Exhib's Chapter 11 proceedings moving forward
NEW YORK — United Artists Theater Co. losses have more than doubled from $23.4 million to $58.4 million, the company revealed on Monday.
It blamed the latest quarter’s drop on financial and corporate restructuring, lower cash flow, higher interest expense, higher lease impairment and termination costs.
UA and a number of other exhibitors have filed for bankruptcy protection. CEO Kurt Hall said UA’s Chapter 11 proceedings are moving forward as planned and a confirmation hearing on the Denver-based company’s reorganization plan is set for Jan. 22.
Hall said the industry had made great strides in shuttering underperforming theaters and slowing down the new construction that left many in massive debt. But he said exhibs’ bottom lines were still suffering from excess screens and seats, adding, “It’s going to be a very long recovery period.”
Revenue for the quarter ended in September fell 17% to $150 million. Cash flow dipped to $19.4 million from $26.7 million. The revenue decline was partly due to UA operating 23% fewer theaters than the previous year.
On a brighter note, Hall said year-to-date admissions per theater were up 8.7%, concession sales per theater were up 13.2% and cash flow per theater was up 7.7%.
UA’s reorganization is being helped by Denver financier Philip Anschutz, who bought up distressed bonds of UA and will be a significant equity owner of the revamped group.
UA’s bonds, but not its stock, have been publicly traded.
While rumors of UA’s financial difficulties have been around for a year or more, the company seems likely to be the first big exhib to emerge from bankruptcy as creditors and bondholders hashed out a restructuring plan ahead of time.
Carmike Cinema, Edwards Theaters and several other major chains have also filed for Chapter 11, and others are in discussions with their bank lenders.