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Author Topic: Regal For Sale?
Martin McCaffery
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From: Montgomery, AL
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 - posted 10-27-2014 03:59 PM      Profile for Martin McCaffery   Author's Homepage   Email Martin McCaffery   Send New Private Message       Edit/Delete Post 
Regal Exploring Possible Sale

OCTOBER 27, 2014 | 01:15PM PT
Brent Lang
Senior Film and Media Reporter
Regal Entertainment Group is exploring a possible sale, a move that would dramatically alter the exhibition landscape.

The blockbuster announcement came as quarterly revenues and profits fell sharply at the world’s largest theater chain as it struggled to ride out a summer box office downturn.

To soften the blow from its disappointing earnings announcement, the company said it was announcing a special cash dividend. But it was Regal’s announcement that its board of directors might flirt with selling the company as part of an “exploration of strategic alternatives” that might drive shareholder value that lifted its stock in after hours trading. Shares were up 1.53% at $20.51 after earnings were released.

In the past Regal CEO Amy Miles has said that the company was a buyer, not a seller, in the ongoing consolidation of the country’s theater chains. Regal has 7,349 screens across 574 theaters.

Not that the financial results were that sterling. Revenues at the Knoxville, Tenn. based circuit fell nearly 15% to $693.8 million for the quarter ending in September compared to total revenues of $813.1 million for the year-ago period. Net income plunged nearly 65% to $26.7 million, a steep drop from the $75.1 million the company reported in the third quarter of 2013.

The company reported earnings per share of 18 cents, compared with 38 cents for the same period a year ago, while EBITDA fell from $177.3 million to $122.1 million.

The results failed to hit Wall Street’s targets. Analysts projected the exhibition giant would post earnings of 20 cents per share and revenues of $724.1 million.

Overall, ticket sales for the industry were off 15% last summer with a few films such as “Teenage Mutant Ninja Turtles” and “Guardians of the Galaxy” providing lone bright spots in what was a disappointing end to the summer blockbuster season.

FILED UNDER: Amy MilesRegal Entertainment

Variety Article

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Jonathan Goeldner
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Regal at the moment seems to be run by morons - install a brand new RPX auditorium at a new theater, and add Dolby Atmos system to maximum effect ?? nope...

Upgrade to 7.1? no chance... apparently 5.1 is fine and dandy. Regal here in the DC area is a joke.

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Monte L Fullmer
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EBITDA fell from $177.3 million to $122.1 million.

This really hurts any business with this much of a drop.

This makes the investors extremely nervous.

I was with REG from 2010 til 2013 and was an ASSOC MGR at my first year with them.

When REG had just a 5% drop in the EBITDA at the end of 2010, this is when MGRS were booted out of the booth and replaced by floor monkeys.

Since I was good with the booth, I had to take a demotion to a Senior Cast Member so I can get the booth back in order due to the massive destruction that the floor monkeys were creating.

Granted, we've had a decent summer with "Guardians/Galaxy" and a handful of others, but these releases only makes up about 15% of features that made locations any decent monies.

As Amy Miles mentions that this industry has its peaks and valleys and now seeing bigger peaks and valleys, that is going to really hit a large business hard where it hurts.

EBITDA = Earnings Before Interest, Taxes, Depreciation, and Amortization


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Steve Kraus
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Well we already have Chinese Multi Cinema so perhaps Regal Indian Entertainment.

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Dennis Benjamin
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Bobby Henderson
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I have never fully understood just why any theater chain would want to be the biggest, other than the illusion having more bargaining clout with the movie studios.

I'm sure the movie distributors probably look at theaters in terms of specific markets, like seeing which chains have the best performing theaters in specific cities. Just like AMC, I doubt Regal has a solid strangle-hold on any major movie-going market. They have rivals everywhere.

Regal's overhead costs with over 7,000 screens have to be insane. A decade ago Carmike was trying in vain to become the first movie theater company with over 5,000 screens. The company was buying up just about any theater it could acquire. The buying binge threw Carmike into bankruptcy. Not long after Carmike emerged from bankruptcy they started an ambitious program to convert all the theaters to digital. The company ended up selling quite a few older theaters for various reasons, including those theaters not being worth d-cinema upgrades.

quote: Jonathan Goeldner
Regal at the moment seems to be run by morons - install a brand new RPX auditorium at a new theater, and add Dolby Atmos system to maximum effect ?? nope...
It's the essence of Fake Large Format. Make the auditorium and screen a little bigger, install a couple techie logo signs. But don't make any of the fundamentals of the movie going experience any better than usual, but be sure to charge more money for it..

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Steve Guttag
We forgot the crackers Gromit!!!

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I don't know if the desire is to be the largest are just large. It has its advantages. Booking is likely never a problem. Getting the best deal on hardware is likely never a problem either. A percentage of under-performing theatres are less likely to bring down the chain than when it is a small chain with the same number of under-performing theatres.

It is almost a requirement to have a chain to run a single first run nowadays. I know at the Uptown in DC, we used Wisc. Ave Cinemas as our "move over house" to ensure we never had to play a turkey for very long. Most small guys can't make such a deal.

The down side is when the industry takes an across-the-board it did this summer, it hits very HARD on a large chain because everything under-performs. When you are a public company, it can compound as your stock drops and people pull out more. Then again, you have sometimes questionable leadership in such big companies but that doesn't stop much of the industry trying to play "follow the leader" into the brink too.

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Michael Riley
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Regal is owned by Philip Anschutz, although he's just the owner on paper, the company is really run by a committee in Tennessee, and Anschutz has no input. Anschutz isn't getting any younger, so it's not unlikely that he'd want to divest his interest in the company if it's starting to tank.

The problem with Regal, AMC, and really all the large chains, is that all the major decisions that get made in running the theater are decided upon by pencil pushers in a central office hundreds or thousands of miles away. What works well at a theater in Knoxville, TN won't necessarily work at a theater in Hyannis, MA and vice versa.

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Monte L Fullmer
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quote: Michael Riley
What works well at a theater in Knoxville, TN won't necessarily work at a theater in Hyannis, MA and vice versa.
In the 45 years in this industry, I've seen this SO many times where HOME OFFICE yells at one location on their grosses are not matching the grosses in locations close to HOME OFFICE. And HOME OFFICE has no clue on how the market goes in far away locations from their home base. The poor manager HAS to take major steps in trying to convince HOME OFFICE that his location isn't like the other locations due to demographics and the locale of his location.

Now, it really makes us wonder and can see why Mike Campbell stepped down a few years ago - he knew something.

Now, with MARVEL making the announcement of nine more Superhero stories from their vaults that are going to be made into movies, this should keep REG and the other BIG BOX companies doors open for a few more years.

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Marcel Birgelen
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Maybe it's me, but I'm not getting all excited about the news of nine new superhero stories from Marvel. The Guardians of the Galaxy was a fun deviation from the norm, but please cut the crap, go see a doctor and have this sequelitis looked at, pretty please.

I remember this discussion about a year ago about this (then still upcoming) summer, filled to the brim with sequels and reboots, could become somewhat problematic.

But maybe it's not time to write off the year entirely, as there is still Interstellar on the horizon. Together with this year's Hunger Games sequel, there's still some hope for damage control.

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Frank B. McLaughlin
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Now that the chains have effectively wiped out most of the independent competition with their mega-plexes they are discovering that each of these 7000 screens need to be heated and cooled for every performance irrespective of attendance.

It's the overhead.

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Louis Bornwasser
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I once made the comment that to be a large chain operation, all you needed to be was insane. I have seen nothing lately to change my opinion.

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Monte L Fullmer
Film God

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From: Nampa, Idaho, USA
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Maybe the original uppers of the old Edwards Cinemas Corporation can join together and take over their deceased owner's company on the sale and return it to the glory it once was before junior destroyed when daddy passed away.

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Buck Wilson
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***Edit*** Delete, sorry. I've upset the Regal overlords.

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Terry Monohan
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Regal ex United Artists, ex United California Theatres ex Golden State Theatres has only one old theatre left in San Francisco that is the tired Stonestown Cinema. A big split theatre with now bowling alley screens. They sold off all there nice theatres in SF and got rid of the big giant theatres when Regal bought them out. Some big foreign bank will buy them out and sell off 50% of the non profit theatres. Goodbye old Regal your ruling days and bad run multiplex's are coming to a end in the USA.

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