Digiplex Agrees to Be Acquired by Carmike Cinemas in an All-Stock Transaction

  Digiplex Agrees to Be Acquired by Carmike Cinemas in an All-Stock
  Transaction

             Fiscal 2014 Q3 Revenue Rises 14.7% to $10.1 Million

           Theater Level Cash Flow Increases 30.4% to $1.5 Million

Business Wire

WESTFIELD, N.J. -- May 15, 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 third quarter financial
results for the three-month period ended March 31, 2014. Separately, the
Boards of Directors of both companies have approved a definitive agreement for
Carmike to acquire Digiplex. The agreement is a stock-for-stock transaction in
which Carmike will acquire 100% of Digiplex’s 7.93 million shares outstanding.
Each Digiplex share will be exchanged for 0.1775 shares (subject to certain
potential reductions) of Carmike common stock.

 [PLEASE NOTE THAT DIGIPLEX MANAGEMENT IS NOT HOSTING A CALL OR WEBCAST TODAY
                                 AT 4:30 PM]

                                                  
SUMMARY AND SUPPLEMENTARY FINANCIAL DATA
(unaudited)
                                                       
                             Three Months Ended        Nine Months Ended

                             March 31,                 March 31,
(in thousands)               2014        2013         2014        2013
Consolidated total           $ 10,054     $ 8,765      $ 32,719     $ 19,982
revenue
Consolidated net loss          (1,194 )     (2,151 )     (3,928 )     (4,047 )
                                                                    
Consolidated theater           1,506        1,155        5,271        3,624
level cash flow (1)
Adjusted EBITDA of
Digital Cinema                 415          451          2,261        1,452
Destinations Corp. (1)
                                                          
Theaters (period end)          20           18           20           18
Average screens                188          172          186          113
Average attendance per         4,362        4,697        15,554       16,327
screen
Average admission per        $ 8.31       $ 8.17       $ 7.92       $ 7.78
patron
Average concessions          $ 3.59       $ 3.04       $ 3.27       $ 3.03
sales per patron
Total attendance (in           822          810          2,893        1,845
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 nine months ended March 31, 2014 and 2013 are included in
      the supplementary tables accompanying this news announcement.

Digiplex Chairman, Chief Executive Officer and Founder Bud Mayo commented, “We
view this transaction as a complementary win-win for both organizations.
Digiplex holders will benefit by receiving stock in one of the
industry-leading exhibitors. David Passman, his fellow senior executives and
their customer-centric, theatre-level teams have together orchestrated a
fantastic, multi-year turnaround – both operationally and financially.”

                          (financial tables follow)

                                                               
DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
                                                                    
                                                      March 31,     June 30,

                                                      2014          2013
                                                      (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents                             $  4,417      $ 3,607
Accounts receivable                                      842          697
Inventories                                              150          191
Deferred financing costs, current portion                357          357
Prepaid expenses and other current assets               895        1,444  
                                                                    
Total current assets                                     6,661        6,296
Property and equipment, net                              29,786       29,171
Goodwill                                                 4,314        3,156
Intangible assets, net                                   5,401        6,186
Security deposit                                         189          205
Deferred financing costs, long term portion,             962          1,225
net
Other assets                                            103        9      
                                                                    
TOTAL ASSETS                                          $  47,416    $ 46,248 
                                                                    
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable                                      $  2,086      $ 2,478
Accrued expenses and other current liabilities           2,616        3,964
Notes payable, current portion                           1,718        1,373
Capital lease, current portion                           245          121
Earn out from theater acquisitions                       -            296
Deferred revenue                                        594        305    
                                                                    
Total current liabilities                                7,259        8,537
NONCURRENT LIABILITIES
Notes payable, long term portion                         7,693        8,615
Capital lease, net of current position                   575          239
Unfavorable leasehold liability, long term               132          159
portion
Deferred rent expense                                    707          407
Deferred tax liability                                  210        199    
                                                                    
TOTAL LIABILITIES                                       16,576     18,156 
                                                                    
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred Stock, $.01 par value: 10,000,000
shares authorized as of March 31,
2014 and June 30, 2013, 6 shares of Series B             -            -
Preferred Stock issued and
outstanding as of March 31, 2014 and June 30,
2013, respectively
Class A Common stock, $.01 par value, 20,00,000
shares authorized; and
7,214,073 and 5,511,938 shares issued and                72           55
outstanding as of March 31, 2014 and
June 30, 2013, respectively
Class B Common stock, $.01 par value, 9,00,000
shares authorized; 849,000 and                           9            9
865,000 shares issued and outstanding as of
March 31, 2014 and June 30, 2013, respectively
Additional paid-in capital                               33,819       25,816
Accumulated deficit                                     (9,874 )    (7,049 )
                                                                    
TOTAL STOCKHOLDERS’ EQUITY OF DIGITAL CINEMA             24,026       18,831
DESTINATIONS CORP.
Noncontrolling interest                                  8,618        9,261
Treasury stock, 361,599 shares                          (1,804 )    -      
                                                                    
Total equity                                            30,840     28,092 
                                                                    
TOTAL LIABILITIES AND EQUITY                          $  47,416    $ 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                  Nine Months Ended

                      March 31,                           March 31,
                                                                        
                      2014           2013              2014            2013
REVENUES
Admissions            $ 6,662         $ 5,985           $ 22,009        $ 13,728
Concessions             2,951           2,461             9,455           5,586
Other                  441           319              1,255         668       
                                                                        
Total revenues         10,054        8,765           32,719        19,982    
                                                                        
COSTS AND
EXPENSES
Cost of
operations:
Film rent               3,205           2,824             10,920          6,637
expense
Cost of                 451             413               1,634           895
concessions
Salaries and            1,239           1,155             3,986           2,378
wages
Facility lease          1,523           1,514             4,653           2,847
expense
Utilities and           2,227           1,868             6,501           3,794
other
General and             1,509           1,365             4,175           3,311
administrative
Change in fair
value of                -               (79       )       54              (79       )
earnout
Gain on sale of         (950      )     -                 (950      )     -
theater
Depreciation
and                    1,565         1,439            4,279         3,385     
amortization
                                                                        
Total costs and        10,769        10,499           35,252        23,168    
expenses
                                                                        
OPERATING LOSS          (715      )     (1,734    )       (2,533    )     (3,186    )
OTHER EXPENSE
Interest                (345      )     (326      )       (1,044    )     (620      )
expense
Non-cash
interest                (71       )     (75       )       (223      )     (153      )
expense
Other expense          (41       )    (38       )       (88       )    (46       )
                                                                        
LOSS BEFORE             (1,172    )     (2,173    )       (3,888    )     (4,005    )
INCOME TAXES
Income tax             22            (22       )       40            42        
expense
                                                                        
NET LOSS              $ (1,194    )   $ (2,151    )     $ (3,928    )   $ (4,047    )
                                                                        
Net loss
attributable to        419           620              1,078         713       
non-controlling
interest
                                                                        
Net loss
attributable to
Digital Cinema        $ (775      )   $ (1,531    )     $ (2,850    )   $ (3,334    )
Destinations
Corp.
Preferred stock        (5        )    (5        )       (15       )    (11       )
dividends
                                                                        
Net loss
attributable to       $ (780      )   $ (1,536    )     $ (2,865    )   $ (3,345    )
common
stockholders
                                                                        
Net loss per
Class A and
Class B common
share – basic
and                   $ (0.10     )   $ (0.25     )     $ (0.39     )   $ (0.59     )
diluted
attributable to
common
stockholders
Weighted
average common          7,931,270       6,065,265         7,313,618       5,663,016
shares
outstanding
                                                                                    

                                                  
SUPPLEMENTARY NON-GAAP RECONCILIATION
OF THEATER LEVEL CASH FLOW
(Unaudited) ($ in thousands)
                                                       
                             Three months ended        Nine months ended
                             March 31,                 March 31,
                             2014        2013         2014        2013
Net loss                     $ (1,194 )   $ (2,151 )   $ (3,928 )   $ (4,047 )
Add back:
General and                    1,509        1,365        4,175        3,311
administrative (1)
Depreciation and               1,565        1,439        4,279        3,385
amortization
Income tax expense             22           (22    )     40           42
Interest expense               416          401          1,267        773
Other expense                  41           38           88           46
Deferred rent expense          97           85           300          114
(5)
Less:
Gain on sale of               (950   )    -          (950   )    -      
theater
Consolidated TLCF            $ 1,506     $ 1,155     $ 5,271     $ 3,264  
                                                                    

                                                  
SUPPLEMENTARY NON-GAAP RECONCILIATION
OF ADJUSTED EBITDA
(Unaudited) ($ in thousands)
                                                       
                             Three months ended        Nine months ended
                             March 31,                 March 31,
                             2014        2013         2014        2013
Net loss                     $ (1,194 )   $ (2,151 )   $ (3,928 )   $ (4,047 )
Add back:
Depreciation and               1,565        1,439        4,279        3,385
amortization
Interest expense               416          401          1,267        773
Income tax expense             22           (22    )     40           42
Other expense                  41           38           88           46
Deferred rent expense          97           85           300          200
(5)
Stock-based                    133          79           494          148
compensation (2)
Non-recurring
organizational and             104          315          110          552
M&A-related
professional fees (3)
Management fees (4)            245          203          805          255
Start Media's share of         (64    )     64           (244   )     98
Adjusted EBITDA
Less:
Gain on sale of               (950   )    -          (950   )    -      
theater
Adjusted EBITDA of
Digital Cinema               $ 415       $ 451       $ 2,261     $ 1,452  
Destinations 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, 2013 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, a
fast-growing theatrical exhibitor dedicated to transforming its movie theaters
into interactive digital entertainment centers featuring ‘something for
everyone.’ The Company provides consumers with uniquely satisfying experiences
combining state-of-the-art technology with engaging, dynamic content that far
transcends traditional cinematic fare. Digiplex 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.

Additional Information and Where to Find it

In connection with the proposed transaction, Carmike will file a registration
statement on Form S-4 with the Securities and Exchange Commission (the
“SEC”).DIGIPLEX STOCKHOLDERS ARE ENCOURAGED TO READ THE REGISTRATION
STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME
AVAILABLE, INCLUDING THE PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE
REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
THE TRANSACTION.The final proxy statement/prospectus will be mailed to
stockholders of Digiplex. Investors and security holders will be able to
obtain the documents free of charge at the SEC’s web site, www.sec.gov, or by
directing a request to Digiplex at 250 East Broad Street, Westfield, New
Jersey, 07090 or (908) 396-1360.In addition, investors and security holders
may access copies of the documents filed with the SEC by Carmike on its web
site at www.carmike.com or Digiplex on its web site at
http://digiplexdest.com, when they become available.

Participants in Solicitation

Carmike, Digiplex and their respective directors and executive officers and
other members of management and employees may be deemed to be participants in
the solicitation of proxies in respect of the transaction. Information
concerning Carmike’s participants is set forth in the proxy statement dated
April 18, 2014 for Carmike’s 2014 annual meeting of shareholders as filed with
the SEC on Schedule 14A. Information concerning Digiplex’s participants is
set forth in the proxy statement dated October 25, 2013 for Digiplex’s 2013
annual meeting of stockholders as filed with the SEC on Schedule 14A.
Additional information regarding the interests of participants of Carmike and
Digiplex in the solicitation of proxies in respect of the proposed transaction
will be included in the registration statement and proxy statement/prospectus
contained therein, to be filed with the SEC.

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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