<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 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
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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
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
------------- -----------
(Unaudited)
(000's omitted)
<S> <C> <C>
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
========= =========
</TABLE>
2
<PAGE> 3
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1994 1993
--------------- --------------
(Unaudited)
(000's omitted)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
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
========= =========
</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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1994 1993
--------- --------- --------- ---------
(000's omitted except per share data)
<S> <C> <C> <C> <C>
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
========= ========= ========= =========
</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 Class A Common
Common Stock Common Stock Additional Stock in Treasury
------------- -------------- Paid in Retained -----------------
Shares Amount Shares Amount Capital Earnings Shares Amount Total
------ ------ ------ ------- -------- --------- ----- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
===== ===== ===== ==== ======== ======== === ====== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1994 1993
---------- ---------
(000's omitted)
<S> <C> <C>
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
========== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
<PAGE> 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
<PAGE> 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
<PAGE> 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:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------
1994 1993
--------- ---------
<S> <C> <C>
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
</TABLE>
9
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<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)
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
<PAGE> 1
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
($000's omitted, except for per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
-------- -------- -------- --------
(000's omitted except for per share data)
<S> <C> <C> <C> <C>
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
======== ======= ======== ========
</TABLE>
Note: Fully diluted calculation is not presented because dilution is less than
3%.
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 2,971
<SECURITIES> 6,796
<RECEIVABLES> 2,344
<ALLOWANCES> 0
<INVENTORY> 1,621
<CURRENT-ASSETS> 18,311
<PP&E> 373,381
<DEPRECIATION> 83,693
<TOTAL-ASSETS> 357,003
<CURRENT-LIABILITIES> 38,363
<BONDS> 191,903
<COMMON> 42,226
0
0
<OTHER-SE> 68,457
<TOTAL-LIABILITY-AND-EQUITY> 357,003
<SALES> 244,516
<TOTAL-REVENUES> 244,516
<CGS> 209,126
<TOTAL-COSTS> 209,126
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,804
<INCOME-PRETAX> 22,586
<INCOME-TAX> 9,034
<INCOME-CONTINUING> 13,552
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,552
<EPS-PRIMARY> 1.65
<EPS-DILUTED> 1.65
</TABLE>
