Motion Picture Daily (Oct-Dec 1960)

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Motion Picture Daily Friday, December 9 Loew^to Have Same Number of Theatre Contemplating Adding More, Tisch Reveals ( Continued from page 1 ) might be disposed of, but these could be offset by the addition of two theatres in New York replacing the old Lexington and 72d Street Theatres. The circuit presently consists of about 100 theatres. He said the company would like to add more money-making theatres to the circuit and that it did not anticipate any difficulties from the Department of Justice, whose approval is needed, in doing so. Tisch estimated earnings for the first quarter of the current fiscal year, begun Aug. 31, at "about the same as last year, 13 or 14 cents per share," on the approximately 2,600,000 shares outstanding. He said the actors and writers strikes in Hollywood last spring, which reduced picture releases subsequently, was responsible for holding down earnings to some extent but added, "Business could get much better. Any time we get good product, we do better business." During a question period at the meeting, Tisch assured one stockholder who wanted to know whether the company was abandoning theatre business for hotel operation, diat "Loew's is remaining in the theatre business. As long as they make pictures," he said, "we'll exhibit them." The stockholders reelected all 15 directors and rejected a proposal made by a stockholder for the adoption of the cumulative voting system for the election of directors. Directors reelected are: George T. Baker, Charles B. Benenson, James Bruce, Thomas J. Connellan, Leopold Friedman, Arnold M. Grant, Lewis Gruber, Herbert A. Hofmann, John F. Murphy, Thomas L. Norton, Eugene Picker, Simon H. Rifkind, Laurence Tisch, Preston R. Tisch and Jay Wells. Questioning of Tisch by stockhold ers brought out that the recent sale of Station WMGM to the CrowellCollier company for $10,950,000 involves a substantial capital gains tax. The sum is payable $7,950,000 at closing and $3,000,000 within 18 months. Tisch said he believes it is the "highest price ever paid for a radio station." Own 600,000 Shares Answering a stockholder, he denied the sale was made to aid in financing the company's new hotels, the Summit and American in New York. Tisch said he and his brother own more than 600,000 shares of Loew's Theatres stock and if they had been solely interested in entering New York hotel operation they could have used the money for that purpose instead of investing it in Loew's. He said the company has plans for two motor hotels, one in central Washington, D. C, and the other at 8th Ave. and 51st Street, New York. The stockholders were told that Loew's Theatres will receive $200,000 annually on a 99-year lease from Tishman Realty Co. for the property on which Loew's 72d Street Theatre stands. Tishman will erect a 34-story cooperative apartment building on the site. Tisch said the rental represents a "tremendous increase" over what the property was earning as a theatre. Tisch presided at a Loew's Thea MGMs 1960 Net Sets Record Loew's Theatres' Ad Budget Is $1,700,000 Loew's Theatres has an annual advertising expenditure of $1,700,000, Laurence A. Tisch, board chairman, told stockholders at their annual meeting here yesterday. The information was offered in reply to a stockholder's question. Tisch also reported that the company had about 15,000 shareholders, down slightly from the previous year, and about 4,000 employes, also representing a slight decline. ( Continued that earnings for fiscal 1961 would substantially exceed the 1960 figure. Vogel pointed out that each division of the company continued to operate profitably during the year just concluded. Gross revenues from film production-distribution operations amounted to $102,625,000 during 1960. They were slightly higher than those of the previous year while net income before interest and income taxes from these operations amounted to $10,212,000, an increase of approximately $3,800,000 over the previous year. 'Ben-Hur' Included "This favorable trend reflects both improved quality in our pictures and tighter control over operations," Vogel said. "The above figures for film production-distribution include 'BenHur,' which had only been presented in 84 theatres by the end of the fiscal year and which is rolling up the biggest grosses and longest engagements of any release in industry history." The annual report just mailed to stockholders noted that the company had working capital of $81,866,000, including $40,520,000 of cash and U. S. Government securities. After payments totaling $9,800,000, including dividends of approximately $3,000,000 and reductions in long-term debt and purchases of company's stock in the sum of $6,800,000, working capital increased by $900,000 during the year. Equity Increased Stockholders equity increased from $87,463,000 to $89,864,000 by the end of the fiscal year. The company has maintained regular quarterly dividends since the recommencement of dividend payments on Oct. 14, 1959, Four payments were made at the quarterly rate of 30 cents per share. On Sept. 7, 1960, a payment at the increased rate of 40 cents was declared payable on Oct. 14, 1960 and a second payment at this increased rate was voted from page 1 ) on Nov. 29, 1960, payable on Jan. 13, 1961. In his letter to stockholders, Vogel wrote: "Earnings for the first quarter of this fiscal year appear to be moderately above those for the first quarter of the year just ended. I am confident that with the splendid overall condition of the company, together with the importance and attractiveness of pictures to be released on our up-coming schedule, earnings for the full year ending Aug. 31, 1961, will substantially exceed those of 1960. "Since the close of the 1960 fiscal year, the company has taken an important step in its long range growth program. It acquired the profitable Verve Records Inc. in an all-cash transaction. This acquisition will add more than 30 per cent to the volume of our record sales. Verve is the top American jazz label, featuring most of the outstanding artists in this field. Will Expand Further "In adding Verve to our already outstanding catalog of popular music, we have broadened the base of our records operations and now cover several important fields of music. We will continue our efforts to expand into other record fields with the emphasis on classical music." During the year, licensing of pre1949 features and short subjects continued satisfactorily and by Aug. 31, 1960, licensing contracts totaled $58,351,000, of which $21,766,000 remains to be earned. The extremely valuable feature pictures made by M-G-M since 1948, none of which have been shown on television, are being reviewed so that the company will be able to act promptly when circumstances are most favorable, Vogel said. The company's music operations continued profitably during 1960, and since the acquisition of interests in two English music publishing houses — B. Feldman and Francis Day & Hunter Ltd.— revenues and earnings from abroad have increased substantially. Stockholder Told Plans f J Hotels, Motel ties stockholders meeting for the time and handled the mee smoothly, even though professki shareholders such as John Gill1 and Martha Brandt were in attei anoe. Meetings formerly were J sided over by Leopold Friedir! who resigned as chairman last k tember but continues a member' the board. Loew's Theatres expects to immediate profits from its new tels as soon as they open, Tisch tj the shareholders. Unlike in manuf turing and many other industr no breaking-in period is required hotels, he explained. Pre-opening expenses of the Su mit at East 51st Street and Lexii ton Avenue and the Americana New York at Seventh Avenue I tween 52nd and 53rd Streets, i being written off in their entml against current income, he addec Looks for 20% Return "I can say," Tisch declared, "tf we are looking for a return frc' these hotels of at least 20 per ce on our cash outlay although I hone! ly believe that it will be much mc than that." Construction is on schedule ai costs are "well within" original co struction budgets with the Sumn expected to open this coming Ju and the Americana of New York di for completion in the spring of 196 he said. Looking to the future, he explaini that because Loew's Theatres, has heavy investment in real estate, i cash flow is relatively large an amounted to nearly $6,000,000 in tl fiscal year ended August 31, 196; and can be expected to increase by wide margin over this figure ond the new hotel projects are in oper: tion. <S' at $2,600,000 Metro-Goldwyn-Mayer's "Buttel field 8," showing consistent holdovo power, has already grossed over $2 600,000 at the box office in repor from its first 139 engagements. A this pace, it is equalling the blocii1 buster business of 'Cat on a Hot Til Roof" and easily exceeding the opei ing weeks and holdover weeks < "North by Northwest" and "Pleas Don't Eat the Daisies," M-G-M safr 'Alamo' at $25,640 John Wayne's "The Alamo" grosse< a smash $25,640 in the sixth week o its road-show engagement at tht Rivoli Theatre on Broadway, accord ing to United Artists.