Print Page  |  Close Window

SEC Filings

10-Q
CINEMARK HOLDINGS, INC. filed this Form 10-Q on 05/09/2018
Entire Document
 

 

Three months ended March 31, 2018 versus March 31, 2017

Revenues. Total revenues increased $0.4 million to $780.0 million for the three months ended March 31, 2018 (“first quarter of 2018”) from $779.6 million for the three months ended March 31, 2017 (“first quarter of 2017”), representing a 0.1% increase. The table below, presented by reportable operating segment, summarizes our revenue performance and certain key performance indicators for the three months ended March 31, 2018 and 2017.

 

 

U.S. Operating Segment

 

 

International Operating Segment

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Constant

Currency (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

 

2017

 

 

%

Change

 

 

2018

 

 

2017

 

 

%

Change

 

 

2018

 

 

%

Change

 

 

2018

 

 

2017

 

 

%

Change

 

Admissions revenues (1)

 

$

349.3

 

 

$

356.2

 

 

 

(1.9

)%

 

$

103.3

 

 

$

120.3

 

 

 

(14.1

)%

 

$

107.7

 

 

 

(10.5

)%

 

$

452.6

 

 

$

476.5

 

 

 

(5.0

)%

Concession revenues (1)

 

$

203.8

 

 

$

203.4

 

 

 

0.2

%

 

$

58.0

 

 

$

64.8

 

 

 

(10.5

)%

 

$

60.1

 

 

 

(7.3

)%

 

$

261.8

 

 

$

268.2

 

 

 

(2.4

)%

Other revenues (1)(2)

 

$

43.3

 

 

$

18.0

 

 

 

140.6

%

 

$

22.3

 

 

$

16.9

 

 

 

32.0

%

 

$

23.8

 

 

 

40.8

%

 

$

65.6

 

 

$

34.9

 

 

 

88.0

%

Total revenues (1)(2)

 

$

596.4

 

 

$

577.6

 

 

 

3.3

%

 

$

183.6

 

 

$

202.0

 

 

 

(9.1

)%

 

$

191.6

 

 

 

(5.1

)%

 

$

780.0

 

 

$

779.6

 

 

 

0.1

%

Attendance (1)

 

 

44.6

 

 

 

46.5

 

 

 

(4.1

)%

 

 

23.9

 

 

 

27.8

 

 

 

(14.0

)%

 

 

 

 

 

 

 

 

 

 

68.5

 

 

 

74.3

 

 

 

(7.8

)%

Average ticket price (1)

 

$

7.83

 

 

$

7.66

 

 

 

2.2

%

 

$

4.32

 

 

$

4.33

 

 

 

(0.2

)%

 

$

4.51

 

 

 

4.2

%

 

$

6.61

 

 

$

6.41

 

 

 

3.1

%

Concession revenues per patron (1)

 

$

4.57

 

 

$

4.37

 

 

 

4.6

%

 

$

2.43

 

 

$

2.33

 

 

 

4.3

%

 

$

2.51

 

 

 

7.7

%

 

$

3.82

 

 

$

3.61

 

 

 

5.8

%

 

(1)

Revenues and attendance amounts in millions.  Average ticket price is calculated as admissions revenues divided by attendance.  Concession revenues per patron is calculated as concession revenues divided by attendance.  

(2)

U.S. operating segment revenues include eliminations of intercompany transactions with the international operating segment. See Note 15 to our condensed consolidated financial statements.

(3)

Constant currency revenue amounts, which are non-GAAP measurements, were calculated using the average exchange rate for the corresponding month for 2017. We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results.   We are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

 

U.S. Admissions revenues decreased $6.9 million primarily due to a 4.1% decrease in attendance, partially offset by a 2.2% increase in average ticket price. The increase in concession revenues of $0.4 million was primarily due to a 4.6% increase in concession revenues per patron, partially offset by the 4.1% decrease in attendance. The decrease in attendance was due to the mix of films in the first quarter of 2018 compared to the first quarter of 2017, partially offset by the favorable impact of luxury lounger conversions and new theatres. The increase in average ticket price was primarily due to price increases. The increase in concession revenues per patron was primarily due to price increase, incremental sales and new theatres.  Other revenues increased $25.3 million primarily due to the impact of changes in revenue recognition as discussed in Note 3 to our condensed consolidated financial statements.  

 

International. Admissions revenues decreased $17.0 million as reported primarily due to a 14.0% decrease in attendance and a 0.2% decrease in average ticket price.  Admissions revenues decreased $12.6 million in constant currency. Concession revenues decreased $6.8 million as reported primarily due to the 14.0% decrease in attendance, partially offset by a 4.3% increase in concession revenues per patron.  Concession revenues decreased $4.7 million in constant currency. The decrease in attendance was driven by a weaker slate of films during the first quarter of 2018 compared to the first quarter of 2017.  Concession revenues per patron increased primarily due to price increases.  Other revenues increased primarily due to incremental screen advertising revenues as well as the impact of changes in revenue recognition as discussed in Note 3 to our condensed consolidated financial statements.

Cost of Operations. The table below summarizes our theatre operating costs (in millions) by reportable operating segment for the three months ended March 31, 2018 and 2017.

 

 

U.S. Operating Segment

 

 

International Operating Segment

 

 

Consolidated

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

Constant

Currency

2018 (1)

 

 

2018

 

 

2017

 

Film rentals and advertising

 

$

192.9

 

 

$

196.4

 

 

$

48.1

 

 

$

56.4

 

 

$

50.2

 

 

$

241.0

 

 

$

252.8

 

Concession supplies

 

 

28.5

 

 

 

28.1

 

 

 

12.3

 

 

 

14.0

 

 

 

12.8

 

 

 

40.8

 

 

 

42.1

 

Salaries and wages

 

 

71.7

 

 

 

63.2

 

 

 

21.4

 

 

 

21.0

 

 

 

22.7

 

 

 

93.1

 

 

 

84.2

 

Facility lease expense

 

 

61.0

 

 

 

61.4

 

 

 

21.1

 

 

 

22.9

 

 

 

21.7

 

 

 

82.1

 

 

 

84.3

 

Utilities and other

 

 

79.0

 

 

 

60.0

 

 

 

30.4

 

 

 

28.4

 

 

 

32.1

 

 

 

109.4

 

 

 

88.4

 

 

(1)

Constant currency expense amounts, which are non-GAAP measurements were calculated using the average exchange rate for the corresponding month for 2017. We translate the results of our international operating segment from local currencies into U.S. dollars using currency rates in effect at different points in time in accordance with U.S. GAAP. Significant changes in foreign exchange rates from one period to the next can result in meaningful variations in reported results. We are providing constant currency amounts for our international operating segment to present a period-to-period comparison of business performance that excludes the impact of foreign currency fluctuations.

 

U.S. Film rentals and advertising costs were $192.9 million, or 55.2% of admissions revenues, for the first quarter of 2018 compared to $196.4 million, or 55.1% of admissions revenues, for the first quarter of 2017. The increase in the film rentals

28