Carmike third-quarter earnings less than expected

CEO says earnings come during slump industry-wide

chwilliams@ledger-enquirer.comNovember 1, 2012 

Columbus-based theater chain Carmike Cinemas fell short of Wall Street expectations when it reported an adjusted net third-quarter income of more than $2.3 million Thursday morning.

The earnings were 13 cents per share, short of the estimates of 16 cents per share.

Carmike generated more than $127.5 million in revenue compared to $133.3 million during the same period a year ago.

For the first nine months of the year, Carmike has produced $394.3 million in revenue and an adjusted net income of $11.3 million, according to the news release.

Carmike President and Chief Executive Office David Passman points out the earnings come at a time of an industry-wide slump.

"While only slightly outperforming the industry box office, we are nevertheless pleased that Carmike's quarterly box office results were ahead of the overall U.S. industry for the fifth consecutive quarter," Passman stated in the release. "… We think it's important to note that the 2012 domestic third quarter box office competed with the all-time strongest like quarter on record in 2011, somewhat mitigating the year over year decline."

The earnings come on the heels of Carmike's agreement in late September to buy 16 complexes and 251 screens from Rave Reviews Cinemas.

"The Rave transaction is a significant step for Carmike strategically and operationally, bringing us closer to our goal of expanding our footprint to 300 theatres and 3,000 screens," Passman said. "The acquisition will increase our revenue and operating base with state-of-the-art theatres located in markets where we believe we can quickly apply our operating and management disciplines which we believe will drive strong cash flow. In line with our stated objectives, we believe the transaction will add new value for our shareholders without materially increasing our leverage ratio."

Carmike is a one of the nation's largest motion picture exhibitors. At the end of September, Carmike had 232 theatres with 2,242 screens in 35 states.

In Thursday trading on the Nasdaq, Carmike shares were down 1.62 percent, closing at $13.40 per share.

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