Dave & Busters ends 2008 with comfortable debt covenants cushion

By Jennifer Lanning Drey

Portland, Ore., April 14 - Dave & Buster's, Inc. believes it has a comfortable cushion against the leverage ratio and fixed charge covenants included in its credit agreement as a result of improved performance and reduced debt reported in 2008, Brian Jenkins, the company's chief financial officer, said during the its fourth-quarter earnings conference call.

The leverage ratio at the Feb. 1 fiscal year-end was 2.7 times versus a covenant maximum of 4.25 times. The fixed charge ratio was 1.6 versus a minimum allowed of 1.15, Jenkins reported during the Tuesday call.

During 2008, Dave & Busters reduced outstanding debt by $13.6 million to end the year with $229.8 million of outstanding debt. The company's debt consisted of $67.8 million in term debt, $160 million of senior notes and $2 million outstanding on its revolving credit facility.

The company had revolver availability of $50.8 million at Feb. 1 and expects to be cash flow positive in fiscal 2009, Jenkins said.

Regarding potential uses of cash, the CFO said the company is no longer able to repurchase debt, aside from term debt, and will likely keep any excess cash on its balance sheet.

The company posted fourth-quarter EBITDA of $22.3 million, down from $27.1 million in the fourth quarter of 2007.

In the fourth quarter, the company saw its special events business suffer significant declines versus historical fourth quarters, Jenkins said. Dave & Busters' fourth-quarter revenues decreased 7.2% to $134.9 million, compared to $145.4 million in the comparable period of 2007.

For the full-year fiscal 2008, Dave & Busters' revenues were $533.4 million, down from $536.3 million in fiscal 2007.

"As we continue to navigate through a tough economic environment, we're very satisfied with the results," Jenkins said.

The company is pessimistic regarding the sales outlook for 2009, he said.

The company is a Dallas-based operator of upscale restaurant and entertainment complexes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.