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SEC Filings

10-Q
CINEMARK HOLDINGS, INC. filed this Form 10-Q on 05/09/2018
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and advertising rate was primarily due to the relative contribution of higher grossing films to overall box office during the first quarter of 2018. Concession supplies expense was $28.5 million, or 14.0% of concession revenues, for the first quarter of 2018 compared to $28.1 million, or 13.8% of concession revenues, for the first quarter of 2017.

Salaries and wages increased to $71.7 million for the first quarter of 2018 from $63.2 million for the first quarter of 2017 primarily due to staffing at new and recently remodeled theatres, increases in minimum and other wages and increased insurance and other benefit costs. Facility lease expense decreased to $61.0 million for the first quarter of 2018 from $61.4 million for the first quarter of 2017 primarily due to decreased percentage rent due to the decline in admissions revenues. Utilities and other costs increased to $79.0 million for the first quarter of 2018 from $60.0 million for the first quarter of 2017 primarily due to the presentation of transactional fees on a gross basis versus net basis due to the adoption of ASC Topic 606 (see Note 3 to our condensed consolidated financial statements).

 

International. Film rentals and advertising costs were $48.1 million ($50.2 million in constant currency), or 46.6% of admissions revenues, for the first quarter of 2018 compared to $56.4 million, or 46.9% of admissions revenues, for the first quarter of 2017. The decrease in the film rental and advertising rate was primarily due to the weaker slate of films during the first quarter of 2018 compared to the first quarter of 2017.  Concession supplies expense was $12.3 million ($12.8 million in constant currency), or 21.2% of concession revenues, for the first quarter of 2018 compared to $14.0 million, or 21.6% of concession revenues, for the first quarter of 2017.

Salaries and wages increased to $21.4 million ($22.7 million in constant currency) for the first quarter of 2018 compared to $21.0 million for the first quarter of 2017.  The as reported increase was due to increased local currency wage rates primarily due to inflation and new theatres.  Facility lease expense decreased to $21.1 million ($21.7 million in constant currency) for the first quarter of 2018 compared to $22.9 million for the first quarter of 2017.  The as reported decrease was due to decreased percentage rent due to the decline in revenues.  Utilities and other costs increased to $30.4 million ($32.1 million in constant currency) for the first quarter of 2018 compared to $28.4 million for the first quarter of 2017.  The as reported increase was primarily due to the presentation of transactional fees on a gross basis versus net basis due to the adoption of ASC Topic 606 (see Note 3 to our condensed consolidated financial statements).    

General and Administrative Expenses. General and administrative expenses increased to $42.4 million for the first quarter of 2018 from $38.2 million for the first quarter of 2017. The increase was primarily due to increased salaries, insurance, benefits costs and professional fees.

Depreciation and Amortization. Depreciation and amortization expense increased to $64.4 million during the first quarter of 2018 compared to $57.3 million during the first quarter of 2017. The increase was primarily due to theatre remodels and new theatres.

Impairment of Long-Lived Assets.  We recorded asset impairment charges on assets held and used of $0.6 million during the first quarter of 2018 compared to $0.3 million during the first quarter of 2017. The long-lived asset impairment charges recorded during each of the periods presented were specific to theatres that were directly and individually impacted by increased competition, adverse changes in market demographics or adverse changes in the development or the conditions of the areas surrounding the theatre. Impairment charges for the first quarter of 2018 impacted two of our twenty-seven reporting units. See Note 11 to our condensed consolidated financial statements.

Loss on Sale of Assets and Other. We recorded a loss on sale of assets and other of $3.9 million during the first quarter of 2018 compared to $0.8 million during the first quarter of 2017. Activity for the first quarter of 2018 and the first quarter of 2017 was primarily due to the retirement of assets related to theatre remodels.  

Interest Expense.  Interest costs incurred, including amortization of debt issue costs, were $27.1 million during the first quarter of 2018 compared to $26.4 million during the first quarter of 2017.  The increase was primarily due to an increase in the variable rate at which our term loan accrues interest.  

Loss on Debt Amendments.  We recorded a loss on debt amendments of $1.4 million for the first quarter of 2018 related to amendments to our senior secured credit facility.  See Note 5 to our condensed consolidated financial statements for further discussion.  

Distributions from NCM.  We recorded distributions from NCM of $6.4 million during the first quarter of 2018 compared to $6.8 million recorded during the first quarter of 2017, which were in excess of the carrying value of our Tranche 1 investment. See Note 7 to our condensed consolidated financial statements.  

Interest expense – NCM.  We recorded non-cash interest expense of $5.0 million for the first quarter of 2018 related to the significant financing component associated with certain of our agreements with NCM.  See Note 3 to our condensed consolidated financial statements for further discussion.  

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