At Carmike Cinemas, the show must go on. The movie exhibitor owns, operates, or has stakes in about 250 theaters with more than 2,500 screens in 35 states across the US. The company's theaters are located mostly in small to midsized communities where the chain hosts the only theater in town. Revenues come from the sale of admission tickets and concessions. Carmike also owns two Hollywood Connection family entertainment centers (one in Georgia and one in Utah), which feature multiplex theaters along with skating rinks, miniature golf, and arcades.
The company groups its revenue into two segments: box office admissions along with concessions and "other" revenue. The majority of its revenues come from the sale of movie tickets. In fiscal 2012 box office admissions totaled 64% of total revenues. Its concession and other revenues totaled 36% of total revenues.
Carmike has screens in 35 states. Its largest markets are located in Alabama, Georgia, North Carolina, and Tennessee.
Sales and Marketing
Most of the tickets the company sells are sold at its theatre box offices immediately before the start of a film. Patrons also buy tickets in advance on the Internet.
Carmike spent about $1.9 billion on advertising and marketing promotions during fiscal 2012 after spending about $2 billion in fiscal 2011 and $3.86 billion in fiscal 2010.
The company's revenues increased by 12% in fiscal 2012 compared to fiscal 2011, due to an increase in total attendance, an increase in average admissions per patron, and from and an increase in concessions and other sales per patron. Following several years of reporting a net loss, the company posted a new profit of $96 million in fiscal 2012 due to an income tax benefit of $81 million combined with the overall increase in total annual revenue.
Carmike targets smaller, non-urban markets because of their lower operating costs and their lack of a variety of alternative forms of entertainment. Because the company focuses on smaller markets, it held back on developing the costly new multiplex theatres (12 screens or more) that are the focus of its larger rivals (Regal Entertainment Group and AMC Entertainment). Carmike has rolled out cutting edge technology at many of its theatres.
The chain's strategy emphasizes quick and efficient service built around a limited menu primarily focused on higher margin items such as popcorn, flavored popcorn, candy, cotton candy, bottled water, and soft drinks. In addition, in a limited number of markets, Camike sells frozen drinks, coffee, ice cream, hot dogs, pizza, and pretzels in order to respond to competitive conditions.
The company moved into the advertising realm in 2010 when it purchased a 20% stake in advertising network operator Screenvision. The theater chain had been an exhibitor partner of Screenvision; as part of the deal, Screenvision continues to support its Carmike with cinema advertising solutions.
Mergers and Acquisitions
Carmike Cinemas in 2012 acquired 16 entertainment complexes totaling about 250 screens in seven states from Rave Review Cinemas, a key step in its path toward expanding to 300 entertainment complexes and 3,000 screens.