Carmike Cinemas’ Third Quarter Revenue Rises 30.2% to $165 Million

  Carmike Cinemas’ Third Quarter Revenue Rises 30.2% to $165 Million

- Box Office Admissions Increase 28.7% and Per Screen Attendance Rises 10.5% -

- Concession and Other Per Patron Increases for the 15^th Consecutive Quarter
                                      -

Business Wire

COLUMBUS, Ga. -- November 5, 2013

Carmike Cinemas, Inc. (NASDAQ:CKEC):


Webcast/Conference Call TODAY, Tuesday, November 5 at 5:00 p.m. ET
              
WEBCAST LINK:   www.carmikeinvestors.com (archived for 30 days)
                
CALL DIAL-IN:   800/735-5968 or 212/231-2910 (international callers)
                
                800/633-8284 or 402/977-9140; passcode: 21676800
CALL REPLAY:
                (through November 12)
                

Carmike Cinemas, Inc. (NASDAQ: CKEC), a leading entertainment, digital cinema
and 3-D motion picture exhibitor, today reported results for the three and
nine month periods ended September 30, 2013, as summarized below.


Summary Financial Data

(unaudited)
                                        Three Months Ended   Nine Months Ended
                                                        
                                        September 30,        September 30,
(in millions)                             2013    2012     2013    2012
Total operating revenues                $  165.0  $ 126.7   $ 465.2  $ 391.8
Operating income                           13.5      7.4       40.3      38.1
Interest expense                           12.4      8.6       37.0      25.5
Theatre level cash flow,
excluding acquisition-related              33.9      24.2      96.6      82.8
expenses ^(1)(2)
Net income                                 1.0       0.2       1.9       4.7
Adjusted net income, excluding
acquisition-related                        3.5       2.3       6.9       11.2
expenses^(1)(2)
Adjusted EBITDA, excluding
acquisition-related                        28.4      19.4      79.9      67.8
expenses^(1)(2)
                                                                       
(in millions)                           Sept. 30, 2013       Dec. 31, 2012
Total debt^(1)                          $ 437.5              $ 434.7
Net debt^(1)                            $ 286.9              $ 366.2
                                                             

      Theatre level cash flow, adjusted net income, adjusted EBITDA, total
      debt and net debt are supplemental non-GAAP financial measures.
      Reconciliations of theatre level cash flow and adjusted EBITDA to net
(1)  income and adjusted net income to net income for the three and nine
      months ended September 30, 2013 and 2012, as well as a schedule of total
      debt and net debt as of September 30, 2013 and December 31, 2012, are
      included in the supplementary tables accompanying this news
      announcement.
      Theatre level cash flow, adjusted net income and adjusted EBITDA exclude
(2)   merger and acquisition-related expenses during the three and nine months
      ended September 30, 2013.

Carmike Cinemas’ President and Chief Executive Officer David Passman stated,
“The third quarter was another strong reporting period for Carmike as we
posted growth in box office receipts and attendance that exceeded those of the
overall domestic exhibition industry. The Company achieved solid increases in
key per cap metrics, adjusted EBITDA and theatre level cash flow. We also
extended Carmike’s streak of increases in year-over-year per patron spending
on concessions and other items to 15 consecutive quarters. Carmike’s solid
third quarter operating performance underscores our Company-wide focus on
customer service excellence and patrons are clearly responding.

“We continually strive to provide the best customer experience, and to that
end we recently entered into an agreement with IMAX Corporation to add ten
additional IMAX^® theatre systems to be installed in new construction projects
and existing Carmike multiplexes across the U.S. The addition will increase
our total number of IMAX auditoriums to 18. We also opened our 20^th Big D
auditorium last week at our new theatre in Champaign, Illinois. We believe
that both of these large format alternatives provide an exceptional
movie-going experience for our patrons.

“We continue to prioritize an active expansionary M&A program, seeking
attractive acquisition opportunities that will help us further expand the
circuit to approximately 300 locations and 3,000 screens, leveraging Carmike’s
corporate infrastructure as we remain an active participant in the ongoing
consolidation of the movie theatre industry. Following our equity offering in
early Q3, as previously announced on November 4, we signed a definitive
agreement to purchase 9 entertainment complexes and 147 screens based in 3
states from Muvico Entertainment, L.L.C. The Muvico acquisition not only moves
us closer to our desired theatre and screen target, but also stretches the
Company’s footprint into key markets and further expands the Company’s
cinema-dining presence with the addition of two Bogart’s Bar & Grill^®
restaurants.”


Theatre Performance Statistics
                                 Three Months Ended      Nine Months Ended
                                                    
                                 September 30,           September 30,
                                  2013      2012       2013      2012
Average theatres                   246        233         246        235
Average screens                    2,504       2,244       2,484       2,256
Average attendance per             6,084       5,504       16,771      16,449
screen^(1)
Average admission per            $ 6.75      $ 6.47      $ 6.99      $ 6.70
patron^(1)
Average concessions/other        $ 4.09      $ 3.79      $ 4.15      $ 3.85
sales per patron^(1)
Total attendance (in               15,231      12,353      41,793      37,117
thousands)^(1)
Total operating revenues         $ 165,013   $ 126,672   $ 465,210   $ 391,784
(in thousands)
                                                                     

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

Carmike Cinemas’ Chief Financial Officer Richard B. Hare stated, “Fueled by
recent acquisitions, total operating revenues grew more than 30% to $165
million, with admission receipts increasing 28.7% year-over-year during a
quarter when the domestic industry box office grew 6.4% year-over-year.
Carmike’s concessions and other revenues rose 33%, compared to the year-ago
Q3. Average per patron spending increased 5.7% to $10.84. Average per cap
admissions rose 4.3% and concessions/other sales expanded 7.9%.

“Film exhibition costs as a percentage of admissions revenue remained steady
at 54.9%, as the motion picture slate performed well and a variety of titles
contributed to the year-over-year growth in receipts. Concession costs as a
percentage of concession and other revenues increased to 13.4% in the third
quarter of 2013, primarily due to increases in the cost of concession supplies
and discounts and other promotional activities. As a percentage of total
operating revenues, other theatre operating costs improved 160 basis points to
40.2%, despite a 25.4% year-over-year increase in costs to $66.3 million. The
rise versus the year-ago period was largely a reflection of the 11.6% increase
in average screen count, plus higher theatre salaries, wages and occupancy
costs. General and administrative expenses were $6.6 million for the three
months ended September 30, 2013, compared to $5.7 million for the same period
in 2012, primarily due to costs associated with professional fees related to
merger and acquisition activities.

“Third quarter theatre level cash flow rose 40.1% to $33.9 million and
adjusted EBITDA increased 46.7% to $28.4 million. The Q3 adjusted EBITDA
margin was 17.2%, 190 basis points better than the 15.3% margin in the prior
year period. We continue to focus on managing Carmike’s controllable costs and
believe that successful M&A activity will further enhance margins as the
infrastructure required to operate a substantially larger circuit is already
in place. As such, we expect a higher percentage of theatre level cash flow
from future acquisitions to flow directly to our adjusted EBITDA results,”
concluded Mr. Hare.

Supplemental Financial Measures

Theatre level cash flow, EBITDA, adjusted EBITDA, adjusted net income, 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 is defined as net income plus impairment of long-lived
assets, loss on sale of property and equipment, loss on extinguishment of
debt, lease termination charges, severance agreement charges and merger and
acquisition-related expenses, net of tax. Carmike believes adjusted net income
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 plus
income tax expense, interest expense and depreciation and amortization.
Adjusted EBITDA is defined as EBITDA plus income from unconsolidated
affiliates, loss from discontinued operations, loss on extinguishment of debt,
lease termination charges, severance agreement chargers, merger and
acquisition-related expenses, loss 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. As of
September 30, 2013, the Company had 247 theatres with 2,521 screens in 36
states, with a digital footprint of 2,418 screens, including 229 locations
with 954 screens also equipped for 3-D. The circuit includes 20 “Big D” large
format digital experience auditoriums, featuring state-of-the-art equipment
and luxurious amenities, as well as 8 IMAX^® auditoriums. As “America’s
Hometown Theatre Chain,” Carmike’s primary focus is small to mid-sized
community locations.

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 future operating efficiencies, box office performance,
circuit expansion, third quarter performance, additional acquisition
opportunities, and the operating impact of the Muvico transaction.
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         Nine Months Ended
                         September 30,               September 30,
                          2013        2012       2013       2012    
Revenues:                (Unaudited)   (Unaudited)  (Unaudited)  (Unaudited)
Admissions               $ 102,792     $ 79,889      $ 291,927     $ 248,776
Concessions and           62,221      46,783     173,283    143,008 
other
                                                                   
Total operating            165,013       126,672       465,210       391,784
revenues
                                                                   
Operating costs
and expenses:
Film exhibition            56,482        43,858        160,769       135,225
costs
Concession costs           8,328         5,741         22,009        16,767
Other theatre              66,341        52,904        185,783       157,037
operating costs
General and
administrative             6,621         5,650         18,668        15,939
expenses
Lease termination          —             —             3,063         —
charges
Severance                  102           95            102           473
agreement charges
Depreciation and           10,627        8,468         31,105        23,966
amortization
Loss on sale of
property and               11            700           70            948
equipment
Impairment of             2,974       1,835      3,385      3,358   
long-lived assets
                                                                   
Total operating           151,486     119,251    424,954    353,713 
costs and expenses
                                                                   
Operating income           13,527        7,421         40,256        38,071
Interest expense           12,353        8,605         36,998        25,478
Loss on
extinguishment of         —           —          —          4,961   
debt
                                                                   
Income (loss)
before income tax
and income from            1,174         (1,184  )     3,258         7,632
unconsolidated
affiliates
Income tax expense         1,253         466           1,733         3,813
Income from
unconsolidated            1,145       1,950      482        958     
affiliates
                                                                   
Income from
continuing                 1,066         300           2,007         4,777
operations
Loss from
discontinued              (57     )    (67     )   (105    )   (114    )
operations
                                                                   
Net income               $ 1,009      $ 233       $ 1,902     $ 4,663   
                                                                   
Weighted average
shares
outstanding:
Basic                      20,985        17,519        18,723        15,775
Diluted                    21,501        17,881        19,202        16,061
                                                                   
Net income per
common share
(Basic):
Income from
continuing               $ 0.05        $ 0.02        $ 0.11        $ 0.30
operations
Income from
discontinued              —           —          (0.01   )   —       
operations, net of
tax
                                                                   
Net income per           $ 0.05       $ 0.02      $ 0.10      $ 0.30    
common share
                                                                   
Net income per
common share
(Diluted):
Income from
continuing               $ 0.05        $ 0.01        $ 0.10        $ 0.30
operations
Income from
discontinued              —           —          —          (0.01   )
operations, net of
tax
                                                                   
Net income per           $ 0.05       $ 0.01      $ 0.10      $ 0.29    
common share
                                                                             

                                     
CARMIKE CINEMAS, INC. and SUBSIDIARIES
SUPPLEMENTARY NON-GAAP RECONCILIATIONS
THEATRE LEVEL CASH FLOW AND ADJUSTED EBITDA
(Unaudited) ($ in thousands)
                                          
                             Three Months Ended        Nine Months Ended
                                                     
                             September 30,             September 30,
                              2013       2012      2013      2012   
Net income                   $ 1,009      $ 233       $ 1,902     $ 4,663
Income tax expense             1,253        466          1,733        3,813
Interest expense               12,353       8,605        36,998       25,478
Depreciation and              10,627     8,468     31,105    23,966 
amortization
                                                                    
EBITDA                       $ 25,242     $ 17,772     $ 71,738     $ 57,920
Income from
unconsolidated                 (1,145 )     (1,950 )     (482   )     (958   )
affiliates
Loss from discontinued         57           67           105          114
operations
Loss on sale of                11           700          70           948
property and equipment
Loss on extinguishment         —            —            —            4,961
of debt
Impairment of                  2,974        1,835        3,385        3,358
long-lived assets
Lease termination              —            —            3,063        —
charges
Severance agreement            102          95           102          473
charges
Merger and
acquisition-related           1,154      831       1,901     1,030  
expenses
                                                                    
Adjusted EBITDA              $ 28,395    $ 19,350   $ 79,882   $ 67,846 
                                                                    
General and
administrative                5,467      4,819     16,767    14,909 
expenses
                                                                    
Theatre level cash           $ 33,862    $ 24,169   $ 96,649   $ 82,755 
flow
                                                                             

                                                            
TOTAL DEBT AND NET DEBT (Unaudited)
($ in thousands)
                                                                 
                                                Sept. 30, 2013   Dec. 31, 2012
                                                                 
Current maturities of capital leases and        $  5,246         $  4,422
long-term financing obligations
Long-term debt                                     209,601          209,548
Capital leases and long-term financing            222,633        220,725  
obligations, less current maturities
                                                                 
Total debt                                      $  437,480       $  434,695
Less cash and cash equivalents                    (150,602  )     (68,531  )
                                                                 
Net debt                                        $  286,878      $  366,164  
                                                                 

                          
ADJUSTED NET INCOME (Unaudited)
($ in thousands)
                                                              
                              Three Months              Nine Months
                                                      
                              Ended Sept. 30,           Ended Sept. 30,
                               2013      2012     2013       2012   
Net income                    $ 1,009      $ 233       $ 1,902    $ 4,663
Impairment of                   2,974        1,835      3,385         3,358
long-lived assets
Loss on sale of                 11           700        70            948
property and equipment
Loss on extinguishment          —            —          —             4,961
of debt
Lease termination               —            —          3,063         —
charges
Severance agreement             102          95         102   473
charges
Merger and
acquisition-related             1,154        831        1,901         1,030
expenses
Tax effect of
adjustments to net             (1,760 )    (1,367 )  (3,536  )    (4,254 )
income^(1)
                                                                    
Adjusted net income           $ 3,490     $ 2,327    $ 6,887    $ 11,179 
                                                                    
Weighted average shares         20,985       17,519     18,723        15,775
outstanding (basic)
Weighted average shares         21,501       17,881     19,202        16,061
outstanding (diluted)
Adjusted net income per       $ 0.17       $ 0.13       $ 0.37      $ 0.71
share (basic)
Adjusted net income per       $ 0.16       $ 0.13       $ 0.36      $ 0.70
share (diluted)
                                                                    

            Adjustments to net income for the three and nine months ended
   (1)  September 30, 2013 and 2012 are shown net of tax effect of 41.5%
            and 39.5%, respectively, 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, 706-576-3416
Chief Financial Officer
 
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