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Cinemark Holdings, Inc. Reports Revenues of $744.4 Million and Adjusted EBITDA of $168.4 Million for the Second Quarter of 2016

PLANO, Texas--(BUSINESS WIRE)--Aug. 9, 2016-- Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and six months ended June 30, 2016.

Cinemark Holdings, Inc.’s total revenues for the three months ended June 30, 2016 were $744.4 million compared to $799.9 million for the three months ended June 30, 2015. For the three months ended June 30, 2016, admissions revenues were $456.1 million and concession revenues were $253.6 million. Concession revenues per patron increased 2.7% to $3.47 and average ticket price was $6.25 for the three months ended June 30, 2016.

Adjusted EBITDA for the three months ended June 30, 2016 was $168.4 million compared to $194.5 million for the three months ended June 30, 2015. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

Net income attributable to Cinemark Holdings, Inc. for the three months ended June 30, 2016 was approximately $53.9 million compared to $70.3 million for the three months ended June 30, 2015. Diluted earnings per share for the three months ended June 30, 2016 was $0.46 compared to $0.61 for the three months ended June 30, 2015.

“While our industry faced a challenging second quarter box office hurdle, given last year’s all-time record-setting benchmark, we are pleased that our continued execution on our key initiatives yet again enabled Cinemark to outperform the industry. Our U.S. segment surpassed the North American industry’s box office by 120 basis points in the second quarter, marking 27 out of the past 30 quarters of outperformance. Furthermore, our international segment continues to demonstrate recession-resistant strength, having attracted a consistent number of patrons despite last year’s all-time high, as well as the economic and political challenges that exist across Latin America,” stated Mark Zoradi, Cinemark’s Chief Executive Officer. Mr. Zoradi continued, “Year-to-date industry box office has increased more than 3% through July, which has surpassed everyone's expectations, and we remain enthusiastic about the film content for the remainder of this year, as well as coming years, and how it will appeal to our patrons.”

Cinemark Holdings, Inc.’s total revenues for the six months ended June 30, 2016 increased to $1,449.3 million from $1,445.3 million for the six months ended June 30, 2015. During the six months ended June 30, 2016, admissions revenues were $891.9 million and concession revenues increased 3.7% to $491.4 million. Attendance increased 2.3% to 145.5 million patrons. Concession revenues per patron increased 1.5% to $3.38 and average ticket price was $6.13 for the six months ended June 30, 2016.

Adjusted EBITDA for the six months ended June 30, 2016 increased 1.2% to $353.0 million, compared to $348.9 million for the six months ended June 30, 2015. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

Net income attributable to Cinemark Holdings, Inc. for the six months ended June 30, 2016 was $112.4 million compared to $112.8 million for the six months ended June 30, 2015. Net income for the six months ended June 30, 2016 was impacted by a loss on debt amendments and refinancing of $13.3 million, which was primarily due to the refinancing of the Company’s 7.375% senior subordinated notes with an add-on to the Company’s 4.875% senior notes. Diluted earnings per share for the six months ended June 30, 2016 was consistent with the six months ended June 30, 2015 at $0.97, even with the aforementioned loss on debt amendments and refinancing.

On June 30, 2016, the Company’s aggregate screen count was 5,888. As of June 30, 2016, the Company had signed commitments to open nine new theatres and 69 screens by the end of 2016 and open 12 new theatres with 109 screens subsequent to 2016.

Conference Call/Webcast – Today at 8:30AM ET

Telephone: via 800-374-1346 or 706-679-3149 (for international callers).

Live Webcast/Replay: Available live at investors.cinemark.com. A replay will be available following the call and archived for a limited time.

About Cinemark Holdings, Inc.

Cinemark is a leading domestic and international motion picture exhibitor, operating 522 theatres with 5,888 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries as of June 30, 2016. For more information go to investors.cinemark.com.

Forward-looking Statements

This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The “forward-looking statements” include our current expectations, assumptions, estimates and projections about our business and our industry. They include statements relating to future revenues, expenses and profitability, the future development and expected growth of our business, projected capital expenditures, attendance at movies generally or in any of the markets in which we operate, the number or diversity of popular movies released and our ability to successfully license and exhibit popular films, national and international growth in our industry, competition from other exhibitors and alternative forms of entertainment and determinations in lawsuits in which we are defendants. You can identify forward-looking statements by the use of words such as “may,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “anticipates,” “believes,” “plans,” “expects,” “future” and “intends” and similar expressions which are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. In evaluating forward-looking statements, you should carefully consider the risks and uncertainties described in the “Risk Factors” section or other sections in the Company’s Annual Report on Form 10-K filed February 24, 2016 and quarterly reports on Form 10-Q. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements and risk factors. Forward-looking statements contained in this press release reflect our view only as of the date of this press release. We undertake no obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 
Cinemark Holdings, Inc.
Financial and Operating Summary
(unaudited, in thousands)
         
Three months ended June 30, Six months ended June 30,

2016

2015

2016

2015

Statement of income data:
Revenues
Admissions $ 456,075 $ 502,963 $ 891,895 $ 903,625
Concession 253,592 259,530 491,407 473,957
Other   34,737     37,439     65,971     67,748  
Total revenues 744,404 799,932 1,449,273 1,445,330
Cost of operations
Film rentals and advertising 250,421 278,125 483,335 485,735
Concession supplies 39,208 40,903 75,111 73,406
Facility lease expense 80,252 82,391 159,056 162,008
Other theatre operating expenses 173,367 168,844 329,880 321,473
General and administrative expenses 35,987 39,277 73,853 77,202
Depreciation and amortization 52,358 46,569 101,687 91,901
Impairment of long-lived assets 1,425 3,528 1,917 4,322
Loss on sale of assets and other   5,824     5,802     4,045     4,352  
Total cost of operations   638,842     665,439     1,228,884     1,220,399  
Operating income 105,562 134,493 220,389 224,931
Interest expense (1) (27,262 ) (28,304 ) (55,321 ) (56,511 )
Loss on debt amendments and refinancing (98 ) (925 ) (13,284 ) (925 )
Distributions from NCM 193 8,736 8,499
Foreign currency gain (loss) 512 1,439 2,398 (6,767 )
Other income   7,078     6,961     15,572     13,719  
Income before income taxes 85,985 113,664 178,490 182,946
Income taxes   31,617     42,774     65,076     69,154  
Net income $ 54,368 $ 70,890 $ 113,414 $ 113,792
Less: Net income attributable to noncontrolling interests   462     632     983     1,013  
Net income attributable to Cinemark Holdings, Inc. $ 53,906   $ 70,258   $ 112,431   $ 112,779  

Earnings per share attributable to Cinemark Holdings, Inc.’s common stockholders:

Basic $ 0.46   $ 0.61   $ 0.97   $ 0.97  
Diluted $ 0.46   $ 0.61   $ 0.97   $ 0.97  
 
Weighted average diluted shares outstanding   115,758     115,328     115,660     115,215  
 
Other financial data:
Adjusted EBITDA (2) $ 168,395   $ 194,498   $ 353,042   $ 348,883  

________________________________

(1) Includes amortization of debt issue costs.
(2) Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of Adjusted EBITDA to net income is provided in the financial schedules accompanying this press release.
 
   
As of As of
June 30, December 31,

2016

2015

Balance sheet data:
Cash and cash equivalents $ 583,600 $ 588,539
Theatre properties and equipment, net $ 1,590,780 $ 1,505,069
Total assets $ 4,215,693 $ 4,126,497
Long-term debt, including current portion $ 1,789,392 $ 1,781,335
Equity $ 1,200,066 $ 1,110,813
 
   
Three months ended Six months ended
June 30, June 30,

2016

 

2015

2016

 

2015

Other operating data:
  Attendance (patrons, in millions):
Domestic 45.5 49.0 90.0 90.5
International   27.5   27.7   55.5   51.7
Worldwide   73.0   76.7   145.5   142.2
 
Average ticket price (in dollars):
Domestic $ 7.59 $ 7.67 $ 7.59 $ 7.42
International $ 4.03 $ 4.60 $ 3.77 $ 4.49
Worldwide $ 6.25 $ 6.56 $ 6.13 $ 6.35
 
Concession revenues per patron (in dollars):
Domestic $ 4.26 $ 3.98 $ 4.20 $ 3.92
International $ 2.17 $ 2.33 $ 2.05 $ 2.31
Worldwide $ 3.47 $ 3.38 $ 3.38 $ 3.33
 
Average screen count (month end average):
Domestic 4,566 4,498 4,543 4,497
International   1,298   1,209   1,291   1,196
Worldwide   5,864   5,707   5,834   5,693
 
     
Segment Information
(unaudited, in thousands)
 
Three months ended Six months ended
June 30, June 30,

2016

 

2015

2016

 

2015

Revenues
U.S. $ 560,534 $ 592,482 $ 1,104,449 $ 1,066,777
International 187,561 211,505 351,736 385,838
Eliminations   (3,691 )   (4,055 )   (6,912 )   (7,285 )
Total revenues $ 744,404   $ 799,932   $ 1,449,273   $ 1,445,330  
Adjusted EBITDA
U.S. $ 127,845 $ 144,649 $ 271,478 $ 259,020
International   40,550     49,849     81,564     89,863  
Total Adjusted EBITDA $ 168,395   $ 194,498   $ 353,042   $ 348,883  
Capital expenditures
U.S. $ 58,182 $ 43,947 $ 99,380 $ 118,214
International   25,597     26,018     32,144     37,498  
Total capital expenditures $ 83,779   $ 69,965   $ 131,524   $ 155,712  
 
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
 
Three months ended   Six months ended
June 30, June 30,

2016

 

2015

2016

 

2015

Net income $ 54,368 $ 70,890 $ 113,414 $ 113,792
Income taxes 31,617 42,774 65,076 69,154
Interest expense 27,262 28,304 55,321 56,511
Other income (7,590 ) (8,400 ) (17,970 ) (6,952 )
Loss on debt amendments and refinancing 98 925 13,284 925
Other cash distributions from equity investees (2) 184 1,045 8,270 8,309
Depreciation and amortization 52,358 46,569 101,687 91,901
Impairment of long-lived assets 1,425 3,528 1,917 4,322
Loss on sale of assets and other 5,824 5,802 4,045 4,352
Deferred lease expenses - theatres (3) 26 (351 ) (182 ) (819 )
Deferred lease expenses – DCIP equipment (4) (233 ) (234 ) (465 ) (469 )
Amortization of long-term prepaid rents (3) 514 669 985 1,382
Share based awards compensation expense (5)   2,542     2,977     7,660     6,475  
Adjusted EBITDA (1) $ 168,395   $ 194,498   $ 353,042   $ 348,883  
 
(1)   Adjusted EBITDA as calculated in the chart above represents net income before income taxes, interest expense, other income, loss on debt amendments and refinancing, other cash distributions from equity investees, depreciation and amortization, impairment of long-lived assets, loss on sale of assets and other, changes in deferred lease expense, amortization of long-term prepaid rents and share based awards compensation expense. Adjusted EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net income as an indicator of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and liquidity, estimate our value and evaluate our ability to service debt. In addition, we use Adjusted EBITDA for incentive compensation purposes. Adjusted EBITDA margin represents Adjusted EBITDA divided by total revenues.
(2) Represents cash distributions received from equity investees that were recorded as a reduction of the respective investment balances. Adjusted EBITDA for the three and six months ended June 30, 2015 has been adjusted to reflect a comparable presentation.
(3) Non-cash expense included in facility lease expense.
(4) Non-cash expense included in other theatre operating expenses.
(5) Non-cash expense included in general and administrative expenses.
 

Source: Cinemark Holdings, Inc.

Cinemark Holdings, Inc.
Financial Contact:
Chanda Brashears, 972-665-1671
cbrashears@cinemark.com
Media Contact:
James Meredith, 972-665-1060
communications@cinemark.com