Dave Busters Entertainment Inc

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with the accompanying consolidated financial statements and the related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”) on April 2, 2024. Amounts included in the following discussion, except for operating weeks and per share amounts, are rounded in millions.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with the accompanying consolidated financial statements and the related notes in Item 1 and with the audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K as filed with the SEC on April 2, 2024. Amounts included in the following discussion, except for operating weeks and per share amounts, are rounded in millions.

Previous wording

•Net income totaled $41.4 million, or $0.99 per diluted share, compared with net income of $70.1 million, or $1.45 per diluted share in the first quarter of 2023.

Current wording

•Net income totaled $40.3 million, or $0.99 per diluted share, compared with net income of $25.9 million, or $0.60 per diluted share in the second quarter of 2023.

Previous wording

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. The success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models. For the thirteen weeks ended May 5, 2024, we opened four new stores (three Dave & Buster's branded stores and one Main Event branded store).

Current wording

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. The success of our new stores is indicative of our brand appeal and the efficacy of our site selection and operating models. For the twenty-six weeks ended August 6, 2024, we opened six new stores (five Dave & Buster's branded stores and one Main Event branded store).

Previous wording

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. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include Adjusted EBITDA, Adjusted EBITDA Margin, Credit Adjusted EBITDA, Store Operating Income Before Depreciation and Amortization and Store Operating Income Before Depreciation and Amortization Margin (defined below). These non-GAAP measures do not represent and should not be considered as an alternative to net income or cash flows from operations, as determined in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Current wording

In addition to the results provided in accordance with GAAP, we provide non-GAAP measures which present operating results on an adjusted basis. These are supplemental measures of performance that are not required by or presented in accordance with GAAP and include Adjusted EBITDA, Adjusted EBITDA Margin, Credit Adjusted EBITDA, Store Operating Income Before Depreciation and Amortization and Store Operating Income Before Depreciation and Amortization Margin (defined below). These non-GAAP measures do not represent and should not be considered as an alternative to net income or cash flows from operations, as determined in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Previous wording

We define “Store Operating Income Before Depreciation and Amortization” as operating income, plus depreciation and amortization expense, general and administrative expenses and pre-opening costs. “Store Operating Income Before Depreciation and Amortization Margin” is defined as Store Operating Income Before Depreciation and Amortization divided by total revenues. Store Operating Income Before Depreciation and Amortization Margin allows us to evaluate operating performance of each store across stores of varying size and volume.

Current wording

Depreciation and Amortization Margin” is defined as Store Operating Income Before Depreciation and Amortization divided by total revenues. Store Operating Income Before Depreciation and Amortization Margin allows us to evaluate operating performance of each store across stores of varying size and volume.

Previous wording

On May 6, 2024, the first day of the 2nd quarter of fiscal 2024, the Company changed its fiscal year to end on the Tuesday after the Monday closest to January 31 st. As a result of this change, the second quarter and fiscal year 2024 have two additional days added to its normal 13-week quarter and 52-week year. The 2 nd, 3 rd and 4 th quarters of fiscal 2024 will end on August 6, 2024; November 5, 2024; and February 4, 2025, respectively.

Current wording

On May 6, 2024, the first day of the second quarter of fiscal 2024, the Company changed its fiscal year to end on the Tuesday after the Monday closest to January 31 st. The change was made to improve labor and operational efficiencies by ending the Company's periods outside of the busier weekend timeframe. As a result of this change, the second quarter and fiscal year 2024 have two additional days added to its normal 13-week quarter and 52-week year. The third and fourth quarters of fiscal 2024 will end on November 5, 2024 and February 4, 2025, respectively.

Previous wording

The following table reconciles (in millions of dollars and as a percent of total revenues) Net income to Adjusted EBITDA for the periods indicated:

Current wording

The following table reconciles Net income to Adjusted EBITDA for the periods indicated:

Previous wording

(4)The amount for the thirteen weeks ended May 5, 2024 primarily consisted of $1.8 million of one-time, third-party consulting fees, $0.8 million of severance costs and a $0.3 million gain on property and equipment transactions. The amount for the thirteen weeks ended April 30, 2023 primarily consisted of a $0.7 million loss on property and equipment transactions. The third-party consulting fees are not part of our ongoing operations and were incurred to execute two related, discrete, and project-based strategic initiatives aimed at transforming our marketing strategy, which are included in general and administrative expenses on the consolidated statement of comprehensive income. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business.

Current wording

(4)The amount for the second quarter of 2024 primarily consisted of $7.2 million of one-time, third-party consulting fees, $0.1 million of severance costs and a $3.1 million gain on property and equipment transactions. The amount for the second quarter of 2023 primarily consisted of losses on property and equipment transactions. The third-party consulting fees are not part of our ongoing operations and were incurred to execute two related, discrete, and project-based strategic initiatives aimed at transforming our marketing strategy and one discrete, project-based initiative to transform our supply chain operational efficiency. They are included in general and administrative expenses on the consolidated statement of comprehensive income. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business.

Previous wording

The following table reconciles (in millions of dollars and as a percent of total revenues) Operating income to Store Operating Income Before Depreciation and Amortization for the periods indicated:

Current wording

The following table reconciles Operating income to Store Operating Income Before Depreciation and Amortization for the periods indicated:

Previous wording

Selected revenue and store data (in millions except for store operating weeks) for the periods indicated are as follows:

Current wording

Selected revenue and store data for the periods indicated are as follows:

Previous wording

(1)Our noncomparable store count included two stores planned for closure during the 2nd quarter of 2024.

Current wording

(2)Our noncomparable store count includes two stores that were closed during the second quarter of 2024.

Previous wording

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 statement of comprehensive income.

Current wording

The following table sets forth selected data for the periods indicated. All information is derived from the accompanying consolidated statement of comprehensive income.

Previous wording

(2)We reclassified $0.9 to cost of entertainment and $3.1 to cost of food and beverage, respectively, from other store operating expenses for the thirteen weeks ended April 30, 2023 to be consistent with the presentation for the thirteen weeks ended May 5, 2024. During the thirteen weeks ended May 5, 2024, we determined that reclassifying the expenses, which are primarily related to inventory items provided to customers during promotions and events, results in a clearer presentation of the cost of goods sold.

Current wording

(2)We reclassified $1.8 to cost of entertainment and $5.7 to cost of food and beverage, respectively, from other store operating expenses for the 2023 period to be consistent with the presentation for the 2024 period. We determined that reclassifying the expenses, which are primarily related to inventory items provided to customers during promotions and events, results in a clearer presentation of the cost of goods sold.

Previous wording

The decrease in revenue is primarily attributable to a $38.3 million decrease in comparable store sales, partially offset by $28.9 million of incremental sales from noncomparable stores. The decrease in comparable store revenues is due primarily to a reduction in walk-in transaction counts relative to a more robust consumer environment in the prior year period, partially offset by increases in food and beverage prices and increases in special event revenues.

Current wording

The increase in revenue is primarily attributable to $55.8 million of incremental sales from new stores and an increase of $7.8 million in other revenues and deferrals, partially offset by a $57.8 million decrease in comparable store sales. The decrease in comparable store revenues is due primarily to a reduction in demand relative to a more robust consumer environment in the prior year period.

Previous wording

The $38.3 million, or 6.8%, revenue decrease presented in the table above is on a fiscal period basis. Due to the 53rd week in fiscal 2023, the thirteen weeks ended May 5, 2024 ended one week later than the thirteen weeks ended April 30, 2023. Comparable store revenues based on the same calendar period adjusts for this shift in weeks and compares the thirteen weeks from February 5, 2024 through May 5, 2024 to the thirteen weeks from February 6, 2023 through May 7, 2023. Comparable store revenues based on the same calendar period decreased 5.6%.

Current wording

The $57.8 million, or 5.4%, comparable store revenue decrease presented in the table above is on a fiscal period basis. Due to the 53rd week in fiscal 2023, the 2024 period ended approximately one week later than the 2023 period. Additionally, the 2024 period includes two additional days of revenue due to the adjusted calendar discussed in the footnote to the table above. Comparable store revenues based on the same calendar period adjusts for this shift in weeks and compares the period from February 5, 2024 through August 6, 2024 to the period from February 6, 2023 through August 8, 2023. Comparable store revenues based on the same calendar period decreased 6.0%.

Previous wording

The total cost of products was $87.3 million for the thirteen weeks ended May 5, 2024 and $94.3 million for the thirteen weeks ended April 30, 2023. The total cost of products as a percentage of total revenues decreased to 14.8% for the thirteen weeks ended May 5, 2024 compared to 15.8% for the thirteen weeks ended April 30, 2023.

Current wording

The total cost of products was $169.1 million for the 2024 period and $181.4 million for the 2023 period. The total cost of products as a percentage of total revenues decreased to 14.8% for the 2024 period compared to 15.9% for the 2023 period.

Previous wording

Cost of entertainment decreased to $33.2 million in the thirteen weeks ended May 5, 2024 compared to $35.2 million in the thirteen weeks ended April 30, 2023. The cost of entertainment, as a percentage of entertainment revenues, decreased to 8.6% for the thirteen weeks ended May 5, 2024 from 9.0% in the thirteen weeks ended April 30, 2023. The decrease was primarily attributable to price increases.

Current wording

Cost of entertainment decreased to $66.1 million in the 2024 period compared to $70.5 million in the 2023 period. The cost of entertainment, as a percentage of entertainment revenues, decreased to 8.7% for the 2024 period from 9.4% in the 2023 period. The decrease was primarily attributable to price increases.

Previous wording

Cost of food and beverage products decreased to $54.1 million for the thirteen weeks ended May 5, 2024 compared to $59.1 million for the thirteen weeks ended April 30, 2023. Cost of food and beverage products, as a percentage of food and beverage revenues, decreased to 26.7% for the thirteen weeks ended May 5, 2024 from 28.9% for the thirteen weeks ended April 30, 2023. The decrease was primarily attributable to food and beverage menu price increases, continued supply chain and ingredient optimization, and the mix of products sold with our new menu, partially offset by promotional pricing to drive traffic and loyalty engagement.

Current wording

Cost of food and beverage products decreased to $103.0 million for the 2024 period compared to $110.9 million for the 2023 period. Cost of food and beverage products, as a percentage of food and beverage revenues, decreased to 26.8% for the 2024 period from 28.8% for the 2023 period. The decrease was primarily attributable to food and beverage menu price increases, continued supply chain and ingredient optimization, and the mix of products sold with our new menu, partially offset by promotional pricing to drive traffic and loyalty engagement.

Previous wording

Total operating payroll and benefits increased to $141.6 million in the thirteen weeks ended May 5, 2024 compared to $130.6 million in the thirteen weeks ended April 30, 2023. The total cost of operating payroll and benefits as a percentage of total revenues was 24.1% in the thirteen weeks ended May 5, 2024 compared to 21.9% in the thirteen weeks ended April 30, 2023. This increase is primarily due to temporary staffing hours related to menu updates, hourly wage rate and manager salary increases.

Current wording

Total operating payroll and benefits increased to $272.8 million in the 2024 period compared to $257.6 million in the 2023 period. The total cost of operating payroll and benefits as a percentage of total revenues was 23.8% in the 2024 period compared to 22.6% in the 2023 period. This increase is primarily due to additional stores in the current year and employee retention tax credits recognized in the prior year, partially offset by labor management efficiencies.

Previous wording

Other store operating expenses increased to $176.1 million in the thirteen weeks ended May 5, 2024 compared to $166.0 million in the thirteen weeks ended April 30, 2023. The increase is primarily due to higher occupancy costs related to new store openings and marketing costs. Other store operating expense as a percentage of total revenues increased to 29.9% in the thirteen weeks ended May 5, 2024 compared to 27.8% in the thirteen weeks ended April 30, 2023. This increase in expense as a percentage of total revenues was primarily due to the marketing costs noted above.

Current wording

Other store operating expenses increased to $343.7 million in the 2024 period compared to $331.6 million in the 2023 period. The increase is primarily due to higher occupancy costs related to new store openings, marketing costs primarily from the first quarter of the year, maintenance costs, utilities and supplies, partially offset by gains on asset disposals and lease terminations and favorable self-insurance experience rates. Other store operating expense as a percentage of total revenues increased to 30.0% in the 2024 period compared to 29.1% in the 2023 period. This increase as a percentage of total revenues was primarily due to marketing costs, repairs and maintenance costs, utilities and supplies, partially offset by gains on asset sales and lease terminations and favorable self-insurance experience rates.

Previous wording

General and administrative expenses increased to $31.5 million in the thirteen weeks ended May 5, 2024 compared to $31.4 million in the thirteen weeks ended April 30, 2023. The increase in general and administrative expenses was driven primarily by system implementation and consulting costs, partially offset by lower incentive compensation in the current year. General and administrative expenses as a percentage of total revenues increased to 5.4% in the thirteen weeks ended May 5, 2024 compared to 5.3% in the thirteen weeks ended April 30, 2023 due primarily to the reasons noted above.

Current wording

General and administrative expenses decreased to $61.9 million in the 2024 period compared to $63.6 million in the 2023 period. The decrease in general and administrative expenses was driven primarily by lower share-based and incentive compensation in the current year, partially offset by increased consulting and other costs related to discrete, one-time initiatives. General and administrative expenses as a percentage of total revenues decreased to 5.4% in the 2024 period compared to 5.6% in the 2023 period due primarily to the reasons noted above.

Previous wording

Depreciation and amortization expense increased to $62.8 million in the thirteen weeks ended May 5, 2024 compared to $48.9 million in the thirteen weeks ended April 30, 2023, primarily due to new store openings and remodels and the acceleration of depreciation for two planed store closures during the 2 nd quarter of 2024.

Current wording

Depreciation and amortization expense increased to $120.3 million in the 2024 period compared to $98.0 million in the 2023 period, primarily due to new store openings and remodels and the acceleration of depreciation for two store closures.

Previous wording

Pre-opening costs decreased to $3.3 million in the thirteen weeks ended May 5, 2024 compared to $4.7 million in the thirteen weeks ended April 30, 2023 primarily related to the pipeline of new store openings during the thirteen weeks ended May 5, 2024 compared to the thirteen weeks ended April 30, 2023.

Current wording

Pre-opening costs decreased to $7.4 million in the 2024 period compared to $8.7 million in the 2023 period primarily related to the cadence of new store openings during the 2024 period compared to the 2023 period.

Previous wording

Interest expense, net increased to $33.1 million in the thirteen weeks ended May 5, 2024 compared to $30.7 million in the thirteen weeks ended April 30, 2023 due primarily to a decrease in interest income and additional interest expense associated with a failed sale-leaseback transaction, partially offset by a decrease in interest rates on our Credit Facility. See further discussion of the Company's debt activity and failed sale-leaseback transaction at Note 4 and Note 3, respectively, to the consolidated financial statements.

Current wording

Interest expense, net increased to $67.0 million in the 2024 period compared to $63.6 million in the 2023 period due primarily to a decrease in interest income and incremental interest expense associated with sale-leaseback transactions, partially offset by a decrease in interest rates on our Credit Facility. See further discussion of the Company's debt activity and failed sale-leaseback transaction at Note 4 and Note 3, respectively, to the consolidated financial statements.

Previous wording

The effective tax rate for the thirteen weeks ended May 5, 2024 was 21.0%, compared to 22.7% for the thirteen weeks ended April 30, 2023. The current year tax provision includes higher excess tax benefits associated with share-based compensation and lower permanent differences compared to the prior year.

Current wording

The effective tax rate for the 2024 period was 20.7%, compared to 22.4% for the 2023 period. The current year tax provision includes higher excess tax benefits associated with share-based compensation and lower permanent differences compared to the prior year.

Previous wording

The revolving credit facility can expire before the stated maturity date if the aggregate outstanding principal amount of the 7.625% senior notes (described below) exceeds $100.0 ninety-one days prior to November 1, 2025. A portion of the revolving facility not to exceed $35.0 is available for the issuance of letters of credit. As of May 5, 2024, we had letters of credit outstanding of $11.0 and an unused commitment balance of $484.0 under the revolving facility. The Credit Facility may be increased through incremental facilities, by an amount equal to the greater of (i) $400.0 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 is unconditionally guaranteed by D&B Holdings and certain of D&B Inc’s existing and future wholly owned material domestic subsidiaries.

Current wording

The revolving credit facility portion of the Credit Facility can expire before the stated maturity date if the aggregate outstanding principal amount of the 7.625% senior notes (described below) exceeds $100.0 ninety-one days prior to November 1, 2025. A portion of the revolving facility not to exceed $35.0 is available for the issuance of letters of credit. As of August 6, 2024, we had letters of credit outstanding of $11.0 and an unused commitment balance of $481.0 under the revolving facility. The Credit Facility may be increased through incremental facilities, by an amount equal to the greater of (i) $400.0 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 is unconditionally guaranteed by D&B Holdings and certain of D&B Inc’s existing and future wholly owned material domestic subsidiaries.

Previous wording

The term loan facility bears interest at Term SOFR or ABR (each, as defined in the amended Credit Facility) plus (i) in the case of Term SOFR loans, 3.25% per annum and (ii) in the case of ABR loans, 2.25% per annum. The Revolving Loans bear interest subject to a pricing grid based on net total leverage, at Term SOFR plus a spread ranging from 2.50% to 3.00% per annum or ABR plus a spread ranging from 1.50% to 2.00% per annum. Unused commitments under the revolving facility incur initial commitment fees of 0.30% to 0.50%. The interest rate margin applicable to term loans and Revolving Loans outstanding under the Credit Facility would be subject to an additional 0.25% step-down if a rating of B1/B+ or higher from Moody’s and S&P is achieved (which will step back up if such rating is subsequently not maintained)

Current wording

The term loan facility portion of the Credit Facility bears interest at Term SOFR or ABR (each, as defined in the amended Credit Facility) plus (i) in the case of Term SOFR loans, 3.25% per annum and (ii) in the case of ABR loans, 2.25% per annum. The Revolving Loans bear interest subject to a pricing grid based on net total leverage, at Term SOFR plus a spread ranging from 2.50% to 3.00% per annum or ABR plus a spread ranging from 1.50% to 2.00% per annum. Unused commitments under the revolving facility incur initial commitment fees of 0.30% to 0.50%. The interest rate margin applicable to term loans and Revolving Loans outstanding under the Credit Facility would be subject to an additional 0.25% step-down if a rating of B1/B+ or higher from Moody’s and S&P is achieved (which will step back up if such rating is subsequently not maintained).

Previous wording

During fiscal 2020, the Company issued $550.0 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. 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 $110.0 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.

Current wording

The Company issued the Notes during fiscal 2020. 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. 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 $110.0 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.

Previous wording

In October 2023, the Company entered into a sale and master lease agreement (a "sale-leaseback") with an unrelated third party. Under this agreement, the Company sold four of its store properties, including land, buildings and certain improvements, and then leased the assets back through the sale-leaseback transaction. As of May 5, 2024 the current outstanding liability of $0.2 million was recorded in accrued liabilities and the long term outstanding liability of $83.6 million was recorded in other liabilities on the consolidated balance sheet related to the financing liability. See further discussion at Note 3 to the consolidated financial statements.

Current wording

In July 2024, the Company entered into a sale-leaseback with an unrelated third party. Under this agreement, the Company sold two of its store properties, including land, buildings and certain improvements, at a sale price of $44.8 and then leased the assets back through the sale-leaseback transaction.

Previous wording

(1)See discussion of sale-leaseback transaction at Note 3 to the consolidated financial statements.

Current wording

(1)See discussion of sale-leaseback transactions at Note 3 to the consolidated financial statements.

Previous wording

(5)Represents non-cash adjustments to our deferred entertainment revenue liabilities. These costs, which are included in entertainment revenues on the consolidated comprehensive income statement, are considered an "other non-cash charge" as defined in our Credit Facility.

Current wording

(5)Represents non-cash reductions to our deferred entertainment revenue liabilities. These costs, which are included in entertainment revenues on the consolidated comprehensive income statement, are considered an "other non-cash charge reducing net income" as defined in our Credit Facility.

Previous wording

(6)Amount primarily consisted of $5.6 million of one-time, third-party consulting fees, $0.8 million of severance costs, a $2.9 million gain on property and equipment transactions and a $1.7 million impairment charge. The third-party consulting fees are not part of our ongoing operations and were incurred to execute two related, discrete, and project-based strategic initiatives aimed at transforming our marketing strategy, which are included in general and administrative expenses on the consolidated statement of comprehensive income. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business.

Current wording

(6)Amount primarily consists of one-time, third-party consulting fees, severance costs and (gain) loss on property and equipment transactions. The third-party consulting fees are not part of our ongoing operations and were incurred to execute two related, discrete, and project-based strategic initiatives aimed at transforming our marketing strategy, which are included in general and administrative expenses on the consolidated statement of comprehensive income. The transformative nature, narrow scope, and limited duration of these incremental consulting fees are not reflective of the ordinary course expenses incurred to operate our business.

Previous wording

Our Board of Directors has approved a share repurchase program with a total authorization limit of $500.0 million. During the thirteen weeks ended May 5, 2024, the Company repurchased 0.18 million shares at an average of $52.97 per share. Between May 6 and the filing of this quarterly report on Form 10-Q, the Company repurchased 0.79 million additional shares for a total of $40.3 million. In fiscal 2024, through the filing of this quarterly report on Form 10-Q, the Company has repurchased 0.97 million shares for a total of $50.0 million representing 2.4% of the shares issued and outstanding as of February 4, 2024. The remaining dollar value of shares that may be repurchased under the program is $150.0 million as of the filing of this quarterly report on Form 10-Q.

Current wording

Our Board of Directors has approved a share repurchase program with a total authorization limit of $500.0 million. During the 2024 period, the Company repurchased 1.23 million shares for a total of $60.0 million representing 3.1% of the shares issued and outstanding as of February 4, 2024. The remaining dollar value of shares that may be repurchased under the program is $140.0 million as of August 6, 2024.

Previous wording

There were no dividends declared or paid during the thirteen weeks ended May 5, 2024. 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, compliance with debt agreements and other factors that the Board of Directors considers relevant.

Current wording

There were no dividends declared or paid during the 2024 period. 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, compliance with debt agreements and other factors that the Board of Directors considers relevant.

Previous wording

As of May 5, 2024, the Company had cash and cash equivalents of $32.1 million. 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. Our operations do not require significant inventory or receivables and we continually invest in our business through the growth of stores and operating improvement additions, which are reflected as non-current assets and not a part of working capital. Based on our current business plan, we believe our cash and cash equivalents combined with expected cash flows from operations and available borrowings under our revolving credit facility should be sufficient not only for our operating requirements but also to enable us, in the aggregate, to finance our capital allocation strategy, including capital expenditures, through at least the next twelve months.

Current wording

As of August 6, 2024, the Company had cash and cash equivalents of $13.1 million. 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. Our operations do not require significant inventory or receivables and we continually invest in our business through the growth of stores and operating improvement additions, which are reflected as non-current assets and not a part of working capital. Based on our current business plan, we believe our cash and cash equivalents combined with expected cash flows from operations and available borrowings under our revolving credit facility should be sufficient not only for our operating requirements but also to enable us, in the aggregate, to finance our capital allocation strategy, including capital expenditures, through at least the next twelve months.

Previous wording

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. Working capital at any specific point in time is subject to many variables, including seasonality, the timing of cash receipts and payments, and vendor payment terms.

Current wording

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, occupancy, and other operating costs. Cash from operating activities is also subject to changes in working capital. Working capital at any specific point in time is subject to many variables, including seasonality, the timing of cash receipts and payments, and vendor payment terms.

Previous wording

Cash flow from operating activities increased to $108.8 million for the thirteen weeks ended May 5, 2024 compared to $92.4 million for the thirteen weeks ended April 30, 2023. The increase was primarily driven by the timing of changes in working capital, partially offset by a decrease in net income.

Current wording

Cash flow from operating activities increased to $210.6 million for the 2024 period compared to $196.2 million for the 2023 period. The increase was primarily driven by higher revenues and the timing of changes in working capital, partially offset by a decrease in net income.

Previous wording

Investing Activities— Cash flow used in investing increased to $112.8 million for the thirteen weeks ended May 5, 2024 from $50.8 million for the thirteen weeks ended April 30, 2023 primarily due to an increase in capital expenditures related to new store openings and store remodels.

Current wording

Investing Activities— Cash flow used in investing increased to $228.7 million for the 2024 period from $133.4 million for the 2023 period primarily due to an increase in capital expenditures related to store remodels and new store openings.

Previous wording

Financing Activities— Cash flow used in financing was $1.2 million in the thirteen weeks ended May 5, 2024 primarily consisting of share repurchases, partially offset by net debt proceeds and proceeds from stock option exercises. Cash flow used in financing activities of $131.7 million in the thirteen weeks ended April 30, 2023 primarily consisted of share repurchases and net debt repayments.

Current wording

Financing Activities— Cash flow used in financing was $6.1 million in the 2024 period primarily consisting of share repurchases, partially offset by proceeds from sale leaseback transactions, net debt proceeds and proceeds from stock option exercises. Cash flow used in financing activities of $161.8 million in the 2023 period primarily consisted of share repurchases, partially offset by net debt proceeds.