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Chuck E Cheese parent readies for Q3 merger propelled by healthy Q1 results

May 14, 2019

A little more than a month after news broke that Chuck E. Cheese parent company, CEC Entertainment was planning to go public, following a merger with Leo Holdings expected in Q3 2019, the brand and its sister chain, Peter Piper Pizza, reported gains in the first quarter of this year. In fact, the chain, said its redesign, which ditched the animatronics and increased the focus on play-based dining, were starting to pay off. 

"We are pleased with our results in the first quarter of 2019 as the positive impact of the All You Can Play game packages and More Tickets initiatives led to our fourth consecutive quarter of comparable venue sales growth," CEO Tom Leverton, said in the financials report.  "Our team continues to make great progress in advancing our brand and improving the experience we deliver to our guests. While our quarterly performance benefited from the comparison to last year and a shift in Easter, the result was strong with great flow through to earnings. We remain optimistic about our venue remodel program, which is really a complete re-imaging of the venue, along with additional planned initiatives to improve our business and our profitability."

For the quarter ending on March 31, 2019, comparable venue sales increased 7.7%  compared to the first quarter of 2018, and total revenues increased $18.4 million, or 7.2%, to $273.3 million, compared to $254.9 million in the first quarter of 2018, according to the release.

Other key Q1 highlights include: 

• Net income grew to $21.2 million for the quarter, compared to $12.2 million in Q1 2018. 
• Adjusted EBITDA grew $9.8 million, or 14.8%, to $76.1 million from $66.3 million for Q1 2018.
• End-of-quarter cash and cash equivalents of $112.0 million with net availability of $86.5 million.
• $977 million of principal outstanding on long-term debt.
• $18.6 million of capital expenditures, mostly for game enhancements and general venue capital expenditures.

The company reiterated its previous guidance for the year to investors.