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| 8-K - FORM 8-K - Cinemark Holdings, Inc. | d596710d8k.htm |
Exhibit 99.1
CINEMARK HOLDINGS, INC. REPORTS GLOBAL REVENUES OF $780 MILLION FOR THE FIRST QUARTER OF 2018
Plano, TX, May 9, 2018 – Cinemark Holdings, Inc. (NYSE: CNK), one of the largest motion picture exhibitors in the world, today reported results for the three months ended March 31, 2018.
Cinemark Holdings, Inc.’s total revenues for the three months ended March 31, 2018 were $780.0 million compared to $779.6 million for the three months ended March 31, 2017. For the three months ended March 31, 2018, admissions revenues were $452.6 million and concession revenues were $261.8 million. Average ticket price increased 3.1% to $6.61 and concession revenues per patron increased 5.8% to $3.82 for the three months ended March 31, 2018.
Net income attributable to Cinemark Holdings, Inc. for the three months ended March 31, 2018 was $62.0 million compared to $79.7 million for the three months ended March 31, 2017. Diluted earnings per share for the three months ended March 31, 2018 was $0.53 compared to $0.68 for the three months ended March 31, 2017.
Adjusted EBITDA for the three months ended March 31, 2018 were $193.4 million compared to $211.9 million for the three months ended March 31, 2017. Reconciliations of non-GAAP financial measures are provided in the financial schedules accompanying this press release and at investors.cinemark.com.
“Fueled by the unprecedented success of Black Panther, the North American industry box office results in the first quarter far surpassed expectations, demonstrating the powerful potential of a break-out film,” stated Mark Zoradi, Cinemark’s Chief Executive Officer.
“And driven by the benefits we continue to derive from our strategic initiatives and actions, Cinemark again outperformed industry attendance and box office results, while maintaining the consistency and strength of our operating margins.”
As of March 31, 2018, the Company’s aggregate screen count was 5,964 and the Company had commitments to open 12 new theatres and 79 screens during the remainder of 2018 and 11 new theatres and 106 screens subsequent to 2018.
Conference Call/Webcast – Today at 8:30 AM 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 533 theatres with 5,964 screens in 41 U.S. states, Brazil, Argentina and 13 other Latin American countries as of March 31, 2018. For more information go to investors.cinemark.com.
Financial Contact :
Chanda Brashears – 972-665-1671 or cbrashears@cinemark.com
Media Contact:
James Meredith – 972-665-1060 or communications@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, 2018. 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.
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Cinemark Holdings, Inc.
Financial and Operating Summary
(unaudited, in thousands, except per share amounts)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2018 | 2017 | |||||||
| Statement of income data: |
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| Revenues |
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| Admissions |
$ | 452,624 | $ | 476,469 | ||||
| Concession |
261,772 | 268,224 | ||||||
| Other |
65,575 | 34,917 | ||||||
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| Total revenues |
779,971 | 779,610 | ||||||
| Cost of operations |
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| Film rentals and advertising |
240,915 | 252,818 | ||||||
| Concession supplies |
40,824 | 42,100 | ||||||
| Salaries and wages |
93,158 | 84,201 | ||||||
| Facility lease expense |
82,091 | 84,262 | ||||||
| Utilities and other |
109,432 | 88,357 | ||||||
| General and administrative expenses |
42,384 | 38,216 | ||||||
| Depreciation and amortization |
64,395 | 57,356 | ||||||
| Impairment of long-lived assets |
591 | 273 | ||||||
| Loss on sale of assets and other |
3,939 | 834 | ||||||
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| Total cost of operations |
677,729 | 648,417 | ||||||
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| Operating income |
102,242 | 131,193 | ||||||
| Interest expense |
(27,115 | ) | (26,369 | ) | ||||
| Loss on debt amendments |
(1,484 | ) | — | |||||
| Interest income |
2,238 | 1,333 | ||||||
| Foreign currency exchange gain |
1,378 | 1,589 | ||||||
| Distributions from NCM |
6,358 | 6,788 | ||||||
| Interest expense - NCM |
(4,979 | ) | — | |||||
| Equity in income of affiliates |
8,636 | 10,060 | ||||||
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| Income before income taxes |
87,274 | 124,594 | ||||||
| Income taxes |
25,097 | 44,400 | ||||||
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| Net income |
$ | 62,177 | $ | 80,194 | ||||
| Less: Net income attributable to noncontrolling interests |
156 | 466 | ||||||
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| Net income attributable to Cinemark Holdings, Inc. |
$ | 62,021 | $ | 79,728 | ||||
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| Earnings per share attributable to Cinemark Holdings, Inc.‘s common stockholders |
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| Basic |
$ | 0.53 | $ | 0.68 | ||||
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| Diluted |
$ | 0.53 | $ | 0.68 | ||||
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| Weighted average shares outstanding |
116,143 | 115,915 | ||||||
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Other Operating Data
(unaudited, in thousands)
| As of | As of | |||||||
| March 31, | December 31, | |||||||
| 2018 | 2017 | |||||||
| Balance sheet data: |
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| Cash and cash equivalents |
$ | 474,046 | $ | 522,547 | ||||
| Theatre properties and equipment, net |
$ | 1,835,652 | $ | 1,828,054 | ||||
| Total assets |
$ | 4,413,471 | $ | 4,470,893 | ||||
| Long-term debt, including current portion, net of unamortized debt issue costs |
$ | 1,783,236 | $ | 1,787,480 | ||||
| Equity |
$ | 1,471,991 | $ | 1,405,688 | ||||
Segment Information
(unaudited, in millions, except per patron data)
| U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, |
Three Months Ended March 31, |
Constant Currency (1) |
Three Months Ended March 31, |
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| 2018 | 2017 | % Change |
2018 | 2017 | % Change |
2018 | % Change |
2018 | 2017 | % Change |
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| Admissions revenues |
$ | 349.3 | $ | 356.2 | (1.9 | )% | $ | 103.3 | $ | 120.3 | (14.1 | )% | $ | 107.7 | (10.5 | )% | $ | 452.6 | $ | 476.5 | (5.0 | )% | ||||||||||||||||||||||
| Concession revenues |
$ | 203.8 | $ | 203.4 | 0.2 | % | $ | 58.0 | $ | 64.8 | (10.5 | )% | $ | 60.1 | (7.3 | )% | $ | 261.8 | $ | 268.2 | (2.4 | )% | ||||||||||||||||||||||
| Other revenues |
$ | 43.3 | $ | 18.0 | 140.6 | % | $ | 22.3 | $ | 16.9 | 32.0 | % | $ | 23.8 | 40.8 | % | $ | 65.6 | $ | 34.9 | 88.0 | % | ||||||||||||||||||||||
| Total revenues |
$ | 596.4 | $ | 577.6 | 3.3 | % | $ | 183.6 | $ | 202.0 | (9.1 | )% | $ | 191.6 | (5.1 | )% | $ | 780.0 | $ | 779.6 | 0.1 | % | ||||||||||||||||||||||
| Attendance |
44.6 | 46.5 | (4.1 | )% | 23.9 | 27.8 | (14.0 | )% | 68.5 | 74.3 | (7.8 | )% | ||||||||||||||||||||||||||||||||
| Average ticket price |
$ | 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 |
$ | 4.57 | $ | 4.37 | 4.6 | % | $ | 2.43 | $ | 2.33 | 4.3 | % | $ | 2.51 | 7.7 | % | $ | 3.82 | $ | 3.61 | 5.8 | % | ||||||||||||||||||||||
| U.S. Operating Segment | International Operating Segment | Consolidated | ||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||
| March 31, | March 31, | March 31, | ||||||||||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | Constant Currency (1) 2018 |
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 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. |
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Segment Information, continued
(unaudited, in thousands)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2018 | 2017 | |||||||
| Revenues |
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| U.S. |
$ | 599,645 | $ | 581,209 | ||||
| International |
183,628 | 202,068 | ||||||
| Eliminations |
(3,302 | ) | (3,667 | ) | ||||
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| Total revenues |
$ | 779,971 | $ | 779,610 | ||||
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| Adjusted EBITDA (1) |
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| U.S. |
$ | 155,844 | $ | 164,654 | ||||
| International |
37,586 | 47,226 | ||||||
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| Total Adjusted EBITDA (1) |
$ | 193,430 | $ | 211,880 | ||||
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| Capital expenditures |
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| U.S. |
$ | 69,971 | $ | 78,817 | ||||
| International |
10,192 | 12,370 | ||||||
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| Total capital expenditures |
$ | 80,163 | $ | 91,187 | ||||
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| (1) | Adjusted EBITDA represents net income before income taxes, interest expense, other income, loss on debt amendments, 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, as calculated below. 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. |
Reconciliation of Adjusted EBITDA
(unaudited, in thousands)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2018 | 2017 | |||||||
| Net income |
$ | 62,177 | $ | 80,194 | ||||
| Add (deduct): |
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| Income taxes |
25,097 | 44,400 | ||||||
| Interest expense |
27,115 | 26,369 | ||||||
| Other income |
(7,273 | ) | (12,982 | ) | ||||
| Loss on debt amendments |
1,484 | — | ||||||
| Other cash distributions from equity investees (2) |
12,323 | 12,049 | ||||||
| Depreciation and amortization |
64,395 | 57,356 | ||||||
| Impairment of long-lived assets |
591 | 273 | ||||||
| Loss on sale of assets and other |
3,939 | 834 | ||||||
| Deferred lease expenses - theatres (3) |
(251 | ) | (114 | ) | ||||
| Deferred lease expenses - projectors (4) |
(232 | ) | (233 | ) | ||||
| Amortization of long-term prepaid rents (3) |
639 | 493 | ||||||
| Share based awards compensation expense (5) |
3,426 | 3,241 | ||||||
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| Adjusted EBITDA |
$ | 193,430 | $ | 211,880 | ||||
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| (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. |
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