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Regal Profit Rises on Acquisitions

October 22, 2002|From Times Staff and Wire Services

Regal Entertainment Group, the largest U.S. movie theater chain, saw its third-quarter profit rise almost sixfold, primarily from acquisitions.

Net income in the latest quarter rose to $36.1 million from $6.1 million a year ago. Per-share earnings declined to 27 cents a share from 32 cents a year earlier as the number of shares outstanding increased to 136.2 million from about 19 million.

Sales for the Sept. 26 quarter more than tripled to $571.5 million from $158.7 million a year earlier, the Knoxville, Tenn.-based company said.

Colorado billionaire Philip Anschutz created Regal Entertainment by merging Regal Cinemas Corp., United Artists Theatre Co. and Edwards Theatres Inc., all of which he acquired through bankruptcy reorganizations.

Third-quarter sales and profit include the results of all three chains, while the year-earlier figures reflect only the operations of United Artists.

"Third-quarter results demonstrate how a growth strategy of prudent consolidation works well even in periods of minimal box-office growth," Co-Chief Executive Mike Campbell said in a conference call. Regal also declared a 15-cent dividend, payable Dec. 13 to shareholders as of Nov. 26.

Shares of Regal rose 63 cents, or 3%, to close at $21 on the New York Stock Exchange. They have risen 11% since the company's $342-million initial public offering in May.

Regal also announced Monday that National Broadcasting Co. would develop original short videos to play before movies, using a digital network that Regal is rolling out to many of its theaters. As part of the multi-year deal, National Broadcasting also will run ads on screens in theater lobbies, convenience stores and restaurants connected to Regal's digital network. Financial terms of the deal were not released.

Regal plans to deploy the network and digital projectors in about 400 of its 530 theaters by the end of 2003.

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