Regal Entertainment Group (NYSE: RGC), a leading motion picture
exhibitor, today announced third quarter 2017 results.
Total revenues for the third quarter ended September 30, 2017
were $716.0 million compared to total revenues of $811.5 million
for the third quarter ended September 30, 2016. Net income
attributable to controlling interest in the third quarter of 2017,
which included a $10.7 million after-tax gain on the sale of our
investment in Open Road Films, was $11.4 million compared to $42.3
million in the third quarter of 2016. Diluted earnings per share(1)
was $0.07 for the third quarter of 2017 compared to $0.27 for the
third quarter of 2016. Adjusted diluted earnings per share(1) was
$0.07 for the third quarter of 2017 compared to $0.29 for the third
quarter of 2016. Net cash provided by operating activities was
$47.8 million for the third quarter of 2017 and $9.1 million for
the third quarter of 2016. Adjusted EBITDA(3) was $104.4 million
for the third quarter of 2017 and $155.9 million for the third
quarter of 2016. Reconciliations of non-GAAP financial measures are
provided in the financial schedules accompanying this press
release.
Regal’s Board of Directors also today declared a cash dividend
of $0.22 per Class A and Class B common share, payable on December
15, 2017, to stockholders of record on December 4, 2017. The
Company intends to pay a regular quarterly dividend for the
foreseeable future at the discretion of the Board of Directors
depending on available cash, anticipated cash needs, overall
financial condition, loan agreement restrictions, future prospects
for earnings and cash flows as well as other relevant factors.
“In a challenging third quarter box office environment, we were
pleased that our ongoing focus on customer amenities had a positive
impact on our market share and operating metrics, including
significant growth in both average ticket price and concession
sales per patron,” stated Amy Miles, CEO of Regal Entertainment
Group. “Looking ahead, we are optimistic regarding the potential
for box office success during the upcoming holiday season and
throughout 2018,” Miles continued.
Forward-looking Statements:
This press release includes “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements included herein, other than statements of
historical fact, may constitute forward-looking statements.
Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be correct.
Important factors that could cause actual results to differ
materially from the Company’s expectations are disclosed in the
risk factors contained in the Company’s 2016 Annual Report on Form
10-K filed with the Securities and Exchange Commission on February
27, 2017. All forward-looking statements are expressly qualified in
their entirety by such factors.
Conference Call:
Regal Entertainment Group management will conduct a conference
call to discuss third quarter 2017 results on October 24, 2017 at
4:30 p.m. (Eastern Time). Interested parties can listen to the call
live on the Internet through the Investor Relations section of the
Company’s website: www.REGmovies.com or by dialing 877-407-0778
(Domestic) and 201-689-8565 (International). Please dial in to the
call at least 5-10 minutes prior to the start of the call or go to
the website at least 15 minutes prior to the call to download and
install any necessary audio software. When prompted, ask for the
Regal Entertainment Group conference call. A replay of the call
will be available beginning approximately two hours following the
call. Those interested in listening to the replay of the conference
call should dial 877-481-4010 (Domestic) or 919-882-2331
(International) and enter conference call ID #10181.
About Regal Entertainment Group:
Regal Entertainment Group (NYSE: RGC) operates one of the
largest and most geographically diverse theatre circuits in the
United States, consisting of 7,315 screens in 561 theatres in 43
states along with Guam, Saipan, American Samoa and the District of
Columbia as of September 30, 2017. The Company operates theatres in
48 of the top 50 U.S. designated market areas. We believe that the
size, reach and quality of the Company’s theatre circuit not only
provide its patrons with a convenient and enjoyable movie-going
experience, but is also an exceptional platform to realize
economies of scale in theatre operations.
Additional information is available on the Company’s website at
www.REGmovies.com.
Regal Entertainment
GroupConsolidated Statements of Income InformationFor
the Quarters and Three Quarters Ended 9/30/17 and 9/30/16(in
millions, except per share data)(unaudited)
Quarter Ended Three
Quarters Ended Sept. 30, 2017 Sept. 30, 2016 Sept.
30, 2017 Sept. 30, 2016 Revenues Admissions $ 455.4 $
525.3 $ 1,469.8 $ 1,546.8 Concessions 212.7 239.9 683.6 705.5 Other
operating revenues 47.9 46.3 148.0 132.2
Total revenues 716.0 811.5 2,301.4 2,384.5 Operating
expenses Film rental and advertising costs 236.8 275.6 778.4 832.0
Cost of concessions 28.1 31.3 89.5 90.1 Rent expense 107.0 107.3
319.2 321.1 Other operating expenses 227.4 226.3 665.9 652.6
General and administrative expenses (including share-based
compensation of $2.4 and $2.5 for the quarters ended September 30,
2017 and September 30, 2016, respectively, and $6.9 and $6.6 for
the three quarters ended September 30, 2017 and September 30, 2016,
respectively) 19.9 20.5 65.4 62.6 Depreciation and amortization
62.4 58.5 186.2 171.1 Net loss on disposal and impairment of
operating assets and other 11.9 4.8 15.8 10.6
Income from operations 22.5 87.2 181.0 244.4 Interest
expense, net 31.7 31.9 93.5 96.7 Loss on extinguishment of debt ― ―
1.3 1.5 Earnings recognized from NCM (5.4 ) (3.6 ) (14.0 ) (18.8 )
Gain on sale of Open Road Films investment (17.8 ) ― (17.8 ) ―
Equity in income of non-consolidated entities and other, net (10.0
) (12.6 ) (26.7 ) (33.0 ) Income before income taxes 24.0 71.5
144.7 198.0 Provision for income taxes 12.6 29.2 61.3
81.4 Net income 11.4 42.3 83.4 116.6 Noncontrolling
interest, net of tax ― ― ― (0.1 ) Net income
attributable to controlling interest $ 11.4 $ 42.3 $
83.4 $ 116.5 Diluted earnings per share(1) $
0.07 $ 0.27 $ 0.53 $ 0.74 Adjusted diluted earnings per share(1) $
0.07 $ 0.29 $ 0.55 $ 0.79 Weighted average number of diluted shares
outstanding(2) 156.9 156.9 157.0 156.8
Consolidated Summary Balance Sheet
Information(dollars in millions)(unaudited)
As of
September 30, 2017
As of
December 31, 2016
Cash and cash equivalents $ 189.5 $ 246.5 Total assets 2,672.2
2,645.7 Total debt 2,478.1 2,340.1 Total stockholders’ deficit of
Regal Entertainment Group (855.3 ) (839.1 )
Operating Data(unaudited)
Quarter Ended Three
Quarters Ended Sept. 30, 2017 Sept. 30, 2016 Sept.
30, 2017 Sept. 30, 2016 Theatres at period end
561 565 561 565 Screens at period end 7,315 7,310 7,315 7,310
Average screens per theatre 13.0 12.9 13.0 12.9 Attendance (in
thousands) 44,687 54,513 145,483 159,056 Average ticket price $
10.19 $ 9.64 $ 10.10 $ 9.72 Average concessions per patron $ 4.76 $
4.40 $ 4.70 $ 4.44
Reconciliation of Net Income
Attributable to Controlling Interest to EBITDA to Net Cash Provided
by Operating Activities(dollars in millions)(unaudited)
Quarter Ended Three
Quarters Ended Sept. 30, 2017 Sept. 30, 2016 Sept.
30, 2017 Sept. 30, 2016 Net income attributable to
controlling interest $ 11.4 $ 42.3 $ 83.4 $ 116.5 Interest expense,
net 31.7 31.9 93.5 96.7 Provision for income taxes 12.6 29.2 61.3
81.4 Depreciation and amortization 62.4 58.5
186.2 171.1 EBITDA(3) 118.1 161.9 424.4 465.7
Interest expense, net (31.7 ) (31.9 ) (93.5 ) (96.7 ) Provision for
income taxes (12.6 ) (29.2 ) (61.3 ) (81.4 ) Deferred income taxes
7.0 1.7 (0.7 ) (2.9 ) Changes in operating assets and liabilities
(32.3 ) (99.9 ) (79.0 ) (85.0 ) Loss on extinguishment of debt ― ―
1.3 1.5 Gain on sale of Open Road Films investment (17.8 ) ― (17.8
) ― Landlord contributions 14.1 12.7 64.0 56.5 Other items, net 3.0
(6.2 ) 18.2 (9.8 ) Net cash provided by operating
activities $ 47.8 $ 9.1 $ 255.6 $ 247.9
Reconciliation of EBITDA to Adjusted
EBITDA(dollars in millions)(unaudited)
Quarter Ended Three
Quarters Ended Sept. 30, 2017 Sept. 30, 2016 Sept.
30, 2017 Sept. 30, 2016 EBITDA(3) $ 118.1 $ 161.9 $
424.4 $ 465.7 Net loss on disposal and impairment of operating
assets and other 11.9 4.8 15.8 10.6 Share-based compensation
expense 2.4 2.5 6.9 6.6 Acquisition related costs 0.7 ― 1.7 ― Loss
on extinguishment of debt ― ― 1.3 1.5 Gain on sale of Open Road
Films investment (17.8 ) ― (17.8 ) ― Earnings recognized from NCM
(5.4 ) (3.6 ) (14.0 ) (18.8 ) Cash distributions from NCM and other
non-consolidated entities 4.5 2.9 36.0 25.1 Noncontrolling
interest, net of tax and equity in income of non-consolidated
entities and other, net (10.0 ) (12.6 ) (26.7 ) (32.9 ) Adjusted
EBITDA(3) $ 104.4 $ 155.9 $ 427.6 $ 457.8
Reconciliation of Net Cash Provided by
Operating Activities to Free Cash Flow(dollars in
millions)(unaudited)
Quarter Ended Three
Quarters Ended Sept. 30, 2017 Sept. 30, 2016 Sept.
30, 2017 Sept. 30, 2016 Net cash provided by
operating activities 47.8 9.1 $ 255.6 $ 247.9 Capital expenditures
(71.2 ) (65.7 ) (175.5 ) (155.1 ) Proceeds from asset sales 8.5
― 13.1 1.3 Free cash flow(3) $ (14.9 )
$ (56.6 ) $ 93.2 $ 94.1
Reconciliation of Net Income
Attributable to Controlling Interest to Adjusted Diluted Earnings
Per Share(dollars in millions, except per share
data)(unaudited)
Quarter Ended Three
Quarters Ended Sept. 30, 2017 Sept. 30, 2016 Sept.
30, 2017 Sept. 30, 2016 Net income attributable to
controlling interest $ 11.4 $ 42.3 $ 83.4 $ 116.5 Loss on
extinguishment of debt, net of related tax effects of $0.5 for the
three quarters ended September 30, 2017, and $0.6 for the three
quarters ended September 30, 2016 ― ― 0.8 0.9 Net loss on disposal
and impairment of operating assets and other, net of related tax
effects of $1.8 and $1.9 for the quarters ended September 30, 2017
and September 30, 2016, respectively, and $3.4 and $4.2 for the
three quarters ended September 30, 2017 and September 30, 2016,
respectively 10.1 2.9 12.4 6.4 Gain on sale of Open Road Films
investment, net of related tax effects of $7.1 for the quarter and
three quarters ended September 30, 2017 (10.7 ) ― (10.7 ) ― Gain on
sale of available for sale securities, net of related tax effects
of $0.4 for the three quarters ended September 30, 2016 ― ―
― (0.6 ) Net income attributable to controlling interest,
excluding loss on extinguishment of debt, net of related tax
effects, net loss on disposal and impairment of operating assets
and other, net of related tax effects, gain on sale of Open Road
Films investment, net of related tax effects, and gain on sale of
available for sale securities, net of related tax effects $ 10.8 $
45.2 $ 85.9 $ 123.2 Weighted average number of dilutedshares
outstanding(2) 156.9 156.9 157.0 156.8 Adjusted diluted earnings
per share(1) $ 0.07 $ 0.29 $ 0.55 $ 0.79 Diluted earnings per
share(1) $ 0.07 $ 0.27 $ 0.53 $ 0.74
___________________________________
(1) Diluted earnings per share is net income
attributable to controlling interest divided by weighted average
number of diluted shares outstanding. We have included adjusted
diluted earnings per share, which is diluted earnings per share
excluding loss on extinguishment of debt, net of related tax
effects, net loss on disposal and impairment of operating assets
and other, net of related tax effects, gain on sale of Open Road
Films investment, net of related tax effects, and gain on sale of
available for sale securities, net of related tax effects, because
we believe it provides investors with a useful industry comparative
and is a financial measure used by management to assess the
performance of our Company. (2) Represents reported weighted
average number of diluted shares outstanding for purposes of
computing diluted earnings per share and adjusted diluted earnings
per share for the quarters and three quarters ended September 30,
2017 and September 30, 2016. (3) Adjusted EBITDA (net income
attributable to controlling interest adjusted for interest expense,
net, provision for income taxes, depreciation and amortization, net
loss on disposal and impairment of operating assets and other,
share-based compensation expense, acquisition related costs, loss
on extinguishment of debt, gain on sale of Open Road Films
investment, earnings recognized from NCM, cash distributions from
NCM and other non-consolidated entities, and noncontrolling
interest, net of tax and equity in income of non-consolidated
entities and other, net) was approximately $104.4 million for the
quarter ended September 30, 2017. We believe EBITDA, Adjusted
EBITDA and Free Cash Flow provide useful measures of cash flows
from operations for our investors because EBITDA, Adjusted EBITDA
and Free Cash Flow are industry comparative measures of cash flows
generated by our operations and because they are financial measures
used by management to assess the liquidity and performance of our
Company. EBITDA, Adjusted EBITDA and Free Cash Flow are not
measurements of liquidity or performance under U.S. generally
accepted accounting principles and should not be considered in
isolation or construed as a substitute for other operations data or
cash flow data prepared in accordance with U.S. generally accepted
accounting principles for purposes of analyzing our liquidity or
performance. In addition, not all funds depicted by EBITDA,
Adjusted EBITDA and Free Cash Flow are available for management’s
discretionary use. For example, a portion of such funds are subject
to contractual restrictions and functional requirements to pay debt
service, fund necessary capital expenditures and meet other
commitments from time to time as described in more detail in the
Company’s 2016 Annual Report on Form 10-K filed with the Securities
and Exchange Commission on February 27, 2017. EBITDA, Adjusted
EBITDA and Free Cash Flow, as calculated, may not be comparable to
similarly titled measures reported by other companies.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171024006608/en/
Financial Contact:Kevin MeadRegal Entertainment GroupVice
President Investor Relations and
PlanningKevin.Mead@regalcinemas.com865-925-9685orMedia
Contact:Ken ThewesRegal Entertainment GroupSenior Vice
President and Chief Marketing Officer865-925-9539
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