Regal Entertainment (RGC) revenues and earnings down in tough quarter

On February 10, 2005, Regal Entertainment (RGC) reported results for the fourth quarter and year-end 2004.  Below are some highlights. Read the press release

Highlights for 4Q04 vs. 4Q03:

• EPS: $0.22 vs. $0.41 (-46%); Consensus was $0.23
• Total revenues: $643M vs. $689 (-6%)
• Admissions revenues: $428M vs. $463M (-8%)
• Concessions revenues: $166M vs. $175M (-5%)
• Net income: $33M vs. $59M (-44%)
• Adjusted EBITDA: $133M vs. $164M (-19%)
• Cash: $244M vs. $289M
• Debt: $2.0B vs. $1.2B
• Free Cash Flow: $140M vs. $164M
• Theaters: 558 vs. 550 (+1%)
• Screens: 6,273 vs. 6,045 (+4%)
• Attendance: 65,140 vs. 72,248 (-10%)
• Avg. ticket price: $6.58 vs. $6.41 (+3%)
• Avg. concessions/patron: $2.55 vs. $2.41 (+6%)

Guidance:

• Ticket prices: +3% (in-line with historic avg.)
• Concession prices: +2% (below historic avg.)
• EBITDA: $555M-565M
• Screen additions: +63 (-24 in 1Q; +36 in 2Q; -16 in 3Q; +67 in 4Q)

Quick Comments:

• RGC faced tough comps versus 4Q03 because of the success of films like Lord Of The Rings and The Matrix last year; also, the quarter was 13 weeks long this year versus 14 week last year
• RGC's admissions revenues fell 8% versus industry box office results that declined 10%-13%.  RGC's revenues were helped by the Signature acquisition
• 2004 industry highlights: 143 film reached wide release (+6.7% versus 2003); 22 films grossed $100M+; 6 films grossed $200M+
• 2005 expectations (according to industry analysts): +3-5% box office revenue growth; +1-3% concession revenue growth
• 2005 upcoming films: Star Wars, War of the Worlds, Harry Potter, Batman Begins
• 1Q will face a tough comp because of the success of Mel Gibson's Passion last year ($320 in box office receipts); 1Q will be helped by Easter weekend this year