While the latest financial results from Regal showed a healthy profit, the underlying numbers paint a far less comforting picture. From The Hollywood Reporter:
The company earned $23.2 million in the fourth quarter, down 21% from a year ago. But on a per-share basis, the company earned 15 cents, which was 4 cents better than Wall Street expected.
Revenue dropped about 9% to $599.9 million, less than analysts predicted, but investors focused on the positive and the shares rose fractionally Thursday to $18.57.
Admissions revenue was down 6% to $404.1 million and concessions revenue was off 8% to $158.4 million.
It seems that the exhibitor is relying heavily on National CineMedia for its revenue and profit growth. From the press release:
“In 2007, Regal Entertainment Group benefited from the successful IPO of National CineMedia, returned value to shareholders in the form of dividends totaling $485 million and continued to generate significant free cash flow,” stated Mike Campbell, CEO of Regal Entertainment Group. “We were pleased to start the 2008 fiscal year with our announcement of the pending purchase of Consolidated Theatres and look forward to the successful closing of this accretive acquisition,” Campbell continued.
It will be interesting to hear the transcript of the conference call (usually released a couple of weeks after the Q4 figures) to see what if any update on digital cinema Regal gave.