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 Theater News
 

- Theater Level Cash Flow and Adjusted EBITDA Also Rise Significantly -  


WESTFIELD, New Jersey (September 17, 2013) - Digital Cinema Destinations Corp. (NasdaqCM: DCIN) (Digiplex), a fast-growing motion picture exhibitor dedicated to transforming movie theaters into digital entertainment centers, today reported its fiscal 2013 fourth quarter and full-year financial results for the periods ended June 30, 2013.  Management is hosting a conference call and webcast at 4:30 p.m. ET to review the results.



DATE/TIME: Today—Tuesday, September 17, 2013 at 4:30 p.m. ET


TELEPHONE: dial 800/404-5245.  Please call at least five minutes in advance to ensure that you are connected.


WEBCAST: live webcast is available through the Investor Relations section of Digiplex’s website at www.digiplexdest.com.  A webcast replay will be available and accessible for at least 30 days following the live event.



SUMMARY AND SUPPLEMENTARY FINANCIAL DATA

(unaudited)



Three Months Ended

June 30,

Twelve Months Ended

June 30,

(in thousands)

2013

2012

2013

2012

Consolidated total revenue

$ 11,201

 $ 3,796

$ 31,184

$ 6,671

Consolidated net loss

 (1,209)

(1,002)

(5,256)

(1,967)






Consolidated theater level cash flow (1)

1,922

701

5,633

1,251

Adjusted EBITDA of Digital Cinema Destinations Corp. (1)

888

32

2,366

(410)






Theaters (period end)

18

 8

18

 8

Average screens

178

62

130

 30

Average attendance per screen

5,667

5,506

22,014

19,331

Average admission per patron

$ 7.92

$ 7.82

$ 7.83

$ 8.31

Average concessions sales per patron

$ 3.45

$ 3.04

$ 3.27

$ 2.89

Total attendance (in thousands)

1,009

339

2,852

570


(1) Theater level cash flow and Adjusted EBITDA are supplemental non-GAAP financial measures. Reconciliations of these metrics to the net loss for the three and twelve months ended June 30, 2013 and 2012 are included in the supplementary tables accompanying this news announcement.


Digiplex Chairman and CEO Bud Mayo stated, “The fiscal fourth quarter was a productive period for Digiplex and also for the U.S. box office.  Industry admissions receipts grew approximately 7.8% versus the prior year and our Company achieved revenue, Adjusted EBITDA, and theater level cash flow increases, due to the 116 additional average screens under operation, compared to the 2012 fiscal fourth quarter, as well as internal operational improvements during a favorable box office environment.


“Of note, the 2013 fiscal fourth quarter marks the first time in our organization’s short history that over one million patrons attended Digiplex’s locations.  We continue to focus on providing our valued customers with high quality service and a clean and friendly environment to enjoy the best selection of popular Hollywood titles, specially curated independent pictures and exciting alternative programming events.  We are also driving incremental theater traffic through unique social media and targeted marketing strategies.


“An exciting development during fiscal Q4 was the opening of our first IMAX® location, at Digiplex’s Surprise Pointe 14 theater in Arizona.  We are extremely pleased to form a new alliance with IMAX® and will evaluate potential additional large format locations that feature their leading entertainment experience as the Digiplex circuit continues expanding.  Subsequent to fiscal year-end, we also 4D-enabled an auditorium at our Solon, OH theater with the installation of immersive ButtKicker seating.  We will continue experimenting with state-of-the-art technologies that further enhance the enjoyment of our guests.


“Throughout fiscal 2013, Digiplex opportunistically identified and completed acquisitions in attractive markets that adhere to our theater level cash flow and asset quality criteria.  As a result, our organization nearly tripled its average screen count versus the prior year.  We completed the purchase of a state-of-the art, fully digital 12-plex in Lisbon, CT during the fiscal first quarter, in fiscal Q2 we acquired seven theaters and 74 screens from UltraStar Cinemas on the west coast and we added two additional theaters with an aggregate of 19 screens in Solon, OH and Sparta, NJ during fiscal Q3.  Additionally, subsequent to our year-end we acquired a 6-plex in Torrington, CT, further expanding the Company’s circuit to 19 locations and 184 screens.


“We are proud of our achievements to date, but acknowledge that we are still in the early stages of expanding Digiplex’s footprint to the 100 location/1000 screen goal we have set as a corporate milestone.  Our top priority continues to be executing disciplined growth through opportunistic acquisitions.  As we build scale, roll new theaters onto our digital platform, and leverage the Company’s corporate infrastructure and operating disciplines, over time we expect to achieve meaningful improvements in both top- and bottom-line results,” Mr. Mayo concluded.


DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


June 30,

2013


June 30,

2012


ASSETS



CURRENT ASSETS



Cash and cash equivalents

$ 3,607

$ 2,037

Accounts receivable

697

238

Inventories

191

78

Deferred financing costs, current portion

357

-

Prepaid expenses and other current assets

1,444

381




Total current assets

 6,296

2,734

Property and equipment, net

29,171

15,432

Goodwill

3,156

980

Intangible assets, net

6,186

4,114

Security deposit

205

3

Deferred financing costs, long term portion, net

1,225

-

Other assets

9

14




TOTAL ASSETS

$ 46,248

$ 23,277




LIABILITIES AND STOCKHOLDERS’ EQUITY



CURRENT LIABILITIES



Accounts payable

$ 2,478

$ 851

Accrued expenses

3,964

1,088

Payable to vendor for digital systems

-

3,334

Notes payable, current portion

1,373

1,000

Capital lease, current portion

121

-

Earnout from theater acquisition

296

79

Deferred revenue

305

31




Total current liabilities

8,537

6,383

NONCURRENT LIABILITIES



Notes payable, long term portion

8,615

-

Capital lease, net of current portion

239

-

Unfavorable leasehold liability, long term portion

159

190

Deferred rent expense

407

83

Deferred tax liability

199

39




TOTAL LIABILITIES

 18,156

6,695




COMMITMENTS AND CONTINGENCIES



STOCKHOLDERS’ EQUITY



Preferred Stock, $.01 par value, 10,000,000 shares authorized as of June 30, 2013 and 2012, respectively; and 6
and 0 shares issued of Series B Preferred Stock issued and outstanding as of June 30, 2013 and 2012, respectively

-

-

Class A Common Stock, $.01 par value, 20,000,000 shares authorized; 5,511,938 and 4,519,452 shares issued and outstanding as of June 30, 2013 and 2012, respectively

55

45

Class B Common Stock, $.01 par value, 900,000 shares authorized; 865,000 and 900,000 shares issued and
outstanding as of June 30, 2013 and 2012, respectively

9

9

Additional paid-in capital

25,816

19,285

Accumulated deficit

(7,049)

(2,757)




TOTAL STOCKHOLDERS’ EQUITY OF DIGITAL CINEMA DESTINATIONS CORP

18,831

16,582

Noncontrolling interest

9,261

-




Total Equity

28,092

16,582




TOTAL LIABILITIES AND EQUITY

$ 46,248

$ 23,277






DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)



Three Months Ended

June 30,


Twelve Months Ended

June 30,






2013


2012



2013


2012




REVENUES







Admissions

$ 7,578

$ 2,651


$ 21,305


$ 4,738

Concessions

3,301

1,032


8,889


1,646

Other

322

113


990


287







Total revenues

11,201

3,796

         31,184


6,671








COSTS AND EXPENSES







   Cost of operations:







   Film rent expense

3,996

1,484


10,694


2,387

   Cost of concessions

595

187


1,491


294

   Salaries and wages

1,412

452


3,791


849

   Facility lease expense

1,600

423


4,435


821

   Utilities and other

2,052

594


5,797


1,152

   General and administrative

1,743

855


5,054


1,945

   Change in fair value of earn out

(254)

-


(333)


(20)

   Depreciation and amortization

665

760


4,049


1,147







Total costs and expenses

11,809

4,755


34,978


8,575







OPERATING LOSS

(608)

(959)


(3,794)


(1,904)

OTHER EXPENSE







   Interest expense

(379)

(12)


(999)


(12)

   Non-cash interest expense

(75)

-


(228)


-

   Other expense

(14)

(7)

(60)


(9)







LOSS BEFORE INCOME TAXES

(1,076)

(978)


(5,081)


(1,925)

Income tax expense

133

24


175


42







NET LOSS

$ (1,209)

$ (1,002)


$ (5,256)


$ (1,967)








Net loss attributable to non-controlling interest

251

-


964


-








Net loss attributable to Digital Cinema Destinations Corp.

$     (958)

 $    (1,002)


$  (4,292)


$    (1,967)

Preferred stock dividends

(5)

(21)


(16)


(257)







Net loss attributable to common stockholders

$ (963)

$ (1,023)


$ (4,308)


$ (2,224)







Net loss per Class A and Class B common share – basic and diluted

attributable to common stockholders

$ (0.15)

$ (0.23)


$ (0.74)


$ (1.00)

Weighted average common shares outstanding

6,324,272

4,472,914


5,828,283


2,218,045












SUPPLEMENTARY NON-GAAP RECONCILIATION

OF ADJUSTED EBITDA

(Unaudited) ($ in thousands)



Three months ended


Twelve months ended


June 30,


 June 30,


2013


2012


2013



2012

 Net loss

$ (1,209)


$ (1,002)


$ (5,256)

$ (1,967)

 Add back:








 Depreciation and amortization

665


760


4,049


1,147

 Interest expense

454


24


 1,227


12

 Income tax expense

133


24


175


42

 Other expense

14


7


60


9

 Deferred rent expense (5)

132


33


324


63

 Stock-based compensation (2)

400


155


549


204

 Non-recurring organizational and M&A-related professional fees (3)

90


31


642


80

 Management fees (4)

288


               -


543


             -

 (Deduct) Add:








Start Media's share of Adjusted EBITDA

(79)          


-


53


-

Adjusted EBITDA of Digital Cinema Destinations  Corp.

$ 888


$ 32


$ 2,366


$ (410)



SUPPLEMENTARY NON-GAAP RECONCILIATION

OF THEATER LEVEL CASH FLOW

(Unaudited) ($ in thousands)


Three months ended


Twelve months ended


June 30,


June 30,


2013



2012


2013



2012

 Net loss

$ (1,209)

$ (1,002)


$ (5,256)

$ (1,967)

 Add back:








 General and administrative (1)

1,743


855


5,054


1,945

 Depreciation and amortization

655


760


4,049


1,147

 Income tax expense

133


24


175


42

 Interest expense

454


24


1,227


12

 Other expense

14


7


60


9

 Deferred rent expense (5)

132


33


324


63

 Consolidated TLCF 

$ 1,922


$ 701


$ 5,633  


$ 1,251



(1) TLCF is intended to be a measure of theater profitability. Therefore, our corporate general and administrative expenses have been excluded.


(2) Represents the fair value of shares of Class A common stock and restricted stock awards issued to employees and non-employees for services rendered. As these are non-cash charges, we believe that it is appropriate to show Adjusted EBITDA excluding this item.


(3) Primarily represents professional fees incurred in connection with start-up activities, the creation of acquisition template documents that will be used by us for future transactions, and certain other costs related to our acquisition strategy. Since we intend to acquire additional theaters, we have laid the groundwork for our acquisition program and we expect to incur reduced legal fees in connection with future acquisitions. We therefore believe that it is appropriate to exclude these items from Adjusted EBITDA.


(4) To add back management fees to Digiplex from JV.


(5) Represents non-cash deferred rent expense which is included in our facility lease expense in the consolidated statements of operations.  As these are non-cash changes, we believe it is appropriate to show TLCF and Adjusted EBITDA excluding this item.


Disclosure Regarding Forward-Looking Statements

This press release and other written or oral statements made by or on behalf of Digital Cinemas Destination Corp. may contain forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs, expectations and future performance, are forward-looking statements. Forward-lookingstatements are only predictions and are not guarantees of performance. These statements are based on beliefs and assumptions of management, which in turn are based on currently available information. The forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Risk factors are disclosed in our Annual Report on Form 10-K under the caption “Risk Factors.” We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.


About Digital Cinema Destinations Corp.(www.digiplexdest.com)


Digital Cinema Destinations Corp. is dedicated to transforming its movie theaters into interactive entertainment centers. The Company provides consumers with uniquely satisfying experiences, combining state-of-the-art digital technology with engaging, dynamic content that far transcends traditional cinematic fare.  The Company’s customers enjoy live and pre-recorded alternative programming such as concerts, operas, ballets, sporting events, conferences, interactive videogames, auctions, fashion shows and, on an ongoing basis, the very best major motion pictures. As of September 1, 2013, Digiplex operates 19 cinemas and 184 screens in AZ, CA, CT, NJ, OH and PA.  You can connect with Digiplex via Facebook, Twitter, YouTube and Blogger.  Digiplex is also participating in DigiNext, a unique, specialty content joint venture (with Nehst Studios) featuring curated content from festivals around the world.  DigiNext releases typically include innovative live Q&A sessions between the audience and cast members.


                                                                                      

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