Monday, December 18, 2017 | Today's Vending Industry News
CEC Entertainment Inc. Posts $5.9 Million Net Loss In 2017 Second Quarter

Posted On: 9/26/2017

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IRVING, TX -- CEC Entertainment Inc., the parent company of Chuck E. Cheese's and Peter Piper Pizza, reported a net loss of $5.9 million for its second quarter, ended July 2, compared with a net loss of $9.1 million in the second quarter of 2016. Other highlights of the CEC's second quarter are:

» Adjusted EBITDA was $40.3 million in 2017, compared with $41.7 million in 2016.
» Comparable venue sales declined 3.8% for both Chuck E. Cheese's and Peter Piper Pizza venues.
» PlayPass system is now deployed in 95% of company-operated Chuck E. Cheese's venues.
» Two new company-operated Peter Piper Pizza venues and four new international Chuck E. Cheese's franchise venues opened in the second quarter.

"While we are pleased that our cost efforts allowed us to preserve margins, we are disappointed with our revenue performance in the second quarter," said CEC chief executive Tom Leverton. "We experienced traffic declines in walk-in business as well as booked birthday parties during the quarter. To address the issue, we have returned our advertising messaging to our successful 2016 themes, which focused on our many improvements to the in-store experience."

Leverton added that CEC's strong operating focus and the favorable impact of its recently implemented inventory management system led to adjusted EBITDA of $40.3 million for the quarter.

Second Quarter Results

CEC's total revenue decreased by $4.8 million to $211.8 million during the second quarter, compared with same period last year, primarily driven by a 3.8% decline in comparable venue sales, offset partially by new venue sales.

The company reported a net loss of $5.9 million for the second quarter of 2017, compared with a net loss of $9.1 million for 2016's second quarter. Improved results were driven by better venue-level operating margins, and lower depreciation and administrative expenses, which offset the decline in company-operated venue sales.

During this year's second quarter, adjusted EBITDA decreased by $1.4 million, or 3.3%, to $40.3 million, compared with the second quarter of 2016.

Balance Sheet And Liquidity

As of July 2, 2017, CEC's cash and cash equivalents were $89.5 million, and the principal outstanding on its debt was $990.3 million, with net availability of $140.1 million on its undrawn revolving credit facility. During the quarter, CEC said it had capital expenditures of $25.2 million, of which $8.7 million related to its PlayPass initiative and another $6.8 million related to other growth initiatives. The company also had $1.8 million in capital expenditures related to IT initiatives, and $7.9 million related to maintenance capital expenditures, primarily arcade game enhancements and general venue capital expenditures.

CEC Entertainment Inc. owns and operates 564 venues. Another 193 stores (89 domestic and 104 international) are franchised. In February 2014, Apollo Global Management acquired CEC for about $950 million.