IRVING, Texas - Aug. 4, 2016 // PRNewswire // - CEC Entertainment, Inc. (the "Company") today announced financial results for its second quarter ended July 3, 2016.
"We are pleased to report our fifth consecutive quarter of same store sales growth at our Chuck E. Cheese's stores" said Tom Leverton, Chief Executive Officer. "We continue to see the benefit of the food and hospitality initiatives we have implemented during the past two years. In addition, we are pleased to report that Peter Piper Pizza recorded its 24th consecutive quarter of same store sales growth."
Our fiscal calendar results were negatively impacted by the shift in the July 4th holiday weekend into the second quarter of 2016 instead of the third quarter in 2015 and the shift of several spring breaks into the first quarter of 2016 instead of the second quarter in 2015.
Total revenues for the second fiscal quarter of 2016 increased 2.1%, or $4.5 million, over the prior year to$216.6 million. The increase is attributable to increased same store sales at both our Chuck E. Cheese'sand Peter Piper Pizza brands. On a calendar week basis same store sales for our Chuck E. Cheese's andPeter Piper Pizza stores increased 2.6% over the comparable weeks in 2015.
The Company reported a net loss of $9.1 million for the second quarter of 2016, compared to a net loss of$9.9 million for the second quarter of 2015. The decrease in the net loss was driven by increased store revenues and lower marketing and corporate overhead costs, offset by an increase in merchandise and other store related operating costs.
Adjusted EBITDA for the second quarter of 2016 increased $0.3 million over the prior year period to $41.4 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. In determining Adjusted EBITDA, the increase in revenue was offset by the higher merchandise and other store operating costs.
(1) Our fiscal year ending January 1, 2017 will consist of 52 weeks and our fiscal year ended January 3, 2016 consisted of 53 weeks. As a result of the 53 week fiscal year in 2015, our 2016 fiscal year began one calendar week later than our 2015 fiscal year. In order to provide useful information and to better analyze our business, we have provided same store sales presented on both a fiscal week basis and calendar week basis. Same store sales growth on a calendar week basis compares the results for the period from April 4, 2016 through July 3, 2016 (weeks 14 through 26 of our 2016 fiscal year) to the results for the period from April 6, 2015 through July 5, 2015 (weeks 15 through 27 of our 2015 fiscal year). We believe same store sales growth calculated on a same calendar week basis is more indicative of the operating trends in our business. However, we also recognize that same store sales growth calculated on a fiscal week basis is a useful measure when analyzing year-over-year changes in our financial results.
As of July 3, 2016, cash and cash equivalents were $75.6 million, and the principal outstanding on our debt was $1.0 billion, with net availability of $140.1 million on our undrawn revolving credit facility. During the second quarter of 2016, we had capital expenditures of $26.4 million, of which $8.5 million related to our PlayPass initiative and another $5.2 million were related to other growth initiatives. In addition, we had $2.4 million in capital expenditures related to IT initiatives.
As of July 3, 2016, 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 Friday, August 5, 2016. The call can be accessed by dialing (855) 743-8451 or (330) 968-0151 for international participants and conference code 49324126.
A replay of the call will be available from 12:00 p.m. Central Time on August 5, 2016 through midnight Central Time on August 12, 2016. The replay of the call can be accessed by dialing (800) 585-8367 or (404) 537-3406 for international participants and conference code 49324126.
For nearly 40 years, CEC Entertainment has served as the nationally recognized leader in family dining and entertainment and the place Where A Kid Can Be A Kid®. Chuck E. Cheese's goal is to create positive, lifelong memories for families through fun, food, and play. Each Chuck E. Cheese's features musical entertainment, games, rides, and play areas for kids of all ages, as well as a variety of freshly prepared dining options. It is also a place where more than a million happy birthdays are celebrated every year. Committed to providing a fun, safe environment, Chuck E. Cheese's helps protect families through industry-leading programs such as Kid Check®. As a strong advocate for its local communities and childhood education, Chuck E. Cheese's has donated more than $13 million to schools through its fundraising programs. As of July 3, 2016 the Company and its franchisees operated a system of 598 Chuck E. Cheese's stores and 141 Peter Piper Pizza stores, with locations in 47 states and 12 foreign countries and territories. For more information, visit chuckecheese.com and peterpiperpizza.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release, 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 January 3, 2016, filed with the Securities and Exchange Commission on March 2, 2016. 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.
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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, 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.
Dale R. Black
Investor Relations
EVP & CFO
CEC Entertainment, Inc.
(972) 258-4525
dblack@cecentertainment.com
Shannon McGovern
Media Relations
Director
Current Marketing
(312) 929-0510
SMcGovern@talktocurrent.com
For more than 35 years, CEC Entertainment is a family dining and entertainment franchise.