Digital Cinema Destinations Corp. (Digiplex) Reports Fiscal 2013 Fourth Quarter Increases in Revenue and Per Cap Metrics - Theater Level Cash Flow and Adjusted EBITDA Also Rise Significantly - Business Wire WESTFIELD, N.J. -- September 17, 2013 Digital Cinema Destinations Corp. (NasdaqCM:DCIN) (Digiplex), a fast-growing motion picture exhibitor dedicated to transforming movie theaters into digital entertainment centers, today reported its fiscal 2013 fourth quarter and full-year financial results for the periods ended June 30, 2013. Management is hosting a conference call and webcast at 4:30 p.m. ET to review the results. DATE/TIME: Today—Tuesday, September 17, 2013 at 4:30 p.m. ET TELEPHONE: dial 800/404-5245. Please call at least five minutes in advance to ensure that you are connected. WEBCAST: live webcast is available through the Investor Relations section of Digiplex’s website at www.digiplexdest.com. A webcast replay will be available and accessible for at least 30 days following the live event. SUMMARY AND SUPPLEMENTARY FINANCIAL DATA (unaudited) Three Months Ended Twelve Months Ended June 30, June 30, (in thousands) 2013 2012 2013 2012 Consolidated total $ 11,201 $ 3,796 $ 31,184 $ 6,671 revenue Consolidated net loss (1,209 ) (1,002 ) (5,256 ) (1,967 ) Consolidated theater 1,922 701 5,633 1,251 level cash flow (1) Adjusted EBITDA of Digital Cinema 888 32 2,366 (410 ) Destinations Corp. (1) Theaters (period end) 18 8 18 8 Average screens 178 62 130 30 Average attendance per 5,667 5,506 22,014 19,331 screen Average admission per $ 7.92 $ 7.82 $ 7.83 $ 8.31 patron Average concessions $ 3.45 $ 3.04 $ 3.27 $ 2.89 sales per patron Total attendance (in 1,009 339 2,852 570 thousands) (1) Theater level cash flow and Adjusted EBITDA are supplemental non-GAAP financial measures. Reconciliations of these metrics to the net loss for the three and twelve months ended June 30, 2013 and 2012 are included in the supplementary tables accompanying this news announcement. Digiplex Chairman and CEO Bud Mayo stated, “The fiscal fourth quarter was a productive period for Digiplex and also for the U.S. box office. Industry admissions receipts grew approximately 7.8% versus the prior year and our Company achieved revenue, Adjusted EBITDA, and theater level cash flow increases, due to the 116 additional average screens under operation, compared to the 2012 fiscal fourth quarter, as well as internal operational improvements during a favorable box office environment. “Of note, the 2013 fiscal fourth quarter marks the first time in our organization’s short history that over one million patrons attended Digiplex’s locations. We continue to focus on providing our valued customers with high quality service and a clean and friendly environment to enjoy the best selection of popular Hollywood titles, specially curated independent pictures and exciting alternative programming events. We are also driving incremental theater traffic through unique social media and targeted marketing strategies. “An exciting development during fiscal Q4 was the opening of our first IMAX^® location, at Digiplex’s Surprise Pointe 14 theater in Arizona. We are extremely pleased to form a new alliance with IMAX^® and will evaluate potential additional large format locations that feature their leading entertainment experience as the Digiplex circuit continues expanding. Subsequent to fiscal year-end, we also 4D-enabled an auditorium at our Solon, OH theater with the installation of immersive ButtKicker seating. We will continue experimenting with state-of-the-art technologies that further enhance the enjoyment of our guests. “Throughout fiscal 2013, Digiplex opportunistically identified and completed acquisitions in attractive markets that adhere to our theater level cash flow and asset quality criteria. As a result, our organization nearly tripled its average screen count versus the prior year. We completed the purchase of a state-of-the art, fully digital 12-plex in Lisbon, CT during the fiscal first quarter, in fiscal Q2 we acquired seven theaters and 74 screens from UltraStar Cinemas on the west coast and we added two additional theaters with an aggregate of 19 screens in Solon, OH and Sparta, NJ during fiscal Q3. Additionally, subsequent to our year-end we acquired a 6-plex in Torrington, CT, further expanding the Company’s circuit to 19 locations and 184 screens. “We are proud of our achievements to date, but acknowledge that we are still in the early stages of expanding Digiplex’s footprint to the 100 location/1000 screen goal we have set as a corporate milestone. Our top priority continues to be executing disciplined growth through opportunistic acquisitions. As we build scale, roll new theaters onto our digital platform, and leverage the Company’s corporate infrastructure and operating disciplines, over time we expect to achieve meaningful improvements in both top- and bottom-line results,” Mr. Mayo concluded. DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, June 30, 2013 2012 ASSETS CURRENT ASSETS Cash and cash equivalents $ 3,607 $ 2,037 Accounts receivable 697 238 Inventories 191 78 Deferred financing costs, current portion 357 - Prepaid expenses and other current assets 1,444 381 Total current assets 6,296 2,734 Property and equipment, net 29,171 15,432 Goodwill 3,156 980 Intangible assets, net 6,186 4,114 Security deposit 205 3 Deferred financing costs, long term portion, 1,225 - net Other assets 9 14 TOTAL ASSETS $ 46,248 $ 23,277 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 2,478 $ 851 Accrued expenses 3,964 1,088 Payable to vendor for digital systems - 3,334 Notes payable, current portion 1,373 1,000 Capital lease, current portion 121 - Earnout from theater acquisition 296 79 Deferred revenue 305 31 Total current liabilities 8,537 6,383 NONCURRENT LIABILITIES Notes payable, long term portion 8,615 - Capital lease, net of current portion 239 - Unfavorable leasehold liability, long term 159 190 portion Deferred rent expense 407 83 Deferred tax liability 199 39 TOTAL LIABILITIES 18,156 6,695 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS’ EQUITY Preferred Stock, $.01 par value, 10,000,000 shares authorized as of June 30, 2013 and 2012, respectively; and 6 and 0 shares issued of - - Series B Preferred Stock issued and outstanding as of June 30, 2013 and 2012, respectively Class A Common Stock, $.01 par value, 20,000,000 shares authorized; 5,511,938 and 55 45 4,519,452 shares issued and outstanding as of June 30, 2013 and 2012, respectively Class B Common Stock, $.01 par value, 900,000 shares authorized; 865,000 and 900,000 9 9 shares issued and outstanding as of June 30, 2013 and 2012, respectively Additional paid-in capital 25,816 19,285 Accumulated deficit (7,049 ) (2,757 ) TOTAL STOCKHOLDERS’ EQUITY OF DIGITAL CINEMA 18,831 16,582 DESTINATIONS CORP Noncontrolling interest 9,261 - Total Equity 28,092 16,582 TOTAL LIABILITIES AND EQUITY $ 46,248 $ 23,277 DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) Three Months Ended Twelve Months Ended June 30, June 30, 2013 2012 2013 2012 REVENUES Admissions $ 7,578 $ 2,651 $ 21,305 $ 4,738 Concessions 3,301 1,032 8,889 1,646 Other 322 113 990 287 Total revenues 11,201 3,796 31,184 6,671 COSTS AND EXPENSES Cost of operations: Film rent 3,996 1,484 10,694 2,387 expense Cost of 595 187 1,491 294 concessions Salaries and 1,412 452 3,791 849 wages Facility lease 1,600 423 4,435 821 expense Utilities and 2,052 594 5,797 1,152 other General and 1,743 855 5,054 1,945 administrative Change in fair value of earn (254 ) - (333 ) (20 ) out Depreciation and 665 760 4,049 1,147 amortization Total costs and 11,809 4,755 34,978 8,575 expenses OPERATING LOSS (608 ) (959 ) (3,794 ) (1,904 ) OTHER EXPENSE Interest (379 ) (12 ) (999 ) (12 ) expense Non-cash interest (75 ) - (228 ) - expense Other expense (14 ) (7 ) (60 ) (9 ) LOSS BEFORE (1,076 ) (978 ) (5,081 ) (1,925 ) INCOME TAXES Income tax 133 24 175 42 expense NET LOSS $ (1,209 ) $ (1,002 ) $ (5,256 ) $ (1,967 ) Net loss attributable to 251 - 964 - non-controlling interest Net loss attributable to Digital Cinema $ (958 ) $ (1,002 ) $ (4,292 ) $ (1,967 ) Destinations Corp. Preferred stock (5 ) (21 ) (16 ) (257 ) dividends Net loss attributable to $ (963 ) $ (1,023 ) $ (4,308 ) $ (2,224 ) common stockholders Net loss per Class A and Class B common share – basic and diluted $ (0.15 ) $ (0.23 ) $ (0.74 ) $ (1.00 ) attributable to common stockholders Weighted average common 6,324,272 4,472,914 5,828,283 2,218,045 shares outstanding SUPPLEMENTARY NON-GAAP RECONCILIATION OF ADJUSTED EBITDA (Unaudited) ($ in thousands) Three months ended Twelve months ended June 30, June 30, 2013 2012 2013 2012 Net loss $ (1,209 ) $ (1,002 ) $ (5,256 ) $ (1,967 ) Add back: Depreciation and 665 760 4,049 1,147 amortization Interest 454 24 1,227 12 expense Income tax 133 24 175 42 expense Other expense 14 7 60 9 Deferred rent 132 33 324 63 expense (5) Stock-based compensation 400 155 549 204 (2) Non-recurring organizational and 90 31 642 80 M&A-related professional fees (3) Management 288 - 543 - fees (4) (Deduct) Add: Start Media's share of (79 ) - 53 - Adjusted EBITDA Adjusted EBITDA of Digital Cinema $ 888 $ 32 $ 2,366 $ (410 ) Destinations Corp. SUPPLEMENTARY NON-GAAP RECONCILIATION OF THEATER LEVEL CASH FLOW (Unaudited) ($ in thousands) Three months ended Twelve months ended June 30, June 30, 2013 2012 2013 2012 Net loss $ (1,209 ) $ (1,002 ) $ (5,256 ) $ (1,967 ) Add back: General and administrative 1,743 855 5,054 1,945 (1) Depreciation and 655 760 4,049 1,147 amortization Income tax 133 24 175 42 expense Interest 454 24 1,227 12 expense Other expense 14 7 60 9 Deferred rent 132 33 324 63 expense (5) Consolidated $ 1,922 $ 701 $ 5,633 $ 1,251 TLCF (1) TLCF is intended to be a measure of theater profitability. Therefore, our corporate general and administrative expenses have been excluded. (2) Represents the fair value of shares of Class A common stock and restricted stock awards issued to employees and non-employees for services rendered. As these are non-cash charges, we believe that it is appropriate to show Adjusted EBITDA excluding this item. (3) Primarily represents professional fees incurred in connection with start-up activities, the creation of acquisition template documents that will be used by us for future transactions, and certain other costs related to our acquisition strategy. Since we intend to acquire additional theaters, we have laid the groundwork for our acquisition program and we expect to incur reduced legal fees in connection with future acquisitions. We therefore believe that it is appropriate to exclude these items from Adjusted EBITDA. (4) To add back management fees to Digiplex from JV. (5) Represents non-cash deferred rent expense which is included in our facility lease expense in the consolidated statements of operations. As these are non-cash changes, we believe it is appropriate to show TLCF and Adjusted EBITDA excluding this item. Disclosure Regarding Forward-Looking Statements This press release and other written or oral statements made by or on behalf of Digital Cinemas Destination Corp. may contain 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 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. Risk factors are disclosed in our Annual Report on Form 10-K 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. About Digital Cinema Destinations Corp. (www.digiplexdest.com) Digital Cinema Destinations Corp. is dedicated to transforming its movie theaters into interactive entertainment centers. The Company provides consumers with uniquely satisfying experiences, combining state-of-the-art digital technology with engaging, dynamic content that far transcends traditional cinematic fare. The Company’s customers enjoy live and pre-recorded alternative programming such as concerts, operas, ballets, sporting events, conferences, interactive videogames, auctions, fashion shows and, on an ongoing basis, the very best major motion pictures.As of September 1, 2013, Digiplex operates 19 cinemas and 184 screens in AZ, CA, CT, NJ, OH and PA. You can connect with Digiplex via Facebook, Twitter, YouTube and Blogger. Digiplex is also participating in DigiNext, a unique, specialty content joint venture (with Nehst Studios) featuring curated content from festivals around the world. DigiNext releases typically include innovative live Q&A sessions between the audience and cast members. Contact: Digital Cinema Destinations Corp. Bud Mayo, 908-396-1362 Chairman/CEO email@example.com or JCIR Robert Rinderman or Jennifer Neuman 212-835-8500 or DCIN@jcir.com
Digital Cinema Destinations Corp. (Digiplex) Reports Fiscal 2013 Fourth Quarter Increases in Revenue and Per Cap Metrics
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