Carmike Cinemas loses $5.8 million in the first quarter as attendance slips

CEO Passman ‘optimistic’ that financial results will bounce back this summer

tadams@ledger-enquirer.comMay 6, 2013 

A sluggish performance at the box office, with overall attendance slipping, took a bite out of Carmike Cinemas’ earnings in the first quarter, leading to a net loss of $5.8 million, or 33 cents per share.

That’s sharply lower than the $3.2 million profit, or 26 cents per share, posted by the Columbus-based movie-theater company in the same January-March period of 2012. Stock market analysts surveyed by research firm Thomson Financial had been expecting on average a profit of 7 cents per share.

“Notwithstanding the slow first quarter for the industry, we are optimistic about the balance of 2013,” Carmike President and Chief Executive Officer David Passman said in a statement. “The second quarter is off to a strong start with the successful nationwide premiere of ‘Iron Man 3’ this past weekend and we expect the positive momentum to continue throughout the summer as the upcoming release calendar features a strong movie slate with several highly anticipated titles.”

The blockbuster season this spring and summer includes “The Great Gatsby,” “Star Trek Into Darkness,” “Fast & Furious 6,” “After Earth,” “Man of Steel,” and “The Lone Ranger,” the latter starring Johnny Depp. Animated offerings include “EPIC” and “Monsters University.”

There were bright spots in the first quarter, Passman said. Those included total revenue coming in virtually flat at $130 million, with the average ticket price and concessions bought per patron rising. Growth from theater acquisitions factored into the picture as well.

The average admissions charged per moviegoer was up from $6.84 in the quarter a year ago to $7.02 in the latest period. The average concession and “other” charge, which includes things like 3-D viewing glasses, came in at an all-time record $4.18 in the current quarter, up from $3.91 a year ago.

The theater chain’s overall attendance fell from 12.1 million in the year-ago period to 11.6 million in the current quarter.

“Last year’s first-quarter box office benefitted from a strong and well-balanced film slate, creating a challenging year-over-year comparison for the industry,” Passman said of the company’s quarterly results.

Carmike Cinemas has been in an expansion mode for several quarters. Passman said two new complexes were opened in the first quarter, with 11 more either under construction, being planned or under negotiation.

The company is aggressively pushing toward having 300 theaters and 3,000 screens. As of March 31, it was up to 244 theaters and 2,464 screens in 35 states. Most of its locations have digital screens and are equipped to show 3-D movies. It also is up to 18 “Big D” large-screen auditoriums, which include digital audio and upgraded seating.

Carmike Chief Financial Office Richard Hare said company expenses were higher in several categories during the quarter. Theater operating costs rose from $52 million a year ago to $58 million in the current period, primarily because of its purchase of properties from Rave Cinemas LLC.

There also were lease-termination charges of about $3 million, while interest expense rose $8.3 million to $12.3 million, with the company assuming debt from the Rave deal, along with a higher interest rate on $210 million in secured notes (money borrowed) in April of last year.

“While a majority of our costs are largely fixed, we continue to exercise expense management disciplines throughout the organization to maximize the performance of our operations and create efficiencies where possible,” Hare said in a statement.

Carmike shares were up 27 cents, or 1.5 percent, to $17.62 in trading Monday on the Nasdaq exchange. The stock’s 52-week trading range is $11.04 to $18.90 per share. The company released its earnings report after the market’s close.

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