Ladies and gentlemen, thank you for standing by and welcome to the CEC Entertainment teleconference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session with instructions given at that time. (Operator instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mike Magusiak. Please go ahead.

Thank you. Welcome to our conference call. I am Mike Magusiak, President and CEO of the company, and I am joined by Dick Frank, our Executive Chairman and Chris Morris, our Executive Vice President and Chief Financial Officer. Before we begin today’s discussion, I would like to make you aware that some of the information presented today may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those implied in the forward-looking statements. Information regarding the company’s risk factors was included in our press release and is also included in the company’s filings with the SEC. Reconciliation information related to non-GAAP financial measures discussed in this call may be found in the company’s quarter one earnings release and on the company’s Web site under “Investor Information”. The primary objectives for today’s call are first, to discuss our financial performance during the first quarter. Next, I will present our multifaceted strategic plan to increase comparable store sales and earnings per share. This plan incorporates sales initiatives that were effective last year as well as new sales initiatives. Third, Chris will discuss our business outlook. Finally, Dick will provide some concluding remarks and then open the line for a Q&A session. Now, I’d turn the call over to Chris Morris, who will review our financial performance.

Thank you. Welcome to our conference call. I am Mike Magusiak, President and CEO of the company, and I am joined by Dick Frank, our Executive Chairman and Chris Morris, our Executive Vice President and Chief Financial Officer. Before we begin today’s discussion, I would like to make you aware that some of the information presented today may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those implied in the forward-looking statements. Information regarding the company’s risk factors was included in our press release and is also included in the company’s filings with the SEC. Reconciliation information related to non-GAAP financial measures discussed in this call may be found in the company’s quarter one earnings release and on the company’s Web site under “Investor Information”. The primary objectives for today’s call are first, to discuss our financial performance during the first quarter. Next, I will present our multifaceted strategic plan to increase comparable store sales and earnings per share. This plan incorporates sales initiatives that were effective last year as well as new sales initiatives. Third, Chris will discuss our business outlook. Finally, Dick will provide some concluding remarks and then open the line for a Q&A session. Now, I’d turn the call over to Chris Morris, who will review our financial performance.

Thank you, Mike. Good afternoon everyone. Let’s start with the top line. Comparable store sales on a same calendar week basis were up 0.7% in Q1. Revenues in the first quarter totaled $246.3 million compared to $248.1 million in Q1 '09. The decline in revenue was primarily due to the shift in calendar weeks between the two quarters caused by the 2009 fiscal year, including an extra operating week, which had the effect of pushing the weeks in the 2010 fiscal year forward one week. This calendar week shift resulted in a loss of the seasonally high sales volume week from the first quarter of 2010. Our weighted average unit count increased by approximately 3 units in Q1 '10 compared to Q1 '09. Cost of food and beverage as a percentage of food and beverage sales increased 170 basis points to 22.8% during the first quarter of 2010 and 21.1% in the first quarter of '09, primarily due to a 50 basis point increase in cheese cost associated with a $0.24 per pound increase in cheese prices; a 50 basis point increase in wing cost associated with an increase in wing product mix; and increases in other miscellaneous items. Cost of entertainment merchandise as a percentage of entertainment merchandise sales decreased a 100 basis points to 8.1% during the first quarter of 2010 from 9.1% in the first quarter of 2009, primarily due to charges in the prior year associated with the liquidation of certain prize inventory during the first quarter of 2009. Labor expense as a percentage of company store sales increased 20 basis points to 24.7% during the first quarter of 2010 compared to 24.5% in the first quarter of 2009, primarily due to higher unemployment taxes and a 3.7% increase in average hourly wage rates at our…

Thanks, Chris. My presentation will focus on our comprehensive strategic plan to increase comparable store sales and earnings per share in 2010. This plan incorporates sales initiatives that were effective last year as well as new sales initiatives that we’ve been testing in our integral components of what we believe is an enhanced strategic plan. It is difficult to forecast comparable store sales in any operating environment and it is extremely challenging in the current economic environment with high unemployment and a consumer that continues to be cautious. However, assuming a moderate improvement in the economy this year, minimal anticipated impact from H1N1 swine flu in the current year couple with our belief that we have an enhanced and already strategic plan, we have established a comparable store sales growth goal of approximately 2% for 2010. Year-to-date comparable store sales on a same week basis through 17 weeks are positive 0.5%. We believe that the timing of Easter and school spring breaks marginally improved first quarter sales results while negatively impacting primarily one week in April. Therefore, we believe that the best indicator of sales performance is the year-to-date same week comp sales of positive 0.5% through the first 17 weeks of 2010. At this point in time, based on our performance in the first one-third of the year, we believe that we are on track to achieve our sales growth goal of approximately 2% for 2010. As stated earlier, it is difficult to project comparable store sales because many external and internal factors may impact sales either negatively or positively. However, we believe that comparable store sales will accelerate throughout the remainder of this year due to the following factors. First, comparable store sales comparisons for the remainder of 2010 are significantly easier than the first quarter. The two-year…

Thanks, Mike. Mike stated in his presentation that we have set an internal goal to increase comparable store sales 2% in 2010. As we discussed in our last conference call, we believe this goal is achievable based on the combination of our strategic initiatives and soft comparisons in the last three quarters of the year. However, in light of the external environment we continue to remain cautious in our near-term outlook for the business. At this point in time, we are estimating comparable stores sales growth calculated on a same week basis will be in a range of up 1% to 2% in fiscal-year 2010. We are slightly raising our estimates of fiscal-year 2010 diluted EPS to a range of $2.70 to $2.80, representing a growth rate of 8% to 12% excluding the extra week from 2009. Incorporated into this guidance are the following assumptions; we are assuming cheese prices will average $1.55 to $1.65 per pound in fiscal-year 2010 as compared to $1.28 in fiscal-year ’09. Recall that every $0.10 change in cheese prices is estimated to impact pre-tax income by approximately $700,000 to $800,000. We expect slight pressure on the labor line associated with the ongoing pressure for minimum wage increases and anticipated increases in unemployment taxes. We're estimating fiscal-year 2010 depreciation and rent expense will grow 1% [ph] and 3% respectively. We’re estimating a 10 to 20 basis point reduction in fiscal-year 2010 advertising expense as a percentage of total revenue. We’re targeting approximately seven new company units in fiscal-year 2010, including one re-location. We are currently estimating total capital expenditures to be in a range of $96 million to $100 million. We are assuming an effective tax rate of approximately 38% for the year and we are assuming free cash flow will be used to repurchase shares on an opportunistic basis. While we are not providing quarterly EPS guidance, please note the following items related to the second quarter. Increases in minimum wage rates are expected to negatively impact cost of labor in Q2 2010 as the last scheduled increase in the federal minimum wage rolled out in July 2009. General and administrative expenses in Q2 ‘09 benefitted approximately $870,000 from a favorable adjustment to our bonus accrual. Therefore this adjustment will have a negative impact on the Q2 2010 G&A comparison to the prior year, and our effective tax rate in Q2 2009 was 35.1% as certain discrete favorable adjustments were made in the second quarter of last year. We are currently expecting our effective tax rate in Q2 2010 to be 38%. With that, I will now like to turn the call over to Dick.

Thanks, Chris. We continue to operate in somewhat difficult, although we believe slightly improved economic environment in the early part of 2010. Unemployment is still relatively high throughout much of the country and the consumer continues to be cautious. Despite the continuing economic headwinds carrying over from 2009, we are at least moderately pleased with the performance in the first four months of the year. Comparable store sales on a same week basis of positive 0.5% through the first 17 weeks of the year was led by our western region performance of positive 1.8%. This positive performance in California is important given the number of locations we have in the state and the high absolute dollar volume of the locations. Additionally, this strong performance has caused us to expand the number of markets with new games supported by Spot TV past the initial test markets of LA and San Diego. As we move ahead in 2010, our outlook on sales and performance is best characterized as one of cautious optimism. The economy still seems somewhat fragile, but our strategies are solid. We are pleased with the results realized from our capital initiatives, our continued focus on birthday party sales, school and non-profit fund raising and our recent changes to our pricing and coupon strategies. We intend to build upon these proven and successful initiatives to further improve our future comparable store sales performance. The strength of our brand Chuck E. Cheese's is once again evident in the seasonally high first quarter of the year. With operating cash flow of approximately $92 million, we were able to fund approximately $22 million in capital against new and existing locations, repurchase $17 million of our company stock while still reducing the outstanding balance in our line of credit by $50 million. At the end of the first quarter, the company has a balance of approximately $200 million in its share repurchase authorization. We look forward to sharing the performance of the company as we move through 2010. And at this time, Mike, Chris and I would be glad to answer any questions you might have.

(Operator instructions) And here we have a question from the line of Brad Ludington from KeyBanc Capital. Please go ahead. Brad Ludington – KeyBanc Capital: Thank you. I wanted to start off with the strain on labor in the first quarter from the unemployment tax increases. Does that really – I mean, we're hearing from other companies that that primarily hits the first quarter and kind of rolls off. Is it similar here or should we expect that to continue in future quarters?

We do expect it to continue in future quarters. The first quarter impact is probably going to be the greatest of the quarters in 2010, but it still going to be in the numbers. Brad Ludington – KeyBanc Capital: Okay. And then on your – the 100 token bonus for moving your party off of Saturday, was that did you say for Sunday and Thursday or Sunday and Friday?

That’s Friday and Sunday. Brad Ludington – KeyBanc Capital: Friday and Sunday.

Right. Brad Ludington – KeyBanc Capital: Okay. Thank you very much.

You are welcome.

: : Robert Derrington – Morgan Keegan: Yes, hi, a couple of questions if I may. Chris, your leverage ratio I think you mentioned was at 1.7 times. And I think the company has historically talked about a target at two times. I'm just wondering what your view is longer-term through the course of the year. Would you consider using your balance sheet to bring that leverage ratio back to where you target – essentially on a share repurchase, for example?

: Based on the timing of our earnings release for the prior year, the earnings release doesn’t hit until the end of February. So we're just simply not able to be in the market repurchasing shares in January or February. So we find ourselves in a position where the business generates substantial cash flow that we are not able to use that cash flow to repurchase shares just because of the timing of the trading window. Robert Derrington – Morgan Keegan: Well, it looks like you can take advantage of the market to your benefit, right? A question is – note the second question, if I may, on cheddar prices, your guidance for the block cheddar is I think unchanged from last time, $1.55 to $1.65, yet recently the USDA lowered their expectations for the year to a range of $1.49 to $1.54. Is that just your being conservative in your guidance?

Maybe. Look we cannot – we are not in a position to speculate on the cheese market. We stopped trying to forecast that market a long time ago. I did notice that the USDA dropped their forecast, but based on all the information that we were receiving from our suppliers and our other sources, we just didn't feel like that now is the time to lower our estimate. So we just wanted to give you a range that we are assuming in our earnings guidance and then give you that metric every $0.10 change represents about 10 basis points. And then you can adjust your models accordingly. Robert Derrington – Morgan Keegan: Sure, sure, I appreciate that. And Mike, one last question if I could. The fact that you talk cautiously optimistic about the year and sales trends and expectations and you talk a little bit more about a target of 2%. But given that you feel relatively cautious about the economy, what is your gut feel – your gut feel about taking the menu pricing that you are the fact that you're taking menu pricing midyear that's in that roughly 2% to 3% range anyway?

That’s a good question, Bob. I think first of all when we are taking it up to about 2.5% to 3% for the rest of the year, there is two primary components. The first is on birthday parties and we've tied that to the Ticket Blaster. And as we stated, Ticket Blaster sales have significant exceeded birthday sales and non-Ticket Blaster stores. We've monitored that very closely. We have not yet even started advertising that. We are going to have a national advertising campaign and every indication so far shows that we have substantially improved the birthday party. So we feel good about that. And then the other largest component of the price increase is reducing the discount in the coupons that we offer our guests. In our revised coupon offering, the discount approximates about 33% to 35% discount above our menu price. We tested that in 35% of our stores. We saw no meaningful impact to sales, yet our cost to sales improved. And we really see a slight reduction to that discount as an initiative to actually increase sales going forward. : Robert Derrington – Morgan Keegan: Did that test stores, Mike, for the Ticket Blaster, did they have the higher prices?

Yes, it did. Substantially all of the stores in Los Angeles and San Diego, every one of those stores had – we increased the birthday parties by $1 per child. Robert Derrington – Morgan Keegan: Got you, okay. Exciting program, Mike. Thank you.

Thank you, Bob.

: Mike Gallo – CL King: Hi, good afternoon. My question is on the advertising. I think you noted in your release that you're planning advertising as a percentage of sales to be down slightly. Given that you plan to roll out the Ticket Blaster, I was wondering why you wouldn't expect that line item to be more flattish to even maybe up a little on a year-over-year basis, particularly given – I guess it was down a little here in the first quarter and I would expect media rates in general should be moving up here as the economy improves in order to get the same weight. Thank you.

: The second point is, you are right, we spent or we will spend over about an 18-week period about $300,000 advertising new games and rides in LA and San Diego. We are going to test an additional two to three markets and that additional cost depending on the markets we test might increase our advertising dollars from about $100,000 to $300,000. But at least what we are seeing so far and what we believe that our sales will go up and even though we are increasing our advertising dollars that our sales will offset that. So we anticipate for the year about two-tenths improvement in advertising to sales. Mike Gallo – CL King: Okay, thank you.

You’re welcome.

: Greg Schroeder – Wisco Research: Hi, thank you. Mike, could you elaborate a little bit on how the introduction of the Ticket Blaster will help you to extend the birthday party time from an hour and a half to two hours? And then if you could maybe help us with what percent of your total sales are birthday parties, if you can measure that?

Yes, yes. I’d be happy to do that. First, the Ticket Blaster is somewhat of a separate issue than the two-hour birthday parties. We have been testing in our Ticket Blaster locations a two-hour party and one of the things that we’ve tracked for a number of years is the issues that we have with birthday parties and one of the biggest opportunities we feel we have is to increase the length of that birthday party, the kids can play more games, the adults have more time to relax, order more food. And so what we did is we looked at our busiest period, the first quarter on birthday parties and birthday parties, as you might expect, are more from the 11 o’clock to 5 o’clock, and when we re-laid that out we were able to expand the one and an half hour parties to two hours and even though we had some less wave of birthday parties, we were able to move the birthday parties to other hours. So we tested them with Ticket Blasters and what I would tell you is just response we are having from guests and they don't feel rushed, that it's just a much, much better birthday experience. And the birthday sales as a percentage of total sales, they’re about 14, almost 15% of sales. Greg Schroeder – Wisco Research: Okay, thanks. And then if I could just on the birthday party pricing, which you're expecting to raise $0.50 to $1.00 in June per child, could you just remind me what the average price is right now for a birthday party per child?

Yes. It varies by market. But it’s typically between the $9.99 and $13.99 price range. Greg Schroeder – Wisco Research: Okay. And then just to I guess expand on that a little bit. In your expectation for the average check being up approximately 2.5% in Q2, 3% in the second half, I guess I was a little unclear whether that was just the addition of the fourth value menu item. And the – I guess is that an all-in average check including the birthday pricing?

: Greg Schroeder – Wisco Research: Okay. So that's both pricing and check? I mean that's the total you would expect for the rest of the year?

That’s correct. Greg Schroeder – Wisco Research: Okay, thank you.

: Michael Wolleben – Sidoti & Company: Thanks, guys. Just two quick things here. With the calendar shift from the 53rd week last year, are there any other weeks that kind of fall on the borders here of the second through the fourth quarter that we should be looking out for?

: Michael Wolleben – Sidoti & Company: Okay, great. And then the last thing here. How are you guys looking at the market here to possibly increase the number of expansions that you guys are doing moving forward? Is there more store space available or are you looking into possibly upping the number of expansions into 2010 – or 2011, sorry?

At this point in time it will be about the same. We announced that we are going to do about 33 this year. We had an update yesterday, we look at that constantly and there can always be a little bit of movement from when a lease is actually executed. But I would suspect that it's somewhere around the level that we have this year. Michael Wolleben – Sidoti & Company: Okay, great. Thanks

Mr. Magusiak, there are no further questions.

Thank you. We appreciate your participation, and if you have any additional questions please call Chris, Dick or myself. Thank you.