Regal Entertainment Group (NYSE: RGC), a leading motion picture
exhibitor, today announced second quarter 2016 results.
Total revenues for the second quarter ended June 30, 2016 were
$785.9 million compared to total revenues of $862.8 million for the
second quarter ended June 30, 2015. Net income attributable to
controlling interest in the second quarter of 2016 was $33.5
million, which included a $0.9 million after-tax loss on
extinguishment of debt, compared to $53.4 million in the second
quarter of 2015, which included a $3.6 million after-tax loss on
extinguishment of debt. Diluted earnings per share(1) was $0.21 for
the second quarter of 2016 compared to $0.34 for the second quarter
of 2015. Adjusted diluted earnings per share(1) was $0.23 for the
second quarter of 2016 compared to $0.38 for the second quarter of
2015. Net cash provided by operating activities(4) was $58.0
million for the second quarter of 2016 and $187.7 million for the
second quarter of 2015. Adjusted EBITDA(4) was $137.7 million for
the second quarter of 2016 and $177.3 million for the second
quarter of 2015. Reconciliations of non-GAAP financial measures are
provided in the financial schedules accompanying this press
release.
Regal’s Board of Directors also today declared a cash dividend
of $0.22 per Class A and Class B common share, payable on September
15, 2016, to stockholders of record on September 2, 2016. The
Company intends to pay a regular quarterly dividend for the
foreseeable future at the discretion of the Board of Directors
depending on available cash, anticipated cash needs, overall
financial condition, loan agreement restrictions, future prospects
for earnings and cash flows as well as other relevant factors.
“In a challenging second quarter box office environment, we were
pleased that our ongoing seating and concession initiatives had a
positive impact on our operating metrics including new record highs
in both average ticket price and concession sales per patron,”
stated Amy Miles, CEO of Regal Entertainment Group. “With
year-to-date industry box office results slightly ahead of last
year’s record setting pace and an exciting film slate in the back
half of the year, we remain optimistic regarding the potential for
box office success in 2016.”
Forward-looking Statements:
This press release includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements included herein, other than statements of
historical fact, may constitute forward-looking statements.
Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct.
Important factors that could cause actual results to differ
materially from the Company's expectations are disclosed in the
risk factors contained in the Company's 2015 Annual Report on Form
10-K filed with the Securities and Exchange Commission on February
29, 2016. All forward-looking statements are expressly qualified in
their entirety by such factors.
Conference Call:
Regal Entertainment Group management will conduct a conference
call to discuss second quarter 2016 results on July 26, 2016 at
4:30 p.m. (Eastern Time). Interested parties can listen to the call
live on the Internet through the Investor Relations section of the
Company's website: www.REGmovies.com or by dialing 877-407-0778
(Domestic) and 201-689-8565 (International). Please dial in to the
call at least 5-10 minutes prior to the start of the call or go to
the website at least 15 minutes prior to the call to download and
install any necessary audio software. When prompted, ask for the
Regal Entertainment Group conference call. A replay of the call
will be available beginning approximately two hours following the
call. Those interested in listening to the replay of the conference
call should dial 877-660-6853 (Domestic) or 201-612-7415
(International) and enter conference call ID # 13625454.
About Regal Entertainment Group:
Regal Entertainment Group (NYSE: RGC) operates one of the
largest and most geographically diverse theatre circuits in the
United States, consisting of 7,307 screens in 564 theatres in 42
states along with Guam, Saipan, American Samoa and the District of
Columbia as of June 30, 2016. The Company operates theatres in 46
of the top 50 U.S. designated market areas. We believe that the
size, reach and quality of the Company’s theatre circuit not only
provide its patrons with a convenient and enjoyable movie-going
experience, but is also an exceptional platform to realize
economies of scale in theatre operations.
Additional information is available on the Company's website at
www.REGmovies.com.
Regal Entertainment Group Consolidated
Statements of Income Information For the Fiscal Quarters and
Two Quarters Ended 6/30/16 and 6/30/15
(in millions, except per share data)
(unaudited)
Quarter Ended Two Quarters Ended June 30, 2016 June
30, 2015 June 30, 2016 June 30, 2015 Revenues Admissions $
505.8 $ 568.6 $ 1,021.5 $ 1,022.7 Concessions 235.5 247.7 465.6
445.9 Other operating revenues 44.6 46.5 85.9 85.5 Total revenues
785.9 862.8 1,573.0 1,554.1 Operating expenses Film rental
and advertising costs 278.9 314.7 556.4 549.0 Cost of concessions
30.0 34.4 58.8 60.4 Rent expense 106.3 106.6 213.8 210.3 Other
operating expenses 214.8 214.7 426.3 416.9 General and
administrative expenses (including share-based compensation of $2.3
and $2.2 for the quarters ended June 30, 2016 and June 30, 2015,
respectively, and $4.1 and $3.9 for the two quarters ended June 30,
2016 and June 30, 2015, respectively) 20.9 19.3 42.1 37.9
Depreciation and amortization 56.9 54.0 112.6 108.2 Net loss on
disposal and impairment of operating assets and other 1.5 4.0 5.8
5.9 Income from operations 76.6 115.1 157.2 165.5 Interest
expense, net 32.3 33.2 64.8 63.2 Loss on extinguishment of debt 1.5
5.7 1.5 5.7 Earnings recognized from NCM (2.9 ) (3.4 ) (15.2 )
(12.2 ) Equity in income of non-consolidated entities and other,
net (10.4 ) (7.9 ) (20.4 ) (17.0 ) Income before income taxes 56.1
87.5 126.5 125.8 Provision for income taxes 22.5 34.2 52.2 49.5 Net
income 33.6 53.3 74.3 76.3 Noncontrolling interest, net of tax (0.1
) 0.1 (0.1 ) 0.2 Net income attributable to controlling interest $
33.5 $ 53.4 $ 74.2 $ 76.5 Diluted earnings per share(1) $
0.21 $ 0.34 $ 0.47 $ 0.49
Adjusted diluted earnings per share(1)
$ 0.23 $ 0.38 $ 0.50 $ 0.53
Weighted average number of diluted shares
outstanding(2)
156.7 156.4 156.8 156.5
Consolidated
Summary Balance Sheet Information
(dollars in millions)
(unaudited)
As of
June 30, 2016
As of
December 31, 2015
Cash and cash equivalents $ 288.1 $ 219.6 Total assets(3)
2,572.9 2,601.6 Total debt 2,344.9 2,342.4 Total stockholders’
deficit of Regal Entertainment Group (872.4 ) (877.8 )
Operating Data
(unaudited)
Quarter Ended Two Quarters Ended June 30, 2016 June
30, 2015 June 30, 2016 June 30, 2015 Theatres at
period end 564 569 564 569 Screens at period end 7,307 7,324 7,307
7,324 Average screens per theatre 13.0 12.9 13.0 12.9 Attendance
(in thousands) 51,246 59,078 104,543 109,683 Average ticket price $
9.87 $ 9.62 $ 9.77 $ 9.32 Average concessions per patron $ 4.60 $
4.19 $ 4.45 $ 4.07
Reconciliation of Net
Income Attributable to Controlling Interest to EBITDA to Net
Cash Provided by Operating Activities
(dollars in millions)
(unaudited)
Quarter Ended Two Quarters Ended June 30, 2016 June
30, 2015 June 30, 2016 June 30, 2015 Net income
attributable to controlling interest $ 33.5 $ 53.4 $ 74.2 $ 76.5
Interest expense, net 32.3 33.2 64.8 63.2 Provision for income
taxes 22.5 34.2 52.2 49.5 Depreciation and amortization 56.9
54.0 112.6 108.2 EBITDA(4) 145.2 174.8 303.8
297.4 Interest expense, net (32.3 ) (33.2 ) (64.8 ) (63.2 )
Provision for income taxes (22.5 ) (34.2 ) (52.2 ) (49.5 ) Deferred
income taxes (0.4 ) (9.6 ) (4.6 ) (12.8 ) Changes in operating
assets and liabilities (46.2 ) 84.3 14.9 95.8 Loss on
extinguishment of debt 1.5 5.7 1.5 5.7 Landlord contributions 21.6
3.2 43.8 14.1 Other items, net (8.9 ) (3.3 ) (3.6) 2.1 Net cash
provided by operating activities $ 58.0 $ 187.7 $ 238.8 $ 289.6
Reconciliation of EBITDA to Adjusted
EBITDA
(dollars in millions)
(unaudited)
Quarter Ended Two Quarters Ended June 30, 2016 June
30, 2015 June 30, 2016 June 30, 2015 EBITDA(4) $
145.2 $ 174.8 $ 303.8 $ 297.4 Net loss on disposal and impairment
of operating assets and other 1.5 4.0 5.8 5.9 Share-based
compensation expense 2.3 2.2 4.1 3.9 Loss on extinguishment of debt
1.5 5.7 1.5 5.7 Earnings recognized from NCM (2.9 ) (3.4 ) (15.2 )
(12.2 ) Cash distributions from NCM 0.4 ― 22.2 19.9 Cash
distributions from other non-consolidated entities ― 2.0 ― 2.0
Noncontrolling interest, net of tax and
equity in income of non-consolidated entities and other, net
(10.3 ) (8.0 ) (20.3 ) (17.2 ) Adjusted EBITDA(4) $ 137.7 $ 177.3 $
301.9 $ 305.4
Reconciliation of Net Cash
Provided by Operating Activities to Free Cash Flow
(dollars in millions)
(unaudited)
Quarter Ended Two Quarters Ended June 30, 2016 June
30, 2015 June 30, 2016 June 30, 2015 Net cash
provided by operating activities $ 58.0 $ 187.7 $ 238.8 $ 289.6
Capital expenditures (58.3 ) (41.4 ) (89.4 ) (71.1 ) Proceeds from
asset sales ― ― 1.3 ― Free cash flow(4) $
(0.3
)
$ 146.3 $ 150.7 $ 218.5
Reconciliation of
Net Income Attributable to Controlling Interest to Adjusted
Diluted Earnings Per Share
(dollars in millions, except per share
data)
(unaudited)
Quarter Ended Two Quarters Ended June 30, 2016 June
30, 2015 June 30, 2016 June 30, 2015 Net income
attributable to controlling interest $ 33.5 $ 53.4 $ 74.2 $ 76.5
Loss on extinguishment of debt, net of
related tax effects of $0.6 for the quarter and two quarters ended
June 30, 2016, and $2.1 for the quarter and two quarters ended June
30, 2015
0.9 3.6 0.9 3.6
Gain on sale of available for sale
securities, net of tax
―
―
(0.6
)
―
Net loss on disposal and impairment of
operating assets and other, net of related tax effects of $0.6 and
$1.5 for the quarters ended June 30, 2016 and June 30, 2015,
respectively, and $2.3 for the two quarters ended June 30, 2016 and
June 30, 2015
0.9 2.5 3.5 3.6
Net income attributable to controlling
interest, excluding loss on extinguishment of debt, net of related
tax effects, gain on sale of available for sale securities, net of
related tax effects, and net loss on disposal and impairment of
operating assets and other, net of related tax effects
$ 35.3 $ 59.5 $
78.0
$ 83.7
Weighted average number of diluted shares
outstanding(2)
156.7 156.4 156.8 156.5 Adjusted diluted earnings per share(1) $
0.23 $ 0.38 $ 0.50 $ 0.53 Diluted earnings per share(1) $ 0.21 $
0.34 $ 0.47 $ 0.49
_________________________
(1)
Diluted earnings per share is net income
attributable to controlling interest divided by weighted average
number of diluted shares outstanding. We have included adjusted
diluted earnings per share, which is diluted earnings per share
excluding loss on extinguishment of debt, net of related tax
effects and gain on sale of available for sale securities, net of
tax effects, and net loss on disposal and impairment of operating
assets and other, net of related tax effects, because we believe it
provides investors with a useful industry comparative and is a
financial measure used by management to assess the performance of
our Company.
(2) Represents reported weighted average number of diluted
shares outstanding for purposes of computing diluted earnings per
share and adjusted diluted earnings per share for the quarters and
two quarters ended June 30, 2016 and June 30, 2015. (3) In
April 2015, the FASB issued ASU 2015-03, Interest—Imputation of
Interest, which intends to simplify the presentation of debt
issuance costs. Prior to the issuance of ASU 2015-03, debt issuance
costs were reported on the balance sheet as assets and amortized as
interest expense. ASU 2015-03 requires that they be presented on
the balance sheet as a direct deduction from the carrying amount of
the related debt liability. The costs will continue to be amortized
to interest expense using the effective interest method. ASU
2015-03 is to be applied retrospectively and is effective for
annual periods and interim periods within those annual periods
beginning after December 15, 2015. The Company adopted this
guidance during the quarter ended March 31, 2016. Debt issuance
costs associated with long-term debt, net of accumulated
amortization, were $28.4 million and $30.7 million as of June 30,
2016 and December 31, 2015, respectively. The balance sheet as of
December 31, 2015 has been recast to reflect the reclassification
of debt issuances costs, net of accumulated amortization.
(4) Adjusted EBITDA (net income attributable to controlling
interest adjusted for interest expense, net, provision for income
taxes, depreciation and amortization, net loss on disposal and
impairment of operating assets and other, share-based compensation
expense, loss on extinguishment of debt, earnings recognized from
NCM, cash distributions from NCM, cash distributions from other
non-consolidated entities, noncontrolling interest, net of tax and
equity in income of non-consolidated entities and other, net) was
approximately $137.7 million for the quarter ended June 30, 2016.
We believe EBITDA, Adjusted EBITDA and Free Cash Flow provide
useful measures of cash flows from operations for our investors
because EBITDA, Adjusted EBITDA and Free Cash Flow are industry
comparative measures of cash flows generated by our operations and
because they are financial measures used by management to assess
the liquidity and performance of our Company. EBITDA, Adjusted
EBITDA and Free Cash Flow are not measurements of liquidity or
performance under U.S. generally accepted accounting principles and
should not be considered in isolation or construed as a substitute
for other operations data or cash flow data prepared in accordance
with U.S. generally accepted accounting principles for purposes of
analyzing our liquidity or performance. In addition, not all funds
depicted by EBITDA, Adjusted EBITDA and Free Cash Flow are
available for management’s discretionary use. For example, a
portion of such funds are subject to contractual restrictions and
functional requirements to pay debt service, fund necessary capital
expenditures and meet other commitments from time to time as
described in more detail in the Company’s 2015 Annual Report on
Form 10-K filed with the Securities and Exchange Commission on
February 29, 2016. EBITDA, Adjusted EBITDA and Free Cash Flow, as
calculated, may not be comparable to similarly titled measures
reported by other companies.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160726006448/en/
Financial Contact:Kevin MeadRegal Entertainment GroupVice
President Investor Relations and
PlanningKevin.Mead@regalcinemas.com865-925-9685orMedia
Contact:Ken ThewesRegal Entertainment GroupSenior Vice
President and Chief Marketing Officer865-925-9539
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