Current Report
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 19, 2009
Regal Entertainment Group
(Exact Name of Registrant as Specified in Charter)
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Delaware |
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001-31315 |
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02-0556934 |
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(State or Other Jurisdiction
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(Commission
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(IRS Employer
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7132 Regal Lane, Knoxville, Tennessee 37918
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: 865 -922-1123
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On February 19, 2009, Regal Entertainment Group (“Regal”) announced its financial results for its fourth fiscal quarter ended January 1, 2009. A copy of the earnings release is furnished to the United States Securities and Exchange Commission (the “Commission”) with this current report on Form 8-K as Exhibit 99.1. The earnings release contains certain non-GAAP financial measures for the periods set forth therein, including adjusted earnings per diluted share and adjusted EBITDA. Adjusted earnings per diluted share is earnings per diluted share excluding loss on debt extinguishment, net of related tax effects, gain on NCM transaction, net of related tax effects and gain on sale of Fandango interest, net of related tax effects. The most directly comparable GAAP financial measure to this non-GAAP financial measure is earnings per diluted share, which is set forth in the earnings release and below for the relevant periods set forth in the earnings release. Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization expense, gain on sale of Fandango interest, (gain) loss on disposal and impairment of operating assets, share-based compensation expense, joint venture employee compensation, and minority interest and other, net. The most directly comparable GAAP financial measure to this non-GAAP financial measure is net cash provided by operating activities, which is set forth in the earnings release and below for the relevant periods set forth in the earnings release.
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Quarter Ended |
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January 1, 2009 |
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December 27, 2007 |
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Earnings per diluted share |
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$ |
0.20 |
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$ |
0.15 |
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Quarter Ended |
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January 1, 2009 |
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December 27, 2007 |
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Net cash provided by operating activities (in millions) |
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$ |
143.8 |
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$ |
127.3 |
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Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the earnings release.
Regal is also furnishing to the Commission as Exhibit 99.2 to this current report on Form 8-K certain other financial information for its last four completed fiscal quarters, including reconciliations to the most directly comparable GAAP financial measures of the non-GAAP financial measures included therein.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. |
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Exhibit Description |
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99.1 |
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Earnings release furnished pursuant to Item 2.02 |
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99.2 |
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Reconciliations of Non-GAAP Financial Measures furnished pursuant to Item 2.02 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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REGAL ENTERTAINMENT GROUP |
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Date: February 19, 2009 |
By: |
/s/ Amy E. Miles |
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Name: Amy E. Miles |
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Title: Chief Financial Officer |
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3
Exhibit 99.1
Regal Entertainment Group Reports Results for Fourth Quarter 2008
Knoxville, Tennessee – February 19, 2009 – Regal Entertainment Group (NYSE: RGC), a leading motion picture exhibitor owning and operating the largest theatre circuit in the United States, today announced fiscal fourth quarter 2008 results.
Total revenues for the fourth quarter ended January 1, 2009 were $711.7 million compared to total revenues of $599.9 million for the fourth quarter of 2007. Net income was $30.1 million in the fourth quarter of 2008 compared to net income of $23.2 million in the same period of 2007. Adjusted earnings per diluted share(1) were $0.18 for the fourth quarter of 2008 compared to $0.15 during the fourth quarter of 2007. Adjusted EBITDA(2) was $145.8 million for the fourth quarter of 2008. Results for the fourth fiscal quarter of 2008 and for fiscal 2008 were significantly and positively impacted by the timing of our fiscal calendar which consisted of a 14 week period in the fourth quarter of 2008 compared to a 13 week period in the fourth quarter of 2007 and a 53 week period in 2008 compared to a 52 week period in 2007. The additional week was the week between Christmas and New Years, a traditionally high attendance week for the company and the industry. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.
“We are pleased with our 2008 accomplishments including the successful acquisition and integration of Consolidated Theatres,” stated Mike Campbell, CEO of Regal Entertainment Group. “We are also encouraged by the early 2009 box office results in this challenging economic environment,” Campbell 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 2007 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2008. 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 fourth quarter 2008 results on February 19, 2009 at 9:30 a.m. (Eastern Time). Interested parties can listen to the call live on the Internet through the investor relations section of the Company’s Web site: 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 Web site 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 877-660-6853 (Domestic) or 201-612-7415 (International) and enter account #286 and conference call ID #306156. In addition, this press release and other pertinent statistical and financial information are available in the investor relations section of the Company’s Web site: www.REGmovies.com.
About Regal Entertainment Group
Regal Entertainment Group (NYSE: RGC) is the largest motion picture exhibitor in the world. The Company’s theatre circuit, comprising Regal Cinemas, United Artists Theatres and Edwards Theatres, operates 6,801 screens in 552 locations in 39 states and the District of Columbia. Regal operates theatres in all of the top 33 and 44 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 Web site at www.REGmovies.com.
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Financial Contacts: |
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Media Contact: |
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Don De Laria |
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Dick Westerling |
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Regal Entertainment Group |
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Regal Entertainment Group |
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Vice President – Investor Relations |
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Senior Vice President - Marketing |
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865-925-9685 |
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865-925-9539 |
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don.delaria@REGmovies.com |
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dick.westerling@REGmovies.com |
Regal Entertainment Group
Consolidated Statements of Income Information
For the Fiscal Quarters and Four Quarters Ended 01/01/09 and 12/27/07
(in millions, except per share data)
(unaudited)
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Quarter Ended |
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Four Quarters Ended |
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Jan. 1, 2009 |
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Dec. 27, 2007 |
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Jan. 1, 2009 |
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Dec. 27, 2007 |
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Revenues |
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Admissions |
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$ |
478.6 |
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$ |
404.1 |
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$ |
1,883.1 |
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$ |
1,804.5 |
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Concessions |
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193.4 |
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158.4 |
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758.0 |
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735.0 |
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Other operating revenues |
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39.7 |
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37.4 |
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130.8 |
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121.7 |
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Total revenues |
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711.7 |
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599.9 |
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2,771.9 |
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2,661.2 |
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Operating expenses |
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Film rental and advertising costs |
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245.5 |
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207.7 |
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990.4 |
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957.5 |
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Cost of concessions |
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28.0 |
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21.6 |
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106.6 |
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103.8 |
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Rent expense |
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95.9 |
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86.0 |
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363.3 |
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335.9 |
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Other operating expenses |
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193.6 |
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167.4 |
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739.9 |
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692.3 |
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General and administrative expenses (including share-based compensation expense of $1.4 million and $1.2 million for the quarters ended January 1, 2009 and December 27, 2007 respectively, and $5.7 million and $5.8 million for the four quarters ended January 1, 2009 and December 27, 2007, respectively) |
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15.8 |
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15.0 |
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62.1 |
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63.1 |
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Depreciation and amortization |
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55.0 |
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45.4 |
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202.3 |
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183.4 |
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Net loss (gain) on disposal and impairment of operating assets |
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6.4 |
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(0.1 |
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22.4 |
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(0.9 |
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Joint venture equity including former employee compensation |
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0.1 |
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0.1 |
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0.5 |
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3.9 |
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Income from operations |
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71.4 |
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56.8 |
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284.4 |
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322.2 |
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Interest expense, net |
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35.6 |
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28.6 |
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124.3 |
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112.9 |
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Gain on NCM transaction |
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— |
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— |
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— |
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(350.7 |
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Gain on sale of Fandango interest |
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(3.4 |
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— |
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(3.4 |
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(28.6 |
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Earnings recognized from NCM |
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(11.5 |
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(9.3 |
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(32.9 |
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(18.6 |
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Minority interest in earnings of consolidated subsidiaries and other |
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0.8 |
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0.9 |
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2.6 |
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1.3 |
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Loss on debt extinguishment |
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— |
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— |
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70.5 |
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— |
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Income before income taxes |
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49.9 |
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36.6 |
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123.3 |
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605.9 |
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Provision for income taxes |
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19.8 |
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13.4 |
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50.8 |
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242.9 |
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Net income |
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$ |
30.1 |
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$ |
23.2 |
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$ |
72.5 |
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$ |
363.0 |
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Earnings per diluted share |
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$ |
0.20 |
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$ |
0.15 |
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$ |
0.47 |
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$ |
2.28 |
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Adjusted earnings per diluted share(1) |
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$ |
0.18 |
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$ |
0.15 |
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$ |
0.73 |
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$ |
0.86 |
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Weighted average number of diluted shares outstanding |
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153.6 |
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160.0 |
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153.7 |
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159.5 |
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Consolidated Summary Balance Sheet Information
(dollars in millions)
(unaudited)
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As of |
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As of |
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Jan. 1, 2009 |
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Dec. 27, 2007 |
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Cash and cash equivalents |
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$ |
170.2 |
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$ |
435.2 |
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Total assets |
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2,599.5 |
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2,634.9 |
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Total debt |
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2,014.4 |
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1,965.5 |
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Stockholders’ deficit |
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(241.3 |
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(119.3 |
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Operating Data
(unaudited)
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Quarter Ended |
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Four Quarters Ended |
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Jan. 1, |
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Dec. 27, |
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Jan. 1, |
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Dec. 27, |
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2009 |
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2007 |
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2009 |
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2007 |
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Theatres at period end |
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552 |
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527 |
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552 |
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527 |
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Screens at period end |
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6,801 |
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6,388 |
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6,801 |
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6,388 |
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Average screens per theatre |
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12.3 |
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12.1 |
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12.3 |
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12.1 |
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Attendance (in thousands) |
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61,756 |
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53,320 |
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245,174 |
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242,931 |
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Average ticket price |
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$ |
7.75 |
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$ |
7.58 |
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$ |
7.68 |
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$ |
7.43 |
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Average concessions per patron |
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$ |
3.13 |
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$ |
2.97 |
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$ |
3.09 |
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$ |
3.03 |
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Reconciliation of EBITDA to Net Cash Provided by Operating Activities
(dollars in millions)
(unaudited)
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Quarter Ended |
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Jan. 1, |
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Dec. 27, |
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2009 |
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2007 |
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EBITDA |
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$ |
140.5 |
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$ |
110.6 |
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Interest expense, net |
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(35.6 |
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(28.6 |
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Provision for income taxes |
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(19.8 |
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(13.4 |
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Deferred income taxes |
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9.5 |
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41.7 |
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Changes in operating assets and liabilities |
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40.6 |
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12.9 |
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Gain on sale of Fandango interest |
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(3.4 |
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— |
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Other items, net |
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12.0 |
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4.1 |
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Net cash provided by operating activities |
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$ |
143.8 |
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$ |
127.3 |
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Reconciliation of EBITDA to Adjusted EBITDA
(dollars in millions)
(unaudited)
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Quarter Ended |
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Jan. 1,
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Dec. 27,
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EBITDA |
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$ |
140.5 |
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$ |
110.6 |
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Gain on sale of Fandango interest |
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(3.4 |
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— |
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(Gain) loss on disposal and impairment of operating assets |
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6.4 |
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(0.1 |
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Share-based compensation expense |
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1.4 |
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1.2 |
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Joint venture employee compensation |
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0.1 |
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0.1 |
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Minority interest and other, net |
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0.8 |
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0.9 |
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Adjusted EBITDA(2) |
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$ |
145.8 |
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$ |
112.7 |
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Free Cash Flow
(dollars in millions)
(unaudited)
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Quarter Ended |
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Jan. 1, |
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Dec. 27, |
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2009 |
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2007 |
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Net cash provided by operating activities |
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$ |
143.8 |
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$ |
127.3 |
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Capital expenditures |
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(32.6 |
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(32.4 |
) |
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Proceeds from asset sales |
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— |
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8.7 |
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Free cash flow(2) |
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$ |
111.2 |
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$ |
103.6 |
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Reconciliation to Earnings Per Diluted Share and Net Income
(dollars in millions, except per share data)
( unaudited)
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Quarter Ended |
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Four Quarters Ended |
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Jan. 1 |
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Dec. 27, |
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Jan. 1, |
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Dec. 27, |
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2009 |
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2007 |
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2009 |
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2007 |
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Net income |
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$ |
30.1 |
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$ |
23.2 |
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$ |
72.5 |
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$ |
363.0 |
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Loss on debt extinguishment, net of related tax effects |
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— |
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— |
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42.3 |
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— |
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Gain on NCM transaction, net of related tax effects |
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— |
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— |
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— |
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(209.0 |
) |
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Gain on sale of Fandango interest, net of related tax effects |
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(2.0 |
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— |
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(2.0 |
) |
(17.2 |
) |
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Net income, excluding loss on debt extinguishment, gain on NCM transaction and gain on sale of Fandango interest, net of related tax effects |
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$ |
28.1 |
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$ |
23.2 |
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$ |
112.8 |
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$ |
136.8 |
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Weighted average number of diluted shares |
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153.6 |
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160.0 |
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153.7 |
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159.5 |
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Adjusted earnings per diluted share(1) |
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$ |
0.18 |
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$ |
0.15 |
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$ |
0.73 |
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$ |
0.86 |
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Earnings per diluted share |
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$ |
0.20 |
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$ |
0.15 |
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$ |
0.47 |
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$ |
2.28 |
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(1) |
We have included adjusted earnings per diluted share, which is earnings per diluted share excluding loss on debt extinguishment, net of related tax effects, gain on NCM transaction, net of related tax effects and gain on sale of Fandango interest, 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. |
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(2) |
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization expense, gain on sale of Fandango interest, (gain) loss on disposal and impairment of operating assets, share-based compensation expense, joint venture employee compensation and minority interest and other, net) was approximately $145.8 million for the quarter ended January 1, 2009. 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 of our Company. EBITDA, Adjusted EBITDA and Free Cash Flow are not measurements of liquidity 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. 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 2007 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2008. EBITDA, Adjusted EBITDA and Free Cash Flow, as calculated, may not be comparable to similarly titled measures reported by other companies. |
Exhibit 99.2
Reconciliations
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Four |
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Quarters Ended |
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March 27, |
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June 26, |
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September 25, |
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January 1, |
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January 1, |
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2008 |
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2008 |
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2008 |
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2009 |
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2009 |
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|||||
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Reconciliation of EBITDA to Net Cash Provided by (Used in) Operating Activities |
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|||||
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(dollars in millions) |
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(unaudited) |
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EBITDA |
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$ |
73.9 |
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$ |
102.2 |
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$ |
133.3 |
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$ |
140.5 |
|
$ |
449.9 |
|
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Interest expense, net |
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(29.7 |
) |
(30.0 |
) |
(29.0 |
) |
(35.6 |
) |
(124.3 |
) |
|||||
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Provision for income taxes |
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(0.9 |
) |
(8.5 |
) |
(21.6 |
) |
(19.8 |
) |
(50.8 |
) |
|||||
|
Deferred income taxes |
|
1.4 |
|
(27.6 |
) |
(1.7 |
) |
9.5 |
|
(18.4 |
) |
|||||
|
Loss on debt extinguishment |
|
52.8 |
|
17.7 |
|
— |
|
— |
|
70.5 |
|
|||||
|
Changes in operating assets and liabilities |
|
(32.3 |
) |
25.3 |
|
(125.7 |
) |
40.6 |
|
(92.1 |
) |
|||||
|
Gain on sale of Fandango interest |
|
— |
|
— |
|
— |
|
(3.4 |
) |
(3.4 |
) |
|||||
|
Other items, net |
|
6.0 |
|
6.2 |
|
15.3 |
|
12.0 |
|
39.5 |
|
|||||
|
Net cash provided by (used in) operating activities |
|
$ |
71.2 |
|
$ |
85.3 |
|
$ |
(29.4 |
) |
$ |
143.8 |
|
$ |
270.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Reconciliation of EBITDA to Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(dollars in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
EBITDA |
|
$ |
73.9 |
|
$ |
102.2 |
|
$ |
133.3 |
|
$ |
140.5 |
|
$ |
449.9 |
|
|
Gain on sale of Fandango interest |
|
— |
|
— |
|
— |
|
(3.4 |
) |
(3.4 |
) |
|||||
|
Net loss on disposal and impairment of operating assets |
|
2.2 |
|
2.3 |
|
11.5 |
|
6.4 |
|
22.4 |
|
|||||
|
Share-based compensation expense |
|
1.4 |
|
1.5 |
|
1.4 |
|
1.4 |
|
5.7 |
|
|||||
|
Joint venture employee compensation |
|
0.2 |
|
0.1 |
|
0.1 |
|
0.1 |
|
0.5 |
|
|||||
|
Loss on debt extinguishment |
|
52.8 |
|
17.7 |
|
— |
|
— |
|
70.5 |
|
|||||
|
Minority interest and other, net |
|
0.6 |
|
0.6 |
|
0.6 |
|
0.8 |
|
2.6 |
|
|||||
|
Adjusted EBITDA (1) |
|
$ |
131.1 |
|
$ |
124.4 |
|
$ |
146.9 |
|
$ |
145.8 |
|
$ |
548.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(dollars in millions) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net cash provided by (used in) operating activities |
|
$ |
71.2 |
|
$ |
85.3 |
|
$ |
(29.4 |
) |
$ |
143.8 |
|
$ |
270.9 |
|
|
Capital expenditures |
|
(24.8 |
) |
(45.8 |
) |
(28.5 |
) |
(32.6 |
) |
(131.7 |
) |
|||||
|
Proceeds from asset sales |
|
— |
|
3.3 |
|
0.3 |
|
— |
|
3.6 |
|
|||||
|
Free cash flow (1) |
|
$ |
46.4 |
|
$ |
42.8 |
|
$ |
(57.6 |
) |
$ |
111.2 |
|
$ |
142.8 |
|
(1) Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization expense, gain on sale of Fandango interest, net loss on disposal and impairment of operating assets, share-based compensation expense, joint venture employee compensation, loss on debt extinguishment and minority interest and other, net) was approximately $548.2 million, for the four quarters ended January 1, 2009. 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 of our Company. EBITDA, Adjusted EBITDA and Free Cash Flow are not measurements of liquidity 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. 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 2007 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 26, 2008. EBITDA, Adjusted EBITDA and Free Cash Flow, as calculated, may not be comparable to similarly titled measures reported by other companies.