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Regal Entertainment Group Reports Operating Results (10-Q)

May 04, 2010 | About:
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10qk

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Regal Entertainment Group (RGC) filed Quarterly Report for the period ended 2010-04-01.

Regal Entertainment Group has a market cap of $2.67 billion; its shares were traded at around $17.32 with a P/E ratio of 21.4 and P/S ratio of 0.9. The dividend yield of Regal Entertainment Group stocks is 4.2%. Regal Entertainment Group had an annual average earning growth of 11.7% over the past 10 years.RGC is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

Our total revenues for the quarter ended April 1, 2010 (Q1 2010 Period) were $719.8 million and consisted of $506.0 million of admissions revenues, $185.0 million of concessions revenues and $28.8 million of other operating revenues, and increased approximately 8.1% from total revenues of $665.6 million for the quarter ended April 2, 2009 (Q1 2009 Period).

During the Q1 2010 Period, total concessions revenues increased $5.6 million, or 3.1%, to $185.0 million, from $179.4 million for the Q1 2009 Period. Average concessions revenues per patron during the Q1 2010 Period increased 2.6%, to $3.16, from $3.08 for the Q1 2009 Period. The increase in total concessions revenues during the Q1 2010 Period was attributable to an increase in average concessions revenues per patron and a slight increase in attendance during the period. The increase in average concessions revenues per patron for the Q1 2010 Period were primarily a result of price increases and also benefitted from the concession friendly mix of film product exhibited during the Q1 2010 Period.

Depreciation and amortization expense increased $6.3 million, or 12.6%, to $56.2 million for the Q1 2010 Period, from $49.9 million in the Q1 2009 Period. The increase in depreciation and amortization expense during the Q1 2010 Period as compared to the Q1 2009 Period was primarily due to accelerated depreciation of $7.0 million related to the replacement of 35mm projectors in connection with our conversion to digital projection systems, partially offset by lower capital expenditures during the Q1 2010 Period.

Net interest expense totaled $36.0 million for the Q1 2010 Period, which represents a decrease of $1.2 million, or 3.2%, from that of the Q1 2009 Period. The decrease in net interest expense during the Q1 2010 Period was principally due to a lower effective interest rate on our Term Facility as a result of a change in our interest rate swap portfolio during fiscal 2009 and incremental interest income ($0.7 million and $0.3 million, respectively, for the Q1 2010 Period and the Q1 2009 Period) during such period, partially offset by incremental interest expense related to the fiscal 2009 issuance of the 85/8% Senior Notes.

The Company received $19.4 million and $12.4 million, respectively, in cash distributions from National CineMedia during the Q1 2010 Period and Q1 2009 Period. Approximately $3.3 million and $1.8 million, respectively, of these cash distributions received during the Q1 2010 Period and the Q1 2009 Period were recognized as a reduction in our investment in National CineMedia. In addition, during the Q1 2010 Period and the Q1 2009 Period, the Company recorded approximately $0.6 million and less than $0.1 million, respectively, of equity earnings with respect to newly issued common units received from National CineMedia. As a result, during the Q1 2010 Period and the Q1 2009 Period, the Company recognized $16.7 million and $10.6 million, respectively, of earnings from National CineMedia. Such amounts are presented as Earnings recognized from NCM in the accompanying unaudited condensed consolidated statements of income. The increase in earnings recognized from National CineMedia during the Q1 2010 Period was primarily attributable to incremental earnings of National CineMedia and the timing in their contractually committed cash distributions to the Company.

aggregate of $660.0 million, consisting of $445.0 million in senior bank debt, $135.0 million in additional junior capital and approximately $80.0 million in equity contributions (consisting of cash and existing digital projection systems) from us, AMC and Cinemark. Concurrent with closing, the Company entered into the Digital Cinema Agreements with Kasima, LLC. and made the DCIP Contributions. The Company recorded such DCIP Contributions as an increase in its investment in DCIP, which included the fair value of the 200 existing digital projection systems, as determined by an independent appraisal. In connection with the contribution of its 200 existing digital projection systems, the Company recorded a loss on the contribution of $2.0 million based on the excess of the carrying value of the digital projection systems contributed over the $12.6 million fair value of such equipment. After giving effect to the DCIP Contributions, the Company holds a 46.7% economic interest in DCIP as of April 1, 2010, while continuing to maintain a one-third voting interest along with AMC and Cinemark. Since the Company determined that it is not the primary beneficiary of DCIP or any of its subsidiaries, it will continue to account for its investment in DCIP under the equity method of accounting.

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