Q2 2016 – Regal Entertainment Group Earnings Call Summary

Regal Cinemas

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:

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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