Surging attendance and rising concession sales helped propel Carmike Cinemas to a $3.2 million profit in the first quarter of this year, it reported today. A year ago, the movie-theater chain posted a loss of $18.4 million.
The motion-picture exhibitor, headquartered in Columbus, rang up earnings of 25 cents per share, far higher than the penny per share expected by analysts surveyed by research firm Thomson Financial. The loss a year ago was $1.44 per share.
Carmike President and Chief Executive Officer David Passman, in a statement, pointed out the company hit record first-quarter levels in several areas, including admissions revenue, concessions, net income and EBITDA, which is earnings before interest, taxes, depreciation and amortization.
He noted this is the fourth quarter in a row Carmike has performed better than the industry average on attendance. Its concessions and other revenue per patron of $3.91 set a quarterly record.
“We believe that our sustained favorable operating results demonstrate that we are successfully revitalizing the Carmike circuit,” Passman said. “Over the past few years, we have worked hard to divest underperforming locations and refresh our circuit. While we are not done, we can now focus on transitioning into a growth mode.”
The company has been strategically opening new theaters in key markets, which tend to be small to mid-sized cities. The new properties, which Carmike typically leases instead of owns, are outfitted with the latest digital video and audio technology, including 3-D viewing and its expanded “BigD” format that brings in additional revenue for larger screens and more posh seats.
It didn’t hurt that there were several strong movies that either made their debut in the first quarter of this year or launched in late 2011 and carried over into the January-March period. Those included “The Twilight Saga: Breaking Dawn Part 1,” “Mission: Impossible — Ghost Protocol,” “The Hunger Games,” and “Dr. Seuss’ The Lorax.”
Carmike’s earnings report was released after the stock market’s final bell today. But investors were pouncing on its stock throughout the day, with shares spiking higher out of the gate to a new 52-week high of $14.97 before settling slightly to a close of $14.70 per share, a 61-cent gain, or 4.3 percent.
The higher-than-anticipated profit, or net income, came on better than expected revenues as well, with Carmike bringing in $130.8 million in the quarter, about 37 percent higher than the $95.8 million in the same period last year.
Admission revenues jumped 36 percent and concessions and other revenue rose 37 percent, said Richard Hare, Carmike’s chief financial officer. Specifically, the company charged an average of $6.84 per customer for an admission ticket, up from $6.53 a year ago.
Average attendance per screen leaped from 4,216 people a year ago to 5,394 this quarter, the company said. Total attendance within its 35-state theater circuit was nearly 12.2 million, up from about 9.4 million. It operates 236 theaters with 2,264 total screens.
Carmike appears to be positioning itself financially for growth. In mid-April, it sold 4.6 million shares of common stock at $13 per share, raising about $56 million after sales expenses. The money, Passman said, will be used for “general corporate purposes, including potential acquisitions and other capital expenditures.”
The movie-house operator also refinanced some of its existing debt in late April. It issued $210 million in senior secured notes that are due in 2019 that was used to pay off an existing loan. It also set up a new $25 million revolving credit account to replace an old one that it had yet to tap.
Several equity research firms have raised their outlook for Carmike shares recently. The company’s shares are being rated either a “buy” or “outperform” with 52-week price targets ranging from $17 to $20 per share.