To: Corporate Employees, Theatre Managers

From: Michael L. Campbell

Date: August 14, 2000

I m sure that all of you are hearing or have heard the rumors
surrounding our industry. These rumors were sparked by last Tuesday s
news of Carmike filing for bankruptcy protection. The press has also been
full of news of other exhibitor s problems, even speculating on future
filings for bankruptcy protection. The industry is going through difficult
times. We are all struggling with excess capacity, over-leveraged balance
sheets, and limited availability to additional capital.

We are no exception. We were obviously very disappointed with the
second quarter results. The June box office was down approximately 16%,
earnings before interest, taxes, depreciation & amortization (EBITDA) was
down approximately 12%.

However, our company has been aggressive and will continue to be
aggressive in dealing with the issues that face us in this difficult
environment. As a circuit, we are curtailing our capital programs and
working to accelerate our screen closings. We have done an extensive
strategic review of each of our theatres and each of our markets and have
targeted a significant number of sites and markets for potential closure or
disposal. We are also pursuing a number of operations / profit enhancing
initiatives.

We have engaged outside resources to help us implement this plan. By
using outside resources, management can focus on maximizing results
from our base of high performance sites that will remain long-term quality
assets for the company.

In addition to our operational restructuring efforts, the Company remains
focused on generating additional sources of liquidity. We believe that as of
today, we have an adequate liquidity reserve for the balance of the fiscal
year. We have negotiated $45 million in sale - leaseback transactions, of
which $20 million has already been received. The company is also
evaluating other liquidity sources including without limitation additional
financing and the sale of certain non - strategic assets.

There is no doubt that this is a tough operating environment, and will likely
remain difficult while the industry rationalization of its screens progresses.

For our part, we intend to continue to be a leader in the industry. We intend
to implement our restructuring plan as quickly and in as non disruptive a
way as possible. We intend to continue to proactively look for solutions.

Even in our tough industry environment, we continue to have our
employees best interests at heart. We appreciate your continued
enthusiasm and commitment to this Company and the theatre industry. As
the dust settles over the next couple of years, we are confident that our
industry will rebound as it has numerous times before in the face of
adversity.

Thank You,

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Things I never would think about - the owner takes. Door closers, exit signs, emregency lights, railings, etc. EVERYTHING.

Although ususally the seats are old and dingy so we leave those.

If anybody needs a theatre cleaned out --- we're pros.

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On the October Friday mid-afternoon of my visit shortly after its debut, the Warrinton had a total of 27 paying customers in its 22 screens. Some of the screens were running even without patrons. The 16 plex just up the road (which was showing the exact same movies) had 5 paying customers in the whole place.

In our hey-day (at my previous company), all concession and booth supplies became sunk costs once they were delivered to theatres.

All of the sudden, corporate had us inventorying and calculating values for all stock and supplies previously delivered.

When my boss (and friend) finally came to me and advised that I have an alternate employer lined up, he was pleased to find that I already had a list of prospects that I shared with him!

Some of these big players today owe more than all of their un-used xenon lamps and popcorn cups will ever add up to.

The president of that chain was a "Mike Cambell" wan-a-be, so that little chain just folded sooner.

Good luck to you.

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When I hear that 16 or 20 screen theatres have only 5 oy 27 or even 50 people in them for a weekday matinee I know why they are sinking. Those figures are absurd. I've heard that weeknights at many plexes aren't that much better. Why do they run all those shows then? Only a few years ago it was standard proceedure to run one matinee and two evening shows at many theatres in this area. Some theatres didn't run weekday matinees at all. Why run them if no one comes...it just doesn't make any sense to me.

I on the other hand own and operate a single screen theatre (sub run)in a small town and run a Wednesday matinee every week during the school year, and often every weekday
during the summer vacation period. I'm crying if I have less then 50 people in for my one screen, and that doesn't happen often. I usually get between 50 to 100 people for that matinee. On a good film it will bring in as many as 200 to 250. During the summer months, it is even better. And I'm not the only game around...there are five 8 to 16 screen plexes within ten miles of me.

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