CinemaStar Announces First Quarter Results; Revenues Increase 23%.SAN DIEGO--(BUSINESS WIRE)--Aug. 14, 1998--CinemaStar Luxury Theaters Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :LUXY), which owns and operates eight first run motion picture theaters in southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, (7 theaters with 69 screens) and Tijuana Tijuana (tēhwä`nä), city (1990 pop. 698,752), Baja California state, NW Mexico, just south of the U.S. border. It is a gaudy border resort, noted for its racetracks and bullfights. An irrigated agricultural area surrounds the city. , Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. (one theater with 10 screens), announced results of operations for the first quarter ended June June: see month. 30, 1998. For the first quarter ended June 30, 1998, the company reported net revenues increased 23% to $7.1 million compared to the same period of the previous year. For the quarter, the company reported a net loss of $458,736 compared to a net loss of $878,897 for the same period of the previous year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before depreciation and amortization, a common measure of performance for motion picture theaters, increased to $112,486 for the quarter compared to a loss of $243,983 for the same period of the previous year. "First quarter financial performance met our expectations," said Jack R. Crosby, chairman and chief executive officer of CinemaStar. "We have implemented improved operating procedures and controls while simultaneously pursuing growth opportunities." Crosby concluded, "The company is now operationally cash positive, and we expect to achieve improved operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: during the fiscal year. We are pleased to begin to report the improvement in margins on our concession business, all of which the company now manages internally since the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created , on June 15, 1998, of the final notice periods under prior concession lease agreements. Our goal over the next few years is to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. positive demographic trends and industry consolidation by doubling our screen count through the development of new megaplex theater complexes in underserved markets. Several projects are under development which represent positive steps towards the fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. of this goal." CinemaStar theaters feature high-quality projection and sound capabilities, including LucasFilm THX A design system that provides realistic sound playback for movie and home theater from THX, Ltd., San Rafael, CA (www.thx.com), an independent spin-off from Lucasfilm, Ltd. The THX Sound System was developed during the production of the Return of the Jedi in 1982 and named after George Stereo Surround Sound An audio recording and playback system that uses five or more channels plus a subwoofer channel. See 5.1 channel and 3D audio. environment systems, along with luxury amenities such as high-back reclining seats and extra-wide aisles between seat rows. Further information may be obtained from the company's website: www.cinemastar.com. The information contained in this press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risk and uncertainties, such as the statements of the company's plan, objectives, expectations and intentions. The company's actual results could differ materially from those indicated by such statements as a result of various factors, including those discussed in the company's Form 10-KSB and Form 10-QSB on file with the SEC. -- Table Follows -- -0-
CINEMASTAR LUXURY THEATERS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended June 30,
1998 1997
---- ----
REVENUES:
Admissions $ 4,865,395 $ 3,915,058
Concessions 2,065,181 1,719,006
Other operating revenues 159,401 118,669
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TOTAL REVENUES 7,089,977 5,752,733
COSTS AND EXPENSES:
Film rental and booking costs 2,645,292 2,248,524
Cost of concession supplies 632,593 593,194
Theater operating expenses 3,042,385 2,280,566
Selling, general
and administrative expenses 657,221 874,432
Depreciation and amortization 532,208 454,598
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TOTAL COSTS AND EXPENSES 7,509,699 6,451,314
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OPERATING LOSS (419,722) (698,581)
OTHER INCOME (EXPENSE):
Interest expense (76,834) (186,869)
Interest income 39,420 6,553
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TOTAL OTHER EXPENSE (37,414) (180,316)
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LOSS BEFORE PROVISION
FOR INCOME TAXES (457,136) (878,897)
PROVISION FOR INCOME TAXES (1,600) --
------------ ------------
NET LOSS $ (458,736) $ (878,897)
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BASIC AND DILUTED
NET LOSS PER SHARE $ (0.02) $ (0.11)
WEIGHTED AVERAGE SHARES 25,703,646 7,790,747
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