Building on $5.04 bil

Fresh off a record $ 5.04 billion year at the box office, U.S. exhibitors aren’t resting on their laurels — especially Carmike, Regal and AMC, among the more entrepreneurial and attractive exhibs on Wall Street.

The smallest of those, Tennessee-based Regal Cinemas, started 1993 with 267 screens before going public last summer with 1.725 million shares at $ 13 each.

It built 72 screens, bought 20 and plans to build 145 more this year. Its stock is up 60%.

The exhib also expects to complete a purchase of 82 screens in the first quarter.

Georgia-based Carmike Cinemas, which added 169 of its 1,701 screens last year , expects to announce a small purchase this month and hopes to close a bigger deal by summer, said president/CEO Michael Patrick, who just approved construction of 125 screens for 1994 and is looking at building more.

Industry critics have long argued that there are already too many screens. A few exhibs, like UA, closed some theaters in 1993, while others continue to draw up blueprints with Wall Street’s backing. Two offerings (one equity, one debt) raised almost $ 105 million last year, according to Securities Data Co.

Analysts say the expansion boom by some in the 25,500-screen U.S. universe obscures the closure of many indie screens, and that the trend is really more a consolidation.

“What you’re seeing is a pretty constant number of screens with only very slight growth,” said Tom Thomson, analyst at Wheat First Butcher & Singer. “What that is masking is a lot of new exhibitors opening bigger complexes in suburban areas and closing a lot of smaller, inefficient screens.”

Add to that shift an optimism among theater operators that Hollywood product will continue to draw audiences.

“We had a wonderful summer and the year on balance turned out to be a wonderful year,” said Emanuel Gerard, partner at research firm Gerard Klauer Mattison. He noted that 1993 went out “like a lamb.”

Not so sheepish are the hefty gains by exhibitor shares. As of Dec. 29, the index was up about 32% for the year, thanks to the industry’s high growth rates and buoyant earnings.

AMC Entertainment’s stock was up 115% in 1993. Last spring it bought 452 screens it had already operated, for a total of 1,609. In November, the Missouri-based exhib posted record second-quarter earnings of 52 cents a share vs. 1992’s comparable loss of 62 cents a share. And last month, it announced a 4 million share convertible offering to raise $ 96 million for renovations, acquisitions and construction.

By building and buying more screens, exhibs are knitting themselves a security blanket to protect against volatile product swings.

“We could have a year where the box office was off significantly and Carmike could still have a year where they did well since they have great capacity,” said Lee Isgur at Volpe, Welty & Co.

The exhibitors themselves aren’t too worried about the upcoming slew of summer releases. Several of them predict 1994 will be as good as or better than last year.

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