Regal Entertainment Group (RGC, Financial) filed Quarterly Report for the period ended 2009-10-01.
Regal Entertainment Group is a leading motion picture exhibitor operating the largest theatre circuit in the United States. The Company's nationwide theatre circuit is comprised of Regal Cinemas Corporation, United Artists Theatre Company and Edwards Theatres, Inc. Regal Entertainment Group has a market cap of $1.96 billion; its shares were traded at around $12.71 with a P/E ratio of 18.2 and P/S ratio of 0.7. The dividend yield of Regal Entertainment Group stocks is 5.7%.
On April 30, 2008, the Company acquired Consolidated Theatres, which held a total of 28 theatres with 400 screens in Georgia, Maryland, North Carolina, South Carolina, Tennessee and Virginia. The total net cash purchase price for the acquisition was approximately $209.3 million. The results of operations of the acquired theatres have been included in the Companys consolidated financial statements for periods subsequent to the acquisition date. In conjunction with the closing, we entered into a final judgment with the DOJ, which required us to hold separate and divest ourselves of four theaters comprising 52 screens in North Carolina. During the quarter ended September 25, 2008, the Company entered into an agreement to sell three of the four theatres and recorded impairment charges of approximately $7.9 million related to these theatres. On October 23, 2008, the Company completed its divestiture of the three theatres. On April 30, 2009, the Company completed its divestiture of the last of the four theatres. See Note 2 Acquisition for further discussion of this transaction.
On July 15, 2009, Regal Cinemas issued $400.0 million in aggregate principal amount of the 85/8% Senior Notes at a price equal to 97.561% of their face value in a transaction exempt from registration under the Securities Act. Interest on the 85/8% Senior Notes is payable semi-annually in arrears on July 15 and January 15 of each year, beginning on January 15, 2010. The 85/8% Senior Notes will mature on July 15, 2019. The net proceeds from the offering, after deducting the initial purchase discount (approximately $9.8 million) and offering expenses paid by the Company, were approximately $381.3 million. The Company used all of the net proceeds of the offering to repay a portion of the Amended Senior Credit Facility. As a result of this repayment, the Company recorded a loss on debt extinguishment of approximately $7.4 million, representing the pro-rata write off of unamortized debt issue costs under the Amended Senior Credit Facility. See Note 4Debt Obligations for further discussion of this transaction.
Our total revenues for the quarter ended October 1, 2009 (Q3 2009 Period) were $673.5 million and consisted of $463.4 million of admissions revenues, $182.6 million of concessions revenues and $27.5 million of other operating revenues, and decreased 11.1% from total revenues of $757.6 million for the quarter ended September 25, 2008 (Q3 2008 Period).
During the Q3 2009 Period, total admissions revenues decreased $53.4 million, or 10.3%, to $463.4 million, from $516.8 million in the Q3 2008 Period primarily due to a 14.5% decrease in attendance, partially offset by a 4.9% increase in average ticket prices. We believe the overall decrease in attendance during the Q3 2009 Period was primarily a result of a shift in our Q3 2009 Period fiscal calendar, which resulted in the traditionally robust attendance week leading up to July 4th being included in the Q3 2008 Period, but not the Q3 2009 Period and strong attendance generated by the top tier films exhibited during the Q3 2008 Period, including The Dark Knight. Price increases identified during our ongoing periodic pricing reviews (which include analysis of various factors such as general inflationary trends and local market conditions) along with an increase in the percentage of our admissions revenues generated by premium priced IMAX® and 3D films exhibited during the Q3 2009 Period were the primary drivers of the increase in our Q3 2009 Period average ticket price. Based on our review of certain industry sources, the decrease in our admissions revenues on a per screen basis was approximately 200 basis points greater than the industrys results for the Q3 2009 Period as compared to the Q3 2008 Period. We believe the greater than industry decrease in admissions revenues on a per screen basis was attributable to various factors including geographical differences and film product performance, incremental screens from regional theatre circuits and our allocation of capital during such periods.
Total admissions revenues decreased $53.4 million during the Q3 2009 Period, or 10.3%, to $463.4 million, from $516.8 million in the Q3 2008 Period primarily due to a 14.5% decrease in attendance, partially offset by a 4.9% increase in average ticket prices. During the Fiscal 2009 Period, total admissions revenues increased $60.1 million, or 4.3%, to $1,464.6 million, from $1,404.5 million for the Fiscal 2008 Period. A 5.2% increase in our average ticket price, partially offset by an attendance decrease of 1.0% led to the favorable increase in the Fiscal 2009 Period admissions revenues. We believe the overall decrease in attendance during the Q3 2009 Period was primarily a result of a shift in our Q3 2009 Period fiscal calendar, which resulted in the traditionally robust attendance week leading up to July 4th being included in the Q3 2008 Period, but not the Q3 2009 Period and strong attendance generated by the top tier films exhibited during the Q3 2008 Period, including The Dark Knight. In addition, the Fiscal 2009 Periods attendance was negatively impacted by a shift in our Fiscal 2009 Period fiscal calendar, which resulted in the traditionally high attendance week between Christmas and New Years Day being included in the
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Regal Entertainment Group is a leading motion picture exhibitor operating the largest theatre circuit in the United States. The Company's nationwide theatre circuit is comprised of Regal Cinemas Corporation, United Artists Theatre Company and Edwards Theatres, Inc. Regal Entertainment Group has a market cap of $1.96 billion; its shares were traded at around $12.71 with a P/E ratio of 18.2 and P/S ratio of 0.7. The dividend yield of Regal Entertainment Group stocks is 5.7%.
Highlight of Business Operations:
On March 10, 2008, Regal issued $200.0 million aggregate principal amount of 6¼% Convertible Senior Notes. Concurrent with the issuance of the 6¼% Convertible Senior Notes, we entered into simultaneous convertible note hedge and warrant transactions with respect to our Class A common stock in order to reduce the potential dilution from conversion of the 6¼% Convertible Senior Notes into shares of our Class A common stock. The net cost of the convertible note hedge and warrant transactions was approximately $6.6 million and is included as a component of equity in the accompanying unaudited condensed consolidated balance sheets. See Note 4Debt Obligations for further description of the 6¼% Convertible Senior Notes and the related convertible note hedge and warrant transactions. The Company used cash on hand and a portion of the net proceeds from the issuance of the 6¼% Convertible Senior Notes to redeem approximately $90.0 million principal amount of Regals 3¾% Convertible Senior Notes due May 15, 2008, in a series of privately negotiated transactions. As a result of the early redemption, the Company recorded a $3.0 million loss on debt extinguishment (as retrospectively adjusted for the adoption of certain provisions of ASC Subtopic 470-20 described in Note 4Debt Obligations) during the quarter ended March 27, 2008. In connection with the early redemption, the Company received net proceeds of approximately $13.7 million from Credit Suisse attributable to the convertible note hedge and warrant transactions associated with the 3¾% Convertible Senior Notes described further in Note 4Debt Obligations. Such proceeds were recorded as an increase to additional paid-in capital. In connection with the final maturity of the 3¾% Convertible Senior Notes on May 15, 2008, holders of the remaining $33.7 million in principal amount exercised their conversion rights. The Company elected to settle these conversions entirely in cash for approximately $51.4 million using the remaining proceeds from the issuance of the 6¼% Convertible Senior Notes. In connection with these conversions, the Company received net proceeds of approximately $5.2 million from Credit Suisse attributable to the convertible note hedge and warrant transactions associated with the 3¾% Convertible Senior Notes. Such proceeds were also recorded as an increase to additional paid-in capital. See Note 4Debt Obligations for further discussion of this transaction.On April 30, 2008, the Company acquired Consolidated Theatres, which held a total of 28 theatres with 400 screens in Georgia, Maryland, North Carolina, South Carolina, Tennessee and Virginia. The total net cash purchase price for the acquisition was approximately $209.3 million. The results of operations of the acquired theatres have been included in the Companys consolidated financial statements for periods subsequent to the acquisition date. In conjunction with the closing, we entered into a final judgment with the DOJ, which required us to hold separate and divest ourselves of four theaters comprising 52 screens in North Carolina. During the quarter ended September 25, 2008, the Company entered into an agreement to sell three of the four theatres and recorded impairment charges of approximately $7.9 million related to these theatres. On October 23, 2008, the Company completed its divestiture of the three theatres. On April 30, 2009, the Company completed its divestiture of the last of the four theatres. See Note 2 Acquisition for further discussion of this transaction.
On July 15, 2009, Regal Cinemas issued $400.0 million in aggregate principal amount of the 85/8% Senior Notes at a price equal to 97.561% of their face value in a transaction exempt from registration under the Securities Act. Interest on the 85/8% Senior Notes is payable semi-annually in arrears on July 15 and January 15 of each year, beginning on January 15, 2010. The 85/8% Senior Notes will mature on July 15, 2019. The net proceeds from the offering, after deducting the initial purchase discount (approximately $9.8 million) and offering expenses paid by the Company, were approximately $381.3 million. The Company used all of the net proceeds of the offering to repay a portion of the Amended Senior Credit Facility. As a result of this repayment, the Company recorded a loss on debt extinguishment of approximately $7.4 million, representing the pro-rata write off of unamortized debt issue costs under the Amended Senior Credit Facility. See Note 4Debt Obligations for further discussion of this transaction.
Our total revenues for the quarter ended October 1, 2009 (Q3 2009 Period) were $673.5 million and consisted of $463.4 million of admissions revenues, $182.6 million of concessions revenues and $27.5 million of other operating revenues, and decreased 11.1% from total revenues of $757.6 million for the quarter ended September 25, 2008 (Q3 2008 Period).
During the Q3 2009 Period, total admissions revenues decreased $53.4 million, or 10.3%, to $463.4 million, from $516.8 million in the Q3 2008 Period primarily due to a 14.5% decrease in attendance, partially offset by a 4.9% increase in average ticket prices. We believe the overall decrease in attendance during the Q3 2009 Period was primarily a result of a shift in our Q3 2009 Period fiscal calendar, which resulted in the traditionally robust attendance week leading up to July 4th being included in the Q3 2008 Period, but not the Q3 2009 Period and strong attendance generated by the top tier films exhibited during the Q3 2008 Period, including The Dark Knight. Price increases identified during our ongoing periodic pricing reviews (which include analysis of various factors such as general inflationary trends and local market conditions) along with an increase in the percentage of our admissions revenues generated by premium priced IMAX® and 3D films exhibited during the Q3 2009 Period were the primary drivers of the increase in our Q3 2009 Period average ticket price. Based on our review of certain industry sources, the decrease in our admissions revenues on a per screen basis was approximately 200 basis points greater than the industrys results for the Q3 2009 Period as compared to the Q3 2008 Period. We believe the greater than industry decrease in admissions revenues on a per screen basis was attributable to various factors including geographical differences and film product performance, incremental screens from regional theatre circuits and our allocation of capital during such periods.
Total admissions revenues decreased $53.4 million during the Q3 2009 Period, or 10.3%, to $463.4 million, from $516.8 million in the Q3 2008 Period primarily due to a 14.5% decrease in attendance, partially offset by a 4.9% increase in average ticket prices. During the Fiscal 2009 Period, total admissions revenues increased $60.1 million, or 4.3%, to $1,464.6 million, from $1,404.5 million for the Fiscal 2008 Period. A 5.2% increase in our average ticket price, partially offset by an attendance decrease of 1.0% led to the favorable increase in the Fiscal 2009 Period admissions revenues. We believe the overall decrease in attendance during the Q3 2009 Period was primarily a result of a shift in our Q3 2009 Period fiscal calendar, which resulted in the traditionally robust attendance week leading up to July 4th being included in the Q3 2008 Period, but not the Q3 2009 Period and strong attendance generated by the top tier films exhibited during the Q3 2008 Period, including The Dark Knight. In addition, the Fiscal 2009 Periods attendance was negatively impacted by a shift in our Fiscal 2009 Period fiscal calendar, which resulted in the traditionally high attendance week between Christmas and New Years Day being included in the
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