Regal Entertainment Profit Dips, Mulls Potential Sale; Stock Up

(RTTNews) - Regal Entertainment Group's (RGC) shares climbed around 15 percent in the after hours trading in the NYSE on Monday after the motion picture exhibitor declared a cash dividend and a special cash dividend, and also that the company is mulling a potential sale. This was despite reporting weak profit and revenues in its third quarter.

The company said its Board of Directors has authorized the exploration of strategic alternatives to enhance shareholder value, which may include a potential sale.

According to the firm, the combination of Regal's continued strong performance and attractive industry dynamics has led the Board to conclude that this is an opportune time to conduct a thorough review of options.

The Board has retained Morgan Stanley & Co. LLC, Inc. as its financial advisor to assist in the review process. The company has not set a definitive timetable for completing its exploration of strategic alternatives. There can be no assurance that the process will result in any specific outcome.

Amy Miles, CEO of Regal Entertainment said, "Commitment to delivering shareholder value has been the cornerstone of our strategy for many years and we believe today's announcement along with the declaration of our sixth special dividend clearly demonstrate that commitment. Looking ahead, we are optimistic regarding the potential for box office success during the upcoming holiday season and throughout 2015."

In its third quarter, net income attributable to controlling interest declined to $26.7 million or $0.17 per share from $75.1 million or $0.48 per share last year. Excluding items, adjusted earnings per share was $0.18, compared to $0.38 for the third quarter of 2013.

Total revenues for the third quarter fell to $693.8 million from $813.1 million a year ago.

Analysts polled by Thomson Reuters expected the company to earn $0.17 per share on revenue of $724.14 million for the third quarter. Analysts' estimates typically exclude special items.

Adjusted EBITDA, a key earnings metric, was $122.1 million, compared to $177.3 million a year ago.

Regal declared both a quarterly cash dividend of $0.22 and a special cash dividend of $1.00 per Class A and Class B share, each payable on December 15 to stockholders of record on December 4.

The company further said it intends to pay a regular quarterly dividend for the foreseeable future at the discretion of the Board .

Regal shares settled at $20.51 in the regular trading, up 1.53 percent. In the extended trading, shares gained 15.31 percent further to $23.65.