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» Film-Tech Forum   » Operations   » Ground Level   » Regal Responds about Carmike and State of Theater Industry (Page 1)

 
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Author Topic: Regal Responds about Carmike and State of Theater Industry
Tyler Skinner
Expert Film Handler

Posts: 115
From: Pa
Registered: Nov 1999


 - posted 08-14-2000 07:08 PM      Profile for Tyler Skinner   Email Tyler Skinner   Send New Private Message       Edit/Delete Post 

To: Corporate Employees, Theatre Managers

From: Michael L. Campbell

Date: August 14, 2000


I m sure that all of you are hearing or have heard the rumors
surrounding our industry. These rumors were sparked by last Tuesday s
news of Carmike filing for bankruptcy protection. The press has also been
full of news of other exhibitor s problems, even speculating on future
filings for bankruptcy protection. The industry is going through difficult
times. We are all struggling with excess capacity, over-leveraged balance
sheets, and limited availability to additional capital.

We are no exception. We were obviously very disappointed with the
second quarter results. The June box office was down approximately 16%,
earnings before interest, taxes, depreciation & amortization (EBITDA) was
down approximately 12%.

However, our company has been aggressive and will continue to be
aggressive in dealing with the issues that face us in this difficult
environment. As a circuit, we are curtailing our capital programs and
working to accelerate our screen closings. We have done an extensive
strategic review of each of our theatres and each of our markets and have
targeted a significant number of sites and markets for potential closure or
disposal. We are also pursuing a number of operations / profit enhancing
initiatives.

We have engaged outside resources to help us implement this plan. By
using outside resources, management can focus on maximizing results
from our base of high performance sites that will remain long-term quality
assets for the company.

In addition to our operational restructuring efforts, the Company remains
focused on generating additional sources of liquidity. We believe that as of
today, we have an adequate liquidity reserve for the balance of the fiscal
year. We have negotiated $45 million in sale - leaseback transactions, of
which $20 million has already been received. The company is also
evaluating other liquidity sources including without limitation additional
financing and the sale of certain non - strategic assets.

There is no doubt that this is a tough operating environment, and will likely
remain difficult while the industry rationalization of its screens progresses.

For our part, we intend to continue to be a leader in the industry. We intend
to implement our restructuring plan as quickly and in as non disruptive a
way as possible. We intend to continue to proactively look for solutions.

Even in our tough industry environment, we continue to have our
employees best interests at heart. We appreciate your continued
enthusiasm and commitment to this Company and the theatre industry. As
the dust settles over the next couple of years, we are confident that our
industry will rebound as it has numerous times before in the face of
adversity.

Thank You,

Mike Campbell
Chief Executive Officer

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Brad Miller
Administrator

Posts: 17687
From: Plano, TX (36.2 miles NW of Rockwall)
Registered: May 99


 - posted 08-15-2000 02:46 AM      Profile for Brad Miller   Author's Homepage   Email Brad Miller       Edit/Delete Post 
Word I heard was Regal ordered a complete inventory of equipment, concession inventory, spare items, absolutely everything in the building right down to the serial numbers of unused xenon bulbs in ALL of their theaters.

Somebody's about to have a big sale! Wouldn't it be funny if such items started turning up on Ebay?

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Mike Spaeth
Phenomenal Film Handler

Posts: 1112
From: Hampton, GA
Registered: Jul 2000


 - posted 08-15-2000 04:51 AM      Profile for Mike Spaeth   Author's Homepage   Email Mike Spaeth   Send New Private Message       Edit/Delete Post 
Sounds like someone's getting ready for a garage sale... On a somewhat related note, has anyone been involved in the closing of a theater? I helped close Cinemark Movies 10 in Overland Park, KS, and they had us completely gut the building - down to popping off the lens covers and taking the aisle light bulbs. Most of the equipment was picked up and moved to Sierra Vista, AZ (12 trailers worth), to open a new theater.

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Dave Bird
Jedi Master Film Handler

Posts: 753
From: Perth, Ontario, Canada
Registered: Jun 2000


 - posted 08-15-2000 08:55 AM      Profile for Dave Bird   Author's Homepage   Email Dave Bird   Send New Private Message       Edit/Delete Post 
Read "We have engaged outside resources to....handle our dirty work and fire sales."

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Scott D. Neff
Theatre Dork

Posts: 919
From: San Francisco, CA
Registered: Oct 1999


 - posted 08-15-2000 12:44 PM      Profile for Scott D. Neff   Author's Homepage   Email Scott D. Neff   Send New Private Message       Edit/Delete Post 
Our company has stripped out many many theatres that were not our own. And yes -- EVERYTHING is taken -- from ceiling to floor.

Things I never would think about - the owner takes. Door closers, exit signs, emregency lights, railings, etc. EVERYTHING.

Although ususally the seats are old and dingy so we leave those.

If anybody needs a theatre cleaned out --- we're pros.

------------------
Scott D. Neff
----------------
www.cinema-west.com

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Brad Miller
Administrator

Posts: 17687
From: Plano, TX (36.2 miles NW of Rockwall)
Registered: May 99


 - posted 08-15-2000 12:52 PM      Profile for Brad Miller   Author's Homepage   Email Brad Miller       Edit/Delete Post 
I remember working for Cinemark 10 years ago when we took over a UA theater. UA had stripped that place down pretty good, including changing out the intermittents with obviously bad ones about to bite the dust, they took some halfway decent sound equipment and replaced it with the worst of the worst sound equipment, and I remember one of the 2000 watt xenons had over 10,000 hours on it which was virtually impossible to strike (of course, they even took the emergency spares). Other things I remember was them taking a few bag-in-the-box soda products that didn't even have 1/4 of syrup left in them and they even took the damn light bulbs out of the light fixtures in the lobby! When the sun went down, we were in for a real surprise. I mean, even renting an apartment you are responsible to have all functioning light bulbs in the sockets upon leaving.

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Jonathan M. Crist
Jedi Master Film Handler

Posts: 524
From: Hershey, PA, USA
Registered: Apr 2000


 - posted 08-15-2000 11:04 PM      Profile for Jonathan M. Crist   Email Jonathan M. Crist   Send New Private Message       Edit/Delete Post 
Late last summer in Bucks County PA (Suburban Philadelphia,) Regal built and opened a 22 screen stadium megaplex at Warrington Crossing. The Warrinton was less than one mile south (on the same road) from a standard 16 plex which Regal had completely refurbished and reopened less than nine months before! (The 16 was an expanded former AMC which AMC had given up). The Warrington was also less than 5 miles away from another standard 12 plex that Regal had built less than 2 years before.

On the October Friday mid-afternoon of my visit shortly after its debut, the Warrinton had a total of 27 paying customers in its 22 screens. Some of the screens were running even without patrons. The 16 plex just up the road (which was showing the exact same movies) had 5 paying customers in the whole place.

With such strategic building decisions, it is hard to see how any amount of belt tightening is going to help.

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Tyler Skinner
Expert Film Handler

Posts: 115
From: Pa
Registered: Nov 1999


 - posted 08-15-2000 11:16 PM      Profile for Tyler Skinner   Email Tyler Skinner   Send New Private Message       Edit/Delete Post 
Johnathon,
Regal Barn Plaza is a 14 and is a new building. The AMC barn 5 which was on the lot was completely torn down. It is about 5 miles away from Warrington. Regal Huntington Valley is a 16 and is about 5 miles down the road in the opposite direction. Yes they are bunched together. I'm not going to tell which one is mine

27 people in the afternoon in OCTOBER isn't that unheard of. With kids in school and in the movie off-season, what else do you expect? On friday and Saturday nights it is a different story I assure you.

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Russ Kress
Expert Film Handler

Posts: 202
From: Charleston, WV, USA
Registered: May 2000


 - posted 08-15-2000 11:21 PM      Profile for Russ Kress   Author's Homepage   Email Russ Kress   Send New Private Message       Edit/Delete Post 
Tyler, I too have done this before, only on a smaller scale. We would send out up-beat communications to theatres even as our fleet of U-Hauls was proceeding to the next victim!

In our hey-day (at my previous company), all concession and booth supplies became sunk costs once they were delivered to theatres.

All of the sudden, corporate had us inventorying and calculating values for all stock and supplies previously delivered.

When my boss (and friend) finally came to me and advised that I have an alternate employer lined up, he was pleased to find that I already had a list of prospects that I shared with him!

Some of these big players today owe more than all of their un-used xenon lamps and popcorn cups will ever add up to.

The president of that chain was a "Mike Cambell" wan-a-be, so that little chain just folded sooner.

Good luck to you.

Russ

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Sean M. Grimes
Expert Film Handler

Posts: 247
From: Lunenburg, MA
Registered: Apr 2000


 - posted 08-16-2000 02:22 AM      Profile for Sean M. Grimes   Author's Homepage   Email Sean M. Grimes   Send New Private Message       Edit/Delete Post 
The one thing I have to give my company is for being number seven in the nation (according to N.A.T.O) we know when to spend money and when to tighten our belts... We recently (over the past two years) picked up a "Cookie Cutter" Regal - and have done everything within operation budget (and then beyond!!) to make sure we are operating where we should be. All companies are hard to work for - but quite honestly I am glad to be working for Hoyts. Or Hush Holdings corp. Of course though, my own theater wouldnt be that bad either

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Dustin Mitchell
Phenomenal Film Handler

Posts: 1865
From: Mondovi, WI, USA
Registered: Mar 2000


 - posted 08-16-2000 08:59 AM      Profile for Dustin Mitchell   Email Dustin Mitchell   Send New Private Message       Edit/Delete Post 
Russ, I must agree. If I published the memo's we've been getting you'd think that Carmike was about to climb to the #1 spot, not fold up.

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Jason Burroughs
Jedi Master Film Handler

Posts: 654
From: Allen, TX
Registered: Jun 99


 - posted 08-16-2000 04:19 PM      Profile for Jason Burroughs   Email Jason Burroughs   Send New Private Message       Edit/Delete Post 
Has it been that long ago that UA abandoned the Skillman Brad? Wow, I thought Cinemark did a fantastic job of refurbishing the theatre, althought I never got to see the booth, but now even Cinemark has long since abandoned it. Someone ought to make a dinner theatre out of it

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Richard C. Wolfe
Master Film Handler

Posts: 250
From: Northampton, PA, USA
Registered: Apr 2000


 - posted 08-16-2000 09:14 PM      Profile for Richard C. Wolfe   Author's Homepage   Email Richard C. Wolfe   Send New Private Message       Edit/Delete Post 
No wonder these guts are going bankrupt.

When I hear that 16 or 20 screen theatres have only 5 oy 27 or even 50 people in them for a weekday matinee I know why they are sinking. Those figures are absurd. I've heard that weeknights at many plexes aren't that much better. Why do they run all those shows then? Only a few years ago it was standard proceedure to run one matinee and two evening shows at many theatres in this area. Some theatres didn't run weekday matinees at all. Why run them if no one comes...it just doesn't make any sense to me.

I on the other hand own and operate a single screen theatre (sub run)in a small town and run a Wednesday matinee every week during the school year, and often every weekday
during the summer vacation period. I'm crying if I have less then 50 people in for my one screen, and that doesn't happen often. I usually get between 50 to 100 people for that matinee. On a good film it will bring in as many as 200 to 250. During the summer months, it is even better. And I'm not the only game around...there are five 8 to 16 screen plexes within ten miles of me.

It seems like there could be a lot of fat trimed from their operations. Now if they would just put me in charge for awhile.

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Brad Miller
Administrator

Posts: 17687
From: Plano, TX (36.2 miles NW of Rockwall)
Registered: May 99


 - posted 08-17-2000 02:32 AM      Profile for Brad Miller   Author's Homepage   Email Brad Miller       Edit/Delete Post 
That old UA Skillman theater underwent a fantastic renovation by Cinemark. However, even after the renovation, it still failed to make a profit. I don't know exactly what happened, but when Cinemark got out of their lease the equipment disappeared. (Not pointing the finger at anyone, I have no idea what really happened.) UA has been using it for storage and I heard it is packed full to the brim. It'll never see the light of day as a theater again.

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Jason Burroughs
Jedi Master Film Handler

Posts: 654
From: Allen, TX
Registered: Jun 99


 - posted 08-17-2000 01:03 PM      Profile for Jason Burroughs   Email Jason Burroughs   Send New Private Message       Edit/Delete Post 
I think that there were several factors that killed the Skillman, Yes Cinemark did a fantastic job of remodeling the theatre, but it may not have been enough, It was only 6 screens and was the typical UA "Shoebox" configuration, it didn't have the featrues of the new theatres just down the highway: Better sightlines, Stadium Seating, etc, UA ran the theatre into the ground and I don't think it ever recoverd from that reputation. Plus I heard there was some stink over the lease agreement, Supposedly UA stated that when the let go of their lease that the building could no longer be used for first run exhibition, I was run semi-successfully as a sub run house by an independent for a little while and later by cinemark, who remodeled it completely, and continued to run it as a sub-run for a little while, but then they changed it to a first run, upsetting UA. Even the Walunt Hill theatre has long been since closed and is now opening as a gentleman's club I belive. The AMC Prestonwood is now a series of night clubs as well.

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