The chain said in July that it would go on a shopping spree when it raised $88.1M through a secondary stock offering. “We are not seeing fixer-uppers or turnaround projects,” CEO David Passman told analysts at the time. Today’s deal seems to fit his criteria. It will provide Carmike with an additional 147 screens in three states — Florida, California, and Illinois — giving it a total of 2,681 at 257 theaters in 37 states. They shouldn’t need much work: “Muvico is a cinema technology leader and industry pioneer, with recent capital expenditures for digital projection system upgrades, IMAX and MuviXL large format screens, installations of cutting-edge sound, reserved seating and ticket kiosks, as well as additional facility enhancements,” Passman says. “We expect limited incremental maintenance capital expenditures on these acquired facilities over the near-term.” He adds that the deal will add Bogart’s Bar & Grill restaurants to Carmike theaters in Thousand Oaks, Calif. and Rosemont, Ill. which advances “our entry into the full-service food and beverage arena.” Seven of the nine theaters are in Florida and most have beer and wine service, entertainment centers, party rooms and conference facilities. The deal should boost revenues by $68M and cash flow by $5.4M and provides “a number of operational and cost synergy opportunities,” Passman says. Carmike will have a chance to discuss the deal with analysts tomorrow when it releases its Q3 earnings.
Shares are down about 1.4% pre-market. The exhibition chain announced that it has launched an underwritten public offering of 4.5M shares of common stock, with an opportunity for underwriters to nab an additional 675,000 shares. The proceeds could be used for acquisitions, as well as general corporate purposes, the company says. “We are not seeing fixer-uppers or turnaround projects,” CEO David Passman told analysts this morning. The goal is to expand to 300 locations with 3,000 screens. Carmike made the announcement as it released Q2 earnings that looked great on the top line, but will disappoint some investors on the bottom — even though they’re substantially up.
All exhibition chains struggled with the weak box office in early 2012. But Carmike suffered from a triple whammy in Q1 as it recorded $12.3M in interest expenses — due in part to the additional leverage to finance its …
This is becoming a familiar theme in exhibition, although Carmike‘s Q4 numbers are complicated by its acquisition in November of 251 screens from Rave Reviews Cinemas as well as an $86.5M year-end tax benefit. With those factored …
Carmike shares are up more than 9% in early trading after it announced its agreement to pay $19M — and assume $100.4M in lease obligations — for Rave’s 16 theaters with 251 screens in the south and mid-west. Carmike signaled its interest in acquisitions early this year when it launched a refinancing effort that included a $56.5M stock sale and $210M sale of senior secured notes. CEO David Passman calls today’s deal a “key, opportunistic development for Carmike as we recently embarked on a corporate mission of expanding our footprint to 300 theatres and 3,000 screens through attractive acquisitions.” Rave is controlled by private equity firm BV Investment Partners. The companies expect the deal to close by year end.
Here’s the release:
LAS VEGAS/CINEMACON – April 24, 2012 – Fandango, the nation’s leading moviegoer destination, has extended its multi-year strategic agreement with founding partner Carmike Cinemas, Inc. (NASDAQ: CKEC), the nation’s premier “home town” motion picture exhibitor with 2,254 screens, just in time for the summer moviegoing season.
B. Riley analyst Eric Wold says it will in a major look-forward report today for the film business. He predicts 4% growth in box office sales this year — the result of a 1% uptick in attendance and a 3% rise in average ticket prices. What makes him so confident, especially following the 3.9% drop in 2011? Wold says that more consumers would have gone to the movies last year if Hollywood hadn’t released so many dogs. He dismisses another theory: that tickets are becoming too expensive. If that were the case, he says, then we would have seen soft numbers throughout the year — instead box offices set records in Q2 and Q3. He’s also optimistic about 2012 because there’ll be at least 25 sequels of films that collectively generated $3.64B at box offices. Sequels typically deliver about 6% less in ticket sales than the originals. But even if 2012′s films slip 20%, consumers will spend 12% more than they did for sequels in 2010. That could “set up 2012 for a potential rebound,” Wold says. He’s also encouraged to see that there’ll be at least 40 wide-release 3D
The weak box office sales this past weekend made it clear that the year is going to end with a whimper. Regal’s shares fell 8.7%, making it the biggest loser among the theater chains followed by Carmike (-4.9%) and Cinemark (-2.9%). Companies closely aligned with theaters also suffered: 3-D technology provider RealD fell 6.2% while ad seller National Cinemedia was off nearly 3%. “The hoped-for 4Q11 box office pop is slipping away,” says Lazard Capital Markets analyst Barton Crockett. Ticket sales so far this quarter are down about 6.9% vs the same period last year, he says. He predicts the quarter will end down 1.9% following an expected surge of Christmas weekend turnout for Paramount’s Mission: Impossible Ghost Protocol as it goes into wide release, Warner Bros’ Sherlock Holmes: A Game Of Shadows, Sony’s The Girl With The Dragon Tatoo, Fox’s Alvin And The Chipmunks: Chipwrecked, and Paramount’s The Adventures Of Tintin.