ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Kansas (State or other jurisdiction of incorporation or organization) | 48-0905805 (IRS Employer Identification No.) | |
1707 Market Place Blvd Irving, Texas | 75063 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | ý | Smaller reporting company | ¨ |
Emerging growth company | ¨ |
Page | |
October 1, 2017 | January 1, 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 79,427 | $ | 61,023 | ||||
Restricted cash | 219 | 268 | ||||||
Accounts receivable | 17,086 | 20,495 | ||||||
Inventories | 22,624 | 21,677 | ||||||
Prepaid expenses | 20,487 | 21,498 | ||||||
Total current assets | 139,843 | 124,961 | ||||||
Property and equipment, net | 582,928 | 592,886 | ||||||
Goodwill | 484,438 | 483,876 | ||||||
Intangible assets, net | 481,278 | 484,083 | ||||||
Other noncurrent assets | 20,170 | 24,306 | ||||||
Total assets | $ | 1,708,657 | $ | 1,710,112 | ||||
LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||
Current liabilities: | ||||||||
Bank indebtedness and other long-term debt, current portion | $ | 7,600 | $ | 7,613 | ||||
Capital lease obligations, current portion | 571 | 467 | ||||||
Accounts payable | 32,473 | 33,202 | ||||||
Accrued expenses | 38,658 | 40,098 | ||||||
Unearned revenues | 21,353 | 16,381 | ||||||
Accrued interest | 3,163 | 8,155 | ||||||
Other current liabilities | 4,666 | 4,275 | ||||||
Total current liabilities | 108,484 | 110,191 | ||||||
Capital lease obligations, less current portion | 13,162 | 13,602 | ||||||
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion | 965,976 | 968,266 | ||||||
Deferred tax liability | 180,789 | 186,290 | ||||||
Accrued insurance | 8,784 | 9,183 | ||||||
Other noncurrent liabilities | 222,092 | 216,575 | ||||||
Total liabilities | 1,499,287 | 1,504,107 | ||||||
Stockholder’s equity: | ||||||||
Common stock, $0.01 par value; authorized 1,000 shares; 200 shares issued as of October 1, 2017 and January 1, 2017 | — | — | ||||||
Capital in excess of par value | 359,144 | 357,166 | ||||||
Accumulated deficit | (148,065 | ) | (148,265 | ) | ||||
Accumulated other comprehensive loss | (1,709 | ) | (2,896 | ) | ||||
Total stockholder’s equity | 209,370 | 206,005 | ||||||
Total liabilities and stockholder’s equity | $ | 1,708,657 | $ | 1,710,112 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | October 2, 2016 | October 1, 2017 | October 2, 2016 | ||||||||||||
REVENUES: | |||||||||||||||
Food and beverage sales | $ | 98,255 | $ | 101,984 | $ | 320,085 | $ | 321,591 | |||||||
Entertainment and merchandise sales | 110,633 | 121,764 | 356,274 | 383,978 | |||||||||||
Total company venue sales | 208,888 | 223,748 | 676,359 | 705,569 | |||||||||||
Franchise fees and royalties | 4,459 | 4,322 | 13,731 | 13,440 | |||||||||||
Total revenues | 213,347 | 228,070 | 690,090 | 719,009 | |||||||||||
OPERATING COSTS AND EXPENSES: | |||||||||||||||
Company venue operating costs: | |||||||||||||||
Cost of food and beverage (exclusive of items shown separately below) | 23,974 | 25,507 | 75,014 | 80,702 | |||||||||||
Cost of entertainment and merchandise (exclusive of items shown separately below) | 7,430 | 8,014 | 22,771 | 25,004 | |||||||||||
Total cost of food, beverage, entertainment and merchandise | 31,404 | 33,521 | 97,785 | 105,706 | |||||||||||
Labor expenses | 61,220 | 61,721 | 187,958 | 191,170 | |||||||||||
Depreciation and amortization | 25,289 | 27,667 | 77,492 | 85,029 | |||||||||||
Rent expense | 24,259 | 24,120 | 71,484 | 72,318 | |||||||||||
Other venue operating expenses | 40,561 | 38,757 | 113,277 | 112,143 | |||||||||||
Total company venue operating costs | 182,733 | 185,786 | 547,996 | 566,366 | |||||||||||
Other costs and expenses: | |||||||||||||||
Advertising expense | 12,083 | 11,515 | 37,702 | 36,777 | |||||||||||
General and administrative expenses | 15,422 | 17,284 | 48,237 | 51,222 | |||||||||||
Transaction, severance and related litigation costs | 128 | 166 | 698 | 1,349 | |||||||||||
Asset impairments | 1,843 | 772 | 1,843 | 772 | |||||||||||
Total operating costs and expenses | 212,209 | 215,523 | 636,476 | 656,486 | |||||||||||
Operating income | 1,138 | 12,547 | 53,614 | 62,523 | |||||||||||
Interest expense | 17,451 | 17,237 | 51,574 | 51,419 | |||||||||||
Income (loss) before income taxes | (16,313 | ) | (4,690 | ) | 2,040 | 11,104 | |||||||||
Income tax expense (benefit) | (5,221 | ) | (2,286 | ) | 1,840 | 4,645 | |||||||||
Net income (loss) | $ | (11,092 | ) | $ | (2,404 | ) | $ | 200 | $ | 6,459 |
Three Months Ended | Nine Months Ended | ||||||||||||||
October 1, 2017 | October 2, 2016 | October 1, 2017 | October 2, 2016 | ||||||||||||
Net income (loss) | $ | (11,092 | ) | $ | (2,404 | ) | $ | 200 | $ | 6,459 | |||||
Components of other comprehensive income (loss), net of tax: | |||||||||||||||
Foreign currency translation adjustments | 648 | (212 | ) | 1,187 | 703 | ||||||||||
Comprehensive income (loss) | $ | (10,444 | ) | $ | (2,616 | ) | $ | 1,387 | $ | 7,162 |
Nine Months Ended | |||||||
October 1, 2017 | October 2, 2016 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 200 | $ | 6,459 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 83,064 | 90,167 | |||||
Deferred income taxes | (5,220 | ) | (10,329 | ) | |||
Stock-based compensation expense | 520 | 522 | |||||
Amortization of lease related liabilities | (411 | ) | (17 | ) | |||
Amortization of original issue discount and deferred debt financing costs | 3,410 | 3,410 | |||||
Loss on asset disposals, net | 5,457 | 6,298 | |||||
Asset impairments | 1,843 | 772 | |||||
Non-cash rent expense | 3,562 | 5,261 | |||||
Other adjustments | 18 | 237 | |||||
Changes in operating assets and liabilities: | |||||||
Restricted cash | 49 | (196 | ) | ||||
Accounts receivable | 2,678 | 5,938 | |||||
Inventories | (4,499 | ) | (1,867 | ) | |||
Prepaid expenses | 1,195 | (321 | ) | ||||
Accounts payable | 1,775 | (3,973 | ) | ||||
Accrued expenses | (2,097 | ) | 3,424 | ||||
Unearned revenues | 5,952 | 4,386 | |||||
Accrued interest | (4,891 | ) | (5,784 | ) | |||
Income taxes payable | 425 | 5,400 | |||||
Deferred landlord contributions | 1,210 | 1,467 | |||||
Net cash provided by operating activities | 94,240 | 111,254 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchases of property and equipment | (71,910 | ) | (66,535 | ) | |||
Development of internal use software | (2,520 | ) | (8,788 | ) | |||
Proceeds from sale of property and equipment | 424 | 426 | |||||
Net cash used in investing activities | (74,006 | ) | (74,897 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Repayments on senior term loan | (5,700 | ) | (5,700 | ) | |||
Repayments on note payable | (13 | ) | (37 | ) | |||
Proceeds from sale leaseback transaction | 4,073 | — | |||||
Payments on capital lease obligations | (340 | ) | (311 | ) | |||
Payments on sale leaseback obligations | (1,789 | ) | (1,466 | ) | |||
Excess tax benefit realized from stock-based compensation | — | 4 |
Return of capital | 1,447 | — | |||||
Net cash used in financing activities | (2,322 | ) | (7,510 | ) | |||
Effect of foreign exchange rate changes on cash | 492 | 356 | |||||
Change in cash and cash equivalents | 18,404 | 29,203 | |||||
Cash and cash equivalents at beginning of period | 61,023 | 50,654 | |||||
Cash and cash equivalents at end of period | $ | 79,427 | $ | 79,857 | |||
Nine Months Ended | |||||||
October 1, 2017 | October 2, 2016 | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||
Interest paid | $ | 53,076 | $ | 53,971 | |||
Income taxes paid, net | $ | 6,635 | $ | 9,569 | |||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||||||
Accrued construction costs | $ | 2,772 | $ | 2,926 |
Weighted Average Life (Years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
(in thousands) | |||||||||||||
Chuck E. Cheese's tradename | Indefinite | $ | 400,000 | $ | 400,000 | ||||||||
Peter Piper Pizza tradename | Indefinite | 26,700 | 26,700 | ||||||||||
Favorable lease agreements (1) | 10 | 14,880 | (6,917 | ) | 7,963 | ||||||||
Franchise agreements | 25 | 53,300 | (6,685 | ) | 46,615 | ||||||||
$ | 494,880 | $ | (13,602 | ) | $ | 481,278 |
(1) | In connection with the Merger, as defined in Note 12 “Consolidating Guarantor Financial Information”, and the acquisition of Peter Piper Pizza in October 2014, 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. |
October 1, 2017 | January 1, 2017 | ||||||
(in thousands) | |||||||
Trade and other amounts payable | $ | 22,107 | $ | 24,615 | |||
Book overdraft | 10,366 | 8,587 | |||||
Accounts payable | $ | 32,473 | $ | 33,202 |
October 1, 2017 | January 1, 2017 | ||||||
(in thousands) | |||||||
Term loan facility | $ | 733,400 | $ | 739,100 | |||
Senior notes | 255,000 | 255,000 | |||||
Note payable | — | 13 | |||||
Total debt outstanding | 988,400 | 994,113 | |||||
Less: | |||||||
Unamortized original issue discount | (1,829 | ) | (2,235 | ) | |||
Deferred financing costs, net | (12,995 | ) | (15,999 | ) | |||
Current portion | (7,600 | ) | (7,613 | ) | |||
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion | $ | 965,976 | $ | 968,266 |
Three Months Ended | |||||||
October 1, 2017 | October 2, 2016 | ||||||
(in thousands) | |||||||
Term loan facility (1) | $ | 8,014 | $ | 7,646 | |||
Senior notes | 5,083 | 5,157 | |||||
Capital lease obligations | 434 | 436 | |||||
Sale leaseback obligations | 2,647 | 2,674 | |||||
Amortization of debt issuance costs | 1,001 | 1,001 | |||||
Other | 272 | 323 | |||||
Total interest expense | $ | 17,451 | $ | 17,237 |
Nine Months Ended | |||||||
October 1, 2017 | October 2, 2016 | ||||||
(in thousands) | |||||||
Term loan facility (1) | $ | 23,240 | $ | 23,303 | |||
Senior notes | 15,248 | 15,470 | |||||
Capital lease obligations | 1,264 | 1,315 | |||||
Sale leaseback obligations | 7,949 | 8,067 | |||||
Amortization of debt issuance costs | 3,004 | 3,004 | |||||
Other | 869 | 260 | |||||
Total interest expense | $ | 51,574 | $ | 51,419 |
October 1, 2017 | January 1, 2017 | ||||||||||||||||
Carrying Amount (1) | Estimated Fair Value | Carrying Amount (1) | Estimated Fair Value | ||||||||||||||
(in thousands) | |||||||||||||||||
Financial Liabilities: | |||||||||||||||||
Bank indebtedness and other long-term debt: | |||||||||||||||||
Current portion | $ | 7,600 | $ | 7,562 | $ | 7,613 | $ | 7,623 | |||||||||
Long-term portion (2) | 978,971 | 987,972 | 984,265 | 993,311 | |||||||||||||
Bank indebtedness and other long-term debt: | $ | 986,571 | $ | 995,534 | $ | 991,878 | $ | 1,000,934 |
October 1, 2017 | January 1, 2017 | |||||||
(in thousands) | ||||||||
Sale leaseback obligations, less current portion (1) | $ | 178,724 | $ | 176,831 | ||||
Deferred rent liability | 26,342 | 21,784 | ||||||
Deferred landlord contributions | 6,237 | 5,702 | ||||||
Long-term portion of unfavorable leases | 5,917 | 7,308 | ||||||
Other | 4,872 | 4,950 | ||||||
Total other noncurrent liabilities | $ | 222,092 | $ | 216,575 |
(1) | See Note 8 “Sale Leaseback Transaction” for further discussion on the sale leaseback transaction completed in the nine months ended October 1, 2017. |
Three Months Ended | |||||||
October 1, 2017 | October 2, 2016 | ||||||
(in thousands, except %) | |||||||
Federal and state income taxes | $ | (5,533 | ) | $ | (2,662 | ) | |
Foreign income taxes (1) | 312 | 376 | |||||
Income tax expense (benefit) | $ | (5,221 | ) | $ | (2,286 | ) |
Nine Months Ended | |||||||
October 1, 2017 | October 2, 2016 | ||||||
(in thousands, except %) | |||||||
Federal and state income taxes | $ | 1,145 | $ | 4,051 | |||
Foreign income taxes (1) | 695 | 594 | |||||
Income tax expense (benefit) | $ | 1,840 | $ | 4,645 |
Stock Options | Weighted Average Exercise Price (1) | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||
($ per share) | ($ in thousands) | ||||||
Outstanding stock options, January 1, 2017 | 2,400,914 | $8.74 | |||||
Options Granted | 92,620 | $15.93 | |||||
Options Forfeited | (33,385 | ) | $11.53 | ||||
Outstanding stock options, October 1, 2017 | 2,460,149 | $8.98 | 6.8 | $ | 20,427 | ||
Stock options expected to vest, October 1, 2017 | 1,827,408 | $9.09 | 6.8 | $ | 14,963 | ||
Exercisable stock options, October 1, 2017 | 429,697 | $8.43 | 6.5 | $ | 3,801 | ||
Three Months Ended | |||||||
October 1, 2017 | October 2, 2016 | ||||||
(in thousands) | |||||||
Stock-based compensation costs | $ | 187 | $ | 188 | |||
Portion capitalized as property and equipment (1) | (3 | ) | (3 | ) | |||
Stock-based compensation expense recognized | $ | 184 | $ | 185 |
Nine Months Ended | |||||||
October 1, 2017 | October 2, 2016 | ||||||
(in thousands) | |||||||
Stock-based compensation costs | $ | 531 | $ | 532 | |||
Portion capitalized as property and equipment (1) | (11 | ) | (10 | ) | |||
Stock-based compensation expense recognized | $ | 520 | $ | 522 | |||
Excess tax benefit recognized from exercise of stock-based compensation awards | $ | — | $ | 4 |
(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 venue development projects, such as the design and construction of a new venue and the remodeling and expansion of our existing venues. Capitalized stock-based compensation costs attributable to our venue development projects are included in “Property and equipment, net” in the Consolidated Balance Sheets. |
Common Stock | Capital In Excess of Par Value | Accumulated Deficit | Accumulated Other Comprehensive Loss | ||||||||||||||||||||
Shares | Amount | Total | |||||||||||||||||||||
(in thousands, except share information) | |||||||||||||||||||||||
Balance at January 1, 2017 | 200 | $ | — | $ | 357,166 | $ | (148,265 | ) | $ | (2,896 | ) | $ | 206,005 | ||||||||||
Net income | — | — | — | 200 | — | 200 | |||||||||||||||||
Other comprehensive income | — | — | — | — | 1,187 | 1,187 | |||||||||||||||||
Stock-based compensation costs | — | — | 531 | — | — | 531 | |||||||||||||||||
Return of capital | — | — | 1,447 | — | — | 1,447 | |||||||||||||||||
Balance October 1, 2017 | 200 | $ | — | $ | 359,144 | $ | (148,065 | ) | $ | (1,709 | ) | $ | 209,370 |
CEC Entertainment, Inc. | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
As of October 1, 2017 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Issuer | Guarantors | Non-Guarantors | Eliminations | Consolidated | ||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 70,041 | $ | 1,850 | $ | 7,536 | $ | — | $ | 79,427 | ||||||||||
Restricted cash | — | — | 219 | — | 219 | |||||||||||||||
Accounts receivable | 13,676 | 2,644 | 4,040 | (3,274 | ) | 17,086 | ||||||||||||||
Inventories | 18,480 | 3,859 | 285 | — | 22,624 | |||||||||||||||
Prepaid expenses | 13,683 | 5,359 | 1,445 | — | 20,487 | |||||||||||||||
Total current assets | 115,880 | 13,712 | 13,525 | (3,274 | ) | 139,843 | ||||||||||||||
Property and equipment, net | 513,147 | 63,203 | 6,578 | — | 582,928 | |||||||||||||||
Goodwill | 433,024 | 51,414 | — | — | 484,438 | |||||||||||||||
Intangible assets, net | 17,337 | 463,941 | — | — | 481,278 | |||||||||||||||
Intercompany | 84,420 | — | — | (84,420 | ) | — | ||||||||||||||
Investment in subsidiaries | 465,766 | — | — | (465,766 | ) | — | ||||||||||||||
Other noncurrent assets | 7,747 | 12,180 | 243 | — | 20,170 | |||||||||||||||
Total assets | $ | 1,637,321 | $ | 604,450 | $ | 20,346 | $ | (553,460 | ) | $ | 1,708,657 | |||||||||
Current liabilities: | ||||||||||||||||||||
Bank indebtedness and other long-term debt, current portion | $ | 7,600 | $ | — | $ | — | $ | — | $ | 7,600 | ||||||||||
Capital lease obligations, current portion | 562 | — | 9 | — | 571 | |||||||||||||||
Accounts payable and accrued expenses | 60,104 | 30,447 | 5,096 | — | 95,647 | |||||||||||||||
Other current liabilities | 4,155 | 511 | — | — | 4,666 | |||||||||||||||
Total current liabilities | 72,421 | 30,958 | 5,105 | — | 108,484 | |||||||||||||||
Capital lease obligations, less current portion | 13,105 | — | 57 | — | 13,162 | |||||||||||||||
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion | 965,976 | — | — | — | 965,976 | |||||||||||||||
Deferred tax liability | 159,582 | 24,022 | (2,815 | ) | — | 180,789 | ||||||||||||||
Intercompany | — | 60,498 | 27,196 | (87,694 | ) | — | ||||||||||||||
Other noncurrent liabilities | 216,867 | 13,588 | 421 | — | 230,876 | |||||||||||||||
Total liabilities | 1,427,951 | 129,066 | 29,964 | (87,694 | ) | 1,499,287 | ||||||||||||||
Stockholder's equity: | ||||||||||||||||||||
Common stock | — | — | — | — | — | |||||||||||||||
Capital in excess of par value | 359,144 | 466,114 | 3,241 | (469,355 | ) | 359,144 | ||||||||||||||
Retained earnings (deficit) | (148,065 | ) | 9,270 | (11,150 | ) | 1,880 | (148,065 | ) | ||||||||||||
Accumulated other comprehensive income (loss) | (1,709 | ) | — | (1,709 | ) | 1,709 | (1,709 | ) | ||||||||||||
Total stockholder's equity | 209,370 | 475,384 | (9,618 | ) | (465,766 | ) | 209,370 | |||||||||||||
Total liabilities and stockholder's equity | $ | 1,637,321 | $ | 604,450 | $ | 20,346 | $ | (553,460 | ) | $ | 1,708,657 |
CEC Entertainment, Inc. | ||||||||||||||||||||
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
As of January 1, 2017 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Issuer | Guarantors | Non-Guarantors | Eliminations | Consolidated | ||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 53,088 | $ | 1,158 | $ | 6,777 | $ | — | $ | 61,023 | ||||||||||
Restricted cash | — | — | 268 | — | 268 | |||||||||||||||
Accounts receivable | 16,922 | 3,220 | 2,455 | (2,102 | ) | 20,495 | ||||||||||||||
Inventories | 18,255 | 3,151 | 271 | — | 21,677 | |||||||||||||||
Prepaid expenses | 14,294 | 6,077 | 1,127 | — | 21,498 | |||||||||||||||
Total current assets | 102,559 | 13,606 | 10,898 | (2,102 | ) | 124,961 | ||||||||||||||
Property and equipment, net | 538,195 | 47,906 | 6,785 | — | 592,886 | |||||||||||||||
Goodwill | 432,462 | 51,414 | — | — | 483,876 | |||||||||||||||
Intangible assets, net | 19,157 | 464,926 | — | — | 484,083 | |||||||||||||||
Intercompany | 127,107 | 317 | — | (127,424 | ) | — | ||||||||||||||
Investment in subsidiaries | 436,483 | — | — | (436,483 | ) | — | ||||||||||||||
Other noncurrent assets | 6,888 | 17,025 | 393 | — | 24,306 | |||||||||||||||
Total assets | $ | 1,662,851 | $ | 595,194 | $ | 18,076 | $ | (566,009 | ) | $ | 1,710,112 | |||||||||
Current liabilities: | ||||||||||||||||||||
Bank indebtedness and other long-term debt, current portion | $ | 7,600 | $ | 13 | $ | — | $ | — | $ | 7,613 | ||||||||||
Capital lease obligations, current portion | 460 | — | 7 | — | 467 | |||||||||||||||
Accounts payable and accrued expenses | 84,207 | 11,445 | 2,184 | — | 97,836 | |||||||||||||||
Other current liabilities | 3,764 | 511 | — | — | 4,275 | |||||||||||||||
Total current liabilities | 96,031 | 11,969 | 2,191 | — | 110,191 | |||||||||||||||
Capital lease obligations, less current portion | 13,542 | — | 60 | — | 13,602 | |||||||||||||||
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion | 968,266 | — | — | — | 968,266 | |||||||||||||||
Deferred tax liability | 166,064 | 21,234 | (1,008 | ) | — | 186,290 | ||||||||||||||
Intercompany | — | 106,131 | 23,395 | (129,526 | ) | — | ||||||||||||||
Other noncurrent liabilities | 212,943 | 12,484 | 331 | — | 225,758 | |||||||||||||||
Total liabilities | 1,456,846 | 151,818 | 24,969 | (129,526 | ) | 1,504,107 | ||||||||||||||
Stockholder's equity: | ||||||||||||||||||||
Common stock | — | — | — | — | — | |||||||||||||||
Capital in excess of par value | 357,166 | 466,114 | 3,241 | (469,355 | ) | 357,166 | ||||||||||||||
Retained earnings (deficit) | (148,265 | ) | (22,738 | ) | (7,238 | ) | 29,976 | (148,265 | ) | |||||||||||
Accumulated other comprehensive income (loss) | (2,896 | ) | — | (2,896 | ) | 2,896 | (2,896 | ) | ||||||||||||
Total stockholder's equity | 206,005 | 443,376 | (6,893 | ) | (436,483 | ) | 206,005 | |||||||||||||
Total liabilities and stockholder's equity | $ | 1,662,851 | $ | 595,194 | $ | 18,076 | $ | (566,009 | ) | $ | 1,710,112 |
CEC Entertainment, Inc. | ||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss) | ||||||||||||||||||||
For the Three Months Ended October 1, 2017 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Issuer | Guarantors | Non-Guarantors | Eliminations | Consolidated | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Food and beverage sales | $ | 83,413 | $ | 13,234 | $ | 1,608 | $ | — | $ | 98,255 | ||||||||||
Entertainment and merchandise sales | 88,551 | 19,174 | 2,908 | — | 110,633 | |||||||||||||||
Total company venue sales | 171,964 | 32,408 | 4,516 | — | 208,888 | |||||||||||||||
Franchise fees and royalties | 506 | 3,953 | — | — | 4,459 | |||||||||||||||
International Association assessments and other fees | 364 | 7,702 | 8,294 | (16,360 | ) | — | ||||||||||||||
Total revenues | 172,834 | 44,063 | 12,810 | (16,360 | ) | 213,347 | ||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||
Company venue operating costs: | ||||||||||||||||||||
Cost of food and beverage | 19,916 | 3,519 | 539 | — | 23,974 | |||||||||||||||
Cost of entertainment and merchandise | 6,807 | 432 | 191 | — | 7,430 | |||||||||||||||
Total cost of food, beverage, entertainment and merchandise | 26,723 | 3,951 | 730 | — | 31,404 | |||||||||||||||
Labor expenses | 55,252 | 4,729 | 1,239 | — | 61,220 | |||||||||||||||
Depreciation and amortization | 23,789 | 1,064 | 436 | — | 25,289 | |||||||||||||||
Rent expense | 22,066 | 1,624 | 569 | — | 24,259 | |||||||||||||||
Other venue operating expenses | 43,731 | 3,817 | 1,079 | (8,066 | ) | 40,561 | ||||||||||||||
Total company venue operating costs | 171,561 | 15,185 | 4,053 | (8,066 | ) | 182,733 | ||||||||||||||
Advertising expense | 8,670 | 1,085 | 10,622 | (8,294 | ) | 12,083 | ||||||||||||||
General and administrative expenses | 4,863 | 10,454 | 105 | — | 15,422 | |||||||||||||||
Transaction, severance and related litigation costs | 128 | — | — | — | 128 | |||||||||||||||
Asset impairments | 1,824 | 14 | 5 | 1,843 | ||||||||||||||||
Total operating costs and expenses | 187,046 | 26,738 | 14,785 | (16,360 | ) | 212,209 | ||||||||||||||
Operating income (loss) | (14,212 | ) | 17,325 | (1,975 | ) | — | 1,138 | |||||||||||||
Equity in earnings (loss) in affiliates | (10,551 | ) | — | — | 10,551 | — | ||||||||||||||
Interest expense | 15,902 | 1,353 | 196 | — | 17,451 | |||||||||||||||
Income (loss) before income taxes | (40,665 | ) | 15,972 | (2,171 | ) | 10,551 | (16,313 | ) | ||||||||||||
Income tax expense (benefit) | (29,573 | ) | 25,067 | (715 | ) | — | (5,221 | ) | ||||||||||||
Net income (loss) | $ | (11,092 | ) | $ | (9,095 | ) | $ | (1,456 | ) | $ | 10,551 | $ | (11,092 | ) | ||||||
Components of other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustments | 648 | — | 648 | (648 | ) | 648 | ||||||||||||||
Comprehensive income (loss) | $ | (10,444 | ) | $ | (9,095 | ) | $ | (808 | ) | $ | 9,903 | $ | (10,444 | ) |
CEC Entertainment, Inc. | ||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss) | ||||||||||||||||||||
For the Three Months Ended October 2, 2016 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Issuer | Guarantors | Non-Guarantors | Eliminations | Consolidated | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Food and beverage sales | $ | 88,557 | $ | 11,892 | $ | 1,535 | $ | — | $ | 101,984 | ||||||||||
Entertainment and merchandise sales | 112,306 | 6,703 | 2,755 | — | 121,764 | |||||||||||||||
Total company venue sales | 200,863 | 18,595 | 4,290 | — | 223,748 | |||||||||||||||
Franchise fees and royalties | 292 | 4,030 | — | — | 4,322 | |||||||||||||||
International Association assessments and other fees | 273 | 615 | 8,431 | (9,319 | ) | — | ||||||||||||||
Total revenues | 201,428 | 23,240 | 12,721 | (9,319 | ) | 228,070 | ||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||
Company venue operating costs: | ||||||||||||||||||||
Cost of food and beverage | 21,773 | 3,194 | 540 | — | 25,507 | |||||||||||||||
Cost of entertainment and merchandise | 7,391 | 428 | 195 | — | 8,014 | |||||||||||||||
Total cost of food, beverage, entertainment and merchandise | 29,164 | 3,622 | 735 | — | 33,521 | |||||||||||||||
Labor expenses | 56,386 | 4,039 | 1,296 | — | 61,721 | |||||||||||||||
Depreciation and amortization | 26,501 | 650 | 516 | — | 27,667 | |||||||||||||||
Rent expense | 22,235 | 1,331 | 554 | — | 24,120 | |||||||||||||||
Other venue operating expenses | 35,659 | 3,033 | 953 | (888 | ) | 38,757 | ||||||||||||||
Total company venue operating costs | 169,945 | 12,675 | 4,054 | (888 | ) | 185,786 | ||||||||||||||
Advertising expense | 8,967 | 828 | 10,151 | (8,431 | ) | 11,515 | ||||||||||||||
General and administrative expenses | 6,741 | 10,270 | 273 | — | 17,284 | |||||||||||||||
Transaction, severance and related litigation costs | 166 | — | — | — | 166 | |||||||||||||||
Asset impairments | 709 | — | 63 | — | 772 | |||||||||||||||
Total operating costs and expenses | 186,528 | 23,773 | 14,541 | (9,319 | ) | 215,523 | ||||||||||||||
Operating income (loss) | 14,900 | (533 | ) | (1,820 | ) | — | 12,547 | |||||||||||||
Equity in earnings (loss) in affiliates | (2,299 | ) | — | — | 2,299 | — | ||||||||||||||
Interest expense | 15,685 | 1,440 | 112 | — | 17,237 | |||||||||||||||
Income (loss) before income taxes | (3,084 | ) | (1,973 | ) | (1,932 | ) | 2,299 | (4,690 | ) | |||||||||||
Income tax expense (benefit) | (680 | ) | (935 | ) | (671 | ) | — | (2,286 | ) | |||||||||||
Net income (loss) | $ | (2,404 | ) | $ | (1,038 | ) | $ | (1,261 | ) | $ | 2,299 | $ | (2,404 | ) | ||||||
Components of other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustments | (212 | ) | — | (212 | ) | 212 | (212 | ) | ||||||||||||
Comprehensive income (loss) | $ | (2,616 | ) | $ | (1,038 | ) | $ | (1,473 | ) | $ | 2,511 | $ | (2,616 | ) |
CEC Entertainment, Inc. | ||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss) | ||||||||||||||||||||
For the Nine Months Ended October 1, 2017 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Issuer | Guarantors | Non-Guarantors | Eliminations | Consolidated | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Food and beverage sales | $ | 274,411 | $ | 40,959 | $ | 4,715 | $ | — | $ | 320,085 | ||||||||||
Entertainment and merchandise sales | 296,197 | 52,097 | 7,980 | — | 356,274 | |||||||||||||||
Total company venue sales | 570,608 | 93,056 | 12,695 | — | 676,359 | |||||||||||||||
Franchise fees and royalties | 1,411 | 12,320 | — | — | 13,731 | |||||||||||||||
International Association assessments and other fees | 1,054 | 28,791 | 26,900 | (56,745 | ) | — | ||||||||||||||
Total revenues | 573,073 | 134,167 | 39,595 | (56,745 | ) | 690,090 | ||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||
Company venue operating costs: | ||||||||||||||||||||
Cost of food and beverage | 62,847 | 10,671 | 1,496 | — | 75,014 | |||||||||||||||
Cost of entertainment and merchandise | 21,037 | 1,236 | 498 | — | 22,771 | |||||||||||||||
Total cost of food, beverage, entertainment and merchandise | 83,884 | 11,907 | 1,994 | — | 97,785 | |||||||||||||||
Labor expenses | 170,089 | 14,108 | 3,761 | — | 187,958 | |||||||||||||||
Depreciation and amortization | 73,162 | 2,946 | 1,384 | — | 77,492 | |||||||||||||||
Rent expense | 65,168 | 4,678 | 1,638 | — | 71,484 | |||||||||||||||
Other venue operating expenses | 129,415 | 10,360 | 3,373 | (29,871 | ) | 113,277 | ||||||||||||||
Total company venue operating costs | 521,718 | 43,999 | 12,150 | (29,871 | ) | 547,996 | ||||||||||||||
Advertising expense | 27,921 | 4,345 | 32,310 | (26,874 | ) | 37,702 | ||||||||||||||
General and administrative expenses | 15,672 | 32,194 | 371 | — | 48,237 | |||||||||||||||
Transaction, severance and related litigation costs | 698 | — | — | — | 698 | |||||||||||||||
Asset Impairments | 1,824 | 14 | 5 | — | 1,843 | |||||||||||||||
Total operating costs and expenses | 567,833 | 80,552 | 44,836 | (56,745 | ) | 636,476 | ||||||||||||||
Operating income (loss) | 5,240 | 53,615 | (5,241 | ) | — | 53,614 | ||||||||||||||
Equity in earnings (loss) in affiliates | 28,096 | — | — | (28,096 | ) | — | ||||||||||||||
Interest expense | 47,730 | 3,345 | 499 | — | 51,574 | |||||||||||||||
Income (loss) before income taxes | (14,394 | ) | 50,270 | (5,740 | ) | (28,096 | ) | 2,040 | ||||||||||||
Income tax expense (benefit) | (14,594 | ) | 18,263 | (1,829 | ) | — | 1,840 | |||||||||||||
Net income (loss) | $ | 200 | $ | 32,007 | $ | (3,911 | ) | $ | (28,096 | ) | $ | 200 | ||||||||
Components of other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustments | 1,187 | — | 1,187 | (1,187 | ) | 1,187 | ||||||||||||||
Comprehensive income (loss) | $ | 1,387 | $ | 32,007 | $ | (2,724 | ) | $ | (29,283 | ) | $ | 1,387 |
CEC Entertainment, Inc. | ||||||||||||||||||||
Consolidating Statement of Comprehensive Income (Loss) | ||||||||||||||||||||
For the Nine Months Ended October 2, 2016 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Issuer | Guarantors | Non-Guarantors | Eliminations | Consolidated | ||||||||||||||||
Revenues: | ||||||||||||||||||||
Food and beverage sales | $ | 280,391 | $ | 36,779 | $ | 4,421 | $ | — | $ | 321,591 | ||||||||||
Entertainment and merchandise sales | 358,192 | 18,151 | 7,635 | — | 383,978 | |||||||||||||||
Total company venue sales | 638,583 | 54,930 | 12,056 | — | 705,569 | |||||||||||||||
Franchise fees and royalties | 1,561 | 11,879 | — | — | 13,440 | |||||||||||||||
International Association assessments and other fees | 735 | 1,845 | 28,746 | (31,326 | ) | — | ||||||||||||||
Total revenues | 640,879 | 68,654 | 40,802 | (31,326 | ) | 719,009 | ||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||
Company venue operating costs: | ||||||||||||||||||||
Cost of food and beverage | 69,431 | 9,632 | 1,639 | — | 80,702 | |||||||||||||||
Cost of entertainment and merchandise | 23,149 | 1,329 | 526 | — | 25,004 | |||||||||||||||
Total cost of food, beverage, entertainment and merchandise | 92,580 | 10,961 | 2,165 | — | 105,706 | |||||||||||||||
Labor expenses | 175,495 | 11,842 | 3,833 | — | 191,170 | |||||||||||||||
Depreciation and amortization | 81,661 | 1,884 | 1,484 | — | 85,029 | |||||||||||||||
Rent expense | 66,601 | 4,043 | 1,674 | — | 72,318 | |||||||||||||||
Other venue operating expenses | 104,297 | 7,568 | 2,884 | (2,606 | ) | 112,143 | ||||||||||||||
Total company venue operating costs | 520,634 | 36,298 | 12,040 | (2,606 | ) | 566,366 | ||||||||||||||
Advertising expense | 30,188 | 3,548 | 31,761 | (28,720 | ) | 36,777 | ||||||||||||||
General and administrative expenses | 19,669 | 30,996 | 557 | — | 51,222 | |||||||||||||||
Transaction, severance and related litigation costs | 1,294 | 55 | — | — | 1,349 | |||||||||||||||
Asset impairment | 709 | — | 63 | — | 772 | |||||||||||||||
Total operating costs and expenses | 572,494 | 70,897 | 44,421 | (31,326 | ) | 656,486 | ||||||||||||||
Operating income (loss) | 68,385 | (2,243 | ) | (3,619 | ) | — | 62,523 | |||||||||||||
Equity in earnings (loss) in affiliates | (8,096 | ) | — | — | 8,096 | — | ||||||||||||||
Interest expense | 47,765 | 3,328 | 326 | — | 51,419 | |||||||||||||||
Income (loss) before income taxes | 12,524 | (5,571 | ) | (3,945 | ) | 8,096 | 11,104 | |||||||||||||
Income tax expense (benefit) | 6,065 | (185 | ) | (1,235 | ) | — | 4,645 | |||||||||||||
Net income (loss) | $ | 6,459 | $ | (5,386 | ) | $ | (2,710 | ) | $ | 8,096 | $ | 6,459 | ||||||||
Components of other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustments | 703 | — | 703 | (703 | ) | 703 | ||||||||||||||
Comprehensive income (loss) | $ | 7,162 | $ | (5,386 | ) | $ | (2,007 | ) | $ | 7,393 | $ | 7,162 |
CEC Entertainment, Inc. | ||||||||||||||||||||
Consolidating Statement of Cash Flows | ||||||||||||||||||||
For the Nine Months Ended October 1, 2017 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Issuer | Guarantors | Non-Guarantors | Eliminations | Consolidated | ||||||||||||||||
Cash flows provided by operating activities: | $ | 68,568 | $ | 24,632 | $ | 1,040 | $ | — | $ | 94,240 | ||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchases of property and equipment | (49,735 | ) | (21,407 | ) | (768 | ) | — | (71,910 | ) | |||||||||||
Development of internal use software | — | (2,520 | ) | — | — | (2,520 | ) | |||||||||||||
Proceeds from sale of property and equipment | 424 | — | — | — | 424 | |||||||||||||||
Cash flows provided by (used in) investing activities | (49,311 | ) | (23,927 | ) | (768 | ) | — | (74,006 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Repayments on senior term loan | (5,700 | ) | — | — | — | (5,700 | ) | |||||||||||||
Repayments on note payable | — | (13 | ) | — | — | (13 | ) | |||||||||||||
Proceeds from sale-leaseback transaction | 4,073 | — | — | — | 4,073 | |||||||||||||||
Payments on capital lease obligations | (335 | ) | — | (5 | ) | — | (340 | ) | ||||||||||||
Payments on sale leaseback transactions | (1,789 | ) | — | — | — | (1,789 | ) | |||||||||||||
Return of capital | 1,447 | — | — | — | 1,447 | |||||||||||||||
Cash flows provided by (used in) financing activities | (2,304 | ) | (13 | ) | (5 | ) | — | (2,322 | ) | |||||||||||
Effect of foreign exchange rate changes on cash | — | — | 492 | — | 492 | |||||||||||||||
Change in cash and cash equivalents | 16,953 | 692 | 759 | — | 18,404 | |||||||||||||||
Cash and cash equivalents at beginning of period | 53,088 | 1,158 | 6,777 | — | 61,023 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 70,041 | $ | 1,850 | $ | 7,536 | $ | — | $ | 79,427 |
CEC Entertainment, Inc. | ||||||||||||||||||||||||
Consolidating Statement of Cash Flows | ||||||||||||||||||||||||
For the Nine Months Ended October 2, 2016 | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Issuer | Guarantors | Non-Guarantors | Eliminations | Consolidated | ||||||||||||||||||||
Cash flows provided by (used in) operating activities: | $ | 93,340 | $ | 17,674 | $ | 240 | $ | — | $ | 111,254 | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Purchases of property and equipment | (50,823 | ) | (15,506 | ) | (206 | ) | — | (66,535 | ) | |||||||||||||||
Development of internal use software | (6,004 | ) | (2,784 | ) | — | — | (8,788 | ) | ||||||||||||||||
Proceeds from the sale of property and equipment | 426 | — | — | — | 426 | |||||||||||||||||||
Cash flows provided by (used in) investing activities | (56,401 | ) | — | (18,290 | ) | — | (206 | ) | — | — | — | (74,897 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Repayments on senior term loan | (5,700 | ) | — | — | — | (5,700 | ) | |||||||||||||||||
Repayments on note payable | — | (37 | ) | — | — | (37 | ) | |||||||||||||||||
Payments on capital lease obligations | (308 | ) | — | (3 | ) | — | (311 | ) | ||||||||||||||||
Payments on sale leaseback transactions | (1,466 | ) | — | — | — | (1,466 | ) | |||||||||||||||||
Excess tax benefit realized from stock-based compensation | 4 | — | — | — | 4 | |||||||||||||||||||
Cash flows provided by (used in) financing activities | (7,470 | ) | — | (37 | ) | — | (3 | ) | — | — | — | (7,510 | ) | |||||||||||
Effect of foreign exchange rate changes on cash | — | — | 356 | — | 356 | |||||||||||||||||||
Change in cash and cash equivalents | 29,469 | — | (653 | ) | — | 387 | — | — | — | 29,203 | ||||||||||||||
Cash and cash equivalents at beginning of period | 42,235 | 1,797 | 6,622 | — | 50,654 | |||||||||||||||||||
Cash and cash equivalents at end of period | $ | 71,704 | $ | 1,144 | $ | 7,009 | $ | — | $ | 79,857 |
• | Presentation of Operating Results; |
• | Executive Summary; |
• | Key Measure of Our Financial Performance and Key Non-GAAP Measure; |
• | Key Income Statement Line Item Descriptions; |
• | Results of Operations; |
• | Financial Condition, Liquidity and Capital Resources; |
• | Off-Balance Sheet Arrangements and Contractual Obligations; |
• | Critical Accounting Policies and Estimates; |
• | Recently Issued Accounting Guidance; |
• | Non-GAAP Financial Measures; and |
• | Cautionary Statement Regarding Forward-Looking Statements. |
Three Months Ended | Nine Months Ended | |||||||||||
October 1, 2017 | October 2, 2016 | October 1, 2017 | October 2, 2016 | |||||||||
Number of Company-owned venues: | ||||||||||||
Beginning of period | 564 | 556 | 559 | 556 | ||||||||
New | — | 3 | 3 | 4 | ||||||||
Acquired from franchisee | — | — | 2 | — | ||||||||
Closed | (2 | ) | (2 | ) | (2 | ) | (3 | ) | ||||
End of period | 562 | 557 | 562 | 557 | ||||||||
Number of franchised venues: | ||||||||||||
Beginning of period | 193 | 183 | 188 | 176 | ||||||||
New | — | 2 | 7 | 11 | ||||||||
Acquired from franchisee | — | — | (2 | ) | — | |||||||
Closed | (2 | ) | — | (2 | ) | (2 | ) | |||||
End of period | 191 | 185 | 191 | 185 | ||||||||
Total number of venues: | ||||||||||||
Beginning of period | 757 | 739 | 747 | 732 | ||||||||
New | — | 5 | 10 | 15 | ||||||||
Acquired from franchisee | — | — | — | — | ||||||||
Closed | (4 | ) | (2 | ) | (4 | ) | (5 | ) | ||||
End of period | 753 | 742 | 753 | 742 |
• | 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 guests; |
• | Labor expenses consist of salaries and wages, bonuses, related payroll taxes and benefits for venue personnel; |
• | Depreciation and amortization includes expenses that are directly related to our Company-operated venues’ property and equipment, including leasehold improvements, game and ride equipment, furniture, fixtures and other equipment; |
• | Rent expense includes lease costs for Company-operated venues, excluding common occupancy costs (e.g., common area maintenance (“CAM”) charges and property taxes); and |
• | Other venue operating expenses primarily include utilities, repair and maintenance costs, liability and property insurance, CAM charges, property taxes, credit card processing fees, licenses, preopening expenses, venue asset disposal gains and losses and all other costs directly related to the operation of a venue. |
Three Months Ended | ||||||||||||||
October 1, 2017 | October 2, 2016 | |||||||||||||
(in thousands, except percentages) | ||||||||||||||
Food and beverage sales | $ | 98,255 | 47.0 | % | $ | 101,984 | 45.6 | % | ||||||
Entertainment and merchandise sales | 110,633 | 53.0 | % | 121,764 | 54.4 | % | ||||||||
Total company venue sales | $ | 208,888 | 100.0 | % | $ | 223,748 | 100.0 | % |
Nine Months Ended | ||||||||||||||
October 1, 2017 | October 2, 2016 | |||||||||||||
(in thousands, except percentages) | ||||||||||||||
Food and beverage sales | $ | 320,085 | 47.3 | % | $ | 321,591 | 45.6 | % | ||||||
Entertainment and merchandise sales | 356,274 | 52.7 | % | 383,978 | 54.4 | % | ||||||||
Total company venue sales | $ | 676,359 | 100.0 | % | $ | 705,569 | 100.0 | % |
Three Months Ended | ||||||||||||||
October 1, 2017 | October 2, 2016 | |||||||||||||
(in thousands, except percentages) | ||||||||||||||
Total company venue sales | $ | 208,888 | 97.9 | % | $ | 223,748 | 98.1 | % | ||||||
Franchise fees and royalties | 4,459 | 2.1 | % | 4,322 | 1.9 | % | ||||||||
Total revenues | 213,347 | 100.0 | % | 228,070 | 100.0 | % | ||||||||
Company venue operating costs: | ||||||||||||||
Cost of food and beverage (1) | 23,974 | 24.4 | % | 25,507 | 25.0 | % | ||||||||
Cost of entertainment and merchandise (2) | 7,430 | 6.7 | % | 8,014 | 6.6 | % | ||||||||
Total cost of food, beverage, entertainment and merchandise (3) | 31,404 | 15.0 | % | 33,521 | 15.0 | % | ||||||||
Labor expenses (3) | 61,220 | 29.3 | % | 61,721 | 27.6 | % | ||||||||
Depreciation and amortization (3) | 25,289 | 12.1 | % | 27,667 | 12.4 | % | ||||||||
Rent expense (3) | 24,259 | 11.6 | % | 24,120 | 10.8 | % | ||||||||
Other venue operating expenses (3) | 40,561 | 19.4 | % | 38,757 | 17.3 | % | ||||||||
Total company venue operating costs (3) | 182,733 | 87.5 | % | 185,786 | 83.0 | % | ||||||||
Other costs and expenses: | ||||||||||||||
Advertising expense | 12,083 | 5.7 | % | 11,515 | 5.0 | % | ||||||||
General and administrative expenses | 15,422 | 7.2 | % | 17,284 | 7.6 | % | ||||||||
Transaction, severance and related litigation costs | 128 | 0.1 | % | 166 | 0.1 | % | ||||||||
Asset impairments | 1,843 | 0.9 | % | 772 | 0.3 | % | ||||||||
Total operating costs and expenses | 212,209 | 99.5 | % | 215,523 | 94.5 | % | ||||||||
Operating income | 1,138 | 0.5 | % | 12,547 | 5.5 | % | ||||||||
Interest expense | 17,451 | 8.2 | % | 17,237 | 7.6 | % | ||||||||
Loss before income taxes | $ | (16,313 | ) | (7.6 | )% | $ | (4,690 | ) | (2.1 | )% |
(1) | Percent amount expressed as a percentage of Food and beverage sales. |
(2) | Percent amount expressed as a percentage of Entertainment and merchandise sales. |
(3) | Percent amount expressed as a percentage of Total company venue sales. |
(4) | Due to rounding, percentages presented in the table above may not sum to total. The percentage amounts for the components of Cost of food and beverage and the Cost of entertainment and merchandise may not sum to total due to the fact that Cost of food and beverage and Cost of entertainment and merchandise are expressed as a percentage of related Food and beverage sales and Entertainment and merchandise sales, as opposed to Total company venue sales. |
Nine Months Ended | ||||||||||||||
October 1, 2017 | October 2, 2016 | |||||||||||||
(in thousands, except percentages) | ||||||||||||||
Total company venue sales | $ | 676,359 | 98.0 | % | $ | 705,569 | 98.1 | % | ||||||
Franchise fees and royalties | 13,731 | 2.0 | % | 13,440 | 1.9 | % | ||||||||
Total revenues | 690,090 | 100.0 | % | 719,009 | 100.0 | % | ||||||||
Company venue operating costs: | ||||||||||||||
Cost of food and beverage (1) | 75,014 | 23.4 | % | 80,702 | 25.1 | % | ||||||||
Cost of entertainment and merchandise (2) | 22,771 | 6.4 | % | 25,004 | 6.5 | % | ||||||||
Total cost of food, beverage, entertainment and merchandise (3) | 97,785 | 14.5 | % | 105,706 | 15.0 | % | ||||||||
Labor expenses (3) | 187,958 | 27.8 | % | 191,170 | 27.1 | % | ||||||||
Depreciation and amortization (3) | 77,492 | 11.5 | % | 85,029 | 12.1 | % | ||||||||
Rent expense (3) | 71,484 | 10.6 | % | 72,318 | 10.2 | % | ||||||||
Other venue operating expenses (3) | 113,277 | 16.7 | % | 112,143 | 15.9 | % | ||||||||
Total company venue operating costs (3) | 547,996 | 81.0 | % | 566,366 | 80.3 | % | ||||||||
Other costs and expenses: | ||||||||||||||
Advertising expense | 37,702 | 5.5 | % | 36,777 | 5.1 | % | ||||||||
General and administrative expenses | 48,237 | 7.0 | % | 51,222 | 7.1 | % | ||||||||
Transaction, severance and related litigation costs | 698 | 0.1 | % | 1,349 | 0.2 | % | ||||||||
Asset impairments | 1,843 | 0.3 | % | 772 | 0.1 | % | ||||||||
Total operating costs and expenses | 636,476 | 92.2 | % | 656,486 | 91.3 | % | ||||||||
Operating income | 53,614 | 7.8 | % | 62,523 | 8.7 | % | ||||||||
Interest expense | 51,574 | 7.5 | % | 51,419 | 7.2 | % | ||||||||
Income before income taxes | $ | 2,040 | 0.3 | % | $ | 11,104 | 1.5 | % |
(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 Total company venue sales. |
(4) | Due to rounding, percentages presented in the table above may not sum to total. The percentage amounts for the components of Cost of food and beverage and the Cost of entertainment and merchandise may not sum to total due to the fact that Cost of food and beverage and Cost of entertainment and merchandise are expressed as a percentage of related Food and beverage sales and Entertainment and merchandise sales, as opposed to Total company venue sales. |
• | our venue guests 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 become due; |
• | frequent inventory turnover results in a limited investment required in inventories; and |
• | our accounts payable are generally due within five to 30 days. |
Nine Months Ended | ||||||||
October 1, 2017 | October 2, 2016 | |||||||
(in thousands) | ||||||||
Net cash provided by operating activities | $ | 94,240 | $ | 111,254 | ||||
Net cash used in investing activities | (74,006 | ) | (74,897 | ) | ||||
Net cash used in financing activities | (2,322 | ) | (7,510 | ) | ||||
Effect of foreign exchange rate changes on cash | 492 | 356 | ||||||
Change in cash and cash equivalents | $ | 18,404 | $ | 29,203 | ||||
Interest paid | $ | 53,076 | $ | 53,971 | ||||
Income taxes paid, net | $ | 6,635 | $ | 9,569 |
October 1, 2017 | January 1, 2017 | |||||||
(in thousands) | ||||||||
Cash and cash equivalents | $ | 79,427 | $ | 61,023 | ||||
Restricted cash | $ | 219 | $ | 268 | ||||
Term loan facility | $ | 733,400 | $ | 739,100 | ||||
Senior notes | $ | 255,000 | $ | 255,000 | ||||
Note payable | $ | — | $ | 13 | ||||
Available unused commitments under revolving credit facility | $ | 140,100 | $ | 140,100 |
Nine Months Ended | ||||||||
October 1, 2017 | October 2, 2016 | |||||||
(in thousands) | ||||||||
Growth capital spend (1) | $ | 42,960 | $ | 37,734 | ||||
Maintenance capital spend (2) | 26,104 | 29,018 | ||||||
IT capital spend | 5,363 | 8,571 | ||||||
Total Capital Spend | $ | 74,427 | $ | 75,323 |
(1) | Growth capital spend includes major remodels, venue expansions, our PlayPass initiative and new venue development, including relocations and franchise acquisitions. |
Three Months Ended | Nine Months Ended | |||||||||||||||
October 1, 2017 | October 2, 2016 | October 1, 2017 | October 2, 2016 | |||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Total revenues | $ | 213,347 | $ | 228,070 | $ | 690,090 | $ | 719,009 | ||||||||
Net income (loss) as reported | $ | (11,092 | ) | $ | (2,404 | ) | $ | 200 | $ | 6,459 | ||||||
Interest expense | 17,451 | 17,237 | 51,574 | 51,419 | ||||||||||||
Income tax expense (benefit) | (5,221 | ) | (2,286 | ) | 1,840 | 4,645 | ||||||||||
Depreciation and amortization | 27,136 | 29,886 | 83,064 | 90,167 | ||||||||||||
Asset Impairments | 1,843 | 772 | 1,843 | 772 | ||||||||||||
Loss on asset disposals, net (1) | 1,741 | 2,225 | 5,457 | 6,298 | ||||||||||||
Non-cash stock-based compensation (2) | 184 | 185 | 520 | 522 | ||||||||||||
Rent expense book to cash (3) | 1,192 | 1,635 | 4,028 | 6,478 | ||||||||||||
Franchise revenue, net cash received (4) | — | (35 | ) | (344 | ) | 127 | ||||||||||
Impact of purchase accounting (5) | — | 171 | 785 | 725 | ||||||||||||
Venue pre-opening costs (6) | 155 | 572 | 643 | 888 | ||||||||||||
One-time and unusual items (7) | 1,167 | 1,583 | 4,379 | 4,459 | ||||||||||||
Cost savings initiatives (8) | — | — | — | 62 | ||||||||||||
Change in deferred amusement revenue (9) | 3,568 | 1,674 | 7,937 | 2,265 | ||||||||||||
Adjusted EBITDA | $ | 38,124 | $ | 51,215 | $ | 161,926 | $ | 175,286 | ||||||||
Adjusted EBITDA Margin | 17.9 | % | 22.5 | % | 23.5 | % | 24.4 | % |
(1) | Relates primarily to gains or losses upon disposal of property or equipment. |
(2) | Represents non-cash equity-based compensation expense. |
(3) | Represents (i) the removal of the non-cash portion of rent expense relating to the impact of straight-line rent and the amortization of cash incentives and allowances received from landlords, plus (ii) the actual cash received from landlords incentives and allowances in the period in which it was received. |
(4) | Represents the actual cash received for franchise fees received in the period for post-acquisition franchise development agreements, which are not recorded as revenue until the franchise venue is opened, less the actual revenue recognized with respect to these franchise development agreements at the time the franchise venue 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 venues and generally consists of payroll, recruiting, training, supplies and rent incurred prior to venue opening. |
(7) | Represents non-recurring income and expenses primarily related to (i) legal fees, claims and settlements related to litigation in respect of the Merger; (ii) severance expense and executive termination benefits; (iii) legal claims and settlements related to employee class action lawsuits and settlements; (iv) one-time costs incurred in connection with the relocation of our corporate offices; (v) sales and use tax refunds relating to prior periods; (vi) professional fees incurred in connection with one-time strategic corporate and tax initiatives, such as accounting and consulting fees incurred to enhance transfer pricing and to implement PlayPass, and initial fees incurred in connection with the overseas outsourcing of our accounts payable and payroll functions; (vii) removing current period property losses and insurance recoveries relating to prior period business interruption losses at certain venues, primarily relating to disaster recoveries, such as natural disasters, fires, floods and property damage; and (viii) one-time training and travel-related costs incurred in connection with training venue employees in connection with the implementation of our PlayPass initiative that we began in 2016. |
(8) | Relates to estimated net cost savings primarily from estimated cost savings associated with the full-year effect of costs savings associated with upgrades to our IT and telephone communication systems. |
(9) | Represents the change in deferred revenue estimates related to unused game play credits on PlayPass cards. The deferred revenue liability is building due to the PlayPass implementation as the shift in our business model is impacting revenue recognition. Once PlayPass is fully deployed, the liability will fluctuate in proportion to entertainment and merchandise revenue thereafter. |
• | our strategy, outlook and growth prospects; |
• | our operational and financial targets and dividend policy; |
• | our planned expansion of the venue base and the implementation of the new design in our existing venues; |
• | general economic trends and trends in the industry and markets; and |
• | the competitive environment in which we operate. |
• | negative publicity concerning food quality, health, general safety and other issues, and changes in consumer preferences; |
• | our ability to successfully expand and update our current venue base; |
• | our ability to successfully implement our marketing strategy; |
• | our ability to compete effectively in an environment of intense competition in both the restaurant and entertainment industries; |
• | our ability to weather economic uncertainty and changes in discretionary spending; |
• | increases in food, labor and other operating costs; |
• | our ability to successfully open international franchises and to operate under the U.S. and foreign anti-corruption laws that govern those international ventures; |
• | risks related to our substantial indebtedness; |
• | failure of our information technology systems to support our current and growing business; |
• | disruptions to our commodity distribution system; |
• | our dependence on third-party vendors to provide us with sufficient quantities of new entertainment-related equipment, prizes and merchandise at acceptable prices; |
• | risks from product liability claims and product recalls; |
• | the impact of governmental laws and regulations and the outcomes of legal proceedings; |
• | potential liability under certain state property laws; |
• | fluctuations in our financials due to new venue openings; |
• | local conditions, natural disasters, terrorist attacks and other events and public health issues; |
• | the seasonality of our business; |
• | inadequate insurance coverage; |
• | labor shortages and immigration reform; |
• | loss of certain personnel; |
• | our ability to protect our trademarks or other proprietary rights; |
• | risks associated with owning and leasing real estate, as well as the risks from any forced venue relocaton or closure; |
• | our ability to successfully integrate the operations of companies we acquire; |
• | impairment charges for goodwill, indefinite-lived intangible assets or other long-lived assets; |
• | our failure to maintain adequate internal controls over our financial and management systems; and |
• | other risks, uncertainties and factors set forth in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 1, 2017, filed with the SEC on March 16, 2017. |
Exhibit Number | Description | |
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 |
CEC ENTERTAINMENT, INC. | ||||
November 13, 2017 | By: | /s/ Dale R. Black | ||
Dale R. Black | ||||
Executive Vice President and Chief Financial Officer | ||||
(Principal Financial Officer) | ||||
November 13, 2017 | /s/ Laurie E. Priest | |||
Laurie E. Priest | ||||
Vice President, Controller | ||||
(Principal Accounting Officer) |
Exhibit Number | Description | |
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 |
1. | I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2017 of CEC Entertainment, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
November 13, 2017 | /s/ Thomas Leverton | |
Thomas Leverton | ||
Chief Executive Officer and Director |
1. | I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended October 1, 2017 of CEC Entertainment, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
November 13, 2017 | /s/ Dale R. Black | |
Dale R. Black | ||
Executive Vice President, Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
November 13, 2017 | /s/ Thomas Leverton | |
Thomas Leverton | ||
Chief Executive Officer and Director |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
November 13, 2017 | /s/ Dale R. Black | |
Dale R. Black | ||
Executive Vice President, Chief Financial Officer |
Document and Entity Information |
9 Months Ended |
---|---|
Oct. 01, 2017
State
shares
| |
Entity Information [Line Items] | |
Number of States in which Entity Operates | State | 47 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Oct. 01, 2017 |
Document Fiscal Year Focus | 2017 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | CEC |
Entity Registrant Name | CEC ENTERTAINMENT INC |
Entity Central Index Key | 0000813920 |
Current Fiscal Year End Date | --01-01 |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | shares | 200 |
Consolidated Statements of Earnings - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
|
REVENUES: | ||||
Food and beverage sales | $ 98,255,000 | $ 101,984,000 | $ 320,085,000 | $ 321,591,000 |
Entertainment and merchandise sales | 110,633,000 | 121,764,000 | 356,274,000 | 383,978,000 |
Total company store sales | 208,888,000 | 223,748,000 | 676,359,000 | 705,569,000 |
Franchise fees and royalties | 4,459,000 | 4,322,000 | 13,731,000 | 13,440,000 |
Total revenues | 213,347,000 | 228,070,000 | 690,090,000 | 719,009,000 |
Company store operating costs: | ||||
Cost of food and beverage (exclusive of items shown separately below) | 23,974,000 | 25,507,000 | 75,014,000 | 80,702,000 |
Cost of entertainment and merchandise (exclusive of items shown separately below) | 7,430,000 | 8,014,000 | 22,771,000 | 25,004,000 |
Total cost of food, beverage, entertainment and merchandise | 31,404,000 | 33,521,000 | 97,785,000 | 105,706,000 |
Labor expenses | 61,220,000 | 61,721,000 | 187,958,000 | 191,170,000 |
Depreciation and amortization | 25,289,000 | 27,667,000 | 77,492,000 | 85,029,000 |
Rent expense | 24,259,000 | 24,120,000 | 71,484,000 | 72,318,000 |
Other store operating expenses | 40,561,000 | 38,757,000 | 113,277,000 | 112,143,000 |
Total company store operating costs | 182,733,000 | 185,786,000 | 547,996,000 | 566,366,000 |
Other costs and expenses: | ||||
Advertising expense | 12,083,000 | 11,515,000 | 37,702,000 | 36,777,000 |
General and administrative expenses | 15,422,000 | 17,284,000 | 48,237,000 | 51,222,000 |
Transaction and severance costs | 128,000 | 166,000 | 698,000 | 1,349,000 |
Asset impairments | 1,843,000 | 772,000 | 1,843,000 | 772,000 |
Total operating costs and expenses | 212,209,000 | 215,523,000 | 636,476,000 | 656,486,000 |
Operating income (loss) | 1,138,000 | 12,547,000 | 53,614,000 | 62,523,000 |
Interest Income (Expense), Net | 17,451,000 | 17,237,000 | 51,574,000 | 51,419,000 |
Income (loss) before income taxes | (16,313,000) | (4,690,000) | 2,040,000 | 11,104,000 |
Income tax expense (benefit) | (5,221,000) | (2,286,000) | 1,840,000 | 4,645,000 |
Net income (loss) | (11,092,000) | (2,404,000) | 200,000 | 6,459,000 |
Weighted average common shares outstanding: | ||||
Comprehensive income (loss) | (10,444,000) | (2,616,000) | 1,387,000 | 7,162,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | $ 648,000 | $ (212,000) | 1,187,000 | $ 703,000 |
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | 1,187,000 | |||
Retained Earnings [Member] | ||||
Other costs and expenses: | ||||
Net income (loss) | $ 200,000 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
|
Net income (loss) | $ (11,092) | $ (2,404) | $ 200 | $ 6,459 |
Components of other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 648 | (212) | 1,187 | 703 |
Total components of other comprehensive income (loss), net of tax | 1,187 | |||
Comprehensive income (loss) | $ (10,444) | $ (2,616) | 1,387 | $ 7,162 |
Retained Earnings [Member] | ||||
Net income (loss) | $ 200 |
Description of Business and Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Oct. 01, 2017 | |
Accounting Policies [Abstract] | |
Description of Business and Summary of Significant Accounting Policies: | Description of Business and Summary of Significant Accounting Policies: Description of Business The use of the terms “CEC Entertainment,” the “Company,” “we,” “us” and “our” throughout these unaudited notes to the interim Consolidated Financial Statements refer to CEC Entertainment, Inc. and its subsidiaries. We currently operate and franchise Chuck E. Cheese’s and Peter Piper Pizza family dining and entertainment venues in a total of 47 states and 13 foreign countries and territories. Our venues provide our guests with a variety of family entertainment and dining alternatives. All of our venues utilize a consistent restaurant-entertainment format that features both family dining and entertainment areas with a mix of food, entertainment and merchandise. The economic characteristics, products and services, preparation processes, distribution methods and types of customers are substantially similar for each of our venues. Therefore, we aggregate each venue’s operating performance into one reportable segment for financial reporting purposes. Basis of Presentation The Company has a controlling financial interest in International Association of CEC Entertainment, Inc. (the “Association”), a variable interest entity (“VIE”). The Association primarily administers the collection and disbursement of funds (the “Association Funds”) used for advertising, entertainment and media programs that benefit both us and our Chuck E. Cheese’s franchisees. We and our franchisees are required to contribute a percentage of gross sales to these funds and could be required to make additional contributions to fund any deficits that may be incurred by the Association. We include the Association in our Consolidated Financial Statements, as we concluded that we are the primary beneficiary of its variable interests because we (a) have the power to direct the majority of its significant operating activities; (b) provide it unsecured lines of credit; and (c) own the majority of the venues that benefit from the Association’s advertising, entertainment and media expenditures. The assets, liabilities and operating results of the Association are not material to our Consolidated Financial Statements. Because the Association Funds are required to be segregated and used for specified purposes, we do not reflect franchisee contributions to the Association Funds as revenue, but rather record franchisee contributions as an offset to reported advertising expenses. Our contributions to the Association Funds are eliminated in consolidation. Contributions to the advertising, entertainment and media funds from our franchisees were $1.7 million for both the nine months ended October 1, 2017 and October 2, 2016, respectively. Cash balances held by the Association are restricted for use in our advertising, entertainment and media programs, and are recorded as “Restricted cash” on our Consolidated Balance Sheets. The preparation of these unaudited Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Interim Financial Statements The accompanying Consolidated Financial Statements as of and for the three and nine months ended October 1, 2017 and October 2, 2016 are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and, consequently, do not include all of the information and footnote disclosures required by GAAP. In the opinion of management, the Consolidated Financial Statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of its consolidated results of operations, financial position and cash flows as of the dates and for the periods presented in accordance with GAAP and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). All intercompany accounts have been eliminated in consolidation. Consolidated results of operations for interim periods are not necessarily indicative of results for the full year. The unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 1, 2017, filed with the SEC on March 16, 2017. |
Property and Equipment |
9 Months Ended |
---|---|
Oct. 01, 2017 | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment | Total depreciation and amortization expense was $83.1 million and $90.2 million for the nine months ended October 1, 2017 and October 2, 2016, respectively, of which $5.6 million and $5.1 million, respectively, was included in “General and administrative expenses” in our Consolidated Statements of Earnings. Total depreciation and amortization expense was $27.1 million and $29.9 million for the three months ended October 1, 2017 and October 2, 2016, respectively, of which $1.8 million and $2.2 million, respectively, was included in “General and administrative expenses” in our Consolidated Statements of Earnings. |
Goodwill and Intangible Assets |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Net | Intangible Assets, Net: The following table presents our indefinite and definite-lived intangible assets at October 1, 2017:
__________________
Amortization expense related to favorable lease agreements was $0.4 million and $0.5 million for the three months ended October 1, 2017 and October 2, 2016, respectively, and $1.3 million and $1.5 million for the nine months ended October 1, 2017 and October 2, 2016, respectively, and is included in “Rent expense” in our Consolidated Statements of Earnings. Amortization expense related to franchise agreements was $0.5 million for both the three months ended October 1, 2017 and October 2, 2016, respectively, and $1.5 million for both the nine months ended October 1, 2017 and October 2, 2016, respectively, and is included in “General and administrative expenses” in our Consolidated Statements of Earnings. |
Accounts Payable (Notes) |
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Accounts Payable and Accrued Liabilities Disclosure [Text Block] | Accounts payable consisted of the following as of the dates presented:
The book overdraft balance represents checks issued but not yet presented to banks. |
Indebtedness and Interest Expense |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indebtedness and Interest Expense | Indebtedness and Interest Expense: Our long-term debt consisted of the following as of the dates presented:
We were in compliance with the debt covenants in effect as of October 1, 2017 for both the secured credit facilities and the senior notes. For further discussion regarding the debt covenants, see Secured Credit Facilities and Senior Unsecured Notes sections below. Secured Credit Facilities Our secured credit facilities include (i) a $760.0 million term loan facility with a maturity date of February 14, 2021 (the “term loan facility”) and (ii) a $150.0 million senior secured revolving credit facility with a maturity date of February 14, 2019, which includes a letter of credit sub-facility and a $30.0 million swingline loan sub-facility (the “revolving credit facility” and together with the term loan facility, the “secured credit facilities”). The secured credit facilities require scheduled quarterly payments on the term loan facility equal to 0.25% of the original principal amount of the term loan facility from July 2014 to December 2020, with the remaining balance paid at maturity, February 14, 2021. As of October 1, 2017 and January 1, 2017, we had no borrowings outstanding and $9.9 million of letters of credit issued but undrawn under the revolving credit facility. The term loan was issued net of $3.8 million of original issue discount. We also paid $17.8 million and $3.4 million in debt financing costs related to the term loan facility and revolving credit facility, respectively, which we capitalized in “Bank indebtedness and other long-term debt, net of deferred financing costs” on our Consolidated Balance Sheets. The original issue discount and deferred financing costs are amortized over the lives of the facilities and are included in “Interest expense” on our Consolidated Statements of Earnings. Borrowings under the secured credit facilities bear interest at a rate equal to, at our option, either (a) a London Interbank Offered Rate (“LIBOR”) determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowings, adjusted for certain additional costs, subject to a 1.00% floor in the case of term loans or (b) a base rate determined by reference to the highest of (i) the federal funds effective rate plus 0.50%; (ii) the prime rate of Deutsche Bank AG New York Branch; and (iii) the one-month adjusted LIBOR plus 1.00%, in each case plus an applicable margin. The base applicable margin is 3.25% with respect to LIBOR borrowings and 2.25% with respect to base rate borrowings under the term loan facility and base rate borrowings and swingline borrowings under the revolving credit facility. The applicable margin for LIBOR borrowings under the term loan facility was subject to one step-down from 3.25% to 3.00% based on our net first lien senior secured leverage ratio and the applicable margin for LIBOR borrowings under the revolving credit facility was subject to two step-downs from 3.25% to 3.00% and 2.75% based on our net first lien senior secured leverage ratio. Effective March 4, 2016, the applicable margin for both our term loan facility and revolving credit facilities stepped down to 3.0%. During the fourth quarter of 2017, the applicable margin for LIBOR borrowings under both the term loan facility and the revolving credit facility will return to their previous level of 3.25%. During the nine months ended October 1, 2017, the federal funds rate ranged from 0.55% to 1.16%, the prime rate ranged from 3.75% to 4.25% and the one-month LIBOR ranged from 0.76% to 1.24% . The weighted average effective interest rate incurred on our borrowings under our secured credit facilities was 4.7% and 4.6% for the nine months ended October 1, 2017 and October 2, 2016, respectively, which includes amortization of debt issuance costs related to our secured credit facilities, amortization of our term loan facility original issue discount and commitment and other fees related to our secured credit facilities. In addition to paying interest on outstanding principal under the secured credit facilities, we are required to pay a commitment fee to the lenders under the revolving credit facility with respect to the unutilized commitments thereunder. The base applicable commitment fee rate under the revolving credit facility was 0.50% per annum and was subject to one step-down from 0.50% to 0.375% based on our net first lien senior secured leverage ratio. Effective March 4, 2016, the commitment fee rate stepped down to 0.375%. During the fourth quarter of 2017, the commitment fee rate will return to it previous level of 0.50%. We are also required to pay customary agency fees, as well as letter of credit participation fees computed at a rate per annum equal to the applicable margin for LIBOR rate borrowings on the dollar equivalent of the daily stated amount of outstanding letters of credit, plus such letter of credit issuer’s customary documentary and processing fees and charges and a fronting fee computed at a rate equal to 0.125% per annum on the daily stated amount of such letter of credit. All obligations under the secured credit facilities are unconditionally guaranteed by our Parent on a limited-recourse basis and each of our existing and future direct and indirect material, wholly-owned domestic subsidiaries, subject to certain exceptions. The obligations are secured by a pledge of our capital stock and substantially all of our assets and those of each subsidiary guarantor, including capital stock of the subsidiary guarantors and 65% of the capital stock of the first-tier foreign subsidiaries that are not subsidiary guarantors, in each case subject to exceptions. Such security interests consist of first priority liens with respect to the collateral. The secured credit facilities also contain customary affirmative and negative covenants, and events of default, which limit our ability to, among other things: incur additional debt or issue certain preferred shares; create liens on certain assets; make certain loans or investments (including acquisitions); pay dividends on or make distributions with respect to our capital stock or make other restricted payments; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; sell assets; enter into certain transactions with our affiliates; enter into sale-leaseback transactions; change our lines of business; restrict dividends from our subsidiaries or restrict liens; change our fiscal year; and modify the terms of certain debt or organizational agreements. Our revolving credit facility includes a springing financial maintenance covenant that requires our net first lien senior secured leverage ratio not to exceed 6.25 to 1.00 (the ratio of consolidated net debt secured by first-priority liens on the collateral to the last twelve months’ EBITDA, as defined in the senior credit facilities). The covenant will be tested quarterly if the revolving credit facility is more than 30% drawn (excluding outstanding letters of credit) and will be a condition to drawings under the revolving credit facility that would result in more than 30% drawn thereunder. Senior Unsecured Debt Our senior unsecured debt consists of $255.0 million aggregate principal amount borrowings of 8.000% Senior Notes due 2022 (the “senior notes”). The senior notes bear interest at a rate 8.000% per year and mature on February 15, 2022. We may redeem some or all of the senior notes at certain redemption prices set forth in the indenture governing the senior notes (the “indenture”). We paid $6.4 million in debt issuance costs related to the senior notes, which we capitalized in “Bank indebtedness and other long-term debt, net of deferred financing costs” on our Consolidated Balance Sheets. The deferred financing costs are being amortized over the life of the senior notes and are included in “Interest expense” on our Consolidated Statements of Earnings. Our obligations under the senior notes are fully and unconditionally guaranteed, jointly and severally, by our present and future direct and indirect wholly-owned material domestic subsidiaries that guarantee our secured credit facilities. The indenture contains restrictive covenants that limit our ability to, among other things: (i) incur additional debt or issue certain preferred shares; (ii) create liens on certain assets; make certain loans or investments (including acquisitions); (iii) pay dividends on or make distributions in respect of our capital stock or make other restricted payments; (iv) consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; (v) sell assets; (vi) enter into certain transactions with our affiliates; and (vii) restrict dividends from our subsidiaries. The weighted average effective interest rate incurred on borrowings under our senior notes was 8.2% for the nine months ended October 1, 2017 and 8.3% for the nine months ended October 2, 2016, which included amortization of debt issuance costs and other fees related to our senior notes. Interest Expense Interest expense consisted of the following for the periods presented:
__________________ (1) Includes amortization of original issue discount. The weighted average effective interest rate incurred on our combined borrowings under our secured credit facilities and senior notes was 5.6% for both the nine months ended October 1, 2017 and October 2, 2016, respectively. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments: Fair value measurements of financial instruments are determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy) has been established. The following table presents information on our financial instruments as of the periods presented:
_________________ (1) Excluding net deferred financing costs. (2) Net of original issue discount. Our financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, our secured credit facilities and our senior notes. The carrying amount of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximates fair value because of their short maturities. The estimated fair value of our secured credit facilities, term loan facility and senior notes was determined by using the respective average of the ask and bid price of our outstanding borrowings under our term loan facility and the senior notes as of the nearest open market date preceding the reporting period end. The average of the ask and bid price are classified as Level 2 in the fair value hierarchy. Our non-financial assets, which include long-lived assets, including property, plant and equipment, goodwill and intangible assets, are reported at carrying value and are not required to be measured at fair value on a recurring basis. However, on a periodic basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, we assess our long-lived assets for impairment. During the nine months ended October 1, 2017 and October 2, 2016, there were no significant transfers among Level 1, 2 or 3 fair value determinations. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Legal Proceedings From time to time, we are involved in various inquiries, investigations, claims, lawsuits and other legal proceedings that are incidental to the conduct of our business. These matters typically involve claims from customers, employees or other third parties involved in operational issues common to the retail, restaurant and entertainment industries. Such matters typically represent actions with respect to contracts, intellectual property, taxation, employment, employee benefits, personal injuries and other matters. A number of such claims may exist at any given time, and there are currently a number of claims and legal proceedings pending against us. In the opinion of our management, after consultation with legal counsel, the amount of liability with respect to claims or proceedings currently pending against us is not expected to have a material effect on our consolidated financial condition, results of operations or cash flows. All necessary loss accruals based on the probability and estimate of loss have been recorded. Employment-Related Litigation: On October 10, 2014, former venue General Manager Richard Sinohui filed a purported class action lawsuit against CEC Entertainment in the Superior Court of California, Riverside County (the “Sinohui Litigation”), claiming to represent other similarly-situated current and former General Managers of CEC Entertainment in California during the period October 10, 2010 to the present. The lawsuit sought an unspecified amount in damages and to certify a class based on allegations that CEC Entertainment wrongfully classified current and former California General Managers as exempt from overtime protections; that such General Managers worked more than 40 hours a week without overtime premium pay, paid rest periods, and paid meal periods; and that CEC Entertainment failed to provide accurate itemized wage statements or to pay timely wages upon separation from employment, in violation of the California Labor Code, California Business and Professions Code, and the applicable Wage Order issued by the California Industrial Welfare Commission. The plaintiff also alleged that CEC Entertainment failed to reimburse General Managers for certain business expenses, including for personal cell phone usage and mileage, in violation of the California Labor Code; he also asserted a claim for civil penalties under the California Private Attorneys General Act (“PAGA”). On December 5, 2014, CEC Entertainment removed the Sinohui Litigation to the U.S. District Court for the Central District of California, Southern Division. On March 16, 2016, the Court issued an order denying in part and granting in part Plaintiff’s Motion for Class Certification. Specifically, the Court denied Plaintiff’s motion to the extent that he sought to certify a class on Plaintiff’s misclassification and wage statement claims, but certified a class with respect to Plaintiff’s claims that CEC Entertainment had wrongfully failed to reimburse him for cell phone expenses and/or mileage. On June 14, 2016, the Court dismissed Sinohui’s PAGA claim. After participating in mediation on April 19, 2017, the parties agreed to settle all of Sinohui’s individual and class claims. Pursuant to the basic terms of their settlement, Sinohui will grant a complete release to CEC Entertainment of all claims that he asserted or could have asserted against the Company, based on the facts that gave rise to the Sinohui Litigation, in exchange for the Company’s settlement payment. The parties presented their proposed class settlement to the Court for review and approval during the third quarter of 2017, and expect that the settlement will be concluded and the case dismissed by the end of the first quarter of 2018. The settlement of this action will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. After the Court in the Sinohui Litigation issued its order denying certification of a class of California-based general managers on misclassification and wage statement claims, six lawsuits were filed against the Company in California state court (the “California General Manager Litigation”). The plaintiffs in these actions include nine current and 12 former California General Managers asserting individual misclassification, wage statement, and expense reimbursement claims. Between December 20, 2016 and April 21, 2017 the Company filed initial responses to each of the lawsuits and removed them all to Federal District Court. As part of the settlement reached by the parties in the Sinohui Litigation, described above, the parties also agreed to settle the California General Manager Litigation. Pursuant to the basic terms of their comprehensive settlement, each of the Plaintiffs will grant a complete release to CEC Entertainment of all claims that he or she asserted or could have asserted against the Company based on the facts that gave rise to the California General Manager Litigation in exchange for the Company’s settlement payments to each of them. The parties expect that the comprehensive settlement of these lawsuits will be concluded and each of these cases dismissed by the end of the first quarter of 2018. The settlement of these actions will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. On January 30, 2017, former Technical Manager Kevin French filed a purported class action lawsuit against the Company in the United States District Court for the Northern District of California, alleging that CEC Entertainment failed to pay overtime wages, failed to issue accurate itemized wage statements, failed to pay wages due upon separation of employment, and failed to reimburse for certain business expenses, including for mileage and personal cell phone usage, in violation of the California Labor Code and federal law. We believe the Company has meritorious defenses to this lawsuit and we intend to vigorously defend it. On October 30, 2017, the parties conducted a mediation. At the conclusion of the mediation,the parties agreed to settle all of French’s class and individual claims. The proposed class settlement must be presented to the Court for review and preliminary approval, and we expect that the settlement will be concluded and the case dismissed by the end of the second quarter of 2018. The settlement of this action will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. Litigation Related to the Merger: Following the January 16, 2014 announcement that CEC Entertainment had entered into an agreement (“Merger Agreement”), pursuant to which an entity controlled by Apollo Global Management, LLC and its subsidiaries merged with and into CEC Entertainment, with CEC Entertainment surviving the merger (“the Merger”), four putative shareholder class actions were filed in the District Court of Shawnee County, Kansas, on behalf of purported stockholders of CEC Entertainment, against A.P. VIII Queso Holdings, L.P., CEC Entertainment, CEC Entertainment's directors, Apollo and Merger Sub (as defined in the Merger Agreement), in connection with the Merger Agreement and the transactions contemplated thereby. These actions were consolidated into one action (the “Consolidated Shareholder Litigation”) in March 2014, and on July 21, 2015, a consolidated class action petition was filed as the operative consolidated complaint, asserting claims against CEC’s former directors, adding The Goldman Sachs Group (“Goldman Sachs”) as a defendant, and removing all Apollo entities as defendants (the “Consolidated Class Action Petition”). The Consolidated Class Action Petition alleges that CEC Entertainment’s directors breached their fiduciary duties to CEC Entertainment’s stockholders in connection with their consideration and approval of the Merger Agreement by, among other things, conducting a deficient sales process, agreeing to an inadequate tender price, agreeing to certain provisions in the Merger Agreement, and filing materially deficient disclosures regarding the transaction. The Consolidated Class Action Petition also alleges that two members of CEC Entertainment’s board who also served as the senior managers of CEC Entertainment had material conflicts of interest and that Goldman Sachs aided and abetted the board’s breaches as a result of various conflicts of interest facing the bank. The Consolidated Class Action Petition seeks, among other things, to recover damages, attorneys’ fees and costs. The Company assumed the defense of the Consolidated Shareholder Litigation on behalf of CEC’s named former directors and Goldman Sachs pursuant to existing indemnity agreements. On March 23, 2016, the Court conducted a hearing on the defendants’ Motion to Dismiss the Consolidated Class Action Petition and on March 1, 2017, the Special Master appointed by the Court issued a report recommending to the Court that the Consolidated Class Action Petition be dismissed in its entirety. On March 17, 2017, Plaintiffs filed objections to the Special Master’s report and recommendation with the Kansas court and separately filed a motion with the Special Master to amend the complaint as to Goldman Sachs. We currently await the Special Master’s decision on the Plaintiffs’ motion for leave to amend. The District Court has not yet set this case for trial. The Company continues to believe the Consolidated Class Action Petition is without merit and intends to defend it vigorously. While no assurance can be given as to the ultimate outcome of the consolidated matter, we currently believe that the final resolution of the action will not have a material adverse effect on our results of operations, financial position, liquidity or capital resources. Peter Piper, Inc. Litigation: On September 8, 2016, Diane Jacobson filed a purported class action lawsuit against Peter Piper, Inc. (“Peter Piper”) in the U.S. District Court for the District of Arizona, Tucson Division (the “Jacobson Litigation”). The plaintiff claims to represent other similarly-situated consumers who, within the two years prior to the filing of the Jacobson Litigation, received a printed receipt on which Peter Piper allegedly printed more than the last five digits of the consumer’s credit/debit card number, in violation of the Fair and Accurate Credit Transactions Act. On November 11, 2016, Peter Piper filed a motion to dismiss the Jacobson Litigation. After the plaintiff filed her opposition to the Motion to Dismiss and Peter Piper filed its reply in support thereof, the motion was submitted to the Court for ruling on December 22, 2016. On February 2, 2017, the Court stayed the Jacobson Litigation pending the decision of the U.S. Ninth Circuit Court of Appeals in Noble v. Nevada Check Cab Corp., a case that presents an issue for decision that is relevant to the Peter Piper’s motion to dismiss. We believe Peter Piper has meritorious defenses to this lawsuit and, should the Court overrule the motion to dismiss, we intend to vigorously defend it. Since the litigation is in its earliest stages, the Company does not yet have sufficient information to reach a good faith determination on Peter Piper’s potential liability or exposure in the event that its defense is unsuccessful. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes: | Income Taxes: Our income tax expense (benefit) consists of the following for the periods presented:
(1) Including foreign taxes withheld. Our effective income tax rate for the three and nine months ended October 1, 2017 differs from the statutory rate primarily due to the favorable impact of employment related federal income tax credits offset by the unfavorable impact of a true-up related to prior year’s estimate of employment related tax credits versus actuals, the negative impact of non-deductible litigation costs related to the Merger (see Note 12 “Consolidating Guarantor Financial Information” for a definition of the Merger), non-deductible Canadian interest expense, and unfavorable adjustments to our deferred tax liability resulting from changes to state income tax apportionment factors and rates. Our effective income tax rate for the three and nine months ended October 2, 2016 differs from the statutory rate primarily due to the favorable impact of employment related federal income tax credits, the impact in of a true-up to the prior year’s estimated tax provision versus actuals, offset by the negative impact of non-deductible litigation costs related to the Merger (see Note 12 “Consolidating Guarantor Financial Information” for a definition of the Merger), non-deductible Canadian interest expense, and an increase in the liability for uncertain tax positions. For the periods presented herein, we have used the year-to-date effective tax rate (the “discrete method”), as prescribed by ASC 740-270, Accounting for Income Taxes-Interim Reporting when a reliable estimate of the estimated annual rate cannot be made. We believe at this time, the use of the discrete method is more appropriate than the annual effective tax rate method due to significant variations in the customary relationship between income tax expense and projected annual pre-tax income or loss which occurs when annual projected pre-tax income or loss nears a relatively small amount in comparison to the differences between income and deductions determined for financial statement purposes versus income tax purposes. Using the discrete method, we have determined our current and deferred income tax expense as if the interim period were an annual period. Our liability for uncertain tax positions (excluding interest and penalties) was $3.0 million and $3.1 million as of October 1, 2017 and January 1, 2017, respectively, and if recognized would decrease our provision for income taxes by $1.5 million. Within the next twelve months, we could settle or otherwise conclude income tax audits. As such, it is reasonably possible that the liability for uncertain tax positions could decrease by as much as $1.0 million as a result of settlements with certain taxing authorities and expiring statutes of limitations within the next twelve months. Total accrued interest and penalties related to unrecognized tax benefits as of October 1, 2017 and January 1, 2017, was $1.3 million and $1.2 million, respectively. On the Consolidated Balance Sheets, we include current interest related to unrecognized tax benefits in “Accrued interest,” current penalties in “Accrued expenses” and noncurrent accrued interest and penalties in “Other noncurrent liabilities.” |
Stock-Based Compensation Arrangements |
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Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable [Table Text Block] | A summary of the options outstanding under the equity incentive plan as of October 1, 2017 and the activity for the nine months ended October 1, 2017 is presented below:
__________________ (1) The weighted average exercise price reflects the original grant date fair value per option as adjusted for the dividend payment made in August 2015. As of October 1, 2017, we had $1.8 million of total unrecognized share-based compensation expense related to unvested options, which is expected to be amortized over the remaining weighted-average period of 1.5 years. |
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Stock-Based Compensation Arrangements |
The following table summarizes stock-based compensation expense and the associated tax benefit recognized in the Consolidated Financial Statements for the periods presented:
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Stockholders' Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ Equity: | Stockholder’s Equity: The following table summarizes the changes in stockholder’s equity during the nine months ended October 1, 2017:
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Condensed Consolidating Schedules |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Statements | Consolidating Guarantor Financial Information: On February 14, 2014, CEC Entertainment, Inc. merged with and into an entity controlled by Apollo Global Management, LLC and its subsidiaries, which we refer to as the “Merger”. The senior notes issued by CEC Entertainment, Inc. (the “Issuer”), in conjunction with the Merger, are our unsecured obligations and are fully and unconditionally, jointly and severally guaranteed by all of our 100% wholly-owned U.S. subsidiaries (the “Guarantors”). Our wholly-owned foreign subsidiaries and our less-than-wholly-owned U.S. subsidiaries are not a party to the guarantees (the “Non-Guarantors”). The following schedules present the condensed consolidating financial statements of the Issuer, Guarantors and Non-Guarantors, as well as consolidated results, for the periods presented:
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Related Party Transactions (Notes) |
9 Months Ended |
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Oct. 01, 2017 | |
Related Party Transaction [Line Items] | |
Related Party Transactions Disclosure [Text Block] | 13. Related Party Transactions: CEC Entertainment reimburses Apollo Management, L.P. for certain out-of-pocket expenses incurred in connection with travel and Board of Directors related expenses. Expense reimbursements by CEC Entertainment to Apollo Management, L.P. totaled less than $0.1 million and $0.3 million for the three months ended October 1, 2017 and October 2, 2016, and $0.4 million and $0.3 million for the nine months ended October 1, 2017 and October 2, 2016, respectively, and are included in “General and administrative expenses” in our Consolidated Statements of Earnings. |
Sale Leaseback (Notes) |
9 Months Ended |
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Oct. 01, 2017 | |
Sale Leaseback [Abstract] | |
Sale Leaseback Transactions, Policy [Policy Text Block] | On April 25, 2017, we closed a sale leaseback transaction with NADG NNN Acquisitions, Inc. (“NADG NNN”). Pursuant to the sale leaseback transaction, we sold our property located in Conyers, Georgia to NADG NNN, and we leased the property back from NADG NNN pursuant to a master lease on a triple-net basis for its continued use as Chuck-E-Cheese’s family dining and entertainment venue. The lease has an initial term of 20 years, with four five-year options to renew. For accounting purposes, this sale-leaseback transaction is accounted for under the financing method rather than as a completed sale. Under the financing method, we (i) include the sales proceeds received in other long-term liabilities until our continuing involvement with the properties is terminated, (ii) report the associated property as owned assets, (iii) continue to depreciate the assets over their remaining useful lives, and (iv) record the rental payments as interest expense and a reduction of the sale leaseback obligation. When and if our continuing involvement with a property terminates and the sale of that property is recognized for accounting purposes, we expect to record a gain equal to the excess of the proceeds received over the remaining net book value of the property. The aggregate purchase price for the property in connection with the sale leaseback transaction was approximately $4.1 million million in cash, and the net proceeds realized were approximately $3.9 million |
Description of Business and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Oct. 01, 2017 | |
Entity Information [Line Items] | |
Business Description and Basis of Presentation [Text Block] | 1. Description of Business and Summary of Significant Accounting Policies: Description of Business The use of the terms “CEC Entertainment,” the “Company,” “we,” “us” and “our” throughout these unaudited notes to the interim Consolidated Financial Statements refer to CEC Entertainment, Inc. and its subsidiaries. We currently operate and franchise Chuck E. Cheese’s and Peter Piper Pizza family dining and entertainment venues in a total of 47 states and 13 foreign countries and territories. Our venues provide our guests with a variety of family entertainment and dining alternatives. All of our venues utilize a consistent restaurant-entertainment format that features both family dining and entertainment areas with a mix of food, entertainment and merchandise. The economic characteristics, products and services, preparation processes, distribution methods and types of customers are substantially similar for each of our venues. Therefore, we aggregate each venue’s operating performance into one reportable segment for financial reporting purposes. |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] | Description of Business and Summary of Significant Accounting Policies: Description of Business The use of the terms “CEC Entertainment,” the “Company,” “we,” “us” and “our” throughout these unaudited notes to the interim Consolidated Financial Statements refer to CEC Entertainment, Inc. and its subsidiaries. We currently operate and franchise Chuck E. Cheese’s and Peter Piper Pizza family dining and entertainment venues in a total of 47 states and 13 foreign countries and territories. Our venues provide our guests with a variety of family entertainment and dining alternatives. All of our venues utilize a consistent restaurant-entertainment format that features both family dining and entertainment areas with a mix of food, entertainment and merchandise. The economic characteristics, products and services, preparation processes, distribution methods and types of customers are substantially similar for each of our venues. Therefore, we aggregate each venue’s operating performance into one reportable segment for financial reporting purposes. Basis of Presentation The Company has a controlling financial interest in International Association of CEC Entertainment, Inc. (the “Association”), a variable interest entity (“VIE”). The Association primarily administers the collection and disbursement of funds (the “Association Funds”) used for advertising, entertainment and media programs that benefit both us and our Chuck E. Cheese’s franchisees. We and our franchisees are required to contribute a percentage of gross sales to these funds and could be required to make additional contributions to fund any deficits that may be incurred by the Association. We include the Association in our Consolidated Financial Statements, as we concluded that we are the primary beneficiary of its variable interests because we (a) have the power to direct the majority of its significant operating activities; (b) provide it unsecured lines of credit; and (c) own the majority of the venues that benefit from the Association’s advertising, entertainment and media expenditures. The assets, liabilities and operating results of the Association are not material to our Consolidated Financial Statements. Because the Association Funds are required to be segregated and used for specified purposes, we do not reflect franchisee contributions to the Association Funds as revenue, but rather record franchisee contributions as an offset to reported advertising expenses. Our contributions to the Association Funds are eliminated in consolidation. Contributions to the advertising, entertainment and media funds from our franchisees were $1.7 million for both the nine months ended October 1, 2017 and October 2, 2016, respectively. Cash balances held by the Association are restricted for use in our advertising, entertainment and media programs, and are recorded as “Restricted cash” on our Consolidated Balance Sheets. The preparation of these unaudited Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Interim Financial Statements The accompanying Consolidated Financial Statements as of and for the three and nine months ended October 1, 2017 and October 2, 2016 are unaudited and are presented in accordance with the requirements for quarterly reports on Form 10-Q and, consequently, do not include all of the information and footnote disclosures required by GAAP. In the opinion of management, the Consolidated Financial Statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of its consolidated results of operations, financial position and cash flows as of the dates and for the periods presented in accordance with GAAP and the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). All intercompany accounts have been eliminated in consolidation. Consolidated results of operations for interim periods are not necessarily indicative of results for the full year. The unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended January 1, 2017, filed with the SEC on March 16, 2017. |
Basis of Presentation | Basis of Presentation The Company has a controlling financial interest in International Association of CEC Entertainment, Inc. (the “Association”), a variable interest entity (“VIE”). The Association primarily administers the collection and disbursement of funds (the “Association Funds”) used for advertising, entertainment and media programs that benefit both us and our Chuck E. Cheese’s franchisees. We and our franchisees are required to contribute a percentage of gross sales to these funds and could be required to make additional contributions to fund any deficits that may be incurred by the Association. We include the Association in our Consolidated Financial Statements, as we concluded that we are the primary beneficiary of its variable interests because we (a) have the power to direct the majority of its significant operating activities; (b) provide it unsecured lines of credit; and (c) own the majority of the venues that benefit from the Association’s advertising, entertainment and media expenditures. The assets, liabilities and operating results of the Association are not material to our Consolidated Financial Statements. Because the Association Funds are required to be segregated and used for specified purposes, we do not reflect franchisee contributions to the Association Funds as revenue, but rather record franchisee contributions as an offset to reported advertising expenses. Our contributions to the Association Funds are eliminated in consolidation. Contributions to the advertising, entertainment and media funds from our franchisees were $1.7 million for both the nine months ended October 1, 2017 and October 2, 2016, respectively. Cash balances held by the Association are restricted for use in our advertising, entertainment and media programs, and are recorded as “Restricted cash” on our Consolidated Balance Sheets. The preparation of these unaudited Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Sale Leaseback Transaction | On April 25, 2017, we closed a sale leaseback transaction with NADG NNN Acquisitions, Inc. (“NADG NNN”). Pursuant to the sale leaseback transaction, we sold our property located in Conyers, Georgia to NADG NNN, and we leased the property back from NADG NNN pursuant to a master lease on a triple-net basis for its continued use as Chuck-E-Cheese’s family dining and entertainment venue. The lease has an initial term of 20 years, with four five-year options to renew. For accounting purposes, this sale-leaseback transaction is accounted for under the financing method rather than as a completed sale. Under the financing method, we (i) include the sales proceeds received in other long-term liabilities until our continuing involvement with the properties is terminated, (ii) report the associated property as owned assets, (iii) continue to depreciate the assets over their remaining useful lives, and (iv) record the rental payments as interest expense and a reduction of the sale leaseback obligation. When and if our continuing involvement with a property terminates and the sale of that property is recognized for accounting purposes, we expect to record a gain equal to the excess of the proceeds received over the remaining net book value of the property. The aggregate purchase price for the property in connection with the sale leaseback transaction was approximately $4.1 million million in cash, and the net proceeds realized were approximately $3.9 million |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance Accounting Guidance Adopted: Effective January 2, 2017 we adopted Accounting Standards Update (“ASU”) 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This amendment requires entities to measure most inventory at the “lower of cost or net realizable value,” thereby simplifying the former guidance under which entities measured inventory at the lower of cost or market (market in this context was defined as one of three different measures, one of which was net realizable value). The adoption of this amendment did not have a significant impact on our Consolidated Financial Statements. Effective January 2, 2017 we adopted ASU 2016-09, Compensation—Stock Compensation (Topic 718). This amendment requires that (i) all excess tax benefits and deficiencies (including tax benefits of dividends on share-based payment awards) be recognized as income tax expense or benefit on the income statement, (ii) the tax effects of exercised or vested awards be treated as discrete items in the reporting period in which they occur, and (iii) an entity recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period or not. On the statement of cash flows excess tax benefits are classified along with other income tax cash flows as an operating activity. As allowed by the amendment we have elected to account for forfeitures when they occur. The threshold for an award to qualify for equity classification permits withholding up to the maximum statutory tax rate in applicable jurisdictions, and the cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity on the statement of cash flows. The adoption of this amendment did not have a significant impact on our Consolidated Financial Statements. Accounting Guidance Not Yet Adopted: In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02, Leases (Topic 842). This new standard introduces a new lease model that requires the recognition of lease assets and lease liabilities on the balance sheet and the disclosure of key information about leasing arrangements. While this new standard retains most of the principles of the existing lessor model under U.S. GAAP, it aligns many of those principles with Accounting Standards Codification (“ASC”) 606: Revenue from Contracts with Customers. The new guidance will be effective for us beginning on December 31, 2018. Early adoption will be permitted for all entities. We are currently evaluating the impact of the adoption of this guidance on our Consolidated Financial Statements, but we expect this will have a material effect on our balance sheet since the Company has a significant amount of operating and capital lease arrangements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. This amendment updates the revenue guidance on identifying performance obligations and accounting for licenses of intellectual property, changing the FASB's previous proposals on right-of-use licenses and contractual restrictions. For an entity that licenses intellectual property, the amount or timing of revenue recognition and the timing and pattern of revenue recognition for intellectual property licenses, including the application of the sale- and usage-based royalties exception, may be significantly different from current practice. We are currently in the process of completing our assessment of all potential impacts of this amendment on our revenues, including: (i) our accounting for franchise and development fees, and (ii) accounting for our national advertising costs under the Association Funds. Specifically, we expect the adoption of this amendment will require us to recognize initial and renewal franchise and development fees on a straight-line basis over the life of the franchise agreement. Historically, we have recognized revenue from initial franchise and development fees upon the opening of a franchised restaurant when we have completed all of our material obligations and initial services. Additionally, we expect to account for our national advertising fund revenues on a gross basis, instead of net. We do not expect the impact of recognizing initial franchise fees over the franchise agreement period and recognizing advertising expense upon adoption of this standard to have a material effect on our consolidated financial statements. We have determined that this amendment will not have an impact on our recognition of revenue related to our franchise royalties, which are based on a percentage of franchise sales and revenue from Company-operated venues. We will adopt the guidance in this amendment beginning with our fiscal first quarter 2018 and will apply the guidance using the modified retrospective method, recognizing the cumulative effect of applying the new standard to new contracts and contracts that are not considered completed as of January 1, 2018, with no restatement of the comparative periods presented. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business (Topic 805). The amendments in this update clarify the definition of a business to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting, including acquisitions, disposals, goodwill and consolidation. This ASU will be effective for us for annual and interim reporting periods beginning on January 1, 2018. We do not expect the adoption of this amendment to have a significant impact on our Consolidated Financial Statements. In January 2017, the FASB issued ASU 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This amendment eliminates Step 2, which measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill, from the goodwill impairment test. Instead, under the amendments in this ASU, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. However, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This ASU is effective for us for our annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2020 and will be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We do not expect the adoption of this amendment to have a significant impact on our Consolidated Financial Statements. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815). This amendment expands and refines hedge accounting for both nonfinancial and financial risk components and aligns the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. It also includes certain targeted improvements to simplify the application of current guidance related to hedge accounting. This ASU will be effective for us for annual and interim reporting periods beginning on December 31, 2019, with early adoption permitted. We do not expect the adoption of this amendment to have a significant impact on our Consolidated Financial Statements. |
Goodwill and Intangible Assets (Tables) |
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Schedule of Indefinite-Lived Intangible Assets | The following table presents our indefinite and definite-lived intangible assets at October 1, 2017:
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Schedule of Finite-Lived Intangible Assets | The following table presents our indefinite and definite-lived intangible assets at October 1, 2017:
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Indebtedness and Interest Expense Indebtedness and Interest Expense (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Our long-term debt consisted of the following as of the dates presented:
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Schedule of Interest Expense | Interest expense consisted of the following for the periods presented:
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Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value by Balance Sheet Grouping | The following table presents information on our financial instruments as of the periods presented:
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Income Taxes Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) |
(1) Including foreign taxes withheld. Our income tax expense (benefit) consists of the following for the periods presented:
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Stock-Based Compensation Arrangements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
The following table summarizes stock-based compensation expense and the associated tax benefit recognized in the Consolidated Financial Statements for the periods presented:
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Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable [Table Text Block] | A summary of the options outstanding under the equity incentive plan as of October 1, 2017 and the activity for the nine months ended October 1, 2017 is presented below:
__________________ (1) The weighted average exercise price reflects the original grant date fair value per option as adjusted for the dividend payment made in August 2015. As of October 1, 2017, we had $1.8 million of total unrecognized share-based compensation expense related to unvested options, which is expected to be amortized over the remaining weighted-average period of 1.5 years. |
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Schedule of Stock-Based Compensation Expense and Associated Tax Benefits Recognized | 10. Stock-Based Compensation Arrangements: The 2014 Equity Incentive Plan provides Queso Holdings Inc. (“Parent”) authority to grant equity incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonus awards or performance compensation awards to certain directors, officers or employees of the Company. A summary of the options outstanding under the equity incentive plan as of October 1, 2017 and the activity for the nine months ended October 1, 2017 is presented below:
__________________ (1) The weighted average exercise price reflects the original grant date fair value per option as adjusted for the dividend payment made in August 2015. As of October 1, 2017, we had $1.8 million of total unrecognized share-based compensation expense related to unvested options, which is expected to be amortized over the remaining weighted-average period of 1.5 years. The following table summarizes stock-based compensation expense and the associated tax benefit recognized in the Consolidated Financial Statements for the periods presented:
__________________
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Stockholders' Equity (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Stockholders' Equity | The following table summarizes the changes in stockholder’s equity during the nine months ended October 1, 2017:
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Condensed Consolidating Schedules (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet |
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Condensed Consolidating Income Statement |
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Condensed Consolidating Cash Flow Statement |
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Related Party Transactions (Tables) |
9 Months Ended |
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Oct. 01, 2017 | |
Related Party Transaction [Line Items] | |
Related Party Transactions Disclosure [Text Block] | 13. Related Party Transactions: CEC Entertainment reimburses Apollo Management, L.P. for certain out-of-pocket expenses incurred in connection with travel and Board of Directors related expenses. Expense reimbursements by CEC Entertainment to Apollo Management, L.P. totaled less than $0.1 million and $0.3 million for the three months ended October 1, 2017 and October 2, 2016, and $0.4 million and $0.3 million for the nine months ended October 1, 2017 and October 2, 2016, respectively, and are included in “General and administrative expenses” in our Consolidated Statements of Earnings. |
Description of Business and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands |
9 Months Ended | |
---|---|---|
Oct. 01, 2017
USD ($)
Country
State
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Jan. 01, 2017
USD ($)
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Accounting Policies [Abstract] | ||
Number of States in which Entity Operates | State | 47 | |
Number of foreign countries in which Entity operates | Country | 13 | |
Related Party Transaction [Line Items] | ||
Deferred financing costs, net | $ 12,995 | $ 15,999 |
Contributions from franchisees to advertising and media funds | $ 1,700 |
Description of Business and Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets (Details) |
9 Months Ended |
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Oct. 01, 2017 | |
Franchise Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 25 years |
Favorable Lease Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Acquisition of CEC Entertainment, Inc. - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
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Business Acquisition [Line Items] | ||||
Transaction and severance costs | $ 128 | $ 166 | $ 698 | $ 1,349 |
Acquisition of CEC Entertainment, Inc. - Pro Forma Financial Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
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Business Acquisition [Line Items] | ||||
Total revenues | $ 213,347 | $ 228,070 | $ 690,090 | $ 719,009 |
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Jan. 01, 2017 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 582,928 | $ 592,886 |
Property and Equipment - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
Sep. 27, 2015 |
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Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization | $ 27,100,000 | $ 29,900,000 | $ 83,064,000 | $ 90,167,000 | |
Depreciation | 1,800,000 | 2,200,000 | 5,600,000 | 5,100,000 | |
Asset Impairment Charges | $ 1,843,000 | $ 772,000 | $ 1,843,000 | $ 772,000 | $ 0 |
Goodwill and Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
|
Goodwill [Roll Forward] | ||||
Goodwill | $ 483,876 | |||
Goodwill | $ 484,438 | 484,438 | ||
Above Market Leases [Member] | ||||
Goodwill [Line Items] | ||||
Amortization of Intangible Assets | $ 400 | $ 500 | $ 1,300 | $ 1,500 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
Jan. 01, 2017 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Off-market Lease, Unfavorable | $ 5,917 | $ 5,917 | $ 7,308 | ||
Unfavorable lease amortization period | 10 years | ||||
Favorable Lease Agreements [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of Intangible Assets | 400 | $ 500 | $ 1,300 | $ 1,500 | |
Franchise Agreements [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of Intangible Assets | 500 | 1,500 | |||
CEC Entertainment, Inc. [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Off-market Lease, Unfavorable | 10,200 | 10,200 | |||
Peter Piper Pizza [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Off-market Lease, Unfavorable | $ 3,900 | $ 3,900 |
Goodwill and Intangible Assets - Schedule of Estimated Future Amortization Expense (Details) $ in Thousands |
Oct. 01, 2017
USD ($)
|
---|---|
Favorable Lease Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, net | $ 7,963 |
Franchise Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, net | $ 46,615 |
Accounts Payable (Details) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Jan. 01, 2017 |
---|---|---|
Accounts Payable [Line Items] | ||
Accounts Payable, Trade, Current | $ 22,107 | $ 24,615 |
Bank Overdrafts | 10,366 | 8,587 |
Accounts Payable | $ 32,473 | $ 33,202 |
Indebtedness and Interest Expense - Schedule of Debt Obligations (Details) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Jan. 01, 2017 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ (988,400) | $ (994,113) |
Unamortized original issue discount | (1,829) | (2,235) |
Debt Issuance Costs, Noncurrent, Net | 12,995 | 15,999 |
Bank indebtedness and other long-term debt, net of deferred financing costs, less current portion | $ 965,976 | $ 968,266 |
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Additional Margin on Basis Spread of Variable Rate | 3.25% |
Indebtedness and Interest Expense - Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
|
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs | $ 272 | |||
Interest Expense, Other Long-term Debt | $ 323 | $ 869 | $ 260 | |
Interest expense | 17,451 | 17,237 | 51,574 | 51,419 |
Term Loan Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest Expense, Debt | 8,014 | 7,646 | 23,240 | 23,303 |
Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest Expense, Debt, Excluding Amortization | 5,083 | 5,157 | 15,248 | 15,470 |
Capital Lease Obligations [Member] | ||||
Debt Instrument [Line Items] | ||||
InterestExpenseSaleLeaseback | 2,647 | 2,674 | 7,949 | 8,067 |
Capital Leases, Income Statement, Interest Expense | 434 | 436 | 1,264 | 1,315 |
Sale Leaseback Obligations [Member] | ||||
Debt Instrument [Line Items] | ||||
InterestExpenseSaleLeaseback | $ 1,001 | |||
Amortization of debt issuance costs | $ 1,001 | $ 3,004 | $ 3,004 | |
Term Loan Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate During Period | 4.60% | |||
SecuredCreditFacilitiesAndSeniorNotes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Interest Rate During Period | 5.60% | |||
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | The Senior Secured Credit Facilities [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Additional Margin on Basis Spread of Variable Rate | 3.25% | 3.25% |
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Jan. 01, 2017 |
||
---|---|---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt, Current | $ 7,600 | $ 7,613 | ||
Bank indebtedness and other long-term debt, less current portion | 965,976 | 968,266 | ||
Long-term portion (2) | 995,534 | 1,000,934 | ||
debt, net of unamortized issue discount | 986,571 | 991,878 | ||
Carrying Amount [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Bank indebtedness and other long-term debt, less current portion | [1] | 978,971 | 984,265 | |
Short-term Debt [Member] | Estimate of Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term portion (2) | 7,562 | 7,623 | ||
Long-term Debt [Member] | Estimate of Fair Value [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term portion (2) | $ 987,972 | $ 993,311 | ||
|
Other Non-current Liabilities (Details) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Jan. 01, 2017 |
---|---|---|
Other Noncurrent Liabilities [Line Items] | ||
Sale leaseback obligations, less current portion | $ 178,724 | $ 176,831 |
Long-term portion of unfavorable leases | 26,342 | 21,784 |
Other | 4,872 | 4,950 |
Other noncurrent liabilities | 222,092 | 216,575 |
Deferred Landlord Contributions, Noncurrent | 6,237 | 5,702 |
Off-market Lease, Unfavorable | $ 5,917 | $ 7,308 |
Commitments and Contingencies (Details) |
9 Months Ended | ||
---|---|---|---|
Jan. 16, 2014
lawsuit
|
Oct. 01, 2017
lawsuit
|
Jul. 21, 2015
lawsuit
|
|
Loss Contingencies [Line Items] | |||
New claims filed | 6 | ||
Merger Agreement [Member] | |||
Loss Contingencies [Line Items] | |||
New claims filed | 4 | ||
Loss contingency, members of the Board also senior management | 2 | ||
Minimum [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency, Number of Plaintiffs | 9 | ||
Maximum [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency, Number of Plaintiffs | 12 |
Income Taxes Taxes by Jurisdiction (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
|
Income Taxes [Line Items] | ||||
Federal and state income taxes | $ (5,533) | $ (2,662) | $ 1,145 | $ 4,051 |
Foreign income taxes | 312 | 376 | 695 | 594 |
Income tax expense (benefit) | $ (5,221) | $ (2,286) | $ 1,840 | $ 4,645 |
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Jan. 01, 2017 |
|
Tax Credit Carryforward [Line Items] | |||
Deferred income taxes | $ (5,220) | $ (10,329) | |
Unrecognized tax benefits | 3,000 | $ 3,100 | |
Unrecognized tax benefits that would decrease effective tax rate and provision for income taxes, if recognized | 1,500 | ||
Expected decrease in unrecognized tax benefits within next twelve months | 1,000 | ||
Total amount of interest and penalties accrued related to unrecognized tax benefits | $ 1,300 | $ 1,200 |
Stock-Based Compensation Arrangements - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | |||||
---|---|---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Jan. 01, 2017 |
||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 2,460,149 | 2,400,914 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 8.98 | $ 8.74 | [1] | |||
ShareBasedCompensationArrangementbyShareBasedPaymentAwarad,Options,Outstanding,WeightedAverageRemainingContractualLife | 6 years 9 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 20,427 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 1 year 6 months 18 days | |||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 15.93 | |||||
Tax benefit related to the accelerated vesting of restricted stock awards | $ 0 | $ 4 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 9.09 | |||||
ShareBasedCompensationArrangementbyShareBasedPaymentAward,Options,ExpectedtoVest,WeightedAverageRemainingContractualTerm | 6 years 9 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Aggregate Intrinsic Value | $ 14,963 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested Options Forfeited, Number of Shares | (33,385) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | [1] | $ 11.53 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number | 1,827,408 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Number of Exercisable Options | 429,697 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price | $ 8.43 | |||||
ShareBasedCompensationArrangementbyShareBasedPaymentAward,Options,Exercisable,WeightedAverageRemainingContractualLife | 6 years 5 months 26 days | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | $ 3,801 | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted (shares) | 92,620 | |||||
|
Stock-Based Compensation Arrangements Stock-Based Compensation Arrangements - Summary of Stock-Based Compensation Expense and Associated Tax Benefit Recognized (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
|||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||
Stock-based compensation costs | $ 187 | $ 188 | $ 531 | $ 532 | ||
Portion capitalized as property and equipment | [1] | (3) | (3) | (11) | (10) | |
Stock-based compensation expense recognized | 184 | $ 185 | 520 | 522 | ||
Tax benefit recognized from stock-based compensation awards | 0 | $ 4 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 1,800 | $ 1,800 | ||||
|
Stockholders' Equity - Summary of Changes In Stockholders' Equity (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common Stock, Value, Issued beginning balance | $ 0 | |||
Capital in excess of par value beginning balance | 357,166,000 | |||
Retained earnings beginning balance | (148,265,000) | |||
Accumulated other comprehensive income beginning balance | $ (1,709,000) | (1,709,000) | ||
Beginning Balance | 206,005,000 | |||
Net income (loss) | (11,092,000) | $ (2,404,000) | 200,000 | $ 6,459,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 648,000 | $ (212,000) | 1,187,000 | 703,000 |
Total components of other comprehensive income (loss), net of tax | 1,187,000 | |||
Stock-based compensation costs | 531,000 | |||
Adjustments to Additional Paid in Capital, Other | 1,447,000 | $ 0 | ||
Common Stock, Value, Issued ending balance | 0 | 0 | ||
Capital in excess of par value ending balance | 359,144,000 | 359,144,000 | ||
Retained earnings ending balance | (148,065,000) | (148,065,000) | ||
Accumulated other comprehensive income ending balance | (2,896,000) | |||
Ending Balance | $ 209,370,000 | $ 209,370,000 | ||
Common Stock [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning Balance (in shares) | 200 | |||
Common Stock, Value, Issued beginning balance | $ 0 | |||
Ending Balance (in shares) | 200 | 200 | ||
Common Stock, Value, Issued ending balance | $ 0 | $ 0 | ||
Additional Paid-in Capital [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation costs | 531,000 | |||
Adjustments to Additional Paid in Capital, Other | (1,447,000) | |||
Capital in excess of par value ending balance | 359,144,000 | 359,144,000 | ||
Retained Earnings [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income (loss) | 200,000 | |||
Retained earnings ending balance | (148,065,000) | (148,065,000) | ||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Accumulated other comprehensive income beginning balance | $ (1,709,000) | (1,709,000) | ||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | $ 1,187,000 |
Condensed Consolidating Schedules - Balance Sheet (Details) - USD ($) $ in Thousands |
Oct. 01, 2017 |
Jan. 01, 2017 |
Oct. 02, 2016 |
Jan. 03, 2016 |
---|---|---|---|---|
Current assets: | ||||
Cash and cash equivalents | $ 79,427 | $ 61,023 | $ 79,857 | $ 50,654 |
Restricted Cash and Cash Equivalents | 219 | 268 | ||
Accounts receivable | 17,086 | 20,495 | ||
Inventories | 22,624 | 21,677 | ||
Prepaid expenses | 20,487 | 21,498 | ||
Total current assets | 139,843 | 124,961 | ||
Property and equipment, net | 582,928 | 592,886 | ||
Goodwill | 484,438 | 483,876 | ||
Intangible assets, net | 481,278 | 484,083 | ||
Intercompany | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Other noncurrent assets | 20,170 | 24,306 | ||
Total assets | 1,708,657 | 1,710,112 | ||
Current liabilities: | ||||
Bank indebtedness and other long-term debt, current portion | 7,600 | 7,613 | ||
Capital lease obligations, current portion | 571 | 467 | ||
Accounts payable and accrued expenses | 95,647 | 97,836 | ||
Other current liabilities | 4,666 | 4,275 | ||
Total current liabilities | 108,484 | 110,191 | ||
Capital lease obligations, less current portion | 13,162 | 13,602 | ||
Bank indebtedness and other long-term debt, less current portion | 965,976 | 968,266 | ||
Lease-related Liabilities | 26,342 | 21,784 | ||
Deferred tax liability | 180,789 | 186,290 | ||
Intercompany | 0 | 0 | ||
Sale leaseback obligations, less current portion | 178,724 | 176,831 | ||
Other noncurrent liabilities | 230,876 | 225,758 | ||
Total liabilities | 1,499,287 | 1,504,107 | ||
Stockholder’s equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par value | 359,144 | 357,166 | ||
Accumulated deficit | (148,065) | (148,265) | ||
Accumulated other comprehensive loss | (1,709) | (2,896) | ||
Total stockholder’s equity | 209,370 | 206,005 | ||
Total liabilities and stockholder’s equity | 1,708,657 | 1,710,112 | ||
Issuer | ||||
Current assets: | ||||
Cash and cash equivalents | 70,041 | 53,088 | 71,704 | 42,235 |
Restricted Cash and Cash Equivalents | 0 | 0 | ||
Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 1,850 | 1,158 | 1,144 | 1,797 |
Restricted Cash and Cash Equivalents | 0 | 0 | ||
Accounts receivable | 2,644 | 3,220 | ||
Inventories | 3,859 | 3,151 | ||
Prepaid expenses | 5,359 | 6,077 | ||
Total current assets | 13,712 | 13,606 | ||
Property and equipment, net | 63,203 | 47,906 | ||
Goodwill | 51,414 | 51,414 | ||
Intangible assets, net | 463,941 | 464,926 | ||
Intercompany | 0 | 317 | ||
Investment in subsidiaries | 0 | 0 | ||
Other noncurrent assets | 12,180 | 17,025 | ||
Total assets | 604,450 | 595,194 | ||
Current liabilities: | ||||
Bank indebtedness and other long-term debt, current portion | 0 | 13 | ||
Capital lease obligations, current portion | 0 | 0 | ||
Accounts payable and accrued expenses | 30,447 | 11,445 | ||
Other current liabilities | 511 | 511 | ||
Total current liabilities | 30,958 | 11,969 | ||
Capital lease obligations, less current portion | 0 | 0 | ||
Bank indebtedness and other long-term debt, less current portion | 0 | 0 | ||
Deferred tax liability | 24,022 | 21,234 | ||
Intercompany | 60,498 | 106,131 | ||
Other noncurrent liabilities | 13,588 | 12,484 | ||
Total liabilities | 129,066 | 151,818 | ||
Stockholder’s equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par value | 466,114 | 466,114 | ||
Accumulated deficit | 9,270 | (22,738) | ||
Accumulated other comprehensive loss | 0 | 0 | ||
Total stockholder’s equity | 475,384 | 443,376 | ||
Total liabilities and stockholder’s equity | 604,450 | 595,194 | ||
Non-Guarantors | ||||
Current assets: | ||||
Cash and cash equivalents | 7,536 | 6,777 | 7,009 | 6,622 |
Restricted Cash and Cash Equivalents | 219 | 268 | ||
Accounts receivable | 4,040 | 2,455 | ||
Inventories | 285 | 271 | ||
Prepaid expenses | 1,445 | 1,127 | ||
Total current assets | 13,525 | 10,898 | ||
Property and equipment, net | 6,578 | 6,785 | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Intercompany | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Other noncurrent assets | 243 | 393 | ||
Total assets | 20,346 | 18,076 | ||
Current liabilities: | ||||
Bank indebtedness and other long-term debt, current portion | 0 | 0 | ||
Capital lease obligations, current portion | 9 | 7 | ||
Accounts payable and accrued expenses | 5,096 | 2,184 | ||
Other current liabilities | 0 | 0 | ||
Total current liabilities | 5,105 | 2,191 | ||
Capital lease obligations, less current portion | 57 | 60 | ||
Bank indebtedness and other long-term debt, less current portion | 0 | 0 | ||
Deferred tax liability | (2,815) | (1,008) | ||
Intercompany | 27,196 | 23,395 | ||
Other noncurrent liabilities | 421 | 331 | ||
Total liabilities | 29,964 | 24,969 | ||
Stockholder’s equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par value | 3,241 | 3,241 | ||
Accumulated deficit | (11,150) | (7,238) | ||
Accumulated other comprehensive loss | (1,709) | (2,896) | ||
Total stockholder’s equity | (9,618) | (6,893) | ||
Total liabilities and stockholder’s equity | 20,346 | 18,076 | ||
Subsidiary Issuer [Member] | ||||
Current assets: | ||||
Cash and cash equivalents | 70,041 | 53,088 | ||
Accounts receivable | 13,676 | 16,922 | ||
Inventories | 18,480 | 18,255 | ||
Prepaid expenses | 13,683 | 14,294 | ||
Total current assets | 115,880 | 102,559 | ||
Property and equipment, net | 513,147 | 538,195 | ||
Goodwill | 433,024 | 432,462 | ||
Intangible assets, net | 17,337 | 19,157 | ||
Intercompany | 84,420 | 127,107 | ||
Investment in subsidiaries | 465,766 | 436,483 | ||
Other noncurrent assets | 7,747 | 6,888 | ||
Total assets | 1,637,321 | 1,662,851 | ||
Current liabilities: | ||||
Bank indebtedness and other long-term debt, current portion | 7,600 | 7,600 | ||
Capital lease obligations, current portion | 562 | 460 | ||
Accounts payable and accrued expenses | 60,104 | 84,207 | ||
Other current liabilities | 4,155 | 3,764 | ||
Total current liabilities | 72,421 | 96,031 | ||
Capital lease obligations, less current portion | 13,105 | 13,542 | ||
Bank indebtedness and other long-term debt, less current portion | 965,976 | 968,266 | ||
Deferred tax liability | 159,582 | 166,064 | ||
Intercompany | 0 | 0 | ||
Other noncurrent liabilities | 216,867 | 212,943 | ||
Total liabilities | 1,427,951 | 1,456,846 | ||
Stockholder’s equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par value | 359,144 | 357,166 | ||
Accumulated deficit | (148,065) | (148,265) | ||
Accumulated other comprehensive loss | (1,709) | (2,896) | ||
Total stockholder’s equity | 209,370 | 206,005 | ||
Total liabilities and stockholder’s equity | 1,637,321 | 1,662,851 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Restricted Cash and Cash Equivalents | 0 | 0 | ||
Accounts receivable | (3,274) | (2,102) | ||
Inventories | 0 | 0 | ||
Prepaid expenses | 0 | 0 | ||
Total current assets | (3,274) | (2,102) | ||
Property and equipment, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Intercompany | (84,420) | (127,424) | ||
Investment in subsidiaries | (465,766) | (436,483) | ||
Other noncurrent assets | 0 | 0 | ||
Total assets | (553,460) | (566,009) | ||
Current liabilities: | ||||
Bank indebtedness and other long-term debt, current portion | 0 | 0 | ||
Capital lease obligations, current portion | 0 | 0 | ||
Accounts payable and accrued expenses | 0 | 0 | ||
Other current liabilities | 0 | 0 | ||
Total current liabilities | 0 | 0 | ||
Capital lease obligations, less current portion | 0 | 0 | ||
Bank indebtedness and other long-term debt, less current portion | 0 | 0 | ||
Deferred tax liability | 0 | 0 | ||
Intercompany | (87,694) | (129,526) | ||
Other noncurrent liabilities | 0 | 0 | ||
Total liabilities | (87,694) | (129,526) | ||
Stockholder’s equity: | ||||
Common stock | 0 | 0 | ||
Capital in excess of par value | (469,355) | (469,355) | ||
Accumulated deficit | 1,880 | 29,976 | ||
Accumulated other comprehensive loss | 1,709 | 2,896 | ||
Total stockholder’s equity | (465,766) | (436,483) | ||
Total liabilities and stockholder’s equity | $ (553,460) | $ (566,009) |
Condensed Consolidating Schedules - P&L (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
Sep. 27, 2015 |
Jan. 01, 2017 |
Jan. 03, 2016 |
|
Condensed Financial Statements, Captions [Line Items] | |||||||
Fees and Commissions, Other | $ 0 | $ 0 | $ 0 | $ 0 | |||
Franchise fees and royalties | 4,459,000 | 4,322,000 | 13,731,000 | 13,440,000 | |||
Total company store sales | 208,888,000 | 223,748,000 | 676,359,000 | 705,569,000 | |||
Entertainment and merchandise sales | 110,633,000 | 121,764,000 | 356,274,000 | 383,978,000 | |||
Food and beverage sales | 98,255,000 | 101,984,000 | 320,085,000 | 321,591,000 | |||
Intangible assets, net | 481,278,000 | 481,278,000 | $ 484,083,000 | ||||
Proceeds from sale of property and equipment | (424,000) | (426,000) | |||||
Repayments of Senior Debt | 5,700,000 | 5,700,000 | |||||
Net Cash Provided by (Used in) Operating Activities | 94,240,000 | 111,254,000 | |||||
Payments to Acquire Property, Plant, and Equipment | 71,910,000 | 66,535,000 | |||||
Payments to Develop Software | (2,520,000) | (8,788,000) | |||||
Net cash used in investing activities | (74,006,000) | (74,897,000) | |||||
Repayments on note payable | (37,000) | ||||||
Repayments of Long-term Capital Lease Obligations | (340,000) | (311,000) | |||||
Excess tax benefit realized from stock-based compensation | 0 | 4,000 | |||||
Net Cash Provided by (Used in) Financing Activities | (2,322,000) | (7,510,000) | |||||
Effect of foreign exchange rate changes on cash | 492,000 | 356,000 | |||||
Change in cash and cash equivalents | 18,404,000 | 29,203,000 | |||||
REVENUES: | |||||||
Food and beverage sales | 98,255,000 | 101,984,000 | 320,085,000 | 321,591,000 | |||
Entertainment and merchandise sales | 110,633,000 | 121,764,000 | 356,274,000 | 383,978,000 | |||
Total company store sales | 208,888,000 | 223,748,000 | 676,359,000 | 705,569,000 | |||
Franchise fees and royalties | 4,459,000 | 4,322,000 | 13,731,000 | 13,440,000 | |||
Fees and Commissions, Other | 0 | 0 | 0 | 0 | |||
Total revenues | 213,347,000 | 228,070,000 | 690,090,000 | 719,009,000 | |||
Company store operating costs: | |||||||
Cost of food and beverage (exclusive of items shown separately below) | 23,974,000 | 25,507,000 | 75,014,000 | 80,702,000 | |||
Cost of entertainment and merchandise (exclusive of items shown separately below) | 7,430,000 | 8,014,000 | 22,771,000 | 25,004,000 | |||
Total cost of food, beverage, entertainment and merchandise | 31,404,000 | 33,521,000 | 97,785,000 | 105,706,000 | |||
Labor expenses | 61,220,000 | 61,721,000 | 187,958,000 | 191,170,000 | |||
Depreciation and amortization | 25,289,000 | 27,667,000 | 77,492,000 | 85,029,000 | |||
Other store operating expenses | 40,561,000 | 38,757,000 | 113,277,000 | 112,143,000 | |||
Total company store operating costs | 182,733,000 | 185,786,000 | 547,996,000 | 566,366,000 | |||
Other costs and expenses: | |||||||
Advertising expense | 12,083,000 | 11,515,000 | 37,702,000 | 36,777,000 | |||
General and administrative expenses | 15,422,000 | 17,284,000 | 48,237,000 | 51,222,000 | |||
Asset Impairment Charges | 1,843,000 | 772,000 | 1,843,000 | 772,000 | $ 0 | ||
Transaction and severance costs | 128,000 | 166,000 | 698,000 | 1,349,000 | |||
Total operating costs and expenses | 212,209,000 | 215,523,000 | 636,476,000 | 656,486,000 | |||
Rent expense | 24,259,000 | 24,120,000 | 71,484,000 | 72,318,000 | |||
Operating income (loss) | 1,138,000 | 12,547,000 | 53,614,000 | 62,523,000 | |||
Equity in earnings (loss) in affiliates | 0 | 0 | 0 | 0 | |||
Interest expense | 17,451,000 | 17,237,000 | 51,574,000 | 51,419,000 | |||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | (16,313,000) | (4,690,000) | 2,040,000 | 11,104,000 | |||
Income tax expense (benefit) | (5,221,000) | (2,286,000) | 1,840,000 | 4,645,000 | |||
Net income (loss) | (11,092,000) | (2,404,000) | 200,000 | 6,459,000 | |||
Components of other comprehensive income (loss), net of tax: | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 648,000 | (212,000) | 1,187,000 | 703,000 | |||
Total components of other comprehensive income (loss), net of tax | 1,187,000 | ||||||
Comprehensive income (loss) | 10,444,000 | 2,616,000 | (1,387,000) | (7,162,000) | |||
Cash and cash equivalents | 79,427,000 | 79,857,000 | 79,427,000 | 79,857,000 | 61,023,000 | $ 50,654,000 | |
Retained Earnings [Member] | |||||||
Other costs and expenses: | |||||||
Net income (loss) | 200,000 | ||||||
Issuer | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Fees and Commissions, Other | 1,054,000 | 735,000 | |||||
Franchise fees and royalties | 1,411,000 | 1,561,000 | |||||
Total company store sales | 570,608,000 | 638,583,000 | |||||
Entertainment and merchandise sales | 296,197,000 | 358,192,000 | |||||
Food and beverage sales | 274,411,000 | 280,391,000 | |||||
Proceeds from sale of property and equipment | (424,000) | (426,000) | |||||
Repayments of Senior Debt | 5,700,000 | 5,700,000 | |||||
Net Cash Provided by (Used in) Operating Activities | 68,568,000 | 93,340,000 | |||||
Payments to Acquire Property, Plant, and Equipment | 49,735,000 | 50,823,000 | |||||
Payments to Develop Software | 0 | (6,004,000) | |||||
Net cash used in investing activities | (49,311,000) | (56,401,000) | |||||
Repayments on note payable | 0 | ||||||
Repayments of Long-term Capital Lease Obligations | (335,000) | (308,000) | |||||
Excess tax benefit realized from stock-based compensation | 4,000 | ||||||
Net Cash Provided by (Used in) Financing Activities | (2,304,000) | (7,470,000) | |||||
Effect of foreign exchange rate changes on cash | 0 | 0 | |||||
Change in cash and cash equivalents | 16,953,000 | 29,469,000 | |||||
REVENUES: | |||||||
Food and beverage sales | 274,411,000 | 280,391,000 | |||||
Entertainment and merchandise sales | 296,197,000 | 358,192,000 | |||||
Total company store sales | 570,608,000 | 638,583,000 | |||||
Franchise fees and royalties | 1,411,000 | 1,561,000 | |||||
Fees and Commissions, Other | 1,054,000 | 735,000 | |||||
Total revenues | 573,073,000 | 640,879,000 | |||||
Company store operating costs: | |||||||
Cost of food and beverage (exclusive of items shown separately below) | 62,847,000 | 69,431,000 | |||||
Cost of entertainment and merchandise (exclusive of items shown separately below) | 21,037,000 | 23,149,000 | |||||
Total cost of food, beverage, entertainment and merchandise | 83,884,000 | 92,580,000 | |||||
Labor expenses | 170,089,000 | 175,495,000 | |||||
Depreciation and amortization | 73,162,000 | 81,661,000 | |||||
Other store operating expenses | 129,415,000 | 104,297,000 | |||||
Total company store operating costs | 521,718,000 | 520,634,000 | |||||
Other costs and expenses: | |||||||
Advertising expense | 27,921,000 | 30,188,000 | |||||
General and administrative expenses | 15,672,000 | 19,669,000 | |||||
Asset Impairment Charges | 1,824,000 | 709,000 | |||||
Transaction and severance costs | 698,000 | 1,294,000 | |||||
Total operating costs and expenses | 567,833,000 | 572,494,000 | |||||
Rent expense | 65,168,000 | 66,601,000 | |||||
Operating income (loss) | 5,240,000 | 68,385,000 | |||||
Equity in earnings (loss) in affiliates | 28,096,000 | (8,096,000) | |||||
Interest expense | 47,730,000 | 47,765,000 | |||||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | (14,394,000) | 12,524,000 | |||||
Income tax expense (benefit) | (14,594,000) | 6,065,000 | |||||
Net income (loss) | 200,000 | 6,459,000 | |||||
Components of other comprehensive income (loss), net of tax: | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 703,000 | ||||||
Total components of other comprehensive income (loss), net of tax | 1,187,000 | ||||||
Comprehensive income (loss) | (1,387,000) | (7,162,000) | |||||
Cash and cash equivalents | 70,041,000 | 71,704,000 | 70,041,000 | 71,704,000 | 53,088,000 | 42,235,000 | |
Guarantors | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Fees and Commissions, Other | 7,702,000 | 615,000 | 28,791,000 | 1,845,000 | |||
Franchise fees and royalties | 3,953,000 | 4,030,000 | 12,320,000 | 11,879,000 | |||
Total company store sales | 32,408,000 | 18,595,000 | 93,056,000 | 54,930,000 | |||
Entertainment and merchandise sales | 19,174,000 | 6,703,000 | 52,097,000 | 18,151,000 | |||
Food and beverage sales | 13,234,000 | 11,892,000 | 40,959,000 | 36,779,000 | |||
Intangible assets, net | 463,941,000 | 463,941,000 | 464,926,000 | ||||
Proceeds from sale of property and equipment | 0 | 0 | |||||
Repayments of Senior Debt | 0 | 0 | |||||
Net Cash Provided by (Used in) Operating Activities | 24,632,000 | 17,674,000 | |||||
Payments to Acquire Property, Plant, and Equipment | 21,407,000 | 15,506,000 | |||||
Payments to Develop Software | (2,520,000) | (2,784,000) | |||||
Net cash used in investing activities | (23,927,000) | (18,290,000) | |||||
Repayments on note payable | (37,000) | ||||||
Repayments of Long-term Capital Lease Obligations | 0 | 0 | |||||
Excess tax benefit realized from stock-based compensation | 0 | ||||||
Net Cash Provided by (Used in) Financing Activities | (13,000) | (37,000) | |||||
Effect of foreign exchange rate changes on cash | 0 | 0 | |||||
Change in cash and cash equivalents | 692,000 | (653,000) | |||||
REVENUES: | |||||||
Food and beverage sales | 13,234,000 | 11,892,000 | 40,959,000 | 36,779,000 | |||
Entertainment and merchandise sales | 19,174,000 | 6,703,000 | 52,097,000 | 18,151,000 | |||
Total company store sales | 32,408,000 | 18,595,000 | 93,056,000 | 54,930,000 | |||
Franchise fees and royalties | 3,953,000 | 4,030,000 | 12,320,000 | 11,879,000 | |||
Fees and Commissions, Other | 7,702,000 | 615,000 | 28,791,000 | 1,845,000 | |||
Total revenues | 44,063,000 | 23,240,000 | 134,167,000 | 68,654,000 | |||
Company store operating costs: | |||||||
Cost of food and beverage (exclusive of items shown separately below) | 3,519,000 | 3,194,000 | 10,671,000 | 9,632,000 | |||
Cost of entertainment and merchandise (exclusive of items shown separately below) | 432,000 | 428,000 | 1,236,000 | 1,329,000 | |||
Total cost of food, beverage, entertainment and merchandise | 3,951,000 | 3,622,000 | 11,907,000 | 10,961,000 | |||
Labor expenses | 4,729,000 | 4,039,000 | 14,108,000 | 11,842,000 | |||
Depreciation and amortization | 1,064,000 | 650,000 | 2,946,000 | 1,884,000 | |||
Other store operating expenses | 3,817,000 | 3,033,000 | 10,360,000 | 7,568,000 | |||
Total company store operating costs | 15,185,000 | 12,675,000 | 43,999,000 | 36,298,000 | |||
Other costs and expenses: | |||||||
Advertising expense | 1,085,000 | 828,000 | 4,345,000 | 3,548,000 | |||
General and administrative expenses | 10,454,000 | 10,270,000 | 32,194,000 | 30,996,000 | |||
Asset Impairment Charges | 14,000 | 0 | 14,000 | 0 | |||
Transaction and severance costs | 0 | 0 | 0 | 55,000 | |||
Total operating costs and expenses | 26,738,000 | 23,773,000 | 80,552,000 | 70,897,000 | |||
Rent expense | 1,624,000 | 1,331,000 | 4,678,000 | 4,043,000 | |||
Operating income (loss) | 17,325,000 | (533,000) | 53,615,000 | (2,243,000) | |||
Equity in earnings (loss) in affiliates | 0 | 0 | 0 | 0 | |||
Interest expense | 1,353,000 | 1,440,000 | 3,345,000 | 3,328,000 | |||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | 15,972,000 | (1,973,000) | 50,270,000 | (5,571,000) | |||
Income tax expense (benefit) | 25,067,000 | (935,000) | 18,263,000 | (185,000) | |||
Net income (loss) | (9,095,000) | (1,038,000) | 32,007,000 | (5,386,000) | |||
Components of other comprehensive income (loss), net of tax: | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 0 | 0 | 0 | ||||
Total components of other comprehensive income (loss), net of tax | 0 | ||||||
Comprehensive income (loss) | 9,095,000 | 1,038,000 | (32,007,000) | 5,386,000 | |||
Cash and cash equivalents | 1,850,000 | 1,144,000 | 1,850,000 | 1,144,000 | 1,158,000 | 1,797,000 | |
Non-Guarantors | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Fees and Commissions, Other | 8,294,000 | 8,431,000 | 26,900,000 | 28,746,000 | |||
Franchise fees and royalties | 0 | 0 | 0 | 0 | |||
Total company store sales | 4,516,000 | 4,290,000 | 12,695,000 | 12,056,000 | |||
Entertainment and merchandise sales | 2,908,000 | 2,755,000 | 7,980,000 | 7,635,000 | |||
Food and beverage sales | 1,608,000 | 1,535,000 | 4,715,000 | 4,421,000 | |||
Intangible assets, net | 0 | 0 | 0 | ||||
Proceeds from sale of property and equipment | 0 | 0 | |||||
Repayments of Senior Debt | 0 | 0 | |||||
Net Cash Provided by (Used in) Operating Activities | 1,040,000 | 240,000 | |||||
Payments to Acquire Property, Plant, and Equipment | 768,000 | 206,000 | |||||
Payments to Develop Software | 0 | 0 | |||||
Net cash used in investing activities | (768,000) | (206,000) | |||||
Repayments on note payable | 0 | ||||||
Repayments of Long-term Capital Lease Obligations | (5,000) | (3,000) | |||||
Excess tax benefit realized from stock-based compensation | 0 | ||||||
Net Cash Provided by (Used in) Financing Activities | (5,000) | (3,000) | |||||
Effect of foreign exchange rate changes on cash | 492,000 | 356,000 | |||||
Change in cash and cash equivalents | 759,000 | 387,000 | |||||
REVENUES: | |||||||
Food and beverage sales | 1,608,000 | 1,535,000 | 4,715,000 | 4,421,000 | |||
Entertainment and merchandise sales | 2,908,000 | 2,755,000 | 7,980,000 | 7,635,000 | |||
Total company store sales | 4,516,000 | 4,290,000 | 12,695,000 | 12,056,000 | |||
Franchise fees and royalties | 0 | 0 | 0 | 0 | |||
Fees and Commissions, Other | 8,294,000 | 8,431,000 | 26,900,000 | 28,746,000 | |||
Total revenues | 12,810,000 | 12,721,000 | 39,595,000 | 40,802,000 | |||
Company store operating costs: | |||||||
Cost of food and beverage (exclusive of items shown separately below) | 539,000 | 540,000 | 1,496,000 | 1,639,000 | |||
Cost of entertainment and merchandise (exclusive of items shown separately below) | 191,000 | 195,000 | 498,000 | 526,000 | |||
Total cost of food, beverage, entertainment and merchandise | 730,000 | 735,000 | 1,994,000 | 2,165,000 | |||
Labor expenses | 1,239,000 | 1,296,000 | 3,761,000 | 3,833,000 | |||
Depreciation and amortization | 436,000 | 516,000 | 1,384,000 | 1,484,000 | |||
Other store operating expenses | 1,079,000 | 953,000 | 3,373,000 | 2,884,000 | |||
Total company store operating costs | 4,053,000 | 4,054,000 | 12,150,000 | 12,040,000 | |||
Other costs and expenses: | |||||||
Advertising expense | 10,622,000 | 10,151,000 | 32,310,000 | 31,761,000 | |||
General and administrative expenses | 105,000 | 273,000 | 371,000 | 557,000 | |||
Asset Impairment Charges | 5,000 | 63,000 | 5,000 | 63,000 | |||
Transaction and severance costs | 0 | 0 | 0 | 0 | |||
Total operating costs and expenses | 14,785,000 | 14,541,000 | 44,836,000 | 44,421,000 | |||
Rent expense | 569,000 | 554,000 | 1,638,000 | 1,674,000 | |||
Operating income (loss) | (1,975,000) | (1,820,000) | (5,241,000) | (3,619,000) | |||
Equity in earnings (loss) in affiliates | 0 | 0 | 0 | 0 | |||
Interest expense | 196,000 | 112,000 | 499,000 | 326,000 | |||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | (2,171,000) | (1,932,000) | (5,740,000) | (3,945,000) | |||
Income tax expense (benefit) | (715,000) | (671,000) | (1,829,000) | (1,235,000) | |||
Net income (loss) | (1,456,000) | (1,261,000) | (3,911,000) | (2,710,000) | |||
Components of other comprehensive income (loss), net of tax: | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 648,000 | (212,000) | 703,000 | ||||
Total components of other comprehensive income (loss), net of tax | 1,187,000 | ||||||
Comprehensive income (loss) | 808,000 | 1,473,000 | 2,724,000 | 2,007,000 | |||
Cash and cash equivalents | 7,536,000 | 7,009,000 | 7,536,000 | 7,009,000 | 6,777,000 | 6,622,000 | |
Subsidiary Issuer [Member] | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Fees and Commissions, Other | 364,000 | 273,000 | |||||
Franchise fees and royalties | 506,000 | 292,000 | |||||
Total company store sales | 171,964,000 | 200,863,000 | |||||
Entertainment and merchandise sales | 88,551,000 | 112,306,000 | |||||
Food and beverage sales | 83,413,000 | 88,557,000 | |||||
Intangible assets, net | 17,337,000 | 17,337,000 | 19,157,000 | ||||
REVENUES: | |||||||
Food and beverage sales | 83,413,000 | 88,557,000 | |||||
Entertainment and merchandise sales | 88,551,000 | 112,306,000 | |||||
Total company store sales | 171,964,000 | 200,863,000 | |||||
Franchise fees and royalties | 506,000 | 292,000 | |||||
Fees and Commissions, Other | 364,000 | 273,000 | |||||
Total revenues | 172,834,000 | 201,428,000 | |||||
Company store operating costs: | |||||||
Cost of food and beverage (exclusive of items shown separately below) | 19,916,000 | 21,773,000 | |||||
Cost of entertainment and merchandise (exclusive of items shown separately below) | 6,807,000 | 7,391,000 | |||||
Total cost of food, beverage, entertainment and merchandise | 26,723,000 | 29,164,000 | |||||
Labor expenses | 55,252,000 | 56,386,000 | |||||
Depreciation and amortization | 23,789,000 | 26,501,000 | |||||
Other store operating expenses | 43,731,000 | 35,659,000 | |||||
Total company store operating costs | 171,561,000 | 169,945,000 | |||||
Other costs and expenses: | |||||||
Advertising expense | 8,670,000 | 8,967,000 | |||||
General and administrative expenses | 4,863,000 | 6,741,000 | |||||
Asset Impairment Charges | 1,824,000 | 709,000 | |||||
Transaction and severance costs | 128,000 | 166,000 | |||||
Total operating costs and expenses | 187,046,000 | 186,528,000 | |||||
Rent expense | 22,066,000 | 22,235,000 | |||||
Operating income (loss) | (14,212,000) | 14,900,000 | |||||
Equity in earnings (loss) in affiliates | (10,551,000) | (2,299,000) | |||||
Interest expense | 15,902,000 | 15,685,000 | |||||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | (40,665,000) | (3,084,000) | |||||
Income tax expense (benefit) | (29,573,000) | (680,000) | |||||
Net income (loss) | (11,092,000) | (2,404,000) | |||||
Components of other comprehensive income (loss), net of tax: | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 648,000 | (212,000) | |||||
Comprehensive income (loss) | 10,444,000 | 2,616,000 | |||||
Cash and cash equivalents | 70,041,000 | 70,041,000 | 53,088,000 | ||||
Eliminations | |||||||
Condensed Financial Statements, Captions [Line Items] | |||||||
Fees and Commissions, Other | (16,360,000) | (9,319,000) | (56,745,000) | (31,326,000) | |||
Franchise fees and royalties | 0 | 0 | 0 | 0 | |||
Total company store sales | 0 | 0 | 0 | 0 | |||
Entertainment and merchandise sales | 0 | 0 | 0 | 0 | |||
Food and beverage sales | 0 | 0 | 0 | 0 | |||
Intangible assets, net | 0 | 0 | 0 | ||||
Proceeds from sale of property and equipment | 0 | 0 | |||||
Repayments of Senior Debt | 0 | 0 | |||||
Net Cash Provided by (Used in) Operating Activities | 0 | 0 | |||||
Payments to Acquire Property, Plant, and Equipment | 0 | 0 | |||||
Payments to Develop Software | 0 | 0 | |||||
Net cash used in investing activities | 0 | 0 | |||||
Repayments on note payable | 0 | ||||||
Repayments of Long-term Capital Lease Obligations | 0 | 0 | |||||
Excess tax benefit realized from stock-based compensation | 0 | ||||||
Net Cash Provided by (Used in) Financing Activities | 0 | 0 | |||||
Effect of foreign exchange rate changes on cash | 0 | 0 | |||||
Change in cash and cash equivalents | 0 | 0 | |||||
REVENUES: | |||||||
Food and beverage sales | 0 | 0 | 0 | 0 | |||
Entertainment and merchandise sales | 0 | 0 | 0 | 0 | |||
Total company store sales | 0 | 0 | 0 | 0 | |||
Franchise fees and royalties | 0 | 0 | 0 | 0 | |||
Fees and Commissions, Other | (16,360,000) | (9,319,000) | (56,745,000) | (31,326,000) | |||
Total revenues | (16,360,000) | (9,319,000) | (56,745,000) | (31,326,000) | |||
Company store operating costs: | |||||||
Cost of food and beverage (exclusive of items shown separately below) | 0 | 0 | 0 | 0 | |||
Cost of entertainment and merchandise (exclusive of items shown separately below) | 0 | 0 | 0 | 0 | |||
Total cost of food, beverage, entertainment and merchandise | 0 | 0 | 0 | 0 | |||
Labor expenses | 0 | 0 | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | 0 | 0 | |||
Other store operating expenses | (8,066,000) | (888,000) | (29,871,000) | (2,606,000) | |||
Total company store operating costs | (8,066,000) | (888,000) | (29,871,000) | (2,606,000) | |||
Other costs and expenses: | |||||||
Advertising expense | (8,294,000) | (8,431,000) | (26,874,000) | (28,720,000) | |||
General and administrative expenses | 0 | 0 | 0 | 0 | |||
Asset Impairment Charges | 0 | 0 | 0 | ||||
Transaction and severance costs | 0 | 0 | 0 | 0 | |||
Total operating costs and expenses | (16,360,000) | (9,319,000) | (56,745,000) | (31,326,000) | |||
Rent expense | 0 | 0 | 0 | 0 | |||
Operating income (loss) | 0 | 0 | 0 | 0 | |||
Equity in earnings (loss) in affiliates | 10,551,000 | 2,299,000 | (28,096,000) | 8,096,000 | |||
Interest expense | 0 | 0 | 0 | 0 | |||
Income (Loss) from Continuing Operations before Income Taxes, Domestic | 10,551,000 | 2,299,000 | (28,096,000) | 8,096,000 | |||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | |||
Net income (loss) | 10,551,000 | 2,299,000 | (28,096,000) | 8,096,000 | |||
Components of other comprehensive income (loss), net of tax: | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (648,000) | 212,000 | (703,000) | ||||
Total components of other comprehensive income (loss), net of tax | (1,187,000) | ||||||
Comprehensive income (loss) | (9,903,000) | (2,511,000) | 29,283,000 | (7,393,000) | |||
Cash and cash equivalents | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidating Schedules - Cash Flow (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
Jan. 01, 2017 |
|
Condensed Financial Statements, Captions [Line Items] | |||||
Capital lease obligations, less current portion | $ 13,162 | $ 13,162 | $ 13,602 | ||
Capital lease obligations, current portion | 571 | 571 | 467 | ||
Transaction and severance costs | 128 | $ 166 | 698 | $ 1,349 | |
Cash flows provided by (used in) operating activities: | |||||
Net Cash Provided by (Used in) Operating Activities | 94,240 | 111,254 | |||
Cash flows provided by (used in) investing activities: | |||||
Proceeds from sale of property and equipment | (71,910) | (66,535) | |||
Proceeds from Sale of Property, Plant, and Equipment | 424 | 426 | |||
Payments to Develop Software | (2,520) | (8,788) | |||
Net cash used in investing activities | (74,006) | (74,897) | |||
Repayments on senior term loan | (5,700) | (5,700) | |||
Repayments of Notes Payable | (13) | (37) | |||
Cash flows from financing activities: | |||||
Repayments on note payable | (37) | ||||
Proceeds from sale leaseback transaction | 4,073 | 0 | |||
Repayments of Long-term Capital Lease Obligations | (340) | (311) | |||
Sale Leaseback Transaction, Payments, Financing Activities | (1,789) | (1,466) | |||
Excess tax benefit realized from stock-based compensation | 0 | 4 | |||
Adjustments to Additional Paid in Capital, Other | 1,447 | 0 | |||
Net cash used in financing activities | (2,322) | (7,510) | |||
Effect of foreign exchange rate changes on cash | 492 | 356 | |||
Change in cash and cash equivalents | 18,404 | 29,203 | |||
Cash and cash equivalents at beginning of period | 61,023 | 50,654 | |||
Cash and cash equivalents at end of period | 79,427 | 79,857 | 79,427 | 79,857 | |
Guarantors | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Capital lease obligations, less current portion | 0 | 0 | 0 | ||
Capital lease obligations, current portion | 0 | 0 | 0 | ||
Transaction and severance costs | 0 | 0 | 0 | 55 | |
Cash flows provided by (used in) operating activities: | |||||
Net Cash Provided by (Used in) Operating Activities | 24,632 | 17,674 | |||
Cash flows provided by (used in) investing activities: | |||||
Proceeds from sale of property and equipment | (21,407) | (15,506) | |||
Proceeds from Sale of Property, Plant, and Equipment | 0 | 0 | |||
Payments to Develop Software | (2,520) | (2,784) | |||
Net cash used in investing activities | (23,927) | (18,290) | |||
Repayments on senior term loan | 0 | 0 | |||
Repayments of Notes Payable | (13) | ||||
Cash flows from financing activities: | |||||
Repayments on note payable | (37) | ||||
Proceeds from sale leaseback transaction | 0 | ||||
Repayments of Long-term Capital Lease Obligations | 0 | 0 | |||
Sale Leaseback Transaction, Payments, Financing Activities | 0 | 0 | |||
Excess tax benefit realized from stock-based compensation | 0 | ||||
Adjustments to Additional Paid in Capital, Other | 0 | ||||
Net cash used in financing activities | (13) | (37) | |||
Effect of foreign exchange rate changes on cash | 0 | 0 | |||
Change in cash and cash equivalents | 692 | (653) | |||
Cash and cash equivalents at beginning of period | 1,158 | 1,797 | |||
Cash and cash equivalents at end of period | 1,850 | 1,144 | 1,850 | 1,144 | |
Non-Guarantors | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Capital lease obligations, less current portion | 57 | 57 | 60 | ||
Capital lease obligations, current portion | 9 | 9 | 7 | ||
Transaction and severance costs | 0 | 0 | 0 | 0 | |
Cash flows provided by (used in) operating activities: | |||||
Net Cash Provided by (Used in) Operating Activities | 1,040 | 240 | |||
Cash flows provided by (used in) investing activities: | |||||
Proceeds from sale of property and equipment | (768) | (206) | |||
Proceeds from Sale of Property, Plant, and Equipment | 0 | 0 | |||
Payments to Develop Software | 0 | 0 | |||
Net cash used in investing activities | (768) | (206) | |||
Repayments on senior term loan | 0 | 0 | |||
Repayments of Notes Payable | 0 | ||||
Cash flows from financing activities: | |||||
Repayments on note payable | 0 | ||||
Proceeds from sale leaseback transaction | 0 | ||||
Repayments of Long-term Capital Lease Obligations | (5) | (3) | |||
Sale Leaseback Transaction, Payments, Financing Activities | 0 | 0 | |||
Excess tax benefit realized from stock-based compensation | 0 | ||||
Adjustments to Additional Paid in Capital, Other | 0 | ||||
Net cash used in financing activities | (5) | (3) | |||
Effect of foreign exchange rate changes on cash | 492 | 356 | |||
Change in cash and cash equivalents | 759 | 387 | |||
Cash and cash equivalents at beginning of period | 6,777 | 6,622 | |||
Cash and cash equivalents at end of period | 7,536 | 7,009 | 7,536 | 7,009 | |
Subsidiary Issuer [Member] | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Capital lease obligations, less current portion | 13,105 | 13,105 | 13,542 | ||
Capital lease obligations, current portion | 562 | 562 | 460 | ||
Transaction and severance costs | 128 | 166 | |||
Cash flows from financing activities: | |||||
Cash and cash equivalents at beginning of period | 53,088 | ||||
Cash and cash equivalents at end of period | 70,041 | 70,041 | |||
Issuer | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Transaction and severance costs | 698 | 1,294 | |||
Cash flows provided by (used in) operating activities: | |||||
Net Cash Provided by (Used in) Operating Activities | 68,568 | 93,340 | |||
Cash flows provided by (used in) investing activities: | |||||
Proceeds from sale of property and equipment | (49,735) | (50,823) | |||
Proceeds from Sale of Property, Plant, and Equipment | 424 | 426 | |||
Payments to Develop Software | 0 | (6,004) | |||
Net cash used in investing activities | (49,311) | (56,401) | |||
Repayments on senior term loan | (5,700) | (5,700) | |||
Repayments of Notes Payable | 0 | ||||
Cash flows from financing activities: | |||||
Repayments on note payable | 0 | ||||
Proceeds from sale leaseback transaction | 4,073 | ||||
Repayments of Long-term Capital Lease Obligations | (335) | (308) | |||
Sale Leaseback Transaction, Payments, Financing Activities | (1,789) | (1,466) | |||
Excess tax benefit realized from stock-based compensation | 4 | ||||
Adjustments to Additional Paid in Capital, Other | 1,447 | ||||
Net cash used in financing activities | (2,304) | (7,470) | |||
Effect of foreign exchange rate changes on cash | 0 | 0 | |||
Change in cash and cash equivalents | 16,953 | 29,469 | |||
Cash and cash equivalents at beginning of period | 53,088 | 42,235 | |||
Cash and cash equivalents at end of period | 70,041 | 71,704 | 70,041 | 71,704 | |
Eliminations | |||||
Condensed Financial Statements, Captions [Line Items] | |||||
Capital lease obligations, less current portion | 0 | 0 | 0 | ||
Capital lease obligations, current portion | 0 | 0 | $ 0 | ||
Transaction and severance costs | 0 | 0 | 0 | 0 | |
Cash flows provided by (used in) operating activities: | |||||
Net Cash Provided by (Used in) Operating Activities | 0 | 0 | |||
Cash flows provided by (used in) investing activities: | |||||
Proceeds from sale of property and equipment | 0 | 0 | |||
Proceeds from Sale of Property, Plant, and Equipment | 0 | 0 | |||
Payments to Develop Software | 0 | 0 | |||
Net cash used in investing activities | 0 | 0 | |||
Repayments on senior term loan | 0 | 0 | |||
Repayments of Notes Payable | 0 | ||||
Cash flows from financing activities: | |||||
Repayments on note payable | 0 | ||||
Proceeds from sale leaseback transaction | 0 | ||||
Repayments of Long-term Capital Lease Obligations | 0 | 0 | |||
Sale Leaseback Transaction, Payments, Financing Activities | 0 | 0 | |||
Excess tax benefit realized from stock-based compensation | 0 | ||||
Adjustments to Additional Paid in Capital, Other | 0 | ||||
Net cash used in financing activities | 0 | 0 | |||
Effect of foreign exchange rate changes on cash | 0 | 0 | |||
Change in cash and cash equivalents | 0 | 0 | |||
Cash and cash equivalents at beginning of period | 0 | 0 | |||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
Related Party Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
Oct. 01, 2017 |
Oct. 02, 2016 |
|
Related Party Transaction [Line Items] | ||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 3.9 | |||
Issuer | ||||
Related Party Transaction [Line Items] | ||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 0.1 | $ 0.3 | $ 0.4 | $ 0.3 |
Sale Leaseback (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Oct. 01, 2017 |
Oct. 02, 2016 |
|
Sale Leaseback Transaction [Line Items] | ||
Sale Leaseback Transaction, Gross Proceeds, Financing Activities | $ 4,073 | $ 0 |
Sale Leaseback Transaction, Net Proceeds, Financing Activities | $ 3,900 |
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