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 advance to 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.

 

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-looking statements 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. You can connect with Digiplex via Facebook, Twitter, YouTube and Blogger.

Digital Cinema Destinations Corp.
Bud Mayo, 908-396-1362
Chairman/CEO
bmayo@digiplexdest.com
or
JCIR
Robert Rinderman or Jennifer Neuman, 212-835-8500
DCIN@jcir.com