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The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.
Regal (NYSE:RGC) revenue beat our Street-high expectations driven by attendance and other operating revenues. Revenue was $723 million, compared with our estimate of $715 million, and the consensus estimate of $706 million. Adjusted EBITDA was $152 million, compared with our estimate of $154 million and consensus of $139 million. EPS was $0.24, in line with our estimate, compared with the consensus estimate of $0.21. The company once again did not provide forward guidance.
The earnings upside was attributable to several factors. Admissions revenue per screen was ahead of our estimates driven by slightly higher attendance on a lower-than-anticipated screen count, and roughly in line with the industry despite the acquisition of 301 theaters contributing only one month during the quarter. Excluding the December acquisition, Regal outperformed the industry by ≈ 150bps. Concessions per cap were up 3% y-o-y driven by improvements in beverage and concession volume as well as expanded menus in over 50 theaters. Earnings were in line with our estimate as higher rent expenses were offset by well-managed film rental costs and better than expected earnings from Open Road Films.
Fewer potential new theaters limits the opportunity for further cost reductions. Regal has reined in costs throughout most of the past several quarters as it closed underperforming theaters. As the company begins to add theaters, we expect…
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