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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~OCTOBER~~MAY 285, ~~2012~~2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File No. 001-15007

Dave & Buster’s, Inc.

(Exact name of registrant as specified in its charter)

MISSOURI

43-1532756

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

2481 Mañana Drive

Dallas, Texas 75220

(Address of principal executive offices)

(Zip Code)

(214) 357-9588

(Registrant’s telephone number, including area code)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by checkmark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “small reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares of the Issuer’s common stock, $0.01 par value, outstanding as of ~~December~~June 714, ~~2012~~2013, was 100 shares.

DAVE & BUSTER’S, INC.

FORM 10-Q FOR PERIOD ENDED ~~OCTOBER~~MAY 285, ~~2012~~2013

TABLE OF CONTENTS

		PAGE
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS		3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		1312
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		2319
ITEM 4.	CONTROLS AND PROCEDURES		2319
PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS		2520
ITEM 1A.	RISK FACTORS		2520
ITEM 6.	EXHIBITS		2520
	SIGNATURES		2621

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

DAVE & BUSTER’S, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

	October 28,		January 29,
	May 5,2013		February 3,2013
	2012		2012
	(unaudited)		(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	4964,~~693~~108	$	3336,~~684~~117
Inventories		14,~~948~~665		14,~~840~~849
Prepaid expenses		89,~~877~~326		9,~~595~~371
Deferred income taxes		1514,~~736~~449		1318,~~382~~209
Other current assets		2,828		3,493
Income taxes receivable		1,120		1,120
Total current assets		92,082		74,994
Other current assets		3,542		12,152
Property and equipment (net of $126,061 and $83,422 accumulated depreciation as of October 28, 2012 and January 29, 2012, respectively)		326,820		323,342
Total current assets		107,210		91,818
Property and equipment (net of $155,112 and $139,457 accumulated depreciation as of May 5, 2013 and February 3, 2013, respectively)		329,379		337,239
Tradenames		79,000		79,000
Goodwill		272,~~278~~294		272,~~286~~278
Other assets and deferred charges		2523,~~000~~882		2924,~~040~~218
Total assets	$	~~795~~811,~~180~~765	$	~~778~~804,~~662~~553
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Current installments of long-term debt (Note 3)	$	1,~~500~~267	$	1,500
Accounts payable		2617,~~361~~816		23,~~974~~878
Accrued liabilities (Note 2)		6970,~~071~~855		5967,~~716~~124
Income taxes payable		~~274~~3,808		~~903~~192
Deferred income taxes		~~866~~489		~~550~~189
Total current liabilities		9894,~~072~~235		8692,~~643~~883
Deferred income taxes		2321,~~026~~813		3024,~~308~~887
Deferred occupancy costs		6268,~~304~~633		6369,~~101~~544
Other liabilities		1412,~~718~~579		1112,~~578~~684
Long-term debt, less current installments, net of unamortized discount (Note 3)		~~344~~343,~~263~~266		~~345~~343,~~167~~579
Commitments and contingencies (Note 5)
Stockholder’s equity:
Common stock, $0.01 par value, 1,000 authorized; 100 issued and outstanding as of October 28, 2012 and January 29, 2012		—		—
Common stock, $0.01 par value, 1,000 authorized; 100 issued and outstanding as of May 5, 2013 and February 3, 2013		—		—
Preferred stock, 10,000,000 authorized; none issued		—		—
Paid-in capital		~~246~~247,~~696~~206		~~245~~246,~~830~~929
Accumulated other comprehensive income		~~253~~209		~~237~~252
Retained earnings (accumulated deficit)		5,848		(4,202	)
Retained earnings		23,824		13,795
Total stockholder’s equity		~~252~~271,~~797~~239		~~241~~260,~~865~~976
Total liabilities and stockholder’s equity	$	~~795~~811,~~180~~765	$	~~778~~804,~~662~~553

See accompanying notes to consolidated financial statements.

DAVE & BUSTER’S, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(in thousands, unaudited)

	Thirteen Weeks			Thirteen Weeks
	Thirteen WeeksEndedMay 5, 2013			Thirteen WeeksEndedApril 29, 2012
	Ended			Ended
Food and beverage revenues	$	80,911		$	79,144
	October 28, 2012			October 30, 2011
Amusement and other revenues		87,244			84,330
Food and beverage revenues	$	63,159		$	59,567
Total revenues		168,155			163,474
Amusement and other revenues		67,907			60,755
Cost of food and beverage		20,151			19,207
Total revenues		131,066			120,322
Cost of amusement and other		12,213			11,747
Cost of food and beverage		15,716			14,649
Total cost of products		32,364			30,954
Cost of amusement and other		10,505			9,432
Operating payroll and benefits		37,439			36,610
Total cost of products		26,221			24,081
Other store operating expenses		48,181			48,881
Operating payroll and benefits		33,735			30,552
General and administrative expenses		9,724			9,017
Other store operating expenses		44,595			42,719
Depreciation and amortization expense		16,910			14,795
General and administrative expenses		12,242			8,279
Pre-opening costs		872			150
Depreciation and amortization expense		15,746			13,578
Total operating costs		145,490			140,407
Pre-opening costs		1,089			587
Operating income		22,665			23,067
Total operating costs		133,628			119,796
Interest expense, net		8,142			8,342
Operating income (loss)		(2,562	)		526
Income before provision for income taxes		14,523			14,725
Interest expense, net		7,979			8,097
Provision for income taxes		4,494			3,741
Loss before income tax benefit		(10,541	)		(7,571	)
Net income		10,029			10,984
Income tax benefit		(8,920	)		(3,124	)
Unrealized foreign currency translation gain (loss), net of taxes		(43	)		90
Net loss		(1,621	)		(4,447	)
Total comprehensive income	$	9,986		$	11,074
Unrealized foreign currency translation gain (loss)		20			(146	)
Total comprehensive loss	$	(1,601	)	$	(4,593	)

See accompanying notes to consolidated financial statements.

DAVE & BUSTER’S, INC.

CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE~~CASH ~~INCOME~~FLOWS ~~(LOSS)~~

(in thousands, unaudited)

	Thirty-Nine Weeks			Thirty-Nine Weeks
	Thirteen Weeks			Thirteen Weeks
	Ended			Ended
	October 28, 2012			October 30, 2011
	May 5, 2013			April 29, 2012
Food and beverage revenues	$	213,734		$	197,706
Cash flows from operating activities:
Amusement and other revenues		228,747			199,883
Net income	$	10,029		$	10,984
Total revenues		442,481			397,589
Adjustments to reconcile net income to net cash provided by operating activities:
Cost of food and beverage		52,446			48,041
Depreciation and amortization expense		16,910			14,795
Cost of amusement and other		34,117			30,084
Debt costs and discount amortization		576			751
Total cost of products		86,563			78,125
Deferred income tax expense		868			1,107
Operating payroll and benefits		105,704			95,830
Loss on disposal of fixed assets		504			335
Other store operating expenses		143,873			133,054
Share-based compensation charges		277			292
General and administrative expenses		30,099			25,704
Other, net		311			66
Depreciation and amortization expense		45,573			39,873
Changes in assets and liabilities:
Pre-opening costs		1,798			2,758
Inventories		184			471
Total operating costs		413,610			375,344
Prepaid expenses		81			402
Operating income		28,871			22,245
Other current assets		8,451			(539	)
Interest expense, net		24,372			24,553
Other assets and deferred charges		(287	)		(558	)
Income (loss) before benefit for income taxes		4,499			(2,308	)
Accounts payable		(6,062	)		(5,465	)
Income tax benefit		(5,551	)		(1,461	)
Accrued liabilities		3,696			4,571
Net income (loss)		10,050			(847	)
Income taxes payable		3,616			1,118
Unrealized foreign currency translation gain		16			73
Deferred occupancy costs		(876	)		513
Total comprehensive income (loss)	$	10,066		$	(774	)
Other liabilities		(105	)		1,749
Net cash provided by operating activities		38,173			30,592
Cash flows from investing activities:
Capital expenditures		(9,679	)		(5,095	)
Proceeds from sales of property and equipment		105			54
Net cash used in investing activities		(9,574	)		(5,041	)
Cash flows from financing activities:
Repayments of senior secured credit facility		(608	)		(375	)
Net cash used in financing activities		(608	)		(375	)
Increase in cash and cash equivalents		27,991			25,176
Beginning cash and cash equivalents		36,117			33,684
Ending cash and cash equivalents	$	64,108		$	58,860
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net	$	10		$	23
Cash paid for interest and related debt fees, net of amounts capitalized	$	2,095		$	2,194

See accompanying notes to consolidated financial statements.

DAVE & BUSTER’S, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

	Thirty-Nine Weeks			Thirty-Nine Weeks
	Ended			Ended
	October 28, 2012			October 30, 2011
Cash flows from operating activities:
Net income (loss)	$	10,050		$	(847	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		45,573			39,873
Debt costs and discount amortization		1,908			1,861
Deferred income tax benefit		(9,320	)		(1,890	)
Loss on disposal of fixed assets		1,952			1,018
Share-based compensation charges		866			853
Business interruption reimbursement		—			(1,629	)
Other, net		133			1,020
Changes in assets and liabilities:
Inventories		(108	)		(402	)
Prepaid expenses		929			540
Income taxes receivable		—			5,861
Other current assets		843			1,080
Other assets and deferred charges		833			(1,696	)
Accounts payable		2,387			5,499
Accrued liabilities		9,192			3,318
Income taxes payable		(629	)		(149	)
Deferred occupancy costs		(634	)		1,930
Other liabilities		3,140			(341	)
Deferred insurance proceeds		—			883
Net cash provided by operating activities		67,115			56,782
Cash flows from investing activities:
Capital expenditures		(50,246	)		(50,183	)
Insurance proceeds on Nashville property		—			798
Repurchase of parent shares from former executive		—			(1,000	)
Proceeds from sales of property and equipment		265			29
Net cash used in investing activities		(49,981	)		(50,356	)
Cash flows from financing activities:
Repayments of senior secured credit facility		(1,125	)		(1,125	)
Debt issuance costs		—			(968	)
Net cash used in financing activities		(1,125	)		(2,093	)
Increase in cash and cash equivalents		16,009			4,333
Beginning cash and cash equivalents		33,684			34,407
Ending cash and cash equivalents	$	49,693		$	38,740
Supplemental disclosures of cash flow information:
Cash paid (refunds received) for income taxes, net	$	1,830		$	(5,540	)
Cash paid for interest and related debt fees, net of amounts capitalized	$	17,223		$	17,616

See accompanying notes to consolidated financial statements.

Dave & Buster’s, Inc.

Notes to Consolidated Financial Statements

(in thousands, except share and per share amounts)

Note 1: Description of Business and Basis of Presentation

Description of Business — Dave & Buster’s, Inc., a Missouri corporation, owns, operates and licenses high-volume venues that combine dining and entertainment in North America for both adults and families. Our venues operate under the names “Dave & Buster’s” and “Dave & Buster’s Grand Sports Café.” As of ~~October~~May 285, ~~2012~~2013, there were 6061 company-owned locations in the United States and Canada and one franchise location in Canada. On May 31, 2013, our lone franchise store ceased operation as Dave & Buster’s. This change and the associated termination of the related franchise and development agreements are not expected to have a material impact on our financial position or results of operations. Dave & Buster’s, Inc. operates its business as one operating and one reportable segment. ~~Our~~We operate on a 52 or 53 week fiscal year that ends on the Sunday after the Saturday closest to January 31. ~~Our~~Each ~~2012~~quarterly period has 13 weeks, except for a 53 week year when the fourth quarter has 14 weeks. Our fiscal year ending February 2, 2014 will ~~end~~consist onof 52 weeks. Our fiscal year ended February 3, 2013 ~~and~~consisted ~~will consist~~ of ~~fifty-three~~53 weeks.

Dave & Buster’s, Inc. is a wholly owned subsidiary of Dave & Buster’s Holdings, Inc. (“D&B Holdings”), a ~~Missouri~~Delaware corporation. D&B Holdings is a wholly owned subsidiary of Dave & Buster’s Entertainment, Inc. (formerly known as Dave & Buster’s Parent, Inc.) (“D&B Entertainment”), a Delaware corporation owned by Oak Hill Capital Partners III, L.P., Oak Hill Capital Management Partners III, L.P. (collectively “Oak Hill”) and certain members of the Board of Directors and management of Dave & Buster’s, Inc.

D&B Entertainment owns no other significant assets or operations other than the ownership of all the common stock of D&B Holdings. D&B Holdings owns no other significant assets or operations other than the ownership of all the common stock of Dave & Buster’s, Inc. References to “Dave & Buster’s,” the “Company,” “we,” “us,” and “our” are references to Dave & Buster’s, Inc. and its subsidiaries.

~~The~~Related ~~ownership~~party oftransactions ~~Dave &~~— ~~Buster’s~~From bytime ~~D&B~~to time, ~~Entertainment~~we ~~commenced~~temporarily onadvance ~~June 1,~~funds ~~2010,~~to ~~when~~D&B itEntertainment ~~acquired~~for ~~all~~payment of ~~the~~expenditures ~~outstanding~~for ~~common~~its ~~stock~~corporate ofpurposes. Additionally, we owe D&B ~~Holdings~~Entertainment ~~from~~for ~~Wellspring~~certain ~~Capital Partners~~tax-related ~~III, L~~matters.P. ~~and~~We ~~HBK~~had ~~Main~~a ~~Street~~net ~~Investors~~payable ~~L.P.~~of ~~The June 1~~$5,467 ~~2010~~and $3,349 ~~acquisition~~as ~~transactions resulted in a change in ownership~~ of May 5, ~~100%~~2013 ofand ~~our~~February 3, ~~outstanding~~2013, ~~common stock~~respectively.

~~Related~~Interim ~~party~~financial ~~transactions~~statements — ~~From~~The ~~time~~accompanying unaudited tofinancial ~~time,~~statements wehave ~~temporarily~~been ~~advance~~prepared ~~funds~~in toaccordance ~~D&B~~with ~~Entertainment~~generally accepted accounting principles (“GAAP”) in the United States for interim financial information as prescribed by the Securities and Exchange Commission ~~payment~~(“SEC”). Accordingly, they do not include all of ~~expenditures~~the information and footnotes required by GAAP for ~~its~~complete ~~corporate~~financial ~~purposes~~statements. ~~Additionally~~In the opinion of management, wethese ~~owe~~financial ~~D&B~~statements ~~Entertainment~~contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for ~~certain~~the ~~tax-related~~periods ~~matters~~indicated. The ~~net~~preparation ~~D&B~~of ~~Entertainment~~financial ~~receivable~~statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Operating results for the thirteen weeks ended May 5, 2013 are not necessarily indicative of results that may be expected for any other interim period or for the year ending February 2, 2014. Our quarterly financial data should be read in conjunction with our Annual Audited Consolidated Financial Statements for the year ended February 3, 2013 (~~payable~~including the notes thereto) ~~balances~~as contained ~~consist~~in ofour Annual Report on Form 10-K filed with the ~~following:~~SEC.

	October 28, 2012			January 29, 2012
Advances (prepaids) for corporate purposes	$	(457	)	$	575
Liability for income taxes		(2,502	)		(200	)
Net D&B Entertainment receivable (payable)	$	(2,959	)	$	375

Interim financial statements — The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States for interim financial information as prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these financial statements contain all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Operating results for the thirteen and thirty-nine weeks ended October 28, 2012, are not necessarily indicative of results that may be expected for any other interim period or for the year ending February 3, 2013. Our quarterly financial data should be read in conjunction with our Annual Audited Consolidated Financial Statements for the year ended January 29, 2012 (including the notes thereto) as contained in our Annual Report on Form 10-K filed with the SEC.

The financial statements include our accounts after elimination of all significant intercompany balances and transactions. All dollar amounts are presented in thousands, unless otherwise noted, except share amounts.

~~Recent~~Concentration ~~Accounting~~of ~~Pronouncements~~Credit Risk — InFinancial ~~June~~instruments ~~2011,~~which ~~the Financial~~potentially ~~Accounting~~subject ~~Standards~~us ~~Board~~to ~~(“FASB”)~~a ~~issued~~concentration ~~guidance~~of ~~that~~credit ~~eliminates~~risk ~~the~~are ~~option~~cash toand ~~report~~cash ~~other~~equivalents. ~~comprehensive~~We ~~income~~currently ~~and~~maintain ~~its~~our ~~components~~day-to-day operating incash ~~the~~balances ~~statement~~with ofmajor ~~changes~~financial ininstitutions. ~~equity~~At (times, our ~~prior~~operating ~~reporting~~cash ~~method).~~balances Inmay ~~accordance~~be ~~with~~in ~~this new~~excess ~~guidance,~~of ~~effective~~the inFederal ~~the~~Deposit ~~first~~Insurance ~~quarter~~Corporation of(“FDIC”) ~~2012,~~insurance welimit. ~~have~~From ~~elected~~time to ~~present~~time, ~~items~~we ofinvest ~~net~~temporary ~~income~~excess ~~and~~cash ~~other~~in overnight ~~comprehensive~~investments ~~income~~with asexpected ~~one~~minimal ~~statement.~~volatility, ~~There~~such ~~are~~as nomoney ~~changes~~market tofunds. ~~the~~Although ~~accounting~~we ~~for~~maintain ~~items~~balances ~~within~~that ~~comprehensive~~exceed ~~income.~~the WeFDIC ~~have~~insured ~~revised~~limit, ~~the reporting~~we ofhave ~~fiscal~~not ~~2011~~experienced ~~other~~any ~~comprehensive~~losses ~~income~~related to ~~conform~~this tobalance, ~~the~~and ~~current~~we ~~year~~believe ~~presentation~~credit risk to be minimal.

7Recent Accounting Pronouncements — In July 2012, the FASB issued Accounting Standards Update (“ASU”) No. 2012-02, “Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment”. The revised standard is intended to reduce the cost and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. It allows companies to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. We review our intangible assets for impairment in our fourth quarter unless circumstances require this analysis to be completed sooner. We do not expect the provisions of ASU No. 2012-02 to have a material effect on the Company’s financial position, results of operations or cash flows.

In February 2013, the FASB issued ASU No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”, which requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. This guidance requires the disclosure of significant amounts reclassified from each component of accumulated other comprehensive income and the income statement line items affected by the reclassification. ASU No. 2013-02 is effective for the Company prospectively for reporting periods beginning after December 15, 2012. The adoption of ASU No. 2013-02 did not have an impact on the Company’s financial position, results of operations or cash flows.

Dave & Buster’s, Inc.

Notes to Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

InSignificant ~~September~~accounting ~~2011,~~policies ~~the~~— ~~FASB~~There ~~finalized~~were ~~guidance~~no onsignificant ~~testing goodwill for impairment. This~~changes ~~guidance~~to ~~permits~~our ancritical ~~entity~~accounting topolicies ~~first~~from ~~assess~~those ~~qualitative~~disclosed ~~factors~~ in ~~order~~our toAnnual ~~determine~~Report ~~whether~~on itForm is10-K ~~more~~filed ~~likely~~with ~~than not that~~ the ~~fair~~SEC ~~value of a reporting unit is less than its carrying value. The qualitative assessment may be used as a basis~~ for ~~determining~~ the ~~necessity~~year ofended performing the two-step goodwill impairment test. If an entity determines through its qualitative assessment that it is more likely than not that the fair value of goodwill exceeds its carrying value, then the remaining impairment steps would be deemed unnecessary. The initial qualitative assessment is optional and companies are allowed to only perform the quantitative assessment. This guidance is effective for annual goodwill impairment testing performed in fiscal years beginning after DecemberFebruary 153, ~~2011~~2013. ~~We assess the fair value of our goodwill annually, during our fourth fiscal quarter. This guidance is not expected to have a material impact on the consolidated financial statements.~~

In July 2012, the FASB issued Accounting Standards Update (“ASU”) 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The revised standard is intended to reduce the cost and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. It allows companies to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. We do not expect the provisions of ASU 2012-02 to have a material effect on our financial position or results of operations.

Significant accounting policies — There were no significant changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K filed with the SEC for the year ended January 29, 2012.

Note 2: Accrued Liabilities

Accrued liabilities consist of the following:

	October 28, 2012		January 29, 2012
	May 5, 2013		February 3, 2013
Compensation and benefits	$	12,901	$	12,447
Deferred amusement revenue	$	12,583	$	11,675
Interest		11,244		5,788
Compensation and benefits		10,969		15,205
Deferred amusement revenue		10,771		10,453
Interest		9,793		4,242
Rent		8,~~181~~457		78,~~597~~902
Amusement redemption liability		67,~~859~~582		57,~~895~~144
Sales and use taxes		3,382		3,972
Property taxes		3,711		2,884
Property taxes		4,042		2,844
Deferred gift card revenue		3,672		4,028
Deferred gift card revenue		3,220		3,860
Sales and use taxes		3,190		4,282
Other		8,471		6,860
Current portion of long term insurance reserves		3,000		3,000
Total accrued liabilities	$	69,071	$	59,716
Other		7,898		5,762
Total accrued liabilities	$	70,855	$	67,124

Note 3: Long-Term Debt

Long-term debt consisted of the following:

	October 28, 2012			January 29, 2012
	May 5, 2013			February 3, 2013
Senior secured credit facility—revolving	$	—		$	—
Senior secured credit facility—term	$	145,267		$	145,875
Senior secured credit facility—term		146,625			147,750
Senior notes		200,000			200,000
Total debt outstanding		~~346~~345,~~625~~267			~~347~~345,~~750~~875
Unamortized debt discount		(~~862~~734	)		(~~1,083~~796	)
Less current installments		(1,~~500~~267	)		(1,500	)
Long-term debt, less current installments, net of unamortized discount	$	~~344~~343,~~263~~266		$	~~345~~343,~~167~~579

Senior Secured Credit Facility — Our senior secured credit facility provides (a) a $150,000 term loan facility with a maturity date of June 1, 2016, and (b) a $50,000 revolving credit facility with a maturity date of June 1, 2015. The $50,000 revolving credit facility includes (i) a $20,000 letter of credit sub-facility (ii) a $5,000 swingline sub-facility and (iii) a $1,000 (in US Dollar equivalent) sub-facility available in Canadian dollars to the Company’s Canadian subsidiary. The revolving credit facility will be used to provide financing for general purposes. The Company originally received proceeds on the term loan facility of $148,500, net of a $1,500 discount. The discount is being amortized to interest expense over the life of the term loan facility. As of ~~October~~ May 285, ~~2012~~2013, we had no borrowings under the revolving credit facility, borrowings of $~~146~~145,~~625~~267 ($~~145~~144,~~763~~533, net of discount) under the term facility and $45,~~894~~670 in letters of credit outstanding. We believe that the carrying amount of our term credit facility approximates its fair value because the interest rates are adjusted regularly based on current market conditions. The interest rate on the term loan facility at ~~October~~May 285, ~~2012~~2013 was 5.5%. The fair value of the Company’s senior ~~secured~~ secured credit facility was determined to be a Level Two instrument as defined by GAAP.

8The interest rates per annum applicable to loans, other than swingline loans, under our senior secured credit facility are set periodically based on, at our option, either (1) the greatest of (a) the defined prime rate in effect, (b) the Federal Funds Effective Rate in effect plus 1 / 2 of 1% and (c) a Eurodollar rate, which is subject to a minimum (or, in the case of the Canadian revolving credit facility, a Canadian prime rate or Canadian cost of funds rate), for one-, two-, three- or six-months (or, if agreed by the applicable lenders, nine or twelve months) or, in relation to the Canadian revolving credit facility, 30-, 60-, 90- or 180-day interest periods chosen by us or our Canadian subsidiary, as applicable in each case (the “Base Rate”), plus an applicable margin percentage between 2.50% and 4.50% or (2) a defined Eurodollar rate plus an applicable margin. Swingline loans bear interest at the Base Rate plus an applicable margin.

On May 13, 2011, the Company executed an amendment (the “Amendment”) to the senior secured credit facility. The Amendment reduced the applicable term loan margins and LIBOR floor used in setting interest rates, as well as limited the Company’s requirement to meet the covenant ratios, as stipulated in the Amendment, until such time as we make a draw on our revolving credit facility or issue letters of credit in excess of $12,000. As of May 5, 2013, we have had no draws on our revolving credit facility and outstanding letters of credit have not exceeded $12,000, and as such we were not required to maintain financial ratios under our senior secured credit facility.

Dave & Buster’s, Inc.

Notes to Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

~~The~~On ~~interest~~May 14, ~~rates~~2013, ~~per~~the ~~annum~~Company ~~applicable~~executed toa ~~loans,~~second ~~other~~amendment ~~than~~(the ~~swingline~~“Second Amendment”) ~~loans,~~to ~~under~~the ~~our~~ senior secured credit facility. ~~are~~The ~~set~~primary ~~periodically~~modification ~~based~~included ~~on,~~in ~~at our option, either (1)~~ the ~~greatest~~Second ofAmendment (is a~~) the~~ ~~defined~~reduction ~~prime rate~~ in ~~effect, (b)~~ the ~~Federal~~applicable ~~Funds~~term ~~Effective~~loan ~~Rate~~margin, inwhich ~~effect~~is ~~plus~~reduced 1by ~~/ 2 of 1~~0.75% ~~and (c)~~ aper ~~Eurodollar rate,~~annum ~~which~~based ison ~~subject to~~ a ~~minimum~~consolidated ~~(or,~~leverage inratio greater ~~the~~than ~~case~~or ofequal ~~the~~to ~~Canadian~~2.75:1.00. ~~revolving~~For ~~credit facility,~~ a ~~Canadian~~consolidated ~~prime~~leverage ~~rate~~ratio orless ~~Canadian~~than ~~cost of funds rate)~~2.75:1.00, ~~for one-, two-, three- or six-months (or, if agreed by~~ the applicable ~~lenders,~~term ~~nine~~loan ormargin ~~twelve months)~~will ~~or,~~be inreduced ~~relation~~further ~~to the Canadian revolving credit facility, 30-, 60-, 90- or 180-day interest periods chosen~~ by us0.25%. ~~or our Canadian subsidiary~~Additionally, asthe ~~applicable~~Second inAmendment ~~each~~reduced ~~case (~~the ~~“Base~~LIBOR ~~Rate”),~~floor ~~plus~~used anin ~~applicable~~setting ~~margin~~rates ofby 3.0~~% or (2) a defined Eurodollar rate plus an applicable margin of 4~~.025%. ~~Swingline loans bear interest at the Base Rate plus an applicable margin.~~

The senior secured credit facility requires compliance with financial covenants including a minimum fixed charge coverage ratio test and a maximum leverage ratio test. The Company is required to maintain a minimum fixed charge coverage ratio of 1.1015:1.00 and a maximum leverage ratio of 4.5025:1.00 as of ~~October~~May 285, ~~2012~~2013. The financial covenants will become more restrictive over time. The required minimum fixed charge coverage ratio increases annually to a required ratio of 1.30:1.00 in the fourth quarter of fiscal year 2014 and thereafter. The maximum leverage ratio decreases annually to a required ratio of 3.25:1.00 in the fourth quarter of fiscal 2014 and thereafter. In addition, the senior secured credit facility includes negative covenants restricting or limiting, D&B Holdings, Dave & Buster’s and its subsidiaries’ ability to, among other things, incur additional indebtedness, pay dividends, make capital expenditures and sell or acquire assets. Virtually all of the Company’s assets are pledged as collateral for the senior secured credit facility.

Our senior secured credit facility also contains certain customary representations and warranties, affirmative covenants and events of default, including: payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults and cross-acceleration to certain indebtedness, certain events of bankruptcy, certain events under the Employee Retirement Income Security Act of 1974 as amended from time to time (“ERISA”), material judgments, actual or asserted failures of any guarantee or security document supporting the senior secured credit facility to be in full force and effect and a change of control. If an event of default occurs, the lenders under the senior secured credit facility would be entitled to take various actions, including acceleration of amounts due under the senior secured credit facility and all other actions permitted to be taken by a secured creditor.

OnFunds ~~May 13,~~managed ~~2011,~~by ~~the~~Oak ~~Company~~Hill ~~executed~~Advisors, anL.P. ~~amendment~~ (the “~~Amendment~~OHA Funds”) tocomprise ~~the~~one ~~senior~~of twenty-two ~~secured~~creditors ~~credit~~participating ~~facility.~~in ~~The Amendment reduced~~ the ~~applicable~~ term loan ~~margins~~portion ~~and~~of ~~LIBOR~~our ~~floor~~senior ~~used~~secured incredit ~~setting~~facility. ~~interest~~As ~~rates~~of May 5, as2013, ~~well~~the asOHA ~~limited~~Funds ~~the~~held ~~Company’s~~approximately ~~requirement~~9.43%, toor ~~meet~~$13,695, ~~the~~of ~~covenant~~our ~~ratios,~~total asterm ~~stipulated~~loan inobligation. ~~the~~Oak ~~Amendment~~Hill Advisors, ~~until~~L.P. ~~such~~is ~~time~~an independent asinvestment wefirm ~~make~~that ais ~~draw~~not onan ~~our revolving~~affiliate ~~credit~~of ~~facility~~Oak orHill ~~issue~~and ~~letters~~is ofnot ~~credit~~under incommon ~~excess~~control ofwith ~~$12,000~~Oak Hill. AsOak ofHill ~~October 28~~Advisors, ~~2012,~~L.P. weand ~~have~~an ~~had~~affiliate noof ~~draws~~Oak onHill ~~our~~Capital ~~revolving~~Management, ~~credit~~LLC ~~facility~~co-manage ~~and~~Oak ~~outstanding~~Hill ~~letters~~Special ofOpportunities ~~credit~~Fund, ~~have~~L.P., ~~not~~a private ~~exceeded~~fund. ~~$12~~Certain employees of Oak Hill,~~000,~~ ~~and~~in astheir ~~such~~individual wecapacities, ~~were~~have ~~not required~~passive toinvestments ~~maintain~~in ~~financial~~Oak ~~ratios~~Hill ~~under~~Advisors, ~~our~~L.P. ~~senior~~and/or ~~secured~~the ~~credit~~funds ~~facility~~it manages.

~~Funds~~Senior ~~managed~~notes by— ~~Oak~~Our ~~Hill~~senior ~~Advisors~~notes are general unsecured, ~~L.P.~~unsubordinated (obligations of the ~~“OHA~~ ~~Funds”)~~Company ~~comprise~~and ~~one~~mature ofon ~~twenty-two~~June 1, ~~creditors~~2018. ~~participating~~Interest inon the ~~term~~notes ~~loan~~is ~~portion~~paid ofsemi-annually ~~our~~and ~~senior~~accrues at ~~secured~~the ~~credit~~rate ~~facility~~of 11.0% per Asannum. ofOn ~~October~~or after June 281, ~~2012~~2014, the ~~OHA~~Company ~~Funds~~may ~~held~~redeem ~~approximately 9.43%~~all, or ~~$13~~from time-to-time,~~823,~~ ofa ~~our~~part ~~total~~of ~~term~~the ~~loan obligation.~~senior ~~Oak~~notes ~~Hill~~at ~~Advisors,~~redemption ~~L.P.~~prices is(expressed anas ~~independent~~a ~~investment~~percentage ~~firm~~of ~~that~~principal isamount) ~~not~~ranging anfrom ~~affiliate~~105.5% ofto ~~Oak~~100.0% ~~Hill~~plus accrued and isunpaid ~~not~~interest ~~under~~on ~~common~~the ~~control~~senior ~~with Oak Hill~~notes. ~~Oak~~As ~~Hill~~of ~~Advisors~~May 5, ~~L.P.~~2013, ~~and~~our an$200,000 ~~affiliate~~ of ~~Oak~~senior ~~Hill~~notes ~~Capital~~had ~~Management,~~an ~~LLC~~approximate ~~co-manage~~fair ~~Oak~~value ~~Hill Special~~of ~~Opportunities Fund~~$225,800 ~~L.P.,~~based aon ~~private~~quoted ~~fund~~market price. ~~Certain~~The ~~employees~~fair value of ~~Oak~~the ~~Hill,~~Company’s insenior ~~their~~notes ~~individual~~was ~~capacities,~~determined ~~have~~to ~~passive~~be ~~investments~~a Level One ininstrument ~~Oak~~as ~~Hill~~defined ~~Advisors,~~by LGAAP.P. ~~and/or the funds it manages.~~

~~Senior~~The senior notes —restrict ~~Our~~the ~~senior~~Company’s ~~notes~~ability ~~are~~to ~~general~~incur ~~unsecured~~indebtedness, outside ~~unsubordinated obligations~~ of the ~~Company~~senior ~~and~~secured ~~mature~~credit ~~on June 1~~facility, ~~2018.~~unless ~~Interest on~~ the ~~notes~~consolidated iscoverage ~~paid~~ratio ~~semi-annually~~exceeds ~~and accrues at the rate of 11~~2.~~0% per annum~~00:1.00 On or ~~after~~other ~~June 1,~~financial ~~2014,~~and ~~the~~operational ~~Company~~requirements ~~may~~are ~~redeem~~met. ~~all~~Additionally, ~~or from time-to-time, a part of~~ the ~~senior~~terms ~~notes at redemption prices (expressed as a percentage~~ of ~~principal amount) ranging from 105.5% to 100.0% plus accrued and unpaid interest on~~ the senior notes. ~~Prior~~restrict ~~to June 1, 2013,~~ the Company’s ~~may~~ability ~~on any one or more occasions redeem up~~ to ~~40.0% of the original principal~~make ~~amount of the senior notes using the proceeds of~~ certain ~~equity~~payments ~~offerings~~to ataffiliated ~~a redemption price of 111~~entities.0% ~~of the principal amount thereof, plus any accrued and unpaid interest. As of October 28, 2012, our $200,000 of senior notes had an approximate fair value of $226,400 based on quoted market price.~~ The ~~fair value of the~~ Company’s ~~senior notes~~ was ~~determined~~in tocompliance bewith athe ~~Level One~~debt ~~instrument~~covenants as ~~defined~~of byMay 5, ~~GAAP~~2013.

~~The~~Future ~~senior~~debt ~~notes~~obligations ~~restrict~~— ~~the~~The ~~Company’s~~following ~~ability~~table tosets ~~incur~~forth ~~indebtedness,~~our ~~outside~~future ofdebt ~~the~~principal ~~senior~~payment ~~secured~~obligations ~~credit~~as ~~facility~~of May 5, ~~unless~~2013 ~~the consolidated~~(excluding ~~coverage~~repayment ~~ratio~~obligations ~~exceeds~~under ~~2.00:1.00 or other financial and operational requirements are met. Additionally,~~ the ~~terms~~revolving portion of ~~the~~our senior ~~notes~~secured ~~restrict~~credit ~~the Company’s ability to make certain payments to affiliated entities~~facility). ~~The Company was in compliance with the debt covenants as of October 28, 2012.~~


	Debt Outstanding
	at May 5, 2013
1 year or less	$	1,267
2 years		1,500
3 years		1,500
4 years		141,000
5 years		—
Thereafter		200,000

Total future payments	$	345,267

Dave & Buster’s, Inc.

Notes to Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

Future debt obligations — The following table sets forth our future debt principal payment obligations as of October 28, 2012 (excluding repayment obligations under the revolving portion of our senior secured credit facility).

	Debt Outstanding
	at October 28, 2012
1 year or less	$	1,500
2 years		1,500
3 years		1,500
4 years		142,125
5 years		—
Thereafter		200,000
Total future payments	$	346,625

The following tables set forth our recorded interest expense, net:

	Thirteen Weeks			Thirteen Weeks
	Ended			Ended
	October 28, 2012			October 30, 2011
	May 5, 2013			April 29, 2012
Gross interest expense	$	7,~~704~~689		$	7,~~753~~713
Amortization of issuance cost and discount		~~578~~576			~~585~~751
Capitalized interest		(~~232~~41	)		(~~170~~51	)
Interest income		(7182	)		(71	)
Total interest expense, net	$	78,~~979~~142		$	8,~~097~~342
	Thirty-Nine Weeks			Thirty-Nine Weeks
	Ended			Ended
	October 28, 2012			October 30, 2011
Gross interest expense	$	23,116		$	23,473
Amortization of issuance cost and discount		1,908			1,861
Capitalized interest		(439	)		(568	)
Interest income		(213	)		(213	)
Total interest expense, net	$	24,372		$	24,553

Our senior secured credit facility requires us to make mandatory debt prepayments to the extent that we have excess cash flow, as defined by the facility, in any completed fiscal year. During the first quarter of fiscal 2013 we made a $608 debt prepayment based on our fiscal 2012 excess cash flow. The excess cash flow prepayment represented early payment of $375 in principal which was due on April 30, 2013 and $233 in principal which is due on July 30, 2013.

Note 4: Income Taxes

We use the asset/liability method for recording income taxes, which recognizes the amount of current and deferred taxes payable or refundable at the date of the financial statements as a result of all events that are recognized in the financial statements and as measured by the provisions of enacted tax laws. We also recognize liabilities for uncertain income tax positions for those items that meet the “more likely than not” threshold.

In assessing the realizability of deferred tax assets, at ~~October~~May 285, ~~2012~~2013 we considered whether it is more likely than not that some or all of the deferred tax assets will not be realized. Based on the level of recent historical taxable income; consistent generation of annual taxable income, and estimations of future taxable income we have concluded that it is more likely than not that we will realize the federal tax benefits associated with our deferred tax assets. Accordingly, we have ~~reduced our previously~~ established a valuation allowance byof $61,~~662.~~160 ~~The valuation allowances previously established~~ for deferred tax assets associated with state taxes, foreign taxes and uncertain tax positions ~~remain~~as ~~unchanged from the end~~ of ~~fiscal~~May 5, ~~year 2011~~2013. The ultimate realization of our deferred tax assets is dependent on the generation of future taxable income during periods in which temporary differences and carryforwards become deductible.

The calculation of tax liabilities involves significant judgment and evaluation of uncertainties in the interpretation of state tax regulations. As a result, we have established accruals for taxes that may become payable in future years due to audits by tax authorities. Tax accruals are reviewed regularly pursuant to accounting guidance for uncertainty in income taxes. Tax accruals are adjusted as events occur that affect the potential liability for taxes, such as the expiration of statutes of limitations, conclusion of tax audits, identification of additional exposure based on current calculations, identification of new issues, the issuance of statutory or administrative guidance, or rendering of a court decision affecting a particular issue. Accordingly, we may experience significant changes in tax accruals in the future, if or when such events occur.

As of ~~October~~May 285, ~~2012~~2013, we have accrued approximately $~~1,165~~588 of unrecognized tax benefits and approximately $~~1,230~~301 of penalties and interest. Future recognition of potential interest or penalties, if any, will be recorded as a component of income tax expense. Because of the impact of deferred income tax accounting, $~~1,044~~509 of unrecognized tax benefits, if recognized, would affect the effective tax rate.

10The Company is a member of a consolidated group that includes D&B Entertainment. As of May 5, 2013, the Company owes D&B Entertainment approximately $5,015 of tax-related balances. Included in income tax payable is $2,123, which the Company anticipates paying to D&B Entertainment in fiscal 2013. In fiscal year 2013, we expect to utilize approximately $3,177 of available stand-alone tax credit carryforwards to offset our estimated stand-alone cash tax liability to D&B Entertainment.

Note 5: Commitments and Contingencies

We are subject to certain legal proceedings and claims that arise in the ordinary course of our business. In the opinion of management, based upon consultation with legal counsel, the amount of ultimate liability with respect to such legal proceedings and claims will not materially affect the consolidated results of our operations or our financial condition.

We lease certain property and equipment under various non-cancelable operating leases. Some of the leases include options for renewal or extension on various terms. Most of the leases require us to pay property taxes, insurance, and maintenance of the leased assets. Certain leases also have provisions for additional percentage rentals based on revenues.

Dave & Buster’s, Inc.

Notes to Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

~~Subsequent~~The tofollowing ~~October 28,~~table ~~2012,~~sets weforth ~~reached~~our anlease ~~agreement~~commitments ~~with~~as ~~a taxing jurisdiction to settle an uncertain tax position~~ of ~~the Company. We anticipate that the settlement will result in an $992 reduction of our accrual for unrecognized taxes~~May 5, ~~penalties~~2013: ~~and interest.~~

The Company is a member of a consolidated group that includes D&B Entertainment. As of October 28, 2012, the Company owes D&B Entertainment approximately $2,502 of tax-related balances. The Company expects to utilize stand-alone net operating loss carry-forwards of approximately $1,750 to offset stand-alone taxable income for the current fiscal year. Additionally, we expect to utilize approximately $8,100 of available stand-alone tax credit carryforwards to offset our estimated stand-alone cash tax liability for the current fiscal year.


	Operating Lease
	Obligations
	at May 5, 2013
1 year or less	$	54,192
2 years		54,074
3 years		52,471
4 years		50,912
5 years		49,001
Thereafter		255,805

Total future payments	$	516,455

~~Note 5:~~We ~~Commitments~~have signed operating lease agreements for future sites located in Virginia Beach, Virginia, Albany, New York, Syracuse, New York, Cary, North Carolina and ~~Contingencies~~Livonia, Michigan, for which the landlord has fulfilled the obligations to commit us to the lease terms and therefore, the future obligations related to these locations are included in the table above. These five locations are expected to open in fiscal 2013.

WeAdditionally, ~~are~~as ~~subject~~of toMay 5, ~~certain~~2013, ~~legal~~we ~~proceedings~~have ~~and~~signed ~~claims~~six lease ~~that~~agreements ~~arise~~which incontain ~~the~~certain ~~ordinary~~landlord ~~course~~obligations ofwhich ~~our~~remain ~~business.~~unfulfilled Inas ~~the opinion~~ of ~~management,~~that ~~based~~date. ~~upon~~Our ~~consultation~~commitments ~~with~~under ~~legal~~these ~~counsel,~~agreements ~~the~~are ~~amount~~contingent ofupon ~~ultimate~~among ~~liability~~other ~~with~~things, ~~respect~~the tolandlord’s ~~such~~delivery ~~legal~~of ~~proceedings~~access ~~and~~to ~~claims~~the ~~will~~premises ~~not~~for construction. ~~materially~~Future ~~affect~~obligations ~~the~~related ~~consolidated~~to ~~results~~these ofagreements ~~our~~are ~~operations~~not orincluded ~~our~~in ~~financial~~the ~~condition~~table above.

The following table sets forth our lease commitments as of October 28, 2012:

	Operating Lease
	Obligations
	at October 28, 2012
1 year or less	$	51,172
2 years		51,230
3 years		49,748
4 years		48,015
5 years		46,364
Thereafter		212,358
Total future payments	$	458,887

We have signed operating lease agreements for future sites located in Dallas, Texas, and Boise, Idaho, for which the landlord has fulfilled the obligations to commit us to the lease terms and therefore, the future obligations related to these locations are included in the table above. These two locations are expected to open in the fourth quarter of fiscal 2012.

Additionally, as of October 28, 2012, we have signed seven lease agreements which contain certain landlord obligations which remain unfulfilled as of that date. Our commitments under these agreements are contingent upon among other things, the landlord’s delivery of access to the premises for construction. Future obligations related to these agreements are not included in the table above.

Note 6: Condensed Consolidating Financial Information

The senior notes (described in Note 3) are guaranteed on a senior basis by all domestic subsidiaries of the Company. The subsidiaries’ guarantee of the senior notes are full and unconditional and joint and several.

The accompanying condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10 “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered.” No other condensed consolidating financial statements are presented herein. The results of operations and cash flows from operating activities from the non-guarantor subsidiary were $~~16 and $607, respectively, for the thirteen-week period ended October 28, 2012. The results of operations and cash flows from operating activities from the non-guarantor subsidiary were $~~(~~276~~58) and $2(879),~~210,~~ respectively, for the ~~thirty-nine~~thirteen week period ended ~~October~~ May 285, ~~2012~~2013. There are no restrictions on cash distributions from the non-guarantor subsidiary.

1110

Dave & Buster’s, Inc.

Notes to Consolidated Financial Statements (continued)

(in thousands, except share and per share amounts)

~~October~~May 285, ~~2012~~2013:

	Issuer andSubsidiaryGuarantors		SubsidiaryNon-Guarantors			ConsolidatingAdjustments			ConsolidatedDave & Buster’s, Inc.
Assets:
Current assets	$	87102,~~019~~038	$	5,~~063~~172		$	—		$	92107,~~082~~210
Property and equipment, net		~~322~~325,~~377~~384		43,~~443~~995			—			~~326~~329,~~820~~379
Tradenames		79,000		—			—			79,000
Goodwill		273,725		(1,~~447~~431	)		—			272,~~278~~294
Investment in sub		34,~~709~~114		—			(34,~~709~~114	)		—
Other assets and deferred charges		2423,~~922~~404		78478			—			2523,~~000~~882
Total assets	$	~~790~~807,~~752~~665	$	8,~~137~~214		$	(34,~~709~~114	)	$	~~795~~811,~~180~~765
	Issuer andSubsidiaryGuarantors		SubsidiaryNon-Guarantors			ConsolidatingAdjustments			ConsolidatedDave & Buster’s, Inc.
Liabilities and stockholder’s equity:
Current liabilities	$	93,733	$	4,339		$	—			98,072
Deferred income taxes		23,026		—			—			23,026
Deferred occupancy costs		62,215		89			—			62,304
Other liabilities		14,718		—			—			14,718
Long-term debt, less current installments, net of unamortized discount (Note 3)		344,263		—			—			344,263
Stockholder’s equity		252,797		3,709			(3,709	)		252,797
Total liabilities and stockholder’s equity	$	790,752	$	8,137		$	(3,709	)	$	795,180

January 29, 2012:


	Issuer and Subsidiary Guarantors		Subsidiary Non-Guarantors		Consolidating Adjustments			Consolidated Dave & Buster’s, Inc.
Liabilities and stockholder’s equity:
Current liabilities	$	90,241	$	3,994	$	—		$	94,235
Deferred income taxes		21,813		—		—			21,813
Deferred occupancy costs		68,527		106		—			68,633
Other liabilities		12,579		—		—			12,579
Long-term debt, less current installments, net of unamortized discount (Note 3)		343,266		—		—			343,266
Stockholder’s equity		271,239		4,114		(4,114	)		271,239

Total liabilities and stockholder’s equity	$	807,665	$	8,214	$	(4,114	)	$	811,765

	Issuer andSubsidiaryGuarantors		SubsidiaryNon-Guarantors			ConsolidatingAdjustments			ConsolidatedDave & Buster’s, Inc.
Assets:
Current assets	$	71,890	$	3,104		$	—		$	74,994
Property and equipment, net		318,501		4,841			—			323,342
Tradenames		79,000		—			—			79,000
Goodwill		273,727		(1,441	)		—			272,286
Investment in sub		3,951		—			(3,951	)		—
Other assets and deferred charges		28,963		77			—			29,040
Total assets	$	776,032	$	6,581		$	(3,951	)	$	778,662
	Issuer andSubsidiaryGuarantors		SubsidiaryNon-Guarantors			ConsolidatingAdjustments			ConsolidatedDave & Buster’s, Inc.
Liabilities and stockholder’s equity:
Current liabilities	$	84,074	$	2,569		$	—		$	86,643
Deferred income taxes		30,308		—			—			30,308
Deferred occupancy costs		63,040		61			—			63,101
Other liabilities		11,578		—			—			11,578
Long-term debt, less current installments, net of unamortized discount (Note 3)		345,167		—			—			345,167
Stockholder’s equity		241,865		3,951			(3,951	)		241,865
Total liabilities and stockholder’s equity	$	776,032	$	6,581		$	(3,951	)	$	778,662

February 3, 2013:


	Issuer and Subsidiary Guarantors		Subsidiary Non-Guarantors			Consolidating Adjustments			Consolidated Dave & Buster’s, Inc.
Assets:
Current assets	$	85,696	$	6,122		$	—		$	91,818
Property and equipment, net		333,018		4,221			—			337,239
Tradenames		79,000		—			—			79,000
Goodwill		273,725		(1,447	)		—			272,278
Investment in sub		4,215		—			(4,215	)		—
Other assets and deferred charges		23,854		364			—			24,218

Total assets	$	799,508	$	9,260		$	(4,215	)	$	804,553


	Issuer and Subsidiary Guarantors		Subsidiary Non-Guarantors		Consolidating Adjustments			Consolidated Dave & Buster’s, Inc.
Liabilities and stockholder’s equity:
Current liabilities	$	87,936	$	4,947	$	—		$	92,883
Deferred income taxes		24,887		—		—			24,887
Deferred occupancy costs		69,446		98		—			69,544
Other liabilities		12,684		—		—			12,684
Long-term debt, less current installments, net of unamortized discount (Note 3)		343,579		—		—			343,579
Stockholder’s equity		260,976		4,215		(4,215	)		260,976

Total liabilities and stockholder’s equity	$	799,508	$	9,260	$	(4,215	)	$	804,553

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in thousands).

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Annual Report on Form 10-K for the year ended ~~January~~February 293, ~~2012~~2013. Our Annual Report is available on our website at www.daveandbusters.com. Unless otherwise specified, the meanings of all defined terms in Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are consistent with the meanings of such terms as defined in the Notes to Consolidated Financial Statements. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” in Item 4 for a discussion of the risks, uncertainties, and assumptions relating to our forward-looking statements. All dollar amounts are presented in thousands.

General

We are a leading owner and operator of high-volume venues that combine dining and entertainment in North America for both adults and families. Founded in 1982, the core of our concept is to offer our guest base the opportunity to “Eat Drink Play ® ” all in one location, through a full menu of casual dining food items and a full selection of non-alcoholic and alcoholic beverage items combined with an extensive assortment of entertainment attractions, including large screen televisions and high quality audio systems providing guests with a venue for watching live sports and other televised events, skill and sports-oriented redemption games, video games, interactive simulators and other traditional games. Our guests are primarily a balanced mix of men and women aged 21 to 39, and we are also an attractive venue for families with children and teenagers. We believe we appeal to a diverse customer base by providing a highly customizable experience in a dynamic and fun setting.

As of ~~October~~May 285, ~~2012~~2013, we owned and operated 6061 ~~stores~~company-owned locations in 25 26 states and Canada and one franchise store location in Canada. InOn ~~addition~~May 31, ~~there~~2013, isour ~~one~~lone ~~franchised~~franchise store ~~operating~~ceased inoperation ~~Canada~~as Dave & Buster’s. This change and the associated termination of the related franchise and development agreements are not expected to have a material impact on our financial position or results of operations. Our stores average 47,000 square feet, range in size between 16,000 and 66,000 square feet and are open seven days a week, with hours of operation typically from 11:30 a.m. to midnight on ~~weekdays~~Sunday through Thursday and 11:30 a.m. to 2:00 a.m. on ~~weekends~~Friday and Saturday.

Corporate history

On June 1, 2010, Dave & Buster’s Entertainment, Inc. (formerly known as Dave & Buster’s Parent, Inc. and originally named Games Acquisition Corp.) (“D&B Entertainment”), a newly-formed Delaware corporation owned by Oak Hill Capital Partners III, L.P. and Oak Hill Capital Management Partners III, L.P. (collectively, the “Oak Hill Funds” and together with their manager, Oak Hill Capital Management, LLC, and its related funds, “Oak Hill Capital Partners”), acquired all of the outstanding common stock (the “Acquisition”) of Dave & Buster’s Holdings, Inc. (“D&B Holdings”) from Wellspring Capital Partners III, L.P. and HBK Main Street Investors L.P. In connection therewith, Games Merger Corp. a newly-formed Missouri corporation and an indirect wholly-owned subsidiary of D&B Entertainment, merged (the “Merger”) with and into D&B Holdings’ wholly-owned, direct subsidiary, Dave & Buster’s, Inc. (with Dave & Buster’s, Inc. being the surviving corporation in the Merger). As a result of the Acquisition and certain post-acquisition activity, the Oak Hill Funds directly control approximately 95.4% of D&B Entertainment’s outstanding common stock and have the right to appoint certain members of our Board of Directors, and certain members of our Board of Directors and management control approximately 4.6% of the outstanding common stock of D&B Entertainment.

The Acquisition resulted in a change in ownership of 100% of the Company’s outstanding common stock. The purchase price paid in the Acquisition has been “pushed down” to the Company’s financial statements and is allocated to record the acquired assets and liabilities assumed based on their acquisition date fair value.

As of October 28, 2012, the Oak Hill Funds control approximately 95.4% and certain members of our Board of Directors and management control approximately 4.6% of the outstanding common stock of D&B Entertainment.

Expense Reimbursement Agreement

We entered into an expense reimbursement agreement with Oak Hill Capital Management, LLC, concurrently with the consummation of the Acquisition. Pursuant to this agreement, Oak Hill Capital Management, LLC provides general advice to us in connection with our long-term strategic plans, financial management, strategic transactions and other business matters. The expense reimbursement agreement provides for the reimbursement of certain expenses of Oak Hill Capital Management, LLC. We incurred expenses of $205 during the first quarter of fiscal 2013 and $201 during the first quarter of fiscal 2012 under the terms of the expense reimbursement agreement. The initial term of the expense reimbursement agreement expires in June 2015 and after that date, such agreement will renew automatically on a year-to-year basis unless one party gives at least 30 days’ prior notice of its intention not to renew.

Presentation of Operating Results

~~Our~~We operate on a 52 or 53 week fiscal year that ends on the Sunday after the Saturday closest to January 31. Each quarter consists of 13 weeks, except for a 53 week year when the fourth quarter consists of 14 weeks. All references to the ~~third~~ first quarter of ~~2012~~2013 relate to the 13- week period ended ~~October~~May 285, ~~2012~~2013. All references to the ~~third~~first quarter of ~~2011~~2012 relate to the 13~~-week~~ week period ended ~~October~~April 3029, ~~2011~~2012. ~~All~~Our ~~references~~2013 tofiscal year will consist of 52 weeks and our 2012 fiscal year consisted of 53 weeks. As a result of the 53 week fiscal year~~-to-date~~ in 2012, our 2013 fiscal year began one week later than our 2012 ~~period~~fiscal ~~relate~~year. In order to ~~the~~provide ~~39-~~useful information to investors to better analyze our business, we have provided below comparable store sales presented on a calendar week basis. Comparable store sales on a calendar week basis compares the results for the period from ~~ended~~February 4, ~~October~~2013 through May 285, ~~2012.~~2013 ~~All~~(weeks ~~references~~1 tothrough ~~the~~13 ~~year-to-date~~of our 2013 fiscal year) ~~2011~~to ~~period~~the ~~relate~~results tofor the ~~39-week~~ period ~~ended~~from ~~October~~February 306, ~~2011.~~2012 ~~Our~~through May 6, 2012 (weeks 2 through 14 of our 2012 fiscal year). ~~will~~We ~~end~~believe comparable store sales calculated on ~~February 3,~~a ~~2013~~calendar ~~and~~week ~~will~~basis ~~consist~~is more indicative of ~~fifty~~ the health of our business. However, we also recognize that comparable store sales growth calculated on a fiscal week basis is a useful measure when analyzing year-~~three~~over-year changes ~~weeks~~in our financial statements.

1312

Overview

We monitor and analyze a number of key performance measures in order to manage our business and evaluate financial and operating performance. These measures include:

Revenue — Revenues consist of food and beverage revenues as well as amusement and other revenues. Beverage revenues refer to alcoholic beverages. For the thirteen weeks ended ~~October~~May 285, ~~2012~~2013, we derived 33.~~0% of our total revenue from food sales, 15.~~2% ~~from beverage sales, 51.0% from amusement sales and 0.8% from other sources. For the thirty-nine weeks ended October 28, 2012, we derived 33.5%~~ of our total revenue from food sales, 14.89% from beverage sales, 5051.91% from amusement sales and 0.8% from other sources. Our revenues are primarily influenced by the number of stores in operation and comparable store revenue. Comparable store revenue growth reflects the change in year-over-year revenue for the comparable store base and is an important measure of store performance. We define our comparable store base to include those stores open at the end of the period which have been open for at least a full 18 months as of the beginning of each fiscal year. Percentage changes have been calculated based on an equivalent number of weeks in both the current and comparison periods. Comparable store sales growth can be generated by an increase in guest traffic counts or by increases in average dollars spent per guest.

We continually monitor the success of current food and beverage items, the availability of new menu offerings, the menu price structure and our ability to adjust prices where competitively appropriate. With respect to the beverage component, we operate fully licensed facilities, which means that we offer full beverage service, including alcoholic beverages, throughout each store.

Our stores also offer an extensive array of amusements and entertainment options, with typically over 150 redemption and simulation games. We also offer traditional pocket billiards and shuffleboard. Redemption games offer our guests the opportunity to win tickets that can be redeemed for prizes in the “Winner’s Circle,” ranging from branded novelty items to high-end home electronics. Our redemption games include basic games of skill, such as skeeball and basketball, as well as competitive racing, and individual electronic games of skill. We review the amount of game play on existing amusements in an effort to match amusements availability with guest preferences. We intend to continue to invest in new games as they become available and prove to be attractive to guests. Our unique venue allows us to provide our customers with value driven food and amusement combination offerings such as our “Eat &, Play, Win Combo.” The “Eat, & Play, Win Combo” allows customers to purchase a variety of entrée and game card pairings at various discounted fixed price levels and receive tickets that can be redeemed for prizes as part of the offering. We also offer “Half-Price Game Play Wednesdays,” which allows guests to play virtually all of our games for one-half of the regular price on Wednesdays. In addition, from time to time we have limited time offers which allow our guests to play certain new games for free as a way to introduce those new games.

We believe that special events business is a very important component of our revenue because a significant percentage of our guests attending a special event are visiting a Dave & Buster’s for the first time. This is a very advantageous way to introduce the concept to new guests. Accordingly, a considerable emphasis is placed on the special events portion of our business.

Cost of products — Cost of products includes the cost of food, beverages and the “Winner’s Circle” redemption items. For the thirteen weeks ended ~~October~~May 285, ~~2012~~2013, the cost of food products averaged 25.46% of food revenue and the cost of beverage products averaged 23.94% of beverage revenue. ~~The~~ amusement and other cost of products averaged 15.5% of amusement and other revenues. For the thirty-nine weeks ended October 28, 2012, the cost of food products averaged 25.0% of food revenue and the cost of beverage products averaged 23.5% of beverage revenue. The amusement and other cost of products averaged 14.90% of amusement and other revenues. The cost of products is driven by product mix and pricing movements from third-party suppliers. We continually strive to gain efficiencies in both the acquisition and use of products while maintaining high standards of product quality.

Operating payroll and benefits — Operating payroll and benefits consist of wages, employer taxes and benefits for store personnel. We continually review the opportunity for efficiencies principally through scheduling refinements.

Other store operating expenses — Other store operating expenses consist primarily of store-related occupancy, supply and outside service expenses, utilities, repair and maintenance and marketing and promotional costs.

Liquidity and cash flows —The primary source of cash flow is from our operating activities and availability under the revolving credit facility.

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 locations typically open with sales volumes in excess of their run-rate levels, which we refer to as a “honeymoon” effect. We expect our new store volumes and margins to be lower in the second full year of operations than in their first full year of operations, and to grow in line with the rest of our comparable store base thereafter. As a result of the substantial revenues associated with each new store, the timing of new store openings will result in significant fluctuations in quarterly results.

We also expect seasonality to be a factor in the operation or results of the business in the future with higher first and fourth quarter revenues associated with the spring and year-end holidays. These quarters will continue to be susceptible to the impact of severe weather on customer traffic and sales during that period. Our third quarter, which encompasses the end of the summer vacation season, has historically had lower revenues as compared to the other quarters.

We expect that volatile economic conditions will continue to exert pressure on both supplier pricing and consumer spending related to entertainment and dining alternatives. Although there is no assurance that our cost of products will remain stable or that federal or state minimum wage rates will not increase beyond amounts currently legislated, the effects of any supplier price increases or minimum wage rate increases are expected to be partially offset by selected menu price increases where competitively appropriate.

1413

Results of Operations — The following tables set 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 operations.

	Thirteen Weeks					Thirteen Weeks
	Ended					Ended
	October 28, 2012					October 30, 2011
	May 5, 2013					April 29, 2012
Food and beverage revenues	$	6380,~~159~~911		48.21	%	$	5979,~~567~~144		4948.54	%
Amusement and other revenues		6787,~~907~~244		51.89			6084,~~755~~330		5051.56
Total revenues		~~131~~168,~~066~~155		100.0			~~120~~163,~~322~~474		100.0
Cost of food and beverage (as a percentage of food and beverage revenues)		1520,~~716~~151		24.9			1419,~~649~~207		24.63
Cost of amusement and other (as a percentage of amusement and other revenues)		1012,~~505~~213		1514.50			911,~~432~~747		1513.59
Total cost of products		2632,~~221~~364		2019.02			2430,~~081~~954		2018.09
Operating payroll and benefits		3337,~~735~~439		2522.73			3036,~~552~~610		2522.4
Other store operating expenses		4448,~~595~~181		3428.07			4248,~~719~~881		3529.59
General and administrative expenses		129,~~242~~724		95.38			89,~~279~~017		65.95
Depreciation and amortization expense		1516,~~746~~910		1210.01			1314,~~578~~795		119.31
Pre-opening costs		~~1,089~~872		0.85			~~587~~150		0.51
Total operating costs		~~133~~145,~~628~~490		~~101~~86.86			~~119~~140,~~796~~407		9985.69
Operating income (loss)		(2,562	)	(1.8	)		526		0.4
Operating income		22,665		13.4			23,067		14.1
Interest expense, net		78,~~979~~142		64.18			8,~~097~~342		65.71
Loss before income tax benefit		(10,541	)	(7.9	)		(7,571	)	(6.3	)
Income before provision for income taxes		14,523		8.6			14,725		9.0
Income tax benefit		(8,920	)	(6.8	)		(3,124	)	(2.6	)
Provision for income taxes		4,494		2.7			3,741		2.3
Net loss	$	(1,621	)	(1.1	)%	$	(4,447	)	(3.7	)%
Net income	$	10,029		5.9	%	$	10,984		6.7	%
Change in comparable store sales (1)				31.98	%				(0.93	)%
Company owned stores open at end of period (2)				61					59	(3)
Comparable stores open at end of period (1)				55					55	(3)

(1) “Comparable store sales” (year-over-year comparison of stores operating at the end of the fiscal period and open at least 18 months as of the beginning of each of the fiscal years) is a key performance indicator used within the industry and is indicative of acceptance of our initiatives as well as local economic and consumer trends. The change in comparable store sales for fiscal 2013 has been calculated on a comparable calendar week basis as described previously.

~~Thirteen~~(2) ~~Weeks~~The ~~Ended~~number ~~October 28, 2012~~of ~~Compared~~stores toopen ~~Thirteen~~excludes ~~Weeks~~one ~~Ended~~franchise ~~October 30,~~location ~~2011~~in Canada.

⁽³⁾	Our location in Dallas, Texas, which was permanently closed on December 17, 2012, was included in our 2012 store count.

Thirteen Weeks Ended May 5, 2013 Compared to Thirteen Weeks Ended April 29, 2012

Revenues

Total revenues increased $104,~~744~~681, or 82.9%, in the ~~third~~first quarter of ~~2012~~2013 compared to the ~~third~~first quarter of ~~2011~~2012.

The increased revenues were derived from the following sources:

Non-comparable stores - operating	$	6,430
Non-comparable stores	$	3,925
Comparable stores		42,~~459~~619
Other		(145	)
Shift in fiscal year impact		(1,355	)
Total	$	10,744
Other		(508	)
Total	$	4,681

The following discussion of store sales has been prepared by comparing fiscal 2013 revenues to an adjusted fiscal 2012 revenues. Fiscal 2012 revenues have been adjusted to reflect the impact of the shift in our fiscal 2013 calendar due to the 53rd week in our fiscal 2012, as discussed previously in “Presentation of Operating Results”. We have estimated the shift in comparable store revenues due to the 53rd week in fiscal 2012 to be a reduction in sales of $1,070. Comparable store revenue increased $42,~~459~~619, or 31.98%, in the ~~third~~first quarter of ~~2012~~2013 compared to the ~~third quarter~~comparable 13 weeks of ~~2011~~2012. Comparable walk-in revenues, which accounted for 8990.50% of consolidated comparable store revenue in the ~~third~~first quarter of ~~2012~~2013, increased $42,~~405~~373, or 41.38%, in the first quarter of 2013 compared to the ~~third~~similar ~~quarter~~period ofin ~~2011~~2012. Comparable store special events revenues, which accounted for 10.50% of consolidated comparable store revenue in the ~~third~~first quarter of ~~2012~~2013, increased $54246 or 01.46% ~~in the third quarter of 2012~~ compared to the ~~third~~comparable ~~quarter~~period ofin ~~2011~~2012.

~~Sales~~14 growth was led by amusement revenue. Comparable store amusements and other revenues in the third quarter of 2012 increased by $3,745, or 6.6%, to $60,545 from $56,800 in the third quarter of 2011. The growth over 2011 in amusement sales was sparked by strategic investments in new games, up-sell initiatives and television advertising promoting the new games. Beverage sales at comparable stores increased by $901, or 5.2%, to $18,264 in the third quarter of 2012 from $17,363 in the third quarter of 2011. Food sales at comparable stores decreased by $187, or 0.5%, to $39,400 in the third quarter of 2012 from $39,587 in the third quarter of 2011.

~~The~~Sales ~~non-comparable~~growth ~~store~~was led by amusement revenue. ~~increase~~Comparable store amusements and other revenues in the first quarter of 2013 increased by $1,772, or 2.3%, to $78,712 from $76,940 in the 2012 comparison period. The growth over 2012 in amusement sales was driven by Power Card up-sell initiatives and higher buy ins. Food sales at ~~our~~comparable stores increased ~~opened~~by in$519, ~~fiscal 2011~~or 1.0%, ~~our~~to ~~two~~$50,613 ~~stores~~in ~~opened~~the ~~this~~first ~~fiscal~~quarter ~~year~~of 2013 from $50,094 ~~and~~in the ~~reopening~~comparable ofperiod ~~our~~in ~~Nashville~~2012. Beverage sales at comparable stores increased by $328, ~~Tennessee~~or ~~location~~1.5%, ~~during~~to $22,836 in the ~~third~~first quarter of ~~fiscal~~2013 ~~2011~~from $22,508 in the comparable period in 2012.

~~Our~~We have estimated the shift in non-comparable store revenue ~~mix~~due ~~was~~to ~~33.0%~~the ~~for~~53rd ~~food,~~week 15in fiscal 2012 to be a reduction in sales of $285.2% ~~for~~The ~~beverage~~non-comparable store revenue increased by a total of $3,925, ~~and~~or 5131.81%, ~~for~~in ~~amusements~~the ~~and~~first ~~other~~quarter ~~for~~of 2013 compared to the ~~third~~comparable ~~quarter~~13 weeks of 2012. ~~This~~The ~~compares~~increase toin ~~34.4%~~non-comparable store revenue was primarily driven by sales at our Orland Park, ~~15.1%~~Illinois store which opened in the third quarter of 2012, and ~~50.5%~~our Dallas, ~~respectively~~Texas and Boise, ~~for~~Idaho stores which opened in the ~~third~~fourth quarter of 2012. The revenue gains achieved in our stores opening in the second half of fiscal 2012 were partially offset by revenue decreases in our stores opened in fiscal 2011. and early fiscal 2012, due to those stores coming out of the “honeymoon” period, and the December 2012 closure of one store in Dallas, Texas.

Our revenue mix was 33.2% for food, 14.9% for beverage, and 51.9% for amusements and other for the first quarter of 2013. This compares to 33.3%, 15.1%, and 51.6%, respectively, for the first quarter of 2012.

Cost of products

Cost of food and beverage products increased to $1520,~~716~~151 in the ~~third~~first quarter of ~~2012~~2013 compared to $1419,~~649~~207 in the ~~third~~ first quarter of ~~2011~~2012 due primarily to the increased sales volume. Cost of food and beverage products, as a percentage of food and beverage revenues, increased 3060 basis points to 24.9% for the ~~third~~first quarter of ~~2012~~2013 from 24.63% for the ~~third~~first quarter of ~~2011~~ 2012. Increased cost pressure in our meat and ~~grocery~~poultry categories was partially offset by reduced ~~dairy,~~ seafood ~~and poultry~~ costs.

Cost of amusement and other increased to $1012,~~505~~213 in the ~~third~~first quarter of ~~2012~~ 2013 compared to $911,~~432~~747 in the ~~third~~first quarter of ~~2011~~2012. The costs of amusement and other, as a percentage of amusement and other revenues ~~remained~~increased ~~constant~~10 atbasis 15points to 14.50% for the first ~~third~~ quarter of ~~2012~~2013 asfrom ~~compared~~13.9% tofor the ~~third~~first quarter of ~~2011~~2012.

Operating payroll and benefits

Operating payroll and benefits increased by $3829,~~183,~~ or 102.43%, to $3337,~~735~~439 in the ~~third~~first quarter of ~~2012~~2013 compared to $3036,~~552~~610 in the ~~third~~ first quarter of ~~2011~~2012, primarily due to new store openings during fiscal ~~2011~~ ~~and fiscal~~ 2012. The total cost of operating payroll and benefits, as a percent of total revenues, ~~increased~~decreased 3010 basis points to 2522.73% for the ~~third~~first quarter of ~~2012~~2013 compared to 2522.4% for the first ~~third~~ quarter of ~~2011~~2012. The ~~increase~~decrease in operating payroll and benefits, as a percentage of revenues, in the ~~third~~first quarter of ~~2012~~2013 compared to the ~~third~~first quarter of ~~2011~~2012, was driven primarily by ~~increased~~decreased incentive compensation expense ~~and higher costs associated with health insurance claims experience during the third quarter of fiscal 2012~~, partially offset by amanagement ~~continued focus on~~ labor ~~scheduling and efficiency improvement~~costs.

Other store operating expenses

Other store operating expenses ~~increased~~ decreased by $1700,~~876,~~ or 41.4%, to $4448,~~595~~181 in the ~~third~~first quarter of ~~2012~~2013 compared to $4248,~~719~~881 in the ~~third~~ first quarter of ~~2011~~2012, driven primarily by ~~additional~~reduced ~~occupancy~~cost ~~expenses as a result~~ of ~~new~~marketing ~~store~~due ~~openings~~to ~~and~~strategic ~~the~~shifts ~~absence of business interruption recoveries, which totaled $820,~~ in ~~the~~media ~~third quarter of 2011~~purchasing. Other store operating expenses as a percentage of total revenues decreased ~~150~~120 basis points to 3428.07% in the ~~third~~first quarter of ~~2012~~2013 compared to 35 29.59% for the same period of 2011. Other store operating expenses, as a percentage of total revenues, were lower primarily as a result of favorable trends in utility costs, and the leveraging impact of higher store sales, partially offset by higher workers’ compensation claim requirements in the third quarter of 2012.

General and administrative expenses

General and administrative expenses consist primarily of personnel, facilities, and professional expenses for the various departments of our corporate headquarters. General and administrative expenses increased by $3707,~~963,~~ or 477.98%, to $129,~~242~~724 in the ~~third~~first quarter of ~~2012~~2013 compared to $89,~~279~~017 in the ~~third~~first quarter of ~~2011~~2012. The increase in general and administrative expenses was primarily driven by ~~recognition~~increased ofsalaries ~~approximately~~at ~~$2,940~~our ofcorporate ~~cost~~headquarters related to the withdrawn initial public offering of D&B Entertainment’s common stock. The expenses related to this transaction were pushed down to the Company as the funds from the offering were to have been substantially used to reduce the Company’s senior notes. The increase in general and ~~administrative~~consulting ~~expenses was also driven by increased salaries~~ and ~~incentive~~professional ~~compensation expense at our corporate headquarters~~fees, partially offset by ~~decreases~~decreased inincentive ~~consulting~~compensation ~~and professional fees~~expense.

Depreciation and amortization expense

Depreciation and amortization expense includes the depreciation of fixed assets and the amortization of trademarks with finite lives. Depreciation and amortization expense increased by $2,~~168~~115, or 1614.03%, to $1516,~~746~~910 in the ~~third~~first quarter of ~~2012~~2013 compared to $1314,~~578~~795 in the ~~third~~ first quarter of ~~2011~~2012. The increase was driven by higher depreciation associated with new store openings, major remodeling projects at ~~nine~~sixteen stores during fiscal 2012 and 2013, several smaller scale remodels in fiscal 2013 and maintenance capital expenditures. These increases were partially offset by the absence of depreciation related to our location in Dallas, Texas which closed in December 2012.

Pre-opening costs

Pre-opening costs include costs associated with the opening and organizing of new stores or conversion of existing stores, including pre-opening rent, staff training and recruiting, and travel costs for employees engaged in such pre-opening activities. Pre-opening costs increased by $~~502~~722 to $~~1,089~~872 in the ~~third~~first quarter of ~~2012~~2013 compared to $~~587~~150 in the ~~third~~ first quarter of ~~2011~~2012 due to the timing of new store openings. During the ~~third~~first quarter of ~~2012~~2013, our pre-opening costs were primarily attributable to our future sites located at ~~Dallas~~Virginia Beach, ~~Texas and Boise~~Virginia, ~~Idaho~~Albany, ~~(both~~New ~~expected~~York toand ~~open~~Syracuse, inNew ~~the~~York. ~~fourth~~These ~~quarter of~~three ~~fiscal~~locations ~~2012)~~are ~~and~~expected ~~pre-opening costs related~~ to ~~our~~open ~~store located~~ in ~~Orland~~mid-fiscal ~~Park,~~year ~~Illinois, which opened for business on September 24, 2012~~2013. During the ~~third~~first quarter of ~~2011~~2012, our pre-opening costs consisted primarily of expenses incurred in connection with our ~~Orlando~~Orland Park, ~~Florida~~Illinois store, which opened for business on ~~July~~September 1822, ~~2011~~2012, and our ~~Braintree~~Dallas, ~~Massachusetts~~Texas store, which opened for business on December 72, ~~2011, and our Oklahoma City store, which opened for business on January 30,~~ 2012.

1615

Interest expense

Interest expense includes the cost of our debt obligations including the amortization of loan fees and original issue discounts, ~~net~~and of any interest income earned. Interest expense decreased by $~~118~~200 to $78,~~979~~142 in the ~~third~~first quarter of ~~2012~~2013 compared to $8,~~097~~342 in the ~~third~~first quarter of ~~2011. The decrease in interest expense is due primarily to increase capitalized interest recognized in the third quarter of fiscal~~ 2012 ~~related to the new Dallas, Texas and Boise, Idaho locations currently under construction~~.

Income tax ~~benefit~~expense

The income tax ~~benefit~~expense for ~~2012~~2013 was $84,~~920~~ 494 compared to an income tax ~~benefit~~expense of $3,~~124~~741 for the ~~third~~first quarter of fiscal year ~~2011~~2012. Our effective tax rate differs from the statutory rate due to ~~changes in~~ the ~~tax valuation allowance, the deduction for~~ FICA tip credits, state income taxes and the impact of certain expenses, which are not deductible for income tax purposes.

In assessing the realizability of deferred tax assets, at ~~October~~May 285, ~~2012~~2013 we considered whether it is more likely than not that some or all of the deferred tax assets will not be realized. Based on the level of recent historical taxable income, consistent generation of annual taxable income, and estimations of future taxable income we have concluded that it is more likely than not that we will realize the federal tax benefits associated with our deferred tax assets. Accordingly, we have ~~reduced our previously~~ established a valuation allowance byof $61,~~662.~~160 ~~The valuation allowances previously established~~ for deferred tax assets associated with state taxes, foreign taxes and uncertain ~~tax~~ tax positions ~~remain~~as ~~unchanged from the end~~ of ~~fiscal~~May 5, ~~year 2011~~2013. The ultimate realization of our deferred tax assets is dependent on the generation of future taxable income during periods in which temporary differences and carryforwards become deductible.

We have previously adopted the accounting guidance for uncertainty in income taxes. This guidance limits the recognition of income tax benefits to those items that meet the “more likely than not” threshold on the effective date. As of ~~October~~May 285, ~~2012~~2013, we have accrued approximately $~~1,165~~588 of unrecognized tax benefits and approximately $~~1,230~~ 301 of penalties and interest. During the thirteen weeks ended ~~October~~May 285, ~~2012~~2013, we increased our unrecognized provision by $16117 and increased our accrual for interest and penalties by $3211. Subsequent to October 28, 2012, we reached an agreement with a taxing jurisdiction to settle an uncertain tax position of the Company. We anticipate that the settlement will result in a $992 reduction of our accrual for unrecognized taxes, penalties and interest. Future recognition of potential interest or penalties, if any, will be recorded as a component of income tax expense. Because of the impact of deferred tax accounting, $~~1,044~~509 of unrecognized tax benefits, if recognized, would affect the effective tax rate.

We file income tax returns, which are periodically audited by various federal, state and foreign jurisdictions. We are generally no longer subject to federal, state, or foreign income tax examinations for years prior to fiscal ~~2007~~2008.

The Company is a member of a consolidated group that includes D&B Entertainment. As of ~~October~~May 285, ~~2012~~2013, the Company owes D&B Entertainment approximately $25,~~502~~015 of tax related balances. ~~The~~Included in ~~Company~~income ~~expects~~tax topayable ~~utilize~~is ~~stand-alone~~$2,123, ~~net~~which ~~operating~~the ~~loss carry-forwards~~Company ofanticipates ~~approximately~~paying ~~$1,750~~ to ~~offset~~D&B ~~stand-alone~~Entertainment ~~taxable~~in ~~income~~fiscal ~~for~~2013. ~~the~~In ~~current~~ fiscal ~~year. Additionally~~2013, we expect to utilize approximately $83,~~100~~177 of available stand-alone tax credit carryforwards to offset our estimated stand-alone cash tax liability ~~for~~to ~~the~~D&B ~~current fiscal year~~Entertainment.

Results of Operations — The following tables set 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 operations.

	Thirty-Nine WeeksEnded					Thirty-Nine WeeksEnded
	October 28, 2012					October 30, 2011
Food and beverage revenues	$	213,734		48.3	%	$	197,706		49.7	%
Amusement and other revenues		228,747		51.7			199,883		50.3
Total revenues		442,481		100.0			397,589		100.0
Cost of food and beverage (as a percentage of food and beverage revenues)		52,446		24.5			48,041		24.3
Cost of amusement and other (as a percentage of amusement and other revenues)		34,117		14.9			30,084		15.1
Total cost of products		86,563		19.6			78,125		19.6
Operating payroll and benefits		105,704		23.9			95,830		24.1
Other store operating expenses		143,873		32.5			133,054		33.5
General and administrative expenses		30,099		6.8			25,704		6.5
Depreciation and amortization expense		45,573		10.3			39,873		10.0
Pre-opening costs		1,798		0.4			2,758		0.7
Total operating costs		413,610		93.5			375,344		94.4
Operating income		28,871		6.5			22,245		5.6
Interest expense, net		24,372		5.5			24,553		6.2
Income (loss) before income tax benefit		4,499		1.0			(2,308	)	(0.6	)
Income tax benefit		(5,551	)	(1.3	)		(1,461	)	(0.4	)
Net income (loss)	$	10,050		2.3	%	$	(847	)	(0.2	)%
Cash provided by (used in):
Operating activities	$	67,115				$	56,782
Investing activities		(49,981	)				(50,356	)
Financing activities		(1,125	)				(2,093	)
Change in comparable store sales (1)				2.8	%				2.7	%
Company owned stores open at end of period (2)				60					57	(3)
Comparable stores open at end of period (1)				55	(4)				52

(2) The number of stores open excludes one franchise location in Canada.

(3) Our location in Nashville, Tennessee, which temporarily closed from May 2, 2010 to November 28, 2011 due to flooding, is included in our store count.

(4) Includes one store in Dallas, Texas which will be closed in December 2012.

Thirty-Nine Weeks Ended October 28, 2012 Compared to Thirty-Nine Weeks Ended October 30, 2011

Revenues

Total revenues increased $44,892, or 11.3%, in the thirty-nine weeks ended October 28, 2012 compared to the thirty-nine weeks ended October 30, 2011.

The increased revenues were derived from the following sources:

Non-comparable stores - operating	$	35,134
Comparable stores		10,955
Other		(1,197	)
Total	$	44,892

Comparable store revenue increased $10,955, or 2.8%, in the thirty-nine weeks ended October 28, 2012 compared to the thirty-nine weeks ended October 30, 2011. Comparable walk-in revenues, which accounted for 89.2% of consolidated comparable store revenue in the thirty-nine weeks ended October 28, 2012, increased $10,256, or 3.0%, compared to the thirty-nine weeks ended October 30, 2011. Comparable store special events revenues, which accounted for 10.8% of consolidated comparable store revenue in the thirty-nine weeks ended October 28, 2012, increased $699, or 1.6%, in the thirty-nine weeks ended October 28, 2012 compared to the thirty-nine weeks ended October 30, 2011.

The amusement component of the business continued its trend of positive sales growth. Additionally, the beverage component experienced increased sales in the third quarter, partially offset by declines in food sales. Comparable store amusement and other revenues in the thirty-nine weeks ended October 28, 2012 increased by $10,661, or 5.5%, to $205,342 from $194,681 in the thirty-nine weeks ended October 30, 2011. The growth over 2011 in amusement sales was sparked by strategic investments in new games, up-sell initiatives and television advertising promoting the new games. Beverage sales at comparable stores increased by $1,370, or 2.4%, to $59,601 in the thirty-nine weeks ended October 28, 2012 from $58,231 in the thirty-nine weeks ended October 30, 2011. Food sales at comparable stores decreased by $1,076, or 0.8%, to $134,766 in the thirty-nine weeks ended October 28, 2012 from $135,842 in the thirty-nine weeks ended October 30, 2011.

The non-comparable store revenue increase was driven primarily by sales at our stores opened in fiscal 2011, our two stores opened this fiscal year, and the reopening of our Nashville, Tennessee location during the third quarter of fiscal 2011. The revenue gains achieved by our 2011 and year-to-date 2012 openings was partially offset by an $838 revenue reduction related to the May 2, 2011 closure of a store in Dallas, Texas.

Our revenue mix was 33.5% for food, 14.8% for beverage, and 51.7% for amusements and other for the thirty-nine weeks ended October 28, 2012. This compares to 34.8%, 14.9%, and 50.3%, respectively, for the thirty-nine weeks ended October 30, 2011.

Cost of products

Cost of food and beverage products increased to $52,446 in the thirty-nine weeks ended October 28, 2012 compared to $48,041 in the thirty-nine weeks ended October 30, 2011 due primarily to the increased sales volume. Cost of food and beverage products, as a percentage of food and beverage revenues, increased 20 basis points to 24.5% for the thirty-nine weeks ended October 28, 2012 from 24.3% for the thirty-nine weeks ended October 30, 2011. Increased cost pressure in our meat and grocery categories was partially offset by reduced beverage, produce and poultry costs.

Cost of amusement and other increased to $34,117 in the thirty-nine weeks ended October 28, 2012 compared to $30,084 in the thirty-nine weeks ended October 30, 2011. The costs of amusement and other, as a percentage of amusement and other revenues, decreased 20 basis points to 14.9% for the thirty-nine weeks ended October 28, 2012 from 15.1% for the thirty-nine weeks ended October 30, 2011.

Operating payroll and benefits

Operating payroll and benefits increased by $9,874, or 10.3%, to $105,704 in the thirty-nine weeks ended October 28, 2012 compared to $95,830 in the thirty-nine weeks ended October 30, 2011. The total cost of operating payroll and benefits, as a percent of total revenues, decreased 20 basis points to 23.9% for the thirty-nine weeks ended October 28, 2012 compared to 24.1% for the thirty-nine weeks ended October 30, 2011. The decrease in operating payroll and benefits, as a percentage of revenues, was driven primarily by a continued focus on labor scheduling and efficiency improvement partially offset by higher incentive compensation expense and increased benefit costs, in part, due to unfavorable health insurance claims experience.

Other store operating expenses

Other store operating expenses increased by $10,819, or 8.1%, to $143,873 in the thirty-nine weeks ended October 28, 2012 compared to $133,054 in the thirty-nine weeks ended October 30, 2011, driven primarily by additional occupancy expenses as a result of new store openings and increased marketing activity. Additionally, during the thirty-nine weeks ended October 30, 2011, other store operating expenses were reduced by the recognition of business interruption recoveries of $2,622. Other store operating expenses as a percentage of total revenues decreased 100 basis points to 32.5% in the thirty-nine weeks ended October 28, 2012 compared to 33.5% for the same period of 2011. Other store operating expenses, as a percentage of total revenues, were lower primarily as a result of favorable trends in utility costs and the leveraging impact of higher store sales, partially offset by higher losses on fixed asset disposals as a result of strategic investments in new games and the remodel of our store in Cincinnati, Ohio.

General and administrative expenses

General and administrative expenses consist primarily of personnel, facilities, and professional expenses for the various departments of our corporate headquarters. General and administrative expenses increased by $4,395, or 17.1%, to $30,099 in the thirty-nine weeks ended October 28, 2012 compared to $25,704 in the thirty-nine weeks ended October 30, 2011. The increase in general and administrative expenses was primarily driven by recognition of approximately $2,940 of cost related to the withdrawn initial public offering of D&B Entertainment common stock. The expenses related to this transaction were pushed down to the Company as the funds from the offering were to have been substantially used to reduce the Company’s senior notes. The increase in general and administrative expenses was also driven by increased salaries and incentive compensation expense at our corporate headquarters, partially offset by decreases in consulting and professional fees.

Depreciation and amortization expense

Depreciation and amortization expense includes the depreciation of fixed assets and the amortization of trademarks with finite lives. Depreciation and amortization expense increased by $5,700, or 14.3%, to $45,573 in the thirty-nine weeks ended October 28, 2012 compared to $39,873 in the thirty-nine weeks ended October 30, 2011. The increase was driven by higher depreciation associated with new store openings, major remodeling projects at nine stores and maintenance capital expenditures. These increases were partially offset by the absence of depreciation related to assets located in our Dallas, Texas location that were suspended due to the closure of the store in May 2011 and subsequent sale of the assets.

Pre-opening costs

Pre-opening costs include costs associated with the opening and organizing of new stores or conversion of existing stores, including pre-opening rent, staff training and recruiting, and travel costs for employees engaged in such pre-opening activities. Pre-opening costs decreased by $960 to $1,798 in the thirty-nine weeks ended October 28, 2012 compared to $2,758 in the thirty-nine weeks ended October 30, 2011 due to the timing of new store openings. During the thirty-nine weeks ended October 28, 2012, our pre-opening costs were primarily attributable to our future sites located at Dallas, Texas and Boise, Idaho, (both expected to open in the fourth quarter of fiscal 2012) and Orland Park, Illinois, which opened for business on September 24, 2012. During the thirty-nine weeks ended October 30, 2011, our pre-opening costs consisted primarily of expenses incurred in connection with our Orlando, Florida store, which opened for business on July 18, 2011, our Braintree, Massachusetts store, which opened for business on December 7, 2011, and our Oklahoma City store, which opened for business on January 30, 2012.

Interest expense

Interest expense includes the cost of our debt obligations including the amortization of loan fees and original issue discounts, and any interest income earned. Interest expense decreased by $181 to $24,372 in the thirty-nine weeks ended October 28, 2012 compared to $24,553 in the thirty-nine weeks ended October 30, 2011.

Income tax benefit

The income tax benefit for the thirty-nine weeks ended October 28, 2012 was $5,551 compared to an income tax benefit of $1,461 for the thirty-nine weeks ended October 30, 2011. Our effective tax rate differs from the statutory rate due to changes in the tax valuation allowance, the deduction for FICA tip credits, state income taxes and the impact of certain expenses, which are not deductible for income tax purposes.

In assessing the realizability of deferred tax assets at October 28, 2012, we considered whether it is more likely than not that some or all of the deferred tax assets will not be realized. Based on the level of recent historical taxable income, consistent generation of annual taxable income, and estimations of future taxable income we have concluded that it is more likely than not that we will realize the federal tax benefits associated with our deferred tax assets. Accordingly, we have reduced our previously established valuation allowance by $6,662. The valuation allowances previously established for deferred tax assets associated with state taxes, foreign taxes and uncertain tax positions remain unchanged from the end of fiscal year 2011. The ultimate realization of our deferred tax assets is dependent on the generation of future taxable income during periods in which temporary differences and carryforwards become deductible.

We have previously adopted the accounting guidance for uncertainty in income taxes. This guidance limits the recognition of income tax benefits to those items that meet the “more likely than not” threshold on the effective date. As of October 28, 2012, we have accrued approximately $1,165 of unrecognized tax benefits and approximately $1,230 of penalties and interest. During the thirty-nine weeks ended October 28, 2012, we increased our unrecognized provision by $225 and increased our accrual for interest and penalties by $121. Subsequent to October 28, 2012, we reached an agreement with a taxing jurisdiction to settle an uncertain tax position of the Company. We anticipate that the settlement will result in an $992 reduction of our accrual for unrecognized taxes, penalties and interest. Future recognition of potential interest or penalties, if any, will be recorded as a component of income tax expense. Because of the impact of deferred tax accounting, $1,044 of unrecognized tax benefits, if recognized, would affect the effective tax rate.

The Company is a member of a consolidated group that includes D&B Entertainment. As of October 28, 2012, the Company owes D&B Entertainment approximately $2,502 of tax related balances. The Company expects to utilize stand-alone net operating loss carry-forwards of approximately $1,750 to offset stand-alone taxable income for the current fiscal year. Additionally, we expect to utilize approximately $8,100 of available stand-alone tax credit carryforwards to offset our estimated stand-alone cash tax liability for the current fiscal year.

Liquidity and Capital Resources

We finance our activities through cash flow from operations, our senior notes, and borrowings under our senior secured credit facility. As of ~~October~~May 285, ~~2012~~2013, we had cash and cash equivalents of $4964,~~693~~108, net working capital ~~deficit~~ of $512,~~990~~975 and outstanding debt obligations of $~~346~~345,~~625~~267 ($~~345~~344,~~763~~533 net of discount). We also had $4544,~~106~~330 in borrowing availability under our senior secured credit facility, which includes $1,000 in borrowing availability under our Canadian revolving credit facility.

WeIn ~~currently~~the ~~have~~past ~~negative~~we ~~working~~have had, ~~capital~~ and anticipate that in the future we ~~may~~will have, negative working capital balances. We are able to operate with a working capital deficit because cash from sales is usually received before related liabilities for product, supplies, labor and services become due. Funds available from sales not needed immediately to pay for operating expenses have typically been used for noncurrent capital expenditures and payment of long-term debt obligations under our senior secured credit facility and senior notes.

Short-term liquidity requirements — We generally consider our short-term liquidity requirements to consist of those items that are expected to be incurred within the next twelve months and believe those requirements to consist primarily of funds necessary to pay operating expenses, interest and principal payments on our debt, capital expenditures related to the new store construction and other expenditures associated with acquiring new games, remodeling facilities and recurring replacement of equipment and improvements.

As of ~~October~~May 285, ~~2012~~2013, we expect our short-term liquidity requirements to include (a) approximately $~~104~~127,000 of capital expenditures (net of cash contributions from landlords), (b) ~~$31,982~~scheduled of debt service payments of $31,704, including $1,~~500~~267 in principal payments and $30,~~482~~437 in interest, ~~and~~ (c) lease obligation payments of $5154,~~172~~192 and (d) estimated cash tax payments of approximately $3,600.

Long-term liquidity requirements — We generally consider our long-term liquidity requirements to consist of those items that are expected to be incurred beyond the next twelve months and believe these requirements consist primarily of funds necessary for new store development and construction, replacement of games and equipment, performance-necessary renovations and other non-recurring capital expenditures that need to be made periodically to our stores and payments of scheduled debt and lease obligations. We intend to satisfy our long-term liquidity requirements through various sources of capital, including our existing ~~cash~~working ~~on hand~~capital, cash provided by operations, and borrowings under our senior secured credit facility.

We believe the cash flows from operations, together with our existing cash balances and borrowings under the senior secured credit facility described below, will be sufficient to meet our anticipated cash needs for working capital, capital expenditures, and debt service needs in the foreseeable future. Our ability to make scheduled payments of principal or interest on, or to refinance, our indebtedness, or to fund planned capital expenditures, will depend on future performance, which is subject to general economic conditions, competitive environment and other factors.

2016

Indebtedness

Senior Secured Credit Facility — Our senior secured credit facility provides (a) a $150,000 term loan facility with a maturity date of June 1, 2016 and (b) a $50,000 revolving credit facility with a maturity date of June 1, 2015. The $50,000 revolving credit facility includes (i) a $20,000 letter of credit sub-facility (ii) a $5,000 swingline sub-facility and (iii) a $1,000 (in US Dollar equivalent) sub-facility available in Canadian dollars to the Company’s Canadian subsidiary. The revolving credit facility will be used to provide financing for general purposes. The senior secured credit facility is secured by the Company’s assets and is unconditionally guaranteed by each of our direct and indirect, existing and future domestic subsidiaries (with certain agreed-upon exceptions) and by certain specified guarantors with respect to the obligations of the Canadian subsidiary. As of ~~October~~May 285, ~~2012~~2013, we had no borrowings under the revolving credit facility, borrowings of $~~146~~145,~~625~~267 ($~~145~~144,~~763~~533, net of discount) under the term facility and $45,~~894~~670 in ~~letters~~ letters of credit outstanding. We believe that the carrying amount of our term credit facility approximates its fair value because the interest rates are adjusted regularly based on current market conditions.

The interest rates per annum applicable to loans, other than swingline loans, under our senior secured credit facility are set periodically based on, at our option, either (1) the greatest of (a) the defined prime rate in effect, (b) the Federal Funds Effective Rate in effect plus 1 / 2 of 1% and (c) a Eurodollar rate which is subject to a minimum (or, in the case of the Canadian revolving credit facility, a Canadian prime rate or Canadian cost of funds rate), for one-, two-, three- or six-months (or, if agreed by the applicable lenders, nine or twelve months) or, in relation to the Canadian revolving credit facility, 30-, 60-, 90- or 180-day interest periods chosen by us or our Canadian subsidiary, as applicable in each case (the “Base Rate”), plus an applicable margin ~~of 3.0%~~ or (2) a defined Eurodollar rate plus an ~~applicable~~ applicable margin ~~of 4~~.~~0%.~~ Swingline loans bear interest at the Base Rate plus the applicable margin. The effective rate of interest on borrowings under our senior secured credit facility is 5.8% for the ~~thirty-nine~~thirteen weeks ended ~~October~~May 285, ~~2012~~ 2013.

~~Interest~~On ~~rates~~May 13, on2011, ~~borrowings~~the ~~under~~Company ~~our~~executed ~~senior~~an ~~secured~~amendment ~~credit~~(the ~~facility~~“Amendment”) ~~will~~to ~~vary~~the ~~based~~senior onsecured ~~the~~credit ~~movement~~facility. ofThe ~~prescribed~~Amendment ~~indexes~~reduced ~~and/or~~the applicable ~~margin~~term ~~percentages.~~loan Onmargins ~~the~~and ~~last~~LIBOR ~~day~~floor ofused ~~each~~in ~~calendar~~setting ~~quarter~~interest rates, weas ~~will~~well beas ~~required~~limited tothe ~~pay~~Company’s arequirement ~~commitment~~to ~~fee~~meet on the ~~average~~covenant ~~daily~~ratios, ~~unused~~as ~~portion~~stipulated ofin the ~~revolving~~Amendment, ~~credit~~until ~~facilities~~such ~~(with~~time ~~swingline~~as ~~loans~~we ~~not~~make ~~deemed, for these purposes, to be~~ a ~~utilization~~draw ofon ~~the~~ our revolving credit facility). ~~Our~~or ~~senior~~issue ~~secured~~letters of credit ~~facility~~in ~~requires~~excess ~~scheduled~~of ~~quarterly~~$12,000. ~~payments~~As of ~~principal~~May 5, on2013, ~~the~~we ~~term~~have ~~loans~~had ~~near~~no ~~the~~draws ~~end~~on ofour ~~each~~revolving ofcredit ~~the~~facility ~~fiscal~~and ~~quarters~~outstanding inletters ~~aggregate~~of ~~annual~~credit ~~amounts~~have ~~equal~~not ~~to a~~exceeded ~~percentage~~$12,000, ofand ~~the~~as ~~original~~such ~~aggregate~~we ~~principal~~were ~~amount~~not ofrequired ~~the~~to maintain ~~term~~financial ~~loan~~ratios ~~with~~under ~~the~~our ~~balance~~senior ~~payable~~secured oncredit ~~the maturity date~~facility.

~~Funds managed~~On byMay 14, ~~Oak~~2013, ~~Hill~~the ~~Advisors,~~Company ~~L.P.~~executed a second amendment (the “~~OHA~~Second ~~Funds~~Amendment”) isto ~~one of twenty-two creditors participating in~~ the ~~term loan portion of our~~ senior secured credit facility. AsThe ofprimary ~~October 28,~~modification ~~2012,~~included in the ~~OHA~~Second ~~Funds~~Amendment ~~held~~is ~~approximately~~a ~~9.43%,~~reduction ~~or $13,823,~~in ofthe ~~our~~applicable ~~total~~ term loan ~~obligation. Oak Hill Advisors~~margin, ~~L.P.~~which is anreduced ~~independent~~by ~~investment~~0.75% per ~~firm~~annum ~~that~~based ison ~~not~~a consolidated anleverage ~~affiliate~~ratio ofgreater ~~Oak~~than ~~Hill~~or ~~Capital~~equal ~~Partners~~to ~~and is not under common control with Oak Hill Capital Partners~~2. ~~Oak Hill Advisors, L~~75:1.P00. ~~and an~~For ~~affiliate~~a ofconsolidated ~~Oak~~leverage ~~Hill~~ratio ~~Capital~~less ~~Management,~~than ~~LLC co-manage Oak Hill Special Opportunities Fund, L~~2.P75:1.00, athe ~~private~~applicable ~~fund.~~term ~~Certain~~loan ~~employees~~margin ofwill ~~Oak~~be ~~Hill~~reduced ~~Capital~~further ~~Partners,~~by in0.25%. ~~their private capacities~~Additionally, ~~have~~the ~~passive~~Second ~~investments~~Amendment inreduced ~~Oak~~the ~~Hill~~LIBOR ~~Advisors,~~floor ~~L.P.~~used ~~and/or~~in ~~the~~setting ~~funds~~rates itby ~~manages~~0.25%.

~~Senior~~Interest ~~notes~~rates —on ~~Our~~borrowings under our senior ~~notes~~secured ~~are~~credit ~~general~~facility ~~unsecured,~~will ~~unsubordinated~~vary based on the ~~obligations~~movement of ~~the~~prescribed ~~Company~~indexes and/or ~~mature~~applicable onmargin ~~June 1, 2018~~percentages. ~~Interest~~On on the ~~notes~~last isday ~~paid~~of ~~semi-annually~~each ~~and~~calendar ~~accrues~~quarter, atwe ~~the~~will ~~rate~~be ofrequired ~~11.0% per~~to ~~annum.~~pay Ona orcommitment ~~after~~fee ~~June 1,~~on ~~2014,~~ the ~~Company~~average ~~may~~daily ~~redeem~~unused ~~all,~~portion orof ~~from~~the ~~time-to-time,~~revolving acredit ~~part~~facilities of(with ~~the~~swingline loans ~~senior~~not ~~notes~~deemed, atfor ~~redemption~~these ~~prices~~purposes, ~~(expressed~~to asbe a ~~percentage~~utilization of ~~principal~~the ~~amount~~revolving credit facility). ~~ranging~~Our ~~from~~senior ~~105.5%~~secured tocredit ~~100.0%~~facility ~~plus~~requires ~~accrued~~scheduled ~~and~~quarterly ~~unpaid~~payments ~~interest~~of principal on the ~~senior~~term ~~notes.~~loans ~~Prior~~near tothe ~~June 1,~~end ~~2013,~~of ~~the~~each ~~Company~~of ~~may~~the onfiscal ~~any~~quarters ~~one~~in oraggregate annual ~~more~~amounts ~~occasions~~equal ~~redeem up~~ to ~~40.0%~~a percentage of the original aggregate principal amount of the ~~senior~~term ~~notes~~loan ~~using~~with the ~~proceeds~~balance ofpayable ~~certain~~on ~~equity~~the ~~offerings~~maturity atdate. aOur ~~redemption~~senior ~~price~~secured ofcredit ~~111.0%~~facility ofrequires us to make mandatory debt prepayments to the ~~principal~~extent ~~amount~~that ~~thereof~~we have excess cash flow, ~~plus~~as ~~any~~defined ~~accrued~~by ~~and~~the ~~unpaid~~facility, ~~interest~~in any completed fiscal year. AsDuring the first quarter of ~~October 28,~~fiscal ~~2012,~~2013 ~~our~~ we made a $~~200,000~~608 ofdebt ~~senior~~prepayment ~~notes~~based ~~had~~on anour ~~approximate~~fiscal ~~fair~~2012 ~~value~~excess cash flow. The excess cash flow prepayment represented early payment of $~~226,400~~375 ~~based~~in principal which was due on ~~quoted~~April 30, ~~market~~2013 ~~price~~and $233 in principal which is due on July 30, 2013.

~~The~~Funds ~~senior~~managed ~~notes~~by ~~restrict the~~Oak ~~Company’s~~Hill ~~ability~~Advisors, toL.P. ~~incur~~(the ~~indebtedness,~~“OHA ~~outside~~Funds”) is one of twenty-two creditors participating in the term loan portion of our senior secured credit facility. As of May 5, ~~unless~~2013, the ~~consolidated~~OHA ~~coverage~~Funds ~~ratio~~held ~~exceeds~~approximately 29.~~00:1.00~~43%, or ~~other~~$13,695, ~~financial~~of our total term loan obligation. Oak Hill Advisors, L.P. is an independent investment firm that is not an affiliate of Oak Hill Capital Partners and ~~operational~~is ~~requirements~~not ~~are~~under ~~met~~common control with Oak Hill Capital Partners. ~~Additionally~~Oak Hill Advisors, ~~the~~L.P. ~~terms~~and an affiliate of ~~the~~Oak ~~senior notes~~Hill ~~restrict~~Capital ~~the~~Management, ~~Company’s~~LLC ~~ability~~co-manage toOak ~~make~~Hill ~~certain~~Special ~~payments~~Opportunities toFund, ~~affiliated~~L.P., ~~entities~~a private fund. ~~The~~Certain ~~Company~~employees of ~~was~~Oak Hill Capital Partners, in ~~compliance~~their ~~with~~individual ~~the~~capacities, ~~debt~~have ~~covenants~~passive asinvestments ofin ~~October 28~~Oak Hill Advisors, ~~2012~~L.P. and/or the funds it manages.

~~Covenants~~Senior notes — OnOur ~~May 13,~~senior ~~2011,~~notes ~~the~~are ~~Company~~general ~~executed~~unsecured, anunsubordinated ~~amendment~~obligations (of the ~~“Amendment”)~~Company toand ~~its~~mature ~~senior~~on ~~secured~~June 1, ~~credit facility~~2018. ~~The~~Interest ~~Amendment~~on ~~reduced~~ the ~~applicable~~notes ~~term~~is ~~loan margins~~paid semi-annually and ~~LIBOR~~accrues at ~~floor~~the ~~used~~rate inof ~~setting~~11.0% per ~~interest~~annum. ~~rates,~~On asor ~~well~~after asJune 1, ~~limited~~2014, the Company’s ~~requirement~~may toredeem ~~meet~~all, ~~the~~or ~~covenant~~from ~~ratios~~time-to-time, asa ~~stipulated~~part inof the ~~Amendment,~~senior ~~until~~notes ~~such~~at ~~time~~redemption asprices we(expressed ~~make~~as a ~~draw~~percentage onof ~~our~~principal ~~revolving~~amount) ~~credit~~ranging ~~facility~~from or105.5% ~~issue~~to 100.0% plus ~~letters~~accrued ofand ~~credit~~unpaid ininterest ~~excess~~on the senior notes. As of May 5, 2013, our $12200,000 of senior notes had an approximate fair value of $225,800 based on quoted market price.

~~Our~~The senior ~~secured~~notes ~~credit~~restrict ~~facility and~~ the ~~indenture~~Company’s ~~governing the senior notes contain restrictive covenants that, among other things, will limit our~~ ability ~~and the ability of our subsidiaries~~ to incur ~~additional~~ indebtedness, ~~make~~outside ~~loans~~of orthe ~~advances~~senior tosecured ~~subsidiaries~~credit ~~and other entities~~facility, ~~make~~unless ~~initial~~the ~~capital~~consolidated ~~expenditures~~coverage ~~in relation~~ratio toexceeds ~~new~~2.00:1.00 ~~stores,~~or ~~declare~~other ~~dividends,~~financial and operational ~~acquire~~requirements ~~other~~are ~~businesses or sell assets~~met. ~~In addition~~Additionally, ~~under~~the ~~our~~terms ~~senior~~of ~~secured~~the ~~credit~~senior ~~facility,~~notes werestrict ~~will~~the beCompany’s ~~required~~ability to ~~meet~~make certain ~~financial~~payments ~~covenants,~~to ~~ratios~~affiliated ~~and tests, including a minimum fixed charge coverage ratio and a maximum total leverage ratio~~entities. The ~~indenture~~Company ~~under~~was ~~which~~in ~~the~~compliance ~~senior~~with ~~notes~~the ~~have~~debt ~~been issued also contain similar~~ covenants ~~and~~as ~~events~~ of ~~defaults.~~May 5, 2013.

21Covenants — On May 13, 2011, the Company executed an amendment (the “Amendment”) to its senior secured credit facility. The Amendment reduced the applicable term loan margins and LIBOR floor used in setting interest rates, as well as limited the Company’s requirement to meet the covenant ratios, as stipulated in the Amendment, until such time as we make a draw on our revolving credit facility or issue letters of credit in excess of $12,000. As of May 5, 2013, we have had no draws on our revolving credit facility and outstanding letters of credit have not exceeded $12,000, and as such, we were not required to maintain financial ratios under our senior secured credit facility.

Our senior secured credit facility and the indenture governing the senior notes contain restrictive covenants that, among other things, will limit our ability and the ability of our subsidiaries to incur additional indebtedness, make loans or advances to subsidiaries and other entities, make initial capital expenditures in relation to new stores, declare dividends, and acquire other businesses or sell assets. In addition, under our senior secured credit facility, we will be required to meet certain financial covenants, ratios and tests, including a minimum fixed charge coverage ratio and a maximum total leverage ratio. The indenture under which the senior notes have been issued also contain similar covenants and events of defaults.

Cash Flows

The following table presents a summary of our net cash provided by (used in) operating, investing and financing activities:

	Thirty-Nine Weeks			Thirty-Nine Weeks
	Thirteen WeeksEnded May 5, 2013			Thirteen WeeksEnded April 29, 2012
	Ended October 28, 2012			Ended October 30, 2011
Net cash provided by (used in):
Operating activities	$	6738,~~115~~173		$	5630,~~782~~592
Investing activities		(499,~~981~~574	)		(505,~~356~~041	)
Financing activities		(~~1,125~~608	)		(~~2,093~~375	)

Net cash provided by operating activities was $6738,~~115~~173 for the ~~thirty-nine~~thirteen weeks ended ~~October~~May 285, ~~2012~~ 2013 compared to cash provided by operating activities of $5630,~~782~~592 for the ~~thirty-nine~~thirteen weeks ended ~~October~~April 3029, ~~2011~~2012. Improved cash flows from operations were driven primarily by additional non-comparable store sales ~~and margin improvements over the comparable period in fiscal 2011~~.

Net cash used in investing activities was $499,~~981~~574 for the ~~thirty-nine~~thirteen weeks ended ~~October~~ May 285, ~~2012~~2013 compared to $505,~~356~~041 for the ~~thirty-nine~~thirteen weeks ended ~~October~~April 3029, ~~2011~~2012. Net cash used in investing activities ~~decreased~~increased inmainly ~~year-to-date fiscal 2012~~ due to ~~the~~increase ~~absence of any share repurchases~~ in ~~the~~capital ~~current fiscal year~~expenditures. ~~In year-to-date fiscal 2011, the Company spent $1,000 to repurchase shares of D&B Entertainment owned by a former executive.~~ Capital expenditures increased $634,584 to $509,~~246~~679 in ~~year-to-date~~the ~~fiscal~~thirteen ~~2012~~weeks ended May 5, 2013 from $505,~~183~~095 in ~~year-to-date~~the ~~fiscal~~thirteen ~~2011~~weeks ended April 29, 2012. New store capital expenditures increased $2,827 during ~~year-to-date~~the ~~fiscal~~thirteen ~~2011~~weeks ended May 5, 2013 related primarily to construction of our ~~Orlando~~Boise, Idaho store, which opened during the ~~second~~fourth quarter of fiscal ~~2011~~2012, and our Virginia ~~Braintree~~Beach, ~~Massachusetts~~Virginia, ~~store~~Albany, ~~which~~New ~~opened~~York inand ~~the~~Syracuse, ~~fourth~~New ~~quarter~~York ~~of fiscal~~stores ~~2011.~~projected ~~Decreased spending related~~ to ~~new~~open ~~store~~in ~~development~~mid-fiscal ~~was~~2013. ~~offset~~Capital by expenditures ~~of $7,432~~ related to the major ~~remodeling~~remodel project on ~~nine~~seven ~~of our~~ existing stores and several smaller scale remodel projects increased $32,~~507~~410 ~~related~~during tothe ~~our~~first ~~game~~quarter ~~refresh~~of ~~initiative~~fiscal 2013. ~~The~~Partially ~~Company~~offsetting ~~received insurance~~increased ~~proceeds~~expenditures ofrelated ~~$798~~to ~~for~~new ~~reimbursement~~store ofopenings ~~certain~~and ~~leasehold~~remodel ~~improvements~~projects ~~damaged~~was indecreased ~~the~~maintenance ~~flooding~~capital ~~that~~expenditures ~~occurred~~of at$653 ~~our~~in ~~Nashville,~~the ~~Tennessee~~thirteen ~~location~~weeks ~~which~~ended ~~are~~May 5, ~~included~~2013 compared into ~~investing~~the ~~activities~~thirteen ~~for~~weeks ~~year-to-date~~ended ~~fiscal~~April 29, ~~2011~~2012.

Net cash used by financing activities was $~~1,125~~608 for the ~~thirty-nine~~ thirteen weeks ended ~~October~~May 285, ~~2012~~2013 compared to cash used in financing activities of $~~2,093~~375 for the ~~thirty-nine~~thirteen weeks ended ~~October~~April 3029, ~~2011~~2012. The ~~decrease~~increase in net cash used by financing activities is due to ~~$968~~the ofmandatory ~~cost~~prepayment ~~incurred~~of ~~during~~$608 ~~the~~pursuant ~~second~~to ~~quarter~~our credit ofagreement. ~~fiscal~~$375 ~~2011~~was ~~related~~applied to ~~the~~our ~~Amendment~~regularly ~~executed~~scheduled principal payment due on ~~our senior~~April 30, ~~secured~~2013 ~~credit~~and ~~facility~~the remaining $233 will be applied toward the regularly scheduled payment due on July 30, 2013.

We plan toon ~~finance~~financing future growth through operating cash flows, debt facilities and tenant improvement allowances from landlords. We expect to spend ~~approximately~~between $79114,000 and $124,000 ($7095,000 to $105,000 net of cash contributions from landlords) in capital expenditures during fiscal ~~2012~~2013. The fiscal ~~2012~~2013 expenditures are expected to include approximately $5588,000 to $98,000 ($4669,000 to $79,000 net of cash contributions from landlords) for new store construction and operating improvement initiatives, including seven store remodels, $11,000 for game refreshment and $15,000 in maintenance capital. A portion of the 2013 new store expenditures is related to stores that will be under construction in 2013 but will not be open until 2014.

Contractual Obligations and Commercial Commitments

The following tables set forth the contractual obligations and commercial commitments as of ~~October~~May 285, ~~2012~~2013:

Payment due by period

	Total		1 Yearor Less		2-3 Years		4-5 Years		After 5Years
Senior secured credit facility (1)	$	~~146~~145,~~625~~267	$	1,~~500~~267	$	3,000	$	~~142~~141,~~125~~000	$	—
Senior notes		200,000		—		—		—		200,000
Interest requirements (2)		~~161~~146,~~687~~433		30,~~482~~437		60,~~558~~285		4844,~~647~~711		2211,000
Operating leases (3)		~~458~~516,~~887~~455		5154,~~172~~192		~~100~~106,~~978~~545		9499,~~379~~913		~~212~~255,~~358~~805
Total	$	~~967~~1,~~199~~008,155	$	8385,~~154~~896	$	~~164~~169,~~536~~830	$	285,~~151~~624	$	~~434~~466,~~358~~805

(1) Our senior secured credit facility includes a $150,000 term loan facility and $50,000 revolving credit facility, including a sub-facility for borrowings in Canadian dollars by our Canadian subsidiary, a letter of credit sub-facility, and a swingline sub-facility. As of ~~October~~May 285, ~~2012~~2013, we had no borrowings under the revolving credit facility, borrowings of $~~146~~145,~~625~~267 ($~~145~~144,~~763~~533 net of discount) under the term facility and $45,~~894~~670 in letters of credit outstanding.

~~(2)~~18 The cash obligations for interest requirements consist of requirements on our fixed rate debt obligations at their contractual rates and variable rate debt obligations at rates in effect at October 28, 2012.

(3) Our operating leases generally provide for one or more renewal options. These renewal options allow us to extend the term of the lease for a specified time at an established annual lease payment. Future obligations related to lease renewal options that have not been exercised are excluded from the table above.

(2)	The cash obligations for interest requirements consist of requirements on our fixed rate debt obligations at their contractual rates and variable rate debt obligations at rates in effect at May 5, 2013.

(3)

Our operating leases generally provide for one or more renewal options. These renewal options allow us to extend the term of the lease for a specified time at an established annual lease payment. Future obligations related to lease renewal options that have been exercised or were reasonably assured to be exercised as of the lease origination date, have been included in the table above.

Accounting Policies

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires us to make estimates and assumptions about future events. These estimates and assumptions affect amounts of assets, liabilities, revenues and expenses and the disclosure of gain and loss contingencies at the date of the consolidated financial statements. Our current estimates are subject to change if different assumptions as to the outcome of future events were made. We evaluate our estimates and judgments on an ongoing basis and predicate those estimates and judgments on historical experience and on various other factors that we believe are reasonable under the circumstances. We adjust our assumptions and judgments when facts and circumstances dictate. Since future events and their effects cannot be determined with absolute certainty, actual results may differ from the estimates we used in preparing the accompanying consolidated financial statements. A complete description of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended ~~January~~ February 293, ~~2012~~2013.

Recent Accounting Pronouncements — InSee ~~June~~Note ~~2011,~~1 ~~the Financial Accounting Standards Board (~~“~~FASB”)~~Description ~~issued~~of ~~guidance~~Business ~~that eliminates the option to report other comprehensive income~~ and ~~its~~Basis ~~components in the statement~~ of ~~changes~~Presentation” into ~~equity (~~our Consolidated ~~prior~~Financial ~~reporting~~Statements ~~method).~~included Inin ~~accordance~~Part ~~with this new guidance~~I, ~~effective in the first quarter of fiscal 2012~~Item 1, we“Financial ~~have~~Statements” ~~elected~~for toa ~~present~~description ~~items~~ of ~~net~~new ~~income and other comprehensive income as one statement. There are no changes to the~~ accounting ~~for~~standards ~~items~~and ~~within~~their ~~comprehensive~~anticipated ~~income.~~effects Weon ~~have~~our ~~revised~~Consolidated ~~the~~Financial ~~reporting of fiscal 2011 other comprehensive income to conform to the current year presentation~~Statements.

InSignificant ~~September~~accounting ~~2011,~~policies ~~the~~— ~~FASB~~There ~~finalized~~were ~~guidance~~no ~~on testing~~significant ~~goodwill~~changes ~~for impairment. This guidance permits an entity~~ to ~~first~~our ~~assess~~critical ~~qualitative~~accounting ~~factors~~policies infrom ~~order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative~~those ~~assessment~~disclosed ~~may~~in beour ~~used~~Annual asReport aon ~~basis~~Form ~~for determining the necessity of performing the two~~10-~~step~~K ~~goodwill~~filed ~~impairment~~with ~~test. If an entity determines through its qualitative assessment that it is more likely than not that~~ the ~~fair~~SEC ~~value~~for ~~of goodwill exceeds its carrying value, then~~ the ~~remaining~~year ~~impairment~~ended steps would be deemed unnecessary. The initial qualitative assessment is optional and companies are allowed to only perform the quantitative assessment. This guidance is effective for annual goodwill impairment testing performed in fiscal years beginning after DecemberFebruary 153, ~~2011~~2013. ~~We assess the fair value of our goodwill annually, during our fourth fiscal quarter. This guidance is not expected to have a material impact on the consolidated financial statements.~~

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our quantitative and qualitative market risks since the prior reporting period.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 promulgated under the Securities Exchange Act of 1934 as amended, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

Internal Controls Over Financial Reporting

On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) became law. The Act provides smaller companies and debt only issuers with a permanent exemption from the Sarbanes-Oxley internal control audit requirements. The permanent exemption applies only to the external audit requirement of Section 404 of the Sarbanes-Oxley Act. Non-accelerated filers are still required to disclose “management’s assessment” of the effectiveness of internal control over financial reporting. There were no significant changes in our internal controls over financial reporting that occurred during our ~~third~~first quarter ended ~~October~~May 285, ~~2012~~2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

FORWARD-LOOKING STATEMENTS

This Form 10-Q includes statements that are, or may deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “intends,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Form 10-Q and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods. An expanded discussion of these risk factors is contained in Part I, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended ~~January~~February 293, ~~2012~~2013.

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PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

Information regarding legal proceedings is incorporated by reference from Note 5 to our Unaudited Consolidated Financial Statements set forth in Part I of this report.

ITEM 1A.

RISK FACTORS

There has been no material change in the risk factors set forth in Part I, Item 1A, “Risk Factors,” in our Form 10-K for the year ended ~~January~~February 293, ~~2012.~~2013 as filed with the SEC.

ITEM 6.

EXHIBITS

Exhibit Number		Description
10.8		Second Amendment, dated as of May 14, 2013, to the Credit Agreement, dated as of June 1, 2010, among Dave & Buster’s Holdings, Inc., Dave & Buster’s, Inc., 6131646 Canada, Inc. and the several banks and other financial institutions or entities from time to time parties thereto.
31.1		Certification of Stephen M. King, Chief Executive Officer and Director of the Registrant, pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a).
31.2		Certification of Brian A. Jenkins, Senior Vice President and Chief Financial Officer of the Registrant, pursuant to 17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a).
32.1		Certification of Stephen M. King, Chief Executive Officer and Director of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Brian A. Jenkins, Senior Vice President and Chief Financial Officer of the Registrant, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		XBRL Interactive Datafiles

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	DAVE & BUSTER’S, INC., a Missouri corporation
Date: December 11, 2012	By:	/s/ Stephen M. King
Date: June 17, 2013	By:	/s/ Stephen M. King
		Stephen M. King
		Chief Executive Officer
Date: December 11, 2012	By:	/s/ Brian A. Jenkins
Date: June 17, 2013	By:	/s/ Brian A. Jenkins
		Brian A. Jenkins
		Senior Vice President and Chief Financial Officer

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