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Share Name | Share Symbol | Market | Type |
---|---|---|---|
iPic Entertainment Inc | NASDAQ:IPIC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.61 | 0.58 | 0.65 | 0 | 01:00:00 |
Reiterates Full Year 2019 Outlook; Updates Four Key Strategic Initiatives
Hamid Hashemi, Founder & Chief Executive Officer of IPIC® Entertainment, commented, “Our fourth quarter marked an improvement in our key profitability metrics compared to the year-ago period, an achievement we intend to build upon in 2019. Significant growth in our social and experiential revenue enabled us to achieve topline growth of 2.8% in 2018 despite losing considerable screen capacity during the conversion of five theaters to Generation III auditoriums. Coupled with newly implemented cost control measures, we were able to grow Store-level EBITDA by 3.4% despite headwinds from minimum wage increases and losses of screens.”
Hashemi added, “This year, we are forging ahead with executing the four key strategic initiatives that we believe are critical to creating long-term value for stockholders. Through comparable-store sales leverage and effective cost control efforts, we intend to improve the profitability at existing locations, leading to a substantial increase in Store-level EBITDA and a narrowing of our Adjusted EBITDA loss. We will continue to build on the success of our sponsorship and membership program to drive high-margin revenue in 2019 and beyond. We opened our newest IPIC location in Delray Beach, FL last week which is already garnering rave reviews and will be opening another IPIC location in Irvine, CA during the fourth quarter. We have a robust pipeline of domestic sites with up to four scheduled openings for 2020. Finally, we are also pursuing international growth opportunities and eagerly await our operating license for Saudi Arabia.“
Fourth Quarter 2018 Financial Results Compared to Prior Year
Full Year 2018 Financial Results Compared to Prior Year
* Store-level EBITDA, EBITDA, and Adjusted EBITDA are non-GAAP measures. Reconciliations of store-level EBITDA, EBITDA and adjusted EBITDA to net income (loss), the most directly comparable financial measures presented in accordance with GAAP, are set forth in the schedules accompanying this release. See "Non-GAAP Financial Measures."
Full Year 2019 Financial Outlook
Key Strategic Initiatives
Recent Events
Conference Call
IPIC will host a conference call today at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (201) 389-0878. A replay will be available after the call and can be accessed by dialing (412) 317-6671; the passcode is 13687968. The replay will be available until April 12, 2019.
The conference call will also be webcast live from the Company's Investor Relations website at investors.ipictheaters.com. An archive of the webcast will be available at the same location on the website shortly after the call has concluded.
Key Financial Definitions
New store openings – Our ability to expand our business and reach new guests is influenced by the opening of additional IPIC locations in both new and existing markets. The success of our new IPIC locations is indicative of our brand appeal and the efficacy of our site selection and operating models.
Comparable-store sales – Comparable-store sales are a year-over-year comparison of sales at IPIC locations open at the end of the period which have been open for at least 12 months prior to the start of such quarterly period. It is a key performance indicator used within the industry and is indicative of acceptance of our initiatives as well as local economic and consumer trends. Our comparable IPICs consisted of 14 and 15 IPICs as of the end of the fourth quarter of 2017 and 2018, respectively. From period to period, comparable-store sales are generally impacted by attendance and average spend per person. Spend per person is, in turn, composed of pricing and sales-mix changes.
Store-level EBITDA – A non-GAAP measure, Store-level EBITDA consists of total revenues less Store-level expenses that include food-and beverage cost-of-goods sold, box-office-and-other-income costs-of-goods-sold, labor costs, occupancy expenses and other-operating expenses.
EBITDA – A non-GAAP measure, is defined as net income before net interest, taxes, depreciation and amortization.
Adjusted EBITDA – A non-GAAP measure, is defined as net income before net interest, taxes, depreciation and amortization, and which also excludes equity-based compensation expense, losses on the disposal of property and equipment, as well as certain non-recurring items that the Company does not believe directly reflect its core operations.
About IPIC® Entertainment Inc.
Established in 2010 and headquartered in Boca Raton, FL, IPIC® Entertainment is America’s premier luxury restaurant-and-theater brand. A pioneer of the dine-in theater concept, IPIC® Entertainment’s mission is to provide visionary entertainment escapes, presenting high-quality, chef-driven culinary and mixology in architecturally unique destinations that include premium movie theaters and restaurants. IPIC® Theaters offers guests two tiers of luxury leather seating, Premium Chaise lounge and Premium Plus pod or reclining seating options. IPIC® Theaters currently operates 16 locations with 123 screens in Arizona, California, Florida, Illinois, Maryland, New Jersey, New York, Texas, and Washington and new locations planned for Georgia, Texas, California and Connecticut. For more information, visit www.ipic.com.
Forward-Looking Statements
This press release includes ''forward-looking statements'' within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding our financial outlook for the full year 2019; our expectations with respect to the opening of new locations in the near and long term; our expectations with respect to capital expenditures and improvements to existing locations; our expectations with respect to international growth; and our ability to grow our membership network. Such forward-looking statements can be identified by the use of words such as ''should,'' ''may,'' ''intends,'' ''anticipates,'' ''believes,'' ''estimates,'' ''projects,'' ''forecasts,'' ''expects,'' ''plans,'' and ''proposes'' or other variation of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Such forward looking statements are inherently subject to risks, uncertainties and assumptions about us, including risks related to the following: our inability to successfully identify and secure appropriate sites and timely develop and expand our operations in existing and new markets, including international markets; our inability to optimize our theater circuit through new construction and transforming our existing theaters; competition from other theater chains and restaurants; our inability to operate profitably; our dependence on a small number of suppliers for motion picture products; our inability to manage fluctuations in attendance in the motion picture exhibition industry; our inability to address the increased use of alternative film delivery methods or other forms of entertainment; our ability to serve menu items that appeal to our guests and to avoid food safety problems; our inability to obtain sufficient capital to open up new units, to renovate existing units and to deploy strategic initiatives; our ability to address issues associated with entering into long-term non-cancelable leases; our inability to protect against security breaches of confidential guest information; our inability to manage our growth; our inability to maintain sufficient levels of cash flow, or access to capital, to meet growth expectations; our inability to manage our substantial level of outstanding debt; our ability to continue as a going concern; our failure to meet any operational and financial performance guidance we provide to the public; our ability to compete and succeed in a highly competitive and evolving industry; we have identified a material weakness in our internal control over financial reporting which may result in our financial statements containing material misstatements or cause us to fail to meet our periodic reporting obligations and other factors described in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, each as filed with the Securities and Exchange Commission.
Although the forward-looking statements in this press release are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made that the expectations reflected in our forward-looking statements will be attained. Should one or more of the risks or uncertainties referred to above materialize or should any of our assumptions prove to be incorrect, our actual results may vary in material and adverse respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.
iPic Entertainment, Inc. Consolidated Statements of Operations (unaudited, in thousands) | |||||||||||||||||||
Twelve Months Ended | Three Months Ended | ||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Revenues | |||||||||||||||||||
Food and beverage | $ | 76,139 | $ | 75,731 | $ | 19,095 | $ | 20,460 | |||||||||||
Theater | 68,760 | 66,891 | $ | 17,832 | 17,882 | ||||||||||||||
Other | 3,446 | 1,720 | 903 | 575 | |||||||||||||||
Total revenues | 148,345 | 144,342 | 37,830 | 38,917 | |||||||||||||||
Operating expenses | |||||||||||||||||||
Cost of food and beverage | 20,198 | 20,407 | 4,923 | 5,252 | |||||||||||||||
Cost of theater | 28,396 | 28,801 | 6,683 | 7,821 | |||||||||||||||
Operating payroll and benefits | 38,942 | 38,592 | 9,688 | 10,017 | |||||||||||||||
Occupancy expenses | 18,625 | 17,896 | 4,658 | 4,453 | |||||||||||||||
Other operating expenses | 29,803 | 26,653 | 8,071 | 7,977 | |||||||||||||||
General and administrative expenses | 27,357 | 15,264 | 4,631 | 4,204 | |||||||||||||||
Depreciation and amortization expense | 18,300 | 19,686 | 4,568 | 5,135 | |||||||||||||||
Pre-opening expenses | 112 | 1,634 | 94 | - | |||||||||||||||
Impairment of property and equipment | 4,430 | 3,760 | 4,430 | 428 | |||||||||||||||
Loss on abandonment of lease | 1,839 | - | - | - | |||||||||||||||
Operating expenses | 188,002 | 172,693 | 47,746 | 45,287 | |||||||||||||||
Operating loss | (39,657 | ) | (28,351 | ) | (9,916 | ) | (6,370 | ) | |||||||||||
Other Expense | |||||||||||||||||||
Interest expense, net | (17,078 | ) | (16,091 | ) | (4,363 | ) | (4,173 | ) | |||||||||||
Other income (expense) | - | 5 | - | - | |||||||||||||||
Total other income (expense) | (17,078 | ) | (16,086 | ) | (4,363 | ) | (4,173 | ) | |||||||||||
Net loss before income tax expense | $ | (56,735 | ) | $ | (44,437 | ) | $ | (14,279 | ) | $ | (10,543 | ) | |||||||
Income tax expense | 30 | 87 | 30 | 22 | |||||||||||||||
Net loss | (56,765 | ) | (44,524 | ) | (14,309 | ) | (10,565 | ) | |||||||||||
Less: Net loss attributable to non-controlling interests | (33,566 | ) | - | (5,405 | ) | - | |||||||||||||
Net loss attributable to iPic Entertainment, Inc. | $ | (23,199 | ) | $ | (44,524 | ) | $ | (8,904 | ) | $ | (10,565 | ) | |||||||
iPic Entertainment, Inc. Consolidated Balance Sheet Data (unaudited, in thousands) | ||||||||||
December 31, 2018 | December 31, 2017 | |||||||||
Cash and cash equivalents | $ | 6,026 | $ | 10,505 | ||||||
Current assets | 14,926 | 20,439 | ||||||||
Property and equipment, net | 143,539 | 141,166 | ||||||||
Total assets | 158,724 | 162,073 | ||||||||
Current liabilities | 29,607 | 37,497 | ||||||||
Long-term debt – related party | 188,261 | 142,603 | ||||||||
Total stockholders' / members’ deficit | (140,744 | ) | (124,225 | ) | ||||||
Non-GAAP Financial Measures | |||||||||||||||||||
(unaudited, in thousands) | |||||||||||||||||||
Twelve Months Ended | Three Months Ended | ||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Net loss | $ | (56,765 | ) | $ | (44,524 | ) | $ | (14,309 | ) | $ | (10,565 | ) | |||||||
Plus: | |||||||||||||||||||
Interest expense | 17,078 | 16,091 | 4,363 | 4,173 | |||||||||||||||
Income tax expense | 30 | 87 | 30 | 22 | |||||||||||||||
Depreciation and amortization expense | 18,300 | 19,686 | 4,568 | 5,135 | |||||||||||||||
EBITDA | (21,357 | ) | (8,660 | ) | (5,348 | ) | (1,235 | ) | |||||||||||
Plus: | |||||||||||||||||||
Pre-opening expenses | 112 | 1,634 | 94 | - | |||||||||||||||
Other Income | - | (5 | ) | - | - | ||||||||||||||
Equity-based compensation | 9,380 | - | 272 | - | |||||||||||||||
Impairment of property and equipment | 4,430 | 3,760 | 4,430 | 428 | |||||||||||||||
Loss on abandonment of lease | 1,839 | - | - | - | |||||||||||||||
Non-recurring charges | 2,678 | 2,576 | 1,542 | 1,507 | |||||||||||||||
Adjusted EBITDA | (2,918 | ) | (695 | ) | 990 | 700 | |||||||||||||
Plus: | |||||||||||||||||||
General and administrative expense, net of equity-based compensation | 17,977 | 15,264 | 4,359 | 4,204 | |||||||||||||||
Store-Level EBITDA | $ | 15,059 | $ | 14,569 | $ | 5,349 | $ | 4,904 | |||||||||||
Non-GAAP Measures
Certain financial measures presented in this press release, such as EBITDA, Adjusted EBITDA and Store-Level EBITDA are not recognized under accounting principles generally accepted in the United States, which we refer to as “GAAP.” We define these terms as follows:
“EBITDA” means, for any reporting period, net loss before interest, taxes, depreciation, and amortization.
“Adjusted EBITDA” is a supplemental measure of our performance and is also the basis for performance evaluation under our executive compensation programs. Adjusted EBITDA is defined as EBITDA adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, equity-based compensation expense, pre-opening expenses, other income and loss on disposal of property and equipment, impairment of property and equipment as well as certain non-recurring charges. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to our ongoing business performance.
“Store-Level EBITDA” is a supplemental measure of our performance which we believe provides management and investors with additional information to measure the performance of our locations, individually and as an entirety. Store-Level EBITDA is defined by us as EBITDA adjusted for pre-opening expenses, other income, loss on disposal of property and equipment, impairment of property and equipment, non-recurring charges, and general and administrative expense. We use Store-Level EBITDA to measure operating performance and returns from opening new stores. We believe that Store-Level EBITDA is another useful measure in evaluating our operating performance because it removes the impact of general and administrative expenses, which are not incurred at the store level, and the costs of opening new stores, which are non-recurring at the store-level, and thereby enables the comparability of the operating performance of our stores for the periods presented. We also believe that Store-Level EBITDA is a useful measure in evaluating our operating performance within the entertainment and dining industry because it permits the evaluation of store-level productivity, efficiency and performance, and we use Store-Level EBITDA as a means of evaluating store financial performance compared with our competitors.
You are encouraged to evaluate the adjustments we have made to GAAP financial measures and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA and Store-Level EBITDA, you should be aware that in the future we may incur income and expenses that are the same as or similar to some of the adjustments used to calculate the non-GAAP financial measures contained in this press release.
EBITDA and Adjusted EBITDA are included in this press release because they are key metrics used by management and our board of directors to assess our financial performance. EBITDA and Adjusted EBITDA are frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Store-Level EBITDA is utilized to measure the performance of our locations, both individually and in entirety.
EBITDA, Adjusted EBITDA and Store-Level EBITDA are not GAAP measures of our financial performance or liquidity and should not be considered as alternatives to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Our presentation of Adjusted EBITDA and Store-Level EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow for management’s discretionary use, as they do not reflect tax payments, debt service requirements, capital expenditures, IPIC openings and certain other cash costs that may recur in the future, including, among other things, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. Management compensates for these limitations by relying on our GAAP results in addition to using EBITDA and Adjusted EBITDA supplementally. Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled captions of other companies due to different methods of calculation.
Investor Relations: ICRRaphael Gross IPICIR@icrinc.com203-682-8253
Media Relations:The Gab Group for IPIC® Entertainment Corporate Michelle Soudrymsoudry@thegabgroup.com 561-750-3500
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