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Cinemark Holdings, Inc. Reports a 9.8% Increase in Revenues and a 42% Increase in Net Income for the Third Quarter of 2016

PLANO, Texas--(BUSINESS WIRE)--Nov. 8, 2016-- Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three and nine months ended September 30, 2016.

Cinemark Holdings, Inc.’s total revenues for the three months ended September 30, 2016 increased 9.8% to $768.6 million from $700.1 million for the three months ended September 30, 2015. For the three months ended September 30, 2016, admissions revenues increased 9.4% to $472.9 million and concession revenues increased 13.6% to $261.4 million. Attendance increased 7.3% to 76.2 million patrons, concession revenues per patron increased 5.9% to $3.43 and average ticket price increased 2.0% to $6.21 for the three months ended September 30, 2016.

Net income attributable to Cinemark Holdings, Inc. for the three months ended September 30, 2016 increased 42% to approximately $65.7 million from $46.3 million for the three months ended September 30, 2015. Diluted earnings per share for the three months ended September 30, 2016 increased 40% to $0.56 from $0.40 for the three months ended September 30, 2015.

Adjusted EBITDA for the three months ended September 30, 2016 increased 16% to $184.9 million from $159.1 million for the three months ended September 30, 2015. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

“The robust film environment, coupled with our focus and execution on our strategic initiatives, enabled us to deliver a 9.8% increase in total revenues, 16% growth in Adjusted EBITDA and a 42% increase in net income,” stated Mark Zoradi, Cinemark’s CEO. “We are pleased to see how our strategic investments and emphasis on enriching the guest experience favorably impacted our third quarter results. We remain opportunistic regarding these endeavors with an eye toward driving long-term shareholder value.”

Cinemark Holdings, Inc.’s total revenues for the nine months ended September 30, 2016 increased 3.4% to $2,217.9 million from $2,145.4 million for the nine months ended September 30, 2015. For the nine months ended September 30, 2016, admissions revenues increased 2.2% to $1,364.8 million and concession revenues increased 6.9% to $752.8 million. Attendance increased 4.0% to 221.7 million patrons, concession revenues per patron increased 3.0% to $3.40 and average ticket price was $6.16 for the nine months ended September 30, 2016.

Net income attributable to Cinemark Holdings, Inc. for the nine months ended September 30, 2016 increased 12% to $178.1 million from $159.1 million for the nine months ended September 30, 2015. Net income for the nine months ended September 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 nine months ended September 30, 2016 increased 12% to $1.53 from $1.37 for the nine months ended September 30, 2015, even with the aforementioned loss on debt amendments and refinancing.

Adjusted EBITDA for the nine months ended September 30, 2016 increased approximately 6% to $537.9 million from $508.0 million for the nine months ended September 30, 2015. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

On September 30, 2016, the Company’s aggregate screen count was 5,865. As of September 30, 2016, the Company had signed commitments to open 7 new theatres and 60 screens by the end of 2016 and open 16 new theatres with 147 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 5,865 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries as of September 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
September 30,

Nine months ended
September 30,

2016

2015

2016

2015

Statement of income data:

 

Revenues
Admissions $ 472,842 $ 432,136 $ 1,364,737 $ 1,335,761
Concession 261,391 230,233 752,798 704,190
Other   34,341         37,687     100,312         105,435  
Total revenues 768,574 700,056 2,217,847 2,145,386
Cost of operations
Film rentals and advertising 249,766 227,571 733,101 713,306
Concession supplies 41,888 36,039 116,999 109,445
Facility lease expense 82,848 80,604 241,904 242,612
Other theatre operating expenses 179,459 169,940 509,339 491,413
General and administrative expenses 35,290 39,099 109,143 116,301
Depreciation and amortization 54,187 47,543 155,874 139,444
Impairment of long-lived assets 406 633 2,323 4,955
(Gain) loss on sale of assets and other   6,940         (500 )   10,985         3,852  
Total cost of operations   650,784         600,929     1,879,668         1,821,328  
Operating income 117,790 99,127 338,179 324,058
Interest expense (1) (26,659 ) (28,419 ) (81,980 ) (84,930 )
Loss on debt amendments and refinancing - - (13,284 ) (925 )
Distributions from NCM 1,381 4,601 10,117 13,100
Foreign currency exchange gain (loss) 485 (11,935 ) 2,883 (18,702 )
Other income   14,055         13,436     29,627         27,155  
Income before income taxes 107,052 76,810 285,542 259,756
Income taxes   40,926         30,109     106,002         99,263  
Net income 66,126 46,701 179,540 160,493
Less: Net income attributable to noncontrolling interests   471         362     1,454         1,375  
Net income attributable to Cinemark Holdings, Inc. $ 65,655       $ 46,339   $ 178,086       $ 159,118  

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

Basic   115,601         115,164     115,475         115,051  
Diluted   115,793         115,356     115,706         115,279  
 
Weighted average diluted shares outstanding $ 0.56       $ 0.40   $ 1.53       $ 1.37  
 

Other financial data:

Adjusted EBITDA (2)

$ 184,891       $ 159,147   $ 537,933       $ 508,030  

________________________________

(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
September 30, December 31,

2016

2015

Balance sheet data:
Cash and cash equivalents $ 527,111 $ 588,539
Theatre properties and equipment, net $ 1,613,109 $ 1,505,069
Total assets $ 4,176,619 $ 4,126,497
Long-term debt, including current portion $ 1,790,793 $ 1,781,335
Equity $ 1,233,616 $ 1,110,813
 
       

Three months ended
September 30,

Nine months ended
September 30,

2016

   

2015

2016

   

2015

Other operating data:
  Attendance (patrons, in millions):
Domestic 48.0 43.8 138.0 134.3
International 28.2     27.2 83.7     78.9
Worldwide 76.2     71.0 221.7     213.2
 
Average ticket price (in dollars):
Domestic $ 7.39 $ 7.27 $ 7.52 $ 7.37
International $ 4.18 $ 4.18 $ 3.91 $ 4.38
Worldwide $ 6.21 $ 6.09 $ 6.16 $ 6.27
 
Concession revenues per patron (in dollars):
Domestic $ 4.11 $ 3.85 $ 4.17 $ 3.90
International $ 2.27 $ 2.27 $ 2.12 $ 2.30
Worldwide $ 3.43 $ 3.24 $ 3.40 $ 3.30
 
Average screen count (month end average):
Domestic 4,563 4,493 4,547 4,496
International 1,317     1,250 1,299     1,214
Worldwide 5,880     5,743 5,846     5,710
 
         

Segment Information

(unaudited, in thousands)

 

Three months ended
September 30,

Nine months ended
September 30,

2016

   

2015

2016

   

2015

Revenues
U.S. $ 572,916 $ 509,330 $ 1,677,365 $ 1,576,107
International 199,476 194,497 551,212 580,335
Eliminations   (3,818 )       (3,771 )   (10,730 )       (11,056 )
Total revenues $

768,574

      $ 700,056   $ 2,217,847       $ 2,145,386  
Adjusted EBITDA
U.S. $ 137,540 $ 113,059 $ 409,018 $ 372,079
International   47,351         46,088     128,915         135,951  
Total Adjusted EBITDA $ 184,891       $ 159,147   $ 537,933       $ 508,030  
Capital expenditures
U.S. $ 75,839 $ 48,868 $ 175,218 $ 167,082
International   22,984         27,771     55,128         65,269  
Total capital expenditures $ 98,823       $ 76,639   $ 230,346       $ 232,351  
 
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
   
Three months ended     Nine months ended
September 30, September 30,

2016

   

2015

2016

   

2015

Net income $ 66,126 $ 46,701 $ 179,540 $ 160,493
Income taxes 40,926 30,109 106,002 99,263
Interest expense 26,659 28,419 81,980 84,930
Other income (14,540 ) (1,501 ) (32,510 ) (8,453 )
Loss on debt amendments and refinancing - - 13,284 925
Other cash distributions from equity investees (2) 1,391 4,370 9,660 12,679
Depreciation and amortization 54,187 47,543 155,874 139,444
Impairment of long-lived assets 406 633 2,323 4,955
(Gain) loss on sale of assets and other 6,940 (500 ) 10,985 3,852
Deferred lease expenses - theatres (3) 70 (289 ) (111 ) (1,108 )
Deferred lease expenses – DCIP equipment (4) (232 ) (232 ) (698 ) (701 )
Amortization of long-term prepaid rents (3) 371 519 1,357 1,901
Share based awards compensation expense (5)   2,587         3,375     10,247         9,850  
Adjusted EBITDA (1) $ 184,891       $ 159,147   $ 537,933       $ 508,030  
 
   

(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, (gain) 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 nine months ended September 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:
Chanda Brashears, 972-665-1671
cbrashears@cinemark.com
or
Media:
James Meredith, 972-665-1060
communications@cinemark.com