-----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, BU4XSpZ6FNHt4SVrfM6JdeWaY7+GDV7AgDz/GssS24HwWD6gkwnmzbB4hPRohGEt hvgP8TRUw/IQ8cIOplsLkQ== 0000950144-94-001853.txt : 19941031 0000950144-94-001853.hdr.sgml : 19941031 ACCESSION NUMBER: 0000950144-94-001853 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941025 SROS: NYSE 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: 94554806 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 CINEMAS QUARTERLY REPORT 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 SEPTEMBER 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 (I.R.S. Employer of incorporation or organization) 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 -- 7,023,101 shares outstanding as of October 24, 1994 Class B Common Stock, $.03 par value -- 1,420,700 shares outstanding as of October 24, 1994 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements CARMIKE CINEMAS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, DECEMBER 31, 1994 1993 ------------- ----------- (Unaudited) (000's omitted) ASSETS CURRENT ASSETS Cash and cash equivalents $ 2,971 $ 10,649 Short-term investments 6,796 22,004 Accounts and notes receivable 2,344 4,406 Inventories 1,621 1,563 Prepaid film rental 747 -0- Prepaid expenses 3,832 3,626 --------- --------- TOTAL CURRENT ASSETS 18,311 42,248 OTHER ASSETS 5,520 4,673 PROPERTY AND EQUIPMENT - Notes C and D 373,381 317,077 Less accumulated depreciation and amortization (83,693) (67,527) --------- --------- 289,688 249,550 EXCESS OF COST OVER FAIR VALUE OF TANGIBLE ASSETS ACQUIRED - Notes C and D 43,484 30,553 --------- --------- $ 357,003 $ 327,024 ========= =========
2 3
SEPTEMBER 30, DECEMBER 31, 1994 1993 --------------- -------------- (Unaudited) (000's omitted) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 14,827 $ 20,757 Employee compensation 1,241 1,396 Accrued expenses 13,360 6,869 Current maturities of long-term debt and capital lease obligations 8,935 8,207 --------- --------- TOTAL CURRENT LIABILITIES 38,363 37,229 LONG-TERM DEBT - less current maturities - Note B 53,765 35,376 SENIOR NOTES 118,182 125,000 CAPITAL LEASE OBLIGATIONS - less current maturities 16,964 17,441 SUBORDINATED DEBT - Note C 2,992 2,819 DEFERRED INCOME TAXES 16,054 15,303 SHAREHOLDERS' EQUITY - Notes B and C Class A Common Stock, $.03 par value, authorized 15,000,000 shares, issued 7,022,101 and 6,724,901 shares, respectively 211 201 Class B Common Stock, $.03 par value, authorized 5,000,000 shares, issued and outstanding 1,420,700 shares 43 43 Paid-in capital 42,886 39,621 Retained earnings 68,457 54,905 Treasury stock, 170,000 shares, of Class A Common Stock, at cost (914) (914) --------- --------- 110,683 93,856 $ 357,003 $ 327,024 ========= =========
See accompanying notes to condensed consolidated financial statements. 3 4 CARMIKE CINEMAS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, 1994 1993 1994 1993 --------- --------- --------- --------- (000's omitted except per share data) REVENUES Admissions $ 77,337 $ 57,500 $ 172,976 $ 121,684 Concessions and other 31,662 24,946 71,540 54,716 --------- --------- --------- --------- 108,999 82,446 244,516 176,400 COSTS AND EXPENSES Film rentals 39,567 28,594 84,451 59,548 Concession costs 4,358 3,772 9,557 7,099 Other theatre operating costs 36,027 28,243 94,292 67,157 General and administrative 1,358 1,213 3,680 3,550 Depreciation and amortization 6,212 4,529 17,146 11,874 --------- --------- --------- --------- 87,522 66,351 209,126 149,228 --------- --------- --------- --------- OPERATING INCOME 21,477 16,095 35,390 27,172 Interest expense 4,338 3,952 12,804 10,412 --------- --------- --------- --------- INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 17,139 12,143 22,586 16,760 Income taxes 6,855 4,857 9,034 6,704 --------- --------- --------- --------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING FOR INCOME TAXES 10,284 7,286 13,552 10,056 Cumulative effect of change in accounting for income taxes - Note E -0- -0- -0- 390 --------- --------- --------- --------- NET INCOME $ 10,284 $ 7,286 13,552 $ 10,446 ========= ========= ========= ========= Earnings per share: Income before cumulative effect of change in accounting for income taxes $ 1.25 $ .90 $ 1.65 $ 1.28 Cumulative effect of change in accounting -0- -0- -0- .05 --------- --------- --------- --------- NET INCOME PER SHARE $ 1.25 $ .90 $ 1.65 $ 1.33 ========= ========= ========= =========
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 Class A Common Common Stock Common Stock Additional Stock in Treasury ------------- -------------- Paid in Retained ----------------- Shares Amount Shares Amount Capital Earnings Shares Amount Total ------ ------ ------ ------- -------- --------- ----- ------- --------- BALANCES AT DECEMBER 31, 1993 6,725 $ 201 1,421 $ 43 $ 39,621 $ 54,905 170 $ (914) $ 93,856 Issuance of Class A Common Stock through exercise of warrant 250 8 -0- -0- 2,867 -0- -0- -0- 2,875 Issuance of Class A Common Stock through exercise of stock options 47 2 -0- -0- 398 -0- -0- -0- 400 Net income -0- -0- -0- -0- -0- 13,552 -0- -0- 13,552 ----- ----- ----- ---- -------- -------- --- ------ -------- BALANCES AT SEPTEMBER 30, 1994 7,022 $ 211 1,421 $ 43 $ 42,886 $ 68,457 170 $ (914) $110,683 ===== ===== ===== ==== ======== ======== === ====== ========
See accompanying notes to condensed consolidated financial statements. 5 6 CARMIKE CINEMAS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1994 1993 ---------- --------- (000's omitted) OPERATING ACTIVITIES Net income $ 13,552 $ 10,446 Items which did not use cash: Depreciation and amortization 17,146 11,874 Deferred income taxes 751 180 Other -0- (414) Gain on sale of productive property and equipment (50) (932) Changes in operating assets and liabilities: Accounts and notes receivable and inventories 2,004 1,446 Prepaid film rental and expenses (953) (3,063) Accounts payable and employee compensation (6,085) (5,217) Accrued expenses 6,491 10 ---------- --------- NET CASH PROVIDED BY OPERATIONS 32,856 14,330 INVESTING ACTIVITIES Purchases of property and equipment (19,120) (17,123) Purchases of assets from other theatre operators (50,958) -0- Acquisition of remaining interest in Westwynn Theatres, Inc., net of cash acquired -0- (8,542) Disposals of property and equipment 24 1,453 Decrease (increase) in: Short-term investments 15,208 6,793 Other (958) (1,297) ---------- --------- NET CASH USED IN INVESTING ACTIVITIES (55,804) (18,716) FINANCING ACTIVITIES Debt and other liabilities: Borrowings under revolving credit line 103,000 -0- Repayments of revolving credit line (53,500) -0- Additional borrowings -0- 25,000 Payments (37,505) (3,846) Issuance of Class A Common Stock 3,275 329 ---------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES 15,270 21,483 ---------- --------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (7,678) 17,097 Cash and cash equivalents at beginning of period 10,649 16,842 ---------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,971 $ 33,939 ========== =========
See accompanying notes to condensed consolidated financial statements. 6 7 CARMIKE CINEMAS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 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 nine-month period ended September 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 nine month periods ended September 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 .125% 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. At present the Company has outstanding $49,500,000 under this facility. These funds were used primarily 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. Under the terms of this Agreement, no payments are due until after May 3, 1997, nor does the Company anticipate reducing the amount outstanding at September 30, 1994. Accordingly, no amounts have been classified as current maturities in the accompanying Condensed Consolidated Financial Statements. 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 nine months ended September 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) SEPTEMBER 30, 1994 NOTE C -- ACQUISITION 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, $2,819,000 and $2,992,000 at June 11, 1993, December 31, 1993, and September 30, 1994 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 Condensed Consolidated Financial Statements from the effective date of June 11, 1993. Westwynn operated 92 theatres (355 screens) at June 11, 1993. 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 $-0- and $789,981, respectively, for the three months and nine months ended September 30, 1993. 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 Condensed 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. 8 9 CARMIKE CINEMAS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 1994 Effective January 21, 1994, the Company purchased certain assets consisting of 6 multiplex theatres (28 screens) and assumed certain contractual liabilities of certain subsidiaries 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 Condensed 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. of Louisiana for a cash purchase price of approximately $5,800,000. 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 accompanying Condensed 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 an intangible asset. The accompanying Condensed 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. Pro-forma unaudited results of operations assuming consummation of the Cinema World, Inc. acquisition as of January 1, 1993 are as follows:
Nine Months Ended September 30, ---------------------- 1994 1993 --------- --------- Total revenues $ 257,919 $ 203,934 Net income 14,055 10,878 Earnings per share before cumulative effect of change in accounting 1.72 1.38
9 10 CARMIKE CINEMAS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SEPTEMBER 30, 1994 The pro-forma results include adjustments to reflect (i) the incurrence of interest expense to fund the Cinema World, Inc. acquisition; (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. NOTE E - INCOME TAXES Effective January 1, 1993, the Company adopted FASB Statement No. 109, "Accounting for Income Taxes" ("Statement 109"). Under Statement 109, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rate and laws that will be in effect when the differences are expected to reverse. Prior to the adoption of Statement 109, income tax expense was determined using the deferred method. Deferred tax expense was based on items of income and expense that were reported in different years in the financial statements and tax returns and were measured at the tax rate in effect in the year the difference originated. The change in the deferred income tax liability results primarily from recording deferred taxes relative to differences between the tax bases of property and equipment and their book bases in accordance with Statement 109. These differences arose in connection with prior purchase business combinations. The cumulative effect of the change increased net income by $390,000, or $.05 per share. 10 11 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. COMPARISON OF THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1994 AND SEPTEMBER 30, 1993 RESULTS OF OPERATIONS Total revenues for the quarter ended September 30, 1994 increased 32.2% to $108,999,000 from $82,446,000 for the quarter ended September 30, 1993. This increase consists of a $19,837,000 increase in admissions and a $6,716,000 increase in concessions and other. The increases are attributed to additional revenues generated by the increased attendance resulting from the increased number of screens in operation as a result of the acquisitions (See Notes C and D of Notes to Condensed Consolidated Financial Statements)(the "Acquisitions") and increases in admission and concession prices. Attendance for the quarter increased 28.7% and combined admission and concession prices increased 3.7%. On a same screen basis, attendance increased 3.6%. Total revenues for the nine months ended September 30, 1994 increased 38.6% to $244,516,000 from $176,400,000 for the nine months ended September 30, 1993. This increase consists of a $51,292,000 increase in admissions and a $16,824,000 increase in concessions and other. These increases are due primarily to the additional revenues generated by the increase in attendance resulting from the increase in the number of screens in operation as a result of the Acquisitions and increases in admission and concession prices. For the nine months ended September 30, 1994, attendance increased 34.3% above that for the nine months ended September 30, 1993 and for the same period, combined admission and concession prices increased 6.2% Film rentals for the quarter ended September 30, 1994 increased 38.4% to $39,567,000 from $28,594,000 for the quarter ended September 30, 1993 primarily as a result of the additional admission revenues generated by the increase in the number of screens in operation as a result of the Acquisitions. As a percentage of admissions revenues, film rentals for the quarter ended September 30, 1994 increased to 51.2% from 49.7% for the quarter ended September 30, 1993 due to the quantity of popular films in the quarter ended September 30, 1994 which commanded a higher percentage film rental. Film rentals for the nine months ended September 30, 1994 increased 41.8% to $84,451,000 from $59,548,000. The dollar increase is due to additional film rentals being paid on the additional admission revenues discussed above. As a percentage of admission revenues, film rentals for the nine months ended September 30, 1994 decreased to 48.8% from 48.9% for the nine months ended September 30, 1993. Concession costs in the quarter ended September 30, 1994 increased to $4,358,000 from $3,772,000 for the quarter ended September 30, 1993 primarily as a result of the increased attendance due to the number of screens in operation. Concession costs as a percentage of concession revenues (concession and other revenues excluding other revenues) for the quarter ended September 30, 1994 decreased to 15.0% of concession revenues from 16.4% of concession revenues for the quarter ended September 30, 1993. This decrease reflects an increase in concession prices combined with a change in the mix of products sold in the third quarter. Concession costs for the nine months ended September 30, 1994 increased to $9,557,000 from $7,099,000 for the nine months ended September 30, 1993. The dollar increase is due to additional concession costs associated 11 12 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. with theatres added in the Acquisitions. As a percentage of concession revenues (concession and other revenues excluding other revenues), concession costs decreased to 14.4% from 14.5%. Other theatre operating costs increased 27.6% for the quarter ended September 30, 1994 to $36,027,000 from $28,243,000 for the quarter ended September 30, 1993. As a percentage of total revenues, other theatre operating costs decreased to 33.1% of total revenues from 34.3% of total revenues. The dollar increase is due primarily to additional operating costs associated with the additional screens in operation, primarily from the Acquisitions. The percentage decrease reflects an increase in attendance on a same screen basis combined with increased prices, whereas certain fixed costs, primarily rent expense, or certain variable costs with a fixed cost component such as salaries, utilities and property taxes have not increased proportionately. Rent expense represented a larger percentage of operating costs in 1994 than in 1993. Excluding rent expense, cost of operations decreased to 23.6% of total revenues from 25.3% of total revenues. Other theatre operating costs for the nine months ended September 30, 1994 increased 40.4% to $94,292,000 from $67,157,000. The dollar increase is due to additional operating costs associated with the Acquisitions. As a percentage of total revenues, other theatre operating costs increased to 38.6% from 38.1%. The dollar increase is due primarily to additional operating costs associated with the additional screens in operation, whereas the percentage increase reflects a higher level of rent expense. Excluding rent expense, cost of operations decreased to 27.3% of total revenues from 28.0% of total revenues. General and administrative costs for the quarter ended September 30, 1994 increased 12.0% to $1,358,000 from $1,213,000 for the quarter ended September 30, 1993, primarily as a result of additional salary costs and decreased as a percentage of total revenues to 1.2% from 1.5%. General and administrative costs for the nine months ended September 30, 1994 increased 3.7% to $3,680,000 from $3,550,000 primarily as a result of additional salary costs. As a percentage of revenues, general and administrative costs decreased to 1.5% from 2.0%. Depreciation and amortization for the three months ended September 30, 1994 increased 37.2% to $6,212,000 from $4,529,000 and for the nine months ended September 30, 1994 increased 44.4% or $5,272,000 to $17,146,000 from $11,874,000 due to the Acquisitions and additional depreciation on new screens added in 1994 and 1993 as part of the Company's internal expansion program. Interest expense for the quarter ended September 30, 1994 increased 9.8% to $4,338,000 from $3,952,000 due to additional debt incurred to finance the Acquisitions. Interest expense for the nine months ended September 30, 1994 increased 23.0% to $12,804,000 from $10,412,000 for the nine months ended September 30, 1993 due to the addition to the Company's Condensed 12 13 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT SOF OPERATIONS. Consolidated Financial Statements of Westwynn's debt effective June 11, 1993 (See Note C of Notes to Condensed Consolidated Financial Statements) plus debt incurred to finance the Acquisitions. Income taxes as a percentage of income before income taxes for the quarter and nine months ended September 30, 1994 remained constant at 40%. 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, bank credit lines or under long-term leasing arrangements with developers. The Company currently has 64 screens under construction and plans to construct an additional 100 to 150 screens annually for the next several years. The Company believes that its presently anticipated capital needs for theatre construction and possible acquisitions will be satisfied by short-term investments on hand, the revolving credit line (See Note B of Notes to Condensed Consolidated Financial Statements), additional bank financings, additional sale of debt and/or equity securities, private placements of debt, internally generated cash flow and, where appropriate, future lease financings. At October 20, 1994, the Company had approximately $8,800,000 in cash and short term investments on hand and $48,000,000 was available under the Company's revolving credit facility. 13 14 PART II. OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K. (a) Exhibits 11 - Statement re: computation of earnings per share 27 - Financial Data Schedule (for SEC purposes only) (b) Reports on Form 8-K The Company filed a report on Form 8-K on October 13, 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) Date: October 24, 1994 By: /s/ Michael W. Patrick ------------------------------ Michael W. Patrick - President (Chief Executive Officer) Date: October 24, 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 Nine Months Ended September 30, September 30, 1994 1993 1994 1993 -------- -------- -------- -------- (000's omitted except for per share data) Average shares outstanding 8,044 7,901 8,004 7,689 Net effect of dilutive stock options based on the treasury stock method using average market price 179 220 186 192 -------- ------- -------- -------- TOTALS 8,223 8,121 8,190 7,881 ======== ======= ======== ======== Income before cumulative effect of change in accounting $ 10,284 $ 7,286 $ 13,552 $ 10,056 Cumulative effect of change in accounting -0- -0- -0- 390 -------- ------- -------- -------- NET INCOME $ 10,284 $ 7,286 $ 13,552 $ 10,446 ======== ======= ======== ======== Earnings per share: Income before cumulative effect of change in accounting $ 1.25 $ .90 $ 1.65 $ 1.28 Cumulative effect of change in accounting -0- -0- -0- .05 -------- ------- -------- -------- NET INCOME PER SHARE $ 1.25 $ .90 $ 1.65 $ 1.33 ======== ======= ======== ========
Note: Fully diluted calculation is not presented because dilution is less than 3%. 16 EX-27 3 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENT OF CARMIKE CINEMAS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 2,971 6,796 2,344 0 1,621 18,311 373,381 83,693 357,003 38,363 191,903 42,226 0 0 68,457 357,003 244,516 244,516 209,126 209,126 0 0 12,804 22,586 9,034 13,552 0 0 0 13,552 1.65 1.65
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