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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

Commission file number 000-14993

CARMIKE CINEMAS, INC.
(Exact name of registrant as specified in its charter)

(706) 576-3400
(Registrant’s telephone number, including area code)

Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes þ  No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).   Yes o  No þ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Yes þ  No o

Indicate the number of shares outstanding of the issuer’s common stock, as of the latest practicable date.

Common Stock, $.03 par value — 9,088,512 shares outstanding as of November 7, 2003

PART I

ITEM 1.   FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands, except for share data)

See accompanying notes

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See accompanying notes

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands, except per share data)

See accompanying notes

4

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
CARMIKE CINEMAS, INC. and SUBSIDIARIES
(in thousands)

See accompanying notes

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CARMIKE CINEMAS, INC. and SUBSIDIARIES
For the Nine Months Ended September 30, 2003 and 2002

NOTE 1 — BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES

On August 8, 2000, Carmike Cinemas, Inc. (“Carmike”) and its subsidiaries, Eastwynn Theatres, Inc., Wooden Nickel Pub, Inc. and Military Services, Inc. (collectively “the Company”) filed voluntary petitions for relief under Chapter 11 (the “Chapter 11 Cases”) of the United States Bankruptcy Code. In connection with the Chapter 11 Cases, the Company was required to report in accordance with Statement of Position 90-7, Financial Reporting by Entities in Reorganization under the Bankruptcy Code (“SOP 90-7”). SOP 90-7 requires, among other things, (1) pre-petition liabilities that are subject to compromise be segregated in the Company’s consolidated balance sheet as liabilities subject to compromise and (2) the identification of all transactions and events that are directly associated with the reorganization of the Company in the Consolidated Statements of Operations.

On January 4, 2002, the United States Bankruptcy Court for the District of Delaware entered an order confirming the Company’s Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated as of November 14, 2001 (the “Plan”). The Plan became effective on January 31, 2002 (the “Reorganization Date”).

Further, the Company’s accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals and bankruptcy related items) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the consolidated financial statements and footnotes included in Carmike’s Annual Report on Form 10-K for the year ended December 31, 2002.

The Company has identified several critical accounting policies which can be reviewed in detail in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

The Company accounts for its stock-based compensation plans under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (“APB No. 25”).

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. For SFAS No. 123 purposes, the fair value of each option grant and stock based

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award has been estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

The estimated fair value of the options granted during 2003 is $12.12 per share. Had compensation cost been determined consistent with SFAS No. 123, utilizing the assumptions detailed above, the Company’s pro forma net income (loss) and pro forma basic and diluted earnings (loss) per share would have decreased to the following amounts (in thousands, except share data):

NOTE 2 — PROCEEDINGS UNDER CHAPTER 11

On January 31, 2002, the Company emerged from bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. A description of the proceedings under the Chapter 11 Cases is contained in Note 2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

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Reorganization costs for the three and nine month periods ended September 30, 2003 and 2002 are as follows (in thousands):

NOTE 3 — LIABILITIES SUBJECT TO COMPROMISE

The principal categories of obligations classified as Liabilities Subject to Compromise under the Chapter 11 Cases are identified below. The amounts in total may vary significantly from the stated amounts of proofs of claims filed with the bankruptcy court, and may be subject to future adjustments depending on bankruptcy court action, further developments with respect to potential disputed claims, and determination as to the value of any collateral securing claims or other events. During the three months ended September 30, 2003, certain claims were resolved for less than the related amounts, resulting in a $0.3 million change in the Company’s estimate of liability.

A summary of the principal categories of claims classified as Liabilities Subject to Compromise at September 30, 2003 and December 31, 2002 are as follows (in thousands):

The change in outstanding liability resulted from a change in estimate of $4.9 million, cash payments of $5.6 million and a reclassification from liabilities subject to compromise to long-term trade payables of $4.4 million.

NOTE 4 — INCOME TAXES

For the fiscal year ended December 31, 2002, the Company had net deferred tax assets of approximately $79.9 million that were fully offset by a valuation allowance. Further, as a result of its Chapter 11 filing, default on bank facilities, and future projections of operating results, the Company believes that doubt remains as to the ability to recognize future tax benefits related to its deferred tax assets. Thus, the Company continues to offset existing deferred tax assets with a valuation allowance.

For tax purposes, any discharge of the liabilities pursuant to the Chapter 11 filing may result in income that is excluded from the Company's taxable income. However, certain of the Company's tax attributes, including net operating loss carryforwards, may be reduced by the amount of any cancellation of debt income. To the extent the amount excluded exceeds these tax attributes, the tax basis in the Company's property must be reduced by the amount of the excluded cancellation of debt income.

As of December 31, 2002, the Company had approximately $116.0 million of federal and state operating loss carryovers with which to offset future taxable income. Net operating losses may be carried back and then forward for specified periods. If they are not used to offset taxable income by the end of the carryforward period, they expire. Under section 382 of the Internal Revenue Code of 1986, as amended, a corporation may generally be restricted in utilizing its net operating losses to offset prospective taxable income if it experiences an “ownership change”, as defined in section 382(g). The determination as to whether a corporation has experienced an ownership change on a given date is a complex analysis of the beneficial stock ownership of the corporation over a time period of not more than three years. An ownership change under section 382(g) occurs when on a testing date, the beneficial ownership of the corporation by one or more “5-percent shareholders” has increased, in the aggregate, by more than 50 percentage points over the respective lowest ownership percentages of such 5-percent shareholders during the testing period preceding such date. It should be noted that the rules for determining whether an ownership change under section 382 has occurred are different from those applied to evaluate whether a “change in ownership” as defined by Statement of Position 90-7 has occurred.

In the event of an ownership change, certain tax attributes of the corporation, including net operating losses, that pre-date the ownership change are generally subject to limitation in offsetting taxable income arising after the ownership change. The resulting limitation, which indicates how much of the limited tax attributes may be used in each subsequent tax year, is based on the stock value of the corporation immediately before the ownership change, subject to certain adjustments, and multiplied by a published applicable federal long-term-tax exempt rate. Because of this annual limitation, it is possible that losses will expire unused, regardless of whether the corporation has sufficient taxable income to absorb such losses. There are certain exceptions to the general rules under section 382 for corporations that are debtors in a title 11 case and that experience an ownership change pursuant to a court-approved plan.

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NOTE 5 — STOCK PLANS

Upon emergence from Chapter 11, the Company’s Board of Directors approved a new management incentive plan, the Carmike Cinemas, Inc. 2002 Stock Plan. The Board of Directors has approved the grant of 780,000 shares under the 2002 Stock Plan to Michael W. Patrick, the Company’s Chief Executive Officer. Pursuant to the terms of Mr. Patrick’s employment agreement dated January 31, 2002 these shares will be delivered in three equal installments on January 31, 2005, 2006 and 2007 unless, prior to the delivery of any such installment, Mr. Patrick’s employment is terminated for Cause (as defined in his employment agreement) or he has violated certain covenants set forth in such employment agreement. In

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May 2002, the Company’s Stock Option Committee (which administered the 2002 Stock Plan prior to August 2002) approved grants of the remaining 220,000 shares to a group of seven other members of senior management. These shares are to be earned over a three year period, commencing with the year ended December 31, 2002, with the shares being earned as the executive achieves specific performance goals set for the executive to be achieved during each of these years. In some instances the executive may earn partial amounts of his or her stock grant based on graded levels of performance. Shares earned each year will vest and be receivable approximately two years after the calendar year in which they were earned, provided, with certain exceptions, the executive remains an employee of the Company. Of the 220,000 shares granted to members of senior management, 86,250 shares were earned on December 31, 2002 and 14,250 shares were forfeited. However, the Compensation Committee approved two additional grants of 5,500 shares to two members of senior management on March 7, 2003, which shares are deemed to be earned and subject only to vesting requirements. Therefore, of the original 220,000 shares granted to members of senior management, 97,250 shares are deemed to have been earned, subject only to vesting requirements, 3,250 shares have been forfeited and 119,500 shares may be earned over the next two years. During 2003, the Company changed its classification of the offsetting credit to non-cash compensation expense under the plan from long-term liabilities to shareholder’s equity. The Company has included in paid-in capital $5.8 million and $3.6 million at September 30, 2003 and December 31, 2002, respectively, related to the 2002 Stock Plan.

On May 31, 2002, the Board of Directors adopted the Directors Incentive Plan, which was approved by the Stockholders on August 14, 2002. The purpose of the Directors Incentive Plan is to provide incentives that will attract, retain and motivate qualified and experienced persons for service as non-employee Directors of Carmike. There are a total of 75,000 shares reserved under the Directors Incentive Plan. The Board of Directors approved a grant of 5,000 shares each to two independent Directors on August 14, 2002. Additionally, the Board of Directors approved a stock option grant of 5,000 shares in May 2003 for a new director. The option grant price was based on the fair market value of the stock on the date of the grant. These grants of 15,000 shares in the aggregate, represent the only stock options outstanding under the Directors Incentive Plan.

On July 19, 2002, the Board of Directors adopted the Employee and Consultant Long-Term Stock Incentive Plan, which was approved by the Shareholders on August 14, 2002. The purpose of the Employee and Consultant Long-Term Stock Incentive Plan is to provide incentives, competitive with those of similar companies, which will attract, retain and motivate qualified and experienced persons to serve as employees and consultants of the Company and to further align such employees’ and consultants’ interest with those of the Company’s stockholders. There are a total of 500,000 shares reserved under the Employee and Consultant Long-Term Stock Incentive Plan. The Company granted an aggregate of 150,000 options pursuant to this plan on March 7, 2003 to three members of senior management. The exercise price for the 150,000 stock options is $21.74 per share and 75,000 options vest on December 31, 2005 and 75,000 options vest on December 31, 2006, respectively.

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NOTE 6 — EARNINGS PER SHARE

Earnings per share calculations contain dilutive adjustments for shares issued under the various stock plans discussed in Note 5. The following table reflects the effects of those plans on earnings per share (in thousands, except for per share data).

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NOTE 7 — IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In January 2003, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51, (“FIN 46”). FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 is currently effective for all new variable interest entities created or acquired after February 1, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period ending after December 15, 2003. The Company is currently evaluating the effect that the adoption of FIN 46 will have on its results of operations and financial condition, and does not expect adoption to have a material effect.

NOTE 8 — RECLASSIFICATIONS

Certain amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year’s presentation.

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ITEM 2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EMERGENCE FROM CHAPTER 11

     On January 4, 2002, the United States Bankruptcy Court for the District of Delaware entered an order confirming our Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated as of November 14, 2001. The plan of reorganization (the “Plan”) became effective on January 31, 2002 (the “Reorganization Date”). A description of the Plan is disclosed in our Annual Report on Form 10-K for the year ended December 31, 2002 under the caption “Our Reorganization.”

RESULTS OF OPERATIONS

     Comparison of Three and Nine Months Ended September 30, 2002 and 2003

     Revenues. Total revenues increased 4.0% from $123.3 million for the three months ended September 30, 2002 to $128.2 million for the three months ended September 30, 2003. The increase in revenue is primarily attributable to higher average admission and concession prices. Total admission revenues increased 4.5% from $82.8 million for the three months ended September 30, 2002 to $86.5 million for the three months ended September 30, 2003. Total concessions and miscellaneous revenues increased 3.0% from $40.5 million for the three months ended September 30, 2002 to $41.7 million for the three months ended September 30, 2003. Our average admission price was $4.73 for the three months ended September 30, 2002 compared to $4.92 for the three months ended September 30, 2003. The increase is due to selective price increases and changes in the mix of matinee/evening ticket sales. The average concession sale per patron was $2.10 for the three months ended September 30, 2002 compared to $2.14 for the three months ended September 30, 2003. Attendance per average screen was 7,731 for the three months ended September 30, 2002 compared to 7,807 for the three months ended September 30, 2003.

      Total revenues decreased 4.0% from $377.1 million for the nine months ended September 30, 2002 to $361.9 million for the nine months ended September 30, 2003. The decrease in revenue is primarily attributable to lower attendance partially offset by a higher average admission price. Total admission revenues decreased 4.2% from $253.3 million for the nine months ended September 30, 2002 to $242.8 for the nine months ended September 30, 2003. Total concession and miscellaneous revenues decreased 3.8% from $123.8 million for the nine months ended September 30, 2002 to $119.1 million for the nine months ended September 30, 2003. Our average admission price increased 2.3% from $4.79 for the nine months ended September 30, 2002 to $4.90 for the nine months ended September 30, 2003. The average concession sale per patron increased from $2.16 for the nine months ended September 30, 2002 to $2.17 for the nine months ended September 30, 2003. Attendance per average screen decreased from 23,205 for the nine months ended September 30, 2002 to 21,980 for the nine months ended September 30, 2003.

      We operated 309 theatres and 2,255 screens at September 30, 2002 and 300 theatres with 2,239 screens at September 30, 2003.

     Film exhibition costs, concession costs and other theatre operating costs. Film exhibition costs increased 4.5% from $44.7 million for the three months ended September 30, 2002 to $46.7 million for the three months ended September 30, 2003 due to increased sales associated with higher admission prices. Concessions costs increased 17.9% from $3.9 million for the three months ended September 30, 2002 to $4.6 million for the three months ended September 30, 2003 due to changes in product mix and increased attendance. Other theatre operating costs increased 7.8% from $43.4 million for the three months ended September 30, 2002 to $46.8 million for the three months ended September 30, 2003 due to moderate increases in salaries, utilities, repairs and lease costs.

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     Film exhibition costs decreased 6.4% from $137.5 million for the nine months ended September 30, 2002 to $128.7 million for the nine months ended September 30, 2003 due to decreased sales volume associated with decreased attendance. Concession costs decreased 7.5% from $14.7 million for the nine months ended September 30, 2002 to $13.6 million for the nine months ended September 30, 2003. The decrease in concession costs is directly related to the decrease in concession sales. Other theatre costs increased 0.4% from $135.4 million for the nine months ended September 30, 2002 to $136.0 million for the nine months ended September 30, 2003 due to moderate increases in salaries, utilities, repairs and lease costs.

     General and administrative expenses. General and administrative expenses decreased 4.9% from $4.1 million for the three months ended September 30, 2002 to $3.9 million for the three months ended September 30, 2003. General and administrative expenses increased 11.5% from $9.6 million for the nine months ended September 30, 2002 to $10.7 million for the nine months ended September 30, 2003. The increases reflect greater non-cash compensation expenses related to the 2002 Stock Plan. Expenses relating to the 2002 Stock Plan for the three and nine months ended September 30, 2002 were $1.0 million and $2.5 million, respectively, and $1.4 million and $3.9 million, respectively, for the three and nine months ended September 30, 2003.

     Depreciation and amortization expenses. Depreciation and amortization decreased 6.1% from $8.2 million for the three months ended September 30, 2002 to $7.7 million for the three months ended September 30, 2003. Depreciation and amortization decreased 5.4% from $24.4 million for the nine months ended September 30, 2002 to $23.1 million for the nine months ended September 30, 2003. These reductions reflect having fewer screens in operation.

     Gain on real estate sales. Gain on real estate sales decreased from $134,000 for the three months ended September 30, 2002 to $1,000 for the three months ended September 30, 2003. Gain on real estate sales increased from $340,000 for the nine months ended September 30, 2002 to $2.5 million for the nine months ended September 30, 2003. This increase resulted from a sale of six theatres and two parcels of land.

     Interest expense. Interest expense decreased 12.7% from $11.1 million for the three months ended September 30, 2002 to $9.7 million for the three months ended September 30, 2003. Interest expense decreased 69.1% from $93.9 million for the nine months ended September 30, 2002 to $29.1 million for the nine months ended September 30, 2003. The interest reported for three and nine months ended September 30, 2002 includes $0.0 and $55.4 million, respectively, of prior year’s interest not previously recorded due to accounting for interest under requirements of SOP 90-7. Additionally, the lower interest expense for the period is due to lower average outstanding indebtedness as a result of mandatory amortization under our term loan credit agreement.

     Income tax expense. We recognized an income tax benefit of $14.7 million in 2002. The income tax benefit was the result of the Job Creation and Worker Assistance Act of 2002, which allowed for the additional carryback of net operating losses resulting in a cash refund of $14.7 million. As is customary, refunds of this size are reviewed by the Internal Revenue Service; however, we do not anticipate any change. We recognized no income tax expense for the three and nine months ended September 30, 2003.

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LIQUIDITY AND CAPITAL RESOURCES

     Our revenues are collected in cash and credit card payments. Because we receive our revenues in cash prior to the payment of related expenses, we have an operating “float” which partially finances our operations. We had a working capital deficit of $28.5 million as of December 31, 2002 compared to a working capital deficit of $36.5 million as of September 30, 2003. The increased deficit as of September 30, 2003, reflects scheduled payments of debt and payments to unsecured creditors under our plan of reorganization as well as changes in accounts payable and accrued expenses. The deficit will be funded through anticipated operating cash flows as well as the ability to draw from our revolving credit agreement. At September 30, 2003, we had available borrowing capacity of $50 million under our revolving credit agreement. As of September 30, 2003, we had approximately $32.5 million in cash and cash equivalents on hand.

     We amended our term loan credit agreement and our revolving credit agreements subsequent to September 30, 2003. Pursuant to our amended credit agreements, our capital expenditures are limited to $22.3 million in 2003 ($2.3 million of which was carried over from 2002) and $25 million in each of 2004, 2005 and 2006; provided, however, that unused capital expenditures for a given year will be applied to increase the capital expenditure limit for the following year. During the nine months ended September 30, 2003, we made capital expenditures of approximately $10.2 million. Our total budgeted capital expenditures for 2003 are $18.0 million which we anticipate will be funded by using operating cash flows, available cash from our revolving credit agreement and landlord-funded new construction and theatre remodeling, when available.

     Net cash used in operating activities was $7.1 million for the nine months ended September 30, 2002 compared to net cash provided by operating activities of $12.3 million for the nine months ended September 30, 2003. This change is due to increased profit from operations related primarily to lower interest expenses, offset by changes in accounts payable, payments to general unsecured creditors and other reorganization items. Net cash used in investing activities was $0.6 million for the nine months ended September 30, 2002 compared to $5.0 million for the nine months ended September 30, 2003. For the nine months ended September 30, 2002 cash used in financing activities was $31.2 million compared to $28.3 million for the nine months ended September 30, 2003.

     Our liquidity needs are funded by operating cash flow, sales of surplus assets, availability under our credit agreements and short term float. The exhibition industry is seasonal with the studios normally releasing their premiere film product during the holiday season and summer months. This seasonal positioning of film product makes our needs for cash vary significantly from quarter to quarter. Additionally, the ultimate performance of the film product, any time during the calendar year, will have the most dramatic impact on our cash needs.

     Our ability to service our indebtedness will require a significant amount of cash. Our ability to generate this cash will depend largely on future operations. Based upon our current level of operations, we believe that cash flow from operations, available cash, sales of surplus assets and borrowings under our credit agreements will be adequate to meet our liquidity needs. However, the possibility exists that, if our liquidity needs are not met and we are unable to service our indebtedness, we could come into technical default under any of our debt instruments, causing the agents or trustees for those instruments to declare all payments due immediately or, in the case of the senior debt, to issue a payment blockage to the more junior debt. A similar situation contributed to the circumstances that led us to file our voluntary petition for relief under Chapter 11 in August of 2000.

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     We cannot make assurances that our business will continue to generate significant cash flow to fund our liquidity needs. We are dependent to a large degree on the public’s acceptance of the films released by the studios. We are also subject to a high degree of competition and low barriers of entry into our industry. In the future, we may need to refinance all or a portion of our indebtedness on or before maturity. We cannot make assurances that we will be able to refinance any of our indebtedness or raise additional capital through other means, on commercially reasonable terms or at all.

SEASONALITY

     Typically, movie studios release films with the highest expected revenues during the summer and the holiday period between Thanksgiving and Christmas, causing seasonal fluctuations in revenues.

INFORMATION ABOUT FORWARD-LOOKING STATEMENTS

     This quarterly report contains forward-looking statements within the meaning of the federal securities laws. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports and other documents we file with the SEC or in connection with oral statements made to the press, potential investors or others. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words, “believes,” “expects,” “anticipates,” “plans,” “estimates” or similar expressions. These statements include, among others, statements regarding our strategies, sources of liquidity, and the opening of new theatres during 2003.

     Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on beliefs and assumptions of our management, which in turn are based on currently available information. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding expected pricing levels, competitive conditions and general economic conditions. These assumptions could prove inaccurate. The forward-looking statements also involve risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:

	•		the availability of suitable motion pictures for exhibition in our markets;
	•		competition in our markets;
	•		competition with other forms of entertainment;
	•		the effect of our leverage on our financial condition; and
	•		other factors, including the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2002 under the caption “Risk Factors.”

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     We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to various market risks. We have floating rate debt instruments and, therefore, are subject to the market risk related to changes in interest rates. Interest payable under our credit agreement is based on a spread over LIBOR or another index.

     Interest paid on our debt is largely subject to changes in interest rates in the market. Our revolving credit agreement and our term loan agreement are based on a structure that is priced over an index or LIBOR rate option. Our term loan agreement provides for a minimum annual interest rate of 7.75%. A change of 1.0% in interest rates would not raise the effective rate above the 7.75% floor, therefore, there is no measurable risk on the term loan agreement due to limited interest rate changes.

     A substantial number of our theatre leases have increases contingent on Consumer Price Index (“CPI”) changes. A 1.0% change in CPI would not have a material effect on rent expense.

ITEM 4.   CONTROLS AND PROCEDURES

     As required by Securities and Exchange Commission rules, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded that the design and operation of our disclosure controls and procedures are effective. There were no changes to our internal controls during the period covered by this quarterly report that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

     Disclosure controls and procedures are our controls and other procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act are accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

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PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

     From time to time, we are involved in routine litigation and legal proceedings in the ordinary course of our business, such as personal injury claims, employment matters, contractual disputes and claims alleging ADA violations. Currently, we do not have pending any litigation or proceedings that we believe will have a material adverse effect, either individually or in the aggregate, upon our financial position, liquidity or results of operations.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM 5.   OTHER INFORMATION

     None.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)   Listing of Exhibits

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     (b)   Reports on Form 8-K

During the fiscal quarter ended September 30, 2003, we furnished a Current Report on Form 8-K dated September 23, 2003 reporting information under Items 7 and 9.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXHIBIT INDEX