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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cec Entertainment, Inc. | NYSE:CEC | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 53.98 | 0.00 | 01:00:00 |
|
|
|
|
|
Kansas
|
|
1-13687
|
|
48-0905805
|
(State or other jurisdiction
of incorporation)
|
|
(Commission
File Number)
|
|
(IRS Employer
Identification No.)
|
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
(d)
|
Exhibits
|
|
|
Exhibit
Number
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CEC ENTERTAINMENT, INC.
|
||
|
|
|
|
|||
Date: November 7, 2019
|
|
|
|
By:
|
|
/s/ James A. Howell
|
|
|
|
|
|
|
James A. Howell
|
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
(1)
|
For our definition of Adjusted EBITDA, see the financial table “Reconciliation of Non-GAAP Financial Measures” included within this press release.
|
|
|
Chuck E. Cheese
|
|
Peter Piper Pizza
|
|
Total
|
|||
Company operated
|
|
514
|
|
|
39
|
|
|
553
|
|
Domestic franchised
|
|
25
|
|
|
61
|
|
|
86
|
|
International franchised
|
|
71
|
|
|
28
|
|
|
99
|
|
Total
|
|
610
|
|
|
128
|
|
|
738
|
|
▪
|
our strategy, outlook and growth prospects;
|
▪
|
our operational and financial targets and dividend policy;
|
▪
|
our planned expansion of the venue base and the implementation of the new design in our existing venues;
|
▪
|
general economic trends and trends in the industry and markets; and
|
▪
|
the competitive environment in which we operate.
|
▪
|
negative publicity and changes in consumer preferences;
|
▪
|
our ability to successfully expand and update our current venue base;
|
▪
|
our ability to successfully implement our marketing strategy;
|
▪
|
our ability to compete effectively in an environment of intense competition;
|
▪
|
our ability to weather economic uncertainty and changes in consumer discretionary spending;
|
▪
|
increases in food, labor and other operating costs;
|
▪
|
the impact of labor scheduling legislation;
|
▪
|
our ability to successfully open international franchises and to operate under the United States and foreign anti-corruption laws that govern those international ventures;
|
▪
|
risks related to our substantial indebtedness;
|
▪
|
failure of our information technology systems to support our current and growing businesses;
|
▪
|
disruptions to our commodity distribution system;
|
▪
|
our dependence on third-party vendors to provide us with sufficient quantities of new entertainment-related equipment, prizes and merchandise at acceptable prices;
|
▪
|
risks from product liability claims and product recalls;
|
▪
|
the impact of governmental laws and regulations and the outcomes of legal proceedings;
|
▪
|
potential liability under certain state property laws;
|
▪
|
fluctuations in our financial results due to new venue openings;
|
▪
|
local conditions, natural disasters, terrorist attacks and other events and public health issues;
|
▪
|
the seasonality of our business;
|
▪
|
inadequate insurance coverage;
|
▪
|
labor shortages and immigration reform;
|
▪
|
loss of certain personnel;
|
▪
|
our ability to protect our trademarks or other proprietary rights;
|
▪
|
risks associated with owning and leasing real estate, as well as the risks from any forced venue relocation or closure;
|
▪
|
impairment charges for goodwill, indefinite-lived intangible assets or other long-lived assets;
|
▪
|
our ability to successfully integrate the operations of companies we acquire;
|
▪
|
our failure to maintain adequate internal controls over our financial and management systems; and
|
▪
|
other risks, uncertainties and factors set forth in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 30, 2018, filed with the SEC on March 12, 2019.
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
||||||||||||||||||||||||
|
September 29,
2019 |
|
September 30,
2018 |
|
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||||||||||||
|
|
|||||||||||||||||||||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Food and beverage sales
|
$
|
92,645
|
|
|
42.6
|
%
|
|
$
|
94,023
|
|
|
42.6
|
%
|
|
|
$
|
302,111
|
|
|
42.8
|
%
|
|
$
|
308,658
|
|
|
44.5
|
%
|
Entertainment and merchandise sales
|
119,688
|
|
|
55.0
|
%
|
|
121,611
|
|
|
55.0
|
%
|
|
|
386,778
|
|
|
54.8
|
%
|
|
368,633
|
|
|
53.2
|
%
|
||||
Total company venue sales
|
212,333
|
|
|
97.6
|
%
|
|
215,634
|
|
|
97.6
|
%
|
|
|
688,889
|
|
|
97.6
|
%
|
|
677,291
|
|
|
97.7
|
%
|
||||
Franchise fees and royalties
|
5,261
|
|
|
2.4
|
%
|
|
5,311
|
|
|
2.4
|
%
|
|
|
17,194
|
|
|
2.4
|
%
|
|
15,917
|
|
|
2.3
|
%
|
||||
Total revenues
|
217,594
|
|
|
100.0
|
%
|
|
220,945
|
|
|
100.0
|
%
|
|
|
706,083
|
|
|
100.0
|
%
|
|
693,208
|
|
|
100.0
|
%
|
||||
OPERATING COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Company venue operating costs and expenses (excluding Depreciation and amortization):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of food and beverage (1)
|
21,302
|
|
|
23.0
|
%
|
|
22,520
|
|
|
24.0
|
%
|
|
|
69,239
|
|
|
22.9
|
%
|
|
72,774
|
|
|
23.6
|
%
|
||||
Cost of entertainment and merchandise (2)
|
10,113
|
|
|
8.4
|
%
|
|
9,874
|
|
|
8.1
|
%
|
|
|
31,311
|
|
|
8.1
|
%
|
|
27,676
|
|
|
7.5
|
%
|
||||
Total cost of food, beverage, entertainment and merchandise (3)
|
31,415
|
|
|
14.8
|
%
|
|
32,394
|
|
|
15.0
|
%
|
|
|
100,550
|
|
|
14.6
|
%
|
|
100,450
|
|
|
14.8
|
%
|
||||
Labor expenses (3)
|
63,213
|
|
|
29.8
|
%
|
|
65,028
|
|
|
30.2
|
%
|
|
|
199,693
|
|
|
29.0
|
%
|
|
194,994
|
|
|
28.8
|
%
|
||||
Lease costs (3)
|
27,559
|
|
|
13.0
|
%
|
|
23,851
|
|
|
11.1
|
%
|
|
|
82,102
|
|
|
11.9
|
%
|
|
72,615
|
|
|
10.7
|
%
|
||||
Other venue operating expenses (3)
|
34,586
|
|
|
16.3
|
%
|
|
38,232
|
|
|
17.7
|
%
|
|
|
102,536
|
|
|
14.9
|
%
|
|
113,363
|
|
|
16.7
|
%
|
||||
Total company venue operating costs and expenses (3)
|
156,773
|
|
|
73.8
|
%
|
|
159,505
|
|
|
74.0
|
%
|
|
|
484,881
|
|
|
70.4
|
%
|
|
481,422
|
|
|
71.1
|
%
|
||||
Other costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advertising expense
|
10,803
|
|
|
5.0
|
%
|
|
11,058
|
|
|
5.0
|
%
|
|
|
34,033
|
|
|
4.8
|
%
|
|
38,010
|
|
|
5.5
|
%
|
||||
General and administrative expenses
|
13,051
|
|
|
6.0
|
%
|
|
13,193
|
|
|
6.0
|
%
|
|
|
42,944
|
|
|
6.1
|
%
|
|
39,519
|
|
|
5.7
|
%
|
||||
Depreciation and amortization
|
24,622
|
|
|
11.3
|
%
|
|
24,739
|
|
|
11.2
|
%
|
|
|
73,074
|
|
|
10.3
|
%
|
|
76,804
|
|
|
11.1
|
%
|
||||
Transaction, severance and related litigation costs
|
371
|
|
|
0.2
|
%
|
|
(263
|
)
|
|
(0.1
|
)%
|
|
|
402
|
|
|
0.1
|
%
|
|
463
|
|
|
0.1
|
%
|
||||
Asset impairments
|
8,202
|
|
|
3.8
|
%
|
|
5,344
|
|
|
2.4
|
%
|
|
|
9,487
|
|
|
1.3
|
%
|
|
6,935
|
|
|
1.0
|
%
|
||||
Total operating costs and expenses
|
213,822
|
|
|
98.3
|
%
|
|
213,576
|
|
|
96.7
|
%
|
|
|
644,821
|
|
|
91.3
|
%
|
|
643,153
|
|
|
92.8
|
%
|
||||
Operating income
|
3,772
|
|
|
1.7
|
%
|
|
7,369
|
|
|
3.3
|
%
|
|
|
61,262
|
|
|
8.7
|
%
|
|
50,055
|
|
|
7.2
|
%
|
||||
Interest expense
|
22,029
|
|
|
10.1
|
%
|
|
19,069
|
|
|
8.6
|
%
|
|
|
61,816
|
|
|
8.8
|
%
|
|
56,740
|
|
|
8.2
|
%
|
||||
Loss on extinguishment of debt
|
2,910
|
|
|
1.3
|
%
|
|
—
|
|
|
—
|
%
|
|
|
2,910
|
|
|
0.4
|
%
|
|
—
|
|
|
—
|
%
|
||||
Loss before income taxes
|
(21,167
|
)
|
|
(9.7
|
)%
|
|
(11,700
|
)
|
|
(5.3
|
)%
|
|
|
(3,464
|
)
|
|
(0.5
|
)%
|
|
(6,685
|
)
|
|
(1.0
|
)%
|
||||
Income tax benefit
|
(5,833
|
)
|
|
(2.7
|
)%
|
|
(2,213
|
)
|
|
(1.0
|
)%
|
|
|
(642
|
)
|
|
(0.1
|
)%
|
|
(454
|
)
|
|
(0.1
|
)%
|
||||
Net loss
|
$
|
(15,334
|
)
|
|
(7.0
|
)%
|
|
$
|
(9,487
|
)
|
|
(4.3
|
)%
|
|
|
$
|
(2,822
|
)
|
|
(0.4
|
)%
|
|
$
|
(6,231
|
)
|
|
(0.9
|
)%
|
|
|
September 29,
2019 |
|
December 30,
2018 |
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
105,059
|
|
|
$
|
63,170
|
|
Restricted cash
|
|
212
|
|
|
151
|
|
||
Other current assets
|
|
62,429
|
|
|
83,411
|
|
||
Total current assets
|
|
167,700
|
|
|
146,732
|
|
||
Property and equipment, net
|
|
525,107
|
|
|
539,185
|
|
||
Operating lease right-of-use assets, net (1)
|
|
536,057
|
|
|
—
|
|
||
Goodwill
|
|
484,438
|
|
|
484,438
|
|
||
Intangible assets, net
|
|
469,218
|
|
|
477,085
|
|
||
Other noncurrent assets
|
|
16,794
|
|
|
18,725
|
|
||
Total assets
|
|
$
|
2,199,314
|
|
|
$
|
1,666,165
|
|
LIABILITIES AND STOCKHOLDER’S EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Bank indebtedness and other long-term debt, current portion
|
|
$
|
7,600
|
|
|
$
|
7,600
|
|
Operating lease obligations, current portion (1)
|
|
49,203
|
|
|
—
|
|
||
Other current liabilities
|
|
122,497
|
|
|
98,982
|
|
||
Total current liabilities
|
|
179,300
|
|
|
106,582
|
|
||
Operating lease obligations, less current portion (1)
|
|
522,380
|
|
|
—
|
|
||
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion
|
|
958,986
|
|
|
961,514
|
|
||
Deferred tax liability
|
|
102,721
|
|
|
107,058
|
|
||
Other noncurrent liabilities
|
|
196,030
|
|
|
248,440
|
|
||
Total liabilities
|
|
1,959,417
|
|
|
1,423,594
|
|
||
Stockholder’s equity:
|
|
|
|
|
||||
Common stock, $0.01 par value; authorized 1,000 shares; 200 shares issued as of September 29, 2019 and December 30, 2018
|
|
—
|
|
|
—
|
|
||
Capital in excess of par value
|
|
359,930
|
|
|
359,570
|
|
||
Accumulated deficit
|
|
(118,482
|
)
|
|
(115,660
|
)
|
||
Accumulated other comprehensive loss
|
|
(1,551
|
)
|
|
(1,339
|
)
|
||
Total stockholder’s equity
|
|
239,897
|
|
|
242,571
|
|
||
Total liabilities and stockholder’s equity
|
|
$
|
2,199,314
|
|
|
$
|
1,666,165
|
|
|
|
Nine Months Ended
|
||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|||||||
Net loss
|
|
$
|
(2,822
|
)
|
|
$
|
(6,231
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|||
Loss on extinguishment of debt
|
|
2,910
|
|
|
—
|
|
||
Depreciation and amortization
|
|
73,074
|
|
|
76,804
|
|
||
Asset impairments
|
|
9,487
|
|
|
6,935
|
|
||
Deferred income taxes
|
|
(4,261
|
)
|
|
(3,314
|
)
|
||
Stock-based compensation expense
|
|
1,985
|
|
|
169
|
|
||
Amortization of lease related liabilities
|
|
—
|
|
|
(749
|
)
|
||
Amortization of original issue discount and deferred debt financing costs
|
|
3,544
|
|
|
3,284
|
|
||
Debt refinancing costs
|
|
694
|
|
|
—
|
|
||
Loss on asset disposals, net
|
|
2,903
|
|
|
2,551
|
|
||
Non-cash lease costs
|
|
2,438
|
|
|
4,109
|
|
||
Change in operating lease liabilities
|
|
(1,219
|
)
|
|
—
|
|
||
Other adjustments
|
|
(170
|
)
|
|
531
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Operating assets
|
|
2,518
|
|
|
(1,547
|
)
|
||
Operating liabilities
|
|
24,563
|
|
|
(67
|
)
|
||
Net cash provided by operating activities
|
|
115,644
|
|
|
82,475
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(60,388
|
)
|
|
(55,202
|
)
|
||
Development of internal use software
|
|
(787
|
)
|
|
(1,992
|
)
|
||
Proceeds from sale of property and equipment
|
|
160
|
|
|
464
|
|
||
Net cash used in investing activities
|
|
(61,015
|
)
|
|
(56,730
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Proceeds from senior notes
|
|
479,449
|
|
|
—
|
|
||
Repayments on senior term loan
|
|
(473,749
|
)
|
|
(5,700
|
)
|
||
Payment of debt financing costs
|
|
(15,375
|
)
|
|
(395
|
)
|
||
Other financing activities
|
|
(2,999
|
)
|
|
(2,561
|
)
|
||
Net cash used in financing activities
|
|
(12,674
|
)
|
|
(8,656
|
)
|
||
Effect of foreign exchange rate changes on cash
|
|
(5
|
)
|
|
51
|
|
||
Change in cash, cash equivalents and restricted cash
|
|
41,950
|
|
|
17,140
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
|
63,321
|
|
|
67,312
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
105,271
|
|
|
$
|
84,452
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||
|
|
September 29,
2019 |
|
September 30,
2018 |
|
September 29,
2019 |
|
September 30,
2018 |
||||||||||
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
|
$
|
217,594
|
|
|
$
|
220,945
|
|
$
|
220,945
|
|
$
|
706,083
|
|
|
$
|
693,208
|
|
Net loss as reported
|
|
$
|
(15,334
|
)
|
|
$
|
(9,487
|
)
|
|
$
|
(2,822
|
)
|
|
$
|
(6,231
|
)
|
||
Interest expense
|
|
22,029
|
|
|
19,069
|
|
|
61,816
|
|
|
56,740
|
|
||||||
Income tax benefit
|
|
(5,833
|
)
|
|
(2,213
|
)
|
|
(642
|
)
|
|
(454
|
)
|
||||||
Depreciation and amortization
|
|
24,622
|
|
|
24,739
|
|
|
73,074
|
|
|
76,804
|
|
||||||
EBITDA
|
|
25,484
|
|
|
32,108
|
|
|
131,426
|
|
|
126,859
|
|
||||||
Asset impairments
|
|
8,202
|
|
|
5,344
|
|
|
9,487
|
|
|
6,935
|
|
||||||
Loss on asset disposals, net
|
|
920
|
|
|
513
|
|
|
2,903
|
|
|
2,551
|
|
||||||
Unrealized (gain) loss on foreign exchange
|
|
168
|
|
|
(412
|
)
|
|
(469
|
)
|
|
283
|
|
||||||
Non-cash stock-based compensation
|
|
(111
|
)
|
|
(58
|
)
|
|
2,000
|
|
|
169
|
|
||||||
Lease costs book to cash
|
|
783
|
|
|
945
|
|
|
2,481
|
|
|
5,133
|
|
||||||
Franchise revenue, net cash received
|
|
464
|
|
|
(30
|
)
|
|
1,634
|
|
|
712
|
|
||||||
Impact of purchase accounting
|
|
31
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||||
Venue pre-opening costs
|
|
170
|
|
|
81
|
|
|
386
|
|
|
105
|
|
||||||
One-time and unusual items
|
|
2,781
|
|
|
44
|
|
|
3,566
|
|
|
1,511
|
|
||||||
Adjusted EBITDA
|
|
$
|
38,892
|
|
|
$
|
38,535
|
|
|
$
|
153,445
|
|
|
$
|
144,258
|
|
||
Adjusted EBITDA Margin
|
|
17.9
|
%
|
|
17.4
|
%
|
|
21.7
|
%
|
|
20.8
|
%
|
1 Year Cec Entertainment Chart |
1 Month Cec Entertainment Chart |
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