<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 MARCH 31, 1995.
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 --
9,740,101 shares outstanding as of May 11, 1995
Class B Common Stock, $.03 par value --
1,420,700 shares outstanding as of May 11, 1995
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(Unaudited)
(000's omitted)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,396 $ 17,872
Short-term investments 6,993 4,815
Accounts and notes receivable 2,856 3,814
Inventories 2,193 1,939
Prepaid expenses 4,758 5,025
-------- --------
TOTAL CURRENT ASSETS 19,196 33,465
OTHER ASSETS 7,312 7,006
PROPERTY AND EQUIPMENT - Note C 403,218 381,851
Less accumulated depreciation
and amortization 93,600 87,880
-------- --------
309,618 293,971
EXCESS OF COST OVER FAIR
VALUE OF TANGIBLE ASSETS
ACQUIRED -- Note C 44,172 43,156
-------- --------
$380,298 $377,598
======== ========
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(Unaudited)
(000's omitted)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 17,560 $ 23,478
Accrued expenses 7,815 11,327
Current maturities of long-term debt
and capital lease obligations 8,881 9,352
-------- --------
TOTAL CURRENT LIABILITIES 34,256 44,157
LONG-TERM DEBT - less current maturities 17,841 3,495
SENIOR NOTES 118,182 118,182
CAPITAL LEASE OBLIGATIONS -
less current maturities 19,087 19,245
CONVERTIBLE SUBORDINATED DEBT 3,112 3,051
DEFERRED INCOME TAXES 17,912 17,512
SHAREHOLDERS' EQUITY
Class A Common Stock, $.03 par value, authorized
15,000,000 shares, issued 9,740,101 and
9,738,101 shares, respectively 292 292
Class B Common Stock, $.03 par value, authorized
5,000,000 shares, issued and outstanding
1,420,700 shares 43 43
Paid-in capital 99,773 99,763
Retained earnings 69,800 71,858
-------- --------
169,908 171,956
-------- --------
$380,298 $377,598
======== ========
</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
March 31,
1995 1994
-------- --------
(000's omitted except
per share data)
<S> <C> <C>
REVENUES
Admissions $ 45,362 $ 47,652
Concessions and other 18,536 19,780
-------- --------
63,898 67,432
COSTS AND EXPENSES
Film rentals 20,459 22,577
Concession costs 2,650 2,812
Other theatre operating costs 33,197 28,849
General and administrative 1,235 1,081
Depreciation and amortization 6,113 5,343
-------- --------
63,654 60,662
-------- --------
OPERATING INCOME 244 6,770
Interest expense 3,673 4,012
-------- --------
INCOME (LOSS) BEFORE INCOME TAXES (3,429) 2,758
Income taxes (1,371) 1,103
-------- --------
NET INCOME (LOSS) (2,058) $ 1,655
======== ========
NET INCOME (LOSS) PER SHARE $ (.18) $ .20
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
CARMIKE CINEMAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
------------ ------------
(000's omitted)
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (2,058) $ 1,655
Items which did not use cash:
Depreciation and amortization 6,113 5,343
Deferred income taxes 400 251
Gain on sale of productive
property and equipment -0- (50)
Changes in operating assets and liabilities:
Accounts and notes receivable and inventories 704 1,186
Prepaid film rental and expenses 267 139
Accounts payable and
employee compensation (5,918) (2,190)
Accrued expenses (3,512) (158)
-------- --------
NET CASH PROVIDED
BY (USED IN) OPERATIONS (4,004) 6,176
INVESTING ACTIVITIES
Purchases of property and equipment (9,490) (5,754)
Purchases of assets from other theatre operators (13,250) (7,058)
Disposals of property and equipment 4 63
Decrease (increase) in:
Short-term investments (2,178) 18,388
Other (336) (591)
-------- --------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (25,250) 5,048
FINANCING ACTIVITIES
Debt and other liabilities:
Additional borrowings 28,000 -0-
Repayments (14,222) (2,076)
-------- --------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 13,778 (2,076)
-------- --------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (15,476) 9,148
Cash and cash equivalents at beginning of period 17,872 10,649
-------- --------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 2,396 $ 19,797
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE> 6
CARMIKE CINEMAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1995
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 three-month
period ended March 31, 1995 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1995. 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, 1994.
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. 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. At March 31, 1995 the
Company had $14,700,000 outstanding under this facility.
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 March 31,
1995. Accordingly, no amounts have been classified as current maturities in
the accompanying Condensed Consolidated Financial Statements.
6
<PAGE> 7
CARMIKE CINEMAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1995
NOTE C -- ACQUISITIONS
The Company's acquisitions in 1995 and 1994 have been accounted for under the
purchase method of accounting. Under the purchase method of accounting, the
results of operations of the acquired businesses are included in the
accompanying consolidated statements as of their respective acquisition dates.
The assets and liabilities of acquired businesses are included based on an
allocation of the purchase price.
In separate transactions, the Company acquired certain assets and businesses as
follows:
<TABLE>
<CAPTION>
Number of
Approximate --------------------
Seller Purchase Price Theatres Screens Effective Date
------ -------------- -------- ------- --------------
(in thousands)
<S> <C> <C> <C> <C>
1995:
Carolina Cinema Corp. $ 750 2 7 February 10, 1995
Theatre Developers, Inc. 1,200 1 8 February 24, 1995
MasTec, Inc. 11,300 21 83 March 17, 1995
1994:
General Cinema Corp.
and subsidiaries 6,400 6 28 January 21, 1994
General Cinema Corp.
of Louisiana 5,800 4 20 May 20, 1994
Cinema World, Inc. 38,100 38 176 May 20, 1994
</TABLE>
The excess of purchase prices over net assets of businesses acquired has been
recorded as an intangible asset. Amounts recorded were $1,300,000 to date in
1995 and $18,733,000 in 1994.
Pro-forma results have not been presented for the 1995 acquisitions as they
were not significant during the periods presented.
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 1994
acquisition of Cinema World, Inc. occurred on January 1, 1994 and should not
serve as a forecast of the Company's operating results for any future periods.
7
<PAGE> 8
CARMIKE CINEMAS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1995
NOTE C -- ACQUISITIONS (CONTINUED)
Unaudited pro-forma results of the Cinema World, Inc. acquisition are as
follows (in thousands):
<TABLE>
<CAPTION>
Quarter
Ended March 31
1994
--------------
<S> <C>
Revenues $ 76,970
Net income 1,996
Earnings per share .24
</TABLE>
The above pro-forma income statement data gives effect to the acquisition of
assets from Cinema World, Inc. as if the acquisition had occurred at January 1,
1994. The pro-forma adjustments are based upon available information and
certain assumptions that management believes reasonable. The adjustments to
the historical data are as follows:
a. General and administrative costs were reduced to reflect the
incremental amount of general and administrative costs the Company
estimates it would have incurred over the applicable time period.
b. Depreciation expense was adjusted to reflect depreciation based upon
the Company allocation of the acquisition purchase price.
c. Interest expense has been adjusted to reflect debt incurred at
borrowing rates of 4.5% to 5%.
NOTE D - SUBSEQUENT EVENT
Effective May 12, 1995, the Company purchased certain assets consisting of five
theatres (11 screens) and assumed certain contractual liabilities of Rocky
Mountain Resorts, Inc. for a cash purchase price of $1,540,000.
8
<PAGE> 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Comparison of Three Months Ended
March 31, 1995 and March 31, 1994
RESULTS OF OPERATIONS
Total revenues for the quarter ended March 31, 1995 decreased 5.2% to
$63,898,000 from $67,432,000 for the quarter ended March 31, 1994. This
decrease consists of a $2,290,000 decrease in admissions and a $1,244,000
decrease in concessions and other. The decreases are attributed to a 19.7%
decline in attendance on a same screen comparison, resulting from a lack of
popular films available during the quarter ended March 31, 1995, partially
offset by additional attendance from the acquisitions completed in May, 1994
and to date in 1995. (See Note C of Notes to Condensed Consolidated Financial
Statements).
Cost of operations (film rentals, concession costs and other theatre operating
costs) increased 3.8% to $56,306,000 in the quarter ended March 31, 1995 from
$54,238,000 in the quarter ended March 31, 1994. This dollar increase is due
to the increased number of screens in operation. As a percentage of total
revenues, cost of operations increased to 88.1% of total revenues from 80.4%.
This percentage increase is due primarily to the level of fixed costs, such as
occupancy costs, managers salaries and utilities, included in this cost
category that do not vary with decreases in sales and attendance levels.
General and administrative costs increased 14.2% from $1,081,000 to $1,235,000
and increased as a percentage of total revenues from 1.6% to 1.9%. The dollar
increase is due to increased salary costs whereas the percentage increase is
due to the decline in attendance and revenues discussed above.
Depreciation and amortization increased 14.4% from $5,343,000 for the quarter
ended March 31, 1994 to $6,113,000 for the quarter ended March 31, 1995 and as
a percentage of total revenues increased from 7.9% to 9.6% due to the
acquisitions and expansions in 1994 and 1995 and due to the fixed nature of the
costs.
Interest expense for the quarter ended March 31, 1995 decreased 8.4% to
$3,673,000 from $4,012,000 in the comparable quarter of 1994, due to the
decrease in the average amount of outstanding debt. (See Note B of Notes to
Condensed Consolidated Financial Statements).
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.
9
<PAGE> 10
The Company's capital requirements arise principally in connection with new
theatre openings and acquisitions of existing theatres and theatre circuits.
New theatre openings and acquisitions typically have been financed with
internally generated cash and by debt financings, including borrowings under
the Company's revolving credit facility.
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, additional bank financing,
private placements of debt, internally generated cash flow and, where
appropriate, future lease financing. At May 11, 1995, the Company had
approximately $7,900,000 in cash and short-term investments on hand
approximately $80,000,000 was available under the Company's revolving credit
facility.
10
<PAGE> 11
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 use only)
(b) Reports on Form 8-K
None
11
<PAGE> 12
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: May 15, 1995 By: Michael W. Patrick
---------------- ------------------------------
Michael W. Patrick - President
(Chief Executive Officer)
Date: May 15, 1995 By: John O. Barwick, III
---------------- ------------------------------
John O. Barwick, III - Vice
President Finance
(Chief Accounting and
Financial Officer)
12
<PAGE> 1
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
($000's omitted, except for per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1994
-------- --------
(000's omitted except
for per share data)
<S> <C> <C>
Average Shares outstanding 11,160 7,976
Net effect of dilutive stock options
based on the treasury stock method
using average market price 95 181
-------- --------
TOTALS 11,255 8,157
======== ========
NET INCOME (LOSS) $ (2,058) $ 1,655
======== ========
NET INCOME (LOSS) PER SHARE $ (.18) $ .20
======== ========
</TABLE>
Note: Fully diluted calculation is not presented because dilution is less
than 3%.
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF CARMIKE CINEMAS, INC. FOR THE QUARTER ENDED MARCH 31,
1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1,000
<CASH> 2,396
<SECURITIES> 6,993
<RECEIVABLES> 2,856
<ALLOWANCES> 0
<INVENTORY> 2,193
<CURRENT-ASSETS> 19,196
<PP&E> 403,218
<DEPRECIATION> 93,600
<TOTAL-ASSETS> 380,298
<CURRENT-LIABILITIES> 34,256
<BONDS> 0
<COMMON> 292
0
0
<OTHER-SE> 169,616
<TOTAL-LIABILITY-AND-EQUITY> 380,298
<SALES> 63,898
<TOTAL-REVENUES> 63,898
<CGS> 23,109
<TOTAL-COSTS> 56,306
<OTHER-EXPENSES> 7,348
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,673
<INCOME-PRETAX> (3,429)
<INCOME-TAX> (1,371)
<INCOME-CONTINUING> (2,058)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,058)
<EPS-PRIMARY> (.18)
<EPS-DILUTED> (.18)
</TABLE>
