Carmike reports higher revenue of $158.9 million, but $3.1 million net loss

Theater chain’s expenses rise as it expands; attendance and customer spending climbs as well

tadams@ledger-enquirer.comMay 5, 2014 

Keith Bowers of Arkansas was arrested by the FBI last week on charges that he called in bomb threats to Carmike's Columbus headquarters.

FILE — Ledger-Enquirer

At first glance Monday, it appeared to be a weak showing for Carmike Cinemas. The Columbus-based movie-theater chain reported a first-quarter net loss of $3.1 million, or 14 cents per share.

But the picture got decidedly better from there, with most other measures of the company’s January-March performance on the upside.

Carmike’s total revenue came in at $158.9 million for the quarter, up from $129.3 million the same period in 2013. Operating income was $8.1 million, up from $3.4 million a year ago. And theater-level cash flow increased from $22.7 million to $27.5 million.

David Passman, Carmike’s president and chief executive officer, pointed out his firm also saw an increase in spending by customers for concessions — soft drinks, popcorn and candy — and the category of overall spending by each patron.

“Innovative concessions and promotional strategies combined with Carmike’s customer-centric focus on providing guests with an exceptional experience on every visit, continue to be key elements of our operating success,” Passman said in a statement. “Concessions and other sales per patron increased over 8 percent to a company record $4.52 in Q1 2014, further underscoring our achievements.”

The company also said revenue for admissions and attendance per each screen it operates experienced increases of 12 percent and 9 percent, respectively. That compares to overall U.S. box-office growth in those areas of 6 percent and 5 percent, respectively, the CEO said.

Carmike has been in a growth mode, with the company shooting for 300 theaters and 3,000 screens through new theater openings and acquisitions. The company has six theaters under construction, with locations planned in Fayetteville, N.C., Spring Hill, Tenn., and Traverse City, Mich. It also recently opened its Tiger 13 complex in Opelika, Ala.

At the end of March, the company operated 253 theaters (2,670 screens) in 37 states. With the steady expansion, operating expenses have risen as well. They were $150.8 million in the first quarter of this year, up from $125.8 million in the same period a year ago.

“Of those expenses, salaries and benefits rose $3.2 million to $21.5 million and theater occupancy costs rose $5.1 million to $20.4 million in Q1 2014 due primarily to recent acquisitions and new-builds,” said Richard Hare, Carmike’s chief financial officer.

“We believe that Carmike is well positioned to capitalize on future opportunities for circuit growth,” Passman said. “Our balance sheet continues to strengthen and we have ample cash balances on hand with a very manageable debt level.”

As of March 31, the firm’s total debt stood at $453.7 million, slightly lower than at the end of December.

The first quarter of each year is typically one of the lower performing three-month periods for Carmike and other movie-theater companies following the November and December holiday blitz and leading up to the summer blockbuster season that actually begins in May.

For instance, last weekend’s debut of “The Amazing Spider-Man 2” falls into the blockbuster category. Coming films that also would be expected to draw cash-spending crowds include “Legends of Oz: Dorothy’s Return,” “Godzilla,” “X-Men: Days of Future Past,” “Edge of Tomorrow,” “How to Train Your Dragon 2,” “Transformers 4: Age of Extinction,” “Dawn of the Planet of the Apes,” “Hercules,” “Teenage Mutant Ninja Turtles” and “The Expendables 3.”

In Columbus, the company over the weekend reopened its “BigD” big-screen auditorium at the Carmike 15 complex on Whittlesey Boulevard. The original “BigD” screen was shut down last December to make way for a new IMAX-equipped auditorium.

Shares of Carmike Cinemas’ stock fell 58 cents apiece, or 1.9 percent, to $29.88 in trading Monday on the Nasdaq exchange. The stock’s 52-week trading range is $16.14 to $32.60 per share.

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