Cineplex Galaxy Income Fund Reports Second Quarter Results.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- Cineplex Galaxy Income Fund (the "Fund") (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :CGX CGX Consolidated Graphics Inc. CGX Meigs Field, Chicago, Illinois (Airport Code) .UN) today released the financial results of Cineplex Galaxy Limited Partnership (the "Partnership"), for the second quarter of 2005. Second Quarter Results - Total revenues for the quarter were $84.1 million compared to $93.4 million for 2004 - down 10.0%. - Box office revenue decreased by 13.2% compared to the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. industry decline of 16.9%. - Concession CONCESSION. A grant. This word is frequently used in this sense when applied to grants made by the French and Spanish governments in Louisiana. per patron hits a record high of $3.22, the highest quarterly result to date, up 5.6% from the prior year. - Other revenues increased 23.7% to $6.8 million primarily due to higher advertising sales. - EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the quarter was $12.8 million compared to $19.8 million for 2004 - down 35.1% due to the decline in box office volume and other one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges. - Distributable cash flow per unit for the quarter was $0.1664 compared to a declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. distribution of $0.2874. "The acquisition of Famous Players is a transforming event in our company's history," said Ellis ELLIS - EuLisp LInda System. An object-oriented Linda system written for EuLisp. "Using Object-Oriented Mechanisms to Describe Linda", P. Broadbery <pab@maths.bath.ac.uk> et al, in Linda-Like Systems and Their Implementation, G. Wilson ed, U Edinburgh TR 91-13, 1991. Jacob Jacob (jā`kəb), in the Bible, ancestor of the Hebrews, the younger of Isaac and Rebecca's twin sons; the older was Esau. In exchange for a bowl of lentil soup, Jacob obtained Esau's birthright and, with his mother's help, received the blessing , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "The opportunity to acquire Famous Players was truly unique and will enable us to substantially grow our business in the most cost effective, efficient and accretive manner possible". Jacob went on to say: "our goal is to be the best motion picture exhibitor in the business and we are now well positioned to achieve this." EBITDA is not an earnings measure recognized by generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and does not have a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. meaning in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with such principles. Therefore, EBITDA may not be comparable to similar measures presented by other corporations. EBITDA is calculated by adding back to net income, income tax expense, amortization, interest expense, non-controlling interest and eliminating from net income, interest income. Second Quarter Results The acquisition of Famous Players was completed on July July: see month. 22, 2005 and as such the second quarter results of Cineplex Galaxy do not include any results from Famous Players. The second quarter of 2005 was characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by a lack of successful film product. Total revenue for the second quarter decreased 10.0% to $84.1 million for the quarter. Cineplex Galaxy's box office revenue was down 13.2% for the quarter, ahead of the Canadian exhibition industry which was down 16.9% for the quarter. Given that we do not control the quality of film product on-screen on·screen or on-screen adj. & adv. 1. As shown on a movie, television, or display screen. 2. Within public view; in public. , our continued focus remains on increasing our concession revenues and other income while controlling expenses. Revenues from the new digital pre-show cinema network launched last quarter are on target and we are very pleased with the results. Concession revenue decreased 9.2% this quarter, as a result of a 14.1% attendance decline that was partially offset by a $0.17 or 5.6% increase in average concession revenue per patron. Our average concession revenue per patron amount of $3.22 was a new record for Cineplex Galaxy. Other income increased 23.7% this quarter, over the prior year to $6.8 million. This now makes four consecutive quarters where we have shown increases in other income greater than 20% versus the prior year. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.0 million related to strategic acquisition opportunities and the establishment of an information technology department in the Canadian office as we repatriated our IT services back from the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Distributable Cash For the second quarter of 2005 distributable cash flow per unit was $0.1664 and the declared distribution per unit for this period was $0.2874. Transaction Updates On July 22, 2005, we completed the transaction to acquire the Famous Players theatre exhibition business from Viacom
prep. Taking into consideration or account; including. approximately $36 million in capital lease obligations, was completed only 40 days following the initial announcement. The sale of real estate interests to RioCan, as announced on June June: see month. 29, 2005, has been completed, generating proceeds of $67 million. The proceeds of this sale have been used to repay a portion of the debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay related to the acquisition of Famous Players. The divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). process is proceeding and we expect to announce the completion of this process by the end of the third quarter. With respect to synergies, we have reduced approximately 35% of the combined administrative team and are on track to achieve our target of $20 million in annual savings within 12 months of the closing of the acquisition. Currently, we operate two offices, the former Famous Players head office and Cineplex Galaxy's head office. These offices will be merged into one location by the end of the year. We have also begun the Information Technology integration process to combine the operations previously at Famous Players into the Cineplex Galaxy system. This process is expected to be complete by the end of year as well. About Cineplex Galaxy The Partnership owns, operates or has an interest in 132 theatres with 1,278 screens (after giving effect to the 34 theatres and 282 screens to be divested) and is the largest film exhibition company in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . The Partnership operates theatres with the following five top-tier brands: Cineplex Odeon O`de´on n. 1. A kind of theater in ancient Greece, smaller than the dramatic theater and roofed over, in which poets and musicians submitted their works to the approval of the public, and contended for prizes; - hence, in modern usage, the , Coliseum Coliseum: see Colosseum. , Colossus Colossus - (A huge and ancient statue on the Greek island of Rhodes). 1. Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. under Cineplex Galaxy Income Fund (symbol CGX.UN). More information can be found at www.cineplexgalaxy.com. Further information can be found in the disclosure documents filed by the Fund with the securities regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities , available at www.sedar.com. You are cordially invited to participate in a teleconference call with the management of Cineplex Galaxy LP (TSX:CGX.UN) to review the Company's first quarter. Ellis Jacob, Chief Executive Officer and Gord n. 1. An instrument of gaming; a sort of dice. Nelson, Chief Financial Officer, will host the call. The teleconference call is scheduled for: Wednesday Wednesday: see week. , August 10, 2005 10:30 a.m. Eastern Time In order to participate in the conference call, please dial (416) 640-4127 or outside of Toronto dial 1-800-814-4862 at least ten minutes prior to 10:30 a.m. Eastern Time on Wednesday, August 10, 2005. - If you cannot participate in the live mode, a replay will be available. Please dial 416-640-1917 or 1-877-289-8525 and enter code 21131991#. The replay will begin at 1:30 p.m. on Wednesday, August 10, 2005 and end at 11:59 p.m. ET on Wednesday, August 17, 2005. - Note that media will be participating in the call in listen - only mode. - Thank you in advance for your interest and participation.
Cineplex Galaxy Limited Partnership
Consolidated Balance Sheets
---------------------------------------------------------------------
(expressed in thousands of Canadian dollars)
June 30, December 31,
2005 2004
(Unaudited)
Assets
Current assets
Cash and cash equivalents $ 9,523 $ 38,663
Restricted cash - 7,637
Accounts receivable 7,411 10,937
Inventories 2,083 2,123
Prepaid expenses and other current assets 21,586 2,680
Due from related parties 7 4
--------------------------
40,610 62,044
Property, equipment and leaseholds 230,146 234,854
Goodwill 22,942 22,942
Future income taxes 1,698 1,615
Deferred charges and other intangibles 5,398 3,975
--------------------------
$ 300,794 $ 325,430
--------------------------
--------------------------
Liabilities
Current liabilities
Accounts payable and accrued expenses $ 24,551 $ 27,654
Distributions payable 3,390 10,996
Due to related parties - 373
Income taxes payable 21 153
Deferred revenue 6,888 13,580
Current portion of long-term debt 51 52
--------------------------
34,901 52,808
Long-term debt 141,000 125,512
Due to Cineplex Galaxy Trust 100,000 100,000
Accrued pension liability 529 589
Other liabilities 88,048 89,784
--------------------------
364,478 368,693
Partners' Deficiency
Partners' deficit (63,684) (43,263)
--------------------------
$ 300,794 $ 325,430
--------------------------
--------------------------
Cineplex Galaxy Limited Partnership
Consolidated Statements of Income
(Unaudited)
---------------------------------------------------------------------
(expressed in thousands of Canadian dollars)
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
Revenue
Box office $ 54,029 $ 62,275 $ 105,427 $ 116,110
Concessions 23,324 25,699 44,950 46,830
Other 6,767 5,469 12,002 9,542
---------------------------------------
84,120 93,443 162,379 172,482
---------------------------------------
Expenses
Film cost 29,449 33,407 55,346 60,047
Cost of concessions 4,776 5,060 9,221 9,340
Occupancy 13,665 13,798 27,598 27,035
Other theatre operating
expenses 18,829 17,605 35,798 33,982
General and administrative 4,514 3,651 9,408 6,918
Management fee 71 170 224 335
---------------------------------------
71,304 73,691 137,595 137,657
---------------------------------------
Income before undernoted 12,816 19,752 24,784 34,825
Amortization 6,690 5,607 13,214 11,042
Gain on disposal of theatre
assets (19) (36) (19) (42)
Interest on long-term debt 2,344 1,904 4,550 3,905
Interest on loan from
Cineplex Galaxy Trust 3,500 3,500 7,000 7,000
Interest income (60) (61) (178) (155)
---------------------------------------
Income before income taxes 361 8,838 217 13,075
Current income taxes 119 61 174 97
---------------------------------------
Net income for the period $ 242 $ 8,777 $ 43 $ 12,978
---------------------------------------
---------------------------------------
Cineplex Galaxy Limited Partnership
Consolidated Statements of Partner's Deficiency
(Unaudited)
---------------------------------------------------------------------
(expressed in thousands of Canadian dollars)
For the six months ended June 30, 2005
Accum-
Accum- ulated
Partners' ulated distri-
capital Deficit earnings butions Total
Balance -
January 1,
2005 $ 110,203 $ (147,795) $ 38,949 $ (44,620) $ (43,263)
Distributions
declared - - - (20,342) (20,342)
Investment in
Cineplex
Galaxy Income
Fund units (282) - - - (282)
LTIP
compensation
obligation 160 - - - 160
Net income for
the period - - 43 - 43
-----------------------------------------------------
Balance -
June 30, 2005 $ 110,081 $ (147,795) $ 38,992 $ (64,962) $ (63,684)
-----------------------------------------------------
-----------------------------------------------------
For the six months ended June 30, 2004
Accum-
Accum- ulated
Partners' ulated distri-
capital Deficit earnings butions Total
Balance -
January 1,
2004, as
previously
reported $ 110,425 $ (147,698) $ 8,707 $ (3,937) $ (32,503)
Adoption of
asset
retirement
obligation
standard - (121) (6) - (127)
-----------------------------------------------------
Balance -
January 1,
2004, as
restated 110,425 (147,819) 8,701 (3,937) (32,630)
Distributions
declared - - - (20,342) (20,342)
Formation of
Partnership
issuance costs (102) - - - (102)
Contribution of
capital on
acquisition of
theatres - 24 - - 24
Net income for
the period - - 12,978 - 12,978
-----------------------------------------------------
Balance -
June 30, 2004 $ 110,323 $ (147,795) $ 21,679 $ (24,279) $ (40,072)
-----------------------------------------------------
-----------------------------------------------------
Cineplex Galaxy Limited Partnership
Consolidated Statements of Cash Flows
(Unaudited)
---------------------------------------------------------------------
(expressed in thousands of Canadian dollars)
Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
Cash provided by (used in)
Operating activities
Net income for the period $ 242 $ 8,777 $ 43 $ 12,978
Adjustments to reconcile net
income to net cash used
in operating activities
Amortization of property,
equipment and leaseholds 6,690 5,607 13,214 11,042
Amortization of tenant
inducements and rent
averaging liabilities (1,426) (1,285) (2,727) (2,481)
Amortization of debt
issuance costs 234 210 469 414
Gain on disposal of
theatre assets (19) (36) (19) (42)
Changes in operating assets
and liabilities (2,532) (3,802) (8,861) (18,735)
----------------------------------------
3,189 9,471 2,119 3,176
----------------------------------------
Investing activities
Proceeds from sale of
theatre assets 19 44 25 50
Capital expenditures (3,225) (3,386) (8,366) (5,458)
Deposit paid for subsequent
acquisition (17,500) - (17,500) -
Cash received from
segregated account for
distribution - - 8,297 -
Cash transferred to
segregated account for
future distributions - (2,075) (691) (3,458)
----------------------------------------
(20,706) (5,417) (18,235) (8,866)
----------------------------------------
Financing activities
Borrowings under credit
facility 18,500 1,500 19,500 5,500
Formation of Partnership
issuance costs paid - (102) - (102)
Distributions paid (10,170) (8,142) (27,946) (17,432)
Tenant inducements 605 250 1,896 550
Repayment of long-term debt (4,000) (15) (4,013) (25)
Investment in Cineplex Galaxy
Income Fund units - - (423) -
Deferred financing fees (2,038) - (2,038) -
----------------------------------------
2,897 (6,509) (13,024) (11,509)
----------------------------------------
Decrease in cash and cash
equivalents during the
period (14,620) (2,455) (29,140) (17,199)
Cash and cash equivalents -
Beginning of period 24,143 28,783 38,663 43,527
----------------------------------------
Cash and cash equivalents -
End of period $ 9,523 $ 26,328 $ 9,523 $ 26,328
----------------------------------------
----------------------------------------
Supplemental information
Cash paid for interest $ 5,693 $ 5,005 $ 11,087 $ 9,907
Cash paid for income
taxes - net $ 313 $ 44 $ 377 $ 104
Cineplex Galaxy Limited Partnership
Consolidated Supplemental Information
(Unaudited)
---------------------------------------------------------------------
(expressed in thousands of Canadian dollars, except number of units
and per unit data)
Reconciliation to EBITDA
------------------------
Three months Six months
ended June 30, ended June 30,
2005 2004 2005 2004
--------------------------------------------
--------------------------------------------
Net income $242 $8,777 $43 $12,978
Amortization 6,690 5,607 13,214 11,042
Interest on long-term
debt 2,344 1,904 4,550 3,905
Interest on loan from
Cineplex Galaxy Trust 3,500 3,500 7,000 7,000
Interest income (60) (61) (178) (155)
Income tax expense 119 61 174 97
--------------------------------------------
EBITDA $12,835 $19,788 $24,803 $34,867
Distributable Cash
------------------
Three months Six months
ended June 30, ended June 30,
2005 2004 2005 2004
--------------------------------------------
--------------------------------------------
Cash used in operating
activities $3,189 $9,471 $2,119 $3,176
Less:
Changes in operating
assets and liabilities
(i) 2,532 3,802 8,861 18,735
Total Capital
expenditures (3,225) (3,386) (8,366) (5,458)
Add:
Interest on loan from
Cineplex Galaxy Trust
(ii) 3,500 3,500 7,000 7,000
New theatre and Project
capital expenditures
(iii) 1,279 2,226 5,474 3,946
POS/Rebranding capital
expenditures (iv) 642 - 958 -
--------------------------------------------
Distributable $7,917 $15,613 $16,046 $27,399
--------------------------------------------
--------------------------------------------
Number of Units
outstanding
(fully diluted) 47,566,974 47,566,974 47,566,974 47,566,974
Distributable cash
per Unit
(fully diluted) $0.1664 $0.3282 $0.3373 $0.5760
(i) Changes in operating assets and liabilities are not considered
a source of distributable cash
(ii) Subject to "Catch-up Payment" provision and is considered part
of distributable cash
(iii) The total capital expenditures noted above includes new theatre
and maintenance capital expenditures of which the new theatre
capital expenditures are funded out of the Partnership's
Development Facility and therefore are added back to calculate
distributable cash
(iv) Point-of-Sale ("POS") and rebranding capital expenditures are
funded out of a $5.5 million reserve fund established on
November 26, 2003.
Cineplex Galaxy Income Fund (TSX:CGX.UN) |
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