Theater chain parent bounces back from slump
NEW YORK – GC Companies Inc., corporate parent of General Cinema Theatres, moved back into the black in the 1996 fiscal fourth quarter ended Oct. 31 with earnings of $4.5 million or 58¢ a share. This compares with a loss of $2.3 million (30¢) in the year-earlier period.
GC Cos. also announced plans to repurchase up to one million shares of its common stock during the next 12 months through open market and private transactions. The company had a weighted average of 7.9 million outstanding shares on Oct. 31.
The 1996 fourth-quarter results reflect a pre-tax gain of $9.5 million, or 71¢ per share after tax, from the sale of Crescent Communications, the company’s radio group investment. The 1995 fourth-quarter results include a pre-tax charge of $5 million, or 38¢ after tax, to write down an investment in a children’s clothing retailer.
The company’s investment portfolio currently includes minority investments in a privately held eyeglass retailer, a German cable television system operator and an international telecommunications company at an aggregate cost of approximately $50.2 million.
The theater subsidiary reported a fourth-quarter operating loss of $1.6 million because of lower attendance. In the 1995 quarter, General Cinema Theatres reported operating earnings of $1.8 million. For the year, the circuit had operating earnings of $26.1 million, slightly more than the $25.9 million reported in fiscal 1995.
GC Theatres recently opened two megaplexes in Chicago and has commitments to open 17 new megaplex theaters with approximately 240 screens during the next three years. The company said that it has reached agreement with a major financial institution to provide up to $250 million over the next five years to fund its theater expansion program.
Based in Chestnut Hill, Mass., General Cinema Theatres operated 1,159 screens in 189 locations as of Oct. 31, compared with 1,180 screens in 196 locations a year earlier.
Overall revenues for the company declined 15% to $86.7 million from $101.4 million. For the fiscal year, GC Companies reported net earnings of $17.2 million or $2.20 a share, a 98% increase over the $8.7 million ($1.11) reported the previous year.
“Our performance in 1996 reflects the continued implementation of our longterm theater strategy,” said GC Companies president and chief operating officer Robert A. Smith. “The increase in GC Companies’ operating earnings resulted from our efforts to improve margins through growing the company’s concession business, expense control, adding new screens to our most successful locations and closing or selling older, less productive units.”