Regal Entertainment Group Tops Q4 Estimates and Declares Dividend

Revenues, profits and earnings per share all top projections for nation’s largest movie theater chain, which gets big boost from “Star Wars”

Regal Entertainment Group on Tuesday reported fourth quarter 2015 results that beat analysts’ projections for revenue, adjusted earnings and earnings per share and said it would provide a quarterly dividend.

The nation’s largest theater chain said revenues for the fourth quarter ended Dec. 31, 2015 were $848.2 million compared to $799.1 million for the fourth quarter last year. Net income attributable to controlling interest was $55 million in the fourth quarter of 2015 compared to $46.3 million in the fourth quarter of 2014 and diluted earnings per share were 35 cents for the fourth quarter of 2015 compared to 30 cents.

Adjusted diluted earnings per share were 36 cents for the fourth quarter of 2015 compared to 30 cents last year and adjusted earnings were $175.7 million, compared to $163.6 million for the fourth quarter of 2014.

All of those positive numbers enabled Regal’s board of directors to declare a cash dividend of 22 cents per Class A and Class B common share, payable on March 15 to stockholders of record on March 4, 2016.

A booming fourth-quarter box office, led by “Star Wars: The Force Awakens,” drove the surprisingly strong returns, which beat consensus estimates for revenues, adjusted earnings and earnings per share of $842.3 million, $163.8 million and 33 cents.

“We are pleased to report that 2015 was a record year for Regal Entertainment Group. A strong film slate, our investment in premium amenities, and our consistent focus on operational execution helped us achieve new annual records for total revenues, adjusted EBITDA, average ticket price and average concession sales per patron,” said Amy Miles, CEO of Regal Entertainment Group.

The company reported $2.99 billion in revenue for fiscal 2015, two percent decrease compared to the prior fiscal period. Net income was $105.6 million, a 33 decrease compared to fiscal 2014, driven by the decreased revenue and higher rental costs. Cash flow remained strong and Regal said it had about $350 million in cash on hand.

“We believe the most meaningful data point, on an apples-top-apples basis, is our adjusted EBITDA, which grew by almost $100 million or roughly 20 percent ahead of 2014,” said Miles in a post-report question session. She cited luxury seating rollouts, growing advance ticket sales and higher concession returns as the driver for the gains, along with strong overall box office, which saw a 4 percent increase in admissions and a record $11.1 billion in domestic grosses industry-wide.

Regal, based in Knoxville, Tenn., operates 565 theaters in 40-plus states through its Regal Cinemas, Edwards Theatres, United Artists Theatre Company and Hoyts Cinemas.

Regal is the first exhibitor to post earnings in 2016 and the numbers will be sliced and diced carefully by Wall Street and the sector, which has seen its stock hurt by investors focused on concerns about higher film rental costs and comparisons with last year’s record box office.

Regal’s fiscal year changed from a 52-53 week fiscal year ending on the first Thursday after December 25 of each year to a fiscal year ending on December 31 of each year. As a result of the calendar change, the fourth quarter of 2015 consisted of six fewer days than the fourth quarter of 2014 and the fiscal 2015 period consisted of seven fewer days than the fiscal 2014 period.

Regal’s stock closed at $18.07, up roughly two percent.