DIGITAL CINEMA DESTINATIONS CORP 
By DIGITAL CINEMA DESTINATIONS CORP. FISCAL 2014 Q2 REVENUE RISES TO $11.2 MILLION, REFLECTING ONGOING SCREEN GROWTH AND SUCCESSFUL CIRCUIT EXPANSION
- Reports Theater Level Cash Flow of $1.9 Million -
WESTFIELD, New Jersey (February 12, 2014) - Digital Cinema Destinations Corp. (NasdaqCM: DCIN) (Digiplex), a fast-growing motion picture exhibitor dedicated to transforming movie theaters into digital entertainment centers, today reported its fiscal 2014 second quarter financial results for the three-month period ended December 31, 2013.
DATE/TIME: Today, 2/12/14 at 4:30 p.m. ET
TELEPHONE: 800 891 8357. Please call at least five minutes in advanceto be connected.
WEBCAST: live webcast is available through the Investor Relations section of Digiplex's website at www.digiplexdest.com. A webcast replay will be available and accessible for at least 30 days following the live event.
SUMMARY AND SUPPLEMENTARY FINANCIAL DATA
(unaudited)
Three Months Ended December 31, | Six Months Ended December 31, | |||
(in thousands) | 2013 | 2012 | 2013 | 2012 |
Consolidated total revenue | $ 11,196 | $ 6,870 | $ 22,665 | $ 11,216 |
Consolidated net loss | (1,356) | (1,234) | (2,727) | (1,897) |
Consolidated theater level cash flow (1) | 1,943 | 1,553 | 3,773 | 2,554 |
Adjusted EBITDA of Digital Cinema Destinations Corp. (1) | 950 | 644 | 1,958 | 997 |
Theaters (period end) | 20 | 16 | 20 | 16 |
Average screens | 185 | 96 | 184 | 84 |
Average attendance per screen | 5,367 | 6,459 | 11,257 | 12,252 |
Average admission per patron | $ 7.93 | $ 7.71 | $ 7.76 | $ 7.52 |
Average concessions sales per patron | $ 3.31 | $ 3.13 | $ 3.29 | $ 3.03 |
Total attendance (in thousands) | 993 | 619 | 2,070 | 1,035 |
(1) Theater level cash flow and adjusted EBITDA are supplemental non-GAAP financial measures. Reconciliations of these metrics to the net loss for the three and six months ended December 31, 2013 and 2012 are included in the supplementary tables accompanying this news announcement.
Digiplex Chairman and CEO Bud Mayo stated, "Digiplex continues to capitalize on the attractive M&A environment and favorable industry backdrop as we expand our footprint into leading domestic markets. In recent months we completed a previously announced acquisition in the Harrisburg DMA, further growing our Pennsylvania presence. We also have a number of pending locations that have been announced and these are in various stages of final due diligence. We are also in active negotiations and advanced high-level discussion on a wide array of other potential theater purchases as well.
"As with previous acquisitions our mission continues to be transforming all Digiplex locations into digital entertainment centers featuring a wide range of content, including alternative programming that helps drive capacity utilization during non-peak times. This strategy has been working according to plan and we are approximately one-quarter of the way to our organization's ultimate goal of operating a national circuit located in top markets," concluded Mr. Mayo.
(financial tables follow)
DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
December 31, 2013 | June 30, 2013 | |
(Unaudited) | ||
ASSETS | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $ 6,992 | $ 3,607 |
Accounts receivable | 740 | 697 |
Inventories | 148 | 191 |
Deferred financing costs, current portion | 357 | 357 |
Prepaid expenses and other current assets | 1,295 | 1,444 |
Total current assets | 9,532 | 6,296 |
Property and equipment, net | 29,666 | 29,171 |
Goodwill | 3,502 | 3,156 |
Intangible assets, net | 7,012 | 6,186 |
Security deposit | 209 | 205 |
Deferred financing costs, long term portion, net | 1,052 | 1,225 |
Other assets | 107 | 9 |
TOTAL ASSETS | $ 51,080 | $ 46,248 |
LIABILITIES AND EQUITY | ||
CURRENT LIABILITIES | ||
Accounts payable | $ 1,985 | $ 2,478 |
Accrued expenses and other current liabilities | 3,658 | 3,964 |
Notes payable, current portion | 1,716 | 1,373 |
Capital lease, current portion | 162 | 121 |
Earn out from theater acquisitions | 350 | 296 |
Deferred revenue | 767 | 305 |
Total current liabilities | 8,638 | 8,537 |
NONCURRENT LIABILITIES | ||
Notes payable, long term portion | 8,048 | 8,615 |
Capital lease, net of current position | 470 | 239 |
Unfavorable leasehold liability, long term portion | 141 | 159 |
Deferred rent expense | 617 | 407 |
Deferred tax liability | 207 | 199 |
TOTAL LIABILITIES | 18,121 | 18,156 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Class A Common stock, $.01 par value: 20,000,000 shares authorized and 7,035,058 and 5,511,938 shares issued and outstanding as of December 31, 2013 and June 30, 2013, respectively | 70 | 55 |
Class B Common stock, $.01 par value, 900,000 shares authorized; 849,000 and 865,000 shares issued and outstanding as of December 31, 2013 and June 30, 2013, respectively | 9 | 9 |
Additional paid-in capital | 32,959 | 25,816 |
Accumulated deficit | (9,121) | (7,049) |
TOTAL STOCKHOLDERS' EQUITY OF DIGITAL CINEMA DESTINATIONS CORP. | 23,917 | 18,831 |
Non-controlling interest | 9,042 | 9,261 |
Total equity | 32,959 | 28,092 |
TOTAL LIABILITIES AND EQUITY | $ 51,080 | $ 46,248 |
DIGITAL CINEMA DESTINATIONS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except share and per share data)
Three Months Ended December 31, | Six Months Ended December 31, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
REVENUES | ||||||||
Admissions | $ 7,590 | $ 4,752 | $ 15,347 | $ 7,761 | ||||
Concessions | 3,166 | 1,929 | 6,504 | 3,128 | ||||
Other | 440 | 189 | 814 | 327 | ||||
Total revenues | 11,196 | 6,870 | 22,665 | 11,216 | ||||
COSTS AND EXPENSES | ||||||||
Cost of operations: | ||||||||
Film rent expense | 3,936 | 2,401 | 7,714 | 3,813 | ||||
Cost of concessions | 581 | 317 | 1,183 | 482 | ||||
Salaries and wages | 1,297 | 710 | 2,747 | 1,224 | ||||
Facility lease expense | 1,450 | 811 | 2,920 | 1,334 | ||||
Utilities and other | 2,099 | 1,157 | 4,484 | 1,923 | ||||
General and administrative | 1,348 | 1,208 | 2,666 | 1,946 | ||||
Change in fair value of earnout | (5) | - | 54 | - | ||||
Depreciation and amortization | 1,373 | 1,098 | 2,708 | 1,947 | ||||
Total costs and expenses | 12,079 | 7,702 | 24,476 | 12,669 | ||||
OPERATING LOSS | (883) | (832) | (1,811) | (1,453) | ||||
OTHER EXPENSE | ||||||||
Interest expense | (348) | (272) | (699) | (294) | ||||
Non-cash interest expense | (76) | (75) | (152) | (78) | ||||
Other expense | (40) | (8) | (47) | (8) | ||||
LOSS BEFORE INCOME TAXES | (1,347) | (1,187) | (2,709) | (1,833) | ||||
Income tax expense | 9 | 47 | 18 | 64 | ||||
NET LOSS | $ (1,356) | $ (1,234) | $ (2,727) | $ (1,897) | ||||
Net loss attributable to non-controlling interest | 331 | 93 | 655 | 93 | ||||
Net loss attributable to Digital Cinema Destinations Corp. | $ (1,025) | $ (1,141) | $ (2,072) | $ (1,804) | ||||
Preferred stock dividends | (5) | (5) | (10) | (6) | ||||
Net loss attributable to common stockholders | $ (1,030) | $ (1,146) | $ (2,082) | $ (1,810) | ||||
Net loss per Class A and Class B common share - basic and diluted attributable to common stockholders | $ (0.14) | $ (0.21) | $ (0.30) | $ (0.33) | ||||
Weighted average common shares outstanding | 7,565,123 | 5,511,765 | 7,014,926 | 5,465,356 | ||||
SUPPLEMENTARY NON-GAAP RECONCILIATION
OF THEATER LEVEL CASH FLOW
(Unaudited) ($ in thousands)
Three months ended | Six months ended | ||||||
December 31, | December 31, | ||||||
2013 | 2012 | 2013 | 2012 | ||||
Net loss | $ (1,356) | $ (1,234) | $ (2,727) | $ (1,897) | |||
Add back: | |||||||
General and administrative (1) | 1,348 | 1,208 | 2,666 | 1,946 | |||
Depreciation and amortization | 1,373 | 1,098 | 2,708 | 1,947 | |||
Income tax expense | 9 | 47 | 18 | 64 | |||
Interest expense | 424 | 347 | 851 | 372 | |||
Other expense | 40 | 8 | 47 | 8 | |||
Deferred rent expense (5) | 105 | 79 | 210 | 114 | |||
Consolidated TLCF | $ 1,943 | $ 1,553 | $ 3,773 | $ 2,554 | |||
SUPPLEMENTARY NON-GAAP RECONCILIATION
OF ADJUSTED EBITDA
(Unaudited) ($ in thousands)
Three months ended | Six months ended | ||||||
December 31, | December 31, | ||||||
2013 | 2012 | 2013 | 2012 | ||||
Net loss | $ (1,356) | $ (1,234) | $ (2,727) | $ (1,897) | |||
Add back: | |||||||
Depreciation and amortization | 1,373 | 1,098 | 2,708 | 1,947 | |||
Interest expense | 424 | 347 | 851 | 372 | |||
Income tax expense | 9 | 47 | 18 | 64 | |||
Other expense | 40 | 8 | 47 | 8 | |||
Deferred rent expense (5) | 105 | 79 | 210 | 114 | |||
Stock-based compensation (2) | 122 | 26 | 361 | 69 | |||
Non-recurring organizational and M&A-related professional fees (3) | 53 | 315 | 110 | 362 | |||
Management fees (4) | 275 | 52 | 560 | 52 | |||
Deduct: | |||||||
Start Media's share of Adjusted EBITDA | (95) | (94) | (180) | (94) | |||
Adjusted EBITDA of Digital Cinema Destinations Corp. | $ 950 | $ 644 | $ 1,958 | $ 997 | |||
(1) TLCF is intended to be a measure of theater profitability. Therefore, our corporate general and administrative expenses have been excluded.
(2) Represents the fair value of shares of Class A common stock and restricted stock awards issued to employees and non-employees for services rendered. As these are non-cash charges, we believe that it is appropriate to show Adjusted EBITDA excluding this item.
(3) Primarily represents professional fees incurred in connection with start-up activities, the creation of acquisition template documents that will be used by us for future transactions, and certain other costs related to our acquisition strategy. Since we intend to acquire additional theaters, we have laid the groundwork for our acquisition program and we expect to incur reduced legal fees in connection with future acquisitions. We therefore believe that it is appropriate to exclude these items from Adjusted EBITDA.
(4) To add back management fees to Digiplex from JV.
(5) Represents non-cash deferred rent expense which is included in our facility lease expense in the consolidated statements of operations. As these are non-cash changes, we believe it is appropriate to show TLCF and Adjusted EBITDA excluding this item.
Disclosure Regarding Forward-Looking Statements
This press release and other written or oral statements made by or on behalf of Digital Cinemas Destination Corp. may contain forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs, expectations and future performance, are forward-looking statements. Forward-lookingstatements are only predictions and are not guarantees of performance. These statements are based on beliefs and assumptions of management, which in turn are based on currently available information. The forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Risk factors are disclosed in our Form 10-K for the year ended June 30, 2012 under the caption "Risk Factors." We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.
About Digital Cinema Destinations Corp. (www.digiplexdest.com)
Digital Cinema Destinations Corp. (NasdaqCM: DCIN) is Digiplex Destinations, dedicated to transforming its movie theaters into interactive entertainment centers. The Company provides consumers with uniquely satisfying experiences, combining state-of-the-art digital technology with engaging, dynamic content that far transcends traditional cinematic fare. The Company's customers enjoy live opera, ballet, Broadway shows, sports events, concerts and, on an ongoing basis, the very best major motion pictures.YouTube and Blogger.
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