Breaking News

Cognizant to Buy Trizetto for About $2.7 Billion in Merger of Healthcare IT Providers
Tweet TWEET

Regal Plans to Employ Cash for Dividends Before Debt Reduction

Regal Entertainment Group (RGC) plans to use free cash flow that may reach the most since 2009 on acquisitions and dividends as it seeks to maintain its level of indebtedness.

The biggest U.S. cinema operator by revenue may use free cash flow, or cash from operations after deducting capital expenses, to acquire an estimated 150 to 400 movie theater screens, after adding 813 during the last two years, said Chief Financial Officer David Ownby. The company’s free cash flow may be $279.4 million for fiscal 2014, according to analyst estimates compiled by Bloomberg.

The theater chain operator with $2.2 billion in debt has had a recurring dividend since 2002 and has paid five special dividends, Ownby said. The Knoxville, Tennessee-based company’s ratio of net debt to earnings before interest, taxes, depreciation and amortization was 3.2 times as of Sept. 30, Ownby said in a third-quarter 2013 earnings call.

“The future, in terms of capital allocation, looks a lot like the past for us,” he said in an Oct. 29 telephone interview. “We’re pretty comfortable where our leverage is today.”

To contact the reporter on this story: David Holley in New York at dholley8@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.