Jay Tobin - Senior Vice President and General Counsel Steve King - Chief Executive Officer Dolf Berle - President and Chief Operating Officer Brian Jenkins - Chief Financial Officer.

Joshua Long - Piper Jaffray Sharon Zackfia - William Blair Andrew Strelzik - BMO Capital Markets Brian Vaccaro - Raymond James.

Good afternoon, everyone. And welcome to the Dave & Buster’s Incorporated Fourth Quarter 2015 Earnings Conference Call. Today’s call is being hosted by Steve King, Chief Executive Officer. I would like to remind everyone that this call is being recorded and will be available for replay beginning later today.

Now, I would like to turn the conference over to Jay Tobin, Senior Vice President and General Counsel for opening remarks. Sir, please go ahead..

Thank you, Rebecca, and thank you all for joining us. On the call today are Steve King, Chief Executive Officer; and Dolf Berle, President and Chief Operating Officer and Brian Jenkins, Chief Financial Officer. After comments from Mr. King, Mr. Berle and Mr. Jenkins, we will be happy to take your questions.

This call is being recorded on behalf of Dave & Buster's Entertainment 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 maybe discussed which are not based entirely on historical facts.

Any such items 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 adjusted EBITDA, store level EBITDA and pro forma net income, 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’ll turn the call over to Steve..

Thank you, Jay, and good afternoon, everyone. We appreciate your participation in today's quarterly conference call and your continued interest in Dave & Buster's. 2015 was another record setting year for our brand with revenues, adjusted EBITDA, and adjusted EBITDA margins all reaching new milestones.

In fact, the great momentum we experienced for the first three quarters continued through the fourth quarter as well resulting in a performance that was well ahead of our expectations despite tough comparisons and some weather related setbacks.

Our fourth quarter and for that matter the entire year is indicative of what sets Dave & Buster's apart from conventional and casual dining. Our uniquely customizable experience that always provides guests something new across our core platforms, Eat, Drink, Play, and Watch.

Only at Dave & Buster's can guest enjoy the latest and greatest games, the best viewing areas for live sporting events, great food, and one of a kind beverages under one roof at a great entertainment value. Brian will walk you through the financial details and then provide our guidance for 2016.

But first I'd like to discuss fourth quarter highlight and turn the call over to Dolf who will discuss our 2016 plans. On the top line, we grew total revenues by more than 13% inclusive of the 6% increase in comparable store sales, which was at the high end of our implied guidance.

Within our comparable store sales gain, our primary driver was walk-in-sales, which grew at 6.9% while our special events business increased 1.8% which we attributed in part to more competition in some of our markets.

We are also delighted that the flow through from our comparable store sales teams along with the revenue contributions from newer stores enabled us to set a new bar of performance for store level EBITDA and adjusted EBITDA margins during the fourth quarter.

The metrics were also aided by improving food costs as well as better than anticipated strength in the opt-in-rate for our e-ticket initiatives and as a result significantly lower redemption costs. On the marketing front, early in the quarter we focused on sports and football related messaging tied to our D&B sports branding.

Towards the end of the football season, we focused on holiday-themed promotions and introduced the new limited time exclusive SpongeBob game. Our media strategy consisted of national cable advertising focused on D&B sports, and during selective periods, kids related channel such as Nickelodeon and Cartoon Network.

And while targeted messages to younger guests is only a small subsection of our cable advertising buy, we did experience a lift in kid entrees and sales growth during day parts when we normally see more kids.

Comparable store sales were negatively impacted by an estimated 110 basis points because of Winter Storm Jonas, which took place Friday through Saturday in late January and dumped three feet of snow in parts of the Mid Atlantic in northeast.

Over part of that weekend, we closed 10 stores, a couple of which we closed for more than a day but overall we had 18 stores that were significantly impacted.

Despite this challenge, we were able to extend our order performance relative to Knapp Track to 15 consecutive quarters with approximately 600 basis points differential over the effective 15 week period. There were also two calendar shifts of note during the fourth quarter but they essentially offset each other.

The first we were negatively impacted by the Christmas and New Year shifts from – to Friday from Thursday. But this was counterbalanced by Super Bowl which moved into the first quarter of 2016 from the fourth quarter of 2015.

Although the Super Bowl is the quintessential sports viewing event in any calendar year, it's also the single biggest at home party day of the year, and while this day has improved for us with the introduction of D&B sports, it's still slower than average weekend.

On a two-year basis, comparable store sales rose 16.5% which was down sequentially from the 17.5% gain in the third quarter, however if you take into account the weather impact, the two year stock metric would have about the same as what we had in our third quarter.

You may also recall that we rolled out a new menu in October which we discussed in our previous quarterly call, and it has garnered positive feedback for items such Bang-Bang Chicken, Pepperoni Pull-Aparts, and our Glow Kone drinks.

As you probably already know, menu innovation is a hallmark of our brand and our guests always appreciate if there is new entrée appetizer, dessert, or beverage to experience at Dave & Buster's.

Now to speak specifically about the popularity of some of these new menu items that we've introduced over the past couple of years and how it has affected our sales mix. The clear takeaway is the guests respond positively to new culinary and beverage experiences.

This has in turn resulted in comp food and comp beverage sales that are normally seen in Knapp Track. Lastly, as referenced earlier, our electronic ticket conversion resulted in a 250-basis-point improvement in the quarter and cost of sales.

The opt-in rate for guests is over 90% and since completing the conversion early in the third quarter, amusement satisfaction scores remained quite strong. An increase in simulation game probably has also resulted in fewer e-ticket issued and lower redemption costs.

And while there can be now assurance that the trend will continue, it is certainly correlated directly to the rollout. Looking ahead, we are excited about what 2016 holds for our business. Let's now hear it little bit from Dolf on some of our key 2016 initiatives for growing the top line and also increasing our profitability..

Thanks, Steve. Dave & Buster's clearly has great momentum but we are always looking at different ways to become better across the board. This afternoon, I'd like to touch on what we are doing to build sales and further improve operating margins so that we elevate our brand and business to the next level.

More specifically, I am going to discuss how we are going to refine initiatives that have worked so well for us in the past and then layer in new initiative that we believe will drive results in 2016. From a guests-target perspective, our emphasis remains on play-together young adults.

From 21 to 39 years old are our core target given their interest in exploring new amusements as well as new food and beverage offerings. They also have a passion for sports viewing in a social setting.

In addition to this audience, we try to appeal to two secondary targets which are families who visit us on a walk-in basis and corporations having party events.

We will continue our strategy of targeting all of these groups with new news of interests to them .This will involve at least three launches per year of new games, new food, and new drinks that are all marketed on national TV and complemented with a limited time offer to build excitement and a call to action.

With respect amusements, we launched a number of new games this past year with a higher emphasis than ever before on links to other entertainment properties such as movies. Examples of this include the Star Wars Battle Pod and Jurassic Park.

Whenever possible, we are launching new games under a window of exclusivity which means guests can only enjoy that game at D&B for an exclusive number of weeks or months. We've also run games promotion such as playing new games for free for a limited time which provides our guests with more fun and greater value.

This year, we'll build on these practices and have a number of exciting visually impactful games lined up, many of which are links to either movie or video game franchise themes. In 2016, new game titles will include Luigi of Mario Brothers fame;. Ghost Busters, an enhanced version of the Star Wars Battle Pod; and Star Trek.

In each of these cases, we've exclusive windows where these games will only be found at D&B for some length of time. We are also excited to explore the possibility of promotions enabled by our new e-ticket technology which has colored power card swipes. Today at D&B, you will see green swipes on a redemption games and blue swipes on the simulators.

Promotions aimed at these different categories have the potential to feature certain games or play types and we will capitalize on this new capability in 2016. Turning to food and drink.

As you may know we launch new, Fun American New Gourmet and beverage options at the same time as we launched the new games so they will always conveying new news on multiple fronts to our audiences. We know that all of our guests but especially our play together young adults are very attracted to new experiences and new sensations.

Our R&D and marketing teams led by CMO Sean Gleason have done an outstanding in the development and marketing of new products. In fact, 35% of total food sales consist of items that were introduced in the last four years. This includes 58% of burger category sales 4 out of 7 burgers and 31% of appetizer category sales.

In 2015, we were pleased with the success of the Hottie Burger, the Buffalo Wing Burger and Brookie Tower Dessert. These products were all designed with great taste, visual impact for TV and fun in mind. Also in 2015, we were pleased with the expansion items we added to our proven drink platform such as Corona Rita, Mojito and Snow Cone lines.

We also add a new platform such as Glow Kones and Tiki drinks. And just to give you some context for the importance of innovation to our beverage sales mix, 17 of the top 40 cocktails we introduced in the last, were introduced in the last four years since 2012. And this represents over 40% of cocktail sales having been introduced in that timeframe.

In 2016, we will be introducing even more new drinks under this proven platform and we will also pilot and test additional platform such as dry ice vapor drinks. In addition, we will introduce non alcoholic snow cones and/or helix glass line aimed at our family audience. Regarding special events, this category amounted to 11% in overall sales in 2015.

And although this represented a modest growth rate on the heels of an even stronger walk-in business, it still grew 2.8%. In Q4, we upgraded and modernized the party room décor in 20 stores across the country. The timing of this upgrade was such tha we do not have conclusive numbers yet with regard to the exact impact of this investment.

But we know anecdotally that we have reduced the visual disparity between our remodeled spaces and these older showrooms. Another important move made in the fourth quarter was to launch our upgraded website; site navigation for guest was made more intuitive. And the site is much more functional for those on mobile devices.

These improvements serve both the walk-in as well as our special event guests. Turning to watch which what we call the sports viewing part of our business. Of the seven promotional windows we run each year, two are focused on sports. For both March madness and football season we target sports viewers by advertising on sports channels notably ESPN.

We involve sport show hosts and create food and drink items and promotions aimed at the sports viewing audience. For example, we ran all you-can-eat wings during the beginning of football season and on Super Bowl Sunday in order to see Dave & Buster's as replays to watch sports on TV.

We also continue to test technologies and in-store programming to elevate the sports viewing experience. One example is the Tunity technology which allows viewers to listen to audio for any and all of our different TV screens through their personal phone or on a speaker box at their table.

We know that big screens and high definition visuals are important to our guest and are therefore committed to providing great sports viewing in all stores across the country. We will continuously evaluating the quality of our TV packages and have a process where we upgrade these over time.

This applies to legacy stores and is also incorporated into our thinking as we execute our remodels. I'd like to share with you now some thoughts regarding our margin improvement and also quality initiatives. In these we've shown great discipline in controlling cost which has in turn yielded adjusted EBITDA margin growth.

As Steve referenced earlier, we launched our e-ticket innovation and rollout which led to multiple benefit including reduced amusement cogs, higher guest feedback scores and an increase in simulator play. I'd like to also make a point regarding labor cost management.

Along with others in our industry, we face upward pressure with regard to labor costs. We also remain committed to opening new stores according to our plan and the guidance we provided our investors. Combined these factors require us to take a highly disciplined approach to managing labor.

In 2016, we will be recertifying all store management teams on labor management practices to ensure that we utilize our labor forecasting and scheduling tools as optimally as possible. Effective new store openings, comparable store sales growth and improving margins have been and will continue to be our areas of -- key areas of focus.

Our training and incentive compensation programs are designed to optimize performance from all managers in the company and align our efforts in each of these areas. We also continue to keep a close eye on the impact of new initiatives and new product rollout on the guest experience.

In 2015, we were able to drive improvement in guest scores in each of the areas of guest enjoyment, food and beverage quality, games play, sports viewing and staff attentiveness. This year we will be repeating those programs and initiatives that work well before while enhancing them so that they are even more impactful for our guests.

In closing, I'd just like to emphasis that in 2016 we remain committed to ongoing innovation to keep our concept fresh, entertaining and differentiated. And now we will hear from Brian who will walk you through the numbers. .

Well, thank you, Dolf. And good afternoon, everyone. Let me begin by just thanking our D&B team members across the US and in Canada for delivering yet another impressive fiscal year and fourth quarter here at Dave & Buster's.

Once again through their hard work, they enabled us to exceed our revenue, adjusted EBITDA and pro forma net income guidance in a meaningful way. Further more, despite the weather headwind that Steve mentioned, we were also able to deliver comp sales at the top end of our guidance range.

For the quarter, total revenues increased 13.1% to $234.2 million, that’s up from $207.1 million in the prior year. Revenues from our comparable stores increased 6% to $180.3 million, up from $170 million while revenues from our non-comparable stores increased 46.3% to $55.5 million, that’s up from $37.9 million in the prior year.

These strong results were despite weather headwinds, softer but still positive comps in the state of Texas and some cannibalization due to the fact that eight of our new stores in 2015 opened in existing market. In addition, the four store openings in the fourth quarter were later this year relative to the three stores opening in the previous year.

This resulted in fewer operating weeks from our newest locations on a year-over-year basis. Now as a reminder, a store does not enter the comparable base until it has been open at least 18 months as of the beginning of each fiscal year and store is closed as of the end of the reporting period are removed from the comparable base.

We had 59 stores in our comp base during the fourth quarter. With respect to category sales, we continue to experience a total sales mix shift to the more profitable gaming side of our business as total amusement and other sales grew 16.3% while food and beverage collectively increased 9.9%.

During the fourth quarter, amusement and other sales represented 51.7% of total revenues, reflecting 140 basis point increases from the prior year period. Breaking down the 6% increase in comp, amusements rose 8.5%, food sales increased 3.6% while our bar business grew 3.2% for a combined food and beverage increase of 3.5%. Turning to cost.

Total cost of sales was $42.9 million in the fourth quarter and as a percentage of sales improved 160 basis points. Food and beverage costs as a percentage of SMB sales were 20 basis points lower than last year. Our food commodity inflation was flat for the quarter while approximately 2.2% in food pricing drove improve margins versus the prior year.

Please note that the full year commodity inflation was about 3.5% but we look for that to moderate in 2016 and are projecting a flat to 1% increase in commodities.

Cost of amusement and other were 250 basis points lower than last year, reflecting lower paper ticket cost, driven by our e-ticket initiative and a reduction in overall redemption costs that Steve mentioned.

Note that we will begin to lap the e-ticket initiative in the second quarter of this year and will have completely cycled over it by the beginning of our third quarter. Total store operating expenses in the fourth quarter, which includes operating payroll and benefits and other store operating expenses were $114.4 million.

And as a percentage of revenue decreased 160 basis points year-over-year to 48.9% of sales. Similar to the prior quarter, we leveraged our marketing, occupancy and labor related cost on the strong comparable store sales growth.

Our operating payroll and benefit costs improves 120 basis point as we experienced leveraged on both hourly and store management labor, and also had a favorable year on overall medical plan. We experienced wage inflation of approximately 3% during the fourth quarter, primarily due to the higher minimum wage rates in both California and New York.

As we look ahead we are projecting wage inflation of approximately 3% to 4% in 2016 which is higher than the 2.5% experienced in 2015. Store level EBITDA was $76.9 million for the quarter, reflecting growth of 25.7% compared to $61.2 million last year, an improvement of 320 basis points to 32.8% of sales.

This is the highest store level EBITDA margin we have ever generated during the fourth quarter. G&A expenses were $14.6 million; an increase of $1.5 million compared to last year but as a percentage of revenues were 10 basis points lower at 6.2%.

The increase in dollars was primarily driven better than expected performance resulting in higher stock based compensation. Pre-opening cost totaled $3.8 million compared to $1.6 million in the 2014, reflecting the number, the timing and the size of our new store opening throughout fiscal last year.

Recall a larger format store typically incurs about $1.4 million in pre-opening costs while smaller format stores incurred about $1 million, all four of our fourth quarter 2015 openings were large format stores whereas in the previous year we had one large format and two small format stores.

Taken all together, our adjusted EBITDA grew 28.9% to $66.4 million and margins raised roughly 340 basis points to 28.3%, representing another record quarter for us.

Net interest expense for the quarter fell to $2.4million from $5 million in the prior year and that was driven by lower interest rate under our recapitalized debt as well as reduced debt level due to the debt repayment that followed our May 2015 refinancing.

We generated net income of $23 million, that's $0.53 per share on a diluted share base of 43.1 million shares compared to a net income of $14.7 million, or $0.34 per share in the fourth quarter of last year.

Now on a pro forma basis, which we believe provides really the best baseline view of the business, our net income improved to $22.8 million, or $0.53 per share on a diluted basis compared to a net income of $14.1 million in 2014. We have included in our press release, a reconciliation of our GAAP results to these pro forma results.

Now turning to our outlook. As we referenced on our third quarter conference call, we view 2016 as a year of more normalized growth coming off the two best years of growth in the past decade for D&B.

Still we anticipate delivering results that are above our long-term financial target of approximately 10% growth in total revenues and low double digit growth in adjusted EBITDA. With this in mind we are issuing the following annual guidance for 2016 which ends on January 29, 2017. Total revenues are expected between $967 million and $987 million.

We anticipate comparable store sales growth of 2% and 4%, the stronger expected growth in the second half of the year given the tougher comparisons we faced in the first half. Note that we will have 66 stores in our comp base for fiscal 2016.

From a development perspective we are targeting 9 to 10 new store opening and we expect to deliver adjusted EBITDA ranging from $243 million to $251 million.

Our effective tax rate is expected to range from 36.5% to 37.5% and we are projecting net income in the range of $74 million and $80 million with a diluted share count between 43.3 and 43.5 million shares.

And finally we are planning next capital addition after tenant allowances and landlord payments of $120 million to $130 million, driven by our development cost for our new store openings, our remodeling projects as well as new gain and maintenance capital. With that I'll turn the call back over to Steve to make some final remarks. .

Thank you, Brian. I want to touch first on the ongoing remodeling program and then transition into an update on our new store development. In 2015, we completed three comprehensive remodels which include adding D&B sports branding elements along with updates to the exterior or the dining room, the bar and front lobby.

We also enhanced some additional five stores with D&B sports lounges and improve the viewing in several other stores. Over 70% of all locations feature this D&B sports branding.

By making these changes we are continue to take these facilities to next level, really attracting guest become more often and enticing new guests to experience a one of kind dining and entertainment destination. This year we are looking at six comprehensive remodels and enhancing three additional stores with D&B sports lounges.

By the end of 2016, we intend to be substantively complete with our sports related remodeling project. Turning to development in the fourth quarter. We opened four stores, Friendwoods, Texas in the Houston area, Glendale, Arizona in the Phoenix area, Springfield Virginia in the Greater Washington DC Metro and St. Antonio, Texas.

For the full year we opened total of 10 stores including the Buffalo New York re-lo. In 2016, our plans call for as Brian mentioned 9 to 10 stores of which one is open and an additional five are under construction. Four store openings will be in markets where we already have a brand presence.

And if we get the top end of the range six store openings are in new markets for D&B.

In terms of square footage, we will continue to use the entire range between 25,000 and 45,000 square feet, three stores will be 30,000 square feet or less, essentially are small stores, three will be 40,000 square feet or more are very largest store and the remaining three or four stores will be between 32,000 and 36,000 square feet.

During the first quarter, we opened in Rochester, New York; we also plan to open in El Paso, Texas. Both of those are in that mid 30,000 square foot range and Capital Heights, Maryland also in the first quarter precedes Washington DC which will be a large 40,000 square foot unit.

Looking ahead to the second quarter, we are planning to open a small store in Florence, Kentucky in the Cincinnati area. Another small store in Little Rock, Arkansas. Both Kentucky and Arkansas will be the new space for the brand.

We are also under construction in Summerlin, Nevada near Las Vegas which is one of four additional stores that we plan to open in the back half of the year. By yearend, we will have about 90 stores operating across 33 states compared to a long-term goal of over 200 stores in North America.

In other words, despite how far we come we still believe we have a long way to go. Internationally, you were recall that we a development agreement signed for the Middle East and we will expect the first opening maybe sometime in fiscal 2017.

We are also pursuing signing additional agreements for our other parts of the world where we think our D&B experience in brand mantra of Eat, Drink, Play and Watch can flourish. So to conclude, we had a strong finish in the fourth quarter to top off a fantastic year. We have big plans for 2016 and we are excited by what's to come.

Our great brand, led by great team, gives me confidence that Dave & Buster's has a great future in store. We appreciate your continued support and interest in Dave & Buster's. So with that we are now ready to take your questions. Operator, could you please open the lines for questions. .

[Operator Instructions] First we will hear from Joshua Long with Piper Jaffray. .

Great. Thank you. Wanted to see if we might be able to talk about the new game pipeline or platform that you have.

And you mentioned earlier in the call, in terms of being able to tie in with movies, is that something that you will be able to market against and highlight that exclusivity or will it show up in the advertising just in the normal scope of highlighting your amusement offerings?.

We do intend to feature those games on television, and we will be able to talk about exclusivity. In fact, we've gotten that organized for any given game. So yes, that's something we intend to expand upon versus what we even did in 2015..

Great. Thanks. And then in terms of the new food and drink introductions, can you talk about the ability or kind of the impact from brand new items to contrast against the platform extensions, it seems like you have done a good job in terms of bringing out not just one item but bringing out something that you can create platform extensions around.

So just curious if that’s something we should expect to see going forward in this year as well and any sort of commentary you might be able to provide in terms of how those platform extensions have been working for you as a strategy?.

Well, we are extremely pleased with the new platform extensions and we will continue to push forward with those. As I referenced earlier, we have several lined for 2016 and we are confident that they are going to be great additions to the roaster.

They complement what is a strong stable of older and more proven items sort of favorites from over the years.

But we do not intend to slowdown on the new product introduction because we recognize that that creates fun and excitement and very squarely goes against what play-together young adults are looking for which is something new and experiential each time they come to D&B..

That's helpful. Thank you. And then last one for me. In terms of the remodels plan for 2016, that color was helpful.

I was curious if you could remind us what -- you have been spending on each either comprehensive or just an enhancement in terms of CapEx and kind of what’s built into guidance?.

Yes. I'll take that. We guided $120 million to $130 million net capital. There is about $24 million of that number that related to what we would call ROI oriented capital. Of that about $15 million is investments we plan to make on fixed full remodels as well as three D&B sports lounges.

So we are going to do six full remodels, three D&B sports touches and across the platform this year, so it's little bit higher number than we’ve spent actually in 2015. .

Got it. And then going forward, you will be essentially done with your rollout of the D&B Sports, or at least Steve knows that you're going to be touching with that.

And so that aspect -- that piece of the CapEx should come down into something more normalized, just more on the R&M side? Is that a good way to think about it?.

I think so Josh. I think that we will be substantively complete. There may be a store or two that we elect to do going forward, but I don't think it will be at the same sort of volume that we've done -- that we are planning to do this year or even what we did last year.

As I said, just sort of store to -- and then it will roll into on an ongoing maintenance of what we are spending to maintain our stores. .

And just little color, I mentioned $15 million of the $24 million, we do plan to continue to invest in the special events space; Dolf mentioned that in his remarks, we touched about 20 of them in 2015.

So we've earmarked some dollars to go in and improve a number of other stores next year as well as trying to round out the remodel of our win, winner circle to win conversion which we largely completed but we have a number of additional stores we need to do to kind of finish that out.

So those are few other things we are doing to the facilities next year or I guess this year..

In 2016..

Yes.

From William Blair we will hear from Sharon Zackfia..

Hi, good afternoon. A couple of questions. I know you mentioned Texas, and I know everybody has been worried about Texas.

Just curious if you've seen any stabilization in Texas? And if there's any category, in particular, that you'd call out being more weak,, whether it's amusements or beverages or food? And then secondarily, on the color coding of the games, blue and green, can you talk about when we will start to see advertisements where you try to market the simulation versus the non-simulation? And how we should expect that to evolve?.

So I'll take the second one first and let Brian do a few notes here on the former question and let him take that one. But in terms of the color coding of the games, we view that as an opportunity.

There are a couple of technical things that we needed to get done in order to facilitate kind of the rapid deployment and changing back and forth of those colors. We've finished that technology enhancement that we needed to do and stand ready to start experimenting with a couple of different ways to utilize that.

But I would expect to see testing on that certainly here towards the end of the first quarter or into the second quarter of 2016..

Yes. Just on the Texas question. We don't typically make a practice to talking about states and geographies that much there has been so many questions around the state of Texas and impact of oil and gas in that part of the country. And we felt like we wanted to talk about it little bit here today and reality was in our fourth quarter we were positive.

It was not 6% positive, it was a trail the overall change but it was still nose let's say. I would not say that trend has improved. Part of the situation in Texas for us that make a little hard to read whether its oil or something else. We opened three stores in our 2015 class in three of our markets in the state of Texas. One in St.

Antonio, one in Houston and one in Dallas. So we know we are impacting our sales a little bit as well as oil and gas but I would not say we've seen it improved. .

Next we will hear from Andrew Strelzik with BMO Capital Markets..

Hey, good afternoon, everyone. I am just wondering as I am looking at this year-over-year increases in the store level EBITDA margins.

Can you give us a sense for what at the top end of that distribution those store level EBITDA margins looks like and if you continue to see kind of the same levels of improvement there as kind of the consolidated levels?.

I think we are seeing improvement across the portfolio. We've never really talked about by ductile or whatever we are getting from our margin improvement standpoint. But we do continue to see improvement across the spectrum. One of the things that drive that in 2015 was the comp store sales performance.

And I think we said before we had broad participation in terms of comp store sales performance. And now is one of the key drivers in terms of metric in addition to the e-ticket and some of those sorts of things.

But that comp was really very broad in terms of its overall participation both from volume of stores as well geography of stores and days of the week and all that sort of stuff. So we see a lot of -- we see broad participation once again. .

And then on the real estate side you know there is lot of commentary within the industry tightening or loosening or whatever.

Wondering what you guys are seeing obviously going after a different box size if you are seeing kind of loosening or more sites available or less sites available kind of relative to 12 months ago?.

There is a lot of sites available right now especially for our size.

And I think that they changes, there are things like kind of sears coming online and saying they are going dispose a 100 stores and while we may not want to go every sears, there is probably of handful sears that would make chance for us to take a portion of and subdivide, you know they are huge spaces so we won't be able to take the whole thing but us in conjunction with few other retailers or entertainment facilities might be willing to take down some of that, some Macy's have come online, sports authority declared bankruptcy, so there is a lot of real estate coming online in our size.

The only other thing I will say malls are not dead. Actually our mall stores are performing well. And we get that question periodically but the mall stores are performing well.

So I think that mall developers are pivoting towards a bit more entertainment as they are going after trying to replace these folks and so we are an attractive alternative for them. .

And then my last question it sounds like in over the last 18 months or so you continue to evolve the marketing strategy in terms of number of spots and where you are focusing some of that.

From marketing perspective should we expect any change in the levels of marketing or is it really just a continued evolution of the strategy and the kind of different points within the box that you are highlighting in terms of the strategy there?.

I think we are going to continue to focus on new, new. I mean I think those are the -- when we say new, new we are saying we are going to try to introduce new foods, new beverage and new games at the same time and feature those on television.

We are adding some additional weight during the course of 2016, it's probably week or two, we haven't locked in for sure and exactly what we are going to do but it's going to be towards the second half of the year for sure. It will be Q3, Q4.

Last year we added a one week of television, what I am saying last year 2015, we added one week of television during the football timeframe.

And then the only other thing I'd say we are always tweaking what we are spending against and we've been allocating a bit more towards family networks, Nickelodeon and Cartoon Network and some of those sort of things. And we've got good success with that.

And it's relatively inexpensive from marketing standpoint, from a point per cost per point endpoint so we continue to do it in a very targeted way, targeted time of the year.

We are looking to do it like right now over spring break timeframe, where out there with a kid message but three or four weeks from now we will be off that and we won't be on like kids much, we will come back with it over the summer when you see a lot of kid out of school. .

[Operator Instructions] And from Raymond James we will hear from Brian Vaccaro. .

Just wanted to circle back on the fourth-quarter comp trends if I could.

Can you give some color on, say, the strongest day parts or days of the week? And are you still seeing outsize growth during the peak sports viewing periods? The Saturday/Sunday period, you mentioned that promotion?.

Yes. Our strongest day parts are really lunch and afternoon for us and Sunday was a very strong day probably one of the highest percentage days we had for the quarter. And we are actually a little weaker in late night in the fourth quarter and so it stands to reason.

I mean we were focused heavily on sports in first part of the quarter and shifted to some of the holiday time so the lunch afternoon day parts were places where we have some strength. .

Yes, all right, that's helpful. Shifting gears to the amusement side, I wanted to just ask about the level of promotion on the amusement side, and how you were executing that strategy with your email club users, specifically.

Can you speak to the success you've had with things like the winner's circle, and other promotions? And how you're using that, or how you intend to use that as you move through 2016?.

We continue to reach out to that loyalty database on a fairly frequent basis, multiple times a month with various offers. As they use them we can do some customization around that but in general we are hitting them fairly consistency in terms of the timing that we are doing across a given month or given quarter. I mean I think we said this before.

I mean we tend to lead with amusements promotional activity.

We think that's a kind of lowest cost to sales to us, it's sort of least expensive way for us to give a value to the consumer and so they tend to respond well to things like $10 a free game, $5 for 10 -- if you buy $10 or $20 in some cases a free game play, if you buy $20 and so those are the types of promotion that a; have relatively limited cost to us and they generate business are very lucrative.

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Yes, understood. Just one more quick one if I could. Brian, sorry if I missed this but the pricing by segment, I think you said 2.2% on food.

But what was the pricing in the beverage segment for the quarter? And then if you have a blended, that would be great?.

Yes. You got it right on 2.2% for food, 1.7% for beverage, 0% from amusement on a weighted average of one percentage point which is the same for the year-to-date. So quarter and year-to-date were both one percentage point of effective price. .

Okay.

And how should we think about pricing in 2016 in light of the labor cost trends you mentioned on the call?.

I think what we said is we are probably going to -- this year in food we were up 2.6% from our full year basis that we are going to be probably be something in that range 2.5% to little more.

But it will be likely be focused on some of these markets by California, New York where we see some of the labor pressure is where we will top spin the pricing up little bit just try cover some of the pressure we see on the wayside. .

Yes, understood, okay.

And then is there an extra operating week in 2017?.

We are in 2016, it ends of January 29, now forgotten the date for 2017, it is 52 week year. .

Are you asking about the following year?.

I'm asking about 2017, because we all have to publish 2017 estimates. Just wanted to make sure we're all on the same page on an extra week or not. It looks like there might be, but --.

2017, yes I am getting the nod that is a 53 week year. .

And this time I'd like to turn the conference back over to Mr. King for any additional or concluding remarks. .

Well, I just want to thank you again for your continued interest in Dave & Buster's. We look forward to speaking with you again in early June where we will be announcing our first quarter results. Thanks everybody. .

Ladies and gentlemen, that does conclude today's presentation. We do thank everyone for your participation..