Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q2 2019 Earnings Conference Call - Final Transcript

Sep 10, 2019 • 05:00 pm ET


Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY) Q2 2019 Earnings Conference Call - Final Transcript


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Good afternoon, everyone. Welcome to the Dave & Buster's Entertainment, Incorporated Second Quarter 2019 Earnings Results Call. Today's call is being hosted by Brian Jenkins, Chief Executive Officer. [Operator Instructions]

Now, I would like to turn the conference over to Arvind Bhatia, Senior Director of Investor Relations, for opening remarks.

Arvind Bhatia

Thank you, Lisa and thank you all for joining us. On the call today are Brian Jenkins, Chief Executive Officer; and Scott Bowman, Chief Financial Officer. After comments from Mr. Jenkins and Mr. Bowman, we will be happy to take your questions. This call is being recorded on behalf of Dave & Buster's Entertainment Incorporated and is copyrighted.

Before we begin our discussion of the Company's results, I would like to call your attention to the fact that in our remarks and our responses to your questions, certain items may be discussed which are not based entirely on historical facts. Any such item should be considered forward-looking statements and relating to future events within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Information on the various risk factors and uncertainties has been published in our filings with the SEC, which are available on our website at www.daveandbusters.com under the Investor Relations section.

In addition, our remarks today will include references to EBITDA, adjusted EBITDA and store operating income before depreciation and amortization, which are financial measures that are not defined under generally accepted accounting principles. Investors should review the reconciliation of these non-GAAP measures to the comparable GAAP results contained in our earnings announcement released this afternoon, which is also available on our website.

Now, I will turn the call over to Brian.

Brian A. Jenkins

Thank you, Arvind. Good afternoon, everyone and thank you for joining our call today to discuss second quarter results and outlook for the business. For the quarter, we reported record results increasing revenue by 8%, EPS by 7% and EBITDA by 5%. We have built a high margin business that generates strong free cash flow, which when combined with our strong balance sheet, has enabled us to return more than $200 million in share repurchases and dividends, and reduced our float by almost 13% as at the end of the second quarter.

While we continue to profitably grow our business and return significant capital to shareholders, our comp sales results came in below expectations as last year's VR launched proved difficult to match and our promotions were not as effective as we had anticipated. We also face headwinds from adverse weather and the continued impact of competitive intrusion and cannibalization. Later, Scott will provide more details on these factors and additional highlights on the quarter in his prepared remarks. But first let me share with you what we're seeing in the market and our approach to managing the business to maximize value for shareholders.

There is no question that we are in an attractive and