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DIGITAL CINEMA DESTINATIONS CORP. REPORTS SOLID FISCAL 2014 FIRST QUARTER RESULTS, INCLUDING ACROSS-THE-BOARD PER CAP INCREASES

 

- Company Continues Achieving Circuit Growth and Operational Improvements - 

 

WESTFIELD, New Jersey (November 7, 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 2014 first quarter financial results for the three-month period ended September 30, 2013.

 

DATE/TIME: Today-Thursday, November 7, 2013 at 4:30 pm ET

 

TELEPHONE: Dial +1 800 268 5851. Please call at least five minutes in advanceto 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

September 30,

(in thousands)

2013

2012

Consolidated total revenue

      $     11,469

$       4,347

Consolidated net loss

(1,374)

(661)

 

 

 

Consolidated theater level cash flow (1)

1,829

1,009

Adjusted EBITDA of Digital Cinema Destinations Corp. (1)

1,007

358

 

 

 

Theaters (period end)

19

9

Average screens

183

73

Average attendance per screen

5,893

5,690

Average admission per patron

$       7.59

$       7.23

Average concessions sales per patron

$       3.27

$       2.88

Total attendance (in thousands)

1,077

416

 

(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 months ended September 30, 2013 and 2012 are included in the supplementary tables accompanying this news announcement.

 

Digiplex Chairman and CEO Bud Mayo stated, “The September quarter was another productive period for Digiplex as well as for the overall U.S. box office, which rose more than 6%, buoyed by a record-setting summer slate. Importantly, our growing organization again achieved revenue, Adjusted EBITDA, and theater level cash flow increases, versus the year-ago period. Per screen attendance, admissions and concessions sales also trended higher in fiscal Q1 2014, compared to Q1 ’13 levels, over our considerably larger theater and screen base.

 

“To support future circuit growth we successfully completed a $5.7 million registered direct offering of DCIN Class A Common Stock to institutional investors in October, pursuant to our effective shelf registration statement. In addition to footprint expansion, gross proceeds are expected to be utilized for general corporate purposes, which may include repayment of debt, capital expenditures, the acquisition of additional units of membership interest in our joint venture, Start Media/Digiplex, LLC and the financing of ongoing operating expenses and overhead.

 

“Several weeks after the share offering we entered into asset purchase agreements to acquire an 8-plex located in Mechanicsburg, PA (Harrisburg DMA 39) as well as a 7-screen theater based in Churchville, MD (Baltimore DMA 27). In addition, we signed a multi-year theater operating lease that takes effect April 1, 2014. We expect to begin occupancy of the New Smyrna Beach, FL (Daytona DMA 19) 12-plex in late spring or early summer next year, following completion of digital projection system installations at this location. This entertainment complex will be operated under Digiplex’s theater management agreement with Start Media/Digiplex. Additionally, today we entered into an asset purchase agreement to acquire a 10-plex in Londonderry, NH (Boston DMA 7), and also announced the upcoming addition of two screens to an existing theater.”

 

 (financial tables follow)


 

 

DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

 

September 30,

 

June 30,

 

2013

 

2013

ASSETS

 

 

 

CURRENT ASSETS

 

 

 

Cash and cash equivalents

 $               1,337

 

 $               3,607

Accounts receivable

                     660

 

                     697

Inventories

                     170

 

                     191

Deferred financing costs, current portion

                     357

 

                     357

Prepaid expenses and other current assets

                  1,391

 

                  1,444

Total current assets

                  3,915

 

                  6,296

Property and equipment, net

                29,163

 

                29,171

Goodwill

                  3,156

 

                  3,156

Intangible assets, net

                  6,029

 

                  6,186

Security deposits

                     207

 

                     205

Deferred financing costs, long term portion, net

                  1,135

 

                  1,225

Other assets

                       47

 

                         9

TOTAL ASSETS

 $             43,652

 

 $             46,248

LIABILITIES AND EQUITY

 

 

 

CURRENT LIABILITIES

 

 

 

Accounts payable

 $               1,997

 

 $               2,478

Accrued expenses and other current liabilities

                  1,957

 

                  3,964

Notes payable, current portion

                  1,746

 

                  1,373

Capital lease, current portion

                       97

 

                     121

Earn out from theater acquisitions

                     355

 

                     296

Deferred revenue

                     375

 

                     305

Total current liabilities

                  6,527

 

                  8,537

NONCURRENT LIABILITIES

 

 

 

Notes payable, long term portion

                  8,397

 

                  8,615

Capital lease, net of current portion

                     240

 

                     239

Unfavorable leasehold liability, long term portion

                     150

 

                     159

Deferred rent expense

                     512

 

                     407

Deferred tax liability

                     206

 

                     199

TOTAL LIABILITIES

                16,032

 

                18,156

COMMITMENTS AND CONTINGENCIES

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

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

                       -  

 

                       -  

Class A Common stock, $.01 par value: 20,000,000 shares authorized; and 5,642,208 and 5,511,938 shares issued and outstanding as of June 30, 2013 and 2012, respectively

                       56

 

                       55

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

                         8

 

                         9

Additional paid-in capital

                26,418

 

                25,816

Accumulated deficit

                (8,100)

 

                (7,049)

TOTAL STOCKHOLDERS' EQUITY OF DIGITAL CINEMA DESTINATIONS CORP.

                18,382

 

                18,831

Non-controlling interest

                  9,238

 

                  9,261

Total equity

                27,620

 

                28,092

TOTAL LIABILITIES AND EQUITY

 $             43,652

 

 $             46,248

 

 

 

DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)

 

             

Three Months Ended

September 30,

 

2013

 

2012

 

 

REVENUES

 

 

 

        Admissions

 $               7,758

 

 $               3,009

        Concessions

                  3,338

 

                  1,199

        Other

                     373

 

                     139

                Total revenues

                11,469

 

                  4,347

COSTS AND EXPENSES

 

 

 

Cost of operations:

 

 

 

Film rent expense

                  3,778

 

                  1,412

Cost of concessions

                     602

 

                     164

Salaries and wages

                  1,450

 

                     513

Facility lease expense

                  1,470

 

                     523

Utilities and other

                  2,386

 

                     768

General and administrative

                  1,318

 

                     737

Change in fair value of earn out

                    59  

 

                       -  

Depreciation and amortization

                  1,335

 

                     849

Total costs and expenses

                12,398

 

                  4,966

 

 

 

 

OPERATING LOSS

                   (929)

 

                   (619)

 

 

 

 

OTHER EXPENSE

 

 

 

Interest expense

                   (351)

 

                     (23)

Non-cash interest expense

                     (76)

 

                       (2)

Other expense

                       (9)

 

                       -  

LOSS BEFORE INCOME TAXES

                (1,365)

 

                   (644)

 

 

 

 

Income tax expense

                         9

 

                       17

NET LOSS 

 $             (1,374)

 

 $                (661)

 

 

 

 

Net loss attributable to non-controlling interest

                     323

 

                       -  

Net loss attributable to Digital Cinema Destinations Corp.

 $             (1,051)

 

 $                (661)

 

 

 

 

Preferred stock dividends

                       (5)

 

                       (1)

Net loss attributable to common stockholders

 $             (1,056)

 

 $                (662)

 

 

 

 

 

 

 

 

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

 $               (0.16)

 

 $               (0.12)

 

 

 

 

Weighted average common shares outstanding:

           6,470,484

 

           5,419,452

 

 

 

 

 

 

 

SUPPLEMENTARY NON-GAAP RECONCILIATION

OF THEATER LEVEL CASH FLOW

(Unaudited) ($ in thousands)

 

 

Three months ended September 30,

 

 

2013

 

2012

 

 Net loss

 $          (1,374)

 

 $          (661)

 

 Add back:

 

 

 

 

 General and administrative (1)

              1,318

 

               737

 

 Depreciation and amortization

              1,335

 

               849

 

 Income tax expense

                    9

 

                 17

 

 Interest expense

                 427

 

                 25

 

 Other expense

                     9

 

                    -

 

 Deferred rent expense (5)

                 105

 

                 42

 

 Consolidated TLCF 

 $           1,829

 

 $         1,009

 

 

SUPPLEMENTARY NON-GAAP RECONCILIATION

OF ADJUSTED EBITDA

(Unaudited) ($ in thousands)

 

 

Three months ended September 30,

 

 

2013

 

2012

 

 Net loss

 $          (1,374)

 

 $          (661)

 

 Add back:

 

 

 

 

 Depreciation and amortization

              1,335

 

               849

 

 Interest expense

                 427

 

                 25

 

 Income tax expense

                     9

 

                 17

 

 Other expense

                     9

 

                    -

 

 Deferred rent expense (5)

                 105

 

                 42

 

 Stock-based compensation (2)

                 239

 

                 43

 

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

                 

                   56

 

                 43

 

 Management fees (4)

                 286

 

                    -

 

 Start Media's share of adjusted EBITDA 

                  (85)

 

                    -

 

 Adjusted EBITDA of Digital Cinema Destinations Corp.

 $           1,007

 

 $            358

 

 

 

(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 specific acquisitions. Since the amounts will vary depending on the size and quantity of any acquisition, and are not part of ongoing operations of our theaters, we believe that it is appropriate to exclude these items from Adjusted EBITDA.

 

(4) To add back management fees to Digiplex from Start Media/Digiplex, LLC.

 

(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 Cinema Destinations 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. (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. Digiplex operates 19 cinemas and 184 screens in AZ, CA, CT, OH, PA, and NJ. You can connect with Digiplex via Facebook, Twitter, YouTubeand Blogger.

 

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