<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended DECEMBER 31, 1996. [NO FEE REQUIRED,
EFFECTIVE OCTOBER 7, 1966].
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from to
----------- -----------
Commission File Number 0-14993
CARMIKE CINEMAS, INC.
(Exact name of registrant as specified in its charter)
Delaware 58-1469127
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1301 First Avenue, Columbus, Georgia 31901
(Address of principal Executive Offices) (Zip Code)
(706) 576-3400
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
<S> <C>
Class A Common Stock, par New York Stock Exchange, Inc.
value $.03 per share
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
NONE
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K [ ]
As of March 14, 1997, 9,758,601 shares of Class A Common Stock, par value $.03
per share, were outstanding and the aggregate market value of the shares of
the Class A Common Stock held by non-affiliates of the registrant was
approximately $232,000,000.
As of March 14, 1997, 1,420,700 shares of Class B Common Stock, par value $.03
per share, were outstanding, all of which shares are held by affiliates of the
registrant.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Specified portions of Carmike Cinemas, Inc.'s Annual Report to
Shareholders for the fiscal year ended December 31, 1996 are
incorporated by reference into Part II and Part IV.
(2) Specified portions of Carmike Cinemas, Inc.'s Proxy Statement relating to
the 1997 Annual Meeting of Shareholders are incorporated by reference into
Part III.
<PAGE> 2
PART I
Item 1. Business
(a) General Development of Business
Carmike Cinemas, Inc. (herein referred to as the "Company" or "Carmike"),
a corporation organized under the laws of the State of Delaware, is engaged in
the motion picture exhibition business. The Company was incorporated in April
1982 in connection with the leveraged buy-out of the Company's predecessor, the
Martin Theatres circuit, by present management of the Company. The principal
executive offices of the Company are located at 1301 First Avenue, Columbus,
Georgia 31901-2109, and its telephone number at that location is (706)
576-3400.
The following are several of the more significant events which have taken
place since December 31, 1995:
(i) Acquisitions during 1996
In separate transactions during 1996, the Company acquired certain assets
and businesses as follows:
<TABLE>
<CAPTION>
Approximate Number of
-----------------
Seller Purchase Price Theatres Screens Effective Date
------ -------------- -------- ------- --------------
<S> <C> <C> <C> <C>
(in thousands)
Maxi Saver Cinemas, Inc. $3,975 2 18 January 5, 1996
Fox Theatres Corp. 19,100 12 61 February 16, 1996
------- -- --
$23,075 14 79
======= == ==
</TABLE>
The excess of purchase prices over net assets of businesses acquired,
approximately $17.0 million in 1996, has been recorded as an intangible asset.
2
<PAGE> 3
(ii) New Theatre Openings and Additions to Existing Theatres
During 1996, the Company opened or expanded the following theatres:
<TABLE>
<CAPTION>
THEATRE LOCATION SCREENS
------- -------- -------
NEW COMPLEXES
-------------
<S> <C> <C>
Broadway 16 Myrtle Beach, SC 16
Carmike 10 Asheville, NC 10
Carmike 12 Greensboro, NC 12
Wynnsong 10 Columbia, SC 10
Bijou 7 Chattanooga, TN 7
Wynnsong 10 Ft. Benning, GA 10
Carmike 8 Altoona, PA 8
---
Total 73
ADDITIONS TO EXISTING COMPLEXES
-------------------------------
Westwood 12 Fayetteville, NC 6
Carmike 14 Mobile, AL 4
Carmike 8 Lincolnton, NC 4
Carmike 8 Lexington, NC 4
Carmike 10 Stillwater, OK 4
Carmike 14 Columbia, SC 4
Chapel Hills 15 Colorado Springs, CO 6
---
Total 32
---
Total New Screens 105
===
</TABLE>
(iii) Entertainment Complex
The Company is currently developing its first "entertainment complex,"
which will offer a broad spectrum of entertainment in addition to movie
exhibition. Known as the "Hollywood Connection M," this complex, which is
expected to be completed in the summer of 1997, will encompass 125,000 square
feet on an 11 acre site in Columbus, Georgia. The complex will include a
10-screen theatre equipped with Lucasfilm's THX Digital surround systems and
stadium seating, an indoor roller skating rink, an 18-hole themed putting golf
course, a bumper car attraction, a state-of-the-art games arcade, a restaurant
and a laser tag arena.
3
<PAGE> 4
(b) Narrative Description of Business
(i) Theatre Operations
The Company is the largest motion picture exhibitor in the United States
in terms of number of theatres and screens operated. As of December 31, 1996,
the Company operated 519 theatres with an aggregate of 2,518 screens located in
33 states. The Company's screens are located principally in communities where
the Company is the sole or leading exhibitor. For the year ended December 31,
1996, aggregate attendance at the Company's theatres was approximately 74.2
million people.
The Company's theatres are located in the following states:
<TABLE>
<CAPTION>
STATE THEATRES SCREENS
----- -------- -------
<S> <C> <C>
Alabama 28 158
Arkansas 3 25
Colorado 14 77
Delaware 2 12
Florida 32 156
Georgia 39 215
Idaho 11 26
Illinois 3 8
Iowa 22 118
Kentucky 11 53
Louisiana 4 20
Maryland 3 15
Michigan 2 10
Minnesota 16 63
Montana 15 59
Nebraska 5 17
New Mexico 1 2
North Carolina 69 313
North Dakota 9 45
New York 1 8
Ohio 8 43
Oklahoma 16 69
Pennsylvania 44 212
South Carolina 28 151
South Dakota 6 39
Tennessee 45 255
</TABLE>
4
<PAGE> 5
<TABLE>
<S> <C> <C>
Texas 28 114
Utah 12 48
Virginia 15 73
Washington 2 2
Wisconsin 12 57
West Virginia 6 33
Wyoming 7 22
--- -----
519 2,518
=== =====
</TABLE>
The Company's theatre operations are under the supervision of its Vice
President - General Manager and are divided into four geographic divisions,
each of which is headed by a division manager. The division managers are
responsible for implementing Company operating policies and supervising the
Company's seventeen operating districts. Each operating district has a
district manager who is responsible for overseeing the day-to-day operations of
the Company's theatres. Corporate policy development, strategic planning, site
selection and lease negotiation, theatre design and construction, concession
purchasing, film licensing, advertising, and financial and accounting
activities are centralized at the corporate headquarters of the Company. See
"Film Licensing" with respect to the Company's film licensing operations.
Nearly all of the Company's 2,518 screens are located in multi-screen
theatres, with over 90% of the Company's screens being located in theatres
having three or more screens. The Company's average number of screens per
theatre is 4.9, and the Company intends to increase this ratio through the
construction of larger multi-screen theatres. Multi-screen theatres enable the
Company to present a variety of films appealing to several segments of the
movie-going public while serving patrons from common support facilities (such
as the box office, concession areas, restrooms and lobby). This strategy
enhances attendance, utilization of theatre capacity and operating efficiencies
(relating to theatre staffing, performance scheduling and space and equipment
utilization), and thereby enhances revenues and profitability. Staggered
scheduling of starting times minimizes staffing requirements for crowd control,
box office and concession services while reducing congestion at the concession
area. The Company's theatres are housed predominantly in modern facilities
equipped with quality projection and sound equipment.
5
<PAGE> 6
From time to time, the Company converts marginally profitable theatres to
"Discount Theatres" for the exhibition of films that have previously been shown
on a first-run basis. Increased attendance at these theatres following these
conversions, combined with a lower film rental cost, normally improves such
theatres' operating profitability. The Company also operates certain theatres
for the exhibition of first-run films at a reduced admission price. These
theatres are typically in a smaller market where the Company is the only
exhibitor in the market. At present, the Company operates 97 of its theatres
(302 screens) as Discount Theatres.
The Company also sells gift certificates and offers a discount ticket plan
to attract groups of patrons to its theatres.
The Company's revenues are generated primarily from box office receipts
and concession sales. Additional revenues, which are not material, are
generated from electronic video games installed in the lobbies of some of the
Company's theatres and on-screen advertising.
The Company relies upon advertisements and movie schedules published in
newspapers to inform its patrons of film selections and show times. Newspaper
advertisements are typically displayed in a single group for all the Company's
theatres located in the newspaper's circulation area. In addition, the Company
utilizes radio spots and promotions to further market its films. Major
distributors frequently share the cost of newspaper and radio advertising. The
Company also exhibits in its theatres previews of coming attractions and films
presently playing on the Company's other screens in the same market area.
The Company's proprietary computer system, I.Q. Zero, which is presently
installed in approximately 96% of its theatres (representing approximately 98%
of its screens), allows Carmike to centralize most theatre-level administrative
functions at its corporate headquarters, creating significant operating
leverage. I.Q. Zero allows corporate management to monitor ticket and
concession sales and box office and concession staffing on a daily basis. The
Company's integrated MIS, centered around I.Q. Zero, also coordinates payroll,
tracks theatre invoices and generates operating reports analyzing film
performance and theatre profitability. Accordingly, there is active
communication between the theatres and corporate headquarters, which allows
senior management to react to vital profit and staffing information on a daily
basis and perform the
6
<PAGE> 7
majority of the theatre-level administrative functions, thereby enabling the
theatre manager to focus on the day-to-day operations of the theatre.
(ii) Film Licensing
Carmike obtains licenses to exhibit films by directly negotiating with or,
in rare circumstances, submitting bids to film distributors. The Company
licenses films through its booking office located in Columbus, Georgia. The
Company's Vice President - Film, in consultation with the Company's President,
directs the Company's motion picture bookings.
Prior to negotiating or bidding for a film license, the Company's Vice
President - Film and film booking personnel evaluate the prospects for upcoming
films. The criteria considered for each film include cast, director, plot,
performance of similar films, estimated film rental costs and expected MPAA
rating. Successful licensing depends greatly upon the availability of
commercially popular motion pictures, knowledge of the tastes of residents in
markets served by each theatre and insight into the trends in those tastes.
The Company maintains a database that includes revenue information on films
previously exhibited in its markets. This historical information is then
utilized by the Company to match new films with particular markets so as to
maximize revenues.
Film licenses typically specify rental fees based on the higher of a gross
box office receipts formula or an adjusted gross box office receipts formula.
Under a gross box office receipts formula, the distributor receives a specified
percentage of box office receipts, with the percentage declining over the term
of the run. The Company's film rental fees typically begin at 60% of admission
revenues and gradually decline to as low as 30% over a period of four to eight
weeks. Under an adjusted gross box office receipts formula (commonly known as
a "90/10" clause), the distributor receives a specified percentage (i.e., 90%)
of the excess of box office receipts over a negotiated amount for house
expenses. In addition, the Company is occasionally required to pay
non-refundable guarantees of film rentals, to make advance payments of film
rentals, or both, in order to obtain a license for a film. Although not
specifically contemplated by the provisions of film licenses, the terms of film
licenses generally are adjusted or re-negotiated subsequent to exhibition of
the film in relation to its success.
7
<PAGE> 8
Film licensing zones are geographic areas (generally encompassing a radius
of three to five miles) established by film distributors where any given film
is allocated to only one theatre within that area. In film licensing zones
where the Company has little or no competition, the Company obtains film
licenses by selecting a film from among those offered and negotiating directly
with the distributor. In competitive film licensing zones, a distributor will
either require the exhibitors in the zone to bid for a film or will allocate
its films among the exhibitors in the zone. When films are licensed under the
allocation process, a distributor will choose which exhibitor is offered a
movie and then that exhibitor will negotiate film rental terms directly with
the distributor for the film. Over the past several years, distributors have
generally used the allocation rather than the bidding process to license their
films. When films are licensed through a bidding process, exhibitors compete
for licenses based upon economic terms. The Company currently does not bid for
films in any of its film licensing zones.
The Company predominantly licenses "first-run" films. If a film has
substantial remaining potential following its first-run, the Company may
license it for a subsequent run (a "sub-run"). Although average daily sub-run
attendance is often less than average daily first-run attendance, sub-run film
cost is generally less than first-run film cost. Additionally, sub-runs enable
the Company to exhibit a variety of films during periods in which there are few
new releases.
The Company's business is dependent upon the availability of marketable
pictures and its relationships with distributors. While there are numerous
distributors which provide quality first-run movies to the motion picture
exhibition industry, seven major distributors accounted for approximately 92%
of the Company's admission revenues during 1996. No single distributor
dominates the market. Disruption in the production of motion pictures by the
major studios and/or independent producers or poor performance of motion
pictures could have an adverse effect on the business of the Company. The
Company licenses films from a number of distributors and believes that its
relationships with distributors generally are satisfactory.
8
<PAGE> 9
(iii) Competition
The Company's operations are subject to varying degrees of competition
with respect to licensing films, attracting patrons, obtaining new theatre
sites or acquiring theatre circuits. In markets where it is not the sole
exhibitor, the Company competes against regional and independent operators as
well as the larger theatre circuit operators.
The Company believes that the principal competitive factors with respect
to film licensing include licensing terms, seating capacity, location and
prestige of an exhibitor's theatres, quality of projection and sound at the
theatres and the exhibitor's ability and willingness to promote the films. The
competition for patrons is dependent upon factors such as the availability of
popular films, location of the theatres, patron comfort, quality of projection
and sound and the ticket prices. The Company believes that its admission
prices are competitive with admission prices of competing theatres.
The Company's theatres face competition from a number of motion picture
exhibition delivery systems, such as pay television, pay-per-view and home
video systems. The impact of such delivery systems on the motion picture
exhibition industry is difficult to determine precisely, and there can be no
assurance that existing or future delivery systems will not have an adverse
impact on attendance. The Company believes that its strongest competition is
from other forms of entertainment competing for the public's outside-the-home
leisure time and disposable income.
The Company is currently constructing its first complete entertainment
complex, which will offer a variety of forms of family entertainment. See
"General Development of Business - Entertainment Complex".
(iv) Seasonality
The major film distributors generally release during the summer and
holiday seasons, primarily Thanksgiving and Christmas, those films which they
anticipate to be the most successful. Consequently, the Company has
historically generated higher revenues during such periods.
9
<PAGE> 10
(v) Restaurants
The Company, through its wholly-owned subsidiary Wooden Nickel Pub, Inc.,
operates two restaurants, one of which is adjacent to a theatre. These
restaurants, which were opened by the Company's predecessor, offer light fare
as well as beer and wine. These restaurants are not material to the Company's
consolidated operations. The Company does not currently anticipate opening
additional restaurant facilities.
(vi) Regulatory Environment
The distribution of motion pictures is in large part regulated by federal
and state antitrust laws and has been the subject of numerous antitrust cases.
Certain consent decrees resulting from such cases bind certain major motion
picture distributors and require the motion pictures of such distributors to be
offered and licensed to exhibitors, including the Company, on a
theatre-by-theatre basis. Consequently, exhibitors such as the Company cannot
assure themselves of a supply of motion pictures by entering into long-term
arrangements with major distributors but must compete for licenses on a
film-by-film and theatre-by-theatre basis.
The Federal Americans With Disabilities Act (the "ADA"), which became
effective in 1992, prohibits discrimination on the basis of disability in
public accommodations and employment. The Company constructs new theatres to
be accessible to the disabled and believes that it is otherwise in substantial
compliance with all applicable regulations relating to accommodating the needs
of the disabled. The Company does not currently anticipate that ongoing
compliance with the ADA and the regulations thereunder will require the Company
to expend substantial funds.
(vii) Employees
At December 31, 1996, the Company had approximately 9,874 employees.
Eighty of the Company's employees are covered by collective bargaining
agreements. The Company considers its relations with its employees to be good.
10
<PAGE> 11
(viii) Other Factors
Except for historical information contained herein, certain matters set
forth in this Annual Report on Form 10-K are forward looking statements that
involve certain risks and uncertainties that could cause actual results to
differ materially from those in the forward looking statements. Potential
risks and uncertainties include such factors as the financial strength of the
motion picture industry, the level of consumer spending, the availability of
popular motion pictures and the success of planned advertising, marketing and
promotional campaigns. Investors are also directed to consider other risks and
uncertainties discussed in documents filed by the Company with the Securities
and Exchange Commission.
Item 2. Properties
At December 31, 1996, of the Company's 519 theatres , 71 were owned by the
Company, 366 were leased pursuant to building leases, 75 were leased pursuant
to ground leases, and 7 were subject to shared ownership or shared leasehold
interests with various unrelated third parties.
The Company's leases are generally entered into on a long-term basis. See
Note F of Notes to Consolidated Financial Statements incorporated by reference
in Item 8 herein for information with respect to the Company's lease
commitments.
The Company owns its headquarters building in Columbus, Georgia. The
Company occupies all of this modern five-story office building, which has
approximately 48,500 square feet. The Company's interest in the building is
encumbered by a Deed to Secure Debt and Security Agreement in favor of the
Downtown Development Authority of Columbus, Georgia.
The Company also owns and occupies a four-story building in Columbus,
Georgia that has approximately 48,000 square feet. The Company uses this
building for storage and refurbishment of theatre equipment.
Item 3. Legal Proceedings
From time to time, the Company is involved in routine litigation and legal
proceedings in the ordinary course of its business, such as personal injury
claims, employment matters and contractual disputes. Currently, the Company
does not have pending any litigation or proceedings that
11
<PAGE> 12
management believes will have a material adverse effect, either individually or
in the aggregate, upon the Company.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the
last quarter of the year ended December 31, 1996.
12
<PAGE> 13
Executive Officers of the Registrant
[Included pursuant to Regulation S-K,
Item 401(b), Instruction 3]
The following sets forth certain information regarding the executive
officers of the Company. For purposes of this section, references to the
Company include the Company's predecessor, Martin Theatres, Inc.
C. L. Patrick, age 78, who has served as Chairman of the Board of
Directors of the Company since April 1982, joined the Company in 1945, became
its General Manager in 1948 and served as President of the Company from 1969 to
1970. He served as President of Fuqua Industries, Inc. ("Fuqua") from 1970 to
1978, and as Vice Chairman of the Board of Directors of Fuqua from 1978 to
1982. Mr. Patrick is a director emeritus of Columbus Bank & Trust Company.
Michael W. Patrick, age 46, has served as President of the Company since
October 1981, a director of the Company since April 1982 and Chief Executive
Officer since March 29, 1989. He joined the Company in 1970 and served in a
number of operational and film booking and buying capacities prior to becoming
President. Mr. Patrick is the son of Mr. C. L. Patrick. Mr. Patrick is a
director of Columbus Bank & Trust Company. He also serves as a director of the
Will Rogers Institute and Welcome Home, Inc.
John O. Barwick, III, age 47, joined the Company as Controller in July
1977 and was elected Treasurer and Chief Financial Officer in August 1981. In
August 1982, he became Vice President - Finance of the Company. Prior to
joining the Company, Mr. Barwick was a certified public accountant with Ernst &
Ernst, a predecessor of the accounting firm of Ernst & Young LLP, from 1973 to
1977.
Anthony J. Rhead, age 55, joined the Company in June 1981 as manager of
the booking office in Charlotte, North Carolina. Since July 1983, Mr. Rhead
has been Vice President - Film of the Company. Prior to joining the Company,
he worked as a film booker for Plitt Theatres, Inc. from 1973 to 1981.
13
<PAGE> 14
Larry M. Adams, age 53, joined the Company as Data Processing Manager in
July 1973. In August 1982, he became Vice President - Informational Systems
and in August 1988 he became Secretary of the Company.
Fred W. Van Noy, age 40, joined the Company in 1975. He served as a
District Manager from 1984 to 1985 and as Western Division Manager from 1985 to
1988, when he was elected to his present position as Vice President - General
Manager.
Prentiss Lamar Fields, age 42, joined the Company in January 1983 as
Director of Real Estate. He served in this position until 1985 when he was
elected to his present position as Vice President - Development.
H. Madison Shirley, age 45, joined the Company in 1976 as a theatre
manager. He served as a District Manager from 1983 to 1987 and as Director of
Concessions from 1987 until 1990. He was elected to his present position as
Vice President - Concessions in 1990.
Marilyn Grant, age 49, joined the Company in 1975 as a bookkeeper. She
served as the Advertising Coordinator from 1984 to 1985 and became the Director
of Advertising in 1985. In August 1990, she was elected to her present
position as Vice President - Advertising.
James R. Davis, age 58, joined the Company in 1990 as Technical Director.
He served in this position until December 1995, when he was elected to his
present position as Vice President-Technical.
14
<PAGE> 15
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Information regarding the market for the Company's common equity and
related stockholder matters is incorporated by reference to the inside back
cover of the Company's 1996 Annual Report to Shareholders.
Item 6. Selected Financial Data
Selected financial data for the five years ended December 31, 1996 is
incorporated by reference to page 26 of the Company's 1996 Annual Report to
Shareholders.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's discussion and analysis of financial condition and results of
operations of the Company is incorporated by reference to page 24 of the
Company's 1996 Annual Report to Shareholders.
Item 8. Financial Statements and Supplementary Data
The information required by this item is incorporated by reference to
pages 12 through 23 of the Company's 1996 Annual Report to Shareholders.
Information as to quarterly results of operations for the year ended
December 31, 1996 is incorporated by reference to page 22 of the Company's 1996
Annual Report to Shareholders.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable
15
<PAGE> 16
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding the directors of the Company is incorporated by
reference to the section entitled "Election of Directors" in the Proxy
Statement relating to the 1997 Annual Meeting of Shareholders of the Company
(hereinafter, the "1997 Proxy Statement").
Information regarding the executive officers of the Company is set forth
in Part I of this Report on Form 10-K pursuant to General Instruction G(3) of
Form 10-K.
Item 11. Executive Compensation
Information regarding executive compensation is incorporated by reference
to the section entitled "Executive Compensation and Other Information"
contained in the 1997 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this item is incorporated by reference to the
sections entitled "Security Ownership of Certain Beneficial Holders" and
"Security Ownership of Management" contained in the 1997 Proxy Statement.
Item 13. Certain Relationships and Related Transactions
Information regarding certain relationships and related transactions is
incorporated by reference to the section entitled "Certain Relationships and
Related Transactions" contained in the 1997 Proxy Statement.
16
<PAGE> 17
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a)(1) and (2) Financial Statements and Financial Statement Schedules
The following consolidated financial statements of Carmike Cinemas,
Inc. included in the Company's 1996 Annual Report to Shareholders
are incorporated by reference in Item 8:
Consolidated balance sheets--December 31, 1996 and 1995
Consolidated statements of operations--Years ended December 3l,
1996, 1995 and 1994
Consolidated statements of shareholders' equity--Years ended
December 3l, 1996, 1995 and 1994
Consolidated statements of cash flows--Years ended December 31,
1996, 1995 and 1994
Notes to consolidated financial statements--December 31, 1996
Report of Independent Auditors
Financial statement schedules are omitted because they are not applicable
or not required under the related instructions, or because the required
information is shown either in the consolidated financial statements or in the
notes thereto.
17
<PAGE> 18
(a)(3) Listing of Exhibits
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
2(a) Purchase Contract dated May 20, 1992, by and between American
Multi-Cinema, Inc. and Carmike Cinemas, Inc. (filed as Exhibit 2(a) to
the Company's Form 10-K for the fiscal year ended December 31, 1992 (the
"1992 Form 10-K"), and incorporated herein by reference).
2(b) Asset Purchase Agreement dated May 12, 1992 by and between Plitt
Theatres, Inc., Plitt Southern Theatres, Inc. and Plitt Cine Theatres,
Inc. and Carmike Cinemas, Inc. (filed as Exhibit 2(b) to the Company's
1992 Form 10-K and incorporated herein by reference).
2(c) Asset Purchase Agreement dated May 21, 1992 by and between Resources
Financial and Carmike Cinemas, Inc.(filed as Exhibit 2(c) to the
Company's 1992 Form 10-K and incorporated herein by reference).
2(d) Purchase Contract dated as of November 18, 1992 by and between Cinamerica
Theatres, L.P. and Carmike Cinemas, Inc.(filed as Exhibit 2(d) to the
Company's 1992 Form 10-K and incorporated herein by reference).
2(e) Asset Purchase Agreement dated November 19, 1993 by and between Manos
Enterprises, Inc. and Carmike Cinemas, Inc. (filed as Exhibit 2(e) to
the Company's Form 10 -K for the fiscal year ended December 31, 1993
(the "1993 Form 10-K") and incorporated herein by reference).
2(f) Asset Purchase Agreement dated January 21, 1994 by and between General
Cinema Corp. of Georgia, General Cinema Corp. of Virginia, General
Cinema Corp. of West Virginia and Carmike Cinemas, Inc.(filed as Exhibit
2(f) to the Company's 1993 Form 10-K and incorporated herein by
reference).
2(g) Asset Purchase Agreement dated May 18, 1994 by and between Cinema World,
Inc. and Carmike Cinemas, Inc. (filed as Exhibit 2(a) to the Company's
Form 8-K filed on June 6, 1994 and incorporated herein by reference).
2(h) Agreement dated as of March 17, 1995 by and between Floyd Theatres, Inc.,
Tallahassee Theatres, Inc., Floyd Theatres of Georgia, Inc., MasTec, Inc.
and Carmike Cinemas, Inc. (filed as Exhibit 2(h) to the Company's Form
10-K for the fiscal year ended December 31, 1994 (the "1994 Form 10-K")
and incorporated herein by reference).
</TABLE>
18
<PAGE> 19
(a)(3)(Continued)
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
2(i) Agreement dated as of June 2, 1995 by and between Carmike Cinemas,
Inc. and Plitt Theatres, Inc. (filed as Exhibit 12 to the Company's
Form 10-Q for the fiscal quarter ended June 30, 1995 and
incorporated herein by reference).
2(j) Agreement dated as of September 8, 1995 by and between Midcontinent
Theatre Company of Minnesota, Midcontinent Theatre Company of South
Dakota, Midcontinent Theatre Company of North Dakota and Carmike
Cinemas, Inc. (filed as Exhibit 4 to the Company's Form 10-Q for the
fiscal quarter ended September 30, 1995, and incorporated herein by
reference).
2(k) Agreement dated as of October 19, 1995 by and between Cinemark USA,
Inc., Carmike Cinemas, Inc. and Eastwynn Theatres, Inc. (filed
as Exhibit 5 to the Company's Form 10-Q for the fiscal quarter ended
September 30, 1995, and incorporated herein by reference).
2(l) Asset Purchase Agreement dated as of January 25, 1996 by and between
Fox Theatres Corporation, Carmike Cinemas, Inc. and Eastwynn
Theatres, Inc. (filed as Exhibit 2(l) to the Company's Form 10-K
for the fiscal year ended December 31, 1995, and incorporated
herein by reference).
3(a)(i) Restated Certificate of Incorporation of the Company (filed as Exhibit 3(a) to
the Company's Form 10-Q for the fiscal quarter ended June 30, 1995, and
incorporated herein by reference).
3(a)(ii) Certificate of Amendment of Restated Certificate of Incorporation (filed as
Exhibit 3(b) to the Company's Form 10-Q for the quarter ended June 30, 1995,
and incorporated herein by reference).
3(b) By-laws of the Company (filed as Exhibit 3(b) to the Company's Form 10-K for the
fiscal year ended December 31, 1987 (the "1987 Form 10-K"), and incorporated
herein by reference).
4(a) Note Purchase Agreement dated as of June 1, 1990 with respect to 10.53% Senior
Notes due 2005 (filed as Exhibit 4 to the Company's Form 10-Q for the fiscal quarter
ended June 30, 1990, and incorporated herein by reference).
4(b) Note Purchase Agreement dated as of March 1, 1992 with respect to 7.90% Senior
Notes due 2002 (filed as Exhibit 4(c) to the Company's Form l0-K for the year ended
December 31, 1991, and incorporated herein by reference).
</TABLE>
19
<PAGE> 20
(a)(3)(Continued)
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
4(c) Note Purchase Agreement dated as of April 15, 1993 with respect to 7.52% Senior
Notes due 2003 (filed as Exhibit 4 to the Company's Form l0-Q for the fiscal quarter
ended March 31, 1993, and incorporated herein by reference).
4(d) Zero Coupon Convertible Subordinated Note due June 1, 1998 (filed as Exhibit 4(e)
to the Company's 1993 Form 10-K, and incorporated herein by reference).
4(e) Credit Agreement dated as of April 23, 1996 among Carmike Cinemas, Inc., various
banks and Wachovia Bank of Georgia, N.A., as Agent (filed as Exhibit 4 to the
Company's Form 10-Q for the fiscal quarter ended March 31, 1996, and incorporated
herein by reference).
10(a) 1986 Carmike Cinemas, Inc. Class A Stock Option Plan, as amended, together with
form of Stock Option Agreement (filed as Exhibit 10(a) to the Company's Form 10-K
for the year ended December 31, 1990, and incorporated herein by reference).
10(b) Downtown Development Authority of Columbus, Georgia $4,500,000 Industrial
Development Revenue Bonds (Martin Theatres, Inc. Project), Series 1985 (filed
as Exhibit 10(d) to Amendment No. 1 to the Company's Registration Statement
on Form S-1, No. 33-8007 on October 10, 1986, and incorporated herein by
reference).
10(c) Employment Agreement dated August 30, 1986 by and between C. L. Patrick and
the Company, as amended on October 31, 1986 and January 1, 1990 (filed as
Exhibit 10(e) to the Company's Registration Statement on Form S-1, Commission File
No. 33-33558, and incorporated herein by reference).
10(d) Employment Agreement dated January 1, 1993 by and between Michael W. Patrick
and the Company (filed as Exhibit 10(e) to the Company's 1992 Form 10-K and
incorporated herein by reference).
10(e) Aircraft Lease dated July 1, 1983, as amended June 30, 1986, by and between C.L.P.
Equipment and the Company (filed as Exhibit 10(h) to the Company's Registration
Statement on Form S-1, No. 33-8007, and incorporated herein by reference).
10(f) Equipment Lease Agreement dated December 17, 1982 by and between Michael W.
Patrick and the Company (Kingsport, Tennessee) (filed as Exhibit 10(i) to the
Company's Registration Statement on Form S-1, No. 33-8007, and incorporated
herein by reference).
</TABLE>
20
<PAGE> 21
(a)(3)(Continued)
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
10(g) Equipment Lease Agreement dated January 29, 1983 by and between Michael W.
Patrick and the Company (Valdosta, Georgia) (filed as Exhibit 10(j) to the Company's
Registration Statement on Form S-1, No. 33-8007, and incorporated herein by reference).
10(h) Equipment Lease Agreement dated November 23, 1983 by and between Michael W.
Patrick and the Company (Nashville (Belle Meade), Tennessee) (filed as Exhibit 10(k)
to the Company's Registration Statement on Form S-1, No. 33-8007, and incorporated
herein by reference).
10(i) Equipment Lease Agreement dated December 17, 1982 by and between Michael W.
Patrick and the Company (Opelika, Alabama) (filed as Exhibit 10(l) to the Company's
Registration Statement on Form S-1, No. 33-8007, and incorporated herein by
reference).
10(j) Equipment Lease Agreement dated July 1, 1986 by and between Michael W. Patrick
and the Company (Muskogee and Stillwater, Oklahoma) (filed as Exhibit 10(m) to the
Company's Registration Statement on Form S-1, No. 33-8007, and incorporated
herein by reference).
10(k) Equipment Lease Agreement dated December 17, 1982 by and between C. L. Patrick
and the Company (Eastridge, Tennessee) (filed as Exhibit 10(n) to the Company's
Registration Statement on Form S-1, No. 33-8007, and incorporated herein by
reference).
10(l) Summary of Extensions of Equipment Lease Agreements, which are Exhibits 10(f),
10(g), 10(h), 10(i), and 10(k) (filed as Exhibit 10(o) to the 1987 Form 10-K and
incorporated herein by reference).
10(m) Summary of Extensions of the Equipment Lease Agreements, which are Exhibits 10(f),
10(g), 10(h), 10(i), and 10(k) as extended as shown in Exhibit 10(m) (filed as Exhibit
10(n) to the Company's Form 10-K for the year ended December 31, 1991 and
incorporated herein by reference).
10(n) Summary of Extensions of Aircraft Lease Agreement and Equipment Lease
Agreement which are Exhibits 10(e) and 10(k) (filed as Exhibit 10(o) to the
Company's Form 10-K for the year ended December 31, 1991 and incorporated
herein by reference).
</TABLE>
21
<PAGE> 22
(a)(3)(Continued)
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
10(o) Carmike Cinemas, Inc. Deferred Compensation Agreement and Trust Agreement dated
as of January 1, 1990 (filed as Exhibit 10(u) to the Company's Form 10-K for the year
ended December 31, 1990, and incorporated herein by reference).
11 Statement re: Computation of Earnings per share.
13 1996 Annual Report to Shareholders of Carmike Cinemas, Inc. (with the exception of
the information expressly incorporated by reference in Items 5, 6, 7 and 8, this Annual
Report is not to be deemed "filed" with the Securities and Exchange Commission or
otherwise subject to the liabilities of Section 18 of the Securities Exchange Act of
1934).
21 List of Subsidiaries.
23 Consent of Ernst & Young LLP
27 Financial Data Schedule (for SEC use only)
</TABLE>
22
<PAGE> 23
(b) Reports on Form 8-K
During the fiscal quarter ended December 31, 1996, the Company did not
file any reports on Form 8-K.
(c) Exhibits
The response to this portion of Item 14 is submitted as a separate section
of this report.
(d) Financial Statements Schedules
None.
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 18, 1997 By: /s/
----------------------
Michael W. Patrick
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/
- -------------------- Chairman of the Board March 18, 1997
C.L. Patrick
/s/
- -------------------- President and Chief March 18, 1997
Michael W. Patrick Executive Officer, Director
/s/
- -------------------- Vice President-Finance, Treasurer March 18, 1997
John O. Barwick, III (Chief Financial Officer,
Chief Accounting Officer)
/s/
- -------------------- Director March 18, 1997
Carl L. Patrick, Jr.
/s/
- -------------------- Director March 18, 1997
Carl E. Sanders
/s/
- -------------------- Director March 18, 1997
John W. Jordan, II
/s/
- -------------------- Director March 18, 1997
David W. Zalaznick
</TABLE>
24
<PAGE> 25
CARMIKE CINEMAS, INC.
EXHIBIT INDEX
Report on Form 10-K for the fiscal year Ended December 31, 1996
<TABLE>
<CAPTION>
Page Number
Exhibit in Manually
Number Description Signed Original
- ------ ----------- ---------------
<S> <C> <C>
2(a) Purchase Contract dated May 20, 1992,
by and between American Multi-Cinema,
Inc. and Carmike Cinemas, Inc.(filed as Exhibit 2(a)
to the company's Form 10-K for the fiscal year ended
December 31, 1992 (the "1992 Form 10-K"), and
incorporated herein by reference).
2(b) Asset Purchase Agreement dated May 12, 1992
by and between Plitt Theatres, Inc., Plitt Southern
Theatres, Inc. and Plitt Cine Theatres, Inc. and
Carmike Cinemas, Inc.(filed as Exhibit 2(b) to the Company's
1992 Form 10-K and incorporated herein by reference).
2(c) Asset Purchase Agreement dated May 21, 1992
by and between Resources Financial and
Carmike Cinemas, Inc.(filed as Exhibit 2(c) to the Company's
1992 Form 10-K and incorporated herein by reference).
2(d) Purchase Contract dated as of November 18, 1992
by and between Cinamerica Theatres, L.P. and
Carmike Cinemas, Inc.(filed as Exhibit 2(d) to the Company's
1992 Form 10-K and incorporated herein by reference).
2(e) Asset Purchase Agreement dated November 19, 1993 by and
between Manos Enterprises, Inc. and Carmike Cinemas, Inc.
(filed as Exhibit 2(e) to the Company's Form 10K for the fiscal
year ended December 31, 1993 (the "1993 Form 10-K") and
incorporated herein by reference).
2(f) Asset Purchase Agreement dated January 21, 1994 by and between
General Cinema Corp. of Georgia, General Cinema Corp. of Virginia,
General Cinema Corp. of West Virginia and Carmike Cinemas, Inc.
(filed as Exhibit 2(f) to the Company's 1993 Form 10-K and
incorporated herein by reference).
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
Page Number
Exhibit in Manually
Number Description Signed Original
- ------ ----------- ---------------
<S> <C> <C>
2(g) Asset Purchase Agreement dated May 18, 1994 by and
between Cinema World, Inc. and Carmike Cinemas, Inc.
(filed as Exhibit 2(a) to the Company's Form 8-K filed on
June 6, 1994 and incorporated herein by reference).
2(h) Agreement dated as of March 17, 1995 by and between
Floyd Theatres, Inc., Tallahassee Theatres, Inc., Floyd
Theatres of Georgia, Inc., MasTec, Inc. and Carmike
Cinemas, Inc.(filed as Exhibit 2(h) to the Company's
Form 10-K for fiscal year ended December 31, 1994
(the "1994 Form 10-K") and incorporated herein by
reference).
2(i) Agreement dated as of June 2, 1995 by and between
Carmike Cinemas, Inc. and Plitt Theatres, Inc. (filed as
Exhibit 12 to the Company's Form 10-Q for the fiscal
quarter ended June 30, 1995, and incorporated
herein by reference).
2(j) Agreement dated as of September 8, 1995 by and between
Midcontinent Theatre Company of Minnesota, Midcontinent
Theatre Company of South Dakota, Midcontinent Theatre
Company of North Dakota and Carmike Cinemas, Inc.
(filed as Exhibit 4 to the Company's Form 10-Q for the fiscal
quarter ended September 30, 1995, and incorporated
herein by reference).
2(k) Agreement dated as of October 19, 1995 by and between
Cinemark USA, Inc., Carmike Cinemas, Inc. and Eastwynn
Theatres, Inc. (filed as Exhibit 5 to the Company's Form 10-Q
for the fiscal quarter ended September 30, 1995, and
incorporated herein by reference).
2(l) Asset Purchase Agreement dated as of January 25, 1996
by and between Fox Theatres Corp., Carmike Cinemas, Inc.
and Eastwynn Theatres, Inc.(filed as Exhibit 2(l) to the Company's
Form 10-K for the fiscal year ended December 31, 1995, and
incorporated herein by reference).
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
Page Number
Exhibit in Manually
Number Description Signed Original
- ------ ----------- ---------------
<S> <C> <C>
3(a)(i) Restated Certificate of Incorporation of the Company
(filed as Exhibit 3(a) to the Company's Form 10-Q for the
fiscal quarter ended June 30, 1995, and incorporated
herein by reference).
3(a)(ii) Certificate of Amendment of Restated Certificate of Incorporation
(filed as Exhibit 3(b) to the Company's Form 10-Q for the
quarter ended June 30, 1995, and incorporated herein by
reference).
3(b) By-Laws of the Company (filed as Exhibit 3(b) to the
Company's Form 10-K for the fiscal year ended
December 31, 1987 (the "1987 Form 10-K"),
and incorporated herein by reference).
4(a) Note Purchase Agreement dated as of June 1, 1990
with respect to 10.53% Senior Notes due 2005
(filed as Exhibit 4 to the Company's Form 10-Q for
the fiscal quarter ended June 30, 1990, and
incorporated herein by reference).
4(b) Note Purchase Agreement dated as of March 1, 1992
with respect to 7.90% Senior Notes due 2002
(filed as Exhibit 4(c) to the Company's Form l0-K
for the year ended December 31, 1991, and
incorporated herein by reference).
4(c) Note Purchase Agreement dated as of April 15, 1993
with respect to 7.52% Senior Notes due 2003 (filed as
Exhibit 4 to the Company's Form 10-Q for the fiscal quarter
ended March 31, 1993, and incorporated herein by reference).
4(d) Zero Coupon Convertible Subordinated Note due June 1, 1998
(filed as Exhibit 4(e) to the Company's 1993 Form 10-K, and
incorporated herein by reference).
</TABLE>
<PAGE> 28
<TABLE>
<CAPTION>
Page Number
Exhibit in Manually
Number Description Signed Original
- ------ ----------- ---------------
<S> <C> <C>
4(e) Credit Agreement dated as of April 23, 1996 among Carmike
Cinemas, Inc., various banks and Wachovia Bank of
Georgia, N.A., as Agent (filed as Exhibit 4 to the Company's
Form 10-Q for the fiscal quarter ended March 31, 1996,
and incorporated herein by reference).
10(a) 1986 Carmike Cinemas, Inc. Class A Stock Option Plan,
as amended, together with form of Stock Option Agreement
(filed as Exhibit 10(a) to the Company's Form 10-K
for the year ended December 31, 1990, and incorporated
herein by reference).
10(b) Downtown Development Authority of Columbus, Georgia
$4,500,000 Industrial Development Revenue Bonds
(Martin Theatres, Inc. Project), Series 1985 (filed as
Exhibit 10(d) to Amendment No. 1 to the Company's
Registration Statement on Form S-1, No. 33-8007 on
October 10, 1986, and incorporated herein by reference).
10(c) Employment Agreement dated August 30, 1986 by and
between C. L. Patrick and the Company, as amended on
October 31, 1986 and January 1, 1990 (filed as Exhibit 10(e)
to the Company's Registration Statement on Form S-1,
Commission File No. 33-33558, and incorporated herein
by reference).
10(d) Employment Agreement dated January 1, 1993
by and between Michael W. Patrick and the Company,
(filed as Exhibit 10(e) to the Company's 1992 Form 10-K
and incorporated herein by reference).
10(e) Aircraft Lease dated July 1, 1983, as amended
June 30, 1986, by and between C.L.P.
Equipment and the Company (filed as Exhibit 10(h)
to the Company's Registration Statement on Form S-1,
No. 33-8007, and incorporated herein by reference).
</TABLE>
<PAGE> 29
<TABLE>
<CAPTION>
Page Number
Exhibit in Manually
Number Description Signed Original
- ------ ----------- ---------------
<S> <C> <C>
10(f) Equipment Lease Agreement dated December 17, 1982
by and between Michael W. Patrick and the Company
(Kingsport, Tennessee) (filed as Exhibit 10(i) to the
Company's Registration Statement on Form S-1,
No. 33-8007, and incorporated herein by reference).
10(g) Equipment Lease Agreement dated January 29, 1983
by and between Michael W. Patrick and the Company
(Valdosta, Georgia) (filed as Exhibit 10(j) to the Company's
Registration Statement on Form S-1, No. 33-8007, and
incorporated herein by reference).
10(h) Equipment Lease Agreement dated November 23, 1983
by and between Michael W. Patrick and the Company
(Nashville (Belle Meade), Tennessee) (filed as Exhibit 10(k)
to the Company's Registration Statement on Form S-1,
No. 33-8007, and incorporated herein by reference).
10(i) Equipment Lease Agreement dated December 17, 1982
by and between Michael W. Patrick and the Company
(Opelika, Alabama) (filed as Exhibit 10(l) to the Company's
Registration Statement on Form S-1, No. 33-8007, and
incorporated herein by reference).
10(j) Equipment Lease Agreement dated July 1, 1986 by and
between Michael W. Patrick and the Company (Muskogee
and Stillwater, Oklahoma) (filed as Exhibit 10(m) to the
Company's Registration Statement on Form S-1,
No. 33-8007, and incorporated herein by reference).
10(k) Equipment Lease Agreement dated December 17, 1982
by and between C. L. Patrick and the Company
(Eastridge, Tennessee) (filed as Exhibit 10(n) to the Company's
Registration Statement on Form S-1, No. 33-8007, and
incorporated herein by reference).
</TABLE>
<PAGE> 30
<TABLE>
<CAPTION>
Page Number
Exhibit in Manually
Number Description Signed Original
- ------ ----------- ---------------
<S> <C> <C>
10(l) Summary of Extensions of Equipment Lease Agreements,
which are Exhibits 10(f), 10(g), 10(h), 10(i), and 10(k)
(filed as Exhibit 10(o) to the 1987 Form 10-K and
incorporated herein by reference).
10(m) Summary of Extensions of the Equipment Lease Agreements,
which are Exhibits 10(f), 10(g), 10(h), 10(i) and 10(k) as
extended as shown in Exhibit 10(m) (filed as Exhibit 10(n)
to the Company's Form 10-K for the year ended December 31,
1991 and incorporated herein by reference).
10(n) Summary of Extensions of Aircraft Lease Agreement and
Equipment Lease Agreement which are Exhibits 10(e) and
10(k) (filed as Exhibit 10(o) to the Company's Form 10-K
for the year ended December 31, 1991 and incorporated
herein by reference).
10(o) Carmike Cinemas, Inc. Deferred Compensation Agreement and
Trust Agreement dated as of January 1, 1990 (filed as Exhibit 10(u)
to the Company's Form 10-K for the year ended December 31, 1990,
and incorporated herein by reference).
11 Statement re: Computation of Earnings per share.
13 1996 Annual Report to Shareholders of Carmike Cinemas,
Inc. (with the exception of the information expressly
incorporated by reference in Items 5, 6, 7 and 8, this
Annual Report is not to be deemed "filed" with the Securities
and Exchange Commission or otherwise subject to the liabilities
of Section 18 of the Securities Exchange Act of 1934).
21 List of Subsidiaries.
23 Consent of Ernst & Young LLP
27 Financial Data Schedule (for SEC use only)
</TABLE>
<PAGE> 1
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
CARMIKE CINEMAS, INC.
<TABLE>
<CAPTION>
Years Ended December 3l
--------------------------------------
1996 1995 1994
-------- ------- -------
(In thousands, except per share data)
<S> <C> <C> <C>
PRIMARY:
Average shares outstanding 11,174 11,161 8,312
Net effect of dilutive stock
options and warrants based
on the treasury stock method
using average market price -0- 99 165
-------- ------- -------
Totals 11,174 11,260 8,477
======== ======= =======
NET INCOME (LOSS) $(7,277) $13,087 $16,953
======== ======= =======
NET INCOME (LOSS) PER SHARE $ (.65) $ 1.16 $ 2.00
======== ======= =======
</TABLE>
Note: Fully diluted calculation is not presented because dilution is less than
3%.
25
<PAGE> 1
CONSOLIDATED
BALANCE SHEETS
<TABLE>
<CAPTION>
(in thousands, except for share data) December 31
1996 1995
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents ........................................................ $ 5,569 $ 11,345
Short-term investments ........................................................... 7,726 7,502
Recoverable construction allowances under capital leases ......................... 4,178 4,300
Accounts and notes receivable .................................................... 644 7,911
Inventories ...................................................................... 2,631 2,936
Prepaid expenses ................................................................. 5,363 5,632
----------- -----------
TOTAL CURRENT ASSETS 26,111 39,626
OTHER ASSETS
Investments in and advances to partnerships ...................................... 10,324 4,973
Other ............................................................................ 2,425 2,331
----------- -----------
12,749 7,304
PROPERTY AND EQUIPMENT--Notes B, C, E and F
Land ............................................................................. 42,182 38,841
Buildings and improvements ....................................................... 126,790 119,504
Leasehold improvements ........................................................... 148,586 133,273
Leasehold interests .............................................................. 38,180 49,758
Equipment ........................................................................ 151,988 143,029
----------- -----------
507,726 484,405
Accumulated depreciation and amortization ........................................ (119,811) (112,554)
----------- -----------
387,915 371,851
EXCESS OF PURCHASE PRICE OVER NET ASSETS OF BUSINESSES ACQUIRED - Note C ............ 62,608 59,231
----------- -----------
$ 489,383 $ 478,012
=========== ===========
</TABLE>
12
<PAGE> 2
CONSOLIDATED
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31
1996 1995
---- ----
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable ................................................................. $ 21,432 $ 24,873
Accrued expenses ................................................................. 17,240 19,102
Current maturities of long-term debt, senior notes and capital lease obligations . 15,026 12,205
----------- -----------
TOTAL CURRENT LIABILITIES 53,698 56,180
LONG-TERM DEBT, less current maturities-Note D ...................................... 124,476 79,214
SENIOR NOTES-Note E ................................................................. 93,831 107,792
CAPITAL LEASE OBLIGATIONS, less current maturities-Note F ........................... 31,351 27,996
CONVERTIBLE SUBORDINATED DEBT ....................................................... 3,575 3,303
DEFERRED INCOME TAXES-Note I ........................................................ 4,522 18,433
SHAREHOLDERS' EQUITY-Notes D, E, G, and H
Class A Common Stock, $.03 par value, authorized 22,500,000 shares,
issued and outstanding 9,758,601 and 9,745,101 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 .................................................................. 99,927 99,814
Retained earnings ................................................................ 77,668 84,945
----------- -----------
177,930 185,094
----------- -----------
$ 489,383 $ 478,012
=========== ===========
</TABLE>
See accompanying notes.
13
<PAGE> 3
CONSOLIDATED STATEMENTS
OF OPERATIONS
<TABLE>
<CAPTION>
(in thousands, except for per share data) Years Ended December 31
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues:
Admissions .................................................................. $ 296,629 $253,691 $232,134
Concessions and other ....................................................... 130,097 111,058 95,485
--------- -------- --------
426,726 364,749 327,619
Costs and Expenses:
Film exhibition costs ....................................................... 156,968 135,654 123,610
Concession costs ............................................................ 17,252 14,959 12,241
Other theatre operating costs ............................................... 164,149 143,682 118,905
General and administrative .................................................. 5,959 5,482 5,092
Depreciation and amortization ............................................... 28,408 27,216 22,544
Impairment of long-lived assets - Note B .................................... 45,447 - 0 - - 0 -
--------- -------- --------
418,183 326,993 282,392
--------- -------- --------
OPERATING INCOME 8,543 37,756 45,227
Interest expense ............................................................... 20,289 16,031 17,028
INCOME (LOSS) BEFORE INCOME TAXES (11,746) 21,725 28,199
Income tax expense (benefit) ................................................... (4,469) 8,638 11,246
--------- -------- --------
NET INCOME (LOSS) $ (7,277) $ 13,087 $ 16,953
========= ======== ========
Weighted average common shares outstanding ..................................... 11,174 11,260 8,477
========= ======== ========
NET INCOME (LOSS) PER SHARE $ (.65) $ 1.16 $ 2.00
========= ======== ========
</TABLE>
See accompanying notes.
14
<PAGE> 4
CONSOLIDATED STATEMENTS
OF CASH FLOWS
<TABLE>
<CAPTION>
(in thousands) Years Ended December 31
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) ....................................................................... $ (7,277) $ 13,087 $ 16,953
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating
activities:
Depreciation and amortization ........................................................ 28,408 27,216 22,544
Impairment of long-lived assets ...................................................... 45,447 - 0 - - 0 -
Deferred income taxes ................................................................ (14,811) 921 1,674
Gain on sales of property and equipment .............................................. (767) (723) (122)
Changes in operating assets and liabilities:
Accounts and notes receivable ..................................................... 7,267 (5,197) 1,692
Inventories ....................................................................... 305 (997) (376)
Prepaid expenses .................................................................. (231) (607) (1,399)
Accounts payable .................................................................. (2,941) 1,395 2,721
Accrued expenses .................................................................. (962) 7,775 3,597
----------- ---------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES ........................................... 54,438 42,870 47,284
INVESTING ACTIVITIES
Purchases of property and equipment ..................................................... (70,926) (58,035) (29,096)
Purchases of assets from other theatre operators ........................................ (23,075) (64,485) (51,050)
Proceeds from sales of property and equipment ........................................... 1,808 2,232 860
Decrease (increase) in:
Short-term investments ............................................................... (224) (2,687) 17,189
Other ................................................................................ (5,781) (458) (2,493)
----------- ---------- ---------
NET CASH USED IN INVESTING ACTIVITIES ................................................ (98,198) (123,433) (64,590)
FINANCING ACTIVITIES:
Debt:
Additional borrowings ............................................................. 1,205,678 392,689 110,950
Repayments ........................................................................ (1,167,929) (315,504) (146,468)
Issuance of Class A Common Stock ........................................................ 113 51 61,147
Recoverable construction allowances under capital leases ................................ 122 (3,200) (1,100)
----------- ---------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES ............................................... 37,984 74,036 24,529
----------- ---------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ........................................ (5,776) (6,527) 7,223
Cash and cash equivalents at beginning of year ............................................. $ 11,345 $ 17,872 $ 10,649
----------- ---------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR ................................................ $ 5,569 $ 11,345 $ 17,872
=========== ========== =========
</TABLE>
See accompanying notes.
15
<PAGE> 5
CONSOLIDATED STATEMENTS
OF SHAREHOLDERS'EQUITY
<TABLE>
<CAPTION>
Class A Class B Class A Common Stock
Common Stock Common 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:
Public offering ............... 2,705 081 - 0 - - 0 - 56,784 - 0 - (170) (914) 57,779
Exercise of warrant ........... 250 8 - 0 - - 0 - 2,867 - 0 - - 0 - - 0 - 2,875
Exercise of stock options ..... 58 2 - 0 - - 0 - 491 - 0 - - 0 - - 0 - 493
Net income ...................... - 0 - - 0 - - 0 - - 0 - - 0 - 16,953 - 0 - - 0 - 16,953
----- ----- ----- ------- -------- -------- ----- ----- ---------
BALANCES AT DECEMBER 31, 1994 ...... 9,738 292 1,421 43 99,763 71,858 - 0 - - 0 - 171,956
Issuance of Class A Common Stock
on exercise of stock options .. 7 - 0 - - 0 - - 0 - 51 - 0 - - 0 - - 0 - 51
Net income ...................... - 0 - - 0 - - 0 - - 0 - - 0 - 13,087 - 0 - - 0 - 13,087
----- ----- ----- ------- ------- --------- ----- ----- ---------
BALANCES AT DECEMBER 31, 1995 ...... 9,745 292 1,421 43 99,814 84,945 - 0 - - 0 - 185,094
ISSUANCE OF CLASS A COMMON STOCK
ON EXERCISE OF STOCK OPTIONS . 14 - 0 - - 0 - - 0 - 113 - 0 - - 0 - - 0 - 113
NET LOSS ........................ - 0 - - 0 - - 0 - - 0 - - 0 - (7,277) - 0 - - 0 - (7,277)
----- ----- ----- ------- -------- -------- ----- ----- ---------
BALANCES AT DECEMBER 31, 1996 ...... 9,759 $292 1,421 $ 43 $ 99,927 $ 77,668 - 0 - $- 0 - $ 177,930
===== ===== ===== ======= ======== ======== ===== ====== =========
</TABLE>
See accompanying notes.
16
<PAGE> 6
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
December 31, 1996
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
The primary business of the Company is the operation of motion picture theatres
which generate revenues principally through admissions and concessions sales.
Such revenues are received in cash at the point of sale. Seven major
distributors in the motion picture industry accounted for films producing
approximately 92% of the Company's admission revenues in 1996.
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of the Company and its subsidiaries. All significant intercompany
accounts and transactions have been eliminated in consolidation.
OPERATING AGREEMENTS: The Company jointly owns or leases certain theatres which
it operates under the terms of operating agreements related to the other
participants' undivided interest in such theatres. The Company consolidates the
results of operations of these theatres in the accompanying Consolidated
Statements of Operations.
CASH EQUIVALENTS: Cash equivalents are highly liquid investments consisting
primarily of money market accounts and investment grade, short-term debt
instruments and have maturities at the date of purchase of less than three
months. The Company limits the amount of its credit exposure to any one
commercial issue of debt instruments. Cash equivalents are stated at cost which
represents the deposit amount plus interest credited to the account. Deposits
with banks are federally insured in limited amounts.
SHORT-TERM INVESTMENTS: Short-term investments consist principally of U.S.
Government securities with maturity dates less than one year from date of
purchase and are stated at cost which approximates market.
INVENTORIES: Inventories, principally concessions and theatre supplies, are
stated at the lower of cost (first-in, first-out method) or market.
INVESTMENT IN PARTNERSHIPS: The Company is a partner in three partnerships
which operate motion picture theatres. The investments in these partnerships
are accounted for by the equity method whereby the cost of the investment is
adjusted to reflect the Company's equity in the earnings or losses of the
partnership less withdrawals made by the Company. The Company's equity in the
earnings of these partnerships was approximately $399,000, $405,000, and
$568,000 for each of the years in the period ended December 31, 1996.
PROPERTY AND EQUIPMENT: Property and equipment are carried at cost.
Depreciation is computed by the straight-line method for financial reporting
purposes as follows: 30 years for buildings and improvements; 1-30 years for
leasehold interests and leasehold improvements; and 5-15 years for equipment.
The Company uses accelerated methods of depreciation for income tax purposes.
Amortization of assets recorded under capital leases is included with
depreciation expense in the accompanying Consolidated Statements of Operations.
ACCRUED EXPENSES: Accrued expenses include accrued property taxes of
approximately $2.7 million at December 31, 1996 and 1995.
ADVERTISING" The Company expenses advertising costs when incurred.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
EXCESS OF PURCHASE PRICE OVER NET ASSETS OF BUSINESSES ACQUIRED: The excess of
purchase price over the net assets of businesses acquired is amortized on a
straight-line basis over a 40 year period.
In the event that facts and circumstances indicate that the excess of purchase
price over net assets of businesses acquired may be impaired, an evaluation of
continuing value would be performed. If an evaluation is required, the
estimated future undiscounted cash flows associated with this asset would be
compared to its carrying amount to determine if a write down to market value or
discounted cash flow value is required.
BENEFIT PLANS: The Company has a non-qualified deferred compensation plan for
certain of its executive officers. Under this plan, the Company contributes ten
percent of the employee's taxable compensation to a trust designated for the
employee. The Company also has a discretionary benefit plan for certain
non-executive employees. Contri-butions to this plan are at the discretion of
the Company's executive management.
Expenses related to these plans are not material to the Company's operations.
STOCK BASED COMPENSATION: The Company grants stock options to employees for a
fixed number of shares with an exercise price equal to the fair value of the
shares at the date of grant. The Company accounts for stock option grants in
accordance with APB Opinion No. 25, Accounting for Stock Issued to Employees,
and accordingly, recognizes no compensation expense for the stock option
grants.
EARNINGS PER COMMON SHARE: Primary earnings per common share are based on the
weighted average common shares outstanding, adjusted for the incremental shares
attributed to outstanding options to purchase common stock which are calculated
using the treasury stock method.
In November 1994, the Company sold 2,875,000 shares of its Class A Common Stock
pursuant to a public offering. Net proceeds of approximately $58.2 million were
used, in part, to retire certain outstanding debt of the Company. If the
transaction had occurred as of January 1, 1994, the net earnings per share
would have been $1.80 per share for the year ended December 31, 1994.
17
<PAGE> 7
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
NOTE B--IMPAIRMENT OF LONG LIVED ASSETS
The Company adopted Statement of Financial Accounting Standards 121 ("Statement
121"), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", as of January 1, 1996. The Company reviews for
impairment long-lived assets, and goodwill related to those assets, to be held
and used in the business whenever events or changes in circumstances indicate
that the carrying amount of an asset or a group of assets may not be
recoverable. The Company considers a trend of operating results that are not in
line with management's expectations to be its primary indicator of potential
impairment. For purposes of Statement 121, assets are evaluated for impairment
at the theatre level, which management believes is the lowest level for which
there are identifiable cash flows. The Company deems a theatre to be impaired
if a forecast of undiscounted future operating cash flows directly related to
the theatre, including disposal value if any, is less than its carrying amount.
If a theatre is determined to be impaired, the loss is measured as the amount
by which the carrying amount of the theatre exceeds its fair value. Fair value
is based on management's estimates which are based on using the best
information available, including prices for similar theatres or the results of
valuation techniques such as discounting estimated future cash flows as if the
decision to continue to use the impaired theatres was a new investment
decision. Considerable management judgment is necessary to estimate discounted
future cash flows. Accordingly, actual results could vary significantly from
such estimates.
Recoverability of other long-lived assets, primarily investments in
unconsolidated affiliates and goodwill not identified with impaired theatres
covered by the above paragraph, will continue to be evaluated on a recurring
basis. The primary indicator of recoverability is the forecasted profitability
over the estimated remaining life of these assets. If recoverability is
unlikely based on the evaluation, the carrying amount is written down to the
fair value. In the future, additional adjustments could be required.
The initial non-cash charge upon the Company's adoption of Statement 121 was
approximately $45.4 million ($28.2 million after tax or $2.50 per share) to
reduce the carrying amount of 138 of the Company's theatres. This initial
charge resulted from evaluating the recoverability of individual theatres,
which is at a lower level than under the Company's previous accounting policy
for measuring impairment. Under the Company's previous policy, the Company's
long-lived assets were evaluated on a market by market basis for impairment.
As a result of the reduced carrying amount of the impaired assets, depreciation
and amortization expense for 1996 was reduced by approximately $4.2 million
($2.6 million after tax or $.23 per share). Statement 121 also requires, among
other provisions, that long-lived assets held for disposal and certain
identified intangibles be reported at the lower of the asset's carrying amount
or its fair value less costs to sell. The impact of adopting Statement 121 on
assets held for disposal was not material.
The Company's policy is to perform its impairment calculations and evaluations
in the fourth quarter of each year.
NOTE C--ACQUISITIONS
The Company's acquisitions are 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
financial statements as of their respective acquisition dates. The assets and
liabilities of acquired businesses are included based on an allocation of the
purchase prices.
In separate transactions, the Company acquired certain assets and businesses as
follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Approximate Number of Number of
Seller Purchase Price Theatres Screens Effective Date
- -------------------------------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C> <C>
1996:
Maxi Saver Cinemas ......................... $ 3,975 2 18 Jan. 5, 1996
Fox Theatres Corp. ......................... 19,100 12 61 Feb. 16, 1996
------- -- --
$23,075 14 79
======= == ===
1995:
Carolina Cinema, Corp. ................ $ 750 2 7 Feb. 10,1995
Theatre Developers, Inc. .............. 1,200 1 8 Feb. 24, 1995
Floyd Theatres, Inc. and affiliates ... 11,300 21 83 March 17, 1995
Rocky Mountain Cinema Partners ........ 1,585 5 11 May 5, 1995
Plitt Theatres, Inc. .................. 22,000 28 145 June 2, 1995
Midcontinent Theatre, Inc. ............ 19,000 14 67 Oct. 13, 1995
Cinemark, USA ......................... 8,000 10 46 Nov. 10, 1995
Theatres Consulting and Management .... 650 2 10 Nov. 10,1995
$64,485 83 377
======= == ===
1994:
General Cinema Corp. and subsidiaries . $ 6,400 6 28 Jan. 21, 1994
General Cinema Corp. of Louisiana ..... $ 5,800 4 20 May 20, 1994
Cinema World, Inc. .................... $38,100 38 176 May 20, 1994
------- -- ---
$50,300 48 224
======= == ===
</TABLE>
18
<PAGE> 8
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
The excess of purchase price over net assets of businesses acquired has been
recorded as an intangible asset. Amounts recorded were $17.0 million in 1996,
$16.7 million in 1995, and $18.7 million in 1994.
Pro-forma results have not been presented for those acquisitions which were not
significant during the years 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 acquisitions occurred on January 1 of the
year presented and should not serve as a forecast of the Company's operating
results for any future periods.
Unaudited pro-forma results for the 1995 acquisitions of Floyd Theatres, Inc.,
Plitt Theatres, Inc., Midcontinent Theatres, Inc., and Cinemark, USA are as
follows (in thousands, except for per share data):
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Years Ended December 31
1995 1994
-------- --------
<S> <C> <C>
Revenues ................ $390,605 $384,016
======== ========
Net income .............. 11,545 18,157
======== ========
Earnings per share ...... $ 1.03 $ 2.14
======== ========
- ----------------------------------------------------------
</TABLE>
The above pro-forma income statement data gives effect to the 1995 acquisitions
of assets as if those acquisitions had occurred at January 1, 1994.
Unaudited pro-forma results of the 1994 acquisition of Cinema World, Inc. are
as follows (in thousands except for per share data):
<TABLE>
<CAPTION>
- ----------------------------------------------------------
Year Ended
December 31, 1994
<S> <C>
Revenues ............. $ 341,022
==========
Net income ........... $ 17,456
==========
Earnings per share ... $ 2.06
==========
- ----------------------------------------------------------
</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 for the 1995 and 1994 acquisitions 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's allocation of the acquisition purchase price.
c. Interest expense has been adjusted to reflect debt incurred at borrowing
rates of 6.0% for 1995 and 5.0% for 1994.
d. Income taxes have been adjusted to reflect the Company's effective tax
rate.
NOTE D--LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
December 31
1996 1995
-------- --------
<S> <C> <C>
Revolving credit facility ............. $122,000 $ 76,500
Industrial Revenue Bonds;
payable in equal installments
through May 2006, with interest
rates ranging from 3.90% to 5.98% ..... 2,719 2,942
Term Loan ............................. - 0 - 875
-------- --------
$124,719 80,317
Less current maturities ............... (243) (1,103)
-------- --------
$124,476 $ 79,214
======== ========
- ------------------------------------------------------------------
</TABLE>
On April 23, 1996, the Company entered into a credit agreement (the "Credit
Agreement") with four banks to provide a revolving line of credit of up to $175
million for working capital, acquisitions and other general corporate purposes.
The Credit Agreement has a three year revolving credit period, which can be
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 interest rates based on
either the bank base rate or LIBOR plus .40% (effective rate of 6.27% at
December 31, 1996) and is required to pay annual commitment fees of .20% on the
full amount of the facility. 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 December 31, 1996, the Company had $53.0 million
available for borrowing under this facility. The Company has classified all
amounts outstanding under the Credit Agreement as long-term in the accompanying
Consolidated Balance Sheets. The Credit Agreement contains certain restrictive
provisions which, among other things, limit additional indebtedness of the
Company, limit the payment of dividends and other defined restricted payments,
require that certain debt to capitalization ratios be maintained and require
minimum levels of cash flows.
The Company has entered into interest rate swap agreements to modify the
interest characteristics of a portion of its outstanding debt. The agreements
involve the exchange of amounts based on a variable interest rate for amounts
based on a fixed interest rate over the life of the agreements without an
exchange of the notional amounts upon which the payments are based. The Company
specifically designates interest rate swaps on hedges of debt instruments and
recognizes interest differentials as adjustments to interest expense in the
period they occur. The differential to be paid or received as interest rates
change is accrued and recognized as an adjustment of interest expense related
to the debt (the accrual accounting method). The related amount payable to, or
receivable from, counter-parties is included in other liabilities or assets.
The fair value of the swap agreements is not recognized in the financial
statements. If, in the future, an interest rate swap agreement were terminated,
any resulting gain or loss would be deferred and amortized to interest expense
over the remaining life of the interest rate swap agreement. In the event of
early extinguishment of a designated debt obligation, any realized or
unrealized gain or loss from the swap would be recognized in income coincident
with the extinguishment.
The interest rate swap agreements changed floating interest rate expense on
amounts outstanding under the Credit Agreement. Under one interest rate swap
agreement, the Company has fixed $50.0 million of the Company's floating rate
debt for seven years. The effective rate at December 31, 1996 was 6.105%, equal
to a fixed rate of 5.705% plus the margin of .40% the Company presently pays
over
19
<PAGE> 9
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
LIBOR. Under another interest rate swap agreement, the Company has fixed $20.0
million of its floating rate debt for five years at a fixed rate of 5.51% plus
the margin the Company pays over LIBOR (.40% at December 31, 1996) for a total
effective rate of 5.91%.
The Company is exposed to credit losses in the event of nonperformance by
counter-parties on interest rate swap agreements. The Company does not believe
there is a significant risk of nonperformance by any of the counter-parties to
these instruments and the Company monitors the financial stability of such
parties on a periodic basis.
On December 31, 1996, the Company had approximately $40.1 million of
unrestricted retained earnings available for dividends under the most
restrictive debt agreement.
Interest paid and interest capitalized were as follows (in thousands):
<TABLE>
<CAPTION>
- ----------------------------------------------------
Year Ended Interest Interest
December 31 Paid Capitalized
----------- -------- -----------
<S> <C> <C>
1996 $17,590 $1,115
1995 13,264 794
1994 16,398 408
- ----------------------------------------------------
</TABLE>
Aggregate principal payments on long-term debt as of December 31, 1996 are as
follows (in thousands):
<TABLE>
<S> <C>
1997................ $ 243
1998................ 252
1999................ 122,263
2000................ 263
2001................ 263
Thereafter.......... 1,435
$124,719
</TABLE>
NOTE E--SENIOR NOTES
The Company has outstanding various unsecured notes payable to institutional
investors (collectively the "Senior Notes") as follows (in thousands):
<TABLE>
<CAPTION>
- --------------------------------------------------------
December 31
1996 1995
---- ----
<S> <C> <C>
10.53% Senior Notes,
due 2005 ............. $ 61,364 $ 68,182
7.90% Senior Notes,
due 2002 ............. 21,428 25,000
7.52% Senior Notes,
due 2003 ............. 25,000 25,000
-------- --------
107,792 118,182
Less current maturities . (13,961) (10,390)
-------- --------
$ 93,831 $107,792
======== ========
- --------------------------------------------------------
</TABLE>
The 7.52% Senior Notes provide for annual principal payments of $3.6 million
beginning March 1, 1997 through maturity. The 7.90% Senior Notes provide for
annual principal payments of $3.6 million through maturity. The 10.53% Senior
Notes provide for annual principal payments of $6.8 million through maturity.
Loan fees of approximately $908,000 applicable to the 10.53% Senior Notes were
capitalized and are being amortized over the life of the 10.53% Senior Notes.
The agreements pursuant to which each of the above Senior Notes were issued
contain certain restrictive provisions which, among other things, limit
additional indebtedness of the Company and require minimum levels of net worth
and cash flows.
NOTE F--LEASES
Certain of the Company's theatres and equipment are leased under non-cancelable
leases expiring in various years through 2023. The theatre leases generally
provide for the payment of fixed monthly rentals, contingent rentals based on a
percentage of revenue over a specified amount, and the payment of property
taxes, common area maintenance, insurance and repairs. The Company, at its
option, can renew a substantial portion of its theatre leases, at the then fair
rental rate, for various periods with the maximum renewal period totaling 40
years.
Property and equipment includes the following amounts related to capital lease
assets (in thousands):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
December 31
1996 1995
-------- --------
<S> <C> <C>
Buildings and improvements .... $ 32,655 $ 31,140
Equipment ..................... 2,877 2,877
-------- --------
35,532 34,017
Less accumulated amortization . (9,141) (8,804)
-------- --------
$ 26,391 $ 25,213
======== ========
- ---------------------------------------------------------------
</TABLE>
Future minimum payments, by year and in the aggregate, under capital leases and
non-cancelable operating leases with terms over one year as of December 31,
1996 are as follows (in thousands):
<TABLE>
<CAPTION>
- --------------------------------------------------------
Operating Capital
Leases Leases
--------- -------
<S> <C> <C>
1997 $ 43,529 $ 4,711
1998 41,230 4,715
1999 39,110 4,600
2000 36,998 4,460
2001 34,174 4,403
Thereafter 219,024 61,528
-------- -------
Total minimum lease payments $414,065 $84,417
========
Less amounts representing interest ......... (52,244)
Present value of future -------
minimum lease payments .................. 32,173
Less current maturities .................... (822)
-------
$31,351
=======
</TABLE>
Rent expense for each of the three years in the period ended December 31, 1996
was approximately $54.8 million, $45.6 million and $36.1 million, respectively.
NOTE G-STOCK OPTION PLAN
The Company has a stock option plan covering 700,000 shares of Class A Common
Stock. Key employees may be granted options at terms (purchase price,
expiration date and vesting schedule) established at the date of grant by a
committee of the Company's Board of Directors. Options granted through December
31, 1996, have been at a price which approximated fair market value on the date
of the grant.
20
<PAGE> 10
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
Changes in outstanding stock options were as follows (in thousands, except per
share amounts):
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Exercise Price Per Share
------------------------
$6.00 $8.50 $9.00 $18.00 Total
----- ----- ----- ------ -----
<S> <C> <C> <C> <C> <C>
Stock options outstanding at December 31, 1993 1 156 23 - 0 - 180
Issued........................................... - 0 - - 0 - - 0 - 143 143
Exercised........................................ - 0 - (56) (2) - 0 - (58)
Stock options outstanding at December 31, 1994........ 1 100 21 143 265
Exercised........................................ - 0 - (7) - 0 - - 0 - (7)
Stock options outstanding at December 31, 1995........ 1 93 21 143 258
Exercised........................................ - 0 - (14) - 0 - - 0 - (14)
Forfeited........................................ (1) - 0 - (1) (8) (10)
Stock options outstanding at December 31,1996......... - 0 - 79 20 135 234
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Company had 169,000 and 160,000 shares available for grant as of December
31, 1996 and 1995, respectively.
At December 31, 1996, all the above options were exercisable except for the
$18.00 options which become exercisable on March 16, 1997.
NOTE H--SHAREHOLDERS' EQUITY
The Company's authorized capital consists of 22.5 million shares of Class A
Common Stock, $.03 par value, 5 million shares of Class B Common Stock, $.03
par value, and 1 million shares of Preferred Stock, $1.00 par value. Each share
of Class A Common Stock entitles the holder to one vote per share, whereas a
share of Class B Common Stock entitles the holder to ten votes per share. Each
share of Class B Common Stock is entitled to cash dividends, when declared, in
an amount equal to 85% of the cash dividends payable on each share of Class A
Common Stock. Additionally, Class B Common Stock is convertible at any time by
the holder into an equal number of shares of Class A Common Stock.
In connection with a 1993 acquisition, the Company issued a $4 million face
value zero coupon convertible subordinated note (the "Convertible Note")
maturing June 1, 1998 and convertible, at the holder's option, into 100,000
shares of Class A Common Stock.
The Company has shares of Class A Common Stock reserved for future issuance as
follows (in thousands):
<TABLE>
<CAPTION>
December 31
1996 1995
---- ----
<S> <C> <C>
Stock option plan ........... 405 418
Convertible Note ............ 100 100
Conversion rights of
Class B Common Stock ..... 1,421 1,421
----- -----
1,926 1,939
===== =====
</TABLE>
NOTE I--INCOME TAXES
The Company accounts for income taxes in accordance with 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.
The provision for income tax expense (benefit) is summarized as follows (in
thousands):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
Years Ended December 31
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Current:
Federal................. $ 8,492 $6,255 $ 7,165
State................... 1,850 1,462 1,860
Deferred.................. (14,811) 921 2,221
-------- ------ -------
$ (4,469) $8,638 $11,246
======== ====== =======
- --------------------------------------------------------------------
</TABLE>
Significant components of the Company's deferred tax liabilities (assets) are
as follows (in thousands):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
December 31
1996 1995
---- ----
<S> <C> <C>
Financial statement bases
of property and equipment
over tax bases ....... $ 3,744 $ 18,135
Westwynn net operating
loss carry-forward ... $ (568) (1,121)
Deferred rent ........... (1,595) (1,171)
Income taxes payable
for prior years ...... 2,504 2,518
Other ................... 437 72
-------- --------
$ 4,522 $ 18,433
======== ========
- --------------------------------------------------------------------
</TABLE>
21
<PAGE> 11
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
A reconciliation of income tax expense (benefit) at the federal income tax rate
and income tax expense (benefit) as reflected in the consolidated financial
statements follows (in thousands):
<TABLE>
<CAPTION>
Years Ended December 31
1996 1995 1994
------- -------- --------
<S> <C> <C> <C>
Income tax expense
(benefit) at statutory
rates ........................... $(4,111) $ 7,604 $ 9,870
State income taxes, net of
federal tax benefit ............. (501) 1,071 1,523
Amortization of excess of
purchase price over net assets
of business acquired ............ 79 79 79
Other items, net ................... 64 (116) (226)
------- -------- --------
$(4,469) $ 8,638 $ 11,246
======= ======== ========
</TABLE>
Income taxes paid in each of the three years in the period ended December 31,
1996, were approximately $9.2 million, $3.7 million and $8.7 million,
respectively.
NOTE J--COMMITMENTS AND CONTINGENCIES
The Company is subject to various claims and lawsuits arising in the ordinary
course of business. In the opinion of management, the ultimate resolution of
these matters will not have a material effect on the consolidated financial
statements of the Company.
NOTE K--FINANCIAL INSTRUMENTS
CONCENTRATIONS OF CREDIT RISK: Financial instruments that potentially subject
the Company to significant concentrations of credit risk consist principally of
cash investments and short-term investments.
The Company maintains cash and cash equivalents and short-term investments and
certain other financial instruments with various financial institutions. These
financial institutions are located in the southeast and Company policy is
designed to limit exposure to any one institution. The Company performs
periodic evaluations of the relative credit standing of those financial
institutions that are considered in the Company's investment strategy.
SHORT-TERM INVESTMENTS: The Company's short-term investments consist of U.S.
Treasury Notes with maturities of less than one year. The carrying value
approximates market at December 31, 1996 and 1995.
The following methods and assumptions were used by the Company in estimating
its fair value disclosures for financial instruments:
CASH AND CASH EQUIVALENTS: The carrying amount reported in the balance sheets
for cash and cash equivalents approximates their fair value.
ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE: The carrying amounts reported in the
balance sheets for accounts receivable and accounts payable approximate their
fair value.
LONG-TERM DEBT: The carrying amounts of the Company's long-term debt borrowings
approximate their fair value. The fair values of the Company's long-term debt
are estimated using discounted cash flow analyses, based on the Company's
current incremental borrowing rates for similar types of borrowing
arrangements.
SENIOR NOTES: The cumulative fair value of the Company's Senior Notes at
December 31, 1996 is estimated to be approximately $113.4 million. This
estimate is based on a discounted cash flow analysis using the Company's
current incremental borrowing rates for similar types of agreements. The
Company does not anticipate settlement of this debt at fair value and currently
intends to hold the Senior Notes through maturity.
INTEREST RATE SWAP AGREEMENTS: The unrealized gain for the interest rate swap
agreements was approximately $2.2 million at December 31, 1996 based on
evaluations made by the counter-parties to the interest rate swap agreements.
The Company does not anticipate realization of this gain as the Company
intends to hold the interest rate swap agreements to maturity.
NOTE L--QUARTERLY RESULTS (UNAUDITED)
(In thousands, except for per share data)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1996 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER TOTAL
- ---------------------------- ----------- ----------- ----------- ----------- -----
<S> <C> <C> <C> <C> <C>
TOTAL REVENUES ...................................... $ 92,156 $104,698 $121,108 $108,764 $426,726
OPERATING INCOME BEFORE ADOPTION OF STATEMENT 121 ... 8,583 13,039 20,290 12,078 53,990
NET INCOME BEFORE ADOPTION OF STATEMENT 121 ......... 2,263 4,899 9,565 4,173 20,900
NET INCOME PER COMMON SHARE ......................... .20 .43 .85 .37 1.85
Year Ended December 31, 1995
Total revenues ...................................... $ 63,898 $ 91,233 $112,421 $ 97,197 $364,749
Operating income .................................... 244 10,899 17,133 9,480 37,756
Net income (loss) ................................... (2,058) 4,161 7,840 3,144 13,087
Net income (loss) per common share .................. (.18) .37 .70 .28 1.16
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Net income (loss) per common share calculations for each of the above quarters
is based on the weighted average number of shares outstanding for each period
and the sum of the quarters may not necessarily equal the net income (loss) per
common share amount for the year.
Amounts presented above for the quarter ended March 31, 1996 and the year
ended December 31, 1996 exclude the impact of adopting Statement 121. Amounts
including the impact of Statement 121 were as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------
1st Quarter Total
----------- -------------
<S> <C> <C>
Total revenues................ $(92,156) $426,726
Operating income (loss)....... (36,864) 8,543
Net loss...................... (25,915) (7,277)
Net loss per common share..... $ (2.30) $ (.65)
- -----------------------------------------------------------
</TABLE>
<PAGE> 12
REPORT OF
INDEPENDENT AUDITORS
Board of Directors and Shareholders
Carmike Cinemas, Inc.
We have audited the accompanying consolidated balance sheets of Carmike
Cinemas, Inc. and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended December 31,1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Carmike Cinemas,
Inc. and subsidiaries at December 31, 1996 and 1995 and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
As discussed in Note B to the financial statements, in 1996 the Company changed
its method of accounting for long-lived assets.
/s/ Ernst & Young LLP
Columbus, Georgia
February 3, 1997
23
<PAGE> 13
SELECTED FINANCIAL
AND OPERATING DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion of the Company's financial condition and results of
operations should be read in conjunction with the financial information
included herein and the Company's annual report on Form 10-K for the fiscal
year ended December 31, 1996 (the "1996 Form 10-K") as filed with the
Securities and Exchange Commission (the "SEC"). Except for the historical
information contained herein, the following discussion contains forward-looking
statements that involve a number of risks and uncertainties. Factors which
could cause the Company's actual results in future periods to differ materially
include, but are not limited to, the availability of suitable motion pictures
for exhibition in the Company's markets, the availability of opportunities for
expansion, and competition with other forms of entertainment, as well as other
factors discussed or identified from time to time in the Company's filings with
the SEC, including, but not limited to, the Company's 1996 Form 10-K.
RESULTS OF OPERATIONS
Comparison of Years Ended December 31, 1996
and December 31, 1995
Total revenues for the year ended December 31, 1996 increased 17.0% to
$426,726,000 from $364,749,000. This increase consists of a $42,938,000
increase in admissions and a $19,039,000 increase in concessions and other.
Overall attendance increased 14.3% due to the additional screens in operation
which were acquired in 1995 and 1996 (see Note C of Notes to Consolidated
Financial Statements). Attendance on a same screen comparison was basically
the same for 1996 as 1995. Average admission prices increased 2.3% to $4.00
from $3.91 and average concession sales per person increased 2.5% from $1.58
to $1.62.
Cost of theatre operations (film exhibition costs, concession costs and other
theatre operating costs) increased 15.0% to $338,369,000 from $294,295,000 due
to the increased number of screens in operation and the increase in attendance.
As a percentage of revenues, cost of theatre operations decreased from 80.7% of
total revenues to 79.3%. This percentage decrease is due primarily to a lower
level of salaries at the Company.
General and administrative costs increased 8.7% from $5,482,000 in 1995 to
$5,959,000 in 1996 reflecting additional general and administrative costs
incurred to properly integrate the new screens acquired in 1995 and 1996. As a
percentage of total revenues, general and administrative costs decreased from
1.5% to 1.4%.
Depreciation and amortization increased 4.4% to $28,408,000 from $27,216,000 as
a result of the increased screens in operation which were acquired in 1995 and
1996 (see Note C of Notes to Consolidated Financial Statements) combined with
the additional screens added through internal construction. This amount has
also been reduced from the impact of adopting Statement 121 (see Note B of
Notes to Consolidated Financial Statements). As a percentage of total revenues,
depreciation and amortization decreased from 7.5% of total revenues to 6.7% of
total revenues.
Interest expense increased 26.6% to $20,289,000 from $16,031,000 in 1995. This
increase reflects a higher average amount of debt outstanding for 1996.
The Company adopted Statement of Financial Accounting Standards 121 ("Statement
121"), "Accounting for the Impairment of Long-Lived Assets to be Disposed of,"
as of January 1, 1996 (see Note B of Notes to Consolidated Financial
Statements). The initial non-cash charge upon the Company's adoption of
Statement 121 was approximately $45,447,000 ($28,177,000 after tax, or $2.50
per share) to reduce the carrying value of 138 theatres, constituting
approximately 26% of the Company's theatres. This charge resulted from the
evaluation of asset impairment on an individual theatre level rather than on a
market level, which had been the Company's previous accounting policy for
evaluating and measuring impairment. As noted above, the write-down of assets
under Statement 121 resulted in a reduction in depreciation and amortization
expense in the year ended December 31, 1996.
The Company grouped its theatres into corporations in 1995 to achieve business
and tax efficiencies. As a result of these changes, management cost is more
appropriately allocated among the operations and the Company's effective tax
rate declined from approximately 40% to approximately 38%.
24
<PAGE> 14
SELECTED FINANCIAL
AND OPERATING DATA
Comparison of Years Ended December 31, 1995
and December 31, 1994
Total revenues for the year ended December 31, 1995 increased 11.3% to
$364,749,000 from $327,619,000. This increase consists of a $21,557,000
increase in admissions and a $15,573,000 increase in concessions and other.
Overall attendance increased 8.9% due to the additional screens in operation
which were acquired in 1994 and 1995 (see Note C of Notes to Consolidated
Financial Statements); however, attendance for 1995 on a same screen comparison
decreased 7.9%, reflecting fewer blockbuster type movies in 1995. Average
admission prices increased .5% to $3.91 and average concession sales per patron
increased 8.2% from $1.46 to $1.58.
Cost of theatre operations (film exhibition costs, concession costs and other
theatre operating costs) increased 15.5% to $294,295,000 due to the increased
number of screens in operation and the increase in attendance. As a percentage
of revenues, cost of theatre operations increased from 77.8% of total revenues
to 80.7% of total revenues. This percentage increase is due primarily to a
higher level of occupancy expense and to a lesser degree salaries included in
this expense category that do not fluctuate proportionately with decreases in
attendance levels.
General and administrative costs increased 7.7% from $5,092,000 to $5,482,000
in 1995 reflecting additional general and administrative costs incurred to
properly integrate the new screens acquired in 1994 and 1995. As a percentage
of total revenues, general and administrative costs decreased from 1.6% of
total revenues to 1.5% of total revenues.
Depreciation and amortization increased 20.7% to $27,216,000 from $22,544,000
as a result of the increased screens in operation which were acquired in 1994
and 1995 (see Note C of Notes to Consolidated Financial Statements) combined
with the additional screens added through internal construction. As a
percentage of total revenues, depreciation and amortization increased from 6.8%
of total revenues to 7.5% of total revenues.
Interest expense decreased 5.9% to $16,031,000 from $17,028,000 in 1994. This
decrease reflects a lower average amount of debt outstanding for most of 1995.
SEASONALITY AND INFLATION
The major film distributors generally release those films which they anticipate
to be the most successful during the summer and holiday seasons. Consequently,
the Company has historically generated higher revenues during such periods.
Inflation has not had a significant impact on the operations of the Company in
any of the periods discussed above.
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 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 capital needs for theatre construction and
possible acquisitions should be satisfied by internally generated cash flow,
cash and cash equivalents and short-term investments on hand, borrowings under
the revolving credit line (see Note D of Notes to Consolidated Financial
Statements), additional sale of debt and/or equity securities, additional bank
financing and other forms of long-term debt and, where appropriate, future
lease financing. At March 12, 1997, the Company had approximately $8.7 million
in cash and short-term investments on hand and approximately $35.5 million was
available under the Company's revolving credit facility.
25
<PAGE> 15
SELECTED FINANCIAL
AND OPERATING DATA
(in thousands, except for per share and operating data)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
1996(1)(2) 1995(1) 1994(1) 1993(3) 1992
---------- ------- ------- ------- ----
INCOME STATEMENT DATA:
Revenues:
<S> <C> <C> <C> <C> <C>
Admissions ............................. $296,629 $253,691 $232,134 $167,294 $119,408
Concessions and other .................. 130,097 111,058 95,485 74,504 52,570
-------- -------- -------- -------- --------
TOTAL REVENUES 426,726 364,749 327,619 241,798 171,978
Costs and Expenses:
Film exhibition costs .................. 156,968 135,654 123,610 90,874 63,826
Concession costs ....................... 17,252 14,959 12,241 9,406 7,815
Other theatre operating costs .......... 164,149 143,682 118,905 86,498 63,563
General and administrative ............. 5,959 5,482 5,092 4,710 3,897
Depreciation and amortization .......... 28,408 27,216 22,544 16,255 11,134
-------- -------- -------- -------- --------
372,736 326,993 282,392 207,743 150,235
-------- -------- -------- -------- --------
OPERATING INCOME 53,990 37,756 45,227 34,055 21,743
Interest expense ........................... 20,289 16,031 17,028 14,282 11,623
-------- -------- -------- -------- --------
INCOME BEFORE INCOME TAXES 33,701 21,725 28,199 19,773 10,120
Income taxes ............................... 12,801 8,638 11,246 7,912 4,008
-------- -------- -------- -------- --------
NET INCOME $ 20,900 $ 13,087 $ 16,953 $ 11,861 $ 6,112
======== ======== ======== ======== ========
Earnings per common share .................. $ 1.85 $ 1.16 $ 2.00 $ 1.50 $ .80
======== ======== ======== ======== ========
Weighted average common shares outstanding . 11,277 11,260 8,477 7,917 7,672
======== ======== ======== ======== ========
OPERATING DATA:
Theatres (at end of period) ................ 519 519 445 409 302
Screens (at end of period) ................. 2,518 2,383 1,942 1,701 1,215
Average screens per theatre ................ 4.9 4.6 4.4 4.2 4.0
Total attendance (thousands) ............... 74,213 64,496 59,660 45,493 34,415
BALANCE SHEET DATA (AT END OF YEAR):
Cash and cash equivalents .................. $ 5,569 $ 11,345 $ 17,872 $ 10,649 $ 16,842
Total assets ............................... 489,383 478,012 377,598 327,024 230,291
Total long-term debt (4) ................... 253,233 218,305 143,973 180,636 120,234
Shareholders' equity ....................... 177,930 185,094 171,956 93,856 75,728
</TABLE>
(1) See Note C of Notes to Consolidated Financial Statements with respect to
acquisitions.
(2) Excludes the impact of adopting Statement 121 (see Notes B and L of Notes
to Consolidated Financial Statements).
(3) Excludes $390,000 cumulative effect of change in accounting for income
taxes.
(4) Less current maturities. Includes senior notes, capital lease obligations
and convertible subordinated debt (see Notes D, E and F of Notes to
Consolidated Financial Statements).
26
<PAGE> 16
General Information
Carmike Cinemas, Inc. is the largest motion picture exhibitor in the
United States, operating 519 theatres with an aggregate of 2,518 screens in
markets located primarily in the Southeast, the Northeast, the Midwest and the
West. During 1996, the Company opened eight new theatres (73 screens), added 32
screens to existing complexes and purchased fourteen multiplex theatres with a
total of 79 screens.
Stock Trading Information
Carmike Cinemas, Inc. Class A Common Stock trades on the New York Stock
Exchange under the symbol "CKE." The following table sets forth for the periods
indicated the high and low sales prices of a share of Class A Common Stock as
reported by the New York Stock Exchange:
<TABLE>
<CAPTION>
1996 1995
QUARTER ENDED HIGH LOW HIGH LOW
<S> <C> <C> <C> <C>
March $ 23 7/8 $20 1/4 $23 3/8 $19 1/2
June 32 1/2 22 7/8 25 1/2 18 3/4
September 27 22 1/8 25 19 1/4
December 27 1/8 22 3/8 24 1/4 20 1/4
</TABLE>
The Company has declared no dividends and intends to employ future
earnings in the expansion of its business. (See Notes D and E of Notes to
Consolidated Financial Statements with respect to restrictions on dividends.)
On March 7, 1997, the Class A Common Stock was held of record by 763
shareholders. The Company believes that number substantially understates the
beneficial holders of its Class A Common Stock. As of the same date, the Class
B Common Stock was held of record by twelve shareholders. There is no public
trading market for the Class B Common Stock of the Company.
Shareholder Services
Shareholders desiring to change the name, address, or ownership of stock,
to report lost certificates or to consolidate accounts should contact the
transfer agent:
Synovus Trust Company
c/o Carmike Cinemas, Inc. Shareholder Relations
3295 Northcrest Road, N.E.
Atlanta, Georgia 30340-4099
800/241-5568
Form 10-K
A copy of the Company's 1996 Annual Report on Form 10-K, filed with the
Securities and Exchange Commission, is available at no charge to each
shareholder upon written request to:
John O. Barwick, III
Vice President - Finance
Carmike Cinemas, Inc.
P.O. Box 391
Columbus, Georgia 31902-0391
Annual Meeting
The Annual Meeting of the Shareholders of Carmike Cinemas, Inc. will be
held at the offices of Troutman Sanders LLP, NationsBank Plaza, 600 Peachtree
St. N.E., 52nd Floor, Atlanta, Georgia on Monday, May 5, 1997, commencing at
11:00 a.m. E.S.T.
Coming Soon
www.carmike.com
DIRECTORS, OFFICERS AND
SHAREHOLDERS' INFORMATION
Directors
C.L PATRICK
Chairman of the Board
Carmike Cinemas, Inc.
Columbus, Georgia
MICHAEL W. PATRICK
President and CEO
Carmike Cinemas, Inc.
Columbus, Georgia
JOHN W. JORDAN, II
Managing Partner
The Jordan Company
New York, NewYork
CARL L. PATRICK, JR.
Certified Public
Accountant/Attorney
Director, Summit Bank
Corporation and
Co-Chairman PGL
Entertainment Corporation
CARL E. SANDERS
Chairman
Troutman Sanders LLP
Attorneys
Atlanta, Georgia
DAVID ZALAZNICK
Partner
The Jordan Company
New York, New York
General Offices
Carmike Cinemas, Inc.
1301 First Avenue
Columbus, Georgia
31901-2109
Officers
C.L Patrick
Chairman of the Board
MICHAEL W. PATRICK
President and CEO
JOHN O. BARWICK, III
Vice President - Finance
Treasurer & CFO
FRED W. VAN NOY
Vice President -
General Manager
Larry M. Adams
Vice President -
Informational Systems
and Secretary
ANTHONY J. RHEAD
Vice President - Film
P. LAMAR FIELDS
Vice President -
Development
H. MADISON SHIRLEY
Vice President - Concessions
& Assistant Secretary
MARILYN B. GRANT
Vice President - Advertising
JAMES R. DAVIS
Vice President - Technical
27
<PAGE> 1
EXHIBIT 21
CARMIKE CINEMAS, INC.
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
STATE OF
SUBSIDIARY % OWNED INCORPORATION
- ---------- ------- -------------
<S> <C> <C>
Wooden Nickel Pub, Inc. 100% Delaware
Eastwynn Theatres, Inc. 100% Alabama
Military Services, Inc. 80% Delaware
Carmike Realty, Inc. 100% Georgia
</TABLE>
26
<PAGE> 1
EXHIBIT 23
Consent of Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Carmike Cinemas, Inc. of our report dated February 3, 1997, included in
the 1996 Annual Report to Shareholders of Carmike Cinemas, Inc. and
subsidiaries.
We also consent to the incorporation by reference in the Registration
Statements (Form S-8 No. 33-13723 and Form S-8 No. 33-48011) pertaining to
the stock option plan of Carmike Cinemas, Inc. and subsidiaries of our report
dated February 3, 1997, with respect to the consolidated financial statements
of Carmike Cinemas, Inc. and subsidiaries incorporated by reference in the
Annual Report (Form 10-K) for the year ended December 31, 1996.
/s/ Ernst & Young LLP
Columbus, Georgia
March 14, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-K
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-K FILED FOR YEAR
ENDED 12/31/96.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,569,000
<SECURITIES> 7,726,000
<RECEIVABLES> 4,822,000
<ALLOWANCES> 0
<INVENTORY> 2,631,000
<CURRENT-ASSETS> 26,111,000
<PP&E> 507,726,000
<DEPRECIATION> 119,811,000
<TOTAL-ASSETS> 489,383,000
<CURRENT-LIABILITIES> 53,698,000
<BONDS> 0
0
0
<COMMON> 335,000
<OTHER-SE> 177,595,000
<TOTAL-LIABILITY-AND-EQUITY> 489,383,000
<SALES> 130,097,000
<TOTAL-REVENUES> 426,726,000
<CGS> 17,252,000
<TOTAL-COSTS> 338,369,000
<OTHER-EXPENSES> 79,814,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (11,746,000)
<INCOME-TAX> (4,469,000)
<INCOME-CONTINUING> (7,277,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,277,000)
<EPS-PRIMARY> (.65)
<EPS-DILUTED> 0
</TABLE>