Carmike Cinemas (CKEC): notes from the Wachovia Media & Communications Fixed Income conference

On April 11, 2005, Carmike Cinemas (ticker: CKEC) gave a presentation at the Wachovia Securities Media & Communications Fixed Income Conference.  Here are notes from that presentation:

Business Outlook for 2005:

• Strong slate of movies that are well suited to CKEC's theaters
• On track to enter 2 new markets and open 7 new theaters in existing markets
• Potential to grow through acquisition
• Potential to restructure/refinance debt
• Maintain focus on growing cash flows

Company profile:

• Uniquely positioned as 'America's home town exhibitor'
• Focus on small-to-mid sized, non-urban markets
• 80% of theaters in cities with fewer than 100,000 people
• Profitable and free cash flow positive strategy
• Simple strategy: popcorn, Coke & a movie

Gross Margins -  Popcorn

• Small: 96%
• Medium: 94%
• Large: 95%

Gross Margins -  Coke

• Small: 92%
• Medium: 89%
• Large: 86%

Theater quality:

• 80% of theaters have been built, retrofitted or refurbished since 1997
• 70% of theaters have digital sound
• 43% of screens have stadium seating

New Theaters in 2005

• Cullman, AL: 10 screens
• Cartersville, GA: 12 screens
• Ft. Ogelthorpe, GA: 10 screens
• Chubbuck, ID: 10 screens
• Ft. Wayne, IN: 20 screens
• Findlay, OH: 12 screens
• Myrtle Beach, SC: 12 screens
• Chattanooga, TN: 14 screens
• Tyler, TX: 14 screens

New Screens in 2005:

• Statesboro, GA: 3 screens
• Hickory, NC: 2 screens
• Winston-Salem, NC: 2 screens
• St. Clairsville, OH: 3 screens
• Columbus, SC: 4 screens
• Rapid City, SD: 3 screens
• Clarksville, TN: 5 screens
• Lufkin, TX: 5 screens

2005 Retrofits

• Expect to retrofit 100+ screens
• Average cost per screen is $100,000
• Retrofitting usually results in increased attendance

# of theaters

• 2000: 352
• 2001: 323
• 2002: 308
• 2003: 299
• 2004: 282

# of screens

• 2000: 2,438
• 2001: 2,333
• 2002: 2,262
• 2003: 2,253
• 2004: 2,188

# of screens/theater

• 2000: 6.9
• 2001: 7.2
• 2002: 7.3
• 2003: 7.5
• 2004: 7.8

Revenues/screen

• 2002: $224 million
• 2003: $219 million
• 2004: $226 million

Theater level cash flow:

• 2002: $120 million
• 2003: $117 million
• 2004: $124 million

Average ticker price:

• 2000: $4.65

• 2001: $4.83

• 2002: $4.90

• 2003: $4.93

• 2004: $5.17

Average concession sale/patron:

• 2000: $1.98

• 2001: $2.10

• 2002: $2.17

• 2003: $2.19

• 2004: $2.33

2005 Financial objective:

• Acquire circuits at/below 6x theater level cash flow
• Restructure/refinance debt
• Maintain historically low leverage
• Increase capex to $50 million
• Continue to deliver high margins
• Grow cash flow
• Focus on investor returns