Underperforming Hollywood offerings contributed to slumping attendance at Carmike Cinemas, the company said today as it reported a loss of $3.1 million in the fourth quarter and $12.6 million for 2010 as a whole.
“The fourth quarter posed a significant headwind, both literally and figuratively, as we coped with severe weather conditions, as well as a slate of movies that did not live up to expectations,” said David Passman, president and chief executive officer of Carmike, which is headquartered in Columbus.
The top performing titles in the quarter for the company’s 239-theater circuit, Passman said, were “Harry Potter and the Deathly Hallows Part I,” “Jackass 3-D,” “Megamind,” “Little Fockers,” “Tangled,” “Tron: Legacy,” True Grit” and “Chronicles of Narnia: The Voyage of the Dawn Treader.”
But those hits failed to match the box-office success in late 2009 of “Avatar,” “The Twilight Saga: New Moon” and “The Blind Side,” putting Carmike and the motion-picture exhibition industry in a financial hole it couldn’t overcome, the CEO said.
“This year’s fourth quarter was a period in which we focused on managing costs in the face of declining U.S. box office results,” Passman told analysts on a conference call after the earnings were released. “We averaged 40 less screens in the quarter compared to the year ago period as we continue our strategy of exiting underperforming theaters and unprofitable leases and focus instead on opening new, state of the art entertainment complexes.”
As of Dec. 31, Carmike operated 239 theaters (2,236 screens) in 36 states, most of them located in small to mid-sized cities with populations under 100,000.
The company has invested heavily in digital equipment in recent years, outfitting 2,103 of its screens with the crisp, clear technology. Nearly 600 of its screens in 200 theaters also have 3-D capability.
Carmike’s fourth-quarter loss compares to a profit of $6.4 million, or 50 cents per share, in the same October-December period of 2009. The full-year performance was actually improved from a loss of $15.4 million, or $1.22 per share, in 2009.
The company reported total revenue of $115.9 million in the fourth quarter, down from $137.1 million in the same period a year ago. It’s 2010 revenue came in at $491.3 million, off from $513 million in 2009.
“It is worth noting that Q4 did not have a very Carmike market-friendly movie slate as there were more R-rated titles than usual and less animated children films,” said Fred Van Noy, the chain’s chief operating officer. “This is somewhat unusual for the fourth quarter, which includes the all-important Thanksgiving and Christmas holiday seasons when many are off from school and work.”
While overall attendance at its theaters did decline from 52.7 million in 2009 to just under 48 million last year, the firm managed to squeeze more money out of each moviegoer, Van Noy noted.
Average admission per customer rose from $6.52 to $6.85, while the average concession take climbed from $3.21 to $3.43 per person. The average 3-D ticket surcharge, meanwhile, was $3, with premium 3-D showings accounting for 27 percent of admission receipts.
Passman pointed out digital and 3-D technology is on the rise at movie-theater companies across the U.S. The National Association of Theater Owners estimates 15,000 of the 39,000 movie screens nationwide are digital already, with about 8,000 equipped for 3-D flicks.
The industrywide digital surge should bode well for more alternative content offerings that command higher admission fees, the CEO said. That content should include live and recorded concerts, sports and events such as opera and ballet performances, he said.
Carmike noted that four new-theater announcements have come in recent months, including complexes in Tulsa, Okla.; Winder, Ga.; Jacksonville, N.C.; and West Pottsgrove, Pa. They all include the large-screen digital format branded “Big D,” which debuted in Columbus last summer.
“Although 2011 has gotten off to a relatively weak start, especially compared to year-ago box office receipts, we are nevertheless bullish on 2011 as a full year,” Passman said.
The schedule includes nearly three dozen 3-D films, including the latest installments of “Transformers,” “Pirates of the Caribbean,” “Harry Potter,” “Cars,” “X-Men” and “Kungfu Panda.”
Other highly anticipated films this year, he said, include “Captain America: The First Avenger,” “Thor,” “Green Lantern” and “The Adventures of Tintin,” the 3-D directorial debut by famed moviemaker Stephen Spielberg.