Digital Cinema Destinations Corp. (Digiplex) Reports Fiscal 2013 Fourth Quarter Increases in Revenue and Per Cap Metrics

  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 bmayo@digiplexdest.com or JCIR Robert Rinderman or Jennifer Neuman 212-835-8500 or DCIN@jcir.com  
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