NEW YORK — One-time gains on sales of overseas operations helped United Artists Theater Circuit Inc.’s parent company post a third-quarter net profit of $3.3 million, compared with a loss of $2.1 million a year earlier, in the first profit reported by UATC in more than two years.
But the good news for UATC, which is to be acquired by Hicks, Muse, Tate & Furst, was tempered by a slight decline in earnings before interest, taxes, depreciation and amortization (cash flow) to $28.8 million on 1% lower revenue of $189.5 million.
UATC blamed the drop largely on its closure of older theaters, part of a massive streamlining of its circuit, which is seeing the opening of new screens as well. But for the moment, UATC is closing more screens than it is opening.
The shakeup in its circuit reduced the number of screens in operation by 4.8% to 2,174 during the quarter, which ended Sept. 30, compared with a year earlier. So far this year UATC has closed or sold 116 screens and opened 102, and it plans to close another 35 to 40 in the final quarter, opening just 30.
Some of these sales, particularly UATC’s overseas operations such as its Hong Kong theater venture, produced one-time gains that added $8.2 million to the bottom line in the quarter. At the same time, UATC took a one-time $7 million non-cash write-off on the value of some theaters that are marked for sale, but this write off was part of the depreciation charge.
UATC chief operating officer Kurt Hall said it was not possible to provide revenue or cash flow numbers for UATC adjusted for the screen openings and closures.