Wall Street won’t have a chance to hear what Carmike Cinemas’ top executives think about its Q1 earnings, the state of the company, the exhibition industry — or, yes, its plan to sell itself to AMC Entertainment — on May 2 when it releases its report for the beginning of 2016.
The No. 4 movie theater chain says this morning that it will not hold its usual conference call to respond to analysts’ questions “in light of” its $1.1 billion (including debt) deal with AMC. Carmike’s previous quarterly call took place on February 29, shortly before the March 3 announcement of its agreement with AMC.
While executives in the spotlight occasionally refuse to schedule calls, it’s unusual in a case where a company is simply waiting for a sale to play out — a period when it still is supposed to operate independently and serve shareholders.
For example, Time Warner Cable continued to answer questions after it agreed to sell itself to Comcast and, when that deal fell apart last year, Charter Communications. DirecTV also did so while waiting for its sale to AT&T to close.
CEOs engaged in a deal that they don’t want to discuss typically hold their quarterly calls and decline to answer questions about it while still addressing queries about their operations or industry trends.
To be sure, Carmike CEO David Passman likely would have had to do some tap dancing. A few of his largest shareholders, led by investment firms Mittleman Brothers and Driehaus Capital Management, oppose the AMC deal and criticize the vetting process leading up to it. They believe AMC’s $30 a share offer is too low.
The deal requires approval by Carmike shareholders. The Justice Department also is considering whether to challenge it on antitrust grounds, or approve — possibly with conditions such as a sale of theaters in markets where AMC and Carmike compete.
But even if executives ruled out discussion of the deal, they could have responded to questions about other matters — including the Q1 news.
Investors want to know how Carmike’s October acquisition of Sundance Cinemas is panning out, as well as its plans to install additional Imax theaters. They’d be interested in executives’ post-CinemaCon thoughts about the 2016 and 2017 movie slates — or industry concerns such as theaters’ shortening window to exclusively offer new releases, prospects for The Screening Room, and challenges to clearance deals with studios.
And there would be the usual questions about how the chain performed vs expectations: The Street is looking for Carmike’s revenues to hit $206.2 million in Q1, a 11.8% increase vs the period last year, with earnings soaring to 23 cents a share from 2 cents.