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Cinemark Holdings, Inc. Reports a 0.9% Increase in Revenues to $751.2 Million for the Second Quarter of 2017

PLANO, Texas--(BUSINESS WIRE)--Aug. 4, 2017-- 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, 2017.

Cinemark Holdings, Inc.’s total revenues for the three months ended June 30, 2017 increased 0.9% to $751.2 million from $744.4 million for the three months ended June 30, 2016. For the three months ended June 30, 2017, admissions revenues were $449.9 million and concession revenues were $262.3 million. Concession revenues per patron increased 8.9% to $3.78 and average ticket price increased 3.7% to $6.48 for the three months ended June 30, 2017.

Net income attributable to Cinemark Holdings, Inc. for the three months ended June 30, 2017 was $51.2 million compared to $53.9 million for the three months ended June 30, 2016. Diluted earnings per share for the three months ended June 30, 2017 was $0.44 compared to $0.46 for the three months ended June 30, 2016.

Adjusted EBITDA for the three months ended June 30, 2017 increased 1.4% to $170.7 million from $168.4 million for the three months ended June 30, 2016. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

“We continue to be pleased with the consistency of our financial performance, including our second quarter’s global revenue growth, record food and beverage per caps, and year-over-year box office results that again exceeded the North American industry,” stated Mark Zoradi, Cinemark’s CEO. “We remain optimistic about film content for the remainder of the year, as well as the future growth potential that our strong foundation and strategic initiatives provide for our Company.”

Cinemark Holdings, Inc.’s total revenues for the six months ended June 30, 2017 increased 5.6% to $1,530.8 million from $1,449.3 million for the six months ended June 30, 2016. During the six months ended June 30, 2017, admissions revenues increased 3.9% to $926.4 million and concession revenues increased 8.0% to $530.5 million. Concession revenues per patron increased 9.2% to $3.69 and average ticket price increased 5.2% to $6.45 for the six months ended June 30, 2017.

Net income attributable to Cinemark Holdings, Inc. for the six months ended June 30, 2017 was $131.0 million compared to $112.4 million for the six months ended June 30, 2016. Diluted earnings per share for the six months ended June 30, 2017 was $1.12 compared to $0.97 for the six months ended June 30, 2016. Net income for the six months ended June 30, 2016 was impacted by a pre-tax 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.

Adjusted EBITDA for the six months ended June 30, 2017 increased 8.4% to $382.6 million, compared to $353.0 million for the six months ended June 30, 2016. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release.

On June 30, 2017, the Company’s aggregate screen count was 5,926. As of June 30, 2017, the Company had signed commitments to open five new theatres and 48 screens by the end of 2017 and open 14 new theatres with 114 screens subsequent to 2017.

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 529 theatres with 5,926 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries as of June 30, 2017. 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 23, 2017 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,

2017 2016 2017 2016
Statement of income data:
Revenues
Admissions $ 449,880 $ 456,075 $ 926,349 $ 891,895
Concession 262,322 253,592 530,546 491,407
Other 38,993     34,737 73,910     65,971
Total revenues 751,195 744,404 1,530,805 1,449,273
Cost of operations
Film rentals and advertising 246,556 250,421 499,374 483,335
Concession supplies 41,839 39,208 83,939 75,111
Facility lease expense 82,388 80,252 166,650 159,056
Other theatre operating expenses 180,865 173,367 353,423 329,880
General and administrative expenses 37,834 35,987 76,050 73,853
Depreciation and amortization 59,137 52,358 116,493 101,687
Impairment of long-lived assets 4,301 1,425 4,574 1,917
Loss on sale of assets and other 54     5,824 888     4,045
Total cost of operations 652,974     638,842 1,301,391     1,228,884
Operating income 98,221 105,562 229,414 220,389
Interest expense (1) (26,522) (27,262) (52,891) (55,321)
Loss on debt amendments and refinancing (246) (98) (246) (13,284)
Distributions from NCM 2,772 193 9,560 8,736
Foreign currency exchange gain (loss) (155) 512 1,434 2,398
Other income 7,185     7,078 18,578     15,572
Income before income taxes 81,255 85,985 205,849 178,490
Income taxes 29,445     31,617 73,845     65,076
Net income $ 51,810 $ 54,368 $ 132,004 $ 113,414
Less: Net income attributable to noncontrolling interests 571     462 1,037     983
Net income attributable to Cinemark Holdings, Inc. $ 51,239     $ 53,906 $ 130,967     $ 112,431
 

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

Basic $ 0.44     $ 0.46 $ 1.12     $ 0.97
Diluted $ 0.44     $ 0.46 $ 1.12     $ 0.97
 
Weighted average diluted shares outstanding 116,072     115,758 116,020     115,660
 
Other financial data:
Adjusted EBITDA (2) $ 170,679     $ 168,395 $ 382,559     $ 353,042

_______________

(1)

 

Includes amortization of debt issue costs.

(2)

Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of Adjusted EBITDA to net income, the most comparable GAAP measure, is provided in the financial schedules accompanying this press release.

 
       
As of As of
June 30, December 31,
2017 2016
Balance sheet data:
Cash and cash equivalents $ 504,179 $ 561,235
Theatre properties and equipment, net $ 1,756,986 $ 1,704,536
Total assets $ 4,354,525 $ 4,306,633
Long-term debt, including current portion $ 1,789,203 $ 1,788,112
Equity $ 1,335,421 $ 1,272,960
 
         

Three months ended
June 30,

Six months ended
June 30,

2017     2016 2017     2016
Other operating data:
Attendance (patrons, in millions):
Domestic 43.0 45.5 89.5 90.0
International   26.4       27.5   54.2       55.5
Worldwide   69.4       73.0   143.7       145.5
 
Average ticket price (in dollars):
Domestic $ 7.79 $ 7.59 $ 7.72 $ 7.59
International $ 4.35 $ 4.03 $ 4.34 $ 3.77
Worldwide $ 6.48 $ 6.25 $ 6.45 $ 6.13
 
Concession revenues per patron (in dollars):
Domestic $ 4.59 $ 4.26 $ 4.48 $ 4.20
International $ 2.46 $ 2.17 $ 2.39 $ 2.05
Worldwide $ 3.78 $ 3.47 $ 3.69 $ 3.38
 
Average screen count (month end average):
Domestic 4,537 4,566 4,544 4,543
International   1,367       1,298   1,358       1,291
Worldwide   5,904       5,864   5,902       5,834
 
         

Segment Information
(unaudited, in thousands)

 

Three months ended
June 30,

Six months ended
June 30,

2017     2016 2017     2016
Revenues
U.S. $ 554,929 $ 560,534 $ 1,136,138 $ 1,104,449
International 199,926 187,561 401,994 351,736
Eliminations   (3,660 )       (3,691 )   (7,327 )       (6,912 )
Total revenues $ 751,195       $ 744,404   $ 1,530,805       $ 1,449,273  
Adjusted EBITDA
U.S. $ 129,394 $ 127,845 $ 294,048 $ 271,478
International   41,285         40,550     88,511         81,564  
Total Adjusted EBITDA $ 170,679       $ 168,395   $ 382,559       $ 353,042  
Capital expenditures
U.S. $ 77,175 $ 58,182 $ 155,992 $ 99,380
International   14,438         25,597     26,808         32,144  
Total capital expenditures $ 91,613       $ 83,779   $ 182,800       $ 131,524  
 
 
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
   
Three months ended       Six months ended
June 30, June 30,
2017     2016 2017     2016
Net income $ 51,810 $ 54,368 $ 132,004 $ 113,414
Income taxes 29,445 31,617 73,845 65,076
Interest expense 26,522 27,262 52,891 55,321
Other income (7,030 ) (7,590 ) (20,012 ) (17,970 )
Loss on debt amendments and refinancing 246 98 246 13,284
Other cash distributions from equity investees (2) 2,870 184 14,919 8,270
Depreciation and amortization 59,137 52,358 116,493 101,687
Impairment of long-lived assets 4,301 1,425 4,574 1,917
Loss on sale of assets and other 54 5,824 888 4,045

Deferred lease expenses – theatres (3)

(120 ) 26 (234 ) (182 )

Deferred lease expenses – DCIP equipment (4)

(255 ) (233 ) (488 ) (465 )
Amortization of long-term prepaid rents (3) 496 514 989 985
Share based awards compensation expense (5)   3,203         2,542     6,444         7,660  
Adjusted EBITDA (1) $ 170,679       $ 168,395   $ 382,559       $ 353,042  
 
(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.
(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
or
Media Contact:
James Meredith, 972-665-1060
communications@cinemark.com