Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 1, 2019
CEC ENTERTAINMENT, INC.
(Exact name of registrant as specified in charter)
 
 
 
 
Kansas
1-13687
 
48-0905805
(State or other jurisdiction
of incorporation)
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
1707 Market Place Blvd, Suite 200
Irving, Texas
 
75063
(Address of principal executive offices)
 
(Zip Code)
(972) 258-8507
(Registrant’s telephone number, including area code)
Not applicable
(Former name or former address, if changed since last report) 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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Item 2.02 Results of Operations and Financial Condition

On July 1, 2019, CEC Entertainment, Inc. (the “Company”) released the investor presentation and issued the press release described in Item 7.01 below and filed as Exhibits 99.1 and 99.2 hereto. The investor presentation and press release include certain estimated results, including preliminary unaudited comparable venue sales, for the second quarter of 2019 and year-to-date of the Company and Queso Holdings Inc. (“Queso”), the parent holding company of the Company.

Item 7.01. Regulation FD Disclosure

On July 1, 2019, the Company and Leo Holdings Corp. (NYSE: LHC) (“Leo”), a publicly traded special purpose acquisition company with whom Queso has entered into an agreement for a business combination (the “Business Combination”), released an investor presentation respecting the Business Combination. A copy of the investor presentation is attached hereto as Exhibit 99.1 and incorporated herein by reference.

In addition, on July 1, 2019, the Company issued a press release announcing, among other things, preliminary unaudited comparable venue sales for the second quarter of 2019 and year-to-date, details about the Business Combination and a reiteration of the Company’s annual guidance. A copy of the press release is attached hereto as Exhibit 99.2 and incorporated herein by reference.
  
Important Information About the Proposed Business Combination and Where to Find It

In connection with the proposed Business Combination, Leo has filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 containing a preliminary proxy statement and a preliminary prospectus of Leo. After the registration statement is declared effective, Leo will mail a definitive proxy statement/prospectus relating to the proposed Business Combination to its shareholders. Leo’s shareholders and other interested persons are advised to read the preliminary proxy statement/prospectus and the amendments thereto and, when available, the definitive proxy statement/prospectus and other documents filed in connection with the proposed Business Combination, as these materials contain or will contain important information about the Company, Leo and the Business Combination. When available, the definitive proxy statement/prospectus and other relevant materials for the proposed Business Combination will be mailed to shareholders of Leo as of a record date to be established for voting on the proposed Business Combination. Shareholders may also obtain copies of the preliminary proxy statement/prospectus and, when available, will be able to obtain copies of the definitive proxy statement/prospectus and other documents filed with the SEC without charge, at the SEC’s website at www.sec.gov, or by directing a request to: Leo Holdings, Corp., 21 Grosvenor Place, London, SW1X 7HF.

Participants in the Solicitation

Leo and its directors and executive officers may be deemed participants in the solicitation of proxies from Leo’s shareholders with respect to the proposed Business Combination. A list of the names of those directors and executive officers and a description of their interests in Leo is contained in Leo’s annual report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC and is available free of charge at the SEC’s web site at www.sec.gov, or by directing a request to Leo Holdings, Corp., 21 Grosvenor Place, London, SW1X 7HF. Additional information regarding the interests of such participants is contained in the preliminary proxy statement/prospectus and will be contained in the definitive proxy statement/prospectus for the proposed Business Combination when available.

Queso and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of Leo in connection with the proposed Business Combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed Business Combination is included in the preliminary proxy statement/prospectus and will be included in the definitive proxy statement/prospectus for the proposed Business Combination when available.

The information provided in the above Items 2.02 and 7.01, including Exhibit 99.1, is intended to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

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Item 9.01. Financial Statements and Exhibits.
(d)
Exhibits
 
 
Exhibit
Number
Description
 
 









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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 hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
CEC ENTERTAINMENT, INC.
 
 
 
 
Date: July 1, 2019
 
 
 
By:
 
/s/ James A. Howell
 
 
 
 
 
 
James A. Howell
 
 
 
 
 
 
Executive Vice President and Chief Financial Officer


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EXHIBIT INDEX
 
 
 
 
Exhibit
Number
  
Description
 
 
  
 


5
            
exhibit991
Supplemental Materials July 2019


 
Slide title - Font size: 20 pt Disclaimer FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt These Supplemental Materials supplement, and should be reviewed together with, the CEC Entertainment Investor Presentation dated March 2019. References below to this presentation 682C91 R:104 G:44 B:145 refer to such Investor Presentation as supplemented hereby. Heading Neither Leo Holdings Corp. (“Leo”) nor CEC Entertainment, Inc. (“CEC”, “Chuck E. Cheese’s” or the “Company”) nor any of their respective affiliates makes any representation or warranty, either express or implied, as to the accuracy, completeness or reliability of the information contained in this presentation. This presentation has been prepared for informational purposes only Colour: R:104 G:44 B:145 and the exclusive use of the party to whom the presentation has been delivered (such party, together with its subsidiaries and affiliates, the “Recipients”). The Recipient should not construe the contents of this presentation as legal, tax, accounting or investment advice or a recommendation. The Recipient should consult its own counsel and tax and financial advisors as to legal Line: R:104 G:44 B:145 / Hex: 682C91 and related matters concerning the matters described herein, and, by accepting this presentation, the Recipient confirms that it is not relying upon the information contained herein to make any decision. This presentation does not purport to be all-inclusive or to contain all of the information that the Recipient may require. Theme Colour Accents The Recipient acknowledges that Leo and the Company consider this presentation and all information contained herein to include confidential, sensitive and proprietary information that is 682C91 R:104 G:44 B:145 A1 covered by the confidentiality undertaking of the Recipient. The Recipient acknowledges and agrees that it will use this presentation and all information contained herein in accordance with the confidentiality agreement. D20033 R:210 G:0 B:51 A2 Forward-Looking Statements. Certain statements in this presentation may be considered forward-looking statements. Forward-looking statements generally relate to future events or Leo’s 249384 R:36 G:147 B:132 A3 or the Company’s future financial or operating performance. For example, projections of future Adjusted EBITDA, Gross Profit, Capital Expenditures and Free Cash Flow are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could FA7600 R:250 G:118 B:0 A4 cause actual results to differ materially from those expressed or implied by such forward looking statements. 0561BA R:5 G:97 B:186 A5 These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Leo and its management, and CEC and its management, as the case may be, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations, include, but are not limited to, various factors beyond management's control including competition and general economic conditions for the Company and its management, and other risks, uncertainties and factors set forth in the sections entitled “Risk Factors” 76BB1F R:118 G:187 B:31 A6 and “Cautionary Statement Regarding Forward-Looking Statements” in (i) Leo’s Prospectus dated February 12, 2018 with respect to its initial public offering, and (ii) the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018. 9D0E2D R:157 G:14 B:45 H/A7 Nothing in this presentation should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated 76BB1F R:118 G:187 B:31 F/A8 results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Neither Leo nor the Company undertakes any duty to update these forward-looking statements. Recommended client's colour Following the completion of the Business Combination, the combined company does not intend to publicly issue quarterly guidance. Client: Fill with colour Financial Presentation. All Company financial information included in this presentation is consolidated financial information of Queso Holdings Inc., the direct parent holding company of CEC and the entity that will be party to the transaction with Leo. Queso Holdings Inc. has no material assets other than its ownership of CEC and conducts no operations other than through Recommended CS colour CEC and its subsidiaries. CS: Fill with colour Non-GAAP Financial Information. In this presentation, Leo and the Company may refer to certain non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, Venue-Level Adjusted EBITDA, Adjusted EBITDAR, Adjusted EBITDAR margin, Free Cash Flow and Free Cash Flow Conversion. To the extent Leo and the Company disclose non-GAAP Highlights in tables financial measures, please refer to footnotes where presented on each page of this presentation or to the appendix found at the end of this presentation for a reconciliation of these measures to what the Company believes are the most directly comparable measure evaluated in accordance with generally accepted accounting principles in the U.S. (“GAAP”). This H1: Fill with colour presentation also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain H2: Fill with colour amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable efforts. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included. CustomColour Checker v2.2 2


 
Slide title - Font size: 20 pt Transaction Update FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt 682C91 R:104 G:44 B:145 • On April 8, 2019, Leo Holdings, Corporation (“Leo”), a publicly traded special purpose acquisition company, and CEC Entertainment, Inc. (“CEC”) announced a definitive business combination agreement Heading between Leo and Queso Holdings, Inc. (“Queso”), the parent company of CEC, together with Apollo Total Revenue: $929mm Colour: R:104 G:44 B:145 Global Management (“Apollo”), Queso’s controlling stockholder Line: R:104 G:44 B:145 / Hex: 682C91 Theme Colour Accents • The transaction values CEC at an enterprise value of $1.4bn 682C91 R:104 G:44 B:145 A1 • Transaction funded by cash in trust of $200mm, a PIPE of $114mm, and rollover equity by Apollo and D20033 R:210 G:0 B:51 A2 existing shareholders of $360mm SSS Growth: 4.2% 249384 R:36 G:147 B:132 A3 • Proceeds from the transaction will be used to de-leverage and pay down CEC’s Senior Unsecured Notes as well as pay expenses associated with the transaction FA7600 R:250 G:118 B:0 A4 • The PIPE investment has increased to $114mm from $100mm 0561BA R:5 G:97 B:186 A5 Adj. EBITDA: $187mm 76BB1F R:118 G:187 B:31 A6 • This reflects an incremental $14mm investment of primary capital on the same terms as other PIPE investors, the substantial majority of which is being made by a highly respected investor 9D0E2D R:157 G:14 B:45 H/A7 with a strong track record in the consumer sector 76BB1F R:118 G:187 B:31 F/A8 • This will lower the proceeds necessary to meet the minimum cash requirement under the Company Operated Venue Remodels: 60 Recommended client's colour business combination agreement from 75% to 68% of cash in trust Client: Fill with colour • Apollo and existing shareholders will not be selling any shares and will continue to retain (To be completed in Q3 and Q4) Recommended CS colour majority ownership of CEC. Excess proceeds will be utilized for de-leveraging CS: Fill with colour • Leo expects to hold a shareholder vote by the end of July 2019 and to close the business Highlights in tables combination shortly thereafter H1: Fill with colour Total Capital Expenditures: $95-105mm • Leo has established June 21, 2019 as the record date for a shareholder meeting H2: Fill with colour CustomColour Checker v2.2 3


 
Slide title - Font size: 20 pt CEC Reiterates FY2019 Guidance FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt 682C91 R:104 G:44 B:145 Heading Total Revenue: $929mm Colour: R:104 G:44 B:145 Line: R:104 G:44 B:145 / Hex: 682C91 Theme Colour Accents 682C91 R:104 G:44 B:145 A1 D20033 R:210 G:0 B:51 A2 SSS Growth: +4.2% 249384 R:36 G:147 B:132 A3 FA7600 R:250 G:118 B:0 A4 0561BA R:5 G:97 B:186 A5 Adj. EBITDA: $187mm 76BB1F R:118 G:187 B:31 A6 9D0E2D R:157 G:14 B:45 H/A7 76BB1F R:118 G:187 B:31 F/A8 Company Operated Venue Remodels: 60 Recommended client's colour Client: Fill with colour (To be completed in Q3 and Q4) Recommended CS colour CS: Fill with colour Highlights in tables H1: Fill with colour Total Capital Expenditures: $95-105mm H2: Fill with colour CustomColour Checker v2.2 4


 
Slide title - Font size: 20 pt CEC on Track to Achieve FYE 2019 SSS Guidance FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt CEC SSS Performance Including Q2 and FYE Guidance 682C91 R:104 G:44 B:145 Heading Colour: R:104 G:44 B:145 On track to achieve full year SSS growth of +4.2% Line: R:104 G:44 B:145 / Hex: 682C91 Theme Colour Accents Period As Reported Adjusted Commentary 682C91 R:104 G:44 B:145 A1 D20033 R:210 G:0 B:51 A2 Q1 2019 +7.7% ~+6.2% 150bps shifted to Q2 Adjusted SSS represents shift 249384 R:36 G:147 B:132 A3 in Easter / Spring Break timing FA7600 R:250 G:118 B:0 A4 between quarters to properly reflect YoY performance (1) 0561BA R:5 G:97 B:186 A5 Q2 2019E +0.4% ~+2.2% 175bps shifted from Q1 76BB1F R:118 G:187 B:31 A6 9D0E2D R:157 G:14 B:45 H/A7 2019 SSS YTD(1) +4.5% Represents SSS results through the end of Q2 2019 76BB1F R:118 G:187 B:31 F/A8 Growth Recommended client's colour Implied H2 2019E performance Initiatives In Test: reflected in current guidance All Time Stores Client: Fill with colour Implied +3.9% 8.0 Tickets per tap H2 2019E Includes ~70bps total YoY Recommended CS colour contribution to SSS from Simplified Menu CS: Fill with colour planned remodels Bigger Combo Deals Highlights in tables H1: Fill with colour 2019E +4.2% CEC reiterates 2019E SSS growth guidance of +4.2% H2: Fill with colour CustomColour Checker v2.2 5 Note: CEC financials available at SEC.gov. (1) Reported SSS figures may differ due to rounding.


 
Slide title - Font size: 20 pt Consistent CEC SSS Outperformance vs Dave & Buster’s FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt 682C91 R:104 G:44 B:145 CEC SSS Outperformance Heading . The below graph shows the outperformance of CEC vs. Dave & Buster’s same store sales on a quarterly basis Colour: R:104 G:44 B:145 . For comparability purposes, CEC’s sales results have been aligned to Dave & Buster’s fiscal calendar Line: R:104 G:44 B:145 / Hex: 682C91 Theme Colour Accents 682C91 R:104 G:44 B:145 A1 Difference in CEC vs Dave & Buster’s Year-on-Year SSS Performance CEC SSS Conformed to FYE January for Comparability to D&B(1) D20033 R:210 G:0 B:51 A2 249384 R:36 G:147 B:132 A3 + 4.3% + 4.2% + 4.2% FA7600 R:250 G:118 B:0 A4 + 3.0% 0561BA R:5 G:97 B:186 A5 + 1.5% 76BB1F R:118 G:187 B:31 A6 9D0E2D R:157 G:14 B:45 H/A7 Q1 Q2 Q3 Q4 Q1 76BB1F R:118 G:187 B:31 F/A8 2018 2019 Recommended client's colour Quarterly SSS Performance CEC SSS Conformed to FYE January for Comparability to D&B(1) Client: Fill with colour Recommended CS colour (0.6%) (0.9%) +2.9% +5.9% +3.9% CS: Fill with colour Highlights in tables (4.9%) (2.4%) (1.3%) +2.9% (0.3%) H1: Fill with colour H2: Fill with colour Consistent CEC SSS Outperformance versus Dave & Buster’s CustomColour Checker v2.2 6 Note: CEC and Dave & Buster’s financials available at SEC.gov. (1) CEC year-on-year SSS data conformed to match D&B's reporting period, e.g. February 4 to May 5 2019, for Q1 2019.


 
. Play Pass, All You . Management Can Play and More guiding to flat to Tickets initiatives negative 2019 SSS Slide title - Font size: 20 pt CEC has a Growth Algorithm Driven by SSS and Proven Initiatives FFFFFF R:255 G:255 B:255 (1) (2) Subtitle - Font size: 11 pt 682C91 R:104 G:44 B:145 Heading 2019E: +4.2% . 1% traffic / remodels 2019E: (0.6%) . Management highlighted . 12%+ sales lift, ~480 remaining remodels Colour: R:104 G:44 B:145 SSS . 1.5% basket / share of wallet competitive pressures as a 2020E: +4.0% 2020E: +0.8% Remodel . No new site selection, labor or leases . 1.5% price driver of negative SSS . [ ] Line: R:104 G:44 B:145 / Hex: 682C91 Program . 20%+ cash-on-cash returns Theme Colour Accents . ~$45 – 55m incremental Adj. EBITDA 682C91 R:104 G:44 B:145 A1 . Focused on high ROIC remodels Company-Operated 2019E: 4 2019E: 16 . Focused on developing in near-term D20033 R:210 G:0 B:51 A2 New Units new units 2020E: 2 . 29 new franchised units 2020E: 16 . 230-250 domestic unit opportunity internationally . Play Pass, All You Can Play and More 249384 R:36 G:147 B:132 A3 Tickets initiatives SSS Growth FA7600 R:250 G:118 B:0 A4 . Improved guest experience 2019E: 60 . 12%+ sales lift per venue 2019E: None . Market share gains from strong execution Remodels . No announced remodels 0561BA R:5 G:97 B:186 A5 2020E: 90 . 32 completed by Q1 2019, 450+ 2020E: None remaining including 60 in H2 2019 76BB1F R:118 G:187 B:31 A6 . Operational deleveraging at 9D0E2D R:157 G:14 B:45 H/A7 existing units New Unit and . International expansion Sales CAGR . 200+ domestic unit opportunity 76BB1F R:118 G:187 B:31 F/A8 Other (FY2018-20) ~4.3% ~8.9% . 50-60% flow through from . Licensing & other brand extensions Opportunities remodeled venues . Platform for future M&A Recommended client's colour – ~$45-55mm incremental EBITDA(4) Client: Fill with colour . Increased franchise royalties Recommended CS colour EBITDA Margin (Δ FY2018-20) . Strong “risk-adjusted” near term returns . Guidance to flat / negative SSS targets CS: Fill with colour ~150bps ~(160bps) . SSS growth drives strong flow-through . Management highlighted competitive Highlights in tables . 15 – 16 new units in FY2019 (12% of pressures as a driver of negative SSS . Benefitting from operational investments New Unit store base) H1: Fill with colour EBITDA CAGR . Focused on new game and VR experiences Growth . Unit growth drives sales growth . Proven remodel concept H2: Fill with colour (FY2018-20) ~8.2% ~4.8% to drive traffic . Estimated 230 – 250 unit potential CustomColour Checker v2.2 7 Note: Company management, Company filings, Wall Street research and Dave & Buster’s filings. CEC and Dave & Buster’s financials available at SEC.gov. (1) Fiscal year ending in December of calendar year. CEC FY2020E reflects 52-week basis. (2) Fiscal year ending in January of following calendar year. Calculated using 2018A revenue of $1,265mm, 2018A EBITDA of $279mm, 2020E revenue of $1,502mm and 2020E EBITDA of $307mm, based on Wall Street consensus. Flat to . Limited new owned . 22 large and 8 . Guidance of (1.5%) to +0.5% for FY2019 units; ~29 new small format units; Negative SSS +18% from 2018 . Historic underperformance franchised units Performance unit base Muted . Growth driven by new units EBITDA . Expected margin contraction in future Performance years


 
Slide title - Font size: 20 pt CEC Economics and Attractive Growth Opportunity FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt 682C91 R:104 G:44 B:145 748 127 Global Venues Units Heading Colour: R:104 G:44 B:145 14% 26% 0% 0% (1) (1) Line: R:104 G:44 B:145 / Hex: 682C91 International Franchised International Franchised Theme Colour Accents 12,700 sq.ft. 682C91 R:104 G:44 B:145 A1 41,000 sq.ft. Average Store Size Average Store Size D20033 R:210 G:0 B:51 A2 ~150bps 249384 R:36 G:147 B:132 A3 ~(160bps) EBITDA margin expansion, EBITDA margin contraction, FA7600 R:250 G:118 B:0 A4 FY2018-20 (4) FY2018-20 0561BA R:5 G:97 B:186 A5 76BB1F R:118 G:187 B:31 A6 ~200 230-250 Domestic Unit Opportunity(3) Domestic Unit Opportunity 9D0E2D R:157 G:14 B:45 H/A7 ~$45-55mm 76BB1F R:118 G:187 B:31 F/A8 $2.5mm Long-Term Incremental EBITDA $8.3-$8.8mm (5) (2) Recommended client's colour Cost to Build New Venue from Remodels ; Net Development Cost for $525k to $575k Cost per Remodel Large Stores(6) Client: Fill with colour Recommended CS colour  Smaller, less expensive venues  Higher buildout costs CS: Fill with colour  Scalable in smaller markets  Highlights in tables  Multiple levers for growth Focused on new unit expansion in large urban − Proven remodel program markets H1: Fill with colour − Large addressable market for new units that can be  Growth driven by square footage expansion H2: Fill with colour targeted once high-ROI remodel spend is complete CustomColour Checker v2.2 Note: CEC financials reflect Q1 2019A data. Dave & Buster’s financials reflect Q1 (3) Buxton’s estimate of ~150 Chuck E. Cheese venues plus select other opportunities validated by Buxton and Management. 2019A data. CEC and Dave & Buster’s financials available at SEC.gov. (4) Wall Street research consensus; calculated using 2020E revenue of $1,502mm and 2020E EBITDA of $307mm. 8 (1) Units outside of U.S. and Canada. (5) Cost to build adjusted for tenant incentives and capital overhead. Represents cost to build large format CEC venue. (2) Assumes 480 venues, $1.6mm AUV, 12% AUV uplift and 50-60% flow (6) Large Stores defined as 30,000-45,000 sq. ft. Net development costs include equipment, building, leaseholds and site costs, net of tenant through. improvement allowances and other landlord payments, excluding pre-opening costs and capitalized interest.


 
Slide title - Font size: 20 pt CEC Has a More Defensive Platform FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt 682C91 R:104 G:44 B:145 Iconic Brand Heading Unaided Brand Awareness vs. Brand Alternatives(1) Colour: R:104 G:44 B:145  Loyal young age  Older demographic with group with limited greater range of 61% Line: R:104 G:44 B:145 / Hex: 682C91 More choices for out of entertainment options Theme Colour Accents Attractive home entertainment 682C91 R:104 G:44 B:145 A1 Demographics  Not dependent on 21% D20033 R:210 G:0 B:51 A2 new content 8% 7% 249384 R:36 G:147 B:132 A3 3% 2% FA7600 R:250 G:118 B:0 A4  Affordable and  Higher price point convenient business business model 0561BA R:5 G:97 B:186 A5 Compelling model appeals to broad consumer base More Affordable 76BB1F R:118 G:187 B:31 A6 Value Proposition Example Spend(2) 9D0E2D R:157 G:14 B:45 H/A7  Example Spend per  Example Spend per Visit: $39(2) Visit: $106(2) 76BB1F R:118 G:187 B:31 F/A8 $106 $112 Recommended client's colour Client: Fill with colour 2008-2010 2008-2010 +0.2% SSS Stacked (12.5%) SSS Stacked Recommended CS colour $39 $45 CS: Fill with colour  No corporate events  Corporate events >10% Less  Consistent recurring of sales Highlights in tables Cyclicality revenue: H1: Fill with colour − 26% franchised  0% franchise revenue − Birthdays ~15% of H2: Fill with colour sales Family Dining(3) Movie Theatres CustomColour Checker v2.2 9 Note: CEC financials reflect Q1 2019A data. Dave & Buster’s financials reflect Q1 2019A data. CEC and Dave & Buster’s financials available at SEC.gov. (2) Illustrative pricing for parties of 2 adults and 2 children for an everyday visit. Chuck E. Cheese based on New York pricing versus (1) When mothers (on an unaided basis) were asked ‘‘When thinking about places to take your children for family-fun and entertainment, and also having a $35 price point in most U.S. venues. meal and/or snacks, what is the first place that comes to mind? What other places come to mind?” (3) Based on 2 kids meals (pizza), 2 adult burgers & fries, and 4 beverages at Chili’s.


 
Slide title - Font size: 20 pt Highly Attractive Valuation for CEC FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt Restaurants & Entertainment Pizza-Focused QSR 682C91 R:104 G:44 B:145 Median: 10.4x 21.5x 14.7x MTN-US Vail Resorts Heading FV / 12.8x 12.1x 11.9x 11.1x 10.4x 9.5x 9.2x 8.9x DRI-US Darden CY2019 7.5x 7.8x 6.7x Colour: R:104 G:44 B:145 SIX-US Six Flags Adj. TXRH-US Texas Roadhouse Line: R:104 G:44 B:145 / Hex: 682C91 EBITDA CBRL-US Cracker Barrel (1) Median of MERL-GB Merlin Entertainment Theme Colour Accents Pizza-Focused QSR Peers(2) SEAS-US Seaworld FUN-US Cedar Fair 682C91 R:104 G:44 B:145 A1 Median: 1.7x CAKE-US Cheesecake Factory BJRI-US BJ's D20033 R:210 G:0 B:51 A2 Growth- 8.4x PLAY-US Dave & Busters 6.1x Adjusted 2.5x 1.9x 1.7x 1.9x 249384 R:36 G:147 B:132 A3 EBITDA 0.9x 1.4x 1.5x NM 0.5x NM 1.4x Multiple(3) (1) Median of FA7600 R:250 G:118 B:0 A4 Pizza-Focused QSR Peers(2) 0561BA R:5 G:97 B:186 A5 Median: 5.1% 76BB1F R:118 G:187 B:31 A6 Sales 8.7% 9.9% 8.9% 6.1% CAGR 5.1% 4.4% 5.5% 9D0E2D R:157 G:14 B:45 H/A7 4.3% 4.2% 3.5% 3.6% 1.9% 1.5% CY2018- 76BB1F R:118 G:187 B:31 F/A8 CY2020(4) (1) Median of Pizza-Focused (2) Recommended client's colour QSR Peers Client: Fill with colour Median: 4.7% Adj. 17.8% 11.3% Recommended CS colour EBITDA 8.2% 10.6% 8.7% 4.7% 5.5% 5.4% 4.7% CAGR 1.8% 0.9% CS: Fill with colour CY2018- Highlights in tables (1.8%) (2.2%) (4) CY2020 (1) Median of H1: Fill with colour Pizza-Focused QSR Peers(2) CY2019 Adj. H2: Fill with colour EBITDA 20.1% 31.2% 14.1% 37.5% 11.3% 12.7% 28.9% 31.2% 34.9% 9.1% 11.1% 21.0% 18.8% Margin CustomColour Checker v2.2 10 Source: Company Filings, FactSet. Market data as of June 28, 2019. Utilizes medians of broker estimates. (2) Includes Domino’s, Yum! Brands and Papa John’s. (1) Merlin Entertainment data as of June 27, 2019, prior to announcement of acquisition by Kirkbi Invest and (3) (FV / 2019 Adj. EBITDA) / ’18 – ’20 Adj. EBITDA CAGR. Blackstone. (4) CEC CY2020 shown on 52-week basis.


 
Slide title - Font size: 20 pt FFFFFF R:255 G:255 B:255 Subtitle - Font size: 11 pt 682C91 R:104 G:44 B:145 Heading Colour: R:104 G:44 B:145 Line: R:104 G:44 B:145 / Hex: 682C91 Theme Colour Accents 682C91 R:104 G:44 B:145 A1 D20033 R:210 G:0 B:51 A2 249384 R:36 G:147 B:132 A3 FA7600 R:250 G:118 B:0 A4 0561BA R:5 G:97 B:186 A5 76BB1F R:118 G:187 B:31 A6 9D0E2D R:157 G:14 B:45 H/A7 76BB1F R:118 G:187 B:31 F/A8 Recommended client's colour Client: Fill with colour Recommended CS colour CS: Fill with colour Highlights in tables H1: Fill with colour 11 H2: Fill with colour CustomColour Checker v2.2


 
Exhibit


Exhibit 99.2
https://cdn.kscope.io/66857c6bf8c00a3ee462087ca504807f-transaction_image1a02.gif

CEC ENTERTAINMENT, INC. ANNOUNCES PRELIMINARY UNAUDITED COMPARABLE VENUE
SALES RESULTS FOR THE SECOND QUARTER AND YEAR-TO-DATE 2019
Private Placement Concurrent with Business Combination Transaction Increased to $114 Million from $100 Million
Issues Updated Investor Presentation
Reiterates Annual Guidance

IRVING, Texas - July 1, 2019 - CEC Entertainment, Inc. (“CEC” or the “Company”), a nationally recognized leader in family entertainment and dining, today announced preliminary unaudited comparable venue sales results for its second quarter and year-to-date periods ended June 30, 2019.
Second Quarter and Year-to-Date 2019 Sales Results
Comparable venue sales increased 0.4% in the second quarter of 2019 and increased 4.5% in the first half of 2019.
“We generated our fifth consecutive quarter of comparable venue sales growth due to the positive impact of the All You Can Play game packages and More Tickets initiatives and despite the estimated 1.8% negative impact from the shift of Easter and the corresponding timing of Spring Breaks in the second quarter 2019 versus the first quarter 2018. Through the first half of 2019, our comparable venue sales growth was an impressive 4.5%,” said Tom Leverton, Chief Executive Officer. “Looking ahead, we are re-affirming the annual guidance that we first laid out in April. Our team is doing a solid job of advancing the Chuck E. Cheese brand through planned initiatives while simultaneously further improving the guest experience. We continue to be pleased with the results of our venue re-imaging project and are on track to complete the targeted 60 venue remodels in the back half of this year."
As of June 30, 2019, the Company’s system-wide portfolio consisted of:

 
 
Chuck E. Cheese’s
 
Peter Piper Pizza
 
Total
Company operated
 
516
 
38

 
554

Domestic franchised
 
25
 
61

 
86

International franchised
 
68
 
42

 
110

Total
 
609

 
141

 
750


During the second quarter of 2019, there were three net international franchised Chuck E. Cheese openings and one Peter Piper Pizza franchise closure.
Business Combination
On April 8, 2019 CEC and Leo Holdings, Corporation (NYSE: LHC) (“Leo”), a publicly traded special purpose acquisition company, announced that Leo and Queso Holdings, Inc. (“Queso”), the parent company of CEC, together with Queso’s controlling stockholder, an entity owned by funds managed by affiliates of Apollo Global Management, LLC (NYSE: APO) (together with its consolidated subsidiaries, “Apollo”), have entered into a definitive business combination agreement.
The Boards of Directors of both Leo and Queso have unanimously approved the proposed transaction. Completion of the transaction is subject to Leo shareholder approval and other customary closing conditions.
Concurrent with the consummation of the transaction, additional investors will purchase $114 million of Leo common stock in a private placement. This reflects an incremental $14 million investment of primary capital on the same terms as other PIPE investors, the substantial majority of which is being made by a highly respected investor with a strong track record in the consumer sector. After giving effect to any redemptions by the public shareholders of Leo, the balance of the approximately $200 million in cash held in Leo Holdings' trust account, together with the $114 million in private placement proceeds, will be

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used to pay down indebtedness and de-leverage the Company's existing capital structure as well as pay expenses associated with the transaction.
The additional proceeds funded through the private placement reflect these investors’ strong confidence in the transaction, while lowering the proceeds necessary to meet the minimum cash requirement under the business combination agreement from 75% to 68% of cash in trust,” said Lyndon Lea, Chairman and Chief Executive Officer, Leo Holdings, Corp. “We look forward to closing the business combination transaction following the approval of our shareholders.”
Leo expects to hold a shareholder vote by the end of July 2019 and to close the business combination shortly thereafter. A record date of June 21, 2019 has been established.
CEC and Leo have issued a business update presentation that can be found at https://www.chuckecheese.com/company/investor-relations under the tab “Business Combination”. The presentation will also be furnished today to the Securities and Exchange Commission (the “SEC”) and can be viewed on the SEC’s website at www.sec.gov.
Annual Guidance
The Company is again reiterating its annual guidance that was referenced in the investor presentation related to the definitive business combination agreement with Leo, which includes the following:
Total revenues of $929 million;
Comparable venue sales growth of 4.2%;
Adjusted EBITDA(1) of $187 million;
Four net Peter Piper Pizza openings and 11 net international franchised Chuck E. Cheese openings; and
Capital expenditures of $95 million to $105 million.
________________
(1)
For our definition of Adjusted EBITDA, see the “Non-GAAP Financial Measures” section within this press release. The Company provides guidance on Adjusted EBITDA, but does not provide a reconciliation of such guidance to the most directly comparable financial measures because of the high variability and inherent difficulty in making accurate forecasts of some of the information excluded from Adjusted EBITDA.
About CEC Entertainment, Inc.
CEC Entertainment, Inc. is the nationally recognized leader in family dining and entertainment with both its Chuck E. Cheese and Peter Piper Pizza venues. As America's #1 place for birthdays and the place Where A Kid Can Be A Kid®, Chuck E. Cheese’s goal is to create positive, lifelong memories for families through fun, play and delicious handmade pizza. With the first-of-its-kind gaming experience, All You Can Play, kids have access to play every game at Chuck E. Cheese, as many times as they want on any day, without any restrictions. Committed to providing a fun, safe environment, Chuck E. Cheese helps protect families through industry-leading programs such as Kid Check®. As a strong advocate for its local communities, Chuck E. Cheese has donated more than $16 million to schools through its fundraising programs and supports its new national charity partner, Boys and Girls Clubs of America. Peter Piper Pizza features dining, entertainment and carryout with a neighborhood pizzeria feel and “pizza made fresh, families made happy” culture. Peter Piper Pizza takes pride in delivering quality food and fun that reconnects family and friends. With a bold design and contemporary layout, an open kitchen revealing much of their handcrafted food preparation, the latest technology and games, and beer and wine for adults, Peter Piper Pizza restaurants appeal to parents and kids alike. As of June 30, 2019, the Company and its franchisees operated a system of 609 Chuck E. Cheese’s and 141 Peter Piper Pizza venues, with locations in 47 states and 14 foreign countries and territories. For more information, visit chuckecheese.com and peterpiperpizza.com.

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Investor Inquiries:                        Media Inquiries:
Jim Howell                            Liz DiTrapano, ICR
EVP & CFO                            (646) 277-1226
CEC Entertainment, Inc.                        Liz.DiTrapano@icrinc.com
(972) 258-4525                             
jhowell@cecentertainment.com

Raphael Gross, ICR
(203) 682-8253
Raphael.Gross@icrinc.com                    
                
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements, which involve risks and uncertainties. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this press release, including statements regarding our strategy, future operations, objectives of management and expected market growth, are forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future events and, therefore, involve a number of assumptions, risks and uncertainties, including the risk factors described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 30, 2018, filed with the SEC on March 12, 2019. 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. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including but not limited to:
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.
These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause our results to vary from expectations include, but are not limited to:
negative publicity 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;
our ability to weather economic uncertainty and changes in consumer discretionary spending;
increases in food, labor and other operating costs;
the impact of labor scheduling legislation;
our ability to successfully open international franchises and to operate under the United States 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 businesses;
disruptions to our commodity distribution system;

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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 financial results 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 relocation 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;
risks associated with our proposed business combination and the related business combination agreement, and following the consummation of the proposed business combination, the increased costs, and the risks, associated with being a reporting company with publicly traded equity; 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 December 30, 2018, filed with the SEC on March 12, 2019.
The forward-looking statements made in this press release reflect our views with respect to future events as of the date of this press release and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, undue reliance should not be placed on these forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release and, except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this report. We anticipate that subsequent events and developments will cause our views to change. Our forward-looking statements do not reflect the potential impact of any future acquisitions, merger, dispositions, joint ventures or investments we may undertake. We qualify all of our forward-looking statements by these cautionary statements.
Non-GAAP Financial Measures
Certain financial measures presented in this press release, such as Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”) is not a recognized term under accounting principles generally accepted in the United States (“GAAP”). The Company’s management believes that the presentation of this measure is appropriate to provide useful information to investors regarding its operating performance and its capacity to incur and service debt and fund capital expenditures. Further, the Company believes that Adjusted EBITDA is used by many investors, analysts and rating agencies as a measure of performance. The Company also presents Adjusted EBITDA because it is substantially similar to Credit Agreement EBITDA, a measure used in calculating financial ratios and other calculations under our debt agreements, except for excluding the annualized full year effect of Company-operated and franchised venues that were opened and closed during the year. By reporting Adjusted EBITDA, the Company provides a basis for comparison of its business operations between current, past and future periods by excluding items that we do not believe are indicative of our core operating performance.
The Company’s definition of Adjusted EBITDA allows for the exclusion of certain non-cash and other income and expense items that are used in calculating net income from continuing operations. However, these are items that may recur, vary greatly and can be difficult to predict. They can represent the effect of long-term strategies as opposed to short-term results. In addition, certain of these items can represent the reduction of cash that could be used for other corporate purposes. This measure should not be considered as an alternative to operating income, cash flows from operating activities or any other performance measures derived in accordance with GAAP as measures of operating performance, or cash flows as measures of liquidity. This measure has important limitations as an analytical tool, and users should not consider it in isolation or as a substitute for analysis of our results as reported

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under GAAP. Because of these limitations, the Company relies primarily on its GAAP results and uses Adjusted EBITDA only supplementally.
Important Information About the Proposed Business Combination and Where to Find It
In connection with the proposed transaction described under “Business Combination” above (the “Business Combination”), Leo has filed with the SEC a registration statement on Form S-4 containing a preliminary proxy statement and a preliminary prospectus of Leo. After the registration statement is declared effective, Leo will mail a definitive proxy statement/prospectus relating to the proposed Business Combination to its shareholders. Leo’s shareholders and other interested persons are advised to read the preliminary proxy statement/prospectus and the amendments thereto and, when available, the definitive proxy statement/prospectus and other documents filed in connection with the proposed Business Combination, as these materials contain or will contain important information about the Company, Leo and the Business Combination. When available, the definitive proxy statement/prospectus and other relevant materials for the proposed Business Combination will be mailed to shareholders of Leo as of a record date to be established for voting on the proposed Business Combination. Shareholders may also obtain copies of the preliminary proxy statement/prospectus and, when available, will be able to obtain copies of the definitive proxy statement/prospectus and other documents filed with the SEC without charge, at the SEC’s website at www.sec.gov, or by directing a request to: Leo Holdings, Corp., 21 Grosvenor Place, London, SW1X 7HF.
Participants in the Solicitation
Leo and its directors and executive officers may be deemed participants in the solicitation of proxies from Leo’s shareholders with respect to the proposed Business Combination. A list of the names of those directors and executive officers and a description of their interests in Leo is contained in Leo’s annual report on Form 10-K for the fiscal year ended December 31, 2018, which was filed with the SEC and is available free of charge at the SEC’s web site at www.sec.gov, or by directing a request to Leo Holdings, Corp., 21 Grosvenor Place, London, SW1X 7HF. Additional information regarding the interests of such participants is contained in the preliminary proxy statement/prospectus and will be contained in the definitive proxy statement/prospectus for the proposed Business Combination when available.
Queso and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of Leo in connection with the proposed Business Combination. A list of the names of such directors and executive officers and information regarding their interests in the proposed Business Combination is included in the preliminary proxy statement/prospectus and will be included in the definitive proxy statement/prospectus for the proposed Business Combination when available.


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