High-end cinema chain iPic theaters is going public in late fall of this year, announcing Tuesday that it is seeking to raise up to $30 million despite the theater business struggling with a brutal summer box office.
iPic will file an initial public offering under Regulation A+ of the JOBS Act, adopted by the Securities and Exchange Commission in 2015 as a way for smaller startups to go public without the expense of the traditional process. It also allows non-accredited investors (generally individuals earning more than $200,000 a year and/or with a net worth in excess of $1 million) to buy shares in the offering.
Florida-based iPic currently owns and operates 16 theaters with 121 screens in 10 states, with an additional 5 locations under construction. According to an investment summary posted on its website, iPic has grown its revenue by 22 percent a year since 2012. The company generates 51 percent of its revenue from concessions, with 31 percent from the box office and the remainder from memberships, sponsorships and other sources.
iPic is going public at an interesting time for the theater business, as a disastrous summer box office has delivered a brutal blow to the stock prices of some of the country’s largest exhibitors, including AMC Theatres. The company’s shares plunged more than 25 percent in after-hours trading August 1 after it announced a cost-cutting plan and previewed a massive second quarter loss with little hope for a rebound in the third quarter. However, iPic exclusively operates luxury, dine-in theaters, which should be a little more resilient to market trends. On AMC’s second-quarter earnings call, CEO Adam Aron said its recliner-equipped theaters had their admissions revenues rise 5 percent during the quarter, while overall admissions revenue nationwide was down 4 percent.
“Since our inception in 2006, iPic Entertainment has prided itself on building architecturally unique dining and entertainment destinations designed for sharing with a strong emphasis on genuine hospitality and world-class customer service,” iPic CEO and Founder Hamid Hashemi said in a statement. “Today, as we announce our decision to transition from a private company to a public one, we are excited to empower our supporters and 1.7 million members to become part owners of the iPic Entertainment brand experience and company.”