General Cinema Corp. yesterday reported a significant profit improvement in its fourth quarter of 1992 and full fiscal year, reflecting sharply higher earnings from its publishing operations and substantial reductions in interest expense.
For the three months ended Oct. 31, the company reported revenues of $ 911.1 million, a 14.2% gain from the similar period a year ago. Net income for the period was $ 19.9 million (25 cents per share) compared to a loss of $ 283 million ($ 3.62 per share) for the same period last year.
For the full fiscal year, the company reported revenues of $ 3.72 billion, up 3.6% from $ 3.59 billion in 1991. Earnings for the year rose to $ 494.5 million ($ 6.25) from a loss of $ 305.8 million ($ 3.88) last year.
Robert J. Tarr, president and chief executive of General Cinema, called the 1992 operating results “extremely gratifying and demonstrate the substantial earnings potential of our company’s businesses.”
Wall Street, however, didn’t reward the news, with General Cinema shares falling 25 cents to $ 31.63 in an up market, with 252,000 shares traded.
Operating earnings for the fourth quarter were $ 54.1 million, compared to a loss of $ 312.8 million in the similar period a year ago, mostly due to charges related to the company’s acquisition of publishing concern Harcourt Brace Jovanovich Inc.
For the full year, operating earnings were $ 241.1 million, compared to a loss of $ 127.6 million last year, due to merger and restructuring charges.
Tarr added that both the publishing and insurance businesses “are responding positively to the restoration of their financial health.”
The publishing businesses had operating earnings of $ 61.7 million, compared to an operating loss of $ 141.9 million in 1991 for merger and restructuring charges.
Publishing earnings for the full year were $ 148.4 million, a 35% increase when compared to 1991 prior to merger and restructuring charges.
Theater revs off
The company said revenues in the theater division “declined slightly in 1992 due to a modest drop in patronage as a result of a mixed film crop.”
General Cinema said, however, that the theater division was able to increase concession revenue and hold down expenses, resulting in a 24.8% gain in operating earnings for the year.
Interest expenses in the fourth quarter declined to $ 21.6 million from $ 88. 5 million a year earlier, while investment income dropped to $ 3.4 million from $ 40.1 million in the 1991 quarter.
Harcourt junk purchase
These changes reflect General Cinema’s use of approximately $ 1.1 billion of its cash late last year to purchase Harcourt Braces’ junk bonds.
Interest expense for the full year fell to $ 86.1 million from $ 349.1 million in 1991, partially offset by a decline in investment income to $ 23.7 million in 1992 from $ 129.1 million in 1991.
The company reported that the Neiman Marcus Group, its 65%-owned specialty retailing subsidiary, contributed $ 8.3 million, or 10 cents a share, to 1992 earnings, compared to $ 4.3 million or 5 cents, last year.
The company also said it had adopted FASB 106 requiring accrual of post-retirement benefits, resulting in a non-cash after-tax charge of $ 39.2 million, or 49 cents per share.