Carmike Cinemas posts $1 million quarterly profit; cash flow strong

Revenue up more than 30 percent to $165 million

tadams@ledger-enquirer.comNovember 5, 2013 

Carmike 15 is located at 5555 Whitlesey Parkway in Columbus.

BILLY SMITH II

The day after unveiling its $31.75 million cash purchase of nine theater complexes in three states, Carmike Cinemas on Tuesday reported a third-quarter profit of $1 million, or 5 cents per share, on total operating revenue of $165 million per share.

That’s up from $200,000 in net income, or 2 cents per share, and revenue of $126.7 million in the same July-September period a year ago. Revenue, in fact, was up more than 30 percent in the current quarter.

“The third quarter was another strong reporting period for Carmike as we posted growth in box office receipts and attendance that exceeded those of the overall domestic exhibition industry,” said Carmike President and Chief Executive Officer David Passman in a statement.

He noted that several key earnings elements watched by the Columbus-based company increased in the quarter, including theater-level cash flow and the money spent by movie fans on refreshments and other items. It marked the 15th quarter in a row that the average concession sale per customer — now at $4.09 and up from $3.79 — has risen.

“Carmike’s solid third quarter operating performance underscores our companywide focus on customer service excellence and patrons are clearly responding,” Passman said.

The company’s key numbers continue to grow with it continuing to add theaters either through acquisitions or individual movie-house openings in specific communities. Carmike added its 20th signature Big D auditorium last week at a new theater in Champaign, Ill.

On Monday, the firm said it is buying nine complexes with 147 screens from Fort Lauderdale, Fla.-based Muvico Entertainment for $31.75 million, a deal that will close by the end of this year.

That adds theaters in Florida, California and Illinois and will give Carmike 257 complexes in all, with 2,681 screens, in 37 states. The company’s stated goal is to reach 300 theaters and 3,000 screens, a size it says it can easily digest with its current corporate infrastructure.

“We continue to prioritize an active expansionary (merger and acquisition) program, seeking attractive acquisition opportunities that will help us further expand,” Passman said.

Richard Hare, Carmike’s chief financial officer, said the new theaters are fueling not only the company’s operating revenue, but its admission receipts (up nearly 29 percent), concessions and other revenue (33 percent higher) and overall per-patron spending on tickets and snacks. That’s up nearly 6 percent to $10.84 per person.

Passman also mentioned Carmike’s recent agreement with IMAX Corp. to add 10 of its large screens to the chain’s current total of eight, giving it 18 IMAX screens in all once they are installed around the country.

The company’s steady growth in theater count was evident in rising film exhibition costs for the quarter, up from $43.8 million to $56.4 million, and “other” theater operating costs of $66.3 million, which was up from $52.9 million in the same quarter a year ago.

“The rise versus the year-ago period was largely a reflection of the 11.6 percent increase in average screen count, plus higher theater salaries, wages and occupancy costs,” Hare said. “General and administrative expenses were $6.6 million for the three months ended Sept. 30, compared to $5.7 million for the same period in 2012, primarily due to costs associated with professional fees related to merger and acquisition activities.”

Factoring out the cost of goods and other items needed to operate the theater chain, Carmike’s operating income for the quarter was $13.5 million, up from $7.4 million.

Through the first nine months of this year, the firm posted net income, or a profit, of $1.9 million, or 10 cents per share, compared to net income of $4.6 million, or 30 cents per share in the same period last year.

Total operating revenue from January through September was $465.2 million, up from $391.8 million in the first nine months of 2012.

Theater-level cash flow — excluding acquisition-related expenses — was $33.9 million in the quarter and $96.6 million over the nine months. Those are up from $24.2 million and $82.8 million, respectively.

Carmike reported total debt of $437.5 million as of Sept. 30, slightly higher than at the end of December of last year.

The movie-theater company released its earnings data after the stock markets’ close Tuesday. Shares were up in trading on the Nasdaq exchange during the day, closing 32 cents higher at $23.38, a 1.4 percent gain. The stock’s 52-week trading range is $13.26 to $23.90 per share.

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