Carmike Cinemas reports $1.6 million loss amid ‘weaker’ lineup of summer movies

Carmike Cinemas, awaiting its possible $1.2 billion acquisition by AMC Entertainment Holdings, on Monday reported a second-quarter loss of $1.6 million on total operating revenues of $204.7 million.

Those numbers compare to a loss of $1.4 million in the same April-June period a year ago, on total operating revenues of $219.1 million. Ticket, food and beverage sales are included in the operating revenues.

“Our second quarter results reflect the continued successful execution of our theater-level initiatives and operating effectiveness around our recent acquisitions, offset by the difficult year-over-year comparison related to the record U.S. box office performance in the second quarter of 2015,” David Passman, president and chief executive officer of Columbus-based Carmike, said in a statement.

Passman said improvement in his company’s food and beverage areas helped offset the impact of a “weaker industry box office” that pinched admission, or ticket, revenue per screen year over year.

“Despite the soft industry trends, our focus on delivering differentiated and improved food and beverage offerings and innovative dining concepts is reflected by the healthy rise of nearly 10 percent in second quarter concessions and other spending per patron metrics, marking 26 consecutive reporting periods of year-over-year concessions and other per patron spending growth and highlighting the value of our strategies to further leverage our food, beverage and concession initiatives to support our growth,” the CEO said.

Carmike reported that average concessions sales per moviegoer — purchases of popcorn, soft drinks, candy and other edibles — rose from $4.75 a year ago to $5.20 in the current quarter. Average admission, or ticket price, per customer inched higher from $7.62 to $7.69.

To sell food and drinks, however, companies have to get movie fans in the doors. Carmike said its average attendance per screen in the quarter fell from 6,145 patrons a year ago to the current 5,389.

“A difficult year-over-year industry box office comparison led to a 10.4 percent decrease in attendance, resulting in a $14.4 million decrease in second quarter operating revenues, including declines in admissions revenue, and concessions and other revenue, of 9.5 percent and 1.9 percent, respectively,” said Carmike Chief Financial Officer Richard Hare.

The company noted admissions revenues held fairly steady overall in the three-month period, with the lack of growth indicating fewer strong performing movies.

The top-performing, $100 million-plus grossing films contributing to the movie industry’s second-quarter financial numbers, according to the website Box Office Mojo, were “Finding Dory,” “Captain America: Civil War,” “Deadpool,” “The Jungle Book,” “Zootopia,” “Batman v Superman: Dawn of Justice,” “The Secret Life of Pets,” “X-Men: Apocalypse,” “Kung Fu Panda 3,” “Central Intelligence,” “The Legend of Tarzan,” “The Angry Birds Movie,” “Independence Day: Resurgence” and “The Conjuring 2.”

Other data released by Carmike showed operating income, which subtracts one-time financial items, dropped from $26.9 million in the second quarter a year ago to $8.8 million in the current period.

Through the first six months of 2016, meanwhile, the company posted a profit of $600,000 on total operating revenues of $410.9 million. That’s improved from a loss of $1.1 million on $403.4 million in revenues a year ago.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell from $40.8 million in the second quarter a year ago to $31 million in the current one. Through six months, EBITDA slipped from $70.6 million to $67.3 million.

Carmike reported total debt of $461.3 million at the end of June, up from $454.7 million at the end of December. Hare said cash and cash equivalents on hand were $108.5 million at the end of June.

“Looking ahead, we are optimistic about the box office environment in the second half of this year and on our prospects for the remainder of 2016 and beyond,” Passman said.

The only mention in Monday’s report of AMC’s pursuit of Carmike was that no conference call was being held because of the deal that remains up in the air. Some Carmike shareholders have voiced opposition to the acquisition because of the price they will receive per common share. That prompted AMC recently to sweeten the per-share price for shareholders from $30 to $33.06, or the option of receiving a little more than one share of AMC for each Carmike share.

Leawood, Kan.-based AMC Entertainment Holdings released its own second-quarter results on Monday morning, with it reporting that profits were down from $43.9 million a year ago to $24 million in the current period, a tumble of about 45 percent.

Carmike still must receive approval from regulators and shareholders for the purchase to be completed. The company has postponed the special vote of shareholders a handful of times, and has yet to reschedule it.

This story was originally published August 1, 2016 at 4:37 PM with the headline "Carmike Cinemas reports $1.6 million loss amid ‘weaker’ lineup of summer movies."