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S. David Passman III, the President and CEO of Carmike Cinemas Inc. (CKEC) Interviews with the Wall Street Transcript

67 WALL STREET, New York - November 12, 2012 - The Wall Street Transcript has just published its Entertainment, Toys and Games Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Cable Subscription Rates - International Paid Television Growth - Digital Advertisement Trends - Mobile Device Gaming Prospects - Content Quality

Companies include: Carmike Cinemas Inc. (CKEC) and many others.

In the following excerpt from the Entertainment, Toys and Games Report, the CEO of Carmike Cinemas discusses the outlook for his company for investors:

TWST: Please begin by giving us a brief description of Carmike Cinemas.

Mr. Passman: Carmike is a leading cinema circuit, the nation's fourth largest, with about 235 locations spread across the continental U.S. and more than 2,200 screens in 35 or 36 states depending on what month of the year it happens to be and whether we've just opened or closed a theater in a new state. We're publicly traded under the symbol CKEC and have been in business nearly 50 years.

TWST: What were Carmike's revenues and its earnings in the latest quarter the company reported?

Mr. Passman: We generate approximately $0.5 billion a year in revenue, and about two-thirds of that's from admissions, and the remaining one-third is generated by concessions. We were solidly profitable in Q2 on total revenues of more than $136 million.

TWST: What are some of the most significant trends, developments and changes you're seeing in the market over the next several years?

Mr. Passman: First of all, the big thing that has changed our industry probably more so in the last five years than any single development in cinematic history has been the conversion from film or celluloid print to digital print. That not only has been a tremendous thing for clarity of picture and resolution on the screen and viewing enjoyment for our patrons - without the interruption of broken film and that kind of thing - but digitization has helped the studios eliminate the majority of their costs for making additional prints and sending them to individual auditoriums across the world.

But more importantly, from Carmike's standpoint as an exhibitor, is that technology is an enabler that is going to be the growth engine for the entertainment complexes of the future. What I mean by that is that not only will we be showing feature films, which will continue to be our mainstay, but we will also be able to do additional things, like show live performances, whether they're concerts or sporting events or lecture series or that kind of thing, and digital will also enable us to, during the slower parts of our week, increasingly use our auditoriums for events such as business meetings and church groups. All simply because we can now take transmission via satellite or hard drive instead of needing master 35-mm prints of a Hollywood feature film for one of our auditoriums. Digital creates a much enhanced opportunity for asset utilization for Carmike and others in the cinema industry.

TWST: How does Carmike's revenue break out now - first-run films versus discount films?

Mr. Passman: Discount is way less than 10% of our volume. In terms of dollars, it's probably approaching 10% of attendance. But when you're charging $1.50 to $2.50 per attendee, you end up getting an awful lot of attendance from people that are value shoppers or not necessarily looking for a movie when it first hits the screens, but rather still looking to see it on the big screen rather than in their home. But it is not a very significant part of our strategy, our revenue or the company's profit streams.

TWST: Carmike Cinemas recently announced its intent to acquire Rave Review Cinemas with its 16 theaters with 251 screens for roughly $119 million, with $19 million cash and $100 million in assumed capital leases. Would you explain what assumed capital leases are, and what are their advantages?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.