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x
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ANNUAL 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
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48-0905805
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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1707 Market Place Blvd, Suite 200
Irving, Texas
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75063
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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None
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None
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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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x
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Page
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PART I
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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•
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The success of our capital initiatives, including new store development and existing store evolution;
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•
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Our ability to successfully implement our marketing strategy;
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•
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Competition in both the restaurant and entertainment industries;
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•
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Economic uncertainty and changes in consumer discretionary spending in the United States and Canada;
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•
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Negative publicity concerning food quality, health, general safety and other issues, and changes in consumer preferences;
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•
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Expansion in international markets;
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•
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Our ability to generate sufficient cash flow to meet our debt service payments;
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•
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Increases in food, labor and other operating costs;
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•
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Disruptions of our information technology systems and technologies, including, but not limited to, data security breaches;
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•
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Any disruption of our commodity distribution system;
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•
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Our dependence on a limited number of suppliers for our games, rides, entertainment-related equipment, redemption prizes and merchandise;
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•
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Product liability claims and product recalls;
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•
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Government regulations;
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•
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Litigation risks;
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•
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Adverse effects of local conditions, natural disasters and other events;
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•
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Fluctuations in our quarterly results of operations due to seasonality;
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•
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Inadequate insurance coverage;
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•
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Loss of certain key personnel;
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•
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Our ability to adequately protect our trademarks or other proprietary rights;
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•
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Risks in connection with owning and leasing real estate;
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•
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Our ability to successfully integrate the operations of companies we acquire; and
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•
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Litigation risks associated with our merger.
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•
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limit our ability to borrow money for our working capital, capital expenditures, debt service requirements, strategic initiatives or other purposes;
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•
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make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the indenture and the agreements governing other indebtedness;
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•
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require us to dedicate a substantial portion of our cash flow from operations to the repayment of our indebtedness, thereby reducing funds available to us for other purposes;
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•
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limit our flexibility in planning for, or reacting to, changes in our operations or business;
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•
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make us more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;
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•
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impact our rent expense on leased space, which could be significant;
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•
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make us more vulnerable to downturns in our business or the economy;
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•
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restrict us from making strategic acquisitions, engaging in development activities, introducing new technologies, or exploiting business opportunities;
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•
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cause us to make non-strategic divestitures;
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•
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limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or dispose of assets;
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•
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limit our ability to repurchase shares and pay cash dividends; and
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•
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expose us to the risk of increased interest rates, as certain of our borrowings are at variable rates of interest.
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Domestic
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Company-Owned Stores
|
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Franchised Stores
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Total
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|||
Chuck E. Cheese’s
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512
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29
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541
|
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Peter Piper Pizza
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32
|
|
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62
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|
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94
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Total domestic
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544
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|
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91
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635
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International
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Chuck E. Cheese’s
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12
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39
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|
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51
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Peter Piper Pizza
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—
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46
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|
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46
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Total international
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12
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85
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|
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97
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Total stores in operation
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556
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176
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732
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Domestic
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Company-
Owned Stores
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Franchised
Stores
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Total
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|||
Alabama
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8
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1
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9
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Alaska
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1
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—
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|
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1
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Arizona
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32
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|
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17
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|
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49
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Arkansas
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6
|
|
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—
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|
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6
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California
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81
|
|
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4
|
|
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85
|
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Colorado
|
10
|
|
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—
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|
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10
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Connecticut
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4
|
|
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—
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|
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4
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Delaware
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2
|
|
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—
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|
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2
|
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Florida
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31
|
|
|
—
|
|
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31
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Georgia
|
15
|
|
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—
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|
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15
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Hawaii
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—
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|
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2
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|
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2
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Idaho
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1
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|
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—
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|
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1
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Illinois
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22
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|
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—
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|
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22
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Indiana
|
13
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—
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13
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Iowa
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4
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|
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—
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|
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4
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Kansas
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4
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—
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4
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Kentucky
|
5
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|
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—
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|
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5
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Louisiana
|
10
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|
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2
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|
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12
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Maryland
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16
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|
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—
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16
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Massachusetts
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11
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|
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—
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11
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Michigan
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16
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—
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16
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Minnesota
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8
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|
|
—
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8
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Mississippi
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3
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|
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2
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|
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5
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Missouri
|
8
|
|
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—
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8
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Montana
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—
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1
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1
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Nebraska
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2
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—
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|
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2
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Nevada
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6
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—
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6
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New Hampshire
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2
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|
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—
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|
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2
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New Jersey
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15
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|
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—
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|
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15
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New Mexico
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5
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|
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3
|
|
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8
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New York
|
22
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|
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—
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|
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22
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North Carolina
|
13
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|
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2
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|
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15
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North Dakota
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—
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|
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1
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|
|
1
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Ohio
|
19
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|
|
1
|
|
|
20
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Oklahoma
|
6
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|
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—
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|
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6
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Oregon
|
1
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|
|
2
|
|
|
3
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Pennsylvania
|
23
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|
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—
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|
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23
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Rhode Island
|
1
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|
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—
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|
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1
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South Carolina
|
7
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—
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7
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South Dakota
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2
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—
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|
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2
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Tennessee
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12
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|
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—
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|
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12
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Texas
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65
|
|
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46
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|
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111
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Utah
|
2
|
|
|
1
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|
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3
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Virginia
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12
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|
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3
|
|
|
15
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Washington
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8
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|
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3
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|
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11
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West Virginia
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1
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|
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—
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|
|
1
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Wisconsin
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9
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|
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—
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|
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9
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Total domestic
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544
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|
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91
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|
|
635
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International
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Company-
Owned Stores
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Franchised
Stores
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Total
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|||
Canada
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12
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|
|
—
|
|
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12
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Chile
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—
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7
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|
|
7
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Guam
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—
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|
|
1
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|
|
1
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|
Guatemala
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—
|
|
|
2
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|
|
2
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|
Mexico
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—
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|
|
54
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|
|
54
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Panama
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—
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|
|
2
|
|
|
2
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|
Peru
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—
|
|
|
3
|
|
|
3
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Puerto Rico
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—
|
|
|
3
|
|
|
3
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|
Trinidad
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—
|
|
|
1
|
|
|
1
|
|
Saudi Arabia
|
—
|
|
|
9
|
|
|
9
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|
United Arab Emirates
|
—
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|
|
2
|
|
|
2
|
|
Total international
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12
|
|
|
85
|
|
|
97
|
|
Total stores in operation
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556
|
|
|
176
|
|
|
732
|
|
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Fiscal Year 2015
(1)
|
|
For the 317 Day Period Ended December 28, 2014
(5) (6)
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|
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For the 47 Day Period Ended February 14, 2014
(7)
|
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Fiscal Year 2013
(1)
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Fiscal Year 2012
(1)
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Fiscal Year 2011
(1)
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||||||||||||
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Successor
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Successor
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Predecessor
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Predecessor
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Predecessor
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Predecessor
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||||||||||||
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(in thousands, except percentages and store number amounts)
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|||||||||||||||||||||||
Statements of Earnings Data:
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Company store sales
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$
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905,110
|
|
|
$
|
712,098
|
|
|
|
$
|
113,556
|
|
|
$
|
816,739
|
|
|
$
|
798,937
|
|
|
$
|
815,894
|
|
Sales percent increase (decrease):
|
|
|
|
|
|
|
|
|
|
|
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||||||||||||
Total company store sales
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NM
|
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NM
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NM
|
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2.2
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%
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(2.1
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)%
|
|
0.3
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%
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|||||||||
Comparable store sales
(2)
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NM
|
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NM
|
|
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NM
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0.4
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%
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(2.9
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)%
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(2.0
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)%
|
|||||||||
Total revenues
|
$
|
922,589
|
|
|
$
|
718,581
|
|
|
|
$
|
114,243
|
|
|
$
|
821,721
|
|
|
$
|
803,480
|
|
|
$
|
821,178
|
|
Revenues percent increase (decrease)
|
NM
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|
NM
|
|
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NM
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|
2.3
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%
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(2.2
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)%
|
|
0.5
|
%
|
|||||||||
Operating income (loss)
|
$
|
55,131
|
|
|
$
|
(32,259
|
)
|
|
|
$
|
2,873
|
|
|
$
|
83,471
|
|
|
$
|
79,071
|
|
|
$
|
97,979
|
|
As a percent of total revenues
|
6.0
|
%
|
|
NM
|
|
|
2.5
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%
|
|
10.2
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%
|
|
9.8
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%
|
|
11.9
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%
|
|||||||
Net income (loss)
|
$
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(12,510
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)
|
|
$
|
(62,088
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)
|
|
|
$
|
704
|
|
|
$
|
47,824
|
|
|
$
|
43,590
|
|
|
$
|
54,962
|
|
Balance Sheet Data (end of year):
|
|
|
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|
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|
||||||||||||
Total assets
|
$
|
1,733,035
|
|
|
$
|
1,836,113
|
|
|
|
NM
|
|
$
|
791,611
|
|
|
$
|
801,806
|
|
|
$
|
772,471
|
|
||
Total debt
(3)
|
$
|
994,448
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|
|
$
|
999,783
|
|
|
|
NM
|
|
$
|
382,879
|
|
|
$
|
412,216
|
|
|
$
|
400,509
|
|
||
Stockholders’ equity
|
$
|
208,546
|
|
|
$
|
292,586
|
|
|
|
NM
|
|
$
|
160,768
|
|
|
$
|
143,274
|
|
|
$
|
124,177
|
|
||
Dividends declared
|
$
|
70,000
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
17,372
|
|
|
$
|
16,182
|
|
|
$
|
15,806
|
|
Non-GAAP Financial Measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted EBITDA
(4)
|
$
|
220,936
|
|
|
$
|
170,456
|
|
|
|
$
|
24,967
|
|
|
$
|
186,131
|
|
|
$
|
184,024
|
|
|
198,412
|
|
|
Adjusted EBITDA as a percent of Total revenues
|
23.9
|
%
|
|
23.7
|
%
|
|
|
21.9
|
%
|
|
22.7
|
%
|
|
22.9
|
%
|
|
24.2
|
%
|
||||||
Number of Stores (end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Company-owned
|
556
|
|
|
559
|
|
|
NM
|
|
522
|
|
|
514
|
|
|
507
|
|
||||||||
Franchised
|
176
|
|
|
172
|
|
|
NM
|
|
55
|
|
|
51
|
|
|
49
|
|
||||||||
|
732
|
|
|
731
|
|
|
NM
|
|
577
|
|
|
565
|
|
|
556
|
|
(1)
|
We operate on a 52 or 53 week fiscal year ending on the Sunday nearest December 31. Fiscal year 2015 was 53 weeks in length and all other fiscal years presented were 52 weeks.
|
(2)
|
We define comparable store sales as the percentage change in sales for our domestic Company-owned stores that have been open for at least 18 months as of the beginning of each respective fiscal year or acquired stores we have operated for at least 12 months as of the beginning of the applicable fiscal period. We believe comparable store sales to be a key performance indicator used within our industry; it is a critical factor in evaluating our performance, as it is indicative of acceptance of our strategic initiatives and local economic and consumer trends. Our comparable store sales for Fiscal 2015 and the Successor 2014 period exclude the Peter Piper Pizza stores that were acquired in October 2014 as we had operated them for less than 12 months at the beginning of each respective fiscal year. Chuck E. Cheese’s comparable store sales for Fiscal 2015
decreased
0.4%
in 2015. On a proforma basis, combining the successor and predecessor 2014 periods, Chuck E. Cheese’s comparable store sales decreased 2.2% in 2014. On a standalone basis, Peter Piper Pizza’s comparable store sales increased
5.2%
in 2015,
4.6%
in 2014,
4.9%
in 2013 and
4.6%
in 2012. The impact of the 53rd week on comparable store sales was excluded from these percentages for Fiscal 2015.
|
(3)
|
Total debt includes our senior notes, our outstanding borrowings under the term loan facility, the revolving credit facility, and the Predecessor Facility, and capital lease obligations.
|
(4)
|
See the definition of Adjusted Earnings Before Interest, Income Taxes, Depreciation and Amortization (“Adjusted EBITDA”) and the reconciliation of net income to Adjusted EBITDA in “Non-GAAP Financial Measures” below.
|
(5)
|
The financial results for the period February 15, 2014 through December 28, 2014 represent the 317 day Successor period following the Merger.
|
(6)
|
Results for the Successor 2014 period include the revenues and expenses for Peter Piper Pizza for the 73 day period from October 17, 2014 through December 28, 2014.
|
(7)
|
The financial results for the period December 29, 2013 through February 14, 2014 represent the 47 day Predecessor period prior to the Merger.
|
•
|
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;
|
•
|
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, gains or losses upon disposal of property or equipment and inventory obsolescence charges outside of the ordinary course of business;
|
•
|
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) integration costs in connection with acquisitions; (iv) employee and other legal claims and settlements; (v) costs incurred in connection with the relocation of our corporate offices; (vi) actual cash landlord incentives received on our new corporate offices; (vii) sales and use tax refunds relating to prior periods; (viii) miscellaneous professional fees; and (ix) 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.
|
|
Fiscal 2015
|
|
For the 317 Day Period Ended December 28, 2014
|
|
|
For the 47 Day Period Ended February 14, 2014
|
|
Fiscal 2013
|
|
Fiscal 2012
|
|
Fiscal 2011
|
||||||||||||
|
Successor
|
|
Successor
|
|
|
Predecessor
|
|
Predecessor
|
|
Predecessor
|
|
Predecessor
|
||||||||||||
|
|
|
(in thousands)
|
|||||||||||||||||||||
Total revenues
|
$
|
922,589
|
|
|
$
|
718,581
|
|
|
|
$
|
114,243
|
|
|
$
|
821,721
|
|
|
$
|
803,480
|
|
|
$
|
821,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income (loss) as reported
|
$
|
(12,510
|
)
|
|
$
|
(62,088
|
)
|
|
|
$
|
704
|
|
|
$
|
47,824
|
|
|
$
|
43,590
|
|
|
$
|
54,962
|
|
Interest expense
|
70,582
|
|
|
60,952
|
|
|
|
1,151
|
|
|
7,453
|
|
|
9,401
|
|
|
8,875
|
|
||||||
Income tax expense (benefit)
|
(2,941
|
)
|
|
(31,123
|
)
|
|
|
1,018
|
|
|
28,194
|
|
|
26,080
|
|
|
34,142
|
|
||||||
Depreciation and amortization
|
119,294
|
|
|
118,556
|
|
|
|
9,883
|
|
|
79,028
|
|
|
79,510
|
|
|
81,560
|
|
||||||
Non-cash impairments, gain or loss on disposal
(1)
|
8,934
|
|
|
9,841
|
|
|
|
294
|
|
|
6,360
|
|
|
10,314
|
|
|
5,774
|
|
||||||
Non-cash stock-based compensation
(2)
|
838
|
|
|
703
|
|
|
|
12,639
|
|
|
8,481
|
|
|
7,468
|
|
|
7,185
|
|
||||||
Rent expense book to cash
(3)
|
8,463
|
|
|
10,616
|
|
|
|
(1,190
|
)
|
|
714
|
|
|
(313
|
)
|
|
1,675
|
|
||||||
Franchise revenue, net cash received
(4)
|
1,217
|
|
|
2,585
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Impact of purchase accounting
(5)
|
995
|
|
|
1,496
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Store pre-opening costs
(6)
|
792
|
|
|
1,166
|
|
|
|
131
|
|
|
2,057
|
|
|
1,525
|
|
|
391
|
|
||||||
One-time items
(7)
|
23,085
|
|
|
55,109
|
|
|
|
(165
|
)
|
|
(40
|
)
|
|
99
|
|
|
372
|
|
||||||
Cost savings initiatives
(8)
|
2,187
|
|
|
2,643
|
|
|
|
502
|
|
|
6,060
|
|
|
6,350
|
|
|
3,476
|
|
||||||
Adjusted EBITDA
|
$
|
220,936
|
|
|
$
|
170,456
|
|
|
|
$
|
24,967
|
|
|
$
|
186,131
|
|
|
$
|
184,024
|
|
|
$
|
198,412
|
|
Adjusted EBITDA as a percent of total revenues
|
23.9
|
%
|
|
23.7
|
%
|
|
|
21.9
|
%
|
|
22.7
|
%
|
|
22.9
|
%
|
|
24.2
|
%
|
(1)
|
Relates primarily to (i) the impairment of Company-owned stores or impairments of long lived assets; (ii) gains or losses upon disposal of property or equipment; and (iii) inventory obsolescence charges outside of the ordinary course of business.
|
(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 landlord 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, Sale Leaseback transaction and PPP Acquisition; (ii) severance expense and executive termination benefits; (iii) integration costs in connection with the PPP Acquisition; (iv) employee and other legal claims and settlements; (v) costs incurred in connection with the relocation of our corporate offices; (vi) actual cash landlord incentives received on our new corporate offices; (vii) sales and use tax refunds relating to prior periods; (viii) miscellaneous professional fees; and (ix) 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; (v) cost savings in connection with the relocation of the Company’s corporate offices in 2015; (vi) labor savings associated with planned headcount reductions in 2015; (vii) estimated cost savings associated with the integration of PPP; (viii) the full-year effect of costs savings associated with upgrades to our telephone communication systems; and net of (ix) the estimated incremental costs associated with our new IT systems and post-closing insurance arrangements.
|
•
|
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; and
|
•
|
Recently Issued Accounting Guidance.
|
•
|
Total revenues of
$922.6 million
in the
Successor 2015 period
compared to total revenues of
$718.6 million
in the
Successor 2014 period
and
$114.2 million
in the
Predecessor 2014 period
.
|
•
|
Adjusted EBITDA of
$220.9 million
in the
Successor 2015 period
compared to adjusted EBITDA of
$170.5 million
in the
Successor 2014 period
and
$25.0 million
in the
Predecessor 2014 period
. We estimate our Adjusted EBITDA for
2015
, before the impact of the 53
rd
week, to be approximately
$209.4 million
.
|
•
|
Net loss of
$12.5 million
in the
Successor 2015 period
compared to a net loss of
$62.1 million
in the
Successor 2014 period
and net income of
$0.7 million
in the
Predecessor 2014 period
.
|
•
|
Cash provided by operations was
$100.6 million
for the
Successor 2015 period
compared to
$48.1 million
for the
Successor 2014 period
and
$22.3 million
for the
Predecessor 2014 period
. The
increase
in the
Successor 2015 period
was primarily driven by an additional week of operations in 2015, transaction, severance and related litigation costs incurred in 2014 in connection with the Merger.
|
|
|
|
Twelve Months Ended
|
|||||||
|
|
|
January 3,
2016 |
|
December 28,
2014 |
|
December 29, 2013
|
|||
Number of Company-owned stores:
|
|
|
|
|
|
|
|
|||
Beginning of period
|
|
|
559
|
|
|
522
|
|
|
514
|
|
New
(1)
|
|
|
5
|
|
|
11
|
|
|
13
|
|
Acquired by the Company
(2)
|
|
|
—
|
|
|
32
|
|
|
—
|
|
Acquired from franchisee
|
|
|
—
|
|
|
1
|
|
|
—
|
|
Closed
(1)
|
|
|
(8
|
)
|
|
(7
|
)
|
|
(5
|
)
|
End of period
|
|
|
556
|
|
|
559
|
|
|
522
|
|
Number of franchised stores:
|
|
|
|
|
|
|
|
|||
Beginning of period
|
|
|
172
|
|
|
55
|
|
|
51
|
|
New
(3)
|
|
|
12
|
|
|
10
|
|
|
6
|
|
Acquired by the Company
(2)
|
|
|
—
|
|
|
110
|
|
|
—
|
|
Acquired from franchisee
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
Closed
(3)
|
|
|
(8
|
)
|
|
(2
|
)
|
|
(2
|
)
|
End of period
|
|
|
176
|
|
|
172
|
|
|
55
|
|
Total number of stores:
|
|
|
|
|
|
|
|
|||
Beginning of period
|
|
|
731
|
|
|
577
|
|
|
565
|
|
New
(4)
|
|
|
17
|
|
|
21
|
|
|
19
|
|
Acquired by the Company
(2)
|
|
|
—
|
|
|
142
|
|
|
—
|
|
Acquired from franchisee
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Closed
(4)
|
|
|
(16
|
)
|
|
(9
|
)
|
|
(7
|
)
|
End of period
|
|
|
732
|
|
|
731
|
|
|
577
|
|
(1)
|
The number of new and closed Company-owned stores during
2015
,
2014
and
2013
included
two
,
two
and
one
stores, respectively,
|
(2)
|
In October 2014, we acquired Peter Piper Pizza, including 32 Company-owned stores and 110 franchised stores.
|
(3)
|
The number of new and closed franchise stores during
2015
,
2014
and
2013
included
two
,
one
, and
one
stores, respectively, that were relocated.
|
(4)
|
The number of new and closed stores during
2015
,
2014
and
2013
included
four
,
three
and
two
stores, respectively, that were relocated.
|
|
|
Fiscal Year Ended
(1)
|
||||||||||
|
|
January 3, 2016
|
|
December 28, 2014
|
|
December 29, 2013
|
||||||
|
|
(in thousands, except store number amounts)
|
||||||||||
Average annual sales per comparable store
(2) (3)
|
|
$
|
1,563
|
|
|
$
|
1,550
|
|
|
$
|
1,573
|
|
Number of stores included in our comparable store base
(3)
|
|
489
|
|
|
485
|
|
|
485
|
|
(1)
|
The information for the Fiscal year ended January 3, 2016 is presented on a 52 week basis.
|
(2)
|
Average annual sales per comparable store is calculated based on the average weekly sales of our comparable store base. The amount of average annual sales per comparable store cannot be used to compute year-over year comparable store sales increases or decreases due to the change in the comparable store base. Additionally, the average annual sales amount for
Fiscal 2015
excludes the impact of an additional 53
rd
week of sales. Including the 53
rd
week in
Fiscal 2015
, the average annual sales per comparable store in thousands was
$1,607
.
|
(3)
|
Average annual sales per comparable store and the comparable store base exclude the Peter Piper Pizza branded stores that were acquired in October 2014 as we have operated them for less than 12 months as of the beginning of
Fiscal 2015
and 2014.
|
•
|
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 “Cost of Food and beverage sales” and “Cost of 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 “Cost of Food and beverage sales” and “Cost of Entertainment and merchandise sales.”
|
|
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
|
Fiscal Year Ended
|
||||||||||||||||||||
|
|
January 3, 2016
(1) (2)
|
|
December 28, 2014
(1)
|
|
|
February 14, 2014
|
|
|
December 29, 2013
|
||||||||||||||||||||
|
|
Successor
|
|
Successor
|
|
|
Predecessor
|
|
|
Predecessor
|
||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||
Food and beverage sales
|
|
$
|
408,095
|
|
|
45.1
|
%
|
|
$
|
307,696
|
|
|
43.2
|
%
|
|
|
$
|
50,897
|
|
|
44.8
|
%
|
|
|
$
|
368,584
|
|
|
45.1
|
%
|
Entertainment and merchandise sales
|
|
497,015
|
|
|
54.9
|
%
|
|
404,402
|
|
|
56.8
|
%
|
|
|
62,659
|
|
|
55.2
|
%
|
|
|
448,155
|
|
|
54.9
|
%
|
||||
Total company store sales
|
|
$
|
905,110
|
|
|
100.0
|
%
|
|
$
|
712,098
|
|
|
100.0
|
%
|
|
|
$
|
113,556
|
|
|
100.0
|
%
|
|
|
$
|
816,739
|
|
|
100.0
|
%
|
(1)
|
Company store sales for the
Successor 2014 period
include sales from the acquired Peter Piper Pizza stores for the 73 day period from October 17, 2014 through December 28, 2014. Total Food and beverage sales and Entertainment and merchandise sales from PPP stores were
$8.0 million
and
$2.5 million
, respectively, for the 2014 Successor period since the PPP Acquisition.
|
(2)
|
Company store sales for
Fiscal 2015
include the impact of an additional 53
rd
week of revenues. Excluding the 53
rd
week in
2015
, total company store sales were approximately
$880.7 million
.
|
|
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year Ended
|
||||||||||||||||||||
|
|
January 3, 2016
|
|
December 28, 2014
(4)
|
|
|
February 14, 2014
|
|
December 29, 2013
|
||||||||||||||||||||
|
|
Successor
|
|
Successor
|
|
|
Predecessor
|
|
Predecessor
|
||||||||||||||||||||
|
|
(in thousands, except percentages)
|
|
|
|
||||||||||||||||||||||||
Total company store sales
|
|
$
|
905,110
|
|
|
98.1
|
%
|
|
$
|
712,098
|
|
|
99.1
|
%
|
|
|
$
|
113,556
|
|
|
99.4
|
%
|
|
$
|
816,739
|
|
|
99.4
|
%
|
Franchise fees and royalties
|
|
17,479
|
|
|
1.9
|
%
|
|
6,483
|
|
|
0.9
|
%
|
|
|
687
|
|
|
0.6
|
%
|
|
4,982
|
|
|
0.6
|
%
|
||||
Total revenues
|
|
922,589
|
|
|
100.0
|
%
|
|
718,581
|
|
|
100.0
|
%
|
|
|
114,243
|
|
|
100.0
|
%
|
|
821,721
|
|
|
100.0
|
%
|
||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of food and beverage
(1)
|
|
104,434
|
|
|
25.6
|
%
|
|
79,996
|
|
|
26.0
|
%
|
|
|
12,285
|
|
|
24.1
|
%
|
|
90,363
|
|
|
24.5
|
%
|
||||
Cost of entertainment and merchandise
(2)
|
|
31,519
|
|
|
6.3
|
%
|
|
24,608
|
|
|
6.1
|
%
|
|
|
3,729
|
|
|
6.0
|
%
|
|
29,775
|
|
|
6.6
|
%
|
||||
Total cost of food, beverage, entertainment and merchandise
(3)
|
|
135,953
|
|
|
15.0
|
%
|
|
104,604
|
|
|
14.7
|
%
|
|
|
16,014
|
|
|
14.1
|
%
|
|
120,138
|
|
|
14.7
|
%
|
||||
Labor expenses
(3)
|
|
250,584
|
|
|
27.7
|
%
|
|
200,855
|
|
|
28.2
|
%
|
|
|
31,998
|
|
|
28.2
|
%
|
|
229,172
|
|
|
28.1
|
%
|
||||
Depreciation and amortization
(3)
|
|
115,236
|
|
|
12.7
|
%
|
|
115,951
|
|
|
16.3
|
%
|
|
|
9,733
|
|
|
8.6
|
%
|
|
78,167
|
|
|
9.6
|
%
|
||||
Rent expense
(3)
|
|
96,669
|
|
|
10.7
|
%
|
|
76,698
|
|
|
10.8
|
%
|
|
|
12,365
|
|
|
10.9
|
%
|
|
78,463
|
|
|
9.6
|
%
|
||||
Other store operating expenses
(3)
|
|
143,078
|
|
|
15.8
|
%
|
|
119,896
|
|
|
16.8
|
%
|
|
|
15,760
|
|
|
13.9
|
%
|
|
131,035
|
|
|
16.0
|
%
|
||||
Total Company store operating costs
(3)
|
|
741,520
|
|
|
81.9
|
%
|
|
618,004
|
|
|
86.8
|
%
|
|
|
85,870
|
|
|
75.6
|
%
|
|
636,975
|
|
|
78.0
|
%
|
||||
Other costs and expenses
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Advertising expense
|
|
47,146
|
|
|
5.1
|
%
|
|
33,702
|
|
|
4.7
|
%
|
|
|
5,903
|
|
|
5.2
|
%
|
|
41,217
|
|
|
5.0
|
%
|
||||
General and administrative expenses
|
|
66,003
|
|
|
7.2
|
%
|
|
48,182
|
|
|
6.7
|
%
|
|
|
7,963
|
|
|
7.0
|
%
|
|
56,691
|
|
|
6.9
|
%
|
||||
Transaction, severance and litigation related costs
|
|
11,914
|
|
|
1.3
|
%
|
|
50,545
|
|
|
7.0
|
%
|
|
|
11,634
|
|
|
10.2
|
%
|
|
316
|
|
|
—
|
%
|
||||
Asset impairments
|
|
875
|
|
|
0.1
|
%
|
|
407
|
|
|
0.1
|
%
|
|
|
—
|
|
|
—
|
%
|
|
3,051
|
|
|
0.4
|
%
|
||||
Total operating costs and expenses
|
|
867,458
|
|
|
94.0
|
%
|
|
750,840
|
|
|
104.5
|
%
|
|
|
111,370
|
|
|
97.5
|
%
|
|
738,250
|
|
|
89.8
|
%
|
||||
Operating income (loss)
|
|
55,131
|
|
|
6.0
|
%
|
|
(32,259
|
)
|
|
(4.5
|
)%
|
|
|
2,873
|
|
|
2.5
|
%
|
|
83,471
|
|
|
10.2
|
%
|
||||
Interest expense
|
|
70,582
|
|
|
7.7
|
%
|
|
60,952
|
|
|
8.5
|
%
|
|
|
1,151
|
|
|
1.0
|
%
|
|
7,453
|
|
|
0.9
|
%
|
||||
Income (loss) before income taxes
|
|
(15,451
|
)
|
|
(1.7
|
)%
|
|
$
|
(93,211
|
)
|
|
(13.0
|
)%
|
|
|
$
|
1,722
|
|
|
1.5
|
%
|
|
$
|
76,018
|
|
|
9.3
|
%
|
(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)
|
Results for the Successor 2014 period include the revenues and expenses for PPP for the 73 day period from October 17, 2014 through December 28, 2014.
|
•
|
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.
|
|
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year Ended
|
||||||||
|
|
January 3,
2016 |
|
December 28,
2014 |
|
|
February 14,
2014 |
|
December 29,
2013 |
||||||||
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
(in thousands)
|
|||||||||||||||
Net cash provided by operating activities
|
|
$
|
100,613
|
|
|
$
|
48,091
|
|
|
|
$
|
22,314
|
|
|
$
|
138,664
|
|
Net cash used in investing activities
|
|
(78,191
|
)
|
|
(1,124,285
|
)
|
|
|
(9,659
|
)
|
|
(70,942
|
)
|
||||
Net cash provided by (used in) financing activities
|
|
(81,599
|
)
|
|
1,168,448
|
|
|
|
(13,844
|
)
|
|
(66,031
|
)
|
||||
Effect of foreign exchange rate changes on cash
|
|
(1,163
|
)
|
|
(444
|
)
|
|
|
(313
|
)
|
|
(641
|
)
|
||||
Change in cash and cash equivalents
|
|
$
|
(60,340
|
)
|
|
$
|
91,810
|
|
|
|
$
|
(1,502
|
)
|
|
$
|
1,050
|
|
Interest paid
|
|
$
|
73,255
|
|
|
$
|
41,801
|
|
|
|
$
|
938
|
|
|
$
|
7,798
|
|
Income taxes paid (refunded), net
|
|
$
|
13,346
|
|
|
$
|
24,424
|
|
|
|
$
|
(79
|
)
|
|
$
|
31,614
|
|
|
|
Successor
|
||||||
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
|
|
(in thousands)
|
||||||
Cash and cash equivalents
|
|
$
|
50,654
|
|
|
$
|
110,994
|
|
Term loan facility
|
|
$
|
746,700
|
|
|
$
|
756,200
|
|
Senior notes
|
|
$
|
255,000
|
|
|
$
|
255,000
|
|
Note payable
|
|
$
|
63
|
|
|
$
|
113
|
|
Net availability on undrawn revolving credit facility
|
|
$
|
139,100
|
|
|
$
|
139,100
|
|
|
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year Ended
|
||||||||
|
|
January 3, 2016
|
|
December 28, 2014
|
|
|
February 14, 2014
|
|
December 29, 2013
|
||||||||
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
(in thousands)
|
|||||||||||||||
Growth capital spend
(1)
|
|
$
|
35,482
|
|
|
$
|
32,084
|
|
|
|
$
|
5,102
|
|
|
$
|
48,175
|
|
Maintenance capital spend
(2)
|
|
29,267
|
|
|
27,608
|
|
|
|
4,608
|
|
|
23,010
|
|
||||
IT capital spend
|
|
13,087
|
|
|
4,995
|
|
|
|
—
|
|
|
2,900
|
|
||||
Total Capital Spend
|
|
$
|
77,836
|
|
|
$
|
64,687
|
|
|
|
$
|
9,710
|
|
|
$
|
74,085
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
Total
|
|
Less than
1 Year |
|
1-3
Years |
|
4-5
Years |
|
More than
5 Years |
||||||||||
|
(in thousands)
|
||||||||||||||||||
Operating leases
(1)
|
$
|
1,016,358
|
|
|
$
|
89,594
|
|
|
$
|
173,258
|
|
|
$
|
165,082
|
|
|
$
|
588,424
|
|
Capital leases
|
31,953
|
|
|
2,169
|
|
|
4,485
|
|
|
4,580
|
|
|
20,719
|
|
|||||
Purchase obligations
(2)
|
51,232
|
|
|
46,218
|
|
|
3,523
|
|
|
1,491
|
|
|
—
|
|
|||||
Secured credit facilities
|
746,700
|
|
|
7,600
|
|
|
13,300
|
|
|
17,100
|
|
|
708,700
|
|
|||||
Senior notes
|
255,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
255,000
|
|
|||||
Note payable - Peter Piper Pizza
|
63
|
|
|
50
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|||||
Interest obligations
(3)
|
299,831
|
|
|
54,125
|
|
|
98,720
|
|
|
111,940
|
|
|
35,046
|
|
|||||
Sale leaseback obligations
|
290,968
|
|
|
13,014
|
|
|
26,814
|
|
|
27,897
|
|
|
223,243
|
|
|||||
Uncertain tax positions
(4)
|
1,641
|
|
|
1,641
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
2,693,746
|
|
|
$
|
214,411
|
|
|
$
|
320,113
|
|
|
$
|
328,090
|
|
|
$
|
1,831,132
|
|
(1)
|
Includes the initial non-cancelable term plus renewal option periods provided for in the lease that can be reasonably assured but excludes contingent rent obligations and obligations to pay property taxes, insurance and maintenance on the leased assets.
|
(2)
|
A “purchase obligation” is defined as an agreement to purchase goods or services that is enforceable and legally binding on us and that specifies all significant terms, including (a) fixed or minimum quantities to be purchased; (b) fixed, minimum or variable price provisions; and (c) the approximate timing of the transaction. Our purchase obligations primarily consist of obligations for the purchase of merchandise and entertainment inventory, obligations under fixed price purchase agreements and contracts with “spot” market prices primarily relating to food and beverage products, obligations for the purchase of commercial airtime, and obligations associated with the modernization of various information technology platforms. The above purchase obligations exclude agreements that are cancelable without significant penalty.
|
(3)
|
Interest obligations represent an estimate of future interest payments under our Secured Credit Facilities, senior notes, and Peter Piper Pizza note payable. We calculated the estimate based on the terms of the Secured Credit Facilities, senior notes, and note payable. Our estimate uses interest rates in effect during
Fiscal 2015
and assumes we will not have any amounts drawn on our revolving credit facility.
|
(4)
|
Due to the uncertainty related to the settlement of uncertain tax positions, only the current portion of the liability for unrecognized tax benefits (including accrued interest and penalties) has been provided in the table above. The non-current portion of
$3.4 million
is excluded from the table above.
|
|
|
Successor
|
||||||
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
50,654
|
|
|
$
|
110,994
|
|
Accounts receivable
|
|
25,936
|
|
|
18,835
|
|
||
Inventories
|
|
23,275
|
|
|
18,979
|
|
||
Prepaid expenses
|
|
18,223
|
|
|
20,894
|
|
||
Total current assets
|
|
118,088
|
|
|
169,702
|
|
||
Property and equipment, net
|
|
629,047
|
|
|
681,972
|
|
||
Goodwill
|
|
483,876
|
|
|
483,444
|
|
||
Intangible assets, net
|
|
488,095
|
|
|
491,400
|
|
||
Other noncurrent assets
|
|
13,929
|
|
|
9,595
|
|
||
Total assets
|
|
$
|
1,733,035
|
|
|
$
|
1,836,113
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Bank indebtedness and other long-term debt, current portion
|
|
$
|
7,650
|
|
|
$
|
9,545
|
|
Capital lease obligations, current portion
|
|
421
|
|
|
408
|
|
||
Accounts payable
|
|
44,090
|
|
|
43,633
|
|
||
Accrued expenses
|
|
38,284
|
|
|
35,561
|
|
||
Unearned revenues
|
|
10,233
|
|
|
8,906
|
|
||
Accrued interest
|
|
9,757
|
|
|
16,152
|
|
||
Other current liabilities
|
|
3,678
|
|
|
2,990
|
|
||
Total current liabilities
|
|
114,113
|
|
|
117,195
|
|
||
Capital lease obligations, less current portion
|
|
15,044
|
|
|
15,476
|
|
||
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion
|
|
971,333
|
|
|
974,354
|
|
||
Deferred tax liability
|
|
201,734
|
|
|
218,972
|
|
||
Accrued insurance
|
|
9,737
|
|
|
12,146
|
|
||
Other noncurrent liabilities
|
|
212,528
|
|
|
205,384
|
|
||
Total liabilities
|
|
1,524,489
|
|
|
1,543,527
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Common stock, $0.01 par value; authorized 1,000 shares; 200 shares issued as of January 3, 2016 and December 28, 2014
|
|
—
|
|
|
—
|
|
||
Capital in excess of par value
|
|
356,460
|
|
|
355,587
|
|
||
Retained earnings (deficit)
|
|
(144,598
|
)
|
|
(62,088
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
(3,316
|
)
|
|
(913
|
)
|
||
Total stockholders’ equity
|
|
208,546
|
|
|
292,586
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
1,733,035
|
|
|
$
|
1,836,113
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year Ended
|
||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
|
February 14,
2014 |
|
December 29,
2013 |
||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
||||||||
Food and beverage sales
|
$
|
408,095
|
|
|
$
|
307,696
|
|
|
|
$
|
50,897
|
|
|
$
|
368,584
|
|
Entertainment and merchandise sales
|
497,015
|
|
|
404,402
|
|
|
|
62,659
|
|
|
448,155
|
|
||||
Total company store sales
|
905,110
|
|
|
712,098
|
|
|
|
113,556
|
|
|
816,739
|
|
||||
Franchise fees and royalties
|
17,479
|
|
|
6,483
|
|
|
|
687
|
|
|
4,982
|
|
||||
Total revenues
|
922,589
|
|
|
718,581
|
|
|
|
114,243
|
|
|
821,721
|
|
||||
OPERATING COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
|
||||||||
Company store operating costs
:
|
|
|
|
|
|
|
|
|
||||||||
Cost of food and beverage (exclusive of items shown separately below)
|
104,434
|
|
|
79,996
|
|
|
|
12,285
|
|
|
90,363
|
|
||||
Cost of entertainment and merchandise (exclusive of items shown separately below)
|
31,519
|
|
|
24,608
|
|
|
|
3,729
|
|
|
29,775
|
|
||||
Total cost of food, beverage, entertainment and merchandise
|
135,953
|
|
|
104,604
|
|
|
|
16,014
|
|
|
120,138
|
|
||||
Labor expenses
|
250,584
|
|
|
200,855
|
|
|
|
31,998
|
|
|
229,172
|
|
||||
Depreciation and amortization
|
115,236
|
|
|
115,951
|
|
|
|
9,733
|
|
|
78,167
|
|
||||
Rent expense
|
96,669
|
|
|
76,698
|
|
|
|
12,365
|
|
|
78,463
|
|
||||
Other store operating expenses
|
143,078
|
|
|
119,896
|
|
|
|
15,760
|
|
|
131,035
|
|
||||
Total company store operating costs
|
741,520
|
|
|
618,004
|
|
|
|
85,870
|
|
|
636,975
|
|
||||
Other costs and expenses
:
|
|
|
|
|
|
|
|
|
||||||||
Advertising expense
|
47,146
|
|
|
33,702
|
|
|
|
5,903
|
|
|
41,217
|
|
||||
General and administrative expenses
|
66,003
|
|
|
48,182
|
|
|
|
7,963
|
|
|
56,691
|
|
||||
Transaction, severance and related litigation costs
|
11,914
|
|
|
50,545
|
|
|
|
11,634
|
|
|
316
|
|
||||
Asset impairments
|
875
|
|
|
407
|
|
|
|
—
|
|
|
3,051
|
|
||||
Total operating costs and expenses
|
867,458
|
|
|
750,840
|
|
|
|
111,370
|
|
|
738,250
|
|
||||
Operating income (loss)
|
55,131
|
|
|
(32,259
|
)
|
|
|
2,873
|
|
|
83,471
|
|
||||
Interest expense
|
70,582
|
|
|
60,952
|
|
|
|
1,151
|
|
|
7,453
|
|
||||
Income (loss) before income taxes
|
(15,451
|
)
|
|
(93,211
|
)
|
|
|
1,722
|
|
|
76,018
|
|
||||
Income tax (benefit) expense
|
(2,941
|
)
|
|
(31,123
|
)
|
|
|
1,018
|
|
|
28,194
|
|
||||
Net income (loss)
|
$
|
(12,510
|
)
|
|
$
|
(62,088
|
)
|
|
|
$
|
704
|
|
|
$
|
47,824
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year Ended
|
||||||||
|
|
January 3,
2016 |
|
December 28,
2014 |
|
|
February 14,
2014 |
|
December 29, 2013
|
||||||||
Net income (loss)
|
|
$
|
(12,510
|
)
|
|
$
|
(62,088
|
)
|
|
|
$
|
704
|
|
|
$
|
47,824
|
|
Components of other comprehensive income (loss), net of tax
:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
(2,403
|
)
|
|
(913
|
)
|
|
|
(541
|
)
|
|
(1,116
|
)
|
||||
Comprehensive income (loss)
|
|
$
|
(14,913
|
)
|
|
$
|
(63,001
|
)
|
|
|
$
|
163
|
|
|
$
|
46,708
|
|
|
Common Stock
|
|
Capital In
Excess of Par Value |
|
Retained
Earnings (Deficit) |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Treasury Stock
|
||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Total
|
||||||||||||||||||||
Predecessor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 30, 2012
|
61,696,806
|
|
|
6,170
|
|
|
447,449
|
|
|
823,012
|
|
|
5,880
|
|
|
43,814,979
|
|
|
(1,139,237
|
)
|
|
143,274
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
47,824
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47,824
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,116
|
)
|
|
—
|
|
|
—
|
|
|
(1,116
|
)
|
||||||
Stock-based compensation costs
|
—
|
|
|
—
|
|
|
8,660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,660
|
|
||||||
Restricted stock issued, net of forfeitures
|
240,619
|
|
|
24
|
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tax benefit from restricted stock, net
|
—
|
|
|
—
|
|
|
(178
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(178
|
)
|
||||||
Restricted stock returned for taxes
|
(71,930
|
)
|
|
(7
|
)
|
|
(2,205
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,212
|
)
|
||||||
Dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,372
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,372
|
)
|
||||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
526,246
|
|
|
(18,112
|
)
|
|
(18,112
|
)
|
||||||
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 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 declared
|
—
|
|
|
—
|
|
|
—
|
|
|
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 (Deficit)
|
|
Accumulated
Other Comprehensive Income (Loss) |
|
Treasury Stock
|
|
|
||||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
|
Total
|
|||||||||||||||||
|
|
(in thousands, except share information)
|
||||||||||||||||||||||||||||
Successor:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equity contribution
|
|
200
|
|
|
—
|
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
||||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,088
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,088
|
)
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(913
|
)
|
|
—
|
|
|
—
|
|
|
(913
|
)
|
||||||
Stock-based compensation costs
|
|
—
|
|
|
—
|
|
|
713
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
713
|
|
||||||
Tax benefit from restricted stock, net
(1)
|
|
—
|
|
|
—
|
|
|
4,874
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,874
|
|
||||||
Balance at December 28, 2014
|
|
200
|
|
|
$
|
—
|
|
|
$
|
355,587
|
|
|
$
|
(62,088
|
)
|
|
$
|
(913
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
292,586
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,510
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,510
|
)
|
||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,403
|
)
|
|
—
|
|
|
—
|
|
|
(2,403
|
)
|
||||||
Stock-based compensation costs
|
|
—
|
|
|
—
|
|
|
855
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
855
|
|
||||||
Tax benefit from restricted stock, net
|
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||||
Dividends paid
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,000
|
)
|
||||||
Balance at January 3, 2016
|
|
200
|
|
|
$
|
—
|
|
|
$
|
356,460
|
|
|
$
|
(144,598
|
)
|
|
$
|
(3,316
|
)
|
|
—
|
|
|
$
|
—
|
|
|
$
|
208,546
|
|
(1)
|
We recorded the tax benefit related to the accelerated vesting of restricted stock awards in the
317 day period ended
December 28, 2014
, the period the related expense is deductible for income tax purposes.
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year Ended
|
||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
|
February 14,
2014 |
|
December 29,
2013 |
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|||||||||||
Net income (loss)
|
$
|
(12,510
|
)
|
|
$
|
(62,088
|
)
|
|
|
$
|
704
|
|
|
$
|
47,824
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization
|
119,294
|
|
|
118,556
|
|
|
|
9,883
|
|
|
79,028
|
|
||||
Deferred income taxes
|
(16,748
|
)
|
|
(62,554
|
)
|
|
|
(1,785
|
)
|
|
(3,025
|
)
|
||||
Stock-based compensation expense
|
838
|
|
|
703
|
|
|
|
12,225
|
|
|
8,481
|
|
||||
Amortization of lease-related liabilities
|
87
|
|
|
428
|
|
|
|
(356
|
)
|
|
(2,355
|
)
|
||||
Amortization of original issue discount and deferred financing costs
|
4,634
|
|
|
3,962
|
|
|
|
58
|
|
|
448
|
|
||||
Loss on asset disposals, net
|
7,729
|
|
|
7,649
|
|
|
|
294
|
|
|
3,309
|
|
||||
Asset impairments
|
875
|
|
|
407
|
|
|
|
—
|
|
|
3,051
|
|
||||
Non-cash rent expenses
|
8,218
|
|
|
7,037
|
|
|
|
(916
|
)
|
|
2,431
|
|
||||
Other adjustments
|
(951
|
)
|
|
1,195
|
|
|
|
144
|
|
|
135
|
|
||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Accounts receivable
|
(4,478
|
)
|
|
(3,046
|
)
|
|
|
1,503
|
|
|
578
|
|
||||
Inventories
|
(2,012
|
)
|
|
1,418
|
|
|
|
(2,472
|
)
|
|
(368
|
)
|
||||
Prepaid expenses
|
57
|
|
|
213
|
|
|
|
2,656
|
|
|
(1,270
|
)
|
||||
Accounts payable
|
(2,948
|
)
|
|
8,558
|
|
|
|
(270
|
)
|
|
(2,355
|
)
|
||||
Accrued expenses
|
659
|
|
|
1,754
|
|
|
|
(2,403
|
)
|
|
(344
|
)
|
||||
Unearned revenues
|
1,339
|
|
|
2,360
|
|
|
|
349
|
|
|
2,735
|
|
||||
Accrued interest
|
(7,175
|
)
|
|
15,712
|
|
|
|
152
|
|
|
(730
|
)
|
||||
Income taxes payable
|
451
|
|
|
2,134
|
|
|
|
2,898
|
|
|
(647
|
)
|
||||
Deferred landlord contributions
|
3,254
|
|
|
3,693
|
|
|
|
(350
|
)
|
|
1,738
|
|
||||
Net cash provided by operating activities
|
100,613
|
|
|
48,091
|
|
|
|
22,314
|
|
|
138,664
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
||||||||
Acquisition of Predecessor
|
—
|
|
|
(946,898
|
)
|
|
|
—
|
|
|
—
|
|
||||
Acquisition of Peter Piper Pizza
|
(663
|
)
|
|
(113,142
|
)
|
|
|
—
|
|
|
—
|
|
||||
Purchases of property and equipment
|
(73,034
|
)
|
|
(61,028
|
)
|
|
|
(9,710
|
)
|
|
(74,085
|
)
|
||||
Acquisition of franchisee
|
—
|
|
|
(1,529
|
)
|
|
|
—
|
|
|
—
|
|
||||
Development of internal use software
|
(4,802
|
)
|
|
(2,130
|
)
|
|
|
—
|
|
|
—
|
|
||||
Proceeds from sale of property and equipment
|
308
|
|
|
442
|
|
|
|
51
|
|
|
2,530
|
|
||||
Other investing activities
|
—
|
|
|
—
|
|
|
|
—
|
|
|
613
|
|
||||
Net cash used in investing activities
|
(78,191
|
)
|
|
(1,124,285
|
)
|
|
|
(9,659
|
)
|
|
(70,942
|
)
|
||||
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
|
(9,500
|
)
|
|
(3,807
|
)
|
|
|
—
|
|
|
—
|
|
||||
Repayments on note payable
|
(49
|
)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
||||
Net repayments on revolving credit facility
|
—
|
|
|
—
|
|
|
|
(13,500
|
)
|
|
(28,000
|
)
|
||||
Proceeds from sale leaseback transaction
|
—
|
|
|
183,685
|
|
|
|
—
|
|
|
—
|
|
||||
Payment of debt financing costs
|
—
|
|
|
(27,575
|
)
|
|
|
—
|
|
|
—
|
|
||||
Payments on capital lease obligations
|
(405
|
)
|
|
(297
|
)
|
|
|
(164
|
)
|
|
(953
|
)
|
||||
Payments on sale leaseback obligations
|
(1,663
|
)
|
|
(742
|
)
|
|
|
—
|
|
|
—
|
|
||||
Dividends paid
|
(70,000
|
)
|
|
(890
|
)
|
|
|
(38
|
)
|
|
(17,097
|
)
|
||||
Excess tax benefit realized from stock-based compensation
|
18
|
|
|
4,874
|
|
|
|
—
|
|
|
343
|
|
Restricted stock returned for payment of taxes
|
—
|
|
|
—
|
|
|
|
(142
|
)
|
|
(2,212
|
)
|
||||
Purchases of treasury stock
|
—
|
|
|
—
|
|
|
|
—
|
|
|
(18,112
|
)
|
||||
Equity contribution
|
—
|
|
|
350,000
|
|
|
|
—
|
|
|
—
|
|
||||
Net cash provided by (used in) financing activities
|
(81,599
|
)
|
|
1,168,448
|
|
|
|
(13,844
|
)
|
|
(66,031
|
)
|
||||
Effect of foreign exchange rate changes on cash
|
(1,163
|
)
|
|
(444
|
)
|
|
|
(313
|
)
|
|
(641
|
)
|
||||
Change in cash and cash equivalents
|
(60,340
|
)
|
|
91,810
|
|
|
|
(1,502
|
)
|
|
1,050
|
|
||||
Cash and cash equivalents at beginning of period
|
110,994
|
|
|
19,184
|
|
|
|
20,686
|
|
|
19,636
|
|
||||
Cash and cash equivalents at end of period
|
$
|
50,654
|
|
|
$
|
110,994
|
|
|
|
$
|
19,184
|
|
|
$
|
20,686
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year Ended
|
||||||||
|
January 3,
2016 |
|
December 28,
2014 |
|
|
February 14,
2014 |
|
December 29,
2013 |
||||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
||||||||
Interest paid
(1)
|
$
|
73,255
|
|
|
$
|
41,801
|
|
|
|
$
|
938
|
|
|
$
|
7,798
|
|
Income taxes paid (refunded), net
|
$
|
13,346
|
|
|
$
|
24,424
|
|
|
|
$
|
(79
|
)
|
|
$
|
31,614
|
|
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
||||||||
Accrued construction costs
|
$
|
1,270
|
|
|
$
|
2,361
|
|
|
|
$
|
3,605
|
|
|
$
|
5,542
|
|
Dividends payable
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
890
|
|
|
$
|
931
|
|
Capital lease obligations
|
$
|
—
|
|
|
$
|
657
|
|
|
|
$
|
—
|
|
|
$
|
740
|
|
(1)
|
The
317 day period ended December 28, 2014
includes
$4.9 million
of debt issuance costs and interest expense related to the bridge loan. See Note 10. “Indebtedness and Interest Expense” for further discussion of the bridge loan.
|
Buildings
|
40 years
|
Game and ride equipment
|
4 to 12 years
|
Non-technical play equipment
|
15 to 20 years
|
Furniture, fixtures and other equipment
|
4 to 20 years
|
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.
|
|
|
Twelve Months Ended
|
||||||
|
|
December 28,
2014 |
|
December 29,
2013 |
||||
|
|
(in thousands)
|
||||||
Total revenues
|
|
$
|
832,824
|
|
|
$
|
821,721
|
|
Net loss
|
|
$
|
(1,359
|
)
|
|
$
|
(6,038
|
)
|
|
PPP Preliminary Purchase Price Allocation
|
|
Measurement Period Adjustments
|
|
PPP Final Purchase Price Allocation
|
||||||
Cash consideration paid
|
$
|
118,409
|
|
|
$
|
663
|
|
|
$
|
119,072
|
|
|
|
|
|
|
|
||||||
Fair value of assets acquired and liabilities assumed:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
5,267
|
|
|
—
|
|
|
5,267
|
|
|||
Accounts receivable
|
511
|
|
|
—
|
|
|
511
|
|
|||
Inventories
|
820
|
|
|
—
|
|
|
820
|
|
|||
Other current assets
|
598
|
|
|
—
|
|
|
598
|
|
|||
Property, plant and equipment
|
14,383
|
|
|
—
|
|
|
14,383
|
|
|||
Favorable lease interests
|
2,000
|
|
|
(1,120
|
)
|
|
880
|
|
|||
Peter Piper Pizza's tradename
|
24,800
|
|
|
1,900
|
|
|
26,700
|
|
|||
Franchise agreements
|
39,300
|
|
|
—
|
|
|
39,300
|
|
|||
Other non-current assets
|
154
|
|
|
—
|
|
|
154
|
|
|||
Indebtedness
|
(120
|
)
|
|
—
|
|
|
(120
|
)
|
|||
Unfavorable lease interests
|
(3,290
|
)
|
|
(580
|
)
|
|
(3,870
|
)
|
|||
Deferred taxes
|
(12,935
|
)
|
|
31
|
|
|
(12,904
|
)
|
|||
Other current and non-current liabilities
|
(4,061
|
)
|
|
—
|
|
|
(4,061
|
)
|
|||
Net assets acquired
|
67,427
|
|
|
231
|
|
|
67,658
|
|
|||
Excess purchase price allocated to goodwill
|
$
|
50,982
|
|
|
$
|
432
|
|
|
$
|
51,414
|
|
|
|
Twelve Months Ended
|
||||
|
|
December 28,
2014 |
|
December 29,
2013 |
||
|
|
(in thousands)
|
||||
Total revenues
|
|
887,018
|
|
|
885,476
|
|
Net income (loss)
|
|
5,758
|
|
|
(1,328
|
)
|
|
Successor
|
||||||
|
January 3, 2016
|
|
December 28, 2014
|
||||
|
(in thousands)
|
||||||
Trade receivables
|
$
|
11,106
|
|
|
$
|
5,471
|
|
Vendor rebates
|
7,820
|
|
|
7,340
|
|
||
Income taxes receivable
|
2,896
|
|
|
2,218
|
|
||
Other accounts receivable
|
4,114
|
|
|
3,806
|
|
||
Total Accounts receivable
|
$
|
25,936
|
|
|
$
|
18,835
|
|
|
Successor
|
||||||
|
January 3, 2016
|
|
December 28, 2014
|
||||
|
(in thousands)
|
||||||
Food and beverage
|
$
|
4,524
|
|
|
$
|
4,877
|
|
Entertainment and merchandise
|
18,751
|
|
|
14,102
|
|
||
Inventories
|
$
|
23,275
|
|
|
$
|
18,979
|
|
|
Successor
|
||||||
|
January 3,
2016 |
|
December 28,
2014 |
||||
|
(in thousands)
|
||||||
Land
|
$
|
50,135
|
|
|
$
|
50,135
|
|
Buildings
|
52,637
|
|
|
50,132
|
|
||
Leasehold improvements
|
417,174
|
|
|
397,338
|
|
||
Game and ride equipment
|
186,602
|
|
|
168,709
|
|
||
Furniture, fixtures and other equipment
|
116,418
|
|
|
108,510
|
|
||
Buildings leased under capital leases
|
16,109
|
|
|
16,183
|
|
||
|
839,075
|
|
|
791,007
|
|
||
Less accumulated depreciation and amortization
|
(224,124
|
)
|
|
(114,396
|
)
|
||
Net property and equipment in service
|
614,951
|
|
|
676,611
|
|
||
Construction in progress
|
14,096
|
|
|
5,361
|
|
||
Property and equipment, net
|
$
|
629,047
|
|
|
$
|
681,972
|
|
|
Successor
|
||||||
|
January 3, 2016
|
|
December 28, 2014
|
||||
|
(in thousands)
|
||||||
Balance at beginning of period
|
$
|
483,444
|
|
|
$
|
—
|
|
Goodwill assigned in connection with Merger
(1)
|
—
|
|
|
432,058
|
|
||
Goodwill assigned in acquisition of Peter Piper Pizza
(2) (3)
|
432
|
|
|
50,982
|
|
||
Other additions
(4)
|
—
|
|
|
404
|
|
||
Balance at end of period
|
$
|
483,876
|
|
|
$
|
483,444
|
|
(1)
|
See Note 2 “Acquisition of CEC Entertainment, Inc.” for a discussion of goodwill recorded in connection with Merger.
|
(2)
|
See Note 3 “Acquisition of Peter Piper Pizza” for a discussion of goodwill recorded in connection with the PPP Acquisition.
|
(3)
|
During
Fiscal 2015
, we recorded certain adjustments to the initial PPP purchase price allocation related to the final settlement of net working capital, the valuation of favorable and unfavorable lease interests, the valuation of PPP’s tradename and the valuation of net operating losses acquired and other tax positions that resulted in a net increase to goodwill of
$0.4 million
. See Note 3 “Acquisition of Peter Piper Pizza” for a discussion of the measurement period adjustments.
|
(4)
|
Other additions for the
317 day period ended
December 28, 2014
represents goodwill related to a franchise the Company acquired in the second quarter of 2014.
|
|
|
|
Successor
|
||||||||||||||||||||||
|
|
|
January 3, 2016
|
|
December 28, 2014
|
||||||||||||||||||||
|
Weighted Average Life (Years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
|
|
|
(in thousands)
|
||||||||||||||||||||||
Chuck E. Cheese's tradename
|
Indefinite
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
|
$
|
—
|
|
|
$
|
400,000
|
|
Peter Piper Pizza tradename
(2)
|
Indefinite
|
|
26,700
|
|
|
—
|
|
|
26,700
|
|
|
24,800
|
|
|
—
|
|
|
24,800
|
|
||||||
Favorable lease agreements
(1)
(2)
|
10
|
|
14,880
|
|
|
(3,686
|
)
|
|
11,194
|
|
|
16,000
|
|
|
(1,679
|
)
|
|
14,321
|
|
||||||
Franchise agreements
|
25
|
|
53,300
|
|
|
(3,099
|
)
|
|
50,201
|
|
|
53,300
|
|
|
(1,021
|
)
|
|
52,279
|
|
||||||
|
|
|
$
|
494,880
|
|
|
$
|
(6,785
|
)
|
|
$
|
488,095
|
|
|
$
|
494,100
|
|
|
$
|
(2,700
|
)
|
|
$
|
491,400
|
|
(1)
|
In connection with the Merger and the PPP Acquisition, we also recorded unfavorable lease liabilities of
$10.2 million
and
$3.9 million
, respectively, which are included in “Other current liabilities” and “Other noncurrent liabilities” in our Consolidated Balance Sheets. Such amounts are being amortized over a weighted average life of
10 years
, and are included in “Rent expense” in our Consolidated Statements of Earnings for the Successor periods.
|
(2)
|
During
Fiscal 2015
we recorded adjustments related to the valuation of the favorable lease agreements intangible asset and PPP’s tradename of
$(1.1) million
and
$1.9 million
, respectively, recorded in connection with the PPP Acquisition. See Note 3 “Acquisition of Peter Piper Pizza” for a discussion of these adjustments.
|
|
|
Favorable Lease Agreements
|
|
Franchise Agreements
|
||||
Fiscal 2016
|
|
$
|
1,938
|
|
|
$
|
2,049
|
|
Fiscal 2017
|
|
1,659
|
|
|
2,049
|
|
||
Fiscal 2018
|
|
1,246
|
|
|
2,049
|
|
||
Fiscal 2019
|
|
1,102
|
|
|
2,049
|
|
||
Fiscal 2020
|
|
1,050
|
|
|
2,088
|
|
||
Thereafter
|
|
4,199
|
|
|
39,917
|
|
||
|
|
$11,194
|
|
$50,201
|
|
Successor
|
||||||
|
January 3, 2016
|
|
December 28, 2014
|
||||
|
(in thousands)
|
||||||
Trade and other amounts payable
|
$
|
35,228
|
|
|
$
|
16,389
|
|
Book overdraft
|
8,862
|
|
|
27,244
|
|
||
Accounts Payable
|
$
|
44,090
|
|
|
$
|
43,633
|
|
|
Successor
|
||||||
|
January 3, 2016
|
|
December 28, 2014
|
||||
|
(in thousands)
|
||||||
Current:
|
|
|
|
||||
Salaries and wages
|
$
|
13,947
|
|
|
$
|
13,236
|
|
Insurance
|
5,195
|
|
|
6,514
|
|
||
Taxes, other than income taxes
|
12,975
|
|
|
10,434
|
|
||
Other accrued operating expenses
|
6,167
|
|
|
5,377
|
|
||
Accrued expenses
|
$
|
38,284
|
|
|
$
|
35,561
|
|
Noncurrent:
|
|
|
|
||||
Insurance
|
$
|
9,737
|
|
|
$
|
12,146
|
|
|
Successor
|
||||||
|
January 3,
2016 |
|
December 28,
2014 |
||||
|
(in thousands)
|
||||||
Term loan facility
|
$
|
746,700
|
|
|
$
|
756,200
|
|
Senior notes
|
255,000
|
|
|
255,000
|
|
||
Note payable
|
63
|
|
|
113
|
|
||
Total debt outstanding
|
1,001,763
|
|
|
1,011,313
|
|
||
Less:
|
|
|
|
||||
Unamortized original issue discount
|
(2,776
|
)
|
|
(3,327
|
)
|
||
Deferred financing costs, net
|
(20,004
|
)
|
|
(24,087
|
)
|
||
Current portion
|
(7,650
|
)
|
|
(9,545
|
)
|
||
Bank indebtedness and other long-term debt, less current portion
|
$
|
971,333
|
|
|
$
|
974,354
|
|
One year or less
|
$
|
7,650
|
|
Two years
|
7,613
|
|
|
Three years
|
5,700
|
|
|
Four years
|
7,600
|
|
|
Five years
|
9,500
|
|
|
Thereafter
|
963,700
|
|
|
|
1,001,763
|
|
|
Less: debt financing costs, net
|
(20,004
|
)
|
|
Less: unamortized discount
|
(2,776
|
)
|
|
|
$
|
978,983
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Fiscal Year Ended
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year Ended
|
||||||||
|
January 3,
2016 |
|
December 28, 2014
|
|
|
February 14,
2014 |
|
December 29,
2013 |
||||||||
|
(in thousands)
|
|||||||||||||||
Term loan facility
(1)
|
$
|
31,760
|
|
|
$
|
29,962
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Senior notes
|
21,023
|
|
|
17,697
|
|
|
|
—
|
|
|
—
|
|
||||
Bridge loan facility
(2)
|
—
|
|
|
4,943
|
|
|
|
—
|
|
|
—
|
|
||||
Predecessor Facility
|
—
|
|
|
—
|
|
|
|
745
|
|
|
6,034
|
|
||||
Capital lease obligations
|
1,791
|
|
|
1,541
|
|
|
|
275
|
|
|
1,610
|
|
||||
Sale leaseback obligations
|
11,096
|
|
|
3,721
|
|
|
|
—
|
|
|
—
|
|
||||
Amortization of debt issuance costs
|
4,083
|
|
|
3,488
|
|
|
|
58
|
|
|
459
|
|
||||
Other
|
829
|
|
|
(400
|
)
|
|
|
73
|
|
|
(650
|
)
|
||||
Total interest expense
|
$
|
70,582
|
|
|
$
|
60,952
|
|
|
|
$
|
1,151
|
|
|
$
|
7,453
|
|
(2)
|
The
317 day period ended December 28, 2014
includes debt issuance costs of
$4.7 million
related to the issuance of the Bridge Loan and
$0.2 million
interest.
|
|
|
Successor
|
||||||||||||||
|
|
January 3, 2016
|
|
December 28, 2014
|
||||||||||||
|
|
Carrying Amount
(1)
|
|
Estimated Fair Value
|
|
Carrying Amount
(1)
|
|
Estimated Fair Value
|
||||||||
|
|
(in thousands)
|
||||||||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Bank indebtedness and other long-term debt, less current portion
|
|
$
|
991,337
|
|
|
$
|
962,600
|
|
|
$
|
998,441
|
|
|
$
|
974,084
|
|
|
|
Successor
|
||||||
|
|
January 3,
2016 |
|
December 28,
2014 |
||||
|
|
(in thousands)
|
||||||
Sale leaseback obligations, less current portion
(1)
|
|
$
|
179,258
|
|
|
$
|
181,282
|
|
Deferred rent liability
|
|
14,325
|
|
|
7,847
|
|
||
Deferred landlord contributions
|
|
4,988
|
|
|
981
|
|
||
Long-term portion of unfavorable leases
|
|
9,536
|
|
|
10,942
|
|
||
Other
|
|
4,421
|
|
|
4,332
|
|
||
Total other noncurrent liabilities
|
|
$
|
212,528
|
|
|
$
|
205,384
|
|
(1)
|
See Note 13 “Sale Leaseback Transaction” for further discussion on our sale leaseback obligations.
|
|
Capital
|
|
Operating
|
||||
Fiscal Years
|
(in thousands)
|
||||||
2016
|
$
|
2,169
|
|
|
$
|
89,594
|
|
2017
|
2,207
|
|
|
87,738
|
|
||
2018
|
2,278
|
|
|
85,520
|
|
||
2019
|
2,274
|
|
|
83,183
|
|
||
2020
|
2,305
|
|
|
81,899
|
|
||
Thereafter
|
20,719
|
|
|
588,424
|
|
||
Future minimum lease payments
|
31,952
|
|
|
1,016,358
|
|
||
Less amounts representing interest
|
(16,487
|
)
|
|
|
|||
Present value of future minimum lease payments
|
15,465
|
|
|
|
|||
Less current portion
|
(421
|
)
|
|
|
|||
Capital lease obligations, net of current portion
|
$
|
15,044
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
Fiscal Year
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year
|
||||||||
|
2015
|
|
December 28, 2014
|
|
|
February 14, 2014
|
|
2013
|
||||||||
|
(in thousands)
|
|||||||||||||||
Minimum rentals
|
$
|
98,023
|
|
|
$
|
77,498
|
|
|
|
$
|
12,480
|
|
|
$
|
79,315
|
|
Contingent rentals
|
338
|
|
|
117
|
|
|
|
36
|
|
|
103
|
|
||||
|
$
|
98,361
|
|
|
$
|
77,615
|
|
|
|
$
|
12,516
|
|
|
$
|
79,418
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Fiscal Year
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year
|
||||||||
|
|
2015
|
|
December 28, 2014
|
|
|
February 14, 2014
|
|
2013
|
||||||||
|
(in thousands)
|
||||||||||||||||
Current tax expense (benefit):
|
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
10,726
|
|
|
26,702
|
|
|
|
2,505
|
|
|
26,950
|
|
||||
State
|
|
1,825
|
|
|
4,984
|
|
|
|
390
|
|
|
4,191
|
|
||||
Foreign
|
|
1,256
|
|
|
(255
|
)
|
|
|
(92
|
)
|
|
78
|
|
||||
|
|
13,807
|
|
|
31,431
|
|
|
|
2,803
|
|
|
31,219
|
|
||||
Deferred tax expense (benefit):
|
|
|
|
|
|
|
|
|
|
||||||||
Federal
|
|
(14,022
|
)
|
|
(52,251
|
)
|
|
|
(2,282
|
)
|
|
(2,099
|
)
|
||||
State
|
|
(2,203
|
)
|
|
(9,909
|
)
|
|
|
302
|
|
|
(732
|
)
|
||||
Foreign
|
|
(523
|
)
|
|
(394
|
)
|
|
|
195
|
|
|
(194
|
)
|
||||
|
|
(16,748
|
)
|
|
(62,554
|
)
|
|
|
(1,785
|
)
|
|
(3,025
|
)
|
||||
Income tax expense (benefit)
|
|
$
|
(2,941
|
)
|
|
$
|
(31,123
|
)
|
|
|
$
|
1,018
|
|
|
$
|
28,194
|
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
Fiscal Year
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year
|
||||
|
2015
|
|
December 28, 2014
|
|
|
February 14, 2014
|
|
2013
|
||||
Federal statutory rate
|
(35.0
|
)%
|
|
(35.0
|
)%
|
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
0.2
|
%
|
|
(3.8
|
)%
|
|
|
20.5
|
%
|
|
3.0
|
%
|
Federal income tax credits, net
|
(7.6
|
)%
|
|
(0.4
|
)%
|
|
|
(2.0
|
)%
|
|
(1.2
|
)%
|
Merger and litigation related costs
|
25.0
|
%
|
|
4.8
|
%
|
|
|
3.1
|
%
|
|
—
|
%
|
State tax credit, valuation adjustment
|
(1.3
|
)%
|
|
0.4
|
%
|
|
|
5.6
|
%
|
|
—
|
%
|
Other
|
(0.3
|
)%
|
|
0.6
|
%
|
|
|
(3.1
|
)%
|
|
0.3
|
%
|
Effective tax rate
|
(19.0
|
)%
|
|
(33.4
|
)%
|
|
|
59.1
|
%
|
|
37.1
|
%
|
|
Successor
|
||||||
|
January 3, 2016
|
|
December 28, 2014
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Accrued compensation
|
$
|
3,059
|
|
|
$
|
2,548
|
|
Unearned revenue
|
1,493
|
|
|
2,105
|
|
||
Deferred rent
|
5,520
|
|
|
2,497
|
|
||
Stock-based compensation
|
501
|
|
|
270
|
|
||
Accrued insurance and employee benefit plans
|
5,162
|
|
|
8,462
|
|
||
Unrecognized tax benefits
(1)
|
1,378
|
|
|
1,471
|
|
||
NOL and Other Carryforwards
|
5,660
|
|
|
8,483
|
|
||
Loan Costs
|
1,461
|
|
|
1,758
|
|
||
Other
|
514
|
|
|
527
|
|
||
Gross deferred tax assets
|
24,748
|
|
|
28,121
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation and amortization
|
(40,976
|
)
|
|
(59,871
|
)
|
||
Prepaid assets
|
(895
|
)
|
|
(1,238
|
)
|
||
Intangibles
|
(181,546
|
)
|
|
(183,102
|
)
|
||
Favorable/Unfavorable Leases
|
(1
|
)
|
|
(795
|
)
|
||
Other
|
(3,064
|
)
|
|
(2,087
|
)
|
||
Gross deferred tax liabilities
|
(226,482
|
)
|
|
(247,093
|
)
|
||
Net deferred tax liability
|
$
|
(201,734
|
)
|
|
$
|
(218,972
|
)
|
(1)
|
Amount represents the value of future tax benefits that would result if the liabilities for uncertain state tax positions and accrued interest related to uncertain tax positions are settled.
|
|
Fiscal Year
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(in thousands)
|
||||||||||
Balance at beginning of period
|
$
|
1,882
|
|
|
$
|
2,598
|
|
|
$
|
2,923
|
|
Additions for tax positions taken in the current year
|
214
|
|
|
168
|
|
|
223
|
|
|||
Increases for tax positions taken in prior years
|
1,581
|
|
|
613
|
|
|
463
|
|
|||
Decreases for tax positions taken in prior years
|
(184
|
)
|
|
(421
|
)
|
|
(422
|
)
|
|||
Settlement with tax authorities
|
79
|
|
|
(114
|
)
|
|
(283
|
)
|
|||
Expiration of statute of limitations
|
(284
|
)
|
|
(962
|
)
|
|
(306
|
)
|
|||
Balance at end of period
|
$
|
3,288
|
|
|
$
|
1,882
|
|
|
$
|
2,598
|
|
|
|
Stock Options
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Term
|
Aggregate Intrinsic Value
|
|||
|
|
|
($ per share)
|
|
($ in thousands)
|
|||
Outstanding stock options, December 28, 2014
|
|
$
|
2,287,463
|
|
$8.12
|
|
|
|
Options Granted
|
|
519,412
|
|
$10.57
|
|
|
||
Options Forfeited
|
|
(413,791
|
)
|
$8.51
|
|
|
||
Outstanding stock options, January 3, 2016
|
|
$
|
2,393,084
|
|
$8.59
|
8.1
|
9,388
|
|
Stock options expected to vest, January 3, 2016
|
|
$
|
2,153,777
|
|
$8.59
|
8.1
|
8,449
|
|
Exercisable stock options, January 3, 2016
|
|
$
|
160,088
|
|
$8.24
|
8.1
|
683
|
|
|
|
Successor
|
|
|
Predecessor
|
||||||||||||
|
|
Fiscal Year
|
|
For the 317 Day Period Ended
|
|
|
For the 47 Day Period Ended
|
|
Fiscal Year
|
||||||||
|
|
January 3,
2016 |
|
December 28,
2014 |
|
|
February 14,
2014 |
|
December 29,
2013 |
||||||||
|
|
(in thousands)
|
|||||||||||||||
Stock-based compensation costs
|
|
$
|
855
|
|
|
$
|
713
|
|
|
|
$
|
1,117
|
|
|
$
|
8,660
|
|
Portion capitalized as property and equipment
(1)
|
|
(17
|
)
|
|
(10
|
)
|
|
|
—
|
|
|
(179
|
)
|
||||
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
|
|
$
|
838
|
|
|
$
|
703
|
|
|
|
$
|
12,225
|
|
|
$
|
8,481
|
|
Tax benefit recognized from stock-based compensation awards
(2)
|
|
$
|
18
|
|
|
$
|
4,874
|
|
|
|
$
|
—
|
|
|
$
|
3,377
|
|
(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 costs attributable to our store development projects are included in “Property and equipment, net” in the Consolidated Balance Sheets.
|
(2)
|
We recorded the tax benefit related to the accelerated vesting of restricted stock awards in the
317 day period ended
December 28, 2014
, the period the related expense is deductible for income tax purposes.
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Condensed Consolidating Balance Sheet
|
||||||||||||||||||||
As of January 3, 2016
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Successor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
42,235
|
|
|
$
|
1,797
|
|
|
$
|
6,622
|
|
|
$
|
—
|
|
|
$
|
50,654
|
|
Accounts receivable
|
|
21,595
|
|
|
3,944
|
|
|
9,468
|
|
|
(9,071
|
)
|
|
25,936
|
|
|||||
Inventories
|
|
19,959
|
|
|
3,021
|
|
|
295
|
|
|
—
|
|
|
23,275
|
|
|||||
Other current assets
|
|
13,562
|
|
|
3,561
|
|
|
1,100
|
|
|
—
|
|
|
18,223
|
|
|||||
Total current assets
|
|
97,351
|
|
|
12,323
|
|
|
17,485
|
|
|
(9,071
|
)
|
|
118,088
|
|
|||||
Property and equipment, net
|
|
585,915
|
|
|
34,539
|
|
|
8,593
|
|
|
—
|
|
|
629,047
|
|
|||||
Goodwill
|
|
432,462
|
|
|
51,414
|
|
|
—
|
|
|
—
|
|
|
483,876
|
|
|||||
Intangible assets, net
|
|
21,855
|
|
|
466,240
|
|
|
—
|
|
|
—
|
|
|
488,095
|
|
|||||
Intercompany
|
|
129,151
|
|
|
30,716
|
|
|
—
|
|
|
(159,867
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
|
422,407
|
|
|
—
|
|
|
—
|
|
|
(422,407
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
|
4,318
|
|
|
8,940
|
|
|
671
|
|
|
—
|
|
|
13,929
|
|
|||||
Total assets
|
|
$
|
1,693,459
|
|
|
$
|
604,172
|
|
|
$
|
26,749
|
|
|
$
|
(591,345
|
)
|
|
$
|
1,733,035
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bank indebtedness and other long-term debt, current portion
|
|
$
|
7,600
|
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,650
|
|
Capital lease obligations, current portion
|
|
418
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
421
|
|
|||||
Accounts payable and accrued expenses
|
|
71,320
|
|
|
27,774
|
|
|
3,270
|
|
|
—
|
|
|
102,364
|
|
|||||
Other current liabilities
|
|
3,350
|
|
|
328
|
|
|
—
|
|
|
—
|
|
|
3,678
|
|
|||||
Total current liabilities
|
|
82,688
|
|
|
28,152
|
|
|
3,273
|
|
|
—
|
|
|
114,113
|
|
|||||
Capital lease obligations, less current portion
|
|
14,980
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
15,044
|
|
|||||
Bank indebtedness and other long-term debt, less current portion
|
|
971,320
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
971,333
|
|
|||||
Deferred tax liability
|
|
184,083
|
|
|
17,867
|
|
|
(216
|
)
|
|
—
|
|
|
201,734
|
|
|||||
Intercompany
|
|
20,580
|
|
|
121,850
|
|
|
26,508
|
|
|
(168,938
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
|
211,262
|
|
|
10,784
|
|
|
219
|
|
|
—
|
|
|
222,265
|
|
|||||
Total liabilities
|
|
1,484,913
|
|
|
178,666
|
|
|
29,848
|
|
|
(168,938
|
)
|
|
1,524,489
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital in excess of par value
|
|
356,460
|
|
|
466,114
|
|
|
3,241
|
|
|
(469,355
|
)
|
|
356,460
|
|
|||||
Retained earnings (deficit)
|
|
(144,598
|
)
|
|
(40,608
|
)
|
|
(3,024
|
)
|
|
43,632
|
|
|
(144,598
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
|
(3,316
|
)
|
|
—
|
|
|
(3,316
|
)
|
|
3,316
|
|
|
(3,316
|
)
|
|||||
Total stockholders' equity
|
|
208,546
|
|
|
425,506
|
|
|
(3,099
|
)
|
|
(422,407
|
)
|
|
208,546
|
|
|||||
Total liabilities and stockholders' equity
|
|
$
|
1,693,459
|
|
|
$
|
604,172
|
|
|
$
|
26,749
|
|
|
$
|
(591,345
|
)
|
|
$
|
1,733,035
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Condensed Consolidating Balance Sheet
|
||||||||||||||||||||
As of December 28, 2014
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Successor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
97,020
|
|
|
$
|
6,427
|
|
|
$
|
7,547
|
|
|
$
|
—
|
|
|
$
|
110,994
|
|
Accounts receivable
|
|
13,209
|
|
|
5,487
|
|
|
3,797
|
|
|
(3,658
|
)
|
|
18,835
|
|
|||||
Inventories
|
|
15,008
|
|
|
3,596
|
|
|
375
|
|
|
—
|
|
|
18,979
|
|
|||||
Other current assets
|
|
15,642
|
|
|
3,212
|
|
|
2,040
|
|
|
—
|
|
|
20,894
|
|
|||||
Total current assets
|
|
140,879
|
|
|
18,722
|
|
|
13,759
|
|
|
(3,658
|
)
|
|
169,702
|
|
|||||
Property and equipment, net
|
|
638,239
|
|
|
33,064
|
|
|
10,669
|
|
|
—
|
|
|
681,972
|
|
|||||
Goodwill
|
|
432,462
|
|
|
50,982
|
|
|
—
|
|
|
—
|
|
|
483,444
|
|
|||||
Intangible assets, net
|
|
24,649
|
|
|
466,751
|
|
|
—
|
|
|
—
|
|
|
491,400
|
|
|||||
Intercompany
|
|
129,429
|
|
|
25,090
|
|
|
32,655
|
|
|
(187,174
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
|
428,836
|
|
|
—
|
|
|
—
|
|
|
(428,836
|
)
|
|
—
|
|
|||||
Other noncurrent assets
|
|
3,683
|
|
|
5,875
|
|
|
37
|
|
|
—
|
|
|
9,595
|
|
|||||
Total assets
|
|
$
|
1,798,177
|
|
|
$
|
600,484
|
|
|
$
|
57,120
|
|
|
$
|
(619,668
|
)
|
|
$
|
1,836,113
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Bank indebtedness and other long-term debt, current portion
|
|
$
|
9,500
|
|
|
$
|
45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,545
|
|
Capital lease obligations, current portion
|
|
405
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
408
|
|
|||||
Accounts payable and accrued expenses
|
|
82,995
|
|
|
21,989
|
|
|
(248
|
)
|
|
(484
|
)
|
|
104,252
|
|
|||||
Other current liabilities
|
|
2,990
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,990
|
|
|||||
Total current liabilities
|
|
95,890
|
|
|
22,034
|
|
|
(245
|
)
|
|
(484
|
)
|
|
117,195
|
|
|||||
Capital lease obligations, less current portion
|
|
15,395
|
|
|
—
|
|
|
81
|
|
|
—
|
|
|
15,476
|
|
|||||
Bank indebtedness and other long-term debt, less current portion
|
|
974,287
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
974,354
|
|
|||||
Deferred tax liability
|
|
203,814
|
|
|
14,378
|
|
|
780
|
|
|
—
|
|
|
218,972
|
|
|||||
Intercompany
|
|
6,309
|
|
|
126,497
|
|
|
57,542
|
|
|
(190,348
|
)
|
|
—
|
|
|||||
Other noncurrent liabilities
|
|
209,896
|
|
|
7,472
|
|
|
162
|
|
|
—
|
|
|
217,530
|
|
|||||
Total liabilities
|
|
1,505,591
|
|
|
170,448
|
|
|
58,320
|
|
|
(190,832
|
)
|
|
1,543,527
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital in excess of par value
|
|
355,587
|
|
|
465,451
|
|
|
3,089
|
|
|
(468,540
|
)
|
|
355,587
|
|
|||||
Retained earnings (deficit)
|
|
(62,088
|
)
|
|
(35,415
|
)
|
|
(3,376
|
)
|
|
38,791
|
|
|
(62,088
|
)
|
|||||
Accumulated other comprehensive income (loss)
|
|
(913
|
)
|
|
—
|
|
|
(913
|
)
|
|
913
|
|
|
(913
|
)
|
|||||
Total stockholders' equity
|
|
292,586
|
|
|
430,036
|
|
|
(1,200
|
)
|
|
(428,836
|
)
|
|
292,586
|
|
|||||
Total liabilities and stockholders' equity
|
|
$
|
1,798,177
|
|
|
$
|
600,484
|
|
|
$
|
57,120
|
|
|
$
|
(619,668
|
)
|
|
$
|
1,836,113
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||
Fiscal Year 2015
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Successor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage sales
|
|
$
|
353,200
|
|
|
$
|
48,747
|
|
|
$
|
6,148
|
|
|
$
|
—
|
|
|
$
|
408,095
|
|
Entertainment and merchandise sales
|
|
469,741
|
|
|
16,864
|
|
|
10,410
|
|
|
—
|
|
|
497,015
|
|
|||||
Total company store sales
|
|
822,941
|
|
|
65,611
|
|
|
16,558
|
|
|
—
|
|
|
905,110
|
|
|||||
Franchise fees and royalties
|
|
2,280
|
|
|
15,199
|
|
|
—
|
|
|
—
|
|
|
17,479
|
|
|||||
International Association assessments and other fees
|
|
995
|
|
|
24,591
|
|
|
43,829
|
|
|
(69,415
|
)
|
|
—
|
|
|||||
Total revenues
|
|
826,216
|
|
|
105,401
|
|
|
60,387
|
|
|
(69,415
|
)
|
|
922,589
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of food and beverage
|
|
89,772
|
|
|
12,527
|
|
|
2,135
|
|
|
—
|
|
|
104,434
|
|
|||||
Cost of entertainment and merchandise
|
|
29,147
|
|
|
1,729
|
|
|
643
|
|
|
—
|
|
|
31,519
|
|
|||||
Total cost of food, beverage, entertainment and merchandise
|
|
118,919
|
|
|
14,256
|
|
|
2,778
|
|
|
—
|
|
|
135,953
|
|
|||||
Labor expenses
|
|
230,113
|
|
|
14,968
|
|
|
5,503
|
|
|
—
|
|
|
250,584
|
|
|||||
Depreciation and amortization
|
|
109,307
|
|
|
3,856
|
|
|
2,073
|
|
|
—
|
|
|
115,236
|
|
|||||
Rent expense
|
|
88,773
|
|
|
5,363
|
|
|
2,533
|
|
|
—
|
|
|
96,669
|
|
|||||
Other store operating expenses
|
|
155,366
|
|
|
9,017
|
|
|
4,308
|
|
|
(25,613
|
)
|
|
143,078
|
|
|||||
Total company store operating costs
|
|
702,478
|
|
|
47,460
|
|
|
17,195
|
|
|
(25,613
|
)
|
|
741,520
|
|
|||||
Advertising expense
|
|
46,136
|
|
|
4,014
|
|
|
40,798
|
|
|
(43,802
|
)
|
|
47,146
|
|
|||||
General and administrative expenses
|
|
20,939
|
|
|
44,446
|
|
|
618
|
|
|
—
|
|
|
66,003
|
|
|||||
Transaction, severance and Merger related litigation costs
|
|
6
|
|
|
11,908
|
|
|
—
|
|
|
—
|
|
|
11,914
|
|
|||||
Asset Impairment
|
|
766
|
|
|
20
|
|
|
89
|
|
|
—
|
|
|
875
|
|
|||||
Total operating costs and expenses
|
|
770,325
|
|
|
107,848
|
|
|
58,700
|
|
|
(69,415
|
)
|
|
867,458
|
|
|||||
Operating income (loss)
|
|
55,891
|
|
|
(2,447
|
)
|
|
1,687
|
|
|
—
|
|
|
55,131
|
|
|||||
Equity in earnings (loss) in affiliates
|
|
(4,654
|
)
|
|
—
|
|
|
—
|
|
|
4,654
|
|
|
—
|
|
|||||
Interest expense
|
|
65,775
|
|
|
4,288
|
|
|
519
|
|
|
—
|
|
|
70,582
|
|
|||||
Income (loss) before income taxes
|
|
(14,538
|
)
|
|
(6,735
|
)
|
|
1,168
|
|
|
4,654
|
|
|
(15,451
|
)
|
|||||
Income tax expense (benefit)
|
|
(2,028
|
)
|
|
(1,575
|
)
|
|
662
|
|
|
—
|
|
|
(2,941
|
)
|
|||||
Net income (loss)
|
|
$
|
(12,510
|
)
|
|
$
|
(5,160
|
)
|
|
$
|
506
|
|
|
$
|
4,654
|
|
|
$
|
(12,510
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Foreign currency translation adjustments
|
|
(2,403
|
)
|
|
—
|
|
|
(2,403
|
)
|
|
2,403
|
|
|
(2,403
|
)
|
|||||
Comprehensive income (loss)
|
|
$
|
(14,913
|
)
|
|
$
|
(5,160
|
)
|
|
$
|
(1,897
|
)
|
|
$
|
7,057
|
|
|
$
|
(14,913
|
)
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||
For the 317 Day Period Ended December 28, 2014
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Successor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage sales
|
|
$
|
293,407
|
|
|
$
|
8,259
|
|
|
$
|
6,030
|
|
|
$
|
—
|
|
|
$
|
307,696
|
|
Entertainment and merchandise sales
|
|
391,818
|
|
|
2,490
|
|
|
10,094
|
|
|
—
|
|
|
404,402
|
|
|||||
Total Company store sales
|
|
685,225
|
|
|
10,749
|
|
|
16,124
|
|
|
—
|
|
|
712,098
|
|
|||||
Franchise fees and royalties
|
|
1,813
|
|
|
4,670
|
|
|
—
|
|
|
—
|
|
|
6,483
|
|
|||||
International Association assessments and other fees
|
|
1,006
|
|
|
1,233
|
|
|
37,388
|
|
|
(39,627
|
)
|
|
—
|
|
|||||
Total revenues
|
|
688,044
|
|
|
16,652
|
|
|
53,512
|
|
|
(39,627
|
)
|
|
718,581
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of food and beverage
|
|
75,772
|
|
|
2,324
|
|
|
1,900
|
|
|
—
|
|
|
79,996
|
|
|||||
Cost of entertainment and merchandise
|
|
23,832
|
|
|
244
|
|
|
660
|
|
|
(128
|
)
|
|
24,608
|
|
|||||
Total cost of food, beverage, entertainment and merchandise
|
|
99,604
|
|
|
2,568
|
|
|
2,560
|
|
|
(128
|
)
|
|
104,604
|
|
|||||
Labor expenses
|
|
192,651
|
|
|
2,922
|
|
|
5,282
|
|
|
—
|
|
|
200,855
|
|
|||||
Depreciation and amortization
|
|
111,816
|
|
|
1,197
|
|
|
2,938
|
|
|
—
|
|
|
115,951
|
|
|||||
Rent expense
|
|
73,337
|
|
|
938
|
|
|
2,423
|
|
|
—
|
|
|
76,698
|
|
|||||
Other store operating expenses
|
|
112,669
|
|
|
2,445
|
|
|
3,410
|
|
|
1,372
|
|
|
119,896
|
|
|||||
Total Company store operating costs
|
|
590,077
|
|
|
10,070
|
|
|
16,613
|
|
|
1,244
|
|
|
618,004
|
|
|||||
Advertising expense
|
|
38,511
|
|
|
638
|
|
|
31,712
|
|
|
(37,159
|
)
|
|
33,702
|
|
|||||
General and administrative expenses
|
|
18,414
|
|
|
32,389
|
|
|
1,091
|
|
|
(3,712
|
)
|
|
48,182
|
|
|||||
Transaction, severance and Merger related litigation costs
|
|
40,998
|
|
|
9,547
|
|
|
—
|
|
|
—
|
|
|
50,545
|
|
|||||
Asset Impairment
|
|
40
|
|
|
3
|
|
|
364
|
|
|
—
|
|
|
407
|
|
|||||
Total operating costs and expenses
|
|
688,040
|
|
|
52,647
|
|
|
49,780
|
|
|
(39,627
|
)
|
|
750,840
|
|
|||||
Operating income (loss)
|
|
4
|
|
|
(35,995
|
)
|
|
3,732
|
|
|
—
|
|
|
(32,259
|
)
|
|||||
Equity in earnings (loss) in affiliates
|
|
(36,988
|
)
|
|
—
|
|
|
—
|
|
|
36,988
|
|
|
—
|
|
|||||
Interest expense
|
|
59,644
|
|
|
770
|
|
|
538
|
|
|
—
|
|
|
60,952
|
|
|||||
Income (loss) before income taxes
|
|
(96,628
|
)
|
|
(36,765
|
)
|
|
3,194
|
|
|
36,988
|
|
|
(93,211
|
)
|
|||||
Income tax expense (benefit)
|
|
(34,540
|
)
|
|
2,441
|
|
|
976
|
|
|
—
|
|
|
(31,123
|
)
|
|||||
Net income (loss)
|
|
$
|
(62,088
|
)
|
|
$
|
(39,206
|
)
|
|
$
|
2,218
|
|
|
$
|
36,988
|
|
|
$
|
(62,088
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foreign currency translation adjustments
|
|
(913
|
)
|
|
—
|
|
|
(913
|
)
|
|
913
|
|
|
(913
|
)
|
|||||
Comprehensive income (loss)
|
|
$
|
(63,001
|
)
|
|
$
|
(39,206
|
)
|
|
$
|
1,305
|
|
|
$
|
37,901
|
|
|
$
|
(63,001
|
)
|
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, severance and Merger related 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
|
)
|
|||||
Comprehensive income (loss)
|
|
$
|
163
|
|
|
$
|
(4,960
|
)
|
|
$
|
(104
|
)
|
|
$
|
5,064
|
|
|
$
|
163
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss)
|
||||||||||||||||||||
Fiscal Year 2013
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Predecessor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantor
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage sales
|
|
$
|
358,931
|
|
|
$
|
683
|
|
|
$
|
9,016
|
|
|
$
|
(46
|
)
|
|
$
|
368,584
|
|
Entertainment and merchandise sales
|
|
434,429
|
|
|
—
|
|
|
13,726
|
|
|
—
|
|
|
448,155
|
|
|||||
Total company store sales
|
|
793,360
|
|
|
683
|
|
|
22,742
|
|
|
(46
|
)
|
|
816,739
|
|
|||||
Franchise fees and royalties
|
|
2,363
|
|
|
2,619
|
|
|
—
|
|
|
—
|
|
|
4,982
|
|
|||||
International Association assessments and other fees
|
|
—
|
|
|
63,400
|
|
|
43,463
|
|
|
(106,863
|
)
|
|
—
|
|
|||||
Total revenues
|
|
795,723
|
|
|
66,702
|
|
|
66,205
|
|
|
(106,909
|
)
|
|
821,721
|
|
|||||
Operating Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Company store operating costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of food and beverage
|
|
87,543
|
|
|
33
|
|
|
2,787
|
|
|
—
|
|
|
90,363
|
|
|||||
Cost of entertainment and merchandise
|
|
28,952
|
|
|
(32
|
)
|
|
915
|
|
|
(60
|
)
|
|
29,775
|
|
|||||
Total cost of food, beverage, entertainment and merchandise
|
|
116,495
|
|
|
1
|
|
|
3,702
|
|
|
(60
|
)
|
|
120,138
|
|
|||||
Labor expenses
|
|
222,085
|
|
|
—
|
|
|
7,087
|
|
|
—
|
|
|
229,172
|
|
|||||
Depreciation and amortization
|
|
76,026
|
|
|
—
|
|
|
2,141
|
|
|
—
|
|
|
78,167
|
|
|||||
Rent expense
|
|
75,681
|
|
|
—
|
|
|
2,782
|
|
|
—
|
|
|
78,463
|
|
|||||
Other store operating expenses
|
|
189,087
|
|
|
(460
|
)
|
|
4,782
|
|
|
(62,374
|
)
|
|
131,035
|
|
|||||
Total company store operating costs
|
|
679,374
|
|
|
(459
|
)
|
|
20,494
|
|
|
(62,434
|
)
|
|
636,975
|
|
|||||
Advertising expense
|
|
44,244
|
|
|
—
|
|
|
40,411
|
|
|
(43,438
|
)
|
|
41,217
|
|
|||||
General and administrative expenses
|
|
17,817
|
|
|
38,617
|
|
|
1,294
|
|
|
(1,037
|
)
|
|
56,691
|
|
|||||
Transaction, severance and related litigation costs
|
|
316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|||||
Asset impairment
|
|
2,241
|
|
|
—
|
|
|
810
|
|
|
—
|
|
|
3,051
|
|
|||||
Total operating costs and expenses
|
|
743,992
|
|
|
38,158
|
|
|
63,009
|
|
|
(106,909
|
)
|
|
738,250
|
|
|||||
Operating income (loss)
|
|
51,731
|
|
|
28,544
|
|
|
3,196
|
|
|
—
|
|
|
83,471
|
|
|||||
Equity in earnings (loss) in affiliates
|
|
23,240
|
|
|
—
|
|
|
—
|
|
|
(23,240
|
)
|
|
—
|
|
|||||
Interest expense (income)
|
|
12,620
|
|
|
(6,002
|
)
|
|
835
|
|
|
—
|
|
|
7,453
|
|
|||||
Income (loss) before income taxes
|
|
62,351
|
|
|
34,546
|
|
|
2,361
|
|
|
(23,240
|
)
|
|
76,018
|
|
|||||
Income tax expense (benefit)
|
|
14,527
|
|
|
12,877
|
|
|
790
|
|
|
—
|
|
|
28,194
|
|
|||||
Net income (loss)
|
|
$
|
47,824
|
|
|
$
|
21,669
|
|
|
$
|
1,571
|
|
|
$
|
(23,240
|
)
|
|
$
|
47,824
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Components of other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
|
$
|
(1,116
|
)
|
|
$
|
—
|
|
|
$
|
(1,116
|
)
|
|
$
|
1,116
|
|
|
$
|
(1,116
|
)
|
Comprehensive income (loss)
|
|
$
|
46,708
|
|
|
$
|
21,669
|
|
|
$
|
455
|
|
|
$
|
(22,124
|
)
|
|
$
|
46,708
|
|
CEC Entertainment, Inc.
|
|||||||||||||||||||||
Consolidating Statement of Cash Flows
|
|||||||||||||||||||||
Fiscal Year 2015
|
|||||||||||||||||||||
(in thousands)
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Successor
|
|||||||||||||||||||
|
|
Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
|||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
95,659
|
|
|
$
|
(492
|
)
|
|
$
|
5,446
|
|
|
$
|
—
|
|
|
$
|
100,613
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Acquisition of Peter Piper Pizza
|
|
(663
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(663
|
)
|
||||||
Intercompany note
|
|
2,393
|
|
|
2,925
|
|
|
—
|
|
|
(5,318
|
)
|
|
—
|
|
||||||
Purchases of property and equipment
|
|
(65,070
|
)
|
|
(6,028
|
)
|
|
(1,936
|
)
|
|
—
|
|
|
(73,034
|
)
|
||||||
Development of internal use software
|
|
(2,018
|
)
|
|
(2,784
|
)
|
|
—
|
|
|
—
|
|
|
(4,802
|
)
|
||||||
Proceeds from sale of property and equipment
|
|
308
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308
|
|
||||||
Cash flows provided by (used in) investing activities
|
|
(65,050
|
)
|
|
|
(5,887
|
)
|
|
(1,936
|
)
|
|
(5,318
|
)
|
|
(78,191
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Repayments on senior term loan
|
|
(9,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,500
|
)
|
||||||
Repayments on note payable
|
|
—
|
|
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
||||||
Intercompany note
|
|
(3,847
|
)
|
|
1,798
|
|
|
(3,269
|
)
|
|
5,318
|
|
|
—
|
|
||||||
Proceeds from financing sale-leaseback transaction
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payment of debt financing costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Payments on capital lease obligations
|
|
(402
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(405
|
)
|
||||||
Payments on sale leaseback transactions
|
|
(1,663
|
)
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,663
|
)
|
|||||
Dividends paid
|
|
(70,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(70,000
|
)
|
||||||
Excess tax benefit realized from stock-based compensation
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||||
Equity contribution
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cash flows provided by (used in) financing activities
|
|
(85,394
|
)
|
|
|
1,749
|
|
|
(3,272
|
)
|
|
5,318
|
|
|
(81,599
|
)
|
|||||
Effect of foreign exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(1,163
|
)
|
|
—
|
|
|
(1,163
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Change in cash and cash equivalents
|
|
(54,785
|
)
|
|
|
(4,630
|
)
|
|
(925
|
)
|
|
—
|
|
|
(60,340
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
97,020
|
|
|
6,427
|
|
|
7,547
|
|
|
—
|
|
|
110,994
|
|
||||||
Cash and cash equivalents at end of period
|
|
$
|
42,235
|
|
|
|
$
|
1,797
|
|
|
$
|
6,622
|
|
|
$
|
—
|
|
|
$
|
50,654
|
|
CEC Entertainment, Inc.
|
||||||||||||||||||||||||
Consolidating Statement of Cash Flows
|
||||||||||||||||||||||||
For the 317 Day Period Ended December 28, 2014
|
||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Successor
|
||||||||||||||||||||||
|
|
Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
70,034
|
|
|
$
|
(24,166
|
)
|
|
$
|
2,223
|
|
|
$
|
—
|
|
|
$
|
48,091
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acquisition of Predecessor
|
|
(946,898
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(946,898
|
)
|
|||||||||
Acquisition of Franchise
|
|
—
|
|
|
(1,529
|
)
|
|
—
|
|
|
—
|
|
|
(1,529
|
)
|
|||||||||
Acquisition of Peter Piper Pizza
|
|
(118,409
|
)
|
|
5,267
|
|
|
—
|
|
|
—
|
|
|
(113,142
|
)
|
|||||||||
Intercompany note
|
|
—
|
|
|
375,539
|
|
|
—
|
|
|
(375,539
|
)
|
|
—
|
|
|||||||||
Purchases of property and equipment
|
|
(55,299
|
)
|
|
(4,136
|
)
|
|
(1,593
|
)
|
|
—
|
|
|
(61,028
|
)
|
|||||||||
Development of internal use software
|
|
—
|
|
|
(2,130
|
)
|
|
—
|
|
|
—
|
|
|
(2,130
|
)
|
|||||||||
Proceeds from sale of property and equipment
|
|
23
|
|
|
419
|
|
|
—
|
|
|
—
|
|
|
442
|
|
|||||||||
Cash flows provided by (used in) investing activities
|
|
(1,120,583
|
)
|
—
|
|
373,430
|
|
—
|
|
(1,593
|
)
|
—
|
|
(375,539
|
)
|
—
|
|
(1,124,285
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Proceeds from secured credit facilities, net of original issue discount
|
|
756,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
756,200
|
|
|||||||||
Proceeds from senior notes
|
|
255,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
255,000
|
|
|||||||||
Repayment of Predecessor Facility
|
|
—
|
|
|
(348,000
|
)
|
|
—
|
|
|
—
|
|
|
(348,000
|
)
|
|||||||||
Repayments on senior term loan
|
|
(3,800
|
)
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(3,807
|
)
|
|||||||||
Intercompany note
|
|
(375,539
|
)
|
|
5,050
|
|
|
(5,050
|
)
|
|
375,539
|
|
|
—
|
|
|||||||||
Proceeds from financing sale-leaseback transaction
|
|
183,685
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
183,685
|
|
|||||||||
Payment of debt financing costs
|
|
(27,575
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,575
|
)
|
|||||||||
Payments on capital lease obligations
|
|
(297
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(297
|
)
|
|||||||||
Payments on sale leaseback transactions
|
|
(742
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(742
|
)
|
|||||||||
Dividends paid
|
|
(890
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(890
|
)
|
|||||||||
Excess tax benefit realized from stock-based compensation
|
|
4,874
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,874
|
|
|||||||||
Equity contribution
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
|||||||||
Cash flows provided by (used in) financing activities
|
|
1,140,916
|
|
|
(342,957
|
)
|
|
(5,050
|
)
|
|
375,539
|
|
|
1,168,448
|
|
|||||||||
Effect of foreign exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(444
|
)
|
|
—
|
|
|
(444
|
)
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Change in cash and cash equivalents
|
|
90,367
|
|
|
6,307
|
|
|
(4,864
|
)
|
|
—
|
|
|
91,810
|
|
|||||||||
Cash and cash equivalents at beginning of period
|
|
6,653
|
|
|
120
|
|
|
12,411
|
|
|
—
|
|
|
19,184
|
|
|||||||||
Cash and cash equivalents at end of period
|
|
$
|
97,020
|
|
|
$
|
6,427
|
|
|
$
|
7,547
|
|
|
$
|
—
|
|
|
$
|
110,994
|
|
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
|
||||||||||||||||||||
Fiscal Year 2013
|
||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Predecessor
|
||||||||||||||||||
|
|
Issuer
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows provided by (used in) operating activities:
|
|
$
|
179,913
|
|
|
$
|
(43,734
|
)
|
|
$
|
2,485
|
|
|
$
|
—
|
|
|
$
|
138,664
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Intercompany Note
|
|
—
|
|
|
87,775
|
|
|
—
|
|
|
(87,775
|
)
|
|
—
|
|
|||||
Purchases of property and equipment
|
|
(71,947
|
)
|
|
(1,265
|
)
|
|
(873
|
)
|
|
—
|
|
|
(74,085
|
)
|
|||||
Proceeds from sale of property and equipment
|
|
1,890
|
|
|
640
|
|
|
—
|
|
|
—
|
|
|
2,530
|
|
|||||
Other investing activities
|
|
613
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
613
|
|
|||||
Cash flows provided by (used in) investing activities
|
|
(69,444
|
)
|
|
87,150
|
|
|
(873
|
)
|
|
(87,775
|
)
|
|
(70,942
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net proceeds from (repayments on) revolving credit facility
|
|
—
|
|
|
(28,000
|
)
|
|
—
|
|
|
—
|
|
|
(28,000
|
)
|
|||||
Intercompany Note
|
|
(73,650
|
)
|
|
(13,750
|
)
|
|
(375
|
)
|
|
87,775
|
|
|
—
|
|
|||||
Payments on capital lease obligations
|
|
(885
|
)
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|
(953
|
)
|
|||||
Dividends paid
|
|
(17,097
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(17,097
|
)
|
|||||
Excess tax benefit realized from stock-based compensation
|
|
343
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
343
|
|
|||||
Restricted stock returned for payment of taxes
|
|
(2,212
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,212
|
)
|
|||||
Purchases of treasury stock
|
|
(18,112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,112
|
)
|
|||||
Cash flows provided by (used in) financing activities
|
|
(111,613
|
)
|
|
(41,750
|
)
|
|
(443
|
)
|
|
87,775
|
|
|
(66,031
|
)
|
|||||
Effect of foreign exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
(641
|
)
|
|
—
|
|
|
(641
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Change in cash and cash equivalents
|
|
(1,144
|
)
|
|
1,666
|
|
|
528
|
|
|
—
|
|
|
1,050
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
11,321
|
|
|
248
|
|
|
8,067
|
|
|
—
|
|
|
19,636
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
10,177
|
|
|
$
|
1,914
|
|
|
$
|
8,595
|
|
|
$
|
—
|
|
|
$
|
20,686
|
|
|
Quarters in Fiscal Year 2015
(1)
|
||||||||||||||
|
Successor
|
||||||||||||||
|
March 29,
2015 |
|
June 28,
2015 |
|
Sept. 27,
2015 |
|
Jan. 3,
2016 |
||||||||
|
(in thousands)
|
||||||||||||||
Food and beverage sales
|
$
|
116,537
|
|
|
$
|
94,145
|
|
|
$
|
98,243
|
|
|
$
|
99,170
|
|
Entertainment and merchandise sales
|
144,744
|
|
|
113,861
|
|
|
118,753
|
|
|
119,657
|
|
||||
Company store sales
|
261,281
|
|
|
208,006
|
|
|
216,996
|
|
|
218,827
|
|
||||
Franchise fees and royalties
|
4,227
|
|
|
4,073
|
|
|
4,941
|
|
|
4,238
|
|
||||
Total revenues
|
$
|
265,508
|
|
|
$
|
212,079
|
|
|
$
|
221,937
|
|
|
$
|
223,065
|
|
Operating income (loss)
|
$
|
44,687
|
|
|
$
|
(188
|
)
|
|
$
|
12,499
|
|
|
$
|
(1,867
|
)
|
Income (loss) before income taxes
|
$
|
27,188
|
|
|
$
|
(17,512
|
)
|
|
$
|
(4,710
|
)
|
|
$
|
(20,417
|
)
|
Net income (loss)
|
$
|
14,742
|
|
|
$
|
(9,892
|
)
|
|
$
|
(3,202
|
)
|
|
$
|
(14,158
|
)
|
|
Quarters in Fiscal Year 2014
|
|||||||||||||||||||
|
Predecessor
|
|
|
Successor
(2)
|
||||||||||||||||
|
For the 47 Day Period Ended
|
|
|
For the 44 Day Period Ended
|
|
|
|
|
|
|
||||||||||
|
February 14, 2014
|
|
|
March 30,
2014 |
|
June 29,
2014 |
|
Sept. 28,
2014 |
|
Dec. 28,
2014 |
||||||||||
|
(in thousands)
|
|||||||||||||||||||
Food and beverage sales
|
$
|
50,897
|
|
|
|
$
|
62,277
|
|
|
$
|
79,649
|
|
|
$
|
82,271
|
|
|
$
|
83,499
|
|
Entertainment and merchandise sales
|
62,659
|
|
|
|
78,613
|
|
|
105,651
|
|
|
115,885
|
|
|
104,253
|
|
|||||
Company store sales
|
113,556
|
|
|
|
140,890
|
|
|
185,300
|
|
|
198,156
|
|
|
187,752
|
|
|||||
Franchise fees and royalties
|
687
|
|
|
|
686
|
|
|
1,274
|
|
|
1,533
|
|
|
2,990
|
|
|||||
Total revenues
|
$
|
114,243
|
|
|
|
$
|
141,576
|
|
|
$
|
186,574
|
|
|
$
|
199,689
|
|
|
$
|
190,742
|
|
Operating income (loss)
|
$
|
2,873
|
|
|
|
$
|
(3,367
|
)
|
|
$
|
(4,905
|
)
|
|
$
|
(4,241
|
)
|
|
$
|
(19,746
|
)
|
Income (loss) before income taxes
|
$
|
1,722
|
|
|
|
$
|
(15,410
|
)
|
|
$
|
(20,144
|
)
|
|
$
|
(20,215
|
)
|
|
$
|
(37,442
|
)
|
Net income (loss)
|
$
|
704
|
|
|
|
$
|
(13,872
|
)
|
|
$
|
(12,784
|
)
|
|
$
|
(13,279
|
)
|
|
$
|
(22,153
|
)
|
(1)
|
Our 2015 fiscal year consisted of 53 weeks. Each quarterly period has 13 weeks, except for the fourth quarterly period ended January 3, 2016 which has 14 weeks.
|
(2)
|
The quarterly condensed consolidated results of operations for the quarter ended December 28, 2014 include the results of Peter Piper Pizza for the 73 day period from October 17, 2014 through December 28, 2014.
|
Name
|
|
Age
|
|
Position(s)
|
|
|
|
|
|
Thomas Leverton
|
|
44
|
|
Chief Executive Officer and Director
|
J. Roger Cardinale
|
|
56
|
|
President
|
Dale R. Black
|
|
52
|
|
Executive Vice President and Chief Financial Officer
|
Randy G. Forsythe
|
|
54
|
|
Executive Vice President and Director of Operations
|
Michael Hartman
|
|
48
|
|
Executive Vice President and Chief Marketing Officer
|
Lance A. Milken
|
|
40
|
|
Director
|
Daniel E. Flesh
|
|
34
|
|
Director
|
Allen R. Weiss
|
|
61
|
|
Director
|
Name of Beneficial Owner
|
|
Number of Shares of Common Stock
|
|
Percentage of Outstanding Common Stock
|
||
Queso Holdings Inc.
(1)
|
|
200
|
|
|
100
|
%
|
Thomas Leverton
|
|
—
|
|
|
—
|
|
Dale R. Black
|
|
—
|
|
|
—
|
|
J. Roger Cardinale
|
|
—
|
|
|
—
|
|
Randy G. Forsythe
|
|
—
|
|
|
—
|
|
Lance A. Milken
|
|
—
|
|
|
—
|
|
James Chambers
|
|
—
|
|
|
—
|
|
Daniel E. Flesh
|
|
—
|
|
|
—
|
|
Allen R. Weiss
|
|
—
|
|
|
—
|
|
Directors and Executive Officers as a Group (8 persons)
|
|
—
|
|
|
—
|
|
(1)
|
AP VIII CEC Holdings, L.P. (“Queso LP”) is the sole shareholder of Queso Holdings, Inc. Apollo Management VIII, L.P. (“Management VIII”) is the manager of Queso LP. AIF VIII Management, LLC (“AIF VIII LLC”) is the general partner of Management VIII. Apollo Management, L.P. (“Apollo Management”) is the sole member-manager of AIF VIII LLC. Apollo Management GP, LLC (“Management GP”) is the general partner of Apollo Management. Apollo Management Holdings, L.P. (“Management Holdings”) is the sole member of Management GP. Apollo Management Holdings GP, LLC (“Management Holdings GP”) is the general partner of Management Holdings. Leon Black, Joshua Harris and Marc Rowan are the managers, as well as executive officers, of Management Holdings GP, and as such may be deemed to have voting and dispositive control with respect to the shares of our common stock held of record by Queso Holdings, Inc. Each of Queso LP, Management VIII, AIF VIII LLC, Apollo Management, Management GP, Management Holdings and Management Holdings GP, disclaims beneficial ownership of the shares of our common stock owned of record by Queso Holdings, Inc., except to the extent of any pecuniary interest therein. The address of each of Queso Holdings, Inc., Queso LP, Management VIII, AIF VIII LLC, Apollo Management, Management GP, Management Holdings and Management Holdings GP, and Messrs. Black, Harris and Rowan, is 9 W. 57th Street, 43rd Floor, New York, New York 10019.
|
•
|
Related party transactions must be approved by the Audit Committee or by the Chairman of the Audit Committee under authority delegated to the Chairman of the Audit Committee by the Audit Committee.
|
•
|
A related party transaction will be approved only if the Audit Committee or the Chairman of the Audit Committee determines that it is fair to the Company and in, or not inconsistent with, the best interests of the Company and its stockholders.
|
•
|
In considering the transaction, the Audit Committee or its Chairman will consider all relevant facts and circumstances of the transaction or proposed transaction with a related party.
|
•
|
The affected related party will bring the matter to the attention of the General Counsel.
|
•
|
The General Counsel will determine whether the matter should be considered by the Audit Committee or its Chairman.
|
•
|
If a member of the Audit Committee is involved in the transaction, he or she will be recused from all discussions and decisions about the transaction.
|
•
|
The transaction must be approved in advance by the Audit Committee or its Chairman whenever practicable, and if not practicable, it may be presented to the General Counsel for preliminary approval, or be preliminarily entered into, subject to ratification by the Audit Committee or its Chairman.
|
•
|
If the Audit Committee or its Chairman does not ratify the related party transaction, the Company will take all reasonable efforts or actions to amend, terminate or cancel it, as directed by the Audit Committee or its Chairman.
|
•
|
All related party transactions will be disclosed to the Board of Directors following their approval or ratification.
|
|
|
Fiscal 2015
|
|
Fiscal 2014
|
||||
Audit Fees
(1)
|
|
$
|
561,000
|
|
|
$
|
621,000
|
|
Audit-related Fees
(2)
|
|
5,500
|
|
|
49,000
|
|
||
Tax fees
(3)
|
|
—
|
|
|
—
|
|
||
All other fees
(4)
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
566,500
|
|
|
$
|
670,000
|
|
(1)
|
“Audit fees” are fees billed by Deloitte & Touche LLP for professional services rendered for the audit of the Company’s annual consolidated financial statements included in the Company’s Form 10-K, the review of the Company’s quarterly consolidated financial statements included in the Company’s Forms 10-Q, and includes fees for services that are normally incurred in connection with statutory and regulatory filings or engagements, such as consents, comfort letters, statutory audits, attest services and review of documents filed with the Securities and Exchange Commission.
|
(2)
|
“Audit-related fees” are fees billed by Deloitte & Touche LLP for assurance services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements or other attestation services or consultations that are not reported under audit fees.
|
(3)
|
“Tax fees” are fees billed by Deloitte & Touche LLP for professional services rendered for tax compliance, tax planning and tax advice.
|
(4)
|
“All other fees” are fees billed by Deloitte & Touche LLP for any professional services not included in the first three categories.
|
|
|
|
Financial Statements.
|
|
The financial statements and related notes included in Part II, Item 8. “Financial Statements and Supplementary Data” are filed as a part of this Annual Report on Form 10-K. See “Index to Consolidated Financial Statements.”
|
|
|
|
Financial Statement Schedules.
|
|
There are no financial statement schedules filed as a part of this Annual Report on Form 10-K, since the circumstances requiring inclusion of such schedules are not present.
|
|
|
|
Exhibits.
|
|
The exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index, which Exhibit Index is incorporated in this Annual Report on Form 10-K by reference. The exhibits include agreements to which the Company is a party or has a beneficial interest. The agreements have been filed to provide investors with information regarding their respective terms. The agreements are not intended to provide any other factual information about the Company or its business or operations. In particular, the assertions embodied in any representations, warranties and covenants contained in the agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to investors and may be qualified by information in confidential disclosure schedules not included with the exhibits. These disclosure schedules may contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the agreements. Moreover, certain representations, warranties and covenants in the agreements may have been used for the purpose of allocating risk between the parties, rather than establishing matters as facts. In addition, information concerning the subject matter of the representations, warranties and covenants may have changed after the date of the respective agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. Accordingly, investors should not rely on the representations, warranties and covenants in the agreements as characterizations of the actual state of facts about the Company or its business or operations on the date hereof.
|
|
||
|
|
|
Dated: March 1, 2016
|
|
CEC Entertainment, Inc.
|
|
|
|
|
|
/s/ Thomas Leverton
|
|
|
Thomas Leverton
|
|
|
Chief Executive Officer and Director
|
|
||||
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ Thomas Leverton
|
|
Chief Executive Officer and Director (Principal Executive Officer)
|
|
March 1, 2016
|
Thomas Leverton
|
|
|
|
|
|
|
|
||
/s/ Dale R. Black
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
March 1, 2016
|
Dale R. Black
|
|
|
|
|
|
|
|
||
/s/ Laurie E. Priest
|
|
Vice President and Controller (Principal Accounting Officer)
|
|
March 1, 2016
|
Laurie E. Priest
|
|
|
|
|
|
|
|
||
*
|
|
Director
|
|
March 1, 2016
|
Lance A. Milken
|
|
|
|
|
|
|
|
||
*
|
|
Director
|
|
March 1, 2016
|
Daniel E. Flesh
|
|
|
|
|
|
|
|
||
*
|
|
Director
|
|
March 1, 2016
|
Allen R. Weiss
|
|
|
|
|
|
|
|
||
*By:
|
|
|
|
|
/s/ Rodolfo Rodriguez, Jr.
|
|
Senior Vice President and General Counsel
|
|
March 1, 2016
|
Rodolfo Rodriguez, Jr.
|
|
|
|
|
Exhibit
Number
|
|
Description
|
2.1
|
|
Agreement and Plan of Merger, dated as of January 15, 2014, among Queso Holdings Inc., Q Merger Sub Inc., and CEC Entertainment, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
3.1
|
|
Third Restated Articles of Incorporation of CEC Entertainment, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
3.2
|
|
Second Amended and Restated Bylaws of CEC Entertainment, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
4.1
|
|
Indenture, dated as of February 19, 2014, among CEC Entertainment, Inc., the Subsidiary Guarantors party thereto from time to time and Wilmington Trust, National Association (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
.
|
|
|
|
4.2
|
|
Registration Rights Agreement, dated as of February 19, 2014, among CEC Entertainment, Inc., the Subsidiary Guarantors, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc. (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-4 (File No. 333-199298) as filed with the Commission on October 14, 2014)
|
|
|
|
4.3
|
|
First Supplemental Indenture, dated as of October 9, 2014, among CEC Entertainment, Inc., CEC Entertainment Leasing Company and Wilmington Trust, National Association (incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q (File No. 001-13687) as filed with the Commission on November 12, 2014)
|
|
|
|
4.4
|
|
Second Supplemental Indenture, dated as of November 20, 2014, among Peter Piper Holdings, Inc., CEC Entertainment, Inc., Peter Piper Inc., Peter Piper Mexico, LLC, Peter Piper Texas, LLC, Texas PP Beverage, Inc. and Wilmington Trust, National Association (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K (File No. 001-13687) as filed with the Commission on March 5, 2015)
|
|
|
|
10.1
|
|
First Lien Credit Agreement, dated as of February 14, 2014, among Queso Holdings Inc., as Holdings, Q Merger Sub Inc., as Borrower, the Lenders party thereto, Deutsche Bank AG New York Branch, as Administrative Agent, Deutsche Bank Securities Inc., Credit Suisse Securities (USA) LLC, Morgan Stanley Senior Funding, Inc. and UBS Securities LLC, as Joint Lead Arrangers and Joint Bookrunners, Credit Suisse Securities (USA) LLC, as Syndication Agent, and Morgan Stanley Senior Funding, Inc. and UBS Securities LLC, as Documentation Agents (incorporated by reference to Exhibit 10.1 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
|
|
Collateral Agreement (First Lien), dated as of February 14, 2014, among CEC Entertainment, Inc. (as successor by merger on the date thereof to Q Merger Sub Inc.), as Borrower, each Subsidiary Loan Party party thereto and Deutsche Bank AG New York Branch, as Collateral Agent (incorporated by reference to Exhibit 10.2 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
|
|
Holdings Guarantee and Pledge Agreement, dated as of February 14, 2014, between Queso Holdings Inc., as Holdings, and Deutsche Bank AG New York Branch, as Agent (incorporated by reference to Exhibit 10.3 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
|
|
Subsidiary Guarantee Agreement (First Lien), dated as of February 14, 2014, among the subsidiaries of CEC Entertainment, Inc. named therein and Deutsche Bank AG New York Branch, as Collateral Agent (incorporated by reference to Exhibit 10.4 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
|
|
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)
|
|
|
|
10.6
|
|
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)
|
|
|
|
10.7
|
|
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)
|
|
|
|
10.8
|
|
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)
|
|
|
|
10.9
|
|
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)
|
|
|
|
10.10
|
|
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)
|
|
|
|
10.11
|
|
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)
|
|
|
|
10.12*
|
|
Employment Term Sheet, dated as of December 17, 2014 between the Company and Michael Hartman
|
|
|
|
10.13*
|
|
Employment Agreement, dated as of November 20, 2015, between the Company and Dale R. Black
|
|
|
|
21.1*
|
|
Subsidiaries of the Company
|
|
|
|
24.1*
|
|
Power of attorney
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
Subsidiaries
|
|
Jurisdiction of Formation
|
|
Percentage of Equity Interest Owned
|
|
|
|
|
|||
1.
|
|
CEC Entertainment Canada, Inc.
|
|
Canada
|
|
100%
|
|
|
|
|
|||
2.
|
|
CEC Entertainment Holdings, LLC
|
|
Nevada
|
|
100%
|
|
|
|
|
|||
3.
|
|
SPT Distribution Company, Inc.
|
|
Texas
|
|
100%
|
|
|
|
|
|||
4.
|
|
BHC Acquisition Corporation
|
|
Texas
|
|
100%
|
|
|
|
|
|||
5.
|
|
CEC Entertainment Concepts, L.P.
|
|
Texas
|
|
0.1% by CEC Entertainment, Inc.
99.9% by CEC Entertainment Holdings, LLC
|
|
|
|
|
|||
6.
|
|
Hospitality Distribution Incorporated
|
|
Texas
|
|
100% by BHC Acquisition Corporation
|
|
|
|
|
|||
7.
|
|
SB Hospitality Corporation
|
|
Texas
|
|
100% by Hospitality Distribution Incorporated
|
|
|
|
|
|||
8.
|
|
CEC Entertainment Leasing Company
|
|
Delaware
|
|
100%
|
9.
|
|
Peter Piper Holdings, Inc.
|
|
Delaware
|
|
100%
|
10.
|
|
Peter Piper, Inc.
|
|
Arizona
|
|
100% by Peter Piper Holdings, Inc.
|
11.
|
|
Peter Piper Texas, LLC
|
|
Texas
|
|
100% by Peter Piper, Inc.
|
12.
|
|
Peter Piper Mexico, LLC
|
|
Arizona
|
|
100% by Peter Piper, Inc.
|
13.
|
|
Texas PP Beverage, Inc.
|
|
Texas
|
|
100% by Peter Piper Texas, LLC
|
14.
|
|
Peter Piper De Mexico, S. De R.L. De C.V.
|
|
Mexico
|
|
1% by Peter Piper Mexico, LLC
99% by Peter Piper, Inc.
|
1.
|
I have reviewed this annual report on Form 10-K for the fiscal year ended
January 3, 2016
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)
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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
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b)
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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.
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March 1, 2016
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/s/ Thomas Leverton
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Thomas Leverton
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Chief Executive Officer and Director
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1.
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I have reviewed this annual report on Form 10-K for the fiscal year ended
January 3, 2016
of CEC Entertainment, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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March 1, 2016
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/s/ Dale R. Black
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Dale R. Black
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Executive Vice President and Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in this Report.
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March 1, 2016
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/s/ Thomas Leverton
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Thomas Leverton
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Chief Executive Officer and Director
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in this Report.
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March 1, 2016
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/s/ Dale R. Black
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Dale R. Black
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Executive Vice President and Chief Financial Officer
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