. Fiscal year 2023, which ended on February 4, 2024, contained 53 weeks. Fiscal years 2022 and 2021, which ended on January 29, 2023 and January 30, 2022, respectively, each contained 52 weeks.
Credit Adjusted EBITDA We define “Credit Adjusted EBITDA” as Adjusted EBITDA plus certain other items as defined in our Credit Facility (defined at Liquidity and Capital Resources below).
Credit Adjusted EBITDA We define “Credit Adjusted EBITDA” as Adjusted EBITDA plus certain other items as defined in our Credit Facility (see Liquidity and Capital Resources below). Other adjustments include (i) entertainment revenue deferrals, (ii) the cost of new projects, including store pre-opening costs, and (iii) other costs and adjustments as permitted by the debt agreements.
The total cost of products as a percentage of total revenues was consistent at 15.7% for fiscal 2022 and fiscal 2021. Cost of food and beverage products increased to $193,742 compared to $119,123 for fiscal 2021.
The total cost of products as a percentage of total revenues decreased to 15.3% for fiscal 2023 compared to 15.7% for fiscal 2022. Cost of entertainment increased to $134.1 million in fiscal 2023 compared to $115.1 million in fiscal 2022.
Pre-opening costs - Pre-opening costs increased to $14,620 compared to $8,150 in fiscal 2021 primarily due to opening eight new stores in fiscal 2022 compared to five in fiscal 2021.
Pre-opening costs - Pre-opening costs increased to $18.4 million in fiscal 2023 compared to $14.6 million in fiscal 2022 primarily related to sixteen new store openings in fiscal 2023 compared to eight new store openings in fiscal 2022.
See further discussion of Adjusted EBITDA, a non-GAAP measure, at Non-GAAP Financial Measures below as well as a reconciliation to net income at Reconciliations of Non-GAAP Financial Measures below. • The Company ended the year with $672,686 million of liquidity, which included $181,591 in cash and $491,095 available under its $500 million revolving credit facility.
See further discussion of Adjusted EBITDA, a non-GAAP measure, at Non-GAAP Financial Measures below as well as a reconciliation to net income at Reconciliations of Non-GAAP Financial Measures below. • The 53rd week of fiscal 2023 contributed $39.5 million in revenue.
Furthermore, rents in our new stores are typically higher than our comparable store base. Our operating results historically have fluctuated due to seasonal factors. Typically, we have higher revenues associated with the spring and year-end holidays, which will continue to be susceptible to the impact of severe or unseasonably mild weather on customer traffic and sales during that period.
Typically, we have higher revenues associated with the spring and year-end holidays, and sales and customer traffic during these periods are susceptible to the impact of severe, unfavorable or unseasonably mild weather. Our third quarter, which encompasses the back-to-school fall season, has historically had lower revenues as compared to other quarters.
Our comparable store base consisted of 113 stores as of the end of fiscal 2022 and 2021. New store openings. Our ability to expand our business and reach new customers is influenced by the opening of additional stores in both new and existing markets.
Our Main Event branded stores are not included in comparable store sales for fiscal 2023. New store openings. Our ability to reach new customers is influenced by the opening of additional stores in new and existing markets. The success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models.
Because there were no borrowings outstanding under the revolving facility, the Company was not subject to the leverage ratio and/or interest coverage ratio requirements as of January 29, 2023. The Credit Facility is unconditionally guaranteed by Dave & Buster's Holdings, Inc. ("D&B Holdings") and certain of Dave & Buster's, Inc.'s ("D&B Inc’s") existing and future wholly owned material domestic subsidiaries.
A portion of the revolving facility not to exceed $35.0 million is available for the issuance of letters of credit. The Credit Facility is unconditionally guaranteed by Dave & Buster’s Holdings, Inc. (“D&B Holdings”), and certain of Dave & Buster’s, Inc.’s (“D&B Inc.”) existing and future wholly owned material domestic subsidiaries serve as guarantors and/or co-borrowers.
Cost of food and beverage products, as a percentage of food and beverage revenues, increased 130 basis points to 28.6% for fiscal 2022 from 27.3% for fiscal 2021. The increase was due to unfavorable impacts of commodity cost increases, primarily in meat and dairy products, during fiscal 2022, and were partially offset by food price increases.
The cost of entertainment, as a percentage of entertainment revenues, increased to 9.3% for fiscal 2023 from 8.9% in the fiscal 2022. The increase was primarily due to a shift in mix toward more redemption games. Cost of food and beverage products increased to $202.9 million for fiscal 2023 compared to $193.8 million for fiscal 2022.
Other store operating expenses - Other store operating expenses increased to $600,568 in fiscal 2022 compared to $402,661 in fiscal 2021. The increase is primarily due to higher utilities, supplies, maintenance, marketing, and other services as well as $88,532 of costs related to Main Event.
The increase is primarily due to the additional store operating hours related to our Main Event stores, the impact of the 53rd week in fiscal 2023, the impact of newly opened stores, and higher occupancy and marketing costs. Other store operating expense as a percentage of total revenues increased to 31.1% in fiscal 2023 compared to 30.6% in fiscal 2022.
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. During fiscal 2021, the Company redeemed a total of $110,000 outstanding principal amount of the Notes, and paid prepayment premiums of $3,300, plus accrued and unpaid interest to the date of redemptions.
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.
Strategy Our strategy is built on four key components, including offering the latest entertainment to enjoy together, novel food & drink to bring people together, creating an aligned team and integrated experience, and driving customer engagement. For further information about our strategy, refer to “Item 1.
Strategy Our strategy is built on the following key initiatives: • Offer the latest entertainment at competitive prices • Offer novel food & drink to bring people together • Drive customer engagement through strategic marketing and loyalty offerings • Optimize our footprint through opening new stores and remodeling existing locations • Drive incremental sales volume through advertising and hosting special events • Drive an improved guest experience and optimize operations through targeted technology investments For further information about our strategy, refer to “Item 1.
Comparable store revenue increased due primarily to increased special event incidence, increases in food and beverage prices in the third quarter of fiscal 2021 and in fiscal 2022, and a 3.7% increase in comparable store operating weeks.
The decrease in comparable store revenue is due primarily to a reduction in walk-in transaction counts relative to the robust consumer environment of the prior year period, partially offset by increases in food and beverage prices and increases in special event bookings.
Cash Flow Summary The Company ended the year with $672,686 million of liquidity, which included $181,591 in cash and $491,095 available under its $500 million revolving credit facility. Operating Activities — Cash flow from operations typically provides us with a significant source of liquidity.
Cash Flow Summary The Company ended the year with $527.6 million of liquidity, which included $37.3 million in cash and cash equivalents and $490.3 million available under its $500.0 million revolving credit facility. The Company can operate with a working capital deficit because cash from sales is usually received before related liabilities for product supplies, labor and services become due.
The success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models. During fiscal 2022, we opened seven new Dave & Buster's stores, added 52 stores as a result of the Main Event Acquisition on June 29, 2022, and opened one Main Event store since they were acquired.
The increase in revenue is primarily attributable to increased revenue from our Main Event stores, which were acquired on June 29, 2022, incremental revenue from new, noncomparable, Dave & Buster's stores, and incremental revenues as a result of the 53rd week in fiscal 2023, partially offset by a decrease in comparable store sales.
Comparable store amusement and other revenues in fiscal 2022 increased by $152,762, or 21.6%, to $860,714 in fiscal 2022 from $707,952 in fiscal 2021. Cost of products - The total cost of products was $308,864 for fiscal 2022 and $204,971 for fiscal 2021.
Beverage sales at comparable stores increased by $5.0 million, or 2.8%, to $184.2 million in fiscal 2023 from $179.2 million in fiscal 2022. 32 Table of Contents Cost of products - The total cost of products was $337.0 million for fiscal 2023 and $308.9 million for fiscal 2022.
Removed
All dollar amounts are presented in thousands, unless otherwise noted, except share and per share amounts. The following discussion and analysis should be read in conjunction with the financial statements and accompanying notes included in this report.
Added
Financial Highlights • Revenue of $2,205.3 million increased 12.3% compared with $1,964.4 million in fiscal 2022. • Net income totaled $126.9 million, or $2.88 per diluted share, compared with net income of $137.1 million, or $2.79 per diluted share in fiscal 2022. • Adjusted EBITDA increased $75.2 million to $555.6 million, or 25.2% of revenues, compared with Adjusted EBITDA of $480.4, or 24.5% of revenues, in fiscal 2022.
Removed
In the Financial Highlights section below, we discuss certain fiscal 2022 results in comparison to fiscal 2019 as that was the last full fiscal year of results that were not impacted by the COVID-19 pandemic.
Added
Each quarterly period has 13 weeks, except in a 53-week year when the fourth quarter has 14 weeks. All dollar amounts are presented in millions, unless otherwise noted, except share and per share amounts.
Removed
Recent Events On June 29, 2022, the Company completed its acquisition (the “Main Event Acquisition” or “the Acquisition”) including 49 family entertainment centers under the Main Event brand and 3 family entertainment centers under the name The Summit (collectively referred to as “Main Event”), operating in 17 states.
Added
(2) Transaction and integration costs related to the acquisition and integration of Main Event recorded in general and administrative expenses on the consolidated comprehensive income statement.
Removed
Refer to Note 2, Business Combinations , to the Consolidated Financial Statements for further details. Financial Highlights • Revenue of $1,964,427 increased 50.6% compared with $1,304,056 in fiscal 2021 and increased 45.0% compared with fiscal 2019.
Added
(3) System implementation costs represent expenses incurred related to the development and launch of new enterprise resource planning, human capital management and inventory software for our stores and store support teams and staff augmentation for the implementation team at the store support center. These charges are primarily recorded in general and administrative expenses on the consolidated comprehensive income statement.
Removed
Main Event branded stores contributed $288,778 of revenue during fiscal 2022. • Comparable sales at Dave & Buster’s branded stores increased 24.8% compared with fiscal 2021 and 11.6% compared with fiscal 2019. • Net income totaled $137,135, or $2.79 per diluted share, compared with net income of $108,640, or $2.21 per diluted share in fiscal 2021.
Added
(4) Includes one-time, third-party consulting fees that are not part of our ongoing operations, impairment expenses and (gain) loss on property and equipment transactions.
Removed
Net income for fiscal 2022 was impacted by $25,257 of incremental acquisition and integration costs related to the Main Event Acquisition. • Adjusted EBITDA totaled $480,367, or 24.5% of revenues, compared with Adjusted EBITDA of $343,575, or 26.3% of revenues, in fiscal 2021 and $289,251, or 22.8% of revenues, in fiscal 2019.
Added
Fiscal Year Ended February 4, 2024 January 29, 2023 New store and operating initiatives $ 271.5 $ 165.5 Games 20.8 28.7 Maintenance capital 73.1 40.9 Total capital additions $ 365.4 $ 235.1 Payments from landlords $ 20.2 $ 11.6 Results of Operations Revenues - Selected revenue data (in millions except for store operating weeks) and store data for the periods indicated are as follows: Fiscal Year Ended February 4, 2024 January 29, 2023 Change Total revenues $ 2,205.3 $ 1,964.4 $ 240.9 Total store operating weeks (1) 11,241 9,304 1,937 Comparable store revenues $ 1,524.8 $ 1,599.5 $ (74.7) Comparable store operating weeks (1) 7,473 7,332 141 Noncomparable store revenues (2) $ 683.7 $ 376.2 $ 307.5 Noncomparable store operating weeks (1)(2) 3,768 1,972 1,796 Other revenues and deferrals $ (3.2) $ (11.3) $ 8.1 (1) Total store operating weeks, comparable store operating weeks and noncomparable store operating weeks included an additional 220, 141 and 79 operating weeks, respectively, due to the 53rd week included in fiscal 2023.
Removed
Due to the limitations of store operations during the COVID-19 pandemic, the comparable store base for fiscal 2021 and fiscal 2022 is defined as stores open for a full 18 months before the beginning of fiscal 2020 and excludes two stores that the Company elected not to reopen after they were closed in March 2020 due to local operating limitations and one store in Cary, North Carolina that was closed and relocated during the fourth quarter of fiscal 2021.
Added
(2) Noncomparable store revenues and operating weeks includes all of the acquired Main Event stores as they were owned less than 18 months at the beginning of fiscal 2023. See further discussion of the definition of comparable and noncomparable stores at Key Measures of Our Performance above. The table below represents our revenue mix for the fiscal periods indicated.
Removed
Store Operating Income Before Depreciation and Amortization Margin allows us to evaluate operating performance of each store across stores of varying size and volume.
Added
Fiscal Year Ended February 4, 2024 January 29, 2023 Entertainment revenues $ 1,434.8 65.1 % $ 1,286.1 65.5 % Food revenues 517.1 23.4 % 459.9 23.4 % Beverage revenues 253.4 11.5 % 218.4 11.1 % Total revenues $ 2,205.3 100.0 % $ 1,964.4 100.0 % Total revenues increased $240.9 million, or 12.3%, to $2,205.3 million in fiscal 2023 compared to $1,964.4 million in fiscal 2022.

… 67 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed5 unchanged
Biggest changeInterest Rate Risk In the second quarter of fiscal 2022, the Company elected SOFR as the alternative base rate for outstanding borrowings on the Credit Facility, which is based on variable rates. As of January 29, 2023, there was no balance outstanding on our revolving credit facility and $847,875 was outstanding under the term loan facility.
Biggest changeInterest Rate Risk The Company has elected SOFR as the alternative base rate for outstanding borrowings on the Credit Facility, which is based on variable rates. As of February 4, 2024, there was no balance outstanding on our revolving credit facility and $897.8 million was outstanding under the term loan facility.
The impact on our annual results of operations of a hypothetical one-point interest rate change on the outstanding balance of credit facility as of January 29, 2023 would be approximately $8,500. Inflation Severe increases in inflation could affect the United States or global economies and have an adverse impact on our business, financial condition and results of operation.
The impact on our annual results of operations of a hypothetical one-point interest rate change on the outstanding balance of credit facility as of February 4, 2024 would be approximately $9.0 million. Inflation Severe increases in inflation could affect the United States or global economies and have an adverse impact on our business, financial condition and results of operation.

Other PLAY 10-K year-over-year comparisons