CEC Entertainment, Inc. Reports Fourth Quarter And Full Year 2019 Comparable Venue Sales Growth

For the fiscal year ended December 29, 2019, comparable venue sales increased 2.7% over the prior year and total revenues increased from $896.1 million to $912.9 million.

Mar 9, 2020 - 11:12

CEC Entertainment, Inc. today announced financial results for its fourth quarter ended December 29, 2019.

Full Year and Fourth Quarter Results

For the fiscal year ended December 29, 2019, comparable venue sales increased 2.7% over the prior year and total revenues increased from $896.1 million to $912.9 million. Comparable venue sales increased 2.6% in the fourth quarter of 2019 compared to the fourth quarter of 2018. For the fourth quarter of 2019, total revenues increased $3.9 million, or 1.9%, to $206.8 million, compared to $202.9 million in the fourth quarter of 2018.

The Company reported a net loss of $26.1 million for the fourth quarter of 2019, compared to a net loss of $14.2 million for the fourth quarter of 2018. The net loss for the current quarter was impacted by a $13.8 million impairment charge related to the underperformance of certain Company-operated locations, and an increase in interest expense driven by a higher average interest rate on our variable rate debt. These negative impacts were partially offset by an increase in revenues, driven by comparable venue sales growth, and a $0.7 million gain on open market repurchases of our senior notes.

Adjusted EBITDA (1) for the fiscal year ended December 29, 2019 increased $8.9 million, or 5.1%, to $184.1 million from $175.2 million for the fiscal year ended December 30, 2018. For the fourth quarter of 2019, Adjusted EBITDA decreased $0.3 million or 1.0%, to $30.6 million from $30.9 million for the fourth quarter of 2018.

"2019 was a strong year built on the All You Can Play value gaming platform and expanded remodel program," said David McKillips, Chief Executive Officer. "This year, I am looking forward to introducing our new domestic promotional initiatives, global franchise expansion and the debut of our entertainment & licensing efforts, as we work through some of the headwinds that the industry is facing today."

Through this Sunday, the Company's year to date comparable venue sales were down 3.6%. For January, comparable venue sales were up, but have been down in February and March to date.

Balance Sheet and Liquidity

As of December 29, 2019, the Company had cash and cash equivalents of $34.8 million with net availability of $105.5 million on the undrawn revolving credit facility. There is $975.7 million of principal outstanding on the Company's long-term debt. During the fourth quarter, the Company repurchased $39.3 million of its senior notes in the open market. As of December 29, 2019, $215.7 million in principal remained on the Company's senior notes.

The Company monitors the capital markets and its capital structure and makes changes from time to time, with the goal of maintaining financial flexibility, preserving or improving liquidity and/or achieving cost efficiency. From time to time the Company may opportunistically pursue financing transactions or asset sales. In addition, the Company may elect to repurchase amounts of its outstanding debt, including the senior notes for cash, through open market repurchases or privately negotiated transactions with certain of its debt holders, although there is no assurance the Company will do so.

During the fourth quarter of 2019, the Company made $26.6 million of capital expenditures, of which $16.0 million related to growth initiatives, $4.9 million related to IT initiatives, and $5.7 million related to maintenance capital expenditures, primarily consisting of game enhancements and general venue capital expenditures.

As of December 29, 2019, the Company's system-wide portfolio consisted of:



Chuck E. Cheese


Peter Piper Pizza


Total

Company operated


515


40


555

Domestic franchised


22


61


83

International franchised


75


28


103

Total


612


129


741

About CEC Entertainment, Inc.

CEC Entertainment, Inc. is the nationally recognized leader in family dining and entertainment with both its Chuck E. Cheese and Peter Piper Pizza restaurants.