Digiplex Fiscal 2014 Q2 Revenue Rises to $11.2 Million, Reflecting Ongoing Screen Growth and Successful Circuit Expansion

  Digiplex Fiscal 2014 Q2 Revenue Rises to $11.2 Million, Reflecting Ongoing
  Screen Growth and Successful Circuit Expansion

             - Reports Theater Level Cash Flow of $1.9 Million -

Business Wire

WESTFIELD, N.J. -- February 12, 2014

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 2014 second quarter financial
results for the three-month period ended December 31, 2013.


DATE/TIME: Today, 2/12/14 at 4:30 p.m. ET

TELEPHONE: 800 891 8357. Please call at least five minutes in advance to be
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       Six Months Ended
                             December 31,              December 31,
(in thousands)               2013        2012         2013        2012
Consolidated total revenue   $ 11,196     $ 6,870      $ 22,665     $ 11,216
Consolidated net loss          (1,356 )     (1,234 )     (2,727 )     (1,897 )
                                                                    
Consolidated theater level     1,943        1,553        3,773        2,554
cash flow (1)
Adjusted EBITDA of Digital
Cinema Destinations Corp.      950          644          1,958        997
(1)
                                                            
Theaters (period end)          20           16           20           16
Average screens                185          96           184          84
Average attendance per         5,367        6,459        11,257       12,252
screen
Average admission per        $ 7.93       $ 7.71       $ 7.76       $ 7.52
patron
Average concessions sales    $ 3.31       $ 3.13       $ 3.29       $ 3.03
per patron
Total attendance (in           993          619          2,070        1,035
thousands)
                                                                    

      Theater level cash flow and adjusted EBITDA are supplemental non-GAAP
(1)  financial measures. Reconciliations of these metrics to the net loss for
      the three and six months ended December 31, 2013 and 2012 are included
      in the supplementary tables accompanying this news announcement.
      

Digiplex Chairman and CEO Bud Mayo stated, “Digiplex continues to capitalize
on the attractive M&A environment and favorable industry backdrop as we expand
our footprint into leading domestic markets. In recent months we completed a
previously announced acquisition in the Harrisburg DMA, further growing our
Pennsylvania presence. We also have a number of pending locations that have
been announced and these are in various stages of final due diligence. We are
also in active negotiations and advanced high-level discussion on a wide array
of other potential theater purchases as well.

“As with previous acquisitions our mission continues to be transforming all
Digiplex locations into digital entertainment centers featuring a wide range
of content, including alternative programming that helps drive capacity
utilization during non-peak times. This strategy has been working according to
plan and we are approximately one-quarter of the way to our organization’s
ultimate goal of operating a national circuit located in top markets,”
concluded Mr. Mayo.


DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

                                                    December 31,  June 30,
                                                     2013           2013
                                                     (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents                            $  6,992       $ 3,607
Accounts receivable                                     740           697
Inventories                                             148           191
Deferred financing costs, current portion               357           357
Prepaid expenses and other current assets              1,295       1,444  
                                                                    
Total current assets                                    9,532         6,296
Property and equipment, net                             29,666        29,171
Goodwill                                                3,502         3,156
Intangible assets, net                                  7,012         6,186
Security deposit                                        209           205
Deferred financing costs, long term portion, net        1,052         1,225
Other assets                                           107         9      
                                                                    
TOTAL ASSETS                                         $  51,080     $ 46,248 
                                                                    
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable                                     $  1,985       $ 2,478
Accrued expenses and other current liabilities          3,658         3,964
Notes payable, current portion                          1,716         1,373
Capital lease, current portion                          162           121
Earn out from theater acquisitions                      350           296
Deferred revenue                                       767         305    
                                                                    
Total current liabilities                               8,638         8,537
                                                                    
NONCURRENT LIABILITIES
Notes payable, long term portion                        8,048         8,615
Capital lease, net of current position                  470           239
Unfavorable leasehold liability, long term portion      141           159
Deferred rent expense                                   617           407
Deferred tax liability                                 207         199    
                                                                    
TOTAL LIABILITIES                                      18,121      18,156 
                                                                    
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Class A Common stock, $.01 par value: 20,000,000
shares authorized and
7,035,058 and 5,511,938 shares issued and               70            55
outstanding as of December 31, 2013
and June 30, 2013, respectively
Class B Common stock, $.01 par value, 900,000
shares authorized; 849,000 and
865,000 shares issued and outstanding as of             9             9
December 31, 2013 and June 30,
2013, respectively
Additional paid-in capital                              32,959        25,816
Accumulated deficit                                    (9,121  )    (7,049 )
                                                                    
TOTAL STOCKHOLDERS’ EQUITY OF DIGITAL CINEMA
DESTINATIONS                                            23,917        18,831
CORP.
Non-controlling interest                               9,042       9,261  
                                                                    
Total equity                                           32,959      28,092 
                                                                    
TOTAL LIABILITIES AND EQUITY                         $  51,080     $ 46,248 
                                                                    


DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except share and per share data)
                 Three Months Ended             Six Months Ended
                  December 31,                    December 31,
                  2013           2012            2013           2012
REVENUES                                                       
                                                                                
Admissions        $ 7,590         $ 4,752         $ 15,347        $ 7,761
Concessions         3,166           1,929           6,504           3,128
Other              440           189           814           327       
                                                                                
Total revenues     11,196        6,870         22,665        11,216    
                                                                                
COSTS AND
EXPENSES
Cost of
operations:
Film rent           3,936           2,401           7,714           3,813
expense
Cost of             581             317             1,183           482
concessions
Salaries and        1,297           710             2,747           1,224
wages
Facility lease      1,450           811             2,920           1,334
expense
Utilities and       2,099           1,157           4,484           1,923
other
General and         1,348           1,208           2,666           1,946
administrative
Change in fair
value of            (5        )     -               54              -
earnout
Depreciation
and                1,373         1,098         2,708         1,947     
amortization
                                                                                
Total costs and    12,079        7,702         24,476        12,669    
expenses
                                                                                
OPERATING LOSS      (883      )     (832      )     (1,811    )     (1,453    )
OTHER EXPENSE
Interest            (348      )     (272      )     (699      )     (294      )
expense
Non-cash
interest            (76       )     (75       )     (152      )     (78       )
expense
Other expense      (40       )    (8        )    (47       )    (8        )
                                                                                
LOSS BEFORE         (1,347    )     (1,187    )     (2,709    )     (1,833    )
INCOME TAXES
Income tax         9             47            18            64        
expense
                                                                                
NET LOSS          $ (1,356    )   $ (1,234    )   $ (2,727    )   $ (1,897    )
                                                                                
Net loss
attributable to    331           93            655           93        
non-controlling
interest
                                                                                
Net loss
attributable to
Digital Cinema    $ (1,025    )   $ (1,141    )   $ (2,072    )   $ (1,804    )
Destinations
Corp.
Preferred stock    (5        )    (5        )    (10       )    (6        )
dividends
                                                                                
Net loss
attributable to   $ (1,030    )   $ (1,146    )   $ (2,082    )   $ (1,810    )
common
stockholders
                                                                                
Net loss per
Class A and
Class B common
share – basic
and               $ (0.14     )   $ (0.21     )   $ (0.30     )   $ (0.33     )
diluted
attributable to
common
stockholders
Weighted
average common      7,565,123       5,511,765       7,014,926       5,465,356
shares
outstanding


SUPPLEMENTARY NON-GAAP RECONCILIATION
OF THEATER LEVEL CASH FLOW
(Unaudited) ($ in thousands)

                           Three months ended       Six months ended
                             December 31,              December 31,
                              2013      2012       2013      2012   
Net loss                     $ (1,356 )   $ (1,234 )   $ (2,727 )   $ (1,897 )
Add back:
General and administrative     1,348        1,208        2,666        1,946
(1)
                                                                    
Depreciation and               1,373        1,098        2,708        1,947
amortization
Income tax expense             9            47           18           64
Interest expense               424          347          851          372
Other expense                  40           8            47           8
Deferred rent expense (5)     105        79         210        114    
Consolidated TLCF            $ 1,943     $ 1,553     $ 3,773     $ 2,554  
                                                                    

SUPPLEMENTARY NON-GAAP RECONCILIATION
OF ADJUSTED EBITDA
(Unaudited) ($ in thousands)
                                                    
                            Three months ended        Six months ended
                             December 31,              December 31,
                             2013        2012         2013        2012
Net loss                     $ (1,356 )   $ (1,234 )   $ (2,727 )   $ (1,897 )
Add back:
Depreciation and               1,373        1,098        2,708        1,947
amortization
Interest expense               424          347          851          372
Income tax expense             9            47           18           64
Other expense                  40           8            47           8
Deferred rent expense (5)      105          79           210          114
Stock-based compensation       122          26           361          69
(2)
Non-recurring
organizational and             53           315          110          362
M&A-related
professional fees (3)
Management fees (4)            275          52           560          52
Deduct:
Start Media's share of        (95    )    (94    )    (180   )    (94    )
Adjusted EBITDA
Adjusted EBITDA of Digital
Cinema Destinations          $ 950       $ 644       $ 1,958     $ 997    
Corp.
                                                                    

    
(1)   TLCF is intended to be a measure of theater profitability. Therefore,
      our corporate general and administrative expenses have been excluded.
      Represents the fair value of shares of Class A common stock and
(2)   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.
      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
(3)   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.
      Represents non-cash deferred rent expense which is included in our
(5)   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 Form 10-K for the year ended June 30, 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.

About Digital Cinema Destinations Corp.(www.digiplexdest.com)

Digital Cinema Destinations Corp. (NasdaqCM: DCIN) is Digiplex Destinations,
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 opera, ballet, Broadway shows, sports events, concerts and, on an ongoing
basis, the very best major motion pictures. You can connect with Digiplex via
Facebook, Twitter, YouTube and Blogger.

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
DCIN@jcir.com
 
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