Regal Entertainment Group Reports Results for Fiscal Third Quarter 2015 and Declares Quarterly Dividend

KNOXVILLE, Tenn.--(BUSINESS WIRE)--Oct. 27, 2015-- Regal Entertainment Group (NYSE: RGC), a leading motion picture exhibitor owning and operating the largest theatre circuit in the United States, today announced fiscal third quarter 2015 results.

Total revenues for the third quarter ended September 30, 2015 were $725.0 million compared to total revenues of $693.8 million for the third quarter ended September 25, 2014. Net income attributable to controlling interest in the third quarter of 2015 was $21.9 million compared to $26.7 million in the third quarter of 2014. Diluted earnings per share was $0.14 for the third quarter of 2015 compared to $0.17 for the third quarter of 2014. Adjusted diluted earnings per share(1) was $0.18 for both the third quarter of 2015 and the third quarter of 2014. Adjusted EBITDA(3) was $126.6 million for the third quarter of 2015 compared to $122.5 million for the third quarter of 2014. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

Regal’s Board of Directors also today declared a cash dividend of $0.22 per Class A and Class B common share, payable on December 15, 2015, to stockholders of record on December 4, 2015. The Company intends to pay a regular quarterly dividend for the foreseeable future at the discretion of the Board of Directors depending on available cash, anticipated cash needs, overall financial condition, loan agreement restrictions, future prospects for earnings and cash flows as well as other relevant factors.

“We are pleased that our ongoing concession initiatives have generated above-average growth in concession sales per patron for the fifth consecutive quarter and contributed to Adjusted EBITDA growth of almost 5% so far this year,” stated Amy Miles, CEO of Regal Entertainment Group. “With a number of highly anticipated releases scheduled for the upcoming holiday box office season, we remain optimistic about the potential for box office success for the remainder of 2015 and early 2016.”

Forward-looking Statements:

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements included herein, other than statements of historical fact, may constitute forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the risk factors contained in the Company's 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 2, 2015 and in the Company’s Quarterly Report on Form 10-Q filed with the SEC on August 10, 2015. All forward-looking statements are expressly qualified in their entirety by such factors.

Conference Call:

Regal Entertainment Group management will conduct a conference call to discuss third quarter 2015 results on October 27, 2015 at 4:30 p.m. (Eastern Time). Interested parties can listen to the call live on the Internet through the Investor Relations section of the Company's website: www.REGmovies.com or by dialing 877-407-0778 (Domestic) and 201-689-8565 (International). Please dial in to the call at least 5-10 minutes prior to the start of the call or go to the website at least 15 minutes prior to the call to download and install any necessary audio software. When prompted, ask for the Regal Entertainment Group conference call. A replay of the call will be available beginning approximately two hours following the call. Those interested in listening to the replay of the conference call should dial 877-660-6853 (Domestic) or 201-612-7415 (International) and enter conference call ID # 13595836.

About Regal Entertainment Group

Regal Entertainment Group (NYSE: RGC) operates the largest and most geographically diverse theatre circuit in the United States and, as of September 30, 2015, operates 7,357 screens in 571 theatres throughout 42 states along with the District of Columbia, American Samoa and Guam. The Company operates theatres in 46 of the top 50 U.S. designated market areas. We believe that the size, reach and quality of the Company’s theatre circuit not only provide its patrons with a convenient and enjoyable moviegoing experience, but is also an exceptional platform to realize economies of scale in theatre operations.

Additional information is available on the Company's website at www.REGmovies.com.

Regal Entertainment Group
Consolidated Statements of Income Information
For the Fiscal Quarters and Three Quarters Ended 9/30/15 and 9/25/14

(in millions, except per share data)

(unaudited)

Quarter Ended Three Quarters Ended
Sept. 30, 2015 Sept. 25, 2014 Sept. 30, 2015 Sept. 25, 2014
Revenues
Admissions $ 469.9 $ 461.1 $ 1,492.6 $ 1,467.7
Concessions 214.7 194.5 660.6 607.5
Other operating revenues 40.4 38.2 125.9 115.8
Total revenues 725.0 693.8 2,279.1 2,191.0
 
Operating expenses
Film rental and advertising costs 246.7 244.7 795.7 773.2
Cost of concessions 24.8 25.7 85.2 80.3
Rent expense 104.8 104.5 315.1 315.4
Other operating expenses(4) 216.0 188.2 632.9 592.4
General and administrative expenses (including share-based compensation of $2.2 for the quarters ended September 30, 2015 and September 25, 2014, and $6.1 and $6.4 for the three quarters ended September 30, 2015 and September 25, 2014, respectively) 17.6 17.3 55.5 54.2
Depreciation and amortization 52.8 51.9 161.0 154.3
Net loss on disposal and impairment of operating assets and other 10.4 2.9 16.3 6.5
Income from operations 51.9 58.6 217.4 214.7
Interest expense, net 33.3 29.3 96.5 94.0
Loss on extinguishment of debt 5.7 62.4
Earnings recognized from NCM (8.4 ) (6.5 ) (20.6 ) (23.3 )
Equity in income of non-consolidated entities and other, net (9.3 ) (8.6 ) (26.3 ) (19.6 )
Income before income taxes 36.3 44.4 162.1 101.2
Provision for income taxes 14.4 18.0 63.9 42.3
Net income 21.9 26.4 98.2 58.9
Noncontrolling interest, net of tax 0.3 0.2 0.4
Net income attributable to controlling interest $ 21.9 $ 26.7 $ 98.4 $ 59.3
Diluted earnings per share $ 0.14 $ 0.17 $ 0.63 $ 0.38
Adjusted diluted earnings per share(1) $ 0.18 $ 0.18 $ 0.71 $ 0.65

Weighted average number of diluted shares outstanding(2)

156.5 156.4 156.5 156.3
Consolidated Summary Balance Sheet Information

(dollars in millions)

(unaudited)

As of

September 30, 2015

As of

January 1, 2015

Cash and cash equivalents $ 99.6 $ 147.1
Total assets 2,409.1 2,539.5
Total debt 2,349.3 2,360.2
Total stockholders’ deficit of Regal Entertainment Group (902.2 ) (894.8 )
Operating Data

(unaudited)

Quarter Ended Three Quarters Ended
Sept. 30, 2015 Sept. 25, 2014 Sept. 30, 2015 Sept. 25, 2014
Theatres at period end 571 573 571 573
Screens at period end 7,357 7,347 7,357 7,347
Average screens per theatre 12.9 12.8 12.9 12.8
Attendance (in thousands) 51,136 50,814 160,819 162,035
Average ticket price $ 9.19 $ 9.07 $ 9.28 $ 9.06
Average concessions per patron $ 4.20 $ 3.83 $ 4.11 $ 3.75
Reconciliation of EBITDA to Net Cash (Used in) Provided by Operating Activities

(dollars in millions)

(unaudited)

Quarter Ended Three Quarters Ended
Sept. 30, 2015 Sept. 25, 2014 Sept. 30, 2015 Sept. 25, 2014
EBITDA $ 122.4 $ 125.9 $ 419.8 $ 349.9
Interest expense, net (33.3 ) (29.3 ) (96.5 ) (94.0 )
Provision for income taxes (14.4 ) (18.0 ) (63.9 ) (42.3 )
Deferred income taxes (9.7 ) (7.2 ) (22.5 ) (7.7 )
Changes in operating assets and liabilities (155.5 ) (96.5 ) (59.7 ) (87.4 )
Loss on extinguishment of debt 5.7 62.4
Landlord contributions 13.4 1.2 27.5 2.9
Other items, net 4.2 (4.0 ) 6.3 1.2
Net cash (used in) provided by operating activities $ (72.9 ) $ (27.9 ) $ 216.7 $ 185.0
Reconciliation of EBITDA to Adjusted EBITDA

(dollars in millions)

(unaudited)

Quarter Ended Three Quarters Ended
Sept. 30, 2015 Sept. 25, 2014 Sept. 30, 2015 Sept. 25, 2014
EBITDA $ 122.4 $ 125.9 $ 419.8 $ 349.9
Net loss on disposal and impairment of operating assets and other 10.4 2.9 16.3 6.5
Share-based compensation expense 2.2 2.2 6.1 6.4
Loss on extinguishment of debt 5.7 62.4
Earnings recognized from NCM (8.4 ) (6.5 ) (20.6 ) (23.3 )
Cash distributions from NCM 9.3 6.9 29.2 30.2
Cash distributions from DCIP 2.0
Noncontrolling interest, net of tax and equity in income of non-consolidated entities and other, net (9.3 ) (8.9 ) (26.5 ) (20.0 )
Adjusted EBITDA(3) $ 126.6 $ 122.5 $ 432.0 $ 412.1
Reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow

(dollars in millions)

(unaudited)

Quarter Ended Three Quarters Ended
Sept. 30, 2015 Sept. 25, 2014 Sept. 30, 2015 Sept. 25, 2014
Net cash (used in) provided by operating activities $ (72.9 ) $ (27.9 ) $ 216.7 $ 185.0
Capital expenditures (55.1 ) (39.3 ) (126.2 ) (96.8 )
Proceeds from asset sales 8.7 8.7 1.7
Free cash flow(3) $ (119.3 ) $ (67.2 ) $ 99.2 $ 89.9
Reconciliation of Net Income Attributable to Controlling Interest to Adjusted Diluted
Earnings Per Share

(dollars in millions, except per share data)

(unaudited)

Quarter Ended Three Quarters Ended
Sept. 30, 2015 Sept. 25, 2014 Sept. 30, 2015 Sept. 25, 2014
Net income attributable to controlling interest $ 21.9 $ 26.7 $ 98.4 $ 59.3

Loss on extinguishment of debt, net of related tax effects

3.6 39.2
Gain on sale of available for sale securities, net of related tax effects (1.2 )

Net loss on disposal and impairment of operating assets and other, net of related tax effects

6.2 1.7 9.8 3.9

Net income attributable to controlling interest, excluding loss on extinguishment of debt, net of related tax effects, gain on sale of available for sale securities, net of related tax effects, and net loss on disposal and impairment of operating assets and other, net of related tax effects

$ 28.1 $ 28.4 $ 111.8 $ 101.2

Weighted average number of diluted shares outstanding(2)

156.5 156.4 156.5 156.3
Adjusted diluted earnings per share(1) $ 0.18 $ 0.18 $ 0.71 $ 0.65
Diluted earnings per share $ 0.14 $ 0.17 $ 0.63 $ 0.38

________________________________

(1) We have included adjusted diluted earnings per share, which is diluted earnings per share excluding loss on extinguishment of debt, net of related tax effects, gain on sale of available for sale securities, net of related tax effects, and net loss on disposal and impairment of operating assets and other, net of related tax effects, because we believe it provides investors with a useful industry comparative and is a financial measure used by management to assess the performance of our Company.
(2) Represents reported weighted average number of diluted shares outstanding for purposes of computing diluted earnings per share and adjusted diluted earnings per share for the quarters and three quarters ended September 30, 2015 and September 25, 2014.
(3) Adjusted EBITDA (earnings adjusted for interest, taxes, depreciation and amortization expense, net loss on disposal and impairment of operating assets and other, share-based compensation expense, loss on extinguishment of debt, earnings recognized from NCM, cash distributions from NCM, cash distributions from DCIP and noncontrolling interest, net of tax and equity in income of non-consolidated entities and other, net) was approximately $126.6 million for the quarter ended September 30, 2015. Prior to 2015, earnings recognized from NCM were included in Adjusted EBITDA. However, we believe that including cash distributions of NCM in our Adjusted EBITDA measure more accurately reflects our liquidity. Accordingly, the Adjusted EBITDA computation for all periods presented herein reflects such cash distributions received from NCM. We believe EBITDA, Adjusted EBITDA and Free Cash Flow provide useful measures of cash flows from operations for our investors because EBITDA, Adjusted EBITDA and Free Cash Flow are industry comparative measures of cash flows generated by our operations and because they are financial measures used by management to assess the liquidity of our Company. EBITDA, Adjusted EBITDA and Free Cash Flow are not measurements of liquidity under U.S. generally accepted accounting principles and should not be considered in isolation or construed as a substitute for other operations data or cash flow data prepared in accordance with U.S. generally accepted accounting principles for purposes of analyzing our liquidity. In addition, not all funds depicted by EBITDA, Adjusted EBITDA and Free Cash Flow are available for management's discretionary use. For example, a portion of such funds are subject to contractual restrictions and functional requirements to pay debt service, fund necessary capital expenditures and meet other commitments from time to time as described in more detail in the Company’s 2014 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2015. EBITDA, Adjusted EBITDA and Free Cash Flow, as calculated, may not be comparable to similarly titled measures reported by other companies.
(4) On July 10, 2014, the State of New York approved a sales tax refund claim filed by the Company to recover sales taxes paid on certain nontaxable purchases made during the fiscal 2008 through fiscal 2012 periods. The refund resulted in a reduction to other operating expenses of $16.8 million during the third quarter of fiscal 2014.

Source: Regal Entertainment Group

Financial Contact:
Kevin Mead
Regal Entertainment Group
Vice President Investor Relations and Planning
Kevin.Mead@regalcinemas.com
865-925-9685
or
Media Contact:
Ken Thewes
Regal Entertainment Group
Senior Vice President and Chief Marketing Officer
865-925-9539

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