Theatrical exhibition has demonstrated long-term steady growth. U.S. and Canadian box office revenues increased by a 4.7% CAGR over the last 20 years, driven by increases in both ticket prices and attendance. Ticket prices have grown steadily over the past 20 years, growing at a 2.9% CAGR. In calendar 2006, industry box office revenues were $9.5 billion, an increase of 5.5%, compared to a decrease of 5.7% in calendar year 2005 and through August 30, 2007, box office revenues increased 8.0% over the same period in the prior year, driven by an estimated 2% increase in average ticket prices and a 6% increase in attendance.

There are approximately 570 companies competing in the North American theatrical exhibition industry, approximately 360 of which operate four or more screens. Industry participants vary substantially in size, from small independent operators to large international chains. Based on information obtained from the NATO 2006-07 Encyclopedia of Exhibition, it is believed that the ten largest exhibitors (in terms of number of screens) operated approximately 61% of the indoor screens in 2006. This statistic is up from 34% in 1999 and is evidence that the theatrical exhibition business in the United States and Canada has been consolidating.

The theatrical exhibition industry faces competition from other forms of out-of-home entertainment, such as concerts, amusement parks and sporting events, and from other distribution channels for filmed entertainment, such as cable television, pay per view and home video systems, as well as from all other forms of entertainment.

In the United States and Canada, as of June 28, 2007, the Company operated 311 theatres with 4,597 screens in 30 states, the District of Columbia and 2 Canadian provinces.

As of June 28, 2007, the Company’s international circuit of 66 theatres with 703 screens consisted principally of wholly-owned theatres in Mexico. In Mexico, the Company owned and operated 44 theatres with 488 screens primarily located in the Mexico City Metropolitan Area, or MCMA, through Grupo Cinemex, S.A. de C.V. and its subsidiaries (Cinemex). The Company also had three wholly-owned theatres and 42 screens in Europe.

The Company predominantly license \"first-run\" motion pictures from distributors owned by major film production companies and from independent distributors. The Company licenses films on a film-by-film and theatre-by-theatre basis. The Company obtains these licenses based on several factors, including number of seats and screens available for a particular picture, revenue potential and the location and condition of its theatres.

Concessions sales are the Company’s second largest source of revenue after box office admissions. Concessions items include popcorn, soft drinks, candy, hot dogs and other products. Different varieties of candy and soft drinks are offered at the Company’s theatres based on preferences in that particular geographic region. The Company has also implemented \"combo-meals\" for patrons which offer a pre-selected assortment of concessions products and offer co-branded and private label products.

Total costs and expenses decreased 3.9%, or $23.6 million, during the thirteen weeks ended June 28, 2007 compared to the thirteen weeks ended June 29, 2006.

Merger, acquisition and transaction costs increased $798,000 from $3.8 million to $4.6 million during the thirteen weeks ended June 28, 2007 compared to the thirteen weeks ended June 29, 2006.

Depreciation and amortization decreased 0.3%, or $207,000, compared to the prior period.

Investment income was $19.3 million for the thirteen weeks ended June 28, 2007 compared to $2.5 million for the thirteen weeks ended June 29, 2006.

Net earnings (loss) was $14.6 million and ($14.1 million) for the thirteen weeks ended June 28, 2007 and June 29, 2006, respectively.