CinemaStar Luxury Theaters Reports Results for Fiscal 1997 Second
Quarter and Six Months
OCEANSIDE, CALIF. (Nov. 20) BUSINESS WIRE -Nov. 20, 1997--CinemaStar
Luxury Theaters Inc. (Nasdaq:LUXY) has reported results for the second
quarter and six months ended Sept. 30, 1997, which reflected higher
revenues from an increase in the number of theaters and screens in
operation, and a narrowing of the company's net losses.
Revenues for the second quarter increased 36 percent to $6.9 million
from $5 million a year ago. The company reported a net loss of
$957,239, equal to $0.12 per share, compared with a net loss of $1.3
million, or $0.21 per share, in the same period last year.
For the first half of the current fiscal year, CinemaStar's revenues
advanced 36 percent to $12.6 million from $9.3 million a year ago. The
company experienced a net loss for the period of $1.8 million, or $0.23
per share, vs. a net loss of $2.3 million, or $0.37 per share, for the
corresponding period last year.
Commenting on the results, John Ellison Jr., president and chief
executive officer, said: "We are very encouraged by our revenue growth
and continue to focus our efforts on reaching profitability. We expect
strong box office returns during the upcoming Thanksgiving/Christmas
holiday season when distributors traditionally release many of the
higher-profile films."
Ellison stated: "The addition of more theaters and screens has
resulted in sequentially higher operating costs, which will continue to
restrain our near-term performance. Our strategy is to continue to
invest for growth in an effort to increase shareholder value."
Ellison noted that film and booking costs for the three months ended
Sept. 30, 1997, increased 37 percent to $2.7 million from nearly $2
million the year before. Cost of concession supplies for the same
period climbed 54 percent to $742,271, compared with $482,909 for the
same period last year.
For the six-month period, film and booking expense totaled $12.6
million, compared with $9.3 million for the same period last year, a 38
percent increase. Cost of concession supplies increased 59 percent to
$1.3 million from $841,893 the year before.
The increase in concession expense for both the three-month and
six-month periods ended Sept. 30, 1997, was due largely to an amendment
to a concession agreement with the company's primary concession vendor.
The company reported that interest expense for both the three-month and
six-month periods increased 90 percent and 57 percent, respectively,
because of more debt incurred for use as working capital.
Separately, the company has scheduled a special meeting of shareholders
to consider certain actions relating to the recently announced
agreement pursuant to which CinemaStar Acquisition Partners L.L.C.
will, subject to satisfaction of certain contingencies, acquire a
majority interest in CinemaStar through a $15 million purchase of newly
issued shares of CinemaStar's common stock.
The meeting is now scheduled for Wednesday, Dec. 10, at 10 a.m. at
CinemaStar's Ultraplex 10 at Perris Plaza, 1688 North Perris Blvd.,
Perris, Calif. A Notice of Special Meeting and a Proxy Statement was
mailed Nov. 17 to shareholders of record on the close of business on
Oct. 29, 1997.
CinemaStar Luxury Theaters, founded in 1989, recently opened a new
10-screen Ultraplex theater complex in Tijuana, Mexico. The company
now operates eight first-run movie theaters, with a total of 799
screens in Southern California and Mexico. CinemaStar theaters feature
high-quality projection and sound capabilities, including LucasFilm THX
sound environment system in most auditoriums, along with luxury
amenities such as high-back reclining seats and extra- wide aisles
between seat rows.
The information contained in this news release contains certain
forward-looking statements that involve risk and uncertainties, such as
the statements of the company's plan, objectives, expectations and
intentions. The company's actual results could differ materially from
those indicated by such statements as a result of various factors,
including those discussed in the company's annual report on Form 10-KSB
and periodic reports on Form 10-QSB on file with the SEC.
CINEMASTAR LUXURY THEATERS
Statement of Income
(unaudited)
Three Months Ended Six Months Ended
Sept. 30, Sept. 30,
1997 1996 1997 1996
Total revenues $ 6,885,954 $ 5,046,948 $12,638,687 $ 9,307,951
Total costs and
expenses 7,555,743 5,168,786 14,007,965 9,297,289
Operating income
(loss) (669,789) (121,838) (1,369,278) 10,062
Other income (expense):
Interest income 2,928 12,514 9,482 15,158
Interest expense (288,850) (152,204) (475,648) (302,865)
Non-cash interest
expense related to
convertible
debentures -- (1,071,429) -- (2,048,997)
Total other expense (288,850) (1,211,119) (486,166) (2,336,704)
Loss before
provision for
income taxes (955,637) (1,332,957) (1,835,444) (2,326,642)
Provision for
income taxes (1,600) (1,600) (1,600) (1,600)
Net loss $ (957,239) $(1,334,557) $(1,837,044) $(2,328,242)
Net loss per
common share $ (0.12) $ (0.21) $ (0.23) $ (0.37)
Weighted average
number of common
shares and share
equivalents
outstanding 7,993,633 6,441,512 7,891,902 6,348,514
-0- RPL/la* MEM/la MEL/la
CONTACT: CinemaStar Luxury Theaters Inc., Oceanside
John Ellison Jr. or Alan Grossberg, 760/630-2011
or
Pondel Parsons & Wilkinson, Los Angeles
Michael Pollock, 310/207-9300
KEYWORD: CALIFORNIA
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