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Digiplex Destinations
   
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DIGITAL CINEMA DESTINATIONS CORP. FISCAL 2014 Q2 REVENUE RISES TO $11.2 MILLION, REFLECTING ONGOING SCREEN GROWTH AND SUCCESSFUL CIRCUIT EXPANSION

 

- Reports Theater Level Cash Flow of $1.9 Million -

 

WESTFIELD, New Jersey (February 12, 2014) – 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 2014 second quarter financial results for the three-month period ended December 31, 2013.

 

DATE/TIME: Today, 2/12/14 at 4:30 p.m. ET

 

TELEPHONE: 800 891 8357. Please call at least five minutes in advanceto be 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

December 31,

Six Months Ended

December 31,

(in thousands)

2013

2012

2013

2012

Consolidated total revenue

 $ 11,196

$ 6,870

$  22,665

 $ 11,216

Consolidated net loss

  (1,356)

(1,234)

(2,727)

(1,897)

 

 

 

 

 

Consolidated theater level cash flow (1)

1,943

1,553

3,773

2,554

Adjusted EBITDA of Digital Cinema Destinations Corp. (1)

950

644

1,958

997

 

 

 

 

 

Theaters (period end)

20

16

20

16

Average screens

185

96

184

84

Average attendance per screen

5,367

6,459

11,257

12,252

Average admission per patron

$     7.93

$   7.71

$     7.76

$     7.52

Average concessions sales per patron

$     3.31

$   3.13

$     3.29

$     3.03

Total attendance (in thousands)

993

619

2,070

1,035

 

(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 six months ended December 31, 2013 and 2012 are included in the supplementary tables accompanying this news announcement.

 

Digiplex Chairman and CEO Bud Mayo stated, “Digiplex continues to capitalize on the attractive M&A environment and favorable industry backdrop as we expand our footprint into leading domestic markets. In recent months we completed a previously announced acquisition in the Harrisburg DMA, further growing our Pennsylvania presence. We also have a number of pending locations that have been announced and these are in various stages of final due diligence. We are also in active negotiations and advanced high-level discussion on a wide array of other potential theater purchases as well.

 

“As with previous acquisitions our mission continues to be transforming all Digiplex locations into digital entertainment centers featuring a wide range of content, including alternative programming that helps drive capacity utilization during non-peak times. This strategy has been working according to plan and we are approximately one-quarter of the way to our organization’s ultimate goal of operating a national circuit located in top markets,” concluded Mr. Mayo.

 

(financial tables follow)

 

DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

December 31,

2013

 

June 30,

2013

 

 

(Unaudited)

 

ASSETS

 

 

CURRENT ASSETS

 

 

Cash and cash equivalents

$        6,992

$        3,607

Accounts receivable

740

697

Inventories

148

191

Deferred financing costs, current portion

357

357

Prepaid expenses and other current assets

1,295

1,444

 

 

 

Total current assets

 9,532

6,296

Property and equipment, net

29,666

29,171

Goodwill

3,502

3,156

Intangible assets, net

7,012

6,186

Security deposit

209

205

Deferred financing costs, long term portion, net

1,052

1,225

Other assets

107

9

 

 

 

TOTAL ASSETS

$       51,080

$       46,248

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

CURRENT LIABILITIES

 

 

Accounts payable

$         1,985

$         2,478

Accrued expenses and other current liabilities

3,658

3,964

Notes payable, current portion

1,716

1,373

Capital lease, current portion

162

121

Earn out from theater acquisitions

350

296

Deferred revenue

767

305

 

 

 

Total current liabilities

8,638

8,537

NONCURRENT LIABILITIES

 

 

Notes payable, long term portion

8,048

8,615

Capital lease, net of current position

470

239

Unfavorable leasehold liability, long term portion

141

159

Deferred rent expense

617

407

Deferred tax liability

207

199

 

 

 

TOTAL LIABILITIES

18,121

 18,156

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

STOCKHOLDERS’ EQUITY

 

 

Class A Common stock, $.01 par value: 20,000,000 shares authorized and 7,035,058 and 5,511,938 shares issued and outstanding as of December 31, 2013 and June 30, 2013, respectively

70

55

Class B Common stock, $.01 par value, 900,000 shares authorized; 849,000 and 865,000 shares issued and outstanding as of December 31, 2013 and June 30, 2013, respectively

9

9

Additional paid-in capital

32,959

25,816

Accumulated deficit

(9,121)

(7,049)

 

 

 

TOTAL STOCKHOLDERS’ EQUITY OF DIGITAL CINEMA DESTINATIONS CORP.

23,917

18,831

Non-controlling interest

9,042

9,261

 

 

 

Total equity

32,959

28,092

 

 

 

TOTAL LIABILITIES AND EQUITY

 $      51,080

 $      46,248

 

 

 

 

 

DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except share and per share data)

 

 

 

Three Months Ended

December 31,

 

Six Months Ended

December 31,

 

 

 

 

 

2013

 

2012

 

 

2013

 

2012

 

 

 

REVENUES

 

 

 

 

 

 

Admissions

$    7,590

$     4,752

 

$   15,347

 

$   7,761

Concessions

3,166

1,929

 

6,504

 

3,128

Other

440

189

 

814

 

327

 

 

 

 

 

 

Total revenues

11,196

6,870

         22,665

 

         11,216

 

 

 

 

 

 

 

COSTS AND EXPENSES

 

 

 

 

 

 

Cost of operations:

 

 

 

 

 

 

Film rent expense

3,936

2,401

 

7,714

 

3,813

Cost of concessions

581

317

 

1,183

 

482

Salaries and wages

1,297

710

 

2,747

 

1,224

Facility lease expense

1,450

811

 

2,920

 

1,334

Utilities and other

2,099

1,157

 

4,484

 

1,923

General and administrative

1,348

1,208

 

2,666

 

1,946

Change in fair value of earnout

(5)

-

 

54

 

-

Depreciation and amortization

1,373

1,098

 

2,708

 

1,947

 

 

 

 

 

 

Total costs and expenses

12,079

7,702

 

24,476

 

12,669

 

 

 

 

 

 

OPERATING LOSS

(883)

(832)

 

(1,811)

 

(1,453)

OTHER EXPENSE

 

 

 

 

 

 

Interest expense

(348)

(272)

 

(699)

 

(294)

Non-cash interest expense

(76)

(75)

 

(152)

 

(78)

Other expense

(40)

(8)

(47)

 

(8)

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

(1,347)

(1,187)

 

(2,709)

 

(1,833)

Income tax expense

9

47

 

18

 

64

 

 

 

 

 

 

NET LOSS

$   (1,356)

$   (1,234)

 

$  (2,727)

 

 $  (1,897)

 

 

 

 

 

 

 

Net loss attributable to non-controlling interest

331

93

 

655

 

93

 

 

 

 

 

 

 

Net loss attributable to Digital Cinema Destinations Corp.

$   (1,025)

$   (1,141)

 

$  (2,072)

 

$  (1,804)

Preferred stock dividends

(5)

(5)

 

(10)

 

(6)

 

 

 

 

 

 

Net loss attributable to common stockholders

$   (1,030)

$   (1,146)

 

$  (2,082)

 

$  (1,810)

 

 

 

 

 

 

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

 

$     (0.14)

 

$     (0.21)

 

 

$    (0.30)

 

 

$    (0.33)

Weighted average common shares outstanding

7,565,123

5,511,765

 

7,014,926

 

5,465,356

                 

 

 

SUPPLEMENTARY NON-GAAP RECONCILIATION

OF THEATER LEVEL CASH FLOW

(Unaudited) ($ in thousands)

 

 

 Three months ended

 

Six months ended

 

December 31,

 

 December 31,

 

2013

 

 

2012

 

2013

 

 

2012

 Net loss

$  (1,356)

$   (1,234)

 

$  (2,727)

$  (1,897)

 Add back:

 

 

 

 

 

 

 

 General and administrative (1)

     1,348

 

1,208

 

2,666

 

1,946

 Depreciation and amortization

        1,373

 

        1,098

 

2,708

 

1,947

 Income tax expense

          9

 

         47

 

18

 

64

 Interest expense

424

 

347

 

851

 

372

 Other expense

40

 

8

 

47

 

8

 Deferred rent expense (5)

105

 

79

 

210

 

114

 Consolidated TLCF 

$    1,943

 

$    1,553

 

$    3,773  

 

$    2,554

 

 

SUPPLEMENTARY NON-GAAP RECONCILIATION

OF ADJUSTED EBITDA

(Unaudited) ($ in thousands)

 

 

 Three months ended

 

Six months ended

 

December 31,

 

 December 31,

 

2013

 

2012

 

2013

 

 

2012

 Net loss

$  (1,356)

 

$  (1,234)

 

$  (2,727)

$  (1,897)

 Add back:

 

 

 

 

 

 

 

 Depreciation and amortization

      1,373

 

      1,098

 

  2,708

 

   1,947

 Interest expense

     424

 

         347

 

 851

 

372

 Income tax expense

9

 

         47

 

18

 

           64

 Other expense

40

 

8

 

47

 

8

 Deferred rent expense (5)

105

 

79

 

210

 

114

 Stock-based compensation (2)

         122

 

   26

 

361

 

69

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

53

 

315

 

110

 

362

 Management fees (4)

    275

 

          52

 

560

 

52

 Deduct:

 

 

 

 

 

 

 

Start Media's share of Adjusted EBITDA

(95)          

 

(94)

 

(180)

 

(94)

Adjusted EBITDA of Digital Cinema Destinations  Corp.

$       950

 

$       644

 

$    1,958

 

 $     997

 

(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 Form 10-K for the year ended June 30, 2012 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. (NasdaqCM: DCIN) is Digiplex Destinations, 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 opera, ballet, Broadway shows, sports events, concerts and, on an ongoing basis, the very best major motion pictures. You can connect with Digiplex via Facebook, Twitter, YouTube and Blogger.

 

 

 

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