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Monday, 05/04/2015 5:03:57 PM

Monday, May 04, 2015 5:03:57 PM

Post# of 56
Carmike Cinemas’ 2015 First Quarter Operating Revenue Rises 16% to a Record $184.3 Million (5/04/15)

Operating Revenue Growth Drives Q1 Operating Income of $12.0 Million and Adjusted EBITDA of $29.8 Million

Carmike Cinemas, Inc. (NASDAQ: CKEC), a leading entertainment, digital cinema and 3-D motion picture exhibitor, today reported results for the three-month period ended March 31, 2015, as summarized below.

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“The success of Carmike’s recent growth and operating initiatives continue to yield positive operating results for our circuit. We achieved records across a number of key financial metrics which reflect continued progress against our strategies to identify and complete value-building theatre acquisitions and the ongoing success of our theatre-level initiatives, combined with a healthy U.S. box office environment. On a per screen basis, our first quarter admissions revenues grew approximately 5% which outperformed the overall industry growth by approximately 180 basis points. While average ticket prices remained flat versus the comparable 2014 period, first quarter attendance growth of nearly 14% generated a 16% rise in operating revenues, resulting in adjusted EBITDA and theatre level cash flow growth of nearly 38% and 28%, respectively,” stated David Passman, Carmike Cinemas’ President and Chief Executive Officer.

“Our first quarter box office successes have carried over to the concession stand. Carmike’s 19% increase in total concessions and other revenues and greater than 4% rise in concessions and other spending per patron highlight the benefits of our focus on delivering a diverse range of food and beverage offerings at attractive price points as well as first class in-theatre dining services. In the 2015 first quarter, we further extended our food and beverage platform by generating record-level concessions and other spending per patron of $4.72, marking 21 consecutive reporting periods of year-over-year concessions and other per patron spending growth while maintaining attractive gross margins.

“Consistent with our food and beverage initiatives and strategies to expand in-theatre dining offerings, during the first quarter we opened our first two full-complex casual dining locations in Bloomington, IL and Richmond, VA, and we plan to open a third location in Athens, GA later this quarter. Our new dine-in locations are receiving positive responses from the local communities and meeting our performance expectations. We remain confident that these investments will benefit mid- and long-term operating results. We are actively evaluating other markets where we believe this concept can deliver attractive returns. In addition to our new dine-in locations, we also opened two additional theatres in Florida during the period.

“In summary, Carmike is executing well against its theatre-level initiatives and is well positioned to participate in additional industry consolidation opportunities, which we believe support our goal of enhancing long-term shareholder value. We are actively executing strategies to identify acquisition and organic growth prospects that expand our theatre circuit and leverage our scale across attractive, complementary markets while strengthening our platform for sustainable growth. With a strong balance sheet including over $90 million in cash, an untapped credit facility and outstanding debt levels that remain well within our target leverage range, we have the financial flexibility and capacity to fund our expansion plans. The year is off to a great start, and we remain optimistic that the favorable operating environment will continue as the year unfolds,” concluded Mr. Passman.

Carmike Cinemas’ Chief Financial Officer Richard B. Hare stated, “Carmike achieved solid top-line growth in Q1 2015, with admissions revenue and concessions and other revenue increasing over the prior year period by 14.1% and 18.9%, respectively. Q1 2015 average admissions per patron was in-line with the prior year at $7.20 while on average guests spent a record-level $11.92 per visit in the quarter, representing a 1.8% increase in combined per patron spending compared to the prior year.

“Carmike’s Q1 2015 film exhibition costs as a percentage of admissions revenues were 55.4%, versus 54.2% in Q1 2014, reflecting a higher concentration of strong performing titles. Concession costs as a percentage of concessions and other revenue decreased by 60 basis points to 11.0%, as a result of lower commodity prices and volume-based vendor rebates.

“As expected, our three theatre-level expense categories increased during the first quarter of 2015, primarily reflecting Carmike’s expanded circuit due to recent acquisitions and new theatre openings. Salaries and benefits rose $2.2 million to $23.7 million, theatre occupancy costs increased $3.1 million to $23.4 million, and other theatre operating costs were $32.0 million, compared to $29.4 million in the first quarter of 2014. General and administrative expenses were $10.0 million for Q1 2015, including $2.7 million of non-cash share-based compensation expense and $1.7 million of M&A related costs. Quarterly interest expense declined $0.4 million to $12.7 million in Q1 2015, due primarily to the maturing of certain legacy capital leases and long-term financing obligations.

“Adjusted EBITDA increased 38.1% to $29.8 million and theatre level cash flow rose 28.3% to $35.5 million due to a combination of Carmike’s strong top-line growth, higher attendance levels, results-focused operating disciplines, and expanded scale. Reflecting cash of $92.9 million at March 31, 2015, we ended the quarter with $354.8 million of net debt, compared with $352.0 million at December 31, 2014. Our capital allocation strategy continues to focus on deploying cash to expand our theatre circuit through accretive acquisitions and new locations through build-to-suit arrangements,” concluded Mr. Hare.

Supplemental Financial Measures

Theatre level cash flow, EBITDA, adjusted EBITDA, adjusted net income (loss), total debt and net debt are supplemental non-GAAP financial measures used by Carmike to evaluate its operating performance. Carmike defines theatre level cash flow as adjusted EBITDA, as defined below, plus general and administrative expenses. Carmike believes that theatre level cash flow is an important supplemental measure of operating performance for a motion picture exhibitor’s operations because it provides a measure of the core operations, rather than factoring in items such as general and administrative expenses and depreciation and amortization, among others. In addition, Carmike believes that theatre level cash flow, as defined, is a widely accepted measure of comparative operating performance in the motion picture exhibition industry. Adjusted net income (loss) is defined as net income (loss) plus impairment of long-lived assets, merger and acquisition-related expenses, share-based compensation expense and gain on sale of property and equipment, net of tax. Carmike believes adjusted net income (loss) is an important supplemental measure of operating performance for a motion picture exhibitor because it provides a measure of core operations. Total debt is defined as the sum of current maturities of capital leases and long-term financing obligations, long-term debt and capital leases and long-term financing obligations (less current maturities). Net debt is defined as total debt less cash and cash equivalents. EBITDA is defined as net income (loss) plus income tax expense (benefit), interest expense and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus income (loss) from unconsolidated affiliates, loss from discontinued operations, merger and acquisition-related expenses, share-based compensation expense, gain on sale of property and equipment, and impairment of long-lived assets. Carmike believes that EBITDA and adjusted EBITDA are important supplemental measures of operating performance for a motion picture exhibitor’s operations because they provide measures of core operations.

About Carmike Cinemas (www.carmike.com)

Carmike Cinemas, Inc. is a U.S. leader in digital cinema, 3-D cinema deployments and one of the nation's largest motion picture exhibitors. Carmike has 272 theatres with 2,894 screens in 41 states. The circuit includes 46 premium large format (PLF) auditoriums featuring state-of-the-art technology and luxurious seating, including 28 "BigDs," 16 IMAX auditoriums and two MuviXL screens. As "America's Hometown Theatre Chain" Carmike's primary focus is mid-sized communities. Visit www.carmike.com for exact show-times and to purchase tickets.

http://www.businesswire.com/news/home/20150504006403/en/Carmike-Cinemas%E2%80%99-2015-Quarter-Operating-Revenue-Rises#.VUfeToktGUk

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