Carmike Cinemas Reports 23% Year over Year Increase in Q4 Revenue to $146.6 Million

  Carmike Cinemas Reports 23% Year over Year Increase in Q4 Revenue to $146.6
  Million

Recognition of Deferred Income Tax Asset of $86.5 Million Increases Net Income

Business Wire

COLUMBUS, Ga. -- March 14, 2013

Carmike Cinemas, Inc. (NASDAQ: CKEC):

Webcast/Conference Call TODAY, Thursday, March 14 at 5:00 p.m. ET
              
WEBCAST LINK:   www.carmikeinvestors.com (archived for 30 days)
                
CALL DIAL-IN:   800/381-7839 or 212/231-2904 (international callers)
                
                800/633-8284 or 402/977-9140; passcode: 21648760
CALL REPLAY:
                (through March 21)

Carmike Cinemas, Inc. (NASDAQ: CKEC), a leading entertainment, digital cinema
and 3-D motion picture exhibitor, today reported results for the three and
twelve month periods ended December 31, 2012, as summarized below.

SUMMARY FINANCIAL DATA

(unaudited)

                  Three Months Ended Dec. 31     Twelve Months Ended Dec. 31
(in millions)          2012          2011          2012          2011
Total revenue      $    146.6      $    118.9      $   539.3       $   477.8
Operating income        16.7            8.3            54.7            35.5
Interest expense        10.5            8.3            36.0            34.1
Theatre level           35.6            24.3           118.3           91.8
cash flow^(1)
Net income              91.6            1.7            96.3            (7.7)
(loss)
Adjusted net
income                  7.6             3.1            18.7            (4.6)
(loss)^(1)
Adjusted                30.2            18.9           97.9            72.7
EBITDA^(1)
                                                                   
(in millions)      Dec. 31, 2012   Dec. 31, 2011
Total debt^(1)     $    434.7      $    315.4
Net debt^(1)       $    366.2      $    301.8


(1) Theatre level cash flow, adjusted net income (loss), adjusted EBITDA,
total debt and net debt are supplemental non-GAAP financial measures.
Reconciliations of theatre level cash flow and adjusted EBITDA to net income
(loss) and adjusted net income (loss) to net income (loss) for the three and
twelve months ended December 31, 2012 and 2011, as well as a schedule of total
debt and net debt as of December 31, 2012 and 2011, are included in the
supplementary tables accompanying this news announcement.

Carmike Cinemas’ President and Chief Executive Officer David Passman stated,
“Carmike finished the year on a strong note, propelled by attendance gains,
the Rave asset acquisition and increased average ticket and concessions
purchases by our patrons. Carmike’s full-year admissions receipts increased by
11.7%, some 520 basis points above the reported industry percentages.
Excluding the acquisition of Rave, Carmike's full year box office gains
bettered the industry by 220 basis points.

"Carmike’s operational and financial turnaround over the last few years is
underscored by the Q4 recognition of an income tax benefit of deferred tax
assets of $86.5 million. This is another example reflecting the hard work and
diligence of our entire organization, from senior management to our thousands
of theatre-level associates that serve our guests each and every day at
Carmike’s approximately 250 locations.

“Carmike’s ongoing focus on increasing concessions and other revenues
continues to be an area of noteworthy success. In Q4 our concessions/other
spending per cap approached the $4.00 mark, thereby extending our streak of
year-over-year per patron spending gains to 12 successive quarters. We will
continue to deploy our most successful concessions promotions, actively
experiment with a wide array of creative new programs and also work to keep
the positive theatre-level momentum going strong in the year ahead.

“The Rave Reviews Cinemas 251 screen acquisition closed in mid-November 2012,
which aided in the achievement of strong cash flow in Q4, with an Adjusted
EBITDA increase of nearly 60% over 2011. Our 2012 Q4 Adjusted EBITDA margin
exceeded 20 percent, a substantial improvement over the 2011 period. The
Company’s growing footprint expanded to approximately 2,500 screens as we took
another step along our way to achieving Carmike’s next corporate milestone of
3,000 screens and 300 locations across ‘Hometown America.’ We will continue to
actively target acquisitions and attractive build-to-suit opportunities. The
Company has a pipeline of new theatre locations under construction as well as
a number in the planning or advanced negotiating stage,” concluded Mr.
Passman.


THEATRE PERFORMANCE STATISTICS

(unaudited)

                      Three Months Ended Dec. 31  Twelve Months Ended Dec.
                                                    31
                         2012         2011         2012         2011
Average theatres          242            237           236            236
Average screens           2,397          2,259         2,286          2,230
Average attendance        5,523          5,046         22,032         21,155
per screen^(1)
Average admissions     $  7.10        $  6.76       $  6.85        $  6.57
per patron^(1)
Average
concessions/other      $  3.99        $  3.77       $  3.91        $  3.66
sales per patron^(1)
Total attendance (in      13,240         11,401        50,357         47,177
thousands)^(1)
Total operating
revenues (in           $  146,564     $  118,933    $  539,324     $  477,816
thousands)

(1) Includes activity from theatres designated as discontinued operations and
reported as such in the consolidated statements of operations.

Carmike’s average Q4 admissions per patron increased 5.0% to $7.10, primarily
due to fewer discounted admissions and promotional activities versus the
comparable 2011 quarter. Average concessions and other revenue per patron rose
5.8% to $3.99. In aggregate, per patron spending rose 5.3% to a record $11.09,
up from $10.53 a year earlier.

Carmike Cinemas’ Chief Financial Officer Richard B. Hare stated, “Carmike’s Q4
film exhibition costs as a percentage of admissions revenues increased
modestly to 53.8%, compared to the year-ago level due primarily to the more
successful movie slate. Other theatre operating costs as a percentage of total
revenues declined significantly during the period – by 420 basis points to
36.9% – illustrating the significant leverage in our cost structure. The
increase in G&A expenses primarily resulted from higher professional fees
related to merger and acquisition activity, including the Rave transaction.
Also as expected, quarterly interest expense rose last quarter to $10.5
million, due to a combination of our assumption of long-term lease obligations
associated with the additional Rave theatres, as well as higher fixed
quarterly interest charges on the $210 million of seven-year senior secured
notes we issued last April.

“On a full-year basis, Carmike’s Adjusted EBITDA rose to $97.9 million, a
34.6% increase over the prior 12 month period. At year end we had $366.2
million of net debt, reflecting an aggregate of capital leases and long-term
financing obligations, plus our senior notes, versus net debt of $301.8
million at December 31, 2011. The increase is primarily related to financing
obligations on leases assumed in the Rave acquisition. Carmike's balance sheet
included a year-end cash balance of $68.5 million. Our top priority for cash
deployment over the near-term continues to be growth via acquisitions and
new-builds.

“Lastly, our reported Q4 and full-year net income and EPS positively benefited
from an $86.5 million valuation allowance reversal of the Company’s deferred
tax assets at December 31, 2012. This accounting treatment was made after
reviewing the potential future recovery of our deferred tax asset balance from
future taxable income," 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) less benefit from
release of valuation allowance on deferred tax assets plus impairment of
long-lived assets, loss on extinguishment of debt, write-off of note
receivable, merger and acquisition-related expenses, loss on sale of property
and equipment and severance agreement charges, 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
long-term debt, capital leases and long-term financing obligations, long-term
debt (less current maturities) 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 (benefit) expense, interest expense and depreciation and amortization.
Adjusted EBITDA is defined as EBITDA plus income from unconsolidated
affiliates, (income) loss from discontinued operations, loss on extinguishment
of debt, severance agreement charges, merger and acquisition-related expenses,
loss on sale of property and equipment, write-off of note receivable 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 and 3-D cinema
deployments and one of the nation’s largest motion picture exhibitors. As of
December 31, 2012, Carmike had 249 theatres with 2,502 screens in 35 states.
Carmike’s digital cinema footprint reached 2,359 screens, including 225
theatres with 855 screens that are also equipped for 3-D. The circuit also
includes 16 “Big D” large format digital experience auditoriums, featuring
state-of-the-art equipment and luxurious seating and 7 IMAX^® auditoriums. As
“America’s Hometown Theatre Chain,” Carmike’s primary focus for its locations
is small to mid-sized communities.

Disclosure Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
the federal securities laws. Statements that are not historical facts,
including statements about our beliefs, expectations and future performance,
are forward-looking statements. Forward-looking statements include statements
preceded by, followed by or that include the words, “believes,” “expects,”
“anticipates,” “plans,” “estimates,” “seeks” or similar expressions. Examples
of forward-looking statements in this press release include the Company’s
expectations regarding circuit expansion, additional acquisition
opportunities, recoverability of deferred tax assets, and additional operating
gains. Forward-looking statements are only predictions and are not guarantees
of performance. These statements are based on beliefs and assumptions of
management, which in turn are based on currently available information. The
forward-looking statements also involve risks and uncertainties, which could
cause actual results to differ materially from those contained in any
forward-looking statement. Many of these factors are beyond our ability to
control or predict. Important factors that could cause actual results to
differ materially from those contained in any forward-looking statement
include, but are not limited to: our ability to achieve expected results from
our strategic acquisitions, general economic conditions in our regional and
national markets; our ability to comply with covenants contained in our senior
secured credit agreement and the indenture governing our 7.375% Senior Secured
Notes due 2019; our ability to operate at expected levels of cash flow;
financial market conditions including, but not limited to, changes in interest
rates and the availability and cost of capital; our ability to meet our
contractual obligations, including all outstanding financing commitments; the
availability of suitable motion pictures for exhibition in our markets;
competition in our markets; competition with other forms of entertainment; and
other factors, including the risk factors disclosed in our Annual Report on
Form 10-K for the year ended December31, 2012, under the caption “Risk
Factors.” We believe these forward-looking statements are reasonable; however,
undue reliance should not be placed on any forward-looking statements, which
are based on current expectations. Further, forward-looking statements speak
only as of the date they are made, and we undertake no obligation to update
publicly any of them in light of new information or future events.

CARMIKE CINEMAS, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)
                                                              
                         Three Months Ended          Twelve Months Ended
                         December 31,                December 31,
                         2012          2011          2012          2011
Revenues:                (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Admissions               $  93,707     $  76,416     $  343,091    $  307,107
Concessions and other      52,857       42,517       196,233      170,709
                                                                   
Total operating             146,564       118,933       539,324       477,816
revenues
                                                                   
Operating costs and
expenses:
Film exhibition costs       50,456        40,847        186,016       165,934
Concession costs            6,427         4,877         23,239        19,690
Other theatre               54,116        48,894        211,746       200,390
operating costs
General and
administrative              8,608         5,396         24,547        19,084
expenses
Severance agreement         —             —             473           845
charges
Depreciation and            9,395         8,266         33,370        32,083
amortization
Loss on sale of             19            226           968           333
property and equipment
Write-off of note           —             —             —             750
receivable
Impairment of              882          2,129        4,253        3,239
long-lived assets
                                                                   
Total operating costs      129,903      110,635      484,612      442,348
and expenses
                                                                   
Operating income            16,661        8,298         54,712        35,468
Interest expense            10,526        8,280         36,004        34,113
Loss on extinguishment     —            —            4,961        —
of debt
                                                                   
Income before income
tax and income from         6,135         18            13,747        1,355
unconsolidated
affiliates
Income tax (benefit)        (84,586)      (878)         (80,790)      10,479
expense
Income from
unconsolidated             246          810          1,204        1,797
affiliates
                                                                   
Income (loss) from          90,967        1,706         95,741        (7,327)
continuing operations
Income (loss) from
discontinued               681          9            567          (383)
operations
                                                                   
Net income (loss)        $  91,648     $  1,715      $  96,308     $  (7,710)
                                                                   
Weighted average
shares outstanding:
Basic                       17,273        12,824        15,761        12,807
Diluted                     17,661        12,884        16,086        12,807
                                                                   
Net loss per common
share (Basic):
Income (loss) from       $  5.27       $  0.13       $  6.07       $  (0.57)
continuing operations
Income (loss) from
discontinued               0.04         —            0.04         (0.03)
operations, net of tax
                                                                   
Net income (loss) per    $  5.31       $  0.13       $  6.11       $  (0.60)
common share
Net loss per common
share (Diluted):
Income (loss) from       $  5.15       $  0.13       $  5.95       $  (0.57)
continuing operations
Income (loss) from
discontinued               0.04         —            0.04         (0.03)
operations, net of tax
                                                                   
Net income (loss) per    $  5.19       $  0.13       $  5.99       $  (0.60)
common share

CARMIKE CINEMAS, INC. and SUBSIDIARIES
SUPPLEMENTARY NON-GAAP RECONCILIATIONS

THEATRE LEVEL CASH FLOW AND ADJUSTED EBITDA (Unaudited)
($ in thousands)

                               Three Months Ended     Twelve Months Ended
                                December 31,            December 31,
                                2012        2011       2012        2011
Net income (loss)               $ 91,648     $ 1,715    $ 96,308     $ (7,710)
Income tax (benefit) expense      (84,586)     (878)      (80,790)     10,479
Interest expense                  10,526       8,280      36,004       34,133
Depreciation and amortization    9,395       8,266     33,370      32,083
                                                                     
EBITDA                          $ 26,983     $ 17,383   $ 84,892     $ 68,985
Income from unconsolidated        (246)        (810)      (1,204)      (1,797)
affiliates
(Income) loss from                (681)        (9)        (567)        383
discontinued operations
Loss on extinguishment of         —            —          4,961        —
debt
Merger and                        3,214        —          4,094        —
acquisition-related expenses
Severance agreement charges       —            —          473          845
Write-off of note receivable      —            —          —            750
Loss on sale of property and      19           226        968          333
equipment
Impairment of long-lived         882         2,129     4,253       3,239
assets
                                                                     
Adjusted EBITDA                 $ 30,171     $ 18,919   $ 97,870     $ 72,738
                                                                     
General and administrative       5,394       5,396     20,453      19,084
expenses
                                                                     
Theatre level cash flow         $ 35,565     $ 24,315   $ 118,323    $ 91,822

TOTAL DEBT AND NET DEBT (Unaudited)

($ in thousands)

                                                Dec. 31, 2012  Dec. 31, 2011
Current maturities of long-term debt, capital    $   4,422       $   3,959
leases and long-term financing obligations
Long-term debt, less current maturities              209,548         196,880
Capital leases and long-term financing              220,725        114,608
obligations, less current maturities
                                                                 
Total debt                                       $   434,695     $   315,447
Less cash and cash equivalents                      (68,531)       (13,616)
                                                                 
Net debt                                         $   366,164     $   301,831

ADJUSTED NET INCOME (Unaudited)

($ in thousands)

                               Three Months           Twelve Months
                                Ended December 31,      Ended December 31,
                                2012        2011       2012        2011
Net income (loss)               $ 91,648     $ 1,715    $ 96,308     $ (7,710)
Release of valuation
allowance on deferred tax         (86,533)     —          (86,533)     —
assets
Impairment of long-lived          882          2,129      4,253        3,239
assets
Merger and                        3,214        —          4,094        —
acquisition-related expenses
Write-off of note receivable      —            —          —            750
Loss on extinguishment of         —            —          4,961        —
debt
Loss on sale of property and      19           226        968          333
equipment
Severance agreement charges       —            —          473          845
Tax effect of adjustments to     (1,626)     (930)     (5,826)     (2,041)
net income (loss)(1)
                                                                     
Adjusted net income (loss)      $ 7,604      $ 3,140    $ 18,698     $ (4,584)
                                                                     
Weighted average shares           17,273       12,824     15,761       12,807
outstanding (basic)
Weighted average shares           17,661       12,884     16,086       12,807
outstanding (diluted)
Adjusted net income (loss)      $ 0.44       $ 0.24     $ 1.19       $ (0.36)
per share (basic)
Adjusted net income (loss)      $ 0.43       $ 0.24     $ 1.16       $ (0.36)
per share (diluted)

(1) Adjustments to net income (loss) for the three and twelve months ended
December 31, 2012 and 2011 are shown net of tax effect of 39.5%, which
represents the estimated combined federal and state tax rates.

Contact:

JCIR – Investor Relations/Corporate Communications
Robert Rinderman or Jennifer Neuman
212/835-8500 or ckec@jcir.com
or
Carmike Cinemas, Inc.
Richard B. Hare
Chief Financial Officer
706/576-3416
 
Press spacebar to pause and continue. Press esc to stop.