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FOR RELEASE CONTACT: Chris Morris
May 1, 2007 Executive Vice President
3:05 p.m. Central Time Chief Financial Officer
(972) 258-4525
CEC ENTERTAINMENT, INC. REPORTS
FIRST QUARTER EARNINGS
IRVING, TEXAS - CEC Entertainment, Inc. (NYSE:"CEC") today announced earnings
for the first quarter ended April 1, 2007.
Revenues for the first quarter of 2007 increased to $232.9 million from $227.0
million in the first quarter of 2006 primarily due to new store development and
an increase in comparable store sales of 0.5%. Net income in the first quarter
of 2007 increased to $32.0 million from $28.9 million in the same period of
2006. Diluted earnings per share in the first quarter of 2007 increased 13% to
$0.95 per share from $0.84 per share in the first quarter of 2006.
Richard M. Frank, Chairman and Chief Executive Officer, stated that, "We are
pleased with the solid performance of our restaurants despite a challenging
consumer environment in the casual dining sector and severe winter weather
impacting much of the country during the quarter. Comparable store sales have
increased 1.4% through the first seventeen weeks of this year. We believe the
refined strategies we announced in mid 2006 are positively impacting sales and
earnings and over the long-term will deliver an excellent experience for our
guests and solid performance for our shareholders."
Based on current estimates, the Company expects diluted earnings per share to
range from $2.25 to $2.30 per share for the 2007 fiscal year reflecting an
annual growth rate of 10% to 13%. Estimates for fiscal year 2007 assume an
increase in comparable store sales of 2.0% to 2.5%, 10 new restaurant openings
and capital expenditures of approximately $90 to $92 million. Diluted earnings
per share are expected to range from $0.33 to $0.35 per share for the second
quarter of 2007 and $0.60 to $0.62 per share for the third quarter of 2007.
In addition, the Company announced that on April 23, 2007 the Company filed all
outstanding reports required to be filed with the U.S. Securities and Exchange
Commission ("SEC") bringing the Company into compliance with the reporting
requirements of the SEC and the New York Stock Exchange, as well as reinstating
the effectiveness of the Company's registration statements on Form S-8.
The Company's management will discuss the results for the first quarter on a
conference call and simultaneous webcast on May 1, 2007 at 3:30 p.m. Central
Time. The webcast can be accessed through the Company's website at
www.chuckecheese.com.
Certain statements in this press release, other than historical information, may
be considered forward-looking statements, within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995, and
is subject to various risks, uncertainties and assumptions. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may differ from those anticipated, estimated or
expected. Among the key factors that may have a direct bearing on CEC's
operating results, performance or financial condition are its ability to
implement its growth strategies; national, regional and local economic
conditions affecting the restaurant/entertainment industry; competition within
each of the restaurant and entertainment industries; success of its franchise
operations; negative publicity; health epidemics or pandemics; acts of God;
terrorists acts; litigation; demographic trends; fluctuations in quarterly
results of operations, including seasonality; government regulations; weather;
school holidays; increased commodity, utility, insurance, and advertising and
labor costs.
CEC Entertainment, Inc. operates a system of 529 Chuck E. Cheese's restaurants
in 48 states, of which 485 are owned and operated by the Company. # # #
CEC ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
(Thousands, except per share data)
Quarters Ended
4/1/07 4/2/06
--------- --------
Revenues:
Food and beverage $144,006 $148,600
Games and merchandise 88,036 77,506
Franchise fees and royalties 856 884
Interest income 1 2
------- -------
232,899 226,992
------- -------
Costs and expenses:
Cost of sales:
Food, beverage and related supplies 26,569 27,422
Games and merchandise 9,685 10,062
Labor 58,234 59,626
Selling, general and
administrative expenses 29,694 28,483
Depreciation and amortization 17,106 15,919
Interest expense 2,772 1,793
Other operating expenses 37,361 36,610
------- -------
181,421 179,915
------- -------
Income before income taxes 51,478 47,077
Income taxes 19,458 18,224
------- -------
Net income $ 32,020 $ 28,853
======== ========
Earnings per share:
Basic $1.00 $.86
Diluted $.95 $.84
Weighted average shares outstanding:
Basic 32,164 33,719
Diluted 33,670 34,517
CEC ENTERTAINMENT, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
Quarters Ended
4/1/07 4/2/06
Number of Company-owned restaurants:
Beginning of period 484 475
New 3 3
Closed (2) (1)
---- ---
End of period 485 477
Number of franchise restaurants:
Beginning of period 45 44
New 0 1
Closed 0 0
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End of period 45 45