IRVING, Texas - July 29, 2015 // PRNewswire // - CEC Entertainment, Inc. (the "Company") today announced financial results for its second quarter ended June 28, 2015.
"We are pleased to report positive same store sales growth this quarter of 3.0% at our Chuck E. Cheese's stores and 5.3% at our Peter Piper Pizza stores," said Tom Leverton, Chief Executive Officer. "We believe our initiatives to improve the overall food and entertainment experience at Chuck E. Cheese's are beginning to have an impact. The new menu at our Chuck E. Cheese's stores launched in April and has been very well received by our guests. We believe other initiatives like free guest Wi-Fi and enhanced hospitality training are also improving the in-store experience and helping to contribute to stronger traffic. With all of the positive changes at Chuck E. Cheese's, we invested in marketing to communicate our new menu and initiate our Mom's focused advertising campaign which we believe will help support revenue growth in future quarters, as well as the quarter just completed. In addition, Peter Piper Pizza, which we acquired in October 2014, continues its positive momentum, reporting its 20th consecutive quarter of same store sales growth."
Total revenues for the second quarter of 2015 increased 13.7%, or $25.5 million, over the prior year to $212.1 million. The increase is primarily related to additional revenues of $17.8 million resulting from the Peter Piper Pizza acquisition, which closed in October 2014, and an increase in same store sales at our Chuck E. Cheese's stores. Same store sales for the second quarter of 2015 for Chuck E. Cheese's stores increased 3.0% from the prior year. Same store sales for the second quarter of 2015 for Peter Piper Pizza stores increased 5.3% over the prior year, a period in which the Company did not own Peter Piper Pizza.
Adjusted EBITDA for the second quarter of 2015 increased 11.3%, or $4.2 million, over the prior year to $41.1 million. The increase is primarily related to incremental Adjusted EBITDA for Peter Piper Pizza, offset by increases in store expenses associated with the increase in store revenues and an increase in rent due to fewer landlord incentives being received than the prior year, as well as investments made in advertising. Adjusted EBITDA for Peter Piper Pizza increased 31.0% over the prior year, a period in which the Company did not own Peter Piper Pizza, to $5.4 million. Adjusted EBITDA represents net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization, asset impairments, the effects of acquisition accounting adjustments, transaction and severance costs and certain other items.
The Company reported a net loss of $9.9 million for the second quarter of 2015, compared to a net loss of $12.8 million for the second quarter of 2014. The decrease in the net loss is due to an increase in same store sales at our Chuck E. Cheese's stores and net income from Peter Piper Pizza for the second quarter of 2015 of $1.7 million.
As of June 28, 2015, cash and cash equivalents were $132.4 million, and total debt was $1.0 billion, with no borrowings drawn under the Company's $150.0 million revolving credit facility. Capital expenditures were $23.9 million for the second quarter of 2015, of which $15.3 million were related to IT and growth initiatives, including new store development, major remodels, store expansions and major attractions.
As of June 28, 2015, the Company's system-wide portfolio consisted of:
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The Company will host a conference call beginning at 9:00 a.m. Central Time on Thursday, July 30, 2015. The call can be accessed by dialing (855) 743-8451 or (330) 968-0151 for international participants and conference code 85512719.
A replay of the call will be available from 12:00 p.m. Central Time on July 30, 2015 through midnight Central Time on August 6, 2015. The replay of the call can be accessed by dialing (800) 585-8367 or (404) 537-3406 for international participants and conference code 85512719.
For more than 35 years, CEC Entertainment has served as a nationally recognized leader in family dining and entertainment. The Company and its franchisees operate a system of more than 585 Chuck E. Cheese's stores and 140 Peter Piper Pizza stores, with locations in 47 states and 11 foreign countries and territories. For more information, visit chuckecheese.com.
Certain statements in this report, other than historical information, may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, and are subject to various risks, uncertainties and assumptions. Statements that are not historical in nature and which may be identified by the use of words such as "may," "should," "could," "believe," "predict," "potential," "continue," "plan," "intend," "expect," "anticipate," "future," "project," "estimate," and similar expressions (or the negative of such expressions) are forward-looking statements. Forward-looking statements are made based on management's current expectations and beliefs concerning future events and, therefore, involve a number of assumptions, risks and uncertainties, including the risk factors described in Part I, Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 28, 2014, filed with the Securities and Exchange Commission on March 5, 2015. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ from those anticipated, estimated or expected. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including but not limited to:
The forward-looking statements made in this report relate only to events as of the date on which the statements were made. Except as may be required by law, we undertake no obligation to update our forward-looking statements to reflect events and circumstances after the date on which the statements were made or to reflect the occurrence of unanticipated events.
On February 14, 2014, the Company announced the completion of the acquisition of CEC Entertainment, Inc. by an affiliate of Apollo Global Management, LLC ("Apollo"). The acquisition is referred to as the "Merger." The accompanying consolidated statements of earnings and related information present the Company's results of operations for the period preceding the acquisition (Predecessor) and the period succeeding the acquisition (Successor) based on the mathematical combination of the Successor and Predecessor periods in the six months ended June 29, 2014. Although this combined presentation does not comply with GAAP, the Company believes that it provides a meaningful method of comparison.
- financial tables follow -
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CEC ENTERTAINMENT, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
(in thousands)
Non-GAAP Financial Measures
The Company reports and discusses its operating results using financial measures consistent with accounting principles generally accepted in the United States ("GAAP"). From time to time in the course of financial presentations, earnings conference calls or otherwise, the Company may disclose certain non-GAAP financial measures such as Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"). The Company believes Adjusted EBITDA is a measure that provides investors with additional information to measure our performance. We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future, as well as other items. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance and understanding certain significant items. The non-GAAP financial measures presented in this earnings release should not be viewed as alternatives or substitutes for the Company's reported GAAP results.
The following table sets forth a reconciliation of net income to Adjusted EBITDA and Adjusted EBITDA expressed as a percentage of total revenues for the periods shown:
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Adjusted EBITDA, a measure used by management to assess operating performance, is defined as Net income (loss) plus interest expense, income taxes and depreciation and amortization and adjusted to exclude asset impairments, the effects of acquisition accounting adjustments, transaction and severance costs, and certain other items.
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SOURCE CEC Entertainment, Inc.
Temple Weiss
Investor Relations
EVP & CFO
CEC Entertainment, Inc
(972) 258-4525
tweiss@cecentertainment.com
Kari Streiber
Media Relations
CEC Entertainment, Inc.
(214) 632-9360
kstreiber@talktocurrent.com
For more than 35 years, CEC Entertainment is a family dining and entertainment franchise.