An expanding Carmike Cinemas continued to grow revenue, operating income and theater-level cash flow in the second quarter of this year. But it wasn’t enough to avoid a net loss of $1.4 million, or 6 cents per share, in the April-June period.
The movie-theater chain, headquartered in downtown Columbus, reported the financial data after the stock market’s close Monday. In pre-release trading, the company’s shares slipped 6 cents apiece to $26.04 in an overall down day for the market. The stock is trading in a range of $24 to $35.36 per share over the past year.
Carmike’s second-quarter loss compares to net income, or profit, of $3.2 million (14 cents per share) in the same period of 2014.
For the first six months of this year, the firm posted a loss of just over $1 million, compared to a profit of $58,000 in the same timeframe a year ago.
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“Carmike’s strong second quarter operating revenue growth reflects the ongoing success of our theater-level initiatives and the progress we are achieving around our value-building theater acquisition and organic growth strategies,” Carmike President and Chief Executive Officer David Passman said in a statement.
“Buoyed by an attendance increase of nearly 14 percent, Carmike’s strong operating and financial momentum has continued in 2015 as we achieved record performance across several key financial metrics, including a 20 percent rise in operating revenues that marked an all-time quarterly record, as well as a 43 percent rise in operating income, and increases in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) and theater level cash flow of over 24 percent and 25 percent, respectively,” the CEO said.
Top movies released in the April-June period included “Jurassic World,” “Avengers: Age of Ultron,” “Inside Out,” “Pitch Perfect 2,” “San Andreas” and “Mad Max: Fury Road.”
Carmike, with 271 theaters in 41 states and about 9,000 employees, reported total operating revenue in the quarter of $219.1 million, up from $183 million in the same period a year ago. Operating income rose from $18.7 million to $26.9 million year over year. Theater-level cash flow climbed from $37.6 million to $47 million, and EBITDA increased from $32.8 million to $40.8 million.
Several key areas impacted the company’s bottom line, including “record-level” concessions and other spending per customer, along with a sharp increase in film exhibit costs.
Carmike said admission costs rose to an average $7.62 per patron, up from $7.39 a year ago, while average concessions/other sales per customer was up from $4.36 last year to $4.75 this quarter. The company said this marks the 22nd quarter in row that the “take” from customers for popcorn, drinks, candy and other food has gone up.
Overall, said Carmike Chief Financial Officer Richard Hare, “guests spent a record level of $12.37 per visit on average in the second quarter, which represents a 5.3 percent increase in combined per patron spending compared to the prior year.”
Passman said the increasing movie ticket, food and beverage averages fit into management’s long-term goals, with the company “confident” that segment will ultimately play a vital role in the company’s financial growth as it tests and rolls out various concession and in-theater dining services companywide.
On the expense side, costs for personnel, concessions and theater occupancy all rose during the second quarter from the year prior. But the major increase came in film exhibition costs, with that outlay by the firm at just over $79 million, up from $64.4 million a year ago. Management said better-performing movies typically command higher charges from Hollywood to show them.
In terms of debt, Carmike did refinance a portion of its notes in the quarter, which it expects will save the company $1.7 million annually in interest expense through the year 2023. Overall, debt rose from $445 million at the end of December to $459.3 million at the end of June. Current net debt, after the nearly $133 million in cash on hand, stands at $326.8 million.
“Looking ahead,” Passman said, “we intend to continue our role as an industry consolidator, with our capital allocation strategy focused on expanding our theater circuit in complementary markets through opportunistic theater acquisitions and new build locations.”
The CEO has stated a long-term goal of operating 300 theaters with 3,000 overall screens. That strategy includes buyouts of smaller movie theaters and opening new complexes in various markets, typically with developers constructing the buildings and leasing them to Carmike.
Carmike CEO ‘deeply saddened’ by Louisiana theater shooting tragedy
Carmike Cinemas President and Chief Executive Officer David Passman began a conference call Monday with Wall Street analysts who follow his company by expressing sympathy for victims of last Thursday’s movie theater shooting in Lafayette, La.
“First, on behalf of the entire Carmike family, I want to express how deeply saddened we are about the tragic incident that took place in Lafayette, La., last week, and express our deepest condolences to the families and loved ones of the victims, and the members of the local community,” the said. “We also want to express our gratitude to the first responders, as well as theater personnel for quickly and professionally dealing with the situation.”
The gunman in the mass shooting was John Russell “Rusty” Houser, a longtime resident of Columbus and Phenix City. Police called him a “drifter” and said he had been staying at a Motel 6 in Lafayette since early July, before purchasing a ticket to the movie, “Trainwreck,” and opening fire early in its showing, killing two young women and wounding nine others.
Columbus-based Carmike operates 271 theaters with 2,884 screens in 41 states, but none of those are in Louisiana. Locally, it has three theaters in Columbus and another on Fort Benning.