<PAGE> 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)
<TABLE>
<S> <C>
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)
</TABLE>
(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
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
----------- --------------
(Unaudited)
(000's omitted)
<S> <C> <C>
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
========= =========
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
-------- ------------
(Unaudited)
(000's omitted)
<S> <C> <C>
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
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
------------ ---------- ---------- -----------
(000's omitted except per share data)
<S> <C> <C> <C> <C>
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
======== ======== ======== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
(000' s omitted)
<TABLE>
<CAPTION>
Class A Class B
Common Stock Common Stock Additional
---------------- -------------- Paid in Retained
Shares Amount Shares Amount Capital Earnings
------ ------ ------ ------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
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
===== ===== ===== ===== ======= ========
</TABLE>
<TABLE>
<CAPTION>
Class A Common
Stock in Treasury
-----------------
Shares Amount Total
------- ------- ------
<S> <C> <C> <C>
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
===== ===== =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1994 1993
------------ ------------
(000's omitted)
<S> <C> <C>
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
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
Six Months Ended
June 30, 199
----------------
<S> <C>
Total revenues $115,574
Net income 2,408
Earnings per share before cumulative
effect of change in accounting .30
</TABLE>
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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
Year Ended Six Months Ended
December 31, 1993 June 30, 1994
----------------- -----------------
<S> <C> <C>
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
</TABLE>
10
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
FOR VOTE WITHHELD
--- -------------
<S> <C> <C>
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
</TABLE>
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
<PAGE> 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
<PAGE> 1
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
($000's omitted, except for per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
--------- ----------- ---------- ---------
(000's omitted except for per share data)
<S> <C> <C> <C> <C>
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
====== ====== ====== ======
</TABLE>
Note: Fully diluted calculation is not presented because dilution is less than
3%.
16
