ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Kansas
(State or other jurisdiction of
incorporation or organization)
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48-0905805
(IRS Employer
Identification No.)
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4441 West Airport Freeway
Irving, Texas
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75062
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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¨
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Non-accelerated filer
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ý
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Smaller reporting company
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¨
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Page
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Successor
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Predecessor
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||||
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September 28,
2014 |
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December 29,
2013 |
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ASSETS
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||||
Current assets:
|
|
|
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|
||||
Cash and cash equivalents
|
|
$
|
240,985
|
|
|
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$
|
20,686
|
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Accounts receivable
|
|
13,425
|
|
|
|
24,881
|
|
||
Inventories
|
|
18,228
|
|
|
|
19,250
|
|
||
Prepaid expenses
|
|
19,182
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|
|
|
20,111
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|
||
Deferred tax asset
|
|
2,643
|
|
|
|
2,091
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|
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Total current assets
|
|
294,463
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|
|
|
87,019
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|
||
Property and equipment, net
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|
682,718
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|
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691,454
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|
||
Goodwill
|
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430,697
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|
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|
3,458
|
|
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Intangible assets, net
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426,304
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—
|
|
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Deferred financing costs, net
|
|
25,088
|
|
|
|
1,268
|
|
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Other noncurrent assets
|
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8,723
|
|
|
|
8,412
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|
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Total assets
|
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$
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1,867,993
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|
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$
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791,611
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||||
Bank indebtedness and other long-term debt, current portion
|
|
$
|
7,600
|
|
|
|
$
|
—
|
|
Capital lease obligations, current portion
|
|
397
|
|
|
|
1,014
|
|
||
Accounts payable
|
|
35,316
|
|
|
|
35,770
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|
||
Accrued expenses
|
|
44,716
|
|
|
|
34,001
|
|
||
Unearned revenues
|
|
6,969
|
|
|
|
14,504
|
|
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Accrued interest
|
|
11,703
|
|
|
|
977
|
|
||
Other current liabilities
|
|
2,904
|
|
|
|
440
|
|
||
Total current liabilities
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109,605
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|
|
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86,706
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|
||
Capital lease obligations, less current portion
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15,585
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|
|
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20,365
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|
||
Bank indebtedness and other long-term debt, less current portion
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1,002,037
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|
|
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361,500
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|
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Deferred tax liability
|
|
213,219
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|
|
|
57,831
|
|
||
Accrued insurance
|
|
12,045
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|
|
|
13,194
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|
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Other noncurrent liabilities
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200,348
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91,247
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Total liabilities
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1,552,839
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630,843
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Stockholders’ equity:
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||||
Predecessor: Common stock, $0.10 par value; authorized 100,000,000 shares; 61,865,495 shares issued as of December 29, 2013
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—
|
|
|
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6,187
|
|
||
Successor: Common stock, $0.01 par value; authorized 1,000 shares; 200 shares issued as of September 28, 2014
|
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—
|
|
|
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—
|
|
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Capital in excess of par value
|
|
355,240
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|
|
|
453,702
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|
||
Retained earnings (deficit)
|
|
(39,935
|
)
|
|
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853,464
|
|
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Accumulated other comprehensive income (loss)
|
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(151
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)
|
|
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4,764
|
|
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Less Predecessor treasury stock, at cost; 44,341,225 shares as of December 29, 2013
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—
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|
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(1,157,349
|
)
|
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Total stockholders’ equity
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315,154
|
|
|
|
160,768
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,867,993
|
|
|
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$
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791,611
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|
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Successor
|
|
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Predecessor
|
||||
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Three Months Ended
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Three Months Ended
|
||||
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September 28,
2014 |
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September 29,
2013 |
||||
REVENUES:
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|
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Food and beverage sales
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$
|
82,271
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$
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87,170
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Entertainment and merchandise sales
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115,885
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|
|
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107,629
|
|
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Total Company store sales
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198,156
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194,799
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|
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Franchise fees and royalties
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1,533
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|
|
|
1,107
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|
||
Total revenues
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199,689
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|
|
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195,906
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|
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OPERATING COSTS AND EXPENSES:
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|
|
|
|
||||
Company store operating costs
:
|
|
|
|
|
||||
Cost of food and beverage (exclusive of items shown separately below)
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21,167
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|
|
|
20,850
|
|
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Cost of entertainment and merchandise (exclusive of items shown separately below)
|
6,669
|
|
|
|
6,976
|
|
||
Total cost of food, beverage, entertainment and merchandise
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27,836
|
|
|
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27,826
|
|
||
Labor expenses
|
57,086
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|
|
56,469
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|
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Depreciation and amortization
|
31,622
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|
|
19,603
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|
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Rent expense
|
22,587
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|
|
19,672
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|
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Other store operating expenses
|
35,123
|
|
|
|
34,401
|
|
||
Total Company store operating costs
|
174,254
|
|
|
|
157,971
|
|
||
Other costs and expenses
:
|
|
|
|
|
||||
Advertising expense
|
10,114
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|
|
10,644
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|
||
General and administrative expenses
|
13,820
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|
|
|
13,529
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|
||
Transaction and severance costs
|
5,742
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|
|
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—
|
|
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Asset impairments
|
—
|
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|
|
537
|
|
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Total operating costs and expenses
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203,930
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182,681
|
|
||
Operating income (loss)
|
(4,241
|
)
|
|
|
13,225
|
|
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Interest expense
|
15,974
|
|
|
|
1,278
|
|
||
Income (loss) before income taxes
|
(20,215
|
)
|
|
|
11,947
|
|
||
Income tax expense (benefit)
|
(6,936
|
)
|
|
|
4,508
|
|
||
Net income (loss)
|
$
|
(13,279
|
)
|
|
|
$
|
7,439
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
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For the 226 Day Period Ended
|
|
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For the 47 Day Period Ended
|
|
Nine Months Ended
|
||||||
|
September 28,
2014 |
|
|
February 14,
2014 |
|
September 29,
2013 |
||||||
REVENUES:
|
|
|
|
|
|
|
||||||
Food and beverage sales
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$
|
224,197
|
|
|
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$
|
50,897
|
|
|
$
|
289,488
|
|
Entertainment and merchandise sales
|
300,149
|
|
|
|
62,659
|
|
|
349,957
|
|
|||
Total Company store sales
|
524,346
|
|
|
|
113,556
|
|
|
639,445
|
|
|||
Franchise fees and royalties
|
3,493
|
|
|
|
687
|
|
|
3,708
|
|
|||
Total revenues
|
527,839
|
|
|
|
114,243
|
|
|
643,153
|
|
|||
OPERATING COSTS AND EXPENSES:
|
|
|
|
|
|
|
||||||
Company store operating costs
:
|
|
|
|
|
|
|
||||||
Cost of food and beverage (exclusive of items shown separately below)
|
57,250
|
|
|
|
12,285
|
|
|
69,815
|
|
|||
Cost of entertainment and merchandise (exclusive of items shown separately below)
|
17,426
|
|
|
|
3,729
|
|
|
23,256
|
|
|||
Total cost of food, beverage, entertainment and merchandise
|
74,676
|
|
|
|
16,014
|
|
|
93,071
|
|
|||
Labor expenses
|
143,781
|
|
|
|
31,998
|
|
|
174,409
|
|
|||
Depreciation and amortization
|
84,141
|
|
|
|
9,733
|
|
|
58,666
|
|
|||
Rent expense
|
53,012
|
|
|
|
12,365
|
|
|
58,648
|
|
|||
Other store operating expenses
|
84,101
|
|
|
|
15,760
|
|
|
98,775
|
|
|||
Total Company store operating costs
|
439,711
|
|
|
|
85,870
|
|
|
483,569
|
|
|||
Other costs and expenses
:
|
|
|
|
|
|
|
||||||
Advertising expense
|
24,802
|
|
|
|
5,903
|
|
|
32,960
|
|
|||
General and administrative expenses
|
32,576
|
|
|
|
7,963
|
|
|
42,950
|
|
|||
Transaction and severance costs
|
43,263
|
|
|
|
11,634
|
|
|
—
|
|
|||
Asset impairments
|
—
|
|
|
|
—
|
|
|
763
|
|
|||
Total operating costs and expenses
|
540,352
|
|
|
|
111,370
|
|
|
560,242
|
|
|||
Operating income (loss)
|
(12,513
|
)
|
|
|
2,873
|
|
|
82,911
|
|
|||
Interest expense
|
43,256
|
|
|
|
1,151
|
|
|
5,509
|
|
|||
Income (loss) before income taxes
|
(55,769
|
)
|
|
|
1,722
|
|
|
77,402
|
|
|||
Income tax expense (benefit)
|
(15,834
|
)
|
|
|
1,018
|
|
|
29,467
|
|
|||
Net income (loss)
|
$
|
(39,935
|
)
|
|
|
$
|
704
|
|
|
$
|
47,935
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
Three Months Ended
|
|||||||
|
September 28,
2014 |
|
|
September 29,
2013 |
||||
Net income (loss)
|
$
|
(13,279
|
)
|
|
|
$
|
7,439
|
|
Components of other comprehensive income (loss), net of tax
:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
(652
|
)
|
|
|
225
|
|
||
Total components of other comprehensive income (loss), net of tax
|
(652
|
)
|
|
|
225
|
|
||
Comprehensive income (loss)
|
$
|
(13,931
|
)
|
|
|
$
|
7,664
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Nine Months Ended
|
||||||
|
September 28,
2014 |
|
|
February 14,
2014 |
|
September 29,
2013 |
||||||
Net income (loss)
|
$
|
(39,935
|
)
|
|
|
$
|
704
|
|
|
$
|
47,935
|
|
Components of other comprehensive income (loss), net of tax
:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(151
|
)
|
|
|
(541
|
)
|
|
(596
|
)
|
|||
Total components of other comprehensive income (loss), net of tax
|
(151
|
)
|
|
|
(541
|
)
|
|
(596
|
)
|
|||
Comprehensive income (loss)
|
$
|
(40,086
|
)
|
|
|
$
|
163
|
|
|
$
|
47,339
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Nine Months Ended
|
||||||
|
September 28,
2014 |
|
|
February 14,
2014 |
|
September 29,
2013 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(39,935
|
)
|
|
|
$
|
704
|
|
|
$
|
47,935
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
85,383
|
|
|
|
9,883
|
|
|
59,269
|
|
|||
Deferred income taxes
|
(56,431
|
)
|
|
|
(1,785
|
)
|
|
(477
|
)
|
|||
Stock-based compensation expense
|
191
|
|
|
|
12,225
|
|
|
6,469
|
|
|||
Amortization of lease-related liabilities
|
287
|
|
|
|
(356
|
)
|
|
(1,729
|
)
|
|||
Amortization of original issue discount and deferred financing costs
|
2,824
|
|
|
|
58
|
|
|
337
|
|
|||
Loss on asset disposals, net
|
5,223
|
|
|
|
294
|
|
|
704
|
|
|||
Asset impairments
|
—
|
|
|
|
—
|
|
|
763
|
|
|||
Other adjustments
|
378
|
|
|
|
144
|
|
|
75
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accounts receivable
|
482
|
|
|
|
1,503
|
|
|
4,246
|
|
|||
Inventories
|
3,304
|
|
|
|
(2,472
|
)
|
|
(1,665
|
)
|
|||
Prepaid expenses
|
(1,480
|
)
|
|
|
2,656
|
|
|
55
|
|
|||
Accounts payable
|
650
|
|
|
|
(270
|
)
|
|
(2,928
|
)
|
|||
Accrued expenses
|
4,239
|
|
|
|
(2,403
|
)
|
|
5,325
|
|
|||
Unearned revenues
|
605
|
|
|
|
349
|
|
|
(1,029
|
)
|
|||
Accrued interest
|
10,597
|
|
|
|
152
|
|
|
(637
|
)
|
|||
Income taxes payable
|
12,778
|
|
|
|
2,898
|
|
|
4,105
|
|
|||
Lease-related liabilities
|
8,367
|
|
|
|
(1,266
|
)
|
|
2,937
|
|
|||
Net cash provided by operating activities
|
37,462
|
|
|
|
22,314
|
|
|
123,755
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Acquisition of Predecessor
|
(946,898
|
)
|
|
|
—
|
|
|
—
|
|
|||
Purchases of property and equipment
|
(40,395
|
)
|
|
|
(9,710
|
)
|
|
(54,446
|
)
|
|||
Proceeds from sale of property and equipment
|
350
|
|
|
|
51
|
|
|
2,260
|
|
|||
Other investing activities
|
—
|
|
|
|
—
|
|
|
678
|
|
|||
Net cash used in investing activities
|
(986,943
|
)
|
|
|
(9,659
|
)
|
|
(51,508
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Proceeds from secured credit facilities, net of original issue discount
|
756,200
|
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from senior notes
|
255,000
|
|
|
|
—
|
|
|
—
|
|
|||
Repayment of Predecessor Facility
|
(348,000
|
)
|
|
|
—
|
|
|
—
|
|
|||
Repayments on senior term loan
|
(1,900
|
)
|
|
|
—
|
|
|
—
|
|
|||
Net repayments on revolving credit facility
|
—
|
|
|
|
(13,500
|
)
|
|
(41,000
|
)
|
|||
Proceeds from sale leaseback transaction
|
183,685
|
|
|
|
—
|
|
|
—
|
|
|||
Payment of debt financing costs
|
(27,575
|
)
|
|
|
—
|
|
|
—
|
|
|||
Payments on capital lease obligations
|
(204
|
)
|
|
|
(164
|
)
|
|
(697
|
)
|
|||
Dividends paid
|
(890
|
)
|
|
|
(38
|
)
|
|
(8,445
|
)
|
|||
Excess tax benefit realized from stock-based compensation
|
5,043
|
|
|
|
—
|
|
|
249
|
|
|||
Restricted stock returned for payment of taxes
|
—
|
|
|
|
(142
|
)
|
|
(2,191
|
)
|
|||
Purchases of treasury stock
|
—
|
|
|
|
—
|
|
|
(18,112
|
)
|
|||
Equity contribution
|
350,000
|
|
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
1,171,359
|
|
|
|
(13,844
|
)
|
|
(70,196
|
)
|
|||
Effect of foreign exchange rate changes on cash
|
(77
|
)
|
|
|
(313
|
)
|
|
(303
|
)
|
|||
Change in cash and cash equivalents
|
221,801
|
|
|
|
(1,502
|
)
|
|
1,748
|
|
|||
Cash and cash equivalents at beginning of period
|
19,184
|
|
|
|
20,686
|
|
|
19,636
|
|
|||
Cash and cash equivalents at end of period
|
$
|
240,985
|
|
|
|
$
|
19,184
|
|
|
$
|
21,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
Successor
|
|
|
Predecessor
|
||||||||
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Nine Months Ended
|
||||||
|
September 28,
2014 |
|
|
February 14,
2014 |
|
September 29,
2013 |
||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
||||||
Interest paid
(1)
|
$
|
29,914
|
|
|
|
$
|
938
|
|
|
$
|
5,713
|
|
Income taxes paid (refunded), net
|
$
|
22,777
|
|
|
|
$
|
(79
|
)
|
|
$
|
25,616
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
||||||
Accrued construction costs
|
$
|
3,724
|
|
|
|
$
|
3,605
|
|
|
$
|
3,904
|
|
Dividends payable
|
$
|
—
|
|
|
|
$
|
890
|
|
|
$
|
4,904
|
|
Capital lease obligations
|
$
|
657
|
|
|
|
$
|
—
|
|
|
$
|
740
|
|
(1)
|
Includes
$4.9 million
of debt issuance costs and interest expense related to the bridge loan. See Note 5 "Indebtedness and Interest Expense" for further discussion of the bridge loan.
|
Level 1 –
|
inputs are quoted prices available for identical assets or liabilities in active markets.
|
|
|
Level 2 –
|
inputs are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; or other inputs that are observable or can be corroborated by observable market data.
|
|
|
Level 3 –
|
inputs are unobservable and reflect our own assumptions.
|
Cash consideration paid to shareholders
|
$
|
946,898
|
|
|
|
||
Fair value of assets acquired and liabilities assumed:
|
|
||
Cash and cash equivalents
|
19,184
|
|
|
Accounts receivable
|
22,185
|
|
|
Inventories
|
21,696
|
|
|
Other current assets
|
16,463
|
|
|
Property, plant and equipment
|
718,066
|
|
|
Property under capital lease
|
15,530
|
|
|
Favorable lease interests
|
14,000
|
|
|
Chuck E. Cheese's tradename
|
400,000
|
|
|
Franchise agreements
|
14,000
|
|
|
Other non-current assets
|
9,872
|
|
|
Indebtedness
|
(348,000
|
)
|
|
Capital Leases
|
(15,530
|
)
|
|
Unfavorable lease interests
|
(10,160
|
)
|
|
Deferred taxes
|
(267,181
|
)
|
|
Other current and non-current liabilities
|
(93,520
|
)
|
|
Net assets acquired
|
516,605
|
|
|
Excess purchase price allocated to goodwill
(1)
|
$
|
430,293
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
September 28,
2014 |
|
September 29,
2013 |
|
September 28,
2014 |
|
September 29,
2013 |
||||||||
|
|
(in thousands)
|
||||||||||||||
Total revenues
|
|
$
|
199,689
|
|
|
$
|
195,906
|
|
|
$
|
642,082
|
|
|
$
|
643,153
|
|
Net loss
|
|
$
|
(11,003
|
)
|
|
$
|
(11,349
|
)
|
|
$
|
(3,268
|
)
|
|
$
|
(5,223
|
)
|
|
Successor
|
|
|
Predecessor
|
||||
|
September 28,
2014 |
|
|
December 29,
2013 |
||||
|
(in thousands)
|
|||||||
Land
|
$
|
50,100
|
|
|
|
$
|
43,423
|
|
Buildings
|
49,345
|
|
|
|
110,817
|
|
||
Leasehold improvements
|
380,467
|
|
|
|
624,353
|
|
||
Game and ride equipment
|
162,949
|
|
|
|
284,454
|
|
||
Furniture, fixtures and other equipment
|
96,493
|
|
|
|
230,986
|
|
||
Property leased under capital leases
|
16,188
|
|
|
|
28,228
|
|
||
|
755,542
|
|
|
|
1,322,261
|
|
||
Less accumulated depreciation and amortization
|
(83,426
|
)
|
|
|
(641,559
|
)
|
||
Net property and equipment in service
|
672,116
|
|
|
|
680,702
|
|
||
Construction in progress
|
10,602
|
|
|
|
10,752
|
|
||
|
$
|
682,718
|
|
|
|
$
|
691,454
|
|
•
|
Discount rate based on our weighted average cost of capital and the risk-free rate of return;
|
•
|
Sales growth rates and cash flow margins;
|
•
|
Strategic plans, including projected capital spending and intent to exercise lease renewal options for the store;
|
•
|
Salvage values; and
|
•
|
Other risks and qualitative factors specific to the asset or market conditions in which the asset is located at the time the assessment was made.
|
Predecessor:
|
|
||
Balance at December 29, 2013
(1)
|
$
|
3,458
|
|
|
|
||
Successor:
|
|
||
Goodwill assigned in acquisition accounting
(1)
|
$
|
430,293
|
|
Additions
(2)
|
404
|
|
|
Balance at September 28, 2014
|
$
|
430,697
|
|
(1)
|
The historical goodwill was eliminated in acquisition accounting. See Note 2 "Acquisition of CEC Entertainment, Inc." for a discussion of goodwill recorded in connection with the Merger.
|
(2)
|
The Company acquired a franchisee in the second quarter of 2014.
|
|
Successor
|
||||||||||||
|
Weighted Average Life (Years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||
|
|
|
(in thousands)
|
||||||||||
Tradename
|
Indefinite
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
400,000
|
|
Favorable lease agreements
(1)
|
10
|
|
14,000
|
|
|
(1,142
|
)
|
|
12,858
|
|
|||
Franchise agreements
|
15
|
|
14,000
|
|
|
(554
|
)
|
|
13,446
|
|
|||
|
|
|
$
|
428,000
|
|
|
$
|
(1,696
|
)
|
|
$
|
426,304
|
|
(1)
|
In connection with the Merger, we also recorded an unfavorable lease liability of
$10.2 million
, which is being amortized over a weighted average life of
10 years
and is included in "Rent expense" in our Consolidated Statements of Earnings.
|
September 29, 2014 through December 28, 2014
|
$
|
491
|
|
Fiscal 2015
|
1,930
|
|
|
Fiscal 2016
|
1,809
|
|
|
Fiscal 2017
|
1,530
|
|
|
Fiscal 2018
|
1,187
|
|
|
Fiscal 2019
|
1,043
|
|
|
Thereafter
|
4,868
|
|
|
|
$
|
12,858
|
|
September 29, 2014 through December 28, 2014
|
$
|
233
|
|
Fiscal 2015
|
948
|
|
|
Fiscal 2016
|
930
|
|
|
Fiscal 2017
|
930
|
|
|
Fiscal 2018
|
930
|
|
|
Fiscal 2019
|
930
|
|
|
Thereafter
|
8,545
|
|
|
|
$
|
13,446
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
September 28,
2014 |
|
|
December 29,
2013 |
||||
|
(in thousands)
|
|||||||
Term loan facility
|
$
|
758,100
|
|
|
|
$
|
—
|
|
Revolving credit facility
|
—
|
|
|
|
361,500
|
|
||
Senior notes
|
255,000
|
|
|
|
—
|
|
||
Total debt outstanding
|
1,013,100
|
|
|
|
361,500
|
|
||
Less:
|
|
|
|
|
||||
Unamortized original issue discount
|
(3,463
|
)
|
|
|
—
|
|
||
Current portion
|
(7,600
|
)
|
|
|
—
|
|
||
Bank indebtedness and other long-term debt, less current portion
|
$
|
1,002,037
|
|
|
|
$
|
361,500
|
|
One year or less
|
$
|
7,600
|
|
Two years
|
9,500
|
|
|
Three years
|
7,600
|
|
|
Four years
|
7,600
|
|
|
Five years
|
5,700
|
|
|
Thereafter
|
975,100
|
|
|
|
1,013,100
|
|
|
Less: unamortized discount
|
(3,463
|
)
|
|
|
$
|
1,009,637
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
Three Months Ended
|
|
|
Three Months Ended
|
||||
|
September 28,
2014 |
|
|
September 29,
2013 |
||||
|
(in thousands)
|
|||||||
Term loan facility
(1)
|
$
|
8,725
|
|
|
|
$
|
—
|
|
Senior notes
|
5,169
|
|
|
|
—
|
|
||
Predecessor Facility
|
—
|
|
|
|
1,488
|
|
||
Capital lease obligations
|
469
|
|
|
|
422
|
|
||
Sale leaseback obligations
|
932
|
|
|
|
—
|
|
||
Amortization of debt issuance costs
|
1,001
|
|
|
|
112
|
|
||
Other
|
(322
|
)
|
|
|
(744
|
)
|
||
|
$
|
15,974
|
|
|
|
$
|
1,278
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Nine Months Ended
|
||||||
|
September 28,
2014 |
|
|
February 14, 2014
|
|
September 29,
2013 |
||||||
|
(in thousands)
|
|||||||||||
Term loan facility
(1)
|
$
|
21,586
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Senior notes
|
12,592
|
|
|
|
—
|
|
|
—
|
|
|||
Bridge loan facility
(2)
|
4,943
|
|
|
|
—
|
|
|
—
|
|
|||
Predecessor Facility
|
—
|
|
|
|
745
|
|
|
4,372
|
|
|||
Capital lease obligations
|
1,082
|
|
|
|
275
|
|
|
1,191
|
|
|||
Sale leaseback obligations
|
932
|
|
|
|
—
|
|
|
—
|
|
|||
Amortization of debt issuance costs
|
2,487
|
|
|
|
58
|
|
|
347
|
|
|||
Other
|
(366
|
)
|
|
|
73
|
|
|
(401
|
)
|
|||
|
$
|
43,256
|
|
|
|
$
|
1,151
|
|
|
$
|
5,509
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
September 28, 2014
|
|
|
December 29, 2013
|
||||||||||||
|
|
Carrying Amount
|
|
Estimated Fair Value
|
|
|
Carrying Amount
|
|
Estimated Fair Value
|
||||||||
|
|
(in thousands)
|
|||||||||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Bank indebtedness and other long-term debt, less current portion
|
|
$
|
1,002,037
|
|
|
$
|
981,783
|
|
|
|
$
|
361,500
|
|
|
$
|
361,500
|
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
September 28,
2014 |
|
|
December 29,
2013 |
||||
|
|
(in thousands)
|
|||||||
Sale leaseback obligations, less current portion
|
|
$
|
181,747
|
|
|
|
$
|
—
|
|
Lease-related liabilities
|
|
14,088
|
|
|
|
86,445
|
|
||
Other
|
|
4,513
|
|
|
|
4,802
|
|
||
|
|
$
|
200,348
|
|
|
|
$
|
91,247
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
Three Months Ended
|
|
|
Three Months Ended
|
||||
|
September 28, 2014
|
|
|
September 29, 2013
|
||||
|
(in thousands, except percentages)
|
|||||||
Federal and state income taxes
|
$
|
(6,728
|
)
|
|
|
$
|
4,519
|
|
Foreign income taxes
|
(208
|
)
|
|
|
(11
|
)
|
||
Income tax expense (benefit)
|
$
|
(6,936
|
)
|
|
|
$
|
4,508
|
|
Effective rate
|
34.3
|
%
|
|
|
37.7
|
%
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Nine Months Ended
|
||||||
|
September 28, 2014
|
|
|
February 14, 2014
|
|
September 29, 2013
|
||||||
|
(in thousands, except percentages)
|
|||||||||||
Federal and state income taxes
|
$
|
(15,220
|
)
|
|
|
$
|
914
|
|
|
$
|
29,247
|
|
Foreign income taxes
|
(614
|
)
|
|
|
104
|
|
|
220
|
|
|||
Income tax expense (benefit)
|
$
|
(15,834
|
)
|
|
|
$
|
1,018
|
|
|
$
|
29,467
|
|
Effective rate
|
28.4
|
%
|
|
|
59.1
|
%
|
|
38.1
|
%
|
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
Three Months Ended
|
|
|
Three Months Ended
|
||||
|
|
September 28,
2014 |
|
|
September 29,
2013 |
||||
|
|
(in thousands)
|
|||||||
Stock-based compensation costs
|
|
$
|
197
|
|
|
|
$
|
2,288
|
|
Portion capitalized as property and equipment
(1)
|
|
(6
|
)
|
|
|
(44
|
)
|
||
Stock-based compensation expense recognized
|
|
$
|
191
|
|
|
|
$
|
2,244
|
|
Tax benefit recognized from stock-based compensation awards
|
|
$
|
—
|
|
|
|
$
|
77
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Nine Months Ended
|
||||||
|
September 28,
2014 |
|
|
February 14,
2014 |
|
September 29,
2013 |
||||||
|
(in thousands)
|
|||||||||||
Stock-based compensation costs
|
$
|
197
|
|
|
|
$
|
1,117
|
|
|
$
|
6,603
|
|
Portion capitalized as property and equipment
(1)
|
(6
|
)
|
|
|
—
|
|
|
(134
|
)
|
|||
Stock-based compensation costs related to the accelerated vesting of restricted stock awards in connection with the Merger
|
—
|
|
|
|
11,108
|
|
|
—
|
|
|||
Stock-based compensation expense recognized
|
$
|
191
|
|
|
|
$
|
12,225
|
|
|
$
|
6,469
|
|
Tax benefit recognized from stock-based compensation awards
(2)
|
$
|
5,043
|
|
|
|
$
|
—
|
|
|
$
|
249
|
|
(1)
|
We capitalize the portion of stock-based compensation costs related to our design, construction, facilities and legal departments that are directly attributable to our store development projects, such as the design and construction of a new store and the remodeling and expansion of our existing stores. Capitalized stock-based compensation cost attributable to our store development projects is included in "Property and equipment, net" in the Consolidated Balance Sheets.
|
(2)
|
We recorded the
$5.0 million
tax benefit related to the accelerated vesting of restricted stock awards in the
226 day period ended
September 28, 2014
, as such tax benefit will be deductible for income tax purposes on the Successor tax return for fiscal year 2014.
|
|
|
Common Stock
|
|
Capital In
Excess of
Par Value
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income
|
|
Treasury Stock
|
|
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
Total
|
|||||||||||||||||
|
|
(in thousands, except share information)
|
||||||||||||||||||||||||||||
Predecessor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 29, 2013
|
|
61,865,495
|
|
|
$
|
6,187
|
|
|
$
|
453,702
|
|
|
$
|
853,464
|
|
|
$
|
4,764
|
|
|
44,341,225
|
|
|
$
|
(1,157,349
|
)
|
|
$
|
160,768
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
704
|
|
||||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(541
|
)
|
|
—
|
|
|
—
|
|
|
(541
|
)
|
||||||
Stock-based compensation costs
|
|
—
|
|
|
—
|
|
|
12,225
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,225
|
|
||||||
Restricted stock issued, net of forfeitures
|
|
13,792
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock returned for taxes
|
|
(2,907
|
)
|
|
—
|
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
||||||
Dividends forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Balance at February 14, 2014
|
|
61,876,380
|
|
|
$
|
6,188
|
|
|
$
|
465,784
|
|
|
$
|
854,170
|
|
|
$
|
4,223
|
|
|
44,341,225
|
|
|
$
|
(1,157,349
|
)
|
|
$
|
173,016
|
|
|
|
Common Stock
|
|
Capital In
Excess of Par Value |
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income |
|
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
Total
|
||||||||||||||
|
|
(in thousands, except share information)
|
|||||||||||||||||||||
Successor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Equity contribution
|
|
200
|
|
|
$
|
—
|
|
|
$
|
350,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350,000
|
|
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,935
|
)
|
|
—
|
|
|
(39,935
|
)
|
|||||
Other comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
|
(151
|
)
|
|||||
Stock-based compensation costs
|
|
—
|
|
|
—
|
|
|
197
|
|
|
—
|
|
|
—
|
|
|
197
|
|
|||||
Tax benefit from restricted stock, net
(1)
|
|
—
|
|
|
—
|
|
|
5,043
|
|
|
—
|
|
|
—
|
|
|
5,043
|
|
|||||
Balance at September 28, 2014
|
|
200
|
|
|
$
|
—
|
|
|
$
|
355,240
|
|
|
$
|
(39,935
|
)
|
|
$
|
(151
|
)
|
|
$
|
315,154
|
|
(1)
|
We recorded the tax benefit related to the accelerated vesting of restricted stock awards in the
226 day period ended
September 28, 2014
, as such tax benefit will be deductible for income tax purposes on the Successor tax return for fiscal year 2014.
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Condensed Consolidating Balance Sheet
|
||||||||||||||||||||
As of September 28, 2014
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Successor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
222,314
|
|
|
$
|
14
|
|
|
$
|
18,657
|
|
|
$
|
—
|
|
|
$
|
240,985
|
|
Accounts receivable
|
|
11,176
|
|
|
1,652
|
|
|
4,086
|
|
|
(3,489
|
)
|
|
13,425
|
|
|||||
Inventories
|
|
14,763
|
|
|
3,037
|
|
|
428
|
|
|
—
|
|
|
18,228
|
|
|||||
Other current assets
|
|
17,059
|
|
|
2,390
|
|
|
2,376
|
|
|
—
|
|
|
21,825
|
|
|||||
Total current assets
|
|
265,312
|
|
|
7,093
|
|
|
25,547
|
|
|
(3,489
|
)
|
|
294,463
|
|
|||||
Property and equipment, net
|
|
649,564
|
|
|
19,011
|
|
|
14,143
|
|
|
—
|
|
|
682,718
|
|
|||||
Goodwill
|
|
430,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
430,697
|
|
|||||
Intangible assets, net
|
|
25,344
|
|
|
400,960
|
|
|
—
|
|
|
—
|
|
|
426,304
|
|
|||||
Intercompany
|
|
61,376
|
|
|
24,482
|
|
|
24,472
|
|
|
(110,330
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
|
388,504
|
|
|
—
|
|
|
—
|
|
|
(388,504
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
|
28,551
|
|
|
4,945
|
|
|
443
|
|
|
(128
|
)
|
|
33,811
|
|
|||||
Total assets
|
|
$
|
1,849,348
|
|
|
$
|
456,491
|
|
|
$
|
64,605
|
|
|
$
|
(502,451
|
)
|
|
$
|
1,867,993
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bank indebtedness and other long-term debt, current portion
|
|
$
|
7,600
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,600
|
|
Capital lease obligations, current portion
|
|
394
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
397
|
|
|||||
Accounts payable and accrued expenses
|
|
81,955
|
|
|
16,277
|
|
|
472
|
|
|
—
|
|
|
98,704
|
|
|||||
Other current liabilities
|
|
2,904
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,904
|
|
|||||
Total current liabilities
|
|
92,853
|
|
|
16,277
|
|
|
475
|
|
|
—
|
|
|
109,605
|
|
|||||
Capital lease obligations, less current portion
|
|
15,499
|
|
|
—
|
|
|
86
|
|
|
—
|
|
|
15,585
|
|
|||||
Bank indebtedness and other long-term debt, less current portion
|
|
1,002,037
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,002,037
|
|
|||||
Deferred tax liability
|
|
212,362
|
|
|
—
|
|
|
955
|
|
|
(98
|
)
|
|
213,219
|
|
|||||
Intercompany
|
|
3,482
|
|
|
44,715
|
|
|
65,652
|
|
|
(113,849
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
|
207,961
|
|
|
4,310
|
|
|
122
|
|
|
—
|
|
|
212,393
|
|
|||||
Total liabilities
|
|
1,534,194
|
|
|
65,302
|
|
|
67,290
|
|
|
(113,947
|
)
|
|
1,552,839
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital in excess of par value
|
|
355,240
|
|
|
410,178
|
|
|
3,354
|
|
|
(413,532
|
)
|
|
355,240
|
|
|||||
Retained earnings (deficit)
|
|
(39,935
|
)
|
|
(18,989
|
)
|
|
(5,888
|
)
|
|
24,877
|
|
|
(39,935
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
|
(151
|
)
|
|
—
|
|
|
(151
|
)
|
|
151
|
|
|
(151
|
)
|
|||||
Total stockholders' equity
|
|
315,154
|
|
|
391,189
|
|
|
(2,685
|
)
|
|
(388,504
|
)
|
|
315,154
|
|
|||||
Total liabilities and stockholders' equity
|
|
$
|
1,849,348
|
|
|
$
|
456,491
|
|
|
$
|
64,605
|
|
|
$
|
(502,451
|
)
|
|
$
|
1,867,993
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Condensed Consolidating Balance Sheet
|
||||||||||||||||||||
As of December 29, 2013
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Predecessor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
10,177
|
|
|
$
|
1,914
|
|
|
$
|
8,595
|
|
|
$
|
—
|
|
|
$
|
20,686
|
|
Accounts receivable
|
|
22,686
|
|
|
1,420
|
|
|
3,752
|
|
|
(2,977
|
)
|
|
24,881
|
|
|||||
Inventories
|
|
15,865
|
|
|
2,965
|
|
|
420
|
|
|
—
|
|
|
19,250
|
|
|||||
Other current assets
|
|
16,367
|
|
|
3,222
|
|
|
2,613
|
|
|
—
|
|
|
22,202
|
|
|||||
Total current assets
|
|
65,095
|
|
|
9,521
|
|
|
15,380
|
|
|
(2,977
|
)
|
|
87,019
|
|
|||||
Property and equipment, net
|
|
661,593
|
|
|
15,242
|
|
|
14,619
|
|
|
—
|
|
|
691,454
|
|
|||||
Goodwill
|
|
3,458
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,458
|
|
|||||
Intercompany
|
|
20,689
|
|
|
379,695
|
|
|
1,636
|
|
|
(402,020
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
|
6,190
|
|
|
—
|
|
|
—
|
|
|
(6,190
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
|
4,333
|
|
|
5,305
|
|
|
1,344
|
|
|
(1,302
|
)
|
|
9,680
|
|
|||||
Total assets
|
|
$
|
761,358
|
|
|
$
|
409,763
|
|
|
$
|
32,979
|
|
|
$
|
(412,489
|
)
|
|
$
|
791,611
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital lease obligations, current portion
|
|
$
|
947
|
|
|
$
|
—
|
|
|
$
|
67
|
|
|
$
|
—
|
|
|
$
|
1,014
|
|
Accounts payable and accrued expenses
|
|
61,680
|
|
|
21,665
|
|
|
1,907
|
|
|
—
|
|
|
85,252
|
|
|||||
Other current liabilities
|
|
440
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
440
|
|
|||||
Total current liabilities
|
|
63,067
|
|
|
21,665
|
|
|
1,974
|
|
|
—
|
|
|
86,706
|
|
|||||
Capital lease obligations, less current portion
|
|
19,752
|
|
|
—
|
|
|
613
|
|
|
—
|
|
|
20,365
|
|
|||||
Bank indebtedness and other long-term debt
|
|
—
|
|
|
361,500
|
|
|
—
|
|
|
—
|
|
|
361,500
|
|
|||||
Deferred tax liability
|
|
58,996
|
|
|
—
|
|
|
184
|
|
|
(1,349
|
)
|
|
57,831
|
|
|||||
Intercompany
|
|
362,748
|
|
|
12,224
|
|
|
29,978
|
|
|
(404,950
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
|
96,027
|
|
|
4,432
|
|
|
3,982
|
|
|
—
|
|
|
104,441
|
|
|||||
Total liabilities
|
|
600,590
|
|
|
399,821
|
|
|
36,731
|
|
|
(406,299
|
)
|
|
630,843
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
|
6,187
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,187
|
|
|||||
Capital in excess of par value
|
|
453,702
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
453,702
|
|
|||||
Retained earnings (deficit)
|
|
853,464
|
|
|
9,942
|
|
|
(8,516
|
)
|
|
(1,426
|
)
|
|
853,464
|
|
|||||
Accumulated other comprehensive income (loss)
|
|
4,764
|
|
|
—
|
|
|
4,764
|
|
|
(4,764
|
)
|
|
4,764
|
|
|||||
Less treasury stock
|
|
(1,157,349
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,157,349
|
)
|
|||||
Total stockholders' equity
|
|
160,768
|
|
|
9,942
|
|
|
(3,752
|
)
|
|
(6,190
|
)
|
|
160,768
|
|
|||||
Total liabilities and stockholders' equity
|
|
$
|
761,358
|
|
|
$
|
409,763
|
|
|
$
|
32,979
|
|
|
$
|
(412,489
|
)
|
|
$
|
791,611
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||
For the Three Months Ended September 28, 2014
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Successor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage sales
|
|
$
|
80,296
|
|
|
$
|
75
|
|
|
$
|
1,900
|
|
|
$
|
—
|
|
|
$
|
82,271
|
|
Entertainment and merchandise sales
|
|
112,560
|
|
|
—
|
|
|
3,325
|
|
|
—
|
|
|
115,885
|
|
|||||
Total Company store sales
|
|
192,856
|
|
|
75
|
|
|
5,225
|
|
|
—
|
|
|
198,156
|
|
|||||
Franchise fees and royalties
|
|
526
|
|
|
1,007
|
|
|
—
|
|
|
—
|
|
|
1,533
|
|
|||||
International Association assessments and other fees
|
|
5,002
|
|
|
398
|
|
|
10,596
|
|
|
(15,996
|
)
|
|
—
|
|
|||||
Total revenues
|
|
198,384
|
|
|
1,480
|
|
|
15,821
|
|
|
(15,996
|
)
|
|
199,689
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of food and beverage
|
|
20,575
|
|
|
9
|
|
|
583
|
|
|
—
|
|
|
21,167
|
|
|||||
Cost of entertainment and merchandise
|
|
6,566
|
|
|
(8
|
)
|
|
223
|
|
|
(112
|
)
|
|
6,669
|
|
|||||
Total cost of food, beverage, entertainment and merchandise
|
|
27,141
|
|
|
1
|
|
|
806
|
|
|
(112
|
)
|
|
27,836
|
|
|||||
Labor expenses
|
|
55,414
|
|
|
—
|
|
|
1,672
|
|
|
—
|
|
|
57,086
|
|
|||||
Depreciation and amortization
|
|
30,673
|
|
|
—
|
|
|
949
|
|
|
—
|
|
|
31,622
|
|
|||||
Rent expense
|
|
21,800
|
|
|
—
|
|
|
787
|
|
|
—
|
|
|
22,587
|
|
|||||
Other store operating expenses
|
|
29,028
|
|
|
4,336
|
|
|
1,262
|
|
|
497
|
|
|
35,123
|
|
|||||
Total Company store operating costs
|
|
164,056
|
|
|
4,337
|
|
|
5,476
|
|
|
385
|
|
|
174,254
|
|
|||||
Advertising expense
|
|
10,778
|
|
|
—
|
|
|
9,709
|
|
|
(10,373
|
)
|
|
10,114
|
|
|||||
General and administrative expenses
|
|
10,864
|
|
|
9,625
|
|
|
329
|
|
|
(6,998
|
)
|
|
13,820
|
|
|||||
Transaction and severance costs
|
|
5,757
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
5,742
|
|
|||||
Total operating costs and expenses
|
|
191,455
|
|
|
13,947
|
|
|
15,514
|
|
|
(16,986
|
)
|
|
203,930
|
|
|||||
Operating income (loss)
|
|
6,929
|
|
|
(12,467
|
)
|
|
307
|
|
|
990
|
|
|
(4,241
|
)
|
|||||
Equity in earnings (loss) in affiliates
|
|
(10,913
|
)
|
|
—
|
|
|
—
|
|
|
10,913
|
|
|
—
|
|
|||||
Interest expense (income)
|
|
14,955
|
|
|
(123
|
)
|
|
152
|
|
|
990
|
|
|
15,974
|
|
|||||
Income (loss) before income taxes
|
|
(18,939
|
)
|
|
(12,344
|
)
|
|
155
|
|
|
10,913
|
|
|
(20,215
|
)
|
|||||
Income tax expense (benefit)
|
|
(5,660
|
)
|
|
(1,360
|
)
|
|
84
|
|
|
—
|
|
|
(6,936
|
)
|
|||||
Net income (loss)
|
|
(13,279
|
)
|
|
(10,984
|
)
|
|
71
|
|
|
10,913
|
|
|
(13,279
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments
|
|
$
|
(652
|
)
|
|
$
|
—
|
|
|
$
|
(652
|
)
|
|
$
|
652
|
|
|
$
|
(652
|
)
|
Total components of other comprehensive income (loss), net of tax
|
|
(652
|
)
|
|
—
|
|
|
(652
|
)
|
|
652
|
|
|
(652
|
)
|
|||||
Comprehensive income (loss)
|
|
(13,931
|
)
|
|
(10,984
|
)
|
|
(581
|
)
|
|
11,565
|
|
|
(13,931
|
)
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||
For the Three Months Ended September 29, 2013
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Predecessor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage sales
|
|
$
|
84,779
|
|
|
$
|
269
|
|
|
$
|
2,122
|
|
|
$
|
—
|
|
|
$
|
87,170
|
|
Entertainment and merchandise sales
|
|
104,203
|
|
|
—
|
|
|
3,426
|
|
|
—
|
|
|
107,629
|
|
|||||
Total Company store sales
|
|
188,982
|
|
|
269
|
|
|
5,548
|
|
|
—
|
|
|
194,799
|
|
|||||
Franchise fees and royalties
|
|
535
|
|
|
572
|
|
|
—
|
|
|
—
|
|
|
1,107
|
|
|||||
International Association assessments and other fees
|
|
808
|
|
|
17,115
|
|
|
10,348
|
|
|
(28,271
|
)
|
|
—
|
|
|||||
Total revenues
|
|
190,325
|
|
|
17,956
|
|
|
15,896
|
|
|
(28,271
|
)
|
|
195,906
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of food and beverage
|
|
20,179
|
|
|
19
|
|
|
652
|
|
|
—
|
|
|
20,850
|
|
|||||
Cost of entertainment and merchandise
|
|
6,785
|
|
|
(8
|
)
|
|
231
|
|
|
(32
|
)
|
|
6,976
|
|
|||||
Total cost of food, beverage, entertainment and merchandise
|
|
26,964
|
|
|
11
|
|
|
883
|
|
|
(32
|
)
|
|
27,826
|
|
|||||
Labor expenses
|
|
54,495
|
|
|
—
|
|
|
1,974
|
|
|
—
|
|
|
56,469
|
|
|||||
Depreciation and amortization
|
|
19,129
|
|
|
—
|
|
|
474
|
|
|
—
|
|
|
19,603
|
|
|||||
Rent expense
|
|
18,983
|
|
|
—
|
|
|
689
|
|
|
—
|
|
|
19,672
|
|
|||||
Other store operating expenses
|
|
50,432
|
|
|
(318
|
)
|
|
1,133
|
|
|
(16,846
|
)
|
|
34,401
|
|
|||||
Total Company store operating costs
|
|
170,003
|
|
|
(307
|
)
|
|
5,153
|
|
|
(16,878
|
)
|
|
157,971
|
|
|||||
Advertising expense
|
|
10,516
|
|
|
—
|
|
|
10,476
|
|
|
(10,348
|
)
|
|
10,644
|
|
|||||
General and administrative expenses
|
|
4,191
|
|
|
10,159
|
|
|
227
|
|
|
(1,048
|
)
|
|
13,529
|
|
|||||
Asset impairment
|
|
537
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
537
|
|
|||||
Total operating costs and expenses
|
|
185,247
|
|
|
9,852
|
|
|
15,856
|
|
|
(28,274
|
)
|
|
182,681
|
|
|||||
Operating income (loss)
|
|
5,078
|
|
|
8,104
|
|
|
40
|
|
|
3
|
|
|
13,225
|
|
|||||
Equity in earnings (loss) in affiliates
|
|
10,775
|
|
|
—
|
|
|
—
|
|
|
(10,775
|
)
|
|
—
|
|
|||||
Interest expense (income)
|
|
3,086
|
|
|
(2,012
|
)
|
|
201
|
|
|
3
|
|
|
1,278
|
|
|||||
Income (loss) before income taxes
|
|
12,767
|
|
|
10,116
|
|
|
(161
|
)
|
|
(10,775
|
)
|
|
11,947
|
|
|||||
Income tax expense (benefit)
|
|
5,328
|
|
|
(738
|
)
|
|
(82
|
)
|
|
—
|
|
|
4,508
|
|
|||||
Net income (loss)
|
|
7,439
|
|
|
10,854
|
|
|
(79
|
)
|
|
(10,775
|
)
|
|
7,439
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments
|
|
$
|
225
|
|
|
$
|
—
|
|
|
$
|
225
|
|
|
$
|
(225
|
)
|
|
$
|
225
|
|
Total components of other comprehensive income (loss), net of tax
|
|
225
|
|
|
—
|
|
|
225
|
|
|
(225
|
)
|
|
225
|
|
|||||
Comprehensive income (loss)
|
|
7,664
|
|
|
10,854
|
|
|
146
|
|
|
(11,000
|
)
|
|
7,664
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||
For the 226 Day Period Ended September 28, 2014
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Successor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage sales
|
|
$
|
219,044
|
|
|
$
|
196
|
|
|
$
|
4,957
|
|
|
$
|
—
|
|
|
$
|
224,197
|
|
Entertainment and merchandise sales
|
|
292,064
|
|
|
—
|
|
|
8,085
|
|
|
—
|
|
|
300,149
|
|
|||||
Total Company store sales
|
|
511,108
|
|
|
196
|
|
|
13,042
|
|
|
—
|
|
|
524,346
|
|
|||||
Franchise fees and royalties
|
|
1,452
|
|
|
2,041
|
|
|
—
|
|
|
—
|
|
|
3,493
|
|
|||||
International Association assessments and other fees
|
|
10,502
|
|
|
1,822
|
|
|
27,964
|
|
|
(40,288
|
)
|
|
—
|
|
|||||
Total revenues
|
|
523,062
|
|
|
4,059
|
|
|
41,006
|
|
|
(40,288
|
)
|
|
527,839
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of food and beverage
|
|
55,705
|
|
|
38
|
|
|
1,507
|
|
|
—
|
|
|
57,250
|
|
|||||
Cost of entertainment and merchandise
|
|
17,013
|
|
|
(22
|
)
|
|
527
|
|
|
(92
|
)
|
|
17,426
|
|
|||||
Total cost of food, beverage, entertainment and merchandise
|
|
72,718
|
|
|
16
|
|
|
2,034
|
|
|
(92
|
)
|
|
74,676
|
|
|||||
Labor expenses
|
|
139,673
|
|
|
—
|
|
|
4,108
|
|
|
—
|
|
|
143,781
|
|
|||||
Depreciation and amortization
|
|
81,874
|
|
|
—
|
|
|
2,267
|
|
|
—
|
|
|
84,141
|
|
|||||
Rent expense
|
|
51,196
|
|
|
—
|
|
|
1,816
|
|
|
—
|
|
|
53,012
|
|
|||||
Other store operating expenses
|
|
81,398
|
|
|
9,955
|
|
|
2,654
|
|
|
(9,906
|
)
|
|
84,101
|
|
|||||
Total Company store operating costs
|
|
426,859
|
|
|
9,971
|
|
|
12,879
|
|
|
(9,998
|
)
|
|
439,711
|
|
|||||
Advertising expense
|
|
28,513
|
|
|
(17
|
)
|
|
24,003
|
|
|
(27,697
|
)
|
|
24,802
|
|
|||||
General and administrative expenses
|
|
12,886
|
|
|
21,453
|
|
|
830
|
|
|
(2,593
|
)
|
|
32,576
|
|
|||||
Transaction and severance costs
|
|
37,271
|
|
|
5,992
|
|
|
—
|
|
|
—
|
|
|
43,263
|
|
|||||
Total operating costs and expenses
|
|
505,529
|
|
|
37,399
|
|
|
37,712
|
|
|
(40,288
|
)
|
|
540,352
|
|
|||||
Operating income (loss)
|
|
17,533
|
|
|
(33,340
|
)
|
|
3,294
|
|
|
—
|
|
|
(12,513
|
)
|
|||||
Equity in earnings (loss) in affiliates
|
|
(21,779
|
)
|
|
—
|
|
|
—
|
|
|
21,779
|
|
|
—
|
|
|||||
Interest expense (income)
|
|
42,907
|
|
|
(47
|
)
|
|
396
|
|
|
—
|
|
|
43,256
|
|
|||||
Income (loss) before income taxes
|
|
(47,153
|
)
|
|
(33,293
|
)
|
|
2,898
|
|
|
21,779
|
|
|
(55,769
|
)
|
|||||
Income tax expense (benefit)
|
|
(7,218
|
)
|
|
(9,321
|
)
|
|
705
|
|
|
—
|
|
|
(15,834
|
)
|
|||||
Net income (loss)
|
|
(39,935
|
)
|
|
(23,972
|
)
|
|
2,193
|
|
|
21,779
|
|
|
(39,935
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments
|
|
$
|
(151
|
)
|
|
$
|
—
|
|
|
$
|
(151
|
)
|
|
$
|
151
|
|
|
$
|
(151
|
)
|
Total components of other comprehensive income (loss), net of tax
|
|
(151
|
)
|
|
—
|
|
|
(151
|
)
|
|
151
|
|
|
(151
|
)
|
|||||
Comprehensive income (loss)
|
|
(40,086
|
)
|
|
(23,972
|
)
|
|
2,042
|
|
|
21,930
|
|
|
(40,086
|
)
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||
For the 47 Day Period Ended February 14, 2014
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Predecessor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage sales
|
|
$
|
49,803
|
|
|
$
|
32
|
|
|
$
|
1,062
|
|
|
$
|
—
|
|
|
$
|
50,897
|
|
Entertainment and merchandise sales
|
|
61,082
|
|
|
—
|
|
|
1,577
|
|
|
—
|
|
|
62,659
|
|
|||||
Total Company store sales
|
|
110,885
|
|
|
32
|
|
|
2,639
|
|
|
—
|
|
|
113,556
|
|
|||||
Franchise fees and royalties
|
|
353
|
|
|
334
|
|
|
—
|
|
|
—
|
|
|
687
|
|
|||||
International Association assessments and other fees
|
|
—
|
|
|
4,558
|
|
|
6,095
|
|
|
(10,653
|
)
|
|
—
|
|
|||||
Total revenues
|
|
111,238
|
|
|
4,924
|
|
|
8,734
|
|
|
(10,653
|
)
|
|
114,243
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of food and beverage
|
|
11,924
|
|
|
25
|
|
|
336
|
|
|
—
|
|
|
12,285
|
|
|||||
Cost of entertainment and merchandise
|
|
3,618
|
|
|
—
|
|
|
131
|
|
|
(20
|
)
|
|
3,729
|
|
|||||
Total cost of food, beverage, entertainment and merchandise
|
|
15,542
|
|
|
25
|
|
|
467
|
|
|
(20
|
)
|
|
16,014
|
|
|||||
Labor expenses
|
|
31,107
|
|
|
—
|
|
|
891
|
|
|
—
|
|
|
31,998
|
|
|||||
Depreciation and amortization
|
|
9,430
|
|
|
—
|
|
|
303
|
|
|
—
|
|
|
9,733
|
|
|||||
Rent expense
|
|
11,962
|
|
|
—
|
|
|
403
|
|
|
—
|
|
|
12,365
|
|
|||||
Other store operating expenses
|
|
20,193
|
|
|
(44
|
)
|
|
(82
|
)
|
|
(4,307
|
)
|
|
15,760
|
|
|||||
Total Company store operating costs
|
|
88,234
|
|
|
(19
|
)
|
|
1,982
|
|
|
(4,327
|
)
|
|
85,870
|
|
|||||
Advertising expense
|
|
6,144
|
|
|
17
|
|
|
5,853
|
|
|
(6,111
|
)
|
|
5,903
|
|
|||||
General and administrative expenses
|
|
4,124
|
|
|
3,863
|
|
|
191
|
|
|
(215
|
)
|
|
7,963
|
|
|||||
Transaction and severance costs
|
|
1,800
|
|
|
9,834
|
|
|
—
|
|
|
—
|
|
|
11,634
|
|
|||||
Total operating costs and expenses
|
|
100,302
|
|
|
13,695
|
|
|
8,026
|
|
|
(10,653
|
)
|
|
111,370
|
|
|||||
Operating income (loss)
|
|
10,936
|
|
|
(8,771
|
)
|
|
708
|
|
|
—
|
|
|
2,873
|
|
|||||
Equity in earnings (loss) in affiliates
|
|
(4,523
|
)
|
|
—
|
|
|
—
|
|
|
4,523
|
|
|
—
|
|
|||||
Interest expense (income)
|
|
1,822
|
|
|
(771
|
)
|
|
100
|
|
|
—
|
|
|
1,151
|
|
|||||
Income (loss) before income taxes
|
|
4,591
|
|
|
(8,000
|
)
|
|
608
|
|
|
4,523
|
|
|
1,722
|
|
|||||
Income tax expense (benefit)
|
|
3,887
|
|
|
(3,040
|
)
|
|
171
|
|
|
—
|
|
|
1,018
|
|
|||||
Net income (loss)
|
|
704
|
|
|
(4,960
|
)
|
|
437
|
|
|
4,523
|
|
|
704
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments
|
|
(541
|
)
|
|
—
|
|
|
(541
|
)
|
|
541
|
|
|
$
|
(541
|
)
|
||||
Total components of other comprehensive income (loss), net of tax
|
|
(541
|
)
|
|
—
|
|
|
(541
|
)
|
|
541
|
|
|
(541
|
)
|
|||||
Comprehensive income (loss)
|
|
163
|
|
|
(4,960
|
)
|
|
(104
|
)
|
|
5,064
|
|
|
163
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||
For the Nine Months Ended September 29, 2013
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Predecessor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage sales
|
|
$
|
281,913
|
|
|
$
|
544
|
|
|
$
|
7,031
|
|
|
$
|
—
|
|
|
$
|
289,488
|
|
Entertainment and merchandise sales
|
|
339,138
|
|
|
—
|
|
|
10,819
|
|
|
—
|
|
|
349,957
|
|
|||||
Total Company store sales
|
|
621,051
|
|
|
544
|
|
|
17,850
|
|
|
—
|
|
|
639,445
|
|
|||||
Franchise fees and royalties
|
|
1,755
|
|
|
1,953
|
|
|
—
|
|
|
—
|
|
|
3,708
|
|
|||||
International Association assessments and other fees
|
|
808
|
|
|
48,166
|
|
|
34,046
|
|
|
(83,020
|
)
|
|
—
|
|
|||||
Total revenues
|
|
623,614
|
|
|
50,663
|
|
|
51,896
|
|
|
(83,020
|
)
|
|
643,153
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of food and beverage
|
|
67,597
|
|
|
36
|
|
|
2,182
|
|
|
—
|
|
|
69,815
|
|
|||||
Cost of entertainment and merchandise
|
|
22,597
|
|
|
(25
|
)
|
|
716
|
|
|
(32
|
)
|
|
23,256
|
|
|||||
Total cost of food, beverage, entertainment and merchandise
|
|
90,194
|
|
|
11
|
|
|
2,898
|
|
|
(32
|
)
|
|
93,071
|
|
|||||
Labor expenses
|
|
169,021
|
|
|
—
|
|
|
5,388
|
|
|
—
|
|
|
174,409
|
|
|||||
Depreciation and amortization
|
|
57,040
|
|
|
—
|
|
|
1,626
|
|
|
—
|
|
|
58,666
|
|
|||||
Rent expense
|
|
56,549
|
|
|
—
|
|
|
2,099
|
|
|
—
|
|
|
58,648
|
|
|||||
Other store operating expenses
|
|
142,067
|
|
|
(290
|
)
|
|
3,970
|
|
|
(46,972
|
)
|
|
98,775
|
|
|||||
Total Company store operating costs
|
|
514,871
|
|
|
(279
|
)
|
|
15,981
|
|
|
(47,004
|
)
|
|
483,569
|
|
|||||
Advertising expense
|
|
34,508
|
|
|
—
|
|
|
32,473
|
|
|
(34,021
|
)
|
|
32,960
|
|
|||||
General and administrative expenses
|
|
14,224
|
|
|
30,041
|
|
|
680
|
|
|
(1,995
|
)
|
|
42,950
|
|
|||||
Asset impairment
|
|
763
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
763
|
|
|||||
Total operating costs and expenses
|
|
564,366
|
|
|
29,762
|
|
|
49,134
|
|
|
(83,020
|
)
|
|
560,242
|
|
|||||
Operating income (loss)
|
|
59,248
|
|
|
20,901
|
|
|
2,762
|
|
|
—
|
|
|
82,911
|
|
|||||
Equity in earnings (loss) in affiliates
|
|
16,549
|
|
|
—
|
|
|
—
|
|
|
(16,549
|
)
|
|
—
|
|
|||||
Interest expense (income)
|
|
9,530
|
|
|
(4,649
|
)
|
|
628
|
|
|
—
|
|
|
5,509
|
|
|||||
Income (loss) before income taxes
|
|
66,267
|
|
|
25,550
|
|
|
2,134
|
|
|
(16,549
|
)
|
|
77,402
|
|
|||||
Income tax expense (benefit)
|
|
18,332
|
|
|
10,453
|
|
|
682
|
|
|
—
|
|
|
29,467
|
|
|||||
Net income (loss)
|
|
$
|
47,935
|
|
|
$
|
15,097
|
|
|
$
|
1,452
|
|
|
$
|
(16,549
|
)
|
|
$
|
47,935
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
|
$
|
(596
|
)
|
|
$
|
—
|
|
|
$
|
(596
|
)
|
|
$
|
596
|
|
|
$
|
(596
|
)
|
Total components of other comprehensive income (loss), net of tax
|
|
(596
|
)
|
|
—
|
|
|
(596
|
)
|
|
596
|
|
|
(596
|
)
|
|||||
Comprehensive income (loss)
|
|
$
|
47,339
|
|
|
$
|
15,097
|
|
|
$
|
856
|
|
|
$
|
(15,953
|
)
|
|
$
|
47,339
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Cash Flows
|
||||||||||||||||||||
For the 226 Day Period Ended September 28, 2014
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Successor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
93,262
|
|
|
$
|
(68,202
|
)
|
|
$
|
12,402
|
|
|
$
|
—
|
|
|
$
|
37,462
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of Predecessor
|
|
(946,898
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(946,898
|
)
|
|||||
Intercompany Note
|
|
(41,149
|
)
|
|
375,358
|
|
|
—
|
|
|
(334,209
|
)
|
|
—
|
|
|||||
Purchases of property and equipment
|
|
(33,374
|
)
|
|
(3,667
|
)
|
|
(3,354
|
)
|
|
—
|
|
|
(40,395
|
)
|
|||||
Proceeds from sale of property and equipment
|
|
—
|
|
|
350
|
|
|
—
|
|
|
—
|
|
|
350
|
|
|||||
Cash flows provided by (used in) investing activities
|
|
(1,021,421
|
)
|
|
372,041
|
|
|
(3,354
|
)
|
|
(334,209
|
)
|
|
(986,943
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net proceeds from senior term loan, net of original issue discount
|
|
756,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
756,200
|
|
|||||
Net proceeds from senior unsecured notes
|
|
255,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
255,000
|
|
|||||
Repayment of Predecessor Facility
|
|
—
|
|
|
(348,000
|
)
|
|
—
|
|
|
—
|
|
|
(348,000
|
)
|
|||||
Repayments on senior term loan
|
|
(1,900
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,900
|
)
|
|||||
Intercompany Note
|
|
(375,539
|
)
|
|
44,055
|
|
|
(2,725
|
)
|
|
334,209
|
|
|
—
|
|
|||||
Proceeds from financing sale-leaseback transaction
|
|
183,685
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
183,685
|
|
|||||
Payment of debt financing costs
|
|
(27,575
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,575
|
)
|
|||||
Payments on capital lease obligations
|
|
(204
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(204
|
)
|
|||||
Dividends paid
|
|
(890
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(890
|
)
|
|||||
Excess tax benefit realized from stock-based compensation
|
|
5,043
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,043
|
|
|||||
Equity contribution
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
|||||
Cash flows provided by (used in) financing activities
|
|
1,143,820
|
|
|
(303,945
|
)
|
|
(2,725
|
)
|
|
334,209
|
|
|
1,171,359
|
|
|||||
Effect of foreign exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(77
|
)
|
|
—
|
|
|
(77
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in cash and cash equivalents
|
|
215,661
|
|
|
(106
|
)
|
|
6,246
|
|
|
—
|
|
|
221,801
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
6,653
|
|
|
120
|
|
|
12,411
|
|
|
—
|
|
|
19,184
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
222,314
|
|
|
$
|
14
|
|
|
$
|
18,657
|
|
|
$
|
—
|
|
|
$
|
240,985
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Cash Flows
|
||||||||||||||||||||
For the 47 Day Period Ended February 14, 2014
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Predecessor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
(12,224
|
)
|
|
$
|
29,906
|
|
|
$
|
4,632
|
|
|
$
|
—
|
|
|
$
|
22,314
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany Note
|
|
—
|
|
|
(17,601
|
)
|
|
—
|
|
|
17,601
|
|
|
—
|
|
|||||
Purchases of property and equipment
|
|
(8,538
|
)
|
|
(1,082
|
)
|
|
(90
|
)
|
|
—
|
|
|
(9,710
|
)
|
|||||
Proceeds from sale of property and equipment
|
|
(2
|
)
|
|
53
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|||||
Cash flows provided by (used in) investing activities
|
|
(8,540
|
)
|
|
(18,630
|
)
|
|
(90
|
)
|
|
17,601
|
|
|
(9,659
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net proceeds from (repayments on) revolving credit facility
|
|
—
|
|
|
(13,500
|
)
|
|
—
|
|
|
—
|
|
|
(13,500
|
)
|
|||||
Intercompany Note
|
|
17,571
|
|
|
430
|
|
|
(400
|
)
|
|
(17,601
|
)
|
|
—
|
|
|||||
Payments on capital lease obligations
|
|
(153
|
)
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
(164
|
)
|
|||||
Dividends paid
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38
|
)
|
|||||
Restricted stock returned for payment of taxes
|
|
(142
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|||||
Cash flows provided by (used in) financing activities
|
|
17,238
|
|
|
(13,070
|
)
|
|
(411
|
)
|
|
(17,601
|
)
|
|
(13,844
|
)
|
|||||
Effect of foreign exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(313
|
)
|
|
—
|
|
|
(313
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in cash and cash equivalents
|
|
(3,526
|
)
|
|
(1,794
|
)
|
|
3,818
|
|
|
—
|
|
|
(1,502
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
10,177
|
|
|
1,914
|
|
|
8,595
|
|
|
—
|
|
|
20,686
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
6,651
|
|
|
$
|
120
|
|
|
$
|
12,413
|
|
|
$
|
—
|
|
|
$
|
19,184
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Cash Flows
|
||||||||||||||||||||
For the Nine Months Ended September 29, 2013
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Predecessor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
222,077
|
|
|
$
|
(99,747
|
)
|
|
$
|
1,425
|
|
|
$
|
—
|
|
|
$
|
123,755
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany Note
|
|
—
|
|
|
143,339
|
|
|
—
|
|
|
(143,339
|
)
|
|
—
|
|
|||||
Purchases of property and equipment
|
|
(48,684
|
)
|
|
(4,843
|
)
|
|
(919
|
)
|
|
—
|
|
|
(54,446
|
)
|
|||||
Proceeds from sale of property and equipment
|
|
1,888
|
|
|
372
|
|
|
—
|
|
|
—
|
|
|
2,260
|
|
|||||
Other investing activities
|
|
678
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
678
|
|
|||||
Cash flows provided by (used in) investing activities
|
|
(46,118
|
)
|
|
138,868
|
|
|
(919
|
)
|
|
(143,339
|
)
|
|
(51,508
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net proceeds from (repayments on) revolving credit facility
|
|
—
|
|
|
(41,000
|
)
|
|
—
|
|
|
—
|
|
|
(41,000
|
)
|
|||||
Intercompany Note
|
|
(145,996
|
)
|
|
1,757
|
|
|
900
|
|
|
143,339
|
|
|
—
|
|
|||||
Payments on capital lease obligations
|
|
(646
|
)
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
(697
|
)
|
|||||
Dividends paid
|
|
(8,445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,445
|
)
|
|||||
Excess tax benefit realized from stock-based compensation
|
|
249
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249
|
|
|||||
Restricted stock returned for payment of taxes
|
|
(2,191
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,191
|
)
|
|||||
Purchases of treasury stock
|
|
(18,112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,112
|
)
|
|||||
Cash flows provided by (used in) financing activities
|
|
(175,141
|
)
|
|
(39,243
|
)
|
|
849
|
|
|
143,339
|
|
|
(70,196
|
)
|
|||||
Effect of foreign exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(303
|
)
|
|
—
|
|
|
(303
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in cash and cash equivalents
|
|
818
|
|
|
(122
|
)
|
|
1,052
|
|
|
—
|
|
|
1,748
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
11,321
|
|
|
248
|
|
|
8,067
|
|
|
—
|
|
|
19,636
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
12,139
|
|
|
$
|
126
|
|
|
$
|
9,119
|
|
|
$
|
—
|
|
|
$
|
21,384
|
|
•
|
Executive Summary;
|
•
|
Overview of Operations;
|
•
|
Results of Operations;
|
•
|
Financial Condition, Liquidity and Capital Resources;
|
•
|
Off-Balance Sheet Arrangements and Contractual Obligations;
|
•
|
Critical Accounting Policies and Estimates;
|
•
|
Recently Issued Accounting Guidance;
|
•
|
Presentation of Non-GAAP Measures; and
|
•
|
Cautionary Statement Regarding Forward-Looking Statements.
|
•
|
Total revenues
increased
$3.8 million
, or
1.9%
, compared to the
third quarter
of
2013
, primarily due to revenues generated from
four
net new stores (including the acquisition of
one
franchisee) opened since the end of the
third quarter
of
2013
, partially offset by a
0.2%
decrease
in comparable store sales.
|
•
|
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") was
$44.5 million
for the three months ended
September 28, 2014
compared to
$38.9 million
for the three months ended
September 29, 2013
. For our definition of Adjusted EBITDA and a reconciliation of Net income (loss) to Adjusted EBITDA, see "Presentation of Non-GAAP Measures."
|
•
|
We recorded a net loss of
$13.3 million
for the three months ended
September 28, 2014
compared to net income of
$7.4 million
for the three months ended
September 29, 2013
.
|
•
|
Cash provided by operations was
$59.8 million
for the
nine months ended
September 28, 2014
compared to
$123.8 million
for the
nine months ended
September 29, 2013
. The
decrease
of
$64.0 million
was primarily driven by transaction and severance costs and an increase in interest expense, all of which were incurred in connection with the Merger.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
|
September 28,
2014 |
|
September 29,
2013 |
|
September 28,
2014 |
|
September 29,
2013 |
||||
Number of Company-owned stores:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
524
|
|
|
514
|
|
|
522
|
|
|
514
|
|
New
(1)
|
|
—
|
|
|
5
|
|
|
6
|
|
|
8
|
|
Acquired from franchisee
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Closed
(1)
|
|
(2
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
(4
|
)
|
End of period
|
|
522
|
|
|
518
|
|
|
522
|
|
|
518
|
|
Number of franchised stores:
|
|
|
|
|
|
|
|
|
||||
Beginning of period
|
|
54
|
|
|
53
|
|
|
55
|
|
|
51
|
|
New
|
|
4
|
|
|
1
|
|
|
4
|
|
|
4
|
|
Acquired by the Company
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
Closed
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
End of period
|
|
57
|
|
|
53
|
|
|
57
|
|
|
53
|
|
(1)
|
During the
nine months ended September 28, 2014
, the number of new and closed Company-owned stores included
two
stores that were relocated. During the three and nine months ended September 29, 2013, the number of new and closed Company-owned stores included one store that was relocated.
|
•
|
Cost of food and beverage includes all direct costs of food, beverages and costs of related paper and birthday supplies, less rebates from suppliers;
|
•
|
Cost of entertainment and merchandise includes all direct costs of prizes provided and merchandise sold to our customers, as well as the cost of tickets dispensed to customers;
|
•
|
Labor expenses consist of salaries and wages, bonuses, related payroll taxes and benefits for store personnel;
|
•
|
Depreciation and amortization includes expenses that are directly related to our Company-owned stores’ property and equipment, including leasehold improvements, game and ride equipment, furniture, fixtures and other equipment;
|
•
|
Rent expense includes lease costs for Company-owned stores, excluding common occupancy costs (e.g., common area maintenance ("CAM") charges and property taxes); and
|
•
|
Other store operating expenses primarily include utilities, repair and maintenance costs, liability and property insurance, CAM charges, property taxes, credit card processing fees, licenses, preopening expenses, store asset disposal gains and losses and all other costs directly related to the operation of a store.
|
•
|
our store employees are trained to sell and attend to both our dining and entertainment operations. We believe it would be difficult and potentially misleading to allocate labor costs between "Food and beverage sales" and "Entertainment and merchandise sales"; and
|
•
|
while certain assets are individually dedicated to either our food service operations or game activities, we also have significant capital investments in shared depreciating assets, such as leasehold improvements, point-of-sale systems and showroom fixtures. Therefore, we believe it would be difficult and potentially misleading to allocate depreciation and amortization expense or rent expense between "Food and beverage sales" and "Entertainment and merchandise sales."
|
|
|
Three Months Ended
|
|||||||||||||
|
|
September 28,
2014 |
|
|
September 29,
2013 |
||||||||||
|
|
Successor
|
|
|
Predecessor
|
||||||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Food and beverage sales
|
|
$
|
82,271
|
|
|
41.5
|
%
|
|
|
$
|
87,170
|
|
|
44.7
|
%
|
Entertainment and merchandise sales
|
|
115,885
|
|
|
58.5
|
%
|
|
|
107,629
|
|
|
55.3
|
%
|
||
Total Company store sales
|
|
$
|
198,156
|
|
|
100.0
|
%
|
|
|
$
|
194,799
|
|
|
100.0
|
%
|
|
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
|
Nine Months Ended
|
||||||||||||||||||||||
|
|
September 28, 2014
|
|
|
February 14, 2014
|
|
|
September 28, 2014
|
|
September 29, 2013
|
||||||||||||||||||||
|
|
Successor
|
|
|
Predecessor
|
|
|
Combined
(1)
|
|
Predecessor
|
||||||||||||||||||||
|
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Food and beverage sales
|
|
$
|
224,197
|
|
|
42.8
|
%
|
|
|
$
|
50,897
|
|
|
44.8
|
%
|
|
|
$
|
275,094
|
|
|
43.1
|
%
|
|
$
|
289,488
|
|
|
45.3
|
%
|
Entertainment and merchandise sales
|
|
300,149
|
|
|
57.2
|
%
|
|
|
62,659
|
|
|
55.2
|
%
|
|
|
362,808
|
|
|
56.9
|
%
|
|
349,957
|
|
|
54.7
|
%
|
||||
Total Company store sales
|
|
$
|
524,346
|
|
|
100.0
|
%
|
|
|
$
|
113,556
|
|
|
100.0
|
%
|
|
|
$
|
637,902
|
|
|
100.0
|
%
|
|
$
|
639,445
|
|
|
100.0
|
%
|
(1)
|
In order to present Management’s Discussion and Analysis of Financial Condition and Results of Operations in a way that offers a meaningful period to period comparison, we have combined the Predecessor and Successor periods to arrive at the nine months ended September 28, 2014 and compared to the Predecessor nine months ended September 29, 2013; however, these combined results are considered non-GAAP financial measures
|
|
|
Three Months Ended
|
|||||||||||||
|
|
September 28, 2014
|
|
|
September 29, 2013
|
||||||||||
|
|
Successor
|
|
|
Predecessor
|
||||||||||
|
|
(in thousands, except percentages)
|
|||||||||||||
Total Company store sales
|
|
$
|
198,156
|
|
|
99.2
|
%
|
|
|
$
|
194,799
|
|
|
99.4
|
%
|
Franchise fees and royalties
|
|
1,533
|
|
|
0.8
|
%
|
|
|
1,107
|
|
|
0.6
|
%
|
||
Total revenues
|
|
199,689
|
|
|
100.0
|
%
|
|
|
195,906
|
|
|
100.0
|
%
|
||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
||||||
Cost of food and beverage
(1)
|
|
21,167
|
|
|
25.7
|
%
|
|
|
20,850
|
|
|
23.9
|
%
|
||
Cost of entertainment and merchandise
(2)
|
|
6,669
|
|
|
5.8
|
%
|
|
|
6,976
|
|
|
6.5
|
%
|
||
Total cost of food, beverage, entertainment and merchandise
(3)
|
|
27,836
|
|
|
14.0
|
%
|
|
|
27,826
|
|
|
14.3
|
%
|
||
Labor expenses
(3)
|
|
57,086
|
|
|
28.8
|
%
|
|
|
56,469
|
|
|
29.0
|
%
|
||
Depreciation and amortization
(3)
|
|
31,622
|
|
|
16.0
|
%
|
|
|
19,603
|
|
|
10.1
|
%
|
||
Rent expense
(3)
|
|
22,587
|
|
|
11.4
|
%
|
|
|
19,672
|
|
|
10.1
|
%
|
||
Other store operating expenses
(3)
|
|
35,123
|
|
|
17.7
|
%
|
|
|
34,401
|
|
|
17.7
|
%
|
||
Total Company store operating costs
(3)
|
|
174,254
|
|
|
87.9
|
%
|
|
|
157,971
|
|
|
81.1
|
%
|
||
Other costs and expenses
:
|
|
|
|
|
|
|
|
|
|
||||||
Advertising expense
|
|
10,114
|
|
|
5.1
|
%
|
|
|
10,644
|
|
|
5.4
|
%
|
||
General and administrative expenses
|
|
13,820
|
|
|
6.9
|
%
|
|
|
13,529
|
|
|
6.9
|
%
|
||
Transaction and severance costs
|
|
5,742
|
|
|
2.9
|
%
|
|
|
—
|
|
|
—
|
%
|
||
Asset impairments
|
|
—
|
|
|
—
|
%
|
|
|
537
|
|
|
0.3
|
%
|
||
Total operating costs and expenses
|
|
203,930
|
|
|
102.1
|
%
|
|
|
182,681
|
|
|
93.2
|
%
|
||
Operating income (loss)
|
|
(4,241
|
)
|
|
(2.1
|
)%
|
|
|
13,225
|
|
|
6.8
|
%
|
||
Interest expense
|
|
15,974
|
|
|
8.0
|
%
|
|
|
1,278
|
|
|
0.7
|
%
|
||
Income (loss) before income taxes
|
|
$
|
(20,215
|
)
|
|
(10.1
|
)%
|
|
|
$
|
11,947
|
|
|
6.1
|
%
|
(1)
|
Percent amount expressed as a percentage of Food and beverage sales.
|
(2)
|
Percent amount expressed as a percentage of Entertainment and merchandise sales.
|
(3)
|
Percent amount expressed as a percentage of Company store sales.
|
|
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
|
Nine Months Ended
|
||||||||||||||||||||||
|
|
September 28, 2014
|
|
|
February 14, 2014
|
|
|
September 28, 2014
|
|
September 29, 2013
|
||||||||||||||||||||
|
|
Successor
|
|
|
Predecessor
|
|
|
Combined
(4)
|
|
Predecessor
|
||||||||||||||||||||
|
|
(in thousands, except percentages)
|
||||||||||||||||||||||||||||
Total Company store sales
|
|
$
|
524,346
|
|
|
99.3
|
%
|
|
|
$
|
113,556
|
|
|
99.4
|
%
|
|
|
$
|
637,902
|
|
|
99.3
|
%
|
|
$
|
639,445
|
|
|
99.4
|
%
|
Franchise fees and royalties
|
|
3,493
|
|
|
0.7
|
%
|
|
|
687
|
|
|
0.6
|
%
|
|
|
4,180
|
|
|
0.7
|
%
|
|
3,708
|
|
|
0.6
|
%
|
||||
Total revenues
|
|
527,839
|
|
|
100.0
|
%
|
|
|
114,243
|
|
|
100.0
|
%
|
|
|
642,082
|
|
|
100.0
|
%
|
|
643,153
|
|
|
100.0
|
%
|
||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of food and beverage
(1)
|
|
57,250
|
|
|
25.5
|
%
|
|
|
12,285
|
|
|
24.1
|
%
|
|
|
69,535
|
|
|
25.3
|
%
|
|
69,815
|
|
|
24.1
|
%
|
||||
Cost of entertainment and merchandise
(2)
|
|
17,426
|
|
|
5.8
|
%
|
|
|
3,729
|
|
|
6.0
|
%
|
|
|
21,155
|
|
|
5.8
|
%
|
|
23,256
|
|
|
6.6
|
%
|
||||
Total cost of food, beverage, entertainment and merchandise
(3)
|
|
74,676
|
|
|
14.2
|
%
|
|
|
16,014
|
|
|
14.1
|
%
|
|
|
90,690
|
|
|
14.2
|
%
|
|
93,071
|
|
|
14.6
|
%
|
||||
Labor expenses
(3)
|
|
143,781
|
|
|
27.4
|
%
|
|
|
31,998
|
|
|
28.2
|
%
|
|
|
175,779
|
|
|
27.6
|
%
|
|
174,409
|
|
|
27.3
|
%
|
||||
Depreciation and amortization
(3)
|
|
84,141
|
|
|
16.0
|
%
|
|
|
9,733
|
|
|
8.6
|
%
|
|
|
93,874
|
|
|
14.7
|
%
|
|
58,666
|
|
|
9.2
|
%
|
||||
Rent expense
(3)
|
|
53,012
|
|
|
10.1
|
%
|
|
|
12,365
|
|
|
10.9
|
%
|
|
|
65,377
|
|
|
10.2
|
%
|
|
58,648
|
|
|
9.2
|
%
|
||||
Other store operating expenses
(3)
|
|
84,101
|
|
|
16.0
|
%
|
|
|
15,760
|
|
|
13.9
|
%
|
|
|
99,861
|
|
|
15.7
|
%
|
|
98,775
|
|
|
15.4
|
%
|
||||
Total Company store operating costs
(3)
|
|
439,711
|
|
|
83.9
|
%
|
|
|
85,870
|
|
|
75.6
|
%
|
|
|
525,581
|
|
|
82.4
|
%
|
|
483,569
|
|
|
75.6
|
%
|
||||
Other costs and expenses
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising expense
|
|
24,802
|
|
|
4.7
|
%
|
|
|
5,903
|
|
|
5.2
|
%
|
|
|
30,705
|
|
|
4.8
|
%
|
|
32,960
|
|
|
5.1
|
%
|
||||
General and administrative expenses
|
|
32,576
|
|
|
6.2
|
%
|
|
|
7,963
|
|
|
7.0
|
%
|
|
|
40,539
|
|
|
6.3
|
%
|
|
42,950
|
|
|
6.7
|
%
|
||||
Transaction and severance costs
|
|
43,263
|
|
|
8.2
|
%
|
|
|
11,634
|
|
|
10.2
|
%
|
|
|
54,897
|
|
|
8.5
|
%
|
|
—
|
|
|
—
|
%
|
||||
Asset impairments
|
|
—
|
|
|
—
|
%
|
|
|
—
|
|
|
—
|
%
|
|
|
—
|
|
|
—
|
%
|
|
763
|
|
|
0.1
|
%
|
||||
Total operating costs and expenses
|
|
540,352
|
|
|
102.4
|
%
|
|
|
111,370
|
|
|
97.5
|
%
|
|
|
651,722
|
|
|
101.5
|
%
|
|
560,242
|
|
|
87.1
|
%
|
||||
Operating income (loss)
|
|
(12,513
|
)
|
|
(2.4
|
)%
|
|
|
2,873
|
|
|
2.5
|
%
|
|
|
(9,640
|
)
|
|
(1.5
|
)%
|
|
82,911
|
|
|
12.9
|
%
|
||||
Interest expense
|
|
43,256
|
|
|
8.2
|
%
|
|
|
1,151
|
|
|
1.0
|
%
|
|
|
44,407
|
|
|
6.9
|
%
|
|
5,509
|
|
|
0.9
|
%
|
||||
Income (loss) before income taxes
|
|
$
|
(55,769
|
)
|
|
(10.6
|
)%
|
|
|
$
|
1,722
|
|
|
1.5
|
%
|
|
|
$
|
(54,047
|
)
|
|
(8.4
|
)%
|
|
$
|
77,402
|
|
|
12.0
|
%
|
(1)
|
Percent amount expressed as a percentage of Food and beverage sales.
|
(2)
|
Percent amount expressed as a percentage of Entertainment and merchandise sales.
|
(3)
|
Percent amount expressed as a percentage of Company store sales.
|
(4)
|
In order to present Management’s Discussion and Analysis of Financial Condition and Results of Operations in a way that offers a meaningful period to period comparison, we have combined the Predecessor and Successor periods to arrive at the nine months ended September 28, 2014 and compared to the Predecessor nine months ended September 29, 2013; however, these combined results are considered non-GAAP financial measures.
|
•
|
our store customers pay for their purchases in cash or credit cards at the time of the sale and the cash from these sales is typically received before our related accounts payable to suppliers and employee payroll becomes due;
|
•
|
frequent inventory turnover results in a limited investment required in inventories; and
|
•
|
our accounts payable are generally due within five to 30 days.
|
|
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
|
Nine Months Ended
|
||||||||||
|
|
September 28,
2014 |
|
|
February 14,
2014 |
|
|
September 28,
2014 |
|
September 29,
2013 |
||||||||
|
|
Successor
|
|
|
Predecessor
|
|
|
Combined
|
|
Predecessor
|
||||||||
|
|
(in thousands)
|
||||||||||||||||
Net cash provided by operating activities
|
|
$
|
37,462
|
|
|
|
$
|
22,314
|
|
|
|
$
|
59,776
|
|
|
$
|
123,755
|
|
Net cash used in investing activities
|
|
(986,943
|
)
|
|
|
(9,659
|
)
|
|
|
(996,602
|
)
|
|
(51,508
|
)
|
||||
Net cash provided by (used in) financing activities
|
|
1,171,359
|
|
|
|
(13,844
|
)
|
|
|
1,157,515
|
|
|
(70,196
|
)
|
||||
Effect of foreign exchange rate changes on cash
|
|
(77
|
)
|
|
|
(313
|
)
|
|
|
(390
|
)
|
|
(303
|
)
|
||||
Change in cash and cash equivalents
|
|
$
|
221,801
|
|
|
|
$
|
(1,502
|
)
|
|
|
$
|
220,299
|
|
|
$
|
1,748
|
|
Interest paid
|
|
$
|
29,914
|
|
|
|
$
|
938
|
|
|
|
$
|
30,852
|
|
|
$
|
5,713
|
|
Income taxes paid (refunded), net
|
|
$
|
22,777
|
|
|
|
$
|
(79
|
)
|
|
|
$
|
22,698
|
|
|
$
|
25,616
|
|
|
|
September 28,
2014 |
|
|
December 29,
2013 |
||||
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
(in thousands)
|
|||||||
Cash and cash equivalents
|
|
$
|
240,985
|
|
|
|
$
|
20,686
|
|
Term loan facility, net of unamortized original issue discount
|
|
$
|
754,637
|
|
|
|
$
|
—
|
|
Senior notes
|
|
$
|
255,000
|
|
|
|
$
|
—
|
|
Predecessor Facility
|
|
$
|
—
|
|
|
|
$
|
361,500
|
|
Available unused commitments under revolving credit facility
|
|
$
|
139,100
|
|
|
|
$
|
127,600
|
|
|
|
Nine Months Ended
|
|||||||
|
|
September 28, 2014
|
|
|
September 29, 2013
|
||||
|
|
Successor
|
|
|
Predecessor
|
||||
|
|
(in thousands)
|
|||||||
Growth capital spend
(1)
|
|
$
|
25,390
|
|
|
|
$
|
31,780
|
|
Maintenance capital spend
(2)
|
|
$
|
24,268
|
|
|
|
$
|
22,666
|
|
Total Capital Spend
(3)
|
|
49,658
|
|
|
|
54,446
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year |
|
1-3
Years |
|
4-5
Years |
|
More than
5 Years |
||||||||||
|
(in thousands)
|
||||||||||||||||||
Secured credit facilities
|
$
|
758,100
|
|
|
$
|
7,600
|
|
|
$
|
17,100
|
|
|
$
|
13,300
|
|
|
$
|
720,100
|
|
Senior notes
|
255,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
255,000
|
|
|||||
Interest obligations
(1)
|
371,173
|
|
|
54,456
|
|
|
116,335
|
|
|
97,960
|
|
|
102,422
|
|
|||||
Advertising Spend
|
27,093
|
|
|
19,821
|
|
|
7,272
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
1,411,366
|
|
|
$
|
81,877
|
|
|
$
|
140,707
|
|
|
$
|
111,260
|
|
|
$
|
1,077,522
|
|
(1)
|
Interest obligations represent an estimate of future interest payments under our Secured Credit Facilities and senior notes. We calculated the estimate based on the terms of the Secured Credit Facilities and senior notes. Our estimate uses interest rates in effect during the
226 day
period ended
September 28, 2014
and assumes we will not have any amounts drawn on our revolving credit facility.
|
•
|
excludes certain tax payments that may represent a reduction in cash available to us;
|
•
|
does not reflect any cash capital expenditure requirements for the assets being depreciated and amortized that may have to be replaced in the future;
|
•
|
does not reflect changes in, or cash requirements for, our working capital needs; and
|
•
|
does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness.
|
•
|
does not include one-time expenditures;
|
•
|
excludes the impairment of Company-owned stores or impairments of long-lived assets and gains or losses upon disposal of property or equipment;
|
•
|
excludes non-cash equity based compensation expense;
|
•
|
reflects the removal of the non-cash portion of rent expense relating to the impact of straight-line rent and the amortization of cash incentives and allowances received from landlords, plus the actual cash received from landlords incentives and allowances in the period;
|
•
|
reflects franchise fees received on a cash basis post-acquisition;
|
•
|
excludes the purchase accounting impact to unearned revenue at the time of the acquisition;
|
•
|
excludes start-up and marketing costs incurred prior to the opening of new Company-owned stores;
|
•
|
excludes non-recurring income and expenses primarily related to (i) non-recurring franchise fee income; (ii) severance costs; (iii) employee and other legal claims and settlements; (iv) sales and use tax refunds; and (v) certain insurance recoveries relating to prior year expense;
|
•
|
includes estimated cost savings, including some adjustments not permitted under Article 11 of Regulation S-X; and
|
•
|
does not reflect the impact of earnings or charges resulting from matters that we, the initial purchasers of the senior notes, the current holders of the senior notes or the lenders under the Secured Credit Facilities may consider not to be indicative of our ongoing operations.
|
|
Three Months Ended
|
|||||||
|
September 28,
2014 |
|
|
September 29,
2013 |
||||
|
Successor
|
|
|
Predecessor
|
||||
|
(in thousands)
|
|||||||
Net income (loss) as Reported
|
$
|
(13,279
|
)
|
|
|
$
|
7,439
|
|
Interest expense
|
15,974
|
|
|
|
1,278
|
|
||
Income tax expense (benefit)
|
(6,936
|
)
|
|
|
4,508
|
|
||
Depreciation and amortization
|
32,143
|
|
|
|
19,838
|
|
||
EBITDA
|
27,902
|
|
|
|
33,063
|
|
||
Non-cash impairments, gain or loss on disposal
(1)
|
2,672
|
|
|
|
1,566
|
|
||
Non-cash stock-based compensation
(2)
|
191
|
|
|
|
2,244
|
|
||
Rent expense book to cash
(3)
|
2,008
|
|
|
|
(201
|
)
|
||
Franchise revenue, net cash received
(4)
|
2,104
|
|
|
|
—
|
|
||
Impact of purchase accounting
(5)
|
610
|
|
|
|
—
|
|
||
Store pre-opening costs
(6)
|
(22
|
)
|
|
|
729
|
|
||
One-time items
(7)
|
8,546
|
|
|
|
77
|
|
||
Cost savings initiatives
(8)
|
529
|
|
|
|
1,454
|
|
||
Adjusted EBITDA
|
$
|
44,540
|
|
|
|
$
|
38,932
|
|
|
For the 226 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Nine Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 28,
2014 |
|
|
February 14,
2014 |
|
September 28,
2014 |
|
September 29,
2013 |
||||||||
|
Successor
|
|
|
Predecessor
|
|
Combined
|
|
Predecessor
|
||||||||
|
(in thousands)
|
|||||||||||||||
Net income (loss) as Reported
|
$
|
(39,935
|
)
|
|
|
$
|
704
|
|
|
$
|
(39,231
|
)
|
|
$
|
47,935
|
|
Interest expense
|
43,256
|
|
|
|
1,151
|
|
|
44,407
|
|
|
5,509
|
|
||||
Income tax expense (benefit)
|
(15,834
|
)
|
|
|
1,018
|
|
|
(14,816
|
)
|
|
29,467
|
|
||||
Depreciation and amortization
|
85,383
|
|
|
|
9,883
|
|
|
95,266
|
|
|
59,269
|
|
||||
EBITDA
|
72,870
|
|
|
|
12,756
|
|
|
85,626
|
|
|
142,180
|
|
||||
Non-cash impairments, gain or loss on disposal
(1)
|
5,223
|
|
|
|
294
|
|
|
5,517
|
|
|
1,467
|
|
||||
Non-cash stock-based compensation
(2)
|
191
|
|
|
|
12,639
|
|
|
12,830
|
|
|
6,469
|
|
||||
Rent expense book to cash
(3)
|
8,469
|
|
|
|
(1,190
|
)
|
|
7,279
|
|
|
671
|
|
||||
Franchise revenue, net cash received
(4)
|
2,204
|
|
|
|
—
|
|
|
2,204
|
|
|
—
|
|
||||
Impact of purchase accounting
(5)
|
1,023
|
|
|
|
—
|
|
|
1,023
|
|
|
—
|
|
||||
Store pre-opening costs
(6)
|
485
|
|
|
|
131
|
|
|
616
|
|
|
1,278
|
|
||||
One-time items
(7)
|
46,532
|
|
|
|
(165
|
)
|
|
46,367
|
|
|
427
|
|
||||
Cost savings initiatives
(8)
|
1,696
|
|
|
|
502
|
|
|
2,198
|
|
|
4,335
|
|
||||
Adjusted EBITDA
|
$
|
138,693
|
|
|
|
$
|
24,967
|
|
|
$
|
163,660
|
|
|
$
|
156,827
|
|
(1)
|
Relates primarily to (i) the impairment of Company-owned stores or impairments of long lived assets and (ii) gains or losses upon disposal of property or equipment.
|
(2)
|
Represents non-cash equity-based compensation expense.
|
(3)
|
Represents (i) the removal of the non-cash portion of rent expense relating to the impact of straight-line rent and the amortization of cash incentives and allowances received from landlords, plus (ii) the actual cash received from landlords incentives and allowances in the period in which it was received.
|
(4)
|
Represents the actual cash received for franchise fees received in the period for post-acquisition franchise development agreements, which are not recorded as revenue until the franchise store is opened.
|
(5)
|
Represents revenue related to unearned gift cards and unearned franchise fees that were removed in purchase accounting, and therefore were not recorded as revenue.
|
(6)
|
Relates to start-up and marketing costs incurred prior to the opening of new Company-owned stores and generally consists of payroll, recruiting, training, supplies and rent incurred prior to store opening.
|
(7)
|
Represents non-recurring income and expenses primarily related to (i) transaction costs associated with the Merger; (ii) severance expense and executive termination benefits; (iii) employee and other legal claims and settlements; (iv) sales and use tax refunds; and (v) certain insurance recoveries relating to prior year expense.
|
(8)
|
Relates to estimated net cost savings primarily from (i) the change from public to private ownership upon the closing of the Acquisition and elimination of public equity securities, with reductions in investor relations activities, directors fees and certain legal and other securities and filing costs; (ii) the full-year effect of cost savings initiatives implemented by the Company in 2013; (iii) the estimated effect of cost savings following the Acquisition from participation in Sponsor-leveraged purchasing programs including various supplies, travel and communications purchasing categories; (iv) the net impact of labor savings associated with changes in management; and net of (v) the estimated incremental costs associated with our new IT systems and post-closing insurance arrangements.
|
•
|
The success of our capital initiatives, including new store development and existing store evolution;
|
•
|
Our ability to successfully implement our marketing strategy;
|
•
|
Competition in both the restaurant and entertainment industries;
|
•
|
Changes in consumer discretionary spending;
|
•
|
Impacts on our business and financial results from economic uncertainty in the United States and Canada;
|
•
|
Negative publicity concerning food quality, health, general safety and other issues;
|
•
|
Expansion in international markets;
|
•
|
Increases in our leverage;
|
•
|
Increases in food, labor and other operating costs;
|
•
|
Disruptions of our information technology systems and technologies;
|
•
|
Changes in consumers’ health, nutrition and dietary preferences;
|
•
|
Any disruption of our commodity distribution system;
|
•
|
Our dependence on a limited number of suppliers for our games, rides, entertainment-related equipment, redemption prizes and merchandise;
|
•
|
Product liability claims and product recalls;
|
•
|
Government regulations, including health care reform;
|
•
|
Litigation risks;
|
•
|
Adverse effects of local conditions, natural disasters and other events;
|
•
|
Existence or occurrence of certain public health issues;
|
•
|
Fluctuations in our quarterly results of operations due to seasonality;
|
•
|
Inadequate insurance coverage;
|
•
|
Loss of certain key personnel;
|
•
|
Our ability to adequately protect our trademarks or other proprietary rights;
|
•
|
Risks in connection with owning and leasing real estate; and
|
•
|
Litigation risks associated with our merger.
|
Issuer Purchases of Equity Securities
|
||||||||||||||
Period
|
|
Total Number
of Shares Purchased (1) |
|
Average
Price Paid Per Share (1) |
|
Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs
|
|
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
|
||||||
Predecessor:
|
|
|
|
|
|
|
|
|
||||||
December 30, 2013 – January 26, 2014
|
|
2,907
|
|
|
$
|
48.53
|
|
|
—
|
|
|
$
|
128,880,167
|
|
January 27 – February 14, 2014
(2)
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
2,907
|
|
|
$
|
48.53
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
For the period ended January 26, 2014, the total number of shares purchased were tendered by employees to satisfy tax withholding requirements on the vesting of restricted stock awards, which are not deducted from shares available to be purchased under our stock repurchase program. Shares tendered by employees to satisfy tax withholding requirements were considered purchased at the closing price of our common stock on the date of vesting.
|
(2)
|
As a result of the Merger on February 14, 2014, our stock ceased to be traded on the New York Stock Exchange and all of our outstanding shares were purchased for $54.00 per share.
|
Exhibit
Number
|
|
Description
|
4.1*
|
|
First Supplemental Indenture, dated as of October 9, 2014, among CEC Entertainment, Inc. (the “Company”), CEC Entertainment Leasing Company and Wilmington Trust, National Association
|
|
|
|
10.1
|
|
Employment Agreement, dated as of July 30, 2014, between the Company and Thomas Leverton (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.2
|
|
Employment Agreement, dated as of July 30, 2014, between the Company and J. Roger Cardinale (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.3
|
|
Employment Agreement, dated as of July 30, 2014, between the Company and Randy Forsythe (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.4
|
|
Employment Agreement, dated as of October 9, 2014, between the Company and Temple Weiss (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.5
|
|
Non-Employee Director Term Sheet, dated as of July 30, 2014, between the Company and Allen R. Weiss (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.6
|
|
Queso Holdings Inc. 2014 Equity Incentive Plan, as adopted on August 21, 2014 (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.7
|
|
Form of Queso Holdings Inc. 2014 Equity Incentive Plan Stock Option Agreement (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2**
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS†
|
|
XBRL Instance Document
|
|
|
|
101.SCH†
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL†
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF†
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB†
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE†
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
†
|
Pursuant to Item 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.
|
|
|
|
|
CEC ENTERTAINMENT, INC.
|
|
|
|
|
|
November 12, 2014
|
|
By:
|
|
/s/ Temple H. Weiss
|
|
|
|
|
Temple H. Weiss
|
|
|
|
|
Executive Vice President,
Chief Financial Officer
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
November 12, 2014
|
|
|
|
/s/ Laurie E. Priest
|
|
|
|
|
Laurie E. Priest
|
|
|
|
|
Vice President, Controller
|
|
|
|
|
(Principal Accounting Officer)
|
Exhibit
Number
|
|
Description
|
4.1*
|
|
First Supplemental Indenture, dated as of October 9, 2014, among CEC Entertainment, Inc. (the “Company”), CEC Entertainment Leasing Company and Wilmington Trust, National Association
|
|
|
|
10.1
|
|
Employment Agreement, dated as of July 30, 2014, between the Company and Thomas Leverton (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.2
|
|
Employment Agreement, dated as of July 30, 2014, between the Company and J. Roger Cardinale (incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.3
|
|
Employment Agreement, dated as of July 30, 2014, between the Company and Randy Forsythe (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.4
|
|
Employment Agreement, dated as of October 9, 2014, between the Company and Temple Weiss (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.5
|
|
Non-Employee Director Term Sheet, dated as of July 30, 2014, between the Company and Allen R. Weiss (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.6
|
|
Queso Holdings Inc. 2014 Equity Incentive Plan, as adopted on August 21, 2014 (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
10.7
|
|
Form of Queso Holdings Inc. 2014 Equity Incentive Plan Stock Option Agreement (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2**
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS†
|
|
XBRL Instance Document
|
|
|
|
101.SCH†
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL†
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF†
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB†
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE†
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
†
|
Pursuant to Item 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.
|
By:
|
/s/ Temple Weiss
Name: Temple Weiss Title: Chief Financial Officer, Executive Vice President |
By:
|
/s/ Lesley Lehner
Name: Lesley Lehner Title: President |
By:
|
/s/ Jane Schweiger
Name: Jane Schweiger Title: Vice President |
1.
|
I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended
September 28, 2014
of CEC Entertainment, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 12, 2014
|
|
/s/ Thomas Leverton
|
|
|
Thomas Leverton
|
|
|
Chief Executive Officer and Director
|
1.
|
I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended
September 28, 2014
of CEC Entertainment, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
November 12, 2014
|
|
/s/ Temple H. Weiss
|
|
|
Temple H. Weiss
|
|
|
Executive Vice President, Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 12, 2014
|
|
/s/ Thomas Leverton
|
|
|
Thomas Leverton
|
|
|
Chief Executive Officer and Director
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 12, 2014
|
|
/s/ Temple H. Weiss
|
|
|
Temple H. Weiss
|
|
|
Executive Vice President, Chief Financial Officer
|