Carmike Cinemas Reports $2.2M Profit in Q1
Staff Report From Columbus CEO
Tuesday, May 3rd, 2016
Carmike Cinemas, Inc., a leading entertainment, digital cinema, alternative content and 3-D motion picture exhibitor, today reported results for the three-month period ended March 31, 2016.
“Our first quarter results reflect a favorable U.S. box office environment that included blockbuster releases, as well as the successful execution of our theatre-level initiatives and the effective integration of recent acquisitions,” stated David Passman, Carmike Cinemas’ President and Chief Executive Officer.
“Our focus on delivering differentiated food and beverage offerings and innovative dining concepts supported strong first quarter concessions and other spending per patron, marking 25 consecutive reporting periods of year-over-year concessions and other per patron spending growth. Carmike’s 14% increase in total concessions and other revenues and 12% rise in concessions and other spending per patron again highlight the value of our strategies to drive food, beverage and concession growth.
“First quarter total admissions revenue growth of 10% reflects strong performance from carry over titles as well as new releases. Carmike's first quarter admissions revenue growth was impacted by the tremendous performance of American Sniper in Carmike’s markets during the comparable period last year.
“In summary, we are pleased with the first quarter financial and operating performance, including healthy growth across adjusted EBITDA and theater-level cash flow, and remain optimistic that the positive consumer, economic and box office environments will continue for the remainder of 2016,” concluded Mr. Passman.
Carmike Cinemas’ Chief Financial Officer Richard B. Hare stated, “A modest rise in attendance and an increase in average per patron spending generated 11.9% growth in first quarter operating revenues, including a gain in admissions revenue and concessions and other revenue of 10.2% and 14.4%, respectively. Reflecting the continued appeal of the box office and the ongoing success of our various operating and management initiatives, average admissions per patron was $7.80, while guests spent an average of $13.11 per visit in the quarter, or a 10% increase in combined per patron spending compared to the prior year period.
“Carmike’s 2016 first quarter film exhibition costs as a percentage of admissions revenues were 55.7%, versus 55.4% in the first quarter of 2015, reflecting a continued high concentration of strong performing titles. Concession costs as a percentage of concessions and other revenue increased by 50 basis points to 11.5%, while our three theatre-level expense categories increased primarily as a result of Carmike’s expanded circuit due to recent acquisitions and new theatre openings. Salaries and benefits rose 4.4% to $24.8 million, theatre occupancy costs increased 10.4% to $25.9 million, and other theatre operating costs were $34.5 million, or an increase of 7.8%, compared to $32.0 million in the first quarter of 2015. General and administrative expenses were $12.3 million for the first quarter of 2016, including $1.7 million of non-cash share-based compensation expense and $3.8 million of M&A related costs, while quarterly interest expense declined 2.2% to $12.4 million in Q1 2016, due primarily to more favorable terms as a result of the refinancing transactions we completed in the second quarter of 2015. Adjusted EBITDA increased 21.8% to $36.2 million and theatre level cash flow rose 21.5% to $43.1 million due to an increase across the top-line and operating discipline.
“Looking at our balance sheet, we continue to operate our business on solid financial footing with a healthy balance sheet that includes cash and cash equivalents totaling $95.7 million at March 31, 2016. Net debt for the quarter was $367.6 million compared with $352.2 million at December 31, 2015, reflecting a leverage ratio of net debt to EBITDA of approximately 3.2 times," concluded Mr. Hare.
As previously announced, in light of the pending transaction with AMC Entertainment Holdings, Inc., Carmike will not hold a conference call or webcast to review its results.
