Below are my key takeaways from the Regal Entertainment Group Q2 2016 Earnings Call on July 26:
Summary:
Year to date industry box office results were slightly ahead of last year’s record setting pace (thanks to Avengers: Age of Ultron and Jurassic World), but saw a challenging Q2 due to underperforming movies (no thanks to Independence Day: Resurgence and Teenage Mutant Ninja Turtles: Out of the Shadows). Seating and concession initiatives had a positive impact on results. Had record highs in avg. ticket price and avg. concession sale.
Attendance dropped 13.2% YoY to 51MM.
Overall avg. ticket price was up 2.6% YoY to $9.87. IMAX was +1.0% YoY to $16.36, 3D +2.5% to $12.88 and 2D +4% to $9.21. Ticket prices at recliner installed theaters up 8%.
Avg. concession per patron was up 9.8% to $4.60 YoY.
Saw a decline in premium business – over 20% came from large format and 3D screens vs. last year was over 24%.
Last year they partnered with Atom Tickets to allow patrons to order tickets and concessions via their phone, along with a social component to invite friends to join them. By end of September 100% of theaters will be fully integrated.
| Financials (In millions) | Q2 2016 | Q2 2015 | % Diff |
| Total Revenue | $786 | $863 | -8.9% |
| – Admissions | $506 | $569 | -11.0% |
| – Concessions | $236 | $248 | -4.9% |
| – Other Op Rev | $45 | $47 | -4.1% |
| Film Rental Costs | $279 | $315 | -11.4% |
| Concession Costs | $30 | $34 | -12.8% |
| Rent | $106 | $107 | -0.3% |
| Operating Expense | $215 | $215 | 0.0% |
| EBITDA | $145 | $175 | -16.9% |
| Adjusted EBITDA | $138 | $177 | -22.3% |
| Net Income | $34 | $53 | -37.0% |
| Diluted EPS | $0.21 | $0.34 | -38.2% |
| Adjusted EPS | $0.23 | $0.38 | -39.5% |
| Other Key Metrics | Q2 2016 | Q2 2015 | % Diff |
| # of Theaters | 564 | 569 | -0.9% |
| # of Screens | 7,307 | 7,324 | -0.2% |
| IMAX | 90 | ||
| RPX | 90 | ||
| 4DX | 20 | ||
| Avg. Screens/Theater | 13.0 | 12.9 | 0.8% |
| Attendance | 51,246 | 59,078 | -13.3% |
| Avg. Ticket Price | $9.87 | $9.62 | 2.6% |
| Avg. Concession/Patron | $4.60 | $4.19 | 9.8% |
List of Key Properties:
- Regal Cinemas
- Edward Theaters
- United Artists Theaters
Forward Thinking:
- 2,500-3,000 US screens for potential acquisition, but will be patient on any deals
- Not focused on international right now
- Upcoming slate of movies look more promising than first half
- For future investments, see best ROI in recliner stadium seating
Links to Company Website:
Please comment below if there are data points from Regal Entertainment Group you’d like me to include in their next Earnings Call Summary.
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