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 March 28, 2004.
|_| 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 001-13587
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 |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [X] No [_]
At May 5, 2004, an aggregate of 37,353,604 shares of the registrant's
Common Stock, par value of $.10 each (being the registrant's only class of
common stock), were outstanding.
CEC ENTERTAINMENT, INC.
TABLE OF CONTENTS
Page
----
Part I - Financial Information:
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets.................................. 3
Condensed Consolidated Statements of Earnings and Comprehensive Income. 4
Condensed Consolidated Statement of Shareholders' Equity............... 5
Condensed Consolidated Statements of Cash Flows ....................... 6
Notes to Condensed Consolidated Financial Statements................... 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.............................................. 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk ....... 12
Item 4. Controls and Procedures.......................................... 12
Part II - Other Information:
Item 1. Legal Proceedings................................................ 13
Item 6. Exhibits and Reports on Form 8-K................................. 13
Signatures................................................................... 14
Certifications............................................................... 15
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CEC ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands, except share data)
ASSETS
March 28, December 28,
2004 2003
----------- ------------
(unaudited)
Current assets:
Cash and cash equivalents.................................................. $ 12,464 $ 8,067
Accounts receivable........................................................ 9,919 13,103
Inventories................................................................ 10,254 12,491
Prepaid expenses........................................................... 8,721 7,608
Deferred tax asset......................................................... 1,487 1,487
--------- ---------
Total current assets.................................................... 42,845 42,756
--------- ---------
Property and equipment, net................................................... 538,129 536,124
--------- ---------
Other assets.................................................................. 1,338 1,471
--------- ---------
$ 582,312 $ 580,351
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt.......................................... $ 168 $ 168
Accounts payable........................................................... 24,927 30,126
Accrued liabilities........................................................ 49,811 28,610
--------- ---------
Total current liabilities............................................... 74,906 58,904
--------- ---------
Long-term debt, less current portion.......................................... 37,141 64,581
--------- ---------
Deferred rent................................................................. 5,486 5,153
--------- ---------
Deferred tax liability........................................................ 55,695 50,714
--------- ---------
Accrued insurance............................................................. 8,500 8,500
--------- ---------
Shareholders' equity:
Common stock, $.10 par value; authorized 100,000,000 shares; 54,697,077
and 54,481,913 shares issued, respectively ............................. 5,470 5,448
Capital in excess of par value............................................. 224,637 219,071
Retained earnings ......................................................... 411,256 378,911
Accumulated other comprehensive income .................................... 681 695
Less treasury shares of 16,840,268 and 16,042,418, respectively, at cost... (241,460) (211,626)
--------- ---------
400,584 392,499
--------- ---------
$ 582,312 $ 580,351
========= =========
See notes to condensed consolidated financial statements.
CEC ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE INCOME
(Unaudited)
(Thousands, except per share data)
Three Months Ended
---------------------------------
March 28, 2004 March 30, 2003
-------------- --------------
Food and beverage revenues............................ $ 136,339 $ 120,844
Games and merchandise revenues........................ 69,741 62,408
Franchise fees and royalties.......................... 861 865
Interest income ...................................... 7 9
--------- ---------
206,948 184,126
--------- ---------
Costs and expenses:
Cost of sales:
Food, beverage and related supplies............. 24,478 21,970
Games and merchandise........................... 8,643 7,524
Labor........................................... 53,238 47,934
--------- ---------
86,359 77,428
Selling, general and administrative expenses....... 24,252 21,191
Depreciation and amortization...................... 12,229 10,905
Interest expense................................... 287 283
Other operating expenses........................... 31,397 29,537
--------- ---------
154,524 139,344
--------- ---------
Income before income taxes............................ 52,424 44,782
Income taxes.......................................... 20,079 17,375
--------- ---------
Net income ........................................... 32,345 27,407
Other comprehensive income (loss), net of tax:
Foreign currency translation....................... (14) 283
--------- ---------
Comprehensive income.................................. $ 32,331 $ 27,690
========= =========
Earnings per share:
Basic:
Net income ..................................... $ .84 $ .67
========= =========
Weighted average shares outstanding............. 38,310 40,853
========= =========
Diluted:
Net income .................................... $ .82 $ .66
========= =========
Weighted average shares outstanding............. 39,607 41,157
========= =========
See notes to condensed consolidated financial statements.
CEC ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Unaudited)
(Thousands)
Amounts Shares
--------- -------
Common stock and capital in excess of par value:
Balance, beginning of year....................... $ 224,519 54,482
Stock options exercised.......................... 3,982 203
Tax benefit from exercise of options ............ 1,235
Payment for fractional shares.................... (26)
Stock issued under 401(k) plan................... 397 12
--------- -------
Balance, March 28, 2004.......................... 230,107 54,697
--------- =======
Retained earnings:
Balance, beginning of year....................... 378,911
Net income....................................... 32,345
---------
Balance, March 28, 2004.......................... 411,256
---------
Accumulated other comprehensive income (loss):
Balance, beginning of year....................... 695
Foreign currency translation..................... (14)
---------
Balance, March 28, 2004.......................... 681
---------
Treasury shares:
Balance, beginning of year....................... (211,626) 16,042
Treasury stock acquired.......................... (29,834) 798
--------- -------
Balance, March 28, 2004.......................... (241,460) 16,840
--------- =======
Total shareholders' equity.......................... $ 400,584
=========
See notes to condensed consolidated financial statements.
CEC ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Thousands)
Three Months Ended
---------------------------------
March 28, 2004 March 30, 2003
-------------- --------------
Operating activities:
Net income ....................................................... $ 32,345 $ 27,407
Adjustments to reconcile net income to cash
provided by operations:
Depreciation and amortization.................................. 12,229 10,905
Deferred income tax expense.................................... 4,981 4,482
Tax benefit from exercise of stock options..................... 1,235 44
Other.......................................................... 777 803
Net change in receivables, inventory, prepaids, payables and
accrued liabilities......................................... 20,310 16,163
-------- --------
Cash provided by operations................................. 71,877 59,804
-------- --------
Investing activities:
Purchases of property and equipment............................ (14,542) (19,086)
(Increase) decrease in other assets............................ 60 (996)
-------- --------
Cash used in investing activities........................... (14,482) (20,082)
-------- --------
Financing activities:
Payments on debt and line of credit ........................... (27,440) (31,033)
Exercise of stock options ..................................... 3,982 264
Redeemable preferred stock dividends .......................... (59)
Repurchase of common stock .................................... (29,834) (5,922)
Other ......................................................... 294 637
-------- --------
Cash used in financing activities........................... (52,998) (36,113)
-------- --------
Increase in cash and cash equivalents ............................ 4,397 3,609
Cash and cash equivalents, beginning of period.................... 8,067 12,214
-------- --------
Cash and cash equivalents, end of period.......................... $ 12,464 $ 15,823
======== ========
See notes to condensed consolidated financial statements.
CEC ENTERTAINMENT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Interim financial statements:
In the opinion of management, the accompanying condensed financial
statements for the periods ended March 28, 2004 and March 30, 2003 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 condensed 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 28,
2003. Results of operations for the periods ended March 28, 2004 and March 30,
2003 are not necessarily indicative of the results for the year.
2. Earnings per common share:
Basic earnings per common share ("EPS") is computed by dividing earnings
applicable to common shares by the weighted average number of common shares
outstanding. Diluted EPS adjusts for the effect of potential common shares from
dilutive stock options using the treasury stock method. Net income applicable to
common shares has been adjusted for redeemable preferred stock accretion and
dividends for the applicable periods. Earnings per common and potential common
share were computed as follows (thousands, except per share data):
Three Months Ended
-----------------------
March 28, March 30,
2004 2003
--------- ---------
Net income ........................................... $ 32,345 $ 27,407
Accretion of redeemable preferred stock............... (26)
Redeemable preferred stock dividends.................. (59)
-------- --------
Adjusted income applicable to commons shares.......... $ 32,345 $ 27,322
======== ========
Basic:
Weighted average common shares outstanding......... 38,310 40,853
======== ========
Earnings per common share.......................... $ .84 $ .67
======== ========
Diluted:
Weighted average common shares outstanding......... 38,310 40,853
Potential common shares for stock options.......... 1,297 304
-------- --------
Weighted average shares outstanding................ 39,607 41,157
======== ========
Earnings per common and potential
common share.................................... $ .82 $ .66
======== ========
CEC ENTERTAINMENT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Stock based compensation:
The Company accounts for its stock based compensation under the intrinsic
value method of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" and related interpretations ("APB 25"), and has
adopted the disclosure-only provisions of Statement of Financial Accounting
Standards No. 123, "Accounting for Stock Based Compensation" ("SFAS 123"). Under
APB 25, no stock based compensation cost is reflected in net income for grants
of stock options to employees because the Company grants stock options with an
exercise price equal to the market value of the stock on the date of grant. Had
compensation cost for the Company's stock option plans been determined based on
the fair value method at the grant date for awards under those plans consistent
with the method prescribed by SFAS 123, the Company's pro-forma net income and
earnings per share would have been as follows (thousands, except per share
data):
Three Months Ended
----------------------
March 28, March 30,
2004 2003
--------- ---------
Net income, as reported............................................... $ 32,345 $ 27,407
Fair value based compensation expense, net of taxes................... (1,436) (1,624)
-------- --------
Pro-forma net income ................................................. 30,909 25,783
Accretion and dividends of redeemable preferred stock, as reported.... (85)
-------- --------
Pro-forma net income applicable to common shares...................... $ 30,909 $ 25,698
======== ========
Earnings per Share:
Basic:
As reported........................................................ $ .84 $ .67
Pro-forma.......................................................... $ .81 $ .63
Diluted:
As reported........................................................ $ .82 $ .66
Pro-forma.......................................................... $ .78 $ .62
4. Stock split:
All share and per share information have been retroactively adjusted for
the effects of a three for two stock split in the form of a special stock
dividend effected and distributed on March 15, 2004.
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
First Quarter 2004 Compared to First Quarter 2003
A summary of the results of operations of the Company as a percentage of
revenues for the first quarters of 2004 and 2003 is shown below.
Three Months Ended
---------------------------------
March 28, 2004 March 30, 2003
-------------- --------------
Revenue...................................... 100.0% 100.0%
----- -----
Costs and expenses:
Cost of sales:
Food, beverage and related supplies.... 11.9 11.9
Games and merchandise.................. 4.2 4.2
Labor.................................. 25.7 26.0
----- -----
41.8 42.1
Selling, general and administrative....... 11.7 11.5
Depreciation and amortization............. 5.9 5.9
Interest expense.......................... .1 .2
Other operating expenses.................. 15.2 16.0
----- -----
74.7 75.7
----- -----
Income before income taxes................... 25.3 24.3
Income tax expense .......................... 9.7 9.4
----- -----
Net income .................................. 15.6% 14.9%
===== =====
Revenues
Revenues increased 12.4% to $206.9 million in the first quarter of 2004
from $184.1 million in the first quarter of 2003 due to an increase in the
number of Company-operated restaurants and an increase of 5.0% in comparable
store sales. During the full year of 2003, the Company opened 32 new
restaurants, acquired three restaurants from franchisees and closed one
restaurant. During the first three months of 2004, the Company opened two new
restaurants and has 420 Company-operated restaurants at March 28, 2004. Menu
prices increased 1.0% between the first quarter of 2003 and the first quarter of
2004.
Costs and Expenses
Costs and expenses as a percentage of revenues decreased to 74.7% in the
first quarter of 2004 from 75.7% in the first quarter of 2003.
Cost of sales decreased as a percentage of revenues to 41.8% in the first
quarter of 2004 from 42.1% in the comparable period of 2003. Cost of food,
beverage, and related supplies as a percentage of revenues were 11.9% in the
first quarter of 2004 and the first quarter of 2003. Food costs were negatively
impacted by approximately $1.1 million due to a 36% increase in average cheese
prices paid in the first quarter of 2004 compared to the first quarter of 2003.
However this increase was fully offset by lower beverage costs and the favorable
effects of a 1.0% menu price increase implemented in 2003. Cost of games and
merchandise as a percentage of revenues was 4.2% in both the first quarter of
2004 and the first quarter of 2003. Store labor expenses as a percentage of
store sales decreased to 25.7% in the first quarter of 2004 from 26.0% in the
first quarter of 2003 primarily due to the increase in comparable store sales.
Selling, general and administrative expenses as a percentage of revenues
increased to 11.7% in the first three months of 2004 from 11.5% in the first
three months of 2003. The increase was primarily due to higher bonus expense in
the first quarter of 2004 due to strong financial performance. In addition,
pre-opening expenses for restaurants opened or under construction were higher in
the first quarter of 2004 compared to the first quarter of 2003.
Depreciation and amortization expenses as a percentage of revenues were
5.9% in the first quarters of both 2004 and 2003.
Interest expense as a percentage of revenues decreased to 0.1% in the first
three months of 2004 from 0.2% in the first three months of 2003.
Other operating expenses decreased as a percentage of revenues to 15.2% in
the first quarter of 2004 from 16.0% in the first quarter of 2003 primarily due
to the increase in comparable store sales and the fact that a significant
portion of operating costs are fixed.
The Company's effective income tax rate was 38.3% in the first quarter of
2004 compared to a rate of 38.8% in the first quarter of 2003 due to a reduction
in the Company's effective state tax rate.
Net Income
The Company had net income of $32.3 million in the first quarter of 2004
compared to $27.4 million in the first quarter of 2003 due to the changes in
revenues and expenses discussed above. The Company's diluted earnings per share
increased 24.2% to $.82 per share in the first quarter of 2004 from $.66 per
share in the first quarter of 2003 due to the 18.0% increase in net income
discussed above and a 3.8% decrease in the number of weighted average shares
outstanding.
Financial Condition, Liquidity and Capital Resources
Cash provided by operations increased to $71.9 million in the first three
months of 2004 from $59.8 million in the comparable period of 2003. Cash
outflows from investing activities for the first three months of 2004 were $14.5
million primarily related to capital expenditures. Cash outflows from financing
activities for the first three months of 2004 were $53.0 million primarily
related to the 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.
Cash provided by operations is a significant source of liquidity for the
Company. Since substantially all of the Company's sales are for cash and credit
cards, and accounts payable are generally due in five to 30 days, the Company is
able to carry current liabilities in excess of current assets. The net working
capital deficit increased from $16.1 million at December 28, 2003 to $32.1
million at March 28, 2004 due primarily to the timing of payments for accrued
income taxes payable.
The Company has initiated several strategies to increase revenues and
earnings over the long-term that require capital expenditures. These strategies
include: a) new restaurant development and acquisitions of existing restaurants
from franchisees, b) a game enhancement initiative that includes new games and a
game rotation plan, c) major remodels or reconfigurations and d) expansions of
the square footage of existing restaurants. In addition, the Company is
currently testing revisions to the building exterior along with interior
enhancements in conjunction with a game enhancement initiative.
The game enhancement initiative began in 2003 and has an average capital
cost of approximately $60,000 per restaurant. The primary components of this
plan are to provide new and transferred games and rides and, in certain stores,
enhancements to the toddler area. The major remodel or reconfiguration
initiative includes a reallocation of space between the dining and game room
areas, expansion of the space allocated to the game room and an increase in the
number of games. The typical capital cost of this initiative will range from
$225,000 to $400,000 per restaurant. Expanding the square footage of existing
restaurants can range in cost from $200,000 to $900,000 per restaurant, but
generally have an average capital cost of approximately $500,000.
In 2004, the Company plans to add 36 to 40 restaurants including new
restaurants and acquisitions of existing restaurants from franchisees. The
Company currently anticipates its cost of opening such new restaurants will vary
depending upon many factors including the size of the restaurants, the amount of
any landlord contribution and whether the Company acquires land or the
restaurant is an in-line or freestanding building. The average capital cost of
all new restaurants expected to open in 2004 is approximately $1.4 million per
restaurant. At the beginning of 2004, the Company identified development
opportunities for approximately 300 restaurants including those restaurants
expected to open in 2004.
In 2004, the Company plans to complete the game enhancement initiative in
60 to 80 restaurants. The Company plans to complete a major remodel or
reconfiguration in a select number of restaurants that are believed to have the
greatest opportunity to significantly increase sales and provide an adequate
return on investment. The Company has currently identified approximately 20
potential restaurants for a major remodel including the three franchise
restaurants acquired in 2003. The Company also plans to expand the square
footage of approximately four to five restaurants. In addition, the Company is
currently testing revisions to the building exterior along with interior
enhancements in conjunction with the game enhancement initiative. The Company
expects the aggregate capital costs of completing game enhancement initiatives,
major remodels, reconfigurations, expanding the square footage of existing
restaurants and testing revisions to the building exterior along with interior
enhancements in 2004 to total approximately $16 million and impact 105 to 110
restaurants.
During the first quarter of 2004, the Company opened two new restaurants,
implemented the game enhancement initiative plan in 43 restaurants, completed
major remodels in two restaurants and building exterior and interior
enhancements in three restaurants. The Company currently estimates that capital
expenditures in 2004 will be $79 million to $85 million. The Company plans to
finance its capital expenditures through cash flow from operations and, if
necessary, borrowings under the Company's line of credit.
From time to time, the Company repurchases shares of its common stock under
a plan authorized by its Board of Directors. The plan authorizes repurchases in
the open market or in private transactions. Beginning in 1993 through the first
quarter of 2004, the Company has repurchased approximately 16.0 million shares
of the Company's common stock, retroactively adjusted for a three for two stock
split effective on March 15, 2004, at an aggregate purchase price of
approximately $237 million. During the first quarter of 2004, the Company
repurchased 797,850 shares at an aggregate purchase price of approximately $29.8
million. At the end of the first quarter of 2004, approximately $48.2 million
remained available for repurchase under the current $75 million repurchase
authorization approved by the Company's Board of Directors in the first quarter
of 2004.
The Company has available borrowings under its line of credit agreement of
$132.5 million that is scheduled to mature in December 2005. Interest under the
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 0.75% to 1.50%.
Currently, any borrowings under this line of credit would be at the prime rate
or LIBOR plus 0.75%. As of March 28, 2004, there were $37.0 million in
borrowings under this line of credit. In addition, the Company had outstanding
letters of credit of $7.5 million at March 28, 2004. The line of credit
agreement contains certain restrictions and conditions as defined in the
agreement that require the Company to maintain net worth of $362.0 million as of
March 28, 2004, a fixed charge coverage ratio at a minimum of 1.5 to 1.0 and a
maximum total debt to earnings before interest, taxes, depreciation,
amortization and rent ratio of 3.25 to 1.0. Borrowings under the line of credit
agreement are unsecured but the Company has agreed to not pledge any of its
existing assets to secure future indebtedness. At March 28, 2004, the Company
was in compliance with all of the above debt covenants. The Company intends to
extend the maturity date of its line of credit agreement.
Website Access to Company Reports
Our website address is www.chuckecheese.com. Our annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, Forms 3, 4
and 5 filed by our officers, directors and stockholders holding 10% or more of
our common stock and all amendments to those reports are available free of
charge through our website, as soon as reasonably practicable after such
material is electronically filed with or furnished to the Securities and
Exchange Commission.
Forward Looking Statements
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 restaurant and entertainment industries, store sales
cannibalization, success of its franchise operations, negative publicity,
fluctuations in quarterly results of operations, including seasonality,
government regulations, weather, school holidays, commodity, insurance and labor
costs.
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.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the
participation of the Company's management, including the Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
the Company's disclosure controls and procedures as of the end of the period
covered by this report. Based on that evaluation, the Company's management,
including the Chief Executive Officer and Chief Financial Officer, concluded
that the Company's disclosure controls and procedures were effective as of the
time of such evaluation in timely alerting them to material information
(including information relating to our consolidated subsidiaries) required to be
included in our Exchange Act Filings. There have been no significant changes in
the Company's internal controls over financial reporting that could
significantly affect these controls during the most recent fiscal quarter.
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), was filed in the Superior Court
of the State of California in the County of Los Angeles (the " Court"). The
lawsuit was filed by one former restaurant manager purporting to represent
restaurant managers of the Company in California from 1996 to the present. The
lawsuit alleges violations of the state wage and hour laws involving unpaid
overtime wages and seeks an unspecified amount in damages. On September 29,
2003, the Company entered into a settlement agreement with the Plaintiffs, which
was subject to approval by the Court, whereby the Company will pay $4.2 million
plus up to $50,000 for administrative fees to settle all claims of the
Plaintiff. On January 14, 2004 the Court entered an order granting preliminary
approval of the settlement agreement.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
31.1 Certification of the Chief Executive Officer pursuant to Rule
13a-14(a)/15d-14(a).
31.2 Certification of the Chief Financial Officer pursuant to Rule
13a-14(a)/15d-14(a).
32.1 Certification of the 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 the Chief Financial Officer pursuant to 18
U.S.C. Section 1350 as Adopted Pursuant to Section 906 of The
Sarbanes-Oxley Act of 2002.
b) Reports on Form 8-K
During the first quarter and to present, we filed or furnished the
following reports on Form 8-K:
A current report on Form 8-K, dated February 18, 2004, announcing
fourth quarter 2003 financial results.
A current report on Form 8-K, dated March 5, 2004, furnishing specimen
forms of the Company's current franchise agreement and development
agreement.
A current report on Form 8-K, dated April 14, 2004, announcing first
quarter 2004 financial results.
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 6, 2004 By: /s/ Christopher D. Morris
--------------------------------
Christopher D. Morris
Senior Vice President, Chief Financial Officer