Independent Exhibitors Film Bulletin (1963)

FINANCIAL REPORT Film and Theatre Stocks Hit by Bearish Market in '62 The year 1962 was strewn with disappointments for those who dabble in the stock-market — on the side of the bulls. It cast no special favors on holders of movie industry shares. They were sheared like all the other sheep who wander into the canyons of Wall Street. A comparison of the closing prices at the end of 1961 and the end of 1962 reveals this bearish fact: of all the film company stock prices listed in the Film BULLETIN chart, only one, Decca (via its control of Universal), showed a plus figure. Among the theatre companies, only National General (nee National Theatres) closed higher at the end of '62. There were some whopping losses written: MCA suffered a sharp decline of 301/4 points, most of it prior to clearance of its merger with Decca-Universal; Paramount, among the established film companies, showed the deepest drop, 19%, while M-G-M was down 18% and 20th Century-Fox Even United Artists, despite its solid earnings performance, dipped almost $5 per share in '62. On the brighter side: every film and theatre stock on our list closed out 1962 higher than its low during the past year. MCA recouped over 15 points from its '62 low after the Department of Justice gave the nod to the Decca deal. The latter company ended up almost 11 points above the low. Columbia recovered over $9 per share, Disney over 7, and M-G-M over 5 points from its low ebb in 1962. Among the theatre firms, Stanley Warner closed out '62 more than $19 per share below its '61 close and only 2% above its low for the past year. American Broadcasting-Paramount Theatres ended down 1 li/g from its 1961 close, but recovered over $11 per share from its low for 1962. Loew's Theatres dipped 2iy8 from the '61 close and recouped 3% from its '62 low. Theatres Have Vital Role in S-W Growth A period of "renewed growth" for the movie theatre division of the Stanley Warner Corporation is noted in a recent report by the Chicago brokerage firm, Freehling, Meyerhoff & Co. While advances by the Corporation has centered mainly in the Playtex division, manufacturing undergarments, the theatre chain is reported as strengthening itself by moving out of its "least desirable properties." From 80 cents per share earned on $66 million total revenue in 1954, the Corporation climbed to $1.15 per share on $113 million total revenue in 1958, $2.38 on $124 million in 1959, $1.73 on $132 million in I960 and $2.12 per share earned on $133 million total revenue in 1961. Dividends paid have been below this figure as expansion has been accomplished and continues to be accomplished out of cash earnings. The theatre business accounts for about 30 per cent of the sales volume, with merchandise (garments, pharmaceuticals and chemicals) providing the balance. The theatre division controlled 214 theatres totalling 299,500 seats, as of August 31, 1961. Another 24 theatres were added in October of this year when the Company bought the Lone Star Theatres chain in Texas, for a 10 per cent expansion in capacity. Non-recurring expenses incidental to exchanging dealer stocks for the new fabric-lined Playtex girdle were absorbed in 1962 and, as a result, 1962 earnings will fall below the $2.12 per share shown in 1961. This absorption, however, leaves 1963 unburdened by such unusual costs. In its conclusion, Freehling, Meyerhoff states: "We believe that future growth prospects are dynamic and excellent due to product diversification, and to growing business both in the U.S. and overseas, and to national expansion for the movie chain. "The stock is selling very colse to its lows for the past four years, and represents in our opinion, an excellent vehicle not only for major capital gains, but for generous current income as well." Movie Shares Enter New Year Mixed The beginning of the new year found movie stocks, like most other industries, following no fixed pattern. Some were up, some down, in the main fractionally. Disney led the film companies on the up side, the factor here being reports of a bright financial statement about to appear. For the bi-weekly period to the close of the FB listing on Jan. 3, Disney rose 1% points. In the theatre division, all stocks, except AB-PT, were up, led by Stanley Warner's rise of 2l/g. FILM & THEATRE STOCKS Close Close Film Companies 12/20/62 1/3/63 Change ALLIED ARTISTS 3 1/4 3% ALLIED ARTISTS (Pfd.) ....10% CINERAMA I31/2 14% + % COLUMBIA 24% 23% -1% COLUMBIA (Pfd.) 78 77% % DECCA 45 45% + % DISNEY 28% 30% • 1% MCA 49 49 — MCA (Pfd.) 34% 34% % M-G-M 32% 32% + % PARAMOUNT 353/4 36% + % SCREEN GEMS 18% 18 % 20TH-FOX 20% 21% + % UNITED ARTISTS 27% 27% % WARNER BROS 13% 14% + % * * * Theatre Companies AB-PT 36 33% -2% LOEW'S 21% 23% +1% NATIONAL GENERAL 7% 8% + % STANLEY WARNER 20% 223/4 +2% TRANS-LUX 11% 13 +1% (Allied Artists, Cinerama, Screen Gems. Trans-Lux, American Exchange; all others on New York Stock Exchange.) * * * 12/20/62 1/3/63 Over-the-counter Bid Asked Bid Asked GENERAL DRIVE IN 8 8% 7% 8% MAGNA PICTURES 1% 1% 1% 1% MEDALLION PICTURES 4% 4% 4% 5 SEVEN ARTS 8% 9% 8 8% UA THEATRES 5% 6% 5% 6 UNIVERSAL 57 60% 57 60% WALTER READE STERLING 2 2% 1% 2% WOMETCO 18% 20% 19 20% (Quotations courtesy National Assn. Securities Dealers. Inc.) I Film BULLETIN January 7, 1963 Page 23