CEC Entertainment, Inc. (NYSE:CEC) today announced earnings for the third quarter ended September 29, 2002.
Revenues for the third quarter of 2002 increased to $148.9 million from $141.8 million in the third quarter of 2001. Net income in the third quarter of 2002 increased to $16.5 million from $16.2 million in the same period of 2001. Earnings per share on a diluted basis in the third quarter of 2002 were $0.59 per share compared to $0.57 per share in the third quarter of 2001.
Revenues for the first nine months of 2002 increased to $464.1 million from $432.4 million in the first nine months of 2001. Net income in the first nine months of 2002 increased to $58.7 million from $53.7 million in the same period of 2001. Earnings per share on a diluted basis in the first nine months of 2002 were $2.06 per share compared to $1.87 per share in the first nine months of 2001.
Rodney Carter, Chief Financial Officer said, "Revenue growth and a strong operating margin resulted in increased earnings and strong operating cash flow in a very tough economic environment. Revenue increased 5.0% in the third quarter due to new store development. Comparable store sales decreased 2.7% due to a soft economic environment that is reducing guest frequency and to a lesser degree a significant increase in competition, primarily from kids' movies. Despite higher insurance and labor costs in the third quarter, the operating margin remained strong due primarily to cost efficiencies on higher total revenues and lower advertising and cheese costs. Through the first nine months of 2002, the company generated $118 million in operating cash flow, invested $83 million, primarily in new stores and remodels, repurchased $22 million of treasury stock and reduced outstanding debt by $10 million. We believe the financial position of our company and solid operating cash flow provide the financial flexibility to continue our strategic focus of evolving the concept and driving long-term shareholder value."
Richard M. Frank, Chairman and Chief Executive Officer stated that, "Diluted earnings per share were up 10% for the first nine months of 2002, despite the difficult economic environment and increased competition from kids' movies. Year-to-date the company generated operating cash flow of $118 million, enabling us to continue our new store development and remodel initiative while acquiring $22 million of treasury stock and reducing debt. Our business is well positioned, our financial position is strong and we believe the continued execution of our strategies and evolvement of the concept will result in increasing long-term shareholder value."
CEC Entertainment, Inc. operates a system of 420 Chuck E. Cheese's restaurants in 46 states, of which 371 are owned and operated by the company.