Buoyed by a pair of late-year blockbusters, Carmike Cinemas pulled out a better-than-expected financial performance in the fourth quarter of 2011.
The movie-theater chain, headquartered in Columbus, said today that more movie fans in its seats, combined with rising revenue from soft drink and popcorn sales, helped the company to a profit of $1.7 million in the October-December period, or 14 cents per share.
However, for all of 2011, the motion-picture exhibitor lost $7.7 million, or 60 cents per share.
Still, the numbers for the quarter and the year easily beat the expectations of nearly a dozen Wall Street analysts. Surveyed by Thomson Financial, they were anticipating earnings of 5 cents per share for the quarter and a loss of 68 cents per share for 2011 as a whole.
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“The company’s attendance increased approximately 3 percent during a quarterly period in which overall domestic attendance declined an estimated 3 percent, marking the third consecutive quarter of attendance gains outperforming industry averages,” Carmike President and Chief Executive Officer David Passman said in a statement.
He also noted that the category of “concessions and other revenue” rose 11 percent per customer in the quarter, making it the eighth straight three-month period money made from selling refreshments and 3-D glasses has climbed.
It didn’t hurt the company that the highly anticipated movie, “The Twilight Saga: Breaking Dawn Part 1,” made its debut in mid-November, grossing $281 million nationally before closing its run late last month, according to the website, boxofficemojo.com. Action-thriller, “Mission: Impossible [--] Ghost Protocol,” which opened in mid-December, has topped $208 million in gross revenue so far. Those two films were No. 3 and 7 for the year.
Other top-grossing films to make their release dates in the fourth quarter were “Sherlock Holmes: A Game of Shadows,” “Puss in Boots,” “Alvin and the Chipmunks: Chipwrecked,” “Paranormal Activity 3,” and The Girl with the Dragon Tattoo.” All of those topped $100 million at the box office.
It also was a tale of two financial strategies by Carmike in the fourth quarter.
The company continued to invest in new theaters and enhanced “Big D” auditoriums, with one location opening in West Pottsgrove, Pa., while others in Winder, Ga., and Maryville, Tenn., were wrapping up construction for their debuts early this year. It also plans a new entertainment complex in Sandestin, Fla.
“Carmike’s operating strategy has shifted from primarily closing underperforming theaters and ‘refreshing’ existing facilities to once again growing our overall circuit, further expanding Carmike’s small-town America footprint,” Passman said. “We are targeting aggregate screen growth through new-builds.”
On the flip side of that spending, Carmike said it is continuing its aggressive prepayment of bank debt from its steady cash flow, including $10 million paid back in December, and $35 million altogether in 2011. Since late 2007, the company has voluntarily prepaid a total of $120 million, reducing its bank debt balance to about $200 million.
“Over the past few years, de-leveraging has been our top priority for capital deployment,” said Richard Hare, Carmike’s chief financial officer, pointing out the company’s theater-level cash flow rose 11 percent to more than $24 million the fourth quarter. “Our continued focus on managing controllable costs resulted in improved theater-level cash flow and a reduction in other theater operating costs as a percentage of revenue.”
On the revenue front, Carmike posted $120.1 million in the fourth quarter, up from $115.2 million in the same period a year ago. For 2011, total revenue was $482.2 million, down from $488 million in 2010.
The $1.7 million profit in the fourth quarter of 2011 compared to a loss of $3.1 million in the same period a year ago, while the $7.7 million net loss for all of 2011 was improved from a loss of $12.6 million in 2010.
Carmike operated 237 theaters (2,254 screens) in 35 states as of Dec. 31. Of those, 2,128 are digital, with 744 screens in 210 theaters equipped to show 3-D films and other programming.
Looking ahead, Wall Street analysts currently are projecting Carmike will lose 37 cents per share in the first quarter of this year, but then rebound for an overall profit of 63 cents per share in 2012.
Carmike released its earnings report after the stock markets’ close today. Shares (Ticker: CKEC) rose 40 cents, or 4.6 percent, to $9.10 in trading on the Nasdaq exchange. The stock’s 52-week range is $5.14 to $8.89 per share.