-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, dkDAsLS2ZIQDFCTpIzS06aSGrA8UNtZnh2i5GNaQ8d4zM8zzVfSMgJGC0xSiOLKo cdh6+IhQySuCYCyndl6YpA== 0000950144-94-001476.txt : 19940817 0000950144-94-001476.hdr.sgml : 19940817 ACCESSION NUMBER: 0000950144-94-001476 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARMIKE CINEMAS INC CENTRAL INDEX KEY: 0000799088 STANDARD INDUSTRIAL CLASSIFICATION: 7830 IRS NUMBER: 581469127 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14993 FILM NUMBER: 94543580 BUSINESS ADDRESS: STREET 1: 1301 FIRST AVE CITY: COLUMBUS STATE: GA ZIP: 31901 BUSINESS PHONE: 4045763400 MAIL ADDRESS: STREET 1: P O BOX 391 CITY: COLUMBUS STATE: GA ZIP: 31994 10-Q 1 CARMIKE CINEMA 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended JUNE 30, 1994. OR ____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------- ------- Commission file number 0-14993 ------- CARMIKE CINEMAS, INC. (Exact name of registrant as specified in its charter) DELAWARE 58-1469127 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1301 FIRST AVENUE, COLUMBUS, GEORGIA 31901-2109 (Address of principal Executive Offices) (Zip Code)
(706) 576-3400 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class A Common Stock, $.03 par value -- 6,598,101 shares outstanding as of August 11, 1994 Class B Common Stock, $.03 par value -- 1,420,700 shares outstanding as of August 11, 1994 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements CARMIKE CINEMAS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31, 1994 1993 ----------- -------------- (Unaudited) (000's omitted) ASSETS CURRENT ASSETS Cash and cash equivalents $ 8,509 $ 10,649 Short-term investments 6,719 22,004 Accounts and notes receivable 1,570 4,406 Inventories 1,649 1,563 Prepaid film rental 1,128 -0- Prepaid expenses 3,840 3,626 --------- --------- TOTAL CURRENT ASSETS 23,415 42,248 OTHER ASSETS 5,503 4,673 PROPERTY AND EQUIPMENT - Notes C and D 365,459 317,077 Less accumulated depreciation and amortization (77,756) (67,527) --------- --------- 287,703 249,550 EXCESS OF COST OVER FAIR VALUE OF TANGIBLE ASSETS ACQUIRED -- Notes C and D 43,209 30,553 --------- --------- $ 359,830 $ 327,024 ========= =========
3
June 30, December 31, 1994 1993 -------- ------------ (Unaudited) (000's omitted) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 21,011 $ 20,757 Employee compensation 1,020 1,396 Accrued expenses 7,225 6,869 Current maturities of long-term debt and capital lease obligations 9,214 8,207 -------- -------- TOTAL CURRENT LIABILITIES 38,470 37,229 LONG-TERM DEBT - less current maturities - Note B 69,827 35,376 SENIOR NOTES 118,182 125,000 CAPITAL LEASE OBLIGATIONS - less current maturities 17,124 17,441 CONVERTIBLE SUBORDINATED DEBT - Note C 2,933 2,819 DEFERRED INCOME TAXES 15,804 15,303 SHAREHOLDERS' EQUITY - Notes B and C Class A Common Stock, $.03 par value, authorized 15,000,000 shares, issued 6,768,101 and 6,724,901 shares, respectively 203 201 Class B Common Stock, $.03 par value, authorized 5,000,000 shares, issued and outstanding 1,420,700 shares 43 43 Paid-in capital 39,985 39,621 Retained earnings 58,173 54,905 Treasury stock, 170,000 shares, of Class A Common Stock at cost (914) (914) -------- -------- 97,490 93,856 -------- -------- $359,830 $327,024 ======== ========
See accompanying notes to condensed consolidated financial statements. 3 4 CARMIKE CINEMAS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three Months Ended Six Months Ended June 30, June 30, 1994 1993 1994 1993 ------------ ---------- ---------- ----------- (000's omitted except per share data) REVENUES Admissions $ 47,987 $ 35,023 $ 95,639 $ 64,184 Concessions and other 20,098 15,959 39,878 29,770 ---------- --------- ---------- ---------- 68,085 50,982 135,517 93,954 COSTS AND EXPENSES Film rentals 22,307 17,339 44,884 30,954 Concession costs 2,387 1,473 5,199 3,327 Other theatre operating costs 29,416 20,491 58,265 38,914 General and administrative 1,241 1,270 2,322 2,337 Depreciation and amortization 5,591 3,787 10,934 7,345 --------- --------- --------- ---------- 60,942 44,360 121,604 82,877 --------- --------- --------- ---------- OPERATING INCOME 7,143 6,622 13,913 11,077 Interest expense 4,454 3,453 8,466 6,460 --------- --------- --------- ---------- INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 2,689 3,169 5,447 4,617 Income taxes 1,076 1,268 2,179 1,847 --------- --------- --------- ---------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 1,613 1,901 3,268 2,770 Cumulative effect of change in accounting for income taxes -0- -0- -0- 390 -------- -------- -------- ---------- NET INCOME $ 1,613 $ 1,901 $ 3,268 $ 3,160 ======== ======== ======== ========== Earnings per share: Income before cumulative effect of change in accounting for income taxes $ .20 $ .24 $ .40 $ .36 Cumulative effect of change in accounting -0- -0- -0- .05 -------- -------- -------- ---------- NET INCOME PER SHARE $ .20 $ .24 $ .40 $ .41 ======== ======== ======== ==========
See accompanying notes to condensed consolidated financial statements. 4 5 CARMIKE CINEMAS, INC. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) (000' s omitted)
Class A Class B Common Stock Common Stock Additional ---------------- -------------- Paid in Retained Shares Amount Shares Amount Capital Earnings ------ ------ ------ ------- ------------ --------- BALANCES AT DECEMBER 31, 1993 6,725 $ 201 1,421 $ 43 $ 39,621 $ 54,905 Issuance of Class A Common Stock through exercise of stock options 43 2 -0- -0- 364 -0- Net income -0- -0- -0- -0- -0- 3,268 ----- ----- ----- ----- ------- -------- BALANCES AT JUNE 30, 1994 6,768 $ 203 1,421 $ 43 $39,985 $ 58,173 ===== ===== ===== ===== ======= ========
Class A Common Stock in Treasury ----------------- Shares Amount Total ------- ------- ------ BALANCES AT DECEMBER 31, 1993 170 $ (914) $ 93,856 Issuance of Class A Common Stock through exercise of stock options -0- -0- 366 Net income -0- -0- 3,268 ----- ----- ------- BALANCES AT JUNE 30, 1994 170 $(914) $97,490 ===== ===== =======
See accompanying notes to condensed consolidated financial statements. 5 6 CARMIKE CINEMAS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, 1994 1993 ------------ ------------ (000's omitted) OPERATING ACTIVITIES Net income $ 3,268 $ 3,160 Items which did not use cash: Depreciation and amortization 10,934 7,345 Deferred income taxes 501 (250) Other -0- (64) Gain on sale of productive property and equipment (50) (932) Changes in operating assets and liabilities: Accounts receivable and inventories 2,750 (2,692) Prepaid film rental and expenses (1,342) (1,679) Accounts payable and employee compensation (122) (3,708) Accrued expenses 356 (380) -------- -------- NET CASH PROVIDED BY OPERATIONS 16,295 800 INVESTING ACTIVITIES Purchases of property and equipment (11,365) (7,579) Purchases of assets from other theatre operators (50,300) -0- Acquisition of remaining interest in Westwynn Theatres, Inc., net of cash acquired -0- (8,542) Disposals of property and equipment 46 1,453 Decrease (increase) in: Short-term investments 15,285 (3,052) Other (904) (499) -------- -------- NET CASH USED IN INVESTING ACTIVITIES (47,238) (18,219) FINANCING ACTIVITIES Debt and other liabilities: Borrowings under revolving credit line 85,000 -0- Repayments of revolving credit line (20,000) -0- Additional borrowings -0- 25,000 Payments (36,563) (2,195) Issuance of Class A Common Stock 366 -0- -------- -------- NET CASH PROVIDED BY FINANCING ACTIVITIES 30,435 22,805 -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,140) 5,386 Cash and cash equivalents at beginning of period 10,649 16,842 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 8,509 $ 22,228 ======== ========
See accompanying notes to condensed consolidated financial statements. 6 7 CARMIKE CINEMAS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 1994 NOTE A -- BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended June 30, 1994 are not necessarily indicative of the results that may be expected for the year ending December 31, 1994. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1993. Certain reclassifications have been made to the Condensed Consolidated Statements of Income for the three month and six month periods ended June 30, 1993 to conform to the 1994 presentation. NOTE B -- REVOLVING CREDIT FACILITY On May 4, 1994, the Company entered into a Credit Agreement (the "Agreement") with four banks to provide a revolving line of credit of up to $100,000,000 for working capital, acquisitions and other general corporate purposes. The Agreement has a three year revolving credit period, extended upon the mutual consent of the Company and the banks for one year periods and will convert to a four year term loan at the end of the revolving credit period. The Company has the option to borrow at rates based on either the base rate of Wachovia Bank of Georgia, N. A. or LIBOR + .4375% and is required to pay annual fees of .1250% on the full amount of the facility and annual fees of .075% on the unused part of the commitment. The interest rate, facility fees and commitment fees are subject to adjustment based upon the Company's ratio of total debt to defined cash flows. The Company has drawn down $65,000,000 under this facility to repay debt associated with the Westwynn transaction (See Note C -- Acquisition of Westwynn Theatres, Inc.) and to fund the Cinema World, Inc. and General Cinema Corp. acquisitions in May 1994 (See Note D -- Acquisitions). The Agreement contains certain restrictive provisions which, among other things, limit additional indebtedness of the Company, limit dividend and other restricted payments, require that certain debt to capitalization ratios be maintained and require minimum levels of cash flows. NOTE C -- ACQUISITION OF WESTWYNN THEATRES, INC. Effective August 29, 1991, the Company along with certain former shareholders of Excellence Theatres Corporation ("Excellence") and certain other investors formed Westwynn Theatres, Inc. ("Westwynn"). Westwynn then acquired substantially all the assets, interests and rights and assumed certain defined liabilities of Excellence. The Company recorded its investment in Westwynn at the book value of the assets and cash contributed to Westwynn. The Company accounted for its investment in Westwynn under the cost method. During the six months ended June 30, 1993, the Company recognized income of $207,000 relating to its ownership of Westwynn's 9% Junior Preferred Stock. 7 8 CARMIKE CINEMAS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 1994 NOTE C -- ACQUISITION OF WESTWYNN THEATRES, INC. (CONTINUED) On June 22, 1993, the Company agreed in principle to a transaction (effective June 11, 1993)(the "Transaction") to purchase the remaining securities of Westwynn that it did not previously own for a purchase price of approximately $19,776,000 (net of liabilities assumed). The Transaction was closed on July 23, 1993. In connection with the Transaction, the Company issued 330,000 shares of its Class A Common Stock (out of shares previously held as Treasury Stock), a $4,000,000 face value zero coupon convertible subordinated note maturing June 1, 1998 (fair market value of approximately $2,722,000 and $2,819,000 at June 11, 1993 and December 31, 1993, respectively) and paid $11,780,000 in cash for the retirement of Westwynn subordinated notes and the purchase of certain Westwynn equity securities. The excess of the purchase price over the net assets acquired (approximately $16,000,000) has been recorded as an intangible asset. This acquisition has been accounted for using the purchase method and, accordingly, the purchase price has been allocated to the tangible and intangible assets acquired based on their estimated fair value at the date of acquisition. The results of operations of Westwynn are included in the accompanying Consolidated Financial Statements from the effective date. Westwynn operated 92 theatres (355 screens) at June 11, 1993. The pro-forma unaudited results of operations, assuming consummation of the Transaction as of January 1, 1993, are as follows:
Six Months Ended June 30, 199 ---------------- Total revenues $115,574 Net income 2,408 Earnings per share before cumulative effect of change in accounting .30
The pro-forma results include adjustments to reflect (i) loss of interest income from use of investments or the incurrence of interest expense to fund the Transaction;(ii) depreciation and amortization of assets acquired; (iii) elimination of certain general and administrative costs; and (iv) the income tax effect of such pro-forma adjustments. The Company managed the operations of Westwynn through June 11, 1993 pursuant to a management agreement (the "Management Agreement"). During the term of the Management Agreement, the Company had the sole responsibility and sole and exclusive authority to manage and operate Westwynn, subject to the general supervision of the board of directors of Westwynn and certain contractual limitations relating to the ability to enter into debt and non-film rental agreements, authorization of capital expenditures and construction of new theatres or to discontinue operations of existing theatres. The Company earned management fees from Westwynn of $406,154 and $789,981, respectively, for the three months and six months ended June 30, 1993. 8 9 CARMIKE CINEMAS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 1994 NOTE D - ACQUISITIONS Effective November 19, 1993, the Company purchased certain assets consisting of 19 multiplex theatres (80 screens) and assumed certain contractual liabilities of Manos Enterprises, Inc. for a purchase price of approximately $11,200,000. This acquisition has been accounted for using the purchase method and accordingly the purchase price has been allocated to the tangible and intangible assets acquired based on their estimated fair value at the date of acquisition. The excess of purchase price over the net assets acquired (approximately $3,200,000) has been recorded as an intangible asset. The accompanying Consolidated Financial Statements include the operations of these theatres from the purchase date. Pro-forma results of this acquisition have not been presented as the effect on prior periods is not significant. Effective January 21, 1994, the Company purchased certain assets consisting of 6 multiplex theatres (28 screens) and assumed certain contractual liabilities of General Cinema Corp. for a cash purchase price of approximately $6,400,000. This acquisition has been accounted for using the purchase method and accordingly the purchase price has preliminarily been allocated to the tangible and intangible assets acquired based on their estimated fair value at the date of acquisition. The excess of purchase price over the net assets acquired (approximately $2,500,000) has been recorded as an intangible asset. The accompanying Consolidated Financial Statements include the operations of these theatres from the purchase date. Pro-forma results of this acquisition have not been presented as the effect on prior periods is not significant. Effective May 20, 1994, the Company purchased certain assets consisting of 4 multiplex theatres (20 screens) and assumed certain contractual liabilities of General Cinema Corp. for a cash purchase price of approximately $5,800,000.00. This acquisition has been accounted for using the purchase method and accordingly the purchase price has preliminarily been allocated to the tangible and intangible assets acquired based on their estimated fair value at the date of acquisition. The accompanying Consolidated Financial Statements include the operations of these theatres from the purchase date. Pro-forma results of this acquisition have not been presented as the effect on prior periods is not significant. Also effective May 20, 1994, the Company purchased certain assets consisting of 38 multiplex theatres (176 screens) and assumed certain contractual liabilities of Cinema World, Inc. for a cash purchase price of approximately $38,100,000. This acquisition has been accounted for using the purchase method and accordingly the purchase price has preliminarily been allocated to the tangible and intangible assets acquired based on their estimated fair value at the date of acquisition. The excess of purchase price over the net assets acquired (approximately $12,589,000) has been recorded as June 30, 1994 an intangible asset. The accompanying Consolidated Financial Statements include the operations of these theatres from the purchase date. The pro forma unaudited results of operations below do not purport to represent what the Company's actual results of operations would have been had the Cinema World, Inc. acquisition occurred on January 1, 1993 and should not serve as a forecast of the Company's operating results for any future periods. 9 10 CARMIKE CINEMAS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) June 30, 1994 Pro-forma unaudited results of operations assuming consummation of the Cinema World, Inc. acquisition as of January 1, 1993 are as follows:
Year Ended Six Months Ended December 31, 1993 June 30, 1994 ----------------- ----------------- Total Revenues $ 278,836 $ 148,920 Net income 12,663 3,771 Earnings per share before commutative effect of change in accounting 1.60 .46
10 11 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. COMPARISON OF THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1994 AND JUNE 30, 1993 RESULTS OF OPERATIONS Total revenues for the quarter ended June 30, 1994 increased 33.5% to $68,085,000 from $50,982,000 for the quarter ended June 30, 1993. This increase consists of a $12,964,000 increase in admissions and a $4,139,000 increase in concessions and other. The increases are attributed to additional revenues generated by the increased number of screens in operation and increases in admission and concession prices; however on a same screen basis, attendance for the quarter decreased 8.7% due to a shortage of popular movies in the quarter, in particular, April and May. Total revenues for the six months ended June 30, 1994 increased 44.2% to $135,517,000 from $93,954,000 for the six months ended June 30, 1993. This increase consists of a $31,455,000 increase in admissions and a $10,108,000 increase in concessions and other. These increases are due primarily to the additional revenues generated by the increase in the number of screens in operation as a result of the acquisitions (See Notes C and D of Notes to Condensed Consolidated Financial Statements) and increases in admission and concession prices. For the six months ended June 30, 1994, attendance on a same screen comparison decreased 4.9% below that for the six months ended June 30, 1993 for the reason enumerated above. Film rentals increased 28.7% from $17,339,000 to $22,307,000 for the quarter ended June 30, 1994 primarily as a result of the increased admissions for the quarter ended June 30, 1994 compared to the quarter ended June 30, 1993. As a percentage of admissions revenues, film rentals decreased from 49.5% for the quarter ended June 30, 1993 to 46.5% for the quarter ended June 30, 1994 due to the lessor quality film product in the quarter ended June 30, 1994. Film rentals for the six months ended June 30, 1994 increased 45.0% to $44,884,000 from $30,954,000. The dollar increase is due to additional film rentals being paid on higher admissions due to increased number of theatres in operation. As a percentage of admission revenues, film rentals decreased from 48.2% for the six months ended June 30, 1993 to 46.9% for the six months ended June 30, 1994 due to the lesser quality film product in the quarter ended June 30, 1994. Concession costs increased from $1,473,000 for the quarter ended June 30, 1993 to $2,387,000 in the quarter ended June 30, 1994 primarily as a result of the increased number of screens in operation. Concession costs as a percentage of concession revenues (concession and other revenues excluding other revenues) increased from 10.2% of concession revenues for the quarter ended June 30, 1993 to 12.7% of concession revenues for the quarter ended June 30, 1994. This percentage increase reflects an increase in goods purchased at the end of the quarter to properly service the increase in business at the end of the quarter and first part of the third quarter. Concession costs for the six months ended June 30, 1994 increased to $5,199,000 from $3,327,000 for the six months ended June 30, 1993. The dollar increase is due to additional concession costs associated with theatres acquired during 1993 and 1994. As a percentage of concession revenues (concession and other revenues excluding other revenues), concession costs increased from 12.8% to 14.0% for the reason mentioned in the above paragraph. 11 12 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. COMPARISON OF THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1994 AND JUNE 30, 1993 Other theatre costs increased 43.6% for the quarter ended June 30, 1994 to $29,416,000 from $20,491,000 for the quarter ended June 30, 1993. As a percentage of revenues, cost of operations increased from 40.2% of revenues to 43.2% of revenues. The dollar increase is due primarily to additional operating costs associated with the additional screens in operation whereas the percentage increase reflects the decrease in attendance on a same screen basis while fixed costs such as lease rentals have remained constant. Excluding rent expense, cost of operations increased from 29.5% of revenues to 30.1% of revenues. Other theatre costs for the six months ended June 30, 1994 increased 49.7% to $58,265,000 from $38,914,000. The dollar increase is due to additional operating costs associated with the theatres acquired during 1994 and 1993. As a percentage of revenues, cost of operations increased from 41.4% to 43.0%. The dollar increase is due primarily to additional operating costs associated with the additional screens in operation whereas the percentage increase reflects the decrease in attendance on a same screen basis while fixed costs such as lease rentals have remained constant. Excluding rent expense, cost of operations remained the same at 30.3%. General and administrative costs for the quarter ended June 30, 1994 decreased 2.3% from $1,270,000 to $1,241,000 and decreased as a percentage of total revenues from 2.5% to 1.8%. General and administrative costs for the six months ended June 30, 1994 decreased .6% from $2,337,000 to $2,322,000. As a percentage of revenues, general and administrative costs decreased from 2.5% to 1.7%. Depreciation and amortization increased 47.6% from $3,787,000 to $5,591,000 for the quarter ended June 30, 1994 and as a percentage of total revenues increased from 7.4% to 8.2% due to the acquisitions and expansions in 1994 and 1993. Depreciation and amortization for the six months ended June 30, 1994 increased $3,589,000 or 48.9% from $7,345,000 to $10,934,000 due to the Company's acquisitions in 1994 and 1993. As a percentage of total revenues, depreciation and amortization increased from 7.8% for the six months ended June 30, 1993 to 8.1% for the six months ended June 30, 1994. Interest expense for the quarter ended June 30, 1994 increased 29.0% to $4,454,000 from $3,453,000 due to the issuance of additional debt to finance the Cinema World, Inc. and General Cinema Corp. acquisitions (See Note D of Notes to Condensed Consolidated Financial Statements). Interest expense for the six months ended June 30, 1994 increased 31.1% to $8,466,000 from $6,460,000 for the six months ended June 30, 1993 due to additional debt incurred to finance the Cinema World, Inc. and General Cinema Corp. acquisitions. 12 13 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. LIQUIDITY AND CAPITAL RESOURCES The Company's revenues are collected in cash, principally through box office admissions and theatre concessions. Because its revenues are received in cash prior to the payment of related expenses, the Company has an operating "float" which partially finances its operations. The Company's capital requirements arise principally in connection with new theatre openings and acquisitions of existing theatres and theatre circuits. New theatre openings typically are financed with internally generated cash flow, borrowings under bank credit lines or under long-term leasing arrangements with developers. The Company believes that its presently anticipated capital needs for theatre construction and possible acquisitions will be satisfied by the short-term investments on hand, the revolving credit line (See Note B of Notes to Condensed Consolidated Financial Statements), additional bank financings, private placements of debt, internally generated cash flow and, where appropriate, future lease financings. At August 8, 1994, the Company had approximately $23,000,000 in cash and short term investments on hand and $45,000,000 (additional $10,000,000 on this facility was repaid subsequent to June 30, 1994) was available under the Company's revolving credit facility. 13 14 PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security-Holders. The annual meeting of shareholders of the Company was held on May 9, 1994. At the annual meeting, the shareholders voted on the election of six directors. The results of the voting were as follows:
FOR VOTE WITHHELD --- ------------- C. L. Patrick 18,138,100 92,653 Michael W. Patrick 18,222,198 8,555 Carl L. Patrick, Jr. 18,222,198 8,555 John W. Jordan, II 18,143,600 87,153 Carl E. Sanders 18,227,698 3,055 David W. Zalaznick 18,143,600 87,153
ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits 11 - Statement re: computation of earnings per share (b) Reports on Form 8-K A report was filed on Form 8-K on June 6, 1994 to report the acquisition of assets from Cinema World, Inc. and was amended by a report on Form 8-K/A filed on July 12, 1994. 14 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CARMIKE CINEMAS, INC. (Registrant) By: /s/ Michael W. Patrick ------------------------------- Michael W. Patrick - President (Chief Executive Officer) Date: August 12, 1994 By: /s/ John O. Barwick, III ----------------------- --------------------------------- John O. Barwick, III - Vice President Finance (Chief Accounting and Financial Officer) 15 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 EXHIBIT 11 STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE ($000's omitted, except for per share data)
Three Months Ended Six Months Ended June 30, June 30, 1994 1993 1994 1993 --------- ----------- ---------- --------- (000's omitted except for per share data) Average shares outstanding 7,976 7,612 7,975 7,582 Net effect of dilutive stock options based on the treasury stock method using average market price 185 188 172 176 ------ ------ ------ ------ TOTALS 8,161 7,800 8,147 7,758 ====== ====== ====== ====== Income before cumulative effect of accounting change $1,613 $1,901 $3,268 $2,770 Cumulative effect of change in accounting -0- -0- -0- 390 ------ ------ ------ ------ NET INCOME $1,613 $1,901 $3,268 $3,160 ====== ====== ====== ====== Earnings per share: Income before cumulative effect of change in accounting $ .20 $ .24 $ .40 $ .36 Cumulative effect of change in accounting -0- -0- -0- .05 ------ ------ ------ ------ NET INCOME PER SHARE $ .20 $ .24 $ .40 $ .41 ====== ====== ====== ======
Note: Fully diluted calculation is not presented because dilution is less than 3%. 16 -----END PRIVACY-ENHANCED MESSAGE-----