IRVING, Texas - Oct. 29, 2015 // PRNewswire // - CEC Entertainment, Inc. (the "Company") today announced financial results for its third quarter ended September 27, 2015.
"We are pleased to report our second consecutive quarter of positive same store sales growth at our Chuck E. Cheese's stores," said Tom Leverton, Chief Executive Officer. We believe the investments we are making to improve the in-store experience and communicating to our guests is generating positive momentum and driving traffic and sales at a reinvigorated Chuck E. Cheese's. In addition, we are also pleased to report that Peter Piper Pizza continues its positive momentum, recording its 21st consecutive quarter of same store sales growth."
Total revenues for the third quarter of 2015 increased 11.1%, or $22.2 million, over the prior year to $221.9 million. The increase is primarily related to additional revenues of $16.9 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 third quarter of 2015 for Chuck E. Cheese's stores increased 0.7% from the prior year. Same store sales for the third quarter of 2015 for Peter Piper Pizza stores increased 5.0% over the prior year, a period in which the Company did not own Peter Piper Pizza.
Adjusted EBITDA for the third quarter of 2015 increased 20.0%, or $8.9 million, over the prior year to $53.4 million. The increase is primarily related to incremental Adjusted EBITDA for Peter Piper Pizza, lower corporate overhead expenses and an increase in store revenues, offset by increases in store expenses associated with the increase in store revenues. Adjusted EBITDA for Peter Piper Pizza increased 50.5% over the prior year, a period in which the Company did not own Peter Piper Pizza, to $5.2 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 $3.2 million for the third quarter of 2015, compared to a net loss of $13.3 million for the third 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, a decrease in store operating costs, lower transaction and severance related costs and the addition of net income from Peter Piper Pizza for the third quarter of 2015.
As of September 27, 2015, cash and cash equivalents were $60.9 million, and total debt was $1.0 billion, with no borrowings drawn under the Company's $150.0 million revolving credit facility. During the third quarter of 2015, the Company declared and paid a cash dividend of $70.0 million from its cash balance on hand. Capital expenditures were $19.6 million for the third quarter of 2015, of which $11.2 million were related to IT and growth initiatives, including new store development, major remodels, store expansions and major attractions.
As of September 27, 2015, the Company's system-wide portfolio consisted of:
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Conference Call Information:
The Company will host a conference call beginning at 9:00 a.m. Central Time on Friday, October 30, 2015. The call can be accessed by dialing (855) 743-8451 or (330) 968-0151 for international participants and conference code 63763067.
A replay of the call will be available from 12:00 p.m. Central Time on October 30, 2015 through midnight Central Time on November 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 63763067.
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 more than 135 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 nine months ended September 28, 2014. Although this combined presentation does not comply with GAAP, the Company believes that it provides a meaningful method of comparison.
Temple Weiss
Investor Inquiries
EVP & CFO
CEC Entertainment, Inc.
(972) 258-4525
tweiss@cecentertainment.com
Alexis Linn
Media Inquiries
CEC Entertainment, Inc.
(972) 258-4223
alinn@cecentertainment.com
- financial tables follow -
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Due to rounding, percentages presented in the table above may not sum to total. The percentage amounts for the components of cost of food and beverage and the cost of entertainment and merchandise may not sum to total due to the fact that cost of food and beverage and cost of entertainment and merchandise are expressed as a percentage of related food and beverage sales and entertainment and merchandise sales, as opposed to total Company store sales.
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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.
For more than 35 years, CEC Entertainment is a family dining and entertainment franchise.