Carmike prepays $10 million of loans to trim leverage

By Susanna Moon

Chicago, Sept. 30 - Carmike Cinemas Inc. said it prepaid $10 million of bank debt to reduce its leverage.

"Given current economic and capital market uncertainties, our board has determined that the most prudent use of our free cash flow at this time is in de-leveraging our balance sheet," Michael W. Patrick, chief executive officer of Carmike, said in a press release.

"Debt reduction will further reduce interest expense and support our goal of creating long-term shareholder value," Patrick noted.

The company said it made $33 million of payments against its outstanding debt in the trailing 12 months.

As of Sept. 30, Carmike's bank debt fell to about $285 million, compared with $295 million at June 30 and $302 million in Dec. 31.

Reflecting the expected third-quarter operating results and recent debt reduction payments, the company said it remains in compliance with all credit facility covenants at Sept. 30.

Going forward, the company said it plans to allocate its capital primarily to reducing its overall leverage.

Carmike is a Columbus, Ga.-based motion picture exhibitor.

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