UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-Q

                              (Mark One)

[X]	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended April 1, 2001.
[   ]	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _____________ to _______________.

Commission File Number 0-15782

CEC ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)

Kansas	48-0905805
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

4441 West Airport Freeway
Irving, Texas 75062
(Address of principal executive offices,
including zip code)

(972) 258-8507
(Registrant’s telephone number,
including area code)

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [   ]

      At April 1, 2001, an aggregate of 27,683,867 shares of the registrant’s Common Stock, par value of $.10 each (being the registrant’s only class of common stock), were outstanding.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
	Item 1. Financial Statements
	CONSOLIDATED BALANCE SHEETS
	CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME
	CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Employment Agreement dated May 8, 2001

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

CEC ENTERTAINMENT, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Consolidated balance sheets		3
Consolidated statements of earnings and comprehensive income		4
Consolidated statement of shareholders’ equity		5
Consolidated statements of cash flows		6
Notes to consolidated financial statements		7

2

CEC ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
(Thousands, except share amounts)

			April 1,			December 31,
			2001			2000
			(unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$	8,616		$	7,300
	Accounts receivable			7,691			12,778
	Inventories			8,968			8,436
	Prepaid expenses			4,956			4,419
	Deferred tax asset			1,205			1,205
	Assets held for resale			2,908			4,211
		Total current assets		34,344			38,349
Property and equipment, net				355,656			338,408
Notes receivable from related parties				1,893			1,526
Other assets				13,559			11,092
			$	405,452		$	389,375
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
	Current portion of long-term debt		$	6,106		$	6,102
	Accounts payable and accrued liabilities			54,751			38,616
		Total current liabilities		60,857			44,718
Long-term debt, less current portion				20,584			47,030
Deferred rent				3,457			3,491
Deferred tax liability				9,401			7,708
Other liabilities				1,725			1,725
Commitments and contingencies
Redeemable preferred stock, $60 par value, redeemable for $2,888 in 2005				2,459			2,431
Shareholders’ equity:
	Common stock, $.10 par value; authorized 100,000,000 shares; 34,920,773 and 34,585,454 shares issued, respectively			3,492			3,459
	Capital in excess of par value			185,353			177,828
	Retained earnings			200,316			175,217
	Accumulated other comprehensive loss			(109	)		(30	)
	Less treasury shares of 7,236,906 and 7,039,606, respectively, at cost			(82,083	)		(74,202	)
				306,969			282,272
			$	405,452		$	389,375

See notes to consolidated financial statements.

3

CEC ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE INCOME
(Unaudited)
(Thousands, except per share amounts)

			Three Months Ended
			April 1, 2001			April 2, 2000
Food and beverage revenues			$	110,822		$	93,779
Games and merchandise revenues				51,377			46,567
Franchise fees and royalties				926			942
Interest income, including related party income of $42 and $23, respectively				83			59
				163,208			141,347
Costs and expenses:
		Cost of sales		68,467			61,550
		Selling, general and administrative expenses		21,298			19,996
		Depreciation and amortization		8,286			8,096
		Interest expense		710			761
		Other operating expenses		23,161			20,318
				121,922			110,721
Income before income taxes				41,286			30,626
Income taxes:
		Current expense		14,409			10,750
		Deferred expense		1,693			1,132
				16,102			11,882
Net income				25,184			18,744
Other comprehensive income, net of tax:
		Foreign currency translation		(79	)		34
Comprehensive income			$	25,105		$	18,778
Earnings per share:
	Basic:
		Net income	$	.90		$	.69
		Weighted average shares outstanding		27,745			26,868
	Diluted:
		Net income	$	.88		$	.68
		Weighted average shares outstanding		28,521			27,639

See notes to consolidated financial statements.

4

CEC ENTERTAINMENT, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(Unaudited)
(Thousands, except per share amounts)

		Amounts			Shares
Common stock and capital in excess of par value Balance, beginning of year		$	181,287			34,585
	Stock options exercised		4,813			331
	Net tax benefit from exercise of stock options		2,571
	Stock issued under 401(k) plan		174			5
	Balance, April 1, 2001		188,845			34,921
Retained earnings:
	Balance, beginning of year		175,217
	Net income		25,184
	Redeemable preferred stock accretion		(26	)
	Redeemable preferred stock dividend, $1.20 per share		(59	)
	Balance, April 1, 2001		200,316
Accumulated other comprehensive loss:
	Balance, beginning of year		(30	)
	Foreign currency translation		(79	)
	Balance, April 1, 2001		(109	)
Treasury shares:
	Balance, beginning of year		(74,202	)		7,040
	Treasury stock acquired		(7,881	)		197
	Balance, April 1, 2001		(82,083	)		7,237
Total shareholder’s equity		$	306,969

See notes to consolidated financial statements.

5

CEC ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Thousands)

			Three Months Ended
			April 1, 2001			April 2, 2000
Operating activities:
	Net income		$	25,184		$	18,744
	Adjustments to reconcile net income to cash provided by operations:
Depreciation and amortization				8,286			8,096
Deferred income tax expense				1,693			1,132
Tax benefit from exercise of stock options and stock grants				2,571			66
Compensation expense under stock grant plan							190
Other				242			(6	)
Net change in receivables, inventories, prepaids, payables and accrued liabilities				20,450			14,837
		Cash provided by operations		58,426			43,059
Investing activities:
	Purchases of property and equipment			(26,203	)		(18,849	)
	Additions to notes receivable			(1,100	)		(696	)
	Payments received on notes receivable			733			206
	(Increase) decrease in assets held for resale and other assets			(1,068	)		1,725
		Cash used in investing activities		(27,638	)		(17,614	)
Financing activities:
	Payments on debt and line of credit			(26,442	)		(13,696	)
	Exercise of stock options			4,813			484
	Redeemable preferred stock dividends			(59	)		(59	)
	Purchase of treasury stock			(7,881	)		(5,980	)
	Other			97			121
		Cash used in financing activities		(29,472	)		(19,130	)
Increase in cash and cash equivalents				1,316			6,315
Cash and cash equivalents, beginning of period				7,300			2,731
Cash and cash equivalents, end of period			$	8,616		$	9,046

See notes to consolidated financial statements.

6

CEC ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.   Interim financial statements:

      In the opinion of management, the accompanying financial statements for the periods ended April 1, 2001 and April 2, 2000 reflect all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial condition, results of operations and cash flows in accordance with generally accepted accounting principles.

      Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with generally accepted accounting principles have been omitted. The unaudited consolidated financial statements referred to above should be read in conjunction with the financial statements and notes thereto included in the Company’s Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2000. Results of operations for the periods ended April 1, 2001 and April 2, 2000 are not necessarily indicative of the results for the year.

2.   Earnings per common share:

      Earnings per common share were computed based on the weighted average number of common and potential common shares outstanding during the period. Net income available per common share has been adjusted for the items indicated below, and earnings per common and potential common share were computed as follows (thousands, except per share data):

		Three Months Ended
		April 1,			April 2,
		2001			2000
Net income		$	25,184		$	18,744
Accretion of redeemable preferred stock			(26	)		(26	)
Redeemable preferred stock dividends			(59	)		(59	)
Adjusted income applicable to common and potential common shares		$	25,099		$	18,659
Basic:
	Weighted average common shares outstanding		27,745			26,868
	Earnings per common share	$	.90		$	.69
Diluted:
	Weighted average common shares outstanding		27,745			26,868
	Potential common shares for stock options and stock grants		776			771
	Weighted average shares outstanding		28,521			27,639
	Earnings per common and potential common share	$	.88		$	.68

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

First Quarter 2001 Compared to First Quarter 2000

      A summary of the results of operations of the Company as a percentage of revenues for the first quarters of 2001 and 2000 is shown below.

		Three Months Ended
		April 1, 2001			April 2, 2000
Revenues			100.0	%		100.0	%
Costs and expenses:
	Cost of sales		42.0			43.6
	Selling, general and administrative		13.0			14.1
	Depreciation and amortization		5.1			5.7
	Interest expense		.4			.5
	Other operating expenses		14.2			14.4
			74.7			78.3
Income before income taxes			25.3			21.7
Income tax expense			9.9			8.4
Net income			15.4	%		13.3	%

      Revenues

      Revenues increased to $163.2 million in the first quarter of 2001 from $141.3 million in the first quarter of 2000 due to an increase in the number of Company-operated restaurants and an increase of 5.9% in comparable store sales of the Company’s Chuck E. Cheese’s restaurants which were open during all of the first quarters of both 2001 and 2000. During 2000, the Company opened 31 new restaurants and closed one restaurant. During the first three months of 2001, the Company opened four new stores, acquired one restaurant from a franchisee and closed one restaurant. Menu prices increased 2.4% between the periods.

      Costs and Expenses

      Costs and expenses as a percentage of revenues decreased to 74.7% in the first quarter of 2001 from 78.3% in the first quarter of 2000.

      Cost of sales decreased as a percentage of revenues to 42.0% in the first quarter of 2001 from 43.6% in the comparable period of 2000. Cost of food, beverage, prize and merchandise items as a percentage of revenues decreased to 13.9% in the first quarter of 2001 from 14.7% in the first quarter of 2000 primarily due to the increase in menu prices which was partially offset by higher cheese costs. Store labor expenses as a percentage of store sales decreased to 25.2% in the first quarter of 2001 from 25.7% in the first quarter of 2000 primarily due to the increase in comparable store sales.

      Selling, general and administrative expenses as a percentage of revenues decreased to 13.0% in the first quarter of 2001 from 14.1% in the first quarter of 2000 due primarily to a decrease in advertising and corporate overhead costs as a percentage of revenues.

      Depreciation and amortization expenses as a percentage of revenues decreased to 5.1% in the first quarter of 2001 from 5.7% in the first quarter of 2000 primarily due to the increase in comparable store sales and a change in selected depreciable lives. During the first quarter of 2001, the estimated remaining useful lives of certain fixed assets were changed based on a review of historical asset utilization. This change in estimate resulted in a reduction of depreciation expense of approximately $550,000 or $.01 per share after tax in the first quarter of 2001.

8

      Interest expense as a percentage of revenues decreased to .4% in the first quarter of 2001 from .5% in the first quarter of 2000 due to increased revenues.

      Other operating expenses decreased as a percentage of revenues to 14.2% in the first quarter of 2001 from 14.4% in the first quarter of 2000 primarily due to lower insurance costs, rent and repairs expense as a percentage of revenues which was partially offset by higher utility costs.

      The Company’s effective income tax rate was 39.0% in the first quarter of 2001 compared to 38.8% in the first quarter of 2000 primarily due to higher estimated state tax rates.

      Net Income

      The Company had net income of $25.2 million in the first quarter of 2001 compared to $18.7 million in the first quarter of 2000 due to the changes in revenues and expenses discussed above. The Company’s diluted earnings per share increased to $.88 per share in the first quarter of 2001 from $.68 per share in the first quarter of 2000.

Financial Condition, Liquidity and Capital Resources

      Cash provided by operations increased to $58.4 million in the first three months of 2001 from $43.1 million in the comparable period of 2000. Cash outflows from investing activities for the first three months of 2001 were $27.6 million primarily related to capital expenditures. Cash outflows from financing activities for the first three months of 2001 were $29.5 million primarily related to repayment of borrowings on the Company’s line of credit and the repurchase of the Company’s common stock. The Company’s primary requirements for cash relate to planned capital expenditures, the repurchase of the Company’s common stock and debt service. The Company expects that it will satisfy such requirements from cash provided by operations and, if necessary, funds available under its line of credit.

      In 2001, the Company plans to add 30 to 34 stores including new stores and acquisitions of existing stores from franchisees. The Company currently anticipates its cost of opening such new stores to average approximately $1.8 million per store, which will vary depending upon many factors including the size of the stores and whether the Company acquires land or the store is an in-line or freestanding building. In addition to such new store openings, the Company plans to expand the seating capacity of 10 to 15 high sales volume stores in 2001, including stores which will receive an enhanced showroom package. The Company also plans to complete Phase III upgrades in approximately 100 stores this year at an average cost of approximately $210,000 to $225,000 per store. A Phase III upgrade generally includes a new toddler play area, skill games and rides, kiddie games and rides, sky-tube enhancements, and prize area enhancement with ticket counting machines. During the first three months of 2001, the Company opened four new restaurants, acquired one restaurant from a franchisee, expanded one restaurant and completed Phase III upgrades in 30 restaurants. The Company currently estimates that capital expenditures in 2001, including expenditures for new store openings, existing store expansions and equipment investments, will be approximately $104 million. The Company plans to finance these expenditures through cash flow from operations and borrowings under the Company’s line of credit.

      Pursuant to the Company’s $25 million stock repurchase plan announced in 1999, the Company has purchased shares of its common stock at an aggregate purchase price of approximately $21.7 million as of May 15, 2001.

      The Company’s total credit facilities of $81 million consist of $6 million in term notes and a $75 million line of credit. Term notes totaling $6 million with annual principal payments of $6 million and annual interest of 10.02% mature in 2001. Interest under the $75 million line of credit is dependent on earnings and debt levels of the Company and ranges from prime or, at the Company’s option, LIBOR plus 1% to 1.75%. Currently, any borrowings under this line of credit would be at the prime rate or LIBOR plus 1%. As of May 15, 2001, there was $21.9 million in borrowings under this line of credit. The Company is required to comply with certain financial ratio tests during the terms of the loan agreements.

9

      Certain statements in this report, other than historical information, may be considered forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, and are subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on the Company’s operating results, performance or financial condition are its ability to implement its growth strategies, national, regional and local economic conditions affecting the restaurant/entertainment industry, competition within each of the restaurants and entertainment industries, success of its franchise operations, negative publicity, fluctuations in quarterly results of operations, including seasonality and government regulations.

      Item 3. Quantitative and Qualitative Disclosures about Market Risk

      The Company is subject to market risk in the form of interest risk and foreign currency risk. Both interest risk and foreign currency risk are immaterial to the Company.

10

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

      On June 2, 2000, a purported class action lawsuit against the Company, entitled Freddy Gavarrete, et al. v. CEC Entertainment, Inc., dba Chuck E. Cheese’s, et al., Cause No. 00-08132 FMC (RZx) (“Gavarrete”), was filed in the Superior Court of the State of California in the County of Los Angeles. On July 27, 2000, the lawsuit was removed to the United States District Court for the Central District of California. The lawsuit was filed by one former restaurant manager purporting to represent restaurant managers of the Company in California from 1996 to the present. No class of plaintiffs has been certified in this lawsuit. The lawsuit alleges violations of state wage and hour laws involving unpaid overtime wages and seeks an unspecified amount in damages. The Company believes the lawsuit is without merit and intends to vigorously defend it.

Item 2. Changes in Securities.

      None to report during quarter for which this report is filed.

Item 3. Defaults Upon Senior Securities.

      None to report during quarter for which this report is filed.

Item 4. Submission of Matters to a Vote of Security Holders.

      None to report during quarter for which this report is filed.

Item 5. Other Information.

      None to report during quarter for which this report is filed.

Item 6. Exhibits and Reports on Form 8-K.

      a) Exhibits

      10 (a) Employment Agreement dated May 8, 2001, between Michael H. Magusiak and the Company.

      b) Reports on Form 8-K

          None filed during the quarter for which this report is filed.

11

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CEC ENTERTAINMENT, INC.

Dated: May 15, 2001 By: /s/ Rodney Carter                                                    
    Rodney Carter
    Executive Vice President, Chief Financial Officer and
    Treasurer

12

EXHIBIT INDEX

Exhibit No.	Description	Page No.
10(a)	Employment Agreement dated May 8, 2001, between Michael H. Magusiak and the Company.	14

13